Document:

exv4w5

Exhibit 4.5

ITT

DEFERRED COMPENSATION PLAN

Effective as of January 1, 1995

as amended and restated as of October 31, 2011 including amendments as of

January 1, 2012

 

 

ITT 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 1, 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. Effective as of July 1, 2006, the Plan’s name was revised to the
ITT Deferred Compensation Plan.

The Plan is hereby amended and restated, effective as of December 31, 2008 to comply with the
provisions of Section 409A of the Internal Revenue Code and regulations promulgated thereunder.

The provisions of this Plan as herein amended shall apply to amounts deferred on or after January
1, 2005. Amounts deferred under the provisions of the Plan prior to January 1, 2005, which were
vested as of December 31, 2004, shall be subject to the provisions of the Plan as in effect on
October 3, 2004 without regard to any Plan amendments after October 3, 2004 (attached hereto as
Appendix C and made part hereof) which would constitute a material modification for Code Section
409A purposes, unless otherwise provided in Appendix B attached hereto.

The Plan was amended, effective as of October 1, 2010, to reflect the changes in the timing of
enrollment and the definition of bonus.

Effective as of October 31, 2011, ITT split into three separate companies, ITT Corporation, Exelis
Inc. and Xylem Inc. Under the Benefits and Compensation Matters Agreement dated October 25, 2011,
the Corporation agreed to continue the Plan for eligible employees of the Corporation and all of

 

 

its subsidiaries and to transfer the liabilities attributable to participants who become or were
employees of Xylem Inc. or Exelis Inc., or one of their subsidiaries to Xylem Inc. or Exelis Inc.,
respectively.

The Plan was further amended, effective as of January 1, 2012, to include the deferral of Company
contributions that would have been made under the ITT Corporation Retirement Savings Plan for
Salaried Employees or the ITT Corporation Supplemental Retirement Savings Plan for Salaried
Employees, had the bonus amount deferred under the provisions of the Plan been paid directly to the
Participant.

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.

 

 

ITT DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS

	 	 	 	 	 

	ARTICLE 1 — DEFINITIONS 
	 	 	1	 
	1.01 Accleration Event 
	 	 	1	 
	1.02 Administrative Committee 
	 	 	1	 
	1.03 Asscoaited Company 
	 	 	1	 
	1.04 Based Slary 
	 	 	1	 
	1.05 Beneficiary 
	 	 	2	 
	1.06 Bonus 
	 	 	2	 
	1.07 Board of Directors 
	 	 	2	 
	1.08 Change in Control 
	 	 	2	 
	1.09 Code 
	 	 	2	 
	1.10 Company 
	 	 	2	 
	1.11 Company Contribution Account 
	 	 	2	 
	1.12 Company Core Contribution Rate 
	 	 	3	 
	1.13 Company Transition Credit Contribution Rate 
	 	 	3	 
	1.14 Compensation and Personnel Committee 
	 	 	3	 
	1.15 Corporation 
	 	 	3	 
	1.16 Deferral Account 
	 	 	3	 
	1.17 Deferral Agreement 
	 	 	3	 
	1.18 Deferrals 
	 	 	3	 
	1.19 Effective Date 
	 	 	3	 
	1.20 Eligible Executive 
	 	 	3	 
	1.21 Employee 
	 	 	4	 
	1.22 Executive 
	 	 	4	 
	1.23 ERISA 
	 	 	4	 
	1.24 Grandfathered Deferral Account 
	 	 	4	 
	1.25 Participant 
	 	 	4	 
	1.26 Performance Based Compensation 
	 	 	4	 
	1.27 Performance Period 
	 	 	4	 
	1.28 Plan 
	 	 	5	 
	1.29 Plan Committee 
	 	 	5	 
	1.30 Plan Year 
	 	 	5	 
	1.31 Reporting Date 
	 	 	5	 
	1.32 Retirement 
	 	 	5	 
	1.33 Savings Plan 
	 	 	5	 
	1.34 Special Purpose Subaccount(s) 
	 	 	6	 
	1.35 Specified Distribution Date 
	 	 	6	 
	1.36 Specified Employee 
	 	 	6	 
	1.37 Termination of Employment 
	 	 	7	 
	1.38 Termination Subaccount 
	 	 	7	 

 

 

	 	 	 	 	 

	ARTICLE 2 — PARTICIPATION 
	 	 	8	 
	2.01 Eligibility 
	 	 	8	 
	2.02 In General 
	 	 	8	 
	2.03 Termination of Participation 
	 	 	9	 
	 
	 	 	 	 
	ARTICLE 3 — DEFERRAL 
	 	 	10	 
	3.01 Filing Requirements 
	 	 	10	 
	3.02 Amount of Deferral 
	 	 	12	 
	3.03 Crediting to Deferral Account 
	 	 	13	 
	3.04 Excess Company Contribution 
	 	 	13	 
	3.05 Crediting to Company Contributing Account 
	 	 	14	 
	3.06 Vesting 
	 	 	14	 
	3.07 Unforeseeable Emergency 
	 	 	14	 
	 
	 	 	 	 
	ARTICLE 4 — MAINTENANCE OF ACCOUNTS 
	 	 	16	 
	4.01 Adjustment of Deferral and Grandfathered Deferral Account 
	 	 	16	 
	4.02 Investment Performance Elections 
	 	 	16	 
	4.03 Changing Investment Elections 
	 	 	17	 
	4.04 Investment of the Company Contribution Account 
	 	 	18	 
	4.05 Individual Accounts 
	 	 	18	 
	4.06 Valuation of Accounts 
	 	 	19	 
	4.07 Compliance with Securities Laws and Trading Policies and Procedures 
	 	 	19	 
	 
	 	 	 	 
	ARTICLE 5 — PAYMENT OF BENEFITS 
	 	 	21	 
	5.01 Commencement of Payment 
	 	 	21	 
	5.02 Method of Payment 
	 	 	24	 
	5.03 Change of Distribution Election 
	 	 	26	 
	5.04 Death 
	 	 	28	 
	5.05 Hardship 
	 	 	28	 
	5.06 Payment upon the Occurrence of a Change in Control 
	 	 	29	 
	5.07 Acceleration of or Delay in Payments 
	 	 	30	 
	5.08 Designation of Beneficiary 
	 	 	30	 
	5.09 Debiting Accounts 
	 	 	31	 
	 
	 	 	 	 
	ARTICLE 6 —  AMENDMENT OR TERMINATION 
	 	 	32	 
	6.01 Right to Terminate 
	 	 	32	 
	6.02 Right to Amend 
	 	 	32	 
	 
	 	 	 	 
	ARTICLE 7 —  GENERAL PROVISIONS 
	 	 	33	 
	7.01 Funding 
	 	 	33	 
	7.02 No Contract of Employment 
	 	 	33	 
	7.03 Unsecured Interest 
	 	 	33	 
	7.04 Facility of Payment 
	 	 	34	 
	7.05 Withholding Taxes 
	 	 	34	 
	7.06 Nonalienation 
	 	 	34	 

 

 

	 	 	 	 	 

	7.07 Transfers 
	 	 	34	 
	7.08 Claims Procedure 
	 	 	35	 
	7.09 Payment of Expenses 
	 	 	37	 
	7.10 Discharge of Corporation’s Obligation 
	 	 	37	 
	7.11 Successors 
	 	 	37	 
	7.12 Construction 
	 	 	37	 
	 
	 	 	 	 
	ARTICLE 8 —  ADMINISTRATION 
	 	 	39	 
	8.01 Administration 
	 	 	39	 
	 
	 	 	 	 
	APPENDIX A 
	 	 	41	 
	 
	 	 	 	 
	APPENDIX B 
	 	 	44	 
	 
	 	 	 	 
	APPENDIX C 
	 	 	46	 

 

 

ARTICLE 1 — DEFINITIONS

	1.01	 	“Acceleration Event” shall mean an “Acceleration Event” as such term is defined under the
provisions of the Plan as in effect on October 3, 2004.
	 
