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EXECUTION COPY
EMPLOYEE BENEFIT SERVICES AND LIABILITY AGREEMENT
dated as of November 1, 1995, among ITT CORPORATION, a Delaware
corporation (which, together with its subsidiaries, is herein
referred to as "ITT"), ITT DESTINATIONS, INC., a Nevada
corporation, (which, together with its subsidiaries, is herein
referred to as "ITT Destinations"), and ITT HARTFORD GROUP,
INC., a Delaware corporation (which, together with its
subsidiaries, is herein referred to as "ITT Hartford").
WHEREAS, the Board of Directors of ITT has determined that it
is appropriate and desirable to distribute to the holders of shares of common
stock, par value $1.00 per share, of ITT (the "ITT Common Stock") all the
outstanding shares of common stock of ITT Destinations (the "ITT Destinations
Common Stock") and all the outstanding shares of common stock of ITT Hartford
(the "ITT Hartford Common Stock"); and
WHEREAS, each of ITT, ITT Destinations and ITT Hartford has
determined that it is necessary and desirable to allocate and assign
responsibility for certain employee benefit liabilities in respect of the
activities of the businesses of such entities on the Distribution Date (as
defined herein) and those liabilities in respect of other businesses and
activities of ITT and its former subsidiaries and certain other matters.
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, ITT, ITT Destinations and ITT Hartford agree as
follows:
1. RETIREMENT PLANS. (a) Continuation of Retirement
Plans. (i) Following the Distribution, (x) ITT Industries shall continue to
sponsor the ITT Salaried Retirement Plan, which shall be renamed as the "ITT
Industries Salaried Retirement Plan", (y) ITT Hartford shall continue to sponsor
the ITT Hartford Retirement Plan and (z) ITT Destinations shall adopt the
Sheraton Salaried Retirement Plan as the ITT Destinations Salaried Retirement
Plan.
(ii) Amendment of Retirement Plans. Effective as of the
Distribution Date, (x) ITT Industries shall cause the
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ITT Salaried Retirement Plan to be amended as provided pursuant to Section 1 of
this Agreement; (y) ITT Destinations shall cause the ITT Destinations Salaried
Retirement Plan to be amended as provided pursuant to Section 1 of this
Agreement; and (z) ITT Hartford shall cause the ITT Hartford Retirement Plan to
be amended as provided pursuant to Section 1 of this Agreement.
(b) Recognition of Service Rendered Prior to the
Distribution Date. This paragraph (b) is intended to set forth the steps to
be taken to provide for recognition of service rendered prior to the
Distribution Date by ITT Employees who, immediately prior to the Distribution
Date, (x) have an accrued benefit under more than one of the ITT Salaried
Retirement Plan, the Sheraton Salaried Retirement Plan and the ITT Hartford
Retirement Plan or (y) have an accrued benefit under any such plan and, on the
Distribution Date, will be a participant in any other such plan.
(i) This clause (i) applies solely to ITT Employees who,
immediately prior to the Distribution Date, have an accrued benefit under the
ITT Salaried Retirement Plan and who, on such date, are employed by either ITT
Destinations or ITT Hartford.
Each of the ITT Destinations Salaried Retirement Plan and the
ITT Hartford Retirement Plan shall be amended to recognize all service rendered
by such ITT Employees prior to the Distribution Date which is recognized as
Eligibility Service (as defined in the ITT Salaried Retirement Plan, as in
effect immediately prior to the Distribution Date) under the terms of the ITT
Salaried Retirement Plan for purposes of determining eligibility and vesting,
including, without limitation, eligibility service for purposes of determining
eligibility for plan membership, preretirement survivor benefits, early
retirement benefits and normal retirement benefits. Each of the ITT Destinations
Salaried Retirement Plan and the ITT Hartford Retirement Plan shall further be
amended to (A) recognize as service for benefit accrual purposes all service
rendered by such ITT Employees prior to the Distribution Date which is
recognized as Benefit Service (as defined in the ITT Salaried Retirement Plan,
as in effect immediately prior to the Distribution Date) under the terms of the
ITT Salaried Retirement Plan and (B) provide for an offset of any benefit
payable with respect to service recognized under the ITT Salaried Retirement
Plan or any other defined benefit
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retirement plan maintained by ITT or its Affiliates covering the same period of
service.
(ii) This clause (ii) applies solely to ITT Employees who,
immediately prior to the Distribution Date, have an accrued benefit under the
Sheraton Salaried Retirement Plan and who, on such date, are employed by either
ITT Industries or ITT Hartford.
Each of the ITT Salaried Retirement Plan and the ITT Hartford
Retirement Plan shall be amended to recognize all service rendered by such ITT
Employees prior to the Distribution Date which is recognized as Eligibility
Service (as defined in the Sheraton Salaried Retirement Plan, as in effect
immediately prior to the Distribution Date) under the terms of the Sheraton
Salaried Retirement Plan for purposes of determining eligibility and vesting,
including, without limitation, eligibility service for purposes of determining
eligibility for plan membership, preretirement survivor benefits, early
retirement benefits and normal retirement benefits. Each of the ITT Salaried
Retirement Plan and the ITT Hartford Retirement Plan shall further be amended to
(A) recognize as service for benefit accrual purposes all service rendered by
such ITT Employees prior to the Distribution Date which is recognized as Benefit
Service (as defined in the Sheraton Salaried Retirement Plan, as in effect
immediately prior to the Distribution Date) under the terms of the Sheraton
Salaried Retirement Plan and (B) provide for an offset of any benefit payable
with respect to service recognized under the Sheraton Salaried Retirement Plan
or any other defined benefit retirement plan maintained by ITT or its Affiliates
covering the same period of service.
(iii) This clause (iii) applies solely to ITT Employees who,
immediately prior to the Distribution Date, have an accrued benefit under the
ITT Hartford Retirement Plan and who, on such date, are employed by either ITT
Industries or ITT Destinations.
Each of the ITT Salaried Retirement Plan and the ITT
Destinations Salaried Retirement Plan shall be amended to recognize all service
rendered by such ITT Employees prior to the Distribution Date which is
recognized as Eligibility Service (as defined in the ITT Hartford Retirement
Plan, as in effect immediately prior to the Distribution Date) under the terms
of the ITT Hartford Retirement Plan for purposes of determining eligibility and
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vesting, including, without limitation, eligibility service for purposes of
determining eligibility for plan membership, preretirement survivor benefits,
early retirement benefits and normal retirement benefits. Each of the ITT
Salaried Retirement Plan and the ITT Destinations Salaried Retirement Plan shall
further be amended to (A) recognize as service for benefit accrual purposes all
service rendered by such ITT Employees prior to the Distribution Date which is
recognized as Benefit Service (as defined in the ITT Hartford Retirement Plan,
as in effect immediately prior to the Distribution Date) under the terms of the
ITT Hartford Retirement Plan and (B) provide for an offset of any benefit
payable with respect to service recognized under the ITT Hartford Retirement
Plan or any other defined benefit retirement plan maintained by ITT or its
Affiliates covering the same period of service.
(iv) For purposes of determining the offset to be provided
pursuant to subclause (B) of each of clauses (i), (ii) and (iii) of this
paragraph (b), the benefits payable under each plan shall be determined as a
straight life annuity payable at normal or postponed retirement age, and the
offset shall be applied to reduce the benefit payable under the appropriate
plan. The offset shall be taken as of the date benefits commence under the plan
against which the offset is applied, and the offset shall be computed as if the
benefit being offset commenced as of the same date.
(c) Recognition of Service Rendered On and After the
Distribution Date. This paragraph (c) is intended to set forth the steps to
be taken to provide for recognition of service rendered on and after the
Distribution Date by ITT Employees who, immediately prior to the Distribution
Date (x) have an accrued benefit under more than one of the ITT Salaried
Retirement Plan, the Sheraton Salaried Retirement Plan and the ITT Hartford
Retirement Plan or (y) have an accrued benefit under any such plan and, on the
Distribution Date, will be a participant in any other such plan.
(i) This clause (i) applies solely to ITT Employees who,
on the Distribution Date, are employed by ITT Industries and have an accrued
benefit under either the Sheraton Salaried Retirement Plan or the ITT Hartford
Retirement Plan.
Subject to Section 1(e) hereof and to the extent permitted by
applicable law, each of the ITT Destinations Salaried Retirement Plan and the
ITT Hartford Retirement
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Plan shall be amended to recognize service rendered on and after the
Distribution Date with ITT Industries for each such ITT Employee for purposes of
eligibility and vesting, including, without limitation, eligibility service for
purposes of preretirement death benefits, early retirement benefits and normal
retirement benefits. For purposes of the ITT Destinations Salaried Retirement
Plan and the ITT Hartford Retirement Plan, the final average pay of such ITT
Employees shall be determined immediately prior to the Distribution Date.
(ii) This clause (ii) applies solely to ITT Employees who,
on the Distribution Date, are employed by ITT Destinations and have an accrued
benefit under either the ITT Salaried Retirement Plan or the ITT Hartford
Retirement Plan.
Subject to Section 1(e) hereof and to the extent permitted by
applicable law, each of the ITT Salaried Retirement Plan and the ITT Hartford
Retirement Plan shall be amended to recognize service rendered on and after the
Distribution Date with ITT Destinations for each such ITT Employee for purposes
of eligibility and vesting, including, without limitation, eligibility service
for purposes of preretirement death benefits, early retirement benefits and
normal retirement benefits. For purposes of the ITT Salaried Retirement Plan and
the ITT Hartford Retirement Plan, the final average pay of such ITT Employees
shall be determined immediately prior to the Distribution Date.
(iii) This clause (iii) applies solely to ITT Employees who,
on the Distribution Date, are employed by ITT Hartford and have an accrued
benefit under either the ITT Salaried Retirement Plan or the Sheraton Salaried
Retirement Plan.
Subject to Section 1(e) hereof and to the extent permitted by
applicable law, each of the ITT Salaried Retirement Plan and the ITT
Destinations Salaried Retirement Plan shall be amended to recognize service
rendered on and after the Distribution Date with ITT Hartford for each such ITT
Employee for purposes of eligibility and vesting, including, without limitation,
eligibility service for purposes of preretirement death benefits, early
retirement benefits and normal retirement benefits. For purposes of the ITT
Salaried Retirement Plan and the ITT Destinations Salaried Retirement Plan, the
final average pay of such ITT
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Employees shall be determined immediately prior to the Distribution Date.
