Document:

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                                                                   EXHIBIT 10.10

                                 ITT INDUSTRIES
                          ENHANCED SEVERANCE PAY PLAN
                   (AMENDED AND RESTATED AS OF JULY 13, 2004)

1. PURPOSE

      The purpose of this ITT Industries Enhanced Severance Pay Plan ("PLAN") is
to assist in occupational transition by providing Severance Benefits, as defined
herein, for employees covered by this Plan whose employment is terminated under
conditions set forth in this Plan.

2. COVERED EMPLOYEES

      Covered employees under this Plan ("EMPLOYEES") are active full-time,
regular salaried employees of ITT Industries, Inc., ("ITT INDUSTRIES") and of
any subsidiary company ("ITT INDUSTRIES SUBSIDIARY") (collectively or
individually as the context requires "COMPANY") (including Employees who are
short term disabled as of a Potential Acceleration event within the meaning of
the Company's short term disability benefit plans) (other than Employees on
periodic severance as of a Potential Acceleration Event) who are or were, at any
time within the two year period immediately preceding the Employees' termination
of employment (other than executives covered by the ITT Industries Special
Senior Executive Severance Pay Plan), either (i) United States or Canadian
citizens or who are employed in the United States or Canada, whose primary
employment location is at ITT Industries Headquarters, White Plains, New York
(and satellite locations, including, without limitation, ITT Pension and Savings
Plan (Clifton, New Jersey), ITT TDS (Palm Coast, Florida), ITT Flight Operations
(New Castle, Delaware), ITT Shared Services (Ft. Wayne, Indiana and Seneca
Falls, New York), ITT Industries of Canada (Toronto, Ontario) and ITT Industries
(Shanghai, China)) or (ii) worldwide staff whose primary responsibility is in
support of ITT Defense Headquarters (McLean, Virginia), ITT Fluid Technology
Headquarters (Upper Saddle River, New Jersey), ITT Motion and Flow Control
Headquarters (Upper Saddle River, New Jersey) or ITT Electronic Components
Headquarters (Santa Ana, California) and such other employees of the Company who
shall be designated as covered employees thereunder by the Chief Executive or
the Senior Vice President, Director-Human Resources of ITT Industries or a
designee of such officers ("AUTHORIZED OFFICERS OR DESIGNEES"). No person who is
employed on a temporary, occasional or seasonal basis is eligible under this
Plan.

      After the occurrence of an Acceleration Event, the terms "ITT INDUSTRIES",
"ITT INDUSTRIES SUBSIDIARY" and "COMPANY" as used herein shall also include,
respectively and as the context requires, any successor company to ITT
Industries or any successor company to any ITT Industries Subsidiary and any
affiliate of any such successor company.

3. DEFINITIONS

      An "ACCELERATION EVENT" shall occur if (i) a report on Schedule 13D shall
be filed with the Securities and Exchange Commission pursuant to Section 13(d)
of the Securities Exchange Act of 1934 (the "ACT") disclosing that any person
(within the meaning of Section 13(d) of the

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                                                                               2

Act), other than ITT Industries or a subsidiary of ITT Industries or any
employee benefit plan sponsored by ITT Industries or a subsidiary of ITT
Industries, is the beneficial owner directly or indirectly of twenty percent
(20%) or more of the outstanding Common Stock $1 par value, of ITT Industries
(the "STOCK"); (ii) any person (within the meaning of Section 13(d) of the Act),
other than ITT Industries or a subsidiary of ITT Industries, or any employee
benefit plan sponsored by ITT Industries or a subsidiary of ITT Industries,
shall purchase shares pursuant to a tender offer or exchange offer to acquire
any Stock of ITT Industries (or securities convertible into Stock) for cash,
securities or any other consideration, provided that after consummation of the
offer, the person in question is the beneficial owner (as such term is defined
in Rule 13d-3 under the Act), directly or indirectly, of twenty percent (20%) or
more of the outstanding Stock of ITT Industries (calculated as provided in
paragraph (d) of Rule 13d-3 under the Act in the case of rights to acquire
Stock); (iii) the stockholders of ITT Industries shall approve (A) any
consolidation, business combination or merger involving ITT Industries, other
than a consolidation, business combination or merger involving ITT Industries in
which holders of Stock immediately prior to the consolidation, business
combination or merger (x) hold fifty percent (50%) or more of the combined
voting power of ITT Industries (or the corporation resulting from the merger or
consolidation or the parent of such corporation) after the merger and (y) have
the same proportionate ownership of common stock of ITT Industries (or the
corporation resulting from the merger or consolidation or the parent of such
corporation), relative to other holders of Stock immediately prior to the
merger, business combination or consolidation, immediately after the merger as
immediately before, or (B) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all the
assets of ITT Industries, (iv) there shall have been a change in a majority of
the members of the Board of Directors of ITT Industries within a 12-month period
unless the election or nomination for election by ITT Industries' stockholders
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 where directors at the beginning of such 12-month period or (v) any person
(within the meaning of Section 13(d) of the Act) (other than ITT Industries or
any subsidiary of ITT Industries or any employee benefit plan (or related trust)
sponsored by ITT Industries or a subsidiary of ITT Industries) becomes the
beneficial owner (as such term is defined in Rule 13d-3 under the Act) of twenty
percent (20%) or more of the Stock.

      "CAUSE" shall mean action by the Employee involving willful malfeasance or
gross negligence or the Employee's failure to act involving material nonfeasance
that would tend to have a materially adverse effect on the Company. No act or
omission on the part of the Employee shall be considered "willful" unless it is
done or omitted in bad faith or without reasonable belief that the action or
omission was in the best interests of the Company.

      "ENHANCED SEVERANCE PERIOD" shall mean the period, expressed in weeks,
equal to the sum of (x) two times the normal severance pay or termination pay
period of weeks for the Employee, determined as if the Employee were an employee
of the same grade, and having the same years of service, covered by and eligible
for the severance pay or termination pay plans or policies at ITT Industries
Headquarters, White Plains, New York, as in effect immediately preceding an
Acceleration Event and (y) four (4) weeks (in lieu of notice of termination),

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provided that the Enhanced Severance Period shall not exceed 108 weeks and shall
not be less than the Minimum Severance Period.

      "ENHANCED WEEK'S PAY" shall mean the sum of (x) the highest annual base
salary rate paid to the Employee at any time during the three (3) year period
immediately preceding the Employee's termination of employment and (y) the
highest annual bonus or service recognition award paid or awarded to the
Employee in respect of either (i) the three (3) years preceding an Acceleration
Event or (ii) the three (3) years preceding the Employee's termination of
employment, including, among the bonuses and service recognition awards taken
into account for this purpose, any bonus or service recognition award paid or
awarded by reason of an Acceleration Event, without regard to whether such bonus
or service recognition award is paid during such three year period or after an
Acceleration Event, divided by 52 weeks.

      "GOOD REASON" shall mean (i) without the Employee's express written
consent and excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
or its affiliates promptly after receipt of notice thereof given by the
Employee, (A) a reduction in the Employee's annual base salary or annual bonus
or service recognition award (as measured by the highest bonus or highest
service recognition award paid or awarded, in respect of the three (3) calendar
years preceding an Acceleration Event), including, among the bonuses and service
recognition awards taken into account for this purpose, any bonus or service
recognition award paid or awarded by reason of an Acceleration Event, without
regard to whether such bonus or service recognition award is paid during such
three year period or after an Acceleration Event) or any reduction in any
material compensation or benefits arrangement, (B) the assignment to the
Employee of any duties inconsistent in any respect with the Employee's position
(including status, offices, titles and reporting requirements), authority,
duties or responsibilities, or (C) any other action by the Company or its
affiliates which results in a diminution in such position, authority, duties or
responsibilities; (ii) without the Employee's express written consent, the
Company's requiring the Employee's work location to be other than within
twenty-five (25) miles of the location where such Employee was principally
working immediately prior to the Acceleration Event; or (iii) any failure by the
Company to obtain the express written assumption of this Plan from any successor
to the Company.

      "MINIMUM SEVERANCE PERIOD" shall mean (i) with respect to Employees with
less than twenty (20) years of service with the Company, twenty-six (26) weeks,
(ii) with respect to Employees with between twenty (20) and twenty-five (25)
years of service with the Company, 52 weeks, (iii) with respect to Employees
with greater than twenty-five (25) years of service with the Company but less
than or equal to thirty (30) years of service with the Company, seventy-eight
(78) weeks and (iv) with respect to Employees with greater than thirty (30)
years of service with the Company, one hundred and four (104) weeks. For
purposes hereof, "years of service" shall have the same meaning as in the
termination pay plans or policies at ITT Industries Headquarters, White Plains,
New York, as in effect immediately preceding an Acceleration Event and shall be
determined as of the date of the Employee's termination of employment with the
Company.

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                                                                               4

      "POTENTIAL ACCELERATION EVENT" shall mean any execution of an agreement,
the commencement of a tender offer or any other transaction or event that if
consummated would result in an Acceleration Event.

