SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12
Illinois Tool Works Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[ILLINOIS TOOL WORKS, INC. LOGO]
ILLINOIS TOOL WORKS INC.
3600 WEST LAKE AVENUE
GLENVIEW, ILLINOIS 60025
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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FRIDAY, MAY 10, 2002
3:00 P.M.
THE NORTHERN TRUST COMPANY
50 SOUTH LASALLE STREET
CHICAGO, ILLINOIS
The purpose of our 2002 Annual Meeting is to elect ten directors for the
upcoming year. The Board of Directors recommends that you vote FOR each of the
director nominees.
Stockholders of record on March 12, 2002 are entitled to vote.
It is important that your shares are represented at the Annual Meeting
whether or not you plan to attend. To be certain that your shares are
represented, please sign, date and return the enclosed proxy card as soon as
possible or vote by telephone or the Internet by following the instructions on
the proxy card. Whatever method you choose, please vote as soon as possible. You
may revoke your proxy at any time prior to its exercise at the Annual Meeting.
Our Annual Report for 2001 is enclosed.
By Order of the Board of Directors,
Stewart S. Hudnut
Secretary
March 21, 2002
ILLINOIS TOOL WORKS INC.
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PROXY STATEMENT
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TABLE OF CONTENTS
<Table>
<Caption>
Page
----
Questions and Answers....................................... 1
Election of Directors....................................... 4
Board of Directors and Its Committees....................... 7
Director Compensation....................................... 8
Ownership of ITW Stock...................................... 9
Section 16(a) Beneficial Ownership Reporting Compliance..... 11
Executive Compensation...................................... 12
Report of the Compensation Committee on Executive
Compensation............................................. 16
Company Performance......................................... 18
Report of the Audit Committee............................... 18
Independent Public Accountants.............................. 20
Annual Report on Form 10-K.................................. 20
</Table>
QUESTIONS AND ANSWERS
Following are questions often asked by stockholders of publicly held
companies. We hope that the answers will assist you in casting your vote.
WHAT AM I VOTING ON?
We are soliciting your vote on the election of ten directors for the
upcoming year.
WHO MAY VOTE?
Stockholders at the close of business on March 12, 2002, the record date,
may vote. On that date, there were 305,895,308 shares of ITW common stock
outstanding.
HOW MANY VOTES DO I HAVE?
Each share of ITW common stock that you own entitles you to one vote.
HOW DO I VOTE?
You may vote your shares in one of the following four ways:
<Table>
1. By mail: complete the proxy card and sign, date and return
it in the enclosed envelope;
2. By telephone: call the toll-free number on the proxy card,
enter the control number on the proxy card and
follow the recorded instructions;
3. By Internet: go to the website listed on the proxy card, enter
the control number on the proxy card and follow
the instructions provided; or
4. In person: attend the Annual Meeting, where ballots will be
provided.
</Table>
If you hold your shares through a bank or broker that does not offer telephone
or Internet voting, please complete and return your proxy by mail.
HOW DOES DISCRETIONARY VOTING AUTHORITY APPLY?
If you sign, date and return your proxy card, your vote will be cast as
you direct. If you do not indicate how you want to vote, you give authority to
Susan Crown, Phillip B. Rooney and Harold B. Smith to vote for the election of
directors and on any other matter that is properly raised at the Annual Meeting.
In that event, your proxy will be voted FOR the election of each director
nominee and FOR or AGAINST any other properly raised matter at the discretion of
Ms. Crown and Messrs. Rooney and Smith.
MAY I REVOKE MY PROXY?
You may revoke your proxy at any time before it is exercised in one of
four ways:
1. Notify ITW's Secretary in writing before the Annual Meeting that you
wish to revoke your proxy;
2. Submit another proxy with a later date;
3. Vote by telephone or Internet after you have given your proxy; or
4. Vote in person at the Annual Meeting.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
Your shares are likely registered differently or are in more than one
account. You should sign and return all proxy cards to guarantee that all of
your shares are voted.
WHAT CONSTITUTES A QUORUM?
The presence, in person or by proxy, of the holders of a majority of ITW
shares entitled to vote at the Annual Meeting constitutes a quorum. Your shares
will be considered part of the quorum if you return a signed and dated proxy
card or if you vote by telephone or Internet. Abstentions and broker non-votes
are counted as "shares present" at the meeting for purposes of determining if a
quorum exists. A broker non-vote occurs when a broker submits a proxy that does
not indicate a vote as to a proposal because he or she does not have voting
authority and has not received voting instructions from you.
WHAT VOTE IS REQUIRED TO ELECT THE DIRECTOR NOMINEES?
The ten nominees who receive the highest number of votes will be elected.
If you do not want to vote your shares for a particular nominee, you may
indicate that in the space provided on the proxy card or withhold authority as
prompted during telephone or Internet voting. In the election of directors,
abstentions are not considered shares voted and will not affect the outcome of
the vote.
HOW DO I SUBMIT A STOCKHOLDER PROPOSAL?
You must submit a proposal to be included in our proxy statement for the
May 2003 annual meeting no later than November 21, 2002. Your proposal must be
in writing and must comply with the proxy rules of the Securities and Exchange
Commission (SEC). You may also submit a proposal that you do not want included
in the proxy statement, but that you want to raise at the May 2003 annual
meeting. If you submit that proposal after February 4, 2003, then SEC rules
permit the individuals named in the proxies solicited by ITW's Board of
Directors for that meeting to exercise discretionary voting power as to that
proposal. You should send your proposal to our Secretary at our address on the
cover of this proxy statement.
2
HOW DO I NOMINATE A DIRECTOR?
If you wish to nominate an individual for election as director at the May
2003 annual meeting, our Secretary must receive your nomination by December 31,
2002. Our by-laws require that your nomination include: (1) your name and
address; (2) the name, age and home and business addresses of the nominee; (3)
the principal occupation or employment of the nominee; (4) the number of shares
of ITW stock that the nominee beneficially owns; (5) a statement that the
nominee is willing to be nominated and serve as a director; and (6) any other
information regarding the nominee that would be required by the SEC to be
included in a proxy statement had ITW's Board of Directors nominated that
individual. Any nomination that you make must be approved by the Corporate
Governance and Nominating Committee as well as by the Board of Directors.
WHO PAYS TO PREPARE, MAIL AND SOLICIT THE PROXIES?