(d) Effect of Employment On and After the Distribution
Date with ITT Industries, ITT Destinations or ITT Hartford. (i) Any ITT Employee
who, on the Distribution Date, is employed by ITT Industries and for whom
service rendered on and after the Distribution Date is recognized pursuant to
Section 1(c) under the ITT Destinations Salaried Retirement Plan or the ITT
Hartford Retirement Plan while such person is employed with ITT Industries
(including periods after re-employment following a termination of employment
occurring after the Distribution Date), (I) shall not be deemed either to have
terminated employment or to be in retirement status under the ITT Destinations
Salaried Retirement Plan or the ITT Hartford Retirement Plan and (II) except to
the extent required by law, shall not be eligible to receive payment of his or
her vested benefit or retirement allowance under the ITT Destinations Salaried
Retirement Plan or the ITT Hartford Retirement Plan.
(ii) Any ITT Employee who, on the Distribution Date, is
employed by ITT Destinations and for whom service rendered on and after the
Distribution Date is recognized pursuant to Section 1(c) under the ITT Salaried
Retirement Plan or the ITT Hartford Retirement Plan while such person is
employed with ITT Destinations (including periods after re-employment following
a termination of employment occurring after the Distribution Date) (I) shall not
be deemed either to have terminated employment or to be in retirement status
under the ITT Salaried Retirement Plan or the ITT Hartford Retirement Plan and
(II) except to the extent required by law, shall not be eligible to receive
payment of his or her vested benefit or retirement allowance under the ITT
Salaried Retirement Plan or the ITT Hartford Retirement Plan.
(iii) Any ITT Employee who, on the Distribution Date, is
employed by ITT Hartford and for whom service rendered on and after the
Distribution Date is recognized pursuant to Section 1(c) under the ITT Salaried
Retirement Plan or the ITT Destinations Salaried Retirement Plan while such
person is employed with ITT Hartford (including periods after re-employment
following a termination of employment occurring after the Distribution Date) (I)
shall not be deemed either to have terminated employment or to be in retirement
status under the ITT Salaried Retirement Plan or
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the ITT Destinations Salaried Retirement Plan and (II) except to the extent
required by law, shall not be eligible to receive payment of his or her vested
benefit or retirement allowance under the ITT Salaried Retirement Plan or the
ITT Destinations Salaried Retirement Plan.
(e) Limited Obligation To Recognize Service Rendered On
and After the Distribution Date. (i) With respect to any ITT Employee, service
rendered on and after the Distribution Date that is required to be recognized by
ITT Industries under the ITT Salaried Retirement Plan pursuant to Section 1(c)
hereof shall be the same years and portions thereof of service recognized for
similar purposes under the ITT Hartford Retirement Plan, as in effect
immediately prior to the Distribution Date, with respect to ITT Hartford
Employees, and under the ITT Destinations Salaried Retirement Plan, as in effect
immediately prior to the Distribution Date, with respect to ITT Destinations
Salaried Employees. In no event shall the ITT Salaried Retirement Plan be
required to recognize any enhanced service benefits that might be provided on
and after the Distribution Date under the ITT Destinations Salaried Retirement
Plan or the ITT Hartford Retirement Plan.
(ii) With respect to any ITT Employee, service rendered on
and after the Distribution Date that is required to be recognized by ITT
Destinations under the ITT Destinations Salaried Retirement Plan pursuant to
Section 1(c) hereof shall be the same years and portions thereof of service
recognized for similar purposes under the ITT Salaried Retirement Plan, as in
effect immediately prior to the Distribution Date, with respect to ITT
Industries Salaried Employees, and under the ITT Hartford Retirement Plan, as in
effect immediately prior to the Distribution Date, with respect to ITT Hartford
Employees. In no event shall the ITT Destinations Salaried Retirement Plan be
required to recognize any enhanced service benefits that might be provided on
and after the Distribution Date under the ITT Salaried Retirement Plan or the
ITT Hartford Retirement Plan.
(iii) With respect to any ITT Employee, service rendered on
and after the Distribution Date that is required to be recognized by ITT
Hartford under the ITT Hartford Retirement Plan pursuant to Section 1(c) hereof
shall be the same years and portions thereof of service recognized for similar
purposes under the ITT Salaried Retirement Plan, as in effect immediately prior
to the Distribution Date, with
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respect to ITT Industries Salaried Employees, and under the ITT Destinations
Salaried Retirement Plan, as in effect immediately prior to the Distribution
Date, with respect to ITT Destinations Salaried Employees. In no event shall the
ITT Hartford Retirement Plan be required to recognize any enhanced service
benefits that might be provided on and after the Distribution Date under the ITT
Salaried Retirement Plan or the ITT Destinations Salaried Retirement Plan.
(f) Plan Asset Transfers. It is intended that, at any
time or from time to time following the Distribution, ITT Industries, ITT
Destinations and ITT Hartford may cause to occur transfers of assets from the
ITT Salaried Retirement Plan, the ITT Destinations Salaried Retirement Plan
and/or the ITT Hartford Retirement Plan, to any other such plan, subject to
agreement by the sponsor of the transferor plan and the sponsor of the
transferee plan, with respect to benefits that have accrued as of the
Distribution Date and that are attributable to a person no longer employed by
the sponsor of the transferor plan or its affiliates.
2. INVESTMENT AND SAVINGS PROGRAMS.
(a) Effective as of the Distribution Date, ITT
Destinations shall adopt the ITT Destinations Savings Plan, which shall have
terms similar in all material respects to the ITT Savings Plan. ITT Industries
shall cause the transfer, as soon as practicable on or after the Distribution
Date, of the accounts of all ITT Destinations Salaried Employees from the ITT
Savings Plan to the ITT Destinations Savings Plan. Such assets will be
transferred in kind to the maximum extent practicable.
(b) Effective as of the Distribution Date, ITT Hartford
shall adopt the ITT Hartford Savings Plan, which shall have terms similar in all
material respects to the ITT Savings Plan. ITT Industries shall cause the
transfer, as soon as practicable on or after the Distribution Date, of the
accounts of all ITT Hartford Employees from the ITT Savings Plan to the ITT
Hartford Savings Plan. Such assets will be transferred in kind to the maximum
extent practicable.
(c) With respect to any former ITT employee who is
entitled to a benefit as of the Distribution Date under the ITT Destinations
Salaried Retirement Plan or any other
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defined benefit retirement plan to be maintained by ITT Destinations following
the Distribution or who was a participant in any such plan on such employee's
last day of service with ITT, ITT Industries shall cause the account of such
former employee under the ITT Savings Plan to be transferred in the manner
described in Section 2(a) hereof.
(d) With respect to any former ITT employee entitled to a
benefit as of the Distribution Date under the ITT Hartford Retirement Plan or
any other defined benefit retirement plan to be maintained by ITT Hartford
following the Distribution or who was a participant in any such plan on such
employee's last day of service with ITT, ITT Industries shall cause the account
of such former employee under the ITT Savings Plan to be transferred in the
manner described in Section 2(b) hereof.
(e) The account of any other current or former ITT
employee shall remain in the ITT Savings Plan, which shall continue to be
sponsored by ITT Industries and shall be renamed as the "ITT Industries
Investment and Savings Plan."
3. EXCESS NON-QUALIFIED SUPPLEMENTAL BENEFIT PLANS. (a)
Excess Pension Plans. (i) Effective as of the Distribution Date, ITT
Industries shall continue to sponsor the ITT Excess Pension Plan and ITT Excess
Pension Plan Trust. Effective as of the Distribution Date, ITT Destinations
shall adopt the Sheraton Excess Pension Plan as the ITT Destinations Excess
Pension Plan and shall adopt the ITT Destinations Excess Pension Plan Trust
under which excess pension benefits for certain officers will be funded.
Effective as of the Distribution Date, ITT Hartford shall continue to sponsor
the ITT Hartford Excess Pension Plan and the ITT Hartford Excess Pension Plan
Trust.
(ii) ITT Industries does hereby assume all liability for
benefits (whether funded or unfunded) that have accrued prior to the
Distribution Date under the Sheraton Excess Pension Plan and the ITT Hartford
Excess Pension Plan with respect to ITT Industries Salaried Employees, except
that, to the extent such benefits are funded under the ITT Hartford Excess
Pension Plan Trust, ITT Industries' assumption of liability for benefits to any
ITT Industries Salaried Employee shall be effective only if and to the extent
that such employee waives his or her right to receive such benefits under the
ITT Hartford Excess Pension Plan and ITT Hartford Excess Pension Plan Trust. ITT
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Industries and ITT Hartford shall each use its commercially reasonable efforts
to obtain such waivers from ITT Industries Salaried Employees, and ITT Hartford
shall notify ITT Industries upon receipt of any such waiver.
(iii) ITT Destinations does hereby assume all liability for
benefits (whether funded or unfunded) that have accrued prior to the
Distribution Date under the ITT Excess Pension Plan and the ITT Hartford Excess
Pension Plan with respect to ITT Destinations Salaried Employees, except that,
to the extent such benefits are funded under the ITT Excess Pension Plan Trust
or the ITT Hartford Excess Plan Trust, ITT Destinations' assumption of liability
for benefits to any ITT Destinations Salaried Employee shall be effective only
if and to the extent that such employee waives his or her right to receive such
benefits under the ITT Excess Pension Plan and ITT Excess Pension Plan Trust or
the ITT Hartford Excess Pension Plan and ITT Hartford Excess Pension Plan Trust,
as the case may be. ITT Industries, ITT Destinations and ITT Hartford shall each
use its commercially reasonable efforts to obtain such waivers from ITT
Destinations Salaried Employees, and ITT Industries and ITT Hartford shall
notify ITT Destinations upon receipt of any such waiver.
(iv) ITT Hartford does hereby assume all liability for
benefits (whether funded or unfunded) that have accrued prior to the
Distribution Date under the ITT Excess Pension Plan and the Sheraton Excess
Pension Plan with respect to ITT Hartford Employees, except that, to the extent
such benefits are funded under the ITT Excess Pension Plan Trust, ITT Hartford's
assumption of liability for benefits to any ITT Hartford Employee shall be
effective only if and to the extent that such employee waives his or her right
to receive such benefits under the ITT Excess Pension Plan and ITT Excess
Pension Plan Trust. ITT Industries and ITT Hartford shall each use its
commercially reasonable efforts to obtain such waivers from ITT Hartford
Employees, and ITT Industries shall notify ITT Hartford upon receipt of any such
waiver.
