8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): December 10, 2004

_________________

ILLINOIS TOOL WORKS INC.

(Exact name of registrant as specified in its charter)

Delaware	1-4797	36-1258310
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
3600 West Lake Avenue, Glenview, IL		60026-1215
(Address of Principal Executive Offices)		(Zip Code)

        (Registrant’s telephone number, including area code): 847- 724-7500

Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[    ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[    ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[    ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[    ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement

On December 10, 2004, the Board of Directors of Illinois Tool Works Inc. amended the Illinois Tool Works Inc. 1996 Stock Incentive Plan (the “Plan”) to allow the Compensation Committee of the Board to modify certain restricted stock grants in order to vest the grants at the holder’s retirement, disability or death. Copies of the amendment to the Plan and the forms of restricted stock agreements and stock option terms utilized in granting awards to executive officers are attached as Exhibits 10.1-10.4 of this report and are incorporated herein by reference.

On December 10, 2004, the Board of Directors also amended the Illinois Tool Works Inc. Executive Contributory Retirement Income Plan, as amended and restated as of January 1, 1999 (“1999 ECRIP”), in order to permit participants to continue their deferrals of compensation for periods commencing on and after January 1, 2005. A copy of the amendment to the 1999 ECRIP is attached as Exhibit 10.5 of this report and is incorporated herein by reference. A copy of an earlier amendment is attached as Exhibit 10.6.

As previously disclosed in the Company's previous proxy statements, executive officers receive annual cash bonuses under its Executive Incentive Plan based on predetermined financial and non-financial objectives. The maximum bonus opportunities range from 70% to 200% of base salary. The Chief Executive Officer, Vice Chairmen and certain executive officers can earn half of the maximum bonus opportunity if the Company's net income achieves certain predetermined levels for the particular fiscal year for which the bonuses will be paid. The other half of the maximum bonus opportunity 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 the Company'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 Chief Executive Officer's.

Item 9.01. Financial Statements and Exhibits

(c)       Exhibits
Exhibit Number	Exhibit Description
10.1	Amendment as of December 10, 2004, to the Illinois Tool Works Inc. 1996 Stock Incentive Plan dated February 16, 1996, as amended on December 12, 1997, October 29, 1999, January 3, 2003, March 18, 2003, and January 2, 2004.
10.2	Form of restricted stock agreement (unvested restricted stock forfeited at termination of employment.)
10.3	Form of restricted stock agreement (unvested restricted stock fully vested at retirement, death or disability.)
10.4	Stock option terms.
10.5	Amendment as of December 10, 2004, to the Illinois Tool Works Inc. Executive Contributory Retirement Income Plan, as amended and restated as of January 1, 1999.
10.6	Amendment dated July 17, 2001, to the Illinois Tool Works Inc. Executive Contributory Retirement Income Plan, as amended and restated as of January 1, 1999.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	Illinois Tool Works Inc.
Dated: December 15, 2004	/s/ Robert T. Callahan
	Robert T. Callahan
	Senior Vice President, Human Resources

EX-10.1

Exhibit 10.1

RESOLVED: that the second sentence of Section 9(b) of the Illinois Tool Works Inc. 1996 Stock Incentive Plan is hereby amended to read as follows:

“Notwithstanding the foregoing, the Restricted Shares granted January 2, 2003 and January 2, 2004, shall not become fully vested upon termination of employment by reason of Retirement, Disability or death, unless the Compensation Committee determines otherwise.”

EX-10.2

Exhibit 10.2

__________ __, 20___

Name
Business Unit

Dear __________:

On __________ __, 20___, the Compensation Committee of the Board of Directors granted you _________ restricted shares of ITW common stock the market value of which would be the average of the high and low share price on the grant date.

The shares are “restricted” because you may not sell, assign, transfer, pledge or otherwise encumber them until they vest and are distributed to you. The restricted shares will vest and be distributed to you in three annual installments on __________ __, 20___, __________ __, 20___ and __________ __, 20___, but only if you are employed by ITW or one of its subsidiaries on the date that they are scheduled to vest. If your employment terminates for any reason prior to __________ __, 20___, all unvested restricted shares will be forfeited. The Compensation Committee also may forfeit any unvested shares if they determine that you have acted in a manner adversely affecting ITW.

You have the right to vote the restricted shares and to receive dividends commencing with the dividend to be paid to stockholders on __________ __, 20___. The dividends will be taxable income to you subject to withholding. You also will recognize taxable income subject to withholding on each date that the restricted shares vest. Such taxable income will equal the fair market value of ITW common stock on the vesting date multiplied by the number of restricted shares that vest on that date. Alternatively, you may elect to recognize taxable income this year on all or a portion of the restricted shares by filing an election with the Internal Revenue Service prior to __________ __, 20___, a very short time period. For more information concerning this election we also recommend that you consult with your accountant or other tax advisor.

