EMPLOYMENT AGREEMENT

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”), dated this 25 ^th day of May, 2005, but effective as of December 20, 2004 (the “Effective Date”), is entered into by and between Dresser, Inc., a Delaware corporation (“Employer”) and Patrick M. Murray (“Employee”).

WITNESSETH:

WHEREAS , pursuant to a resolution adopted at its December 18, 2003 meeting, the Board of Directors of Employer approved certain Compensation (as defined therein) arrangements for Employee in his capacity as Chairman of the Board (the “Compensation Resolution”);

WHEREAS , Employer and Employee now desire to enter into this Agreement by which Employer shall hire Employee as Employer’s Chief Executive Officer.

NOW, THEREFORE , for and in consideration of the mutual promises, covenants and obligations contained herein, Employer and Employee agree as follows:

1.1 Employer agrees to employ Employee, and Employee agrees to be employed by Employer, beginning as of the Effective Date and continuing until such time as his successor is elected and qualified or his earlier resignation or removal, subject to any termination of such employment as set forth in Article 3, and subject to other rights and obligations set forth in the terms and conditions of this Agreement.

1.2 Beginning as of the Effective Date, Employee shall be employed as the Chief Executive Officer of Employer. Employer shall use its best efforts to cause Employee to continue to be elected or appointed as a member of the Board of Directors of Employer (the “Board”) for so long as this Agreement is in effect. For so long as Employee is a member of the Board, Employee will also be Chairman of the Board. As Chief Executive Officer, Employee will report directly to the Board, and Employee’s duties will include such functions and operations consistent with Employee’s title and assigned him from time to time by the Board. Employee agrees to perform such functions and operations diligently and to the best of Employee’s abilities as well as such additional or different duties and services appropriate to such positions which Employee from time to time may be reasonably directed to perform by the Board.

1.3 Employee shall at all times comply with and be subject to such policies and procedures as Employer may establish from time to time, including, without limitation, Employer’s Code of Business Conduct (the “Code of Business Conduct”), which at any time during the period of his employment by Employer have been furnished in writing to Employee.

1.4 Employee shall, during the period of Employee’s employment by Employer, devote Employee’s full business time, energy, and best efforts to the business and affairs of Employer. Employee may not engage, directly or indirectly, in any other business, investment,

or activity that materially interferes with Employee’s performance of Employee’s duties hereunder or is contrary to the interest of Employer or any of Dresser, Ltd.’s current or future affiliated subsidiaries (each a “Dresser Entity” or, collectively, the “Dresser Entities”) or requires any significant portion of Employee’s business time. The foregoing notwithstanding, the parties recognize and agree that Employee may engage in passive personal investments and other business activities which do not conflict with the business and affairs of the Dresser Entities or materially interfere with Employee’s performance of his duties hereunder. In addition, Employee may serve on any corporate, civic, or charitable boards of directors, provided that such service is not otherwise a violation of any other provision of this Agreement and he first obtain approval to serve on any for-profit corporate boards in accordance with Employer’s policies and procedures regarding such service to the extent previously furnished in writing to Employee. Employee shall be permitted to retain any compensation received for approved service on any unaffiliated corporation’s board of directors.

1.5 Employee acknowledges and agrees that Employee owes a fiduciary duty of loyalty, fidelity, and allegiance to act at all times in the best interests of Employer and the other Dresser Entities and to do no act which would, directly or indirectly, injure any such entity’s business, interests, or reputation. It is agreed that any direct or indirect interest in, connection with, or benefit from any outside activities, particularly commercial activities, which interest might in any way adversely affect Employer, or any other Dresser Entity, involves a possible conflict of interest. In keeping with Employee’s fiduciary duties to Employer, Employee agrees that Employee shall not knowingly become involved in a conflict of interest with Employer or any Dresser Entity, or upon discovery thereof, allow such a conflict to continue. Moreover, Employee shall not engage in any activity that is reasonably likely to involve a possible conflict of interest without first obtaining approval in accordance with Employer’s policies and procedures.

1.6 Nothing contained herein shall be construed to preclude the transfer of Employee’s employment or this Agreement to another Dresser Entity or Entities (“Subsequent Employer”) as of, or at any time after, the Effective Date and no such transfer shall be deemed to be a termination of employment for purposes of Article 3 hereof; provided, however, that (1) effective with such transfer, all of Employer’s obligations hereunder shall be assumed by and be binding upon, and all of Employer’s rights hereunder shall be assigned to, such Subsequent Employer, jointly and severally with Employer in all respects, and the defined term “Employer” as used herein shall thereafter be deemed amended to include such Subsequent Employer, (2) Employee shall be Chief Executive Officer and a member of the board of directors of each of the one or more companies that in the aggregate hold and/or are the successor or successors to all or substantially all of the business of Employer (“Employer Successors”), and (3) Employer shall remain jointly and severally liable and bound by this Agreement. Except as otherwise provided above, all of the terms and conditions of this Agreement, including without limitation, Employee’s rights and obligations, shall remain in full force and effect following such transfer of employment. An example of such an assignment may be the division of Employer into two separate corporate entities which each assume a portion of Employer’s business and which each then shall become Employers, or the assignment of Employee’s contract to a Dresser Entity which purchases all or substantially all of the assets of Employer, which purchaser will then become an Employer.

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1.7 The Compensation Resolution is hereby superseded in its entirety and shall hereafter be of no further force or effect; provided, however, that if the Termination Date occurs prior to December 31, 2006, the Compensation Resolution shall thereupon become effective and of full force and effect once again. In addition, the “Chairman Fee” previously awarded to Employee in connection with his service as the non-executive chairman of the Board, is hereafter terminated.