(b) Excess Savings Plans. Effective as of the
Distribution Date, ITT Industries shall remain liable for benefits accrued under
the ITT Excess Savings Plan prior to the Distribution Date with respect to ITT
Industries Salaried Employees. Effective as of the Distribution Date, ITT
Destinations shall adopt the ITT Destinations Excess Savings Plan, which shall
be identical in all material respects to the ITT Excess Savings Plan as in
effect
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immediately prior to the Distribution Date. Effective as of the Distribution
Date, ITT Hartford shall continue to sponsor the ITT Hartford Excess Savings
Plan. ITT Destinations does hereby assume liability for benefits accrued prior
to the Distribution Date under the ITT Excess Savings Plan with respect to ITT
Destinations Salaried Employees, and ITT Hartford does hereby assume liability
for benefits accrued prior to the Distribution Date under the ITT Excess Savings
Plan with respect to ITT Hartford Employees.
(c) Guarantee. (i) ITT Destinations and ITT Hartford
jointly and severally guarantee and agree, in the event ITT Industries fails to
satisfy its obligations in respect of benefits that have accrued prior to the
Distribution Date under the ITT Excess Pension Plan (including, without
limitation, to the extent that ITT Industries has assumed any such liability
pursuant to an employee's waiver of benefits under the ITT Hartford Excess
Pension Plan Trust, as contemplated by Section 3(a) above) or benefits that have
accrued prior to the Distribution Date under the ITT Excess Savings Plan, to
make payment when due in respect of all such obligations of ITT Industries in
respect of the ITT Excess Pension Plan or the ITT Excess Savings Plan, as
applicable. To the extent ITT Destinations or ITT Hartford makes payment in
respect of this guarantee, it will have a right of contribution from the
nonpaying guarantor of 50% of the payment made.
(ii) ITT Industries and ITT Hartford jointly and severally
guarantee and agree, in the event ITT Destinations fails to satisfy its
obligations in respect of benefits under the ITT Destinations Excess Pension
Plan that have accrued prior to the Distribution Date (including, without
limitation, to the extent that ITT Destinations has assumed any such liability
pursuant to an employee's waiver of benefits under the ITT Excess Pension Plan
Trust or the ITT Hartford Excess Pension Plan Trust, as contemplated by Section
3(a) above) or benefits that have accrued prior to the Distribution Date under
the ITT Destinations Excess Savings Plan with respect to ITT Destinations
Salaried Employees (including, without limitation, by reason of the assumption
by ITT Destinations of liability for such benefits under Section 3(b) above), to
make payment when due in respect of all such obligations of ITT Destinations in
respect of the ITT Destinations Excess Pension Plan or the ITT Destinations
Excess Savings Plan, as applicable. To the extent ITT Industries or ITT Hartford
makes payment in
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respect of this guarantee, it will have a right of contribution from the
nonpaying guarantor of 50% of the payment made.
(iii) ITT Destinations and ITT Industries jointly and
severally guarantee and agree, in the event ITT Hartford fails to satisfy its
obligations in respect of benefits under the ITT Hartford Excess Plan that have
accrued prior to the Distribution Date (including, without limitation, to the
extent that ITT Hartford has assumed any such liability pursuant to an
employee's waiver of benefits under the ITT Excess Pension Plan Trust, as
contemplated by Section 3(a) above) or benefits that have accrued prior to the
Distribution Date under the ITT Hartford Excess Savings Plan with respect to ITT
Hartford Employees (including, without limitation, by reason of the assumption
by ITT Hartford of liability for such benefits under Section 3(b) above), to
make payment when due in respect of all such obligations of ITT Hartford in
respect of the ITT Hartford Excess Pension Plan or the ITT Hartford Excess
Savings Plan, as applicable. To the extent ITT Destinations or ITT Industries
makes payment in respect of this guarantee, it will have a right of contribution
from the nonpaying guarantor of 50% of the payment made.
(iv) This Section 3(c) is not intended to modify the
allocation and assumption of liabilities in respect of the excess pension plans
and excess savings plans contemplated by Section 3(a) and Section 3(b) hereof.
(v) It is the intention of the parties to this Agreement
that the provisions of this Section 3(c) shall be enforceable by any ITT
Employee or ITT retiree or their respective surviving beneficiaries.
4. ITT EMPLOYEE WELFARE BENEFIT PLANS. (a)
Establishment of Plans. (i) Subject to Section 10(c), effective as of
the Distribution Date, ITT Industries shall continue to sponsor the employee
welfare benefit plans of ITT for ITT Industries Salaried Employees. Such
employee welfare benefit plans shall include coverage for life insurance,
disability, health, accident and post-retirement health and life insurance.
(ii) Subject to Section 10(c), effective as of the
Distribution Date, ITT Destinations shall adopt the broad-based employee welfare
benefit plans of ITT Sheraton as the ITT Destinations salaried employee welfare
benefit program.
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Such employee welfare benefit plans shall include coverage for life insurance,
health, accident and post-retirement health and life insurance. ITT Destinations
shall also adopt a long-term disability insurance plan and an excess long-term
disability plan, as provided in Section 4(d) hereof. Subject to Section 10(c),
ITT Destinations shall further cause CWI, ITT Educational Services and ITT
Intermedia, and use its commercially reasonable efforts to cause MSG, to
continue their respective separate employee welfare benefit plans covering their
respective employees.
(iii) Subject to Section 10(c), effective as of the
Distribution Date, ITT Hartford shall continue its broad-based employee welfare
benefit plans. Such employee welfare benefit plans shall include coverage for
life insurance, disability, health, accident and post-retirement health and life
insurance.
(b) Post-Retirement Benefits. (i) ITT Sheraton and ITT
Hartford each maintains separate employee welfare benefit programs that include
retiree medical and health benefits for certain of their respective salaried
employees. ITT Destinations acknowledges that, following the Distribution, it
will retain all liability with respect to such plans maintained by ITT Sheraton.
ITT Hartford acknowledges that, following the Distribution, it will retain all
liability with respect to such plans maintained by ITT Hartford.
ITT Industries shall retain all liability with respect to, and
all Code Section 501(c)(9) assets attributable to, retiree life insurance and
medical benefits under the ITT employee welfare benefit plans, except that (i)
ITT Industries shall transfer to ITT Destinations the liability of ITT with
respect to, and any assets attributable to, certain ITT Destinations Salaried
Employees whose employment is transferred to ITT Destinations in connection with
the Distribution, and ITT Destinations does hereby assume such liability and
(ii) ITT Industries shall transfer to ITT Hartford the liability with respect
to, and assets attributable to, certain ITT Employees whose employment is
transferred to ITT Hartford in connection with the Distribution, and ITT
Hartford does hereby assume such liability.
(ii) If there is a Change in Control of ITT Industries, ITT
Destinations or ITT Hartford during the ten-year period following the
Distribution, then the company in
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which such Change in Control occurred shall not, during the balance of such
ten-year period, reduce or eliminate health benefits in effect immediately prior
to such Change in Control provided to former employees who retired from ITT or
any of its Affiliates on or prior to the Distribution Date (or as set forth in
the next succeeding sentence), or increase associated retiree contributions,
unless the other companies consent in writing to such a reduction, elimination
or cost increase; provided, however, that the company in which
the Change in Control occurred may, in its sole discretion, modify such benefits
in accordance with the changes contemplated in the assumptions in effect
immediately prior to the Change in Control that are used to establish such
company's Accumulated Postretirement Benefit Obligation (as defined in Statement
of Financial Accounting Standard No. 106). Persons who are receiving severance
payments in connection with the Distribution and who are or become eligible to
retire on or before the end of such severance period shall be afforded the
treatment of this Section 4(b)(ii).
(iii) Indemnity. In the event that any of ITT
Industries, ITT Destinations or ITT Hartford is asked to consent to a reduction,
elimination or cost increase with respect to retiree health benefits after a
Change in Control as described in clause (ii) above, each such company shall
determine whether to provide such consent in its sole and absolute discretion.
Each of ITT Industries, ITT Destinations and ITT Hartford does hereby agree to
indemnify any other company asked by it to provide such consent against any and
all liability that might arise with respect to the granting or withholding of
such consent.
(c) Severance. As of the Distribution Date, each of ITT
Industries, ITT Destinations and ITT Hartford shall provide severance plans for
all ITT Employees which are substantially equivalent to those ITT severance
plans covering such employees immediately prior to the Distribution Date. Such
severance plans shall be maintained without modification for a minimum of one
year.
(d) Long-Term Disability Insurance. (i) As of the
Distribution Date, ITT Destinations shall adopt a long-term disability plan,
identical in all material respects to the ITT Long-Term Disability Plan, as in
effect on the Distribution Date, covering eligible ITT Destinations Salaried
Employees. ITT Destinations shall be allocated a proportionate share of any
assets attributable thereto,
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including any assets (and any related liability) for incurred but unreported
claims. ITT Hartford shall be allocated a proportionate share of any assets
attributable thereto, including any assets (and any related liability) for
incurred but unreported claims. The reasonable determination of Metropolitan
Life Insurance Company with respect to the allocation of such assets among ITT
Industries, ITT Destinations and ITT Hartford shall be binding on the parties
hereto.
(ii) Effective as of the Distribution Date, ITT
Destinations shall adopt an excess long-term disability plan, identical in all
material respects to the ITT Excess Long-Term Disability Plan, as in effect on
the Distribution Date, covering those eligible ITT Destinations employees. ITT
Destinations does hereby assume all liabilities to ITT Destinations Salaried
Employees under the ITT Excess Long-Term Disability Plan.
5. BONUS PLAN; LONG-TERM PERFORMANCE PLAN. ITT
currently maintains certain bonus plans and the ITT Long-Term Performance Plan,
pursuant to which certain ITT Employees employed by ITT World Headquarters might
become entitled to payments after the Distribution Date with respect to their
performance with ITT prior to the Distribution Date. With respect to such ITT
Employees who continue in employment on the Distribution Date, ITT Industries
shall remain liable for such payments, including any such payments to be made
following the Distribution Date, except that any such payments deferred by any
such ITT Employee pursuant to the ITT Deferred Compensation Plan shall be the
liability of the company employing such ITT Employee on the Distribution Date.