	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, as such term is defined the ITT Salaried
Retirement Plan (formerly known as ITT Industries Salaried Retirement Plan) as in the amended
from time to time. Effective on or after the October 31, 2011, “Associated Company” shall
mean any division, subsidiary or affiliated company of the Corporation which is an Associated
Company as such terms is defined in the ITT Corporation Retirement Savings Plan for Salaried
Employees, as amended from time to time.
	 
	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 benefit 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 5.08 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, provided that such amount qualifies
as “Performance Based Compensation”. Effective on and after October 1, 2010, “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 1ersonnel Committee
as a bonus hereunder.
	 
	1.07	 	“Board of Directors” or “Board” shall mean the Board of Directors of the Corporation.
	 
	1.08	 	“Change in Control” shall mean a “Change in Control” as such term is defined in the ITT
Excess Pension Plan IIA, (effective on and after October 31, 2011, the ITT Corporation
Supplemental Retirement Savings Plan for Salaried Employees) as amended from time to time.
	 
	1.09	 	“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
	 
	1.10	 	“Company” shall mean the Corporation and any successor thereto, with respect to its employees
and any Participating Corporation or Participating Division (as such terms are defined in the
Savings Plan) authorized by the Compensation and Personnel Committee to participate in the
Plan with respect to their employees.
	 
	1.11	 	“Company Contribution Account” shall mean the bookkeeping account (or subaccount(s))
maintained for each Member to record all amounts credited on his behalf under Section 3.04(a),
(b) and (c) adjusted pursuant to pursuant to Section 4.04.
	 
	1.12	 	“Company Core Contribution Rate” shall mean the rate of Company Core Contributions (as such
term in defined under the provisions of the Savings Plan) for a particular Plan Year.

Page 2

 

	1.13	 	“Company Transition Credit Contribution Rate” shall mean the rate of Company Transition
Credit Contributions (as such term in defined under the provisions of the Savings Plan) for a
particular Plan Year.
	 
	1.14	 	“Compensation and Personnel Committee” shall mean the Compensation and Personnel Committee of
the Board of Directors.
	 
	1.15	 	“Corporation” shall mean ITT Corporation, an Indiana corporation (successor by merger to and
formerly known as ITT Industries, Inc.), or any successor by merger, purchase, or otherwise.
	 
	1.16	 	“Deferral Account” shall mean the bookkeeping account maintained for each Participant to
record the amount of Bonus deferred on or after January 1, 2005 by a Participant in accordance
with Section 3.02, adjusted pursuant to Article 4. The Deferral Account shall contain
subaccounts, such as a Termination Subaccount, Special Purpose Subaccount(s), a Deferral 2005
Subaccount or any other subaccount established by the Administrative Committee.
	 
	1.17	 	“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.
	 
	1.18	 	“Deferrals” shall mean the amount of deferrals credited to a Participant pursuant to Section
3.02 with respect to Plan Years beginning on or after January 1, 2005.
	 
	1.19	 	“Effective Date” shall mean January 1, 1995.
	 
	1.20	 	“Eligible Executive” shall mean an Executive who is eligible to participate in the Plan as
provided in Section 2.01.

Page 3

 

	1.21	 	“Employee” shall mean a person who is employed by the Company.
	 
	1.22	 	“Executive” shall mean an Employee of the Company whose Base Salary equals or exceeds
$200,000 (or as adjusted from time to time by the Administrative Committee).
	 
	1.23	 	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time
to time.
	 
	1.24	 	“Grandfathered Deferral Account” shall mean the bookkeeping account maintained for each
Participant to record the amount of Bonus and/or Base Salary deferred prior to January 1, 2005
by a Participant in accordance with Article 3 of the Plan as in effect on or prior to October
3, 2004, adjusted pursuant to Article 4.
	 
	1.25	 	“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.
	 
	1.26	 	“Performance Based Compensation” shall mean a bonus where the amount of, or entitlement to,
the bonus is contingent on the satisfaction of pre-established organizational or individual
performance criteria relating to a performance period of at least twelve (12) consecutive
months. Organizational or individual performance criteria are considered pre-established if
established in writing by not later than ninety (90) days after the commencement of the period
of service to which the criteria relate, provided that the outcome is substantially uncertain
at the time the criteria are established. The determination of whether a Bonus qualifies as
“Performance-Based Compensation” will be made in accordance with Treas. Reg. Section
1.409A-1(e) and subsequent guidance.
	 
	1.27	 	“Performance Period” shall mean the period of a least twelve (12) months over which an
individual or a company’s performance is measured for purposes of the Company’s bonus program.

Page 4

 

	1.28	 	“Plan” shall mean the ITT Deferred Compensation Plan (which was formerly known as the ITT
Industries Deferred Compensation Plan, 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.
	 
	1.29	 	“Plan Committee” shall mean the ITT Pension Fund Trust and Investment Committee established
from time to time pursuant to the terms of the ITT Salaried Retirement Plan (the Savings Plan,
effective on and after the October 31, 2011).
	 
	1.30	 	“Plan Year” shall mean the calendar year.
	 
	1.31	 	“Reporting Date” shall mean each business day on which the New York Stock Exchange is open or
such other business day as the Administrative Committee may determine.
	 
	1.32	 	“Retirement” shall mean, 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 provisions of the ITT Salaried Retirement
Plan as in effect prior to October 31, 2011, or would have been eligible had he been a
participant in such Plan. Effective as of January 1, 2012 “Retirement” shall mean with
respect to an Eligible Employee who was not a member of the ITT Salaried Retirement Plan
immediately prior to October 31, 2011 and who becomes a Participant on or after January 1,
2012, the termination of employment by such Eligible Employee after the date such Eligible
Employee attains age 55 and completes 10 or more years of Service (as such term is defined in
the Savings Plan) or attains age 65, if earlier..
	 
	1.33	 	“Savings Plan” shall mean, effective as of October 31, 2011, the new ITT Corporation
Retirement Savings Plan for Salaried Employees (successor plan to the ITT Salaried Investment
and Savings Plan) as amended from time to time.

Page 5

 

	1.34	 	“Special Purpose Subaccount(s)” shall mean the bookkeeping account(s) described in Section
5.01(a) maintained to record deferrals that a Participant has elected to have paid pursuant to
clause (ii) of Section 5.01(a), adjusted pursuant to Article 4.
	 
	1.35	 	“Specified Distribution Date” shall mean the specific date designated by a Participant
pursuant to clause (ii) of Section 5.01(a).
	 
