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exv10wxay

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Exhibit 10(a)

Illinois Tool Works Inc.

1996 Stock Incentive Plan

Approved by the Board of Directors on February 16, 1996

and by the Stockholders on May 3, 1996

Amended by the Board of Directors on

December 12, 1997, October 29, 1999, January 3, 2003,

March 18, 2003, January 2, 2004 and December 10, 2004

 

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TABLE OF CONTENTS

	 	 	 	 	 
	Section 1. Purpose.
	 	 	1	 
	Section 2. Definitions.
	 	 	1	 
	Section 3. Administration.
	 	 	3	 
	Section 4. Common Stock Subject to Plan.
	 	 	3	 
	Section 5. Options.
	 	 	4	 
	Section 6. Stock Awards.
	 	 	4	 
	Section 7. Performance Units.
	 	 	5	 
	Section 8. Stock Appreciation Rights.
	 	 	5	 
	Section 9. Termination of Employment.
	 	 	6	 
	Section 10. Adjustment Provisions.
	 	 	7	 
	Section 11. Term.
	 	 	7	 
	Section 12. Corporate Change.
	 	 	7	 
	Section 13. General Provisions.
	 	 	7	 
	Section 14. Amendment or Discontinuance of the Plan.
	 	 	9	 
	Section 15. Options Granted Under the Premark Plan.
	 	 	9	 

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Illinois Tool Works Inc.

1996 Stock Incentive Plan

Section 1. Purpose.

     The purpose of the Plan is to encourage Key Employees to have a greater financial investment
in the Company through ownership of its Common Stock. The Plan is an amendment and restatement of
the 1979 Stock Incentive Plan (the “1979 Plan”). The terms of the Plan will apply to all
outstanding Incentives granted under the 1979 Plan, including those pertaining to a Corporate
Change and termination of employment as described below. No additional Incentives will be granted
under the 1979 Plan.

     Effective May 9, 2003, the Premark International, Inc. 1994 Incentive Plan (the “Premark
Plan”) is merged into the 1996 Stock Incentive Plan. Section 15 of the 1996 Stock Incentive Plan
sets forth the terms applicable to the merged Premark Plan and the Options granted thereunder.

Section 2. Definitions.

     Board: The Board of Directors of the Company.

     Code: The Internal Revenue Code of 1986, as amended.

     Committee: The Compensation Committee of the Board or such other committee as shall be
appointed by the Board to administer the Plan pursuant to Section 3.

     Common Stock: The Common Stock, without par value, of the Company or such other class of
shares or other securities as may be applicable pursuant to the provisions of Section 10.

     Company: Illinois Tool Works Inc., a Delaware corporation, and any successor thereto.

     Corporate Change: Any of the following: (i) the dissolution of the Company; (ii) the merger,
consolidation, or reorganization of the Company with any other corporation after which the holders
of Common Stock immediately prior to the effective date thereof hold less than 70% of the
outstanding common stock of the surviving or resulting entity; (iii) the sale of all or
substantially all of the assets of the Company to any person or entity other than a wholly owned
subsidiary; (iv) any person or group of persons acting in concert, other than descendants of Byron
L. Smith and trusts for the benefit of such descendants, or entity becomes the beneficial owner,
directly or indirectly, of more than 30% of the outstanding Common Stock; or (v) the individuals
who, as of the close of the most recent annual meeting of the Company’s stockholders, are members
of the Board (the “Existing Directors”) cease for any reason to constitute more than 50% of the
Board; provided, however, that if the election, or nomination for election, by the Company’s
stockholders of any new director was approved by a vote of at least 50% of the Existing Directors,
such new director shall be considered an Existing Director;

 

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provided further, however, that no individual shall be considered an Existing Director if such individual initially
assumed office as a result of either an actual or threatened “Election Contest” (as described
in Rule 14a-11 under the Securities Exchange Act of 1934) or other actual or threatened
solicitation of proxies by or on behalf of anyone other than the Board (a “Proxy Contest”),
including by reason of any agreement intended to avoid or settle any Election Contest or Proxy
Contest.

     Covered Employee: A Key Employee who is or is expected to be a “covered employee” within the
meaning of Code Section 162(m) and the related regulations for the year in which an Incentive is
taxable to such employee and for whom the Committee intends that such Incentive qualify as
performance-based compensation under Code Section 162(m).

     Disability: Eligible for Social Security disability benefits or disability benefits under the
Company’s long-term disability plan, based upon a determination by the Committee that the condition
arose prior to termination of employment.

     Fair Market Value: The average of the highest and lowest price at which Common Stock was
traded on the relevant date, as reported in the “NYSE-Composite Transactions” section of the
Midwest Edition of The Wall Street Journal, or, if no sales of Common Stock were reported for that
date, on the most recent preceding date on which Common Stock was traded.

     Incentive Stock Option: As defined in Code Section 422.

     Incentives: Options (including Incentive Stock Options), Stock Awards, Performance Units and
Stock Appreciation Rights.

     Key Employee: An employee of the Company approved by the Committee for participation in the
Plan on the basis of his or her ability to contribute significantly to the growth and profitability
of the Company.

     Option: An option to purchase shares of Common Stock granted to a Key Employee pursuant to
Section 5.

     Performance Unit: A unit representing a cash sum or one or more shares of Common Stock that
is granted to a Key Employee pursuant to Section 7.

     Plan: The Illinois Tool Works Inc. 1996 Stock Incentive Plan, as amended from time to time.

     Restricted Shares: Shares of Common Stock issued subject to restrictions pursuant to Section
6(b).

     Retirement: Termination of employment while eligible for retirement as defined by the
Company’s tax-qualified defined benefit retirement plan.

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     Stock Appreciation Right or Right: An award granted to a Key Employee pursuant to Section 8.

     Stock Award: An award of Common Stock granted to a Key Employee pursuant to Section 6.

     Stock Ownership Guidelines: The stock ownership guidelines adopted by the Board, as amended
from time to time.

Section 3. Administration.

     (a) Committee. The Plan shall be administered by the Committee. To the extent
required to comply with Rule 16b-3 under the Securities Exchange Act of 1934, each member of the
Committee shall qualify as a “non-employee director” as defined therein. To the extent required to
comply with Code Section 162(m) and the related regulations, each member of the Committee shall
qualify as an “outside director” as defined therein.

     (b) Authority of the Committee. The Committee shall have the authority to approve Key
Employees for participation; to construe and interpret the Plan; to establish, amend or waive rules
and regulations for its administration; and to accelerate the exercisability of any Incentive or
the termination of any restriction under any Incentive. Incentives may be subject to such
provisions as the Committee shall deem advisable, and may be amended by the Committee from time to
time; provided that no such amendment may adversely affect the rights of the holder of an Incentive
without such holder’s consent, and no amendment, as it applies to any Covered Employee, shall be
made that would cause an Incentive granted to such Covered Employee to fail to satisfy the
performance-based compensation exemption under Code Section 162(m) and the related regulations.