With respect to such ITT Employees who do not continue in employment immediately
following the Distribution Date, ITT Industries shall remain liable for (i) the
payments described in the first sentence of this Section 5 and for any payments
under applicable severance arrangements, including any such payments to be made
following the Distribution Date, and (ii) any of the payments referred to in (i)
above deferred by any such ITT Employee pursuant to the ITT Deferred
Compensation Plan. ITT Industries, ITT Destinations and ITT Hartford shall cause
any such payments under the bonus plans to be recognized as compensation for
purposes of their respective retirement plans without regard to the source of
such payments, provided that all other terms and conditions of such retirement
plans shall apply to the determination of whether such payments are recognized
as compensation.
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6. COLI. (i) Effective as of the Distribution Date, a
portion of the COLI policy underwritten by Penn Insurance and Annuity Company
covering ITT Destinations Salaried Employees shall be allocated to ITT
Destinations.
(ii) Effective as of the Distribution Date, the COLI policy
underwritten by Hartford Life Insurance Company covering certain ITT Employees
and directors of ITT, ITT Destinations and ITT Hartford who are eligible for
participation in the ITT Deferred Compensation Plan shall be allocated among the
three companies based on the employment of each such ITT Employee or service of
such director immediately following the Distribution Date.
7. STOCK OPTIONS AND OTHER AWARDS. (a) Effective as of
the Distribution Date, outstanding stock options, stock appreciation rights and
restricted stock awards ("ITT stock awards") under the ITT 1977 Stock Option
Incentive Plan, the ITT 1986 Incentive Stock Plan, and the ITT 1994 Incentive
Stock Plan, as each such plan may have been amended from time to time (the "ITT
Stock Plans"), shall be treated as follows:
(i) ITT Industries Salaried Employees. ITT stock awards
held by ITT Industries Salaried Employees shall be adjusted to reflect
the Distribution, as provided pursuant to the terms of the ITT Stock
Plans.
(ii) ITT Destinations Salaried Employees. ITT
Destinations Salaried Employees holding ITT stock awards shall receive
substitute stock awards in respect of ITT Destinations Common Stock
pursuant to the terms of the ITT Destinations Stock Plan, to be adopted
by ITT Destinations as of the Distribution Date, provided that such ITT
Destinations Salaried Employees surrender their ITT stock awards for
cancellation. Any such ITT stock awards not so surrendered and
cancelled shall be adjusted to reflect the Distribution, as provided
pursuant to the terms of the ITT Stock Plans and as described in
Section 7(a)(i).
(iii) ITT Hartford Employees. ITT Hartford Employees
holding ITT stock awards shall receive substitute stock awards in
respect of ITT Hartford Common Stock pursuant to the terms of the ITT
Hartford Stock Plan, to be adopted by ITT Hartford as of the
Distribution Date, provided that such ITT Hartford Employees surrender
their ITT stock awards for
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cancellation. Any such ITT stock awards not so surrendered and
cancelled shall be adjusted to reflect the Distribution, as provided
pursuant to the terms of the ITT Stock Plans and as described in
Section 7(a)(i).
(iv) Other Persons. Prior to the Distribution Date, the
Compensation and Personnel Committee of the Board of Directors of ITT
shall be asked to waive any remaining restrictions on the
exercisability and vesting of ITT stock awards held by other
individuals, including retirees and former employees of ITT. The
Compensation and Personnel Committee shall be asked to cause such
waiver to occur beginning on October 1, 1995 (or such earlier date as
it may determine). Any ITT stock awards held by such individuals that
have not been exercised as of the Distribution Date shall be adjusted
to reflect the Distribution, as provided pursuant to the terms of the
ITT Stock Plans and as described in Section 7(a)(i).
(b) Manner of Substitution. With respect to each
cancelled ITT stock award, the number and exercise price of substitute stock
awards granted under the ITT Destinations Stock Plan or the ITT Hartford Stock
Plan with respect thereto, and the other terms and conditions of the substitute
stock awards, shall be equitably determined to preserve the economic value of
the cancelled ITT stock award.
8. FOREIGN BENEFIT PLANS. Certain current and former
employees of ITT Industries, ITT Destinations and ITT Hartford participate in
(i) ITT Group pension plans and savings plans made available for ITT Group
employees in Canada, the United Kingdom, Belgium and Ireland or (ii) expatriate
pension plans. The plan actuary for each such plan shall be responsible for
determining the appropriate amount of assets to be allocated to comparable plans
to be established and adopted by the companies as required, in each case in
accordance with applicable local law.
9. DIRECTOR PLANS. (a) Effective as of the Distribution
Date, ITT Industries shall continue the ITT Deferred Compensation Plan, the ITT
Directors Retirement Plan (which was suspended as of October 1, 1995), the group
life insurance program of ITT and the ITT Group Accident Program. With respect
to any non-employee director of ITT Industries immediately following the
Distribution who is not
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also a director of ITT Destinations at such time and who has an accrued benefit
under the suspended ITT Directors Retirement Plan, ITT Industries shall provide
such accrued benefit in accordance with the terms of such plan, but only to the
extent such accrued benefit is not duplicated under a plan maintained by ITT
Destinations or ITT Hartford.
(b) Effective as of the Distribution Date, ITT
Destinations shall adopt plans and programs for non-employee directors that are
identical in all material respects to the ITT Deferred Compensation Plan, the
ITT Directors Retirement Plan (which was suspended as of October 1, 1995), the
group life insurance program of ITT and the ITT Group Accident Program. With
respect to any non-employee director of ITT Destinations immediately following
the Distribution who has an accrued benefit under the suspended ITT Directors
Retirement Plan, ITT Destinations shall provide such accrued benefit in
accordance with the terms of such plan, but only to the extent such accrued
benefit is not duplicated under a plan maintained by ITT Industries or ITT
Hartford.
(c) Effective as of the Distribution Date, ITT Hartford
intends to adopt plans and programs for non-employee directors that are
identical in all material respects to the group life insurance program of ITT
and the ITT Group Accident Program. With respect to any non-employee director of
ITT Hartford who has an accrued benefit under the suspended retirement plan
covering ITT Hartford non-employee directors, ITT Hartford shall provide such
accrued benefit in accordance with the terms of such plan, but only to the
extent such accrued benefit is not duplicated under a plan maintained by ITT
Industries or ITT Destinations.
10. BENEFIT PROGRAM PARTICIPATION. (a) Except as
specifically provided herein, all ITT Destinations and ITT Hartford employees
(including ITT Destinations Salaried Employees and ITT Hartford Employees) will
cease participation in all ITT benefit plans and programs immediately prior to
the Distribution Date. As soon as reasonably practicable, ITT Industries will
provide an accounting of the 1995 claims experience for ITT Destinations
employees and ITT Hartford Employees who participate in the ITT welfare benefit
plans and programs and reasonably determine any reconciliation payment
necessary.
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(b) ITT Destinations shall cause to be recognized each ITT
Destinations Salaried Employee's service with ITT for purposes of determining
(i) eligibility for vacation benefits, short-term disability and severance
benefits and (ii) eligibility for vesting under all other employee benefit plans
and policies of ITT Destinations applicable to such ITT Destinations Salaried
Employees, to the extent such service was recognized by ITT for such purposes.
ITT Hartford shall cause to be recognized each ITT Hartford Employee's service
with ITT for purposes of determining (i) eligibility for vacation benefits,
short-term disability and severance benefits and (ii) eligibility for vesting
under all other employee benefit plans and policies of ITT Hartford applicable
to such ITT Hartford Employees, to the extent such service was recognized by ITT
for such purposes.
(c) Nothing in this Agreement shall be construed or
interpreted to restrict ITT Industries', ITT Destinations' or ITT Hartford's
right or authority to amend or terminate any of its employee benefit plans,
policies or programs effective as of a date following the Distribution Date,
except as explicitly stated in Section 4(b) hereof.
11. ALLOCATION OF BALANCE SHEET ACCOUNTS. Effective as
of the Distribution Date, certain balance sheet accounts attributable to
employee benefit plans for which responsibility is being transferred from ITT to
ITT Destinations and/or ITT Hartford shall be allocated to the balance sheets of
ITT Destinations or ITT Hartford, as appropriate, on the following basis:
(a) All accruals on the balance sheets of ITT Destinations
(including accruals on the balance sheet of ITT Sheraton) and ITT Hartford which
relate to benefit plans sponsored by the respective companies shall be
unaffected by the provisions of this Section 11.
(b)(i) With respect to the unfunded pension plan liabilities
assumed by ITT Destinations (excluding all liabilities assumed pursuant to a
waiver described in Section 3 of this Agreement), the then current balance sheet
accrual shall be transferred.
(ii) With respect to the unfunded pension plan liabilities
assumed by ITT Destinations pursuant to a waiver described in Section 3 of this
Agreement, the then current balance sheet accrual for the ITT Excess Pension
Plan shall be allocated between ITT Industries and ITT Destinations in
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proportion to the Accumulated Benefit Obligation (as that term is defined in
Statement of Financial Accounting Standard No. 87) assumed by such companies.
(c) With regard to the ITT Directors Retirement Plan,
there shall be allocated to the responsible party, determined in accordance with
Section 9 of this Agreement, the present value of the accrued pension benefit as
of the Distribution Date for those eligible directors for whom the liability is
being assumed by either ITT Destinations or ITT Hartford using the discount rate
last adopted by ITT for purposes of Statement of Financial Accounting Standard
No. 87.
(d) With respect to the liabilities being assumed by ITT
Destinations and ITT Hartford in connection with the provisions of Section 4(b)
of this Agreement, ITT shall allocate to the respective parties the "Accumulated
Postretirement Benefit Obligation" (as that term is defined in Statement of
Financial Accounting Standard No. 106), using the assumptions in effect as of
the Distribution Date, for ITT Employees who, immediately after the
Distribution, are employed by ITT Destinations or ITT Hartford.
