Unassociated Document


     

    January
      5, 2007 - revised January 8, 2007

    


    Marcia
      J.
      Avedon, Ph.D.

    xxxxxxxxxxxxxxxxxxxxxxxxxx

    xxxxxxxxxxxxxxxxxxxxxxxxxx

    


    Dear
      Marcia,

    


    I
      am
      pleased to present you with an offer for the position of Senior Vice President,
      Human Resources and Communications reporting to me. This position will be
      located in Montvale, NJ. You will be presented to the Board of Directors at
      their first meeting following your date of hire for election as a Senior Vice
      President, Officer of Ingersoll-Rand Company Limited (the “Company”) to take
      effect on the date of your election. The next scheduled meeting of the Board
      is
      February 7, 2007. We look forward to your acceptance of this offer and becoming
      a part of our team, with a start date of Tuesday, February 6, 2007.

    


    
      	
              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 70% 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. For performance year 2007 you will be eligible for a full
                year
                consideration, i.e., unreduced for partial year
                employment.

            


    

    


    
      	
              3.

            	
              You
                will be recommended for a sign-on award of 30,000 (thirty thousand)
                non-qualified stock options. This award is subject to approval by
                the
                Compensation Committee of the Company’s Board of Directors (the
                “Committee”) and to the terms and conditions of awards made under our
                Incentive Stock Plan. These options will be priced at the fair market
                value of Ingersoll Rand stock on the day the Committee considers
                and
                approves awards and will vest ratably over three years following
                the
                grant. Your award recommendation will be considered by the Committee
                at
                their first meeting following your first day of employment. The next
                scheduled meeting of the Committee is February 7, 2007.
                

            


    

    


    Starting
      with performance year 2007 (first awardable 2008) 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
      a value equal to 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. The methodology
      used
      to determine the number of shares awarded will be consistently applied to all
      program participants whose stock option targets are expressed as a percentage
      of
      salary.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	Marcia J. Avedon, Ph.D.	
               January
                8,
                2007

            


    

     

    
      	
              4.

            	
              You
                will be recommended to be a participant in the IR Performance Share
                Program (PSP) with a target award level of 7,500 performance shares
                for
                2007 (awarded February, 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 normally distributed 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.

            


    

    


    
      	
              5.

            	
              Additionally,
                you will receive a sign-on award of 7,500 employment shares with
                a 3-year
                cliff vesting (all shares will vest in February 2010).
                

            


    

    


    
      	
              6.

            	
              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.

            


    

    


    
      	
              7.

            	
              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.

            


    

    


    
      	
              8.

            	
              You
                will be eligible for four (4) weeks of paid vacation per year, which
                exceeds our normal Company policy. Vacation days are earned and accrued
                on
                a monthly basis each calendar year.

            


    

    


    
      	
              9.

            	
              You
                will be provided a company automobile in accordance with our Company
                car
                policy, which in your case currently 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.

            


    

    


    
      	
              10.

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

            


    

    


    
      	
              11.

            	
              You
                will be recommended 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. Under this employment agreement you will earn double
                service
                credit (not vesting credit) for each of your first five years of
                employment with Ingersoll Rand. The EOSP vests at age 55 with 5 years
                of
                service.

            


    

    


    
      	
              12.

            	
              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.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
       

      
        	Marcia J. Avedon, Ph.D.	
                 January
                  8,
                  2007

              


      

    

     

    
      	
              13.

            	
              Also,
                as an elected officer, you will be given a Change in Control Agreement
                for
                Senior Vice Presidents at the 2.5x level (i.e., 2.5x annual salary,
                AIM
                and PSP), 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.

            


    

    


    
      	
              14.

            	
              During
                the term of your employment, you will be eligible for the Company’s
                Relocation Program. The timing of the relocation will be at your
                discretion. 

            


    

    


    
      	
              15.

            	
              In
                the unlikely event of your involuntary termination from Ingersoll
                Rand
                within five (5) 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) a severance payment of eighteen months base salary
                if
                termination is within five years of your date of hire, and twelve
                months
                base salary if termination is after such five years, plus b) a payment
                equal to your target amount in the Annual Incentive Matrix (AIM)
                Program
                and c) a pro-rata payment (prorated based on days in the year through
                the
                termination date over total days within year) of the Performance
                Share
                (PSP) Program award that is earned as of your termination date, to
                be paid
                according to plan provisions, up to the target level. In addition,
                under
                such circumstances, you will have 90 days following your termination
                date
                within which to exercise your vested
                options.

            


    

    


    Marcia,
      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:	
              Rob
                Butler 

              
                Connie
                  Roseler

                Gillian
                  Scholes

              

            


    

    
       

      
        	Enclosures:	
                Benefits
                  Summary

                
                  Executive
                    Health Program Write-Up

                  Elected
                    Officer Supplemental Program
                    Write-Up

                

              


      

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      
         

        
          	Marcia J. Avedon, Ph.D.	
                   January
                    8,
                    2007

                


        

         

      

    

    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 fixed or specified
                term
                of employment.

            


    

    


    
      	 	
              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, Corporate Center, as Senior Vice
      President, Human Resources and Communications and agree to the conditions hereon
      and in the offer letter.


    


    
      	/s/ Marcia J. Avedon,
              Ph.D. 	January
              11, 2007
	
              
Marcia
              J. Avedon, Ph.D. 	
              
                

              

              Date

            


    

     

    
      
        
        

      

      
        4