Document:

exv10wxpy

Exhibit 10(p)

ILLINOIS TOOL WORKS INC. NONQUALIFIED PENSION PLAN

As Amended and Restated Effective January 1, 2008

     Illinois Tool Works Inc. hereby amends and restates, effective as of January 1, 2008, the ITW
Nonqualified Pension Benefits Plan, originally established effective January 1, 1976, which is
hereby renamed the “Illinois Tool Works Inc. Nonqualified Pension Plan.” The Company intends for
the Plan to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and
applicable regulations (“Section 409A”), and to operate the Plan in good faith compliance with
Section 409A during the Section 409A transition period and any extension thereof.

ARTICLE I.

DEFINITIONS

     Certain definitions utilized in this Plan are set forth below. Capitalized terms utilized in
the Plan that are not defined below shall have the meanings set forth in the Qualified Plan.

     1.1 “Actuarial Equivalent” or “Actuarial Equivalence” means an equivalent form
of payment of a Participant’s Supplemental Benefit. For purposes of converting a Supplemental
Benefit to a form of payment offered under the Qualified Plan, Actuarial Equivalence will be
determined using the Qualified Plan’s definition of Actuarial Equivalent.

     1.2 “Beneficiary” means the person so designated by a Participant according to the
method prescribed by the Company. If no designation is in effect or if an existing designation is
determined to be invalid or ineffective at the time any payments under this Plan become due, the
Beneficiary shall be the spouse of the Participant, or if no spouse is then living, the
Participant’s estate. The Participant may also change his Beneficiary according to the methods
prescribed by the Company, provided that no such change shall be allowed following commencement of
payment.

     1.3 “Board” means the Board of Directors of the Company.

     1.4 “CEO” means the Chief Executive Officer of the Company.

     1.5 “Code” means the Internal Revenue Code of 1986, as amended.

     1.6 “Committee” means the Employee Benefits Steering Committee of the Company.

     1.7 “Company” means Illinois Tool Works Inc., a Delaware corporation, and any
successor thereto, and any corporation or other entity that together with Illinois Tool Works Inc.
is a member of a controlled group of corporations under Code Section 414(b) or a group of trades or
businesses under common control pursuant to Code Section 414(c).

     1.8 “Corporate Change” shall mean either a “Change in Ownership,” “Change in Effective
Control” or a “Change of Ownership of a Substantial Portion of Assets” as defined in Section 409A
and summarized herein. A “Change in Ownership” occurs on the date that any one person, or more
than one person acting as a group (as defined in Section 409A), acquires ownership of stock of the
Company that, together with stock held by such person or group, constitutes more than 50% of the
total fair market value or total voting power of the stock of the Company. A “Change in Effective
Control” occurs on the date that either (i) any one person, or more than one person acting as a
group, acquires (or has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Company possessing 35% or more of
the total voting power of the stock of the Company; or (ii) a majority of members of the Board is
replaced during any 12-month period by directors whose appointment or election is not endorsed by a
majority of the members of the Board prior to the date of the appointment or election. A “Change
of Ownership of a Substantial Portion of Assets” occurs on the date that any one person, or more
than one person acting as a group, acquires (or has acquired during the 12-month period ending on
the date of the most recent acquisition by such person or persons) assets from the Company that
have a total gross fair market value equal to or more than 40% of the total gross fair market value
of all of the assets of the Company immediately prior to such acquisition or acquisitions.

     1.9 “ECRIP” means the Illinois Tool Works Inc. Executive Contributory Retirement
Income Plan, as established effective April 1, 1993 and amended and restated effective January 1,
2008, and as amended from time to time thereafter.

 

 

     1.10 “Eligible Executive” means (i) any participant in ECRIP; (ii) any Company
executive entitled to certain benefits under the Premark Supplemental Plan, to the extent of any
Supplemental Benefit which is based on service through December 31, 2000, unless such person is an
Eligible Executive under either (i) or (iii); and (iii) any other Company executive who is eligible
to receive a Retirement Benefit, the amount of which is reduced by reason of the limitations on
compensation or benefits under Code Sections 401(a)(17) or 415(b) and who is designated as a
Participant by the CEO. Notwithstanding the foregoing, an Eligible Executive shall only be
considered such if he/she is part of a “select group of management or highly compensated employees”
within the meaning of Sections 201, 301 and 401 of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”).