(e) In connection with the book reserves maintained by ITT
with respect to the liabilities for Other Postemployment Benefits, as that term
is described in Statement of Financial Accounting Standard No. 112, ITT shall
allocate to ITT Destinations and ITT Hartford, respectively, the amounts
previously provided by operations which, after the Distribution Date, shall be
part of ITT Destinations and ITT Hartford, adjusted to reflect the gain
recognized by ITT in connection with the 1993 changes to Medicare.
(f) With regard to the liabilities recorded by ITT with
respect to the ITT Excess Savings Plan that will, in accordance with Section
3(b), be assumed by ITT Destinations and ITT Hartford, respectively, ITT shall
allocate to the respective new employing entity an amount equal to the sum of
the plan balances for such affected employees.
(g) With respect to the liabilities accrued by ITT in
connection with the ITT Excess Long-Term Disability Plan, ITT shall allocate to
ITT Destinations a share of such book reserves based on the proportion of the
exposure
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assumed by ITT Destinations to the total exposure under the plan as determined
by Metropolitan Life Insurance Company.
(h) In connection with the assumption by ITT Destinations
of a portion of the responsibility for the ITT Third Country National Pension
Plan, with an appropriate transfer of assets, as provided in Section 8 of this
Agreement, ITT shall allocate to ITT Destinations a portion of the prepaid
pension expense in the same proportion that the assets transferred relate to the
total assets of the plan.
(i) For each category of balance sheet account enumerated in
this Section 11, there has been recorded a corresponding deferred tax debit or
credit, as the case may be, which shall also be allocated to the respective
companies based on the amount allocated for the stated reason above.
(j) To the extent that a balance sheet account requiring
allocation among the companies exists that is not specifically included in this
Section 11, ITT shall make the allocation on a reasonable basis, subject to the
agreement of the party in whose favor the allocation is being made.
12. ACCESS TO INFORMATION AND DATA EXCHANGE. (a)
Provision of Corporate Records. (i) Unless otherwise specified in the
procedures set forth in Schedule 12(c)(ii) hereto, after the Distribution Date,
upon the prior written request by ITT Destinations or ITT Hartford for specific
and identified agreements, documents, books, records or files including, without
limitation, computer files, microfiche, tape recordings and photographs
(collectively, "Records"), relating to or affecting ITT Destinations or ITT
Hartford, as applicable, ITT Industries shall arrange, as soon as reasonably
practicable following the receipt of such request, for the provision of
appropriate copies of such Records (or the originals thereof if the party making
the request has a reasonable need for such originals) in the possession of ITT
Industries or any of its Subsidiaries, but only to the extent such items are not
already in the possession of the requesting party.
(ii) Unless otherwise specified in the procedures set forth
in Schedule 12(c)(ii) hereto, after the Distribution Date, upon the prior
written request by ITT Industries or ITT Hartford for specific and identified
Records relating to or affecting ITT Industries or ITT
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Hartford, as applicable, ITT Destinations shall arrange, as soon as reasonably
practicable following the receipt of such request, for the provision of
appropriate copies of such Records (or the originals thereof if the party making
the request has a need for such originals) in the possession of ITT Destinations
or any of its Subsidiaries, but only to the extent such items are not already in
the possession of the requesting party.
(iii) Unless otherwise specified in the procedures set forth
in Schedule 12(c)(ii) hereto, after the Distribution Date, upon the prior
written request by ITT Industries or ITT Destinations for specific and
identified Records relating to or affecting ITT Industries or ITT Destinations,
as applicable, ITT Hartford shall arrange, as soon as reasonably practicable
following the receipt of such request, for the provision of appropriate copies
of such Records (or the originals thereof if the party making the request has a
need for such originals) in the possession of ITT Hartford or any of its
Subsidiaries, but only to the extent such items are not already in the
possession of the requesting party.
(b) Access to Information. (i) Unless otherwise
specified in the procedures set forth in Schedule 12(c)(ii) hereto, from and
after the Distribution Date, each of ITT Industries, ITT Destinations and ITT
Hartford shall afford to the other and its authorized accountants, counsel and
other designated representatives reasonable access during normal business hours,
subject to appropriate restrictions for classified, privileged or confidential
information, to the personnel, properties, books and Records of such party and
its Subsidiaries insofar as such access is reasonably required by the other
party.
(ii) Without limiting the generality of the foregoing
clause (i), except as otherwise provided by law, each party hereto shall
furnish, or shall cause to be furnished to the other parties, a list of all
benefit plan participants and employee data or information in its possession
which is necessary for such other parties to maintain and implement any benefit
plan or arrangement covered by this Agreement, or to comply with the provisions
of this Agreement, and which is not otherwise readily available to such other
party.
(c) Reimbursement; Other Matters. (i) Except to the
extent otherwise contemplated by the Distribution
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Agreement or any Ancillary Agreement or Schedule 12(c)(ii) hereto, a party
providing Records or access to information to the other party under this Section
12 shall be entitled to receive from the recipient, upon the presentation of
invoices therefor, payments for such amounts, relating to supplies,
disbursements and other out-of-pocket expenses, as may be reasonably incurred in
providing such Records or access to information.
(ii) The parties hereto shall comply with those document
retention policies, cost sharing arrangements, expense reimbursement procedures
and request procedures as shall be set forth in Schedule 12(c)(ii) hereto or
established and agreed to in writing by their respective authorized officers on
or prior to the Distribution Date in respect of Records and related matters.
(d) Confidentiality. Each of (i) ITT Industries and its
Subsidiaries, (ii) ITT Destinations and its Subsidiaries and (iii) ITT Hartford
and its Subsidiaries shall not use or permit the use of (without the prior
written consent of the other) and shall hold, and shall cause its consultants
and advisors to hold, in strict confidence, all information concerning the other
parties in its possession, its custody or under its control (except to the
extent that (A) such information has been in the public domain through no fault
of such party or (B) such information has been later lawfully acquired from
other sources by such party or (C) the Distribution Agreement, this Agreement or
any other Ancillary Agreement or any other agreement entered into pursuant
hereto permits the use or disclosure of such information) to the extent such
information (x) relates to the period up to the Effective Time, (y) relates to
the Distribution Agreement or any Ancillary Agreement or (z) is obtained in the
course of performing services for the other party pursuant to the Distribution
Agreement or any Ancillary Agreement, and each party shall not (without the
prior written consent of the other) otherwise release or disclose such
information to any other person, except such party's auditors and attorneys,
unless compelled to disclose such information by judicial or administrative
process or unless such disclosure is required by law and such party has used
commercially reasonable efforts to consult with the other affected party or
parties prior to such disclosure. To the extent that a party hereto is compelled
by judicial or administrative process to disclose such information under
circumstances in which any evidentiary privilege would be available, such party
agrees
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to assert such privilege in good faith prior to making such disclosure. Each of
the parties hereto agrees to consult with each relevant other party in
connection with any such judicial or administrative process, including, without
limitation, in determining whether any privilege is available, and further
agrees to allow each such relevant party and its counsel to participate in any
hearing or other proceeding (including, without limitation, any appeal of an
initial order to disclose) in respect of such disclosure and assertion of
privilege. Notwithstanding anything to the contrary contained herein, each party
shall be entitled to use information disclosed pursuant to this Agreement to the
extent reasonably necessary for the administration of its employee benefit plans
in accordance with applicable law.
13. NOTICES; COOPERATION. Notwithstanding anything in
this Agreement to the contrary, all actions contemplated herein with respect to
benefit plans which are to be consummated pursuant to this Agreement shall be
subject to such notices to, and/or approvals by, the Internal Revenue Service
(or other governmental agency or entity) as are required or deemed appropriate
by such benefit plan's sponsor. Each of ITT Industries, ITT Destinations and ITT
Hartford agrees to use its commercially reasonable efforts to cause all such
notices and/or approvals to be filed or obtained, as the case may be. Each party
hereto shall reasonably cooperate with the other parties with respect to any
government filings, employee notices or any other actions reasonably necessary
to maintain and implement the employee benefit arrangements covered by this
Agreement.
14. FURTHER ASSURANCES. From time to time, as and when
reasonably requested by any other party hereto, each party hereto shall execute
and deliver, or cause to be executed and delivered, all such documents and
instruments and shall take, or cause to be taken, all such further or other
actions as such other party may reasonably deem necessary or desirable to effect
the purposes of this Agreement and the transactions contemplated hereunder.
15. INDEMNIFICATION. (a) Indemnification by ITT
Industries. Except as otherwise specifically set forth in this Agreement or
the Distribution Agreement, ITT Industries shall indemnify, defend and hold
harmless the ITT Destinations Indemnitees and the ITT Hartford Indemnitees from
and against any and all Indemnifiable Losses of the ITT Destinations Indemnitees
and the ITT Hartford Indemnitees,
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respectively, arising out of, by reason of or otherwise in connection with (i)
any employee benefit plan, policy, program or arrangement established or adopted
by ITT Industries effective on or after the Distribution Date, (ii) any
liability assumed or retained by ITT Industries pursuant to the terms and
conditions set forth in this Agreement or (iii) the breach by ITT Industries of
any provision of this Agreement.
(b) Indemnification by ITT Destinations. Except as
otherwise specifically set forth in this Agreement or the Distribution
Agreement, ITT Destinations shall indemnify, defend and hold harmless the ITT
Industries Indemnitees and the ITT Hartford Indemnitees from and against any and
all Indemnifiable Losses of the ITT Industries Indemnitees and the ITT Hartford
Indemnitees, respectively, arising out of, by reason of or otherwise in
connection with (i) any employee benefit plan, policy, program or arrangement
established or adopted by ITT Destinations effective on or after the
Distribution Date, (ii) any liability assumed or retained by ITT Destinations
pursuant to the terms and conditions set forth in this Agreement or (iii) the
breach by ITT Destinations of any provision of this Agreement.
(c) Indemnification by ITT Hartford. Except as
otherwise specifically set forth in this Agreement or the Distribution
Agreement, ITT Hartford shall indemnify, defend and hold harmless the ITT
Industries Indemnitees and the ITT Destinations Indemnitees from and against any
and all Indemnifiable Losses of the ITT Industries Indemnitees and the ITT
Destinations Indemnitees, respectively, arising out of, by reason of or
otherwise in connection with (i) any employee benefit plan, policy, program or
arrangement established or adopted by ITT Hartford effective on or after the
Distribution Date, (ii) any liability assumed or retained by ITT Hartford
pursuant to the terms and conditions set forth in this Agreement and (iii) the
breach by ITT Hartford of any provision of this Agreement.
