exv10w2



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Exhibit 10.2




BENEFITS AND COMPENSATION MATTERS AGREEMENT



DATED AS OF OCTOBER 25, 2011,



AMONG



ITT CORPORATION,



XYLEM INC.



AND



EXELIS INC.









 



 










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	 	 	Page	 
	1. EMPLOYEES
	 	 	1	 
	2. BENEFIT PROGRAM PARTICIPATION
	 	 	2	 
	3. DEFINED BENEFIT PLANS
	 	 	4	 
	4. DEFINED CONTRIBUTION PLANS
	 	 	8	 
	5. EMPLOYEE HEALTH AND WELFARE BENEFIT PLANS
	 	 	11	 
	6. INCENTIVE PLANS
	 	 	14	 
	7. STOCK OPTIONS AND OTHER AWARDS
	 	 	15	 
	8. COLI
	 	 	17	 
	9. DIRECTOR PLANS
	 	 	18	 
	10. COLLECTIVE BARGAINING AGREEMENTS
	 	 	18	 
	11. TRANSITION SERVICES
	 	 	19	 
	12. ALLOCATION OF BALANCE SHEET ACCOUNTS
	 	 	19	 
	13. ACCESS TO INFORMATION AND DATA EXCHANGE
	 	 	20	 
	14. NOTICES; COOPERATION
	 	 	21	 
	15. FURTHER ASSURANCES
	 	 	22	 
	16. INDEMNIFICATION
	 	 	22	 
	17. DISPUTE RESOLUTION
	 	 	23	 
	18. MISCELLANEOUS
	 	 	23	 
	19. DEFINITIONS
	 	 	1	 
















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     BENEFITS AND COMPENSATION MATTERS AGREEMENT dated as of October 25, 2011, among
ITT CORPORATION, an Indiana corporation (which, together with its subsidiaries, is
herein referred to as “ITT”), Xylem Inc., an Indiana corporation, (which,
together with its subsidiaries, is herein referred to as “Water”), and
Exelis Inc., an Indiana corporation (which, together with its subsidiaries, is
herein referred to as “Defense”).



          WHEREAS, the Board of Directors of ITT (the “Board”) has determined that it is
appropriate, desirable and in the best interests of ITT, its shareholders and its other
constituents, to separate ITT into three separate, publicly traded companies, one for each of (i)
the ITT Retained Business, which shall be owned and conducted, directly or indirectly, by ITT, (ii)
the Defense Business, which shall be owned and conducted, directly or indirectly, by Defense and
(iii) the Water Business, which shall be owned and conducted, directly or indirectly, by Water;




          WHEREAS, the Board of Directors of ITT has determined that it is appropriate and desirable to
distribute to the holders of shares of common stock, par value $1.00 per share, of ITT (the
“ITT Common Stock”), on a pro rata basis (in each case without consideration being paid by
such shareholders) (A) all of the outstanding shares of common stock, par value $.01 per share, of
Water (the “Water Common Stock”) and (B) all of the outstanding shares of common stock, par
value $.01 per share, of Defense (the “Defense Common Stock”) (such transactions as they
may be amended or modified from time to time, the “Distribution”);




          WHEREAS, ITT, Water and Defense have executed a distribution agreement dated as of the date
hereof (the “Distribution Agreement”) to effectuate such Distribution and allocate and
assign certain responsibilities; and




          WHEREAS, each of ITT, Water and Defense has determined that it is necessary and desirable to
allocate and assign responsibility for certain employee benefit liabilities in respect of the
activities of the businesses of such entities on the Distribution Date (as defined herein) and
those liabilities in respect of other businesses and activities of ITT and its former subsidiaries
and certain other matters.




          NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, ITT,
Water and Defense agree as follows:








          1. EMPLOYEES. (a) General. Effective as of the Distribution Date, ITT shall transfer
all employees listed on Schedule 1(a)(i) to Water and all such employees shall become Water
Employees. Effective as of the Distribution Date, ITT shall transfer all employees listed on
Schedule 1(a)(ii) to Defense and all such employees shall become Defense Employees. All
Preexisting ITT Employees employed by legal entities that became legal entities of ITT following
the Distribution Date shall be ITT Employees. All Preexisting ITT Employees employed by legal
entities that became legal entities of Water following the Distribution Date shall be Water
Employees. All Preexisting ITT Employees employed by legal entities that became legal entities of
Defense following the Distribution Date shall be Defense Employees. Except as expressly identified
in this Agreement, Defense shall be liable for all liabilities, claims or controversies involving
Defense Employees, Water shall be liable for all liabilities, claims or









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controversies involving Water Employees and ITT shall be liable for all liabilities, claims or
controversies involving ITT Employees and ITT Retirees.




          (b) Schedule of Water Employees and Defense Employees. As of the date of this
Agreement, ITT, Water and Defense shall have in good faith determined which individuals who are
Preexisting ITT Employees shall become Water Employees and Defense Employees on no later than the
Distribution Date. Such lists may be modified only by written consent by each of ITT, Water and
Defense on or following the Distribution Date. Prior to the Distribution Date, ITT may modify such
lists without the consent of Water and Defense.




          (c) Non-Termination of Employment. Except as otherwise expressly provided herein and
in compliance with Section 2(d) of this Agreement, no provision of, or event arising under, this
Agreement, the Distribution Agreement or any of the Ancillary Agreements shall be construed to
create any right, or accelerate entitlement, to any compensation or benefit whatsoever on the part
of any Preexisting ITT Employee or other future, present, or former employee of ITT, Water or
Defense and any of their respective Subsidiaries.




          (d) Employment Agreements. As soon as practicable on or after the execution of this
Agreement, ITT, Water and Defense shall use their reasonable best efforts to enter into, or have in
place, an employment agreement with each of the Preexisting ITT Employees listed on Schedule 1(d)
attached hereto, which employment agreements shall become effective on the Close of the
Distribution Date. Water shall assume from ITT the employment agreement of Frank Jimenez, along
with the pension assets and liabilities identified in such agreement. Defense shall assume from
ITT the employment agreement of Chris Bernhardt. ITT shall continue to be bound by the employment
agreement of Denise Ramos.




          (e) No Solicit; No Hire. As described in Section 5.1 of the Distribution Agreement and
agreed to by ITT, Defense and Water, none of ITT, Water or Defense shall solicit or hire
Preexisting ITT Employees for such period following the Effective Time as specified therein,
without receiving the written consent of the affected prior employer. In respect of countries
whose local laws declare as invalid or unenforceable or prohibit any agreement between employers
not to hire employees of the other, ITT, Defense and Water will not have an agreement not to hire
employees of the other but agree not to actively solicit the services of each other’s employees for
such period following the Effective Time as specified in the Distribution Agreement.








          2. BENEFIT PROGRAM PARTICIPATION. (a) Except as specifically provided herein with respect to
particular compensation or benefit programs, all Water Employees and Defense Employees will cease
participation in all ITT benefit plans and programs no later than immediately prior to the
Distribution Date; provided that certain Water Employees who participate in the ITT Industries
Pension Plan for UK Expatriates, Godwin Pumps Limited Pension Scheme and ITT Retirement Savings
Plan, as identified as Items 23 and 24 on Schedule 3(a)(iii) and Item 14 of Schedule 4(a)(iii)
shall continue to participate in their respective plans following the Distribution Date, subject to
the terms of such plans. As soon as reasonably practicable, ITT will retain liability for all
incurred but not yet reported claims of Water Employees and Defense Employees who participate in
the ITT welfare benefit plans and programs through the earlier of (i) December 31, 2011 or (ii) the
date on which two separate











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liability accounts for Water and Defense are created. The separate liability accounts shall
correspond to the new bank accounts established by Water and by Defense for new incurred but not
yet reported claims. The balance of the new accounts shall be transferred as soon as reasonably
practicable following the Distribution Date.




          (b) (i) Water shall cause to be recognized each Water Employee’s service with ITT for purposes
of determining (x) eligibility for vacation benefits, short-term disability and severance benefits
and (y) eligibility for vesting under all other employee benefit plans and policies of Water
applicable to such Water Employees, to the extent such service was recognized by ITT for such
purposes.




          (ii) Defense shall cause to be recognized each Defense Employee’s service with ITT for purposes
of determining (x) eligibility for vacation benefits, short-term disability and severance benefits
and (y) eligibility for vesting under all other employee benefit plans and policies of Defense
applicable to such Defense Employees, to the extent such service was recognized by ITT for such
purposes.




          (c) Nothing in this Agreement shall be construed or interpreted to restrict ITT’s, Water’s or
Defense’s right or authority to amend or terminate any of its employee benefit plans, policies or
programs effective as of a date following the Distribution Date, except neither Defense nor any
successor entity to Defense may amend or alter the eligibility schedule described for Preexisting
ITT Employees under Sections 3(b)(vii) and 3(c)(iv) or the requirement not to reduce or eliminate
health benefits under Section 5(b)(ix).




          (d) Any Preexisting ITT Employee who, on the Distribution Date, is employed by ITT, Defense or
Water shall not be deemed either to have terminated employment or to be in retirement status under
any employee benefit plan operated by ITT, Water or Defense. Except to the extent required by law
and as otherwise stated in Section 3(b)(vii), any Preexisting ITT Employee who, on the Distribution
Date, is employed by ITT, Defense or Water shall not, solely as a result of the Distribution or
related transactions, be eligible to receive payment of, or exercise any portability rights in
respect of, his or her vested benefit or retirement allowance under any employee benefit plan
operated by ITT, Water or Defense; provided, that each Water Employee and each Defense Employee
shall receive credit for their service with ITT prior to the Distribution Date from Water or
Defense as provided in this Article II. As permitted by Final Treasury Regulation Section
1.409A-1(h)(4), ITT, Water and Defense agree that any employee and any other “service provider”
within the meaning of the term as defined in Section 409A of the Code who provides services to ITT
immediately before the transactions contemplated hereby and provides services to ITT, Water or
Defense after and in connection with such transactions shall not be treated as separating from
service for purposes of Section 409A of the Code.




          (e) Except as otherwise specified on any of the Schedules, which are specifically incorporated
by reference to this Agreement, (i) any ITT Plan maintained by ITT prior to the Distribution Date
will continue to be maintained by ITT following the Distribution Date, (ii) any Defense Plan
maintained by Defense prior to the Distribution Date will continue to be maintained by Defense
following the Distribution Date and (iii) any Water Plan maintained by Water prior to the
Distribution Date will continue to be maintained by Water following the Distribution Date. Unless
otherwise specified in this Agreement, all assets and liabilities of any











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Plan, Defense Plan or Water Plan will remain with and be assumed by the entity maintaining
such plan.








          3. DEFINED BENEFIT PLANS. (a) List of Defined Benefit Plans. (i) Certain current
and former employees of ITT, Water and Defense participate in ITT Group tax qualified defined
benefit pension plans made available for certain ITT Group employees in the United States. Schedule
3(a)(i) lists each defined benefit pension plan applicable to Preexisting ITT Employees (the
“US Qualified DB Plans”).




          (ii) Certain current and former employees of ITT, Water and Defense participate in ITT Group
tax non-qualified defined benefit pension plans made available for certain ITT Group employees in
the United States. Schedule 3(a)(ii) lists each defined benefit pension plan applicable to
Preexisting ITT Employees (the “US Non-Qualified DB Plans”).




          (iii) Certain current and former employees of ITT, Water and Defense participate in ITT Group
defined benefit pension plans made available for certain ITT Group employees outside of the United
States. Schedule 3(a)(iii) lists each defined benefit pension plan applicable to Preexisting ITT
Employees (the “Non-US DB Plans”).




          (b) US Qualified DB Plans. (i) Continuation of US Qualified DB Plans.
Following the Distribution Date, ITT shall continue to sponsor the ITT US Qualified DB Plans as so
identified on Schedule 3(a)(i). Following the Distribution Date, Defense shall continue to sponsor
the Defense US Qualified DB Plans as so identified on Schedule 3(a)(i). Following the Distribution
Date, Water shall continue to sponsor the Water US DB Qualified Plans as so identified on Schedule
3(a)(i). Each of ITT, Defense and Water shall assume all liabilities associated with such plans
that it sponsors following the Distribution Date, whether incurred prior to, on or following the
Distribution Date; provided, that Defense shall recognize the additional service credit as
specified in Section 3(b)(v) of this Agreement. Each of ITT, Defense and Water shall retain all
accrued benefits associated with such plans that it sponsors following the Distribution Date,
whether accrued prior to, on or following the Distribution Date.




          (ii) Adoption of US Qualified DB Plan. Effective as of the Distribution Date, Water
shall adopt New ITT Pension Plan for Bargaining Unit Employees, Seneca Falls, New York, which shall
have terms similar in all material respects to the ITT Pension Plan for Bargaining Unit Employees,
Seneca Falls, New York maintained by ITT and identified as Item 16 on Schedule 3(a)(i). As soon as
practicable on or after the Distribution Date, ITT shall transfer to Water the assets and
liabilities associated with Water Employees who participated in the ITT Pension Plan for Bargaining
Unit Employees, Seneca Falls, New York as identified as Item 16 on Schedule 3(a)(i). Such assets
will be transferred in kind to the maximum extent practicable. The plan actuary for such plan
shall be responsible for determining the appropriate amount of assets and liabilities to be
allocated per employee transferred, in each case in accordance with applicable law.




          (iii) Adoption of New Master Trusts. As soon as practicable on or after the
Distribution Date, Water shall adopt a new trust that is substantially similar in all material
respects to the Master Trust (the “New Water Trust”). Effective as of the Distribution
Date, ITT











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shall adopt a new trust that is substantially similar in all material respects to the Master
Trust (the “New ITT Trust”).




          (iv) Transfer of Master Trust and Assets. As soon as practicable on or after the
Distribution Date, ITT shall transfer to Defense the Master Trust, and Defense shall assume all
liabilities associated with such Master Trust. As soon as practicable on or after the Distribution
Date, the interests of the US Qualified DB Plans identified on Schedule 3(b)(iv) will be liquidated
and cash will be transferred from the Master Trust to the New Water Trust in the amount identified
on Schedule 3(b)(iv) and to the New ITT Trust in the amount identified on Schedule 3(b)(iv). All
other interests will remain in the Master Trust at Defense.




          (v) Transfer of US Qualified DB Plans to Defense. Effective as of the Distribution
Date, ITT shall transfer to Defense the defined benefit pension plans identified as Items 1-7 on
Schedule 3(a)(i), and Defense shall assume all liabilities associated with such plans, including
with respect to accrued benefits thereof.




          (vi) Transfer of US Qualified DB Plans to Water. Effective as of the Distribution
Date, ITT shall transfer to Water the ITT US Qualified DB Plans identified as Items 19-22 on
Schedule 3(a)(i), and Water shall assume all liabilities associated with such plans, including with
respect to accrued benefits thereof.




          (vii) Additional Retirement Eligibility. (A) Effective as of the Distribution Date,
any ITT Employee or any Water Employee who has accrued benefits under the ITT Salaried Retirement
Plan as reflected on that plan’s records as of the Distribution Date and who is eligible to receive
retirement benefits thereunder may elect to commence receipt of that person’s retirement benefits
under the ITT Salaried Retirement Plan on or after the Distribution Date. Any ITT Employee or
Water Employee shall cease earning additional eligibility service at the earliest of the fifth
anniversary of the Distribution Date, the date on which the employee is terminated, the date on
which benefits attributable to the Traditional Pension Plan formula commence, the date of death or
a Change in Control of ITT or Water, respectively (the “Eligibility End Date”). Any ITT
Employee or any Water Employee who is eligible to begin retirement as of the Distribution Date who
elects to commence receipt of that person’s retirement benefits under the ITT Salaried Retirement
Plan shall not continue to earn eligibility service following the later of the Distribution Date
and the last month preceding the annuity start date. Following the Eligibility End Date, no ITT
Employee or Water Employee will receive credit toward the retirement criteria specified in the ITT
Salaried Retirement Plan. Except as provided in this Section 3(b)(vii), all accrued benefits under
the ITT Salaried Retirement Plan will be frozen with respect to any ITT Employee or any Water
Employee as of the Distribution Date.




          (B) Effective as of the later of the Distribution Date and January 1, 2012, any Defense
Employee who has accrued benefits under the ITT Salaried Retirement Plan may make a one-time
irrevocable election either to (x) continue earning eligibility and benefit service under the
Traditional Pension Plan formula defined in the ITT Salaried Retirement Plan or (y) choose to begin
participation in the enhanced employer-contribution portion of the defined contribution plan
identified as Item 1 on Schedule 4(a)(i).












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          (C) Following the Distribution Date, all unvested benefits accrued by Preexisting ITT
Employees under the ITT Salaried Retirement Plan who have at least one year of service credit as of
the Distribution Date, which are attributable to ITT Employees and Water Employees (other than the
ability to continue earning eligibility service for up to five years as described above) shall be
vested as of the Distribution Date. Unvested benefits attributable to Defense Employees shall
remain unchanged and Defense shall remain liable for all benefits (unvested or vested) attributable
to Defense Employees.




