exv4w4




Exhibit 4.4


ITT CORPORATION RETIREMENT SAVINGS PLAN

FOR SALARIED EMPLOYEES




(Effective October 31, 2011)



 









 





TABLE OF CONTENTS




	 	 	 	 	 

	ARTICLE 1 INTRODUCTION AND PURPOSE
	 	 	1	 
	ARTICLE 2 DEFINITIONS
	 	 	2	 
	ARTICLE 3 MEMBERSHIP
	 	 	14	 
	ARTICLE 4 MEMBER SAVINGS
	 	 	16	 
	ARTICLE 5 COMPANY CONTRIBUTIONS
	 	 	26	 
	ARTICLE 6 VESTED SHARE OF ACCOUNTS
	 	 	31	 
	ARTICLE 7 INVESTMENT OF CONTRIBUTIONS
	 	 	32	 
	ARTICLE 8 CREDITS TO MEMBERS’ ACCOUNTS, VALUATION AND ALLOCATION OF
	 	 	37	 
	ASSETS
	 	 	 	 
	ARTICLE 9 WITHDRAWALS PRIOR TO TERMINATION OF EMPLOYMENT
	 	 	39	 
	ARTICLE 10 LOANS
	 	 	43	 
	ARTICLE 11 DISTRIBUTIONS
	 	 	47	 
	ARTICLE 12 MANAGEMENT OF FUNDS
	 	 	58	 
	ARTICLE 13 ADMINISTRATION OF PLAN
	 	 	60	 
	ARTICLE 14 AMENDMENT AND TERMINATION
	 	 	63	 
	ARTICLE 15 TENDER OFFER
	 	 	65	 
	ARTICLE 16 GENERAL AND ADMINISTRATIVE PROVISIONS
	 	 	67	 
	ARTICLE 17 TOP-HEAVY PROVISIONS
	 	 	69	 
	ARTICLE 18 QUALIFIED DOMESTIC RELATIONS ORDERS
	 	 	71	 
	APPENDIX A
	 	 	74	 
	APPENDIX B
	 	 	77	 
	APPENDIX C
	 	 	80	 
	APPENDIX D
	 	 	82	 
	APPENDIX E
	 	 	83	 
	APPENDIX F
	 	 	84	 
	APPENDIX G
	 	 	85	 
	APPENDIX H
	 	 	 	 






 









 





ITT CORPORATION RETIREMENT SAVINGS PLAN

FOR SALARIED EMPLOYEES




(Effective October 31, 2011)



ARTICLE 1




INTRODUCTION AND PURPOSE


The ITT Investment and Savings Plan for Salaried Employees (the “ISP”) was established effective
April 1, 1974 by ITT Corporation for the benefit of certain salaried employees. The ISP was
subsequently renamed the ITT Salaried Investment and Savings Plan.



Effective October 31, 2011, ITT Corporation restructured into three separate publicly traded
companies named ITT Corporation, Exelis Inc., and Xylem Inc. In connection with the restructuring,
sponsorship of the ISP was transferred to Exelis Inc.



Also in connection with the restructuring, ITT Corporation (as in existence after the
restructuring) hereby establishes, effective as of October 31, 2011, the ITT Corporation Retirement
Savings Plan for Salaried Employees (the “Plan”), as contained in this Plan document, for the
eligible employees of ITT Corporation and its subsidiaries. Accounts in the ISP attributable to
participants in the ISP who become employees on October 31, 2011 of ITT Corporation (as in
existence after the restructuring) or any of its subsidiaries shall be transferred to the Plan and
that portion of the Plan constitutes a successor plan to the ISP.



Effective January 1, 2012, the Plan is designed to be a safe harbor plan with respect to before-tax
savings (pursuant to Section 401(k)(12) of the Internal Revenue Code (the “Code”)) and with respect
to matching contributions (pursuant to Section 401(m)(11) of the Code).



The Plan is intended to constitute a profit sharing plan with an employee stock ownership plan
(“ESOP”) feature within the meaning of Section 4975(e) of the Code and a cash or deferred
arrangement within the meaning of Section 401(k) of the Code. The portion of the Plan intended to
qualify as an ESOP is designed to invest primarily in qualifying employer securities as such term
is defined in Section 4975(e)(8) of the Code and is intended to comply with the distributions
requirements of Section 409(o) of the Code.



The provisions of the Plan are conditioned upon the Plan’s qualification under Section 401(a) of
the Code and Company contributions being deductible under Section 404 of the Code. It is further
intended that the Plan also conform to the requirements of Title I of ERISA and that the Trust be
qualified under Section 501 of the Code.








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ARTICLE 2




DEFINITIONS




	2.1	 	“Accounts” shall mean, with respect to any Member or Deferred Member, his After-Tax Account,
Before-Tax Account, Company Core Account, Company Floor Account, Company Matching Account,
Prior Company Matching Account, Prior ESOP Account, Prior Plan Account, Rollover Account, and
Special Company Contribution Account.






	2.2	 	“Actual Contribution Percentage” shall mean, with respect to a specified group of employees
referred to in Section 4.5, the average of the ratios, calculated separately for each employee
in that group, of:






	 	(a)	 	the After-Tax Savings and Company Matching Contributions (excluding Company
Matching Contributions forfeited under Section 4.1 or 4.5) made by or on behalf of the
Member for the Plan Year; to
	 
	 	(b)	 	the Employee’s Statutory Compensation for a Plan Year.






	 	 	Only Company Matching Contributions that are permitted to be taken into account under
applicable Treasury Regulations for purposes of the test described in Section 4.5 shall be
taken into account for purposes of calculating the Actual Contribution Percentage. An
Actual Contribution Percentage shall be computed to the nearest one-hundredth of one percent
of the Employee’s Statutory Compensation. For purposes of this calculation, the non-Highly
Compensated Employee Actual Contribution Percentage shall be determined based on the then
current Plan Year and the Highly Compensated Employee Actual Contribution Percentage shall
also be determined for the then current Plan Year. For purposes of this Section, Statutory
Compensation shall exclude compensation paid to the employee while he is not a Plan Member.
	 
	 	 	Notwithstanding the foregoing, effective for any Plan Year beginning on or after January 1,
2012, the Benefits Administration Committee may elect to calculate the Actual Contribution
Percentage without regard to Company Matching Contributions.






	2.3	 	“Actual Deferral Percentage” shall mean, for Plan Years beginning before January 1, 2012,
with respect to a specified group of employees referred to in Section 4.1(d), the average of
the ratios, calculated separately for each employee in that group, of:






	 	(a)	 	the amount of Regular Before-Tax Savings made on the employee’s behalf for a
Plan Year under Section 4.1(a) (including Regular Before-Tax Savings returned to a
Highly Compensated Employee under Section 4.1(c)(ii) and Regular Before-Tax Savings
returned to any employee under Section 4.1(c)(iii)); to
	 
	 	(b)	 	the employee’s Statutory Compensation for a Plan Year.






	 	 	Such Actual Deferral Percentage shall be computed to the nearest one-hundredth of one
percent of the employee’s Statutory Compensation. For purposes of this calculation, the
non-Highly Compensated Employee Actual Deferral Percentage shall be determined based on the
then current Plan Year and the Highly Compensated Employee Actual Deferral Percentage shall
also be determined for the then current Plan Year. For purposes of this Section, Statutory
Compensation shall exclude compensation paid to the employee while he is not a Plan Member.
For purposes of this Section, Regular Before-Tax Savings may be taken into account for a
Plan Year only if they relate to compensation that either would have been received by the
Member in the Plan Year but




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	 	 	for the deferral election or are attributable to services performed by the Member in the
Plan Year and would have been received by the Member within 21/2 months after the close of the
Plan Year but for the deferral election; are allocated to the Member as of a date within
that Plan Year and the allocation is not contingent on the participation or performance of
service after such date; and are actually paid to the Trustees no later than 12 months after
the end of the Plan Year to which the contributions relate.






	2.4	 	“After-Tax Account” shall mean that portion of the Trust Fund, which, with respect to any
Member or Deferred Member, is attributable to:






	 	(a)	 	After-Tax Savings made to the Plan under Section 4.2; and
	 
	 	(b)	 	any amounts that are attributable to after-tax contributions made to the ISP or
any qualified profit sharing or other defined contribution plan previously in effect at
a Participating Corporation or Participating Division and that are transferred to the
Plan on the Member’s behalf






	 	 	plus any investment earnings and gains or losses on such amounts.






	2.5	 	“After-Tax Savings” shall mean the contributions made by a Member pursuant to Section 4.2.






	2.6	 	“Associated Company” shall mean any division, subsidiary or affiliated company of ITT not
participating in the Plan designated by the Board of Directors or by the Benefits
Administration Committee, pursuant to authority delegated to it by the Board of Directors, as
an Associated Company for purposes of the Plan during the period for which such designation
exists; provided, however, that any such division, subsidiary or affiliated company not
participating in the Plan which is:






	 	(a)	 	a component member of a controlled group of corporations (as defined in Section
414(b) of the Code), which controlled group of corporations includes as a component
member ITT;
	 
	 	(b)	 	any trade or business under common control (as defined in Section 414(c) of the
Code) with ITT;
	 
	 	(c)	 	any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Section 414(m) of the Code) which includes ITT;
or
	 
	 	(d)	 	any other entity required to be aggregated with ITT pursuant to regulations
under Section 414(o) of the Code,






	 	 	shall automatically be an Associated Company hereunder during the period it is a division,
subsidiary or affiliated company of ITT or during such period as may otherwise be determined
by the Board of Directors or by the Benefits Administration Committee. Notwithstanding the
foregoing, for purposes of the preceding sentence and Section 5.4(a) of the Plan the
definitions of Section 414(b) and (c) of the Code shall be modified by substituting the
phrase “more than 50 percent” for the phrase “at least 80 percent” each place it appears in
Section 1463(a)(1) of the Code.






	2.7	 	“Before-Tax Account” shall mean that portion of the Trust Fund, which, with respect to any
Member or Deferred Member, is attributable to:




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	 	(a)	 	Regular Before-Tax Savings made to the Plan under Section 4.1(a);
	 
	 	(b)	 	Catch-Up Contributions made to the Plan under Section 4.1(b); and
	 
	 	(c)	 	any amounts that are attributable to before-tax contributions (including
catch-up contributions) made to the ISP or any qualified profit sharing or other
defined contribution plan previously in effect at a Participating Corporation or
Participating Division and that are transferred to the Plan on the Member’s behalf






	 	 	plus any investment earnings and gains or losses on such amounts.






	2.8	 	“Before-Tax Savings” shall mean:






	 	(a)	 	Regular Before-Tax contributions made on a Member’s behalf under Section
4.1(a); and
	 
	 	(b)	 	Catch-Up Contributions made on a Member’s behalf under Section 4.1(b).






	2.9	 	“Beneficiary” shall mean such primary beneficiary or beneficiaries as may be designated from
time to time by the Member or Deferred Member, in accordance with procedures prescribed by the
Benefits Administration Committee for such purpose, to receive, in the event of the Member’s
or Deferred Member’s death, the value of his Accounts at the time of his death. If more than
one Beneficiary is designated, the percentage payable to each Beneficiary must be designated.
A Member may also designate a contingent Beneficiary to receive the value of his Accounts at
the time of the Member’s death in the event the primary beneficiary predeceases the Member,
or, if there is more than one primary beneficiary, in the event all primary beneficiaries
predecease the Member. In the event that more than one primary Beneficiary is named (or, in
the event of the death of all of the primary Beneficiaries, more than one contingent
Beneficiary is named), they shall share equally in the value of the Member’s Accounts unless
the Member shall have designated different percentages for the different Beneficiaries.
Unless otherwise specified by the Member, the designation of any primary Beneficiary or
contingent Beneficiary who subsequently predeceases the Member shall be deemed void and have
no further effect. In accordance with applicable Treasury Regulations, a trust may be
designated as either a primary or contingent Beneficiary. Except as hereinafter provided, in
the case of a Member or Deferred Member who is married, the sole Beneficiary shall be the
Member’s or Deferred Member’s spouse unless such spouse consents in writing on a form
witnessed by a notary public to the designation of another person as primary Beneficiary.
Such consent shall be irrevocable with respect to such Beneficiary designation. In the case
of a Member or Deferred Member who incurs a divorce under applicable State law prior to
commencing benefits under the Plan, such Member’s or Deferred Member’s designation of a named
Beneficiary shall remain valid unless otherwise provided in a qualified domestic relations
order (as described in Article 18 of the Plan) or unless such Member or Deferred Member
changes his named Beneficiary or is subsequently remarried. If no Beneficiary designation is
in effect at the Member’s or Deferred Member’s death or if no person, persons or entity so
designated survives the Member or Deferred Member, the Member’s or Deferred Member’s surviving
spouse, if any, shall be the sole Beneficiary; otherwise the Beneficiary shall be the personal
representative of the estate of the Member or Deferred Member.






	2.10	 	“Benefits Administration Committee” shall mean the Benefits Administration Committee
established from time to time pursuant to Article 13 for the purposes of administering the
Plan.






	2.11	 	“Board of Directors” shall mean the Board of Directors of ITT or of any successor by merger,
purchase or otherwise.




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	2.12	 	“Catch-Up Contributions” shall mean Before-Tax Savings made to the Plan pursuant to Section
4.1(b) that constitute catch-up contributions under Section 414(v) of the Code.






	2.13	 	“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
References to any section of the Code shall include any successor provision thereto.






	2.14	 	“Company” shall mean ITT Corporation or any successor by merger, purchase or otherwise with
respect to its Employees, any Participating Division with respect to its Employees, and any
Participating Corporation with respect to its Employees.






	2.15	 	“Company Core Account” shall mean that portion of the Trust Fund which, with respect to any
Member or Deferred Member, is attributable to Company Core Contributions and any investment
earnings and gains or losses thereon.






	2.16	 	“Company Core Contributions” shall mean Company Core Contributions made pursuant to Section
5.2.






	2.17	 	“Company Floor Account” shall mean that portion of the Trust Fund which, with respect to any
Member or Deferred Member, is attributable to his “Company Floor Account” under the ISP that
was transferred from the ISP to the Plan and any investment earnings and gains or losses on
such account in the Plan.






	2.18	 	“Company Matching Account” shall mean that portion of the Trust Fund which, with respect to
any Member or Deferred Member, is attributable to Company Matching Contributions and any
investment earnings and gains or losses thereon.






	2.19	 	“Company Matching Contributions” shall mean Company Matching Contributions made pursuant to
Section 5.1.






	2.20	 	“Contributing Member” shall mean a Member who is making Before-Tax Savings and/or After-Tax
Savings.






	2.21	 	“Deferred Member” shall mean:






	 	(a)	 	a Member who has terminated employment with the Company and all Associated
Companies and who has not received a complete distribution of his Accounts;
	 
	 	(b)	 	the spouse Beneficiary of a deceased Member or Deferred Member; or
	 
	 	(c)	 	an alternate payee designated as such pursuant to a domestic relations order as
qualified by the Plan.






	2.22	 	“Disability” shall mean, with respect to a Member, the total disability of such Member as
defined under any long term disability plan maintained by the Company for employees who are
similarly situated as of the date the disability occurs. If a Member qualifies for benefits
under such plan, then he shall be deemed to be totally disabled as determined by the insurance
company that insures such plan. A Member who does not qualify for benefits under such plan
because he has elected not to participate in such plan or because of a plan limitation shall
be deemed to be totally disabled if the insurance company insuring such plan determines that
he would have qualified for benefits under such plan if he had elected to participate therein
or if he otherwise would have qualified absent the plan limitation. For purposes of this
Plan, the effective date of disability shall




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	 	 	be the later of the date of disability as defined in the applicable disability plan or the
date as of which the applicable insurance company issues its determination of total
disability.






	2.23	 	“Earnings” shall mean the amount of income, if any, to be returned with any excess deferrals,
excess contributions, or excess aggregate contributions under Section 4.1 or 4.5 for the Plan
Year, as determined in accordance with applicable law and regulations prescribed by the
Secretary of the Treasury under the provisions of Sections 402(g), 401(k) and 401(m) of the
Code.






	2.24	 	“Effective Date” shall mean October 31, 2011 with respect to ITT and any Participating
Corporations and Participating Divisions that enter the Plan as of such date. With respect to
Participating Corporations and Participating Divisions that began their participation in the
Plan after such date, “Effective Date” shall mean the date as of which such Participating
Corporation or Participating Division begins its participation in the Plan.






	2.25	 	“Employee” shall mean any person regularly employed by the Company who is considered a
salaried employee for purposes of the Company’s employee benefit plans, who is paid from a
payroll maintained in the continental United States, Hawaii, Puerto Rico, or the US Virgin
Islands, and who receives regular and stated compensation other than a pension or retainer.






	 	 	Notwithstanding the foregoing, except as the Board of Directors or the Benefits
Administration Committee, pursuant to authority delegated to it by the Board of Directors,
may otherwise provide on a basis uniformly applicable to all persons similarly situated, the
following individuals shall not be considered “Employees” for purposes of the Plan:






	 	(a)	 	any individual who is accruing service under a qualified retirement plan
maintained by the Company or any Associated Company or any other retirement plan of the
Company or any Associated Company as shall be specified by the Board of Directors from
time to time and any individual who is eligible to participate in a retirement plan of
the Company or any Associated Company that is maintained outside of the United States;
	 
	 	(b)	 	any individual whose terms and conditions of employment are determined by a
collective bargaining agreement with the Company, which does not make this Plan
applicable to him;
	 
	 	(c)	 	any individual who is a Leased Employee;
	 
	 	(d)	 	any individual who is engaged by the Company to perform services for the
Company or an Associated Company in a relationship (i) that the Company characterizes
as other than an employment relationship, or (ii) that the individual has agreed is not
an employment relationship and has waived his rights to coverage as an employee, such
as where the Company engages the individual to perform services as an independent
contractor, even if a determination is made by the Internal Revenue Service or other
governmental agency or court, after the individual is engaged to perform such services,
that the individual is an employee of the Company or an Associated Company for purposes
of the Code;
	 
	 	(e)	 	any individual:






	 	(i)	 	who is regularly employed by the Company in a permanent
position (as distinguished from a temporary assignment); and
	 
	 	(ii)	 	whose primary place of employment with the Company is outside
of the United States; and




6









 






	 	(iii)	 	who has his primary residence outside of the United States;






	 	(f)	 	any individual:






	 	(i)	 	who is considered a salaried employee and who is paid from a
payroll maintained in the continental United States, Hawaii, Puerto Rico or the
U. S. Virgin Islands; and
	 
	 	(ii)	 	who is not a United States citizen or a resident alien (as
defined in Section 7701(b) of the Code); and
	 
	 	(iii)	 	who is employed by the Company or an Associated Company on a
temporary assignment in the United States;






	 	(g)	 	any individual who is a nonresident alien with no U. S. source income; and
	 
	 	(h)	 	any individual who is a bona fide resident of Puerto Rico.






	 	 	The term “employee,” as used in this Plan, means any individual who is employed by the
Company or an Associated Company as a common law employee of the Company or Associated
Company, regardless of whether the individual is an “Employee,” and any Leased Employee.






	2.26	 	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time
to time.






	2.27	 	“ESOP” shall mean that portion of the Plan that consists of amounts invested in the ITT Stock
Fund.






	2.28	 	“Exelis Stock” shall mean common stock of Exelis Inc.






	2.29	 	“Exelis Stock Fund” shall mean the Investment Fund under the Plan that is invested in Exelis
Stock.






	2.30	 	“Highly Compensated Employee” shall mean, with respect to any Plan Year, any employee who (a)
in the Plan Year or the immediately preceding Plan Year was a 5-percent owner (as defined in
Section 415(i) of the Code), or (b) in the immediately preceding Plan Year earned annual
Statutory Compensation from the Company or an Associated Company which exceeds a dollar amount
that is indexed annually and is determined pursuant to Section 414(q)(1)(B) of the Code. The
threshold referred to in (b) shall be adjusted from time to time for cost of living
in accordance with Section 414(q) of the Code.






	 	 	Notwithstanding the foregoing, employees who are nonresident aliens and who receive no
earned income from the Company or an Associated Company that constitutes income from sources
within the United States shall be disregarded for all purposes of this Section. The
provisions of this Section shall be further subject to such additional requirements as shall
be described in Section 414(q) of the Code and its applicable regulations, which shall
override any aspects of this Section inconsistent therewith.






	2.31	 	“Hours Worked” shall mean hours for which an employee is compensated by the Company or by an
Associated Company whether or not he has worked, such as paid holidays, paid vacation, paid
sick leave and paid time off, and back pay for the period for which it was awarded, and each
such




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	 	 	hour shall be computed as only one hour, even though he is compensated at more than the
straight time rate. With respect to any period for which an employee is compensated but has
not worked, hours counted shall be included on the basis of the Employee’s normal workday or
workweek. This definition of Hours Worked shall be applied in compliance with 29 Code of
Federal Regulations Section 2530.200b-2(b) and (c), as promulgated by the United States
Department of Labor, in a consistent and nondiscriminatory manner.






	2.32	 	“Investment Fund” shall mean the separate funds in which contributions to the Plan are
invested in accordance with Article 7.






	2.33	 	“ISP” shall mean the ITT Salaried Investment and Savings Plan (including certain provisions
that were included in a predecessor plan that was named the Pre-Distribution ITT Plan) that
was maintained by ITT Corporation as in existence prior to October 31, 2011 and the
sponsorship of which was transferred to Exelis Inc. effective October 31, 2011.






	2.34	 	“ITT” shall mean ITT Corporation as restructured effective October 31, 2011.






	2.35	 	“ITT Stock” shall mean common stock of ITT.






	2.36	 	“ITT Stock Fund” shall mean the Investment Fund offered under the Plan that is invested in
ITT Stock.






	2.37	 	“Leased Employee” shall mean any person (other than a common law employee of the Company or
an Associated Company) who, pursuant to an agreement between the Company and any other person
(“leasing organization”) has performed services for the Company or an Associated Company or
any related persons determined in accordance with Section 414(n)(6) of the Code on a
substantially full-time basis for a period of at least one year and such services are
performed under the primary direction of or control by the Company or an Associated Company.
In the case of any person who is a Leased Employee (or who would qualify as a Leased Employee
but for the requirement that substantially full-time service be performed for one year) before
or after a period of service as an employee, the entire period during which he has performed
services as a Leased Employee shall be counted as service as an employee for all purposes of
the Plan, except that he shall not, by reason of that status, become a Member of the Plan.






	2.38	 	“Loan Valuation Date” shall mean the business day on which a Member’s proper application for
a loan under the Plan is received by the Savings Plan Administrator, or its designee.






	2.39	 	“Member” shall mean any person who has become a Member as provided in Article 3.






	2.40	 	“Non-U.S. Citizen Employee” shall mean any person regularly employed by the Company who is
considered a salaried employee for purposes of the Company’s employee benefit plans and who
is:






	 	(a)	 	not a citizen of the United States or a resident alien;
	 
	 	(b)	 	paid from a payroll maintained in the continental United States, Hawaii, Puerto
Rico or the US Virgin Islands; and
	 
	 	(c)	 	employed by the Company in a permanent position (as distinguished from a
temporary assignment).




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	2.41	 	“Participating Corporation” shall mean any subsidiary or affiliated company of ITT or
designated division(s) or unit(s) only of such subsidiary or affiliate which, by appropriate
action of the Board of Directors or by a designated officer of ITT pursuant to authorization
delegated to him by the Board of Directors has been designated as a Participating Corporation
in the Plan as to all of its employees or as to the employees of one or more of its operating
or other units and the board of directors of which shall have taken appropriate action to
adopt this Plan.






	2.42	 	“Participating Division” shall mean any division of ITT or designated unit(s) only of such
division which by appropriate action of the Board of Directors or by a designated officer of
ITT pursuant to authorization delegated to him by the Board of Directors has been designated
as a Participating Division in this Plan.






	2.43	 	“PFTIC” shall mean the ITT Pension Fund Trust and Investment Committee or its successor
established from time to time pursuant to Section 12.1.






	2.44	 	“Plan” shall mean the ITT Corporation Retirement Savings Plan for Salaried Employees as set
forth herein or as amended from time to time.






	2.45	 	“Plan Year” shall mean the calendar year, provided that the first Plan Year shall be the
period from October 31, 2011 through December 31, 2011.






	2.46	 	“Prior Company Matching Account” shall mean that portion of the Trust Fund, which, with
respect to any Member or Deferred Member, is attributable to his “Company Matching
Contribution Account” under the ISP that was transferred from the ISP to the Plan, plus
investment earnings and gains or losses on such account in the Plan.