ITW will pay all of the costs of preparing and mailing the proxy
statement and soliciting these proxies. We will ask brokers, dealers, banks,
voting trustees and other nominees and fiduciaries to forward the proxy
materials and our Annual Report to the beneficial owners of ITW common stock.
Upon request, we will reimburse them for their reasonable expenses. In addition
to mailing proxy materials, our officers, directors and employees may solicit
proxies in person, by telephone or otherwise.
3
ELECTION OF DIRECTORS
Stockholders will elect ten directors at the Annual Meeting. The
individuals listed below have been nominated by the Board of Directors as
recommended by the Corporate Governance and Nominating Committee. Each director
will serve until the May 2003 annual meeting, until a qualified successor
director has been elected, or until he or she resigns or is removed by the Board
of Directors. H. Richard Crowther is retiring from the Board after seven years
of distinguished service.
We will vote your shares as you specify on the enclosed proxy card, by
telephone or by Internet. If you do not specify how you want your shares voted,
we will vote them FOR the election of all the nominees listed below. If
unforeseen circumstances (such as death or disability) make it necessary for the
Board of Directors to substitute another person for any of the nominees, we will
vote your shares FOR that other person. The Board of Directors does not
anticipate that any nominee will be unable to serve. The nominees have provided
the following information about themselves:
<Table>
[W.F. ALDINGER PHOTO] WILLIAM F. ALDINGER, 54, has served as the Chairman and
Chief Executive Officer of Household International, Inc., a
consumer finance company, since 1994. He serves on the
boards of Household International, Inc., Household Finance
Company and MasterCard International. Mr. Aldinger has
served as a director of ITW since 1998.
[MICHAEL J. BIRCK MICHAEL J. BIRCK, 64, has served as the Chairman of Tellabs,
PHOTO] Inc. since 2000. Mr. Birck founded Tellabs and served as
President and Chief Executive Officer from 1975 to 2000.
Tellabs designs, manufactures, markets and services voice
and data equipment. Mr. Birck has served as a director of
ITW since 1996 and is a director of Molex, Inc. and Tellabs,
Inc.
</Table>
4
<Table>
[MARVIN D. BRAILSFORD MARVIN D. BRAILSFORD, 63, has been Vice President of
PHOTO] Kaiser-Hill Company LLC, a construction and environmental
services company, since 1996. Prior to that he served with
the United States Army for 33 years, retiring with the rank
of Lieutenant General. Mr. Brailsford has served as a
director of ITW since 1996.
[JAMES R. CANTALUPO JAMES R. CANTALUPO, 58, President and Vice Chairman,
PHOTO] Emeritus, of McDonald's Corporation (as of January 2002), a
restaurant chain, previously serving as President and Vice
Chairman from 1999 to 2002. He served as Vice Chairman of
McDonald's Corporation and Chairman and Chief Executive
Officer of McDonald's International from 1998 to 1999 and
President of McDonald's Corporation and Chief Executive
Officer of McDonald's International from 1992 to 1998. He
serves on the boards of McDonald's Corporation, Sears,
Roebuck & Co., Rohm and Haas Company and International
Flavors and Fragrances, Inc. Mr. Cantalupo has served as a
director of ITW since 2001.
[SUSAN CROWN PHOTO] SUSAN CROWN, 43, has been Vice President of Henry Crown and
Company, a business with diversified investments, since
1984. She is a director of Baxter International Inc. and
Northern Trust Corporation and its subsidiary, The Northern
Trust Company. Ms. Crown has served as a director of ITW
since 1994.
[DON H. DAVIS PHOTO] DON H. DAVIS, Jr., 62, has been Chairman of the Board of
Rockwell Automation, Inc. (formerly Rockwell International
Corporation), a manufacturer of aviation electronics and
automotive equipment, since 1998 and Chief Executive Officer
of Rockwell International Corporation since 1997. He was
President and Chief Operating Officer from 1995 to 1997. He
is a director of Rockwell Automation, Inc. and Apogent
Technologies Inc. Mr. Davis has served as a director of ITW
since 2000.
</Table>
5
<Table>
[W. JAMES FARRELL W. JAMES FARRELL, 59, has been Chairman of ITW since 1996,
PHOTO] Chief Executive Officer since 1995 and has 36 years of
service with ITW. He is a director of Allstate Insurance
Company, Sears, Roebuck & Co., Kraft Foods, Inc., UAL Corp.
and the Federal Reserve Bank of Chicago. Mr. Farrell has
served as a director of ITW since 1995.
[ROBERT C. MCCORMACK ROBERT C. MCCORMACK, 62, has been a Partner of Trident
PHOTO] Capital LP, a venture capital firm, since 1993. Mr.
McCormack served as Assistant Secretary of the Navy from
1990 to 1993 and Deputy Under Secretary of Defense from 1987
to 1990. He is a director of DeVry, Inc., Mead Westvaco
Corp. and the Northern Trust Corporation and its subsidiary,
The Northern Trust Company. Mr. McCormack has served as a
director of ITW since 1993, and previously served as a
director of ITW from 1978 through 1987.
[PHILLIP B. ROONEY PHILLIP B. ROONEY, 57, has served as Executive Vice
PHOTO] President of The ServiceMaster Company, a network of quality
service companies, from 2001 to present, President of
ServiceMaster Management Services, from 2000 to 2001 and was
Vice Chairman of ServiceMaster Company from 1997 to 2000. He
is a trustee of the Van Kampen Funds. Mr. Rooney has served
as a director of ITW since 1990.
[HAROLD B. SMITH HAROLD B. SMITH, 68, has been Chairman of the Executive
PHOTO] Committee of ITW since 1982. Mr. Smith is a director of W.W.
Grainger Inc. and Northern Trust Corporation and its
subsidiary, The Northern Trust Company. He is a trustee of
The Northwestern Mutual Life Insurance Company. Mr. Smith
has served as a director of ITW since 1968.
</Table>
6
BOARD OF DIRECTORS AND ITS COMMITTEES
ITW's Board of Directors met five times during 2001. In addition to
meetings of the full Board, directors attended meetings of Board committees. The
Board of Directors has standing audit, compensation, corporate governance and
nominating, and finance committees.