     1.11 “Participant” means any Eligible Executive and any former Eligible Executive, to
whom or with respect to whom a Supplemental Benefit is payable.

     1.12 “Plan” means the Illinois Tool Works Inc. Nonqualified Pension Plan as amended
from time to time.

     1.13 “Qualified Plan” means the ITW Retirement Accumulation Plan as amended from time
to time.

     1.14 “Retirement Benefit” means the benefits payable to a Participant in the form of a
single life annuity under the Qualified Plan as of his/her Separation from Service. A Participant’s
Retirement Benefit shall include the value of any benefits paid or payable to an alternate payee
pursuant to a qualified domestic relations order with respect to the Qualified Plan.

     1.15 “Separation from Service” means the date of the Participant’s cessation of
services with the Company for any reason.

     1.16 “Supplemental Benefit” means the benefit payable to a Participant or Beneficiary
pursuant to Article III of the Plan.

ARTICLE II.

PARTICIPATION

     An executive of the Company shall become a Participant effective either (i) as of the date on
which he/she is notified by the Committee that he/she has become an Eligible Executive by
designation by the CEO, (ii) as of the first date he/she is eligible to make deferrals under ECRIP
following designation of eligibility for participation in ECRIP, or (iii) as of January 1, 2001, if
the executive was entitled to Premark Supplemental Plan benefits. Prior to a Corporate Change, the
CEO may determine that an individual who has been designated as a Participant shall cease to
participate herein.

ARTICLE III.

SUPPLEMENTAL BENEFIT

     A Participant’s Supplemental Benefit shall be determined as of his/her Separation from Service
by offsetting his/her actual Retirement Benefit against a hypothetical Retirement Benefit
calculated under the then-applicable provisions of the Qualified Plan, including all benefit
formulas, service credit, early retirement adjustments, vesting and eligibility requirements,
actuarial factors and other calculation methods under any such plan but not any limits on benefits
and compensation under Code Sections 415(b) and 401(a)(17), and as if there had been no deferrals
under ECRIP. Notwithstanding the foregoing, a Participant’s Supplemental Benefit as determined
above shall be adjusted as follows:

	 	(a)	 	The CEO in his sole discretion may determine that a Participant’s
Supplemental Benefit shall not reflect the Participant’s compensation and ECRIP
deferrals in excess of the then-current Code Section 401(a)(17) limit and
benefits in excess of the applicable limit under Code Section 415(b) and reduce
the Participant’s Supplemental Benefit accordingly; and
	 
	 	(b)	 	The CEO may determine that a Participant’s Supplemental Benefit
shall reflect additional service and compensation credits, as he shall deem
appropriate, and shall increase the Participant’s Supplemental Benefit
accordingly.

 

 

ARTICLE IV.

PAYMENT OF BENEFITS

     4.1 Commencement of Benefits. Except as provided in Section 4.2(c), payment of a
Participant’s Supplemental Benefit shall commence on the first day of the month following his/her
Separation from Service. A Participant’s or Beneficiary’s Supplemental Benefit that is being paid
in the form of installments shall continue to be credited with interest using a reasonable rate of
interest determined by the Committee.

     4.2 Payment Elections.

	 	(a)	 	Initial Election. A Participant shall submit an election
(according to the method prescribed by the Company) as to the form of payment of
his/her Supplemental Benefit, which form may be any of the forms of payment
permitted under the Qualified Plan (other than the level income option) or in a
lump sum or monthly installment payments over two to 20 years. Any such election
must be submitted within 30 days after the Participant’s commencement of Plan
participation as defined in Article II. If a Participant chooses a form of
payment available under the Qualified Plan or a lump sum, such form of payment
shall be the Actuarial Equivalent of the Participant’s Supplemental Benefit. If
a Participant (i) does not elect a form of payment, or (ii) as of his/her
Separation from Service, has not either attained age 55 with 10 years of service
or age 65 with 5 years of service, then the Participant shall receive his/her
Supplemental Benefit in the form of a lump sum payment on the first day of the
month following his/her Separation from Service.
	 