2.1 From January 1, 2005 to the earlier of “Termination Date” (as defined in Article 3) or December 31, 2006, Employee’s base salary shall be not less than $200,000 per annum, which base salary shall be paid by Employer in accordance with its standard payroll practice for its executives. Employer and Employee shall renegotiate Employee’s base salary for periods after the 2006 calendar year.

2.2 From January 1, 2005 to the Termination Date, Employee will be eligible for an Annual Bonus to be awarded, if at all, based on achievement of performance goals established annually by the Board, in consultation with Employee, within the first ninety days of Employer’s fiscal year. The Board will reasonably determine whether these performance goals have been met and the amount of any Annual Bonus in its sole discretion, subject to the following guidelines: (1) the Target Annual Bonus will be equal to 50% of Employee’s base salary and the Maximum Annual Bonus will be equal to 100% of Employee’s base salary; (2) the Board may increase the Target Annual Bonus or the Maximum Annual Bonus at any time, but may not decrease them without Employee’s express written consent.

2.3 From January 1, 2005 to the Termination Date, Employee will receive a perquisite allowance as the Board may establish from time to time. In addition, Employer shall pay or reimburse Employee for all actual, reasonable and customary expenses incurred by Employee in the course of his employment; provided that such expenses are incurred and accounted for in accordance with Employer’s applicable policies and procedures.

2.4 From January 1, 2005 to the Termination Date, Employee shall be allowed to participate, on the same basis as other senior executive employees of Employer, in all applicable medical, health, and dental care benefit plans and programs, including improvements or modifications of the same, which as of January 1, 2005 or thereafter are made available by Employer to Employer’s senior executive employees and Employer’s Supplemental Executive Retirement Plan as of January 1, 2005 (the “SERP”) (the “Benefit Plans”), excluding, however, those plans established by predecessors of Employer which as of January 1, 2005 are not generally open to new participants and in which Employee is not already a participant. Employee shall not participate in any other plans, including any life insurance, disability protection, or qualified and non-qualified retirement plans. Except as specifically provided herein, nothing in this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans or programs than provided to its similarly situated executive employees pursuant to the terms and conditions of such benefit plans and programs. For purposes of calculating Employee’s benefits under the SERP, Employee’s salary shall be calculated to include Employee’s base salary plus an amount

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equal to salary amounts that were pre-paid to Employee by Employer as severance benefits in 2004.

2.5 Notwithstanding anything to the contrary in this Agreement, with the exception of equity based incentives and option plans pursuant to which Employee has received, or is contractually entitled to receive, any awards, it is specifically understood and agreed that Employer shall not be obligated to institute, maintain, or refrain from changing, amending, or discontinuing any incentive, compensation, or employee benefit program or plan, so long as such actions are similarly applicable to covered employees generally.

2.6 Employer may withhold from any compensation, benefits, or amounts payable under this Agreement all federal, state, city, or other taxes as may be required pursuant to any law or governmental regulation or ruling.

3.1 Employee’s employment with Employer may be terminated by either Employee or Employer for any reason or for no reason. The first date that either party elects to terminate this Agreement is referred to herein as the “Termination Date.” Notwithstanding the any of the terms contained herein, if the Termination Date occurs on or before December 31, 2006, this Agreement shall be automatically terminated and the Compensation Resolution shall govern the relationship of Employer and Employee as set forth in Section 1.8 hereof.

3.2 Termination of the employment relationship or status as a director does not terminate those obligations imposed by this Agreement, which are continuing obligations, including, without limitation, Employee’s obligations under Article 4 and Article 5.

4.1 All information, ideas, concepts, improvements, discoveries, and inventions, whether patentable or not, which are conceived, made, developed or acquired by Employee, individually or in conjunction with others, during Employee’s employment (or prior employment or while serving Employer as a consultant) by or directorship with Employer or any of the other Dresser Entities (whether during business hours or otherwise and whether on Employer’s premises or otherwise) which relate to the business, products or services of Employer or the other Dresser Entities (including, without limitation, all such information relating to corporate opportunities, research, financial and sales data, pricing and trading terms, evaluations, opinions, interpretations, acquisition prospects, the identity of customers or their requirements, the identity of key contacts within the customer’s organizations or within the organization of acquisition prospects, or marketing and merchandising techniques, prospective names, and marks), and all writings or materials of any type embodying any of such items, shall be the sole and exclusive property of Employer or another Dresser Entity, as the case may be, and shall be treated as “work for hire”.

4.2 Employee acknowledges that the businesses of Employer and the other Dresser Entities are highly competitive and that their strategies, methods, books, records, and documents, their technical information concerning their products, equipment, services, and processes,

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procurement procedures and pricing techniques, the names of and other information (such as credit and financial data) concerning their customers and business affiliates, all comprise confidential business information and trade secrets which are valuable, special, and unique assets which Employer or the other Dresser Entities use in their business to obtain a competitive advantage over their competitors. Employee further acknowledges that protection of such confidential business information and trade secrets against unauthorized disclosure and use is of critical importance to Employer and the other Dresser Entities in maintaining their competitive position. Employee hereby agrees that Employee will not, at any time during or after his employment by Employer, make any unauthorized disclosure of any confidential business information or trade secrets of Employer or the other Dresser Entities, or make any use thereof, except in the carrying out of his responsibilities hereunder. Confidential business information shall not include information in the public domain (but only if the same becomes part of the public domain through a means other than a disclosure prohibited hereunder). The above notwithstanding, a disclosure shall not be unauthorized if (i) it is required by law or by a court of competent jurisdiction or (ii) it is in connection with any judicial, arbitration, dispute resolution or other legal proceeding in which Employee’s legal rights and obligations as an employee or under this Agreement are at issue; provided, however, that Employee shall, to the extent practicable and lawful in any such events, give prior notice to E