Section 4. Common Stock Subject to Plan.

     Subject to Section 10, the aggregate shares of Common Stock that may be issued under the Plan,
including Common Stock authorized but not issued or reserved for issuance under the 1979 Plan,
shall not exceed 10,000,000. In the event of a lapse, expiration, termination, forfeiture or
cancellation of any Incentive granted under the Plan or the 1979 Plan without the issuance of
shares or payment of cash, the Common Stock subject to or reserved for such Incentive may be used
again for a new Incentive hereunder; provided that in no event may the number of shares of Common
Stock issued hereunder exceed the total number of shares reserved for issuance. Any shares of
Common Stock withheld or surrendered to pay withholding taxes pursuant to Section 13(e) or
surrendered in full or partial payment of the exercise price of an Option pursuant to Section 5(e)
shall be added to the aggregate of shares of Common Stock available for issuance.

     The 10,000,000 shares of Common Stock authorized for issuance pursuant to the 1996 Stock
Incentive Plan increased to 20,000,000 shares pursuant to the stock split in 1997. Effective May
9, 2003, the number of shares of Common Stock authorized for issuance shall be

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30,930,193 shares, which number reflects the merger of the Premark Plan into the 1996 Stock Incentive Plan and an
additional 3,000,000 shares.

Section 5. Options.

     (a) Price. The exercise price per share of an Option shall be not less than the Fair
Market Value on the grant date.

     (b) Limitations. The exercise price of Incentive Stock Options exercisable for the
first time by a Key Employee during any calendar year shall not exceed $100,000. Options for more
than 500,000 shares of Common Stock may not be granted in any calendar year to any Key Employee.
No Incentive Stock Options may be granted after April 30, 2006.

     (c) Required Period of Employment. The Committee may condition the exercisability of
any Option on the completion of a minimum period of employment.

     (d) Duration. Each Option shall expire at such time as the Committee may determine at
the time of grant, provided that Incentive Stock Options must expire not later than ten years from
the grant date.

     (e) Payment. The exercise price of an Option shall be paid in full at the time of
exercise in cash, or by the surrender of Common Stock previously acquired from the Company that has
been held by the Incentive holder for a period of at least six months and that has a value equal to
the exercise price, or by a combination of the foregoing.

     (f) Grant of Restorative Options. The Committee shall grant to any Key Employee a
restorative Option to purchase additional shares of Common Stock equal to the number of shares
delivered by the Key Employee in payment of the exercise price of an Option. The terms of a
restorative Option shall be identical to the terms of the exercised Option, except that the
exercise price shall be not less than the Fair Market Value on the grant date of the restorative
Option.

Section 6. Stock Awards.

     (a) Grant of Stock Awards. Stock Awards may be made on terms and conditions fixed by
the Committee. Stock Awards may be in the form of Restricted Shares authorized pursuant to Section
6(b). Officers who are covered by the Stock Ownership Guidelines may elect to receive up to 50% of
their Executive Incentive Plan awards in shares of Common Stock. The recipient of Common Stock
pursuant to a Stock Award shall be a stockholder of the Company with respect thereto, fully
entitled to receive dividends, vote and exercise all other rights of a stockholder except to the
extent otherwise provided in the Stock Award. Stock Awards (including Restricted Share awards) for
more than 500,000 shares of Common Stock may not be granted in any calendar year to any Key
Employee.

     (b) Restricted Shares. Restricted Shares may not be sold by the holder, or subject to
execution, attachment or similar process, until the lapse of the applicable restriction period or

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satisfaction of other conditions specified by the Committee. If the Committee intends the
Restricted Shares granted to any Covered Employee to satisfy the performance-based compensation
exemption under Code Section 162(m) (“Qualifying Restricted Shares”), the extent to which the Qualifying Restricted Shares will vest shall be based on the attainment of
performance goals established in writing prior to commencement of the performance period by the
Committee from the list in Section 7(a). The level of attainment of such performance goals and the
corresponding number of vested Qualifying Restricted Shares shall be certified by the Committee in
writing pursuant to Code Section 162(m) and the related regulations.

Section 7. Performance Units.

     (a) Value of Performance Units. Prior to the commencement of the performance period,
the Committee shall establish in writing an initial target value or number of shares of Common
Stock for the Performance Units to be granted to a Key Employee, the duration of the performance
period, and the specific performance goals to be attained, including performance levels at which
various percentages of Performance Units will be earned and, for Covered Employees, the minimum
level of attainment to be met to earn any portion of the Performance Units. If the Committee
intends the Performance Units granted to any Covered Employee to satisfy the performance-based
compensation exemption under Code Section 162(m) (“Qualifying Performance Units”), the performance
goals shall be based on one or more of the following objective criteria: generation of free cash,
earnings per share, revenues, market share, stock price, cash flow, retained earnings, results of
customer satisfaction surveys, aggregate product price and other product price measures, safety
record, acquisition activity, management succession planning, improved asset management, improved
gross margins, increased inventory turns, product development and liability, research and
development integration, proprietary protections, legal effectiveness, handling SEC or
environmental issues, manufacturing efficiencies, system review and improvement, service
reliability and cost management, operating expense ratios, total stockholder return, return on
sales, return on equity, return on capital, return on assets, return on investment, net income,
operating income, and the attainment of one or more performance goals relative to the performance
of other corporations.

     (b) Payment of Performance Units. After the end of a performance period, the
Committee shall certify in writing the extent to which performance goals have been met and shall
compute the payout to be received by each Key Employee. With respect to Qualifying Performance
Units, for any calendar year, the maximum amount payable in cash to any Covered Employee shall be
$5,000,000, and the aggregate shares of Common Stock that may be issued to any Covered Employee is
500,000. The Committee may not adjust upward the amount payable to any Covered Employee with
respect to Qualifying Performance Units.

Section 8. Stock Appreciation Rights.

     (a) Grant of Stock Appreciation Rights. Stock Appreciation Rights may be granted in
connection with an Option (at the time of the grant or at any time thereafter) or may be granted
independently. Stock Appreciation Rights for more than 500,000 shares of Common Stock may not be
granted to any Key Employee in any calendar year.