	1.36	 	“Specified Employee” shall mean a “specified employee” as such term is defined in the Income
Tax Regulations under Section 409A as modified by the rules set forth below:

	 	(a)	 	For purposes of determining whether a Participant is a Specified Employee, the
compensation of the Participant shall be determined in accordance with the definition
of compensation provided under Treas. Reg. Section 1.415(c) 2(d)(3) (wages within the
meaning of Code Section 3401(a) for purposes of income tax withholding at the source,
plus amounts excludible from gross income under Section 125(1), 132(f)(4), 402(e)(3),
402(h)(1)(B), 402(k) or 457(b), without regard to rules that limit the remuneration
included in wages based on the nature or location of the employment or the services
performed).
	 
	 	(b)	 	The “Specified Employee Identification Date” means December 31, unless the
Compensation and Personnel Committee has elected a different date through action that
is legally binding with respect to all nonqualified deferred compensation plans
maintained by the Company or any Associated Company.
	 
	 	(c)	 	The “Specified Employee Effective Date” means the first day of the fourth month
following the Specified Employee Identification Date or such earlier date as is
selected by the Compensation and Personnel Committee.

	1.37	 	“Termination of Employment” shall mean “Termination of Employment” as such term is defined in
the ITT Excess Pension Plan IIA, (effective on and after October 31, 2011, the ITT Corporation
Supplemental Retirement Savings Plan for Salaried Employees) as amended from time to time.

Page 6

 

	1.38	 	“Termination Subaccount” shall mean the bookkeeping account described in Section 5.01(a)
maintained to record deferrals that a Participant has elected to have paid pursuant to clause
(i) of Section 5.01(a), adjusted pursuant to Article 4.

Page 7

 

ARTICLE 2 — PARTICIPATION

	2.01	 	Eligibility
	 
	 	 	An Employee who is an Executive as of the last business day in June of a calendar year
commencing prior to January 1, 2011, and who was employed by the Company or an Associated
Company on the first day of the Performance Period beginning in that calendar year (or such
other date in the first quarter of such Performance Period as specified by the
Administrative Committee) 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 authorizing Deferrals under this Plan with respect to his Bonus payable
in the following Plan Year.
	 
	 	 	Effective as of October 1, 2010, an Employee who is an Executive as of the last business day
in October of a calendar year beginning on and after January 1, 2011 (or such later date in
that calendar year as determined by the Administrative Committee) 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 authorizing Deferrals under
this Plan with respect to his Bonus earned in such Plan Year.
	 
	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 in the
manner 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

Page 8

 

	 	 	Executive’s Bonus. The Deferral Agreement shall include such other provisions as the
Administrative Committee deems appropriate.
	 
	(c)	 	An Eligible Executive shall become a Participant when Deferrals are first
credited on his behalf pursuant to Article 3.

	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)	 	Subject to the provisions of Section 3.01, a Participant shall only be eligible
to have Deferrals credited on his behalf in accordance with Article 3 for as long as he
remains an Eligible Executive.
	 
	 	(c)	 	If a former Participant who has incurred a Termination of Employment 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 9

 

ARTICLE 3 — DEFERRALS

	3.01	 	Filing Requirements

	 	(a)	 	Subject to the following provisions of this Section, prior to the close of an
annual enrollment period established by the Administrative Committee, an Eligible
Executive who was employed by the Company or an Associated Company on the first day of
a Performance Period commencing prior to January 1, 2011 (or such other date in the
first quarter of such Performance Period as specified by the Administrative Committee)
and who remains continuously employed through the date his Deferral Agreement is
submitted, may elect to defer a portion of his Bonus earned with respect to that
Performance Period which is otherwise payable in the next Plan Year; provided the
Deferral Agreement is filed with Plan Administrative Committee (or its delegates) by
the date established by the Administrative Committee but no later than six months
before the end of the applicable Performance Period (the “Deferral Deadline Date”).
Notwithstanding the foregoing, any election to defer Bonus that is made in accordance
with this paragraph and that becomes payable as a result of the Participant’s death or
disability (as defined in Treas. Reg. Section 1.409A-1(e)) or upon a Change in Control
prior to the satisfaction of the performance criteria, will be void.
	 
	 	 	 	Effective as of October 1, 2010, and subject to the following provisions of this
Section, prior to the close of an annual enrollment period established by the
Administrative Committee that pertains to a Plan Year commencing on or after January
1, 2011, an Eligible Executive who is employed by the Company as of the last day of
such annual enrollment period or such other date prior to the end of that Plan Year
as determined by the Administrative Committee, may elect to defer a portion of his
Bonus earned in the following Plan Year, provided the Deferral Agreement is filed with
the Administrative Committee (or its delegates) by the date established by the
Administrative Committee, but not later than the last day of the calendar year
preceding the Plan Year in which such Bonus is earned (the “Deferral Election
Deadline”).

Page 10

 

	 	(b)	 	A Participant’s election to defer a portion of his Bonus for any calendar year
shall become irrevocable on the last day the deferral of such Bonus may be elected
under Section 3.01(a), except as otherwise provided in Section 3.02(c) or 3.07. A
Participant may revoke or change his election to defer a portion of Bonus 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)	 	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.
	 
	 	(d)	 	Notwithstanding any provision of the Plan to the contrary, an Eligible
Executive’s election to defer Bonus earned in a Plan Year commencing prior to January
1, 2011 shall only be effective if (1) the Eligible Executive files the Deferral
Agreement with respect to such Bonus no later than the earlier of (A) the applicable
Deferral Election Deadline (as defined in paragraph (a) above) or (B) the date that is
six months before the end of the Performance Period with respect to which the Bonus is
payable, (2) the Participant performs services continuously from the later of the
beginning of the Performance Period or the date the criteria are established through
the date the Deferral Agreement is submitted and (3) the Bonus is not readily
ascertainable as of the date the Deferral Agreement is filed.
	 
	 	 	 	Notwithstanding any provision of the Plan to the contrary, an Eligible Executive’s
election to defer Bonus earned in a Plan Year commencing on or after January 1, 2011
shall only be effective if (1) the Eligible Executive files the Deferral Agreement
with respect to such Bonus no later than the applicable Deferral Election Deadline (as
defined in paragraph (a) above), and (2) he is an Eligible Executive as of such
Deferral Election Deadline.

Page 11

 

	 	(e)	 	If a Participant ceases to be an Eligible Executive but continues to be
employed by the Company or an Associated 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 earned in a subsequent Plan Year until such time as he
shall once again become an Eligible Executive.
	 
	 	(f)	 	The Eligible Executive shall submit the Deferral Agreement in the manner
specified by the Administrative Committee and a Deferral Agreement that is not timely
filed shall be considered void and shall have no effect. The Administrative Committee
shall establish procedures that govern deferral elections under the Plan.

	3.02	 	Amount of Deferral

	 	(a)	 	The Compensation and Personnel Committee or its delegate may determine prior to
June 30th of a calendar year commencing prior to January 1, 2011 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 (or such other period as
determined by the Administrative Committee) prior to the date the Deferral Agreement
for the applicable Plan Year must be submitted to the Administrative Committee.
	 
