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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
------------------------
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
MAY 23, 1997
(DATE OF EARLIEST EVENT REPORTED)
ITT INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
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INDIANA 1-5627 13-5158950
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NUMBER)
4 WEST RED OAK LANE, WHITE PLAINS, NEW YORK 10604
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(914)-641-2000
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 23, 1997, George Acquisition, Inc. ("Acquiror"), a wholly-owned
subsidiary of ITT Industries, Inc. (the "Company"), acquired approximately
20,269,000 shares of Goulds Pumps, Incorporated ("Goulds"), which together with
shares already owned by the Company represented approximately 94% of Goulds'
outstanding shares of common stock, for a cash price of $37.00 per share,
pursuant to an April 25, 1997 tender offer.
Goulds' business is the design, manufacture, sale and repair of centrifugal
pumps and accessories for diverse applications.
On May 27, 1997, the Company completed the merger of Acquiror with Goulds.
Upon consummation of the merger, Goulds became a wholly-owned subsidiary of the
Company and the shareholders of Goulds who did not tender their shares became
entitled to receive $37.00 per share. The total purchase price for Goulds was
approximately $815 million plus certain additional amounts to be paid in respect
of outstanding stock options and transaction expenses.
Included among the assets acquired by the Company (indirectly through the
acquisition of the shares of Goulds) are operations described as follows:
1. Industrial Products: The types of pumps manufactured for
customers served by the Industrial Products division of Goulds include
end-suction, double-suction, multistage, axial flow, vertical turbine, sump
and slurry pumps to meet a wide variety of needs in the industrial and
municipal markets, including pumps designed for API and ANSI standards.
Goulds manufactures pumps from nonmetallic materials for applications where
metal alloys are unsatisfactory or prohibitively expensive. Goulds'
vertical industrial turbine pumps are used throughout industries where
space limitations or unsatisfactory suction conditions make the use of
horizontal pumps impractical. Goulds slurry pumps serve the alumina and
phosphate mining and minerals markets. Abrasion resistant pumps are
manufactured for mining, utility and steel mill applications. Goulds' Pump
Repair and Overhaul Service Centers play a role in customer service by
rebuilding and repairing pumps and other rotating equipment produced by any
manufacturer.
2. Water Technologies: The Water Technologies division of Goulds
manufactures and sells water pump systems, which include pumps, motors,
pressure tanks and related accessories, used to supply water for farms,
single and multiple family residences, office buildings, restaurants and
other commercial uses, and municipal water supply and sewage treatment
facilities. A commercial line of pumps is manufactured and sold for light
industrial applications and OEM applications. In addition, sump, effluent
and sewer pumps (SES) are manufactured and used in de-watering and sewage
ejection applications. Submersible and deep-well turbine pumps are used for
irrigation and other agricultural services.
In addition, all receivables and contract rights of Goulds and its
subsidiaries are included indirectly in the purchase.
The funds used to consummate the acquisition came from borrowings of the
Company from a Five Year Competitive Advance and Revolving Credit Facility
Agreement (the "Credit Agreement"), dated November 10, 1995 with The Chase
Manhattan Bank, as agent, and certain other lending institutions.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
See Exhibit Index.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ITT Industries, Inc.
By: /s/ ROBERT W. BEICKE
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Robert W. Beicke
Vice President, Associate General
Counsel
and Assistant Secretary
Dated: June 5, 1997
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION LOCATION
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3
(b) -- By-Laws.......................................................... Filed herewith.
10
(e) -- First Amendment to Employment Agreement between ITT Industries
and D. Travis Engen -- in final form............................. Filed herewith.
(r) -- Trade Name and Trademark License Agreement....................... Filed herewith.
(s) -- ITT Industries Enhanced Severance Pay Plan....................... Filed herewith.
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EXHIBIT 3(b)
BY-LAWS
OF
ITT INDUSTRIES, INC.
1. SHAREHOLDERS.
1.1 Place of Shareholders' Meetings. All meetings of the shareholders of
the Corporation shall be held at such place or places, within or outside the
state of Indiana, as may be fixed by the Corporation's Board of Directors (the
"Board", and each member thereof a "Director") from time to time or as shall be
specified in the respective notices thereof.
1.2 Day and Time of Annual Meetings of Shareholders. An annual meeting of
shareholders shall be held at such place (within or outside the state of
Indiana), date and hour as shall be determined by the Board and designated in
the notice thereof. Failure to hold an annual meeting of shareholders at such
designated time shall not affect otherwise valid corporate acts or work a
forfeiture or dissolution of the Corporation.
1.3 Purposes of Annual Meetings. (a) At each annual meeting, the
shareholders shall elect the members of the Board for the succeeding term. At
any such annual meeting any business properly brought before the meeting may be
transacted.
(b) To be properly brought before an annual meeting, business must be (i)
specified in the notice of the meeting (or any supplement thereto) given by or
at the direction of the Board, (ii) otherwise properly brought before the
meeting by or at the direction of the Board or (iii) otherwise properly brought
before the meeting by a shareholder. For business to be properly brought before
an annual meeting by a shareholder, the shareholder must have given written
notice thereof, either by personal delivery or by United States mail, postage
prepaid, to the Secretary, at the principal executive offices of the
Corporation, not less than 70 days nor more than 90 days prior to the
anniversary date of the immediately preceding annual meeting; provided, however,
that in the event that the date of the annual meeting is more than 30 days
earlier or more than 60 days later than such anniversary date, notice by the
shareholder must be so delivered or received not earlier than the 90th day prior
to such annual meeting and not later than the close of business on the later of
the 70th day prior to such annual meeting or the tenth day following the day on
which public announcement of the date of such meeting is first made. Any such
notice shall set forth as to each matter the shareholder proposes to bring
before the annual meeting (i) a brief description of the business desired to be
brought before the meeting and the reasons for conducting such business at the
meeting and, in the event that such business includes a proposal to amend either
the Articles of Incorporation or By-laws of the Corporation, the language of the
proposed amendment, (ii) the name and address of the shareholder proposing such
business, (iii) a representation that the shareholder is a holder of record of
stock of the Corporation entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to propose such business, (iv) any material
interest of the shareholder in such business and (v) if the shareholder intends
to solicit proxies in support of such shareholder's proposal, a representation
to that effect. The foregoing notice requirements shall be deemed satisfied by a
shareholder if the shareholder has notified the Corporation of his or her
intention to present a proposal at an annual meeting and such shareholder's
proposal has been included in a proxy statement that has been prepared by
management of the Corporation to solicit proxies for such annual meeting;
provided, however, that, if such shareholder does not appear or send a qualified
representative to present such proposal at such annual meeting, the Corporation
need not present such proposal for a vote at such meeting, notwithstanding that
proxies in respect of such vote may have been received by the Corporation. No
business shall be conducted at an annual meeting of shareholders except in
accordance with this Section 1.3(b), and the chairman of any annual meeting of
shareholders may refuse to permit any business to be brought before an annual
meeting without compliance with the foregoing
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procedures or if the shareholder solicits proxies in support of such
shareholder's proposal without such shareholder having made the representation
required by clause (v) of the preceding sentence.
1.4 Special Meetings of Shareholders. Except as otherwise expressly
required by applicable law, special meetings of the shareholders or of any class
or series entitled to vote may be called for any purpose or purposes by the
Chairman or by a majority vote of the entire Board, to be held at such place
(within or outside the state of Indiana), date and hour as shall be determined
by the Board and designated in the notice thereof. Only such business as is
specified in the notice of any special meeting of the shareholders shall come
before such meeting.
1.5 Notice of Meetings of Shareholders. Except as otherwise expressly
required or permitted by applicable law, not less than ten days nor more than
sixty days before the date of every shareholders' meeting the Secretary shall
give to each shareholder of record entitled to vote at such meeting written
notice stating the place, day and time of the meeting and, in the case of a
special meeting, the purpose or purposes for which the meeting is called. Except
as provided in Section 1.6(d) or as otherwise expressly required by applicable
law, notice of any adjourned meeting of shareholders need not be given if the
time and place thereof are announced at the meeting at which the adjournment is
taken. Any notice, if mailed, shall be deemed to be given when deposited in the
United States mail, postage prepaid, addressed to the shareholder at the address
for notices to such shareholder as it appears on the records of the Corporation.
1.6 Quorum of Shareholders. (a) Unless otherwise expressly required by
applicable law, at any meeting of the shareholders, the presence in person or by
proxy of shareholders entitled to cast a majority of votes thereat shall
constitute a quorum. Shares of the Corporation's stock belonging to the
Corporation or to another corporation, if a majority of the shares entitled to
vote in an election of the directors of such other corporation is held by the
Corporation, shall neither be counted for the purpose of determining the
presence of a quorum nor entitled to vote at any meeting of the shareholders.
(b) At any meeting of the shareholders at which a quorum shall be present,
a majority of those present in person or by proxy may adjourn the meeting from
time to time without notice other than announcement at the meeting. In the
absence of a quorum, the officer presiding thereat shall have power to adjourn
the meeting from time to time until a quorum shall be present. Notice of any
adjourned meeting other than announcement at the meeting shall not be required
to be given, except as provided in Section 1.6(d) below and except where
expressly required by applicable law.
(c) At any adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the meeting
originally called, but only those shareholders entitled to vote at the meeting
as originally noticed shall be entitled to vote at any adjournment or
adjournments thereof unless a new record date is fixed by the Board.
(d) If a new date, time and place of an adjourned meeting is not announced
at the original meeting before adjournment, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given in the manner specified in Section 1.6(a) to each
shareholder of record entitled to vote at the meeting.
1.7 Chairman and Secretary of Meeting. The Chairman or, in his or her
absence, another officer of the Corporation designated by the Chairman, shall
preside at meetings of the shareholders. The Secretary shall act as secretary of
the meeting, or in the absence of the Secretary, an Assistant Secretary shall so
act, or if neither is present, then the presiding officer may appoint a person
to act as secretary of the meeting.
1.8 Voting by Shareholders. (a) Except as otherwise expressly required by
applicable law, at every meeting of the shareholders each shareholder shall be
entitled to the number of votes specified in the Articles of Incorporation, in
person or by proxy, for each share of stock standing in his or her name on the
books of the Corporation on the date fixed pursuant to the provisions of Section
5.6 of these By-laws as the record date for the determination of the
shareholders who shall be entitled to receive notice of and to vote at such
meeting.
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(b) When a quorum is present at any meeting of the shareholders, action on
a matter (other than the election of directors) by a voting group is approved if
the votes cast within the voting group favoring the action exceed the votes cast
opposing the action, unless express provision of law or the Articles of
Incorporation require a greater number of affirmative votes.
(c) Except as required by applicable law, the vote at any meeting of
shareholders on any question need not be by ballot, unless so directed by the
chairman of the meeting. On a vote by ballot, each ballot shall be signed by the
shareholder voting, or by his or her proxy, if there be such proxy, and shall
state the number of shares voted.
1.9 Proxies. Any shareholder entitled to vote at any meeting of
shareholders may vote either in person or by his or her attorney-in-fact. Every
proxy shall be in writing and shall be subscribed by the shareholder or his or
her duly authorized attorney-in-fact, but need not be dated, sealed, witnessed
or acknowledged.
1.10 Inspectors. (a) The election of Directors and any other vote by
ballot at any meeting of the shareholders shall be supervised by at least two
inspectors. Such inspectors may be appointed by the Chairman before or at the
meeting. If the Chairman shall not have so appointed such inspectors or if one
or both inspectors so appointed shall refuse to serve or shall not be present,
such appointment shall be made by the officer presiding at the meeting. Each
inspector, before entering upon the discharge of his or her duties, shall take
and sign an oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of his or her ability.
(b) The inspectors shall (i) ascertain the number of shares of the
Corporation outstanding and the voting power of each, (ii) determine the shares
represented at any meeting of shareholders and the validity of the proxies and
ballots, (iii) count all proxies and ballots, (iv) determine and retain for a
reasonable period a record of the disposition of any challenges made to any
determination by the inspectors, and (v) certify their determination of the
number of shares represented at the meeting, and their count of all proxies and
ballots. The inspectors may appoint or retain other persons or entities to
assist the inspectors in the performance of their duties.
1.11 List of Shareholders. (a) At least five business days before every
meeting of shareholders, the Corporation shall cause to be prepared and made a
complete list of the shareholders entitled to vote at the meeting, arranged in
alphabetical order by voting group, if any, and showing the address of each
shareholder and the number of shares registered in the name of each shareholder.
(b) During ordinary business hours for a period of at least five business
days prior to the meeting, such list shall be open to examination by any
shareholder for any purpose germane to the meeting, either at the Corporation's
principal office or a place identified in the meeting notice in the city where
the meeting will be held.
(c) The list shall also be produced and kept at the time and place of the
meeting, and it may be inspected during the meeting by any shareholder or the
shareholder's agent or attorney authorized in writing.
(d) The stock ledger shall be the only evidence as to who are the
shareholders entitled to examine the stock ledger, the list required by this
Section 1.11 or the books of the Corporation, or to vote in person or by proxy
at any meeting of shareholders.
1.12 Confidential Voting. (a) Proxies and ballots that identify the votes
of specific shareholders shall be kept in confidence by the tabulators and the
inspectors of election unless (i) there is an opposing solicitation with respect
to the election or removal of Directors, (ii) disclosure is required by
applicable law, (iii) a shareholder expressly requests or otherwise authorizes
disclosure, or (iv) the Corporation concludes in good faith that a bona fide
dispute exists as to the authenticity of one or more proxies, ballots or votes,
or as to the accuracy of any tabulation of such proxies, ballots or votes.
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(b) The tabulators and inspectors of election and any authorized agents or
other persons engaged in the receipt, count and tabulation of proxies and
ballots shall be advised of this By-law and instructed to comply herewith.
(c) The inspectors of election shall certify, to the best of their
knowledge based on due inquiry, that proxies and ballots have been kept in
confidence as required by this Section 1.12.
2. DIRECTORS.
2.1 Powers of Directors. The business and affairs of the Corporation
shall be managed by or under the direction of the Board, which may exercise all
the powers of the Corporation except such as are by applicable law, the Articles
of Incorporation or these By-laws required to be exercised or performed by the
shareholders.
2.2 Number, Method of Election, Terms of Office of Directors. The number
of Directors which shall constitute the whole Board shall be such as from time
to time shall be determined by resolution adopted by a majority of the entire
Board, but the number shall not be less than three nor more than twenty-five,
provided that the tenure of a Director shall not be affected by any decrease in
the number of Directors so made by the Board. Each Director shall hold office
until the next annual meeting of shareholders and until his or her successor is
elected and qualified or until his or her earlier death, retirement, resignation
or removal. Directors need not be shareholders of the Corporation or citizens of
the United States of America.