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     (b) Value of Stock Appreciation Rights. The holder of a Stock Appreciation Right
granted in connection with an Option, upon surrender of that Option, will receive cash or shares of Common Stock equal in value to the lesser of (i) the excess of the Fair Market Value on the
exercise date over the Option’s exercise price or (ii) the exercise price of the Option that is
surrendered, multiplied by the number of shares covered by such Option. The holder of a Stock
Appreciation Right granted independently of an Option, upon exercise of that Right, will receive
cash or shares of Common Stock equal in value to the lesser of (i) the excess of the Fair Market
Value on the exercise date over the Fair Market Value on the grant date or (ii) the Fair Market
Value on the grant date, multiplied by the number of shares covered by such Right.

Section 9. Termination of Employment.

     (a) Forfeiture of Incentives Upon Termination of Employment. Except as may be
determined otherwise by the Committee, all unvested Options, Rights and Stock Awards and all unpaid
Performance Units shall be forfeited upon termination of employment for reasons other than
Retirement, Disability or death.

     (b) Vesting Upon Retirement, Disability or Death. Subject to Section 13(g), upon
termination of employment by reason of Retirement, Disability or death, all unvested Options,
Rights and Stock Awards shall become fully vested and any Performance Units shall become payable to
the extent provided in Section 9(c)(ii). Notwithstanding the foregoing, the Restricted Shares
granted effective January 2, 2003 and January 2, 2004 shall not become fully vested upon
termination of employment by reason of Retirement, Disability or death, unless the Compensation
Committee determines otherwise.

     (c) Treatment of Incentives Following Termination.

(i) Options and Stock Appreciation Rights.

(A) Termination Due to Retirement, Disability or Death. Upon termination of
employment by reason of Retirement or Disability, Options shall be exercisable not
later than the earlier of five years after the termination date or the expiration of
the term of the Options. Options held by a Key Employee who dies while employed by
the Company or after terminating by reason of Retirement or Disability shall be
exercisable by the Key Employee’s beneficiary not later than the earliest of two
years after the date of death, five years after the date of termination due to
Retirement or Disability, or the expiration of the term of the Options.

(B) Termination for Other Reasons. Upon termination of employment for any
reason other than Retirement, Disability or death, all unvested Options shall be
forfeited as provided in Section 9(a) and any Options vested prior to such
termination may be exercised by a Key Employee during the three-month period
commencing on the date of termination, but not later than the expiration of the

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term of the Options. If a Key Employee dies during such post-employment period, such Key
Employee’s beneficiary may exercise the Options (to the extent such Options were
vested and exercisable at the date of termination of employment), but not later than the earlier of two years after the date of death or the
expiration of the term of the Options.

(C) Stock Appreciation Rights. Sections 9(c)(i)(A) and (B) shall apply in
the same manner to Stock Appreciation Rights.

(ii) Performance Units. If a Key Employee terminates employment by reason
of Retirement, Disability or death, the Key Employee or such Key Employee’s
beneficiary in the event of death shall receive a prorated payment of the Key
Employee’s Performance Units based on the number of full months of service completed
by the Key Employee during the applicable performance period, adjusted based on the
achievement of performance goals during the performance period. Payment shall be
made at the time payments would have been made had the Key Employee not terminated
by reason of Retirement, Disability or death.

Section 10. Adjustment Provisions.

     In the event of a stock split, stock dividend, recapitalization, reclassification or
combination of shares, merger, sale of assets or similar event, the Committee shall adjust
equitably (a) the number and class of shares or other securities that are reserved for issuance
under the Plan, (b) the number and class of shares or other securities that have not been issued
under outstanding Incentives, and (c) the appropriate Fair Market Value and other price
determinations applicable to Incentives.

Section 11. Term.

     The Plan shall be deemed adopted and shall become effective on the date it is approved by the
stockholders of the Company and shall continue until terminated by the Board or no Common Stock
remains available for issuance under Section 4, whichever occurs first.

Section 12. Corporate Change.

     In the event of a Corporate Change, all Incentives shall vest in each Key Employee, and the
maximum value of each Key Employee’s Performance Units, prorated for the number of full months of
service completed by the Key Employee during the applicable performance period, shall immediately
be paid in cash to the Key Employee.

Section 13. General Provisions.

     (a) Employment. Nothing in the Plan or in any related instrument shall confer upon
any employee any right to continue in the employ of the Company or shall affect the right of the
Company to terminate the employment of any employee with or without cause.

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     (b) Legality of Issuance of Shares. No Common Stock shall be issued pursuant to an
Incentive unless and until all legal requirements applicable to such issuance have been satisfied.

     (c) Ownership of Common Stock Allocated to Plan. No employee (individually or as a
member of a group), and no beneficiary or other person claiming under or through such employee,
shall have any right, title or interest in or to any Common Stock allocated or reserved for
purposes of the Plan or subject to any Incentive except as to shares of Common Stock, if any, as
shall have been issued to such employee.

     (d) Governing Law. The Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of Illinois.

     (e) Withholding of Taxes. The Company may withhold, or allow an Incentive holder to
remit to the Company, any Federal, state or local taxes applicable to any grant, exercise, vesting,
distribution or other event giving rise to income tax liability with respect to an Incentive. In
order to satisfy all or a portion of the income tax liability that arises with respect to any
Incentive, the holder of the Incentive may elect to surrender previously acquired Common Stock or
to have the Company withhold Common Stock that would otherwise have been issued pursuant to the
exercise of an Option or in connection with any other Incentive; provided that any withheld Common
Stock, or any surrendered Common Stock previously acquired from the Company and held by the
Incentive holder for less than six months, may only be used to satisfy the minimum tax withholding
required by law.

     (f) Non-transferability; Exceptions. Except as provided in this Section 13(f), no
Incentive may be assigned or subjected to any encumbrance, pledge or charge of any nature. Under
such rules and procedures as the Committee may establish, the holder of an Incentive may transfer
such Incentive to members of the holder’s immediate family (i.e., children, grandchildren and
spouse) or to one or more trusts for the benefit of such family members or to partnerships in which
such family members are the only partners, provided that (i) the agreement, if any, with respect to
such Incentives, expressly so permits or is amended to so permit, (ii) the holder does not receive
any consideration for such transfer, and (iii) the holder provides such documentation or
information concerning any such transfer or transferee as the Committee may reasonably request.
Any Incentives held by any transferees shall be subject to the same terms and conditions that
applied immediately prior to their transfer. The Committee may also amend the agreements
applicable to any outstanding Incentives to permit such transfers. Any Incentive not granted
pursuant to any agreement expressly permitting its transfer or amended expressly to permit its
transfer shall not be transferable. Such transfer rights shall in no event apply to any Incentive
Stock Option.

     (g) Forfeiture of Incentives. Except for an Incentive that becomes vested pursuant to
Section 12, the Committee may immediately forfeit an Incentive, whether vested or unvested, if the
holder competes with the Company or engages in conduct that, in the opinion of the Committee,
adversely affects the Company.