          (c) US Non-Qualified DB Plans. (i) Continuation of US Non-Qualified DB Plans.
Following the Distribution Date, ITT shall continue to sponsor the ITT US Non-Qualified DB Plans as
so identified on Schedule 3(a)(ii). Following the Distribution Date, Defense shall sponsor the
Defense US Non-Qualified DB Plans as so identified on Schedule 3(a)(ii). Following the
Distribution Date, Water shall sponsor the Water US Non-Qualified DB Plans as so identified on
Schedule 3(a)(ii). Each of ITT, Defense and Water shall assume all liabilities associated with
such plans that it sponsors following the Distribution Date, whether incurred prior to, on or
following the Distribution Date; provided, that Defense shall recognize the additional service
credit as specified in Section 3(c)(iv) of this Agreement. Each of ITT, Defense and Water shall be
liable for all accrued benefits associated with such plans that it sponsors following the
Distribution Date, whether accrued prior to, on or following the Distribution Date.




          (ii) Excess Pension Plans. Effective as of the Distribution Date, ITT shall cause the
transfer of the sponsorship of the ITT US Non-Qualified DB Plans identified as Items 1-7 on
Schedule 3(a)(ii) to Defense; provided, that Defense shall recognize the additional service credit
as specified in Section 3(c)(iv) of this Agreement.




          Defense does hereby assume liability for all benefits accrued prior to the Distribution Date
under the ITT Excess Pension Plans, the ITT Enhanced Pension Plan, Federal Labs Unfunded 1, EDO
Excess Plan — SERP and the Retirement Plan for Non-Management Directors of ITT Corp. identified as
Items 1, 3-7 on Schedule 3(a)(ii) for all Preexisting ITT Employees, except as provided in the
Ancillary Agreements.




          (iii) Ex Gratia Plan. Effective as of the Distribution Date, ITT shall cause the
transfer of the Ex Gratia Plan to Defense identified as Item 2 on Schedule 3(a)(ii) along with all
liabilities accrued under the plan with the exception of any liabilities identified on Schedule
3(a)(ii).




          (iv) Additional Retirement Eligibility. Effective as of the Distribution Date, any
ITT Employee and any Water Employee who has accrued benefits under the ITT Excess Pension Plan
shall have his or her benefit accruals under the Excess Pension Plans cease as of the date
immediately preceding the Distribution Date; provided that, solely for purposes of determining the
amount of an employee’s Excess Pension Plans benefit under the Excess Pension Plans, such Water
Employee or ITT Employee shall be deemed to have incurred a Termination of Employment (as defined
in the Excess Pension Plans) as of the Distribution Date; provided however, that
for purposes of determining such employee’s eligibility for a benefit under the Excess Pension
Plans, such Water Employee or ITT Employee shall be credited with the same eligibility service he
or she is credited with under the ITT Salaried Retirement Plan as











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described in Section 3(b)(vii) herein. Notwithstanding the previous sentence, a Water
Employee shall not incur a Termination of Employment under the terms of the Excess Pension Plans
until such Water Employee incurs a Termination of Employment with Water and (b) an ITT Employee
shall not incur a Termination of Employment under the terms of the Excess Pension Plans until such
ITT Employee incurs a Termination of Employment with ITT.




          Effective as of the Distribution Date, all accrued benefits under the Excess Pension Plans for
ITT Employees and Water Employees who have at least one year of service credit as of the
Distribution Date shall become 100 percent vested and nonforfeitable as of the Distribution Date.
Unvested benefits attributable to Defense Employees shall remain unchanged and Defense shall be
liable for all benefits (unvested or vested) attributable to Defense Employees.




          (v) Springing Rabbi Trust. It is contemplated that Defense will enter into a rabbi
trust agreement following the Distribution Date that will, only in the event of a Change in Control
of Defense, be fully funded with the amounts payable under the US Non-Qualified DB Plans identified
as Items 1-7 on Schedule 3(a)(ii) and will pay to each participant the lump-sum amount payable
following a Change in Control in accordance with such plans.




          (d) Non-US DB Plans. (i) Continuation of Non-US DB Plans. Following the
Distribution Date, ITT shall continue to sponsor the ITT Non-US DB Plans as so identified on
Schedule 3(a)(iii). Following the Distribution Date, Defense shall continue to sponsor the Defense
Non-US DB Plans as so identified on Schedule 3(a)(iii). Following the Distribution Date, Water
shall continue to sponsor the Water Non-US DB Plans as so identified on Schedule 3(a)(iii). Each
of ITT, Defense and Water shall assume all liabilities associated with such plans that it sponsors
following the Distribution Date, whether incurred prior to, on or following the Distribution Date.
Each of ITT, Defense and Water shall retain all accrued benefits associated with such plans that it
sponsors following the Distribution Date, whether accrued prior to, on or following the
Distribution Date. For any ITT Non-US DB Plan not identified on Schedule 3(a)(iii), the entity
that maintained such ITT Non-US DB Plan prior to the Distribution Date shall continue to maintain
such plan and assume all liabilities associated with such plan following the Distribution Date.




          (ii) Adoption of Non-US DB Plan. Effective as of the Distribution Date, Water shall
adopt a benefits plan for Water Employees, which shall have terms similar in all material respects
to the benefit plan identified on Item 3 of Schedule 3(a)(iii). Each of ITT, Defense and Water
shall assume all liabilities associated with the plans that it sponsors following the Distribution
Date, whether incurred prior to, on or following the Distribution Date.




          (iii) Transfer of Non-US DB Plans. Effective as of the Distribution Date, ITT shall
transfer to Water the Non-US DB Plan identified as Item 22 of Schedule 3(a)(iii) (the “British
DB Plan”), and Water shall assume all liabilities associated with such plan; provided that the
transfer of such plan will be made in accordance with a deed of substitution between Lowara UK
Limited, ITT Industries Limited and Pension Trustee Management Limited and a scheme apportionment
arrangement deed between the Trustee and the employers participating in such plan.












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          (iv) Transfer of Non-US Assets and Liabilities. As soon as practicable on or after
the Distribution Date, ITT shall transfer to Water the assets and liabilities associated with Water
Employees who participated in the Non-US Pension Plans identified as Items 8, 23 and 24 of Schedule
3(a)(iii) prior to the Distribution. Such assets will be transferred in kind to the maximum extent
practicable. The plan actuary for each such transfer shall be responsible for determining the
appropriate amount of assets and liabilities to be allocated per employee transferred, in each case
in accordance with applicable local law.




          (v) Transfer of Other Non-US Assets. Notwithstanding any other provision of this
Article III, the Plan Actuary for each such Non-US DB Plan shall be responsible for determining the
appropriate amount of assets and liabilities to be allocated to comparable plans to be established
and adopted by the companies as required pursuant to the provisions of this Article III, in each
case in accordance with applicable local law.




          (vi) Canadian DB Plans. Effective as of the Distribution Date, any ITT Employee who
has accrued benefits under the Non-US DB Plans identified as Items 14 and 15 on Schedule 3(a)(iii)
(the “Canadian Salaried DB Plans”) will cease participation in the Canadian Salaried DB
Plans as of the Distribution Date, shall be vested as of the Distribution Date and shall cease to
accrue further benefits under the Canadian Salaried DB Plans following the Distribution Date.
Benefit entitlements of ITT Employees under the Canadian Salaried DB Plans shall be determined in
accordance with the terms of the plans and applicable local law.




          (vii) Additional Retirement Eligibility for British DB Plan. Effective as of September
30, 2011 (or as soon as reasonably practicable after this date), any ITT Employee, Defense Employee
or any Water Employee who has accrued benefits under the Non-US DB Plan identified as the British
DB Plan as Item 22 on Schedule 3(a)(iii) shall be vested and will be credited for benefit service
through December 31, 2011. Such plan will be frozen as of September 30, 2011 (or as soon as
reasonably practicable after this date) and Water will continue to sponsor and administer the plan.




          Effective as of the Distribution Date, all ITT Employees who participate in the Non-US DB Plan
identified as the British DB Plan as Item 22 on Schedule 3(a)(iii) will cease participation in the
British DB Plan as of the Distribution Date, shall be vested as of the Distribution Date and shall
not continue to earn eligibility service following the Distribution Date. Unvested benefits
attributable to Water Employees under the British DB Plan shall remain unchanged and Water shall
remain liable for all benefits (unvested or vested) attributable to Water Employees.








          4. DEFINED CONTRIBUTION PLANS.




          (a) List of Defined Contribution Plans. (i) Certain current and former employees of
ITT, Water and Defense participate in ITT Group tax qualified defined contribution plans made
available for certain ITT Group employees in the United States. Schedule 4(a)(i) lists each defined
contribution plan applicable to Preexisting ITT Employees (the “US Qualified DC Plans”).












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          (ii) Certain current and former employees of ITT, Water and Defense participate in ITT Group
non-tax qualified defined contribution plans made available for certain ITT Group employees in the
United States. Schedule 4(a)(ii) lists each defined contribution plan applicable to Preexisting ITT
Employees (the “US Non-Qualified DC Plans”).




          (iii) Certain current and former employees of ITT, Water and Defense participate in ITT Group
defined contribution plans made available for certain ITT Group employees outside of the United
States. Schedule 4(a)(iii) lists each defined contribution plan applicable to Preexisting ITT
Employees (the “Non-US DC Plans”).




          (b) US Qualified DC Plans. (i) Continuation of Existing US Qualified DC
Plans. Following the Distribution Date, ITT shall continue to sponsor the US Qualified DC
Plans so identified on Schedule 4(a)(i). Following the Distribution Date, Defense shall continue
to sponsor the US Qualified DC Plans so identified on Schedule 4(a)(i). Following the Distribution
Date, Water shall sponsor the US Qualified DC Plans so identified on Schedule 4(a)(i). All
employees who participate in the ITT Salaried Investment and Savings Plan identified as Item 1 on
Schedule 4(a)(i) shall be vested immediately on the Distribution Date.




          (ii) Adoption of New US Qualified DC Plans. Effective as of the Distribution Date, ITT
shall adopt a new defined contribution plan for ITT Employees who participated in the defined
contribution plan identified as Item 1 on Schedule 4(a)(i). Effective as of the Distribution Date,
Water shall adopt new defined contribution plans for Water Employees who participated in the
defined contribution plans identified as Items 1 and 14 on Schedule 4(a)(i).




          (iii) Transfer of US Qualified DC Plans. As soon as practicable on or after the
Distribution Date, ITT shall cause the transfer of the sponsorship of the ITT Salaried Investment
and Savings Plan identified as Item 1 on Schedule 4(a)(i) to Defense and Defense shall cause the
transfer of the accounts of all ITT Employees and Water Employees from such plan to the defined
contribution plans adopted by ITT and Water, as applicable.




          ITT shall cause the transfer of the accounts of all Water Employees from the Goulds Pumps,
Inc. Retirement Savings and Investment Plan identified as Item 14 on Schedule 4(a)(i) to a new
defined contribution plan maintained by Water. Assets attributable to the accounts identified in
this Section 4(b)(iii) will be transferred in kind to the maximum extent practicable. Each of ITT,
Defense and Water shall assume all liabilities associated with the plans that it sponsors following
the Distribution Date, whether incurred prior to, on or following the Distribution Date.




          (iv) ITT Stock Funds. As soon as practicable on or after the Distribution Date, each
U.S. Qualified DC Plan identified on Schedule 4(a)(i) that invests in ITT Common Stock will
maintain stock funds for each of ITT Common Stock, Water Common Stock and Defense Common Stock
(each as adjusted for the Distribution) for a period as determined by the fiduciaries of each such
U.S. Qualified DC Plan. Following the Distribution Date, the applicable fiduciaries of each such
U.S. Qualified DC Plan shall determine the proper treatment of the stock funds maintained in such
U.S. Qualified DC Plans and shall determine the timing of the disposition of shares held in such
stock funds and the treatment of the proceeds of sale of such shares.












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          (c) US Non-Qualified DC Plans. (i) Continuation of Existing US Non-Qualified DC
Plans. Following the Distribution Date, ITT shall continue to sponsor the defined contribution
plans so identified on Schedule 4(a)(ii). Following the Distribution Date, Defense shall sponsor
the defined contribution plans so identified on Schedule 4(a)(ii). Following the Distribution
Date, Water shall sponsor the defined contribution plans so identified on Schedule 4(a)(ii).




          (ii) Deferred Compensation Plans. Effective as of the Distribution Date, ITT shall
remain liable for benefits accrued under the ITT Deferred Compensation Plan identified as Item 2 on
Schedule 4(a)(ii) prior to the Distribution Date with respect to ITT Employees and ITT Retirees.
Effective as of the Distribution Date, Water shall adopt the Water Deferred Compensation Plan
identified as Item 2 on Schedule 4(a)(ii), which shall be identical in all material respects to the
ITT Deferred Compensation Plan as in effect immediately prior to the Distribution Date. Effective
as of the Distribution Date, Defense shall adopt the Defense Deferred Compensation Plan, which
shall be identical in all material respects to the ITT Deferred Compensation Plan identified as
Item 2 on Schedule 4(a)(ii) as in effect immediately prior to the Distribution Date. ITT shall
cause the transfer of all liabilities for benefits accrued under the ITT Deferred Compensation Plan
for such Defense Employees and ITT Retirees listed on Schedule 4(c)(iii) to Defense and for such
Water Employees and ITT Retirees listed on Schedule 4(c)(iii) to Water as soon as practicable
following the Distribution Date.




          Water does hereby assume liability for benefits accrued prior to the Distribution Date under
the ITT Deferred Compensation Plan with respect to Water Employees and specific ITT Retirees listed
on Schedule 4(c)(iii), including without limitation, such liabilities incurred prior to 1995
identified in the 1995 Employee Matters Agreement. Defense does hereby assume liability for
benefits accrued prior to the Distribution Date under the ITT Deferred Compensation Plan with
respect to Defense Employees and specific ITT Retirees listed on Schedule 4(c)(iii), including
without limitation, such liabilities incurred prior to 1995 identified in the 1995 Employee Matters
Agreement.




          (iii) Excess Savings Plans. Effective as of the Distribution Date, ITT shall remain
liable for benefits accrued under the ITT Excess Savings Plan identified as Item 3 on Schedule
4(a)(ii) prior to the Distribution Date with respect to ITT Employees and ITT Retirees. Effective
as of the Distribution Date, Water shall adopt a new excess savings plan, which shall be identical
in all material respects to the ITT Excess Savings Plan identified as Item 3 on Schedule 4(a)(ii)
as in effect immediately prior to the Distribution Date. Effective as of the Distribution Date,
Defense shall adopt a new excess savings plan, which shall be identical in all material respects to
the ITT Excess Savings Plan identified as Item 3 on Schedule 4(a)(ii) as in effect immediately
prior to the Distribution Date. ITT shall cause the transfer of all liabilities for benefits
accrued under the ITT Excess Savings Plan for Defense Employees as reflected on the plan’s records
to Defense and for Water Employees as reflected on the plan’s records to Water as soon as
practicable following the Distribution Date. Water does hereby assume liability for benefits
accrued prior to the Distribution Date under the ITT Excess Savings Plan with respect to Water
Employees, and Defense does hereby assume liability for benefits accrued prior to the Distribution
Date under the ITT Excess Savings Plan with respect to Defense Employees.












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          (d) Non-US DC Plans. (i) Continuation of Non-US DC Plans. Following the
Distribution Date, ITT shall continue to sponsor the ITT Non-US DC Plans as so identified on
Schedule 4(a)(iii). Following the Distribution Date, Defense shall continue to sponsor the Defense
Non-US DC Plans as so identified on Schedule 4(a)(iii). Following the Distribution Date, Water
shall continue to sponsor the Water Non-US DC Plans as so identified on Schedule 4(a)(iii). Each
of ITT, Defense and Water shall assume all liabilities associated with such plans that it sponsors
following the Distribution Date, whether incurred prior to, on or following the Distribution Date.
Each of ITT, Defense and Water shall retain all accrued benefits associated with such plans that it
sponsors following the Distribution Date, whether accrued prior to, on or following the
Distribution Date. For any ITT Non-US DC Plan not identified on Schedule 4(a)(iii), the entity
that maintained such ITT Non-US DC Plan prior to the Distribution Date shall continue to maintain
such plan and assume all liabilities associated with such plan following the Distribution Date.




          (ii) Adoption of Non-US DC Plans. Effective as of the Distribution Date, ITT shall
adopt benefits plans for ITT Employees, which shall have terms similar in all material respects to
the benefit plans identified on Items 9, 10, 13 and 14 of Schedule 4(a)(iii). Effective as of the
Distribution Date, Defense shall adopt benefits plans for Defense Employees, which shall have terms
similar in all material respects to the benefit plan identified as the ITT Retirement Savings Plan
— ITT Industries (UK) on Item 14 of Schedule 4(a)(iii). Effective as of the Distribution Date,
Water shall adopt benefits plans for Water Employees, which shall have terms similar in all
material respects to the benefit plans identified on Items 2 and 3 of Schedule 4(a)(iii). Each of
ITT, Defense and Water shall assume all liabilities associated with the plans that it sponsors
following the Distribution Date, whether incurred prior to, on or following the Distribution Date.




