8-KMaterial AgreementsExhibits & Filings

ILLINOIS TOOL WORKS INC 8-K Report, Material Agreement (Dec 16, 2004)

Filed December 16, 2004For Securities:ITW

Summary

Illinois Tool Works Inc. (ITW) filed an 8-K on December 15, 2004, reporting amendments to key employee benefit plans. The primary focus is on changes made to the 1996 Stock Incentive Plan and the Executive Contributory Retirement Income Plan (ECRIP). These amendments are designed to enhance executive compensation and retention by offering more flexibility and potentially greater benefits to key personnel. Specifically, the stock incentive plan was amended to allow the Compensation Committee to modify restricted stock grants, enabling them to vest upon retirement, disability, or death. This provides executives with greater security and potential for wealth accumulation tied to their tenure and service. The ECRIP was also amended to permit participants to continue deferring compensation for periods commencing on and after January 1, 2005, offering continued tax-advantaged savings opportunities for executives.

Key Highlights

  • 1Amendment to the 1996 Stock Incentive Plan allows for modified restricted stock grants to vest upon retirement, disability, or death.
  • 2Changes aim to enhance executive retention and provide greater financial security to key employees.
  • 3The Executive Contributory Retirement Income Plan (ECRIP) was amended to allow continued compensation deferrals beyond January 1, 2005.
  • 4This ECRIP amendment provides executives with ongoing opportunities for tax-advantaged retirement savings.
  • 5Details on bonus structures for executive officers are provided, including performance-based and company-wide net income components.
  • 6Maximum bonus opportunities range from 70% to 200% of base salary, with performance metrics tied to individual and company financial results.
  • 7The filing includes copies of the plan amendments and forms of related agreements as exhibits.

Frequently Asked Questions

The company amended its 1996 Stock Incentive Plan to allow restricted stock grants to vest upon retirement, disability, or death. It also amended its Executive Contributory Retirement Income Plan (ECRIP) to permit continued compensation deferrals from January 1, 2005, onwards.

These amendments provide executives with increased financial security and retention incentives. The vesting of restricted stock upon retirement, disability, or death offers a significant benefit, while the continued ECRIP deferral option allows for ongoing tax-advantaged savings.

Executive officers receive annual cash bonuses based on predetermined financial and non-financial objectives. Maximum bonus opportunities range from 70% to 200% of base salary. A portion of the bonus is tied to the company's net income, while the remainder is based on individual performance and operational unit results.

Yes, the 8-K filing includes the amendments to the 1996 Stock Incentive Plan and the ECRIP, along with forms of restricted stock agreements and stock option terms, as exhibits to the report for public review.