	2.47	 	“Prior ESOP Account” shall mean that portion of the Trust Fund, which, with respect to any
Member or Deferred Member, is attributable to his “Prior ESOP Account” under the ISP that was
transferred from the ISP to the Plan, plus investment earnings and gains or losses.






	2.48	 	“Prior Plan Account” shall mean that portion of the Trust Fund which, with respect to any
Member or Deferred Member, is attributable to his “Prior Plan Account” under the ISP that was
transferred from the ISP to the Plan, plus investment earnings and gains or losses.






	2.49	 	“Rollover Account” shall mean the portion of the Trust Fund, which, with respect to a Member
or Deferred Member, is attributable to






	 	(a)	 	Rollover Contributions made to the Plan under Section 4.4; and
	 
	 	(b)	 	any amounts that are attributable to rollover contributions made to the ISP or
to a qualified profit sharing or other defined contribution plan previously in effect
at a Participating Corporation or Participating Division and that are transferred to
the Plan on the Member’s behalf






	 	 	plus any investment earnings and gains or losses on such amounts. After-tax Rollover
Contributions shall be accounted for separately in the Rollover Account.






	2.50	 	“Rollover Contributions” shall mean the contributions made by a Member pursuant to Section
4.4.






	2.51	 	“Salary” shall mean an Employee’s total remuneration from the Company for services rendered
while a Member during a Plan Year, including annual base salary, overtime, shift
differentials,




9









 






	 	 	commissions, regularly occurring incentive pay, and differential wage payments (as defined
in Section 3401(h)(2) of the Code), all as determined prior to any deferral election
pursuant to Section 4.1(a), any deferral election pursuant to Section 125 of the Code, and
any deferral election for a qualified transportation fringe under Section 132(f) of the Code
and excluding:






	 	(a)	 	foreign service allowances, separation pay, or, in accordance with rules
uniformly applicable to all Members similarly situated and as interpreted by the
Benefits Administration Committee, special bonuses, special commissions, and other
special pay or allowances of similar nature; and
	 
	 	(b)	 	the cost of any public or private employee benefit plan, including the Plan.






	 	 	In addition to other applicable limitations set forth in the Plan, and notwithstanding any
other provision of the Plan to the contrary, the annual Salary of each Member taken into
account under the Plan for any Plan Year shall not exceed $200,000, as adjusted by the
Secretary of the Treasury to reflect cost-of-living adjustments in accordance with Section
401(a)(17)(B) of the Code.






	 	 	For purposes of Before-Tax Savings, Salary shall not include amounts that are excluded from
compensation within the meaning of Section 415(c)(3) of the Code and Section 1.415(c)-(2) of
the regulations thereunder.






	2.52	 	“Savings” shall mean the After-Tax Savings contributed by a Member and the Before-Tax Savings
contributed on a Member’s behalf.






	2.53	 	“Savings Plan Administrator” shall mean the Benefits Administration Committee or its
delegate.






	2.54	 	“Self-Directed Brokerage Account” or “SDA” shall mean an Investment Fund that is a
self-directed brokerage account established by a Member, as described in Section 7.1(b).






	2.55	 	“Service” shall mean the period of elapsed time beginning on the date an employee commences
employment with the Company or any Associated Company or predecessor company of ITT, and
ending on his most recent Severance Date, subject to the following:






	 	(a)	 	Notwithstanding anything contained herein to the contrary, with respect to an
Employee who is employed by the Company on October 31, 2011, such Employee shall be
credited with “Service” he had earned under the ISP prior to October 31, 2011.
	 
	 	 	 	With respect to an individual who:






	 	(i)	 	was an employee of ITT Corporation or one of its subsidiaries
on October 30, 2011;
	 
	 	(ii)	 	became an employee of Exelis Inc. or Xylem Inc. on October 31,
2011; and
	 
	 	(iii)	 	becomes an Employee immediately following termination of
employment with Exelis Inc. or Xylem Inc. and prior to March 1, 2012,






	 	 	if such Employee had accrued “Service” under the ISP prior to October 31, 2011, his
prior “Service” under the ISP shall be credited under the Plan as of the date he
becomes an Employee after October 31, 2011 and before March 1, 2012.




10









 












	 	(b)	 	If an Employee terminates employment and is later reemployed within 12 months
of the earlier of (i) his date of termination, or (ii) the first day of an absence from
service immediately preceding his date of termination, the period between his Severance
Date and his date of reemployment shall be included in his Service.






	 	(c)	 	If an Employee terminates and is later reemployed, the period of service prior
to his Severance Date shall be included in his Service, regardless of the length of his
absence from employment.






	 	(d)	 	Under the circumstances hereinafter stated and upon such conditions as the
Benefits Administration Committee shall determine on a basis uniformly applicable to
all Employees similarly situated, the period of Service of an Employee shall be deemed
not to be interrupted by an absence of the type hereinafter stated and the period of
such absence shall be included in determining the length of an Employee’s Service:






	 	(i)	 	if a leave of absence has been authorized by the Company or any
subsidiary or affiliate of the Company, for the period of such authorized leave
of absence only; or






	 	(ii)	 	if an Employee enters service in the uniformed services of the
United States and if such individual’s right to re-employment is protected by
the Uniformed Services Employment and Reemployment Rights Act of 1994 or any
similar law then in effect and if the individual returns to regular employment
within the period during which the right to reemployment is protected by any
such law. Notwithstanding any provisions of this Plan to the contrary,
contributions, benefits, and service credit with respect to qualified military
service will be provided in accordance with Section 414(u) of the Code.






	 	(e)	 	If a Member dies while performing qualified military service (as defined in
Section 414(u) of the Code) and while his reemployment rights are protected by the
Uniformed Services Employment and Reemployment Rights Act of 1994, his period of time
in qualified military service through the date of his death shall be included in his
Service.






	2.56	 	“Severance Date” shall mean with respect to employment with the Company and all Associated
Companies:






	 	(a)	 	Except as provided in (b) below, the earlier of:






	 	(i)	 	the date an Employee quits, is discharged, retires or dies; or
	 
	 	(ii)	 	the first anniversary of the date on which he is first absent
from service, with or without pay, for any reason other than discharge,
retirement or death, such as vacation, sickness, disability, layoff or leave of
absence.






	 	(b)	 	If Service is interrupted for maternity or paternity reasons, meaning an
interruption of Service by reason of the pregnancy of the Employee; the birth of a
child of the Employee; the placement of a child with the Employee by reason of
adoption; or for purposes of caring for a newborn child of the Employee immediately
following the birth or adoption of the newborn, then the Severance Date shall be the
earlier of:






	 	(i)	 	the date he quits, is discharged, retires or dies; or




11









 












	 	(ii)	 	the second anniversary of the date on which he is first absent
from service.






	2.57	 	“Special Company Contribution Account” shall mean that portion of the Trust Fund which, with
respect to any Member or Deferred Member, is attributable to Special Company Contributions and
any investment earnings and gains or losses thereon.






	2.58	 	“Special Company Contributions” shall mean Special DC Credit Contributions and Transition
Credit Contributions made pursuant to Appendix A.






	2.59	 	“Statutory Compensation” shall mean total wages and other compensation paid to or for the
Member by the Company or by an Associated Company as reported on the Member’s Form W-2, Wage
and Tax Statement, plus elective contributions under Sections 125, 132(f)(4), 402(g)(3) and
414(v) of the Code. In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the maximum amount of
Statutory Compensation, taken into account under the Plan for any Plan Year for any Member
shall not exceed $200,000, as adjusted by the Secretary of the Treasury to reflect
cost-of-living adjustments in accordance with Section 401(a)(17)(B) of the Code. Statutory
Compensation shall also include:






	 	(a)	 	salary continuation payments for military service as described in Treasury
Regulation Section 1.415(c)-2(e)(4);
	 
	 	(b)	 	compensation paid after severance from employment as described in Treasury
Regulation Section 1.415(c)-2(e)(3)(i), (ii) and (iii)(A);
	 
	 	(c)	 	foreign income as described in Treasury Regulation Section 1.415(c)-2(g)(5)(i),
excluding amounts described in Treasury Regulation Section 1.415(c)-2(g)(5)(ii); and
	 
	 	(d)	 	differential wage payments (as defined in Section 3401(h)(2) of the Code) paid
by the Company or an Associated Company with respect to any period during which an
individual is performing service in the uniformed services (as defined in Section
3401(h)(2)(A) of the Code.






	 	 	Payments not described above, including, but not limited to, amounts described in Treasury
Regulation Section 1.415(c)-2(e)(3)(iii)(B) and (iv), shall not be considered Statutory
Compensation if paid after severance from employment, even if such amounts are paid by the
later of 21/2 months after the date of severance from employment or the end of the Plan Year
that includes the date of severance from employment.






	2.60	 	“Target Retirement Fund” shall mean a fund managed by a provider designated by the PFTIC that
is designed for investors who will retire at or around a specified date. The allocation to
different asset classes will change over time and the fund will become increasingly
conservative as the specified retirement date approaches.






	2.61	 	“Termination of Employment” shall mean severance from the employment of the Company and all
Associated Companies for any reason, including, but not limited to, retirement, death,
disability, resignation or dismissal by the Company or an Associated Company; provided,
however, that transfer in employment between the Company and any Associated Company shall not
be deemed to be “Termination of Employment.” With respect to any leave of absence and any
period of service in the uniformed services of the United States, Section 2.55 shall govern.




12









 












	2.62	 	“Trust Fund” shall mean the aggregate funds held by the Trustee under the trust agreement or
agreements established for the purposes of this Plan, consisting of the funds as described in
Article 7.






	2.63	 	“Trustee” shall mean the Trustee or Trustees at any time acting as such under the trust
agreement or agreements established for the purposes of this Plan.






	2.64	 	“Valuation Date” shall mean the date or dates, as applicable, on which the Trust Fund is
valued in accordance with Article 8.






	2.65	 	“Vested Share” shall mean, with respect to a Member or Deferred Member, that portion of his
Accounts in which the Member or Deferred Member has a nonforfeitable interest as provided in
Article 6.






	2.66	 	“Withdrawal Valuation Date” shall mean, with respect to withdrawals made pursuant to Section
9.2, the business day on which a Member’s proper request for a withdrawal in a form or manner
approved by the Benefits Administration Committee is received and processed by the Savings
Plan Administrator or its designee. With respect to withdrawals made pursuant to Section 9.3,
Withdrawal Valuation Date shall mean the business day on which a Member’s proper request for a
withdrawal under the Plan, as received and processed by the Savings Plan Administrator or its
designee, is approved by the Benefits Administration Committee.






	2.67	 	“Xylem Stock” shall mean common stock of Xylem Inc.






	2.68	 	“Xylem Stock Fund” shall mean the Investment Fund under the Plan that is invested in Xylem
Stock.




13









 











ARTICLE 3




MEMBERSHIP



3.1 Eligibility





	 	(a)	 	An Employee whose employment with the Company is not on a temporary or less
than full-time basis and who is not a Non-U.S. Citizen Employee shall be eligible to
become a Member on the later of the Effective Date or the date he first becomes an
Employee.
	 
	 	(b)	 	An Employee whose employment with the Company is on a temporary or less than
full-time basis and who is not a Non-U.S. Citizen Employee shall be eligible to become
a Member on the later of the Effective Date or the day following the date he completes
1,000 Hours Worked in a twelve-consecutive-month computation period, provided he is
then an Employee. The first computation period shall be the twelve-month period
measured from the date on which such Employee’s Service commences. Subsequent
computation periods shall be the Plan Year, beginning with the Plan Year that contains
the first anniversary of the date on which the Employee’s Service commenced.
	 
	 	(c)	 	An Employee who is a Non-U.S. Citizen Employee who works in the U.S. on an
expatriate basis shall be eligible to become a Member on the later of:






	 	(i)	 	the Effective Date; or
	 
	 	(ii)	 	the day following the date as of which he has worked in the
U.S. as an employee for at least 36 consecutive months






	 	 	 	in either case provided he is an Employee on such date.






	 	 	An individual who is eligible to become a Member under (a), (b) or (c) above shall be
eligible to become a Contributing Member as of the first day of the next available pay
period (based on administrative processing deadlines) following the date Before-Tax Savings
are made pursuant to Section 4.1 and/or After-Tax Savings are made pursuant to Section 4.2.





3.2 Membership





	 	 	An individual who has satisfied the eligibility requirements under Section 3.1 shall become
a Member on the date he satisfies such eligibility requirements provided he is an Employee
on such date. A Member may make Before-Tax Savings and/or After-Tax Savings as of the first
day of the next available pay period or any subsequent pay period (based on administrative
processing deadlines) and subject to the provisions of Section 4.1.





3.3 Certain Member Elections





	 	 	An individual who becomes a Member pursuant to Section 3.2 may make the following elections
in a form or manner approved by the Benefits Administration Committee:






	(a)	 	He may designate one or more Beneficiaries.






	(b)	 	He may designate a different rate of Before-Tax Savings than the rate that will
otherwise automatically apply pursuant to Section 4.1(a).




14









 












	 	(c)	 	He may elect to make Catch-Up Contributions pursuant to Section 4.1(b).
	 
	 	(d)	 	He may elect to make After-Tax Savings pursuant to Section 4.2.
	 
	 	(e)	 	He may make an investment election as described in Section 7.2
	 
	 	(f)	 	He may make a dividend election as described in Section 8.7





3.4 Rehired Member





	 	 	A Member who terminates employment with the Company and all Associated Companies and is
rehired by the Company as an Employee will re-enter the Plan upon his reemployment a Member
in accordance with the provisions of Section 3.2.





3.5 Transferred Members





	 	 	Notwithstanding any provision of the Plan to the contrary, a Member who remains in the
employ of the Company or an Associated Company but ceases to be an Employee shall continue
to be a Member of the Plan but shall not be eligible to make Before-Tax Savings or After-Tax
Savings or to receive allocations of Company Matching Contributions or Company Core
Contributions while his employment status is other than as an Employee. Such Member shall
be entitled to any Special Company Contributions that may be payable for the Plan Year,
based on the period of time during which he was an Employee during such Plan Year.





3.6 Termination of Membership





	 	 	A Member’s membership shall terminate on the date he is no longer employed by the Company or
any Associated Company unless the Member is entitled to benefits under the Plan in which
event his membership shall terminate when those benefits are distributed to him.




15









 











ARTICLE 4




MEMBER SAVINGS




	4.1	 	Member Before-Tax Saving.






	 	(a)	 	Commencement and Amount of Regular Before-Tax Savings









	 	(i)	 	Effective as of the first day of the next available pay period
(based on administrative processing deadlines) an Employee who has become a
Member pursuant to Article 3 shall have his Salary reduced by 6 percent and
that amount shall be contributed on his behalf to the Plan by the Company as
Regular Before-Tax Savings until and unless the Member elects, in accordance
with the procedures prescribed by the Benefits Administration Committee, to
either receive such Salary directly from the Company in cash or to reduce his
Salary in some other percentage. Such reduction in Salary shall be applied to
Salary that could have been subsequently received by the Member. Any such
specified percentage of Salary shall be in a multiple of 1 percent and the
maximum percentage shall be 50 percent. Notwithstanding the preceding
sentence, if in any Plan Year a Member makes After-Tax Savings in accordance
with Section 4.2 in addition to Regular Before-Tax Savings in accordance with
this Section, the maximum percentage of Salary such Member may contribute for
such Plan Year under the combination of this Section and Section 4.2 shall not
exceed 50 percent.
	 
	 	 	 	Notwithstanding the foregoing and Section 4.2, with respect to an Employee
who is employed as an Employee by the Company on October 31, 2011, the
following provisions shall apply:






	 	(A)	 	If such individual was making Regular
Before-Tax Savings and/or After-Tax Savings under the ISP immediately
prior to October 31, 2011 in an amount equal to a total of 6 percent or
more of his Salary, such individual shall become a Member of the Plan
on October 31, 2011 and effective as of the first day of the next
available pay period (based on administrative processing deadlines)
such individual’s election of Regular Before-Tax Savings and/or
After-Tax Savings under the ISP immediately prior to October 31, 2011
shall be deemed to have been made under the Plan and shall continue in
the same amount until and unless the Member makes another Regular
Before-Tax Savings and/or After Tax Savings election in accordance with
procedures prescribed by the Benefits Administration Committee.
	 
	 	(B)	 	If such individual was not making Regular
Before-Tax and/or After-Tax Savings under the ISP immediately prior to
October 31, 2011 in an amount equal to a total of 6 percent or more of
his Salary, such individual shall become a Member of the Plan on
October 31, 2011 and, effective as of the first day of the next
available pay period (based on administrative processing deadlines):






	 	(1)	 	such individual’s After-Tax
Savings election under the ISP immediately prior to October 31,
2011, if any, shall be deemed to have been made under the Plan
until and unless the Member




16









 






	 	 	 	makes another election in accordance with procedures
prescribed by the Benefits Administration Committee; and






	 	(2)	 	such individual shall be deemed
to have elected to make Regular Before-Tax Savings under the
Plan equal to 6 percent of his Salary or, if less, the amount
necessary to have the total of his Regular Before-Tax and
After-Tax Contributions equal 6 percent of his Salary, until and
unless the Member makes another election in accordance with
procedures prescribed by the Benefits Administration Committee.






	 	(ii)	 	In order to comply with Section 415 of the Code, the Benefits
Administration Committee may impose an additional limit on any Member’s
Before-Tax Savings based on the Benefits Administration Committee’s reasonable
projection of the total “annual addition” (as defined in Section 5.4) that will
credited to a Member’s Accounts for a Plan Year.
	 
	 	(iii)	 	Prior to January 1, 2012, in order to comply with Section
401(k)(3) of the Code, the Benefits Administration Committee may impose a
limitation on the extent to which a Member who is a Highly Compensated Employee
may reduce his Salary in accordance herewith, based on the Benefits
Administration Committee’s reasonable projection of Before-Tax Savings rates of
Members who are not Highly Compensated Employees.
	 
	 	(iv)	 	A Member may elect to change the rate of Regular Before-Tax
Savings under this paragraph (a) as of the first day of any pay period by
making an election in the form or manner approved by the Benefits
Administration Committee for such purpose. The changed rate shall be effective
as soon as administratively possible following the date the election is
received by the Savings Plan Administrator.
	 
	 	 	 	Effective as of such date as is approved by the Benefit Administration
Committee and in accordance with such rules and procedures as may be
prescribed by the Benefits Administration Committee, a Member may elect to
have the rate of his Regular Before-Tax Savings automatically escalated.






	 	(b)	 	Catch-Up Contributions
	 
	 	 	 	A Member who has attained or will attain age 50 by the last day of the Member’s
taxable year may elect, in accordance with procedures prescribed by the Benefits
Administration Committee, to make Catch-Up Contributions for any Plan Year in
accordance with and subject to the limitations of Section 414(v) of the Code. Such
Catch-Up Contributions shall be treated under the Plan as Before-Tax Savings but
shall be subject to the following special rules:






	 	(i)	 	A Member’s Catch-Up Contributions shall not be taken into
account for purposes of applying the maximum percentage limitation described in
(a) above or the limitations under Sections 402(g) and 415 of the Code and
Members’ Catch-Up Contributions shall not be taken into account in applying the
Actual Deferral Percentage test of (d) below.
	 
	 	(ii)	 	The Plan shall not be treated as failing to satisfy the
provisions of the Plan implementing the requirements of Section 401(k)(3),
401(k)(11), 401(k)(12),




17









 






	 	 	 	410(b), or 416 of the Code, as applicable, by reason of making such Catch-Up
Contributions.






	 	(iii)	 	The determination of whether a Before-Tax Savings contribution
under this Section constitutes a Catch-Up Contribution for any Plan Year shall
be determined as of the end of such Plan Year, in accordance with Section
414(v) of the Code. Before-Tax Savings contributions that are intended to be
Catch-Up Contributions for a Plan Year but which do not qualify as Catch-Up
Contributions as of the end of the Plan Year shall be treated for all purposes
under the Plan as Regular Before-Tax Savings.
	 
	 	(iv)	 	The Company shall take a Member’s Catch-Up Contributions into
account for purposes of determining the amount of Company Matching
Contributions under Section 5.1 for a Plan Year.
	 
	 	(v)	 	A Member’s Catch-Up Contributions shall be subject to the same
withdrawal and distribution restrictions as Regular Before-Tax Savings
contributions.
	 
	 	(vi)	 	In the event that the sum of a Member’s Catch-Up Contributions
and similar contributions to any other qualified defined contribution plan
maintained by the Company or an Associated Company exceeds the dollar limit on
catch-up contributions under Section 414(v) of the Code for any calendar year
as in effect for such calendar year, the Member shall be deemed to have elected
a return of the Catch-Up Contributions in excess of the limit under Section
414(v) of the Code and such amount shall be treated in the same manner as
“excess deferrals” under (c) below.
	 
	 	(vii)	 	If a Member makes catch-up contributions under a qualified
defined contribution plan and/or Code Section 403(b) plan maintained by an
employer other than the Company or an Associated Company for any calendar year
and those contributions when added to his Catch-Up Contributions exceed the
dollar limit on catch-up contributions under Section 414(v) of the Code for
that calendar year, the Member may allocate all or a portion of such “excess
catch-up contributions” to this Plan. In the event such Member notifies the
Benefits Administration Committee of the “excess catch-up contributions” in the
same manner as is required for allocated “excess deferrals” under (c) below,
such “excess catch-up contributions” shall be distributed in the same manner as
“excess deferrals” under (c) below.






	 	 	 	A Member may elect to change the rate of his Catch-Up Contributions under this
paragraph (b) as of the first day of any pay period by making an election in the
form or manner approved by the Benefits Administration Committee for such purpose.
The changed rate of Catch-Up Contributions shall be effective as soon as
administratively possible following the date the election is received by the Savings
Plan Administrator.
	 
	 	(c)	 	Application of Maximum Dollar Limit on Regular Before-Tax Savings
	 
	 	 	 	The maximum dollar amount of Before-Tax Savings and similar contributions made on a
Member’s behalf by the Company or any Associated Company to all plans, contracts or
arrangements subject to the provisions of Section 401(a)(30) of the Code for a
calendar year shall be the maximum amount determined by the Secretary of the
Treasury for such calendar year, pursuant to Section 402(g) of the Code as in effect
for such calendar year,




18









 






	 	 	 	except as permitted under Section 414(v) of the Code. Amounts contributed in excess
of such limit shall constitute “excess deferrals.”






	 	(i)	 	Prevention of Excess Deferrals Under Plan. If a Member’s
Regular Before-Tax Savings in a calendar year reach the dollar limit on
elective deferrals under Section 401(a)(30) of the Code in any calendar year,
the Member’s election to make Regular Before-Tax Savings will be canceled.
Such Member may elect at any time to make After-Tax Savings in accordance with
Section 4.2. As of the first pay period of the calendar year following the
cancellation of a Member’s Regular Before-Tax Savings in accordance with first
sentence of this paragraph, the Member’s election of Regular Before-Tax Savings
shall again become effective in accordance with his previous election, unless
the Member elects otherwise in accordance with Section 4.3.
	 
	 	(ii)	 	Treatment of Excess Deferrals under Plan and Plans of
Associated Companies. In the event that the sum of a Member’s Regular
Before-Tax Savings and similar contributions to any other qualified defined
contribution plan maintained by the Company or an Associated Company exceeds
the dollar limit on elective deferrals under Section 402(g) of the Code for any
calendar year as in effect for such calendar year, a Member who is eligible to
make Catch-Up Contributions to the Plan will be deemed to have such excess
deferrals reclassified as Catch-Up Contributions, subject to the limitations of
(b) above. To the extent that the reclassification described in the preceding
sentence is not applicable, or is insufficient to fully resolve the issue of
the excess deferrals, the Member shall be deemed to have elected a return of
the Regular Before-Tax Savings in excess of the limit under Section 402(g) of
the Code from this Plan. The excess deferrals, together with Earnings, shall
be returned to the Member no later than April 15 following the end of the
calendar year in which the excess deferrals were made. The amount of excess
deferrals to be returned for any calendar year shall be reduced by any Regular
Before-Tax Savings previously returned to the Member under (d) below for that
calendar year. In the event any Regular Before-Tax Savings returned under this
paragraph were matched by Company Matching Contributions, those Company
Matching Contributions, together with Earnings, shall be forfeited and used to
reduce future Company contributions.
	 