          (iii) Transfer of Non-US Assets and Liabilities. As soon as practicable on or after
the Distribution Date, ITT shall transfer to Defense the assets and liabilities associated with
Defense ITT Group employees who participated in the Non-US DC Plan identified as the ITT Retirement
Savings Plan — ITT Industries (UK) as Item 14 of Schedule 4(a)(iii) prior to the Distribution,
unless any such employee elects otherwise. As soon as practicable on or after the Distribution
Date, ITT shall transfer to Water the assets and liabilities associated with Water ITT Group
employees who participated in the Non-US DC Plans identified as Items 2 and 3 of Schedule 4(a)(iii)
prior to the Distribution, unless any such employee elects otherwise. As soon as practicable on or
after the Distribution Date, Water shall transfer to ITT the assets and liabilities associated with
ITT Employees who participated in the Non-US DC Plans identified as Items 7, 8, 13 and 14 of
Schedule 4(a)(iii) prior to the Distribution, unless any such employee elects otherwise. Such
assets will be transferred in kind to the maximum extent practicable.








          5. EMPLOYEE HEALTH AND WELFARE BENEFIT PLANS.




          (a) List of Health and Welfare Plans. (i) Certain current and former employees of
ITT, Water and Defense participate in ITT Group health and welfare plans made available for certain
ITT Group employees in the United States. Schedule 5(a)(i) lists each health and welfare plan
applicable to Preexisting ITT Employees (the “US H&W Plans”).












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          (ii) Certain current and former employees of ITT, Water and Defense participate in ITT Group
health and welfare plans made available for certain ITT Group employees outside of the United
States. Schedule 5(a)(ii) lists each health and welfare plan applicable to Preexisting ITT
Employees (the “Non-US H&W Plans”).




          (b) US H&W Plans. (i) Continuation of Existing US H&W Plans. Following the
Distribution Date, ITT shall continue to sponsor the health and welfare plans so identified on
Schedule 5(a)(i). Following the Distribution Date, Defense shall continue to sponsor the health
and welfare plans so identified on Schedule 5(a)(i). Following the Distribution Date, Water shall
continue to sponsor the health and welfare plans so identified on Schedule 5(a)(i). Each of ITT,
Defense and Water shall retain all accrued benefits associated with such plans that it sponsors
following the Distribution Date, whether accrued prior to, on or following the Distribution Date.




          (ii) Adoption of New US H&W Plans. Effective on the earlier of the Distribution Date
and December 31, 2011, Defense shall adopt new health and welfare plans, which shall have terms
similar in all material respects to the health and welfare plans identified as Items 14, 21, 22,
23, 24, 26, 42, 43, 45 and 46 on Schedule 5(a)(i). Effective on the earlier of the Distribution
Date and December 31, 2011, Water shall adopt new health and welfare plans, which shall have terms
similar in all material respects to the health and welfare plans identified as Items 14, 21, 22,
23, 24, 26, 42, 43, 45, 46 and 47 on Schedule 5(a)(i).




          (iii) Goulds Plans. Effective as of the Distribution Date, Water shall adopt new
health and welfare plans substantially similar in all material ways to the Goulds Postretirement
Medical Plan and the Goulds Postretirement Life Plan, identified as Items 33 and 39 on Schedule
5(a)(i), respectively. As soon as practicable following the Distribution Date, ITT shall transfer
to Water 25% of the assets and 25% of the liabilities of the Goulds Postretirement Medical Plan and
the Goulds Postretirement Life Plan, and Water shall be liable for such assets and liabilities as
of the date of such transfer.




          (iv) Transfer of ITT Employee Benefit Trust. As soon as practicable on or after the
Distribution Date, ITT shall transfer to Defense the ITT Employee Benefit Trust, and Defense shall
assume all liabilities associated with such trust. As soon as practicable following the
Distribution Date, ITT shall transfer to Defense all of the assets and liabilities of the ITT
Employee Benefit Trust related to the retiree portion of the plan, and Defense shall be liable for
all such assets and liabilities as of the date of such transfer.




          (v) ITT Salaried Retiree Health Plan. Effective as of the Distribution Date, the ITT
Salaried Retiree Health Plan identified as Item 13 on Schedule 5(a)(i) will provide that for
purposes of determining eligibility for post-retirement medical benefits under the ITT Salaried
Retiree Health Plan with respect to an eligible salaried Preexisting ITT Employee who on the
Distribution Date, becomes a Water Employee or remains an ITT Employee, such Water Employee or ITT
Employee shall be credited with the same eligibility service he or she is credited with under the
ITT Salaried Retirement Plan as described in Section 3(b)(vii) herein.




          (vi) Severance. Effective as of the Distribution Date, each of ITT, Water and Defense
shall provide severance plans for all Preexisting ITT Employees which are substantially equivalent
to those ITT severance plans covering such employees immediately prior to the











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Distribution Date identified as Items 15-19 of Schedule 5(a)(i), with no restriction as to
modification by each of ITT, Water and Defense.




          (vii) Long-Term Disability Insurance. Effective as of the Distribution Date, Water and
Defense shall each adopt long-term disability plans, identical in all material respects to the ITT
Long-Term Disability Plan and the ITT Corporation Excess Long-Term Disability Plan identified as
Items 23 and 24 of Schedule 5(a)(i), each as in effect on the Distribution Date, covering eligible
Water Employees and Defense Employees, respectively.




          (viii) Liabilities. ITT shall transfer all liability to Defense with respect to, and
all Code Section 501(c)(9) assets attributable to, retiree life insurance and medical benefits
under the ITT employee welfare benefit plans, except that (x) ITT shall transfer to Water the
liability of ITT with respect to, and any assets attributable to, certain Preexisting ITT Employees
identified on Schedule 1(a)(i) whose employment is transferred to Water in connection with the
Distribution, and Water does hereby assume such liability, and (y) ITT shall transfer to Defense
the liability with respect to, and assets attributable to, certain Preexisting ITT Employees
identified on Schedule 1(a)(ii) whose employment is transferred to Defense in connection with the
Distribution, and Defense does hereby assume such liability.




          (ix) Change in Control. If there is a Change in Control of ITT, Water or Defense
during the five-year period following the Distribution Date, then the company in which such Change
in Control occurred shall not, during the balance of such five-year period, reduce or eliminate
health benefits in effect immediately prior to such Change in Control provided to former employees
who retired from ITT or any of its Affiliates on or prior to the Distribution Date (or as set forth
in the next succeeding sentence), or increase associated retiree contributions, unless the other
companies consent in writing to such a reduction, elimination or cost increase; provided, however,
that the company in which the Change in Control occurred may, in its sole discretion, modify such
benefits in accordance with the changes contemplated in the assumptions in effect immediately prior
to the Change in Control that are used to establish such company’s Accumulated Postretirement
Benefit Obligation (as defined in Financial Accounting Standards Board ASC 715). Persons who are
receiving severance payments in connection with the Distribution and who are or become eligible to
retire on or before the end of such severance period shall be afforded the treatment of this
Section 5(b)(ix).




          (x) Indemnity. In the event that any of ITT, Water or Defense is asked to
consent to a reduction, elimination or cost increase with respect to retiree health benefits after
a Change in Control as described in clause (iii) above, each such company shall determine whether
to provide such consent in its sole and absolute discretion. Each of ITT, Water and Defense does
hereby agree to indemnify any other company asked by it to provide such consent against any and all
liability that might arise with respect to the granting or withholding of such consent.




          (c) Non-US H&W Plans. (i) Continuation of Non-US H&W Plans. Following the
Distribution Date, ITT shall continue to sponsor the ITT Non-US H&W Plans as so identified on
Schedule 5(a)(ii). Following the Distribution Date, Defense shall continue to sponsor the Defense
Non-US H&W Plans as so identified on Schedule 5(a)(ii). Following the Distribution Date, Water
shall continue to sponsor the Water Non-US H&W Plans as so identified on Schedule 5(a)(ii). Each
of ITT, Defense and Water shall assume all liabilities associated with











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such plans that it sponsors following the Distribution Date, whether incurred prior to, on or
following the Distribution Date. Each of ITT, Defense and Water shall retain all accrued benefits
associated with such plans that it sponsors following the Distribution Date, whether accrued prior
to, on or following the Distribution Date. For any ITT Non-US H&W Plan not identified on Schedule
5(a)(ii), the entity that maintained such ITT Non-US H&W Plan prior to the Distribution Date shall
continue to maintain such plan and assume all liabilities associated with such plan following the
Distribution Date.




          (ii) Adoption of Non-US H&W Plans. Effective as of the Distribution Date, ITT shall
adopt benefits plans for ITT Employees, which shall have terms similar in all material respects to
the benefit plans identified on Items 27, 30-35 and 42 of Schedule 5(a)(ii). Effective as of the
Distribution Date, Defense shall adopt benefits plans for Defense Employees, which shall have terms
similar in all material respects to the benefit plans identified on Items 7, 8, 22 and 23 of
Schedule 5(a)(ii). Effective as of the Distribution Date, Water shall adopt benefits plans for
Water Employees, which shall have terms similar in all material respects to the benefit plans
identified on Items 7-11, 22 and 23 of Schedule 5(a)(ii). Each of ITT, Defense and Water shall
assume all liabilities associated with the plans that it sponsors following the Distribution Date,
whether incurred prior to, on or following the Distribution Date.








          6. INCENTIVE PLANS. (a) ITT currently maintains certain annual incentive plans and certain
long-term performance plans, each as listed on Schedule 6(a) (the “Incentive Plans”),
pursuant to which certain Preexisting ITT Employees employed by ITT might become entitled to
payments after the Distribution Date with respect to their performance with ITT prior to the
Distribution Date.




          (b) Effective as of the Distribution Date, ITT shall be and remain liable for all payments
accrued prior to the Distribution Date for ITT Employees under the Incentive Plans, including any
such payments to be made following the Distribution Date. Effective as of the Distribution Date,
Water shall be and remain liable for all payments accrued prior to the Distribution Date for Water
Employees under the Incentive Plans, including any such payments to be made following the
Distribution Date. Effective as of the Distribution Date, Defense shall be and remain liable for
all payments accrued prior to the Distribution Date for Defense Employees under the Incentive
Plans, including any such payments to be made following the Distribution Date. ITT, Water and
Defense shall cause any such payments under the Incentive Plans to be recognized as compensation
without regard to the source of such payments.




          As soon as practicable following the Distribution Date, ITT shall transfer any amounts accrued
under the Incentive Plans for (i) Water Employees to Water and (ii) Defense Employees to Defense.




          (c) All multi-year cash performance awards under the Incentive Plans (the “TSR
Awards”) shall be terminated effective as of the Distribution Date. ITT shall determine the
amount to be paid in cash, if any, to each eligible Preexisting ITT Employee under outstanding TSR
Awards as described in this Section 6(c). The amount to be paid under the TSR Awards shall be paid
in cash on the normal payment schedule of the original TSR Award. ITT shall be liable for and make
any such payments to ITT Employees, including any such payments to be made following the
Distribution Date. Water shall be liable for and make any such











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payments to Water Employees, including any such payments to be made following the Distribution
Date. Defense shall be liable for and make any such payments to Defense Employees, including any
such payments to be made following the Distribution Date.




          For the TSR Awards granted in 2009, ITT shall pay such award in cash to the extent payment is
earned according to the original vesting and payment schedule to each eligible Preexisting ITT
Employee based on (i) actual performance for the pro rata percentage of the performance period
completed on the Distribution Date and (ii) target value for the remaining uncompleted performance
period following the Distribution Date.




          For the TSR Awards granted in 2010, (i) ITT shall pay such award in cash to the extent payment
is earned to each eligible Preexisting ITT Employee based on actual performance for the pro rata
percentage of the performance period completed on the Distribution Date, which shall be paid
according to the original vesting and payment schedule, and (ii) following the Distribution Date,
ITT, Water or Defense shall award to such Preexisting ITT Employee (thereafter, an ITT Employee, a
Water Employee or Defense Employee, as applicable) a restricted stock unit (“RSU”) for the
remaining target value, which RSU shall vest on December 31, 2012 and shall be settled in ITT
shares, Water shares or Defense shares, as applicable.




          For the TSR Awards granted in 2011, (i) ITT shall pay such award in cash to the extent payment
is earned to each eligible Preexisting ITT Employee based on actual performance for the pro rata
percentage of the performance period completed on the Distribution Date, which shall be paid
according to the original vesting and payment schedule, and (ii) following the Distribution Date,
ITT, Water or Defense will award to such Preexisting ITT Employee (thereafter, an ITT Employee, a
Water Employee or Defense Employee, as applicable) an RSU for the remaining target value, which RSU
shall vest on December 31, 2013 and shall be settled in ITT shares, Water shares or Defense shares,
as applicable.




          (d) Effective as of the Distribution Date, ITT shall accrue, be and remain liable for all
payments for ITT Employees under the ITT Corporation Retention Program as identified on Item 4 of
Schedule 6(a). Effective as of the Distribution Date, Water shall accrue, be and remain liable for
all payments for Water Employees under the ITT Corporation Retention Program as identified on Item
4 of Schedule 6(a). Effective as of the Distribution Date, Defense shall accrue, be and remain
liable for all payments for Defense Employees under the ITT Corporation Retention Program as
identified on Item 4 of Schedule 6(a).








          7. STOCK OPTIONS AND OTHER AWARDS. (a) Effective as of the day following the Distribution
Date, outstanding stock options (whether vested or unvested), stock appreciation rights, RSUs and
restricted stock awards (together, “ITT stock awards”) under the ITT stock plans listed on
Schedule 7(a), as each plan may have been amended from time to time (the “ITT Stock
Plans”), shall be treated as follows:





          (i) ITT Employees; Retirees. ITT stock awards held by ITT Employees and ITT
Retirees shall be adjusted to reflect the Distribution, as provided pursuant to the terms of
the ITT Stock Plans, such that they retain ITT stock awards (but not stock awards payable in
Water or Defense shares) following the Distribution Date.









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          (ii) Water Employees. Water Employees holding ITT stock awards shall receive
substitute stock awards in respect of Water Common Stock (but not in respect of ITT Common
Stock or Defense Common Stock) pursuant to the terms of a stock plan to be adopted by Water
as of the Distribution Date (the “Water Stock Plan”), which are deemed adjusted to
reflect the Distribution, as provided pursuant to the terms of the ITT Stock Plans and as
described in Section 7(a)(i).




          (iii) Defense Employees. Defense Employees holding ITT stock awards shall
receive substitute stock awards in respect of Defense Common Stock (but not in respect of
ITT Common Stock or Water Common Stock) pursuant to the terms of a stock plan, to be adopted
by Defense as of the Distribution Date (the “Defense Stock Plan”), which are deemed
adjusted to reflect the Distribution, as provided pursuant to the terms of the ITT Stock
Plans and as described in Section 7(a)(i).




          (iv) ITT Non-Employee Directors. The Compensation and Personnel Committee of
the Board of Directors of ITT has approved the adjustment of any ITT stock awards held by
such non-employee directors that have not been exercised as of the Distribution Date to
reflect the Distribution, as provided pursuant to the terms of the ITT Stock Plans following
the conversion formula used for common shareholders of ITT stock. Such ITT stock awards
held by a non-employee director will be adjusted on an “as distributed basis” such that each
ITT stock award will be converted into a like number of ITT stock awards based on shares of
each of ITT, Water and Defense following the Distribution Date. Generally, vesting and
exercisability terms will remain the same, although certain adjustments may be made as the
Board of Directors of ITT or the applicable committee thereof shall approve.




          (v) Other Provisions. Effective as of the Distribution Date, Water Employees
and Defense Employees shall cease active participation in all ITT Stock Plans;
provided, however, that Water Employees and Defense Employees shall receive full
credit under any substitute stock awards in respect of Water Common Stock and Defense Common
Stock, respectively, for their service to ITT Group prior to the Distribution;
provided, further, that Water Employees and Defense Employees shall be deemed to
participate under the ITT Stock Plans through the day following the Distribution Date for
the purposes of any substitute stock awards they received in connection with the
Distribution. To the extent that any Preexisting ITT Employee continues to be entitled to
future ITT awards following the Distribution Date, such grants may be made in forms that are
acceptable to ITT, Water or Defense, as such entity deem adequate.



          (b) Manner of Substitution. (i) With respect to each cancelled ITT stock award, the
number and exercise price of substitute stock awards granted under the Water Stock Plan or the
Defense Stock Plan with respect thereto, and the other terms and conditions of the substitute stock
awards, shall be equitably determined to preserve the economic value of the cancelled ITT stock
award.




          (ii) Each holder of ITT Common Stock on the Distribution Record Date (or such holder’s
designated transferee or transferees) shall be entitled to receive in the Water











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Distribution a substitute stock award representing one (1) share of Water Common Stock granted
under the Water Stock Plan for every stock award representing one (1) share of ITT Common Stock
granted under the ITT Stock Plan held by such holder. No action by any such holder shall be
necessary for such holder to receive the applicable substitute stock award representing shares of
Water Common Stock such holder is entitled in the Water Distribution.




          (iii) Each holder of ITT Common Stock on the Distribution Record Date (or such holder’s
designated transferee or transferees) shall be entitled to receive in the Defense Distribution a
substitute stock award representing ones (1) share of Defense Common Stock granted under the
Defense Stock Plan for every stock award representing one (1) share of ITT Common Stock granted
under the ITT Stock Plan held by such holder. No action by any such holder shall be necessary for
such holder to receive the applicable substitute stock award representing shares of Defense Common
Stock such holder is entitled in the Defense Distribution.