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     (h) Beneficiary Designation. Under such rules and procedures as the Committee may
establish, each Key Employee may designate a beneficiary or beneficiaries to succeed to any rights
which the Key Employee may have with respect to Options, Stock Appreciation Rights, Stock Awards or Performance Units at the time of his or her death. The designation may be changed
or revoked by the Key Employee at any time. No such designation, revocation or change shall be
effective unless made in writing on a form provided by the Company and delivered to the Company
prior to the Key Employee’s death. If a Key Employee does not designate a beneficiary or no
designated beneficiary survives the Key Employee, then his or her beneficiary shall be the Key
Employee’s estate.

Section 14. Amendment or Discontinuance of the Plan.

     (a) Amendment or Discontinuance. The Plan may be amended or discontinued by the Board
from time to time, provided that without the approval of stockholders, no amendment shall be made
which (i) amends Section 4 to increase the aggregate Common Stock that may be issued pursuant to
Incentives, (ii) amends the provisions of Section 12, (iii) permits any person who is not a Key
Employee to be granted an Incentive, (iv) permits Common Stock to be valued at, or permits the
exercise price of Options at the grant date to be, less than Fair Market Value, (v) amends the
provisions of Section 8 to change the method of establishing the amount the Company shall
distribute upon exercise of a Stock Appreciation Right, (vi) amends the provisions of Section 7(b)
to increase the value which may be specified for Performance Units or amends any other provision of
the Plan, the amendment of which would require stockholder approval in order to continue to satisfy
the performance-based compensation exemption under Code Section 162(m) and the related regulations
with respect to any Incentive awarded to any Covered Employee, (vii) changes the maximum number of
shares of Common Stock that may be awarded to any employee in any year pursuant to Options, Stock
Awards or Stock Appreciation Rights, or (viii) amends this Section 14.

     (b) Effect of Amendment or Discontinuance on Incentives. No amendment or
discontinuance of the Plan by the Board or the stockholders of the Company shall adversely affect
any Incentive theretofore granted without the consent of the holder.

Section 15. Options Granted Under the Premark Plan.

     Pursuant to the merger of the Premark Plan into the 1996 Stock Incentive Plan effective May 9,
2003, each Option granted under the Premark Plan prior to such date shall be assumed by the 1996
Stock Incentive Plan and shall be subject to the requirements set forth below.

     (a) Administration by the Committee. The Committee shall have the full power,
discretion and authority to interpret and administer the Options previously granted under the
Premark Plan in a manner which is consistent with the provisions of the 1996 Stock Incentive Plan,
the terms of the applicable Option agreements, and the requirements of applicable law.

     (b) Option Grants. Any grants of Options to individuals who had previously been
eligible for grants under the Premark Plan prior to the Company’s merger with Premark

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International, Inc. have been made under the 1996 Stock Incentive Plan subsequent to the merger and
will continue to be granted pursuant to the terms of the 1996 Stock Incentive Plan.

     (c) Option Agreements. Each Option granted under the Premark Plan is evidenced by an
Option agreement, the terms of which shall continue in effect.

     (d) Premark Plan Provisions. Except as set forth in this Section 15 or in any
outstanding Option agreement, the provisions of the Premark Plan shall terminate and have no effect
as of May 9, 2003.

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Exhibit 10(j)

ILLINOIS TOOL WORKS INC.

EXECUTIVE CONTRIBUTORY RETIREMENT INCOME PLAN

Illinois Tool Works Inc. hereby amends and restates in its entirety, effective as of January 1,
1999, the Illinois Tool Works Inc. Executive Contributory Retirement Income Plan, which was
originally established April 1, 1993.

I. PURPOSE

The purpose of this Illinois Tool Works Inc. Executive Contributory Retirement Income Plan
is to provide a further means whereby Illinois Tool Works Inc. and its subsidiaries and
affiliated companies may afford financial security to certain employees.

II. DEFINITIONS

	 	2.1  	“Agreement” means the Illinois Tool Works Inc. Executive Contributory
Retirement Income Plan Deferral Agreement(s) executed between a Participant and the
Company, whereby a Participant agrees to defer a portion of his/her Salary and/or Bonus
pursuant to the provisions of the Plan and/or specifies the number of years over which
payments might be made pursuant to Section 4.8 (subject to the provisions of Section
4.10), and the Company agrees to make benefit payments in accordance with the
provisions of the Plan. To the extent a Participant’s deferral agreement changes the
number of payments specified in a prior deferral agreement the most recent agreement
shall be deemed to amend all prior agreements.
	 
	 	2.2  	“Beneficiary” means the person or persons so designated by a Participant
pursuant to Section 4.11.
	 
	 	2.3  	“Board of Directors” means the Board of Directors of Illinois Tool Works Inc.
Notwithstanding anything herein to the contrary, except in regard to a Change in
Control, the Executive Committee of the Board of Directors can act under the Plan in
lieu of the entire Board.
	 
	 	2.4  	“Bonus” means the amount(s) earned during a calendar year by the Participant
under the Company’s Executive Incentive Plan, if the Participant is eligible for such
Bonus.
	 
	 	2.5  	A “Change in Control” means a Corporate Change as defined in the Illinois Tool
Works Inc. 1996 Stock Incentive Plan.
	 
	 	2.6  	“Committee” means the Employee Benefits Committee of the Company appointed by
the Board of Directors to manage and administer the Plan.
	 
	 	2.7  	“Company” means Illinois Tool Works Inc. and any subsidiaries and affiliated
companies of which Illinois Tool Works Inc. owns more than 80% of the outstanding
common stock or other ownership interest.

 

 

	 	2.8  	“Company Matching Contribution” means the contribution made by the Company to a
Participant’s Deferred Compensation Account pursuant to Section 3.7.
	 
	 	2.9  	“Company Savings Plan” means the Illinois Tool Works Inc. Savings and
Investment Plan.
	 
	 	2.10  	“Deferral Year” means any calendar year.
	 
	 	2.11  	“Deferred Benefit Account” means the account maintained on the books of the
Company for each Participant pursuant to Article III. One Deferred Benefit Account
shall be maintained for all Agreements entered into by a Participant and the Company
pursuant to this Plan. A Participant’s Deferred Benefit Account shall not constitute
or be treated as a trust fund of any kind.
	 
	 	2.12  	“Determination Date” means the date on which the amount of a Participant’s
Deferred Benefit Account is determined as provided in Article III hereof. The last day
of each calendar quarter or the date of a Participant’s Termination of Service shall be
a Determination Date.
	 