	 	(b)	 	Change to Prior Election. Effective January 1, 2009, a
Participant may elect to change a form of payment previously elected (or if the
Participant failed to elect a form of payment in accordance with Section 4.2,
then to elect a form other than the lump sum), provided (i) such new election
does not take effect until at least 12 months after the date the election is
made, and (ii) if commencement of payment is not related to the Participant’s
death, the first payment with respect to such new election is deferred for a
period of five years from the date such payment would otherwise have commenced.
However, a change from one type of life annuity permitted under the Qualified
Plan to another type of life annuity permitted under the Qualified Plan is not
considered a change in the form of payment, provided that (i) such change is made
before commencement of payment and (ii) such annuities are actuarially equivalent
applying reasonable actuarial methods and assumptions.
	 
	 	(c)	 	Key Employees. Payments to a Participant who is a key
employee (as defined in Section 409A) shall commence on the first day of the
seventh month commencing after his/her Separation from Service, unless retirement
is due to death. Upon commencement of payment, the Participant’s initial payment
shall include all amounts that would have been paid had there been no six-month
delay and the retroactive payments shall be credited with interest.

     4.3 Payment to Beneficiary. If the Participant elected to receive his/her
Supplemental Benefit as a lump sum or in monthly installment payments and dies prior to the
commencement or completion of payments, then the Participant’s Supplemental Benefit shall be paid
(or continue to be paid if payments had previously commenced) on the first day of the month
following the Participant’s date of death to his/her Beneficiary in accordance with his/her
previously-elected form of payment. If the Participant dies prior to commencement of payment and
(i) failed to make a form of payment election or (ii) elected to receive his/her Supplemental
Benefit in a form of payment available under the Qualified Plan, then the Participant’s
Supplemental Benefit shall be paid on the first day of the month following the Participant’s date
of death to his/her Beneficiary in a lump sum.

     4.4 Small Benefits. Notwithstanding anything in this Article IV to the contrary, if
the lump-sum Actuarial Equivalent of the Participant’s or Beneficiary’s Supplemental Benefit is
$25,000 or less on the Participant’s Separation from Service or death, such amount shall be paid in
a lump sum to the Participant or his/her Beneficiary on the first date of the month following the
Participant’s Separation from Service or death in full settlement of his/her benefits under this
Plan.

     4.5 Forfeiture of Supplemental Benefit. If, prior to a Corporate Change, a
Participant shall be discharged for gross misconduct or a Participant or Beneficiary shall at any
time, regardless of whether before or after the Participant’s Separation from Service, divulge
confidential Company information to other persons or otherwise act against the business interests
of the Company, then the Participant’s or Beneficiary’s Supplemental Benefit attributable to
compensation in excess of the Code Section 401(a)(17) limit may be forfeited by the Committee or
the CEO.

 

 

     4.6 Payment on Specified Date. For purposes of this Article IV, a payment shall be
treated as made (or commencing) on the payment commencement date specified in Section 4.1, 4.2,
4.3, or 4.4 as applicable, if the payment is made (or commences) on (i) such date, (ii) a later
date within the same taxable year of the Participant, or (iii) if later, by the fifteenth day of
the third calendar month following such date, provided that the Participant is not permitted,
directly or indirectly, to designate the taxable year of the payment.

ARTICLE V.

CLAIMS PROCEDURE

     5.1 Claim for Benefits. All claims for benefits shall be submitted in writing to the
Committee which shall process them and approve or disapprove them within 90 days following the date
that the claim is received by the Committee. If special circumstances arise and the Committee
cannot process the claim within 90 days, the Committee shall notify the claimant on or before the
close of the initial 90-day period that the time for making the decision is extended for up to 90
additional days. If the Committee fails to notify the claimant within the applicable period, the
claim is considered denied. If the Committee makes a determination to deny benefits to a claimant,
the denial shall be stated in writing by the Committee and delivered or mailed to the claimant.
Such notice shall set forth the specific reasons for the denial; be written in a manner that may be
understood by the claimant; refer to the specific Plan provisions upon which denial is based; and
describe the steps necessary for appeal.

