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CONFORMED 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):
0 Xxxx Xxx Xxx Xxxx
Xxxxx Xxxxxx, XX 00000
Attn: General Counsel
To ITT Destinations, Inc. (ITT Corporation
after the Distribution):
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Executive Vice President and
General Counsel
To ITT Hartford Group, Inc.:
Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
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: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: VP, Director-Employee
Benefits & HQ Personnel
ITT Destinations, Inc.,
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Executive Vice President
ITT Hartford Group, Inc.,
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
36
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 Xxxxxxx Xxxxx, 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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3
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 Xxxxx 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.