          (c) Fractional Shares(d) . ITT holders of stock awards under ITT incentive plans on
the Distribution Record Date, which would entitle such holders to receive a substitute stock award
representing less than one whole share of Water Common Stock or Defense Common Stock, as the case
may be, in the applicable Distribution, shall receive (x) if such holders are entitled to receive a
substitute stock award representing less than one-half of a whole share of Water Common Stock or
Defense Common Stock, as the case may be, such number shall be rounded down to the next whole share
of Water Common Stock or Defense Common Stock, or (y) if such holders are entitled to receive a
substitute stock award representing at least one-half of a whole share of Water Common Stock or
Defense Common Stock, as the case may be, such number shall be rounded up to the next whole share
of Water Common Stock or Defense Common Stock, as the case may be. Fractional shares of Water
Common Stock or Defense Common Stock shall not be distributed in the Distribution nor credited to
book-entry accounts, provided however that fractional shares of ITT, Water or Defense held for the
benefit of employees in book-entry accounts with the Company’s external administrator may be
credited to such accounts. The Distribution Agent shall, as soon as practicable after the
Distribution Date distribute to each such holder, or for the benefit of each such beneficial owner,
such holder or owner’s ratable share of such stock awards, based upon the average gross selling
price per share of Water Common Stock or Defense Common Stock, as the case may be, after making
appropriate deductions for any amount required to be withheld for United States federal income tax
purposes. Notwithstanding the foregoing, in the event of any adjustment, stock split, reverse
stock split or other adjustment or change to the capitalization of shares of ITT, Water or Defense
that occurs at or following the Distribution, ITT, Water or Defense, as applicable, shall provide
for an adjustment of the applicable stock awards then held to reflect such adjustment, stock split,
reverse stock split or other adjustment or change to the capitalization of shares prior to the
subsequent distribution and the terms of the applicable equity incentive plans will continue to
apply to the applicable stock awards.








          8. COLI. (a) Effective as of the Distribution Date, the COLI policies underwritten by
Northwestern Mutual Life Insurance Company and New York Life covering certain Preexisting ITT
Employees who are eligible for participation in the ITT Deferred Compensation Plan shall be
allocated among the three companies in accordance with Schedule 8(a).












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          (b) Effective as of the Distribution Date, COLI policies underwritten by Penn Insurance and
Annuity Company as set forth in Schedule 8(b) purchased in connection with supplemental executive
life benefits known as “Options C and D” will remain with ITT.








          9. DIRECTOR PLANS. (a) Treatment of Current Director Plans. (i) Effective as of
the Distribution Date, ITT shall continue the director plans identified on Schedule 9(a) (the
“ITT Director Plans”). With respect to any non-employee director of ITT immediately
following the Distribution who is not also a director of Water or Defense at such time and who has
an accrued benefit under the suspended ITT Directors Retirement Plan, ITT shall provide such
accrued benefit in accordance with the terms of such plan, but only to the extent such accrued
benefit is not duplicated under a plan maintained by Water or Defense.




          (ii) Effective as of the Distribution Date, Defense shall adopt benefits plans for non-employee
directors of Defense, which shall have terms similar in all material respects to the ITT Director
Plans set forth on Schedule 9(a) (the “Defense Director Plans”), and Water shall adopt
benefits plans for non-employee directors of Defense, which shall have terms similar in all
material respects to the ITT Director Plans set forth on Schedule 9(a) (the “Water Director
Plans”).




          (iii) As soon as practicable on or after the Distribution Date, ITT shall cause the transfer of
the accounts of all non-employee directors of Defense from the ITT Directors Plans to the Defense
Director Plans. As soon as practicable on or after the Distribution Date, ITT shall cause the
transfer of the accounts of all non-employee directors of Water from the ITT Directors Plans to the
Water Director Plans. Such assets will be transferred in kind to the maximum extent practicable.




          (b) Adoption of Water Director Plans. Effective as of the Distribution Date, Water
shall adopt plans and programs for non-employee directors that are identical in all material
respects to the ITT Director Plans. With respect to any non-employee director of Water immediately
following the Distribution who has an accrued benefit under any ITT Director Plan, Water shall
provide such accrued benefit in accordance with the terms of such plan, but only to the extent such
accrued benefit is not duplicated under a plan maintained by ITT or Defense.




          (c) Adoption of Defense Director Plans. Effective as of the Distribution Date, Defense
shall adopt plans and programs for non-employee directors that are identical in all material
respects to the ITT Director Plans(d) . With respect to any non-employee director of Defense
immediately following the Distribution who has an accrued benefit under any suspended ITT Director
Plan, Defense shall provide such accrued benefit in accordance with the terms of such plan, but
only to the extent such accrued benefit is not duplicated under a plan maintained by ITT or Water.








          10. COLLECTIVE BARGAINING AGREEMENTS. (a) ITT Collective Bargaining Agreements. ITT
shall retain all collective bargaining agreements and associated liabilities so identified on
Schedule 10(a) and for each such collective bargaining agreement in effect as of the Distribution
Date. For each such collective bargaining agreement in effect as of the Distribution Date, ITT
shall continue to recognize the union which is a party to such











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collective bargaining agreement as the exclusive collective bargaining representative for the
ITT Employees covered under the terms of each such collective bargaining agreement.




          (b) Water Collective Bargaining Agreements. Water shall expressly assume all
collective bargaining agreements and associated liabilities so identified on Schedule 10(a)
effective as of the Distribution Date. For each such collective bargaining agreement in effect as
of the Distribution Date, Water agrees to recognize the union which is a party to each such
collective bargaining agreement as the exclusive collective bargaining representative for the Water
Employees covered under the terms of each such collective bargaining agreement.




          (c) Defense Collective Bargaining Agreements. Defense shall expressly assume all
collective bargaining agreements and associated liabilities so identified on Schedule 10(a)
effective as of the Distribution Date. For each such collective bargaining agreement in effect as
of the Distribution Date, Defense agrees to recognize the union which is a party to each such
collective bargaining agreement as the exclusive collective bargaining representative for the
Defense Employees covered under the terms of each such collective bargaining agreement.




          (d) EU Directive. Notwithstanding anything to the contrary in this Section 10, in
countries in which the European Union Acquired Rights Directive applies, collective bargaining
agreements and any other agreements with employee representatives will continue to apply after the
Distribution Date to the extent and in the manner provided for by local law.








          11. TRANSITION SERVICES. Each of ITT, Water and Defense shall provide such transition
services as required by the Transition Services Agreement.








          12. ALLOCATION OF BALANCE SHEET ACCOUNTS. Effective as of the Distribution Date, certain
balance sheet accounts attributable to employee benefit plans for which responsibility is being
transferred from ITT to Water and/or Defense shall be allocated to the balance sheets of Water or
Defense, as appropriate, on the following basis:




          (a) All accruals on the balance sheets of Water (including accruals on the balance sheet of
Water) and Defense (including accruals on the balance sheet of Defense) which relate to benefit
plans sponsored by the respective companies shall be unaffected by the provisions of this Section
12.




          (b) With regard to the liabilities recorded by ITT with respect to the ITT Excess Savings Plan
that will, in accordance with Section 4(c)(iii), be assumed by Water and Defense, respectively, ITT
shall allocate to the respective new employing entity an amount equal to the sum of the plan
balances for such affected employees.




          (c) For each category of balance sheet account enumerated in this Section 12, there has been
recorded a corresponding deferred tax debit or credit, as the case may be, which shall also be
allocated to the respective companies based on the amount allocated for the stated reason above.




          (d) To the extent that a balance sheet account requiring allocation among the companies exists
that is not specifically included in this Section 12, ITT shall make the











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allocation on a reasonable basis, subject to the agreement of the party in whose favor the
allocation is being made.








          13. ACCESS TO INFORMATION AND DATA EXCHANGE. (a) Provision of Corporate Records. (i)
Consistent with Section 6.3 of the Distribution Agreement, upon the prior written request by Water
or Defense for specific and identified agreements, documents, books, records or files including,
without limitation, computer files, microfiche, tape recordings and photographs (collectively,
“Records”), relating to or affecting Water or Defense, as applicable, ITT shall arrange, as
soon as reasonably practicable following the receipt of such request, for the provision of
appropriate copies of such Records (or the originals thereof if the party making the request has a
reasonable need for such originals) in the possession of ITT or any of its Subsidiaries, but only
to the extent such items are not already in the possession of the requesting party;
provided, however, that as soon as practicable following the Distribution Date, ITT
shall provide copies of all necessary employee documentation for the Water Employees listed on
Schedule 1(a)(i) to Water and shall provide copies of all necessary employee documentation for the
Water Employees listed on Schedule 1(a)(ii) to Defense.





          (ii) After the Distribution Date, upon the prior written request by ITT or Defense for
specific and identified Records relating to or affecting ITT or Defense, as applicable,
Water shall arrange, as soon as reasonably practicable following the receipt of such
request, for the provision of appropriate copies of such Records (or the originals thereof
if the party making the request has a need for such originals) in the possession of Water or
any of its Subsidiaries, but only to the extent such items are not already in the possession
of the requesting party.




          (iii) After the Distribution Date, upon the prior written request by ITT or Water for
specific and identified Records relating to or affecting ITT or Water, as applicable,
Defense shall arrange, as soon as reasonably practicable following the receipt of such
request, for the provision of appropriate copies of such Records (or the originals thereof
if the party making the request has a need for such originals) in the possession of Defense
or any of its Subsidiaries, but only to the extent such items are not already in the
possession of the requesting party.



          (b) Access to Information. (i) From and after the Distribution Date and consistent
with Section 6.3 of the Distribution Agreement, each of ITT, Water and Defense shall afford to the
other and its authorized accountants, counsel and other designated representatives reasonable
access during normal business hours, subject to appropriate restrictions for classified, privileged
or confidential information, to the personnel, properties, books and Records of such party and its
Subsidiaries insofar as such access is reasonably required by the other party.





          (ii) Without limiting the generality of the foregoing clause (i), except as otherwise
provided by law, each party hereto shall furnish, or shall cause to be furnished to the
other parties, a list of all benefit plan participants and employee data or information in
its possession which is necessary for such other parties to maintain and implement any
benefit plan or arrangement covered by this Agreement, or to comply with the provisions of
this Agreement, and which is not otherwise readily available to such other party.









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          (c) Reimbursement; Other Matters. (i) Except to the extent otherwise specifically
identified by the Distribution Agreement or any Ancillary Agreement, a party providing Records or
access to information to the other party under this Section 13 shall be entitled to receive from
the recipient, upon the presentation of invoices therefore, payments for such amounts, relating to
supplies, disbursements and other out-of-pocket expenses, as may be reasonably incurred in
providing such Records or access to information.





          (ii) The parties hereto shall comply with those document retention policies, cost
sharing arrangements, expense reimbursement procedures and request procedures as shall be
established and agreed to in writing by their respective authorized officers on or prior to
the Distribution Date in respect of Records and related matters.



          (d) Confidentiality. Each of (i) ITT and its Subsidiaries, (ii) Water and its
Subsidiaries and (iii) Defense and its Subsidiaries shall not use or permit the use of (without the
prior written consent of the other) and shall hold, and shall cause its consultants and advisors to
hold, in strict confidence, all information concerning the other parties in its possession, its
custody or under its control (except to the extent that (A) such information has been in the public
domain through no fault of such party or (B) such information has been later lawfully acquired from
other sources by such party or (C) the Distribution Agreement, this Agreement or any other
Ancillary Agreement or any other agreement entered into pursuant hereto permits the use or
disclosure of such information or (D) as may be required under the USA Patriot Act) to the extent
such information (x) relates to the period up to the Effective Time, (y) relates to the
Distribution Agreement or any Ancillary Agreement or (z) is obtained in the course of performing
services for the other party pursuant to the Distribution Agreement or any Ancillary Agreement, and
each party shall not (without the prior written consent of the other) otherwise release or disclose
such information to any other person, except such party’s auditors and attorneys, unless compelled
to disclose such information by judicial or administrative process or unless such disclosure is
required by law and such party has used commercially reasonable efforts to consult with the other
affected party or parties prior to such disclosure. To the extent that a party hereto is compelled
by judicial or administrative process to disclose such information under circumstances in which any
evidentiary privilege would be available, such party agrees to assert such privilege in good faith
prior to making such disclosure. Each of the parties hereto agrees to consult with each relevant
other party in connection with any such judicial or administrative process, including, without
limitation, in determining whether any privilege is available, and further agrees to allow each
such relevant party and its counsel to participate in any hearing or other proceeding (including,
without limitation, any appeal of an initial order to disclose) in respect of such disclosure and
assertion of privilege. Notwithstanding anything to the contrary contained herein, each party shall
be entitled to use information disclosed pursuant to this Agreement to the extent reasonably
necessary for the administration of its employee benefit plans in accordance with applicable law.








          14. NOTICES; COOPERATION. Notwithstanding anything in this Agreement to the contrary, all
actions contemplated herein with respect to benefit plans which are to be consummated pursuant to
this Agreement shall be subject to such notices to, and/or approvals by, the Internal Revenue
Service (or other governmental agency or entity) as are required or deemed appropriate by such
benefit plan’s sponsor. Each of ITT, Water and Defense agrees to use its commercially reasonable
efforts to cause all such notices and/or approvals to be











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filed or obtained, as the case may be, in a timely fashion. Each party hereto shall reasonably
cooperate with the other parties with respect to any government filings, employee notices or any
other actions reasonably necessary to maintain and implement the employee benefit arrangements
covered by this Agreement.








          15. FURTHER ASSURANCES. From time to time, as and when reasonably requested by any other party
hereto, each party hereto shall execute and deliver, or cause to be executed and delivered, all
such documents and instruments and shall take, or cause to be taken, all such further or other
actions as such other party may reasonably deem necessary or desirable to effect the purposes of
this Agreement and the transactions contemplated hereunder.








          16. INDEMNIFICATION. (a) Indemnification by ITT. Except as otherwise specifically
set forth in this Agreement or in Article VII of the Distribution Agreement, ITT shall indemnify,
defend and hold harmless the Water Indemnitees and the Defense Indemnitees from and against any and
all Indemnifiable Losses of the Water Indemnitees and the Defense Indemnitees, respectively,
arising out of, by reason of or otherwise in connection with (i) any employee benefit plan, policy,
program or arrangement established or adopted by ITT effective on or after the Distribution Date,
(ii) any and all liabilities relating primarily to, arising primarily out of or resulting primarily
from the operation or conduct of any ITT Plan or any individual identified as an ITT Employee,
(iii) any liability assumed or retained by ITT pursuant to the terms and conditions set forth on
Schedule 16(a) of this Agreement or (iv) the breach by ITT of any provision of this Agreement.




          (b) Indemnification by Water. Except as otherwise specifically set forth in this
Agreement or in Article VII of the Distribution Agreement, Water shall indemnify, defend and hold
harmless the ITT Indemnitees and the Defense Indemnitees from and against any and all Indemnifiable
Losses of the ITT Indemnitees and the Defense Indemnitees, respectively, arising out of, by reason
of or otherwise in connection with (i) any employee benefit plan, policy, program or arrangement
established or adopted by Water effective on or after the Distribution Date, (ii) any and all
liabilities relating primarily to, arising primarily out of or resulting primarily from the
operation or conduct of any Water Plan or any individual identified as a Water Employee, (iii) any
liability assumed or retained by Water pursuant to the terms and conditions set forth on Schedule
16(b) of this Agreement or (iv) the breach by Water of any provision of this Agreement.




          (c) Indemnification by Defense. Except as otherwise specifically set forth in this
Agreement or in Article VII of the Distribution Agreement, Defense shall indemnify, defend and hold
harmless the ITT Indemnitees and the Water Indemnitees from and against any and all Indemnifiable
Losses of the ITT Indemnitees and the Water Indemnitees, respectively, arising out of, by reason of
or otherwise in connection with (i) any employee benefit plan, policy, program or arrangement
established or adopted by Defense effective on or after the Distribution Date, (ii) any and all
liabilities relating primarily to, arising primarily out of or resulting primarily from the
operation or conduct of any Defense Plan or any individual identified as a Defense Employee, (iii)
any liability assumed or retained by Defense pursuant to the terms and conditions set forth on
Schedule 16(c) of this Agreement or (iv) the breach by Defense of any provision of this Agreement.












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          (d) Limitations on Indemnification Obligations. (i) The amount that any party (an
“Indemnifying Party”) is or may be required to pay to any other person (an
“Indemnitee”) pursuant to paragraphs (a), (b) or (c) of this Section 16, as applicable,
shall be reduced (retroactively or prospectively) by any Insurance Proceeds or other amounts
actually recovered by or on behalf of such Indemnitee in respect of the related Indemnifiable Loss.
If an Indemnitee shall have received the payment required by this Agreement from an Indemnifying
Party in respect of an Indemnifiable Loss and shall subsequently actually receive Insurance
Proceeds or other amounts in respect of such Indemnifiable Loss, then such Indemnitee shall pay to
such Indemnifying Party a sum equal to the amount of such Insurance Proceeds or other amounts
actually received, up to the aggregate amount of any payments received from such Indemnifying Party
pursuant to this Agreement in respect of such Indemnifiable Loss.