	 	(iii)	 	Treatment of Member-Allocated Excess Deferrals. If a Member
makes tax-deferred contributions under another qualified defined contribution
plan and/or a Code Section 403(b) plan maintained by an employer other than the
Company or an Associated Company for any calendar year and those contributions
when added to his Regular Before-Tax Savings exceed the dollar limit on
elective deferrals under Section 402(g) of the Code for that calendar year, the
Member may allocate all or a portion of such excess deferrals to this Plan. In
that event, a Member who is eligible to make Catch-Up Contributions to the Plan
will be deemed to have such excess deferrals reclassified as Catch-Up
Contributions, subject to the limitations of (b) above. To the extent that the
reclassification described in the preceding sentence is not applicable, or is
insufficient to fully resolve the issue of the excess deferrals, such excess
deferrals, together with Earnings, shall be returned to the Member no later
than the April 15 following the end of the calendar year in which such excess
deferrals were made. However, the Plan shall not be required to return excess
deferrals unless the Member notifies the Benefits Administration Committee or
its designee, in writing, not later than March 1, of that following year, of
the amount of the tax-




19









 












	 	 	 	deferred contributions made to the plan of the other employer. The amount
of any excess deferrals to be returned for any calendar year shall be
reduced by any Regular Before-Tax Savings previously returned to the Member
under (d) below for that calendar year. In the event any Regular Before-Tax
Savings returned under this paragraph were matched by Company Matching
Contributions, those Company Matching Contributions, together with Earnings,
shall be forfeited and used to reduce Company contributions.
	 
	 	 	 	Notwithstanding the foregoing, in lieu of a return of the excess deferrals,
a Member may elect to have the Plan treat all or a portion of the excess
deferrals attributable to his Regular Before-Tax Savings as After-Tax
Savings, subject to the limitations of Section 4.2; provided the Member
notifies the Benefits Administration Committee or its designee, in writing,
by the date determined by the Benefits Administration Committee. For this
purpose, the excess deferrals, together with Earnings, shall be deemed
distributed to the Member and then recontributed to the Plan by the Member
as After-Tax Savings for the Plan Year in which the excess deferrals were
made. Reclassified excess deferrals shall be considered After-Tax Savings
made in the Plan Year to which the excess deferrals relate for purposes of
Section 4.5 and shall be subject to the withdrawal provisions applicable to
After-Tax Savings under Article 9. If the excess deferrals were matched by
Company Matching Contributions, the corresponding Company Matching
Contributions shall remain allocated to the Member’s Company Account to the
extent such excess deferrals if made, as After-Tax Savings would have been
matched under the provisions of Section 5.1. The Member’s election to
reclassify excess deferrals shall be made no later than April 1 following
the close of the Plan Year in which the excess deferrals were made or within
such shorter period as the Benefits Administration Committee may prescribe.
	 
	 	(iv)	 	Notwithstanding the foregoing, in the case of any Member who
(A) ceases to be an Employee during a Plan Year; (B) is employed during such
Plan Year by an employer which is not the Company or an Associated Company; and
(C) exceeds the limitation on elective deferrals enumerated in Section 402(g)
of the Code based on the Member’s participation in the Plan and participation
in a plan maintained by the subsequent employer; the Plan shall not distribute
to the Member any Before-Tax Savings (or any income thereon) arising solely as
a result of such Member’s exceeding the limit under Section 402(g) of the Code
for the Plan Year, unless the exceeding of such limit is based solely on the
Member’s participation in this Plan without considering any other plan.






	 	(d)	 	ADP Test on Before-Tax Savings
	 
	 	 	 	Effective for Plan Years beginning on and after January 1, 2012, the Plan is
intended to satisfy the safe harbor alternative method of meeting the
nondiscrimination requirements under Section 401(k)(12) of the Code by treating the
first three percent of Company Core Contributions under Section 5.2 as nonelective
contributions pursuant to Section 401(k)(12)(C) of the Code. Accordingly, the Plan
is deemed to satisfy the ADP Test under Section 401(k) of the Code for such Plan
Years with respect to Before-Tax Savings.
	 
	 	 	 	Prior to January 1, 2012, the amount of Before-Tax Savings made to the Plan for Plan
Year shall comply with the provisions of Section 401(k)(3) of the Code, including
any




20









 






	 	 	 	regulations issued thereunder and any subsequent Internal Revenue Service guidance
issued under Section 401(k) of the Code. The current year testing method shall be
used.






	 	 	 	Amounts that would cause the Plan to fail the ADP test shall constitute “excess
contributions.” If the Benefits Administration Committee determines that the
limitation has been exceeded, the following provisions shall apply:






	 	(i)	 	The excess contributions shall first be treated as Catch-Up
Contributions to the extent possible under Section 4.1(b).
	 
	 	(ii)	 	Any remaining excess contributions, together with Earnings
thereon, will be allocated to the Highly Compensated Employees with the
greatest dollar amount of such contributions in the following manner:






	 	(A)	 	The amount to be allocated shall be the lesser
of (1) the total excess contributions or (2) such amount as will cause
the dollar amount of such Highly Compensated Employee’s Regular
Before-Tax Savings to equal the dollar amount of the Regular Before-Tax
Savings of the Highly Compensated Employee with the next highest dollar
amount of Regular Before-Tax Savings.
	 
	 	(B)	 	The process described in (A) above shall be
repeated, if necessary, until the total excess contributions shall have
been allocated. At any stage in this allocation process, if two or
more Highly Compensated Employees have the same dollar amount remaining
of Regular Before-Tax Savings, the allocation shall be made to both of
them in equal amounts.






	 	(iii)	 	The excess contributions allocated to Highly Compensated
Employees under (ii) above shall be distributed to such Members before the
close of the Plan Year following the Plan Year in which the excess
contributions were made, and to the extent practicable, within 21/2 months of the
close of the Plan Year in which the excess contributions were made.
Alternatively, under rules adopted by the Benefits Administration Committee,
such Members may elect to recharacterize such excess contributions as After-Tax
Savings provided such election to recharacterize the excess contributions is
made within 21/2 months after the close of the Plan Year in which the excess
contributions were made or within such shorter period as the Benefits
Administration Committee may prescribe. When the total excess contributions
shall have been allocated and distributed or recharacterized in the manner
described above, the Plan shall be deemed to satisfy the tests set forth in
this Section, regardless of whether the final Average Deferral Percentage of
the Highly Compensated Employees in fact satisfy such tests. In the event any
Regular Before-Tax Savings distributed under this Section were matched by
Company Matching Contributions, those Company Matching Contributions, together
with Earnings, shall be forfeited and used to reduce Company contributions.





4.2 Member After-Tax Savings





	 	(a)	 	By authorizing payroll deductions, each Member may elect, subject to (b) below,
to contribute to the Trust Fund as After-Tax Savings any whole percentage from 1
percent to 50 percent of his Salary in such payroll period, subject to the following:




21









 












	 	(i)	 	The total amount of After-Tax Savings for any Plan Year may not
exceed 50 percent of his Salary reduced by the rate of Before-Tax Savings being
made pursuant to Section 4.1(a).
	 
	 	(ii)	 	In order to comply with Section 415 of the Code, the Benefits
Administration Committee may impose an additional limit on any Member’s
After-Tax Savings based on the Benefits Administration Committee’s reasonable
projection of the total “annual addition” (as defined in Section 5.4) that will
credited to a Member’s Accounts for a Plan Year.






	 	 	 	A Member’s election shall be effective as soon as administratively possible
following the date such election is received by the Savings Plan Administrator or
its designee.
	 
	 	 	 	Notwithstanding the foregoing, the special provisions of Section 4.1(a)(i)(A) and
(B) shall apply with respect to an Employee who is employed as an Employee by the
Company on October 31, 2011.
	 
	 	(b)	 	In order to comply with Section 401(m) and/or 415 of the Code, the Benefits
Administration Committee may impose an additional limit on the extent to which a Member
who is a Highly Compensated Employee may contribute to the Trust Fund as After-Tax
Savings, based on the Benefits Administration Committee’s reasonable projection of
After-Tax Savings rates of Members who are not Highly Compensated Employees and the
necessity of satisfying the test described in Section 4.5.






	 	 	A Member may elect to change his After-Tax Savings rate on any business day by making an
election in a form or manner approved by the Benefits Administration Committee for such
purpose. The changed After-Tax Savings rate shall be effective as soon as administratively
possible following the date notice is received by the Savings Plan Administrator or its
designee.






	4.3	 	Suspension and Resumption of Member Savings






	 	(a)	 	A Member may suspend his Savings under Section 4.1 and/or Section 4.2 as of any
business day by making an election in a form or manner approved by the Benefits
Administration Committee for such purpose. Such suspension will become effective as
soon as administratively possible following the date the election is received by the
Savings Plan Administrator or its designee. If a Member takes a withdrawal from his
Before-Tax Account under Section 9.3(b), his Savings shall be suspended for a period of
six months. Such suspension will become effective as soon as administratively possible
following the Withdrawal Valuation Date. No Company Matching Contributions shall be
made under Section 5.1 during the period of a Member’s suspension although he will
continue to be considered a Member and he will be entitled to Company Core
Contributions and any Special Company Contributions that may be payable during the
period of suspension.
	 
	 	(b)	 	A Member who suspends his Savings in accordance with the first sentence of (a)
above may resume his Savings under Section 4.1 and/or under Section 4.2 as of any pay
period after the date the suspension commenced by making an election in a form or
manner approved by the Benefits Administration Committee for such purpose.
	 
	 	(c)	 	A Member whose Savings are suspended in accordance with the third sentence of
(a) above may resume his Savings under Section 4.1 and/or under Section 4.2 as of the
first day of any pay period following the six-month suspension by making an election in
a




22









 






	 	 	 	form or manner approved by the Benefits Administration Committee for such purpose.
A resumption elected pursuant to this Section 4.3 shall occur as soon as
administratively possible after the election is received by the Savings Plan
Administrator or its designee.






	4.4	 	Rollover Contributions






	 	(a)	 	With the permission of the Benefits Administration Committee, and without
regard to any limitation on contributions under this Article 4 or Section 5.4, the Plan
may accept from or on behalf of a Member, but not a Deferred Member, a Rollover
Contribution in cash, consisting of any amount, including after-tax amounts but
excluding any amount attributable to Roth contributions, previously received (or deemed
to be received) by him from an “eligible retirement plan.” Such Rollover Contributions
shall be subject to the following:






	 	(i)	 	For purposes of this Section, “eligible retirement plan” means:






	 	(A)	 	another employer’s qualified plan described in
Section 401(a) of the Code (or another ITT qualified defined
contribution plan, provided that the Rollover Contribution represents
the rollover of all or a portion of a full distribution of the
individual’s account balance in such plan due to the sale or closing of
a business unit sponsoring such plan);
	 
	 	(B)	 	an annuity plan described in Section 403(a) of
the Code;
	 
	 	(C)	 	an annuity contract described in Section 403(b)
of the Code;
	 
	 	(D)	 	an eligible Plan under Section 457(b) of the
Code that is maintained by a state, political subdivision of a state or
any agency or instrumentality of a state or political subdivision of a
state; or
	 
	 	(E)	 	an individual retirement account or individual
retirement annuity of the Member described in Section 408(a) or 408(b)
of the Code that contains only amounts that were originally distributed
from a qualified plan described in Section 401(a) or 403(a) of the Code
(i.e., a “conduit IRA”).






	 	(b)	 	Such Rollover Contribution may be received in either of the following ways:






	 	(i)	 	The Plan may accept such amount as a direct rollover of an
eligible rollover distribution, including after-tax amounts provided such
after-tax amounts are received directly from a plan that is qualified under
Section 401(a) of the Code or an annuity contract described in Section 403(b)
of the Code.
	 
	 	(ii)	 	The Plan may accept such amount directly from the Member
provided such amount:






	 	(A)	 	was distributed to the Member by an eligible
retirement plan;
	 
	 	(B)	 	is received by the Plan on or before the 60th
day after the day it was received by the Member;
	 
	 	(C)	 	would otherwise be includible in gross income;
and




23









 












	 	(D)	 	is not attributable to Roth contributions.






	 	 	 	Notwithstanding (B) above, the Benefits Administration Committee may accept a
Rollover Contribution more than 60 days after the amount was received by the Member
provided the Member has received from the Secretary of the Treasury a waiver of the
60-day requirement, pursuant to Section 402(c)(3)(B) of the Code.






	4.5	 	ACP Test on After-Tax Savings and Company Matching Contributions
	 
	 	 	Effective for Plan Years beginning on or after January 1, 2012, the Plan is intended to
satisfy the alternative method of meeting the nondiscrimination requirements with respect to
Company Matching Contributions under Section 401(m)(11) of the Code by treating the first
three percent of Company Core Contributions under Section 5.2 as nonelective contributions
pursuant to Section 401(k)(12)(C) of the Code. Accordingly, with respect to such Plan
Years, the Plan is deemed to satisfy the ACP Test under Section 401(m)(11) of the Code with
respect to Company Matching Contributions.
	 
	 	 	The amount of After-Tax Savings made to the Plan shall comply with the provisions of Section
401(m)(2) of the Code (the “ACP Test”), including any regulations issued thereunder and any
subsequent Internal Revenue Service guidance issued under Section 401(m) of the Code.
Notwithstanding the preceding sentence, for any Plan Year, the Benefits Administration
Committee may elect to take Company Matching Contributions for the Plan Year into account
for purposes of the ACP Test, to the extent permitted under applicable law.
	 
	 	 	Amounts that would cause the Plan to fail the ACP test constitute “excess aggregate
contributions.” If the Benefits Administration Committee determines that the limitation has
been exceeded, the following provisions apply






	 	(a)	 	The payment or forfeiture of the excess aggregate contributions, together with
Earnings thereon, shall be made before the close of the Plan year following the Plan
Year for which the excess aggregate contributions were made and, to the extent
practicable, any payment or forfeiture will be made within 21/2 months following the end
of the Plan Year for which the contributions were made.
	 
	 	(b)	 	The total amount of excess aggregate contributions, together with Earnings
thereon, shall be allocated to the Highly Compensated Employees with the greatest
dollar amount of such contributions in the following manner:






	 	(i)	 	The amount to be allocated shall be the lesser of (A) the total
excess aggregate contributions, or (B) such amount as will cause the dollar
amount of such Highly Compensated Employee’s After Tax Savings, and, if
applicable, Company Matching Contributions, to equal the dollar amount of the
After Tax Savings, and, if applicable, Company Matching Contributions, of the
Highly Compensated Employee with the next highest dollar amount of After Tax
Savings, and, if applicable, Company Matching Contributions.
	 
	 	(ii)	 	The process described in (i) above shall be repeated, if
necessary, until the total excess aggregate contributions shall have been
allocated. At any stage in the allocation process herein described, if two or
more Highly Compensated Employees have the same dollar amount remaining of
After Tax Savings, and, if applicable, Company Matching Contributions, the
allocation shall be made to both of them in equal amounts.




24









 












	 	(c)	 	The excess aggregate contributions allocated to Highly Compensated Employees
under (b) above, together with Earnings thereon, shall be paid or returned to a Member
from the following categories of contributions (adjusted to reflect earnings or losses
attributable thereto):






	 	(i)	 	first, unmatched After-Tax Savings;
	 
	 	(ii)	 	second, matched After-Tax Savings; and
	 
	 	(iii)	 	third, Company Matching Contributions, if applicable.






	 	 	 	Once the excess aggregate contributions are paid or returned as described above, the
Plan shall be deemed to satisfy the ACP test set forth in this Section, regardless
of whether the final Average Contribution Percentage of the Highly Compensated
Employees in fact satisfy such tests.
	 
	 	(d)	 	A Member’s Actual Contribution Percentage shall be determined after a Member’s
excess Before-Tax Savings are either recontributed to the Plan as After-Tax Savings or
paid to the Member.






	4.6	 	Transfer Contributions
	 
	 	 	With the permission of the Benefits Administration Committee and under such conditions as it
may require, but without regard to any limitations on contributions set forth in this
Article 4 or Section 5.4, the Plan may accept an amount, if any, from another qualified plan
that, in accordance with the provisions of Section 11.9, the Member elects under such plan
to transfer to this Plan, or which the Trustee of such other qualified plan transfers
directly to the Trustee of this Plan. Such transferred contributions shall be paid to the
Trustee as soon as practicable and shall be held in the Accounts of the Member, as
determined by the Benefits Administration Committee. The Member shall be required to
establish that such prior employer’s plan assets meets the qualification requirements under
Section 401(a) of the Code; and no such trust-to-trust transfer shall be permitted unless
the amount transferred is free of all defined benefit or money purchase characteristics and
does not make the Plan a transferee plan under Section 401(a)(11)(B)(iii)(III) of the Code.






25











 





ARTICLE 5




COMPANY CONTRIBUTIONS




	5.1	 	Company Matching Contributions
	 
	 	 	The Company, with respect to each eligible Member employed by it, shall contribute to the
Trust a Company Matching Contribution in an amount equal to 50 percent of the Member’s
Savings for each pay period; provided, however, that only the first 6 percent of the
Member’s Salary will be eligible for such a Company Matching Contribution during each pay
period so that the maximum Company Matching Contribution shall be 3 percent of the Member’s
Salary. Company Matching Contributions will be applied first to a Member’s Before-Tax
Savings. Any remaining Company Matching Contributions will be applied to the Member’s
After-Tax Savings.
	 
	 	 	Notwithstanding anything contained herein to the contrary, with respect to Plan Years
beginning on and after January 1, 2012, if as of the last day of the Plan Year, the amount
of Matching Contributions allocated to a Member for such Plan Year is less than 50 percent
of the Member’s Savings up to 6 percent of the Member’s Salary for the Plan Year, the
Company shall make a “true-up” Company Matching Contribution on behalf of such Member in an
amount equal to the difference. The true-up Company Matching Contribution described in the
preceding sentence shall also be made with respect to a Member who terminates employment
during the Plan Year and such true-up Company Matching Contribution shall be made as soon as
administratively practicable following the end of the calendar year in which the Member
terminates employment.
	 
	 	 	Company Matching Contributions shall be credited to the Member’s Company Matching Account.
	 
	5.2	 	Company Non-Matching Contributions






	 	(a)	 	Company Core Contributions
	 
	 	 	 	The Company shall contribute to the Trust Fund, with respect to each eligible Member
employed by it, Company Core Contributions in the following amounts:






	 	(i)	 	With respect to a Member whose age plus Service as of the first
day of the Plan Year total less than 50, the Company shall make Company Core
Contributions each pay period equal to 3 percent of the Member’s Salary for
such pay period.
	 
	 	(ii)	 	With respect to a Member whose age plus Service as of the first
day of the Plan Year total 50 or more, the Company shall make Company Core
Contributions each pay period equal to 4 percent of the Member’s Salary for
such pay period.






	 	 	 	For purposes of the preceding provisions, a Member’s age and Service shall be
calculated on a basis uniformly applicable to all Members similarly situated as
established by the Benefits Administration Committee.
	 
	 	 	 	Company Core Contributions shall be credited to the Member’s Company Core Account.




26









 






	 	(b)	 	Special Company Contributions
	 
	 	 	 	The Company shall contribute to the Trust Fund, with respect to each eligible Member
employed by it, Special DC Credit Contributions and Transition Credit Contributions
pursuant to Appendix A.
	 
	 	 	 	Special DC Credit Contributions and Transition Credit Contributions shall be
credited to the Member’s Special Company Contribution Account.






	5.3	 	Mode of Payment of Company Contributions
	 
	 	 	Company contributions under Sections 5.1 and 5.2 shall be made in cash.
	 
	5.4	 	Maximum Annual Additions.






	 	(a)	 	The annual addition to a Member’s Accounts for any Plan Year, which shall be
considered the “limitation year” for purposes of Section 415 of the Code, when added to
the Member’s annual addition for that Plan Year under any other qualified defined
contribution plan of the Company or any Associated Company, shall not exceed an amount
which is equal to the lesser of (i) 100% of his Statutory Compensation for that Plan
Year, or (ii) $40,000, as adjusted in accordance with Section 415(d) of the Code.
	 
	 	(b)	 	For purposes of this Section, the “annual addition” to a Member’s Accounts
under this Plan or any other qualified defined contribution plan (including a deemed
qualified defined contribution plan under a qualified defined benefit plan) maintained
by the Company or an Associated Company shall be determined in accordance with (i) and
(ii) below.






	 	(i)	 	The annual addition shall include all of the following amounts
that have been allocated to the Member’s Accounts under this Plan or any other
qualified defined contribution plan (including a deemed qualified defined
contribution plan under a qualified defined benefit plan) maintained by the
Company or an Associated Company:






	 	(A)	 	the total Company contributions made on the
Member’s behalf by the Company and all Associated Companies, including
any Company Matching Contributions distributed or forfeited under the
provisions of Section 4.1 or 4.5;
	 
	 	(B)	 	all Before-Tax Savings and After-Tax Savings,
including Before-Tax Savings distributed as excess contributions under
Section 4.1(d) and After-Tax Savings distributed as excess aggregate
contributions under the provisions of Section 4.5;
	 
	 	(C)	 	forfeitures, if applicable; and
	 
	 	(D)	 	solely for purposes of the dollar limit under
clause (ii) of paragraph (a) above, amounts described in
Sections 415(1)(1) and 419A(d)(2) of the Code allocated to the Member.






	 	(ii)	 	The annual addition shall not include:




27









 












	 	(A)	 	Rollover Contributions;
	 
	 	(B)	 	loan repayments made under Article 10;
	 
	 	(C)	 	Before Tax Savings distributed as excess
deferrals under Section 4.1(c); and
	 
	 	(D)	 	Catch-Up Contributions.






	 	(c)	 	To the extent that the annual additions to a Member’s Accounts exceed the
limitation set forth in Section 415(c)(2) of the Code, corrections shall be made in a
manner consistent with the provisions of the Employee Plans Compliance Resolution
System as set forth in Revenue Procedure 2008-50 or any subsequent guidance. In the
event that a Member of the Plan is a participant in any other defined contribution plan
(whether or not terminated), maintained by the Company or any Associated Company, the
total amount of annual additions to such Member’s accounts under all such defined
contribution plans shall not exceed the limitations set forth in this Section 5.4. The
Benefits Administration Committee, under uniform rules equally applicable to similarly
situated Members, shall determine how to apply the provisions of this Section in order
to satisfy the limitation. In making its decision, the Benefits Administration
Committee shall take into account the applicable provisions of the other qualified
defined contribution plans.






	5.5	 	Contributions for a Period in Uniformed Services






	 	(a)	 	Notwithstanding any provision of this Plan to the contrary, contributions,
benefits, and service credit with respect to qualified uniformed service duty will be
provided in accordance with Section 414(u) of the Code. A Member who is reemployed and
is credited with Service for the purpose of vesting because of a period of service in
the uniformed services of the United States may elect to contribute to the Plan the
Before-Tax Savings (including Catch-Up Contributions) and/or After-Tax Savings that
could have been contributed to the Plan in accordance with the provisions of the Plan
had he remained continuously employed by the Company throughout such period of absence
(“make-up contributions”). For purposes of determining the amount of make-up
contributions a Member may make, his Salary for the period of absence shall be deemed
to be the rate of Salary he would have received had he remained employed as an Employee
for that period or, if such rate is not reasonably certain, on the basis of the
Member’s Salary during the 12-month period immediately preceding such period of absence
(or if shorter, the period of employment immediately preceding such period). Any
Before-Tax Savings, Catch-Up Contributions, and/or After-Tax Savings so determined
shall be limited as provided in Sections 4.1(c), 4.1(d) and 4.5 with respect to the
Plan Year or Years to which such contributions relate rather than the Plan Year in
which payment is made. The make-up contributions may be made over a period not to
exceed three times the period of military leave or five years, if less, but in no event
later than the Member’s Termination of Employment (unless he is subsequently rehired).
The make-up period shall start on the later of (i) the Member’s date of
reemployment, or (ii) the date the Benefits Administration Committee notifies
the Employee of his rights under this Section. Earnings (or losses) on make-up
contributions shall be credited commencing with the date the make-up contribution is
made.
	 
	 	(b)	 	With respect to a Member who makes the election described in paragraph (a)
above, the Company shall make Company Matching Contributions on the make-up
contributions in the amount described in Section 5.1, as in effect for the Plan Year to
which such make-up




28









 






	 	 	 	contributions relate. Company Matching Contributions under this
paragraph shall be made to the Plan at the same time as Company Matching Contributions
are required to be made for Before-Tax Savings and/or After-Tax Savings made during the
same period as the make-up contributions are actually made. Earnings (or losses) on
Company Matching Contributions shall be credited commencing with the date the
contributions are made. Any limitations on Company Matching Contributions described in
Section 4.5 shall be applied with respect to the Plan Year or Years to which such
contributions relate rather than the Plan Year or Years in which payment is made.
	 