Your rights with respect to the restricted shares are contingent upon your satisfaction of all applicable tax withholding obligations. The restricted shares are subject to the terms of the Stock Incentive Plan, as described in the attached Prospectus. Notwithstanding the foregoing, the provisions of the Plan providing for vesting upon retirement, death or disability do not apply to these restricted shares.

If you have any questions regarding this grant contact Robyn McCarthy at 847-657-4225 or Heather Liay at 847-657-4520.

A Form 4 has been filed by ITW with the Securities and Exchange Commission to report the grant of the restricted shares. Any sale by you of the restricted shares after they vest is subject to window period requirements and timely filing on Form 4.

Yours sincerely,

W. James Farrell
Chairman and Chief Executive Officer

Please acknowledge receipt of this letter by signing and dating both copies of this letter and returning the “CORPORATE COPY” to the corporate office in the envelope provided as soon as possible.

Sign:_________________

Date:_________________

EX-10.3

Exhibit 10.3

__________ __, 20___

Name
Business Unit

Dear __________:

On __________ __, 20___, the Compensation Committee of the Board of Directors granted you _________ restricted shares of ITW common stock the market value of which would be the average of the high and low share price on the grant date.

The shares are “restricted” because you may not sell, assign, transfer, pledge or otherwise encumber them until they vest and are distributed to you. The restricted shares will vest and be distributed to you in three annual installments on __________ __, 20___, __________ __, 20___ and __________ __, 20___. If your employment with ITW or any of its subsidiaries terminates prior to __________ __, 20___ for any reason other than retirement or disability (each as defined in the Stock Incentive Plan), or death, all unvested restricted shares will be forfeited. If your employment terminates prior to __________ __, 20___ due to retirement, disability or death, all unvested restricted shares will fully vest. The Compensation Committee may forfeit any unvested shares if they determine that you have acted in a manner adversely affecting ITW.

You have the right to vote the restricted shares and to receive dividends commencing with the dividend to be paid to stockholders on __________ __, 20___. The dividends will be taxable income to you subject to withholding. You also will recognize taxable income subject to withholding on each date that the restricted shares vest. Such taxable income will equal the fair market value of ITW common stock on the vesting date multiplied by the number of restricted shares that vest on that date. Alternatively, you may elect to recognize taxable income this year on all or a portion of the restricted shares by filing an election with the Internal Revenue Service prior to __________ __, 20___, a very short time period. For more information concerning this election we also recommend that you consult with your accountant or other tax advisor.

Your rights with respect to the restricted shares are contingent upon your satisfaction of all applicable tax withholding obligations. The restricted shares are subject to the terms of the Stock Incentive Plan, as described in the attached Prospectus.

If you have any questions regarding this grant contact Robyn McCarthy at 847-657-4225 or Heather Liay at 847-657-4520.

A Form 4 has been filed by ITW with the Securities and Exchange Commission to report the grant of the restricted shares. Any sale by you of the restricted shares after they vest is subject to window period requirements and timely filing on Form 4.

Yours sincerely,

W. James Farrell
Chairman and Chief Executive Officer

Please acknowledge receipt of this letter by signing and dating both copies of this letter and returning the “CORPORATE COPY” to the corporate office in the envelope provided as soon as possible.

Sign:_________________

Date:_________________

EX-10.4

Exhibit 10.4

TERMS OF THE OPTION GRANT

(a.) In the event of a stock dividend, stock split, reorganization or recapitalization, appropriate adjustment will be made in the number of shares subject to the option and in the option price per share.

(b.) The option period shall be for ten (10) years from the date of grant on __________ __, 20___. Accordingly, no options under this grant may be exercised after the close of business in Chicago on __________ __, 20___. No purchase of shares may be made under this option during the first year of the option period. During the second year of the option period, you shall have the right to purchase twenty-five percent (25%) of the total number of optioned shares, and in each of the next three (3) years an additional twenty-five percent (25%) of the total number of shares optioned hereunder. Such rights to exercise shall be cumulative and may be exercised in any succeeding year of the option period up to the extent vested but not exercised in a previous year or years. On __________ __, 20___, all rights under this agreement as to any shares covered by the option shall terminate.

(c.) The exercise price may be paid in cash, through the delivery of shares that you previously acquired through the exercise of an ITW option or otherwise and that you have held for at least six months, or by a combination of the foregoing. If you deliver previously acquired shares, you will automatically be granted an option to purchase additional shares of common stock equal to the number of shares delivered. The new option will have terms identical to the exercised option, except that the exercise price will not be less than the fair market value of ITW’s common stock on the new grant date. You also may elect to pay the minimum required tax withholdings resulting from your option exercise through the delivery of shares that you previously acquired through the exercise of an ITW option or by directing ITW to withhold option shares.