     5.2 Request for Review of a Claim Denial. The claimant whose claim for benefits has
been denied shall have a period of 60 days from the date of the Committee’s denial in which to
appeal in writing to the Committee. The claimant or his/her duly authorized representative shall
have an opportunity to review pertinent documents and submit additional information, issues and
comments to the Committee.

     5.3 Decision Upon Review of a Claim Denial. The Committee (or its delegate) shall
review all evidence submitted by the claimant and shall communicate its decision to the claimant in
writing within 60 days of the date on which the request for review was received, unless special
circumstances require an extension of time for processing, in which case a decision shall be
rendered as soon as possible, but not later than 120 days after receipt of a request for review.
The Committee’s decision regarding the claim shall be final and binding.

     5.4 Timing of Judicial Action. No action at law or in equity may be brought to
recover benefits under the Plan until the Participant has exercised all appeal rights and the Plan
benefits requested in such appeal have been denied in whole or in part. Benefits under the Plan
shall be paid only if the Committee, in its discretion, determines that a claimant is entitled to
them. If a judicial proceeding is undertaken to appeal the denial of a claim or bring any other
action under ERISA other than a breach of fiduciary duty claim, the evidence presented will be
strictly limited to the evidence timely presented to the Committee. In addition, any such judicial
proceeding must be filed within 180 days after the Committee’s final decision.

ARTICLE VI.

ADMINISTRATION

     The Committee, which shall administer the Plan, shall have the power and duty to adopt such
rules and regulations consistent with Plan terms; to maintain records concerning the Plan; to
construe and interpret the Plan and resolve all questions arising under the Plan; to direct the
payment of Plan benefits; and to comply with the requirements of any applicable federal or state
law. Neither the Company, nor any employee or Board or Committee member, shall be liable to any
Eligible Executive, active or former Participant, Beneficiary or any other person for any claim,
loss, liability or expense incurred in connection with the Plan.

 

 

ARTICLE VII.

AMENDMENT AND TERMINATION

     7.1 Amendment and Termination. The Board may amend the Plan in whole or in part at any
time, including without limitation an amendment to discontinue benefit accruals. Any amendment
shall comply with Section 409A. The Board also may terminate the Plan at any time, subject to the
restrictions of Section 409A. In such event, each Participant and Beneficiary shall receive a
lump-sum payment of his/her Supplemental Benefit determined as if the effective date of Plan
termination was each Participant’s Separation from Service provided (i) the termination and
liquidation of the Plan does not occur proximate to a downturn in the financial health of the
Company; (ii) the Company terminates all non-qualified deferred compensation arrangements of the
same type at the same time that this Plan is terminated; (iii) the Company makes no payments to
Participants and Beneficiaries for 12 months but makes all payments within 24 months; and (iv) the
Company adopts no new non-qualified deferred compensation arrangement of the same type for three
years. No amendment or termination of the Plan shall, without the express written consent of the
affected Participant or Beneficiary, reduce such Participant’s or Beneficiary’s Supplemental
Benefit as of the effective date of such Plan amendment or termination.

     7.2 Corporate Change. The Board may terminate the Plan in conjunction with a Corporate
Change, provided that (i) the Company terminates the Plan within the 30 days preceding or the 12
months following a Corporate Change; and (ii) the Company terminates all non-qualified deferred
compensation arrangements of the same type at the same time that this Plan is terminated with
respect to each Participant that experienced Corporate Change. Following such termination, each
current Participant, former Participant and Beneficiary shall receive a lump-sum payment of his/her
Supplemental Benefit within the 12 months following the termination of the Plan.

ARTICLE VIII.

MISCELLANEOUS

     8.1 Corporate Successor. The Plan shall not terminate, but shall continue, upon a
transfer or sale of assets of the Company or upon the reorganization, merger or consolidation of
the Company into or with any other corporation or other entity; provided that it is not terminated
pursuant to Section 7.2 and the transferee, purchaser or successor agrees to continue the Plan. In
the event that the transferee, purchaser or successor does not continue the Plan, then the Plan
shall terminate to the extent permitted under Section 7.1 and the applicable restrictions under
Section 409A.