	 	(c)	 	The Company shall make Company Core Contributions and Special Company
Contributions (and any other non-matching employer contributions that may have been
required under a predecessor plan) (“make-up Company contributions”) in the amounts
described in Section 5.2 (or the provisions of a predecessor plan) as in effect for the
Plan Year to which such make-up Company contributions relate. For purposes of
determining the amount of such make-up Company contributions, a Member’s Salary for the
period of absence shall be deemed to be the rate of Salary he would have received had
he remained employed as an Employee for that period or, if such rate is not reasonably
certain, on the basis of the Member’s Salary during the 12-month period immediately
preceding such period of absence (or if shorter, the period of employment immediately
preceding such period). Make-up Company contributions under this paragraph shall be
made as soon as practicable after the Member’s reemployment and shall be deemed to have
been made to the Plan at the same time as such contributions would have been made but
for the Member’s absence. Earnings (or losses) on make-up Company contributions shall
be credited commencing with the date the make-up Company contributions are made.
	 
	 	(d)	 	All contributions under this Section, other than make-up Catch-Up
Contributions, are considered “annual additions,” as defined in Section 415(c)(2) of
the Code, and shall be limited in accordance with the provisions of Section 5.4 with
respect to the Plan Year or Years to which such contributions relate rather than the
Plan Year in which payment is made.
	 
	 	(e)	 	Notwithstanding any other provisions of this Section, the maximum amount of
make-up contributions made by or on behalf of a Member shall be reduced by the actual
amount of Company Core Contribution, Special Company Contributions, Before-Tax Savings
(including Catch-Up Contributions), After-Tax Savings, and Company Matching
Contributions, as applicable, made by or on behalf of the Member during his period of
service in the uniformed services as a result of differential wage payments (as defined
in Section 3401(h) of the Code) that were made to the Member or for any other reason.






	5.6	 	Return of Contributions






	 	(a)	 	If the Commissioner of Internal Revenue, on timely application made after the
initial establishment of the Plan, determines that the Plan is not qualified under
Section 401(a) of the Code or refuses, in writing, to issue a determination as to
whether the Plan is so qualified, the Company’s contributions made on or after the date
on which that determination or refusal is applicable shall be returned to the Company.
The return shall be made within one year after the denial of qualification. The
provisions of this paragraph shall apply only if the application for the determination
is made by the date prescribed by the Secretary of the Treasury.
	 
	 	(b)	 	If all or part of the Company’s deductions for contributions to the Plan are
disallowed by the Internal Revenue Service, the portion of the contributions to which
that disallowance




29









 






	 	 	 	applies shall be returned to the Company without interest but reduced
by any investment loss attributable to those contributions, provided that the
contribution is returned within one year after the disallowance of deduction. For this
purpose, all contributions made by the Company are expressly declared to be conditioned
upon their deductibility under Section 404 of the Code.
	 
	 	(c)	 	The Company may recover, without interest, the amount of its contributions to
the Plan made on account of a mistake of fact, reduced by any investment loss
attributable to those contributions, if recovery is made within one year after the date
of those contributions.
	 
	 	(d)	 	In the event that Before-Tax Savings made under Section 4.1(a) are returned to
the Company in accordance with the provisions of this Section, the elections to reduce
Salary that were made by Members on whose behalf those contributions were made shall be
void retroactively to the beginning of the period for which those contributions were
made. The Before-Tax Savings so returned shall be distributed in cash to those Members
for whom those contributions were made, provided, however, that if the contributions
are returned under the provisions of paragraph (a) above, the amount of Before-Tax
Savings to be distributed to Members shall be adjusted to reflect any investment gains
or losses attributable to those contributions.






	5.7	 	Contributions Not Contingent Upon Profits
	 
	 	 	The Company may make contributions to the Plan without regard to the existence or the amount
of current and accumulated Company earnings and profits. Notwithstanding the foregoing,
however, this Plan is designed to qualify as a “profit-sharing plan” for all purposes of the
Code.




30









 











ARTICLE 6




VESTED SHARE OF ACCOUNTS




	6.1	 	Full Vesting of all Accounts in Plan
	 
	 	 	A Member shall at all times be 100 percent vested in, and have a nonforfeitable right to,
his Accounts in Plan.




31









 











ARTICLE 7




INVESTMENT OF CONTRIBUTIONS




	7.1	 	Investment Funds






	 	(a)	 	Accounts in the Plan shall be invested by the Trustee in one or more Investment
Funds as authorized by the PFTIC. Such Investment Funds shall include:






	 	(i)	 	the ITT Stock Fund;
	 
	 	(ii)	 	such Target Retirement Funds as the PFTIC shall select; and
	 
	 	(iii)	 	for such period after the Effective Date as shall be
determined by the PFTIC, the Exelis Stock Fund and the Xylem Stock Fund.






	 	 	 	Such Investment Funds may also include equity funds, international equity funds,
fixed income funds, money market funds, and other funds as the PFTIC elects to
offer.
	 
	 	(b)	 	In addition to the Investment Funds selected by the PFTIC, a Member may
establish a self-directed brokerage account (“SDA”), subject to the following terms and
conditions:






	 	(i)	 	Common stock of the Company is not a permitted investment in
the SDA.
	 
	 	(ii)	 	Account fees associated with a Member’s SDA, as well as
commissions, special handling fees, and any other transaction charges
associated with transactions in the Member’s SDA will be charged to the
Member’s SDA.






	 	(c)	 	In any Investment Fund, the Trustee temporarily may hold cash or make
short-term investments in obligations of the United States Government, commercial
paper, an interim investment fund for tax-qualified employee benefit plans established
by the Trustee, unless otherwise provided in the applicable trust agreement or by
applicable law, or other investments of a short-term nature. Notwithstanding the
foregoing, the Trustee in its discretion may hold such amounts in cash, consistent with
its obligations as Trustee, as it deems advisable in accordance with the provisions of
the trust agreement.
	 
	 	(d)	 	For the purpose of determining the value of ITT Stock, Exelis Stock, or Xylem
Stock hereunder, in the event such stock is traded on a national securities exchange,
such stock shall be valued as of the closing quoted selling price of such stock on the
New York Stock Exchange composite tape on the business day such stock is delivered to
the Trustee. In the event such ITT Stock, ITT Exelis Stock, or Xylem Stock is not
traded on a national securities exchange, such shares shall be valued in good faith by
an independent appraiser selected by the Trustee and meeting requirements similar to
those in the regulations prescribed under Section 170(a)(1) of the Code.
	 
	 	(e)	 	The Plan is intended to constitute a plan described in Section 404(c) of ERISA.
Consequently, each Member is solely responsible for the selection of his investment
options. The Trustees, the Benefits Administration Committee, the Company, the PFTIC,
and the officers, supervisors, and other employees of the Company are not empowered to
advise a Member as to the manner in which his Accounts shall be invested. The fact
that an Investment Fund is available to Members for investment under the Plan shall not
be construed as a recommendation for investment in the Investment Fund.




32









 






	 	(f)	 	The Trustee, or such other custodian as the PFTIC may designate, shall maintain
the ITT Stock Fund. It is specifically contemplated that the ITT Stock Fund will
operate as an employee stock ownership plan (“ESOP”) that is designed to invest
primarily in ITT Stock, within the meaning of Section 4975(e)(7) of the Code.
Consistent with the ITT Stock Fund’s status as an ESOP, the Trustee may keep such
amounts of cash, securities or other property as it, in its sole discretion, shall deem
necessary or advisable as part of the Trust Fund, all within the limitations specified
in the trust agreement.
	 
	 	(g)	 	Dividends, interest, and other distributions received on the assets held by the
Trustee in respect to the Investment Funds shall be reinvested in the respective
Investment Fund, provided, however, with respect to the ITT Stock Fund, dividends,
interest, and other distributions received on the assets held by the Trustee in respect
to the ITT Stock Fund shall be reinvested in the ITT Stock Fund, except as otherwise
may be provided in Section 8.7 with respect to dividends on ITT Stock.






	7.2	 	Investment of Contributions
	 
	 	 	Contributions under the Plan shall be invested by the Trustee as follows:






	 	(a)	 	Subject to the following provisions of this Section 7.2, a Member shall make
one investment election, in multiples of 1%, covering his Savings, Company Matching
Contributions, Company Core Contributions, and Special Company Contributions made to
his Accounts, to have such amounts invested in any one or more of the Investment Funds.
If no investment election is made, such contribution shall be invested in the Target
Retirement Fund that is appropriate based on the Member’s year of birth (or such other
Investment Fund as may be designated by the PFTIC), unless and until the Member elects
to have all or part of his contributions invested in or transferred to other funds
pursuant to Sections 7.3 and 7.4.
	 
	 	(b)	 	A Member cannot elect to direct the investment of any contributions into the
Exelis Stock Fund or the Xylem Stock Fund prospectively. Amounts invested in the
Exelis Stock Fund or the Xylem Stock Fund as a result of the restructuring of ITT
coincident with the establishment of the Plan are the only amounts that may be invested
in such funds. A Member may elect at any time to direct the amounts invested in the
Exelis Stock Fund or the Xylem Stock Fund into any other Investment Fund in the Plan,
subject to the provisions of this Section 7.2 and Section 7.4.
	 
	 	(c)	 	Except as provided in Section 7.4(d), no more than 20% of a Member’s Accounts
may be invested in the ITT Stock Fund. A Member’s investment election with respect to
future contributions cannot direct more than 20% to be invested in the ITT Stock Fund.
	 
	 	(d)	 	Contributions may not be initially invested in a Member’s SDA. Any amounts to
be invested in a Member’s SDA must be transferred into the SDA pursuant to Section 7.4.
	 
	 	(e)	 	A Member making a Rollover Contribution pursuant to Section 4.4 or a transfer
contribution pursuant to Section 4.6 may make a separate initial investment election
under this Section 7.2. Such Rollover Contribution or transfer contribution shall be
invested, in multiples of 1%, in any one or more of the Investment Funds as elected by
the Member. Notwithstanding the preceding sentence, Rollover Contributions or transfer
contributions may not be initially invested in the ITT Stock Fund, the Exelis Stock
Fund, Xylem Stock Fund, or a Member’s SDA. A Member may subsequently transfer or




33









 






	 	 	 	reallocate his Rollover Contributions or transfer contributions to the ITT Stock Fund
or the Member’s SDA pursuant to Section 7.4. If a Member has not made an election with
respect to the initial investment of his Rollover Contributions or transfer
contributions under Section 4.6, such Rollover Contributions or transfer contributions
shall be invested in the Target Retirement Fund that is appropriate based on the
Member’s year of birth (or such other Investment Fund as may be designated by the
PFTIC).
	 
	 	(f)	 	A Member may enroll in a managed account program under which investment
professionals will monitor the Member’s Plan Accounts and manage all investment
elections and transactions. The terms of the program shall supersede any contrary
provisions of this Plan with respect to Members enrolled therein and any fees charged
to the Member will be determined under the terms of the program.
	 
	 	(g)	 	A Member’s Prior ESOP Account shall be invested entirely in the ITT Stock Fund,
Exelis Stock Fund, and Xylem Stock Fund, as applicable, except when a Member elects to
have all or part of his Prior ESOP Account transferred to or invested in another
Investment Fund pursuant to this Article 7.






	7.3	 	Changes in Investment Election for Future Contributions
	 
	 	 	On any business day, by making an election in a form or manner approved by the Benefits
Administration Committee for such purpose, a Member may change his investment election
within the limitations set forth in Section 7.2 with respect to future Savings, Company
Matching, Company Core, and Special Company Contributions to be made for any payroll
deposited with the Trustee on or after the effective date of such notice. The effective
date of such election shall be the business day following the date of the election. A
Member shall be permitted to make only one investment election, covering his Savings,
Company Matching, Company Core, and Special Company Contributions. A separate election may
be made for future Rollover Contributions or transferred contributions made under Section
4.6.
	 
	7.4	 	Redistribution of Investments
	 
	 	 	Members and Deferred Members may redistribute their investments as follows:






	 	(a)	 	On any business day, by making an advance election in a form or manner approved
by the Benefits Administration Committee for such purpose, a Member or Deferred Member
may elect to reallocate (or transfer, as the case may be) on any Valuation Date all or
part, in multiples of 1%, all of his Accounts among the Investment Funds, provided
however no more than 20% of a Member’s Accounts may be invested in the SDA or the ITT
Stock Fund after such reallocation or transfer and no amounts may be reallocated or
transferred into the Exelis Stock Fund or the Xylem Stock Fund, except as provided in
Section 7.4(d). The reallocation or transfer shall be effective as soon as
administratively practicable after the Valuation Date.
	 
	 	(b)	 	The PFTIC may establish such rules and restrictions regarding the
redistribution of investments as it deems appropriate, including restrictions on the
maximum number of transfers in a calendar month.
	 
	 	(c)	 	Any amounts invested in a fund of guaranteed investment contracts or an
investment fund covered by a prospectus or other document of similar import or effect
shall be subject to any and all terms of such contracts, prospectus or other documents
of similar import or effect, including any limitations therein placed on the exercise
of any rights otherwise




34









 






	 	 	 	granted to a Member or Deferred Member under any other
provisions of this Plan with respect to such amounts.
	 
	 	(d)	 	No more than 20% of a Member’s Accounts may be invested in the ITT Stock Fund.
Notwithstanding the preceding sentence, a Member with more than 20% of his Accounts
invested in the ITT Stock Fund under the ISP on October 31, 2011 (or such other date as
may be designated by the PFTIC) may elect to direct that amounts invested in the Exelis
Stock Fund and/or the Xylem Stock Fund be transferred to the ITT
Stock Fund without regard to the 20% limit, provided however that such Member may not
make any further investments in, or transfers into, the ITT Stock Fund until the 20%
limitation described in the preceding sentence has been complied with.






	7.5	 	Valuation Date
	 
	 	 	The Valuation Date applicable with respect to reallocations made in accordance with Section
7.4 shall be the business day such election is received and processed by the Savings Plan
Administrator or its designee and shall not be later than the next business day following
the day on which the Member’s completed request is received and processed by the Savings
Plan Administrator or its designee.
	 
	7.6	 	Voting of ITT Stock
	 
	 	 	Each Member, Deferred Member, or Beneficiary (in the event of the death of the Member or
Deferred Member) is, for the purposes of this Section 7.6, hereby designated a named
fiduciary within the meaning of Section 402(a)(2) of ERISA with respect to the shares of ITT
Stock allocated to his Accounts, determined as herein described. Each Member and Deferred
Member (or Beneficiary in the event of the death of the Member or Deferred Member) may
direct the Trustee as to the manner in which the ITT Stock allocated to his Accounts,
determined as herein described, is to be voted. An individual’s proportionate share of the
ITT Stock Fund as to which he holds fiduciary status for voting purposes shall be determined
at the time such voting rights are exercisable by multiplying the number of shares credited
at that time to such portion by a fraction, the numerator of which is the value (as of the
Valuation Date designated by the Benefits Administration Committee for this purpose) of that
part of the Member’s Accounts invested in the ITT Stock Fund with respect to which the
Member provides instructions to the Trustee and the denominator of which is the aggregate
value of all amounts allocated to that part of all Member Accounts which is invested in the
ITT Stock Fund for which instructions are provided to the Trustee. Before each annual or
special meeting of shareholders of ITT, each Member, Deferred Member, and Beneficiary shall
be furnished with information regarding how to obtain a copy of the proxy solicitation
material for such meeting and the form requesting instructions to the Trustee on how to vote
the ITT Stock allocated to such Member’s, Deferred Member’s and Beneficiary’s Accounts.
Upon receipt of such instructions, the Trustee shall vote such shares as instructed. In
lieu of voting fractional shares as instructed by Members, Deferred Members, or
Beneficiaries, the Trustee may vote the combined fractional shares of ITT Stock to the
extent possible to reflect the directions of Members, Deferred Members, or Beneficiaries
with allocated fractional shares of each class of stock. The Trustee shall vote shares of
ITT Stock allocated to Accounts under the Plan but for which the Trustee received no valid
voting instructions in the same manner and in the same proportion as the shares of ITT Stock
in the Accounts in the respective funds with respect to which the Trustee received valid
voting instructions are voted. Instructions to the Trustee shall be in such form and
pursuant to such regulations as the Benefits Administration Committee may prescribe.
	 
	 	 	Any instructions received by the Trustee from Members, Deferred Members, and Beneficiaries
regarding the voting of ITT Stock shall be confidential and shall not be divulged by the
Trustee to




35









 






	 	 	the Company, or to any director, officer, employee or agent of the Company, it
being the intent of this provision of this Section 7.6 to ensure that the Company (and its
directors, officers, employees and agents) cannot determine the voting instructions given by
any Member, Deferred Member, or Beneficiary.
	 
	 	 	In the event of a tender or exchange offer, the provisions of Article 15 shall control,
rather than this Section.
	 
	7.7	 	Blackout Periods
	 
	 	 	Notwithstanding any provision of the Plan to the contrary, when required for administrative
reasons, the Benefits Administration Committee may temporarily suspend, limit, or restrict
the rights of Members, Deferred Members, Beneficiaries or alternate payees (as applicable)
to direct or diversify the investment of some or all of their Accounts, to obtain loans from
the Plan, and to obtain distributions (including in-service withdrawals) from the Plan. The
number and length of such suspensions and the imposition of such limitations or restrictions
shall be limited to the greatest extent practicable. Any suspension, limitation or
restriction of rights under this Section shall comply with all applicable law and any
guidance issued thereunder and may be imposed only if the Benefits Administration Committee
timely provides notice of the suspension, limitation or restriction of such rights, as
required by Section 101 of ERISA, any guidance issued thereunder, and any other applicable
law.




36









 











ARTICLE 8




CREDITS TO MEMBERS’ ACCOUNTS, VALUATION AND

ALLOCATION OF ASSETS




	8.1	 	Before-Tax Savings, After-Tax Savings and Rollover Contributions
	 
	 	 	Before-Tax Savings, After-Tax Savings and Rollover Contributions made on behalf of or by a
Member shall be allocated to the Before-Tax Account, After-Tax Account or Rollover Account
of such Member, as appropriate, as soon as practicable after such contributions are
transferred to the Trust Fund.
	 
	8.2	 	Company Matching Contributions
	 
	 	 	Company Matching Contributions made for a Member shall be allocated to the Company Matching
Account of such Member, as soon as practicable after such contributions are made to the
Trust Fund.
	 
	8.3	 	Company Core Contributions and Special Company Contributions
	 
	 	 	Company Core Contributions made for a Member shall be allocated to the Company Core Account
of such Member, as soon as practicable after such contributions are made to the Trust Fund.
Special Company Contributions made for a Member shall be allocated to the Special Company
Contribution Account of such Member, as soon as practicable after such contributions are
made to the Trust Fund.
	 
	8.4	 	Credits to Members’ Accounts
	 
	 	 	At the end of each business day in which the Plan is in effect and operation, the amount of
each Member’s credit in each of the Investment Funds shall be expressed and credited in
dollars of contributions by the Member and Company allocated to a Member’s Accounts for such
day. For purposes of this Article 8, “business day” means each day on which the New York
Stock Exchange or any successor to its business is open for trading or such other day(s) as
may be designated by the PFTIC.
	 
	8.5	 	Valuation of Assets
	 
	 	 	At the end of each business day, the Trustee shall determine the total fair market value of
all assets then held by it in each Investment Fund. The Benefits Administration Committee
reserves the right to change from time to time the procedures used in valuing the Accounts
or crediting (or debiting) the Accounts if it determines, after due deliberation and upon
the advice of counsel and/or the current recordkeeper, that such an action is justified in
that it results in a more accurate reflection of the fair market value of assets. In the
event of a conflict between the provisions of this Article and such new administrative
procedures, those new administrative procedures shall prevail.
	 
	8.6	 	Allocation of Assets
	 
	 	 	At the end of each business day when the value of all assets in each Investment Fund has
been determined pursuant to Section 8.5, the Trustee shall determine the gain or loss in the
value of such assets in each of the Investment Funds. Such gain or loss shall be allocated
pro rata by




37









 






	 	 	Investment Fund to the balances credited to the Accounts of all Members and
Deferred Members as of such business day.
	 
	8.7	 	Dividends Paid with respect to Stock in the ESOP
	 
	 	 	Dividends with respect to Exelis Stock and Xylem Stock shall be reinvested in the Exelis
Stock Fund and Xylem Stock Fund, respectively. Dividends with respect to ITT Stock shall be
subject to the following provisions:






	 	(a)	 	Dividend Election
	 
	 	 	 	A Member or Deferred Member may elect, with respect to a dividend paid on ITT Stock
in the ESOP as of the record date of such dividend, to have the dividend either
distributed in cash to the Member or Deferred Member or reinvested in shares of ITT
Stock, provided however that if the amount of dividends to be paid to the Member or
Deferred Member is ten dollars or less, said dividends shall be automatically
reinvested in shares of ITT Stock. The Savings Plan Administrator shall prescribe
rules regarding the timing and manner of a dividend election.
	 
	 	(b)	 	Default Election
	 
	 	 	 	In the absence of an affirmative dividend election, the Member or Deferred Member
shall be deemed to have elected to have the dividend reinvested in ITT Stock.
	 
	 	(c)	 	Effect and Duration of Election
	 
	 	 	 	An election made in accordance with (a) or (b) above shall remain in effect until
changed by the Member or Deferred Member in accordance with the rules established by
the Savings Plan Administrator. The election shall apply to all dividends with a
record date on or after the election date.
	 
	 	 	 	A Member or Deferred Member may change his dividend election at any time in the
manner prescribed by the Savings Plan Administrator.
	 
	 	 	 	Notwithstanding any provision of this Section to the contrary, in the event that two
or more dividend checks payable to a Member remain uncashed at one time, that action
shall be deemed as an election by the Member to have his dividends reinvested in ITT
Stock in the Plan and the Savings Plan Administrator shall reinvest any further
dividends payable to the Member until the Member cashes the outstanding checks and
makes another affirmative election to receive his dividends in cash.
	 
	 	(d)	 	Cash Payment
	 
	 	 	 	Dividends elected to be paid in cash shall be distributed to the Member or Deferred
Member as soon as administratively practicable after the dividend is received by the
Trustee in the Trust Fund. The amount of cash dividends distributed shall be
reduced by the amount of any losses attributable to such dividends while held in the
Trust Fund. No earnings attributable to such dividends shall be distributed.




38









 











ARTICLE 9




WITHDRAWALS PRIOR TO TERMINATION OF EMPLOYMENT




	9.1	 	General Conditions for Withdrawals
	 
	 	 	At any time before Termination of Employment, a Member may request a withdrawal from his
Accounts by submitting to the Savings Plan Administrator or its designee an election in a
form or manner approved by the Benefits Administration Committee, and shall conform to the
standards set by the Benefits Administration Committee, if any, regarding minimum and
maximum amounts of withdrawals. Any such withdrawal shall be in accordance with the
conditions of Section 9.2 or Section 9.3. For purposes of this Article 9, a Member’s
Accounts shall be valued as of the applicable Withdrawal Valuation Date. Amounts to be
distributed to Members will not participate in the investment experience of the Plan after
the Withdrawal Valuation Date. Such amounts generally will be paid as soon as
administratively possible following the Withdrawal Valuation Date. Except where
specifically provided otherwise, Savings by the Member under the Plan may be continued
without interruption.
	 
	9.2	 	Withdrawals from Certain Accounts
	 
	 	 	Subject to the provisions of Section 9.1, a Member (but not a Deferred Member) can withdraw
amounts in any whole dollar amount or percentage less than or equal to the described value
of the following Accounts; provided, however, that the full withdrawable amount from each
source from (a) through (h) below must be withdrawn before any amount can be withdrawn from
the source next following on the list of sources from (a) through (h) below:






	 	(a)	 	all or a portion of his After-Tax Account;
	 
	 	(b)	 	all or a portion of his Prior Plan Account;
	 
	 	(c)	 	all or a portion of his Rollover Account;
	 
	 	(d)	 	all or a portion of his Prior ESOP Account;
	 
	 	(e)	 	all or a portion of his Company Floor Account and Prior Company Matching
Account;
	 
	 	(f)	 	all or a portion of his Company Matching Account provided the Member has
attained age 591/2 as of the proposed Withdrawal Valuation Date;
	 
	 	(g)	 	all or a portion of his Company Core Account provided the Member has attained
age 591/2 as of the proposed Withdrawal Valuation Date; and
	 
	 	(h)	 	all or a portion of his Special Company Contribution Account provided the
Member has attained age 591/2 as of the proposed Withdrawal Valuation Date.






	 	 	Withdrawals will be deemed to be deducted from each of the Investment Funds described in
Article 7 on a pro rata basis, provided, however, that no amount shall be deemed to be
deducted from the ITT Stock Fund until all amounts have been withdrawn from all of the other
Investment Funds, and provided further that amounts invested in a Member’s SDA are not
available as a source of any withdrawals described herein. Notwithstanding the foregoing,
however, a Member may reallocate his balance in the SDA to the other Investment Funds in the
Plan as provided in




39









 






	 	 	Article 7 and such Investment Funds (other than the ITT Stock Fund) may
then be available as a source for withdrawals in accordance with the provisions of this
Article 9.
	 