AUDIT COMMITTEE
<Table>
Meetings in 2001: 4
Members: Susan Crown (Chairman)
William F. Aldinger
Michael J. Birck
Marvin D. Brailsford
James R. Cantalupo
H. Richard Crowther
Don H. Davis, Jr.
Function: Reviews and reports to the Board concerning the engagement
of independent public accountants, ITW's internal audit
systems and other matters significantly affecting ITW's
financial status. Additional information on the committee
and its activities is set forth in the "Report of the Audit
Committee" on page 18.
</Table>
COMPENSATION COMMITTEE
<Table>
Meetings in 2001: 3
Members: Phillip B. Rooney (Chairman)
William F. Aldinger
Michael J. Birck
Don H. Davis, Jr.
Robert C. McCormack
Function: Administers ITW's compensation plans for key employees and
approves compensation levels for executive officers.
Additional information on the committee and its activities
is set forth in the "Report of the Compensation Committee on
Executive Compensation" on page 16.
</Table>
7
CORPORATE GOVERNANCE AND NOMINATING COMMITTEE
<Table>
Meetings in 2001: 3
Members: Marvin D. Brailsford (Chairman)
James R. Cantalupo
Susan Crown
H. Richard Crowther
Don H. Davis, Jr.
Harold B. Smith
Function: Receives suggestions, evaluates and recommends director
candidates to the Board. Makes recommendations as to Board
committees and Board size. Recommends and monitors corporate
governance policies and procedures.
</Table>
FINANCE COMMITTEE
<Table>
Meetings in 2001: 2
Members: Robert C. McCormack (Chairman)
William F. Aldinger
James R. Cantalupo
H. Richard Crowther
Phillip B. Rooney
Harold B. Smith
Function: Reviews, evaluates and recommends to the Board, management's
proposals relating to ITW's financing, investment portfolio
and real estate investments.
</Table>
DIRECTOR COMPENSATION
ANNUAL RETAINER AND ATTENDANCE FEES
For non-officer directors in 2002, the retainer is $35,000, the fee for
each Board or committee meeting is $1,500, and the fee for chairmen is an
additional $900 per meeting chaired. In order to link director compensation with
stockholder interests, non-officer directors have also been given the option of
receiving some or all of their retainer and fees in an equivalent value of ITW
common stock, which he or she can elect to receive immediately or at retirement
or resignation. A director can also defer receipt of all or part of cash fees
until he or she is no longer a director. Deferred cash amounts are credited with
interest at current rates.
RESTRICTED ITW COMMON STOCK
A portion of director compensation includes the periodic grant of
restricted ITW common stock, which directly links another element of director
compensation with stockholder interests. In January 2001, each non-officer
director of ITW received an award of 900 restricted shares. Each new non-officer
director who joins the Board after January 2001
8
will be granted an award of 300 shares for each full year of service remaining
until January 2004. Restricted shares vest equally over the years remaining from
the grant date until January 2004 and fully vest upon death or retirement. A
director cannot sell the shares until the earliest of retirement, death or
January 2004. A director who terminates other than for death or retirement prior
to January 2004 will forfeit any unvested restricted shares.
PHANTOM ITW STOCK
To tie a further portion of their compensation to stockholder interests,
non-officer directors of ITW are granted 1,000 units of phantom stock upon
becoming a director. The value of each unit equals the market value of one share
of ITW common stock. Additional units are credited to a director's phantom stock
account in an amount equivalent to cash dividends paid on ITW stock. Accounts
are adjusted for stock dividends, stock splits, combinations or similar changes.
A director is eligible for a cash distribution from his or her account at
retirement or upon approved resignation. When phantom stock is granted,
directors elect to receive the distribution in either a lump sum or in up to ten
annual installments, an election that directors may change at any time until two
years preceding the distribution. Directors receive the value of their phantom
stock account immediately upon a change of control.
OTHER ARRANGEMENTS WITH DIRECTORS
Harold B. Smith entered into a one-year agreement with ITW to provide
consulting services for a fee of $85,000. The agreement expired December 31,
2001 and was not renewed.
OWNERSHIP OF ITW STOCK
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table shows how much ITW common stock the directors,
nominees, the named executive officers, and all directors, nominees and
executive officers as a group beneficially owned as of December 31, 2001. The
named executive officers are the Chief Executive Officer and the four next most
highly compensated executive officers based on compensation earned during 2001.
Beneficial ownership is a technical term broadly defined by the SEC to
mean more than ownership in the usual sense. In general, beneficial ownership
includes any shares a director or executive officer can vote or transfer and
stock options that are exercisable currently or become exercisable within 60
days. Except as otherwise noted, the stockholders named in this table have sole
voting and investment power for all shares shown as beneficially owned by them.
The number of shares beneficially owned by each non-officer director
includes 900 shares (600 shares in the case of Mr. Cantalupo) of ITW common
stock that were granted under the Directors' Restricted Stock Plan. The number
of the director's phantom stock units disclosed in the table represents an
equivalent number of shares of ITW common
9
stock. Phantom stock units are not transferable and have no voting rights. The
units are not included in the "percent of class" calculation.
<Table>
<Caption>
SHARES OF COMMON STOCK PHANTOM PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED STOCK UNITS OF CLASS
------------------------ ---------------------- ----------- --------
Directors and Nominees (other than Executive
Officers)
William F. Aldinger............................. 6,019(1) 1,035 *
Michael J. Birck................................ 12,873 2,114 *
Marvin D. Brailsford............................ 4,292 2,108 *
James R. Cantalupo.............................. 1,420 1,003
Susan Crown..................................... 11,600(2) 2,131 *
H. Richard Crowther............................. 339,719(3) 2,291 *
Don H. Davis, Jr................................ 3,522 1,020 *
Robert C. McCormack............................. 14,194,944(4) 2,131 4.7%
Phillip B. Rooney............................... 57,898(5) 2,131 *
Harold B. Smith................................. 38,096,527(6) -- 12.5%
Executive Officers
W. James Farrell................................ 1,026,808(7) -- *
James M. Ringler................................ 559,467(8) -- *
Frank S. Ptak................................... 392,983(9) -- *
David B. Speer.................................. 118,290(10) -- *
Russell M. Flaum................................ 172,685(11)
Directors, Nominees and Executive Officers as a
Group (23 Persons).............................. 41,532,443(12) 15,964 13.6%
</Table>
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* Less than 1%
(1) Includes 100 shares owned by Mr. Aldinger's spouse, as to which he
disclaims beneficial ownership.