	 	2.13  	“Disability” shall have the same meaning as Disabled under the Illinois Tool
Works Inc. Pension Plan.
	 
	 	2.14  	“Early Benefit Date” means the date of Termination of Service of the
Participant on or after he/she attains age 55 and has 10 Years of Service with the
Company and before attaining age 65.
	 
	 	2.15  	“Interest Yield” means either the Retirement Interest Yield, Death Interest
Yield or the Termination Interest Yield as defined below:

	 	(a)  	“Retirement Interest Yield” or “Death Interest Yield” means 130
percent of Moody’s. The maximum Retirement Interest Yield or Death Interest
Yield pursuant to this Plan shall be 15.6%.
	 
	 	(b)  	“Termination Interest Yield” means 100 percent of Moody’s. The
maximum Termination Interest Yield pursuant to this Plan shall be 12%.

	 	2.16  	“Moody’s” means the average Moody’s Long-Term Corporate Bond Yield for the
preceding calendar quarter as determined from the Moody’s Bond Record published by
Moody’s Investor’s Service, Inc. (or any successor thereto). For purposes of this
Plan, Moody’s shall not exceed 12%. In the event that Moody’s exceeds 12%, for
purposes of calculating the appropriate Interest Yield, 12% shall be used.
	 
	 	2.17  	“Normal Benefit Date” means the date of Termination of Service of the
Participant on or after he/she attains age 65 and has completed five Years of Service
with the Company.

2

 

	 	2.18  	“Participant” means an executive of the Company who is designated to be
eligible pursuant to Section 3.1 who enters into an Agreement, and who has commenced
Salary and/or Bonus reductions pursuant to such Agreement.
	 
	 	2.19  	“Plan” means the Illinois Tool Works Inc. Executive Contributory Retirement
Income Plan as amended from time-to-time.
	 
	 	2.20  	“Plan Effective Date” means April 1, 1993.
	 
	 	2.21  	“Salary” means the Participant’s base pay.
	 
	 	2.22  	“Termination of Service” means the Participant’s cessation of his/her service
with the Company for any reason whatsoever, whether voluntarily or involuntarily,
including by reason of retirement, death, or Disability.
	 
	 	2.23  	“Years of Service” shall have the same meaning as Eligibility Service under the
Illinois Tool Works Inc. Pension Plan.

III. PARTICIPANT AND COMPENSATION REDUCTION

	 	3.1  	Participation. Participation in the Plan shall be limited to executives of the
Company who qualify for inclusion in a “select group of management or highly
compensated employees” as provided in Sections 201(2), 301(a)(3), 401(a)(1) and
4021(b)(6) of ERISA and who are designated to be eligible by the Chief Executive
Officer (CEO) of the Company. The CEO of the Company must be designated to be eligible
by the Board of Directors. In addition, to be eligible to participate in the Plan, an
eligible employee must file an Agreement with the Company prior to the first day of the
deferral period on which a Participant’s participation commences in the Plan. The
election to participate shall be effective upon the receipt by the Company of an
Agreement that is properly completed and executed in conformity with the Plan.
	 
	 	   	A Participant must be designated to be eligible for each deferral period as outlined
in Section 3.2.
	 
	 	3.2  	Minimum and Maximum Deferral and Length of Participation. For Deferral Years
commencing prior to January 1, 2001, a Participant may elect to defer between 5% and
50% of his/her Salary in l% increments during a Deferral Year. In addition, a
Participant may elect to defer up to 100% of his/her Bonus in 1% increments earned
during a Deferral Year.
	 
	 	   	For Deferral Years commencing on or after January 1, 2001, a Participant may elect
to defer either 0% or between 6% and 50% of his/her Salary in 1% increments during a
Deferral Year. In addition, a Participant may elect to defer either 0% or between 6%
and 100% of his/her Bonus in 1% increments earned during a Deferral Year.

3

 

	 	   	In the event a Participant elects to defer an amount of his or her Bonus that would
not allow for the full payment of all FICA, federal, state and/or local income tax
liabilities, the actual amount which shall be credited to the Participant’s Deferred
Compensation Account shall be the maximum amount allowable after all applicable
taxes.
	 
	 	   	At the time of election, a Participant may elect to defer a different percentage of
his/her Salary or Bonus for each Deferral Year and may also elect not to defer any
portion of his/her Salary or Bonus in a Deferral Year. An eligible Participant must
complete a separate Agreement for each deferral period.
	 
	 	3.3  	Timing of Deferral Credits. The amount of Salary and Bonus that a Participant
elects to defer in an Agreement shall cause an equivalent reduction in the
Participant’s Salary and Bonus. Salary and Bonus deferrals shall be credited to the
Participant’s Deferred Benefit Account throughout each Plan year at the end of each
calendar quarter.
	 
	 	3.4  	New Participants. Subsequent to January 1, 1999, an employee shall be eligible
to participate after being approved by the CEO. The eligible employee may begin
participation pursuant to Section 3.1 and shall be bound by all terms and conditions of
the Plan, provided, however, that his/her Agreement must be filed no later than 30 days
following notification of his/her eligibility to participate.
	 
	 	3.5  	Alteration of Salary and Bonus Deferral. Except as provided in this Section
3.5 and in Section 3.6, a Participant’s election to defer Salary and Bonus shall be
irrevocable. Pursuant to this Section 3.5, a Participant may increase or decrease
his/her original Salary and/or Bonus deferral percentage prior to December 1 of the
year preceding the Deferral Year for which such adjustment is requested. A Participant
may increase or decrease the deferral percentage of his/her Salary and/or Bonus by the
greater of 5% for Salary and 10% for Bonus or a percentage which is not more than 50%
of the Participant’s original election if changed prior to December 1 of the year
preceding the Deferral Year for which the adjustment is effective. In the event that
the maximum adjustment percentage is not an integer percentage it shall be rounded up
to the next highest integer percentage.
	 
	 	   	For Deferral Years commencing prior to January 1, 2001, a Participant may not
decrease his/her Salary deferral percentage below 5%. For Deferral Years commencing
on or after January 1, 2001, a Participant may not decrease his/her Salary and/or
Bonus deferral percentage below 6%. In addition, a Participant may choose not to
have any Salary and/or Bonus deferral in accordance with this section 3.5. For
Deferral Years commencing prior to January 1, 2001, to the extent a Participant has
elected to defer 0% of Salary and/or Bonus for any Deferral Year on his/her deferral
agreement, the Participant may increase his/her Salary deferral from 0% to 5% and/or
increase his/her Bonus deferral from 0% to 10%. For Deferral Years commencing on or
after January 1, 2001, to the extent a Participant has elected to defer 0% of Salary
and/or Bonus for any Deferral Year

4

 

	 	   	on his/her deferral agreement, the Participant may increase his/her Salary deferral
from 0% to 6% and/or increase his/her Bonus deferral from 0% to 6%.
	 