	9.3	 	Withdrawal from Before-Tax Account






	 	(a)	 	Subject to the provisions of Sections 9.1, a Member who has attained age 591/2 as
of a Withdrawal Valuation Date may withdraw all or any portion of his Before-Tax
Account.
	 
	 	(b)	 	Subject to the provisions of Section 9.1, a Member who has not attained age 591/2
as of a Withdrawal Valuation Date and who has withdrawn all amounts available under
Section 9.2 may withdraw all or a portion of his Before-Tax Account (except for the
portion that represents investment earnings credited to his Before-Tax Account)
provided he has an immediate and heavy financial need and the withdrawal is necessary
to satisfy such need, as provided below. If a Member has not withdrawn all amounts
available under Section 9.2, he must take a separate withdrawal of the amounts
available under Section 9.2 and that withdrawal shall not be treated as a withdrawal
due to hardship.






	 	(i)	 	As a condition for receiving a withdrawal pursuant to the
provisions of this Section 9.3(b), there must exist with respect to the Member
an immediate and heavy financial need to draw upon his Accounts. For purposes
of this subparagraph (b), the Benefits Administration Committee shall presume
the existence of an immediate and heavy financial need if the requested
withdrawal is on account of any of the following:






	 	(A)	 	expenses for (or necessary to obtain) medical
care that would be deductible under Section 213(d) of the Code
(determined without regard to whether the expenses exceed 7.5 percent
of adjusted gross income);
	 
	 	(B)	 	costs directly related to the purchase of a
principal residence of the Member (excluding mortgage payments);
	 
	 	(C)	 	payment of tuition and related educational
fees, and room and board expenses, for the next 12 months of
post-secondary education of the Member, his spouse, children or
dependents (as defined in Section 152 of the Code and determined
without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B) of the
Code);
	 
	 	(D)	 	payment of amounts necessary to prevent
eviction of the Member from his principal residence or to avoid
foreclosure on the mortgage of his principal residence;
	 
	 	(E)	 	payments for burial or funeral expenses for the
Member’s deceased parent, spouse, children or dependents (as defined in
Section 152 of the Code and without regard to Section 152(d)(1)(B) of
the Code);
	 
	 	(F)	 	expenses for the repair of damages to the
Member’s principal residence that would qualify for the casualty
deduction under Section 165 of the Code (determined without regard to
whether the loss exceeds 10 percent of the Member’s adjusted gross
income); or
	 
	 	(G)	 	the inability of the Member to meet such other
expenses, debts, or other obligations recognized by the Internal
Revenue Service as giving rise to




40









 






	 	 	 	immediate and heavy financial need
for purposes of Section 401(k) of the Code.






	 	 	 	The amount of the withdrawal may not be in excess of the amount of the
financial need of the Member, including an additional amount equal to
20 percent of the amount otherwise needed to satisfy such financial need to
pay any federal, state, or local taxes and any amounts necessary to pay any
penalties reasonably anticipated to result from the hardship distribution.
	 
	 	(ii)	 	As a condition for receiving a withdrawal pursuant to the
provisions of this Section 9.3(b), the Member must demonstrate that the
requested withdrawal is necessary to satisfy the financial need described in
(i) above. For purposes of this subparagraph, the Benefits Administration
Committee shall presume that the withdrawal is necessary to satisfy the
immediate and heavy financial need if the following requirements are met:






	 	(A)	 	The Member has obtained all distributions
(other than hardship distributions) available under all other
retirement plans maintained by the Company and all Associated
Companies, including this Plan and including distribution of all cash
dividends currently available to the Member under Section 8.7 of the
Plan and all non-taxable loans available under all retirement plans
maintained by the Company and all Associated Companies, including this
Plan, provided that the loan repayments do not result in an additional
financial hardship for the Member.
	 
	 	(B)	 	The Member agrees to cease all Before-Tax
Savings and After-Tax Savings under this Plan and under any other plans
of the Company or of any Associated Company for a period of not less
than six months following the hardship withdrawal.






	 	 	 	The Benefits Administration Committee or its designee shall make determinations of
financial hardship in a uniform and nondiscriminatory manner, with reference to all
the relevant facts and circumstances and in accordance with applicable tax law under
Section 401(k) of the Code.






	9.4	 	Form of Payment
	 
	 	 	Withdrawal payments shall be made in the form of cash, except that the Member may request to
receive the portion of his Accounts invested in the ITT Stock Fund to be paid in shares of
ITT Stock, with any fractional shares being paid in cash.
	 
	9.5	 	Death after Withdrawal Election
	 
	 	 	If a Member elects a withdrawal and dies after the issuance of the check(s) or shares of ITT
Stock comprising such withdrawal but prior to negotiation of such check(s) comprising all or
a portion of such distribution, then any unpaid cash portion of the withdrawal as
represented by the non-negotiated check(s) shall be paid to his estate. If more than one
check comprises such withdrawal and the Member negotiates the first check but dies prior to
the issuance of any subsequent check, then any subsequent check shall be paid to his estate.
If a Member elects a withdrawal and dies prior to the issuance of any check(s) or shares of
ITT Stock comprising such withdrawal, then the withdrawal election shall be voided.




41









 






	9.6	 	Direct Rollover
	 
	 	 	Certain withdrawals or portions thereof paid pursuant to this Article 9 may be “eligible
rollover distributions” as defined and discussed in Section 11.7 and are governed with
respect thereto by such Section.




42









 











ARTICLE 10




LOANS




	10.1	 	General Conditions for Loans
	 
	 	 	Subject to the restrictions in this Article 10, at any time before Termination of
Employment, a Member may file an application in a form or manner approved by the Benefits
Administration Committee requesting a loan from his Accounts. By filing the loan forms, the
Member:






	 	(a)	 	specifies the amount and the term of the loan;
	 
	 	(b)	 	agrees to the annual percentage rate of interest;
	 
	 	(c)	 	agrees to the finance charge;
	 
	 	(d)	 	promises to repay the loan; and
	 
	 	(e)	 	authorizes the Company to make regular payroll deductions to repay the loan,
with the loan repayments computed based on the frequency of the Member’s payroll
payments.






	 	 	The Member shall certify in such application as to the existence and amount of any
outstanding loans (including any loans deemed distributed) from any qualified plans
maintained by the Company and all Associated Companies. The Benefits Administration
Committee may, in its sole discretion, deny a loan to a Member who is a director or
executive officer (or the equivalent thereof) of the Company or of an Associated Company
based on a reasonable concern regarding the legality of the loan under Section 13(k) of the
Securities Exchange Act of 1934.
	 
	 	 	If at the time a loan is to be issued to a Member a prior loan has been deemed distributed
to the Member and not repaid, a new loan may only be issued to a Member if the Member repays
the unpaid loan balance, including accrued interest to the date of repayment.
	 
	 	 	To the extent required by law and under such rules as the Benefits Administration Committee
shall adopt, loans shall also be made available on a reasonably equivalent basis to any
Beneficiary or former Employee who maintains an account balance under the Plan and who is
still a party-in-interest (within the meaning of Section 3(14) of ERISA).
	 
	10.2	 	Amounts Available for Loans
	 
	 	 	A Member may request a loan in any specified whole dollar amount which must be at least
$1,000 but which, when added to the outstanding balance of any other loans to the Member
from this Plan or any other qualified plan of the Company or any Associated Company,
including the amount of any unpaid deemed loan distribution and accrued interest thereon,
does not exceed the lesser of:






	 	(a)	 	50% of his Accounts; or
	 
	 	(b)	 	$50,000, reduced by the excess of (i) the Member’s highest outstanding loan
balance(s) from this Plan or any other plan sponsored by the Company or any Associated
Company, if any, during the one-year period ending on the day before the day the loan
is made, over (ii) the outstanding balance of loans to the Member from such plans on
the date on which the loan is made.




43









 












	 	 	For purposes of determining amounts actually available for loans, a Member’s Accounts shall
be determined based on the Loan Valuation Date at the time he files his loan request with
the Savings Plan Administrator or its designee.
	 
	10.3	 	Account Ordering for Loans
	 
	 	 	For purposes of processing a loan, the amount of such loan will be deducted from the
Member’s Accounts in the order set by the Benefits Administration Committee under loan
rules.
	 
	 	 	A loan is deducted from a Member’s Accounts as of the Loan Valuation Date. Amounts so
deducted and distributed to a Member as a Plan loan will not participate in the investment
experience of the Plan except as such amounts are repaid to the Member’s Accounts. Loans
will be deemed to be deducted from each of the Investment Funds on a pro rata basis,
provided, however, that no amount shall be deemed to be deducted from the ITT Stock Fund
until all amounts have been withdrawn from all of the other Investment Funds, and provided
further that amounts invested in a Member’s SDA are not available as a source of any loans
described herein. Notwithstanding the foregoing, however, a Member may reallocate his
balance in the SDA to the other Investment Funds and such Investment Funds may then be
available as a source for loans.
	 
	10.4	 	Interest Rate for Loans
	 
	 	 	The Benefits Administration Committee shall establish and communicate to Members a
reasonable rate of interest for loans commensurate with the interest rates charged by
persons in the business of lending money for loans which would be made under similar
circumstances, as determined by the Benefits Administration Committee, which interest rate
shall remain in effect for the term of the loan, except that with respect to a Member who
enters the uniformed services of the United States, the Member may elect to have the
interest rate applicable to the unpaid loan balance during the period of leave reduced to
6%.
	 
	10.5	 	Term and Repayment of Loan






	 	(a)	 	The term of any loan shall be for a period of from 1 to 60 whole months, at the
election of the Member, provided that a Member who is using a loan to acquire his own
principal residence may elect to repay a loan over a period of whole months between 1
and 180. Except as provided in (b) or (c) below, payments of principal and interest
will be made by after-tax payroll deductions or in a manner agreed to by the Member and
the Benefits Administration Committee in substantially level amounts, but no less
frequently than quarterly, in an amount sufficient to amortize the loan over the
repayment period. A Member who is actively employed by the Company cannot elect to
cease payroll deductions for repayment of a loan. Except as set forth below with
respect to Members who enter the uniformed services of the United States, no extension
of the loan term shall be permitted after the loan is made. Repayment of the loan is
made to the Member’s Accounts from which the loan amount was deducted in the inverse
order to the Account Ordering for Loans described in Section 10.3. Repayments are
invested in the Member’s Accounts in accordance with his current investment election.
Loan repayments are not credited with investment experience under the Plan until the
first business day following the day on which such repayments are received by the Trust
Fund.
	 
	 	(b)	 	If a Member with an outstanding loan takes a leave of absence to enter the
uniformed services of the United States, and such Member will receive military
differential wage payments (as defined in Section 3401(h) of the Code) in an amount
equal to or greater




44









 






	 	 	 	than his loan repayment, his after-tax payroll deduction loan
repayments shall continue during such leave of absence. If a Member with an
outstanding loan takes a leave of absence to enter the uniformed services of the United
States and such Member will not receive military differential wage payments sufficient
to cover his loan repayments, his after-tax payroll deduction loan repayments shall be
suspended during the period of leave unless the Member elects to make payments directly
by certified check or money order. If payments are suspended, upon the Member’s
reemployment from the uniformed services, the period of repayment shall be extended by
the number of months of the period of service in the uniformed services or, if greater,
the number of months that would remain if the original loan term were five years plus
the number of months in the period of absence; provided, however, if the Member incurs
a Termination of Employment and requests a distribution pursuant to Article 11, the
loan shall be canceled, and the outstanding loan balance shall be distributed pursuant
to Article 11. The Member shall resume payments in the same amount as before the leave
with the balance of the loan (including any interest that accrued during the period of
uniformed service) due upon the expiration of the repayment period. Alternatively, the
Member may elect to have the remaining balance (including any interest that accrued
during the period of uniformed service) reamortized in substantially level installments
over the extended term of the loan.
	 
	 	(c)	 	If a Member with an outstanding loan takes an authorized leave of absence without
pay or reduced pay that is less than the required loan payments, for reasons other than
to enter the uniformed services of the United States, loan payments may be suspended at
the request of the Member, for a period of up to 12 months or until the end of the term
of the loan, if earlier. Upon a Member’s reemployment from the leave of absence, the
Member shall resume payments either in the same amount as before the leave with the
full balance due upon the expiration of the repayment period or by reamortizing the
loan in substantially level installments over the remaining term of the loan.






	10.6	 	Frequency of Loan Requests
	 
	 	 	A Member may have no more than two loans outstanding at any time. Each loan shall be
evidenced by a promissory note payable to the Plan.
	 
	10.7	 	Prepayment of Loans
	 
	 	 	A Member may prepay the entire outstanding balance of a loan, with interest to date of
prepayment except as provided under Section 10.8, at any time. Partial prepayments are not
permitted.
	 
	10.8	 	Outstanding Loan Balance at Termination of Employment
	 
	 	 	Upon a Member’s Termination of Employment, the Deferred Member may continue to make periodic
repayments of his outstanding loans provided that his Accounts plus his loan balance at the
time of his Termination of Employment is greater than $5,000, and provided further that if
the Deferred Member requests a distribution of his remaining Accounts pursuant to Article
11, the unpaid loan balance shall be treated as an offset distribution.
	 
	 	 	If a Deferred Member fails to pay the loan balance in full or make loan repayments in
accordance with Section 10.5, the Benefits Administration Committee may execute upon its
security interest in the Member’s Accounts under the Plan to satisfy the debt; provided,
however, the Plan shall




45









 






	 	 	not levy against amounts held in the Member’s Accounts until such
time as a distribution of such Accounts could otherwise be made under the Plan.
	 
	10.9	 	Loan Default
	 
	 	 	Under certain circumstances, including, but not limited to, a Member’s failure to make
timely loan repayments, the Benefits Administration Committee may declare the Member’s loan
to be in default. If a Member’s loan is not repaid in accordance with the terms contained
in the promissory note and a default occurs, the Plan may execute upon its security interest
in the Member’s Accounts under the Plan to satisfy the debt; provided, however, the Plan
shall not levy against amounts held in the Member’s Accounts until such time as a
distribution of such Accounts could otherwise be made under the Plan.
	 
	10.10	 	Incorporation by Reference
	 
	 	 	Any additional rules or restrictions as may be necessary to implement and administer Plan
loans shall be in writing and communicated to Members. Such further documentation is hereby
incorporated into the Plan by reference, and, pursuant to Section 13.3, the Benefits
Administration Committee is hereby authorized to make such revisions to these rules, as it
deems necessary or appropriate on the advice of counsel.
	 
	10.11	 	Death after Loan Application
	 
	 	 	If a Member applies for a loan and dies after a check for the loan amount has been issued
but prior to negotiation of the check, then the loan shall be paid to his estate or voided,
at the option of the Benefits Administration Committee. If a Member applies for a loan and
dies before the check for the loan amount is issued, then the loan application shall be
voided.
	 
	10.12	 	Transfer of Loans
	 
	 	 	The Benefits Administration Committee may designate that the Plan will accept the transfer
of a loan from another qualified retirement plan on behalf of a Member who becomes an
Employee as a result of an acquisition by the Company.




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ARTICLE 11




DISTRIBUTIONS




	11.1	 	General






	 	(a)	 	Upon Termination of Employment, a Member may apply for distribution of the
value of his Accounts. Alternatively, upon Termination of Employment, a Member whose
Accounts exceed $5,000 may elect to defer distribution of his Accounts until December
31 of the year in which he attains age 701/2. If a Member terminates employment with no
Accounts, he shall be deemed to have received a full distribution of his benefit at the
time of his Termination of Employment. If a Member whose Accounts exceed $5,000 does
not apply for a distribution of his Accounts within 90 days of his Termination of
Employment, he shall be deemed to be a Deferred Member. A Deferred Member may elect a
partial distribution of any portion of his Accounts in a lump sum amount at any time,
and from time to time, after his Termination of Employment, provided said Deferred
Member is not receiving installment payments pursuant to an election under Section
11.3. All distributions under this Section 11.1(a) will be deemed to be deducted from
each of the Deferred Member’s Investment Funds on a pro rata basis, provided, however,
that no amount shall be deemed to be deducted from the ITT Stock Fund until all amounts
have been withdrawn from all of the other Investment Funds, and provided further that
amounts invested in an SDA are not available as a source of any partial distributions
described herein. Notwithstanding the foregoing, however, a Deferred Member may
reallocate the balance in his SDA to other Investment Funds in the Plan as provided in
Article 7 and such Investment Funds may then be available as a source for partial
distributions under this Section.
	 
	 	(b)	 	Upon the death of a Member or Deferred Member, the value of such Member’s or
Deferred Member’s Accounts shall be distributed to his Beneficiary, subject to the
following:






	 	(i)	 	If the Member’s or Deferred Member’s Beneficiary is not the
spouse of such Member or Deferred Member, the Member’s or Deferred Member’s
Accounts shall be distributed to the Beneficiary in accordance with said
Beneficiary’s election under Section 11.3; provided the entire value of the
Member’s Accounts is distributed no later than five years from the Member’s or
Deferred Member’s date of death. Such nonspouse Beneficiary may also elect
partial distributions of the Member’s benefit in lump sums from time to time
during this five-year period, provided that the entire value of the Member’s
Accounts is distributed no later than five years from the Member’s or Deferred
Member’s date of death.
	 
	 	(ii)	 	If the Member’s or Deferred Member’s Beneficiary is his spouse
and the value of the Accounts to be distributed to the spouse Beneficiary
exceeds $5,000, such spouse Beneficiary may elect to defer receipt of the
Member’s or Deferred Member’s Accounts until the December 31 Valuation Date of
the year in which the Member or Deferred Member would have reached age 701/2. If
a spouse Beneficiary’s Accounts exceed $5,000 and the spouse Beneficiary does
not apply for a distribution of his Accounts within 90 days of the Member’s or
Deferred Member’s death, such spouse Beneficiary will be deemed to be a
Deferred Member. Such spouse Beneficiary will receive distribution of the
Accounts as of the date the Member or Deferred Member would have attained age
65, provided such spouse Beneficiary files application for such distribution.
A spouse




47









 






	 	 	 	Beneficiary may, however, file application for distribution of such
Accounts at any time prior to the December 31 Valuation Date of the year in
which the Member or Deferred Member would have reached age 701/2. In addition to
the methods of distribution in Section 11.3, a spouse Beneficiary of a deceased
Member or Deferred Member may elect a partial distribution of any portion of
his Accounts in a lump-sum amount at any time, and from time to time and
subject to the provisions of (a) above.






	 	(c)	 	Notwithstanding any provision of the Plan to the contrary, distributions shall
commence as follows:






	 	(i)	 	A Member or Deferred Member who is a “5-percent
owner” as defined in Section 416(i) of the Code must commence distribution of
his Accounts no later than December 31 of the year in which he attains age 701/2.
	 
	 	(ii)	 	A Member or Deferred Member who is not a “5-percent owner” as
defined in Section 416(i) of the Code must commence distribution of his
Accounts after his Termination of Employment by December 31 of the later of the
calendar year in which the Member attains age 701/2 or the calendar year in which
the Member’s Termination of Employment occurs.
	 
	 	(iii)	 	The Accounts of a Member or a Deferred Member who has attained
age 701/2 shall be paid under the payment method described in Section 11.3(c)(ii)
below.






	 	(d)	 	Notwithstanding the provisions of (a), (b), or (c), above, or Section 11.3
below, a Member or Deferred Member (or Beneficiary) may elect to commence distribution
of the value of the Member’s Accounts held in the ESOP portion of the Plan not later
than one year after the end of the Plan Year:






	 	(i)	 	in which the Member separates from service on or after
attaining age 65 or by reason of Disability or death; or
	 
	 	(ii)	 	which is the fifth Plan Year following the Plan Year in which
the Member otherwise separates from service, unless the Member is reemployed by
the Company or any Associated Company before such year.






	 	(e)	 	Notwithstanding the foregoing, in the event a Member or Deferred Member fails
to file a claim for benefits in accordance with the preceding sentence, the Member or
Deferred Member shall be deemed to have elected to defer distribution of his Accounts
to as soon as administratively practicable following the date the Member terminated
employment or attained age 701/2, if later; provided that in no event shall payment
commence later than the April 1 following the calendar year in which the Member
terminated employment or attained age 701/2, if later.






	11.2	 	Valuation Date and Conditions of Distribution






	 	(a)	 	The value of any distribution will be determined as of the Valuation Date on
which a completed application for the distribution by the Member, Deferred Member or
Beneficiary is received and processed by the Savings Plan Administrator (or its
designee) or the next business day.




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	 	(b)	 	Application by the Member, Deferred Member or Beneficiary must be in a form or
manner approved by the Benefits Administration Committee or its designee.
	 
	 	(c)	 	Generally, all funds distributed will be paid as soon as practicable following
the applicable Valuation Date. If part of the distribution is to be paid in stock, the
stock certificate will be distributed after the check representing the cash
distribution has been distributed.






	11.3	 	Methods of Distribution
	 
	 	 	After Termination of Employment occurs, and as soon as practicable following application by
the Member, Deferred Member or Beneficiary, distributions under the Plan shall be made in
the following manner:






	 	(a)	 	All distributions from other than the ITT Stock Fund shall be made in cash.
	 
	 	(b)	 	Unless the Member, Deferred Member or Beneficiary elects to take ITT Stock for
distributions from the ITT Stock Fund, a distribution from such fund shall be in cash.
In all cases, fractional shares shall be paid in cash.
	 
	 	(c)	 	All distributions shall be made in the form of a lump sum payment, unless the
Member, Deferred Member or Beneficiary elects otherwise, as provided below. All
distributions shall be made as soon as practicable after receipt of the application by
the Member, Deferred Member or Beneficiary in accordance with Section 11.2(b).
However, with prior notice in a form or manner approved by the Benefits Administration
Committee, distribution may be made in one of the installment methods of payment
described in (i) or (ii) below, subject to the restrictions provided below or in
Section 11.1(b).






	 	(i)	 	Provided the value of the Member’s, Deferred Member’s or
Beneficiary’s Accounts is at least $5,000, and the first payment is at least
$1,000, by payment in annual installments over a period elected by the Member,
Deferred Member or Beneficiary. The period over which annual installments may
be paid may not exceed the life expectancy of the Member, Deferred Member or
Beneficiary, or if the Member or Deferred Member (for this purpose Deferred
Member does not include a spouse Beneficiary) is married, and so elects, the
joint life expectancy of the Member or Deferred Member and the Member’s or
Deferred Member’s spouse. All such installments shall be determined as
follows:






	 	(A)	 	The amount of the annual installments to be
paid to each Member or Deferred Member (or Beneficiary in the event of
the Member’s or Deferred Member’s death) making such an election shall
be based upon the value of his Accounts as of the Valuation Date
coinciding with or next following the date of receipt by the Savings
Plan Administrator or its designee of his completed application and
each anniversary thereof, and shall be determined by multiplying such
value by a fraction, the numerator of which shall be one and the
denominator of which shall be the number of unpaid annual installments.
	 
	 	(B)	 	Any Member or Deferred Member who is no more
than 70 years old and who elects annual installment payments may, at
any time thereafter, elect, by filing a request with the Savings Plan
Administrator or its designee, to cancel annual installment payments.
The Valuation Date




49









 






	 	 	 	applicable to such election shall be the business
day coinciding with or next following the date on which his completed
request is received and processed by the Savings Plan Administrator or
its designee. Such Member or Deferred Member may at any time
thereafter, make another payment election under the Plan, provided that
he may elect only a lump sum payment or partial distributions.
	 
	 	(C)	 	If a Member or Deferred Member’s Beneficiary is
not his spouse, and the Member is deceased, annual installment payments
to such Beneficiary may not extend beyond the end of the calendar year
which contains the fifth anniversary of the death of the Member or
Deferred Member.






	 	(ii)	 	Provided the value of the Member’s, Deferred Member’s or
Beneficiary’s Accounts is at least $5,000, and the first payment is at least
$1,000, by payment in annual installments over the Member’s or Deferred
Member’s life expectancy or, if the Member or Deferred Member is married, and
so elects, over the joint life expectancies of the Member or Deferred Member
and the Member’s or Deferred Member’s spouse, as actuarially determined at the
time of commencement of the initial installment and as redetermined annually
thereafter. The amount of such installments will be based on the value of his
Accounts as of the Valuation Date coinciding with or next following the date of
receipt by the Savings Plan Administrator or its designee of his application
and each anniversary thereof, and shall be determined by multiplying such value
by a fraction, the numerator of which shall be one and the denominator of which
shall be the number of years and fraction thereof of his life expectancy based
on his age and the mortality table adopted by the Benefits Administration
Committee for such purpose at the time the installment is payable. Any Member
or Deferred Member who is no more than 70 years old and who elects annual
installment payments over his life expectancy may at any time thereafter elect
to cancel such payments by filing a request with the Savings Plan Administrator
or its designee. Such Member or Deferred Member may, at any time thereafter,
make another payment election under the Plan. Life expectancy installments
described in this paragraph are not available to a Beneficiary who is not the
spouse of a Member or Deferred Member.