4. SEVERANCE BENEFITS UPON TERMINATION OF EMPLOYMENT

      If an Employee's employment with the Company is terminated due to a
Qualifying Termination, he or she shall receive the severance benefits set forth
in Section 5 hereof ("SEVERANCE BENEFITS"). For purposes hereof, (i) a
"QUALIFYING TERMINATION" shall mean a termination of an Employee's employment
with the Company either (x) by the Company without Cause (A) within the two (2)
year period commencing on the date of the occurrence of an Acceleration Event or
(B) prior to the occurrence of an Acceleration Event and either (1) following
the public announcement of the transaction or event which ultimately results in
such Acceleration Event or (2) at the request of a party to, or participant in,
the transaction or event which ultimately results in an Acceleration Event; or
(y) by an Employee for Good Reason within the two (2) year period commencing
with the date of the occurrence of an Acceleration Event and (ii) a
determination by an Employee that he or she has "Good Reason" hereunder shall be
final and binding on the parties hereto absent a showing of bad faith on the
Employee's part.

5. SEVERANCE BENEFITS

      Severance Benefits for Employees:

      - Accrued Rights - The Employee's base salary through the date of
termination of employment, any annual bonus earned but unpaid as of the date of
termination for any previously completed fiscal year, reimbursement for any
unreimbursed business expenses properly incurred by the Employee in accordance
with Company policy prior to the date of the Employee's termination of
employment and such employee benefits, if any, as to which the Employee may be
entitled under the employee benefit plans of the Company, including without
limitation, the payment of any accrued or unused vacation under the Company's
vacation policy.

      - Severance Pay - The number of weeks of the Employee's Enhanced Severance
Period times the Employee's Enhanced Week's Pay.

      - Benefits

      - Continued health and life insurance benefits and perquisites (including,
without limitation, any Company-provided automobile and any tax or financial
advisory services) for a period equal to the Employee's Enhanced Severance
Period following the Employee's termination of employment at the same cost to
the Employee, and at the same coverage levels, as provided to the Employee (and
the Employee's eligible dependents) immediately prior to his or her termination
of employment.

      - Payment of a lump sum amount ("PENSION LUMP SUM AMOUNT") equal to the
difference between (i) the total lump sum value of the Employee's pension
benefit under the ITT Industries Salaried Retirement Plan and, as applicable,
ITT Industries Excess Pension Plan II or any successor plan; provided that the
benefits under such successor plan is no less favorable than the benefits under
the plans set forth herein (or corresponding pension arrangements (i) outside

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                                                                               5

the United States or (ii) as may be designated by an Authorized Officer or
Designee) ("PENSION PLANS") as of the Employee's termination of employment and
(ii) the total lump sum value of the Employee's pension benefit under the
Pension Plans after crediting to the Employee an additional two (2) years of age
and two (2) years of eligibility and benefit service and applying the highest
annual base salary rate and highest bonus or service recognition award
determined above under "Enhanced Week's Pay" with respect to the additional
period of service so credited for purposes of determining the Final Average
Compensation under the Pension Plans. The above total lump sum values shall be
determined in the manner provided in the Excess Pension Plans of the Company for
determination of lump sum benefits upon the occurrence of an Acceleration Event,
as defined in said Plans. This provision shall apply to any Employee having a
pension benefit under any of the Pension Plans as of the Employee's termination
of employment. An example of the calculation of benefits set forth in this
paragraph is set forth on Schedule A.

      - Crediting of an additional two (2) years of age and an additional two
(2) years of eligibility service equal to the Employee's Enhanced Severance
Period for purposes of the Company's retiree health and retiree life insurance
benefits. This provision shall apply to any Employees covered under such
benefits any time during the three (3) year period immediately preceding the
Employee's termination of employment.

      - Payment of a lump sum amount ("SAVINGS PLAN LUMP SUM AMOUNT") equal to
the number of weeks of the Employee's Enhanced Severance Period times the
following amount: the highest annual base salary rate determined above under
"Enhanced Week's Pay", divided by 52 weeks, times the highest percentage rate of
Company Contributions (not to exceed 3 1/2%) with respect to the Employee under
the ITT Industries Investment and Savings Plan for Salaried Employees and/or the
ITT Industries Excess Savings Plan (or corresponding savings plan arrangements
(i) outside the United States or (ii) as may be designated by an Authorized
Officer of Designee) ("SAVINGS PLANS") (including matching contributions and
floor contributions) at any time during the three (3) year period immediately
preceding the Employee's termination of employment or the three (3) year period
immediately preceding the Acceleration Event. This provision shall apply to any
Employee who is a member of any of the Savings Plans at any time during such
three (3) year period.

      - Outplacement - Outplacement services for one (1) year.

      With respect to the provision of benefits during the above period equal to
the Employee's Enhanced Severance Period, if, for any reason at any time the
Company is unable to treat the Employee as being eligible for ongoing
participation in any Company employee benefit plans in existence immediately
prior to the termination of employment of the Employee, and if, as a result
thereof, the Employee does not receive a benefit or receives a reduced benefit
the Company shall provide such benefits by (i) direct payment to the Employee of
the amounts the Employee would have received from such benefit plan had the
Employee continued to be eligible or (ii) at the Company's option, making
available equivalent benefits from other sources.

6. FORM OF PAYMENT OF SEVERANCE PAY AND LUMP SUM PAYMENTS

      Severance Pay shall be paid in cash, in a non-discounted lump sum within
five (5)

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                                                                               6

business days after the date the employment of the Employee terminates. The
Pension Lump Sum Amount and the Savings Plan Lump Sum Amount shall be paid in
cash within thirty (30) calendar days after the date the employment of the
Employee terminates.

7. TERMINATION OF EMPLOYMENT - OTHER

      The Severance Benefits shall only be payable upon an Employee's
termination of employment due to a Qualifying Termination; provided, that if,
following the occurrence of an Acceleration Event, an Employee is terminated due
to the Employee's death or disability (as defined in the long-term disability
plan in which the Employee is entitled to participate (whether or not the
Employee voluntarily participates in such plan)) and, at the time of such
termination, the Employee had grounds to resign with Good Reason, such
termination of employment shall be deemed to be a Qualifying Termination.

8. ADMINISTRATION OF PLAN

      This Plan shall be administered by ITT Industries, who shall have the
exclusive right to interpret this Plan, adopt any rules and regulations for
carrying out this Plan as may be appropriate and decide any and all matters
arising under this Plan, including but not limited to the right to determine
appeals. Subject to applicable Federal and state law, all interpretations and
decisions by ITT Industries shall be final, conclusive and binding on all
parties affected thereby.

      Notwithstanding the preceding paragraph, following an Acceleration Event,
any controversy or claim arising out of or relating to this Plan, or the breach
thereof, shall be settled by arbitration administered by the American
Arbitration Association under its Commercial Arbitration Rules and the entire
cost thereof shall be borne by the Company. The location of the arbitration
proceedings shall be reasonably acceptable to the Employee. Judgment on the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. The Company shall pay all legal fees, costs of litigation,
prejudgment interest, and other expenses which are incurred in good faith by the
Employee as a result of the Company's refusal to provide any of the Severance
Benefits to which the Employee becomes entitled under this Plan, or as a result
of the Company's (or any third party's) contesting the validity, enforceability,
or interpretation of this Plan, or as a result of any conflict between the
Employee and the Company pertaining to this Plan. The Company shall pay such
fees and expenses from the general assets of the Company.

9. TERMINATION OR AMENDMENT

      ITT Industries may terminate or amend this Plan ("PLAN CHANGE") at any
time except, that following the occurrence of (i) an Acceleration Event or (ii)
a Potential Acceleration Event, no Plan Change that would adversely affect any
Employee may be made without the prior written consent of such Employee affected
thereby; provided, however, that (ii) above shall cease to apply if such
Potential Acceleration Event does not result in the occurrence of an
Acceleration Event.

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                                                                               7

10. OFFSET

      Any Severance Benefits provided to an Employee under this Plan shall be
offset by reducing (x) any Severance Pay hereunder by any severance pay, salary
continuation pay, termination pay or similar pay or allowance and (y) any other
Severance Benefits hereunder by corresponding employee benefits, or outplacement
services, which the Employee receives or is entitled to receive, (i) pursuant to
any other Company policy, practice program or arrangement, (ii) pursuant to any
Company employment agreement or other agreement with the Company, or (iii) by
virtue of any law, custom or practice excluding, however, any unemployment
compensation in the United States, unless the Employee voluntarily expressly
waives (which the Employee shall have the exclusive right to do) in writing any
such respective entitlement.