Nominations of persons for election as Directors may be made by the Board
or by any shareholder who is a shareholder of record at the time of giving of
the notice of nomination provided for in this Section 2.2 and who is entitled to
vote for the election of Directors. Any shareholder of record entitled to vote
for the election of Directors at a meeting may nominate a person or persons for
election as Directors only if written notice of such shareholder's intent to
make such nomination is given in accordance with the procedures for bringing
business before the meeting set forth in Section 1.3(b) of these By-laws, either
by personal delivery or by United States mail, postage prepaid, to the Secretary
not later than (i) with respect to an election to be held at an annual meeting
of shareholders, not less than 70 nor more than 90 days in advance of the
anniversary date of the immediately preceding annual meeting; provided, however,
that in the event that the date of the annual meeting is more than 30 days
earlier or more than 60 days later than such anniversary date, notice by the
shareholder must be so delivered or received not earlier than the 90th day prior
to such annual meeting and not later than the close of business on the later of
the 70th day prior to such annual meeting or the 10th day following the day on
which public announcement of the date of such meeting is first made and (ii)
with respect to an election to be held at a special meeting of shareholders for
the election of Directors, not earlier than the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day
prior to such special meeting or the 10th day following the day on which public
announcement of the date of the special meeting is first made and of the
nominees to be elected at such meeting. Each such notice shall set forth: (a)
the name and address of the shareholder who intends to make the nomination and
of the person or persons to be nominated; (b) a representation that the
shareholder is a holder of record of stock of the Corporation entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a description of all
arrangements or understandings between the shareholder and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the shareholder; (d) such other
information regarding each nominee proposed by such shareholder as would have
been required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had each nominee been nominated,
or intended to be nominated, by the Board; (e) the consent of each nominee to
serve as a Director if so elected and (f) if the shareholder intends to solicit
proxies in support of such shareholder's nominee(s), a representation to that
effect. The chairman of any meeting of shareholders to elect Directors and the
Board may refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure or if the shareholder
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solicits proxies in support of such shareholder's nominee(s) without such
shareholder having made the representation required by (f) of the preceding
sentence.
At each meeting of the shareholders for the election of Directors at which
a quorum is present, the persons receiving the greatest number of votes, up to
the number of Directors to be elected, shall be the Directors.
2.3 Vacancies on Board. (a) Any Director may resign from office at any
time by delivering a written resignation to the Chairman or the Secretary. The
resignation will take effect at the time specified therein, or, if no time is
specified, at the time of its receipt by the Corporation. The acceptance of a
resignation shall not be necessary to make it effective, unless expressly so
provided in the resignation.
(b) Any vacancy and any newly created Directorship resulting from any
increase in the authorized number of Directors may be filled by vote of a
majority of the Directors then in office, though less than a quorum, and any
Director so chosen shall hold office until the next annual election of Directors
by the shareholders and until a successor is duly elected and qualified or until
his or her earlier death, retirement, resignation or removal. If there are no
Directors in office, then an election of Directors may be held in the manner
provided by applicable law.
2.4 Meetings of the Board. (a) The Board may hold its meetings, both
regular and special, either within or outside the state of Indiana, at such
places as from time to time may be determined by the Board or as may be
designated in the respective notices or waivers of notice thereof.
(b) Regular meetings of the Board shall be held at such times and at such
places as from time to time shall be determined by the Board.
(c) The first meeting of each newly elected Board shall be held as soon as
practicable after the annual meeting of the shareholders and shall be for the
election of officers and the transaction of such other business as may come
before it.
(d) Special meetings of the Board shall be held whenever called by
direction of the Chairman or at the request of Directors constituting one-third
of the number of Directors then in office.
(e) Members of the Board or any Committee of the Board may participate in a
meeting by means of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other, and
such participation shall constitute presence in person at such meeting.
(f) The Secretary shall give notice to each Director of any meeting of the
Board by mailing the same at least two days before the meeting or by
telegraphing or delivering the same not later than the day before the meeting.
Such notice need not include a statement of the business to be transacted at, or
the purpose of, any such meeting. Any and all business may be transacted at any
meeting of the Board. No notice of any adjourned meeting need be given. No
notice to or waiver by any Director shall be required with respect to any
meeting at which the Director is present.
2.5 Quorum and Action. Except as otherwise expressly required by
applicable law, the Articles of Incorporation or these By-laws, at any meeting
of the Board, the presence of at least one-third of the entire Board shall
constitute a quorum for the transaction of business; but if there shall be less
than a quorum at any meeting of the Board, a majority of those present may
adjourn the meeting from time to time. Unless otherwise provided by applicable
law, the Articles of Incorporation or these By-laws, the vote of a majority of
the Directors present (and not abstaining) at any meeting at which a quorum is
present shall be necessary for the approval and adoption of any resolution or
the approval of any act of the Board.
2.6 Presiding Officer and Secretary of Meeting. The Chairman or, in the
absence of the Chairman, a member of the Board selected by the members present,
shall preside at meetings of the Board. The Secretary shall act as secretary of
the meeting, but in the Secretary's absence the presiding officer may appoint a
secretary of the meeting.
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2.7 Action by Consent without Meeting. Any action required or permitted
to be taken at any meeting of the Board or of any Committee thereof may be taken
without a meeting if all members of the Board or Committee, as the case may be,
consent thereto in writing and the writing or writings are filed with the
minutes of their proceedings.
2.8 Standing Committees. By resolution adopted by a majority of the
entire Board, the Board shall elect, from among its members, individuals to
serve on the Standing Committees established by this Section 2.8. Each Standing
Committee shall be comprised of such number of Directors, not less than three,
as shall be elected to such Committee, provided that no officer or employee of
the Corporation shall be eligible to serve on the Audit, Compensation and
Personnel or Nominating Committees. Each Committee shall keep a record of all
its proceedings and report the same to the Board. One-third of the members of a
Committee, but not less than two, shall constitute a quorum, and the act of a
majority of the members of a Committee present at any meeting at which a quorum
is present shall be the act of the Committee. Each Standing Committee shall meet
at the call of its chairman or any two of its members. The chairmen of the
various Committees shall preside, when present, at all meetings of such
Committees, and shall have such powers and perform such duties as the Board may
from time to time prescribe. The Standing Committees of the Board, and functions
of each, are as follows:
(a) Compensation and Personnel Committee. The Compensation and
Personnel Committee shall exercise the power of oversight of the
compensation and benefits of the employees of the Corporation, and shall be
charged with evaluating management performance, and establishing executive
compensation. This Committee shall have access to its own independent
outside compensation counsel and shall consist of a majority of independent
directors. For purposes of this Section 2.8(a), "independent director"
shall mean a Director who: (i) has not been employed by the Corporation in
an executive capacity within the past five years; (ii) is not, and is not
affiliated with a company or firm that is, an advisor or consultant to the
Corporation; (iii) is not affiliated with a significant customer or
supplier of the Corporation; (iv) has no personal services contract(s) with
the Corporation; (v) is not affiliated with a tax-exempt entity that
receives significant contributions from the Corporation; and (vi) is not a
familial relative of any person described by Clauses (i) through (v). This
By-law shall not be amended or repealed except by a majority of the voting
power of the shareholders present in person or by proxy and entitled to
vote at any meeting at which a quorum is present.
(b) Audit Committee. The Audit Committee shall recommend the
selection of independent auditors for the Corporation, confirm the scope of
audits to be performed by such auditors, review audit results and internal
accounting and control procedures and policies, review the fees paid to the
Corporation's independent auditors, and review and recommend approval of
the audited financial statements of the Corporation and the annual reports
to shareholders. The Audit Committee shall also review expense accounts of
senior executives.
(c) Capital Committee. The Capital Committee shall have the
responsibility for maximizing the effective use of the assets of the
Corporation and its subsidiaries and reviewing capital expenditures and
appropriations.
(d) Corporate Responsibility Committee. The Corporate Responsibility
Committee shall review and define social responsibilities and shall review
and consider major claims and litigation and legal, regulatory,
intellectual property and related governmental policy matters affecting the
Corporation and its subsidiaries. The Corporate Responsibility Committee
shall also review and approve management policies and programs relating to
compliance with legal and regulatory requirements and business ethics.
(e) Nominating Committee. The Nominating Committee shall make
recommendations as to the organization, size and composition of the Board
and Committees thereof, propose nominees for election to the Board and the
Committees thereof, and consider the qualifications, compensation and
retirement of Directors.
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2.9 Other Committees. By resolution passed by a majority of the entire
Board, the Board may also appoint from among its members such other Committees,
Standing or otherwise, as it may from time to time deem desirable and may
delegate to such Committees such powers of the Board as it may consider
appropriate, consistent with applicable law, the Articles of Incorporation and
these By-laws.
2.10 Limitations on Committees. (a) Notwithstanding any other provision
of these By-laws, and except as otherwise expressly required by applicable law,
no Standing Committee created by Section 2.8, nor any other committee hereafter
established, may:
(1) authorize dividends or other distributions, except a committee may
authorize or approve a reacquisition of shares if done according to a
formula or method prescribed by the Board of Directors;
(2) approve or propose to shareholders action that is required to be
approved by shareholders;
(3) fill vacancies on the Board of Directors or on any of its
committees;
(4) except as permitted under Section 2.10(a)(7) below, amend the
Corporation's Articles of Incorporation under IC 23-1-38-2;
(5) adopt, amend, repeal or waive provisions of these By-laws;
(6) approve a plan of merger not requiring shareholder approval; or
(7) authorize or approve the issuance or sale or a contract for sale
of shares, or determine the designation and relative rights, preferences,
and limitations of a class or series of shares, except the Board of
Directors may authorize a committee (or an executive officer of the
Corporation designated by the Board of Directors) to take action described
in this Section 2.10(a)(7) within limits prescribed by the Board of
Directors.
(b) Except to the extent inconsistent with the resolutions creating a
Standing Committee, Sections 2.2 to 2.7 and Section 10 of these By-laws, which
govern meetings, action without meetings, notice and waiver of notice, quorum
and voting requirements and telephone participation in meetings of the Board of
Directors, apply to each committee and its members as well.
2.11 Compensation of Directors. Unless otherwise restricted by the
Articles of Incorporation or these By-laws, Directors shall receive for their
services on the Board or any Committee thereof such compensation and benefits,
including the granting of options, together with expenses, if any, as the Board
may from time to time determine. The Directors may be paid a fixed sum for
attendance at each meeting of the Board or Committee thereof and/or a stated
annual sum as a Director, together with expenses, if any, of attendance at each
meeting of the Board or Committee thereof. Nothing herein contained shall be
construed to preclude any Director from serving the Corporation in any other
capacity and receiving compensation therefor.
2.12 Independent Directors. (a) Independence of Nominees for Election as
Directors at the Annual Meeting. The persons nominated by the Board for
election as Directors at any annual meeting of the shareholders of the
Corporation shall include a sufficient number of persons who have been, on the
date of their nomination, determined by the Board to be eligible to be
classified as independent directors such that if all such nominees are elected,
the majority of all Directors holding office would be independent directors.
(b) Directors Elected to Fill Vacancies on the Board. If the Board elects
Directors between annual meetings of shareholders to fill vacancies or newly
created Directorships, the majority of all Directors holding office immediately
after such elections shall be independent directors.
(c) Definition of Independent Director. For purposes of this Section 2.12,
"independent director" shall mean a Director who: (i) has not been employed by
the Corporation in an executive capacity within the past five years; (ii) is
not, and is not affiliated with a company or a firm that is, an adviser or
consultant to the Corporation; (iii) is not affiliated with a significant
customer or supplier of the
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Corporation; (iv) has no personal services contract(s) with the Corporation; (v)
is not affiliated with a tax-exempt entity that receives significant
contributions from the Corporation; (vi) is not a familial relative of any
person described by Clauses (i) through (v); and (vii) is free of any other
relationship which would interfere with the exercise of independent judgment by
such Director.
3. OFFICERS.
3.1 Officers, Titles, Elections, Terms. (a) The Board may from time to
time elect a Chairman, a Vice Chairman, a President, one or more Executive Vice
Presidents, one or more Senior Vice Presidents, one or more Vice Presidents, a
Chief Financial Officer, a Controller, a Treasurer, a Secretary, a General
Counsel, one or more Assistant Controllers, one or more Assistant Treasurers,
one or more Assistant Secretaries, and one or more Associate or Assistant
General Counsels, to serve at the pleasure of the Board or otherwise as shall be
specified by the Board at the time of such election and until their successors
are elected and qualified or until their earlier death, retirement, resignation
or removal.
(b) The Board may elect or appoint at any time such other officers or
agents with such duties as it may deem necessary or desirable. Such other
officers or agents shall serve at the pleasure of the Board or otherwise as
shall be specified by the Board at the time of such election or appointment and,
in the case of such other officers, until their successors are elected and
qualified or until their earlier death, retirement, resignation or removal. Each
such officer or agent shall have such authority and shall perform such duties as
may be provided herein or as the Board may prescribe. The Board may from time to
time authorize any officer or agent to appoint and remove any other such officer
or agent and to prescribe such person's authority and duties.
(c) No person may be elected or appointed an officer who is not a citizen
of the United States of America if such election or appointment is prohibited by
applicable law or regulation.
(d) Any vacancy in any office may be filled for the unexpired portion of
the term by the Board. Each officer elected or appointed during the year shall
hold office until the next annual meeting of the Board at which officers are
regularly elected or appointed and until his or her successor is elected or
appointed and qualified or until his or her earlier death, retirement,
resignation or removal.
(e) Any officer or agent elected or appointed by the Board may be removed
at any time by the affirmative vote of a majority of the entire Board.
(f) Any officer may resign from office at any time. Such resignation shall
be made in writing and given to the President or the Secretary. Any such
resignation shall take effect at the time specified therein, or, if no time is
specified, at the time of its receipt by the Corporation. The acceptance of a
resignation shall not be necessary to make it effective, unless expressly so
provided in the resignation.
3.2 General Powers of Officers. Except as may be otherwise provided by
applicable law or in Article 6 or Article 7 of these By-laws, the Chairman, any
Vice Chairman, the President, any Executive Vice President, any Senior Vice
President, any Vice President, the Chief Financial Officer, the General Counsel,
the Controller, the Treasurer and the Secretary, or any of them, may (i) execute
and deliver in the name of the Corporation, in the name of any Division of the
Corporation or in both names any agreement, contract, instrument, power of
attorney or other document pertaining to the business or affairs of the
Corporation or any Division of the Corporation, including without limitation
agreements or contracts with any government or governmental department, agency
or instrumentality, and (ii) delegate to any employee or agent the power to
execute and deliver any such agreement, contract, instrument, power of attorney
or other document.
3.3 Powers and Duties of the Chairman. The Chairman shall be the Chief
Executive of the Corporation and shall report directly to the Board. Except in
such instances as the Board may confer powers in particular transactions upon
any other officer, and subject to the control and direction of the Board, the
Chairman shall manage and direct the business and affairs of the Corporation and
shall communicate to the Board and any Committee thereof reports, proposals and
recommendations for their
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respective consideration or action. He or she may do and perform all acts on
behalf of the Corporation and shall preside at meetings of the Board and the
shareholders.
3.4 Powers and Duties of a Vice Chairman. A Vice Chairman shall have such
powers and perform such duties as the Board or the Chairman may from time to
time prescribe or as may be prescribed in these By-laws.
3.5 Powers and Duties of the President. The President shall have such
powers and perform such duties as the Board or the Chairman may from time to
time prescribe or as may be prescribed in these By-laws.
3.6 Powers and Duties of Executive Vice Presidents, Senior Vice Presidents
and Vice Presidents. Executive Vice Presidents, Senior Vice Presidents and Vice
Presidents shall have such powers and perform such duties as the Board or the
Chairman may from time to time prescribe or as may be prescribed in these
By-laws.
3.7 Powers and Duties of the Chief Financial Officer. The Chief Financial
Officer shall have such powers and perform such duties as the Board, the
Chairman or any Vice Chairman may from time to time prescribe or as may be
prescribed in these By-laws. The Chief Financial Officer shall cause to be
prepared and maintained (i) a stock ledger containing the names and addresses of
all shareholders and the number of shares of each class and series held by each
and (ii) the list of shareholders for each meeting of the shareholders as
required by Section 1.11 of these By-laws. The Chief Financial Officer shall be
responsible for the custody of all stock books and of all unissued stock
certificates.