	 	 	 	Installment payments under (i) or (ii) above shall be made in the form of ITT Stock
or cash, or both, as provided in (a) and (b), above.
	 
	 	(d)	 	If a Member or Deferred Member elects a distribution other than installments as
provided in (c)(i) or (c)(ii) above and the Member or Deferred Member dies after the
Valuation Date applicable to such distribution but prior to negotiation of any check(s)
comprising any portion of such distribution, then the distribution otherwise payable in
cash shall be paid to his estate. If more than one check comprises the cash portion of
such distribution and the Member or Deferred Member negotiates the first check but dies
prior to the negotiation of any subsequent check, then any
subsequent check shall be paid to his estate. If a Member or Deferred Member
elects a distribution and the Member or Deferred Member dies prior to the Valuation
Date applicable to such distribution, then the distribution shall be paid to his
Beneficiary.
	 
	 	(e)	 	If a Member or Deferred Member elects installment distributions as provided in
(c)(i) or (c)(ii) above and the Member or Deferred Member dies before all the
installments are paid, then the following provisions shall apply:




50









 












	 	(i)	 	If the Member’s or Deferred Member’s Beneficiary is not his
spouse, and if an installment is paid with a Valuation Date that occurred prior
to the date of death of the Member or Deferred Member and prior to the Member’s
or Deferred Member’s negotiation of the check comprising all or a portion of
such installment, then such installment (or portion thereof) shall be paid to
his estate; the remaining value of the Member’s or Deferred Member’s Accounts
shall be paid to his Beneficiary at one time.
	 
	 	(ii)	 	If the Member’s or Deferred Member’s Beneficiary is not his
spouse, such Beneficiary may request annual installment payments, provided that
the number of installments does not extend beyond the end of the calendar year
which contains the fifth anniversary of the death of the Member or Deferred
Member.
	 
	 	(iii)	 	If the Member’s or Deferred Member’s Beneficiary is his
spouse, then such spouse Beneficiary may continue receiving payment of the
deceased Member’s or Deferred Member’s Accounts pursuant to the same method of
distribution elected by the Member or Deferred Member, except that the spouse’s
life expectancy shall be substituted for the life expectancy of the Member.
The spouse Beneficiary may, at any time while receiving payment of such
Accounts, elect, by filing a request with the Savings Plan Administrator or its
designee, to cancel installment payments. Such spouse Beneficiary may at any
time thereafter, elect a lump sum payment or partial distributions, subject to
the provisions of Section 401(a)(9) of the Code.






	 	(f)	 	The Accounts of a Member who, following Termination of Employment, fails to
apply for distribution of such Accounts, shall be paid in cash (or, if the Member so
elects shares of ITT Stock) in the form of a lump sum payment, provided that the value
of such Accounts is $5,000 or less on a Valuation Date no earlier than the next
business day following his Termination of Employment, without regard to the value of
the Member’s Accounts at the time of an earlier distribution.
	 
	 	 	 	In the event a Member who is subject to the provisions of the immediately preceding
paragraph and whose Accounts are in excess of $1,000 fails to make an affirmative
election to either receive the lump sum payment in cash or have it directly rolled
over to an eligible retirement plan pursuant to the provisions of Section 11.8
within such election period as shall be prescribed by the Benefits Administration
Committee, the Benefits Administration Committee shall direct the Trustee to
transfer such lump sum payment to an individual retirement plan (within the meaning
of Section 7701(c)(37) of the Code) (“IRA”) selected by the PFTIC. The IRA shall be
maintained for the exclusive benefit of the Member on whose behalf such transfer is
made. The transfer shall occur as soon as practicable following the end of the
election period. The funds in the IRA shall be invested in an investment product
designed to preserve principal and provide a reasonable rate of return, whether or
not such return is guaranteed, consistent with liquidity, as determined from time to
time by the PFTIC. In implementing the provisions of this paragraph, the Benefits
Administration Committee and/or the PFTIC as appropriate pursuant to the terms of
this paragraph, shall:






	 	(i)	 	enter into a written agreement with each IRA provider setting
forth the terms and conditions applicable to the establishment and maintenance
of the IRA in conformity with applicable law;




51









 






	 	(ii)	 	furnish Members with notice of the Plan’s automatic rollover
provisions, including, but not limited to, a description of the nature of the
investment product in which the assets of the IRA will be invested and how the
fees and expenses attendant to the IRA will be allocated, and a statement that
a Member may roll over the assets of the IRA to another eligible retirement
plan. Such notice shall be provided to Members in such time and form as shall
be prescribed by the Benefits Administration Committee in accordance with
applicable law;
	 
	 	(iii)	 	keep records, when appropriate, of a Member’s after-tax basis
in the amount transferred to the IRA; and
	 
	 	(iv)	 	fulfill such other requirements of the safe harbor contained in
Department of Labor Regulation §2550.404a-2 and, if applicable, the conditions
of Department of Labor Prohibited Transaction Class Exemption 2004-16.






	 	 	Alternative methods of distribution may apply to that portion of a Member’s or a Deferred
Member’s Accounts attributable to a Prior Plan Account, as specified in the applicable
appendices to the Plan.
	 
	11.4	 	Death of Beneficiary
	 
	 	 	Notwithstanding any provision of the Plan to the contrary, upon the death of a Beneficiary
with Accounts remaining in the Plan, the remaining value of all such Accounts shall be paid
in a lump sum distribution within one year of the Beneficiary’s death to the Beneficiary
selected by the Beneficiary, if any, or if no such Beneficiary has been named by the
Beneficiary, the remaining value of all such Accounts shall be paid in a lump sum
distribution within one year of the Beneficiary’s death to the estate of the Beneficiary.
	 
	11.5	 	Proof of Death and Right of Beneficiary or Other Person
	 
	 	 	The Benefits Administration Committee may require and rely on such proof of death and such
evidence of the right of any Beneficiary or other person to receive the undistributed value
of the Accounts of a deceased Member, Deferred Member or Beneficiary as the Benefits
Administration Committee may deem proper, and its determination of death and of the right of
such Beneficiary or other person to receive payment shall be conclusive. Payment to any
Beneficiary shall be final and fully satisfy and discharge the obligation of the Plan with
respect to any and all Accounts of a deceased Member or Deferred Member.
	 
	 	 	In the event of a dispute regarding the account of a deceased Member or Deferred Member, the
Benefits Administration Committee may make a final determination, or initiate or participate
in any action or proceeding as may be necessary or appropriate to determine any Beneficiary
under the Plan.
	 
	 	 	During the pendency of any action or proceeding, the Benefits Administration Committee may
deposit an amount equal to the disputed payment with the court and such deposit shall
relieve the Plan of all of its obligations with respect to any such disputed Accounts.
Alternatively the Benefits Administration Committee, at its discretion, may direct any
disputed accounts be invested in the Stable Value Fund or such other as designated by the
PFTIC pending the resolution of any dispute regarding a deceased Member’s or Deferred
Member’s Accounts.




52









 






	11.6	 	Completion of Appropriate Notice.
	 
	 	 	Except as provided in this Section, if the value of a Member’s Accounts exceeds $5,000, an
election by the Member or Deferred Member (for this purpose Deferred Member does not include
a spouse Beneficiary) to receive a distribution prior to age 65 shall not be valid unless
the written election is made after the Member or Deferred Member has received the notice
required under Section 1.411(a)-11(c) of the Income Tax Regulations and within a reasonable
time before the effective date of the commencement of the distribution as prescribed by said
regulations. Such distribution may commence less than 30 days after the notice required
under Section 1.411(a)-11(c) of the Income Tax Regulations is given, provided that:






	 	(a)	 	the Benefits Administration Committee clearly informs the Member that he has a
right to a period of at least 30 days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if applicable, a particular
distribution option); and
	 
	 	(b)	 	the Member, after receiving the notice under Sections 411 and 417 of the Code,
affirmatively elects a distribution.






	 	 	The Benefits Administration Committee may permit any notices to be given electronically, in
accordance with procedures to be established in the Benefits Administration Committee’s sole
discretion.
	 
	11.7	 	Direct Rollover of Certain Distributions
	 
	 	 	Notwithstanding any other provision of this Plan, with respect to any withdrawal or
distribution from this Plan pursuant to Article 9 or this Article 11 which is determined by
the Savings Plan Administrator or its designee to be an “eligible rollover distribution,”
the distributee may elect, at the time and in a manner prescribed by the Benefits
Administration Committee for such purpose, to have the Plan make a “direct rollover” of all
or part of such withdrawal or distribution to a maximum of two “eligible retirement plans”
which accept such rollover. The following definitions apply to the terms used in this
Section 11.8:






	 	(a)	 	“Distributee” means:






	 	(i)	 	a Member or Deferred Member;
	 
	 	(ii)	 	a Member’s or Deferred Member’s spouse Beneficiary;
	 
	 	(iii)	 	a Member’s or Deferred Member’s spouse or former spouse who is
the alternate payee under a qualified domestic relations order as defined in
Section 414(p) of the Code with regard to the interest of the spouse or former
spouse; and
	 
	 	(iv)	 	a nonspouse Beneficiary.






	 	(b)	 	“Eligible rollover distribution” is any withdrawal or distribution of all or
any portion of an individual’s vested account balance owing to the credit of a
distributee, except that the following distributions shall not be eligible rollover
distributions:






	 	(i)	 	any distribution that is one of a series of substantially equal
periodic payments made for the life or life expectancy of the distributee, or
for a specified period of ten years or more;




53









 






	 	(ii)	 	any distribution required under Section 401(a)(9) of the Code;
	 
	 	(iii)	 	after-tax amounts (determined without regard to the exclusion
for net unrealized appreciation with respect to employer securities) unless
such amount is rolled over or transferred (i.e., directly rolled) to an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, or a
Roth individual retirement account described in Section 408A(b) of the Code; or
transferred (i.e., directly rolled) to a qualified plan described in Section
401(a) of the Code or to an annuity plan described in Section 403(b) of the
Code provided such plan agrees to separately account for such after-tax amount
and earnings thereon;
	 
	 	(iv)	 	any in-service withdrawal that is made on account of hardship;
and
	 
	 	(v)	 	any other distribution that is not an eligible rollover
distribution under the Code or regulations thereunder.






	 	(c)	 	“Eligible retirement plan” means any of the following types of plans that
accept the distributee’s eligible rollover distribution:






	 	(i)	 	a qualified plan described in Section 401(a) of the Code;
	 
	 	(ii)	 	an annuity plan described in Section 403(a) of the Code;
	 
	 	(iii)	 	an individual retirement account or individual retirement
annuity described in Section 408(a) or 408(b) of the Code, respectively;
	 
	 	(iv)	 	an annuity contract described in Section 403(b) of the Code;
	 
	 	(v)	 	an eligible plan under Section 457(b) of the Code which is
maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and which agrees
to separately account for amounts transferred into such plan from this Plan;
and
	 
	 	(vi)	 	a Roth IRA described in Section 408A of the Code






	 	 	 	Notwithstanding the foregoing, with respect to a non-spouse Beneficiary, as defined
in (a)(iv) above, an eligible retirement plan will only be an individual retirement
account described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, or a Roth individual retirement account
described in Section 408A(b) of the Code (collectively, “IRA”) that is established
on behalf of the non-spouse Beneficiary and that will be treated as an inherited IRA
pursuant to the provisions of Sections 402(c)(11) and 408(d)(3)(C)(ii) of the Code.
	 
	 	(d)	 	“Direct rollover” means a payment by the Plan directly to the eligible
retirement plan specified by the distributee in cash and/or shares.






	 	 	In the event that the provisions of this Section 11.7 or any part thereof cease to be
required by law as a result of subsequent legislation or otherwise, this Section 11.7 or
applicable part thereof shall be of no further force or effect without necessity of further
amendment of the Plan.




54









 






	11.8	 	Elective Transfers from Plan
	 
	 	 	The Accounts of a Member or Deferred Member shall be eligible for an elective transfer to a
like transferee employee plan in connection with an asset or stock acquisition, merger, or
other similar transaction involving a change in employer of the Member or Deferred Member
(i.e., an acquisition or disposition within the meaning of Treasury Regulation Section
1.410(b)-2(f)) or, with the permission of the Benefits Administration Committee, in
connection with the Member or Deferred Member’s transfer of employment to a different job
for which service does not result in additional allocations under the Plan as set forth
herein.






	 	(a)	 	Elective Transfer. An elective transfer of a Member’s or Deferred Member’s
Accounts between this Plan and another qualified plan maintained by a transferee shall
be available only if the transfer meets the requirements of Section 414(l) of the Code
and each of the following requirements have been met:






	 	(i)	 	Voluntary Election






	 	(A)	 	Member Election
	 
	 	 	 	The transfer must have been conditioned upon a voluntary, fully
informed election by the Member or Deferred Member to transfer such
Accounts to such transferee plan.
	 
	 	(B)	 	Benefit Retention Alternative
	 
	 	 	 	In making the voluntary election provided for in this section, the
Member or Deferred Member shall have had the option of retaining such
Member’s or Deferred Member’s Accounts (including all optional forms
of benefit) under this Plan. Restrictions may apply to the Member’s
or Deferred Member’s Accounts as set forth in the applicable
Appendices.
	 
	 	(C)	 	Spousal Election
	 
	 	 	 	If Sections 401(a)(11) and 417 of the Code otherwise apply to the
Accounts, the spousal consent requirements of such section must have
been met with respect to the transfer of benefits.
	 
	 	(D)	 	Notice Requirement
	 
	 	 	 	The notice requirement under Section 417 of the Code, if applicable,
must have been met with respect to the Member or Deferred Member and
spousal transfer election.






	 	(ii)	 	Amount of Benefit Transferred
	 
	 	 	 	The amount of the Accounts transferred, including the amount of any
contemporaneous Section 401(a)(31) of the Code transfer to the transferee
plan, must have equaled the entire balance of Accounts under the Plan of the
Member or Deferred Member whose Accounts are being transferred.




55









 






	 	(iii)	 	Benefit Under the Transferee Plan
	 
	 	 	 	An elective transfer may be permitted even if the Member’s or Deferred
Member’s Accounts are not fully vested, provided that the requirements of
Section 411(a)(10) of the Code are satisfied by the transferee employee
plan.






	 	(b)	 	Status of Elective Transfer as Distribution
	 
	 	 	 	The transfer of Accounts pursuant to the elective transfer rules of this Section
generally is not treated as a distribution for purposes of Section 401(a) of the
Code (except to the extent the Member is eligible to receive a full distribution of
his Accounts under this Plan on the date of the transfer). In all cases, however,
the transfer is not treated as a distribution for purposes of the minimum
distribution requirements of Section 401(a)(9) of the Code.






	11.9	 	Elective Transfer to Plan
	 
	 	 	The Plan shall accept elective transfers from plans qualified under Section 401(a) of the
Code that result from an asset or stock acquisition, merger, or other similar transaction
involving a change in employer of an individual who is eligible to become a Member (i.e., an
acquisition or disposition within the meaning of Treasury Regulation Section 1.410(b)-2(f))
or, with the permission of the Benefits Administration Committee, in connection with the
individual’s transfer of employment to a different job for which service does not result in
additional allocations under the Plan, provided that the elective transfer meets the
requirements of Section 414(l) of the Code and Treasury Regulation Section 1.411(d)-(4),
Q&A-3.
	 
	11.10	 	Minimum Required Distributions
	 
	 	 	Notwithstanding any other provision of this Article 11, all distributions from the Plan
shall conform to the requirements of Section 401(a)(9) of the Code, including the incidental
death benefit provisions of Section 401(a)(9)(G) of the Code. Distributions under this
Article 11 shall meet the requirements of Treasury Regulation Sections 1.401(a)(9)-2 through
1.401(a)(9)-9. Such requirements shall be administered in accordance with the regulations
issued under Section 401(a)(9) of the Code, as follows:






	 	(a)	 	The portion of any distribution that constitutes a required minimum
distribution under Section 401(a)(9) of the Code shall be the lesser of:






	 	(i)	 	the quotient obtained by dividing the Member’s Accounts by the
distribution period in the Uniform Lifetime Table set forth in Treasury
Regulation Section 1.401(a)(9)-9, using the Member’s age as of the Member’s
birthday in the distribution calendar year; or
	 
	 	(ii)	 	if the Member’s sole designated beneficiary for the
distribution calendar year is the Member’s spouse, and the spouse is more than
ten years younger than the Member, the quotient obtained by dividing the
Member’s Accounts by the number in the Joint and Last Survivor Table set forth
in Treasury Regulation Section 1.401(a)(9)-9, using the Member’s and spouse’s
attained ages as of the Member’s and the spouse’s birthdays in the distribution
calendar year.






	 	 	 	The provisions of Section 401(a)(9) of the Code and the regulations thereunder shall
override any Plan provision that is inconsistent with Section 401(a)(9) of the Code.




56









 






	 	(b)	 	For purposes of paragraph (a) above, the following definitions apply:






	 	(i)	 	“Designated beneficiary” means the individual who is designated
as the Beneficiary and is the designated beneficiary under Section 401(a)(9) of
the Code and applicable Treasury Regulations. In the event a trust is
designated as the beneficiary of the Member, the beneficiaries of the trust
shall be deemed designated beneficiaries provided the applicable requirements
set forth in Treasury Regulation Section 1.401(a)(9)-4 are met.
	 
	 	(ii)	 	“Distribution calendar year” means a calendar year for which a
minimum distribution is required. For a Member who is a 5-percent owner in
active service, the first distribution calendar year is the calendar year in
which the Member attains age 701/2. For a Member who is not a 5-percent owner,
the first distribution calendar year is the later of the calendar year in which
the Member attains age 701/2 or the year in which the Member terminates
employment.
	 
	 	(iii)	 	“Life expectancy” means life expectancy as computed by use of
the Single Life Table in Treasury Regulation Section 1.401(a)(9)-9, Q & A-1.
	 
	 	(iv)	 	“Member’s Accounts” means the balance of the Member’s Accounts
as of the last Valuation Date in the calendar year immediately preceding the
distribution calendar year (“valuation calendar year”) increased by the amount
of contributions made and allocated or forfeitures allocated to the Member’s
Accounts as of dates in the valuation calendar year after such last Valuation
Date and decreased by distributions made in the valuation calendar year after
such last Valuation Date. The Member’s Accounts for the valuation calendar
year include any amounts rolled over or transferred to the Plan either in the
valuation calendar year or in the distribution calendar year if distributed or
transferred in the valuation calendar year.






57












 





ARTICLE 12




MANAGEMENT OF FUNDS




	12.1	 	Appointment of PFTIC






	 	 	The PFTIC shall consist of the individuals holding the following corporate titles:






	 	(a)	 	Treasurer;






	 	(b)	 	Assistant Treasurer;






	 	(c)	 	Director, Total Rewards;






	 	(d)	 	Director, Global Benefits; and






	 	(e)	 	Head of Financial Planning and Analysis.






	 	 	Any member of the PFTIC may resign by delivering his written resignation to the Board of
Directors and Secretary of the PFTIC.






	12.2	 	Duties of PFTIC






	 	 	The PFTIC shall be responsible for the management of the assets of the Plan, except as
otherwise expressly provided herein. The members of the PFTIC shall elect a Chairman from
their number and a Secretary who may be, but need not be, one of the members of the PFTIC;
may appoint from their number such committees with such powers as they shall determine; may
authorize one or more of their number or any agent to execute or deliver any instrument or
make any payment on their behalf; may retain counsel and employ agents and such clerical and
accounting services as they may require in carrying out the provisions of the Plan; and may
allocate among themselves or delegate to other persons all or such portion of their duties
hereunder as they in their sole discretion decide.






	 	 	The PFTIC shall have the authority to appoint and provide for use of investment managers,
and to establish one or more Trusts for the Plan pursuant to trust instruments approved or
authorized by the PFTIC. In discharging its responsibility, the PFTIC shall evaluate and
monitor the investment performance of the investment managers and the Trustee.






	 	 	The PFTIC is designated a named fiduciary of the Plan within the meaning of Section 402(a)
of ERISA.






	12.3	 	Meetings






	 	 	The PFTIC shall hold meetings upon such notice, at such place or places, and at such time or
times as it may determine. The action of at least a majority of the members of the PFTIC
expressed from time to time by a vote at a meeting or in writing without a meeting shall
constitute the action of the PFTIC and shall have the same effect for all purposes as if
assented to by all members of the PFTIC at the time in office. No member of the PFTIC shall
receive any compensation for his service as such.




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	12.4	 	Compensation and Bonding






	 	 	The members of the PFTIC shall serve without compensation for their services as such.
Except as may otherwise be required by law, no bond or other security need be required of
any member in that capacity in any jurisdiction.






	12.5	 	Trust Fund






	 	 	All the funds of the Plan shall be held by a Trustee appointed from time to time by the
PFTIC in one or more trusts under a trust instrument or instruments approved or authorized
by the PFTIC for use in providing the benefits of the Plan; provided that no part of the
corpus or income of the Trust Fund shall be used for, or diverted to, purposes other than
for the exclusive benefit of Members, Deferred Members and Beneficiaries.






	12.6	 	Benefit Statements






	 	 	A Member and a Deferred Member (or, in the event of the death of the Member or Deferred
Member, a Beneficiary) shall be furnished with a statement setting forth the value of his
Accounts, the Vested Portion of his Accounts and such other information as required under
Section 105(a) of ERISA. Such statement shall be furnished in the time and manner
prescribed by Section 105(a) of ERISA and related guidance thereto.






	12.7	 	Fiscal Year






	 	 	The fiscal year of the Plan and the Trust shall end on the 31st day of December of each year
or at such other date as may be designated by the PFTIC.




59









 











ARTICLE 13




ADMINISTRATION OF PLAN




	13.1	 	Plan Administrator






	 	 	The responsibility for carrying out all phases of the administration of the Plan, except
those connected with management of assets, shall be placed in a Benefits Administration
Committee. The Benefits Administration Committee shall be the administrator of the Plan
within the meaning of Section 3(16)(A) of ERISA and shall have authority and responsibility
for general supervision of the administration of the Plan.






	13.2	 	Appointment of Benefits Administration Committee






	 	 	The Benefits Administration Committee shall consist of the individuals holding the following
corporate titles:






	 	(a)	 	Treasurer;






	 	(b)	 	Assistant Treasurer;






	 	(c)	 	Director, Total Rewards;






	 	(d)	 	Director, Global Benefits; and






	 	(e)	 	Head of Financial Planning and Analysis.






	 	 	Any member of the Benefits Administration Committee shall be deemed to have resigned upon
termination of employment with the Company and all Associated Companies.




13.3 Powers of Benefits Administration Committee.





	 	(a)	 	The Benefits Administration Committee is designated a named fiduciary within
the meaning of Section 402(a) of ERISA and shall have authority and responsibility for
general supervision of the administration of the Plan. For purposes of the regulations
under Section 404(c) of ERISA, the Benefits Administration Committee shall be the
designated fiduciary responsible for safeguarding the confidentiality of all
information relating to the purchase, sale and holding of employer securities and the
exercise of shareholder rights appurtenant thereto. The Benefits Administration
Committee shall safeguard such information pursuant to written procedures providing for
such confidentiality. In addition, for purposes of avoiding any situation for undue
employer influence in the exercise of any shareholder rights, the Benefits
Administration Committee shall appoint an independent fiduciary, who shall not be
affiliated with any sponsor of the Plan, to ensure the maintenance of confidentiality
pursuant to the regulations under Section 404(c) of ERISA.






	 	(b)	 	The Benefits Administration Committee shall have total and complete discretion
to interpret the Plan, including, but not limited to, the discretion to (i) decide all
questions arising in the administration, interpretation and application of the Plan
including the power to construe and interpret the Plan; (ii) decide all questions
relating to an individual’s eligibility to participate in the Plan and/or eligibility
for benefits and the




60









 






	 	 	 	amounts thereof; (iii) decide all facts relevant to the determination of eligibility
for benefits or participation; and (iv) determine the amount, form and timing of any
distribution to be made hereunder. In making its decisions, the Benefits
Administration Committee shall be entitled to, but need not rely upon, information
supplied by a Member, Deferred Member, Beneficiary, or representative thereof.