	 	(b)	 	The Administrative Committee may establish maximum or minimum limits on the
amount of any Bonus which may be deferred and/or the timing of such Deferral. Eligible
Executives shall be given written notice of any such limits 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 Company or an Associated

Page 12

 

	 	 	 	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 6 months after receipt of the hardship withdrawal,

	 	 	 	the Eligible Executive’s Deferral Agreement with respect to Bonus in effect at that
time shall be cancelled. Any Bonus payment which would have been deferred pursuant to
that 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 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	 	Excess Company Contributions

	 	(a)	 	Excess Matching Contributions
	 
	 	 	 	With respect to Plan Years commencing on and after January 1, 2012, the amount of
Excess Matching Contributions credited to a Participant’s Company Contribution Account
for each particular Plan Year shall be equal to the Company Matching Contributions (as
defined under the provisions of the Savings Plan) for each particular Plan Year that
would have otherwise been credited on the Eligible Executive’s behalf under the
provisions of the Savings Plan or the ITT Corporation Supplemental Retirement Savings
Plan for Salaried Employees, as applicable, had the portion of an Eligible Executive’s
Bonus that would have otherwise been paid in that particular Plan Year not been
deferred under the provisions of Section 3.01(a) above.

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	 	(b)	 	Excess Core Contributions
	 
	 	 	 	With respect to Plan Years commencing on and after January 1, 2012, the amount of
Excess Core Contributions credited to a Participant’s Company Contribution Account for
each particular Plan Year shall be equal to Company Core Contribution Rate applicable
to the Eligible Executive in that particular Plan Year multiplied by the Eligible
Executive’s Bonus that would have otherwise been paid in that particular Plan Year had
not been deferred under the provisions of Section 3.01(a) above.
	 
	 	(c)	 	Excess Transition Credit Contributions
	 
	 	 	 	With respect to Plan Years commencing on and after January 1, 2012, the amount of
Excess Transition Credit Contributions credited to a Participant’s Company
Contribution Account for each particular Plan Year shall be equal to Company
Transition Credit Contribution Rate applicable to the Eligible Executive in that
particular Plan Year multiplied by the Eligible Executive’s Bonus that would have
otherwise been paid in that particular Plan Year had it not been deferred under the
provisions of Section 3.01(a) above.

	3.05	 	Crediting to Company Contribution Account
	 
	 	 	The contributions credited on a Participant’s behalf pursuant to Section 3.04(a), (b) and
(c) above shall be credited to a Participant’s Company Contribution Accounts at the same
time as they would have been credited to his accounts under the Savings Plan if not for the
Participant’s election to defer said Bonus under the terms of this Plan.
	 
	3.06	 	Vesting
	 
	 	 	A Participant shall at all times be 100% vested in his Deferral and his Company Contribution
Accounts.
	 
	3.07	 	Unforeseeable Emergency
	 
	 	 	Notwithstanding the foregoing provisions of this Article 3, the Compensation and Personnel
Committee may completely cease Deferrals made under all Deferral

Page 14

 

	 	 	Agreements then in effect with respect to the Participant upon the Participant’s providing
the Compensation and Personnel Committee with such evidence of an Unforeseeable Emergency
(as defined in Section 5.05) as the Compensation and Personnel Committee may deem
appropriate. In the event the Compensation and Personnel Committee finds the Participant
has incurred an Unforeseeable Emergency (as defined in Section 5.05), the Participant’s
Deferral Agreement in effect at that time shall be cancelled and subseqent Deferrals and any
corresponding Excess Company Contributions 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.

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ARTICLE 4 — MAINTENANCE OF ACCOUNTS

	4.01	 	Adjustment of Deferral and Grandfathered Deferral Account

	 	(a)	 	As of each Reporting Date, each Deferral Account (or subaccount thereof) and/or
Grandfathered Deferral Account shall be credited or debited with the amount of earnings
or losses with which such Deferral Account (or subaccounts thereof) and/or
Grandfathered 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 Plan Committee and elected by
the Participant pursuant to Section 4.02 for purposes of measuring the investment
performance of such Accounts. Any portion of a Participant’s Deferral Account (or
subaccount thereof) and/or Grandfathered 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 Plan 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 and/or Grandfathered Deferral Account.
The designation of any such investment funds or indices shall not require the
Corporation to invest or earmark their general assets in any specific manner. The Plan
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 Plan 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 or its delegate with respect to the investment

Page 16

 

		 	of his Deferral Account (or subaccount thereof) and/or Grandfathered Deferral Account within
such time period and in such manner 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 (or subaccount thereof) and/or Grandfathered Deferral Account.

	4.03	 	Changing Investment Elections
	 
	 	 	In the event the Plan 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 the existing account balance of his Deferral Account (or
subaccount thereof) and/or his Grandfathered Deferral Account, by filing an appropriate
written notice with the Administrative Committee or its delegate within such time periods
and in such manner as prescribed by the Administrative Committee, in advance of the date
such election is effective. The election shall be effective as soon as administratively
practicable after the date on which notice is timely filed or at such other time as
prescribed by the Administrative Committee on a basis uniformly applicable to all
Participants similarly situated.
	 
	 	 	A Participant may change his or her election of the investment fund or funds or index or
indices of investment performance used to measure the future investment performance of his
future Deferrals 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 Deferrals will be invested in accordance with his existing investment
election with respect to the current balance of his Deferral Account (or subaccount
thereof), provided, however, if such Participant is an “insider” (as defined in Section 16
of the Securities Exchange Act of 1934) and his existing investment elections include an
investment in the Corporation’s phantom stock fund, his future Deferrals shall be

Page 17

 

	 	 	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	 	Investment of the Company Contribution Account
	 
	 	 	A Participant shall have no choice or election with respect to the investments of his
Company Contribution Account. As of each Reporting Date, there shall be credited or debited
an amount of earnings or losses on the balance of the Participant’s Company Contribution
Account as of such Reporting Date which would have been credited had the Participant’s
Company Contribution Account been invested in the Fixed Rate Option or such other investment
option or options designated by the Plan Committee.
	 
	4.05	 	Individual Accounts

	 	(a)	 	The Administrative Committee shall maintain, or cause to be maintained on the
books of the Corporation, records showing the individual balance of each Participant’s
Deferral Account (or subaccount thereof) or Company Contribution Account and/or
Grandfathered Deferral Account. The Participant’s Deferral Account (or subaccount
thereof) shall be credited with the Deferrals made by the Participant pursuant to the
provisions of Article 3 and the Participant’s Deferral Account (or subaccount thereof)
and/or Grandfathered Deferral Account shall be credited and debited, as the case may
be, with hypothetical investment results determined pursuant to this Article 4.
	 
	 	 	 	Effective with respect to Plan Years commencing on and after January 1, 2012, a
Participant’s Company Contribution Account shall be credited pursuant to the
provisions of Section 3.04 and shall be credited and debited, as the case may be, with
hypothetical investment results determined pursuant to Section 4.04.
	 
	 	 	 	At least once a year each Participant shall be furnished with a statement setting
forth the value of his Deferral Account (or subaccount thereof his Company
Contribution Account and/or Grandfathered Deferral Account.

Page 18

 

	 	(b)	 	Within each Participant’s Deferral Account, Company Contribution Account and/or
Grandfathered 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.