3.8 Powers and Duties of the Controller and Assistant
Controllers. (a) The Controller shall be responsible for the maintenance of
adequate accounting records of all assets, liabilities, capital and transactions
of the Corporation. The Controller shall prepare and render such balance sheets,
income statements, budgets and other financial statements and reports as the
Board or the Chairman may require, and shall perform such other duties as may be
prescribed or assigned pursuant to these By-laws and all other acts incident to
the position of Controller.
(b) Each Assistant Controller shall perform such duties as from time to
time may be assigned by the Controller or by the Board. In the event of the
absence, incapacity or inability to act of the Controller, then any Assistant
Controller may perform any of the duties and may exercise any of the powers of
the Controller.
3.9 Powers and Duties of the Treasurer and Assistant Treasurers. (a) The
Treasurer shall have the care and custody of all the funds and securities of the
Corporation except as may be otherwise ordered by the Board, and shall cause
such funds (i) to be invested or reinvested from time to time for the benefit of
the Corporation as may be designated by the Board, the Chairman, any Vice
Chairman, the President, the Chief Financial Officer or the Treasurer or (ii) to
be deposited to the credit of the Corporation in such banks or depositories as
may be designated by the Board, the Chairman, any Vice Chairman, the President,
the Chief Financial Officer or the Treasurer, and shall cause such securities to
be placed in safekeeping in such manner as may be designated by the Board, the
Chairman, any Vice Chairman, the President, the Chief Financial Officer or the
Treasurer.
(b) The Treasurer, any Assistant Treasurer or such other person or persons
as may be designated for such purpose by the Board, the Chairman, any Vice
Chairman, the President, the Chief Financial Officer or the Treasurer may
endorse in the name and on behalf of the Corporation all instruments for the
payment of money, bills of lading, warehouse receipts, insurance policies and
other commercial documents requiring such endorsement.
(c) The Treasurer, any Assistant Treasurer or such other person or persons
as may be designated for such purpose by the Board, the Chairman, any Vice
Chairman, the President, the Chief Financial Officer or the Treasurer (i) may
sign all receipts and vouchers for payments made to the Corporation, (ii) shall
render a statement of the cash account of the Corporation to the Board as often
as it shall require the same; and (iii) shall enter regularly in books to be
kept for that purpose full and accurate
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account of all moneys received and paid on account of the Corporation and of all
securities received and delivered by the Corporation.
(d) The Treasurer shall perform such other duties as may be prescribed or
assigned pursuant to these By-laws and all other acts incident to the position
of Treasurer. Each Assistant Treasurer shall perform such duties as may from
time to time be assigned by the Treasurer or by the Board. In the event of the
absence, incapacity or inability to act of the Treasurer, then any Assistant
Treasurer may perform any of the duties and may exercise any of the powers of
the Treasurer.
3.10 Powers and Duties of the Secretary and Assistant
Secretaries. (a) The Secretary shall keep the minutes of all proceedings of the
shareholders, the Board and the Committees of the Board. The Secretary shall
attend to the giving and serving of all notices of the Corporation, in
accordance with the provisions of these By-laws and as required by applicable
law. The Secretary shall be the custodian of the seal of the Corporation. The
Secretary shall affix or cause to be affixed the seal of the Corporation to such
contracts, instruments and other documents requiring the seal of the
Corporation, and when so affixed may attest the same and shall perform such
other duties as may be prescribed or assigned pursuant to these By-laws and all
other acts incident to the position of Secretary.
(b) Each Assistant Secretary shall perform such duties as may from time to
time be assigned by the Secretary or by the Board. In the event of the absence,
incapacity or inability to act of the Secretary, then any Assistant Secretary
may perform any of the duties and may exercise any of the powers of the
Secretary.
4. INDEMNIFICATION.
4.1(a) Right to Indemnification. The Corporation, to the fullest extent
permitted by applicable law as then in effect, shall indemnify any person who is
or was a Director or officer of the Corporation and who is or was involved in
any manner (including, without limitation, as a party or a witness) or is
threatened to be made so involved in any threatened, pending or completed
investigation, claim, action, suit or proceeding, whether civil, criminal,
administrative or investigative (including, without limitation, any action, suit
or proceeding by or in the right of the Corporation to procure a judgment in its
favor) (a "Proceeding") by reason of the fact that such person is or was a
Director, officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation, partnership, joint venture, trust or other
enterprise (including, without limitation, any employee benefit plan) (a
"Covered Entity"), against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such Proceeding; provided, however, that the foregoing
shall not apply to a Director or officer of the Corporation with respect to a
Proceeding that was commenced by such Director or officer prior to a Change in
Control (as defined in Section 4.4(e)(i) of this Article 4). Any Director or
officer of the Corporation entitled to indemnification as provided in this
Section 4.1(a) is hereinafter called an "Indemnitee". Any right of an Indemnitee
to indemnification shall be a contract right and shall include the right to
receive, prior to the conclusion of any Proceeding, payment of any expenses
incurred by the Indemnitee in connection with such Proceeding, consistent with
the provisions of applicable law as then in effect and the other provisions of
this Article 4.
(b) Effect of Amendments. Neither the amendment or repeal of, nor the
adoption of a provision inconsistent with, any provision of this Article 4
(including, without limitation, this Section 4.1(b)) shall adversely affect the
rights of any Director or officer under this Article 4 (i) with respect to any
Proceeding commenced or threatened prior to such amendment, repeal or adoption
of an inconsistent provision or (ii) after the occurrence of a Change in
Control, with respect to any Proceeding arising out of any action or omission
occurring prior to such amendment, repeal or adoption of an inconsistent
provision, in either case without the written consent of such Director or
officer.
4.2 Insurance, Contracts and Funding. The Corporation may purchase and
maintain insurance to protect itself and any indemnified person against any
expenses, judgments, fines and amounts paid in settlement as specified in
Section 4.1(a) or Section 4.5 of this Article 4 or incurred by any indemnified
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person in connection with any Proceeding referred to in such Sections, to the
fullest extent permitted by applicable law as then in effect. The Corporation
may enter into contracts with any Director, officer, employee or agent of the
Corporation or any director, officer, employee, fiduciary or agent of any
Covered Entity in furtherance of the provisions of this Article 4 and may create
a trust fund or use other means (including, without limitation, a letter of
credit) to ensure the payment of such amounts as may be necessary to effect
indemnification as provided in this Article 4.
4.3 Indemnification; Not Exclusive Right. The right of indemnification
provided in this Article 4 shall not be exclusive of any other rights to which
any indemnified person may otherwise be entitled, and the provisions of this
Article 4 shall inure to the benefit of the heirs and legal representatives of
any indemnified person under this Article 4 and shall be applicable to
Proceedings commenced or continuing after the adoption of this Article 4,
whether arising from acts or omissions occurring before or after such adoption.
4.4 Advancement of Expenses; Procedures; Presumptions and Effect of
Certain Proceedings; Remedies. In furtherance, but not in limitation, of the
foregoing provisions, the following procedures, presumptions and remedies shall
apply with respect to the advancement of expenses and the right to
indemnification under this Article 4:
(a) Advancement of Expenses. All reasonable expenses incurred by or
on behalf of the Indemnitee in connection with any Proceeding shall be
advanced to the Indemnitee by the Corporation within 20 days after the
receipt by the Corporation of a statement or statements from the Indemnitee
requesting such advance or advances from time to time, whether prior to or
after final disposition of such Proceeding. Any such statement or
statements shall reasonably evidence the expenses incurred by the
Indemnitee and shall include any written affirmation or undertaking
required by applicable law in effect at the time of such advance.
(b) Procedures for Determination of Entitlement to
Indemnification. (i) To obtain indemnification under this Article 4, an
Indemnitee shall submit to the Secretary of the Corporation a written
request, including such documentation and information as is reasonably
available to the Indemnitee and reasonably necessary to determine whether
and to what extent the Indemnitee is entitled to indemnification (the
"Supporting Documentation"). The determination of the Indemnitee's
entitlement to indemnification shall be made not later than 60 days after
receipt by the Corporation of the written request for indemnification
together with the Supporting Documentation. The Secretary of the
Corporation shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that the Indemnitee has
requested indemnification.
(ii) The Indemnitee's entitlement to indemnification under this
Article 4 shall be determined in one of the following ways: (A) by a
majority vote of the Disinterested Directors (as hereinafter defined), if
they constitute a quorum of the Board; (B) by a written opinion of
Independent Counsel as hereinafter defined) if (x) a Change in Control (as
hereinafter defined) shall have occurred and the Indemnitee so requests or
(y) a quorum of the Board consisting of Disinterested Directors is not
obtainable or, even if obtainable, a majority of such Disinterested
Directors so directs; (C) by the shareholders of the Corporation (but only
if a majority of the Disinterested Directors, if they constitute a quorum
of the Board, presents the issue of entitlement to indemnification to the
shareholders for their determination); or (D) as provided in Section 4.4(c)
of this Article 4.
(iii) In the event the determination of entitlement to indemnification
is to be made by Independent Counsel pursuant to Section 4.4(b)(ii), a
majority of the Disinterested Directors shall select the Independent
Counsel, but only an Independent Counsel to which the Indemnitee does not
reasonably object; provided, however, that if a Change in Control shall
have occurred, the Indemnitee shall select such Independent Counsel, but
only an Independent Counsel to which a majority of the Disinterested
Directors does not reasonably object.
(c) Presumptions and Effect of Certain Proceedings. Except as
otherwise expressly provided in this Article 4, if a Change in Control
shall have occurred, the Indemnitee shall be presumed to be
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entitled to indemnification under this Article 4 (with respect to actions
or failures to act occurring prior to such Change in Control) upon
submission of a request for indemnification together with the Supporting
Documentation in accordance with Section 4.4(b) of this Article 4, and
thereafter the Corporation shall have the burden of proof to overcome that
presumption in reaching a contrary determination. In any event, if the
person or persons empowered under Section 4.4(b) of this Article 4 to
determine entitlement to indemnification shall not have been appointed or
shall not have made a determination within 60 days after receipt by the
Corporation of the request therefor together with the Supporting
Documentation, the Indemnitee shall be deemed to be, and shall be, entitled
to indemnification unless (A) the Indemnitee misrepresented or failed to
disclose a material fact in making the request for indemnification or in
the Supporting Documentation or (B) such indemnification is prohibited by
law. The termination of any Proceeding described in Section 4.1 of this
Article 4, or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, adversely affect the right of the
Indemnitee to indemnification or create a presumption that the Indemnitee
did not act in good faith and in a manner which the Indemnitee reasonably
believed to be in or not opposed to the best interests of the Corporation
or, with respect to any criminal Proceeding, that the Indemnitee had
reasonable cause to believe that his or her conduct was unlawful.
(d) Remedies of Indemnitee. (i) In the event that a determination is
made pursuant to Section 4.4(b) of this Article 4 that the Indemnitee is
not entitled to indemnification under this Article 4, (A) the Indemnitee
shall be entitled to seek an adjudication of his or her entitlement to such
indemnification either, at the Indemnitee's sole option, in (x) an
appropriate court of the state of Indiana or any other court of competent
jurisdiction or (y) an arbitration to be conducted by a single arbitrator
pursuant to the rules of the American Arbitration Association; (B) any such
judicial proceeding or arbitration shall be de novo and the Indemnitee
shall not be prejudiced by reason of such adverse determination; and (C) if
a Change in Control shall have occurred, in any such judicial proceeding or
arbitration the Corporation shall have the burden of proving that the
Indemnitee is not entitled to indemnification under this Article 4 (with
respect to actions or failures to act occurring prior to such Change in
Control).
(ii) If a determination shall have been made or deemed to have been
made, pursuant to Section 4.4(b) or (c) of this Article 4, that the
Indemnitee is entitled to indemnification, the Corporation shall be
obligated to pay the amounts constituting such indemnification within five
days after such determination has been made or deemed to have been made and
shall be conclusively bound by such determination unless (A) the Indemnitee
misrepresented or failed to disclose a material fact in making the request
for indemnification or in the Supporting Documentation or (B) such
indemnification is prohibited by law. In the event that (x) advancement of
expenses is not timely made pursuant to Section 4.4(a) of this Article 4 or
(y) payment of indemnification is not made within five days after a
determination of entitlement to indemnification has been made or deemed to
have been made pursuant to Section 4.4(b) or (c) of this Article 4, the
Indemnitee shall be entitled to seek judicial enforcement of the
Corporation's obligation to pay to the Indemnitee such advancement of
expenses or indemnification. Notwithstanding the foregoing, the Corporation
may bring an action, in an appropriate court in the state of Indiana or any
other court of competent jurisdiction, contesting the right of the
Indemnitee to receive indemnification hereunder due to the occurrence of an
event described in Subclause (A) or (B) of this Clause (ii) (a
"Disqualifying Event"); provided, however, that in any such action the
Corporation shall have the burden of proving the occurrence of such
Disqualifying Event.
(iii) The Corporation shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section
4.4(d) that the procedures and presumptions of this Article 4 are not
valid, binding and enforceable and shall stipulate in any such court or
before any such arbitrator that the Corporation is bound by all the
provisions of this Article 4.
(iv) In the event that the Indemnitee, pursuant to this Section
4.4(d), seeks a judicial adjudication of or an award in arbitration to
enforce his or her rights under, or to recover damages for
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breach of, this Article 4, the Indemnitee shall be entitled to recover from
the Corporation, and shall be indemnified by the Corporation against, any
expenses actually and reasonably incurred by the Indemnitee if the
Indemnitee prevails in such judicial adjudication or arbitration. If it
shall be determined in such judicial adjudication or arbitration that the
Indemnitee is entitled to receive part but not all of the indemnification
or advancement of expenses sought, the expenses incurred by the Indemnitee
in connection with such judicial adjudication or arbitration shall be
prorated accordingly.
(e) Definitions. For purposes of this Article 4:
(i) "Change in Control" means a change in control of the
Corporation of a nature that would be required to be reported in
response to Item 6(e) (or any successor provision) of Schedule 14A of
Regulation 14A (or any amendment or successor provision thereto)
promulgated under the Securities Exchange Act of 1934 (the "Act"),
whether or not the Corporation is then subject to such reporting
requirement; provided that, without limitation, such a change in control
shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Corporation representing 20% or more of
the voting power of all outstanding shares of stock of the Corporation
entitled to vote generally in an election of Directors without the prior
approval of at least two-thirds of the members of the Board in office
immediately prior to such acquisition; (B) the Corporation is a party to
any merger or consolidation in which the Corporation is not the
continuing or surviving corporation or pursuant to which shares of the
Corporation's common stock would be converted into cash, securities or
other property, other than a merger of the Corporation in which the
holders of the Corporation's common stock immediately prior to the
merger have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger, (C) there is a sale,
lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, the assets of the
Corporation, or liquidation or dissolution of the Corporation; (D) the
Corporation is a party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest, as a consequence of which
members of the Board in office immediately prior to such transaction or
event constitute less than a majority of the Board thereafter; or (E)
during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board (including for this
purpose any new Director whose election or nomination for election by
the shareholders was approved by a vote of at least two-thirds of the
Directors then still in office who were Directors at the beginning of
such period) cease for any reason to constitute at least a majority of
the Board.
(ii) "Disinterested Director" means a Director who is not or was
not a party to the proceeding in respect of which indemnification is
sought by the Indemnitee.