	 	(c)	 	The members of the Benefits Administration Committee shall elect a Chairman
from their number and a Secretary who may be, but need not be, one of the members of
the Benefits Administration Committee; may appoint from their number such committees
with such powers as they shall determine; may authorize one or more of their number or
any agent to execute or deliver any instrument or make any payment on their behalf; may
retain counsel and employ agents and such clerical and accounting services as they may
require in carrying out the provisions of the Plan; and may allocate among themselves
or delegate to other persons all or such portion of their duties hereunder as they in
their sole discretion decide. The Benefits Administration Committee may also delegate
to any other person or persons the authority and responsibility of administering the
Plan including, but not limited to, telephone access by voice response or
representatives, and completing Plan transactions using forms or by other means, in
accordance with the provisions of the Plan and any policies which, from time to time,
may be established by the Benefits Administration Committee.






	 	(d)	 	Subject to the limitations of the Plan, the Benefits Administration Committee
from time to time shall establish rules or regulations for the administration of the
Plan and the transaction of its business. The Benefits Administration Committee shall
have full discretionary authority, except as to matters which the Board of Directors
from time to time may reserve to itself, to interpret the Plan and to make factual
determinations regarding any and all matters arising hereunder, including but not
limited to, the right to determine eligibility for benefits, the right to construe the
terms of the Plan and the right to remedy possible ambiguities, inequities,
inconsistencies or omissions. The Benefits Administration Committee shall also have
the right to exercise powers otherwise exercisable by the Board of Directors hereunder
to the extent that the exercise of such powers does not involve the management of Plan
assets nor, in the judgment of the Benefits Administration Committee, a substantial
number of persons. In addition, where the number of persons is deemed to be
substantial, the Benefits Administration Committee shall have the further right to
exercise such powers as may be delegated to the Benefits Administration Committee by
the Board of Directors.






	 	(e)	 	Subject to applicable federal and state Law, all interpretations,
determinations and decisions of the Benefits Administration Committee or the Board of
Directors in respect of any matter hereunder shall be final, conclusive and binding on
all parties affected thereby.






	13.4	 	Meetings






	 	 	The Benefits Administration Committee shall hold meetings upon such notice, at such place or
places, and at such time or times as it may from time to time determine.






	13.5	 	Action by Benefits Administration Committee






	 	 	The action of at least a majority of the members of the Benefits Administration Committee
expressed from time to time, by a vote at a meeting or in writing without a meeting, shall
constitute the action of the Benefits Administration Committee and shall have the same
effect for




61









 






	 	 	all purposes as if assented to by all members of the Benefits Administration Committee at
that time in office.






	13.6	 	Compensation






	 	 	No member of the Benefits Administration Committee shall receive any compensation from the
Plan for his services as such and, except as required by law, no bond or other security
shall be required of him in such capacity in any jurisdiction.






	13.7	 	Plan Assets






	 	 	The Trustee shall be appointed by the PFTIC and shall enter into an agreement with the PFTIC
for the purpose of investing and reinvesting contributions designated for the ITT Stock Fund
or other assets of the Plan as provided in Article 12. The PFTIC shall provide for the
investing and reinvesting of contributions in designated investment funds as required
herein. All benefits to which a Member or Beneficiary may be entitled from the Plan will be
paid at the direction of the Benefits Administration Committee.






	13.8	 	Powers and Duties






	 	 	The powers and duties of the Benefits Administration Committee, PFTIC and the Trustee with
respect to each group’s responsibilities under the Plan shall be specified herein or in a
separate trust agreement.






	13.9	 	Records






	 	 	The Benefits Administration Committee shall see that books of account are kept which show
all receipts and disbursements and a complete record of the operation of the Plan, including
records of each Member’s Account.






	13.10	 	Claims






	 	 	When any individual claim for benefits is denied in whole or in part, such denial shall be
handled under the claims and appeals procedures established by the Benefits Administration
Committee.




62









 











ARTICLE 14




AMENDMENT AND TERMINATION




	14.1	 	Amendment of Plan






	 	 	The Board of Directors or its delegate reserves the right at any time and from time to time,
and retroactively if deemed necessary or appropriate to conform with governmental
regulations or other policies, to modify or amend in whole or in part any or all of the
provisions of the Plan; provided that no such modification or amendment (a) shall make it
possible for any part of the funds of the Plan to be used for, or diverted to, purposes
other than for the exclusive benefit of Members, Deferred Members and Beneficiaries; or (b)
shall increase the duties of the Trustee without its consent thereto in writing, other than
to comport with changes in the Code, ERISA or the rules thereunder. Except as may be
required to conform with governmental regulations, no such amendment shall adversely affect
the rights of any Member or Deferred Member with respect to contributions made on his behalf
prior to the date of such amendment.






	 	 	However, no amendment shall make it possible for any part of the funds of the Plan to be
used for, or diverted to, purposes other than for the exclusive benefit of persons entitled
to benefits under the Plan. Except to the extent permitted under Section 411(d)(6) of the
Code and regulations issued thereunder, no amendment shall be made which has the effect of
decreasing the balance of the Accounts of any Member or of reducing the nonforfeitable
percentage of the balance of the Accounts of a Member below the nonforfeitable percentage
computed under the Plan as in effect on the date on which the amendment is adopted, or if
later, the date on which the amendment becomes effective. In addition, no amendment shall be
made that has the effect of eliminating or restricting an optional form of benefit to the
extent it is protected under Section 411(d)(6) of the Code.






	14.2	 	Termination of Plan






	 	(a)	 	The Plan is entirely voluntary on the part of the Company. The Board of
Directors reserves the right at any time to terminate the Plan or to suspend, reduce or
partially or completely discontinue contributions thereto. In the event of such
termination or partial termination of the Plan or complete discontinuance of
contributions, the interests of Members and Deferred Members shall automatically become
nonforfeitable.






	 	(b)	 	Upon termination of the Plan, Before-Tax Savings, with earnings thereon, shall
only be distributed to Members if (i) neither the Company nor an Associated Company
establishes or maintains a successor defined contribution plan, and (ii) payment is
made to the Members in the form of a lump sum distribution (as defined in Section
402(e)(4)(D) of the Code, without regard to subclauses (I) through (IV) of clause (i)
thereof). For purposes of this paragraph, a “successor defined contribution plan” is a
defined contribution plan (other than an employee stock ownership plan as defined in
Section 4975(e)(7) of the Code (“ESOP”) or a simplified employee pension as defined in
Section 408(k) of the Code (“SEP”)) which exists at the time the Plan is terminated or
within the 12-month period beginning on the date all assets are distributed. However,
in no event shall a defined contribution plan be deemed a successor plan if fewer than
2 percent of the employees who are eligible to participate in the Plan at the time of
its termination are or were eligible to participate under another defined contribution
plan of the Company or an Associated Company (other than an ESOP or a SEP, as herein
defined) at any time during the period beginning 12 months before and ending 12 months
after the date of the Plan’s termination.




63









 












	14.3	 	Merger or Consolidation of Plan






	 	 	The Board of Directors or its delegate may, in its sole discretion, merge this Plan with
another qualified plan or transfer a portion of the Plan’s assets or liabilities to another
qualified plan, subject to any applicable legal requirement. The Plan may not be merged or
consolidated with, nor may its assets or liabilities be transferred to, any other plan
unless each Member, Deferred Member, or Beneficiary under the Plan would, if the resulting
plan were then terminated, receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he would have been entitled to
receive immediately before the merger, consolidation, or transfer if the Plan had then
terminated.




64









 











ARTICLE 15




TENDER OFFER




	15.1	 	Applicability






	 	 	The provisions of this Article 15 shall apply in the event any person, either alone or in
conjunction with others, makes a tender offer, or exchange offer, or otherwise offers to
purchase or solicits an offer to sell to such person one percent or more of the outstanding shares of a class of ITT Stock held by the Trustee hereunder (herein jointly and severally
referred to as a “tender offer”). As to any tender offer, each Member and Deferred Member
(or Beneficiary in the event of the death of the Member or Deferred Member) shall have the
right to determine confidentially whether shares held subject to the Plan will be tendered.






	15.2	 	Instructions to Trustee






	 	 	In the event a tender offer for ITT Stock is commenced, the Benefits Administration
Committee, promptly after receiving notice of the commencement of such tender offer, shall
transfer certain of its recordkeeping functions to an independent recordkeeper. The
functions so transferred shall be those necessary to preserve the confidentiality of any
directions given by the Members and Deferred Members (or Beneficiary in the event of the
death of the Member or Deferred Member) in connection with the tender offer. The Trustee may
not take any action in response to a tender offer except as otherwise provided in this
Article 15. Each Member is, for all purposes of this Article 15, hereby designated a named
fiduciary within the meaning of Section 402(a)(2) of ERISA with respect to the shares of ITT
Stock allocated to his Accounts, determined as herein described. An individual’s
proportionate share of the ITT Stock Fund as to which he holds fiduciary status for purposes
of responding to a tender or exchange offer shall be determined at the time such fiduciary
rights are exercisable by multiplying the number of shares credited at that time to the ITT
Stock Fund by a fraction, the numerator of which is the value (as of the Valuation Date
designated by the Benefits Administration Committee for this purpose) of that part of the
Member’s Accounts invested in the ITT Stock Fund and the denominator of which is the
aggregate value of all amounts allocated to the ITT Stock Fund. Each Member and Deferred
Member (or Beneficiary in the event of the death of the Member or Deferred Member) may
direct the Trustee to sell, offer to sell, exchange or otherwise dispose of the ITT Stock
allocated to any such individual’s Accounts in accordance with the provisions, conditions
and terms of such tender offer and the provisions of this Article 15, provided, however,
that such directions shall be confidential and shall not be divulged by the Trustee or
independent recordkeeper to the Company or to any director, officer, employee or agent of
the Company, it being the intent of this provision of Section 15.2 to ensure that the
Company (and its directors, officers, employees and agents) cannot determine the direction
given by any Member, Deferred Member or Beneficiary. Such instructions shall be in such form
and shall be filed in such manner and at such time as the Trustee may prescribe. The
confidentiality provision of this Section shall likewise apply to the directions given to,
and actions taken by, the Trustee pursuant to Section 15.5.






	15.3	 	Trustee Action on Member Instructions






	 	 	The Trustee shall sell, offer to sell, exchange or otherwise dispose of the ITT Stock
allocated to the Member’s, Deferred Member’s or Beneficiary’s Accounts with respect to which
it has received directions to do so under this Article 15 or as provided in Section 15.5.
The proceeds of a disposition directed by a Member, Deferred Member or Beneficiary from his
Accounts under this Article 15 shall be allocated to such individual’s Accounts and be
governed by the provisions of




65









 






	 	 	Section 15.5 or other applicable provisions of the Plan and the trust agreements established
under the Plan.






	15.4	 	Action With Respect to Members Not Instructing the Trustee or Not Issuing Valid Instructions






	 	 	To the extent to which Members, Deferred Members and Beneficiaries do not issue valid
directions to the Trustee to sell, offer to sell, exchange or otherwise dispose of the ITT
Stock allocated to their Accounts, such individuals shall be deemed to have directed the
Trustee that such shares remain invested in ITT Stock subject to all provisions of the Plan,
including Section 15.5 and the trust agreements established under the Plan.






	15.5	 	Investment of Plan Assets after Tender Offer






	 	 	To the extent possible, the proceeds of a disposition of ITT Stock in an individual’s
Accounts shall be reinvested in ITT Stock by the Trustee as expeditiously as possible in the
exercise of the Trustee’s fiduciary responsibility and shall otherwise be held by the
Trustee subject to the provisions of the trust agreement, the Plan and any applicable note
or loan agreement. In the event that ITT Stock is no longer available to be acquired
following a tender offer, the Company may direct the substitution of new employer securities
for the ITT Stock or for the proceeds of any disposition of ITT Stock. Pending the
substitution of new employer securities or the termination of the Plan and trust, the Trust
Fund shall be invested in such securities as the Trustee shall determine; provided, however,
that, pending such investment, the Trustee shall invest the cash proceeds in short-term
securities issued by the United States of America or any agency or instrumentality thereof
or any other investments of a short-term nature, including corporate obligations or
participations therein and interim collective or common investment funds.




66









 











ARTICLE 16




GENERAL AND ADMINISTRATIVE PROVISIONS




	16.1	 	Relief from Liability






	 	 	The Plan is intended to constitute a Plan as described in Section 404(c) of ERISA and Title
29 of the Code of Federal Regulations Section 2550.404c-1. The Plan fiduciaries are
relieved of any liability for any losses that are the direct and necessary result of
investment instructions given by any Member, Deferred Member or Beneficiary.






	16.2	 	Payment of Expenses






	 	(a)	 	Direct charges and expenses arising out of the purchase or sale of securities
and taxes levied on or measured by such transactions, and any investment management
fees, with respect to any Investment Fund, may be paid in part by the Company. Any
such charges, expenses, taxes and fees not paid by the Company shall be paid from the
Investment Fund with respect to which they are incurred.






	 	(b)	 	An annual charge to the Trust Fund of up to 0.25% of the market value of the
assets held by such Trust Fund may be charged and applied to satisfy expenses incurred
in conjunction with Plan administration, including, but not limited to, Trustee,
recordkeeping, and audit fees; the Company shall pay all other expenses reasonably
incurred in administering the Plan, including expenses of the Benefits Administration
Committee, the PFTIC and the Trustee, such compensation to the Trustee as from time to
time may be agreed between the PFTIC and Trustee, fees for legal services, any
investment management fees not paid pursuant to Section 16.2(a), and all taxes, if any.






	16.3	 	Source of Payment






	 	 	Benefits under the Plan shall be payable only out of the Trust Fund, and the Company shall
not have any legal obligation, responsibility or liability to make any direct payment of
benefits under the Plan. Neither the Company nor the Trustee guarantees the Trust Fund
against any loss or depreciation or guarantees the payment of any benefit hereunder. No
person shall have any rights under the Plan with respect to the Trust Fund, or against the
Company, except as specifically provided for herein.






	16.4	 	Inalienability of Benefits






	 	 	Except as specifically provided in the Plan or as Section 401(a)(13) of the Code or other
applicable law may otherwise require or as may be required under the terms of a qualified
domestic relations order, no benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any
attempts so to do shall be void, nor shall any such benefit be in any manner liable for or
subject to debts, contracts, liabilities, engagements or torts of the person entitled to
such benefit; and in the event that the Benefits Administration Committee shall find that
any attempt has been made to anticipate, alienate, sell, transfer, assign, pledge, encumber
or charge any of the benefits under the Plan of any Member, Deferred Member or Beneficiary
who is or may become entitled to benefits hereunder, except as specifically provided in the
Plan or as applicable law may otherwise require, then such benefit shall cease and
terminate, and in that event the Benefits Administration Committee shall hold or apply the
same to or for the benefit of such Member, Deferred Member




67









 






	 	 	or Beneficiary who is or may become entitled to benefits hereunder, his spouse, children,
parents or other blood relatives, or any of them.






	 	 	A Member’s benefit under the Plan shall be offset or reduced by the amount the Member is
required to pay to the Plan under the circumstances set forth in Section 401(a)(13)(C) of
the Code.






	 	 	A Member’s benefit under the Plan shall be distributed as required because of the
enforcement of a federal tax levy made pursuant to Section 6331 of the Code or the
collection by the United States on a judgment resulting from an unpaid tax assessment.






	16.5	 	No Right to Employment






	 	 	Nothing herein contained nor any action taken under the provisions hereof shall be construed
as giving any Employee the right to be retained in the employ of the Company.






	16.6	 	Inability to Locate Member or Beneficiary






	 	 	Notwithstanding the foregoing, if the Benefits Administration Committee is unable to locate
any person to whom a payment is due under the Plan or any person fails to present a check
for payment in a timely manner, the amount due such person shall be forfeited at such time
as the Benefits Administration Committee shall determine in its sole discretion and pursuant
to nondiscriminatory rules established for that purpose (but in all events prior to the time
such payment would otherwise escheat under any applicable State law). If, however, such a
person later files a claim for such payment before the Plan is terminated, the benefit will
be reinstated and payment made without any interest earned thereon.






	16.7	 	Uniform Action






	 	 	Action by the Benefits Administration Committee shall be uniform in nature as applied to all
persons similarly situated, and no such action shall be taken which will discriminate in
favor of any Members who are Highly Compensated Employees.






	16.8	 	Headings






	 	 	The headings of the sections in this Plan are placed herein for convenience of reference and
in the case of any conflict, the text of the Plan, rather than such headings, shall control.






	16.9	 	Use of Pronouns






	 	 	The masculine pronouns as used herein shall be equally applicable to both men and women, and
words used in the singular are intended to include the plural, whenever appropriate.






	16.10	 	Construction






	 	 	The Plan shall be construed, regulated and administered in accordance with the laws of the
State of New York, subject to the provisions of applicable federal laws.




68









 











ARTICLE 17




TOP-HEAVY PROVISIONS




	17.1	 	Definitions






	 	 	The following definitions apply to the terms used in this Section:






	 	(a)	 	“applicable determination date” means the last day of the preceding Plan Year;






	 	(b)	 	“top-heavy ratio” means the ratio of (i) the value of the aggregate of the
Accounts under the Plan for key employees to (ii) the value of the aggregate of the
Accounts under the Plan for all key employees and non-key employees;






	 	(c)	 	“key employee” means any employee or former employee (including any deceased
employee) who at any time during the Plan Year that includes the determination date was
an officer of the Company or Associated Company having Statutory Compensation greater
than $130,000 (as adjusted under Section 416(i)(1) of the Code for Plan Years beginning
after December 31, 2002), a 5-percent owner (as defined in Section 416(i)(1)(B)(i) of
the Code) of the Company or Associated Company, or a 1-percent owner (as defined in
Section 416(i)(1)(B)(ii) of the Code) of the Company or Associated Company having
Statutory Compensation of more than $150,000. The determination of who is a key
employee will be made in accordance with Section 416(i) of the Code and the applicable
regulations and other guidance of general applicability issued thereunder;






	 	(d)	 	“non-key employee” means any Employee who is not a key employee;






	 	(e)	 	“applicable Valuation Date” means the Valuation Date coincident with or
immediately preceding the last day of the preceding Plan Year;






	 	(f)	 	“required aggregation group” means any other qualified plan(s) of the Company
or an Associated Company (including plans that terminated within the five-year period
ending on the applicable determination date) in which there are Members who are key
employees or which enable(s) the Plan to meet the requirements of Section 401(a)(4) or
410 of the Code; and






	 	(g)	 	“permissive aggregation group” means each plan in the required aggregation
group and any other qualified plan(s) of the Company or an Associated Company in which
all members are non-key employees, if the resulting aggregation group continues to meet
the requirements of Sections 401(a)(4) and 410 of the Code.






	17.2	 	Determination of Top Heavy Status






	 	 	For purposes of this Section, the Plan shall be “top-heavy” with respect to any Plan Year if
as of the applicable determination date the top-heavy ratio exceeds 60 percent. The
top-heavy ratio shall be determined as of the applicable Valuation Date in accordance with
Sections 416(g)(3) and (4) of the Code and Article 5 of this Plan, and shall take into
account any contributions made after the applicable Valuation Date but before the last day
of the Plan Year in which the applicable Valuation Date occurs. The determination of
whether the Plan is top-heavy is subject to the following:




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	 	(a)	 	the Accounts under the Plan will be combined with the account balances or the
present value of accrued benefits under each other plan in the required aggregation
group and, in the Company’s discretion, may be combined with the account balances or
the present value of accrued benefits under any other qualified plan in the permissive
aggregation group;






	 	(b)	 	the Accounts for an employee as of the applicable determination date shall be
increased by the distributions made with respect to the employee under the Plan and any
plan aggregated with the Plan under Section 416(g)(2) of the Code during the one-year
period (five-year period in the case of a distribution made for a reason other than
severance from employment, death, or disability) ending on the applicable determination
date;






	 	(c)	 	distributions under any plan that terminated within the five-year period ending
on the applicable determination date shall be taken into account if such plan contained
key employees and, therefore, would have been part of the required aggregation group;
and






	 	(d)	 	if an individual has not performed services for the Company or an Associated
Company at any time during the one-year period ending on the applicable determination
date, such individual’s accounts and the present value of his or her accrued benefits
shall not be taken into account.






	17.3	 	Minimum Requirements






	 	 	For any Plan Year with respect to which the Plan is top-heavy, an additional Company
contribution shall be allocated on behalf of each Member (or each Employee eligible to
become a Member) who is not a “key employee,” and who has not separated from service as of
the last day of the Plan Year, to the extent that the amounts allocated to his Accounts as a
result of contributions made on his behalf under Sections 5.1 and 5.2 for the Plan Year
would otherwise be less than 3% of his Statutory Compensation. However, if the greatest
percentage of Statutory Compensation contributed on behalf of a key employee under Sections
4.1, 5.1, and 5.2 for the Plan Year (disregarding any contributions made under Section 5.5
for the Plan Year) would be less than 3%, such lesser percentage shall be substituted for
“3%” in the preceding sentence. Notwithstanding the foregoing provisions of this Section
17.3, no minimum contribution shall be made with respect to a Member, or an Employee who is
eligible to become a Member, if the required minimum benefit under Section 416(c)(1) of the
Code is provided by any qualified defined benefit plan of the Company or an Associated
Company.




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ARTICLE 18




QUALIFIED DOMESTIC RELATIONS ORDERS




	18.1	 	Applicability of Article






	 	 	The Benefits Administration Committee shall apply the provisions of this Article with regard
to a Domestic Relations Order (as defined below) to the extent not inconsistent with Section
414(p) of the Code.






	18.2	 	Establishment of Procedures






	 	 	The Benefits Administration Committee shall establish procedures, consistent with Section
414(p) of the Code, to determine the qualified status of any Domestic Relations Order (as
defined below), to administer distributions under any Qualified Domestic Relations Order (as
defined below), and to provide to the Member and the Alternate Payee(s) (as defined below)
all notices required under Section 414(p) of the Code with respect to any Domestic Relations
Order. Such procedures shall be binding on all Members and Alternate Payees.






	18.3	 	Determination of Qualified Domestic Relations Order Status






	 	 	Within a reasonable period of time after the receipt of a certified copy of a Domestic
Relations Order (or any modification thereof), the Benefits Administration Committee or its
designee shall determine whether such order is a Qualified Domestic Relations Order. The
Benefits Administration Committee shall have full and complete discretion to determine
whether a domestic relations order constitutes a qualified domestic relations order and
whether the Alternate Payee otherwise qualifies for benefits hereunder.






	18.4	 	Establishment of Segregated Accounts and Payment Procedures






	 	(a)	 	Separate Account for Deferred Amounts






	 	 	 	If a Domestic Relations Order has been determined to be a Qualified Domestic
Relations Order in accordance with Section 18.3, a separate account for the benefits
of the Alternate Payee named in such order shall be established.






	 	(b)	 	Temporary Holding Account






	 	 	 	If, during any period in which the issue of (i) whether a Domestic Relations Order
is a Qualified Domestic Relations Order, or (ii) whether a proposed Domestic
Relations Order would, if it were perfected as a Domestic Relations Order, be a
Qualified Domestic Relations Order is being determined (by the Benefits
Administration Committee, by a court of competent jurisdiction, or otherwise), the
Alternate Payee would be entitled to any payment if the order has been determined to
be a Qualified Domestic Relations Order, the Benefits Administration Committee shall
separately account for, and may cause to be segregated in a separate account, all
amounts which would have been payable to any Alternate Payee during such period if
such order had been determined to be a Qualified Domestic Relations Order.




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	 	(c)	 	Payment from Temporary Holding Account in Certain Cases






	 	 	 	If, by the expiration of the 18-month period beginning on the date the first payment
would be required to be made to an Alternate Payee under a Domestic Relations Order,
either it has been determined that a Domestic Relations Order is not a Qualified
Domestic Relations Order or the issue as to whether such order is a Qualified
Domestic Relations Order has not been resolved, the Benefits Administration
Committee shall cause to be paid all amounts which have been segregated (or
separately accounted for) by reason of such order pursuant to paragraph (b) above,
including any earnings having accrued thereon, to the person or persons who would
have been entitled to such amounts if there had been no order. Notwithstanding the
preceding sentence, if the Member or his or her Beneficiaries are not yet entitled,
or have not elected, to receive benefit payments under the Plan, such amounts,
including all earnings having accrued thereon, shall be restored to the Member’s
Accounts and invested in accordance with the investment election most recently
submitted by the Member pursuant to Section 7.4.