(d.) You shall have no voting, dividend or subscription rights except with respect to the shares which have been issued to you following your exercise of part or all of the option. Your rights under this option agreement may not be assigned or transferred, and during your lifetime the option shall be exercisable only by you personally except with respect to immediate family members, Trusts, and partnerships as provided for in Paragraph (F) of Section 13 of the Stock Incentive Plan as approved by the Stockholders on May 3, 1996.

(e.) If prior to __________ __, 20___, you terminate employment with the Company by reason of disability, as defined by the Company’s benefit plans, your option shall be fully vested and exercisable not later than the earlier of five years after the date of termination due to disability, or __________ __, 20____. If you die while in the employ of the Company, or (notwithstanding the previous sentence) after terminating by reason of disability, your option shall be fully vested and exercisable by your estate not later than the earliest of: (i.) two years after the date of death, or (ii.) five years after the date of termination due to disability, or (iii.) __________ __, 20___.

(f.) If you retire, as defined by the Company’s retirement plan, prior to __________ __, 20___, your option shall be fully vested and exercisable not later than the earlier of five years from the date of your retirement or __________ __, 20___. If you die after terminating employment by reason of retirement, your option shall be exercisable by your estate not later than the earliest of: (i.) two years after the date of death, or (ii.) five years after the date of retirement, or (iii.) __________ __, 20___.

(g.) If you terminate your employment for any reason other than death, retirement or disability, your options that were vested prior to termination and not previously exercised may be exercised by you during the three-month period commencing on the date of your termination but not later than __________ __, 20___. If you die during this three-month period, the exercise period will be extended to the earlier of two years from the date of death or __________ __, 20___.

(h.) Notwithstanding the foregoing, the Compensation Committee of the Board of Directors may, in its sole discretion, deem this option to be immediately forfeited if you are terminated for cause (as defined by the Committee), compete with the Company, or conduct yourself in a manner adversely affecting the Company.

(i.) The option is subject to the terms of the Illinois Tool Works Inc. Stock Incentive Plan. Any inconsistencies shall be resolved in favor of the Plan.

(j.) These options and the Plan should be construed in accordance with and governed by the laws of the State of Illinois, United States of America.

The exercise of this option generally results in ordinary income being recognized for tax purposes in an amount equal to the excess of the market price at the time of exercise over the option price.

Received:___________________

                    (optionee's signature)

Date:___________________

EX-10.5

Exhibit 10.5

RESOLVED: that the fifth paragraph of Section 3.2 of the Illinois Tool Works Inc. Executive Contributory Retirement Income Plan is hereby amended to delete the first three sentences and to read in full as follows:

“An eligible Participant must complete a separate Agreement for each deferral period.”

EX-10.6

Exhibit 10.6

AMENDMENT

Illinois Tool Works Inc.

Executive Contributory Retirement Income Plan

Pursuant to Section 7.1 of the Illinois Tool Works Inc. Executive Contributory Retirement Income Plan as amended and restated effective January 1, 1999 (the “Plan”), effective July l, 2000, the Company hereby amends and restates the following sections of the Plan to read as follows:

2.5   A "Change in Control" means a Corporate Change as defined in the Illinois Tool Works Inc. 1996 Stock Incentive Plan.

2.8   “Company Matching Contribution” means the contribution made by the Company to a Participant’s Deferred Compensation Account pursuant to Section 3.7.

2.9   "Company Savings Plan" means the Illinois Tool Works Inc. Savings and Investment Plan.

3.2   Minimum and Maximum Deferral and Length of Participation. For Deferral Years commencing prior to January 1, 2001, a Participant may elect to defer between 5% and 50% of his/her Salary in l % increments during a Deferral Year. In addition, a Participant may elect to defer up to 100% of his/her Bonus in 1% increments earned during a Deferral Year.

For Deferral Years commencing on or after January 1, 2001, a Participant may elect to defer either 0% or between 6% and 50% of his/her Salary in 1% increments during a Deferral Year. In addition, a Participant may elect to defer either 0% or between 6% and 100% of his/her Bonus in 1% increments earned during a Deferral Year.

In the event a Participant elects to defer an amount of his or her Bonus that would not allow for the full payment of all FICA, federal, state and/or local income tax liabilities, the actual amount which shall be credited to the Participant’s Deferred Compensation Account shall be the maximum amount allowable after all applicable taxes.

At the time of election, a Participant may elect to defer a different percentage of his/her Salary or Bonus for each Deferral Year and may also elect not to defer any portion of his/her Salary or Bonus in a Deferral Year.