(2) Includes (a) 2,000 shares owned by Ms. Crown's spouse, as to which she
disclaims beneficial ownership; and (b) 2,000 shares held in trusts of
which Ms. Crown's children are beneficiaries and as to which she disclaims
beneficial ownership.
(3) Includes (a) 261,352 shares held in a revocable living trust as to which
Mr. Crowther shares voting and investment power; (b) 30,107 shares owned by
his spouse as to which Mr. Crowther disclaims beneficial ownership; and (c)
8,000 shares owned by a charitable foundation of which Mr. Crowther is an
officer.
(4) Includes (a) 400 shares owned in a trust as to which Mr. McCormack shares
voting and investment power with The Northern Trust Company; and (b)
14,186,380 shares owned in twelve trusts as to which Messrs. McCormack, H.
B. Smith and The Northern Trust Company are trustees and share voting and
investment power.
(5) Includes 2,021 shares owned by Mr. Rooney's spouse, as to which he
disclaims beneficial ownership.
(6) Includes (a) 21,157,264 shares owned in twelve trusts as to which Mr. Smith
shares voting and investment power with The Northern Trust Company and
others; (b) 2,138,080 shares owned in ten trusts as to which he shares
voting and investment power; (c) 14,186,380 shares owned in twelve trusts
as to which Messrs. McCormack, H. B. Smith and The Northern Trust Company
are trustees and share voting and investment power; and (d) 61,992 shares
owned by a charitable foundation of which Mr. Smith is a director. Mr.
Smith's address is c/o Secretary, Illinois Tool Works Inc., 3600 West Lake
Avenue, Glenview, Illinois 60025.
10
(7) Includes (a) 164 shares owned by Mr. Farrell's son as to which he disclaims
beneficial ownership; (b) 1,786 shares owned by Mr. Farrell's spouse as to
which he disclaims beneficial ownership; (c) 31,160 shares owned in a
partnership as to which Mr. Farrell shares voting and investment power; (d)
14,026 shares owned in a revocable trust as to which Mr. Farrell has sole
voting and investment power; (e) 4,804 shares owned by a charitable
foundation of which Mr. Farrell is an officer; (f) 6,762 shares allocated
to Mr. Farrell's account in the ITW Savings and Investment Plan; and (g)
968,106 shares covered by options exercisable within 60 days.
(8) Includes (a) 13,860 shares allocated to Mr. Ringler's account in the ITW
Savings and Investment Plan; and (b) 456,638 shares covered by options
exercisable within 60 days.
(9) Includes 322,500 shares covered by options exercisable by Mr. Ptak within
60 days.
(10) Includes (a) 835 shares allocated to Mr. Speer's account in the ITW Savings
and Investment Plan; and (b) 113,250 shares covered by options exercisable
within 60 days.
(11) Includes (a) 1,714 shares allocated to Mr. Flaum's account in the ITW
Savings and Investment Plan; and (b) 146,250 shares covered by options
exercisable within 60 days.
(12) Includes 2,665,544 shares covered by options exercisable within 60 days.
OTHER PRINCIPAL STOCKHOLDERS
This table shows, as of December 31, 2001, the only stockholder other
than a director that we know to be a beneficial owner of more than 5% of ITW
common stock. We have a commercial banking relationship with The Northern Trust
Company, which also acts as the trustee under our principal pension plan. The
Northern Trust Company is a wholly owned subsidiary of Northern Trust
Corporation. Susan Crown, Robert C. McCormack and Harold B. Smith, directors of
ITW, are also directors of Northern Trust Corporation and The Northern Trust
Company.
<Table>
<Caption>
NAME AND ADDRESS AMOUNT OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------- -------------------- --------
The Northern Trust Company.................................. 42,956,452(1) 14.1%
50 South LaSalle Street
Chicago, Illinois 60675
</Table>
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(1) The Northern Trust Company and its affiliates act as sole fiduciary or
co-fiduciary of trusts and other fiduciary accounts that own an aggregate of
42,956,452 shares. They have sole voting power with respect to 4,769,338
shares and share voting power with respect to 36,784,474 shares. They have
sole investment power with respect to 3,468,656 shares and share investment
power with respect to 37,523,002 shares. In addition, The Northern Trust
Company holds in other accounts, but does not beneficially own, 20,399,854
shares, resulting in aggregate holdings by The Northern Trust Company of
63,356,306 shares, or 20.8%.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that ITW's
executive officers, directors and 10% stockholders file reports of ownership and
changes of ownership of ITW common stock with the SEC and the New York Stock
Exchange. Based on a review of copies of these reports provided to us during
fiscal 2001 and written representations from executive officers and directors,
we believe that all filing requirements were met during 2001.
11
EXECUTIVE COMPENSATION
This table summarizes the compensation of the Chief Executive Officer and
the other four most highly compensated executive officers of ITW.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM
COMPENSATION
---------------------
AWARDS
------ PAYOUTS
ANNUAL COMPENSATION SECURITIES ------- ALL OTHER
NAME AND ----------------------- UNDERLYING LTIP COMPENSATION
PRINCIPAL POSITION YEAR SALARY(1) BONUS(1)(2) OPTIONS PAYOUTS (4)(5)
------------------ ---- --------- ----------- ---------- -------- ------------
W. James Farrell.............. 2001 $969,240 $1,071,630 400,000 -- $ 111,994(6)
Chairman and Chief 2000 899,990 1,309,500 450,000 -- 65,280
Executive Officer 1999 696,152 1,350,000 200,000 -- 46,298
James M. Ringler.............. 2001 $750,022 $ 826,875 75,000 -- $ 113,097
Vice Chairman 2000 750,022 1,091,250 75,000 -- 26,339
1999 713,221 1,125,000 80,810 $843,750(3) 10,843,327(7)
Frank S. Ptak................. 2001 $452,704 $ 500,535 200,000 -- $ 54,358
Vice Chairman 2000 420,004 611,100 230,000 -- 30,738
1999 339,626 630,000 100,000 -- 15,877
David B. Speer................ 2001 $292,768 $ 364,568 60,000 -- $ 32,579
Executive Vice President 2000 270,770 398,063 75,000 -- 16,180
1999 244,115 358,628 30,000 -- 9,597
Russell M. Flaum.............. 2001 $282,953 $ 278,490 60,000 -- $ 29,754
Executive Vice President 2000 262,159 379,050 75,000 -- 13,616
1999 242,923 330,255 30,000 -- 8,880
</Table>
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(1) Actual salary or bonus earned. Includes amounts deferred by the executive
under the Executive Contributory Retirement Income Plan or the Savings and
Investment Plan. In the case of Mr. Ringler, includes amounts deferred by
him in 1999 under the Premark International, Inc. Retirement Savings Plan
and the Premark International, Inc. Supplemental Plan.