11. EXCISE TAX

      In the event that it shall be determined that any payment or distribution
by the Company to or for the benefit of the Employee (whether paid or payable or
distributed or distributable pursuant to the terms of this Plan or otherwise,
but determined without regard to any additional payments required under this
Section 11 such payments or distributions being referred to herein as
"PAYMENTS") would give rise to liability of the Employee for the excise tax
imposed by Section 4999 of the Internal Revenue Code, as amended (the "CODE"),
or that any interest or penalties are incurred by the Employee with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "EXCISE TAX"), then the Employee
shall be entitled to receive an additional payment (the "GROSS-UP PAYMENT") in
an amount such that after payment by the Employee of all Federal, state and
local taxes (including any interest or penalties imposed with respect to such
taxes), including without limitation, any income and employment taxes (and any
interest and penalties imposed with respect to such taxes) and Excise Tax
imposed upon the Gross-Up Payment, the Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

      All determinations required to be made under this Section 11, including
whether and when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by a nationally recognized accounting firm mutually agreed to by
the Employee and the Company (the "ACCOUNTING FIRM") which shall provide
detailed supporting calculations both to the Company and the Employee within ten
(10) business days of the receipt of notice from the Employee that there has
been a Payment, or such earlier time as is requested by the Company; provided
that for purposes of determining the amount of any Gross-Up Payment, the
Employee shall be deemed to pay federal income tax at the highest marginal rates
applicable to individuals in the calendar year in which any such Gross-Up
Payment is to be made and deemed to pay state and local income taxes at the
highest effective rates applicable to individuals in the state or locality of
the Employee's residence or place of employment, whichever is higher, in the
calendar year in which any such Gross-Up Payment is to be made. All fees and
expenses of the Accounting Firm shall be borne solely by the Company. Any
Gross-Up Payment, as determined pursuant to this Section 11, shall be paid by
the Company to the Employee when due. If the Accounting Firm determines that no
Excise Tax is payable by the Employee, it shall so indicate to the Employee in
writing. Any determination by the Accounting Firm shall be binding upon the
Company and the Employee. As a result of the uncertainty in the application of
Section 4999 of the Code, it is

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                                                                               8

possible that the amount of the Gross-Up Payment determined by the Accounting
Firm to be due to (or on behalf of) the Employee was lower than the amount
actually due ("UNDERPAYMENT"). In the event that the Company exhausts its
remedies pursuant to this Section 11 and the Employee thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Employee.

      The Employee shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of any Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after Employee is informed in
writing of such claim and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid. Employee shall not pay
such claim prior to the expiration of the thirty day period following the date
on which it gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due). If the
Company notifies Employee in writing prior to the expiration of such period that
it desires to contest such claim, Employee shall (i) give the Company any
information reasonably requested by the Company relating to such claim, (ii)
take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company, (iii) cooperate with the Company in good
faith in order to effectively contest such claim and (iv) permit the Company to
participate in any proceedings relating to such claim; provided, however, that
the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Employee harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Section 11, the Company
shall control all proceedings taken in connection with such contest and, at its
sole option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Employee to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner,
and the Employee agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, further, that if the
Company directs the Employee to pay such claim and sue for a refund, the Company
shall advance the amount of such payment to the Employee, on an interest-free
basis, and shall indemnify and hold the Employee harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with respect to any
imputed income with respect to such advance; provided, further, that if the
Employee is required to extend the statute of limitations to enable the Company
to contest such claim, the Employee may limit this extension solely to such
contested amount. The Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Employee shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

      If, after the receipt by the Employee of an amount paid or advanced by the
Company pursuant to this Section 11, the Employee becomes entitled to receive
any refund with respect to

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                                                                               9

a Gross-Up Payment, the Employee shall (subject to the Company's complying with
the requirements of Section 11) promptly pay to the Company the amount of such
refund received (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Employee of an amount advanced
by the Company pursuant to Section 11, a determination is made that the Employee
shall not be entitled to any refund with respect to such claim and the Company
does not notify the Employee in writing of its intent to contest such denial of
refund prior to the expiration of thirty (30) days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
the Gross-Up Payment required to be paid.

      In the event the Gross-Up Payment shall fail to make the Employee whole on
an after-tax basis, whether by reason of either (i) an adjustment made by the
Internal Revenue Service or state taxing authority or (ii) because the
Employee's actual effective tax rate was higher than the rate used by the
Accounting Firm as determined pursuant to Section 11 for the year in which the
Gross-Up Payment was made, the Gross-Up Payment shall be recalculated
("RECALCULATED GROSS-UP PAYMENT"), using the Employee's actual effective tax
rate, once it is known for the calendar year in which the Gross-Up Payment is
made, and the Company shall reimburse the Employee for the full amount of any
amount by which the Recalculated Gross-Up Payment exceeds the Gross-Up Payment
("ADDITIONAL GROSS-UP PAYMENT").

      The Gross-Up Payment and any Additional Gross-Up Payment shall be paid out
of the general assets of the Company.

12. MISCELLANEOUS

      The Employee shall not be entitled to any notice of termination or pay in
lieu thereof except as included as part of Severance Pay as provided herein.

      Severance Benefits under this Plan are paid entirely by the Company from
its general assets.

      This Plan is not a contract of employment, does not guarantee the Employee
employment for any specified period and does not limit the right of the Company
to terminate the employment of the Employee at any time.

      If an Employee should die while any amount is still payable to the
Employee hereunder had the Employee continued to live, all such amounts shall be
paid in accordance with this Plan to the Employee's designated heirs or, in the
absence of such designation, to the Employee's estate.

      The numbered section headings contained in this Plan are included solely
for convenience of reference and shall not in any way affect the meaning of any
provision of this Plan.

      If, for any reason, any one or more of the provisions or part of a
provision contained in this Plan shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of this

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                                                                              10

Plan not held so invalid, illegal or unenforceable, and each other provision or
part of a provision shall to the full extent consistent with law remain in full
force and effect.

      The Plan shall be governed by and construed in accordance with the laws of
the State of New York without regard to the conflicts of laws provisions
thereof.

      The Plan shall be binding on all successors and assigns of the ITT
Industries and an Employee.

13. NOTICES

            Any notice and all other communication provided for in this Plan
shall be in writing and shall be deemed to have been duly given when delivered
by hand or overnight courier or three days after it has been mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.

            If to the Company:

            ITT Industries, Inc.
            4 West Red Oak Lane
            White Plains, New York 10604
            Attention: General Counsel

            If to Employee:

      To the most recent address of Employee set forth in the personnel records
of ITT Industries.

14. ADOPTION DATE

      This Plan was adopted by ITT Industries on April 15, 1997 ("ADOPTION
DATE") and does not apply to any termination of employment which occurred or
which was communicated to the Employee prior to the Adoption Date.

<PAGE>

                          ENHANCED SEVERANCE PAY PLAN

                    EXAMPLE OF POTENTIAL PENSION ENHANCEMENT

      BASIC INPUT DATA

<TABLE>
<S>                                        <C>
Date of Event                              12/31/2004

Employee Age                                       55

Employee Service                                   20

Current Salary Rate                           139,000

Estimated Social Security Benefit (Mo.)         1,400
</TABLE>

      HISTORICAL EARNINGS

<TABLE>
<CAPTION>
                         BASE     EXECUTIVE
     YEAR              EARNINGS     BONUS
<S>                    <C>        <C>
     1998              104,167      42,000
     1999              109,375      53,000
     2000              114,208      62,500
     2001              119,583      70,000
     2002              125,500      90,000
     2003              131,500      85,000
     2004              137,917      87,000

IMPLIED EARNINGS
    Year 1             139,000      90,000
    Year 2             139,000      90,000
</TABLE>

      CALCULATION OF PENSION BENEFIT

<TABLE>
<CAPTION>
                                          ACTUAL         ENHANCED         IMPROVEMENT
<S>                                     <C>             <C>               <C>
Final Average Pay                       204,641.67      222,983.33
Age                                          55.00           57.00
Service                                      20.00           22.00

Gross Monthly Pension                     6,821.39        8,176.06          1,354.67
Less: Social Security Offset               (350.00)        (385.00)           (35.00)
Net Monthly Pension @ Age 65              6,471.39        7,791.06          1,319.67
Early Retirement Reduction Factor            75.00%          85.00%

Net Pension Payable after age 62          4,766.04        6,564.65          1,798.61
Net Pension Payable to age 62             5,116.04        6,949.65          1,833.61

Lump Sum Value of Benefit from Enhanced
Severance Pay Plan                                                        397,925.45
</TABLE>

Note: In addition to the lump sum payment shown, any portion of the actual
benefit that is payable under the Excess Pension Plan would be paid in a lump
sum<PAGE>

                                                                   EXHIBIT 10.11

                                 ITT INDUSTRIES

                           DEFERRED COMPENSATION PLAN

                        Effective as of January 1, 1995
                   including amendments through July 13, 2004

<PAGE>

                   ITT INDUSTRIES DEFERRED COMPENSATION PLAN

The ITT Deferred Compensation Plan (the "Plan") was established by ITT
Corporation, a Delaware corporation ("Former ITT"), effective January 1, 1995.
The purpose of the Plan is to provide each Participant with a means of deferring
compensation in accordance with the terms of the Plan.

Effective as of December 19, 1995, Former ITT split into three separate
companies -- ITT Hartford Group, Inc., ITT Corporation, a Nevada corporation,
and ITT Industries, Inc. an Indiana corporation (the "Corporation"), which is
the successor to Former ITT.

Under the Employee Benefits Service and Liability Agreement dated November 1,
1995 (the "Agreement") the Corporation agreed to continue the Plan for eligible
employees of the Corporation or of any of its subsidiaries and to transfer the
liabilities attributable to participants who become employees of ITT
Corporation, a Nevada corporation, on December 19, 1995 to ITT Corporation.

Effective as of January 1, 1996, the Plan was amended to accept the liabilities
under the ITT Industries Excess Savings Plan attributable to salary deferrals,
excess matching contributions, and excess floor contributions credited with
respect to Base Salary deferred under this Plan and hold such amounts hereunder
in accordance with the provisions of the ITT Industries Excess Savings Plan as
set forth in Appendix A, attached hereto and made part hereof.

Effective as of October 1, 1997, January 1, 1998, April 1, 1998, January 1,
1999, and November 1, 2000, the Plan was further amended to make certain
administration changes to unify the form and timing of Plan distributions,
respectively.