	4.06	 	Valuation of Accounts

	 	(a)	 	The Administrative Committee shall value or cause to be valued each
Participant’s Deferral Account, Company Contribution Account and/or Grandfathered
Deferral Account at least monthly. On each Reporting Date there shall be allocated to
the Deferral Account and/or `Grandfathered Deferral Account of each Participant the
appropriate amount determined in accordance with Sections 4.01, 4.02 and 4.03, and with
respect to his Company Contribution Account, the appropriate amount determined in
accordance with Section 4.04.
	 
	 	(b)	 	Whenever an event requires a determination of the value of a Participant’s
Deferral Account, Company Contribution Account and/or Grandfathered 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.

	4.07	 	Compliance with Securities Laws and Trading Policies and Procedures
	 
	 	 	A Participant’s ability to direct investments into or out of a Corporation phantom stock
fund shall be subject to such terms, conditions and procedures as the Plan Administrator may
prescribe from time to time to assure compliance with Rule 16b-3 promulgated under Section
16(b) of the Securities Exchange Act of 1934, as amended (“Rule 16b-3”), and other
applicable requirements. Such procedures also may limit or restrict a Participant’s ability
to make (or modify previously made) Deferrals and distribution elections under the Plan. In
furtherance, and not in limitation, of the foregoing, to the extent a Participant acquires
any interest in an equity security under the Plan for purposes

Page 19

 

		 	of Section 16(b), the Participant shall not dispose of that interest within six (6) months,
unless such disposition is exempted by Section 16(b) or any rules or regulations promulgated
thereunder or with respect thereto. Any election by a Participant to invest any amount in a
Corporation phantom stock fund, and any elections to transfer amounts from or to the
Corporation phantom stock fund to or from any other investment fund or indices, shall be
subject to all applicable securities law requirements, including but not limited to the
those reflected in the prior sentence and Rule 16b-3, as well as all applicable stock
trading policies and procedures of the Corporation. To the extent any election violates any
securities law requirement, applicable trading policies and procedures of the Corporation,
or any terms or conditions established from time to time by the Administrative Committee
relating to such elections (whether or not reflected in the Plan), the election shall be
void.

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ARTICLE 5 — PAYMENT OF BENEFITS

	5.01	 	Commencement of Payment

	 	(a)	 	Subject to the limitations in Section 5.01(b) and except as otherwise provided
below, each time a Participant completes a Deferral Agreement, a Participant shall
designate on each applicable Deferral Agreement whether the related Deferrals, adjusted
in accordance with Article 4, will be allocated to one of the following subaccounts:

	 	(i)	 	Termination Subaccount
	 
	 	 	 	Except as otherwise provided in the Plan, amounts allocated to the Termination
Subaccount (after adjustment pursuant to Article 4) will be paid on the first
business day of the seventh month following the Participant’s Termination of
Employment.
	 
	 	(ii)	 	Special Purpose Subaccount
	 
	 	 	 	Except as otherwise provided in the Plan, amounts allocated to the Special
Purpose Subaccount (after adjustment pursuant to Article 4) will be paid as
elected by the Participant, on either (1) the date specified by the Participant,
or (2) the earlier of the date specified by the Participant or the first
business day of the seventh month following the Participant’s Termination of
Employment. The Specified Distribution Date for the Special Purpose Subaccount
shall be the month and year designated by the Participant on his or her initial
Deferral Agreement establishing that Special Purpose Subaccount, unless
otherwise modified in accordance with the provisions of Section 5.03.

	 	 	 	A Participant may elect to have his entire deferred Bonus allocated to the Termination
Retirement Subaccount or the Special Purpose Subaccount or to have a specified portion
of his Bonus allocated to one or more Subaccounts.

Page 21

 

	 	(b)	 	A Participant’s ability to elect to have his deferred Bonus allocated to the
Special Purpose Subaccount and the Participant’s selection of a Specified Distribution
Date shall be subject to the following limitations:

	 	(i)	 	deferred Bonus may only be allocated to the Participant’s Special
Purpose Subaccount if the Specified Distribution Date applicable to that
subaccount is at least twelve (12) months after the day of the Plan Year in which
the Bonus being deferred was earned; and
	 
	 	(ii)	 	a Participant may have only two Special Purpose Subaccounts
established on his behalf (and only one Specified Distribution Date applicable to
each Special Purpose Subaccount) at any one time; provided, however, that if the
Participant is prohibited from allocating any portion of a Deferral to his
existing Special Purpose Subaccounts because of the limitation contained in
Section 5.01(b)(i), the Participant may request pursuant to the procedures
established by the Administrative Committee that a new Special Purpose Subaccount
be established on his behalf in accordance with the provisions of Section 5.01.
Effective as of June, 2009, a Participant may have only five Special Purpose
Subaccounts established on his behalf (and only one Specified Distribution Date
applicable to each Special Purpose Subaccount) at any one time.

	 	(c)	 	(i) Except as otherwise provided below, and notwithstanding the foregoing with
respect to an Eligible Executive who completed a Deferral Agreement with respect to the
Plan Year beginning as of January 1, 2005, the distribution of the Participant’s
Deferral 2005 Subaccount (as defined below) shall commence, pursuant to Section 5.02,
on the occurrence of the distribution event made available under procedures established
from time to time by the Administrative Committee and as designated by the Participant
on his 2005 Deferral Agreement (“Common Distribution Date”). For purposes of this
Article a Participant Deferral 2005 Subaccount shall mean the bookkeeping

Page 22

 

	 	 	 	account maintained for each Participant to record the amount of Bonus deferred
in 2005 by a Participant in accordance with Article 3, adjusted as provided in
Article 4.
	 
	 	(ii)	 	Notwithstanding the foregoing, in the event a Participant incurs a
Termination of Employment for reasons other than Retirement prior to his Common
Distribution Date , the distribution of his Deferral 2005 SubAccount shall
commence, pursuant to Section 5.02, on the first business day of the seventh
month following his Termination of Employment; provided, however, if a
Participant has prior to the date of his Termination of Employment, in accordance
with the procedures prescribed by the Administrative Committee, made a special
termination election, the distribution of his Deferral 2005 Account shall
commence, pursuant to Section 5.02, on the later of (1) 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”) or (2) the first business day
of the seventh month following such Participant’s Termination of Employment.
	 
	 	(iii)	 	In the event a Participant elects pursuant to the foregoing
provisions of this paragraph (c) 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)	 	A Participant shall not change his designation of the distribution event made
pursuant to the foregoing provisions of this Section 5.01 which entitles him to a
distribution of his Deferral Account, except as otherwise provided in Section 5.03
below.

Page 23

 

	 	(e)	 	Notwithstanding any Plan provisions to the contrary, the distribution of a
Participant’s Grandfathered Deferral Account shall be made in accordance with
provisions of the Plan as in effect on October 3, 2004, as modified in Appendix B and
without regard to any Plan amendments after that date which would constitute a material
modfication for Code Section 409A purposes.
	 
	 	(f)	 	Except as otherwise provided in Section 5.04, a Participant shall be entitled
to receive payment of his Company Contribution Account upon his Termination of
Employment with the Company and all Associated Companies for any reason, other than
death. The distribution of his Companty Contribution Account shall be made in the
seventh month following the date theParticipant’s Termination of Employment occurs.