(2) Amounts awarded under the Executive Incentive Plan are based on the
executive's base salary as of December 31 for that year and paid in the
following year. In the case of Mr. Ringler, includes amounts awarded under
the Premark International, Inc. annual incentive plan for 1999.
(3) Consists of change of control long-term incentive payout under the Premark
International, Inc. Long-Term Incentive Plan.
(4) Includes company matching contributions in 2001 to the Executive
Contributory Retirement Income Plan or the Savings and Investment Plan as
follows: Mr. Farrell, $79,756; Mr. Ringler, $64,445; Mr. Ptak, $37,233; Mr.
Speer, $24,179; and Mr. Flaum, $23,170. In 1999, Mr. Ringler received a
company match of $11,281 to the Premark International, Inc. Retirement
Savings Plan and was credited with an additional contribution of $140,796 to
the Premark International, Inc. Supplemental Plan.
(5) Includes interest credited in 2001 on deferred compensation under the
Executive Contributory Retirement Income Plan in excess of 120% of the
Applicable Long-Term Rate as follows: Mr. Farrell, $24,470; Mr. Ringler
$48,652; Mr. Ptak, $17,125; Mr. Speer, $8,400; and Mr. Flaum, $6,584.
(6) Includes $7,768 representing imputed income on Mr. Farrell's outstanding
home loan made by ITW in 1995. The maximum amount of the loan outstanding
during 2001 was $160,000, which in February 2002 had been reduced to
$30,000. The imputed rate of interest on the loan is 7.34% per annum and the
loan is repayable in annual installments through the year 2003.
12
(7) Includes aggregate payment, less short-term and long-term payouts, (a) in
lieu of amounts that Mr. Ringler would have been paid under his employment
agreement with Premark; (b) in recognition that ITW does not maintain a
long-term incentive plan similar to the plan maintained by Premark; and (c)
in consideration for his agreement not to compete during his period of
employment with ITW and for a period of two years thereafter.
In 1995, ITW loaned money to Mr. Farrell evidenced by a five-year term
promissory note. The note was renewed for an additional five-year term at an
annual interest rate of 5.91%, secured by 3,200 shares of ITW stock. In February
2001, Mr. Farrell repaid the outstanding balance of $111,823, which was the
largest amount that Mr. Farrell had been indebted to us under this loan since
the beginning of 2001.
In the event of a change of control of ITW, each executive officer's
unvested restricted stock and stock options previously granted under the Stock
Incentive Plan fully vest. In addition, executives receive a cash payment under
the Executive Incentive Plan immediately upon a change of control. The amount
paid under the Executive Incentive Plan equals a portion of the maximum awards
payable under the Plan for that year based on the number of days in the year
that have elapsed as of the date of the change of control.
13
OPTION GRANTS IN 2001
This table gives information relating to option grants in 2001 to the
Chief Executive Officer and the other four most highly compensated executive
officers of ITW.
<Table>
<Caption>
INDIVIDUAL GRANTS
--------------------------------------------------------
PERCENT OF GRANT DATE
SECURITIES TOTAL OPTIONS VALUE
UNDERLYING GRANTED TO EXERCISE OR ----------------
OPTIONS EMPLOYEES BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED(1) 2001 PER SHARE DATE PRESENT VALUE(2)
---- ---------- ------------- ----------- ---------- ----------------
W. James Farrell............. 400,000 14.7 $62.25 12/14/11 $8,472,000
James M. Ringler............. 75,000 2.8 62.25 12/14/11 1,588,500
Frank S. Ptak................ 200,000 7.4 62.25 12/14/11 4,236,000
David B. Speer............... 60,000 2.2 62.25 12/14/11 1,270,800
Russell M. Flaum............. 60,000 2.2 62.25 12/14/11 1,270,800
</Table>
- ------------
(1) Options become exercisable in four equal annual installments on the
anniversaries of the grant or immediately in the event of retirement,
disability or death. A restorative option right applies to option grants so
long as the option holder is employed by ITW. This means that an option
holder who delivers previously acquired shares of ITW common stock in
payment of an option's exercise price will be granted an additional option,
which is subject to certain restrictions, to purchase the number of shares
equal to the number of delivered shares.
(2) The estimated fair value of each ITW option granted is calculated using the
Black-Scholes option pricing model. The model assumes a 5.2% risk-free
interest rate, 28.9% expected stock volatility, 1.02% dividend yield and 5.7
years expected until exercise.
OPTION EXERCISES IN 2001 AND
YEAR-END 2001 OPTION VALUES
This table provides information regarding the exercise of options during
2001 and options outstanding at the end of the year for the Chief Executive
Officer and the other four most highly compensated executive officers of ITW.
The "value realized" is calculated using the difference between the option
exercise price and the price of ITW common stock on the date of exercise
multiplied by the number of shares acquired upon exercise. The "value of
unexercised in-the-money options at year-end 2001" is calculated using the
difference between the option exercise price and $67.72 (the closing price of
ITW stock on December 31, 2001, the last trading day of the year) multiplied by
the number of shares underlying the option. An option is in-the-money if the
market value of ITW common stock is greater than the option's exercise price.
<Table>
<Caption>
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES YEAR-END 2001 YEAR-END 2001
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
W. James Farrell..... -- -- 968,106 862,500 $24,816,239 $6,644,437
James M. Ringler..... 291,157 $14,912,173 456,638 131,250 15,092,848 1,076,531
Frank S. Ptak........ 30,000 1,416,960 322,500 437,500 7,100,887 3,390,312
David B. Speer....... 19,000 886,346 113,250 138,750 1,905,783 1,098,806
Russell M. Flaum..... 11,600 620,536 146,250 138,750 3,475,293 1,098,806
</Table>
14
RETIREMENT PLANS
ITW's principal defined benefit pension plan covers approximately 25,000
domestic business unit employees, including executive officers. Upon retirement,
participants receive benefits based on years of plan participation and average
compensation for the five highest years out of the last ten years of employment.
