8-KCorporate ChangesOther EventsExhibits & Filings

ILLINOIS TOOL WORKS INC 8-K Report, Bylaw Amendment (May 12, 2009)

Filed May 12, 2009For Securities:ITW

Summary

Illinois Tool Works Inc. (ITW) filed an 8-K on May 11, 2009, reporting significant updates from its Board of Directors meeting on May 8, 2009. The company announced a strategic decision to rescind the planned divestiture of its Decorative Surfaces segment. This reversal was attributed to prevailing weak acquisition market conditions and the perceived premium value of these businesses, leading ITW to retain them as part of its continuing operations. This move signals a focus on internal operations and a cautious approach to asset sales in the current economic climate. In addition to the business strategy update, ITW also made amendments to its corporate governance structure. Key changes include the establishment of a Lead Director position to enhance the oversight role of independent directors and streamline communication between the board and management. By-laws were also adjusted to reflect these changes, notably concerning the presiding officers at board and stockholder meetings. These governance enhancements aim to strengthen board effectiveness and accountability.

Key Highlights

  • 1ITW Board rescinded the previously approved divestiture of the Decorative Surfaces segment.
  • 2The decision to retain Decorative Surfaces is driven by weak acquisition market conditions and the perceived premium value of these businesses.
  • 3The company will continue to operate the Decorative Surfaces segment, integrating it back into ongoing operations.
  • 4A new position of Lead Director was created within the Board of Directors to enhance independent director oversight.
  • 5Amendments were made to By-laws to define the roles of the Chairman, Lead Director, and Vice Chairman in presiding over meetings.
  • 6Corporate Governance Guidelines were updated to clarify committee self-evaluations and introduce annual board and director performance evaluations.

Frequently Asked Questions

ITW decided to rescind the divestiture of its Decorative Surfaces segment due to current weak acquisition market conditions. The company believes the businesses within this segment hold premium value and are better retained as part of continuing operations at this time, rather than being sold in a potentially unfavorable market.

The Lead Director position was created to strengthen the oversight of independent directors. This individual will preside at board meetings when the Chairman is absent, serve as a key liaison between the Chairman & CEO and independent directors, call meetings of independent directors, and communicate feedback from board members to the Chairman & CEO.

The By-laws were amended to clarify who presides over meetings. The Lead Director will preside if the Chairman is absent, and the Vice Chairman will preside in the absence of both the Chairman and the Lead Director. The provision for the President to preside in certain absences was removed.

Yes, the Corporate Governance Guidelines were amended to clarify the ongoing self-evaluation process for the Audit, Compensation, and Corporate Governance and Nominating Committees. Additionally, there will now be an annual evaluation of the performance of the Board and individual directors, coordinated by the Corporate Governance and Nominating Committee.