Effective as of March 1, 2004, the Plan was further amended to provide that a
Participant may make a separate investment election with respect to future
deferrals.

Effective as of July 13, 2004, the Plan was amended and restated to make certain
administrative changes and to unify the definition of Acceleration Event with
other employee benefit plans of ITT Industries.

All benefits payable under this Plan, which constitutes a nonqualified, unfunded
deferred compensation plan for a select group of management or
highly-compensated employees under Title I of ERISA, shall be paid out of the
general assets of the Company.

<PAGE>

                   ITT INDUSTRIES DEFERRED COMPENSATION PLAN

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                    PAGE
                                                                                    ----
<S>                                                                                 <C>
ARTICLE 1.   DEFINITIONS........................................................      1

ARTICLE 2.   PARTICIPATION......................................................      4

ARTICLE 3.   DEFERRALS..........................................................      5

ARTICLE 4.   MAINTENANCE OF ACCOUNTS............................................      8

ARTICLE 5.   PAYMENT OF BENEFITS................................................     10

ARTICLE 6.   AMENDMENT OR TERMINATION...........................................     15

ARTICLE 7.   GENERAL PROVISIONS.................................................     16

ARTICLE 8.   ADMINISTRATION.....................................................     20

APPENDIX A
</TABLE>

<PAGE>

                             ARTICLE 1. DEFINITIONS

1.01 "ACCELERATION EVENT" shall mean an event which shall occur if:

(a)   a report on Schedule 13D shall be filed with the Securities and Exchange
      Commission pursuant to Section 13(d) of the Securities Exchange Act of
      1934 (the "Act") disclosing that any person (within the meaning of Section
      13(d) of the Act), other than the Corporation or a subsidiary of the
      Corporation or any employee benefit plan sponsored by the Corporation or a
      subsidiary of the Corporation, is the beneficial owner directly or
      indirectly of twenty percent (20%) or more of the outstanding Common Stock
      $1 par value, of the Corporation (the "Stock");

(b)   any person (within the meaning of Section 13(d) of the Act), other than
      the Corporation or a subsidiary of the Corporation, or any employee
      benefit plan sponsored by the Corporation or a subsidiary of the
      Corporation, shall purchase shares pursuant to a tender offer or exchange
      offer to acquire any Stock of the Corporation (or securities convertible
      into Stock) for cash, securities or any other consideration, provided that
      after consummation of the offer, the person in question is the beneficial
      owner (as such term is defined in Rule 13d-3 under the Act), directly or
      indirectly, of twenty percent (20%) or more of the outstanding Stock of
      the Corporation (calculated as provided in paragraph (d) of Rule 13d-3
      under the Act in the case of rights to acquire Stock);

(c)   the stockholders of the Corporation shall approve (A) any consolidation,
      business combination or merger involving the Corporation, other than a
      consolidation, business combination or merger involving the Corporation in
      which holders of Stock immediately prior to the consolidation, business
      combination or merger (x) hold fifty percent (50%) or more of the combined
      voting power of the Corporation (or the corporation resulting from the
      merger or consolidation or the parent of such corporation) after the
      merger and (y) have the same proportionate ownership of common stock of
      the Corporation (or the corporation resulting from the merger or
      consolidation or the parent of such corporation), relative to other
      holders of Stock immediately prior to the merger, business combination or
      consolidation, immediately after the merger as immediately before, or (B)
      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 Corporation;

(d)   there shall have been a change in a majority of the members of the Board
      of Directors of the Corporation within a 12-month period unless the
      election or nomination for election by the Corporation's stockholders 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 where directors at the beginning of such 12-month period; or

(e)   any person (within the meaning of Section 13(d) of the Act) (other than
      the Corporation or any subsidiary of the Corporation or any employee
      benefit plan (or related trust) sponsored by the Corporation or a
      subsidiary of the Corporation) becomes the beneficial

<PAGE>

                                                                          Page 2

      owner (as such term is defined in Rule 13d-3 under the Act) of twenty
      percent (20%) or more of the Stock.

1.02  "ADMINISTRATIVE COMMITTEE" shall mean the person or persons appointed to
      administer the Plan as provided in Section 8.01.

1.03  "ASSOCIATED COMPANY" shall mean any division, subsidiary or affiliated
      company of the Corporation which is an Associated Company or Participating
      Unit, as such terms are defined in the ITT Industries Salaried Retirement
      Plan (formerly known as the Retirement Plan for Salaried Employees of ITT
      Corporation).

1.04  "BASE SALARY" shall mean the annual base fixed compensation paid
      periodically during the calendar year, determined prior to any pre-tax
      contributions under a "qualified cash or deferred arrangement" (as defined
      under Code Section 401(k) and its applicable regulations) or under a
      "cafeteria plan" (as defined under Code Section 125 and its applicable
      regulations) or a qualified transportation fringe under Section 132(f) of
      the Code and any deferrals under Article 3, Appendix A or another unfunded
      deferred compensation plan maintained by the Corporation, but excluding
      any overtime, bonuses, foreign service allowances or any other form of
      compensation, except to the extent otherwise deemed "Base Salary" for
      purposes of the Plan under rules as are adopted by the Compensation and
      Personnel Committee.

1.05  "BENEFICIARY" shall mean the person or persons designated by a Participant
      pursuant to the provisions of Section 5.07 in a time and manner determined
      by the Administrative Committee to receive the amounts, if any, payable
      under the Plan upon the death of the Participant.

1.06  "BONUS" shall mean the cash amount, if any, awarded to an employee of the
      Company under the Company's executive bonus program, or other compensation
      program designated by the Compensation and Personnel Committee as a bonus
      hereunder.

1.07  "BOARD OF DIRECTORS" OR "BOARD" shall mean the Board of Directors of the
      Corporation.

1.08  "CODE" shall mean the Internal Revenue Code of 1986, as amended from time
      to time.

1.09  "COMPANY" shall mean the Corporation, and any successor thereto, with
      respect to its employees and any Associated Company authorized by the
      Compensation and Personnel Committee to participate in the Plan, with
      respect to their employees.

1.10  "COMPENSATION AND PERSONNEL COMMITTEE" shall mean the Compensation and
      Personnel Committee of the Board of Directors.

1.11  "CORPORATION" shall mean ITT Industries, Inc., an Indiana corporation
      (successor to ITT Corporation, a Delaware corporation), or any successor
      by merger, purchase, or otherwise.

<PAGE>

                                                                          Page 3

1.12  "DEFERRAL ACCOUNT" shall mean the bookkeeping account maintained for each
      Participant to record the amount of Bonus and/or Base Salary such
      Participant has elected to defer in accordance with Article 3, adjusted
      pursuant to Article 4.

1.13  "DEFERRAL AGREEMENT" shall mean the completed agreement, including any
      amendments, attachments and appendices thereto, in such form approved by
      the Administrative Committee, between an Eligible Executive and the
      Company, under which the Eligible Executive agrees to defer a portion of
      his Bonus and/or his Base Salary.

1.14  "DEFERRALS" shall mean the amount of deferrals credited to a Participant
      pursuant to Section 3.02.

1.15  "EFFECTIVE DATE" shall mean January 1, 1995.

1.16  "ELIGIBLE EXECUTIVE" shall mean an Employee who is eligible to participate
      in the Plan as provided in Section 2.01.

1.17  "EMPLOYEE" shall mean a person who is employed by the Company.

1.18  "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
      amended from time to time.

1.19  "PARTICIPANT" shall mean, except as otherwise provided in Article 2, each
      Eligible Executive who has executed a Deferral Agreement pursuant to the
      requirements of Section 2.02 and is credited with an amount under Section
      3.03.

1.20  "PLAN" shall mean the ITT Industries Deferred Compensation Plan (which was
      formerly known as the ITT Deferred Compensation Plan for 1995, the ITT
      Industries Deferred Compensation Plan for 1996, and the ITT Industries
      Deferred Compensation Plan for 1997) as set forth in this document and the
      appendices and schedules thereto, as it may be amended from time to time.

1.21  "PLAN YEAR" shall mean the calendar year.

1.22  "REPORTING DATE" shall mean the last business day of each calendar month
      following the Effective Date, or such other day as the Administrative
      Committee may determine. For this purpose, a "business day" is any day on
      which the New York Stock Exchange is open.

1.23  "RETIREMENT" shall mean (i) with respect to an Eligible Executive, any
      termination of employment by an Eligible Executive after the date the
      Eligible Executive is eligible for an early, normal or postponed
      retirement benefit under the ITT Industries Salaried Retirement Plan
      (formerly known as the ITT Corporation Retirement Plan for Salaried
      Employees), or would have been eligible had he been a participant in such
      Plan.

<PAGE>

                                                                          Page 4

                            ARTICLE 2. PARTICIPATION

2.01 ELIGIBILITY

(a)   With respect to Plan Years commencing prior to January 1, 2001, an
      Eligible Executive shall be an Employee designated as eligible to
      participate in this Plan by the Compensation and Personnel Committee or
      its delegate.

(b)   Effective as of November 1, 2000, an Employee whose Base Salary as of
      October 31 of a calendar year equals or exceeds $200,000 shall be an
      Eligible Executive with respect to the Plan Year following such calendar
      year and thereby eligible to participate in this Plan and execute a
      Deferral Agreement under this Plan with respect to Bonus and/or Base
      Salary which would be payable in the Plan Year following such October 31.