Compensation includes salary and bonus shown in the Summary Compensation Table.
As of January 1, 2001, the plan was amended to provide a defined lump sum amount
at retirement that is convertible to an annuity. Persons who were age 50 on
January 1, 2001, and had at least five years of service, will receive a benefit
that is no less valuable than that provided under the prior plan formula,
including early retirement subsidy. Because the Internal Revenue Code imposes
limits on those plan benefits, the Board has established a supplemental plan
that provides for payments to certain executives equal to benefits that would be
paid but for these limitations. The table below shows the estimated annual
benefits to be paid under the pension plan and supplemental plan to an
individual who was 55 on December 31, 2001 (the median age of all of the
executive officers) and who continues to participate in the plans through the
plans' normal retirement age of 65, assuming the plan provisions in effect on
December 31, 2001 continue until that date. For years of service prior to 2001,
benefits have been computed based on the pension plan formula then in effect and
the transition provisions in the amended plan.
<Table>
<Caption>
ESTIMATED ANNUAL NORMAL RETIREMENT BENEFITS(1)
--------------------------------------------------------------------------------------
YEARS OF SERVICE AT NORMAL RETIREMENT(2)
COMPENSATION 10 15 20 25 30 35 40
------------ -------- -------- -------- -------- ---------- ---------- ----------
$ 600,000.............. $106,001 $125,468 $174,719 $218,398 $ 262,078 $ 282,535 $ 302,992
850,000............. 151,176 179,115 249,727 312,159 374,590 403,571 432,551
1,100,000............. 196,352 232,761 324,735 405,919 487,103 524,607 562,111
1,350,000............. 241,527 286,408 399,743 499,679 599,615 645,643 691,670
1,600,000............. 286,702 340,055 474,751 593,439 712,127 766,679 821,230
2,000,000............. 358,983 425,889 594,765 743,456 892,147 960,336 1,028,525
2,500,000............. 449,334 533,182 744,781 930,976 1,117,171 1,202,408 1,287,645
</Table>
- ------------
(1) Calculations are based on 5% annual pay increases before and after 2001, 5%
annual increases in Social Security Covered Compensation from 2002 and a
30-year Treasury rate (used to convert defined lump sum benefits into an
annuity) of 5.45% (monthly average for January 2002).
(2) Actual years of participation as of December 31, 2001 for the Chief
Executive Officer and the four most highly compensated executive officers
were as follows: Mr. Farrell, 36.5 years; Mr. Ringler, 12.0 years (10.0 of
which were granted as consideration for his employment by ITW); Mr. Ptak,
26.1 years; Mr. Speer, 23.5 years; and Mr. Flaum, 15.0 years. Mr. Ringler's
benefit for 9.9 years of participation in the Premark pension plans (in
which the formula produced a lesser benefit than the ITW plans had) was
combined with his benefits under the ITW plans and will be adjusted in the
future for increases in average pay since 2000.
In addition, under ITW's 1982 Executive Contributory Retirement Income
Plan, Mr. Farrell is eligible to receive an annual benefit of $113,529 for 15
years beginning at the normal retirement age of 65.
15
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
During 2001, the Compensation Committee of the Board of Directors was
composed of five independent non-employee directors. The Committee administers
ITW's compensation plans for key employees, including the Executive Incentive
Plan and the Stock Incentive Plan. The Committee also approves compensation
levels for executive officers. In making its decisions, the Committee considers
management's contribution to ITW's long-term growth. One long-term performance
factor that the Committee considers is ITW's total stockholder return, which is
measured by capital appreciation and reinvested dividends. For the ten years
ending December 31, 2001, the compound annual stockholder rate of return was
17.0%. For the same period, the rate of return on the Standard & Poor's 500
Index was 12.9%, and the rate of return on the Standard & Poor's Diversified
Manufacturing Index was 18.1%.
Compensation for executive officers is composed of base salary, a cash
bonus based on performance and stock incentives. The Committee believes that the
stock incentive and cash bonus components align the executive officers'
performance with stockholder interests. The Committee's philosophy is to provide
executives with total compensation above the median for executives of comparable
industrial companies.
BASE SALARY. In establishing base salaries for the Chief Executive
Officer (CEO) and other executive officers, the Committee considers compensation
information of a peer group of comparable industrial companies. This peer group
includes some of the same companies as the S&P Diversified Manufacturing Index
used for the Company Performance graph on page 18. In determining base salary,
the Committee considers the executive officer's past performance and potential
future performance as well as ITW's net income and the operating income of the
business units that the officer oversees. The Committee's objective is to target
base salaries of the CEO and the other executive officers at the 50th percentile
of the peer group.
BONUS. Executive officers receive annual cash bonuses under the Executive
Incentive Plan based on predetermined financial and non-financial objectives.
Executive officers may elect to take up to half of their annual cash bonus in
ITW common stock. Maximum bonus opportunities typically range from 50% to 150%
of base salary. The CEO, Vice Chairmen and certain executive officers can earn
half of the maximum bonus opportunity if ITW's net income is at least 120% of
targeted plan. The other half relates to the individual's performance measured
against predetermined management goals, for example, succession planning, cost
reduction targets, market penetration, acquisition planning and a variety of
other objectives specifically related to the individual unit's performance. For
the Executive Vice Presidents, one-eighth of the maximum bonus opportunity is
based on ITW's net income, three-eighths is based on the operating income of the
operating units for which the individual is responsible, and the remaining
one-half is based on the individual's performance measured against evaluation
factors similar to the CEO's. For 2001, the average bonus received by executive
officers was approximately 75% of the maximum award.
STOCK INCENTIVES. The CEO, executive officers and other key employees
participate in ITW's Stock Incentive Plan, principally through the grant of
stock options. The magnitude of
16
a stock option award is based on the executive officer's performance and the
officer's ability to influence ITW's long-term growth and profitability. Options
are priced at fair market value on the date of grant. The Committee approves
these awards and believes that participation in the Stock Incentive Plan is an
effective incentive for executive officers to create value for stockholders
since the ultimate value of a stock option is directly related to the increase
in the market price of ITW's common stock.