(iii) "Independent Counsel" means a law firm or a member of a law
firm that neither presently is, nor in the past five years has been,
retained to represent: (a) the Corporation or the Indemnitee in any
matter material to either such party or (b) any other party to the
Proceeding giving rise to a claim for indemnification under this Article
4. Notwithstanding the foregoing, the term "Independent Counsel" shall
not include any person who, under applicable standards of professional
conduct, would have a conflict of interest in representing either the
Corporation or the Indemnitee in an action to determine the Indemnitee's
rights under this Article 4.
4.5 Indemnification of Employees and Agents. Notwithstanding any other
provision of this Article 4, the Corporation, to the fullest extent permitted by
applicable law as then in effect, may indemnify any person other than a Director
or officer of the Corporation who is or was an employee or agent of the
Corporation and who is or was involved in any manner (including, without
limitation, as a party or a witness) or is threatened to be made so involved in
any threatened, pending or completed Proceeding by reasons of the fact that such
person is or was an employee or agent of the Corporation or, at the request of
the Corporation, a director, officer, employee, fiduciary or agent of a Covered
Entity
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against all expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in connection
with such Proceeding. The Corporation may also advance expenses incurred by such
employee, fiduciary or agent in connection with any such Proceeding, consistent
with the provisions of applicable law as then in effect.
4.6 Severability. If any of this Article 4 shall be held to be invalid,
illegal or unenforceable for any reason whatsoever: (i) the validity, legality
and enforceability of the remaining provisions of this Article 4 (including,
without limitation, all portions of any Section of this Article 4 containing any
such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall not in any way be affected
or impaired thereby; and (ii) to the fullest extent possible, the provisions of
this Article 4 (including, without limitation, all portions of any Section of
this Article 4 containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
be construed so as to give effect to the intent manifested by the provision held
invalid, illegal or unenforceable.
5. CAPITAL STOCK.
5.1 Stock Certificates. (a) Every holder of stock in the Corporation
shall be entitled to have a certificate, which shall state on its face the name
of the Corporation and that it is organized under the laws of the State of
Indiana, the name of the person to whom the certificate was issued, and the
number and class of shares and the designation of the series, if any, the
certificate represents, and shall state conspicuously on its front or back that
the Corporation will furnish the shareholder, upon his written request and
without charge, a summary of the designations, relative rights, preferences, and
limitations applicable to each class and the variations in rights, preferences,
and limitations determined for each series (and the authority of the Board of
Directors to determine variations for future series), which certificate shall
otherwise be in such form as the Board shall prescribe and as provided in
Section 5.1(d). Each such certificate shall be signed by, or in the name of, the
Corporation by the Chairman or any Vice Chairman or the President or any Vice
President, and by the Treasurer or any Assistant Treasurer or the Secretary or
any Assistant Secretary.
(b) If such certificate is countersigned by a transfer agent other than the
Corporation or its employee, or by a registrar other than the Corporation or its
employee, the signatures of the officers of the Corporation may be facsimiles,
and, if permitted by applicable law, any other signature on the certificate may
be a facsimile.
(c) In case any officer who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Corporation with the same effect
as if such person were such officer at the date of issue.
(d) Certificates of stock shall be issued in such form not inconsistent
with the Articles of Incorporation. They shall be numbered and registered in the
order in which they are issued. No certificate shall be issued until fully paid.
(e) All certificates surrendered to the Corporation shall be cancelled
(other than treasury shares) with the date of cancellation and shall be retained
by or under the control of the Chief Financial Officer, together with the powers
of attorney to transfer and the assignments of the shares represented by such
certificates, for such period of time as such officer shall designate.
5.2 Record Ownership. A record of the name of the person, firm or
corporation and address of such holder of each certificate, the number of shares
of each class and series represented thereby and the date of issue thereof shall
be made on the Corporation's books. The Corporation shall be entitled to treat
the holder of record of any share of stock as the holder in fact thereof, and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in any share on the part of any person, whether or not it shall have
express or other notice thereof, except as required by applicable law.
5.3 Transfer of Record Ownership. Transfers of stock shall be made on the
books of the Corporation only by direction of the person named in the
certificate or such person's attorney, lawfully
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constituted in writing, and only upon the surrender of the certificate therefor
and a written assignment of the shares evidenced thereby. Whenever any transfer
of stock shall be made for collateral security, and not absolutely, it shall be
so expressed in the entry of the transfer if, when the certificates are
presented to the Corporation for transfer, both the transferor and transferee
request the Corporation to do so.
5.4 Lost, Stolen or Destroyed Certificates. Certificates representing
shares of the stock of the Corporation shall be issued in place of any
certificate alleged to have been lost, stolen or destroyed in such manner and on
such terms and conditions as the Board from time to time may authorize in
accordance with applicable law.
5.5 Transfer Agent; Registrar; Rules Respecting Certificates. The
Corporation shall maintain one or more transfer offices or agencies where stock
of the Corporation shall be transferable. The Corporation shall also maintain
one or more registry offices where such stock shall be registered. The Board may
make such rules and regulations as it may deem expedient concerning the issue,
transfer and registration of stock certificates in accordance with applicable
law.
5.6 Fixing Record Date for Determination of Shareholders of
Record. (a) The Board may fix, in advance, a date as the record date for the
purpose of determining the shareholders entitled to notice of, or to vote at,
any meeting of the shareholders or any adjournment thereof, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted by the Board, and which record date shall not be more than sixty days
nor less than ten days before the date of a meeting of the shareholders. If no
record date is fixed by the Board, the record date for determining the
shareholders entitled to notice of or to vote at a shareholders' meeting shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. A determination of shareholders
of record entitled to notice of or to vote at a meeting of shareholders shall
apply to any adjournment of the meeting; provided, however, that the Board may
fix a new record date for the adjourned meeting and shall fix a new record date
if such adjourned meeting is more than 120 days after the date of the original
meeting.
(b) The Board may fix, in advance, a date as the record date for the
purpose of determining the shareholders entitled to receive payment of any
dividend or other distribution or the allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or in order to make a determination of the shareholders for the purpose of any
other lawful action, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board, and which record date
shall not be more than sixty calendar days prior to such action. If no record
date is fixed by the Board, the record date for determining the shareholders for
any such purpose shall be at the close of business on the day on which the Board
adopts the resolution relating thereto.
6. SECURITIES HELD BY THE CORPORATION.
6.1 Voting. Unless the Board shall otherwise order, the Chairman, any
Vice Chairman, the President, any Executive Vice President, any Senior Vice
President, any Vice President, the Chief Financial Officer, the Controller, the
Treasurer or the Secretary shall have full power and authority, on behalf of the
Corporation, (i) to attend, act and vote at any meeting of the shareholders of
any corporation in which the Corporation may hold stock and at such meeting to
exercise any or all rights and powers incident to the ownership of such stock,
and to execute on behalf of the Corporation a proxy or proxies empowering
another or others to act as aforesaid, and (ii) to delegate to any employee or
agent such power and authority.
6.2 General Authorization to Transfer Securities Held by the
Corporation. (a) Any of the following officers, to wit: the Chairman, any Vice
Chairman, the President, any Executive Vice President, any Senior Vice
President, any Vice President, the Chief Financial Officer, the Controller, the
Treasurer, any Assistant Controller, any Assistant Treasurer, and each of them,
hereby is authorized and empowered (i) to transfer, convert, endorse, sell,
assign, set over and deliver any and all shares of stock, bonds, debentures,
notes, subscription warrants, stock purchase warrants, evidences of
indebtedness, or other securities now or hereafter standing in the name of or
owned by the Corporation and to make, execute
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<PAGE> 16
and deliver any and all written instruments of assignment and transfer necessary
or proper to effectuate the authority hereby conferred, and (ii) to delegate to
any employee or agent such power and authority.
(b) Whenever there shall be annexed to any instrument of assignment and
transfer executed pursuant to and in accordance with the foregoing Section
6.2(a), a certificate of the Secretary or any Assistant Secretary in office at
the date of such certificate setting forth the provisions hereof, stating that
they are in full force and effect, setting forth the names of persons who are
then officers of the corporation, and certifying as to the employees or agents,
if any, to whom any such power and authority have been delegated, all persons to
whom such instrument and annexed certificate shall thereafter come shall be
entitled, without further inquiry or investigation and regardless of the date of
such certificate, to assume and to act in reliance upon the assumption that (i)
the shares of stock or other securities named in such instrument were
theretofore duly and properly transferred, endorsed, sold, assigned, set over
and delivered by the Corporation, and (ii) with respect to such securities, the
authority of these provisions of these By-laws and of such officers, employees
and agents is still in full force and effect.
7. DEPOSITARIES AND SIGNATORIES.
7.1 Depositaries. The Chairman, any Vice Chairman, the President, the
Chief Financial Officer, and the Treasurer are each authorized to designate
depositaries for the funds of the Corporation deposited in its name or that of a
Division of the Corporation, or both, and the signatories with respect thereto
in each case, and from time to time, to change such depositaries and
signatories, with the same force and effect as if each such depositary and the
signatories with respect thereto and changes therein had been specifically
designated or authorized by the Board; and each depositary designated by the
Board or by the Chairman, any Vice Chairman, the President, the Chief Financial
Officer, or the Treasurer shall be entitled to rely upon the certificate of the
Secretary or any Assistant Secretary of the Corporation or of a Division of the
Corporation setting forth the fact of such designation and of the appointment of
the officers of the Corporation or of the Division or of both or of other
persons who are to be signatories with respect to the withdrawal of funds
deposited with such depositary, or from time to time the fact of any change in
any depositary or in the signatories with respect thereto.
7.2 Signatories. Unless otherwise designated by the Board or by the
Chairman, any Vice Chairman, the President, the Chief Financial Officer or the
Treasurer, each of whom is authorized to execute any of such items individually,
all notes, drafts, checks, acceptances, orders for the payment of money and all
other negotiable instruments obligating the Corporation for the payment of
money, including any form of guaranty by the Corporation with respect to any
such item entered into by any direct or indirect subsidiary of the Corporation,
shall be (a) signed by any Assistant Treasurer and (b) countersigned by the
Controller or any Assistant Controller, or (c) either signed or countersigned by
any Executive Vice President, any Senior Vice President or any Vice President in
lieu of either the officers designated in Clause (a) or the officers designated
in Clause (b) of this Section 7.2.
8. SEAL.
The seal of the Corporation shall be in such form and shall have such
content as the Board shall from time to time determine.
9. FISCAL YEAR.
The fiscal year of the Corporation shall end on December 31 in each year,
or on such other date as the Board shall determine.
10. WAIVER OF OR DISPENSING WITH NOTICE.
(a) Whenever any notice of the time, place or purpose of any meeting of the
shareholders is required to be given by applicable law, the Articles of
Incorporation or these By-laws, a written waiver of notice, signed by a
shareholder entitled to notice of a shareholders' meeting, whether by telegraph,
cable or other form of recorded communication, whether signed before or after
the time set for a given meeting,
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<PAGE> 17
shall be deemed equivalent to notice of such meeting. The waiver must be
included in the minutes or filed with the corporate records. Attendance of a
shareholder in person or by proxy at a shareholders' meeting shall constitute a
waiver of notice to such shareholder of such meeting, except when (i) the
shareholder attends the meeting for the express purpose of objecting at the
beginning of the meeting to the transaction of any business because the meeting
was not lawfully called or convened, or (ii) the shareholder objects to
consideration of a particular matter at the meeting at the time such matter is
presented because it is not within the purpose or purposes described in the
meeting notice.
(b) Whenever any notice of the time or place of any meeting of the Board or
Committee of the Board is required to be given by applicable law, the Articles
of Incorporation or these By-laws, a written waiver of notice signed by a
Director, whether by telegraph, cable or other form of recorded communication,
whether signed before or after the time set for a given meeting, shall be deemed
equivalent to notice of such meeting. Unless the Director is deemed to have
waived notice by attending the meeting, the waiver must be in writing, signed by
the Director entitled to the notice and filed with the minutes or corporate
records. Attendance of a Director at a meeting shall constitute a waiver of
notice to such Director of such meeting, unless the Director at the beginning of
the meeting (or promptly upon the Director's arrival) objects to holding the
meeting or transacting business at the meeting and does not thereafter vote for
or assent to action taken at the meeting.
(c) No notice need be given to any person with whom communication is made
unlawful by any law of the United States or any rule, regulation, proclamation
or executive order issued under any such law.
11. POLITICAL NONPARTISANSHIP OF THE CORPORATION.
The Corporation shall not make, directly or indirectly, any contributions
or expenditures in connection with the election of any candidate for federal,
state or local political office, or any committee campaigning for such a
candidate, except to the extent necessary to permit in the United States the
expenditure of corporate assets for the payment of expenses for establishing,
registering and administering any political action committee and of soliciting
contributions thereto, all as may be authorized by federal or state laws.
12. AMENDMENT OF BY-LAWS.
Except as otherwise provided in Section 2.8(a) of these By-laws, these
By-laws, or any of them, may from time to time be supplemented, amended or
repealed, or new By-laws may be adopted, by the Board at any regular or special
meeting of the Board, if such supplement, amendment, repeal or adoption is
approved by a majority of the entire Board. These By-laws, or any of them, may
from time to time be supplemented, amended or repealed, or new By-laws may be
adopted, by the shareholders at any regular or special meeting of the
shareholders at which a quorum is present, if such supplement, amendment, repeal
or adoption is approved by the affirmative vote of the holders of at least a
majority of the voting power of all outstanding shares of stock of the
Corporation entitled to vote generally in an election of directors.
13. OFFICES AND AGENT
(a) Registered Office and Agent. The registered office of the Corporation
in the State of Indiana shall be One North Capitol Avenue, Suite 1180,
Indianapolis, Indiana 46204. The name of the registered agent is The Corporation
Trust Company. Such registered agent has a business office identical with such
registered office.
(b) Other Offices. The Corporation may also have offices at other places,
either within or outside the State of Indiana, as the Board of Directors may
from time to time determine or as the business of the Corporation may require.
17
<PAGE> 1
EXHIBIT 10(E)
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
DATED AS OF DECEMBER 5, 1995
BETWEEN ITT INDUSTRIES, INC. AND
D. TRAVIS ENGEN
WHEREAS, ITT Industries, Inc., an Indiana corporation ("Industries"),
entered into an employment agreement with D. Travis Engen dated as of December
5, 1995 (the "Agreement"); and,
WHEREAS, Industries and you desire to amend the Agreement in certain
respects;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein set forth and for other consideration herein described, the
parties hereto agree as follows:
1. Paragraph 4 of the Agreement shall be amended by changing the paragraph
heading to "Termination" and by adding the following at the end thereof:
Following an Acceleration Event (as defined herein), no act or omission on
your part shall be considered "willful" for purposes of this Paragraph 4 unless
it is done or omitted in bad faith or without reasonable belief that the action
or omission was in the best interests of Industries.
Following an Acceleration Event, you shall have the right to terminate your
employment for Good Reason (as defined herein). For purposes hereof:
(A) "Good Reason" shall mean:
(i) without your express written consent and excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by Industries or its affiliates promptly
after receipt of notice thereof given by you, (A) a failure to pay or
reduction in your annual base salary (as described in Paragraph 3(a)
hereof) (whether or not deferred) or any bonus (as measured by the
highest bonus paid or awarded, whether or not deferred, in respect of
the three calendar years preceding an Acceleration Event, including,
among the bonuses taken into account for this purpose, any bonus paid or
awarded by reason of an Acceleration Event, without regard to whether
such bonus is paid, whether or not deferred, during such three year
period or after an Acceleration Event) or any reduction in any material
compensation or benefits arrangement provided to you or in which you
participate, (B) your assignment to any duties inconsistent in any
respect with your position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as
contemplated by paragraph (1) hereof, (C) any other action by Industries
or any of its affiliates which results in a diminution in your position,
authority, duties or responsibilities, or (D) any failure by Industries
to comply with any of the provisions of paragraph 3(b) hereof;
(ii) without your express written consent, Industries requiring
your work location to be other than within twenty-five (25) miles of
White Plains, New York;
(iii) any failure by Industries to obtain an express written
assumption of this Agreement by any successor to Industries. For
purposes hereof, a determination by you that you have "Good Reason"
hereunder shall be final and binding on the parties hereto absent a
showing of bad faith on your part.