     8.2 No Implied Rights. Neither the establishment of the Plan nor any amendment thereof
shall be construed as giving any Participant, Beneficiary or any other person any legal or
equitable right unless such right shall be specifically provided for in the Plan or conferred by
specific action of the Committee in accordance with the terms and provisions of the Plan. Except as
expressly provided in this Plan, the Company shall not be required or be liable to make any payment
under this Plan. The provisions of this Plan document supersede and preempt any prior
understandings, agreements or representations by or between the Company and any Participant or
Beneficiary, written or oral, which may have related in any manner to the subject matter hereof.

     8.3 No Right to Company Assets. Neither the Participant nor any other person shall
acquire by reason of the Plan any right in or title to any assets, funds or property of the Company
including, without limitation, any specific funds, assets or other property that the Company, in
its sole discretion, may set aside in anticipation of a liability hereunder. Any benefits that
become payable hereunder shall be paid from the general assets of the Company. The Participant
shall have only a contractual right to the amounts, if any, payable hereunder unsecured by any
asset of the Company. In order to provide for the payment of Supplemental Benefits, the Company has
established an irrevocable trust, the assets of which are part of the Company’s general assets and
therefore subject to the claims of the Company’s general creditors in the event of insolvency. To
the extent any Supplemental Benefit is paid from the trust, the Company shall have no further
obligations to pay such Supplemental Benefit directly to the Participant or Beneficiary.

     8.4 No Employment Rights. Nothing herein shall constitute a contract of employment or
of continuing service or in any manner obligate the Company to continue the services of the
Participant or obligate the Participant to continue in the service of the Company, or as a
limitation of the right of the Company to discharge any of its employees, with or without cause.

 

 

     8.5 Offset. If, at the time payments are to commence hereunder, a Participant or
Beneficiary or both are indebted or obligated to the Company, then such payments may at the
discretion of the Committee be reduced by the amount of such indebtedness or obligation; provided,
however, that an election by the Committee not to reduce any such payments shall not constitute a
waiver of its claim for such indebtedness or obligation. In the event of an overpayment of benefits
under the Qualified Plan, the Committee may determine that all or part of the amount of the
overpayment may be recovered by an offset to the Participant’s or Beneficiary’s Supplemental
Benefit.

     8.6 Non-Assignability. Neither the Participant nor any other person shall have any
voluntary or involuntary right to commute, sell, assign, pledge, anticipate, mortgage or otherwise
encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable
hereunder, or any part thereof, which are expressly declared to be unassignable and
non-transferable. No part of the amounts payable shall be, prior to actual payment, subject to the
payment of any debts, judgments, alimony or separate maintenance owed by the Participant or any
other person, or be transferable by operation of law in the event of the Participant’s or any other
person’s bankruptcy or insolvency. This Section shall not apply to the creation, assignment, or
recognition of a right of any benefit payable pursuant to a domestic relations order, if such order
(i) meets the requirements of Section 414(p)(1)(B) of the Code, and (ii) does not require the
payment of a benefit to an alternate payee prior to the time benefits are payable pursuant to
Article IV, as determined by the Committee.

     8.7 Incapacity of Recipient. If a current or former Participant or a Beneficiary is
deemed by the Committee to be incapable of personally receiving any Supplemental Benefit payment,
then, unless and until claim therefor shall have been made by a duly appointed guardian or other
legal representative of such person, the Committee may provide for such payment or any part thereof
to be made to any other person or institution providing for the care and maintenance of such
person. Any such payment shall be for the account of such person and shall be a complete discharge
of any liability of the Company and the Plan therefor.

     8.8 Withholding of Taxes. The Company shall withhold any federal, state or local taxes
applicable to any Participant’s or Beneficiary’s Supplemental Benefit. Notwithstanding any other
Plan provision to the contrary, the payment of any Participant’s Supplemental Benefit may be
accelerated by the Company to the extent of any required FICA withholdings applicable to such
Supplemental Benefit (plus any other withholdings applicable to the withheld FICA amount).

     8.9 Governing Laws. Except to the extent not pre-empted by ERISA or other federal law,
the Plan shall be construed and administered according to the laws of the State of Illinois.