Internal Revenue Code Section 162(m) limits the deductibility of
compensation in excess of $1,000,000 paid to each of the CEO and the other four
most highly compensated executive officers. Certain performance based and
deferred compensation is not included in compensation counted for purposes of
the limit. The Committee has attempted to structure ITW's compensation programs
to preserve full deductibility and will continue to assess the impact of Section
162(m) on its compensation practices.
Phillip B. Rooney, Chairman
William F. Aldinger
Michael J. Birck
Don H. Davis, Jr.
Robert C. McCormack
17
COMPANY PERFORMANCE
This graph shows a five-year comparison of cumulative total returns for
ITW, the Standard & Poor's (S&P) 500 Composite Index and the S&P Diversified
Manufacturing Index. The graph assumes an investment of $100 on December 31,
1996 and the reinvestment of dividends. Total returns are based on market
capitalization.
[PERFORMANCE GRAPH]
<Table>
<Caption>
1996 1997 1998 1999 2000 2001
----------- ----------- ----------- ----------- ----------- -----------
- ------------------------------------------------------------------------------------------------------------
Illinois Tool Works Inc. $100.00 $151.92 $147.86 $173.88 $155.35 $179.14
S&P 500 $100.00 $133.36 $171.47 $207.56 $188.66 $166.24
S&P Diversified
Manufacturing Index $100.00 $119.08 $138.02 $169.67 $201.98 $198.95
- ------------------------------------------------------------------------------------------------------------
</Table>
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the ITW Board of Directors is composed of seven
independent, financially literate directors, as defined in the listing standards
of the New York Stock Exchange. The Committee is responsible for the oversight
of ITW's financial statements, including reviewing: (1) ITW's accounting
policies and procedures; (2) the adequacy and effectiveness of ITW's financial
and accounting controls; (3) the performance of ITW's independent public
accountants; (4) major changes to ITW's auditing and accounting principles and
practices; (5) the internal audit plan; (6) significant findings from completed
internal audits; (7) consolidated financial statements; and (8) the
effectiveness of the ethical and legal compliance system. The Committee is also
responsible for providing oversight to ITW's financial reporting process through
periodic meetings with ITW's independent public accountants, internal auditors
and management to review accounting, auditing, internal controls and financial
reporting matters. ITW's management is responsible for the preparation and
integrity of the financial reporting information and related systems of
18
internal controls. The Committee, in carrying out its role, relies on ITW's
senior management, including senior financial management, and its independent
public accountants.
We have reviewed and discussed with senior management the audited
financial statements included in the 2001 Annual Report to Stockholders.
Management has confirmed to the Committee that the financial statements have
been prepared in conformity with generally accepted accounting principles.
We have discussed with Arthur Andersen LLP, ITW's independent public
accountants, the matters required to be discussed by the Statement on Auditing
Standards No. 61 (Communications with Audit Committee), under which Arthur
Andersen must provide us with additional information regarding the scope and
results of its audit of ITW's financial statements. This information includes
(1) Arthur Andersen's responsibility under generally accepted auditing
standards, (2) significant accounting policies, (3) management judgments and
estimates, (4) any significant audit adjustments, (5) any disagreements with
management, and (6) any difficulties encountered in performing the audit.
We have received from Arthur Andersen a letter providing the disclosures
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees) with respect to any relationships between
Arthur Andersen and ITW that in its professional judgment may reasonably be
thought to bear on independence. Arthur Andersen has discussed its independence
with us, and has confirmed in the letter that, in its professional judgment, it
is independent of ITW within the meaning of the federal securities laws.
Based on the review and discussions described above, we have recommended
to the Board of Directors that the audited statements included in ITW's 2001
Annual Report to Stockholders be included in ITW's Annual Report on Form 10-K
for the year ended December 31, 2001 filed with the Securities and Exchange
Commission.
The Committee is reviewing the current engagement of Arthur Andersen LLP
as ITW's independent public accountants.
Susan Crown, Chairman
William F. Aldinger
Michael J. Birck
Marvin D. Brailsford
James R. Cantalupo
H. Richard Crowther
Don H. Davis, Jr.
19
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has been ITW's independent public accounting firm
since 1951. During 2001, the Board engaged Arthur Andersen to (1) examine and
report on ITW's financial statements, (2) review ITW's unaudited quarterly
financial statements and (3) review financial reports required by the SEC and
related matters. Given the circumstances relating to Arthur Andersen LLP, the
current engagement is subject to ongoing review by ITW's Board. Representatives
of Arthur Andersen will be present at the Annual Meeting and will have the
opportunity to make a statement and respond to questions.
AUDIT FEES
Arthur Andersen billed us approximately $3,528,000 for professional
services in connection with the audit of the annual financial statements
included in our Annual Report on Form 10-K for the year ended December 31, 2001.
Arthur Andersen also billed us approximately $104,000 for professional services
in connection with the review of the quarterly financial statements included in
our Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and
September 30, 2001.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
In fiscal year 2001, Arthur Andersen did not bill us for or perform any
professional services in connection with operating or supervising the operation
of our information system or managing our local area network. In addition, there
were no fees for professional services in connection with designing or
implementing a hardware or software system that aggregates source data
underlying the financial statements or generates information that is significant
to our financial statements taken as a whole.
ALL OTHER FEES
For fiscal year 2001, the aggregate fees for all other services of Arthur
Andersen were approximately $9,153,000, including audit-related fees of
$1,571,000 and other fees of $7,582,000. Audit-related fees include benefit plan
audits, acquisition due diligence and selected internal audit control reviews. A
significant portion of all other fees was for work that related primarily to tax
services that Arthur Andersen performed globally. Tax fees paid to other public
accounting and consulting firms were approximately $8,700,000.
The Audit Committee has reviewed and determined that the non-audit
services of Arthur Andersen during fiscal year 2001 are compatible with
maintaining Arthur Andersen's independence.
ANNUAL REPORT ON FORM 10-K
YOU MAY OBTAIN A FREE COPY OF ITW'S ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 2001, INCLUDING SCHEDULES, THAT WE FILED WITH THE SEC.
TO DO SO, PLEASE WRITE TO: STEWART S. HUDNUT, SECRETARY, AT ILLINOIS TOOL WORKS
INC., 3600 WEST LAKE AVENUE, GLENVIEW, ILLINOIS 60025.