(B) An "Acceleration Event" shall occur 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 Industries or a subsidiary of Industries or any employee benefit plan
sponsored by Industries or a subsidiary of Industries, is the beneficial
owner directly or indirectly of twenty percent or more of the outstanding
Common Stock, $1 par value, of Industries (the "Stock"); (ii) any
<PAGE> 2
person (within the meaning of Section 13(d) of the Act), other than
Industries or a subsidiary of Industries, or any employee benefit plan
sponsored by Industries or a subsidiary of Industries, shall purchase
shares pursuant to a tender offer or exchange offer to acquire any Stock of
Industries (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 Industries (calculated as provided in paragraph
(d) of Rule 13d-3 under the Act in the case of rights to acquire Stock);
(iii) the stockholders of Industries shall approve (A) any consolidation or
merger of Industries in which Industries is not the continuing or surviving
corporation or pursuant to which shares of Stock of Industries would be
converted into cash, securities or other property, other than a merger of
Industries in which holders of Stock of Industries 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
Industries, or (iv) there shall have been a change in a majority of the
members of the Board of Directors of Industries within a 12-month period
unless the election or nomination for election by Industries' 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.
(C) Following an Acceleration Event, the term "Industries" as used in
this Agreement shall also include any successor company to Industries, any
successor to any affiliate of Industries, and any affiliate of any such
successor company.
If you are terminated by Industries within two years after an Acceleration
Event, the only basis upon which the Severance Benefits shall not be provided to
you is upon a termination of employment for cause.
2. Paragraph 5 (f) is amended to provide as follows:
(f) Termination Allowance Under A Severance Plan or Policy. If you
would otherwise ordinarily receive a termination allowance under an
Industries' severance plan or termination allowance policy, including,
without limitation, the ITT Industries, Inc. Senior Executive Severance Pay
Plan, a copy of which is attached hereto as Exhibit I, were you deemed to
be covered under and eligible for such Plan, exceeding the amount of base
salary remaining under this Agreement at the time of notice by Industries
of its intent to terminate your full-time employment, Industries will pay
you a termination allowance, in accordance with the terms of the
Industries' severance plan or termination allowance policy, in lieu of
salary continuation under this Agreement.
3. A new Paragraph 5A is added to the Agreement to read as follows:
5A. TERMINATION AFTER AN ACCELERATION EVENT
Notwithstanding Paragraph 5 hereof, if within two years following an
Acceleration Event, your employment with Industries is involuntarily terminated
other than for cause or is terminated by you for Good Reason, then Industries
will pay you the following severance benefits ("Severance Benefits"):
Severance Pay -- The sum of (x) three times your highest annual base salary
rate (as provided in Paragraph 3(a) hereof) (whether or not deferred) at any
time during the three year period immediately preceding your termination of
employment, and (y) three times the highest bonus paid or awarded (whether or
not deferred) to you in respect of the three years preceding an Acceleration
Event, including, among the bonuses taken into account for this purpose, any
bonus paid or awarded by reason of an Acceleration Event, without regard to
whether such bonus is paid (whether or not deferred) during such three year
period or after an Acceleration Event.
Benefits and Perquisites
-- Continued health and life insurance benefits and perquisites (including,
without limitation, any Industries provided automobile and any tax or financial
advisory services) for a three year period
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following your termination of employment at the same cost to you, and at the
same coverage levels, provided to you (and your eligible dependents) immediately
prior to your termination of employment.
-- Payment of a lump sum amount ("Pension Lump Sum Amount") equal to the
difference between (i) the total lump sum value of your pension benefit under
the ITT Industries Salaried Retirement Plan, Industries' Excess Pension Plan IA
and Industries' Excess Pension Plan IB ("Pension Plans") as of your termination
of employment and (ii) the total lump sum value of your pension benefit under
the Pension Plans after crediting you with an additional three years of age and
three years of eligibility and benefit service to you and applying the annual
base salary and highest bonus determined above under "Severance Pay" with
respect to each of the additional three years of service so credited for
purposes of determining Final Average Compensation under the Pension Plans. The
above total lump sum values shall be determined in the manner provided in such
Excess Pension Plans of Industries for determination of lump sum benefits upon
the occurrence of an Acceleration Event, as defined in said Plans.
-- Crediting of an additional three years of age and three years of
eligibility service for purposes of Industries' retiree health and retiree life
insurance benefits.
-- Payment of a lump sum amount ("Savings Plan Lump Sum Amount") equal to
three times the following amount: the annual base salary rate determined above
under "Severance Pay" times the highest rate of Company Contributions (not to
exceed 3 1/2%) with respect to you under the ITT Industries Investment and
Savings Plan for Salaried Employees and/or the ITT Industries Excess Savings
Plan (including matching contributions and floor contributions) at any time
during the three year period immediately preceding your termination of
employment.
Outplacement
-- Outplacement services for one year.
With respect to the provision of benefits and perquisites during the above
described three year period, if, for any reason at any time Industries is unable
to treat you as being eligible for ongoing participation in any Industries
employee benefit plans or perquisites in existence immediately prior to your
termination of employment and if, as a result thereof, you do not receive a
benefit or perquisite or receive a reduced benefit or perquisite, Industries
shall provide such benefits or perquisites by (i) direct payment to you of the
amounts you would have received from such benefit plan or perquisite had you
continued to be eligible or (ii) at Industries' option, making available
equivalent benefits or perquisites from other sources.
Severance Pay shall be paid in cash, in a non-discounted lump sum within
five business days after the date your employment terminates. The Pension Lump
Sum Amount and the Savings Plan Lump Sum Amount shall be paid in cash within
thirty calendar days after the date your employment terminates.
In cases where Severance Benefits are provided under this Agreement, pay in
lieu of any unused current year vacation entitlement will be paid to you in a
lump sum, in cash within five business days after the date your employment
terminates.
If, upon the termination of your employment after an Acceleration Event,
you would otherwise ordinarily receive, under an Industries' severance plan or
termination allowance policy, including, without limitation, the ITT Industries,
Inc. Senior Executive Severance Pay Plan and the ITT Industries, Inc. Special
Senior Executive Severance Pay Plan, a copy of which is attached hereto as
Exhibit II, were you deemed to be covered under and eligible for either of such
Plans, (i) severance pay, salary continuation pay, termination pay or similar
pay or allowance ("Plan Severance Pay") exceeding the Severance Pay hereunder
and/or (ii) employee benefits, perquisites or outplacement services ("Plan
Severance Benefits") exceeding the corresponding other Severance Benefits,
Industries will pay you or provide to you the Plan Severance Pay and/or the Plan
Severance Benefits in lieu of, respectively, the Severance Pay hereunder or the
corresponding other Severance Benefits.
3
<PAGE> 4
Upon the termination of your employment after an Acceleration Event, you
may elect, in your sole discretion, to receive the base salary and incentive
bonus and other compensation and benefits pursuant to Paragraph 5 hereof
("Paragraph 5 Benefit") in lieu of the Severance Benefits and in lieu of any
Plan Severance Pay and/or Plan Severance Benefits, whichever is otherwise
payable under the preceding paragraph.
4. Paragraph 13 of the Agreement shall be amended by adding the following
at the end thereof:
Industries shall pay all legal fees, costs of litigation, prejudgment
interest, and other expenses which are incurred in good faith by you as a
result of Industries' refusal to provide any of the Severance Benefits to
which you become entitled under this Agreement, or as a result of
Industries' (or any third party's) contesting the validity, enforceability,
or interpretation of this Agreement, or as a result of any conflict between
you and Industries pertaining to this Agreement. Industries shall pay such
fees and expenses from its general assets.
5. A new Paragraph 14 is added to the Agreement, to read as follows:
14. Excise Tax
In the event that it shall be determined that any payment or
distribution by Industries to you or for your benefit (whether paid or
payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional
payments required under this paragraph 14, such payments or distributions
being referred to herein as "Payments") would give rise to your liability
for the excise tax imposed by Section 4999 of the Internal Revenue Code, as
amended (the "Code"), or that any interest or penalties are incurred by you
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then you shall be entitled to receive an additional payment
(the "Gross-Up Payment") in an amount such that after your payment of all
Federal, state and local taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any income and
employment taxes (and any interest and penalties imposed with respect to
such taxes) and Excise Tax imposed upon the Gross-Up Payment, you retain an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. For this purpose, you shall be deemed to be in the highest
marginal rate of Federal, state and local taxes. This payment shall be made
as soon as possible following the date of your termination of employment,
but in no event later than thirty calendar days of such date.
In the event the Gross-Up Payment shall fail to make you whole on an
after-tax basis, the Gross-Up Payment shall be recalculated ("Recalculated
Gross-Up Payment"), using your actual effective tax rate, once it is known
for the calendar year in which the Gross-Up Payment is made, and Industries
shall reimburse you for the full amount of any amount by which the
Recalculated Gross-Up Payment exceeds the Gross-Up Payment ("Additional
Gross-Up Payment").
The Gross-Up Payment and any Additional Gross-Up Payment shall be paid
out of the general assets of Industries.
In the event the Internal Revenue Service subsequently adjusts the
excise tax computation herein described, Industries shall reimburse you for
the full amount necessary to make you whole on an after-tax basis (less any
amounts received by you that you would not have received had the
computations initially been computed as subsequently adjusted), including
the value of any underpaid excise tax, and any related interest and/or
penalties due to the Internal Revenue Service.
6. A new Paragraph 15 is added to the Agreement, to read as follows:
15. Miscellaneous
Severance Benefits under this Agreement are paid entirely by
Industries from its general assets.
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<PAGE> 5
In the event of your death while any amount is still payable to you
hereunder had you continued to live, all such amounts shall be paid in
accordance with this Agreement to your designated heirs or, in the absence
of such designation, to your estate.
7. Except as hereinabove amended by this First Amendment, the Agreement is
hereby ratified and confirmed and the Agreement shall continue in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this First Amendment to the
Agreement, and this First Amendment shall be effective, as of the 11th day of
March, 1997.
ITT INDUSTRIES, INC.
By: /s/ JAMES P. SMITH
------------------------------------
James P. Smith
Senior Vice President -- Director,
Human Resources
AGREED AND ACCEPTED:
/s/ D. TRAVIS ENGEN
- --------------------------------------
D. Travis Engen
3/23/97
- ---------------------------------------------------
Date
5
<PAGE> 1
EXHIBIT 10(R)
TRADE NAME AND TRADEMARK LICENSE AGREEMENT
TRADE NAME AND TRADEMARK LICENSE AGREEMENT ("License Agreement") effective
as of November 1, 1995 between ITT CORPORATION, a Delaware corporation ("ITT
Corporation"), and ITT MANUFACTURING ENTERPRISES, INC., a Delaware corporation
("ITT Enterprises") (collectively the "Parties").
RECITALS
WHEREAS, in order to carry out the Distribution (as hereinafter defined)
approved by the Board of Directors and by the shareholders of ITT Corporation
whereby the holders of the shares of common stock of ITT Corporation will
receive all of the outstanding shares of common stock of ITT Destinations (as
hereinafter defined) and all the outstanding shares of common stock of ITT
Hartford (as hereinafter defined), it is necessary for these companies to enter
into agreements for the continued right and license to use the "ITT" company
name, trade name, trademark and service mark;
WHEREAS, ITT Corporation is the owner of the company and trade name "ITT"
and of the trademark and the service mark "ITT", and of all rights worldwide in
such name and marks and the goodwill associated therewith;
WHEREAS, ITT Corporation will assign effective November 2, 1995 this
License Agreement to ITT Destinations along with the right, title, and interest
in the "ITT" name and marks, and the registrations, registration applications
and goodwill associated therewith;
WHEREAS, ITT Destinations will assign effective immediately prior to the
Effective Time (as hereinafter defined) this License Agreement to ITT Sheraton
(as hereinafter defined) along with the right, title, and interest in the "ITT"
name and marks, and the registrations, registration applications and goodwill
associated therewith;
WHEREAS, ITT Enterprises is a wholly owned Subsidiary of ITT Corporation
and will be a wholly owned Subsidiary of ITT Industries (as hereinafter defined)
following the Distribution;
WHEREAS, ITT Industries, its predecessors and its Subsidiaries (as each
hereinafter defined) have expended and will in the future expend time and money
in advertising and promoting the "ITT" name and marks in connection with
conducting the ITT Industries Business (as hereinafter defined) for the mutual
benefit of the Parties;
WHEREAS, ITT Enterprises and its Subsidiaries currently have the right to
use and desire to continue to have the right to use "ITT" as part of their
company names and trade names and as a trademark and service mark in connection
with conducting the ITT Industries Business; and
WHEREAS, ITT Corporation is willing to formally grant a license to ITT
Enterprises, with the right to grant certain sublicenses to ITT Industries and
its Subsidiaries, to continue to use the ITT name and marks in connection with
conducting the ITT Industries Business and otherwise as set forth herein.
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual agreements, undertakings and
covenants herein, the Parties hereby agree as follows:
ARTICLE I. DEFINITIONS
Section 1.01 General. As used in this License Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
(a) "Distribution Agreement" shall mean the Distribution Agreement to
be entered into by ITT Corporation, ITT Destinations, and ITT Hartford
relating to the distribution of the shares of ITT Destinations and ITT
Hartford to the holders of ITT Corporation Common Stock.
(b) "Distribution" shall mean the distribution on the Distribution
Date to holders of record of shares of ITT Corporation Common Stock as of
the Distribution Record Date of (i) the ITT Destinations Common Shares
owned by ITT Corporation on the basis of one ITT Destinations Common Share
for each outstanding share of ITT Corporation Common Stock and (ii) the ITT
Hartford Common Shares owned by ITT Corporation on the basis of one ITT
Hartford Common Share for each outstanding share of ITT Corporation Common
Stock.
(c) "Distribution Date" shall mean such date as may hereafter be
determined by ITT Corporation's Board of Directors as the date on which the
Distribution shall be effected.
(d) "Distribution Record Date" shall mean such date as may hereafter
be determined by ITT Corporation's Board of Directors as the record date
for the Distribution.
(e) "Effective Time" shall mean 11:59 p.m., New York time, on the
Distribution Date.
(f) "ITT Corporation" shall mean ITT Corporation, a Delaware
corporation and its predecessor Maryland corporation up to the Effective
Time (to be merged thereafter into ITT Indiana, Inc., an Indiana
corporation which will be renamed ITT Industries, Inc.).
(g) "ITT Destinations" shall mean ITT Destinations, Inc., a Nevada
corporation, to be renamed "ITT Corporation" immediately prior to the
Effective Time.
(h) "ITT Destinations Business" shall mean the principal businesses
and operations conducted by ITT Destinations and its Subsidiaries on the
Distribution Date, such businesses being the hospitality, entertainment,
information and educational services as specifically described in Exhibit
A1 annexed hereto and, in addition, shall also mean the Closely Related
Businesses described in Exhibit A1, provided that ITT Destinations Business
does not include the ITT Industries Business or the ITT Hartford Business.