	 	(d)	 	Payment from Separate Account and Temporary Holding Account to Alternate Payee
of Order if Determined to be a Qualified Domestic Relations Order






	 	 	 	If a Domestic Relations Order (or any modification thereof) is determined to be a
Qualified Domestic Relations Order, the Benefits Administration Committee shall
instruct the Trustee to apply, on a prospective basis, the terms and provisions of
such Qualified Domestic Relations Order, and, in the event any amounts were
segregated (or separately accounted for) by reason of such order pursuant to
paragraph (b) above, the Benefits Administration Committee shall cause to be paid in
accordance with the provisions of the Plan all amounts which have been so segregated
(and have not been released pursuant to paragraph (c)) (or separately accounted
for), including any earnings having accrued thereon, to the Alternate Payee(s)
entitled thereto.






	18.5	 	Subsequent Determination or Order to be Applied Prospectively






	 	 	If a determination is made after the expiration of the 18-month period beginning on the date
the first payment would be required to be made to an Alternate Payee under a Domestic
Relations Order that such order (or any modification thereof) is a Qualified Domestic
Relations Order, such order shall be applied prospectively only.






	18.6	 	Withdrawals, Distributions and Loans by or to Members.






	 	(a)	 	Withdrawals and Distributions






	 	 	 	A Member or Deferred Member shall not be permitted to withdraw from the Plan, nor
shall there be distributed to a Member or Deferred Member, any amounts being held in
a segregated account by reason of a Domestic Relations Order.






	 	(b)	 	Loans






	 	 	In determining the maximum amount of any loan to a Member pursuant to Article 10,
the Benefits Administration Committee shall not include any portion of the Member’s
Accounts being held in a segregated account (or being separately accounted for) by
reason of a Domestic Relations Order.




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	18.7	 	Earliest Commencement Date






	 	 	A Domestic Relations Order shall not fail to be a Qualified Domestic Relations Order merely
because it provides for distribution to the Alternate Payee prior to the Member’s
Termination of Employment. Notwithstanding anything herein to the contrary, if the amount
payable to the Alternate Payee under the Qualified Domestic Relations Order is less than
$5,000, such amount shall be paid in one lump sum as soon as practicable following the
qualification of the order. If the amount exceeds $5,000, it may be paid as soon as
practicable following the qualification of the order if the Qualified Domestic Relations
Order so provides and the Alternate Payee consents thereto; otherwise, it may not be payable
before the earliest of the Member’s Termination of Employment, the time such amount could
otherwise be withdrawn under the terms of this Plan, or the Member’s attainment of age 50.






	18.8	 	Definitions






	 	 	For purposes of this Article:






	 	(a)	 	Alternate Payee shall mean any spouse, former spouse, child or other dependent
of a Member who is recognized by a Domestic Relations Order as having a right to
receive all, or a portion of, the benefits payable under the Plan with respect to such
Member.






	 	(b)	 	Domestic Relations Order shall mean any judgment, decree or order (including
approval of a property settlement agreement) which:






	 	(i)	 	relates to the provision of child support, alimony payments or
marital property rights to a spouse, former spouse, child, or other dependent
of a Member; and






	 	(ii)	 	is made pursuant to a state domestic relations law (including a
community property law).






	 	(c)	 	Qualified Domestic Relations Order shall mean a Domestic Relations Order which
meets the requirements of Section 414(p)(1) of the Code.




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APPENDIX A



Notwithstanding anything contained herein to the contrary, Special Company Contributions shall be
made under Section 5.2(b) as follows:





	A.	 	Special DC Credit Contribution






	 	 	With respect to an Employee who:






	 	(i)	 	was an “Employee” (as defined under the provisions of the ITT Salaried
Retirement Plan as in effect immediately prior to October 31, 2011) on October 30, 2011
and becomes a Member of the Plan on October 31, 2011; and






	 	(ii)	 	was not a participant in the ITT Salaried Retirement Plan in 2011 as a result
of the restructuring of the ITT Corporation






	 	 	the Company shall make a Special DC Credit Contribution to the Plan for the 2011 Plan Year.






	 	 	Such Special DC Credit Contribution shall be equal to the amount that would have been
contributed as a Core Contribution to the Plan if the Plan had been in effect prior to the
October 31, 2011, based on the Salary such Employee received during the period beginning on
the date he was most recently hired or rehired by ITT Corporation or one of its subsidiaries
prior to October 31, 2011 and ending on October 31, 2011 and while he was an “Employee” (as
defined in the ITT Salaried Retirement Plan as in effective immediately prior to October 31,
2011).






	B.	 	Transition Credit Contributions






	 	 	The Company shall make Transition Credit Contributions subject to the following:






	 	1.	 	Eligibility






	 	 	 	The following Employees shall be eligible for Transition Credit Contributions:






	 	(i)	 	each Employee who was an employee of ITT Corporation or one of
its subsidiaries on October 30, 2011 and who becomes a Member of the Plan on
October 31, 2011;






	 	(ii)	 	each individual who was an employee of ITT Corporation or one
of its subsidiaries on October 30, 2011, who became an employee of Exelis Inc.
on October 31, 2011, and who becomes an Employee immediately following
termination of employment with Exelis Inc. and prior to March 1, 2012; and






	 	(iii)	 	each individual who was an employee of ITT Corporation or one
of its subsidiaries on October 30, 2011, who became an employee of Xylem Inc.
on October 31, 2011, and who becomes an Employee immediately following
termination of employment with Xylem Inc. and prior to March 1, 2012.




74









 












	2	 	Amount






	 	(i)	 	With respect to a Member whose age and Service as of the first day of
the applicable Plan Year, as defined below, total 60 to 69 points, the Company
shall make a
Transition Credit Contribution equal to three percent of the Member’s Salary for
the Plan Year.






	 	(ii)	 	With respect to a Member whose age and Service as of the first
day of the applicable Plan Year, as defined below, total 70 or more points, the
Company shall make a Transition Credit Contribution equal to five percent of
the Member’s Salary for the Plan Year.






	 	 	For purposes of the preceding provisions, a Member’s age and Service shall be
calculated on a basis uniformly applicable to all Members similarly situated as
established by the Benefits Administration Committee.
	 
	3.	 	Timing and Frequency
	 
	 	 	Subject to paragraph 4 below, Transition Credit Contributions shall be made for each
Plan Year and shall be made no later than the due for the corporate tax return for
the Plan Year for which the Transition Credit Contributions are made.
Notwithstanding the foregoing, if an eligible Member terminates employment during
the Plan Year for which a Transition Credit Contribution is payable, such Member’s
Transition Credit Contribution for such Plan Year shall be made as soon as
practicable following the end of the calendar year in which the Member terminates
employment.






	4.	 	Duration






	 	 	Transition Credit Contributions shall be made beginning as of October 31, 2011 and
until the earliest of:






	 	(i)	 	October 31, 2016;






	 	(ii)	 	a Member’s commencement of his traditional pension plan (TPP)
benefit from the ITT Salaried Retirement Plan;






	 	(iii)	 	a change in control of ITT;






	 	(iv)	 	a Member’s termination of employment (regardless of whether the
Member is subsequently reemployed); or






	 	(v)	 	a Member’s death.




75









 










The following Appendices B through H apply to certain Members or Deferred Members who had benefits
transferred to the Plan from the ISP attributable to accounts that were transferred into the ISP
from another qualified plan, as specified in the applicable Appendix






76









 








APPENDIX B



This Appendix B shall apply solely to Members and Deferred Members who formerly participated in the
Allis-Chalmers Savings Plan (the “Allis-Chalmers Plan”) and with respect to whom assets were
transferred to the ISP from the Allis-Chalmers Plan. All service recognized under the
Allis-Chalmers Plan for purposes of eligibility to participate and vesting shall be recognized
hereunder as Service.





	A.	 	Subject to Section 11.3 with respect to Accounts that are less than $5,000 and in addition to
the distribution forms enumerated in Section 11.3 of the Plan, upon incurring a Termination of
Employment a Member or Deferred Member described above may elect to receive those amounts
transferred from the Allis-Chalmers Plan to the ISP in the distribution forms described
herein:






	 	1.	 	In installments at intervals not more frequently than once per calendar quarter
over a period of years not exceeding the joint life expectancy of the Member or
Deferred Member and his spouse, as determined under Section 72 of the Code and the
regulations thereunder.






	 	2.	 	In installments at intervals not more frequently than once per calendar quarter
over a period of years which does not extend beyond the Member’s or Deferred Member’s
life expectancy, calculated as follows:






	 	(i)	 	the fixed payment shall be determined annually at the time
payments are to commence, and as of the first day of each succeeding Plan Year,
by multiplying the amount transferred to the ISP from the Allis-Chalmers Plan
by a fraction, the numerator of which is one, and the denominator is the
Member’s or Deferred Member’s life expectancy as of the date of such
determination, as determined under Section 72 of the Code and the regulations
thereunder; and






	 	(ii)	 	then dividing the amount determined under (i) above, by the
number of payments to be paid to the Member or Deferred Member during that Plan
Year.






	 	3.	 	By purchasing an annuity contract for the benefit of the Member or Deferred
Member from a legal reserve life insurance company selected by the Company. If the
Member or Deferred Member is married, such annuity contract shall be in the form of a
qualified joint and survivor annuity unless the Member or Deferred Member, with his
spouse’s consent unless it is established to the satisfaction of the Benefits
Administration Committee that the spouse cannot be located, elects another form of
annuity contract and does not revoke such election within the 90-day period ending on
the first day of the first period for which an amount is received as an annuity. Any
election by a Member or Deferred Member to waive a qualified joint and survivor annuity
must be in writing. The spouse’s consent must be in writing, must acknowledge the
effect of such election and be witnessed by a notary public. A qualified joint and
survivor annuity means an annuity for the life of the Member or Deferred Member with a
survivor annuity for the life of the spouse which is not less than 50 percent and not
more than 100 percent of the annuity which is payable during the joint lives of the
Member or Deferred Member and the spouse, and which is the actuarial equivalent of a
single life annuity for the life of the Member or Deferred Member.






	 	 	The Member or Deferred Member shall, no less than 30 days and no more than 90 days
prior to the first day of the first period for which an amount is received as an
annuity, be provided a written explanation of (i) the terms and conditions of the
qualified joint and




77









 






	 	 	survivor annuity; (ii) the Member’s or Deferred Member’s right to make and the
effect of an election to waive the qualified joint and survivor annuity form of
benefit; (iii) the rights of the Member’s or Deferred Member’s spouse; and (iv) the
right to make, and the effect of, a revocation of a previous election to waive the
qualified joint and survivor annuity. If an annuity form other than a qualified
joint and survivor annuity is elected hereunder, such annuity may not be in a form
that will provide for payments over a period extending beyond either the life of the
Member or Deferred Member (or the lives of the Member or Deferred Member and his
designated Beneficiary) or the life expectancy of the Member or Deferred Member (or
the life expectancy of the Member or Deferred Member and his designated
Beneficiary), and such other forms available under the annuity contract shall be so
designed as to provide that at least 50 percent of the reserve that would be
required to provide payments to the Member or Deferred Member in the normal form
under the Plan will be applied to him over his normal life expectancy.






	 	 	The Company shall cause the contract to be assigned or delivered to the person or
persons then entitled to payment under it. Before the assignment or delivery of an
annuity contract, such contract shall be rendered nontransferable except by
surrender to the issuing insurance company.






	 	4.	 	A Member or Deferred Member may elect to receive the benefits to which this
Appendix B applies in any combination of the forms enumerated herein.






	B.	 	Subject to Section 11.3 with respect to Accounts that are less than $5,000 and in addition to
the distribution forms enumerated in Section 11.3 of the Plan, in the event a Member or
Deferred Member dies before his benefit attributable to amounts transferred from the
Allis-Chalmers Plan to the ISP, or any portion thereof, has been paid to him, the unpaid
balance of such amount shall be paid to his designated Beneficiary as follows:






	 	1.	 	If the beneficiary is an individual or individuals, the amount described in
paragraph (B) above shall be paid to such Beneficiary in one of the methods described
in paragraph (A) above, as elected by such Beneficiary. In the case of a Beneficiary
who elects to receive installments or an annuity, payments thereunder shall not extend
beyond the life expectancy of the Beneficiary.






	 	2.	 	If the Beneficiary is other than an individual or individuals, the Member’s or
Deferred Member’s benefit subject to this Appendix B shall be paid in a lump sum
payment.






	C.	 	Subject to Section 11.3 with respect to Accounts that are less than $5,000 and in addition to
the distribution forms enumerated in Section 11.3 of the Plan, in the event a Member or
Deferred Member dies after installments have commenced, the remainder of his distributable
benefit will be paid to his Beneficiary in a single lump sum except that such Beneficiary may
elect to receive such benefit in the installment forms described in paragraph (A) above. If
the Beneficiary so elects, installments shall be over a period of years not exceeding the
number of years that installments would have continued to be paid to the Member or Deferred
Member had he lived, provided the Member or Deferred Member had been receiving installments
under subsection (A)(1) and over a period of years which does not extend beyond the Member’s
or Deferred Member’s life expectancy on the day before the date of his death, provided the
Member or Deferred Member has been receiving installments under subsection (A)(2).






	D.	 	Notwithstanding anything in this Appendix B to the contrary, single sum payments shall be
made, installments shall commence, and annuity contracts shall be purchased not later than one
year after the date of the Member’s or Deferred Member’s death. In the event a Beneficiary
dies before




78









 






	 	 	he has received the entire amount payable to him under this Appendix B, the Beneficiary’s
beneficiary shall be paid the balance of the amount payable hereunder in a single lump sum
payment within one year of the Beneficiary’s death.




79









 











APPENDIX C



This Appendix C shall apply solely to Members and Deferred Members who formerly participated in the
ITT Higbie Manufacturing Company Retirement Profit-Sharing Plan (the “Higbie Plan”) and with
respect to whom assets and liabilities were transferred to the ISP from the Higbie Plan. All
service recognized under the Higbie Plan for purposes of eligibility to participate and vesting
were recognized under the ISP as Service.





	A.	 	Subject to Section 11.3 with respect to Accounts that are less than $5,000 and in addition to
the distribution forms enumerated in Section 11.3 of the Plan, upon incurring a Termination of
Employment after attaining age 50 and 10 years of Service or attaining age 65, a Member
described above may elect to receive those amounts transferred from the Higbie Plan to the ISP
in the distribution forms described herein. Such amounts shall commence, as selected by the
Member, as of the earlier of the Valuation Date next following a Member’s Termination of
Employment on or after his age 65 or any Valuation Date selected by the Member following the
Member’s attainment of age 50 and 10 years of Service but prior to the Valuation Date next
following his age 65:






	 	1.	 	In approximately equal monthly or annual installments over a period not to
exceed 10 years.






	 	2.	 	By purchasing an annuity contract for the benefit of the Member or Deferred
Member from a legal reserve life insurance company selected by the Company. If the
Member elects to receive his benefits hereunder in the form of an annuity and if the
Member is married on the date benefits commence, such annuity contract shall be in the
form of a 50 percent qualified joint and survivor annuity unless the Member, with his
spouse’s consent unless it is established to the satisfaction of the Benefits
Administration Committee that the spouse cannot be located, elects another form of
annuity contract and does not revoke such election within the 90-day period ending on
the first day of the first period for which an amount is received as an annuity. Any
election by a Member or Deferred Member to waive a qualified joint and survivor annuity
must be in writing. The spouse’s consent must be in writing, must acknowledge the
effect of such election and be witnessed by a notary public. A qualified joint and
survivor annuity means an annuity for the life of the Member with a survivor annuity
for the life of the spouse which is not less than 50 percent and not more than 100
percent of the annuity which is payable during the joint lives of the Member and the
spouse, and which is the actuarial equivalent of a single life annuity for the life of
the Member. In the event the Member elects to receive his benefit hereunder in the
form of an annuity other than a joint and survivor annuity with his spouse as
Beneficiary, the value of the benefit payable to the Member under the annuity shall
never be less than 51 percent of the total value of the benefits payable under the
annuity to the Member and his Beneficiary.
	 
	 	 	 	The Member shall, no less than 30 days and no more than 90 days prior to the first
day of the first period for which an amount is received as an annuity, be provided a
written explanation of (i) the terms and conditions of the qualified joint and
survivor annuity; (ii) the Member’s or Deferred Member’s right to make and the
effect of an election to waive the qualified joint and survivor annuity form of
benefit; (iii) the rights of the Member’s or Deferred Member’s spouse; and (iv) the
right to make, and the effect of, a revocation of a previous election to waive the
qualified joint and survivor annuity. If an annuity form other than a qualified
joint and survivor annuity is elected hereunder, such annuity may not be in a form
that will provide for payments over a period extending beyond either the




80









 






	 	 	 	life of the Member (or the lives of the Member and his designated Beneficiary) or
the life expectancy of the Member (or the life expectancy of the Member and his
designated Beneficiary), and such other forms available under the annuity contract
shall be so designed as to provide that at least 50 percent of the reserve that
would be required to provide payments to the Member in the normal form under the
Plan will be will be applied to him over his normal life expectancy.






	 	B.	 	In the event of the death of a Member or Deferred Member prior to commencing benefits
hereunder, such benefit shall be paid to his Beneficiary as of the Valuation Date coincident
with or next following the Member’s or Deferred Member’s date of death in a single sum payment
or in installment payments, if the Member or Deferred Member has named one Beneficiary and has
so elected, such amount shall be payable in 120 equal, as near as may be, monthly
installments, with any funds remaining at the death of the Beneficiary to go to the
Beneficiary’s estate in one lump sum, or if no Beneficiary survives the Member or Deferred
Member, such amounts shall be payable to the Member’s or Deferred Member’s estate in a single
lump sum. In either case, the Member or Deferred Member may name one or more contingent
Beneficiaries to take in full at such Member’s or Deferred Member’s death in the event the
primary Beneficiary or Beneficiaries have not survived the Member or Deferred Member.






	 	C.	 	In the event of the death of a Member who is receiving installments pursuant to paragraph
(A)(1) hereof and who has designated a Beneficiary to receive installment payments pursuant to
paragraph (B) hereof, such Member’s installment payments shall continue until the July 31 next
following the Member’s death and thereafter shall be payable pursuant to paragraph (B) above
in 120 equal, as near as may be, monthly installments, with any amounts remaining at the death
of the Beneficiary to go to the Beneficiary’s estate in a single lump sum.




81









 











APPENDIX D



This Appendix D shall apply solely to Members and Deferred Members who formerly participated in the
General Motors Savings-Stock Purchase Program for Salaried Employees in the United States (the “GM
Plan”) and with respect to whom assets and liabilities were transferred to the ISP from the GM
Plan. All service recognized under the GM Plan for purposes of eligibility to participate and
vesting was recognized as Service under the ISP.





	A.	 	Subject to Section 11.3 with respect to a Accounts that are less than $5,000 and in addition
to the distribution forms enumerated in Section 11.3 of the Plan, upon incurring a Termination
of Employment, a Member or Deferred Member described above may elect to receive those amounts
transferred from the GM Plan to the ISP in the distribution forms described herein:






	 	1.	 	In installment payments on a monthly, quarterly, semi-annual, or annual basis.
Installments are to be paid in whole dollar amounts, with $1,200 as the minimum annual
installment. A Member or Deferred Member may change the timing, amount, or discontinue
installment payments. Installment payments will commence:






	 	(i)	 	for monthly payments, the first of the month next following the
month in which the Member’s or Deferred Member’s election is received by the
Plan; and






	 	(ii)	 	for quarterly, semi-annual, and annual payments, not sooner
than the month next following the month in which the Plan receives the Member’s
or Deferred Member’s election.






	 	2.	 	A Member or Deferred Member who has incurred a Termination of Employment may
elect to withdraw a portion of the amounts hereunder at any time, but no more
frequently than once per calendar year. In addition to any partial withdrawal, a
Member or Deferred Member may elect, at any time, to receive a complete distribution of
the amounts with respect to which this Appendix D applies.






	B.	 	A Member or Deferred Member shall be permitted to defer commencement of benefits hereunder
until the April 1 next following the date such Member or Deferred Member attains age 701/2.




82









 











APPENDIX E



This Appendix E shall apply solely to Members and Deferred Members who formerly participated in the
Goulds Pumps, Inc. Retirement Savings and Investment Plan (the “Goulds Plan”) and with respect to
whom assets and liabilities were transferred to the ISP from the Goulds Plan. All service
recognized under the Goulds Plan for purposes of eligibility to participate and vesting was
recognized as Service under the ISP.





	A.	 	Subject to Section 11.3 with respect to a Accounts that are less than $5,000 and in addition
to the distribution forms enumerated in Section 11.3 of the Plan, upon incurring a Termination
of Employment a Member or Deferred Member described above may elect to receive those amounts
transferred from the Goulds Plan to the Plan in installment payments on a monthly or quarterly
basis, as the Member elects, over a term certain. The maximum length of the term certain
shall be the joint life expectancy of the Member and his designated beneficiary. If the
installments are to be distributed over the life expectancy of the Member or the joint life of
the Member and his Beneficiary, the life expectancy or joint life expectancies, as applicable
of such persons shall be calculated at the time distributions commence and shall not
thereafter be recalculated. The initial value of the obligation for the installment payments
shall be equal to the amount of the Member’s Account balance. Distributions must satisfy the
requirements of Section 401(a)(9)(G) of the Code.




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APPENDIX F



This Appendix F shall apply solely to Members who are Deferred Members who were employed at ITT
Automotive Brake Systems (“Brakes”) or at ITT Automotive Electrical Systems, Inc. (“ESI”).





	A.	 	Each Member who was employed at Brakes as of September 25, 1998, the closing date of the sale
of Brakes, was 100% vested in his Accounts as of such date.






	B.	 	Each Member who was employed at ESI as of September 28, 1998, the closing date of the sale of
ESI, was 100% vested in his Accounts as of such date.






	C.	 	Effective September 25, 1998, a Member employed at Brakes was permitted, between September
25, 1998 and the date of the trust to trust transfer of his Accounts to the qualified
retirement plan sponsored by Continental AG, to reallocate the investment of amounts in his
Company Contribution Account into any other fund offered by the ISP, regardless of the age of
the Member.






	D.	 	Effective September 28, 1998, a Member employed at ESI was permitted, between September 28,
1998 and the date of the trust to trust transfer of his Accounts to the qualified retirement
plan sponsored by Valeo,to reallocate the investment of amounts in his Company Contribution
Account into any other fund offered by the ISP, regardless of the age of the Member. Amounts
that were invested in the ITT Stock Fund on the date of the trust to trust transfer to the
qualified retirement plan sponsored by Valeo were transferred in kind.




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APPENDIX G



This Appendix G shall apply solely to individuals who were salaried employees of Water Pollution
Control Corporation (“WPCC”).





	A.	 	Each individual who was a salaried employee of WPCC on February 28, 1999 was an Employee for
purposes of the ISP as of March 1, 1999.






	B.	 	In accordance with the terms and conditions of the Stock Purchase Agreement for WPCC dated
January 3, 1999, an individual who became an Employee of ITT Corporation on March 1, 1999 as a
result of ITT Corporation’s acquisition of WPCC was credited with all uninterrupted service
rendered by such salaried employee while employed by WPCC prior to March 1, 1999. Such
service was credited solely for the purposes of determining eligibility and vesting under the
ISP and only to the extent such service was credited by WPCC under a qualified retirement plan
for these purposes.




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APPENDIX H



This Appendix H shall apply solely to Members who are Deferred Members who were employed at
Precision Die Casting (“PDC”), Pomona, or Palm Coast Utility (“PCUC”).





	A.	 	Each Member who was employed at PDC as of March 13, 1998, was permitted to request an
elective transfer to the ISP or a complete distribution through March 12, 2000. On or after
March 13, 2000, such a Member was not be permitted to elect a transfer or distribution of his
Accounts until the Member terminates employment with the buyer of PDC, dies or becomes
Disabled. Effective March 13, 1998, such a Member also was not permitted to request a loan or
a withdrawal (other than a full distribution prior to March 13, 2000) from his Accounts.






	B.	 	Each Member who was employed at Pomona as of September 25, 1998, was permitted to request an
elective transfer to the ISP or a complete distribution through September 24, 2000. On or
after September 25, 2000, such a Member was not be permitted to elect a transfer or
distribution of his Accounts until the Member terminates employment with the buyer of Pomona,
dies or becomes Disabled. Effective September 25, 1998, such a Member also was not permitted
to request a loan or a withdrawal (other than a full distribution prior to September 25, 2000)
from his Accounts.






	C.	 	Each Member who was employed at PCUC as of January 22, 1999, was permitted to request an
elective transfer to the ISP or a complete distribution pursuant to Article 11 of his Accounts
through January 21, 2001. On or after January 22, 2001, such a Member was not be permitted to
elect a transfer or distribution of his Accounts until the Member terminates employment with
the buyer of PCUC, dies or becomes Disabled. Effective January 22, 1999, such a Member also
was not permitted to request a loan or a withdrawal (other than a full distribution prior to
January 22, 2001) from his Accounts.






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