20
<Table>
- -----------------------------------------------------------------------------------------------------------------------------------
PROXY - ILLINOIS TOOL WORKS INC.
- -----------------------------------------------------------------------------------------------------------------------------------
3600 WEST LAKE AVENUE, GLENVIEW, ILLINOIS 60025
ANNUAL MEETING OF STOCKHOLDERS MAY 10, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned stockholder of Illinois Tool Works Inc. hereby appoints Susan Crown, Phillip B. Rooney and Harold B. Smith, or any
of them, with full power of substitution, to act as proxies at the Annual Meeting of Stockholders of ITW to be held in Chicago,
Illinois on May 10, 2002 with authority to vote as directed by this Proxy at the meeting, and any adjournments of the meeting, all
shares of common stock of ITW registered in the name of the undersigned.
IMPORTANT - THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
ILLINOIS TOOL WORKS INC.
ANNUAL MEETING OF STOCKHOLDERS
FRIDAY, MAY 10, 2002
3:00 P.M. CENTRAL TIME
THE NORTHERN TRUST COMPANY (6TH FLOOR)
50 SOUTH LASALLE STREET
CHICAGO, ILLINOIS
IMPORTANT NOTICE
MULTIPLE COPIES OF MAILINGS
To Our Shareholders:
If your household is receiving multiple copies of our shareholder information statements, such as proxy statements and annual
reports, we ask that you check the box "Stop Multiple Mailings" on the reverse of this card. This will allows us to save money by
reducing the number of documents we must print and mail and will help protect the environment as well.
BY CHECKING THIS BOX, YOU ARE CONSENTING TO OUR MAILING OF PROXY STATEMENTS, ANNUAL REPORTS AND OTHER SHAREHOLDER INFORMATION ONLY
TO THE ONE ACCOUNT IN YOUR HOUSEHOLD FOR WHICH THE BOX WAS NOT CHECKED. We will continue to separately mail a proxy card for each
registered shareholder account. Your consent will be perpetual unless you revoke it, which you may do at any time by calling us at
888-829-7424 (toll free), or writing us at Computershare Investor Services, Attn: Proxy Unit, P.O. Box 1878, Chicago, IL 60690-1878.
If you revoke your consent, we will begin sending you individual copies of these documents within 30 days after we receive your
revocation notice.
WE ENCOURAGE YOU TO PARTICIPATE IN THIS PROGRAM BY CHECKING THE "STOP MULTIPLE MAILINGS" BOX ON THE PROXY CARD, FOR ALL BUT ONE OF
YOUR SHAREHOLDERS ACCOUNTS.
YOU CAN VOTE YOUR SHARES BY TELEPHONE OR INTERNET!
QUICK * EASY * IMMEDIATE * AVAILABLE 24 HOURS A DAY * 7 DAYS A WEEK!
Illinois Tool Works Inc. encourages you to take advantage of the convenient ways to vote your shares. If voting by proxy, you may
vote by mail, or choose one of the two methods described below. Your telephone or Internet vote authorizes the named proxies to
vote your shares in the same manner as if you marked, signed, and returned your proxy card. To vote by telephone or Internet, follow
these easy steps:
TO VOTE BY PHONE TO VOTE BY INTERNET
- - Call toll free 1-800-215-9653 anytime on a touch tone - Go the following web site:
telephone. There is NO CHARGE to you for the call. www.computershare.com/us/proxy
- - Enter the Control Number provided on the reverse side. - Enter the information requested on your computer screen,
including your Control Number provided on the reverse
Option 1: To vote as the Board of Directors recommends on side.
the proposals, press 1.
- Follow the instructions on the screen.
Option 2: If you choose to vote on each proposal separately,
press 0 and follow the recorded instructions. THANK YOU FOR VOTING!
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1 -
THANK YOU FOR VOTING!
IF YOU VOTE BY TELEPHONE OR INTERNET, DO NOT MAIL BACK THE PROXY CARD.
007NMC
</Table>
CONTROL NUMBER
[ILLINOIS TOOL WORKS LOGO]
000000 0000000000 0 0000
ILLINOIS TOOL WORKS INC.
000000000.000 ext
[ ] Mark this box with an X if you have made changes to your name or address 000000000.000 ext
details below. 000000000.000 ext
000000000.000 ext
MRA SAMPLE 000000000.000 ext
DESIGNATION (IF ANY) 000000000.000 ext
ADD1 000000000.000 ext
ADD 2
ADD 3 Holder Account Number
ADD 4
ADD 5 C 1234567890 JNT
ADD 6
Use a black pen. Print in
CAPITAL letters inside the grey
areas as shown in this example. A B C 1 2 3 X
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL MEETING PROXY CARD
- ------------------------------------------------------------------------------------------------------------------------------------
A. ELECTION OF DIRECTORS PLEASE REFER TO THE REVERSE SIDE FOR INTERNET AND TELEPHONE VOTING INSTRUCTIONS.
The Board of Directors Recommends a Vote FOR the listed nominees.
For Withhold For Withhold For Withhold
01 - William F. Aldinger [ ] [ ] 05 - Susan Crown [ ] [ ] 09 - Phillip B. Rooney [ ] [ ]
02 - Michael J. Birck [ ] [ ] 06 - Don H. Davis, Jr. [ ] [ ] 10 - Harold B. Smith [ ] [ ]
03 - Marvin D. Brailsford [ ] [ ] 07 - W. James Farrell [ ] [ ]
04 - James R. Cantalupo [ ] [ ] 08 - Robert C. McCormack [ ] [ ]
In their discretion, upon such other matters as may
properly come before the meeting.
CHECK HERE TO STOP MULTIPLE MAILINGS [ ]
Please stop mailing of shareholder
publications for this account, since
multiple copies come to our
household at this address.
THIS PROXY WILL BE VOTED AS DIRECTED. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR ITEM 1, WHICH IS
THE MANNER IN WHICH THIS PROXY WILL BE VOTED IF NO
DIRECTION IS MADE. THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS.
B. AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR INSTRUCTIONS TO BE EXECUTED.
Please sign exactly as your name or names appear. If jointly held, each owner must sign. Executors, administrators, trustees,
officers, etc. should give full title as such.
Signature 1 Signature 2 Date (dd/mm/yyyy)
- ---------------------------------------- -------------------------------------- ------------------------------------------
A 5 2 5 1 1 U P X 007NKB