	 	   	A Participant may change his/her Salary and/or Bonus deferral by entering into a
deferral Agreement by December 1 of the year preceding the Deferral Year for which
such Agreement is to be effective.
	 
	 	3.6  	Emergency Benefit: Waiver of Deferral. In the event that the Company, upon
written petition of the Participant or his/her Beneficiary, determines in its sole
discretion, that the Participant or his/her Beneficiary has suffered an unforeseeable
financial emergency, the Company may pay to the Participant or his/her Beneficiary as
soon as practicable following such determination, an amount, not in excess of the
Participant’s Deferred Benefit Account, necessary to satisfy the emergency. For
purposes of this Plan, an unforeseeable financial emergency is an unanticipated
emergency that is caused by an event beyond the control of the Participant or
Beneficiary and that would result in severe financial hardship to the individual if the
emergency distribution were not permitted, as may result from illness, casualty loss or
sudden financial reversal. Cash needs arising from foreseeable events, such as the
purchase of a residence or education expenses for children shall not be considered the
result of an unforeseeable financial emergency. The Company may also grant a waiver of
the Participant’s agreement to defer a stated amount of Salary and Bonus upon finding
that the Participant has suffered an unforeseeable financial emergency. The waiver
shall be for such period of time as the Company deems necessary under the
circumstances.
	 
	 	3.7  	Company Matching Contribution. For Deferral Years commencing prior to January
1, 2001, the Company shall contribute an amount to a Participant’s Deferred Benefit
Account as and when the Participant’s Salary deferrals are added pursuant to Section
3.3. The amount of the Company Matching Contribution shall be equal to 3% of the
Participant’s Salary. In order for the Company Matching Contribution to be credited to
a Participant’s Deferred Benefit Account, the Participant must elect to defer at least
5% of his/her Salary during the Deferral Year.
	 
	 	   	Commencing with Deferral Years on or after January 1, 2001, the amount of the
Company Matching Contribution shall be equal to 3.5% of the Participant’s Salary. In
order to receive the Company Matching Contribution related to the Participant’s
Salary, the Participant must elect to defer at least 6% of his/her Salary during the
Deferral Year. In addition, the Participant shall be entitled to a Company Matching
Contribution equal to 3.5% of the Participant’s Bonus. In order to receive the
Company Matching Contribution related to the Participant’s Bonus, the Participant
must elect to defer at least 6% of his/her Bonus during the Deferral Year.

5

 

	 	   	In the event a Participant elects to defer any amount of Salary and/or Bonus under
this Plan, he/she will not receive a Company Matching Contribution under the Company
Savings Plan.
	 
	 	   	Notwithstanding the foregoing, when the CEO designates a Participant pursuant to
Section 3.4, he may specify that such Participant is not entitled to a Company
Matching Contribution.
	 
	 	3.8  	Determination of Account. The balance of each Participant’s Deferred Benefit
Account as of each Determination Date shall be calculated as follows, using the terms
and methods in the order defined below:

	 	(a)  	Beginning Balance:
	 
	 	   	The balance on the beginning of the first day of the quarter. This equals
the Ending Balance as of the end of the day on the prior Determination Date.
	 
	 	(b)  	Sub-Ending Balance:
	 
	 	   	The Beginning Balance, plus Participant deferrals plus Company matching
contributions less any distributions, made after the prior Determination
Date and up through and including the current Determination Date.
	 
	 	(c)  	Average Balance:
	 
	 	   	The arithmetic average of the Beginning Balance and the Sub-Ending Balance
from the current quarter.
	 
	 	(d)  	Interest:
	 
	 	   	The Average Balance times the appropriate Interest Yield divided by four,
times the number of calendar days from the prior Determination Date to the
current Determination Date (or the date of payment if applicable and deemed
appropriate by the Company) divided by the total number of calendar days in
the quarter.
	 
	 	(e)  	Ending Balance:
	 
	 	   	The Sub-Ending Balance plus Interest.

	 	3.9  	Vesting of a Participant’s Deferred Benefit Account. A Participant shall be
100% vested in his/her Deferred Benefit Account equal to the amount of Salary and Bonus
he/she deferred into the Deferred Benefit Account and the interest credited thereon.
The Company matching contributions and interest credited thereon shall vest in the same
manner as under the Illinois Tool Works Inc. Savings and Investment Plan.

6

 

IV. BENEFITS

	 	4.1  	Return of Deferrals. At the time a Participant executes an Agreement, he/she
may elect to receive a return of his/her deferrals made within a particular Deferral
Year. The return of deferral election does not apply to either the Company’s matching
contribution or the interest credited to the Participant’s Deferred Benefit Account.
The return of deferral election shall specify the year (distribution year) in which
payment shall be made, which shall be paid as of June 30, five or more years after the
Deferral Year in which the Salary and/or Bonus deferral was initially credited to the
Participant’s Deferred Benefit Account. Each such return of deferral shall be paid in
a lump sum. A return of deferral shall only be paid prior to a Participant’s
Termination of Service. Any return of deferral paid shall be deemed a distribution,
and shall be deducted from the Participant’s Deferred Benefit Account. A separate
return of deferrals election shall be made for each Deferral Year and for both Salary
and Bonus deferrals.
	 
	 	4.2  	Retirement Benefit. Subject to Section 4.8 below, upon a Participant’s Early
Benefit Date or Normal Benefit Date, he/she shall be entitled to receive the amount of
his/her Deferred Benefit Account determined under Section 3.8 using the Retirement
Interest Yield. The form of benefit payment shall be as provided in Section 4.8.
	 
	 	4.3  	Termination Benefit. Upon the Termination of Service of a Participant before
becoming eligible for a retirement benefit, for reasons other than death or Disability,
the Company shall pay to the Participant, a benefit equal to the vested portion of
his/her Deferred Benefit Account using the Termination Interest Yield.
	 
	 	   	Unless otherwise directed by the Committee, the termination benefit shall be payable
in a lump sum within 60 days following his/her Termination of Service. Upon a
Termination of Service, the Participant shall immediately cease to be eligible for
any other benefit provided under this Plan.
	 
	 	4.4  	Death Prior to Termination of Service. Upon the Termination of Service due to
a Participant’s death, the Beneficiary of the deceased Participant shall be entitled to
a death benefit equal to the Participant’s Deferred Benefit Account determined under
Section 3.8 using the Death Interest Yield. The form of benefit shall be as provided
in Section 4.8 and shall be in lieu of all other benefits under this Plan.
	 