(i) "ITT Hartford" shall mean ITT Hartford Group, Inc., a Delaware
corporation.
(j) "ITT Hartford Business" shall mean the principal businesses and
operations conducted by ITT Hartford and its Subsidiaries on the
Distribution Date, such businesses being the insurance services in the
fields of property, casualty, life and reinsurance as specifically
described in Exhibit A1 annexed hereto and, in addition, shall also mean
the Closely Related Businesses described in Exhibit A2, provided that ITT
Hartford Business does not include the ITT Industries Business or the ITT
Destinations Business.
(k) "ITT Industries" shall mean ITT Industries, Inc., an Indiana
corporation and the legal successor after the Distribution to ITT
Corporation as defined in Section 1.01(f).
(l) "ITT Industries Business" shall mean the principal businesses and
operations conducted by ITT Industries and its Subsidiaries on the
Distribution Date, such businesses being the design, manufacture, sale, and
servicing of the automotive products, defense products, electronic
component products, fluid handling products and management services for
military and space satellite launch facilities as specifically described in
Exhibit A3 annexed hereto and, in addition, shall also
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mean the Closely Related Businesses described in Exhibit A3, provided that
ITT Industries Business does not include the ITT Destinations Business or
the ITT Hartford Business.
(m) "ITT Industries Expanded Business" shall mean any businesses not
included in the ITT Industries Business, the ITT Hartford Business or the
ITT Destinations Business, except as specifically precluded by Sections
2.12 and 2.13.
(n) "ITT Industries Design Mark" shall mean the worldwide rights to
the trademark and service mark consisting of the letters "ITT" in a
stylized form that may be selected by ITT Enterprises and used by ITT
Enterprises and ITT Enterprises Sublicensees pursuant to Section 2.05 of
this License Agreement.
(o) "ITT Sheraton" shall mean ITT Sheraton Corporation, a Delaware
corporation.
(p) "ITT Logo" shall mean the worldwide rights to the stylized
trademark and service mark shown in Exhibit B annexed hereto together with
all registrations thereof and all applications thereof now or hereafter
filed or obtained, and the goodwill associated therewith.
(q) "ITT Marks" shall mean the worldwide right to (i) the ITT Logo;
(ii) the ITT Industries Design Mark; and (iii) all other trademarks and
service marks consisting of the letters "ITT", together with all
registrations thereof and all applications thereof now or hereafter filed
or obtained, and the goodwill associated therewith.
(r) "ITT Name" shall mean the worldwide rights to that portion of any
company and trade name consisting of the letters "ITT" and the goodwill
associated therewith.
(s) "Licensor" shall mean (i) effective as of November 1, 1995, ITT
Corporation, (ii) effective as of November 2, 1995, ITT Destinations, and
(iii) effective as of immediately prior to the Effective Time and
thereafter, ITT Sheraton.
(t) "Permitted Manner of Use" shall mean (i) use of ITT Marks, except
the ITT Industries Design Mark, in accordance with any and all legal
requirements and also with Licensor's policy and style standards as
currently existing and as may be reasonably amended from time to time by
Licensor; (ii) use of the ITT Industries Design Mark in accordance with any
and all legal requirements, with the guidelines set forth in the ITT
Industries Graphic Standards Manual governing the proper use of such ITT
Industries Design Mark, and with the provisions of Section 2.05 of this
License Agreement; and (iii) use of the ITT Name in accordance with any and
all legal requirements and with the guidelines set forth in Exhibit D1
annexed hereto.
(u) "Phaseout Period" shall be a period of one and one-half (1 1/2)
years from the termination of this License Agreement during which period
all use of the ITT Name and ITT Marks by ITT Enterprises and/or the ITT
Enterprises Sublicensees (as hereinafter defined), as the case may be,
shall be phased out in accordance with the provisions of this License
Agreement.
(v) "Proxy Statement" shall mean the Proxy Statement sent to the
holders of shares of ITT Common Stock in connection with the Distribution,
including any amendment or supplement thereto.
(w) "Subsidiary" shall mean any corporation, partnership, joint
venture or other entity of which a Party or Licensor, directly or
indirectly owns an interest 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). Irrespective of this
definition and for purposes of this License Agreement, Madison Square
Garden, L.P. and ITT-Dow Jones Television, and their respective
Subsidiaries will be deemed Subsidiaries of ITT Destinations and,
immediately prior to the Effective Time and thereafter, ITT Destinations
and its Subsidiaries will be deemed Subsidiaries of ITT Sheraton.
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(x) "ITT Enterprises Sublicensee" shall mean:
(i) ITT Industries and any Subsidiary of ITT Industries in
existence as of, or acquired or formed after, the Distribution Date; or
(ii) any direct or indirect affiliate of ITT Industries in which
ITT Industries owns at least 40% of such affiliate if the remaining
ownership is held by a single third party or at least 25% of such
affiliate if the remaining ownership is held by more than one third
party and in which ITT Industries, through its control, can exercise a
veto over major decisions of such affiliate,
provided that the business of any such Subsidiary or affiliate is solely
within the field of the ITT Industries Business and/or the ITT Industries
Expanded Business and that ITT Enterprises grants a formal sublicense to
such Subsidiary or affiliate pursuant to Section 2.03 hereof.
(y) "Major Subsidiaries" shall mean the subsidiaries of ITT Industries
set forth in Exhibit E annexed hereto.
(z) "Change in Control" shall mean any one of the following events:
(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 ITT Industries or an ITT
Industries Subsidiary or any employee benefit plan sponsored by ITT
Industries or an ITT Industries Subsidiary is the beneficial owner
directly or indirectly of twenty percent (20%) or more of the
outstanding Common Stock of ITT Industries;
(ii) any person (within the meaning of Section 13(d) of the Act)
other than ITT Industries or an ITT Industries Subsidiary or any
employee benefit plan sponsored by ITT Industries or an ITT Industries
Subsidiary shall purchase shares pursuant to a tender offer or exchange
offer to acquire any Common Stock of ITT Industries (or securities
convertible into such Common 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 (15%) or
more of the outstanding Stock of ITT Industries (calculated as provided
in paragraph (d) of Rule 13d-3 under the Act in the case of rights to
acquire Common Stock);
(iii) the stockholders of ITT Industries shall approve (a) any
consolidation or merger of ITT Industries in which ITT Industries is not
the continuing or surviving corporation or pursuant to which shares of
Common Stock of ITT Industries would be converted into cash, securities
or other property, other than a merger of ITT Industries in which
holders of Common Stock of ITT Industries 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 ITT Industries; or
(iv) there shall have been a change in a majority of the members of
the Board of Directors of ITT Industries within a 12-month period unless
the election or nomination for election by ITT Industries 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.
ARTICLE II. LICENSES
Section 2.01 Grant of Licenses to Use the ITT Marks. Licensor hereby
grants to ITT Enterprises, during the term of this License Agreement, a
personal, non-assignable (except as otherwise provided in this License
Agreement), non-transferable, worldwide license to use, with the right to grant
sublicenses solely to ITT Enterprises Sublicensees as provided for in Section
2.03 hereof to use, the ITT Marks, except
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for the ITT Industries Design Mark which license will be granted pursuant to the
provisions of Section 2.05 herein, in accordance with the applicable Permitted
Manner of Use (i) on an exclusive basis for the ITT Industries Business and (ii)
on a non-exclusive basis for the ITT Industries Expanded Business.
Section 2.02 Grant of Licenses to Use the ITT Name. Licensor hereby
grants to ITT Enterprises, during the term of this License Agreement, a
personal, non-assignable (except as otherwise provided in this License
Agreement), non-transferable, worldwide license to use, with the right to grant
sublicenses solely to ITT Enterprises Sublicensees as provided for in Section
2.03 hereof to use, the ITT Name in their company names and in their trade or
popular names in accordance with the Permitted Manner of Use (i) on an exclusive
basis for the ITT Industries Business, and (ii) on a non-exclusive basis for the
ITT Industries Expanded Business. Licensor during the term of this Agreement
will not use, nor grant a license to any third party to use those company names
in the exact form listed in Exhibit C annexed hereto, subject to all other
provisions of this License Agreement. The form of using the ITT Name in the
company and trade names as set forth in Exhibit C annexed hereto is hereby
approved for purposes of granting the aforementioned sublicenses. The form of
using the ITT Name in the company and trade names of an ITT Enterprises
Sublicensee which is acquired or formed after the Distribution Date shall be
subject to Licensor's approval, which approval shall not be unreasonably
withheld. If the proposed company and/or trade name use in conjunction with the
ITT Name is solely descriptive of a business within the scope of the ITT
Industries Business and (i) not objectionable from a legal standpoint, and (ii)
not likely to create confusion with a field of business of the ITT Destinations
Business or ITT Hartford Business, or a name used by a business of ITT Hartford
or ITT Destinations, then Licensor shall not object to the proposed company
and/or trade name. In the event that Licensor objects to any such form of using
the ITT Name, it shall give written notice of its objections to and consult with
ITT Enterprises in a good faith effort to resolve any such objections. Any such
approved name shall thereafter be deemed to be included in Exhibit C annexed
hereto. ITT Industries and its Subsidiaries shall not have the right to use "ITT
Corporation" or any company or trade name substantially identical thereto.
Section 2.03 Sublicenses. Each sublicense granted by ITT Enterprises to
an ITT Enterprises Sublicensee shall: (i) be in writing; (ii) specifically
require the ITT Enterprises Sublicensee to agree to comply with and observe the
terms and conditions of this License Agreement; and (iii) require the ITT
Enterprises Sublicensee to acknowledge its obligations to Licensor by executing
an agreement in the form annexed hereto as Exhibit F, which shall then be
forwarded to Licensor or its designee by ITT Enterprises.
Section 2.04 Prohibited Uses of ITT Name and ITT Marks. Neither ITT
Enterprises, nor any of the ITT Enterprises Sublicensees shall use the ITT Name
or ITT Marks for any product or service, or with or for any entity, in the ITT
Destinations Business or the ITT Hartford Business.
Section 2.05 ITT Industries Design Mark. Within one and one-half (1 1/2)
years of the Distribution Date, ITT Enterprises may select an ITT Industries
Design Mark that will be owned by Licensor. The ITT Industries Design Mark shall
be subject to approval by Licensor. As part of the selection and submittal of
the ITT Industries Design Mark for approval, ITT Enterprises shall prepare and
submit to Licensor, for review and comment, the proposed ITT Industries Graphic
Standards Manual, which Manual shall be consistent with Licensor's policy and
style standards, governing the proper use of the ITT Industries Design Mark by
ITT Enterprises and the ITT Enterprises Sublicensees. All use of the ITT
Industries Design Mark shall conform to the requirements of such Graphic
Standards Manual. Upon approval, the ITT Industries Design Mark will be deemed
licensed under Section 2.01 hereof. Licensor during the term of this License
Agreement will not use, nor grant a license to any third party to use, the
identical design of such ITT Industries Design Mark. Once an ITT Industries
Design Mark is selected and approved by Licensor, the ITT Industries Design Mark
shall not be altered, provided however ITT Enterprises may periodically
modernize the ITT Industries Design Mark so long as such mark as modernized
creates the same commercial impression and does not diminish the goodwill
thereof. Any registrations of the ITT Industries Design Mark shall be in
accordance with Section 3.07 herein.
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Section 2.06 Expansion of Licenses. All requests for an expansion of
license rights granted under Sections 2.01, 2.02 and 2.05 shall be made by ITT
Enterprises in writing to Licensor. Licensor may grant or deny such requests in
its sole discretion. For purposes of this Section 2.06, expansion of license
rights shall mean a right to use the ITT Name and/or the ITT Marks: (i) within
the scope of the ITT Industries Business and/or ITT Industries Expanded Business
by an ITT Enterprises Sublicensee after it ceases to be a Subsidiary of ITT
Industries; or (ii) outside or within the scope of the ITT Industries Business
or ITT Industries Expanded Business by ITT Enterprises or the ITT Enterprises
Sublicensees if a Change of Control of ITT Industries occurs. For the purpose of
this License Agreement, any expansion of rights granted pursuant to this Section
2.06 shall thereafter be deemed to be within the ITT Industries Expanded
Business and subject to any reasonable limitations imposed by Licensor.
Notwithstanding Section 2.06(i), ITT Enterprises may extend the rights
previously granted to an ITT Enterprises Sublicensee under Sections 2.01, 2.02
or 2.05 for a period of at least one and one-half (1 1/2) years ("Extension
Period") after such ITT Enterprises Sublicensee ceases to be a Subsidiary of ITT
Industries, provided that such former ITT Industries Subsidiary will not be an
ITT Enterprises Sublicensee for purposes of Article VIII of this License
Agreement, but shall agree to remain an ITT Enterprises Sublicensee pursuant to
Section 2.03 hereof for all other purposes, including Section 3.01 hereof, and
further provided that any Agreement Disputes (as defined in Section 8.01(a)
hereof) may be resolved in any manner deemed appropriate in the sole discretion
of Licensor. With respect to the ITT Industries Design Mark, such Extension
Period may be extended by ITT Enterprises for an additional one (1) year period
without approval by Licensor, and beyond the one (1) year period with approval
by Licensor which approval shall not be unreasonably withheld. ITT Enterprises
may also extend the sublicense to the former Subsidiary to use beyond the
Extension Period tooling that molds one or more of the ITT Marks in the products
during manufacture, provided such tooling is in regular use at the commencement
of the Extension Period and is retired from use at the end of the customary
replacement cycle for such tooling.
Section 2.07 Conversion to Exclusive Rights. In the event Licensor, its
Subsidiaries, ITT Enterprises, or the ITT Enterprises Sublicensees shall have a
bona fide intention to materially expand their operations in a field of activity
within the ITT Industries Expanded Business, then (i) ITT Enterprises may
request that its rights to use the ITT Name and the ITT Marks in such field of
activity be exclusive, or (ii) Licensor may request that ITT Enterprises release
its rights to such field of activity. For the purposes of this Section 2.07,
"materially expand" shall mean the plan to invest at least Forty Million
($40,000,000) U.S. Dollars for acquisition of a business with current operations
within such field of activity or the bona fide plan to expand into such a
business within such field of activity. All such requests shall (i) be in
writing, (ii) be provided to the other Party to this License Agreement and to
the General Counsel of ITT Hartford, (iii) describe the specific field of
activity to be commenced, and (iv) state the amount of the proposed investment.
Within twenty (20) days of providing such notice, the General Counsel of
Licensor, ITT Industries and ITT Hartford shall meet to consider the request.
The request shall be granted if and only if, and upon such terms and conditions
(e.g., territory), as all three General Counsel shall approve. If granted, the
new field of activity shall be deemed to be within ITT Destinations Business or
ITT Industries Business, as appropriate, and further subject to Sections 2.11
and 3.09 of this License Agreement. As used herein, exclusive rights shall not
prevent either Licensor, ITT Industries or ITT Hartford or their Subsidiaries or
Sublicensees from using the ITT Name or the ITT Marks (except the ITT Industries
Design Mark) anywhere for any products or services outside the field of activity
for which the exclusive rights are granted under this Agreement, even if such
products or services are related or are shipped, sold or offered in the same
channels of trade or sold to the same customers.
