SEVERANCE, RELEASE, AND PROPRIETARY INTERESTS PROTECTION AGREEMENT

1.

RECITALS

1.1

Flaum has been employed by the Company since October 21, 1975.

1.2

Flaum most recently served as Executive Vice President, with access to customer lists, customer sales history, strategic business planning, new product development, pricing and margin information, human resources planning, trade secret and other proprietary and confidential business-related information.

1.3

The active employment relationship between the Company and Flaum (the “Parties”) will terminate on July 1, 2009.

1.4

The Parties have voluntarily entered into this Agreement for the purposes of granting severance benefits to Flaum for which he is not otherwise eligible, creating a covenant not to compete with valuable consideration being exchanged, and for eliminating any disputes or claims relating to Flaum’s employment and the termination of his employment.

1.5

These recitals are material terms of this Agreement.

2.

PAYMENTS AND OTHER BENEFITS

2.1

Pursuant to the ITW Separation Pay Plan, Flaum will receive thirty-four (34) weeks of separation pay benefits (gross amount of $256,224.00). The Separation Pay benefit will be paid by the Company to Flaum no later than July 10, 2009. Concurrently with such payment, Flaum will receive payment for all unused earned 2009 vacation pay and accrued 2010 vacation pay and all reimbursable expenses incurred by him with respect to his employment with the Company which have not then been paid to him. All required federal, state and local taxes and FICA will be withheld.

2.2

In addition to the Separation Pay benefits in Section 2.1, as long as Flaum signs, does not revoke, and complies with all of the terms of this Agreement:

A.

The Company will pay to Flaum an enhanced severance benefit equal to 50% of his Separation Pay benefit (gross amount of $128,112.00). All required federal, state and local taxes and FICA will be withheld from the enhanced severance benefit, and will be paid no later than 21 calendar days after the expiration of the seven (7) day period to rescind the Agreement in Section 5.4.

B.

The Company will pay to Flaum a half year pro-rated 2009 P&O Bonus based on year end results. The 2009 P&O Bonus will be paid in 2010 in accordance with the Company’s regular process.

C.

R.S.U. vesting will be awarded subject to meeting previously committed performance criteria. If 2009 R.S.U.’s meet required performance criteria, then 25% of the 2009 grant will vest.

D.

Option grants for years 2006, 2007, 2008, and 2009 with options scheduled to vest in February 2010 will be accelerated to vest on July 1, 2009 and their exercise periods will be extended to May 31, 2010. All other original grant terms for stock option and restricted stock units will remain in effect.

2.3

As long as Flaum executes and does not revoke this Agreement and complies with all of the terms, conditions and covenants of this Agreement, then the Company will pay to Flaum an additional payment (hereinafter “additional payment”) totaling $600,000.00, less required legal withholdings, paid in three equal installments on December 31, 2009, July 2, 2010 and December 31, 2010.

2.4

The Parties hereby agree that at least $10,000 of the additional payment in Section 2.3 of this Agreement is expressly deemed as consideration for the Section 3-Mutual Release, and the balance of the additional payment is consideration for the covenants and agreements contained in Section 4-Intellectual Property and Confidential Information and Section 6- Protection of Proprietary Interests.

2.5

The Company will provide health and dental coverage to Flaum provided that Flaum enrolls in COBRA. The first nine months of COBRA (August 2009 through April 2010) will be provided to Flaum at the subsidized COBRA rate of 22% of premium equivalents of ITW Medical and Dental plans. In lieu of COBRA, Flaum has the option to participate in the ITW Retiree Medical Plan effective August 1, 2009, upon exhausting the subsidized COBRA or at any subsequent open enrollment period in accordance with the Plan rules.

2.6

Flaum shall be entitled to retain the laptop computer and mobile phone and Blackberry which he currently utilizes and the Company, by this Agreement, does hereby transfer the ownership thereof to Flaum. The Company shall reimburse Flaum for the reasonable costs of mobile networking service pertaining thereto for the two month period following the termination of Flaum’s employment with the Company.

2.7

Flaum shall be entitled to benefits under the ITW benefit plans, as defined by the appropriate plan documents.

2.8

The Company will select and make available to Flaum, at no cost, outplacement services.

2.9

A summary of some of the benefits to which Flaum is entitled under the terms and provisions of this Agreement is set forth on Exhibit “A”, attached hereto and made a part hereof.

2.10

As long as Flaum executes and does not revoke this Agreement, the Company shall, within fifteen (15) days of execution of this Agreement, reimburse Flaum for the reasonable attorney’s fees and costs he incurs in connection with the matters described herein which amount shall not in any case exceed three thousand Dollars ($3,000.00).

2.11

In consideration of the benefits provided herein, Flaum agrees that the above is the total and final compensation owed to him, and Flaum specifically agrees that, except for benefits to which Flaum may be entitled under the terms of the ITW benefit plans, there is no additional compensation due him in any form including salary, bonus, commission, or vacation.

3.

MUTUAL RELEASE

3.1

Flaum on behalf of himself and his heirs, assigns, agents, representatives, lawyers, and all persons acting by, through, under or in concert with him, do hereby release and forever discharge the Company including all subsidiaries, divisions, affiliates, and related entities, and its present and former officers, directors, shareholders, agents and employees (whether in their individual or representative capacities) of and from any and all manner of action, or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, loss, cost or expense, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which Flaum has or may have against the Company, by reason of any matter, cause or thing whatsoever from the beginning of time to the execution date of this Agreement, including, without limiting the generality of the foregoing, any claims arising out of, based upon, or relating to Flaum’s employment, benefits or otherwise, as well as any matters, causes, or things whatsoever that were, or have been, or could in any way have been alleged by Flaum against the Company relating to his employment, termination, benefits, or otherwise. The Claims released herein include, without limiting the generality of the foregoing, any claims in any way arising out of, based upon, or related to the employment of Flaum, including all claims under Title VII of the Civil Rights Act of 1964, as amended; the Americans with Disabilities Act, as amended; Employee Retirement Income Security Act (ERISA) as amended; the Age Discrimination in Employment Act of 1967, as amended; the Illinois Human Rights Act, any other federal, state or local statutes relating to employment, employment benefits or employment discrimination; personal injury, defamation, mental anguish, injury to health and/or personal reputation.

3.2

The Company, on its own behalf on behalf of its subsidiaries, divisions, affiliates and related entities and its present or former officers, directors, shareholders, agents and employees (whether in their individual or representative capacities) hereby release and forever discharge Flaum and Flaum’s heirs, assigns, agents, representatives, lawyers and all persons acting by, through, under or in concert with him (collectively the “Flaum Parties”), of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, loss, cost or expense of any nature whatsoever, known or unknown, fixed or contingent which the Company has or may have against the Flaum Parties by reason of any matter, cause or thing whatsoever from the beginning of time to the execution date of this Agreement including, without limiting the generality of the foregoing, any claims arising out of or based upon or relating to Flaum’s employment, benefits or otherwise as well as any matters, causes or things whatsoever that were, have been or could in any way have been alleged by the Company against the Flaum Parties relating to Flaum’s employment, termination, benefits or otherwise.

4.

INTELLECTUAL PROPERTY AND CONFIDENTIAL INFORMATION