	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 (c) the Participant shall
elect that the portion of his Deferral Account (or any subaccount thereof) 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 fifteen (15) years, designated by the Participant on his
Deferral Agreement, or
	 
	 	(2)	 	a single lump sum cash payment.

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

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

	 	(2)	 	a single lump sum cash payment.

Page 24

 

	 	 	 	During an installment payment period, the Participant’s Deferral Account (or
subaccounts thereof) shall continue to be credited with earnings or losses as
described in Section 4.01. The value of the first installment or lump sum payment
shall be determined as of the first Reporting Date coincident with or next following
the distribution event designated pursuant to Section 5.01 or 5.03 with respect to
that portion of his Deferral Account. Subsequent installments, if any, shall be paid
on the first business day 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 applicable portion of the
Participant’s Deferral Account (or subaccounts) 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 of a Participant’s Deferral
2005 Subaccount is to be made pursuant to Section 5.01(c) 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 of his Deferral 2005 Subaccount
shall be made as of the first business day of the seventh month following the
Participant’s Termination of Employment.
	 
	 	(c)	 	A Participant shall not change his method of payment, except as otherwise
provided in Section 5.03.
	 
	 	(d)	 	Notwithstanding any Plan provision to the contrary, the form of distribution of
a Participant’s Grandfathered Deferral Account shall be made in accordance with the
provisions of the Plan as in effect on October 3, 2004, as modified in Appendix B and
without regard to any Plan amendments after that date which would constitute a material
modification for Code Section 409A purposes.

Page 25

 

	 	(e)	 	Notwithstanding any Plan provision to the contrary, payment of a Participant’s
Company Contribution Account shall be made in a single lump sum payment.

	5.03	 	Change of Distribution Election

	 	(a)	 	Changes in Election
	 
	 	 	 	In accordance with such procedures as the Administrative Committee may prescribe, a
Participant may elect to delay the payment of Deferrals by specifying a new Common
Distribution Date, a Special Effective Termination Distribution Date or a Specified
Distribution Date applicable to a portion of his Deferral Account (or subaccounts
thereof) payable at said dates by duly completing, executing and filing with the
Administrative Committee a new election, on an appropriate form designated by the
Administrative Committee, subject to the following limitations:

	 	(i)	 	such new election must be made at least twelve (12) months prior to
the Common Distribution Date, Special Effective Termination Distribution Date or
Specified Distribution Date, whichever is then in effect with respect to that
portion of his Deferral Account (or subaccounts thereof), and such election will
not become effective until at least twelve (12) months after the date on which
the new election is made, and
	 
	 	(ii)	 	the new Common Distribution Date, Special Effective Termination
Distribution Date or Specified Distribution Date, whichever is applicable, shall
be a date that is not less than five (5) years from the Common Distribution Date,
Special Effective Termination Distribution Date or Specified Distribution Date
then in effect.

	 	 	 	A Participant may elect to delay a Common Distribution Date, Special Effective
Termination Distribution Date or Specified Distribution Date applicable to a specified
portion of his Deferral Account pursuant to this Section 5.03(a) more than once,
provided that all such elections comply with the provisions of this Section 5.03(a).

Page 26

 

	 	(b)	 	In accordance with such procedures as the Administrative Committee may
prescribe, a Participant may elect to change the form of payment election under Section
5.02 applicable to the portion of his Deferral Account (or subaccounts thereof) that is
deferred to a Common Distribution Date, Special Effective Termination Distribution Date
or Specified Distribution Date by duly completing, executing and filing with the
Administrative Committee a new form of payment election, subject to the following
limitations:

	 	(i)	 	such new election must be made at least twelve (12) months prior to
the Common Distribution Date, Special Effective Termination Distribution Date or
Specified Distribution Date, whichever is then in effect with respect to that
portion of his Deferral Account (or subaccounts thereof), and such election will
not become effective until at least twelve (12) months after the date on which
the election is made, and
	 
	 	(ii)	 	the distribution of that portion of his Deferral Account (or
subaccounts thereof) shall be deferred for five (5) years from the date such
amount would otherwise have been paid absent this new election.

	 	(c)	 	A Participant may change the election as applicable to his Grandfathered
Deferral Accounts pursuant to the provisions of the Plan as in effect on October 3,
2004, as modified in Appendix B and without regard to any Plan amendments after that
date which would constitute a material modification for Code Section 409A purposes.
	 
	 	(d)	 	It is the Company’s intent that the provisions of Section 5.03(a) and Section
5.03(b) comply with the subsequent election provisions in Code Section 409A(a)(4)(C),
related regulations and other applicable guidance, and this Section 5.03(a) and Section
5.03(b) shall be interpreted accordingly. The Administrative Committee may impose
additional restrictions or conditions on a Participant’s ability to elect a new
specified distribution year pursuant to this Section 5.03(a) and Section 5.03(b). The
Participant may revoke or change his election pursuant to this Section 5.03(a) and

Page 27

 

	 	 	 	Section 5.03(b) at any time prior to the deadline for making such election, subject
to such restrictions as the Administrative Committee may establish from time to time.
Any such revocation or change shall be made in a form and manner determined by the
Administrative Committee. For avoidance of doubt, a Participant may not elect to
change the form of payment or delay payment of amounts deferred to Retirement or
Termination of Employment. In addition a Participant may not transfer amounts between
his Termination Subaccount and any Special Purpose Subaccount, or between Special
Purposes Subaccounts.

	 	(e)	 	Transition Rules
	 
	 	 	 	Notwithstanding anything in the Plan to the contrary, the Administrative Committee
may, in its discretion and subject to such terms and conditions as it may from
time to time prescribe, allow Participants to change the time of payment or
portion of payment of all or a portion of their Deferral Accounts (or
subaccounts) prior to January 1, 2009 in accordance with applicable transition
relief provided with respect to Code Section 409A, dated regulations and other
applicable guidance.

	5.04	 	Death
	 
	 	 	Notwithstanding any Plan provisions to the contrary, if a Participant dies before payment of
the entire balance of his Deferral Account and his Company Contribution 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. Such payment will be made in the month following the month the
Participant’s death occurs.
	 
	5.05	 	Hardship
	 
	 	 	Notwithstanding anything in the Plan or in a Deferral Agreement to the contrary, the
Administrative Committee may, if it determines an Unforeseeable Emergency exists which
cannot be satisfied 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 from a Participant’s Deferral
Account pursuant to the provisions of this Section 5.05 shall be limited to the

Page 28

 

	 	 	amount reasonably necessary to satisfy the emergency need (which may include amounts
necessary to pay any Federal, state, local or foreign income taxes or penalties reasonably
anticipated to result from the distribution). Determinations of amounts necessary to
satisfy the emergency need must take into account any additional compensation that is
available, other than additional compensation that, due to the Unforeseeable Emergency, is
available under another nonqualified deferred compensation plan but that has not actually
been paid. This Section 5.05 is intended to comply with Code Section 409A, related
regulations and any other applicable guidance and shall be interpreted accordingly so that
distributions shall be permitted under this Section 5.05 only to the extent they comply with
Code Section 409A and the regulations promulgated thereunder. For purposes of this Section
5.05 an “Unforeseeable Emergency” shall mean a severe financial hardship to a Participant
resulting from (a) an illness or accident of the Participant or the Participant’s spouse,
beneficiary or dependent (as defined in Code Section 152, without regard to Section
152(b)(1), (b)(2) and (d)(1)(B)), (b) loss of the Participant’s property due to casualty
(including the need to rebuild a home following damage to the home not otherwise covered by
insurance) or (c) other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Participant; provided, however, that an
Unforeseeable Emergency shall only exist to the extent the severe financial hardship would
constitute an Unforeseeable Emergency under Code Section 409A, related regulations and other
applicable guidance. Such payments shall be paid in a single lump sum within ninety (90)
days of the date the Unforeseeable Emergency payment is approved by the Administrative
Committee.
	 