(d) Limitations on Indemnification Obligations. (i) The
amount that any party (an "Indemnifying Party") is or may be required to pay to
any other person (an "Indemnitee") pursuant to paragraphs (a), (b) or (c) of
this Section 15, as applicable, shall be reduced (retroactively or
prospectively) by any Insurance Proceeds or other amounts actually recovered by
or on behalf of such Indemnitee in respect of the related Indemnifiable Loss. If
an Indemnitee shall have received the payment required by this Agreement
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from an Indemnifying Party in respect of an Indemnifiable Loss and shall
subsequently actually receive Insurance Proceeds or other amounts in respect of
such Indemnifiable Loss, then such Indemnitee shall pay to such Indemnifying
Party a sum equal to the amount of such Insurance Proceeds or other amounts
actually received, up to the aggregate amount of any payments received from such
Indemnifying Party pursuant to this Agreement in respect of such Indemnifiable
Loss.
(ii) An Indemnifying Party shall not be required to
indemnify or pay an Indemnitee pursuant to paragraphs (a), (b) or (c) of this
Section 15, as applicable, for any Indemnifiable Losses relating to or
associated with any employee benefit plan, policy, program or arrangement of the
Indemnifying Party arising out of, by reason of or otherwise in connection with
any act or failure to act on the part of such Indemnitee (including for this
purpose any subsidiaries, businesses or operations which become associated with
the Indemnitee by virtue of or in connection with the Distribution) with respect
to or in connection with such employee benefit plan, policy, program or
arrangement, including, without limitation, any such act or failure to act in
connection with the administration by the Indemnitee of such employee benefit
plan, policy, program or arrangement.
(e) Procedures for Indemnification (Third Party
Claims). If a claim or demand is made against an Indemnitee by any person
who is not a party to this Agreement (a "Third Party Claim") as to which such
Indemnitee is entitled to indemnification pursuant to this Agreement, such
Indemnitee shall notify the Indemnifying Party in writing, and in reasonable
detail, of the Third Party Claim promptly (and in any event within 15 business
days) after receipt by such Indemnitee of written notice of the Third Party
Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually prejudiced as a result of such
failure (except that the Indemnifying Party shall not be liable for any expenses
incurred during the period in which the Indemnitee failed to give such notice).
Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly
(and in any event within 15 business days) after the Indemnitee's receipt
thereof, copies of all notices and documents (including court papers) received
by the Indemnitee relating to the Third Party Claim.
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If a Third Party Claim is made against an Indemnitee, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses and acknowledges in writing its obligation to indemnify the
Indemnitee therefor, to assume the defense thereof with counsel selected by the
Indemnifying Party; provided that such counsel is not reasonably
objected to by the Indemnitee. Should the Indemnifying Party so elect to assume
the defense of a Third Party Claim, the Indemnifying Party shall not be liable
to the Indemnitee for legal or other expenses subsequently incurred by the
Indemnitee in connection with the defense thereof. If the Indemnifying Party
assumes such defense, the Indemnitee shall have the right to participate in the
defense thereof and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnifying Party, it being understood that the
Indemnifying Party shall control such defense. The Indemnifying Party shall be
liable for the fees and expenses of counsel employed by the Indemnitee for any
period during which the Indemnifying Party has failed to assume the defense
thereof (other than during the period prior to the time the Indemnitee shall
have given notice of the Third Party Claim as provided above). If the
Indemnifying Party so elects to assume the defense of any Third Party Claim, all
of the Indemnitees shall cooperate with the Indemnifying Party in the defense or
prosecution thereof.
If the Indemnifying Party acknowledges in writing liability for
a Third Party Claim, then in no event will the Indemnitee admit any liability
with respect to, or settle, compromise or discharge, any Third Party Claim
without the Indemnifying Party's prior written consent; provided,
however, that the Indemnitee shall have the right to settle, compromise
or discharge such Third Party Claim without the consent of the Indemnifying
Party if the Indemnitee releases the Indemnifying Party from its indemnification
obligation hereunder with respect to such Third Party Claim and such settlement,
compromise or discharge would not otherwise significantly adversely affect the
Indemnifying Party. If the Indemnifying Party acknowledges in writing liability
for a Third Party Claim, the Indemnitee will agree to any settlement, compromise
or discharge of a Third Party Claim that the Indemnifying Party may recommend
and that by its terms obligates the Indemnifying Party to pay the full amount of
the liability in connection with such Third Party Claim and releases the
Indemnitee completely in connection with such Third Party Claim and that would
not otherwise adversely affect the Indemnitee; provided,
however, that the
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Indemnitee may refuse to agree to any such settlement, compromise or discharge
if the Indemnitee agrees that the Indemnifying Party's indemnification
obligation with respect to such Third Party Claim shall not exceed the amount
that would be required to be paid by or on behalf of the Indemnifying Party in
connection with such settlement, compromise or discharge.
Notwithstanding the foregoing, the Indemnifying Party shall not
be entitled to assume the defense of any Third Party Claim (and shall be liable
for the fees and expenses of counsel incurred by the Indemnitee in defending
such Third Party Claim) if the Third Party Claim seeks an order, injunction or
other equitable relief or relief for other than money damages against the
Indemnitee which the Indemnitee reasonably determines, after conferring with its
counsel, cannot be separated from any related claim for money damages. If such
equitable relief or other relief portion of the Third Party Claim can be so
separated from that for money damages, the Indemnifying Party shall be entitled
to assume the defense of the portion relating to money damages.
Indemnification required by this Section 15 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or loss, liability, claim, damage or
expense is incurred.
All claims under Section 15 that are Third Party Claims shall
be governed by this Section 15(e).
(f) Other Adjustments. (i) The amount of any
Indemnifiable Loss shall be (x) increased to take into account any net Tax cost
actually incurred by the Indemnitee arising from any payments received from the
Indemnifying Party (grossed up for such increase) and (y) reduced to take
account of any net Tax benefit actually realized by the Indemnitee arising from
the incurrence or payment of any such Indemnifiable Loss. In computing the
amount of any such Tax cost or Tax benefit, the Indemnitee shall be deemed to
recognize all other items of income, gain, loss, deduction or credit before
recognizing any item arising from the receipt of any payment with respect to an
Indemnifiable Loss or the incurrence or payment of any Indemnifiable Loss.
(ii) In addition to any adjustments required pursuant to
Section 15(d) hereof or clause (i) of this
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Section 15(f), if the amount of any Indemnifiable Loss shall, at any time
subsequent to the payment required by this Agreement, be reduced by recovery,
settlement or otherwise, the amount of such reduction, less any expenses
incurred in connection therewith, shall promptly be repaid by the Indemnitee to
the Indemnifying Party, up to the aggregate amount of any payments received from
such Indemnifying Party pursuant to this Agreement in respect of such
Indemnifiable Loss.
(g) Survival of Indemnities. The obligations of ITT
Industries, ITT Destinations and ITT Hartford under this Section 15 shall
survive the sale or other transfer by any of them of any assets or businesses or
the assignment by any of them of any Liabilities, with respect to any
Indemnifiable Loss of the other related to such assets, businesses or
Liabilities.
16. DISPUTE RESOLUTION. In the event of a controversy,
dispute or claim arising out of, in connection with, or in relation to the
interpretation, performance, nonperformance, validity or breach of this
Agreement or otherwise arising out of, or in any way related to this Agreement,
including, without limitation, any claim based on contract, tort, statute or
constitution (collectively, "Agreement Disputes"), the general counsels of the
relevant parties shall negotiate in good faith for a reasonable period of time
to settle such Agreement Dispute.
If after such reasonable period such general counsels are
unable to settle such Agreement Dispute (and in any event after 60 days have
elapsed from the time the relevant parties began such negotiations), such
Agreement Dispute shall be determined, at the request of any relevant party, by
arbitration conducted in New York City, before and in accordance with the
then-existing Rules for Commercial Arbitration of the American Arbitration
Association (the "Rules"), and any judgment or award rendered by the arbitrator
shall be final, binding and nonappealable (except upon grounds specified in 9
U.S.C. Section 10(a) as in effect on the date hereof), and judgment may be
entered by any state or Federal court having jurisdiction thereof in accordance
with Section 17(q) hereof. Unless the arbitrator otherwise determines, the
pre-trial discovery of the then-existing Federal Rules of Civil Procedure and
the then-existing Rules 46 and 47 of the Civil Rules for the United States
District Court for the Southern District of New York shall apply to any
arbitration hereunder. Any controversy
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concerning whether an Agreement Dispute is an arbitrable Agreement Dispute,
whether arbitration has been waived, whether an assignee of this Agreement is
bound to arbitrate, or as to the interpretation of enforceability of this
Section 15 shall be determined by the arbitrator. The arbitrator shall be a
retired or former judge of any United States District Court or Court of Appeals
or such other qualified person as the relevant parties may agree to designate,
provided such individual has had substantial professional experience
with regard to settling sophisticated commercial disputes. The parties intend
that the provisions to arbitrate set forth herein be valid, enforceable and
irrevocable. The designation of a situs or a governing law for this Agreement or
the arbitration shall not be deemed an election to preclude application of the
Federal Arbitration Act, if it would be applicable. In his award the arbitrator
shall allocate, in his discretion, among the parties to the arbitration all
costs of the arbitration, including, without limitation, the fees and expenses
of the arbitrator and reasonable attorneys' fees, costs and expert witness
expenses of the parties. The undersigned agree to comply with any award made in
any such arbitration proceedings that has become final in accordance with the
Rules and agree to the entry of a judgment in any jurisdiction upon any award
rendered in such proceedings becoming final under the Rules. The arbitrator
shall be entitled, if appropriate, to award any remedy in such proceedings,
including, without limitation, monetary damages, specific performance and all
other forms of legal and equitable relief; provided, however,
the arbitrator shall not be entitled to award punitive damages.
17. MISCELLANEOUS. (a) Complete Agreement;
Construction. This Agreement, including the Schedule, shall constitute the
entire agreement between the parties with respect to the subject matter hereof
and shall supersede all previous negotiations, commitments and writings with
respect to such subject matter. The Schedule shall be construed with and as an
integral part of this Agreement to the same extent as if the same had been set
forth verbatim herein.
