ITT CORPORATION DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS

1.13.

“ Grandfathered Deferrals ” shall mean deferred Director Fees (and any earnings thereon, including amounts attributable to dividends on such deferred Director Fees) that were initially deferred prior to 2005. For avoidance of doubt, an amount will be treated as initially deferred prior to 2005 if the amount would have been paid before 2005 had it not been deferred.

1.14.

“ In-Service Subaccount ” shall mean the bookkeeping account described in Section 5.01(a) maintained to record Deferrals (and related gains and losses on such Deferrals) that a Participant has elected to have paid upon the first to occur of the Specified Distribution Date, the Participant’s Retirement or the Participant’s death.

1.15.

“ Non-Employee Director ” shall mean a member of the Board who is not concurrently an employee of the Corporation.

1.16.

“ Participant ” shall mean, except as otherwise provided in Section 2.02, each Non-Employee Director who has executed a Deferral Agreement pursuant to the requirements of Articles 2 and 3.

1.17.

“ Plan ” shall mean the ITT Corporation Deferred Compensation Plan For Non-Employee Directors, as set forth in this document, as it may be amended from time to time.

1.18.

“ Prior Deferrals ” shall mean Deferrals relating to annual cash retainers that were (a) initially deferred after to 2004 pursuant to a Prior Deferral Agreement, (b) not yet distributed as of the Adoption Date and (c) deferred by Non-Employee Directors who consent to have their Prior Deferrals become subject to the terms of the Plan. For avoidance of doubt, (a) an amount will be treated as initially deferred after 2004 if the amount would have been paid after 2004 had it not been deferred and (b) the term Prior Deferrals shall not include any restricted stock, restricted stock units or Grandfathered Deferrals.

1.19.

“ Prior Deferral Agreement ” shall mean a deferral agreement and/or document that was effective prior to the Adoption Date and that governs the Directors’ Prior Deferrals. For avoidance of doubt, the term Prior Deferral Agreement shall not include any agreement or document governing (a) restricted stock or restricted stock unit awards or a Non-Employee Director’s election to receive restricted stock or restricted stock unit awards or (b) Grandfathered Deferrals.

1.20.

“ Reporting Date ” shall mean the first Business Day of each calendar month following the Adoption Date, or such other day as the Administrative Committee may determine.

1.21.

“ Retirement ” shall mean, subject to Section 8.01(c), the termination of a Non-Employee Director’s service as a member of the Board.

1.22.

“ Retirement Subaccount ” shall mean the bookkeeping account described in Section 5.01(a) maintained to record Deferrals (and related gains and losses on such Deferrals) that a Participant has elected to have paid upon the first to occur of the Participant’s Retirement or death.

1.23.

“ Service Year ” shall mean the period beginning on the date of the Annual Meeting of Shareholders in any year and ending on the day immediately preceding the date of the Annual Meeting of Shareholders for the subsequent year, or such other period as shall be specified from time to time by the Administrative Committee.

1.24.

“ Specified Distribution Date ” shall mean a Business Day selected by a Participant pursuant to Section 5.01(a).

1.25.

“ 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.

pursuant to Article 3 must execute a Deferral Agreement with the Administrative Committee authorizing Deferrals under the Plan in accordance with the provisions of Sections 2.02(b) and 3.01.

(b)

The Deferral Agreement shall be in writing and properly completed upon a form approved by the Administrative Committee, which shall be the sole judge of the proper completion thereof. Such Deferral Agreement shall provide for the deferral of all or a portion of the Non-Employee Director’s Director Fees and shall include such other provisions as the Administrative Committee deems appropriate.

2.03.

Termination of Participation

Participation shall cease when all benefits to which a Participant or Beneficiary is entitled to hereunder are distributed.

(d)

Notwithstanding anything in this Section 3.01 to the contrary, if a Non-Employee Director first becomes eligible to participate in the Plan after the Deferral Election Deadline, but before the first day of the Service Year that begins in the calendar year in which the Non-Employee Director first becomes eligible to participate in the Plan, the Non-Employee Director may, within the period beginning on the date the Non-Employee Director first becomes eligible to participate in the Plan and ending on the earlier of (i) 30 days after such date or (ii) the first day of such Service Year, elect to defer Director Fees that will be earned in such Service Year.

3.02.

Amount of Deferral

Unless the Administrative Committee provides otherwise, a Non-Employee Director may defer all or none of his or her Director Fees, but not a portion of such Director Fees.

3.03.

Crediting to Deferral Account

Except as provided below with respect to Prior Deferrals, Deferrals shall be credited to a Participant’s Deferral Account on the day such Director Fees 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 closing price of the Corporation’s common stock on the New York Stock Exchange (or a successor thereto) on that day or the next Business Day if such day is not a Business Day. Prior Deferrals shall be credited to a Participant’s Deferral Account as of the Adoption Date.

3.04.

Vesting

A Participant shall at all times be 100% vested in his or her Deferral Account.

3.05.

Unforeseeable Emergency

Notwithstanding the foregoing provisions of this Article 3, Deferrals under a Participant’s current Deferral Agreement shall cease in the event a distribution is made to the Participant due to an Unforeseeable Emergency.

measure the investment performance of a Participant’s Deferral Account. The designation of any such investment funds or indices shall not require the Corporation to invest or earmark its general assets in any specific manner. The Administrative 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 6.01.