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EXHIBIT 10.12
[FORM OF AGREEMENT FOR NINE EXECUTIVES]
AMENDED AND RESTATED EXECUTIVE AGREEMENT dated as of February 11,
1997, between ITT Corporation, a Nevada corporation ("the Company"), and
[name of executive] (the "Executive").
WHEREAS the Company considers it essential to the best interests of its
shareholders to xxxxxx the continuous employment of key management personnel;
and
WHEREAS the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly-held corporations, the possibility of a
Change in Control (as defined in Section 1(d) hereof) exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its shareholders; and
WHEREAS the Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including the Executive, to their assigned duties without
distraction in the face of potential disturbing circumstances arising from the
possibility of a Change in Control;
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Company and the Executive agree as follows:
SECTION 1. Definitions. As used in this Agreement:
(a) "Affiliate" has the meaning ascribed thereto in Rule 12b-2
pursuant to the Securities Exchange Act of 1934, as amended (the "Act").
(b) "Board" means the Board of Directors of the Company.
(c) "Cause" means (i) the willful and continued failure of the
Executive to perform substantially the Executive's duties owed to the
Company or its Affiliates after a written demand for substantial
performance is delivered to the Executive which specifically identifies the
nature of such non-performance, or (ii) conviction of the Executive for a
felony.
No act or omission on the part of the Executive shall be considered
"willful" unless it is done or omitted in bad faith or without reasonable
belief that the action or omission was in the best interests of the
Company.
(d) A "Change in Control" shall be deemed to have occurred if:
(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 "Act") disclosing that any person (within the meaning
of Section 13(d) of the Act), other than the Company or a subsidiary of
the Company or any employee benefit plan sponsored by the Company or a
subsidiary of the Company, is the beneficial owner directly or
indirectly of twenty percent of more of the outstanding common stock, no
par value ("Stock"), of the Company;
(ii) any person (within the meaning of Section 13(d) of the Act),
other than the Company or a subsidiary of the Company or any employee
benefit plan sponsored by the Company or a subsidiary of the Company,
shall purchase shares pursuant to a tender offer or exchange offer to
acquire any Stock of the Company (or securities convertible into Stock)
for cash, securities or any other consideration, provided that after
consummation of the offer, the person in question is the beneficial
owner (as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, of fifteen percent or more of the outstanding Stock of the
Company (calculated as provided in paragraph (d) of Rule 13d-3 under the
Act in the case of rights to acquire Stock);
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(iii) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of Stock
of the Company would be converted into cash, securities or other
property, other than a merger of the Company in which holders of Stock
of the Company 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
Company; or
(iv) there shall have been a change in a majority of the members of
the Board within a 12-month period unless the election or nomination for
election by the Company stockholders 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.
Notwithstanding the foregoing, any spin-off of all or a portion of the
assets or operations of the Company or any subsidiary which has been
approved by a majority of the directors serving on the Board as of the date
hereof or by directors approved by the vote of two-thirds of the directors
then still in office who were directors as of the date hereof, shall not be
deemed a "Change in Control".
(e) "Good Reason" means:
(i) without the Executive's express written consent and excluding
for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company or its
Affiliates promptly after receipt of notice thereof given by the
Executive, (A) a reduction in the Executive's Annual Base Salary and
Annual Bonus (each as defined herein) or any reduction in any material
compensation or benefits arrangement, (B) the assignment to the
Executive of any duties inconsistent in any respect with the Executive's
position (including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section 3(a)
hereof, (C) any other action by the Company or any of its Affiliates
which results in a diminution in the Executive's position, authority,
duties or responsibilities, or (D) any failure by the Company to comply
with any of the provisions of Section 3(b) hereof;
(ii) without the Executive's express written consent, the Company's
requiring the Executive's work location to be other than within
twenty-five (25) miles of the location set forth in Section 3(a)(i);
(iii) any failure by the Company to comply with and satisfy Section
8(a).
For purposes hereof, a determination by the Executive that he has
"Good Reason" hereunder shall be final and binding on the parties hereto
absent a showing of bad faith on the Executive's part.