(b) Ancillary Agreements. This Agreement is not
intended to address, and should not be interpreted to address, the matters
explicitly and expressly covered by the Distribution Agreement or the Ancillary
Agreements.
(c) Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be
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considered one and the same agreement, and shall become effective when one or
more such counterparts have been signed by each of the parties and delivered to
the other parties.
(d) Survival of Agreements. Except as otherwise
contemplated by this Agreement, all covenants and agreements of the parties
contained in this Agreement shall survive the Distribution Date.
(e) Notices. All notices and other communications
hereunder shall be in writing and hand delivered or mailed by registered or
certified mail (return receipt requested) or sent by any means of electronic
message transmission with delivery confirmed (by voice or otherwise) to the
parties at the following addresses (or at such other addresses for a party as
shall be specified by like notice) and will be deemed given on the date on which
such notice is received:
To ITT Corporation (ITT Industries, Inc.
after the Distribution):
β ββββ βββ βββ ββββ
βββββ ββββββ, ββ βββββ
Attn: General Counsel
To ITT Destinations, Inc. (ITT Corporation
after the Distribution):
ββββ ββββββ ββ βββ ββββββββ
βββ ββββ, ββ βββββ
Attn: Executive Vice President and
General Counsel
To ITT Hartford Group, Inc.:
ββββββββ βββββ
ββββββββ, ββ βββββ
Attn: General Counsel
(f) Waivers. The failure of either party to require
strict performance by the other party of any
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provision in this Agreement will not waive or diminish that party's right to
demand strict performance thereafter of that or any other provision thereof.
(g) Amendments. Subject to the terms of Section 17(j),
this Agreement may not be modified or amended except by an agreement in writing
signed by the parties.
(h) Assignment. This Agreement shall be assignable in
whole in connection with a merger or consolidation or the sale of all or
substantially all the assets of a party hereto so long as the resulting,
surviving or transferee entity assumes all the obligations of the relevant party
hereto by operation of law or pursuant to an agreement in form and substance
reasonably satisfactory to the other parties to this Agreement. Otherwise this
Agreement shall not be assignable, in whole or in part, directly or indirectly,
by any party hereto without the prior written consent of the others, and any
attempt to assign any rights or obligations arising under this Agreement without
such consent shall be void.
(i) Successors and Assigns. The provisions of this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties and their respective permitted successors and permitted assigns.
(j) Termination. This Agreement (including, without
limitation, Section 3(c) and Section 15 hereof) may be terminated, amended,
modified or abandoned at any time prior to the Distribution by and in the sole
discretion of ITT without the approval of ITT Destinations or ITT Hartford or
the shareholders of ITT. In the event of such termination, no party shall have
any liability of any kind to any other party or any other person. After the
Distribution, this Agreement may not be terminated except by an agreement in
writing signed by the parties; provided, however, that Section 3(c) and
Section 15 shall not be terminated or amended after the Distribution in respect
of the third party beneficiaries thereto without the consent of such persons.
(k) Subsidiaries. Each of the parties hereto shall
cause to be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth herein to be performed by any Subsidiary of
such party or by any entity that is contemplated to be a Subsidiary of such
party on and after the Distribution Date.
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(l) Third Party Beneficiaries. Except as provided in
Section 3(c) hereof relating to excess pension plan guarantees and excess
savings plan guarantees and in Section 15 hereof relating to Indemnitees, this
Agreement is solely for the benefit of the parties hereto and their respective
Subsidiaries and Affiliates and should not be deemed to confer upon third
parties any remedy, claim, liability, reimbursement, claim of action or other
right in excess of those existing without reference to this Agreement.
(m) Attorney Fees. Except as contemplated by the third
to the last sentence of Section 16 hereof, a party in breach of this Agreement
shall, on demand, indemnify and hold harmless the other parties hereto for and
against all out-of-pocket expenses, including, without limitation, legal fees,
incurred by such other party by reason of the enforcement and protection of its
rights under this Agreement. The payment of such expenses is in addition to any
other relief to which such party may be entitled hereunder or otherwise.
(n) Titles and Headings. Titles and headings to
sections herein are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
(o) Specific Performance. Each of the parties hereto
acknowledges that there is no adequate remedy at law for failure by such parties
to comply with the provisions of this Agreement and that such failure would
cause immediate harm that would not be adequately compensable in damages, and
therefore agree that their agreements contained herein may be specifically
enforced without the requirement of posting a bond or other security, in
addition to all other remedies available to the parties hereto under this
Agreement.
(p) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS EXECUTED IN AND TO BE PERFORMED IN THAT STATE.
(q) Consent to Jurisdiction. Without limiting the
provisions of Section 16 hereof, each of the parties irrevocably submits to the
exclusive jurisdiction of (a) the Supreme Court of the State of New York, New
York County, and (b) the United States District Court for the Southern
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District of New York, for the purposes of any suit, action or other proceeding
arising out of this Agreement or any transaction contemplated hereby. Each of
the parties agrees to commence any action, suit or proceeding relating hereto
either in the United States District Court for the Southern District of New York
or if such suit, action or other proceeding may not be brought in such court for
jurisdictional reasons, in the Supreme Court of the State of New York, New York
County. Each of the parties further agrees that service of any process, summons,
notice or document by U.S. registered mail to such party's respective address
set forth above shall be effective service of process for any action, suit or
proceeding in New York with respect to any matters to which it has submitted to
jurisdiction in this Section 17(q). Each of the parties irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
herein in (i) the Supreme Court of the State of New York, New York County, or
(ii) the United States District Court for the Southern District of New York, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient form.
(r) Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
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(s) Effectiveness. This Agreement shall be effective as
of the Distribution Date, subject to the consummation of the Distribution.
(t) Definitions. Capitalized terms used herein shall
have the respective meanings specified in the Appendix attached hereto unless
otherwise herein defined or the context hereof shall otherwise require.
IN WITNESS WHEREOF, the parties have duly executed and entered
into this Agreement, as of the date first above written.
ITT Corporation,
By:______________________
Name:____________________
Title:___________________
ITT Destinations, Inc.,
By:______________________
Name:____________________
Title:___________________
ITT Hartford Group, Inc.,
By:______________________
Name:____________________
Title:___________________
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Appendix
As used in the Agreement, the following terms have the
following meanings:
"Action" means any action, suit, arbitration, inquiry,
proceeding or investigation by or before any court, any governmental or other
regulatory or administrative agency, body or commission or any arbitration
tribunal.
"Affiliate" means, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with the
person specified.
"Agreement Disputes" has the meaning set forth in Section 16 of
this Agreement.
"Ancillary Agreements" means all of the written agreements,
instruments, understandings, assignments or other written arrangements (other
than this Agreement and the Distribution Agreement) entered into in connection
with the transactions contemplated hereby, including, without limitation, the
Conveyancing and Assumption Instruments, the Tax Allocation Agreement and the
Intellectual Property Agreements.
"CWI" means βββββββ βββββ, Inc.
"Change in Control" means the occurrence of any of the
following events with respect to the relevant corporation: (i) a report on
Schedule 13D shall be filed with the Securities and Exchange Commission pursuant
to Section 13(d) of the Securities Exchange Act of 1934 (the "Exchange Act") or
any successor provision disclosing that any person (within the meaning of
Section 13(d) of the Exchange Act), other than the relevant corporation or a
subsidiary thereof, or any employee benefit plan maintained by the relevant
corporation or a subsidiary thereof, is the beneficial owner directly or
indirectly of 20% or more of the outstanding common stock of the relevant
corporation; (ii) any person (within the meaning of Section 13(d) of the
Exchange Act), other than the relevant corporation or a subsidiary thereof, or
any employee benefit plan maintained by the relevant corporation or a subsidiary
thereof, shall purchase shares pursuant to a tender offer or exchange offer
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to acquire any of the common stock of such relevant corporation (or securities
convertible into such common stock) for cash, securities or any other
consideration, provided that after the consummation of the offer, the person in
question is the beneficial owner (as defined in Rule 13d-3 of the Exchange Act)
directly or indirectly of 15% or more of the outstanding common stock of the
relevant corporation (calculated as provided in paragraph (d) of Rule 13d-3
under the Exchange Act in the case of rights to acquire common stock); (iii) the
shareholders of the relevant corporation shall approve (A) any consolidation or
merger of the relevant corporation in which such corporation is not the
continuing or surviving corporation or pursuant to which shares of the common
stock of the relevant corporation would be converted into cash, securities or
other property, other than a merger of the relevant corporation in which holders
of the common stock thereof immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger as immediately before or (B) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all the assets of the relevant corporation; or (iv) there shall
have been a change in majority of the members of the board of directors of the
relevant corporation within a 12-month period unless the election or nomination
for election by the shareholders of the relevant corporation of each new
director during such 12-month period was approved by the vote of two-thirds of
the directors then still in office who were directors at the beginning of such
12-month period.
"Code" means the Internal Revenue Code of 1986, as
amended, and the Treasury regulations promulgated thereunder, including any
successor legislation.
"Conveyancing and Assumption Instruments" means,
collectively, the various agreements, instruments and other documents to be
entered into to effect the transfer of assets and the assumption of Liabilities
in the manner contemplated by the Distribution Agreement, this Agreement and the
Ancillary Agreements.
"Distribution" means the distribution on the
Distribution Date to holders of record of shares of ITT Common Stock as of the
Distribution Record Date of (i) the ITT Destinations Common Stock owned by ITT
on the basis of one share of ITT Destinations Common Stock for each
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outstanding share of ITT Common Stock and (ii) the ITT Hartford Common Stock
owned by ITT on the basis of one share of ITT Hartford Common Stock for each
outstanding share of ITT Common Stock.
"Distribution Agreement" means the Distribution
Agreement dated as of November 1, 1995, among ITT, ITT Destinations and ITT
Hartford.
"Distribution Date" means such date as may hereafter be
determined by ITT's Board of Directors as the date as of which the Distribution
shall be effected.
"Distribution Record Date" means such date as may
hereafter be determined by ITT's Board of Directors as the record date for the
Distribution.
"Effective Time" means 11:59 p.m., New York time, on
the Distribution Date.