	5.06	 	Payment upon the Occurrence of a Change in Control
	 
	 	 	Notwithstanding the foregoing provisions of this Article 5, upon the occurrence of a Change
in Control, every Participant who is an Eligible Executive or a former Eligible Executive
shall automatically receive the entire balance of his Deferral Accounts and his Company
Contribution Account in a single lump sum payment. Such lump sum payment shall be made as
soon as practicable on or after the Change in Control. If such Participant dies after such
Change in Control, but before receiving such payment, it shall be made to his Beneficiary.

Page 29

 

	 	 	For avoidance of doubt, upon the occurrence of an Acceleration Event (either prior, after or
simultaneously with the occurrence of a Change of Control), the provisions of Section 5.06
of the Plan as in effect on October 3, 2004 without regard to any Plan amendments after
October 3, 2004 which would constitute a material modification for Code Section 409A
purposes, shall be applicable to a Participant’s Grandfathered Deferral Account.
	 
	5.07	 	Acceleration of or Delay in Payments
	 
	 	 	The Administrative Committee, in its sole and absolute discretion, may elect to accelerate
the time or form of payment of a benefit owed to the Participant hereunder, provided such
acceleration is permitted under Treas. Reg. Section 1.409A-3(j)(4). The Administrative
Committee may also, in its sole and absolute discretion, delay the time for payment of a
benefit owed to the Participant hereunder, to the extent permitted under Treas. Reg. Section
1.409A-2(b)(7).
	 
	5.08	 	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 5.04 or 5.06. 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 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.

Page 30

 

	5.09	 	Debiting Accounts
	 
	 	 	Any amounts debited from a Participant’s Deferral Account, Company Contribution Account, or
Granfathered Deferral Account by reason of a distribution, withdrawal, or otherwise under
this Article 5, shall be debited from the Participant’s Deferral Account, Company
Contribution Account, and/or Grandfathered Deferral Account and the investment options under
which such amount is credited, and such other accounts, subaccounts, options, or other
allocations, as determined by the Administrative Committee on a basis uniformly applicable
to all Participants similarly situated.

Page 31

 

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. To
the extent consistent with the rules relating to plan terminations and liquidations in
Treasury Regulation Section 1.409A-3(j)(4)(ix) or otherwise consistent with Code Section
409A, the Board may provide that, without the prior written consent of Participants, all of
the Participants’ Deferral Accounts and Company Contribution Account shall be distributed in
a lump sum upon termination of the Plan. Unless so distributed, in the event of a Plan
termination, the Corporation shall continue to maintain the Deferral Accounts until
distributed pursuant to the terms of the Plan and Participants shall remain 100% vested in
all amounts credited to their Deferral Accounts and their Company Contribution Account. For
avoidance of doubt, in the event of a Plan termination, distribution of a Grandfathered
Deferral Account shall be governed by the provisions of the Plan as in effect on October 3,
2004.
	 
	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
5.06 or Section 6.01 under Appendix A, attached hereto and made part hereof. A change in any
investment fund or index under Sections 4.01 or 4.04 shall not be deemed to adversely affect
any Participant’s rights to his Deferral Accounts, Company Contribution Account or
Grandfathered 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 32

 

ARTICLE 7 — GENERAL PROVISIONS

	7.01	 	Funding
	 
	 	 	All amounts payable in accordance with this Plan shall constitute a general unsecured
obligation of the Corporation. Such amounts, as well as any administrative costs relating to
the Plan, shall be paid out of the general assets of the Corporation. The Administrative
Committee may decide that a Participant’s Deferral Account, Company Contribution Account
and/or Grandfather 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 Corporation, the Company nor the Compensation and Personnel Committee nor the
Administrative Committee nor the Plan 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 Corporation. 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 Corporation 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 Corporation.

Page 33

 

	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 has died, or if a Beneficiary is a minor, the
Administrative Committee may direct that any benefit payment due him, unless claim shall
have been made therefore 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 Corporation, the Company and the Plan for
that payment.
	 
	7.05	 	Withholding Taxes
	 
	 	 	The Corporation shall have the right to deduct from each payment to be made under the Plan
any required withholding taxes.
	 
	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

Page 34

 

	 	 	 	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, Company Contribution Account and/or
Grandfathered 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
Corporation.

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

Page 35

 

	 	(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;
	 
	 	(iv)	 	An explanation of the Plan’s claim review procedure; and
	 
	 	(v)	 	The time limits for requesting a review under this Section.

	 	 	 	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 ninety (90) days following the date on which the claim is filed.
Such an extension may not exceed a period of ninety (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 ninety (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 sixty (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 sixty (60) days after receipt of the request for review, the persons
designated by the Company to hear such appeals (the “Appeals 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

Page 36

 

	 		 	extension. Such decision by the Appeals 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 Corporation, except as otherwise may be provided herein.
	 
	7.10	 	Discharge of Corporation’s Obligation
	 
	 	 	The payment by the Corporation of the benefits due under each and every Deferral Agreement
and/or Section 3.04 to the Participant or his Beneficiary shall discharge the Corporation’s
obligation under the Plan, and the Participant or Beneficiary shall have no further rights
under this Plan or the Deferral Agreements upon receipt by the appropriate person of all
such benefits.
	 
	7.11	 	Successors
	 
	 	 	The Plan shall be binding upon the successors and assigns of the Corporation, whether such
succession is by purchase, merger or otherwise.
	 
	7.12	 	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

Page 37

 

	 	 	 	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.

Page 38

 

ARTICLE 8 —  ADMINISTRATION

	8.01	 	Administration

	 	(a)	 	The Administrative Committee shall mean the ITT Benefits Administration
Committee established from time to time pursuant to the terms of the ITT Salaried
Retirement Plan (effective on and after January 1, 2012, the Savings Plan). The
Administrative 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.
	 
	 	(c)	 	With respect to benefits hereunder subject to Code Section 409A, the Plan is
intended to comply with the requirements of Code Section 409A and the provisions hereof
shall be interpreted in a manner that satisfies the requirements of Code Section 409A
and the regulations thereunder, and the Plan shall be operated accordingly. If any
provision of the Plan would otherwise frustrate or

Page 39

 

	 	 	 	conflict with this intent, the provision will be interpreted and deemed amended so as
to avoid this conflict. The Plan has been administered in good faith compliance with
Section 409A and the guidance issued thereunder from January 1, 2005 through December
31, 2008.

Page 40

 

	 	 	APPENDIX A

SPECIAL PROVISIONS APPLICABLE TO CERTAIN PARTICIPANTS

WHO DEFERRED BASE SALARY UNDER THIS PLAN

This Appendix A constitutes a part of this Plan and 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.