The deferral opportunity shall extend through December 31, 2004, however there shall be two periods of three years each. The initial deferral period shall be from January 1, 1999 through December 31, 2001. The second deferral period shall be from January 1, 2002 through December 31, 2004. A Participant must complete a separate Agreement for each deferral period and in order to be eligible for the second deferral period, a Participant must be designated to be eligible for the second deferral period and must complete a separate Agreement for that deferral period.

3.5   Alteration of Salary and Bonus Deferral. Except as provided in this Section 3.5 and in Section 3.6, a Participant’s election to defer Salary and Bonus shall be irrevocable. Pursuant to this Section 3.5, a Participant may increase or decrease his/her original Salary and/or Bonus deferral percentage prior to December 1 of the year preceding the Deferral Year for which such adjustment is requested. A Participant may increase or decrease the deferral percentage of his/her Salary and/or Bonus by the greater of 5% for Salary and 10% for Bonus or a percentage which is not more than 50% of the Participant’s original election if changed prior to December 1 of the year preceding the Deferral Year for which the adjustment is effective. In the event that the maximum adjustment percentage is not an integer percentage it shall be rounded up to the next highest integer percentage.

a)   For Deferral Years commencing prior to January 1, 2001, a Participant may not decrease his/her Salary deferral percentage below 5%. For Deferral Years commencing on or after January 1, 2001, a Participant may not decrease his/her Salary and/or Bonus deferral percentage below 6%. In addition, a Participant may choose not to have any Salary and/or Bonus deferral in accordance with this section 3.5. For Deferral Years commencing prior to January 1, 2001, to the extent a Participant has elected to defer 0% of Salary and/or Bonus for any Deferral Year on his/her deferral agreement, the Participant may increase his/her Salary deferral from 0% to 5% and/or increase his/her Bonus deferral from 0% to 10%. For Deferral Years commencing on or after January 1, 2001, to the extent a Participant has elected to defer 0% of Salary and/or Bonus for any Deferral Year on his/her deferral agreement, the Participant may increase his/her Salary deferral from 0% to 6% and/or increase his/her Bonus deferral from 0% to 6%.

A Participant may change his/her Salary and/or Bonus deferral by entering into a deferral Agreement by December 1 of the year preceding the Deferral Year for which such Agreement is to be effective.

3.7   Company Matching Contribution. For Deferral Years commencing prior to January 1, 2001, the Company shall contribute an amount to a Participant’s Deferred Benefit Account as and when the Participant’s Salary deferrals are added pursuant to Section 3.3. The amount of the Company Matching Contribution shall be equal to 3% of the Participant’s Salary. In order for the Company Matching Contribution to be credited to a Participant’s Deferred Benefit Account, the Participant must elect to defer at least 5% of his/her Salary during the Deferral Year.

Commencing with Deferral Years on or after January 1, 2001, the amount of the Company Matching Contribution shall be equal to 3.5% of the Participant’s Salary. In order to receive the Company Matching Contribution related to the Participant’s Salary, the Participant must elect to defer at least 6% of his/her Salary during the Deferral Year. In addition, the Participant shall be entitled to a Company Matching Contribution equal to 3.5% of the Participant’s Bonus. In order to receive the Company Matching Contribution related to the Participant’s Bonus, the Participant must elect to defer at least 6% of his/her Bonus during the Deferral Year.

In the event a participant elects to defer any amount of Salary and/or Bonus under this Plan, he/she will not receive a Company Matching Contribution under the Company Savings Plan.

Notwithstanding the foregoing, when the CEO designates a Participant pursuant to Section 3.4, he may specify that such Participant is not entitled to a Company Matching Contribution.

4.8   Form of Benefit Payment.

a)   Upon the happening of an event described in Section 4.2, 4.4, 4.5, or 4.6, the Company shall pay the Participant’s Deferred Benefit Account in a lump sum or in monthly installments payable in approximately equal amounts over 2 to 20 years, commencing on the event described in Section 4.2, 4.4, 4.5 or 4.6 in accordance with the Participant’s last Agreement. Interest on the unpaid principal balance equal to the applicable Retirement Interest Yield will be added to the Participant’s Deferred Benefit Account on each Determination Date. The amount of the installment payments shall be based on the prevailing Retirement Interest Yield at the commencement of payments, projected into the future using a method approved by the Company. The amount of the installment payments shall be recomputed once per calendar year at a date determined by the Company and the installment payments shall be increased or decreased to reflect any changes in the Retirement Interest Yield.

A Participant may, by written request filed with the Company at least 13 months prior to the commencement of a distribution pursuant to this Plan, change the method of distribution elected in his/her Agreement to any other method permitted under this Section 4.8.

Sections 2.5, 2.8, 2.9, 3.2, 3.5, 3.7, and 4.8a are the only Sections affected by this Amendment.

Illinois Tool Works Inc.

By:  /s/ Robert T. Callahan

Its:  Vice President, Pension & Systems

Date:  July 17, 2001