(f) "Incapacity" means any physical or mental illness or disability of
the Executive which continues for a period of six consecutive months or
more and which at any time after such six-month period the Board shall
reasonably determine renders the Executive incapable of performing his or
her duties during the remainder of the Term.
(g) "Operative Date" means the date on which a Change in Control shall
have occurred.
SECTION 2. Term of Agreement. This Agreement shall become operative on
the Operative Date and shall remain in effect until the second anniversary of
the Operative Date (the "Term") unless further extended or sooner terminated as
hereinafter provided. Commencing on the second anniversary of the Operative
Date, and each anniversary date thereafter (each, an "Anniversary Date"), the
Term shall automatically be extended for one additional year, unless, not later
than 30 days prior to such Anniversary Date, the Company shall have given notice
to the Executive that it does not wish to extend this Agreement.
SECTION 3. Terms of Employment. (a) Position and Duties. (i) During the
Term: (A) the Executive's position (including status, offices, titles and
reporting requirements), authority, duties and responsibilities shall be at
least commensurate in all material respects with the most significant of those
held,
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exercised and assigned immediately prior to the Operative Date, and (B) the
Executive's services shall be performed at the location at which the Executive
was based on the Operative Date and the Company shall not require the Executive
to travel on Company business to a substantially greater extent than required
immediately before the Operative Date, except for travel and temporary
assignments which are reasonably required for the full discharge of the
Executive's responsibilities and which are consistent with the Executive's being
so based.
(ii) During the Term, and excluding any periods of vacation and sick leave
to which the Executive is entitled in accordance with Company policy, the
Executive agrees to devote reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities.
(b) Compensation. (i) Salary and Bonus. During the first year of the
Term, the Executive will receive compensation at an annual rate equal to the sum
of (A) an annual salary not less than the Executive's annualized salary in
effect immediately prior to the Operative Date (such annualized salary, as may
be increased on or after the Operative Date, the "Annual Base Salary"), plus (B)
a bonus not less than the aggregate amount of the Executive's highest bonus
award under the ITT Annual Performance-Based Incentive Plan for Executive
Officers or any substitute or successor plan in respect of the last three
calendar years preceding the Operative Date ("Annual Bonus"). During the Term,
on each anniversary of the Operative Date, the Executive's compensation in
effect on such anniversary date shall be increased for the following
twelve-month period by not less than the higher of (A) 5% or (B) 80% of the
percentage change in the Consumer Price Index (All Urban Consumers) for the
twelve-month period ended immediately prior to the month in which such
anniversary date occurs.
(ii) Employee Benefit Plans. During the Term, the Executive will be
entitled to (A) continue to participate in all 401(k)/savings and retirement
plans, welfare plans, incentive plans, equity-based plans and all other plans,
programs, policies and arrangements applicable to the Executive prior to the
Operative Date (the "Company Plans"), or (B) participate in employee benefit
plans, programs, policies and arrangements of any successor to the Company which
have benefits that are not less favorable to the Executive.
SECTION 4. Termination of Employment. (a) Death or Incapacity. This
Agreement shall terminate automatically upon the Executive's death during the
Term. This Agreement shall cease and terminate on the date of determination by
the Board that the Incapacity of the Executive has occurred during the Term
("Incapacity Effective Date").
(b) Cause. The Company may terminate the Executive's employment for Cause,
as defined herein. Termination of the Executive for Cause shall not be effective
unless the Board has passed a resolution, duly adopted by the affirmative vote
of not less than three-quarters (3/4) of the entire membership of the Board at
a meeting of the Board which was called and held for the purpose of considering
such termination (after reasonable notice to the Executive and an opportunity
for the Executive, together with the Executive's counsel, to be heard before the
Board, finding that, in the good faith opinion of the Board, the Executive was
guilty of conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.
(c) Good Reason. The Executive may terminate his or her employment for
Good Reason, as defined herein.
