Unassociated Document


    September
      24, 2007 –
revised
      September 28, 2007

    


    Mr.
      James
      Gelly

    1350
      West
      Dean Road

    River
      Hills, WI 53217 

    


    Dear
      James,

    


    I
      am
      pleased to present you with a revised offer for the position of Senior Vice
      President, Finance and Chief Financial Officer 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 Senior
      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 starting on October 4, 2007.

    


    
      	
              1.

            	
              Your
                starting base salary will be at an annual rate of $550,000 (Five
                hundred,
                fifty 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 90% 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 the performance year 2007, your AIM award will be prorated
                based on three (3) months of employment, i.e., 25%. Please see the
                enclosed AIM brochure for further details on this
                program.

            


    

    


    
      	
              3.

            	
              You
                will receive an award of 25,000 (twenty-five thousand) non-qualified
                stock
                options vesting one-third per year for three years following the
                grant
                date. This award is subject to the terms and conditions of awards
                made
                under our Incentive Stock Plan. Assuming you begin employment with
                IR on
                October 4, 2007, these options will be priced at the fair market
                value of
                Ingersoll Rand stock on the first trading day following the Compensation
                Committee of the Company’s Board of Directors (the “Committee”) next
                meeting, i.e., Monday, October 8, 2007.


            


    

    


    In
      addition, you will receive a retention award of 50,000 stock options to be
      priced at the fair market value of Ingersoll Rand stock on the first trading
      day
      following the Committee’s meeting, i.e., Monday, October 8, 2007, assuming you
      begin employment with IR on October 4, 2007. These options will have the
      following vesting schedule:

     

    
      	 	
              
                
                  
                    -

                  

                

              

            	
              50%
                with three (3) year vesting from grant
                date

            


    

    
      	 	
              
                
                  
                    
                      -

                    

                  

                

              

            	
              remaining
                50% with five (5) year vesting from grant
                date

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        2

      

    

     

    
      	
              Mr.
                James Gelly 

            	
              September
                28, 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
      125% 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. For the performance year 2007,
      your stock option award will be based on a full year of service. Please see
      the
      enclosed Stock Option brochure for further details on this program.

    


    
      	
              4.

            	
              You
                will be a participant in the IR Performance Share Program (PSP) with
                an
                annual target award level of 14,000 performance shares. For performance
                year 2007, which will be awarded in February 2008, you will be eligible
                for a pro-rata award, i.e., 25%. 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 of the Board of Directors. Individual awards
                from
                this program will become 100% vested 12 months following the award
                date
                and will be settled in Ingersoll Rand common stock. In subsequent
                years,
                you will be eligible for additional annual awards of similar value
                with
                qualifying criteria set at or near the beginning of each performance
                year.
                Participation in the PSP includes stock ownership requirements, which
                will
                be described in greater detail upon your acceptance of this
                offer.

            


    

    


    
      	
              5.

            	
              You
                will be eligible to participate in the IR Executive Deferred Compensation
                Plan (EDCP). The EDCP gives you the opportunity to defer most of
                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, MullinTBG, 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 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.

            


    

    


    
      	
              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.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        3

      

    

     

    
      	
              Mr.
                James Gelly 

            	
              September
                28, 2007

            


    

     

    
      	
              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. This document will be provided separately to
                you.

            


    

    


    
      	
              13.

            	
              You
                will be eligible for the Company’s Relocation Program. A representative
                from Prudential Relocation will be in touch with you after we receive
                your
                acceptance of this offer to explain the program and begin the process.
                The
                timing of this relocation will be at your discretion.
                

            


    

    


    
      	
              14.

            	
              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 as soon as
                administratively practical in the form of a lump sum, but in no event
                later than two and one-half months following the calendar year in
                which
                your employment was involuntarily terminated, plus b) a payment equal
                to
                your target annual amount in the Annual Incentive Matrix (AIM) Program
                to
                be paid according to plan provisions 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, your
                stock
                options will continue to vest for 18 months following your separation
                with
                the ability to exercise within 90 days following the end of the 18
                month
                vesting period.

            


    

    


    James,
      we
      all believe that you will make a significant contribution in this new role
      and
      look forward to your joining 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
      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 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        4

      

    

     

    
      	
              Mr.
                James Gelly 

            	
              September
                28, 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 contract of employment
                for any period of time.

            


    

    


    
      	 	
              5.

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

            


    

    


    
      	 	
              6.

            	
              Your
                acceptance and execution of this offer in the space provided below,
                and
                its receipt by Ingersoll Rand no later than 7 days following the
                date of
                the offer.

            


    

     

    
      
        

      
CANDIDATE
      ACCEPTANCE

    


    I
      accept
      your offer of employment with Ingersoll Rand, as Senior Vice President Finance
      and Chief Financial Officer and agree to the conditions hereon and in the offer
      letter.

    


    
      
        	/s/
                James Gelly	 	September
                30, 2007	 
	James
                Gelly	 	
                                
                  Date