2.02 IN GENERAL

(a)   An individual who is determined to be an Eligible Executive with respect
      to a Plan Year and who desires to have deferrals credited on his behalf
      pursuant to Article 3 for such Plan Year must execute a Deferral Agreement
      with the Administrative Committee authorizing Deferrals under this Plan
      for such year in accordance with the provisions of Sections 3.01 and 3.02.

(b)   The Deferral Agreement shall be in writing and be properly completed upon
      a form approved by the Administrative Committee, which shall be the sole
      judge of the proper completion thereof. Such Deferral Agreement shall
      provide, subject to the provisions of Section 3.02, for the deferral of a
      portion of the Eligible Executive's Bonus and/or Base Salary earned after
      the effective date of the election and shall include such other provisions
      as the Administrative Committee deems appropriate.

2.03 TERMINATION OF PARTICIPATION

(a)   Participation shall cease when all benefits to which a Participant is
      entitled to hereunder are distributed to him.

(b)   If a former Participant who has terminated employment with the Company and
      whose participation in the Plan ceased under Section 2.03(a) is reemployed
      as an Eligible Executive, the former Participant may again become a
      Participant in accordance with the provisions of Section 2.02.

<PAGE>

                                                                          Page 5

                              ARTICLE 3. DEFERRALS

3.01 FILING REQUIREMENTS

(a)   Prior to the close of business on the date or dates specified by the
      Administrative Committee in a Plan Year and except as otherwise provided
      below, an Eligible Executive may elect, subject to Section 3.02(a), to
      defer a portion of his Bonus payable in the next calendar year and/or a
      portion of his Base Salary that is otherwise earned and payable in the
      next calendar year by filing a Deferral Agreement with the Administrative
      Committee.

(b)   A Participant's election to defer a portion of his Bonus or Base Salary
      for any calendar year shall become irrevocable on the last day the
      deferral of such Bonus or Base Salary may be elected under Section
      3.01(a), except as otherwise provided in Section 3.02(c) or 3.05. A
      Participant may revoke or change his election to defer a portion of Bonus
      or Base Salary at any time prior to the date the election becomes
      irrevocable. Any such revocation or change shall be made in a form and
      manner determined by the Administrative Committee.

(c)   A Participant's Deferral Agreement shall only apply to a Bonus determined
      after the Deferral Agreement is filed with the Administrative Committee
      under Section 3.01 (a). A Participant's Deferral Agreement shall apply
      only with respect to Base Salary earned in the calendar year following the
      Plan Year in which the Deferral Agreement is filed with the Administrative
      Committee under Section 3.01 (a). Subject to the provisions of Section
      3.02, an Eligible Executive must file, in accordance with the provisions
      of Section 3.01 (a), a new Deferral Agreement for each calendar year the
      Eligible Executive is eligible for and elects to defer a portion of his
      Bonus or Base Salary.

(d)   If a Participant ceases to be an Eligible Executive but continues to be
      employed by the Company, he shall continue to be a Participant and his
      Deferral Agreement currently in effect for the Plan Year shall remain in
      force for the remainder of such Plan Year, but such Participant shall not
      be eligible to defer any portion of his Bonus or Base Salary earned in a
      subsequent Plan Year until such time as he shall once again become an
      Eligible Executive.

(e)   Notwithstanding the foregoing, effective as of January 1, 1999, an
      Eligible Executive shall not be permitted under the provisions of this
      Plan to make an election to defer Base Salary earned on or after January
      1, 1999.

3.02 AMOUNT OF DEFERRAL

(a)   (i)   The Compensation and Personnel Committee or its delegate may
            determine prior to October 31 of a calendar year that an Eligible
            Executive may defer all or a portion of his Bonus that is otherwise
            payable in the next Plan Year. An Eligible Executive shall be given
            written notice of the opportunity to defer all or a portion of his
            Bonus at least ten business days prior to the date the Deferral
            Agreement for the applicable Plan Year must be submitted to the
            Administrative Committee.

<PAGE>

                                                                          Page 6

      (ii)  With respect to calendar years commencing prior to January 1, 1999,
            the Compensation and Personnel Committee or its delegate may
            determine prior to October 31 of a calendar year that an Eligible
            Executive may defer a portion of his Base Salary that is otherwise
            earned and payable in the next Plan Year. An Eligible Executive
            shall be given written notice of the opportunity to defer a portion
            of his Base Salary at least ten business days prior to the date the
            Deferral Agreement for the applicable Plan Year must be submitted to
            the Administrative Committee. Notwithstanding any Plan provisions to
            the contrary, effective as of January 1, 1999, deferrals of Base
            Salary earned on or after January 1, 1999 shall not be permitted
            under the provisions of this Plan.

(b)   The Administrative Committee may establish maximum or minimum limits on
      the amount of any Bonus or Base Salary which may be deferred and/or the
      timing of such deferral. Eligible Executives shall be given written notice
      of any such limits at least ten business days prior to the date they take
      effect.

(c)   Notwithstanding anything in this Plan to the contrary, if an Eligible
      Executive:

      (i)   receives a withdrawal of deferred cash contributions on account of
            hardship from any plan which is maintained by the Corporation or an
            Associated Company and which meets the requirements of Code Section
            401(k) (or any successor thereto); and

      (ii)  is precluded from making contributions to such 401(k) plan for at
            least 12 months (six months effective as of January 1, 2002) after
            receipt of the hardship withdrawal,

      no amounts shall be deferred under this Plan under the Eligible
      Executive's Deferral Agreement with respect to Bonus or Base Salary until
      such time as the Eligible Executive is again permitted to contribute to
      such 401(k) plan. Any Bonus or Base Salary payment which would have been
      deferred pursuant to a Deferral Agreement but for the application of this
      Section 3.02(c) shall be paid to the Eligible Executive as if he had not
      entered into the Deferral Agreement.

3.03 CREDITING TO DEFERRAL ACCOUNT

      The amount of Deferrals shall be credited to such Participant's Deferral
      Account on the day such Bonus or Base Salary would have otherwise been
      paid to the Participant in the absence of a Deferral Agreement. Deferrals
      credited to a Participant's Deferral account which are deemed invested in
      a Corporation phantom stock fund will be credited based on the fair market
      value of the Corporation's common stock on that day.

3.04 VESTING

      A participant shall at all times be 100% vested in his Deferral Account.

<PAGE>

                                                                          Page 7

3.05 HARDSHIP

      Notwithstanding the foregoing provisions of this Article 3, a Participant
      may completely cease Deferrals made under all Deferral Agreements then in
      effect with respect to the Participant upon the Participant providing the
      Compensation and Personnel Committee with such evidence of severe
      financial hardship as the Compensation and Personnel Committee may deem
      appropriate. In the event the Compensation and Personnel Committee finds
      the Participant has incurred a severe financial hardship, the
      Participant's Deferrals shall cease as of the first practicable payroll
      period following the Compensation and Personnel Committee's decision. In
      the event the Participant wishes to recommence Deferrals starting in a
      subsequent calendar year, the Participant may do so by duly completing,
      executing, and filing the appropriate Deferral Agreement with the
      Administrative Committee in accordance with Section 3.01, provided said
      Participant is an Eligible Executive at that time.

<PAGE>

                                                                          Page 8

                       ARTICLE 4. MAINTENANCE OF ACCOUNTS

4.01 ADJUSTMENT OF ACCOUNT

(a)   As of each Reporting Date, each Deferral Account shall be credited or
      debited with the amount of earnings or losses with which such Deferral
      Account would have been credited or debited, assuming it had been invested
      in one or more investment funds, or earned the rate of return of one or
      more indices of investment performance, designated by the Administrative
      Committee and elected by the Participant pursuant to Section 4.02 for
      purposes of measuring the investment performance of his Deferral Account.
      Any portion of a Participant's Deferral Account deemed invested in a
      Corporation phantom stock fund shall be credited with dividend
      equivalents, as and when dividends are paid on the Corporation's common
      stock, which shall be deemed invested in additional shares of such phantom
      stock.

(b)   The Administrative Committee shall designate at least one investment fund
      or index of investment performance and may designate other investment
      funds or investment indices (including a Corporation phantom stock fund)
      to be used to measure the investment performance of a Participant's
      Deferral Account. The designation of any such investment funds or indices
      shall not require the Company to invest or earmark their general assets in
      any specific manner. The Administrative Committee may change the
      designation of investment funds or indices from time to time, in its sole
      discretion, and any such change shall not be deemed to be an amendment
      affecting Participants' rights under Section 6.02.

4.02 INVESTMENT PERFORMANCE ELECTIONS

      In the event the Administrative Committee designates more than one
      investment fund or index of investment performance under Section 4.01,
      each Participant shall file an investment election with the Administrative
      Committee with respect to the investment of his Deferral Account within
      such time period and on such form as the Administrative Committee may
      prescribe. The election shall designate the investment fund or funds or
      index or indices of investment performance which shall be used to measure
      the investment performance of the Participant's Deferral Account.