          (ii) An Indemnifying Party shall not be required to indemnify or pay an Indemnitee
pursuant to paragraphs (a), (b) or (c) of this Section 16, as applicable, for any
Indemnifiable Losses relating to or associated with any employee benefit plan, policy,
program or arrangement of the Indemnifying Party arising out of, by reason of or otherwise
in connection with any act or failure to act on the part of such Indemnitee (including for
this purpose any subsidiaries, businesses or operations which become associated with the
Indemnitee by virtue of or in connection with the Distribution) with respect to or in
connection with such employee benefit plan, policy, program or arrangement, including,
without limitation, any such act or failure to act in connection with the administration by
the Indemnitee of such employee benefit plan, policy, program or arrangement.



          (e) Survival of Indemnities. The obligations of ITT, Water and Defense under this
Section 16 shall survive the sale or other transfer by any of them of any assets or businesses or
the assignment by any of them of any Liabilities, with respect to any Indemnifiable Loss of the
other related to such assets, businesses or Liabilities.








          17. DISPUTE RESOLUTION. In the event of a controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance, nonperformance, validity or
breach of this Agreement or otherwise arising out of, or in any way related to this Agreement,
including, without limitation, any claim based on contract, tort, statute or constitution, the
relevant parties shall adhere to the dispute resolution procedures as described in the Distribution
Agreement.








          18. MISCELLANEOUS. (a) Complete Agreement; Construction. This Agreement, including
the Schedules and the Distribution Agreement, shall constitute the entire agreement between the
parties with respect to the subject matter hereof and shall supersede all previous negotiations,
commitments, course of dealings and writings with respect to such subject matter. In the event of
any inconsistency between this Agreement and any Schedule hereto, the Schedule shall prevail. In
the event and to the extent that there shall be a conflict between the provisions of this Agreement
and the provisions of the Distribution Agreement, this Agreement shall control unless specifically
stated otherwise in the Distribution Agreement.












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          (b) Ancillary Agreements. Except as expressly set forth herein, this Agreement is not
intended to address, and should not be interpreted to address, the matters specifically and
expressly covered by the Ancillary Agreements.




          (c) Counterparts. This Agreement may be executed in more than one counterpart, all of
which shall be considered one and the same agreement, and shall become effective when one or more
such counterparts have been signed by each of the parties and delivered to the other parties.




          (d) Survival of Agreements. Except as otherwise contemplated by this Agreement, all
covenants and agreements of the parties contained in this Agreement shall survive the Effective
Time and remain in full force and effect in accordance with their applicable terms.




          (e) Expenses. Except as specifically listed on Schedule 18(e), all out-of-pocket fees
and expenses incurred, or to be incurred and directly related to the transactions contemplated
hereby shall be paid as described in the Distribution Agreement.




          (f) Notices. All notices, requests, claims, demands and other communications under
this Agreement shall be made as described in the Distribution Agreement.




          (g) Waivers. Any consent required or permitted to be given by any party to the other
parties under this Agreement shall be in writing and signed by the party giving such consent and
shall be effective only against such party.




          (h) Assignment. This Agreement shall not be assignable, in whole or in part, directly
or indirectly, by any party hereto without the prior written consent of the other parties, and any
attempt to assign any rights or obligations arising under this Agreement without such consent shall
be void. Notwithstanding the foregoing, this Agreement shall be assignable in whole in connection
with a merger or consolidation or the sale of all or substantially all the assets of a party hereto
so long as the resulting, surviving or transferee entity assumes all the obligations of the
relevant party hereto by operation of law or pursuant to an agreement in form and substance
reasonably satisfactory to the other parties to this Agreement.




          (i) Successors and Assigns. The provisions of this Agreement and the obligations and
rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against)
the parties and their respective successors and permitted transferees and assigns.




          (j) Termination and Amendment. This Agreement may be terminated, amended, modified or
amended and the Distribution may be modified or abandoned at any time prior to the Effective Time
by and in the sole discretion of ITT without the approval of Water, Defense or the shareholders of
ITT. In the event of such termination, no party shall have any liability of any kind to any other
party or any other person. After the Effective Time, this Agreement may not be terminated, modified
or amended except by an agreement in writing signed by ITT, Water and Defense.




          (k) Payment Terms. Except as expressly provided to the contrary in this Agreement,
any amount to be paid or reimbursed by any party, on the one hand, to any other











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party or parties, on the other hand, under this Agreement shall be paid or reimbursed
hereunder within sixty (60) days after presentation of an invoice or a written demand therefor and
setting forth, or accompanied by, reasonable documentation or other reasonable explanation
supporting such amount. Except as expressly provided to the contrary in this Agreement, any amount
not paid when due pursuant to this Agreement (and any amount billed or otherwise invoiced or
demanded and properly payable that is not paid within sixty (60) days of such bill, invoice or
other demand) shall bear interest at a rate per annum equal to LIBOR, from time to time in effect,
calculated for the actual number of days elapsed, accrued from the date on which such payment was
due up to the date of the actual receipt of payment.




          (l) No Circumvention. The parties agree not to directly or indirectly take any
actions, act in concert with any person who takes an action, or cause (including the failure to
take a reasonable action) such that the resulting effect is to materially undermine the
effectiveness of any of the provisions of this Agreement.




          (m) Subsidiaries. Each of the parties hereto shall cause to be performed, and hereby
guarantees the performance of, all actions, agreements and obligations set forth herein to be
performed by any Subsidiary of such party or by any entity that becomes a Subsidiary of such party
at the Effective Time, to the extent such Subsidiary remains a Subsidiary of the applicable party.




          (n) Third Party Beneficiaries. This Agreement is solely for the benefit of the parties
hereto and should not be deemed to confer upon third parties any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing without reference to this
Agreement.




          (o) Title and Headings. Titles and headings to Sections herein are inserted for the
convenience of reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.




          (p) Schedules. The Schedules shall be construed with and as an integral part of this
Agreement to the same extent as if the same had been set forth verbatim herein. Nothing in the
Schedules constitutes an admission of any liability or obligation of ITT, Water or Defense or any
of their respective Affiliates to any third party, nor, with respect to any third party, an
admission against the interests of ITT, Water or Defense or any of their respective Affiliates. The
inclusion of any item or liability or category of item or liability on any Schedule is made solely
for purposes of allocating potential liabilities among the parties and shall not be deemed as or
construed to be an admission that any such liability exists.




          (q) Governing Law. This Agreement shall be governed by and construed in accordance
with the Laws, but not the Laws governing conflicts of Laws (other than Sections 5-1401 and 5-1402
of the New York General Obligations Law), of the State of New York; provided that the Indiana
Business Corporation Law, including the provisions thereof governing the fiduciary duties of
directors of a Indiana corporation, shall govern, as applicable, the internal affairs of ITT,
Defense and Water, as the case may be.












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          (r) Consent to Jurisdiction. Subject to the provisions of Article XVI hereof, each of
the parties irrevocably submits to the exclusive jurisdiction of (a) the Supreme Court of the State
of New York, New York County, or (b) the United States District Court for the Southern District of
New York (the “New York Courts”), for the purposes of any suit, action or other proceeding
to compel arbitration or for provisional relief in aid of arbitration in accordance with Article IX
of the Distribution Agreement or to prevent irreparable harm, and to the non-exclusive jurisdiction
of the New York Courts for the enforcement of any award issued thereunder. Each of the parties
further agrees that service of any process, summons, notice or document by U.S. registered mail to
such party’s respective address set forth above shall be effective service of process for any
action, suit or proceeding in the New York Courts with respect to any matters to which it has
submitted to jurisdiction in this Section 18(r). Each of the parties irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement or the transactions contemplated hereby in the New York Courts, and
hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such
court that any such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.




          (s) Waiver of Jury Trial. EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 18(S).




          (t) Severability. In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable provisions.




          (u) Force Majeure. No party (or any person acting on its behalf) shall have any
liability or responsibility for failure to fulfill any obligation (other than a payment obligation)
under this Agreement, so long as and to the extent to which the fulfillment of such obligation is
prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. A
party claiming the benefit of this provision shall, as soon as reasonably practicable after the
occurrence of any such event: (a) notify the other applicable parties of the nature and extent of
any such Force Majeure condition and (b) use due diligence to remove any such causes and resume
performance under this Agreement as soon as feasible.












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          (v) Interpretation. The parties have participated jointly in the negotiation and
drafting of this Agreement. This Agreement shall be construed without regard to any presumption or
rule requiring construction or interpretation against the party drafting or causing any instrument
to be drafted.




          (w) No Duplication; No Double Recovery. Nothing in this Agreement is intended to
confer to or impose upon any party a duplicative right, entitlement, obligation or recovery with
respect to any matter arising out of the same facts and circumstances.




          (x) No Waiver. No failure to exercise and no delay in exercising, on the part of any
party, any right, remedy, power or privilege hereunder shall operate as a waiver hereof or thereof;
nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.




          (y) No Admission of Liability. The allocation of assets and liabilities herein
(including on the Schedules hereto) is solely for the purpose of allocating such assets and
liabilities among ITT, Water and Defense and is not intended as an admission of liability or
responsibility for any alleged liabilities vis a vis any third party, including with respect to the
Liabilities of any non-wholly owned subsidiary of ITT, Water or Defense.




          (z) Definitions. Capitalized terms used herein shall have the respective meanings
specified in the Appendix attached hereto unless otherwise herein defined or the context hereof
shall otherwise require.




[Signature Page Follows]










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          IN WITNESS WHEREOF, the parties have duly executed and entered into this Agreement, as of
the date first above written.




	 	 	 	 	 	 	 

	 	 	ITT Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Aris C. Chicles	 	 
	 

	 	Name:
	 	 

Aris C. Chicles
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Xylem Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Frank R. Jimenez	 	 
	 

	 	Name:
	 	 

Frank R. Jimenez
	 	 
	 

	 	Title:
	 	Vice President, General Counsel & Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Exelis Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Ann D. Davidson	 	 
	 

	 	Name:
	 	 

Ann D. Davidson
	 	 
	 

	 	Title:
	 	Vice President, General Counsel & Secretary	 	 






[Signature Page]














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1








          19. DEFINITIONS.




          As used in the Agreement, the following terms have the following meanings:




          “1995 Employee Matters Agreement” means the Employee Benefit Services and Liability
Agreement dated as of November 1, 1995, among ITT Corporation, a Delaware corporation, ITT
Destinations, Inc., a Nevada corporation, and ITT Hartford Group, Inc., a Delaware corporation.




          “Affiliate” has the meaning set forth in the Distribution Agreement.




          “Ancillary Agreements” means all of the written agreements, instruments,
understandings, assignments or other written arrangements (other than this Agreement and the
Distribution Agreement) entered into in connection with the transactions contemplated hereby,
including, without limitation, the Conveyancing and Assumption Instruments, the Transition Services
Agreement, the Tax Matters Agreement, the License Agreements, the IP Assignments, the Supply
Agreement[s], the Master Lease Agreement and the Master Sublease Agreement.




          “Board” has the meaning set forth in the recitals to this Agreement.




          “British DB Plan” has the meaning set forth in Section 3 of this Agreement.




          “Canadian Salaried DB Plans” has the meaning set forth in Section 3 of this Agreement.




          “Change in Control” means (i) where reference is made to a particular ITT Plan
(including, without limitation, the 2003 ITT Equity Incentive Plan), the definition of “Change in
Control” or “Acceleration Event” in such ITT Plan and (ii) where no reference is made to a
particular ITT Plan, with respect to ITT, Defense or Water (each, a “Company” for the
purposes of this definition), the first day that any one or more of the following conditions have
been satisfied: (a) a report on Schedule 13D shall be filed with the Securities and Exchange
Commission pursuant to Section 13(d) of the Exchange Act disclosing that any person, other than the
Company or a Subsidiary or any employee benefit plan sponsored by the Company or a Subsidiary (or
related trust), is the beneficial owner directly or indirectly of twenty percent (20%) or more of
the outstanding shares of stock of the Company; (b) any person, other than the Company or a
Subsidiary, or any employee benefit plan sponsored by the Company or a Subsidiary (or related
trust), shall purchase shares pursuant to a tender offer or exchange offer to acquire any of the
shares of stock of the Company (or securities convertible into stock of the Company) for cash,
securities or any other consideration, provided that after consummation of the offer, the person in
question is the beneficial owner, directly or indirectly, of twenty percent (20%) or more of the
outstanding shares (calculated as provided in paragraph (d) of Rule 13d-3 under the Exchange Act in
the case of rights to acquire shares); (c) the consummation of (i) any consolidation, business
combination or merger involving the Company, other than a consolidation, business combination or
merger involving the Company in which holders of shares immediately prior to the consolidation,
business combination or merger (x) hold fifty percent (50%) or more of the combined voting power of
the Company (or the corporation resulting from the consolidation, business combination or merger or
the parent of such












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corporation) after the merger and (y) have the same proportionate ownership of common stock of
the Company (or the corporation resulting from the consolidation, business combination or merger or
the parent of such corporation), relative to other holders of shares immediately prior to the
consolidation, business combination or merger, immediately after the consolidation, business
combination or merger as immediately before; or (ii) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all or substantially all the assets of
the Company; (d) there shall have been a change in a majority of the members of the board of
directors of the Company within a 12-month period unless the election or nomination for election by
the Company’s shareholders of each new director during such 12-month period was approved by the
vote of two-thirds of the directors then still in office who (x) were directors at the beginning of
such 12-month period or (y) whose nomination for election or election as directors was recommended
or approved by a majority of the directors who were directors at the beginning of such 12-month
period; or (e) any person, other than the Company or a Subsidiary or any employee benefit plan
sponsored by the Company or a Subsidiary (or related trust), becomes the beneficial owner of twenty
percent (20%) or more of the shares.




          “Conveyancing and Assumption Instruments” has the meaning set forth in the
Distribution Agreement.




          “Defense” has the meaning set forth in the recitals to this Agreement.




          “Defense Business” has the meaning set forth in the Distribution Agreement.




          “Defense Common Stock” has the meaning set forth in the recitals to this Agreement.




          “Defense Director Plans” has the meaning set forth in Article IX of this Agreement.




          “Defense Employees” means persons who, immediately after the Distribution Date, are
employed by Defense, including such persons identified on Schedule 1(a)(ii) and such persons absent
from work at Defense by reason of layoff, leave of absence or disability.




          “Defense Indemnitees” has the meaning set forth in the Distribution Agreement.




          “Defense Plans” means such plans, programs and arrangements maintained for the benefit
of Defense Employees prior to the Distribution Date.




          “Defense Stock Plan” has the meaning set forth in Article VII of this Agreement.




          “Distribution” has the meaning set forth in the recitals to this Agreement.




          “Distribution Agent” has the meaning set forth in the Distribution Agreement.




          “Distribution Agreement” has the meaning set forth in the recitals to this Agreement.




          “Distribution Date” has the meaning set forth in the Distribution Agreement.













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          “Distribution Record Date” has the meaning set forth in the Distribution Agreement.




          “Distribution” has the meaning set forth in the recitals to this Agreement.




          “Effective Time” has the meaning set forth in the Distribution Agreement.




          “Eligibility End Date” has the meaning set forth in Article III of this Agreement.




          “Force Majeure” has the meaning set forth in the Distribution Agreement.




          “Incentive Plan” has the meaning set forth in Article VI of this Agreement.




          “Indemnifiable Losses” has the meaning set forth in the Distribution Agreement.




          “Indemnifying Party” has the meaning set forth in Section 16(d) of this Agreement.




          “Indemnitee” has the meaning set forth in Section 16(d) of this Agreement.




          “Insurance Proceeds” has the meaning set forth in the Distribution Agreement.




          “ITT” has the meaning set forth in the recitals to this Agreement.




          “ITT Common Stock” has the meaning set forth in the recitals to this Agreement.




          “ITT Director Plans” has the meaning set forth in Article IX of this Agreement.




          “ITT Employees” means persons who, immediately after the Distribution Date, are
employed by ITT, including such persons absent from work at ITT by reason of layoff, leave of
absence or disability.




          “ITT Group” means ITT and its affiliates prior to the Distribution.




          “ITT Indemnitees” has the meaning set forth in the Distribution Agreement.




          “ITT Plans” means the ITT Deferred Compensation Plan, the ITT Defined Benefit Plans,
the ITT Defined Contribution Plans, the ITT Director Plan, the ITT Excess Pension Plan, the ITT
Excess Savings Plan, the ITT Non-Qualified Plans, the ITT Non-US H&W Plans, the ITT Non-US Pension
Plans, the ITT Non-US Unfunded Plans, the ITT Long-Term Disability Plan, the ITT Stock Plans and
any other plan, program or arrangement maintained for the benefit of ITT Employees prior to the
Distribution Date.




          “ITT Retained Business” has the meaning set forth in the Distribution Agreement.




          “ITT Retiree” means any retired employee of ITT or any of its predecessors.




          “ITT stock awards” has the meaning set forth in Section 7 of this Agreement.