(d) Notice of Termination. Any termination by the Company for Cause or
Incapacity, or by the Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section 10 of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated, (iii) in the case
of termination by the Company for Cause or for Incapacity, confirms that such
termination is pursuant to a resolution of the Board (which, in the case of
Cause, is pursuant to Section 4(b) hereof), and (iv) if the Date
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of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than 30
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason, Incapacity or Cause shall not serve to
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Incapacity, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination, and (iii) if the Executive's employment is
terminated by reason of death or Incapacity, the Date of Termination shall be
the date of death of the Executive or the Incapacity Effective Date, as the case
may be.
SECTION 5. Obligations of the Company Upon Termination. (a) Termination
for Good Reason or for Reasons Other Than for Cause, Death or Incapacity. If,
during the Term, the Company shall terminate the Executive's employment other
than for Cause or Incapacity or the Executive shall terminate his or her
employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash,
within five business days after the Date of Termination, the aggregate of
the following amounts:
(A) the sum of (1) the Executive's currently effective Annual Base
Salary through the Date of Termination to the extent not theretofore
paid, (2) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid (the sum
of the amounts described in clauses (1) and (2) shall be hereinafter
referred to as the "Accrued Obligations"); and
(B) the amount equal to the product of (1) three(1) and (2) the sum
of (x) the Executive's Annual Base Salary and (y) his or her Annual
Bonus;
(ii) for three years(2) after the Executive's Date of Termination, or
such longer period as may be provided by the terms of the appropriate
Company Plan, the Company shall continue health and life insurance
benefits, perquisites and fringe benefits to the Executive and the
Executive's eligible family members at least equal to those which would
have been provided to them in accordance with the Company Plans if the
Executive's employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter, provided,
however, that if the Executive becomes reemployed with another employer and
is eligible to receive health or life insurance benefits, perquisites and
fringe benefits under another employer's plans, the Company's obligations
under this Section 5(a)(ii) shall cease;
(iii) the Company shall, at its sole expense as incurred, provide the
Executive with reasonable outplacement services for a period of up to one
year from the Date of Termination, the provider of which shall be selected
by the Executive in his or her sole discretion; and
(iv) to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to
receive under any Company Plan, including earned but unpaid stock and
similar compensation (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits").
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(1) For three of the nine executives covered by individual agreements, the
multiplier will be two, rather than three. The executives covered, respectively,
by the 3x and 2x multipliers are set forth on Schedule A hereto.
(2) Two years for three of the nine executives.
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(b) Certain Additional Payments by the Company. (i) Anything in this
Agreement to the contrary notwithstanding, if it shall be determined that any
payment or distribution to or for the benefit of the Executive (whether paid or
payable or distributed or distributable) pursuant to the terms of this Agreement
or otherwise (the "Payment") would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code", and
such excise tax, the "Excise Tax"), then the Executive shall be entitled to
receive from the Company an additional payment (the "Gross-Up Payment") in an
amount such that the net amount of Payment and Gross-Up Payment retained by the
Executive, after the calculation and deduction of all Excise Taxes (including
any interest or penalties imposed with respect to such taxes) on the Payment and
all federal, state and local income tax, employment tax and Excise Tax
(including any interest or penalties imposed with respect to such taxes) on the
Gross-Up Payment provided for in this Section, shall be equal to the Payment.