4.03 CHANGING INVESTMENT ELECTIONS

      In the event the Administrative Committee designates more than one
      investment fund or index of investment performance under Section 4.01, a
      Participant may change his election of the investment fund or funds or
      index or indices of investment performance used to measure the future
      investment performance of both his future Deferrals and his existing
      account balance, by filing an appropriate written notice with the
      Administrative Committee or its delegate at least 15 days, or such other
      period as determined by the Administrative Committee, in advance of the
      date such election is effective. The election shall be effective as of the
      first business day of the calendar quarter following the month in which
      the notice is filed. Notwithstanding the foregoing, effective as of
      October 1, 1997, the election shall be effective as of the first business
      day of the last month in the

<PAGE>

                                                                          Page 9

      calendar quarter following the month in which the notice is filed, or,
      effective as of May 1, 2000, such earlier date as prescribed by the
      Administrative Committee on a basis uniformly applicable to all
      Participants similarly situated.

      Effective as of March 1, 2004, a Participant may change his or her
      election of the investment fund or funds or indices of investment
      performance used to measure the future investment performance of his
      future Deferral within such time periods and in such manner prescribed by
      the Administrative Committee. The election shall be effective as soon as
      administratively practicable after the date in which notice is timely
      filed or at such other time as the Administrative Committee shall
      determine. In the absence of such an election, the Participant's future
      Deferral will be invested in accordance with his existing investment
      election with respect to the current balance of his Deferral Account,
      provided, however, if such Participant is an "insider" (as defined in
      Section 16 of the Act) and his existing investment elections include an
      investment in the Corporation's phantom stock fund, his future Deferrals
      shall be allocated pro rata among the other funds or indices on his
      existing investment election based on the proportions as designated on
      such existing investment election.

4.04 INDIVIDUAL ACCOUNTS

(a)   The Administrative Committee shall maintain, or cause to be maintained on
      the books of the Company, records showing the individual balance of each
      Participant's Deferral Account. Such accounts shall be credited with the
      Deferrals made by the Participant pursuant to the provisions of Article 3
      and credited and debited, as the case may be, with hypothetical investment
      results determined pursuant to this Article 4. At least once a year each
      Participant shall be furnished with a statement setting forth the value of
      his Deferral Account.

(b)   Within each Participant's Deferral Account, separate subaccounts shall be
      maintained to the extent necessary for the administration of the Plan.

(c)   The accounts established under this Article shall be hypothetical in
      nature and shall be maintained for bookkeeping purposes only so that
      hypothetical gains or losses on the deferrals made to the Plan can be
      credited or debited, as the case may be.

4.05 VALUATION OF ACCOUNTS

(a)   The Administrative Committee shall value or cause to be valued each
      Participant's Deferral Account at least quarterly. On each Reporting Date
      there shall be allocated to the Deferral Account of each Participant the
      appropriate amount determined in accordance with Section 4.01.

(b)   Whenever an event requires a determination of the value of a Participant's
      Deferral Account, the value shall be computed as of the Reporting Date
      immediately preceding the date of the event, except as otherwise specified
      in this Plan.

<PAGE>

                                                                         Page 10

                         ARTICLE 5. PAYMENT OF BENEFITS

5.01 COMMENCEMENT OF PAYMENT

(a)   The following provisions shall apply with respect to an Eligible Executive
      who becomes a Participant prior to January 1, 1998:

      (i)   Except as otherwise provided in paragraph (d) below, the
            distribution of the portion of the Participant's Deferral Account
            attributable to deferrals of Bonus or Base Salary which would
            otherwise be payable on or after January 1, 1998 shall commence,
            pursuant to Section 5.02, on or as soon as practicable after the
            occurrence of any distribution event made available under procedures
            established from time to time by the Administrative Committee and as
            designated by the Participant on his first Deferral Agreement filed
            with respect to Bonus or Base Salary payable on and after January 1,
            1998 ("Common Distribution Date").

      (ii)  Except as otherwise provided in paragraph (d) below, the
            distribution of the portion of the Participant's Deferral Account
            attributable to deferrals of Bonus or Base Salary which would have
            otherwise been paid prior to January 1, 1998 shall commence on or as
            soon as practicable after the occurrence of the distribution event
            designated by the Participant on his Deferral Agreement applicable
            to each particular deferral election ("Distribution Event Date(s)")
            unless the Participant makes an election by duly completing,
            executing and filing with the Administrative Committee prior to
            October 31,1997 the appropriate forms to have the deferrals made
            with respect to 1995, 1996 or 1997 paid on his Common Distribution
            Date.

(b)   Except as otherwise provided in paragraph (d) below, with respect to an
      Eligible Executive who first becomes a Participant on or after January 1,
      1998, the distribution of the Participant's Deferral Account shall
      commence, pursuant to Section 5.02, on or as soon as practicable after the
      occurrence of any distribution event made available under procedures
      established from time to time by the Administrative Committee and as
      designated by the Participant on his initial Deferral Agreement ("Common
      Distribution Date").

(c)   In the event a Participant elects pursuant to paragraphs (a) or (b) above
      to defer to a specific calendar date in a specific calendar year, he may
      not elect a calendar date which occurs prior to the close of the calendar
      year following the calendar year in which he executed the Deferral
      Agreement.

(d)   Notwithstanding the foregoing, in the event a Participant terminates
      employment for reasons other than Retirement prior to his Common
      Distribution Date and/or any Distribution Event Date(s) applicable to
      deferrals made with respect to 1995, 1996, or 1997, the distribution of
      his Deferral Account shall commence, pursuant to Section 5.02, as soon as
      practicable after his termination of employment; provided, however, if a
      Participant whose employment terminates on or after April 1, 1998 has
      prior to the date of his termination of employment, in accordance with the
      procedures prescribed by the

<PAGE>

                                                                         Page 11

      Administrative Committee, made a special termination election, the
      distribution of his Deferral Account shall commence, pursuant to Section
      5.02, as soon as practicable after the occurrence of the termination
      distribution date designated by the Participant on the appropriate special
      termination election form prescribed by the Administrative Committee
      ("Special Effective Termination Distribution Date"). However for a special
      termination election to be effective it must be made in a calendar year
      prior to the calendar year in which any portion of the Participant's
      Deferral Account is first to become payable after taking this election
      into account and a full six months must pass between the date the
      Participant duly makes this election and the date on which any portion of
      the Participant's Deferral Account is first to become payable after taking
      this election into account.

(e)   A Participant shall not change his designation of the distribution event
      which entitles him to a distribution of his Deferral Account, except as
      otherwise provided in Section 5.03 below.

(f)   Notwithstanding any Plan provision to the contrary, the distribution to a
      Participant who is an "insider" (as defined in Section 16 of the Act) and
      who has elected to have any portion of his Deferral Account invested in
      the Corporation phantom stock fund, shall be subject to the advance
      approval of the Compensation and Personnel Committee.

5.02  METHOD OF PAYMENT

(a)   Except as otherwise provided in paragraphs (b) and (c) below:

      (i)   at the time a Participant makes an election of his distribution
            event pursuant to the provisions of Sections 5.01 (a) or (b), the
            Participant shall elect that the portion of his Deferral Account to
            which such distribution event is applicable shall be made payable as
            of such distribution event under one of the following methods of
            payment:

            (1)   ratable annual cash installments for a period of years, not to
                  exceed 15 years, designated by the Participant on his Deferral
                  Agreement,

            (2)   a single lump sum cash payment, or

            (3)   any other form of payment approved by the Compensation and
                  Personnel Committee; and

      (ii)  at the time a Participant makes an election of a Special Effective
            Termination Distribution Date pursuant to the provisions of Section
            5.01(d), the Participant shall elect that his Deferral Account shall
            be made payable as of such Special Effective Termination
            Distribution Date under one of the following methods of payment:

            (1)   ratable annual cash installments for a period of five years,
                  or

            (2)   a single lump sum cash payment.

      During an installment payment period, the Participant's Deferral Account
      shall continue to be credited with earnings or losses as described in
      Section 4.01. The first installment

<PAGE>

                                                                         Page 12

      or lump sum payment shall be made as soon as administratively practicable
      following the Reporting Date coincident with or preceding the distribution
      event designated pursuant to Section 5.01 or 5.03. Subsequent
      installments, if any, shall be paid as soon as administratively
      practicable following the anniversary of said distribution event in the
      following calendar year and each subsequent year of the installment
      period. The amount of each installment shall equal the balance in the
      Participant's Deferral Account as of each Reporting Date of determination
      divided by the number of remaining installments (including the installment
      being determined).

(b)   Notwithstanding the foregoing, in the event payment is to be made pursuant
      to Section 5.01(d) to a Participant who does not have a Special Effective
      Termination Distribution Date election in effect as of his date of
      termination of employment, a lump sum payment shall be made as soon as
      administratively practicable following the Reporting Date coincident with
      or next following the Participant's termination of employment.

(c)   If a Participant dies before payment of the entire balance of his Deferral
      Account, an amount equal to the unpaid portion thereof as of the date of
      his death shall be payable in one lump sum to his Beneficiary as soon as
      practicable after the Reporting Date coincident with or next following the
      Participant's date of death.

(d)   A Participant shall not change his method of payment, except as otherwise
      provided in Section 5.03.

5.03 CHANGE OF DISTRIBUTION ELECTION

      A Participant may change his elections of a Common Distribution Date or a
      Special Effective Termination Distribution Date under Section 5.01 or the
      method of payment under Section 5.02 applicable to the portion of his
      Deferral Account payable at said dates each October by duly completing,
      executing, and filing with the Administrative Committee prior to such
      distribution date a new election on an appropriate form designated by the
      Administrative Committee; provided, however, that for any such change of
      election to be effective it must be made in the calendar year prior to the
      calendar year during which any portion of the Participant's Deferral
      Account is first to become payable after taking the change into account
      and a full six months must pass between the date the Participant duly
      makes the change of election and the date on which any portion of the
      Participant's Deferral Account is first to become payable after taking the
      change into account.