	 	4.5  	Death Subsequent to Early or Normal Benefit Date. Upon the death of a
Participant subsequent to his/her Early or Normal Benefit Date, the Beneficiary of the
deceased Participant shall receive the Participant’s remaining Deferred Benefit
Account. Payment of a Participant’s remaining Deferred Benefit Account shall be in
accordance with Section 4.8.
	 
	 	4.6  	Disability. In the event of a Termination of Service due to Disability, which
first manifests itself after the Plan Effective Date and prior to the commencement of
Benefit Payments in Section 4.8, a disabled Participant may receive a benefit

7

 

	 	   	equal to the balance of his/her Deferred Benefit Account under Section 3.8 using the
Retirement Interest Yield. The commencement of such benefit will be on the
Participant’s earliest benefit date consistent with Sections 2.14 and 2.17.
Payments shall be made in accordance with Section 4.8. The Company, in its sole
discretion, may accelerate the payment of any disability benefit payable under this
Section. Disability benefits shall be treated as distributions from a Participant’s
Deferred Benefit Account.
	 
	 	4.7  	Change of Status. In the event it is determined that the Participant ceases to
be eligible to participate in this Plan or if the Participant’s Salary is materially
reduced, the Participant may elect to reduce the amount of any remaining deferral. In
such event, he/she shall not be treated as having terminated participation pursuant to
this Plan.
	 
	 	4.8  	Form of Benefit Payment.

	 	(a)  	Upon the happening of an event described in Section 4.2, 4.4,
4.5, or 4.6, the Company shall pay the Participant’s Deferred Benefit Account
in a lump sum or in monthly installments payable in approximately equal amounts
over 2 to 20 years, commencing on the event described in Section 4.2, 4.4, 4.5
or 4.6 in accordance with the Participant’s last Agreement. Interest on the
unpaid principal balance equal to the applicable Retirement Interest Yield will
be added to the Participant’s Deferred Benefit Account on each Determination
Date. The amount of the installment payments shall be based on the prevailing
Retirement Interest Yield at the commencement of payments, projected into the
future using a method approved by the Company. The amount of the installment
payments shall be recomputed once per calendar year at a date determined by the
Company and the installment payments shall be increased or decreased to reflect
any changes in the Retirement Interest Yield.
	 
	 	   	A Participant may, by written request filed with the Company at least 13
months prior to the commencement of a distribution pursuant to this Plan,
change the method of distribution elected in his/her Agreement to any other
method permitted under this Section 4.8.
	 
	 	(b)  	In the event of the death of the Participant, as described in
Sections 4.4 or 4.5, the Participant’s Beneficiary may, with the consent of the
Company, elect an alternative form of benefit payment, such as a lump-sum
payment or a shorter installment period. In such event, the applicable Death
Interest Yield shall be utilized in determining the Deferred Benefit Account
until all payments have been made to the Beneficiary of the deceased
Participant.
	 
	 	(c)  	In the event that a Participant retires on or subsequent to
his/her Early Benefit Date but prior to his/her Normal Benefit Date, the
Participant may

8

 

	 	   	file a written request with the Company requesting the deferral of his/her
Retirement Benefit until up to age 70. The written request must be made at
least 13 months prior to the Participant’s Termination of Service. The
Company may, but is not required to, grant the Participant’s request.

	 	4.9  	Tax Withholding. To the extent required by law in effect at the time payments
are made, the Company shall withhold any taxes required to be withheld by any Federal,
State, or local government.
	 
	 	4.10  	Commencement of Payments. Unless otherwise provided, commencement of payments
under this Plan shall be within 60 days following receipt of notice by the Company of
an event which entitles a Participant or a Beneficiary to payments under this Plan, or
at such earlier date as may be determined by the Company. All payments shall be made
as of the first day of the month. Benefits paid pursuant to Section 4.2 may commence
no earlier than age 55 and Deferred Benefit Accounts must be paid out no later than age

85.
	 
	 	4.11  	Recipients of Payments: Designation of Beneficiary. All payments to be made by
the Company under the Plan shall be made to the Participant during his/her lifetime,
provided that if the Participant dies prior to the completion of such payments, then
all subsequent payments under the Plan shall be made by the Company to the Beneficiary
determined in accordance with this Section 4.11. The Participant may designate a
Beneficiary by filing a written notice of such designation with the Company in such
form as the Company requires and may include contingent Beneficiaries. The Participant
may from time-to-time change the designated Beneficiary by filing a new designation in
writing with the Company. If no designation is in effect or if an existing designation
is determined to be invalid or ineffective at the time any benefits payable under this
Plan become due, the Beneficiary shall be the spouse of the Participant, or if no
spouse is then living, the representatives of the Participant’s estate.

V. CLAIMS FOR BENEFITS PROCEDURE

	 	5.1  	Claim for Benefits. Any claim for benefits under the Plan shall be made in
writing to the Company. If such claim is wholly or partially denied by the Company,
the Company shall, within a reasonable period of time, but not later than 60 days after
receipt of the claim, notify the claimant of the denial of the claim. Such notice of
denial shall be in writing and shall contain:

	 	(a)  	The specific reason(s) for denial of the claim;
	 
	 	(b)  	A reference to the relevant Plan provisions upon which the
denial is based;
	 
	 	(c)  	A description of any additional material or information
necessary for the claimant to perfect the claim, together with an explanation
of why such material or information is necessary; and
	 
	 	(d)  	An explanation of the Plan’s claim review procedure.

9

 

	 	   	If no such notice is provided, the claim shall be deemed granted.

	 	5.2  	Request for Review of a Denial of a Claim for Benefits. Upon the receipt by
the claimant of written notice of a denial of a claim, the claimant may within 90 days
file a written request to the Committee, requesting a review of the denial of the
claim, which review shall include a hearing if deemed necessary by the Committee. In
connection with the claimant’s appeal of the denial of his/her claim, he/she may review
relevant documents and may submit issues and comments in writing.
	 
	 	5.3  	Decision Upon Review of Denial of Claim for Benefits. The Committee shall
render a decision on the claim review promptly, but no more than 60 days after the
receipt of the claimant’s request for review, unless special circumstances (such as the
need to hold a hearing) require an extension of time, in which case the 60 day period
shall be extended to 120 days. Such decision shall:

	 	(a)  	Include specific reasons for the decision;
	 
	 	(b)  	Be written in a manner calculated to be understood by the
claimant; and
	 
	 	(c)  	Contain specific references to the relevant Plan provisions
upon which the decision is based.
	 
	 	The decision of the Committee shall be final and binding in all respects on both the
Company and the claimant.