Section 2.08 Reduction of Licenses. In the event ITT Enterprises and/or
ITT Enterprises Sublicensees shall abandon their use of the ITT Name or one or
more of the ITT Marks for all or a portion of the ITT Industries Business, then
the scope of the exclusive rights granted in Sections 2.01, 2.02 and 2.05 with
respect to such abandoned ITT Name or ITT Marks shall be reduced by an amount
equal to the scope of the ITT Industries Business so abandoned. For purpose of
this Section 2.08, abandonment shall mean the failure of ITT Enterprises and its
sublicensed Major Subsidiaries to use the ITT Name or one or more of the ITT
Marks for a period of two (2) years, any such period to commence only after the
Distribution Date, except that should ITT Enterprises or a new ITT Enterprises
Sublicensee revive use in the activity
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previously abandoned, then the reduced exclusive rights shall be expanded
commensurate with the scope of the revived use, subject to any intervening
licenses or rights granted by or entered into or then being negotiated by
Licensor.
Section 2.09 Quality Standards. In view of the status of the Parties
immediately prior to the Distribution Date as one company, each Party's intimate
knowledge with standards and procedures for assuring consistent quality,
Licensor's knowledge of the standards and procedures used in the ITT Industries
Business, the integrity of ITT Industries Business and its history of
trouble-free goods and services, Licensor adopts ITT Industries Business quality
standards and ITT Enterprises and the ITT Enterprises Sublicensees agree to
maintain such standards and procedures to assure the consistent quality of its
goods and services. ITT Enterprises and the ITT Enterprises Sublicensees shall
not materially lower such quality standards without the prior written approval
of Licensor.
Section 2.10 Inspections and Samples. Should Licensor have reason to
believe based on information available to it that the quality standards referred
to in Section 2.09 have not been maintained then, at the request of Licensor,
ITT Enterprises and the ITT Enterprises Sublicensees shall permit a
knowledgeable independent expert or consultant specifically retained by Licensor
to have reasonable access to their premises and personnel during normal working
hours and shall furnish or permit inspection of, at Licensor's request and
without charge to Licensor or to such expert or consultant, product samples,
cartons, containers, packaging, wrapping and service materials bearing or used
in connection with the ITT Name and/or the ITT Marks for the purpose of ensuring
that ITT Enterprises and the ITT Enterprises Sublicensees are complying with
such quality standards. Any information obtained during such inspection and
provided to Licensor shall be limited to that which is necessary to ensure
compliance with such quality standards.
Section 2.11 Advertising, Packaging and Labels. ITT Enterprises and the
ITT Enterprises Sublicensees shall furnish, at Licensor's request and without
charge, to Licensor or to its authorized designee(s) samples of each type of
promotional and advertising material or the like to be used in connection with
any products or services offered by ITT Enterprises and the ITT Enterprises
Sublicensees and bearing or used in connection with the ITT Marks.
Section 2.12 Third Party Rights. ITT Enterprises and the ITT Enterprises
Sublicensees acknowledge that the rights granted by Licensor under Sections
2.01, 2.02, 2.05 and 2.06 are subject to all pre-existing third party rights,
obligations and restrictions as of the Distribution Date.
Section 2.13 Intervening Third Party Rights. Notwithstanding Section 2.01
(ii), Licensor shall be free to grant exclusive rights hereafter to a third
party to use the ITT Name and ITT Marks, except for the ITT Industries Design
Mark, for use with a business within the ITT Industries Expanded Business,
provided that ITT Industries has not given notice to Licensor prior thereto that
it has commenced operations in the identical business. In the event that ITT
Industries gives notice to Licensor that it or an ITT Industries Sublicensee is
operating in a specific business within the ITT Industries Expanded Business,
Licensor shall not thereafter grant any rights to a third party to use the ITT
Name or ITT Marks in the identical specific business.
Section 2.14 Rights to Enter Businesses. Nothing in this License
Agreement shall preclude ITT Industries, ITT Destinations, ITT Hartford nor any
of their respective subsidiaries or affiliates from operating in any business
provided neither the ITT Name nor the ITT Marks are used in such business.
Section 2.15 Abandonment by Licensor. In the event Licensor and its
Subsidiaries abandon completely their use of the ITT Name and the ITT Marks for
a two (2) year period, then ITT Enterprises has the right to obtain ownership of
the ITT Name and the ITT Marks and all licenses with respect thereto at fair
market value and on mutually agreed terms and conditions. As part of any such
transfer of the ITT Name and ITT Marks to ITT Enterprises, ITT Enterprises shall
agree not to use nor permit others to use for a period of five (5) years after
such transfer the ITT Name and the ITT Marks in the ITT Destinations Business
and in any other business that ITT Destinations has entered into prior to any
such transfer. During such five (5) year period, Licensor and its Subsidiaries
shall have the right to revive its use and
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license the use of the ITT Name and/or the ITT Marks on a paid-up, royalty-free,
exclusive, worldwide basis (exclusive of the ITT Industries Design Mark) on an
exclusive basis for the ITT Destinations Business, and a nonexclusive basis for
any businesses not included in the ITT Industries Business or the ITT Hartford
Business.
"Use" of the ITT Name or the ITT Marks as used in this Section 2.15 or as
used in Section 2.08 herein shall mean the bona fide use of the ITT Name or the
ITT Marks made in the ordinary course of trade and not made merely to reserve a
right in such Name or Marks.
ARTICLE III. UNDERTAKINGS
Section 3.01 Indemnification by ITT Enterprises. ITT Enterprises and the
ITT Enterprises Sublicensees hereby agree to indemnify and defend Licensor and
its Subsidiaries and their respective employees, officers, directors, and agents
and shall hold each of them harmless from any and all claims, demands, suits,
actions, damages, and judgments brought or obtained by a third party ("Claims"),
of whatever type or kind (excluding only such claims or legal action as may
arise under Sections 3.02 and 4.02 respectively) arising out of:
(a) any use of the ITT Name or the ITT Marks by ITT Enterprises or the
ITT Enterprises Sublicensees, including, without limitation, product
liability or personal injury Claims; or
(b) any breach by ITT Enterprises or the ITT Enterprises Sublicensees
of any of the terms and conditions of this License Agreement;
provided Licensor shall cooperate with, and assist, ITT Enterprises with respect
to any such Claim by (i) promptly notifying ITT Enterprises of any such Claim,
(ii) agreeing to be defended by counsel of ITT Enterprises' choice and to any
reasonable settlement proposed by ITT Enterprises, (iii) promptly providing to
ITT Enterprises any reasonably requested documents in its possession, custody,
or control, and (iv) making its personnel familiar with the facts available to
ITT Enterprises, except that ITT Enterprises shall reimburse Licensor for any
out-of-pocket travel, lodging, and subsistence expenses necessarily and
reasonably incurred by Licensor in effecting such cooperation.
Section 3.02 Indemnification by Licensor. Licensor and its Subsidiaries
hereby agree to indemnify and defend ITT Enterprises and the ITT Enterprises
Sublicensees and their respective employees, officers, directors, and agents and
shall hold each of them harmless from any and all claims, demands, suits,
actions, damages, and judgments brought or obtained by a third party ("Claims"),
of whatever type or kind (excluding only such claims or legal action as may
arise under Section 3.01) arising out of:
(a) any use of the ITT Name or the ITT Marks, excluding the ITT
Industries Design Mark, by Licensor or its Subsidiaries (excluding ITT
Industries, ITT Hartford and their Subsidiaries) including, without
limitation, product liability or personal injury Claims; or
(b) any breach by Licensor or its Subsidiaries of any of the terms and
conditions of this License Agreement;
provided ITT Enterprises shall cooperate with, and assist, Licensor with respect
to any such Claim by (i) promptly notifying Licensor of any such Claim, (ii)
agreeing to be defended by counsel of Licensor's choice and to any reasonable
settlement proposed by Licensor, (iii) promptly providing to Licensor any
reasonably requested documents in its possession, custody, or control, and (iv)
making its personnel familiar with the facts available to Licensor, except that
Licensor shall reimburse ITT Enterprises for any out-of-pocket travel, lodging,
and subsistence expenses necessarily and reasonably incurred by ITT Enterprises
in effecting such cooperation and assistance.
Section 3.03 Defense of Infringement Claims. Licensor further agrees to
defend ITT Enterprises and/or any ITT Enterprises Sublicensee to the extent that
any and all demands, suits, or actions ("Claims") solely arise out of an
assertion or claim that the use of the ITT Name or ITT Marks, excluding the ITT
Industries Design Mark, by ITT Enterprises or the ITT Enterprises Sublicensees
pursuant to the
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terms of this License Agreement infringes the trade names or trademarks of a
third party, provided, ITT Enterprises shall cooperate with, and assist,
Licensor with respect to any such Claim by (i) promptly notifying Licensor of
any such Claim, (ii) agreeing to be defended by counsel of Licensor's choice,
except that if a third party should institute a legal action against ITT
Enterprises and/or an ITT Enterprises Sublicensee involving their alleged
infringement of a third party mark based on their use of an ITT Mark in the ITT
Industries Business then choice of counsel and the control of the legal action
shall be mutual between ITT Enterprises and Licensor, and to any reasonable
settlement proposed by Licensor, (iii) promptly providing to Licensor any
reasonably requested documents in its possession, custody, or control, and (iv)
making its personnel familiar with the facts available to Licensor. The costs
associated with any such defense shall be borne equally by Licensor and ITT
Enterprises.
Section 3.04 Phase-Out. Licensor agrees not to grant a license during the
Phaseout Period to any third party after any termination of this License
Agreement to use the ITT Name or the ITT Marks in the field of activity of the
ITT Industries Business, except in the case of an abandonment as specified in
the last sentence of Section 2.08 herein.
Section 3.05 Absence of ITT Enterprises Interest in ITT Marks. ITT
Enterprises and the ITT Enterprises Sublicensees agree that nothing herein shall
give ITT Enterprises or the ITT Enterprises Sublicensees any right, title or
interest in the ITT Name or the ITT Marks apart from the rights to use, and to
sublicense the use, granted or to be granted hereunder and to retain any
remuneration resulting therefrom, all such right, title and interest, including
but not limited to rights of registration, maintenance and enforcement, being
solely with Licensor. The ITT Name and the ITT Marks are the sole property of
Licensor, and any and all uses by ITT Enterprises of the ITT Name or of the ITT
Marks shall inure to the benefit of Licensor. In no event shall such use be
deemed or construed to have created or vested any right, title or interest
whatever in and to ITT Enterprises. To the extent that any jurisdiction shall
find for any reason as a matter of law or otherwise that such use has vested in
ITT Enterprises or its Subsidiaries any right, title or interest in or to the
ITT Name or the ITT Marks, ITT Enterprises and its Subsidiaries, upon the
request of Licensor, shall execute and deliver to Licensor, without charge,
appropriate assignments to vest such rights, title and interest in Licensor.
Except for use of the ITT Name or ITT Marks, Licensor agrees that any other
symbol, word, color or design used by ITT Enterprises or the ITT Enterprises
Sublicensees to identify themselves or their products are not subject to the
terms and conditions of this Agreement unless specifically stated otherwise.
Section 3.06 ITT Name and ITT Marks Not Contested. ITT Enterprises and
the ITT Enterprises Sublicensees agree not to raise or cause to be raised any
questions concerning or objections to the validity of the ITT Name or the ITT
Marks in any jurisdiction, or to any registrations thereof or applications
therefor, or to the sole proprietary rights of Licensor thereto, on any grounds
whatsoever.
Section 3.07 Filing, Registration or Use of Names, Trademarks and Service
Marks. ITT Enterprises and the ITT Enterprises Sublicensees agree not to:
(a) file, apply to register or register the ITT Name or the ITT Marks,
alone or in combination with any other word or device or symbol or any
name, mark, term, script or device colorably similar thereto, except if,
as, when, and to the extent as may be expressly consented to in writing in
advance by Licensor in specific instances;
(b) use the ITT Name or the ITT Marks in conjunction or in combination
with any other name, mark, term, script or device whatever, except as
specifically set forth in Article 11, or if, as and to the extent approved
in writing in advance by Licensor; and
(c) use the ITT Name or the ITT Marks in any jurisdiction, or any
name, mark, term, script or device colorably similar thereto, except as
specifically permitted under this License Agreement.
At the request of ITT Enterprises, Licensor shall file registration
applications and maintain any such applications and registrations issued thereon
for the ITT Name and ITT Marks for activities within the ITT Industries Business
or the ITT Industries Expanded Business. Any expenses incurred by Licensor in
connection with registering or maintaining registrations of the ITT Name or the
ITT Marks for the ITT
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Industries Business or for or on behalf of ITT Enterprises and/or the ITT
Enterprises Sublicensees for the ITT Industries Expanded Business, and expenses
incurred in connection with proving or establishing use for the purpose of trade
name or trademark registration or maintenance of the ITT Name or ITT Marks for
the ITT Industries Business or ITT Industries Expanded Business, shall be
reimbursed by ITT Enterprises.
Section 3.08 Injunctive Relief Upon Termination. ITT Enterprises and the
ITT Enterprises Sublicensees agree that should ITT Enterprises and/or the ITT
Enterprises Sublicensees, upon any termination in whole or in part of this
License Agreement, fail to cease use of the ITT Name and the ITT Marks, as
appropriate, in accordance with the provisions of Article VI hereof, such
failure will result in immediate and irreparable injury to Licensor and, in
addition to any provable damages and the right to the costs and expenses of any
litigation, Licensor shall be entitled to equitable relief by way of temporary
and permanent restraining orders and injunctions and such other further relief
as any court with jurisdiction may deem just and proper without the necessity of
posting a bond.
Section 3.09 Other Licensor Licenses. Subject to Section 2.13 and the
exact form of company names set forth in Exhibit C hereto, nothing in this
License Agreement shall be construed to limit the right of Licensor to use, or
to grant a license to any entity or person to use the ITT Name or the ITT Marks
anywhere for any products or services, or in connection with any activities
outside the ITT Industries Business even if such entity or person competes with
ITT Enterprises or the ITT Enterprises Sublicensees, or its products or services
are shipped, sold or offered in the same channels of trade as those of ITT
Enterprises or the ITT Enterprises Sublicensees.
Section 3.10 Execution of Documents. At Licensor's request, ITT
Enterprises and the ITT Enterprises Sublicensees agree to assist Licensor in the
procurement or maintenance of any filings or registrations for the ITT Name or
ITT Marks in any jurisdiction by providing any information available from ITT
Enterprises and the ITT Enterprises Sublicensees and executing any documents
necessary therefor. The rights granted or to be granted hereunder to ITT
Enterprises or the ITT Enterprises Sublicensees shall be recorded in any
jurisdiction where such recordation is required by statute or in the sole
discretion of Licensor is advisable, and ITT Enterprises and the ITT Enterprises
Sublicensees shall extend to Licensor their full cooperation in filing and
completing any such recordation.
ARTICLE IV. INFRINGEMENT BY THIRD PARTIES
Section 4.01 Infringement by Third Parties. Upon discovery by ITT
Enterprises or by an ITT Enterprises Sublicensee, ITT Enterprises shall notify
Licensor of any adverse uses confusingly similar or otherwise damaging to the
ITT Name and/or ITT Marks, but shall take no other action of any kind with
respect thereto except by the express prior written authorization of Licensor.
The determination of whether or not legal action shall be taken in any case
shall lie exclusively with and at the sole discretion of Licensor except that if
such adverse use is in the same field of activity as the ITT Industries
Business, ITT Enterprises may, by such notice, require that Licensor institute
and reasonably pursue legal action.