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          “ITT Stock Plans” has the meaning set forth in Section 7 of this Agreement.




          “Laws” has the meaning set forth in the Distribution Agreement.




          “Liabilities” has the meaning set forth in the Distribution Agreement.




          “Master Trust” means the trust established by ITT and maintained by Northern Trust as
the trustee to hold the assets of all US Qualified DB Plans.




          “New ITT Trust” has the meaning set forth in Section 3 of this Agreement.




          “New Water Trust” has the meaning set forth in Section 3 of this Agreement.




          “New York Courts” has the meaning set forth in Article XVIII of this Agreement.




          “Non-US DB Plans” has the meaning set forth in Article III of this Agreement.




          “Non-US DC Plans” has the meaning set forth in Article IV of this Agreement.




          “Non-US H&W Plans” has the meaning set forth in Article V of this Agreement.




          “party” means ITT, Water and Defense.




          “person” means any natural person, corporation, business trust, joint venture,
association, company, partnership or government, or any agency or political subdivision thereof.




          “Plan Actuary” means the plan actuary for each Non-US DB Plan, Non-US DC Plan or
Non-US H&W Plan prior to the Distribution Date or the third-party individual who determined the
liability under such plan prior to, on or after the Distribution Date.




          “Preexisting ITT Employees” means persons actively employed by the ITT Group
immediately prior to the Distribution; and persons who are absent from work to the ITT Group
immediately prior to the Distribution by reason of layoff, leave of absence or disability.




          “Records” has the meaning set forth in Article 13 of this Agreement.




          “RSUs” has the meaning set forth in Article VII of this Agreement.




          “Schedule” or “Schedules” means the Schedules Relating to Benefits and
Compensation Matters Agreement, dated as of October 25, 2011, among ITT Corporation, Exelis Inc.
and Xylem Inc., as they may be amended from time to time.




          “Subsidiary” has the meaning set forth in the Distribution Agreement.




          “Tax Matters Agreement” has the meaning set forth in the Distribution Agreement.




          “Tax” has the meaning set forth in the Tax Matters Agreement.













Table of Contents



5




          “Transition Services Agreement” has the meaning set forth in the Distribution
Agreement.




          “TSR Awards” has the meaning set forth in Article VI of this Agreement.




          “USA Patriot Act” means the Uniting and Strengthening America By Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act) Act of 2001, and any
amendments thereto.




          “US H&W Plans” has the meaning set forth in Article V of this Agreement.




          “US Non-Qualified DB Plans” has the meaning set forth in Article III of this
Agreement.




          “US Non-Qualified DC Plans” has the meaning set forth in Article IV of this Agreement.




          “US Qualified DB Plans” has the meaning set forth in Article III of this Agreement.




          “US Qualified DC Plans” has the meaning set forth in Article IV of this Agreement.




          “Water” has the meaning set forth in the recitals to this Agreement.




          “Water Business” has the meaning set forth in the Distribution Agreement.




          “Water Common Stock” has the meaning set forth in the recitals to this Agreement.




          “Water Director Plan” has the meaning set forth in Article IX of this Agreement.




          “Water Employees” means persons who, immediately after the Distribution Date, are
employed by Water, including such persons identified on Schedule 1(a)(i) and such persons absent
from work at Water by reason of layoff, leave of absence or disability.




          “Water Indemnitees” has the meaning set forth in the Distribution Agreement.




          “Water Plans” means such plans, programs and arrangements maintained for the benefit
of Water Employees prior to the Distribution Date.

















Table of Contents





SCHEDULES RELATING TO




BENEFITS AND COMPENSATION MATTERS AGREEMENT



DATED AS OF OCTOBER 25, 2011,



AMONG



ITT CORPORATION,



XYLEM INC.



AND



EXELIS INC.








 









Table of Contents








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	Schedule 1(a)(i): ITT Employees to Water
	 	 	1	 
	Schedule 1(a)(ii): ITT Employees to Defense
	 	 	3	 
	Schedule 1(d): Employment Agreements
	 	 	5	 
	Schedule 3(a)(i): List of US Qualified Defined Benefit Plans
	 	 	6	 
	Schedule 3(a)(ii): List of US Non-Qualified Defined Benefit Plans
	 	 	7	 
	Schedule 3(a)(iii): List of Non-US Defined Benefit Plans
	 	 	8	 
	Schedule 3(b)(iv): Master Trust Interest
	 	 	10	 
	Schedule 4(a)(i): List of US Qualified Defined Contribution Plans
	 	 	11	 
	Schedule 4(a)(ii): List of US Non-Qualified Defined Contribution Plans
	 	 	12	 
	Schedule 4(a)(iii): List of Non-US Defined Contribution Plans
	 	 	13	 
	Schedule 4(c)(iii): Employees Under Deferred Compensation Plan
	 	 	14	 
	Schedule 4(c)(iv): Employees Under Excess Savings Plan
	 	 	15	 
	Schedule 5(a)(i): List of US Health & Welfare Plans
	 	 	16	 
	Schedule 5(a)(ii): List of Non-US Health & Welfare Plans
	 	 	18	 
	Schedule 6(a): List of Incentive Plans
	 	 	20	 
	Schedule 7(a): List of ITT Stock Plans
	 	 	21	 
	Schedule 8(a): COLI Policies
	 	 	22	 
	Schedule 8(b): Executive Life Policies
	 	 	23	 
	Schedule 9(a): List of ITT Director Plans
	 	 	24	 
	Schedule 10(a): List of Collective Bargaining Agreements
	 	 	25	 
	Schedule 16(a): Liabilities Assumed by ITT
	 	 	27	 
	Schedule 16(b): Liabilities Assumed by Water
	 	 	27	 
	Schedule 16(c): Liabilities Assumed by Defense
	 	 	27	 
	Schedule 18(e): Miscellaneous Expenses
	 	 	28	 






i









Table of Contents





1


Schedule 1(a)(i): ITT Employees to Water



Individuals listed on Schedule 1(a)(i) are listed as of 9/22/11, which will be adjusted to the date
coincident with, or the end of the month following, the Distribution Date.




     1. Individuals employed by the following legal entities:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CURRENT OFFICIAL LEGAL ENTITY	 	 	 	 	 	CURRENT	 	 	 	CYCLE	 	PAYROLL	 	NEWCO LEGAL	 	 	 	NEW	 	 
	NAME	 	CURRENT FEIN	 	EMPLOYER NAME	 	INFINIUM	 	VC	 	CODE	 	NAME	 	ENTITY	 	NEWCO FEIN	 	INFINIUM	 	COUNTRY
	COMMON PARENT CORPORATION
ITT
CORPORATION

	 	13-5158950
	 	ITT FLUID TECHNOLOGY
	 	 	800	 	 	FC
	 	FLOBW
	 	FLOJET Bl WEEKLY
	 	Flow Control LLC
	 	45-2115170
	 	 	891	 	 	US
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	COMMON PARENT CORPORATION

 ITT CORPORATION

	 	13-5158950
	 	ITT FLUID TECHNOLOGY
	 	 	800	 	 	RCW
	 	BGSAL
	 	BELL & GOSSETT
	 	Fluid Handling, LLC
	 	45-2237289
	 	 	894	 	 	US
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	COMMON PARENT CORPORATION

ITT CORPORATION

	 	13-5158950
	 	ITT FLUID TECHNOLOGY
	 	 	800	 	 	RCW
	 	BGUN
	 	BELL& GOSSETT
	 	Fluid Handling, LLC
	 	45-2237289
	 	 	894	 	 	US
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	COMMON PARENT CORPORATION

ITT CORPORATION

	 	13-5158950
	 	ITT FLUID TECHNOLOGY
	 	 	800	 	 	RCW
	 	HTSAL
	 	HEAT TRANSFER
	 	Fluid Handling, LLC
	 	45-2237289
	 	 	893	 	 	US
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	COMMON PARENT CORPORATION

ITT CORPORATION

	 	13-5158950
	 	ITT FLUID TECHNOLOGY
	 	 	800	 	 	RCW
	 	HTUN
	 	HEAT

TRANSFER
	 	Fluid Handling, LLC
	 	45-2237289
	 	 	893	 	 	US
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	COMMON PARENT CORPORATION

ITT CORPORATION

	 	13-5158950
	 	ITT FLUID TECHNOLOGY
	 	 	800	 	 	RCW
	 	RCSAL
	 	R&CW HQ
	 	Fluid Handling, LLC
	 	45-2237289
	 	 	890	 	 	US
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ITT WATER & WASTEWATER
USA INC. [FORMERLY WEDECO,

	 	23-2914590
	 	ADVANCED WATER TREATMENT
	 	 	870	 	 	RCW
	 	WPC
	 	WATER POLUTION
	 	Water Co US, Inc.
	 	45-2080074
	 	 	870	 	 	US
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ITT WATER & WASTEWATER
USA INC. [FORMERLY WEDECO,

	 	23-2914590
	 	ITT FLYGT CORPORATION
	 	 	850	 	 	WWW
	 	CPSAL
	 	CUSTOM PUMPS
	 	Water Co US, Inc.
	 	45-2080074
	 	 	850	 	 	US
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ITT WATER & WASTEWATER
USA, INC. [FQRMERLY WEDECO,

	 	23-2914590
	 	ITT FLYGT CORPORATION
	 	 	850	 	 	WWW
	 	FLSAL
	 	FLYGT SALARY
	 	Water Co US, Inc.
	 	45-2080074
	 	 	850	 	 	US
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ITT WATER & WASTEWATER
USA, INC. [FORMERLY WEDECO,

	 	23-2914590
	 	WEDECO INC
	 	 	874	 	 	WWW
	 	WEDBW
	 	WEDECO

BW
	 	Water Co US, Inc.
	 	45-2080074
	 	 	874	 	 	US
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	RULE INDUSTRIES, INC.

	 	04-2384630
	 	ITT FLOW CONTROL, AMERICAS/RULE
	 	 	860	 	 	FC
	 	RUSAL
	 	RULE
SALARY
	 	Flow Control LLC
	 	45-2115170
	 	 	860	 	 	US
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 
	ITT
WATER  TECHNOLOGY (TX), LP/LLC

	 	75-2623429
	 	ITT GOULDS 


PUMPS TEXAS
	 	 	830	 	 	RCW
	 	H9WSA
	 	TX
TURBINE &
	 	Texas Turbine, LLC
	 	45-2116251
	 	 	830	 	 	US
	 
	 	 
	 

	 	 	 	Goulds Pumps Canada (IPG)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 CGO	 	 	CANADA
	 
	 	 
	 

	 	 	 	Ontario Pro Service Center
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 CON	 	 	CANADA






     2. Individuals associated with the following entities that will transfer to Water:



	 	 	 	 	 	 	 	 	 

	Chile

	 	 	1	 	 	RCW
	 	 
	 
	 	 	 	 	 	 	 	 
	India

	 	 	120	 	 	Water	 	 
	 
	 	 	 	 	 	 	 	 
	Mexico (Chihuahu

	 	 	5	 	 	FC	 	 
	 
	 	 	 	 	 	 	 	 
	Mexico (Nogales)

	 	 	80	 	 	FC	 	 
	 
	 	 	 	 	 	 	 	 
	Singapore

	 	 	15	 	 	RCW	 	 
	 
	 	 	 	 	 	 	 	 
	South Korea

	 	 	3	 	 	RCW	 	 
	 
	 	 	 	 	 	 	 	 
	Taiwan

	 	 	1	 	 	RCW	 	 
	 
	 	 	 	 	 	 	 	 
	Thailand

	 	 	2	 	 	RCW	 	 
	 
	 	 	 	 	 	 	 	 
	United Kingdom

	 	 	15	 	 	SS	 	 
	 
	 	 	 	 	 	 	 	 
	United Kingdom (Basingsto ke)

	 	 	3	 	 	IT	 	 
	 
	 	 	 	 	 	 	 	 
	United Kingdom (Whiteley, Letchwort

	 	 	168	 	 	FC	 	 






	 	 	 	 	 	 	 	 	 

	ITT High Precision Manufactured
Products (Wuxi) Co., Ltd

	 	 	63	 	 	FC
	 	ITT Water & Waste (Shenyang) Co., Ltd, Wuxi Branch -
Assets will also transfer
	 
	 	 	 	 	 	 	 	 
	ITT (China) Investment, Shanghai Branch

	 	 	51	 	 	Water HQ
	 	ITT (Shanghai) Trading Co., Ltd — Assets will transfer
	 
	 	 	 	 	 	 	 	 
	ITT (China) Investment

	 	 	3	 	 	 	 	ITT (Shanghai) Trading Co., Ltd,
	 
	 	 	 	 	 	 	 	 
	ITT (China) Investment

	 	 	2	 	 	 	 	ITT (Shanghai) Trading Co., Ltd, Beijing Branch
	 
	 	 	 	 	 	 	 	 
	ITT (China) Investment, Shanghai Branch

	 	 	2	 	 	 	 	ITT (Shanghai) Trading Co., Ltd Beijing Branch
	 
	 	 	 	 	 	 	 	 
	ITT (China) Investment, Shanghai Branch

	 	 	1	 	 	 	 	ITT (Nanjing) CO., Ltd
	 
	 	 	 	 	 	 	 	 
	ITT (China) Investment

	 	 	1	 	 	 	 	ITT (Shanghai) Trading Co., Ltd,







 











Table of Contents








	3. Individual employees identified below:





 









Table of Contents











	3. Individual employees identified below:





 









Table of Contents











	Schedule 1(a)(ii): ITT Employees to Defense Individuals listed on Schedule 1 (a)
(ii) are listed as of 9/22/11, which will be adjusted to the
date coincident with, or the end of the month following, the Distribution Date.
1. Individuals employed by the following legal entities:
2. Individuals associated with the following entities that will transfer to defense:






 









Table of Contents




5




Schedule 1(d): Employment Agreements



Defense Employment Agreements





	 	1.	 	Christopher C. Bernhardt




ITT Employment Agreements





	 	2.	 	Denise Ramos




Water Employment Agreements





	 	3.	 	Frank Jimenez











Table of Contents




6





Schedule 3(a)(i): List of US Qualified Defined Benefit Plans



The US Qualified DB Plans consist of the Defense US Qualified DB Plans, the ITT US Qualified DB
Plans and the Water US Qualified DB Plans.



Defense US Qualified DB Plans





	1.	 	357- ITT Systems Corporation Pension Plan for Hourly Employees at Pacific Missile Range
Facility
	 
	2.	 	501- ITT Salaried Retirement Plan
	 
	3.	 	505- ITT Avionics Division & ITT Aerospace/Communications Division Pension Plan
	 
	4.	 	591- ITT Gilfillan Pension Plan for Hourly Employees
	 
	5.	 	611- ITT Electronic Systems Pension Plan for Employees in the Bargaining Unit
	 
	6.	 	630- Pension Plan for the Roanoke Plant Hourly Employees of ITT Night Vision
	 
	7.	 	758- EDO Corporation Employees Pension Plan (frozen plan for former EDO employees)




ITT US Qualified DB Plans





	8.	 	346- Engineered Valves CA Pure Flo Solutions Group Pension Plan for Hourly Employees at Simi
Valley, CA
	 
	9.	 	521- ITT Cannon Employees Retirement Plan for Hourly Non-Bargaining Production and
Maintenance Employees
	 
	10.	 	571- ITT Aerospace Controls Pension Plan for Hourly Employees
	 
	11.	 	577- ITT Consolidated Hourly Pension Plan
	 
	12.	 	638- ITT Conoflow Pension Plan for Non-Clerical, Non-Rep. Hourly Employees
	 
	13.	 	640- ITT Engineered Valves Pension Plan for Hourly Employees at Amory, MS
	 
	14.	 	642- ITT Engineered Valves Pension Plan for Local 36 Hourly Employees at Lancaster, PA
	 
	15.	 	698- ITT Control Technologies Pension Plan for Hourly Employees
	 
	16.	 	724- ITT Pension Plan for Bargaining Unit Employees Seneca Falls, New York [Xylem to
replicate]
	 
	17.	 	727- ITT Pension Plan for Hourly Employees at Vertical Pump Division, City of Industry,
California
	 
	18.	 	730- ITT Pension Plan for Bargaining Unit Employees, Ashland Operations, Ashland, PA




Water US Qualified DB Plans





	19.	 	520- ITT Bell & Gossett Hydonics Pension Plan for Hourly Employees
	 
	20.	 	696- ITT Standard Hourly (Bargaining Unit) Pension Plan
	 
	21.	 	728- ITT Pension Plan for Hourly Employees, Water Technologies Group-America, Turbine
Division, Lubbock, TX
	 
	22.	 	757- Retirement Plan for ITT Water & Wastewater Leopold Inc. For Hourly Paid Employees










Table of Contents




7










Schedule 3(a)(ii): List of US Non-Qualified Defined Benefit Plans



The US Non-Qualified DB Plans consist of the Defense US Non-Qualified DB Plans, the ITT US
Non-Qualified DB Plans and the Water US Non-Qualified DB Plans.