(ii) Subject to the provisions of Section 5(b)(iii), all determinations
required to be made under this Section 5(b), including whether and when the
Gross-Up Payment is required and the amount of such Gross-Up Payment, and the
assumptions to be utilized in arriving at such determinations shall be made by a
nationally recognized certified public accounting firm as may be jointly
designated by the Executive and the Company (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and the Executive
within 15 business days of the receipt of notice from the Executive that there
has been a Payment, or such earlier time as is requested by the Company. All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment shall be paid by the Company to the Executive within five
days of the receipt of the Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the Company and the Executive. As a
result of uncertainty in the application of section 4999 of the Code at the time
of the initial determination by the Accounting Firm hereunder, it is possible
that the Gross-Up Payment made will have been an amount less than the Company
should have paid pursuant to this Section 5(b)(ii) (the "Underpayment"). In the
event that the Company exhausts its remedies pursuant to Section 5(b)(iii) and
the Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
(iii) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable after the Executive is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date on which such claim
is requested to be paid. The Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which he or she gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes, interest and/or penalties with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(A) give the Company any information reasonably requested by the
Company relating to such claim,
(B) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
(C) cooperate with the Company in good faith in order to effectively
contest such claim, and
(D) permit the Company to participate in any proceedings relating to
such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify the Executive for and hold the Executive
harmless from, on an after-tax basis, any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of all related costs and expenses. Without limiting
the foregoing provisions of this Section 5(b)(iii), the Company shall control
all proceedings taken in connection with such contest and, at its sole option,
may pursue or forgo any and all administrative appeals, proceedings, hearings
and conferences with the taxing authority in respect of such
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claim and may, at its sole option, either direct the Executive to pay the tax
claimed and xxx for a refund or contest the claim in any permissible manner, and
the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest- free basis, and shall indemnify the Executive for and hold the
Executive harmless from, on an after-tax basis, any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance
(including as a result of any forgiveness by the Company of such advance); and
further provided that any extension of the statute of limitations relating to
the payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
(iv) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 5(b)(iii), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 5(b)(iii)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 5(b)(iii), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment or other indemnity payment
required to be paid.
(c) Death or Incapacity. If the Executive's employment is terminated by
reason of the Executive's death or Incapacity during the Employment Period, this
Agreement shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for (i) timely payment of
Accrued Obligations and Other Benefits, and (ii) provision by the Company of
death benefits or disability benefits for termination due to death or
Incapacity, respectively, in accordance with the Company Plans as in effect
immediately prior to the Operative Date or, if more favorable to the Executive,
at the Executive's Date of Termination.
(d) Cause; Other than for Good Reason. If the Executive's employment shall
be terminated for Cause during the Term, this Agreement shall terminate without
further obligations to the Executive other than timely payment to the Executive
of (x) the Executive's currently effective Annual Base Salary through the Date
of Termination, (y) the amount of any compensation previously deferred by the
Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the Term,
excluding a termination for Good Reason, this Agreement shall terminate without
further obligations to the Executive, other than for the timely payment of
Accrued Obligations and Other Benefits.
SECTION 6. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
Company Plan and for which the Executive may qualify, nor, subject to Section
14(c), shall anything herein limit or otherwise affect such rights as the
Executive may have under any contract or agreement with the Company or any of
its Affiliates. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any Company Plan at or subsequent to the
Date of Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly modified by
this Agreement.
SECTION 7. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other
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action by way of mitigation of the amounts payable to the Executive under any of
the provisions of this Agreement and such amounts shall not be reduced, whether
or not the Executive obtains other employment. The Company agrees to pay as
incurred, to the full extent permitted by law, all legal fees and expenses which
the Executive may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof.
SECTION 8. Successors; Binding Agreement. (a) The Company will require
any successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the Company,
by agreement, in form and substance satisfactory to the Executive, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession will be a breach of this
Agreement and entitle the Executive to compensation from the Company in the same
amount and on the same terms as the Executive would be entitled to hereunder had
the Company terminated the Executive for any reason other than Cause or
Incapacity on the succession date (and assuming a Change in Control of the
company had occurred prior to such succession date). As used in this Agreement,
"the Company" means the Company as defined in the preamble to this Agreement or
any successor to its business or assets which executes and delivers the
agreement provided for in this Section 8 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law or otherwise.
Notwithstanding the foregoing, it is expressly acknowledged by the Executive and
the Company that, if the distribution of the stock of ITT Destinations, Inc., a
Nevada corporation, to the Company's stockholders shall occur prior to the
occurrence of a Change in Control of the Company, ITT Destinations, Inc. shall
be required to automatically assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
if no such succession had taken place, and following such distribution, all
references herein to "the Company" shall be deemed to refer to ITT Destinations,
Inc.