5.04 HARDSHIP

      Payment of a Participant's Deferral Account shall not commence prior to a
      Participant's designated distribution date, except that the Compensation
      and Personnel Committee may, to the extent permitted by applicable law, if
      it determines a severe unforeseeable financial hardship exists which
      cannot be met from other sources, approve a request by the Participant for
      a withdrawal from his Deferral Account. Such request shall be made in a
      time and manner determined by the Administrative Committee. The payment
      made

<PAGE>

                                                                         Page 13

      from a Participant's Deferral Account pursuant to the provisions of this
      Section 5.04 shall not be in excess of the amount necessary to meet such
      financial hardship of the Participant, including amounts necessary to pay
      any federal, state or local income taxes.

5.05 PAYMENT UPON THE OCCURRENCE OF AN ACCELERATION EVENT

      Notwithstanding the foregoing provisions of this Article 5, upon the
      occurrence of an Acceleration Event, every Participant who is an Eligible
      Executive or a former Eligible Executive shall automatically receive the
      entire balance of his Deferral Accounts in a single lump sum payment. Such
      lump sum payment shall be made as soon as practicable on or after the
      Acceleration Event. If such Participant dies after such Acceleration
      Event, but before receiving such payment, it shall be made to his
      Beneficiary.

5.06 TAX INCREASES

      Notwithstanding the provisions of Section 5.01, in the event a
      Participant's Deferral Account is being paid in installment payments under
      Section 5.02, and during said payout period Federal personal income tax
      rates for the highest marginal tax rate are scheduled to increase by five
      or more percentage points, at the direction of the Administrative
      Committee, any remaining installment payments to be paid after the
      effective date of such increase shall be paid in one lump sum prior to
      said effective date.

5.07 DESIGNATION OF BENEFICIARY

      Each Participant shall file with the Administrative Committee a written
      designation of one or more persons as the Beneficiary who shall be
      entitled to receive the amount, if any, payable under the Plan upon his
      death pursuant to Section 5.02(c) or 5.05. A Participant may, from time to
      time, revoke or change his Beneficiary designation without the consent of
      any prior Beneficiary by filing a new designation with the Administrative
      Committee. The last such designation received by the Administrative
      Committee shall be controlling; provided, however, that no designation, or
      change or revocation thereof, shall be effective unless received by the
      Administrative Committee prior to the Participant's death, and in no event
      shall it be effective as of a date prior to such receipt. If no such
      Beneficiary designation is in effect at the time of a Participant's death,
      or if no designated Beneficiary survives the Participant, the
      Participant's surviving spouse, if any, shall be his Beneficiary,
      otherwise the person designated as beneficiary by the Participant under
      the ITT Industries Salaried Group Life Insurance Plan shall be his
      Beneficiary, and shall receive the payment of the amount, if any, payable
      under the Plan upon his death; provided, however, that if the life
      insurance benefit has been assigned, the Beneficiary shall be the
      Participant's estate.

5.08 DEBITING ACCOUNTS

      Any amounts debited from a Participant's Deferral Account by reason of a
      distribution, withdrawal, or otherwise under this Article 5, shall be
      debited from the Participant's Deferral Account and the investment options
      under which such amount is credited, and such other accounts, subaccounts,
      options, or other allocations in the same proportion that

<PAGE>

                                                                         Page 14

      the Participant's entire Deferral Account is credited at the time such
      debit is made, as determined by the Administrative Committee.

<PAGE>

                                                                         Page 15

                      ARTICLE 6. AMENDMENT OR TERMINATION

6.01 RIGHT TO TERMINATE

      Notwithstanding any Plan provision to the contrary, the Corporation may,
      by action of the Board of Directors, terminate this Plan and the related
      Deferral Agreements at any time. In the event the Plan and related
      Deferral Agreements are terminated, each Participant or Beneficiary shall
      receive a single sum payment in cash equal to the balance of the
      Participant's Deferral Account. The single sum payment shall be made as
      soon as practicable following the date the Plan is terminated and shall be
      in lieu of any other benefit which may be payable to the Participant or
      Beneficiary under this Plan.

6.02 RIGHT TO AMEND

      The Compensation and Personnel Committee or its delegate may amend or
      modify this Plan and the related Deferral Agreements in any way either
      retroactively or prospectively. However, except that without the consent
      of the Participant or Beneficiary, if applicable, no amendment or
      modification shall reduce or diminish such person's right to receive any
      benefit accrued hereunder prior to the date of such amendment or
      modification, and after the occurrence of an Acceleration Event, no
      modification or amendment shall be made to Section 5.05 or Section 6.01
      under Appendix A, attached hereto and made part hereof. A change in any
      investment fund or index under Section 4.01 shall not be deemed to
      adversely affect any Participant's rights to his Deferral Account. Notice
      of an amendment or modification to the Plan shall be given in writing to
      each Participant and Beneficiary of a deceased Participant having an
      interest in the Plan.

<PAGE>

                                                                         Page 16

                         ARTICLE 7. GENERAL PROVISIONS

7.01 FUNDING

      All amounts payable in accordance with this Plan shall constitute a
      general unsecured obligation of the Company. Such amounts, as well as any
      administrative costs relating to the Plan, shall be paid out of the
      general assets of the Company. The Administrative Committee may decide
      that a Participant's Deferral Account may be reduced to reflect allocable
      administrative expenses.

7.02 No CONTRACT OF EMPLOYMENT

      The Plan is not a contract of employment and the terms of employment of
      any Participant shall not be affected in any way by this Plan or related
      instruments, except as specifically provided therein. The establishment of
      the Plan shall not be construed as conferring any legal rights upon any
      person for a continuation of employment, nor shall it interfere with the
      rights of the Company to discharge any person and to treat him without
      regard to the effect which such treatment might have upon him under this
      Plan. Each Participant and all persons who may have or claim any right by
      reason of his participation shall be bound by the terms of this Plan and
      all Deferral Agreements entered into pursuant thereto.

7.03 UNSECURED INTEREST

      Neither the Company nor the Compensation and Personnel Committee nor the
      Administrative Committee in any way guarantees the performance of the
      investment funds or indices a Participant may designate under Article 4.
      No special or separate fund shall be established, and no segregation of
      assets shall be made, to assure the payments thereunder. No Participant
      hereunder shall have any right, title, or interest whatsoever in any
      specific assets of the Company. Nothing contained in this Plan and no
      action taken pursuant to its provisions shall create or be construed to
      create a trust of any kind or a fiduciary relationship between the Company
      and a Participant or any other person. To the extent that any person
      acquires a right to receive payments under this Plan, such right shall be
      no greater than the right of any unsecured creditor of the Company.

7.04 FACILITY OF PAYMENT

      In the event that the Administrative Committee shall find that a
      Participant or Beneficiary is incompetent to care for his affairs or is a
      minor, the Administrative Committee may direct that any benefit payment
      due him, unless claim shall have been made therefor by a duly appointed
      legal representative, be paid on his behalf to his spouse, a child, a
      parent or other relative, and any such payment so made shall thereby be a
      complete discharge of the liability of the Company and the Plan for that
      payment.

7.05 WITHHOLDING TAXES

      The Company shall have the right to deduct from each payment to be made
      under the Plan any required withholding taxes.

<PAGE>

                                                                         Page 17

7.06 NONALIENATION

      Subject to any applicable law, no benefit under the Plan shall be subject
      in any manner to anticipation, alienation, sale, transfer, assignment,
      pledge, encumbrance or charge, and any attempt to do so shall be void, nor
      shall any such benefit be in any manner liable for or subject to
      garnishment, attachment, execution or levy, or liable for or subject to
      the debts, contracts, liabilities, engagements or torts of a person
      entitled to such benefits.

7.07 TRANSFERS

(a)   Notwithstanding any Plan provision to the contrary, in the event the
      Corporation (i) sells, causes the sale of, or sold the stock or assets of
      any employing company in the controlled group of the Corporation to a
      third party or (ii) distributes or distributed to the holders of shares of
      the Corporation's common stock all of the outstanding shares of common
      stock of a subsidiary or subsidiaries of the Corporation and, as a result
      of such sale or distribution, such company or its employees are no longer
      eligible to participate hereunder, the Compensation and Personnel
      Committee, in its sole discretion, may treat such event as not
      constituting a termination of employment and direct that the liabilities
      with respect to the benefits accrued under this Plan for a Participant
      who, as a result of such sale or distribution, is no longer eligible to
      participate in this Plan, shall (with the approval of the new employer),
      be transferred to a similar plan of such new employer and become a
      liability thereunder provided that no provisions of such new plan or
      amendment thereof shall reduce the balance of the Participants' Deferral
      Accounts as of the date of such transfer, as adjusted for investment gains
      or losses. Upon such transfer (and acceptance thereof), the liabilities
      for such transferred benefits shall become the obligation of the new
      employer and the liability under this Plan for such benefits shall cease.

(b)   Notwithstanding any Plan provision to the contrary, at the discretion and
      direction of the Corporation, liabilities with respect to benefits accrued
      by a Participant under a plan maintained by such Participant's former
      employer may be transferred to this Plan and upon such transfer become the
      obligation of the Company.