VI. ADMINISTRATION

	 	6.1  	In general, the Plan shall be administered by the Company.
	 
	 	6.2  	Administrative Rights, Powers, and Duties. The Company shall be responsible
for the management, operation, and administration of the Plan. In addition to any
powers, rights and duties set forth elsewhere in the Plan, the Company shall have the
following powers and duties:

	 	(a)  	To adopt such rules and regulations consistent with the
provisions of the Plan as it deems necessary for the proper and efficient
administration of the Plan;
	 
	 	(b)  	To administer the Plan in accordance with its terms and any
rules and regulations it establishes;
	 
	 	(c)  	To maintain records concerning the Plan sufficient to prepare
reports, returns and other information required by the Plan or by law;
	 
	 	(d)  	To construe and interpret the Plan and to resolve all questions
arising under the Plan;

10

 

	 	(e)  	To direct the payment of benefits under the Plan, and to give
such other directions and instructions as may be necessary for the proper
administration of the Plan;
	 
	 	(f)  	To employ or retain agents, attorneys, actuaries, accountants
or other persons, who may also be employed by or represent the Company in
matters other than this Plan; and
	 
	 	(g)  	To be responsible for the preparation, filing and disclosure on
behalf of the Plan of such documents and reports as are required by any
applicable Federal or State law.

	 	6.3  	Information to be Furnished to Committee. The Company shall furnish the
Committee such data and information as it may require. The records of the Company
shall be determinative of each Participant’s period of employment, termination of
employment and the reason therefore, leave of absence, reemployment, Years of Service,
personal data, and Salary and Bonus reductions. Participants and their Beneficiaries
shall furnish to the Company such evidence, data, or information, and execute such
documents as it requests.

	 	6.4  	Responsibility. No employee of the Company, member of the Committee or of the
Board of Directors of the Company shall be liable to any person for any action taken or
omitted in connection with the administration of this Plan.

VII. AMENDMENT AND TERMINATION

	 	7.1  	Amendment. The Plan may be amended in whole or in part by the Company at any
time. Notice of any such amendment shall be given in writing to the Committee and to
each Participant and each Beneficiary of a deceased Participant. An amendment may not
decrease the value of a Participant’s Deferred Benefit Account.
	 
	 	7.2  	Company’s Right to Terminate. The Company or the Committee may terminate the
Plan and/or any Agreements pertaining to the Participant at any time after the Plan
Effective Date. In the event of any such termination, the Participant shall be
entitled to the amount of his/her Deferred Benefit Account determined under Section
3.8, using the Retirement Interest Yield as of the date of termination of the Plan
and/or his/her Agreement. Such benefit shall be paid to the Participant in quarterly
installments over a period of no more than 15 years, except that the Company, in its
sole discretion, may pay out such benefit in a lump sum or in installments over a
period shorter than 15 years.
	 
	 	7.3  	Change in Control. If there is a Change in Control, notwithstanding any other
provision of this Plan, any Participant or Beneficiary who has a Deferred Benefit
Account hereunder shall, at any time during an 18 month period immediately following a
Change in Control, have the right to request and be paid by the Company a lump sum
payment equal to 90% of the Participant’s remaining Deferred Benefit Account. The
remaining 10% of the Participant’s Deferred

11

 

	 	   	Benefit Account shall be permanently forfeited and shall not be paid to, or in
respect of, the Participant. In the event no such request is made by a Participant,
the Plan and Agreement shall remain in full force and effect with respect to such
Participant.

VIII. MISCELLANEOUS

	 	8.1  	No Implied Rights: Rights on Termination of Service. Neither the establishment
of the Plan nor any amendment thereof shall be construed as giving any Participant,
Beneficiary or any other person any legal or equitable right unless such right shall be
specifically provided for in the Plan or conferred by specific action of the Company in
accordance with the terms and provisions of the Plan. Except as expressly provided in
this Plan, the Company shall not be required or be liable to make any payment under
this Plan subsequent to the Termination of Service of the Participant.
	 
	 	8.2  	No Right to Company Assets. Neither the Participant nor any other person shall
acquire by reason of the Plan any right in or title to any assets, funds or property of
the Company whatsoever including, without limiting the generality of the foregoing any
specific funds, assets or other property which the Company, in its sole discretion, may
set aside in anticipation of a liability hereunder. Any benefits which become payable
hereunder shall be paid from the general assets of the Company. The Participant shall
have only a contractual right to the amounts, if any, payable hereunder unsecured by
any asset of the Company. Nothing contained in the Plan constitutes a guarantee by the
Company that the assets of the Company shall be sufficient to pay any benefit to any
person.
	 
	 	8.3  	No Employment Rights. Nothing herein shall constitute a contract of continuing
service or in any manner obligate the Company to continue the services of the
Participant, or obligate the Participant to continue in the service of the Company, or
as a limitation of the right of the Company to discharge any of its employees, with or
without cause. Nothing herein shall be construed as fixing or regulating the Salary
and Bonus payable to the Participant.
	 
	 	8.4  	Offset. If at the time payments or installments of payments are to be made
hereunder, the Participant or the Beneficiary or both are indebted or obligated to the
Company, then the payments remaining to be made to the Participant or the Beneficiary
or both may, at the discretion of the Company, be reduced by the amount of such
indebtedness or obligation, provided, however, that an election by the Company not to
reduce any such payment or payments shall not constitute a waiver of its claim for such
indebtedness or obligation.
	 
	 	8.5  	Non-assignability. Neither the Participant nor any other person shall have any
voluntary or involuntary right to commute, sell, assign, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, which are expressly declared
to be unassignable and non-transferable. No part of the

12

 

	 	   	amounts payable shall be, prior to actual payment, subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by the Participant or any other person, or be transferable by
operation of law in the event of the Participant’s or any other person’s bankruptcy
or insolvency.
	 
	 	8.6  	Notice. Any notice required or permitted to be given under the Plan shall be
sufficient if in writing and hand delivered, or sent by registered or certified mail,
and if given to the Company, delivered to the principal office of the Company, directed
to the attention of the CEO. Such notice shall be deemed given as of the date of
delivery or, if delivery is made by mail, as of the date shown on the postmark or the
receipt for registration or certification.
	 
	 	8.7  	Governing Laws. The Plan shall be construed and administered according to the
laws of the State of Illinois.

IN WITNESS WHEREOF, the Company has adopted and restated this Illinois Tool Works Inc. Executive
Contributory Retirement Income Plan on January 1, 1999, and as amended effective July 1, 2000 and
December 10, 2004.

ILLINOIS TOOL WORKS INC.

	 	 	 	 	 
	By:

	 	          /s/ Robert T. Callahan
	 	 
	

	 	 	 	 
	 
	Its:

	 	Senior Vice President, Human Resources	 	 

13

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