     8.10 Severability. Whenever possible, each provision of this Plan shall be interpreted
in such manner as to be effective and valid under applicable law, but if any provision of this Plan
is held to be invalid, illegal or unenforceable in any respect under applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision of this Plan or the validity, legality or
enforceability of such provision in any other jurisdiction, but this Plan shall be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.

	 	 	 	 	 
	 

	ILLINOIS TOOL WORKS INC.	 	 
	 
	 	 	 	 
	 

	By: 	/s/ Sharon M. Brady
 

Senior Vice President, Human Resourcesexv10wxsy

Exhibit 10(s)

ILLINOIS TOOL WORKS INC.

PHANTOM STOCK PLAN FOR NON-OFFICER DIRECTORS

The Plan set forth herein shall be known as the “Non-Officer Directors’ Phantom Stock Plan.”
Illinois Tool Works Inc. is hereinafter referred to as ITW.

	 	1.	 	Eligibility. Each member of ITW’s Board of Directors who is not an officer of
ITW shall be eligible to participate in the Plan and shall be known for the purposes of
this Plan as an “eligible director.”
	 
	 	2.	 	Purpose. The purpose of the Plan is to enable ITW to attract and retain as
members of its Board of Directors persons who are not officers of ITW, but whose experience
and judgment are a valuable asset to ITW. It is also intended to provide for the
equivalent of additional stock ownership to align the interests of the non-officer
(employee) directors with those of the stockholders.
	 
	 	3.	 	Grant of Phantom Stock Units. All eligible directors shall have their phantom
stock accounts credited with one thousand phantom stock units, with each unit having a
value at any time equal to the current market value of a share of ITW Common Stock.
	 
	 	4.	 	Plan Administration. The Plan shall be administered under the direction of the
Corporate Secretary of ITW. Each phantom stock account will be maintained by ITW Corporate
accounting, and annual statements will be issued reflecting current account balances
adjusted for dividend reinvestment and market value changes.
	 
	 	5.	 	Dividends. Whenever ITW declares a dividend on the ITW Common Stock, a
dividend award shall be made to all eligible directors as of the date of payment of the
dividend. The dividend award for an eligible director shall be determined by multiplying
the phantom stock units credited to the eligible director’s account on the date of payment
by the amount of the dividend paid on the ITW Common Stock. The dividend award shall be
converted into phantom stock units by dividing the award by the closing market price of a
share of ITW Common Stock as of the dividend payment date.
	 
	 	6.	 	Adjustments. In the event of a stock dividend on the ITW Common Stock, or any
split up or combination of shares of the ITW Common Stock, or other change therein,
appropriate adjustment shall be made to the phantom stock units in each eligible director’s
phantom stock account so as to give effect, to the extent practicable, to such change in
ITW’s capital structure.
	 
	 	7.	 	Distribution of Phantom Stock Account. An eligible director will be eligible
for a cash distribution for his/her phantom stock account at retirement, death or approved
resignation. This distribution will be in the form of a lump sum or annual installments
over one to ten years as elected by the eligible director at the time that this Plan was
implemented or upon appointment to the Board of Directors for future participants. The
distribution will take place on the first day of the month following the date of
retirement, death or approved resignation. With respect to grants made prior to January 1,
2005, any such election may be changed by the eligible director, provided that such change
is made no less than twenty-four months prior to the first distribution to the director.
With respect to grants made on or after January 1, 2005, any such election may be changed
by the eligible director, provided that (i) such new election does not take effect until at
least 12 months after the date the election is made; and (ii) if commencement of payment is
not related to the director’s disability (as defined in the Illinois Tool Works Inc.
Directors’ Deferred Fee Plan) or death, the first payment to the eligible director is
deferred for a period of five years from the date such payment would have otherwise
commenced. For installments, the payment on each distribution date shall be an amount
equal to the value of the phantom stock units credited to the eligible director’s account
on such distribution date, divided by the number of installments remaining to be paid. The
value of the phantom stock units to be distributed is determined by multiplying the market
value of a share of ITW Common Stock on the distribution date by the number of such phantom
stock units.
	 