Defense US Non-Qualified DB Plans





	 	1.	 	680- ITT Excess Plan, which includes the following plans: ITT Excess Pension Plan 1A,
ITT Excess Pension Plan 1B, ITT Excess Pension Plan IIA and ITT Excess Pension Plan IIB
	 
	 	2.	 	ITT Ex-Gratia Plan (with the exception of the liability accrued under the Plan for
Steven R. Loranger, which shall remain with ITT)
	 
	 	3.	 	682- Federal Labs Unfunded 1
	 
	 	4.	 	719- ITT Enhanced Pension Plan
	 
	 	5.	 	759- EDO Excess Plan — SERP
	 
	 	6.	 	Retirement Plan for Non-Management Directors of ITT Corp. (frozen as of October 1,
1995)
	 
	 	7.	 	656- Expatriate




ITT US Non-Qualified DB Plans





	 	8.	 	718- Cranston Unfunded
	 
	 	9.	 	ITT Ex-Gratia Plan (only the liability accrued under the Plan for Steven R. Loranger,
which shall remain with ITT)




Water US Non-Qualified DB Plans





	 	10.	 	None










Table of Contents




8










Schedule 3(a)(iii): List of Non-US Defined Benefit Plans



The Non-US DB Plans consist of the Defense Non-US DB Plans, the ITT Non-US DB Plans and the Water
Non-US DB Plans.



Defense Non-US DB Plans





	 	1.	 	None




ITT Non-US DB Plans





	 	2.	 	325- ITT Belgium — Cannon (Belgium)
	 
	 	3.	 	Gratuity Benefit Program (India)[Xylem to replicate]
	 
	 	4.	 	128- Cannon GmbH (Germany) [Unfunded]
	 
	 	5.	 	378- Cannon GmbH (Germany) [Unfunded]
	 
	 	6.	 	340- Cannon Japan (Japan) [Unfunded]
	 
	 	7.	 	735- Industries Management GmbH, Bad Camberg and former Fechenheim (Germany)
[Unfunded]
	 
	 	8.	 	Salary Sacrifice e.V Plan — ITTG (Germany)




Water Non-US DB Plans





	 	9.	 	323- ITT Belgium — ITT Industries (Belgium)
	 
	 	10.	 	324- ITT Belgium Pension Plan (Belgium)
	 
	 	11.	 	166- Pension Plan for Union Employees of ITT Automotive, a division of ITT Industries
of Canada Ltd. [Electrical Systems, North America] (Canada)
	 
	 	12.	 	200- Pension Plan for Hourly Employees of ITT Residential & Commercial Water (R&CW), a
Division of ITT Industries of Canada L.P (Canada)
	 
	 	13.	 	203- Pension Plan for Hourly Employees of ITT Automotive, a division of ITT Industries
of Canada Ltd. [Structural Systems and Components, North America (Toronto Stamping Plant)]
(Canada)
	 
	 	14.	 	205- ITT Industries Canadian Pension Plan for Salaried Employees (Canada)
	 
	 	15.	 	350- ITT Canadian Excess Benefit Plan — Unregistered (Canada)
	 
	 	16.	 	209- Pension Plan for Hourly Employees of ITT Fabri-Valve, a Division of ITT Industries
of Canada Ltd. (Canada)
	 
	 	17.	 	221- Pension Plan for Union Employees of Ontario Malleable Iron Company Limited
(Canada)
	 
	 	18.	 	223- Pension Plan for Union Employees of ITT Cannon, a Division of ITT Industries of
Canada Ltd.(Canada)
	 
	 	19.	 	744- Pension Plan of ITT Water & Wastewater, a Division of ITT Industries of Canada
L.P.(Canada)
	 
	 	20.	 	369- Industries Management GmbH, Ebernhahn (Division KONI) (Germany)
	 
	 	21.	 	756- Flygt Ireland (Ireland)
	 
	 	22.	 	186- ITT Industries General Pension Plan (UK)
	 
	 	23.	 	189- ITT Industries Pension Plan for UK Expatriates (UK)
	 
	 	24.	 	190- Godwin Pumps Limited Pension Scheme (UK)
	 
	 	25.	 	125- Industriebeteiligungsgesellschaft mbH (Germany) [Unfunded]
	 
	 	26.	 	738- DITTHA GmbH, Kempen (Germany) [Unfunded]
	 
	 	27.	 	126- DITTHA GmbH. Kempen (Germany) [Unfunded]










Table of Contents





9










	28.	 	366- Industries Management GmbH, Ebernhahn (Division KONI) (Germany)[Unfunded]
	 
	29.	 	111- ITT Flygt Pumpen GmbH, Langenhagen, jetzt ITT Water & Wastewater (Germany)
[Unfunded]
	 
	30.	 	Deutschland GmbH (Germany)[Unfunded]
	 
	31.	 	116- ITT Industriebeteiligungsgesellschaft mbH (Germany)[Unfunded]
	 
	32.	 	755- ITT Water & Wastewater, Herford (Germany)[Unfunded]
	 
	33.	 	760- Jabsco GmbH (Germany)[Unfunded]
	 
	34.	 	761- ebro Electronic GmbH & Co. KG (Germany)[Unfunded]
	 
	35.	 	762- SI Analytics GmbH Mainz Deferred Comp (Germany)[Unfunded]
	 
	36.	 	763- SI-FAS Pension Valuation (Germany)[Unfunded]
	 
	37.	 	764- WTW FAS Pension Plan (Germany)[Unfunded]
	 
	38.	 	765- ebro Electronics Instruments GmbH Ingolstadt Pension Plan (Germany)
[Unfunded]
	 
	39.	 	370- Industries Management GmbH,former Regelungstechnik (Germany)[Unfunded]
	 
	40.	 	720- Industries Management GmbH,former Regelungstechnik (Germany)[Unfunded]
	 
	41.	 	731- Industries Management GmbH (Germany)[Unfunded]
	 
	42.	 	732- Industries Management GmbH (Germany)[Unfunded]
	 
	43.	 	734- Industries Management GmbH (Germany)[Unfunded]
	 
	44.	 	736- Industries Management GmbH, Bad Camberg and former Fechenheim (Germany)
[Unfunded]
	 
	45.	 	713- Flygt S.p.a. Flygt Italy Plan (Italy)[Unfunded]
	 
	46.	 	766- ADIN Pension 28229 NOK (Norway)[Unfunded]
	 
	47.	 	767- ADI Storebrand 27835 NOK (Norway)[Unfunded]
	 
	48.	 	768- Storebrand 25000 NOK (Norway)[Unfunded]
	 
	49.	 	118- Grindex AB (Sweden)[Unfunded]
	 
	50.	 	120- Water & Wastewater AB General Pension Plan (ITP-Plan) (Sweden)[Unfunded]
	 
	51.	 	121- Water & Wastewater AB Individual Contracts (Not FPG/PRI) (Sweden)
[Unfunded]
	 
	52.	 	754- Industries Holding AB General Pension Plan (ITP-Plan) (Sweden)[Unfunded]















Table of Contents




10


Schedule 3(b)(iv): Master Trust Interest



Amounts listed on Schedule 3(b)(iv) are listed as of 7/31/11, which will be adjusted to the date
coincident with, or the end of the month following, the Distribution Date.




Water Interest




	 	 	 	 	 	 	 	 	 
	Plan Name	 	Plan #	 	7/31/2011 Balance
	ITT Bell
— Gossett
	 	 	520	 	 	 	26,179,521	 
	ITT Standard Hourly
	 	 	696	 	 	 	14,215,802	 
	Goulds Division Lubbock
	 	 	728	 	 	 	5,415,891	 
	Leopold
	 	 	757	 	 	 	2,444,161	 
	Total Xylem
	 	 	 	 	 	 	48,255,375	 





ITT Interest




	 	 	 	 	 	 	 	 	 
	Plan Name	 	Plan #	 	7/31/2011 Balance
	ITT Shertec Simi Valley
	 	 	346	 	 	 	376,902	 
	ITT Cannon Electric
	 	 	521	 	 	 	25,380,063	 
	ITT Aerospace Controls
	 	 	571	 	 	 	12,399,734	 
	Consolidated Hourly Plans
	 	 	577	 	 	 	66,737,221	 
	ITT Grinell — Non-clerical
	 	 	638	 	 	 	1,280,183	 
	ITT Fluid Tech. — Lancaster
	 	 	642	 	 	 	5,743,973	 
	ITT Fluid Tech. — Amory Hourly
	 	 	640	 	 	 	2,040,563	 
	ITT Control Technologies
	 	 	698	 	 	 	289326.82	 
	Goulds Beginning Unit Employees
	 	 	724	 	 	 	69,070,531	 
	Goulds Vertical Pump Division
	 	 	727	 	 	 	4,191,936	 
	Goulds Bargaining Unit Employees
	 	 	730	 	 	 	12,709,847	 
	 
	 	 	 	 	 	 	 	 
	Total ITT
	 	 	 	 	 	 	200,220,281	 


















Table of Contents





11





Schedule 4(a)(i): List of US Qualified Defined Contribution Plans



The US Qualified DC Plans consist of the Defense US Qualified DC Plans, the ITT US Qualified DC
Plans and the Water US Qualified DC Plans.



Defense US Qualified DC Plans





	1.	 	100- ITT Salaried Investment and Savings Plan
	 
	2.	 	178- ITT Avionics Division & ITT Aerospace/Communications Division Bargaining Unit Savings
Plan
	 
	3.	 	209- ITT Night Vision Savings Plan for Hourly Employees
	 
	4.	 	227- ITT Electronic Systems Savings Plan for Hourly Employees
	 
	5.	 	013- ITT Systems Corporation Retirement/Savings Plan
	 
	6.	 	235- ITT Systems Corporation Pacific Missile Range Facility Savings Plan for Hourly Employees
	 
	7.	 	ITT Research Systems Inc. Employees’ Savings Plan
	 
	8.	 	237- ITT Advanced Engineering and Sciences Professional Benefits Employees’ Savings Plan
	 
	9.	 	003- EDO Corporation Employee Investment Plan
	 
	10.	 	200- ITT Gilfillan Savings Plan for Hourly Employees




ITT US Qualified DC Plans





	11.	 	193- ITT Aerospace Controls Savings Plan for Hourly Employees
	 
	12.	 	196- ITT Cannon Savings Plan for Hourly Employees
	 
	13.	 	216- ITT Engineered Valves — Lancaster Savings Plan for Hourly Employees
	 
	14.	 	009- Goulds Pumps, Inc. Retirement Savings and Investment Plan [Xylem to replicate]
	 
	15.	 	201- ITT Conoflow Savings Plan for Hourly Employees
	 
	16.	 	215- ITT Engineered Valves — Fabri Savings Plan for Hourly Emp. At Amory, MS
	 
	17.	 	225- ITT Engineered Valves CA Pure Flo Solutions Group Savings Plan for Hourly Employees
	 
	18.	 	236- ITT BIW Connector Systems Employees Savings Plan
	 
	19.	 	010- Procast And Goulds Pump Service Center Employee Savings Plan
	 
	20.	 	240- Pure-Flo Precision Savings Plan for Hourly Employees
	 
	21.	 	239- ITT Koni Friction Products Savings Plan for Hourly Employees
	 
	22.	 	238- ITT Control Technologies Savings Plan for Hourly Employees
	 
	23.	 	Evolutionary Concepts Profit Sharing Plan (YE 6/30/2010)
	 
	24.	 	ECI/Alcon 401(k) Plan




Water US Qualified DC Plans





	25.	 	002- ITT Rule Savings Plan for Hourly Employees
	 
	26.	 	203- ITT Bell & Gossett Savings Plan for Hourly Employees
	 
	27.	 	226- ITT Heat Transfer Savings Plan for Hourly Employees
	 
	28.	 	231- ITT Hydro Air Savings Plan for Hourly Employees
	 
	29.	 	241- Flojet Corporation 401(k) Plan
	 
	30.	 	001- F.B. Leopold Co., Inc. Savings Plan for Hourly Employees
	 
	31.	 	001- F.B. Leopold Company, Inc. Retirement Savings Plan
	 
	32.	 	001- Laing Thermotech, Inc. 401(k) Profit Sharing Plan
	 
	33.	 	Godwin Pumps of America, Inc. Profit Sharing Plan and Trust










Table of Contents





12









Schedule 4(a)(ii): List of US Non-Qualified Defined Contribution Plans



The US Non-qualified DC Plans consist of the Defense US Non-qualified DC Plans, the ITT US
Non-qualified DC Plans and the Water US Non-qualified DC Plans.



Defense US Non-Qualified DC Plans





	 	1.	 	EDO Deferred Compensation Plan




ITT US Non-Qualified DC Plans





	 	2.	 	ITT Deferred Compensation Plan [Water and Defense will replicate]
	 
	 	3.	 	ITT Excess Savings Plan [Water and Defense will replicate]




Water US Non-Qualified DC Plans





	 	4.	 	None










Table of Contents





13









Schedule 4(a)(iii): List of Non-US Defined Contribution Plans



The Non-US DC Plans consist of the Defense Non-US DC Plans, the ITT Non-US DC Plans and the Water
Non-US DC Plans.



Defense Non-US DC Plans





	 	1.	 	None




ITT Non-US DC Plans





	 	2.	 	Superannuation Benefit Program — ITT India (India) [Xylem to replicate]
	 
	 	3.	 	Provident Fund — ITT India (India) [Xylem to replicate]
	 
	 	4.	 	Retirement — IP (Taiwan)
	 
	 	5.	 	C&K Switches Limited Pension Plan (UK)
	 
	 	6.	 	C&K Switches Executive Pension Plan (UK)
	 
	 	7.	 	Direct Insurance — ITTG (Germany) [Exelis and Xylem to replicate]




Water Non-US DC Plans





	 	8.	 	Superannuation Fund — WWW (Australia)
	 
	 	9.	 	ITT Industries Canadian Investment Savings Plan for Salaried Employees — ITT Canada
(Canada) [ITT to replicate]
	 
	 	10.	 	Insured Retirement- WWW (Denmark) [ITT to replicate]
	 
	 	11.	 	Plan d’Epargne Enterprise (PEE) — ITT France (France)
	 
	 	12.	 	Insured Retirement — WWW (Netherlands)
	 
	 	13.	 	Retirement — WWW (South Africa) [ITT to replicate]
	 
	 	14.	 	ITT Retirement Savings Plan — ITT Industries (UK) [Exelis and ITT to
replicate]
	 
	 	15.	 	Wedeco Executive Pension Plan (UK)
	 
	 	16.	 	Direct Insurance — WWW (Germany)










Table of Contents




14










Schedule 4(c)(iii): Employees Under Deferred Compensation Plan



Water Employees





	 	1.	 	15 individuals identified as Water Employees or ITT Retirees on the records of the ITT
Deferred Compensation Plan




Defense Employees





	 	2.	 	36 individuals identified as Defense Employees or ITT Retirees on the records of the
ITT Deferred Compensation Plan










Table of Contents






15









Schedule 4(c)(iv): Employees Under Excess Savings Plan



Participants listed on Schedule 4(c)(iv) are listed as of 7/31/11, which will be adjusted to the
date coincident with, or the end of the month following, the Distribution Date.



Water Employees





	 	1.	 	13 individuals identified as Water Employees on the records of the Excess Savings Plan




Defense Employees





	 	2.	 	13 individuals identified as Defense Employees on the records of the Excess Savings
Plan















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16


Schedule 5(a)(i): List of US Health & Welfare Plans



The US H&W Plans consist of the Defense US H&W Plans, the ITT US H&W Plans and the Water US H&W
Plans.