(b) This Agreement shall be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
SECTION 9. Non-assignability. This Agreement is personal in nature and
neither of the parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder, except as
provided in Section 8 hereof. Without limiting the foregoing, the Executive's
right to receive payments hereunder shall not be assignable or transferable,
whether by pledge, creation of a security interest or otherwise, other than a
transfer by his or her will or by the laws of descent or distribution, and, in
the event of any attempted assignment or transfer by the Executive contrary to
this Section, the Company shall have no liability to pay any amount so attempted
to be assigned or transferred.
SECTION 10. Notices. For the purpose of this Agreement, notices and all
other communications provided for herein shall be in writing and shall be deemed
to have been duly given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: [name]
[address]
If to the Company: ITT Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: General Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
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SECTION 11. Operation of Agreement. This Agreement shall be effective
immediately upon its execution and continue to be effective until the Term
expires so long as the Executive is employed by the Company or any of its
Affiliates as of the Operative Date. The provisions of this Agreement do not
take effect until the Operative Date.
SECTION 12. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York without reference to principles of conflict of laws.
SECTION 13. Settlement of Disputes; Arbitration. If there has been a
Change in Control and any dispute arises between the Executive and the Company
as to the validity, enforceability and/or interpretation of any right or benefit
afforded by this Agreement, at the Executive's option, any other agreement or
policy notwithstanding, such dispute shall be resolved by binding arbitration
proceedings in accordance with the rules of the American Arbitration
Association. The arbitrators shall presume that the rights and/or benefits
afforded by this Agreement which are in dispute are valid and enforceable and
that the Executive is entitled to such rights and/or benefits. The Company shall
be precluded from asserting that such rights and/or benefits are not valid,
binding and enforceable and shall stipulate before such arbitrators that the
Company is bound by all the provisions of this Agreement. The burden of
overcoming by clear and convincing evidence the presumption that the Executive
is entitled to such rights and/or benefits shall be on the Company. The results
of any arbitration shall be conclusive on both parties and shall not be subject
to judicial interference or review on any ground whatsoever, including without
limitation any claim that the Company was wrongfully induced to enter into this
Agreement to arbitrate such a dispute.
The Company shall pay the cost of any arbitration proceedings under this
Agreement. The Executive shall be entitled (within two business days of
requesting such advance) to an advance of the actual legal fees and expenses
incurred by the Executive in connection with such proceedings and the Executive
shall be obligated to reimburse the Company for such fees and expenses in
connection with such arbitration proceedings only if it is finally and
specifically determined by the arbitrators that the Executive's position in
initiating the arbitration was frivolous and completely without arguable merit.
The arbitrators shall have discretion to award punitive damages to the Executive
if it is found that the Company's actions or failures to act which led to the
Executive submitting a dispute to arbitration and/or the Company's actions or
failures to act during the pendency of the arbitration proceeding make such an
award appropriate in the circumstances.
In the event the Executive is required to defend in any legal action or
other proceeding the validity or enforceability of any right or benefit afforded
by this Agreement, the Company will pay any and all actual legal fees and
expenses incurred by the Executive regardless of the outcome of such action and,
if requested by the Executive, shall (within two business days of such request)
advance such fees and expenses to the Executive. The Company shall be precluded
from asserting in any judicial or other proceeding commenced with respect to any
right or benefit afforded by this Agreement that such rights and benefits are
not valid, binding and enforceable and shall stipulate in any such proceeding
that the Company is bound by all the provisions of this Agreement.
SECTION 14. Miscellaneous. (a) This Agreement contains the entire
understanding with the Executive with respect to the subject matter hereof and
supersedes any and all prior agreements or understandings, written or oral,
relating to such subject matter. No provisions of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge is
agreed to in writing signed by the Executive and the Company.
(b) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
(c) Except as provided herein, this Agreement shall not be construed to
affect in any way any rights or obligations in relation to the Executive's
employment by the Company or any of its Affiliates prior to the Operative Date
or subsequent to the end of the Term.
(d) This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same Agreement.
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(e) The Company may withhold from any benefits payable under this Agreement
all Federal, state, city or other taxes as shall be required pursuant to any law
or governmental regulation or ruling.
(f) The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first above set forth.
ITT CORPORATION
by
--------------------------------------
Name:
Title:
--------------------------------------
[Name of Executive]
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