	 	8.	 	Beneficiary Designation. Each eligible director or former eligible director
entitled to payment from a phantom stock account may name any person or persons to whom the
value of such director’s phantom stock account shall be paid in the event of his/her death.
Each designation will revoke all prior designations, shall be in writing and in a form
prescribed by the Corporate Secretary of ITW, and will be effective only when filed during
the eligible director’s or former eligible director’s lifetime with the Corporate Secretary
of ITW. If the director shall have failed to name a beneficiary, or if the named
beneficiary dies before receiving payment of the entire balance in such director’s phantom
stock account, payment of the remaining balance shall be made in a lump sum to the legal
representative of the estate of the director or named beneficiary, as applicable.

 

 

	 	9.	 	Miscellaneous.

	 	(a)	 	Establishment of this Plan and coverage hereunder of any person shall not
be construed to confer any right on the part of such person to be nominated for
reelection to the Board of Directors or to be reelected to the Board of Directors.
	 
	 	(b)	 	No eligible director may assign, pledge or encumber his/her interest
under the Plan, or any part thereof, except that an eligible director may designate
a beneficiary as provided in Paragraph 8 or may elect to assign his/her phantom
stock interests to a family trust or family partnership. However, under the
“assignment of income” tax doctrine, any distributions of the assigned phantom stock
interests would still be taxable to the eligible director as ordinary income.
	 
	 	(c)	 	No eligible director or beneficiary shall have any interest in ITW’s
assets by reason of his/her participation in the Plan. It is intended that ITW
merely has a contractual obligation to make payments when due hereunder and it is
not intended that ITW hold any funds in reserve or trust to secure payments
hereunder.

	 	10.	 	Amendment on Termination. This Plan may be amended or terminated at any time
by the Board of Directors; provided, however, that no such amendment or termination may,
without the consent of the eligible director, or his/her beneficiary in the case of his/her
death, reduce the right of the eligible director, or his/her beneficiary as the case may
be, to any payment under the Plan.
	 
	 	11.	 	Corporate Change. Notwithstanding the provisions of Paragraph 7, the value of
each eligible director’s phantom stock account shall be distributed immediately to the
director or his/her beneficiary in the event of a Corporate Change. “Corporate Change”
shall mean either a Change in Ownership, Change in Effective Control or a Change of
Ownership of a Substantial Portion of Assets, as defined in Section 409A of the Internal
Revenue Code of 1986, as amended (Code Section 409A) and summarized herein.

	 	(a)	 	A Change in Ownership occurs on the date that any one person, or more
than one person acting as a group (as defined in Code Section 409A), acquires
ownership of stock of ITW that, together with stock held by such person or group,
constitutes more than 50% of the total fair market value or total voting power of
the stock of ITW.
	 
	 	(b)	 	A Change in Effective Control occurs on the date that either (i) any one
person, or more than one person acting as a group, acquires (or has acquired during
the 12-month period ending on the date of the most recent acquisition by such person
or persons) ownership of stock of ITW possessing 35% or more of the total voting
power of the stock of ITW; or (ii) a majority of members of the Board of Directors
is replaced during any 12-month period by directors whose appointment or election is
not endorsed by a majority of the members of the Board of Directors prior to the
date of the appointment or election.
	 
	 	(c)	 	A Change of Ownership of a Substantial Portion of Assets occurs on the
date that any one person, or more than one person acting as a group, acquires (or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from ITW that have a total gross fair
market value equal to or more than 40% of the total gross fair market value of all
of the assets of ITW immediately prior to such acquisition or acquisitions.

	 	12.	 	Governing Law. This Plan shall be construed, administered and governed in all
respects under and by the laws of the State of Illinois. Grants made on or after January
1, 2005 are also subject to the provisions of Code Section 409A; accordingly, as applied to
those grants, the Plan shall at all times be interpreted and administered so that it is
consistent with Code Section 409A notwithstanding any provision of the Plan to the
contrary.
	 
	 	13.	 	Effective Date. This Plan shall become effective on the date of its adoption
by the Board of Directors of ITW.

	 	 	Approved by the Board of Directors: December 5, 2008

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00154-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00154-of-00352.parquet"}]]