"Indemnifiable Losses" means any and all losses,
liabilities, claims, damages, demands, costs or expenses (including, without
limitation, reasonable attorneys' fees and any and all out-of-pocket expenses)
whatsoever reasonably incurred in investigating, preparing for or defending
against any Actions or potential Actions.
"Indemnifying Party" has the meaning set forth in Section
15(d).
"Indemnitee" has the meaning set forth in Section 15(d).
"Insurance Proceeds" means those monies (i) received by
an insured from an insurance carrier or (ii) paid by an insurance carrier on
behalf of the insured, in either case net of any applicable premium adjustment,
retroactively-rated premium, deductible, retention, cost of reserve paid or held
by or for the benefit of such insured.
"Intellectual Property Agreements" means the various
intellectual property and licensing agreements entered into in connection with
the Distribution.
"ITT" means ITT Corporation, a Delaware corporation and
its predecessor Maryland corporation, together with its Subsidiaries, to be
renamed "ITT
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Industries, Inc." and reincorporated under Indiana law in connection with the
Distribution.
"ITT Bonus Plan" means the ITT Annual Incentive Bonus
Plan maintained by ITT.
"ITT Common Stock" has the meaning set forth in the preamble to
this Agreement.
"ITT Deferred Compensation Plan" means (i) the 1995 ITT
Deferred Compensation Plan or (ii) the 1995 ITT Industries Deferred Compensation
Plan, after giving effect to the Distribution, in each case as the context
requires.
"ITT Destinations" means ITT Destinations, Inc., a
Nevada corporation, together with its Subsidiaries, to be renamed "ITT
Corporation" in connection with the Distribution, and referred to in the Proxy
Statement as "New ITT".
"ITT Destinations Common Stock" has the meaning set forth in
the preamble to this Agreement.
"ITT Destinations Excess Pension Plan" means the excess
pension plan to be adopted by ITT Destinations effective as of the Distribution
Date, to be known after the Distribution as the "ITT Excess Pension Plan" and
referred to in the Proxy Statement as the "New ITT Excess Plan".
"ITT Destinations Excess Pension Plan Trust" means the
excess pension plan trust to be adopted by ITT Destinations effective as of the
Distribution Date.
"ITT Destinations Excess Savings Plan" means the excess
investment and savings plan to be adopted by ITT Destinations effective as of
the Distribution Date, to be known after the Distribution as the "ITT Excess
Savings Plan" and referred to in the Proxy Statement as the "New ITT Excess
Savings Plan".
"ITT Destinations Indemnitees" means ITT Destinations,
each Affiliate of ITT Destinations, each of their respective directors,
officers, employees and agents and each of the heirs, executors, successors and
assigns of any of the foregoing.
"ITT Destinations Salaried Employees" means persons who,
immediately after the Distribution, are
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employed on a salaried basis by ITT Destinations, including such persons absent
from work at ITT Destinations by reason of layoff, leave of absence or
disability.
"ITT Destinations Salaried Retirement Plan" means the
Sheraton Salaried Retirement Plan, as adopted by ITT Destinations effective as
of the Distribution Date, to be known as the "ITT Salaried Retirement Plan" and
referred to in the Proxy Statement as the "New ITT Salaried Retirement Plan".
"ITT Destinations Savings Plan" means the defined
contribution investment and savings plan to be adopted by ITT Destinations
effective as of the Distribution Date, to be known after the Distribution as the
"ITT Investment and Savings Plan" and referred to in the Proxy Statement as the
"New ITT Savings Plan".
"ITT Destinations Stock Plan" means the ITT 1995
Incentive Stock Plan to be adopted by ITT Destinations effective as of the
Distribution.
"ITT Directors Retirement Plan" means (i) the
Retirement Plan for Non-Management Directors of ITT Corporation or (ii) the ITT
Industries Directors Retirement Plan, after giving effect to the Distribution,
in each case as the context requires.
"ITT Employees" means (i) persons employed in the
United States on a salaried basis by the ITT Group immediately prior to the
Distribution, except those persons who are employed by CWI and MSG as of such
time; (ii) persons employed in the United States by ITT Hartford immediately
prior to the Distribution; (iii) persons employed on an hourly basis by the ITT
Group immediately prior to the Distribution who have accrued benefits under the
ITT Salaried Retirement Plan, the Sheraton Salaried Retirement Plan or the ITT
Hartford Retirement Plan and (iv) persons included in clauses (i), (ii) and
(iii) above who are absent from work immediately prior to the Distribution by
reason of layoff, leave of absence or disability.
"ITT Excess Long-Term Disability Plan" means (i) the
ITT Excess Long-Term Disability Plan or (ii) the excess long-term disability
plan maintained by ITT Industries, after giving effect to the Distribution, in
each case as the context requires.
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"ITT Excess Pension Plan" means (i) the ITT Excess Plan
or (ii) the excess pension plan maintained by ITT Industries, after giving
effect to the Distribution, in each case as the context requires.
"ITT Excess Pension Plan Trust" means (i) the excess
pension plan trust maintained by ITT or (ii) the excess pension plan trust
maintained by ITT Industries, after giving effect to the Distribution, in each
case as the context requires.
"ITT Excess Savings Plan" means (i) the ITT Excess
Savings Plan or (ii) the excess savings plan maintained by ITT Industries, after
giving effect to the Distribution, in each case as the context requires.
"ITT Group" means ITT and its affiliates prior to the
Distribution.
"ITT Group Accident Program" means (i) the ITT Group
Accident Program for Officers and Directors or (ii) the ITT Industries Group
Accident Program for Officers and Directors, after giving effect to the
Distribution, in each case as the context requires.
"ITT Hartford" has the meaning set forth in the preamble to
this Agreement.
"ITT Hartford Common Stock" has the meaning set forth in the
preamble to this Agreement.
"ITT Hartford Employees" means persons who, immediately
after the Distribution, are employed by ITT Hartford or absent from work by
reason of layoff, leave of absence or disability.
"ITT Hartford Excess Pension Plan" means the excess
pension plan maintained by ITT Hartford.
"ITT Hartford Excess Pension Plan Trust" means the
excess pension plan trust maintained by ITT Hartford.
"ITT Hartford Excess Savings Plan" has the meaning set
forth in Section 3(b) of this Agreement.
"ITT Hartford Indemnitees" means ITT Hartford, each
Affiliate of ITT Hartford, each of their respective directors, officers,
employees and agents and each of the
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heirs, executors, successors and assigns of any of the foregoing.
"ITT Hartford Retirement Plan" means the Hartford Fire
Insurance Company Retirement Plan.
"ITT Hartford Savings Plan" means the defined contribution
investment and savings plan to be adopted by ITT Hartford effective as of the
Distribution Date.
"ITT Hartford Stock Plan" means the ITT Hartford 1995 Incentive
Stock Plan to be adopted by ITT Hartford effective as of the Distribution.
"ITT Industries" means (i) ITT Industries, Inc., an Indiana
corporation and the legal successor to ITT, together with its Subsidiaries, or
(ii) ITT, together with its Subsidiaries, after giving effect to the
Distribution or as if such transaction had occurred, in each case as the context
requires.
"ITT Industries Indemnitees" means ITT Industries, each
Affiliate of ITT Industries, each of their respective directors, officers,
employees and agents and each of the heirs, executors, successors and assigns of
any of the foregoing.
"ITT Industries Salaried Employees" means persons who,
immediately after the Distribution, are employed on a salaried basis by ITT
Industries, including such persons absent from work at ITT Industries by reason
of layoff, leave of absence or disability.
"ITT Long-Term Disability Plan" means (i) the ITT
Long-Term Disability Plan or (ii) the long-term disability plan maintained by
ITT Industries, after giving effect to the Distribution, in each case as the
context requires.
"ITT Long-Term Performance Plan" means the ITT
Long-Term Performance Plan maintained by ITT.
"ITT Salaried Retirement Plan" means (i) the Retirement
Plan for Salaried Employees of ITT Corporation or (ii) the ITT Industries
Salaried Retirement Plan, after giving effect to the Distribution, in each case
as the context requires.
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"ITT Savings Plan" means (i) the ITT Investment and
Savings Plan for Salaried Employees or (ii) the ITT Industries Investment and
Savings Plan, after giving effect to the Distribution, in each case as the
context requires.
"ITT Sheraton" means ITT Sheraton Corporation.
"ITT Stock Awards" has the meaning set forth in Section 7 of
this Agreement.
"ITT Stock Plans" has the meaning set forth in Section 7 of
this Agreement.
"Liabilities" means any and all debts, liabilities and
obligations, absolute and contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising,
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any court, any governmental or other regulatory or administrative
agency or commission or any award of any arbitration tribunal, and those arising
under any contract, guarantee, commitment or undertaking.
"MSG" means Madison Square Garden, L.P.
"person" means any natural person, corporation,
business trust, joint venture, association, company, partnership or government,
or any agency or political subdivision thereof.
"Proxy Statement" means the proxy statement sent to the
holders of shares of ITT Common Stock in connection with the Distribution,
including any amendment or supplement thereto.
"Records" has the meaning set forth in Section 12 of this
Agreement.
"Rules" has the meaning set forth in Section 16 of this
Agreement.
"Sheraton Excess Pension Plan" means the excess pension
plan maintained by ITT Sheraton prior to the Distribution.
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"Sheraton Salaried Retirement Plan" means the Sheraton
Corporation Retirement Plan for Salaried Employees.
"Subsidiary" means any corporation, partnership or other entity
of which another entity (i) owns, directly or indirectly, ownership interests
sufficient to elect a majority of the Board of Directors (or persons performing
similar functions) (irrespective of whether at the time any other class or
classes of ownership interests of such corporation, partnership or other entity
shall or might have such voting power upon the occurrence of any contingency) or
(ii) is a general partner or an entity performing similar functions (e.g., a
trustee). For purposes of this Agreement, MSG and ITT-Dow βββββ Television and
their respective Subsidiaries are Subsidiaries of ITT Destinations.
"Tax" means all Federal, state, local and foreign taxes and
assessments, including all interest, penalties and additions imposed with
respect to such amounts.
"Tax Allocation Agreement" means the Tax Allocation Agreement
dated as of November 1, 1995, among ITT, ITT Destinations and ITT Hartford.
"Third Party Claim" has the meaning set forth in Section 15(e)
of this Agreement.