7.08 CLAIMS PROCEDURE

(a)   Submission of Claims

      Claims for benefits under the Plan shall be submitted in writing to the
      Administrative Committee or to an individual designated by the
      Administrative Committee for this purpose.

(b)   Denial of Claim

      If any claim for benefits is wholly or partially denied, the claimant
      shall be given written notice within 90 days following the date on which
      the claim is filed, which notice shall set forth the following:

      (i)   the specific reason or reasons for the denial;

<PAGE>

                                                                         Page 18

      (ii)  specific reference to pertinent Plan provisions on which the denial
            is based;

      (iii) a description of any additional material or information necessary
            for the claimant to perfect the claim and an explanation of why such
            material or information is necessary; and

      (iv)  an explanation of the Plan's claim review procedure.

      If special circumstances require an extension of time for processing the
      claim, written notice of an extension shall be furnished to the claimant
      prior to the end of the initial period of 90 days following the date on
      which the claim is filed. Such an extension may not exceed a period of 90
      days beyond the end of said initial period.

      If the claim has not been granted and written notice of the denial of the
      claim or that an extension has been granted is not furnished within 90
      days following the date on which the claim is filed, the claim shall be
      deemed denied for the purpose of proceeding to the claim review procedure.

(c)   Claim Review Procedure

      The claimant or his authorized representative shall have 60 days after
      receipt of written notification of denial of a claim to request a review
      of the denial by making written request to the Administrative Committee,
      and may review pertinent documents and submit issues and comments in
      writing within such 60-day period.

      Not later than 60 days after receipt of the request for review, the
      Administrative Committee shall render and furnish to the claimant a
      written decision, which shall include specific reasons for the decision
      and shall make specific references to pertinent Plan provisions on which
      it is based. If special circumstances require an extension of time for
      processing, the decision shall be rendered as soon as possible, but not
      later than 120 days after receipt of the request for review, provided that
      written notice and explanation of the delay are given to the claimant
      prior to commencement of the extension. Such decision by the
      Administrative Committee shall not be subject to further review. If a
      decision on review is not furnished to a claimant within the specified
      time period, the claim shall be deemed to have been denied on review.

(d)   Exhaustion of Remedy

      No claimant shall institute any action or proceeding in any state or
      federal court of law or equity or before any administrative tribunal or
      arbitrator for a claim for benefits under the Plan until the claimant has
      first exhausted the procedures set forth in this section.

7.09 PAYMENT OF EXPENSES

      All administrative expenses of the Plan and all benefits under the Plan
      shall be paid from the general assets of the Company, except as otherwise
      may be provided herein.

<PAGE>

                                                                         Page 19

7.10 CONSTRUCTION

(a)   The Plan is intended to constitute an unfunded deferred compensation
      arrangement for a select group of management or highly compensated
      employees and, therefore, is exempt from the requirements of parts 2, 3
      and 4 of Subtitle B of Title I of ERISA (pursuant to Sections 201(2),
      301(a)(3) and 401(a)(1) of ERISA), and all rights hereunder shall be
      governed by ERISA. Subject to the preceding sentence, the Plan shall be
      construed, regulated and administered in accordance with the laws of the
      State of New York, subject to the provisions of applicable federal laws.

(b)   The masculine pronoun shall mean the feminine wherever appropriate.

(c)   The illegality of any particular provision of this document shall not
      affect the other provisions, and the document shall be construed in all
      respects as if such invalid provision were omitted.

(d)   The headings and subheadings in the Plan have been inserted for
      convenience of reference only and are to be ignored in any construction of
      the provisions thereof.

<PAGE>

                                                                         Page 20

                           ARTICLE 8. ADMINISTRATION

8.01  (a) The Administrative Committee appointed from time to time by the
      Compensation and Personnel Committee to serve at the pleasure of the
      Compensation and Personnel Committee shall have the exclusive
      responsibility and complete discretionary authority to control the
      operation, management and administration of the Plan, with all powers
      necessary to enable it properly to carry out such responsibilities,
      including, but not limited to, the power to interpret the Plan and any
      related documents, to establish procedures for making any elections called
      for under the Plan, to make factual determinations regarding any and all
      matters arising hereunder, including, but not limited to, the right to
      determine eligibility for benefits, the right to construe the terms of the
      Plan, the right to remedy possible ambiguities, inequities,
      inconsistencies or omissions, and the right to resolve all interpretive,
      equitable or other questions arising under the Plan. The decisions of the
      Administrative Committee or such other party as is authorized under the
      terms of any grantor trust on all matters shall be final, binding and
      conclusive on all persons to the extent permitted by law.

(b)   To the extent permitted by law, all agents and representatives of the
      Administrative Committee shall be indemnified by the Corporation and held
      harmless against any claims and the expenses of defending against such
      claims, resulting from any action or conduct relating to the
      administration of the Plan, except claims arising from gross negligence,
      willful neglect or willful misconduct.

<PAGE>

                                   APPENDIX A

    SPECIAL PROVISIONS APPLICABLE TO CERTAIN PARTICIPANTS WHO DEFERRED BASE
                             SALARY UNDER THIS PLAN

This Appendix A is applicable only with respect to a Participant who deferred
all or a portion of his Base Salary under the provisions of this Plan and who
(i) lost matching or other employer contributions under the ITT Industries
Investment and Savings Plan for Salaried Employees (or any predecessor plan) due
to the deferral of his Base Salary under this Plan, or (ii) had salary deferrals
attributable to such Base Salary credited on his behalf to the ITT Industries
Excess Savings Plan (or a predecessor plan) prior to January 1, 1996.

SECTION 1. - DEFINITIONS

1.01  "ACCOUNTS" shall mean the Deferred Account, Floor Contribution Account and
      the Matching Contribution Account.

1.02  "DEFERRED ACCOUNT" shall mean the bookkeeping account maintained for each
      Participant covered under this Appendix A to record the portion of Base
      Salary deferred under this Plan which was credited as a Salary Deferral
      under the ITT Industries Excess Savings Plan (or any predecessor plan)
      prior to January 1, 1996.

1.03  "MATCHING CONTRIBUTION ACCOUNT" shall mean the bookkeeping account
      maintained for each Participant covered under this Appendix A to record
      the Excess Matching Contribution (as defined under the ITT Industries
      Excess Savings Plan) credited on such Participant's behalf due to his
      deferral of Base Salary under this Plan.

1.04  "FLOOR CONTRIBUTION ACCOUNT" shall mean the bookkeeping account maintained
      for each Participant covered under this Appendix A to record the Excess
      Floor Contributions (as defined under the ITT Industries Excess Savings
      Plan) credited on such Participant's behalf due to his deferral of Base
      Salary under this Plan.

SECTION 2. - INVESTMENT OF ACCOUNTS

2.01  A Participant shall have no choice or election with respect to the
      investments of his Accounts. There shall be credited or debited an amount
      of earnings or losses on the balance of the Participant's Accounts which
      would have been credited had the Participant's Accounts been invested in
      the Stable Value Fund maintained under the ITT Industries Investment and
      Savings Plan for Salaried Employees.

SECTION 3. - VESTING OF ACCOUNTS

3.01  A Participant shall be fully vested in his Deferred Account and Floor
      Contribution Account. The Participant shall vest in the amounts credited
      to his Matching Contribution Account at the same rate and under the same
      conditions at which such contributions would have vested under the ITT
      Industries Investment and Savings Plan for Salaried Employees had they
      been contributed thereunder. In the event the Participant terminates

<PAGE>

                                                                          Page 2

      employment prior to vesting in all or any part of the amount credited on
      his behalf to his Matching Contribution Account, such contributions and
      earnings thereon shall be forfeited and shall not be restored in the event
      the Participant is subsequently reemployed by the Company.

3.02  Notwithstanding any provisions of this Plan or Appendix A to the contrary,
      upon the occurrence of an Acceleration Event, (as such term is defined in
      Article 1 of the Plan) a Participant shall become fully vested in the
      amounts credited to his Matching Contribution Account.

SECTION 4. - COMMENCEMENT OF PAYMENT

4.01  A Participant shall be entitled to receive payment of his Deferred
      Account, Floor Contribution Account and the vested portion of his Matching
      Contribution Account, as determined under Section 3.01, upon his
      termination of employment for any reason, other than death. The
      distribution of such Accounts shall be made as soon as practicable
      following such termination of employment.

4.02  In the event of the death of a Participant prior to the full payment of
      his Accounts, the unpaid portion of his Accounts shall be paid to his
      Beneficiary (as defined in Section 1.05 of the Plan) as soon as
      practicable following his date of death.

SECTION 5. - METHOD OF PAYMENT

5.01  Payment of a Participant's Deferred Account, Floor Contribution Account,
      and the vested portion of his Matching Contribution Account shall be made
      in a single lump sum payment.

SECTION 6. - PAYMENT UPON THE OCCURRENCE OF AN ACCELERATION EVENT

6.01  Upon the occurrence of an Acceleration Event, all Participants shall
      automatically receive the entire balance of their Accounts in a single
      lump sum payment. Such lump sum payment shall be made as soon as
      practicable on or after the Acceleration Event. If the Participant dies
      after such Acceleration Event, but before receiving such payment, it shall
      be made to his Beneficiary.

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