Defense US H&W Plans





	1.	 	940- ITT Avionics Severance Plan for Exempt and Non-Exempt Salaried Employees
	 
	2.	 	903- Avionics Postretirement Medical Plan
	 
	3.	 	918- Avionics Postretirement Life Plan
	 
	4.	 	942- ITT Night Vision Term. Pay for Salaried Exempt Employees
	 
	5.	 	951- ITT A/CD Severance Pay Plan for Ex. And Non-Ex. Salaried Employees
	 
	6.	 	502- EDO Corporation Medical, Dental, Vision and Salary Benefit Plan
	 
	7.	 	503- EDO Corporation Life and Travel Accident Plan
	 
	8.	 	506- EDO Corporation Sickness, STD, and LTD Plan
	 
	9.	 	914- EDO Postretirement Medical & Life Plan
	 
	10.	 	302- ITT Employee Benefit Trust
	 
	11.	 	911- Space Systems Division Postretirement Medical
	 
	12.	 	923- Space Systems Division Postretirement Life
	 
	13.	 	ITT Salaried Retiree Health Plan





ITT US H&W Plans





	14.	 	594- ITT Salaried Medical and Dental Program [Exelis and Xylem to replicate]
	 
	15.	 	ITT Corporation Special Senior Executive Severance Pay Plan
	 
	16.	 	ITT Corporation Enhanced Severance Pay
	 
	17.	 	ITT Corporation Senior Executive Severance Pay Plan
	 
	18.	 	ITT Industries Corporate Policies- Severance Policy 30-08
	 
	19.	 	ITT Corporation Severance Plan
	 
	20.	 	529- ITT Cannon Severance Pay Plan for Exempt and Non-Exempt Salaried Employees
	 
	21.	 	717- ITT Salaried Voluntary Accident Plan [Exelis and Xylem to replicate]
	 
	22.	 	801- Group Accident Insurance Plan for Salaried Employees [Exelis and Xylem to replicate]
	 
	23.	 	802- ITT Corporation Long-Term Disability Plan for Salaried Employees [Exelis and Xylem to
replicate]
	 
	24.	 	ITT Corporation Excess Long-Term Disability Plan [Exelis and Xylem to replicate]
	 
	25.	 	999- ITT Corporate Welfare Plan
	 
	26.	 	717- ITT Salaried Voluntary Travel Accident Plan [Exelis and Xylem to replicate]
	 
	27.	 	514- Kentucky Carbon Corporation Sickness and Accident Plan (YE 10/31/2009)
	 
	28.	 	503- ITT Carbon Employee Benefit Trust (YE 10/31/2009)
	 
	29.	 	503- Moog Controls Inc. Voluntary Employees Beneficiary Trust
	 
	30.	 	902- AC Pump Postretirement Medical Plan
	 
	31.	 	905- Cannon Postretirement Medical Plan
	 
	32.	 	906- Carbon Postretirement Medical Plan
	 
	33.	 	907- Goulds Postretirement Medical Plan
	 
	34.	 	908- Higbie Postretirement Medical Plan
	 
	35.	 	909- Jackson Postretirement Medical Plan











Table of Contents



17



	36.	 	916- ITT Salaried Options C&D
	 
	37.	 	917- AC Pump Postretirement Life Plan
	 
	38.	 	920- Carbon Postretirement Life Plan
	 
	39.	 	921- Goulds Postretirement Life plan
	 
	40.	 	925- Engineered Products Postretirement Life Plan
	 
	41.	 	926- Engineered Valve Postretirement Life Plan
	 
	42.	 	Active Salaried Life Insurance [Exelis and Xylem to replicate]
	 
	43.	 	Active Salaried Voluntary Plans [Exelis and Xylem to replicate]
	 
	44.	 	Active Salaried Long Term Care Plan
	 
	45.	 	Active Salaried United Healthcare/PacifiCare Plan [Exelis and Xylem to replicate]
	 
	46.	 	Active Salaried Kaiser Plan [Exelis and Xylem to replicate]
	 
	47.	 	Active Salaried Excellus BluePoint POS Plan [Xylem to replicate]





Water US H&W Plans





	48.	 	520- ITT Water Technology, Inc. Health Reimbursement Arrangement
	 
	49.	 	504- The F.B. Leopold Company, Inc. Welfare Benefits Plan
	 
	50.	 	904- Bell & Gossett Postretirement Medical Plan
	 
	51.	 	910- Leopold Postretirement Medical Plan
	 
	52.	 	912- ITT Standard (Heat Transfer) Postretirement Medical Plan
	 
	53.	 	918- Bell & Gossett Postretirement Life Plan
	 
	54.	 	922- Leopold Postretirement Life Plan
	 
	55.	 	924- ITT Standard (Heat Transfer) Postretirement Life Plan











Table of Contents



18


Schedule 5(a)(ii): List of Non-US Health & Welfare Plans 



The Non-US H&W Plans consist of the Defense Non-US H&W Plans, the ITT Non-US H&W Plans and the
Water Non-US H&W Plans.




Defense Non-US H&W Plans





	1.	 	None





ITT Non-US H&W Plans 





	2.	 	Medical — Cannon (Belgium)
	 
	3.	 	Life / AD&D — IP (Brazil)
	 
	4.	 	Medical — IP (Brazil)
	 
	5.	 	Life Insurance — IP (Chile)
	 
	6.	 	Medical — IP (Chile)
	 
	7.	 	Direct Insurance — ITTG (Germany) [Exelis and Xylem to replicate]
	 
	8.	 	Accidental Insurance — ITTG (Germany) [Exelis and Xylem to replicate]
	 
	9.	 	Employee Compensation Insurance — ITT India (India) [Xylem to replicate]
	 
	10.	 	Personal Accident — ITT India (India) [Xylem to replicate]
	 
	11.	 	Medical — ITT India (India) [Xylem to replicate]
	 
	12.	 	Life Insurance — ICS (Mexico)
	 
	13.	 	Medical — ICS (Mexico)
	 
	14.	 	Medical — IP (Mexico)
	 
	15.	 	AD&D — IP (Singapore)
	 
	16.	 	Medical — IP (Singapore)
	 
	17.	 	AD&D — IP (South Korea)
	 
	18.	 	AD&D — IP (Taiwan)
	 
	19.	 	Medical — IP (Taiwan)
	 
	20.	 	AD&D — IP (Thailand)
	 
	21.	 	Medical — IP (Thailand)
	 
	22.	 	ITT Life Assurance — ITT Industires (UK) [Exelis and Xylem to replicate]
	 
	23.	 	Medical — ITT Industries (UK) [Exelis and Xylem to replicate]




Water Non-US H&W Plans 





	24.	 	Medical — WWW (Belgium)
	 
	25.	 	Life / AD&D — WWW (Brazil)
	 
	26.	 	Medical — WWW (Brazil)
	 
	27.	 	ITT Canadian Salaried Group Insurance Program — ITT Canada (Canada) [ITT to
replicate]
	 
	28.	 	Life Insurance — WWW (Chile)
	 
	29.	 	Medical — WWW (Chile)
	 
	30.	 	Employer Liability Insurance — ITT China (China) [ITT to replicate]
	 
	31.	 	Life Insurance / AD&D — ITT China (China) [ITT to replicate]
	 
	32.	 	Medical/Dental — ITT China (China) [ITT to replicate]
	 
	33.	 	Medical — WWW (Denmark) [ITT to replicate]
	 
	34.	 	Life / AD&D / Disability (France) [ITT to replicate]
	 
	35.	 	Medical / Dental (France) [ITT to replicate]
	 
	36.	 	Direct Insurance — WWW (Germany)











Table of Contents



19



	37.	 	Accidental Insurance — WWW (Germany)
	 
	38.	 	Life Insurance — WWW (Mexico)
	 
	39.	 	Medical — WWW (Mexico)
	 
	40.	 	Medical — WWW (Russia)
	 
	41.	 	AD&D — WWW (Singapore)
	 
	42.	 	Life / AD&D — WWW (South Africa) [ITT to replicate]










Table of Contents



20







Schedule 6(a): List of Incentive Plans





	1.	 	1997 ITT Industries Annual Incentive Plan
	 
	2.	 	1997 Long-Term Incentive Plan
	 
	3.	 	ITT Corporation Annual Incentive Plan for Executive Officers
	 
	4.	 	ITT Corporation Retention Program
















Table of Contents



21







Schedule 7(a): List of ITT Stock Plans





	1.	 	1994 ITT Incentive Stock Plan
	 
	2.	 	ITT 1996 Restricted Stock Plan for Non-Employee Directors
	 
	3.	 	2002 ITT Stock Option Plan for Non-Employee Directors
	 
	4.	 	2003 ITT Equity Incentive Plan
	 
	5.	 	2011 ITT Omnibus Incentive Plan
	 
	6.	 	Industries Ltd Share Incentive Plan (UK)
	 
	7.	 	ITT Flygt Ltd Share Incentive Plan (UK)











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22


Schedule 8(a): COLI Policies



Individuals listed on Schedule 8(a) are listed as of 7/02/11, which will be adjusted to the date
coincident with, or the end of the month following, the Distribution Date.












ITT




	 	 	 	 	 
	Policy	 	 	 	 
	Number	 	Carrier	 	 
	18395400

	 	NM Life
	 	 
	19127919

	 	NM Life	 	 
	18395404

	 	NM Life	 	 
	19127921

	 	NM Life	 	 
	19127923

	 	NM Life	 	 
	17448846

	 	NM Life	 	 
	56906286

	 	NYLife	 	 
	18696673

	 	NM Life	 	 
	18395408

	 	NM Life	 	 
	18696674

	 	NM Life	 	 
	18395409

	 	NM Life	 	 
	18395411

	 	NM Life	 	 
	18395414

	 	NM Life	 	 
	56906287

	 	NYLife	 	 
	17448847

	 	NM Life	 	 
	17448853

	 	NM Life	 	 
	56906297

	 	NYLife	 	 
	17961894

	 	NM Life	 	 
	19127922

	 	NM Life	 	 
	18696675

	 	NM Life	 	 
	19127925

	 	NM Life	 	 
	17448836

	 	NM Life	 	 
	17616521

	 	NM Life	 	 
	17448845

	 	NM Life	 	 
	17961899

	 	NM Life	 	 






Water




	 	 	 	 	 
	Policy Number	 	Carrier	 	 
	17961895

	 	NM Life
	 	 
	18395405

	 	NM Life	 	 
	17616524

	 	NM Life	 	 
	191279241

	 	NM Life	 	 
	56906275

	 	NYLife	 	 
	18395401

	 	NM Life	 	 






Defense




	 	 	 	 	 
	Policy Number	 	Carrier	 	 
	17616519

	 	NM Life
	 	 
	56906274

	 	NYLife	 	 
	17448842

	 	NM Life	 	 
	56906282

	 	NYLife	 	 
	19127920

	 	NM Life	 	 
	56906285

	 	NYLife	 	 
	18395406

	 	NM Life	 	 
	18395407

	 	NM Life	 	 
	56906292

	 	NYLife	 	 
	17448852

	 	NM Life	 	 
	56906294

	 	NYLife	 	 
	18395412

	 	NM Life	 	 
	19127926

	 	NM Life	 	 
	56906301

	 	NYLife	 	 
	17448856

	 	NM Life	 	 
	56906273

	 	NYLife	 	 
	56906276

	 	NYLife	 	 
	56906283

	 	NYLife	 	 
	56906290

	 	NYLife	 	 
	56906291

	 	NYLife	 	 












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23


Schedule 8(b): Executive Life Policies



Amounts listed on Schedule 8(b) are listed as of 6/30/11, which will be adjusted to the date
coincident with, or the end of the month following, the Distribution Date.




ITT




	 	 	 	 	 	 	 
	Block 1	 	Policy	 	 
	1

	 	 	9061446	 	 	 
	2

	 	 	9061445	 	 	 
	3

	 	 	9061444	 	 	 
	4

	 	 	9061438	 	 	 
	5

	 	 	9061443	 	 	 
	6

	 	 	9061452	 	 	 
	7

	 	 	9061450	 	 	 
	8

	 	 	9061440	 	 	 
	9

	 	 	9061433	 	 	 
	10

	 	 	9061434	 	 	 
	11

	 	 	9061435	 	 	 
	12

	 	 	9061447	 	 	 
	 
	 	 
	Block 2	 	Policy	 	 
	1

	 	 	9096216	 	 	 












Table of Contents



24


Schedule 9(a): List of ITT Director Plans





	1.	 	ITT Corporation Deferred Compensation Plan for Non-Employee Directors
	 
	2.	 	ITT Group Accident Program that provides 24 hour accidental death and dismemberment coverage




Additionally, the ITT 1996 Restricted Stock Plan for Non-Employee Directors and the 2002 ITT Stock
Option Plan for Non-Employee Directors, each as listed on Schedule 7(a) apply to non-employee
directors of ITT.












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25




Schedule 10(a): List of Collective Bargaining Agreements



The Collective Bargaining Agreements consist of the Defense Collective Bargaining Agreements, the
ITT Collective Bargaining Agreements and the Water Collective Bargaining Agreements. Works
councils and collective bargaining agreements from jurisdictions other than the US and Canada are
expressly excluded from this schedule and will continue with their respective company by transfer
of law.



Defense Collective Bargaining Agreements





	1.	 	Agreement dated August 28, 2010 between ITT Corporation, Electronic Systems, Fort Wayne, IN,
a Division of ITT Corporation, Inc., and IUE, the industrial division of the Communication
Workers of America, AFL CIO in behalf of and in conjunction with the IUE the industrial
division of the Communication Workers of America, AFL CIO Local 84999
	 
	2.	 	Agreement dated October 1, 2009 between ITT Electronics Systems/Integrated Electronic Warfare
Systems and ITT Communications Systems and the I.U.E./CWA and its Local Union 81447
	 
	3.	 	Agreement dated May 22, 2011 between ITT Corporation, Night Vision Roanoke Plant and IUE, the
Industrial Division of the Communications Workers of America AFL-CIO and Local 82162
	 
	4.	 	Agreement dated December 15, 2009 between Systems-Benning and Columbus Metal Trades Council
	 
	5.	 	Agreement dated December 15, 2009 between Systems-Benning and Sheet Metal Workers, Local 85
 — Security Guards
	 
	6.	 	Agreement dated November 1, 2009 between Systems — DSN and IBEW Local 543
	 
	7.	 	Agreement dated March 31, 2011 between Systems — K-Town and (Ver.di) Vereinte
Dienstleistungsgewerkschaft
	 
	8.	 	Agreement dated December 1, 2010 between Systems — PMRF and IBEW Local 1260 Main
	 
	9.	 	Agreement dated December 1, 2010 between Systems — PMRF and IBEW Local 1260 Security
	 
	10.	 	Agreement dated December 1, 2010 between Systems — PMRF and IBU
	 
	11.	 	Agreement dated November 1, 2007 between Systems — SLRS and IBEW Local 2088
	 
	12.	 	Agreement dated September 1, 2007 between Systems — SLRS and IAM Local 815
	 
	13.	 	Agreement dated October 31, 2007 between Systems — SLRS and IBT Local 381
	 
	14.	 	Agreement dated October 1, 2008 between Systems — TARS and CWA Local 3177
	 
	15.	 	Agreement dated October 1, 2008 between Systems — TARS (Rio Grande City, TX) and IBEW Local
66
	 
	16.	 	Agreement dated October 1, 2008 between Systems — TARS (Eagle Pass, TX) and IBEW Local 66
	 
	17.	 	Agreement dated October 1, 2008 between Systems — TARS and IBEW Local 583
	 
	18.	 	Agreement dated October 1, 2008 between Systems — TARS and IBEW Local 611
	 
	19.	 	Agreement dated October 1, 2008 between Systems — TARS (Ft. Huachuca, AZ) and IBEW Local 570
	 
	20.	 	Agreement dated October 1, 2008 between Systems — TARS (Yuma, AZ) and IBEW Local 570
	 
	21.	 	Agreement dated December 1, 2010 between Systems — Maxwell and USW Local 13350
	 
	22.	 	Agreement dated July 1, 2009 between Systems — Maxwell and USW Local 8405










Table of Contents



26


	23.	 	Agreement dated August 27, 2010 between Systems — Wallops Island and IAM Local 2552 (Two
units)
	 
	24.	 	Agreement dated April 9, 2011 between Systems — White Sands and IAM Local 2515
	 
	25.	 	Agreement dated December 1, 2010 between Systems — TARS (Lajas, PR) and IUSW 6135





ITT Collective Bargaining Agreements





	26.	 	Agreement dated March 1, 2011 between IP Pro shop and Steelworkers
	 
	27.	 	Agreement between IP/SFO and Steelworkers through July 28, 2012
	 
	28.	 	Agreement dated May 16, 2009 between Industrial Process (Lancaster, Pennsylvania), a unit of
ITT Corporation, and the Glass, Molders, Pottery and Plastics & Allied Workers International
Union, Local No. 36, AFL-CIO, CLC.





Water Collective Bargaining Agreements 





	29.	 	Agreement dated August 1, 2010, between WATER SYSTEMS OPERTIONS (WSO) a unit of ITT Water
Technology, Inc.*, and its successors, and the UNITED STEELWORKERS on behalf of itself and
members of LOCAL UNION No. 3298
	 
	30.	 	Agreement dated August 15, 2010, by and between ITT Residential & Commercial Water located in
the Village of Morton Grove, and INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND
AGRICULTURAL IMPLEMENT WORKERS OF AMERICA and its LOCAL UNION NO. 890
	 
	31.	 	Agreement between ITT RCW Heat Transfer, Buffalo, New York, and UNITED STEELWORKERS,
AFL-CIO-CLC Local Number 897, 2010-2013
	 
	32.	 	Agreement dated September 23, 2010 between ITT R&CW, a division of ITT Industries of Canada
L.P. (for hourly union employees in Guelph, ON) and United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers International Union (United
Steelworkers) — Local 8614-05
	 
	33.	 	Agreement dated April 22, 2010 between ITT W&WW, a division of ITT Industries of Canada L.P.
(for hourly union shop employees in Pointe-Claire, QC) and National Automobile, Aerospace and
Agricultural Implement Workers Union of Canada (CAW Canada) — Local 698
	 
	34.	 	Agreement dated May 1, 2010 between ITT W&WW, a division of ITT Industries of Canada L.P.
(for hourly union shop employees in Surrey, BC) and International Union of Operating Engineers
(IUOE) — Local 115
	 
	35.	 	Agreement dated May 1, 2008 between ITT W&WW, a division of ITT Industries of Canada L.P.
(for salaried union office employees in Surrey, BC) and Canadian Office and Professional
Employee’s Union (COPE) — Local 15











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27


Schedule 16(a): Liabilities Assumed by ITT





	1.	 	None





Schedule 16(b): Liabilities Assumed by Water





	2.	 	None





Schedule 16(c): Liabilities Assumed by Defense





	3.	 	None











Table of Contents



28


Schedule 18(e): Miscellaneous Expenses





	1.	 	None