Page 41

 

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 Salaried Investment and Savings
Plan.

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 Salaried Investment and Savings Plan had they been contributed thereunder. In the
event the Participant terminates 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 I 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.

Page 42

 

	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.

Page 43

 

APPENDIX B

PROVISIONS APPLICABLE TO A PARTICIPANT’S

GRANDFATHERED DEFERRAL ACCOUNT

This Appendix B constitutes an integral part of the Plan and is applicable with respect to the
Grandfathered Deferral Account of those individuals who were Participants in the Plan on December
31, 2004. The Grandfathered Deferral Account is subject to all the terms and conditions of the
Plan as set forth on October 3, 2004, without regard to any Plan amendments after October 3, 2004,
which would constitute a material modification for Code Section 409A. Section references in this
Appendix B correspond to appropriate Sections of the Plan as set forth on October 3, 2004 as
setforth in Appendix C.

ARTICLE 1 — DEFINITIONS

	1.13	 	“Deferral Account” means the Participant’s Grandfathered Deferral Account as set forth in
Section 1.21 of the foregoing provisions of the Plan.

ARTICLE 3 — DEFERRALS

	 	 	The provisions of Section 3.03, 3.04 and 3.05 shall continue to apply to a Participant’s
Grandfathered Deferral Account.

ARTICLE 4 — MAINTENANCE OF ACCOUNTS

The provisions of Section 4 as set forth in the foregoing provisions of the Plan as amended
and restated effective as December 31, 2008, shall be applicable to a Participant’s Grandfathered
Deferral Account on and after January 1, 2009.

ARTICLE 5 — PAYMENT OF BENEFITS

For purposes of this Article 5 — Payment of Benefits, the term “termination of employment” or any
other similar language means, with respect to a Participant, the complete cessation of providing
service to the Company and all Associated Companies as an employee.

Page 44

 

Except as provided in the preceding sentence and below, the provisions of Article 5 shall continue
to apply to a Participant’s Grandfathered Deferral Account.

	5.04	 	Hardship
	 
	 	 	A distribution shall not be made pursuant to this Section 5.04,unless the Participant incurs
an “unforeseeable emergency” as such term is defined in Section 5.06 of the foregoing
provisions of this Plan.
	 
	5.07	 	Designation of Beneficiary
	 
	 	 	The provisions of Section 5.07 as set forth in the foregoing provisions of the Plan as
amended and restated effective as December 1, 2008, shall be applicable to a Participant’s
Grandfathered Deferral Account on and after January 1, 2009.
	 
	5.08	 	Debiting Accounts
	 
	 	 	The provisions of Section 5.08 as set forth in the foregoing provisions of the Plan as
amended and restated effective as December 1, 2008, shall be applicable to a Participant’s
Grandfathered Deferral Account on and after January 1, 2009.

Page 45

 

APPENDIX C

PROVISIONS OF THE PLAN AS IN EFFECT ON OCTOBER 3, 2004

This Appendix C constitutes a part of this Plan and contains the Plan provisions as in effect on
October 3, 2004.

Page 46Exhibit 10.1

Exhibit 10.1

Western Digital Corporation

Summary of Compensation Arrangements

for

Named Executive Officers and Directors

NAMED EXECUTIVE OFFICERS

Base Salaries. The current annual base salaries for the current executive officers of Western
Digital Corporation (the “Company”) who were named in the Summary Compensation Table in the
Company’s Proxy Statement that was filed with the Securities and Exchange Commission in connection
with the Company’s 2011 Annual Meeting of Stockholders (the “Named Executive Officers”) are as
follows:

	 	 	 	 	 	 	 
	Named Executive Officer	 	Title	 	Current Base Salary	 
	John F. Coyne
	 	President and Chief Executive Officer	 	$	1,000,000	 
	Timothy M. Leyden
	 	Chief Operating Officer	 	$	600,000	 
	Wolfgang U. Nickl
	 	Senior Vice President and Chief Financial Officer	 	$	400,000	 
	James J. Murphy
	 	Executive Vice President, Worldwide Sales and Sales Operations	 	$	425,000	 
	James K. Welsh III
	 	Executive Vice President and GM, Branded Products	 	$	400,000	 
	James D. Morris
	 	Executive Vice President and GM, Storage Products	 	$	400,000	 

Semi-Annual Bonuses. Under the Company’s Incentive Compensation Plan (the “ICP”), the Named
Executive Officers are also eligible to receive semi-annual cash bonus awards that are determined
based on the Company’s achievement of performance goals pre-established by the Compensation
Committee (the “Committee”) of the Company’s Board of Directors as well as other discretionary
factors. The ICP, including the performance goals established by the Committee for the first half
of fiscal 2012, are further described in the Company’s current report on form 8-K filed with the
Securities and Exchange Commission on August 15, 2011, which is incorporated herein by reference.

Additional Compensation. The Named Executive Officers are also eligible to receive
equity-based incentives and discretionary bonuses as determined from time to time by the Committee,
are entitled to participate in various Company plans, and are subject to other written agreements,
in each case as set forth in exhibits to the Company’s filings with the Securities and Exchange
Commission. In addition, the Named Executive Officers may be eligible to receive perquisites and
other personal benefits as disclosed in the Company’s Proxy Statement filed with the Securities and
Exchange Commission in connection with the Company’s 2011 Annual Meeting of Stockholders.

 

 

 

DIRECTORS

Annual Retainer and Committee Retainer Fees. The following table sets forth the current
annual retainer and committee membership fees payable to each of the Company’s non-employee
directors:

	 	 	 	 	 
	 	 	Current Annual	 
	Type of Fee	 	Retainer Fees	 
	Annual Retainer
	 	$	75,000	 
	Lead Independent Director Retainer
	 	$	20,000	 
	Non-Executive Chairman of Board Retainer
	 	$	100,000	 
	Additional Committee Retainers
	 	 	 	 
	• Audit Committee
	 	$	10,000	 
	• Compensation Committee
	 	$	5,000	 
	• Governance Committee
	 	$	2,500	 
	Additional Committee Chairman Retainers
	 	 	 	 
	• Audit Committee
	 	$	15,000	 
	• Compensation Committee
	 	$	10,000	 
	• Governance Committee
	 	$	7,500	 

The retainer fee to the Company’s lead independent director referred to above is paid only if
the Chairman of the Board is an employee of the Company. Effective commencing with the Company’s
2010 Annual Meeting of Stockholders, the annual retainer fees are paid immediately following the
Annual Meeting of Stockholders.

Non-employee directors do not receive a separate fee for each Board of Directors or committee
meeting they attend. However, the Company reimburses all non-employee directors for reasonable
out-of-pocket expenses incurred to attend each Board of Directors or committee meeting. Mr. Coyne,
who is an employee of the Company, does not receive any compensation for his service on the Board
or any Board committee.

Additional Director Compensation. The Company’s non-employee directors are also entitled to
participate in the following other Company plans as set forth in exhibits to the Company’s filings
with the Securities and Exchange Commission: Non-Employee Director Option Grant Program and
Non-Employee Director Restricted Stock Unit Grant Program, each as adopted under the Company’s
Amended and Restated 2004 Performance Incentive Plan; Amended and Restated Non-Employee Directors
Stock-for-Fees Plan; and Deferred Compensation Plan.

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