Section 4.02 Costs of Legal Action. In the event that Licensor is
required to institute legal action pursuant to the notice under Section 4.01,
the costs of any such legal action shall be borne by ITT Enterprises. In the
event that Licensor is not so required, but decides to institute legal action
and such confusingly similar or otherwise damaging use is primarily or
exclusively within the field of activity of the ITT Industries Business, the
costs of any such legal action shall be shared equally by ITT Enterprises and by
Licensor. In all such circumstances, Licensor may bring suit in its own name and
in the name of ITT Enterprises or the ITT Enterprises Sublicensees, with choice
of counsel and control of the legal action by Licensor in close coordination and
consultation with ITT Enterprises. All other legal actions for third party
infringements instituted by Licensor shall be at the expense and under the
control of Licensor. ITT Enterprises and the ITT Enterprises Sublicensees shall
cooperate with and assist Licensor in any such suit by promptly providing any
reasonably requested documents in their possession, custody, or control, and by
making their personnel familiar with the facts available to Licensor and
otherwise, without charge.
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Section 4.03 Resolution of Legal Action. In the event that threatened or
actual legal action by Licensor results in a settlement or resolution that
provides damages or other monies to Licensor and/or ITT Enterprises and the ITT
Enterprises Sublicensees, such monies shall first be used to reimburse the
Parties for their respective costs of such legal action. Any remaining damages
or other monies after reimbursement of the aforesaid costs shall be retained by
Licensor, except that any remaining damages assessed as lost profits of ITT
Enterprises or any ITT Enterprises Sublicensee shall be paid to ITT Enterprises
and any remaining damages assessed as royalties shall be shared equally by ITT
Enterprises and Licensor.
Section 4.04 Legal Action Involving the ITT Industries Design
Mark. Notwithstanding the foregoing Sections 3.03, 4.01, 4.02 and 4.03, if ITT
Enterprises or an ITT Enterprises Sublicensee shall discover any adverse use
confusingly similar or otherwise damaging to the ITT Industries Design Mark, or
if a third party should institute legal action against ITT Enterprises and/or an
ITT Enterprises Sublicensee based solely on their use of the ITT Industries
Design Mark, then ITT Enterprises shall notify Licensor in either event. ITT
Enterprises may decide in the case of any such adverse use whether to institute
legal action and in all such circumstances shall have the choice of counsel and
control of any legal action in close consultation with Licensor and the cost of
any such action shall be borne by ITT Enterprises. Any elements of a settlement
of any such legal action involving ownership rights of or restrictions on the
right to use the ITT Industries Design Mark shall require approval of Licensor.
Any damages or other monies that result from resolution of any such legal action
shall be at the expense of or be retained by ITT Enterprises. Notwithstanding
the foregoing Section 4.04, if ITT Enterprises does not institute legal action
against such adverse use within sixty (60) days of such notification to
Licensor, or prior to that time shall notify Licensor in writing that ITT
Enterprises does not intend to institute such legal action, then the provisions
of Sections 3.03, 4.01, 4.02 and 4.03 shall apply.
ARTICLE V. TERMINATION
Section 5.01 Change of Control. In the event that there is a Change of
Control of ITT Industries without the prior written consent of Licensor pursuant
to Section 2.06 hereof, then this License Agreement may be terminated by
Licensor. In the event ITT Enterprises gives notice to Licensor of a Change of
Control and Licensor does not object to such Change of Control within forty-five
(45) days of receipt of such notice, then it shall be deemed that Licensor shall
have granted an expansion of the license pursuant to Section 2.06(ii) hereof.
However, in the event there is a Change of Control of ITT Industries as defined
in Section 1.01(z)(iii) which has been approved in advance by the Board of
Directors of ITT Industries and Licensor has refused to grant an expansion of
licenses pursuant to Section 2.06 hereof then, in such event, (i) the license
grants under Sections 2.01, 2.02, 2.03 and 2.05 hereof shall thereafter only
apply to ITT Enterprises and those ITT Enterprises Sublicensees that were in
existence as of the Distribution Date and any ITT Enterprises Sublicensee formed
thereafter in which ITT Industries has made an investment of at least forty (40)
million U.S. dollars in cash expenditures prior to the date of such Change of
Control ("Intervening ITT Industries Sublicensee"); (ii) the scope of the
license grants under Sections 2.01, 2.02, 2.03 and 2.05 hereof shall be limited
to the ITT Industries Business and the business conducted by and sublicensed to
such Intervening ITT Industries Sublicensee; (iii) Licensor in its sole
discretion may decline to grant further approvals pursuant to Section 2.02
herein for any form of using the ITT Name in company and trade names for ITT
Enterprises Sublicensees and all approved forms of using the ITT Name shall not
thereafter be modified; and (iv) if an ITT Industries Design Mark has been
selected and is in use pursuant to Sections 2.01 and 2.05 herein, then all
existing rights for ITT Enterprises and ITT Enterprises Sublicensees to use the
ITT Logo will be terminated and ITT Enterprises shall take all necessary steps
to cease all use of the ITT Logo by it and by the ITT Enterprises Sublicensees.
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ARTICLE VI. TERM AND EFFECT OF TERMINATION
Section 6.01 License Term. This License Agreement shall continue unless
sooner terminated pursuant to other provisions hereof, until ITT Enterprises
gives written notice of an intent to terminate this License Agreement effective
six (6) months thereafter.
Section 6.02 Effect of Termination. Upon the termination of this License
Agreement, except in the case of termination for abandonment pursuant to Section
2.08, ITT Enterprises and the ITT Enterprises Sublicensees during the Phaseout
Period shall phase out all use of the ITT Name and the ITT Marks. By the end of
the Phaseout Period ITT Enterprises and the ITT Enterprises Sublicensees shall
fully discontinue all use of the ITT Marks and the ITT Name.
Following termination of this License Agreement, ITT Enterprises and the
ITT Enterprises Sublicensees shall:
(i) continue, without any time limitation, to indemnify and hold
harmless Licensor (including subsidiaries, affiliates, employees, officers,
directors, agents or anyone connected with it in any way) pursuant to
Section 3.01 hereof; and
(ii) within thirty (30) days thereafter, account to Licensor and make
any such compensation payments as may be due or called for under Section
4.02 herein up to and including the effective date of termination of this
License Agreement.
Licensor and its Subsidiaries shall continue, for a period of two (2)
years, to indemnify and hold harmless ITT Enterprises and ITT Enterprises
Sublicensees (including subsidiaries, affiliates, employees, officers,
directors, or agents) pursuant to Section 3.02 hereof.
ARTICLE VII. REPRESENTATIONS AND WARRANTIES
Section 7.01 Absence of Other Warranties and Representations. Other than
as specifically set forth herein, neither Party, nor any of their Subsidiaries
makes any representations or warranties including, without limitation, any
statement with respect to the validity, enforceability or coverage of the ITT
Name and ITT Marks, with or without respect to the ITT Industries Business or
the ITT Industries Expanded Business.
ARTICLE VIII. DISPUTE RESOLUTION
Section 8.01 Disputes. The general counsels of the relevant parties shall
negotiate in good faith for a reasonable period of time to settle any:
(a) dispute or claim arising out of, in connection with, or in
relation to the interpretation, performance, non-performance or validity of
this License Agreement or otherwise arising out of, or in any way related
to this License Agreement, including, without limitation, any claim based
on contract, tort, statute or constitution (collectively, "Agreement
Disputes"); or
(b) any breach of any provision of this License Agreement by ITT
Enterprises or ITT Enterprises Sublicensees, other than a Change of Control
as set forth in Section 5.01 or by Licensor, provided the breach has not
been cured within ninety (90) days after receipt of notice of such breach
("Uncured Breach").
Section 8.02 Arbitration. If after such reasonable period such general
counsel are unable to settle such Agreement Dispute or Uncured Breach (and in
any event after 60 days have elapsed from the time the relevant parties began
such negotiations), such Agreement Dispute or Uncured Breach 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
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hereof), and judgment may be entered by any state or Federal court having
jurisdiction thereof in accordance with Section 9.14 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 concerning
whether an Agreement Dispute or an Uncured Breach is an arbitrable Agreement
Dispute, whether arbitration has been waived, whether an assignee of this
License Agreement is bound to arbitrate, or as to the interpretation of
enforceability of this Article 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 License 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.
Section 8.03 Injunctions. In the event the Arbitrator should find that
ITT Enterprises or the ITT Enterprises Sublicensees or Licensor have breached
this License Agreement, then the Arbitrator may order specific performance of
the provisions so breached. Should ITT Enterprises or the ITT Enterprises
Sublicensees or Licensor not so specifically perform, then the Parties recognize
that the damage caused thereby to either Party would be irreparable and not
adequately compensable by monetary damages, and that either Party may
immediately seek and be entitled to an injunction by a Federal Court having
jurisdiction thereof, without the requirement of posting a bond or other
security.
ARTICLE IX. MISCELLANEOUS
Section 9.01 Complete Agreement; Construction. This License Agreement,
including the Exhibits, together with the Distribution Agreement, and the other
Ancillary Agreements (as defined in the Distribution Agreement) 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. Notwithstanding any other provisions in
this License Agreement to the contrary, in the event and to the extent that
there shall be a conflict between the provisions of this License Agreement as it
relates to the ITT Name and ITT Marks, and the provisions of the Distribution
Agreement or the IP Agreement, this License Agreement shall control.
Section 9.02 Counterparts. This License Agreement may be executed in one
or more counterparts, all of which shall be 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 party.
Section 9.03 Survival of Agreement. Except as otherwise contemplated by
this License Agreement, all covenants and agreements of the Parties contained in
this License Agreement shall survive the Distribution Date.
Section 9.04 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
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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 Licensor:
ITT Corporation
1330 Avenue of the Americas
New York, NY 10019
Attn: General Counsel
To ITT Manufacturing Enterprises, Inc.:
ITT Manufacturing Enterprises, Inc.
1105 North Market Street
Suite 1217
Wilmington, Delaware 19801
with copy to:
ITT Industries, Inc.
4 West Red Oak Lane
White Plains, NY 10604
Attn: General Counsel
Section 9.05 Waivers. The failure of either Party to require strict
performance by the other Party of any provision in this License Agreement will
not waive or diminish that Party's right to demand strict performance thereafter
of that or any other provision hereof.
Section 9.06 Amendments. This License Agreement may not be modified or
amended except by an agreement in writing signed by the Parties.
Section 9.07 Assignment. This License Agreement shall not be assignable,
in whole or in part, directly or indirectly, by ITT Enterprises except to ITT
Industries without the prior written consent of Licensor, and any attempt to
assign any rights or obligations arising under this License Agreement without
such consent shall be void. This License Agreement may be assigned by Licensor
to ITT Destinations or any other company which hereafter owns the ITT Marks and
ITT Name.
Section 9.08 Successors and Assigns. The provisions of this License
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the Parties and their respective successors and permitted assigns.
Section 9.09 Termination. This License Agreement may be terminated at any
time prior to the Distribution by and in the sole discretion of Licensor without
the approval of ITT Enterprises or the shareholders of Licensor. In the event of
such termination, no party shall have any liability of any kind to any other
party.
Section 9.10 Subsidiaries. ITT Enterprises hereby guarantees the
performance of the ITT Enterprises Sublicensees under the terms and conditions
of this License Agreement.
Section 9.11 Third Party Beneficiaries. This License Agreement is solely
for the benefit of the Parties hereto and the ITT Enterprises Sublicensees 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 License Agreement.
Section 9.12 Title 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.
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Section 9.13 Governing Law. This License 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.
Section 9.14 Consent to Jurisdiction. Without limiting the provisions of
Article VIII hereof each of the Parties irrevocably submits to the 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 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
9.14. 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
License Agreement or the transactions contemplated hereby 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 any inconvenient forum.
IN WITNESS WHEREOF, the Parties have caused this License Agreement to be
duly executed as of the day and year first above written.
ITT CORPORATION
By /s/ RICHARD S. WARD
------------------------------------
Name: Richard S. Ward
Title: Executive Vice President and
General Counsel
ITT MANUFACTURING ENTERPRISES, INC.
By /s/ VINCENT A. MAFFEO
------------------------------------
Name: Vincent A. Maffeo
Title: Attorney-in-Fact
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EXHIBIT A1
ITT DESTINATIONS BUSINESS
<TABLE>
<S> <C> <C> <C> <C> <C>
I. Hospitality, Entertainment and Gaming
A. Scope of Business:
Hospitality, entertainment and gaming services, facilities, and content of all types
including, sports teams and franchises, television, theatrical studios, networks,
broadcasting, arenas, theaters and other performance facilities, television programs,
resort and destination facilities, hotels, gaming operations, lodging, transportation, and
related marketing, distribution, promotion, advertising and licensing.
B. Major Businesses and Service Groupings
1. ITT Sheraton and Ciga S.p.A. Hotels
a. Hotel operations
(1) reservation services
(2) national marketing
(3) promotional services
b. Hotel management
c. Hotel ownership
2. Caesars World, Inc.
a. resorts/hotels
b. casinos/gaming operations
c. merchandising of Caesars branded products (fragrances, clothing, accessories,
gift items w/Caesars' name)
3. Madison Square Garden
a. New York Knicks
(1) ticket revenues
(2) merchandising
b. New York Rangers
(1) ticket revenues
(2) merchandising
c. Madison Square Garden Arena
(1) sports events
(2) concerts
(3) family shows
(4) trade shows -- conventions
d. The Paramount Theater
e. WNYC-TV (Nationally broadcast business and sports TV station in a joint venture
with Dow Jones)
f. Supply and distribution of television programming for cable
g. Rights to New York Yankees' games
h. MSG Network-Advertiser supported cable television entertainment program service
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C>
II. Information Services
A. Scope of Business
Information services, facilities, and content, in connection with information training and
educational services, electronic and print publication of informational and educational
materials, collection, creation, production, compilation, storage and translation of
informational and educational materials.
B. Major Businesses and Services Groupings
1. ITT World Directories, Inc.
a. publishing traditional telephone directories internationally
b. contracts for the publication of telephone directories with monopoly providers
of telecommunications services
2. ITT Educational Services, Inc.
a. ITT Technical Institutes
III. Closely Related Businesses:
A. Acquisition, management, ownership and operation of:
1. Entertainment services, facilities and content of all types, including, without
limitation: sports teams and franchises, television, theatrical studios, networks,
broadcasting, theme parks, arenas, theaters and other performance facilities, musical
recordings, merchandising, movies, television programs, magazines, electronic
entertainment, interactive media and related marketing, distribution, promotion,
advertising and licensing;
2. Hospitality, tourism, recreation and gaming services, including, without limitation,
resort and destination facilities, services, hotels, gaming operations, lodging and
transportation; and
3. Information services facility and content, including, without limitation
a. training and educational services, electronic and print publication of
informational and educational materials;
b. collection, creation, production, compilation, storage and transmission,
including interactive services, of informational and educational materials;
c. commercial communication equipment, services and facilities including, without
limitation, telecommunications, satellites, cable and all other storage, access
and transmission means.
</TABLE>
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EXHIBIT A2
ITT HARTFORD BUSINESS
<TABLE>
<S> <C> <C> <C>
A. ITT Hartford is engaged in:
1. All lines of property and casualty insurance
2. All lines of life company business, including without limitation all lines of life,
disability, health, stop-loss and special risk (accidental death and dismemberment,
blanket lines, and Medicare Supplements) insurance and annuities (the "Life Company
Business")
3. Ceded and assumed reinsurance in all lines of property and casualty insurance and life
Company Business
4. The following services related to property and casualty insurance and Life Company
Business and reinsurance:
a. Underwriting
b. Loss control
c. Premium collection, audit and financing
d. Actuarial
e. Administrative (including without limitation, benefit plan administration and
consulting)
f. Claim administration (including without limitation, processing)
g. Reinsurance consulting
h. Catastrophe evaluation
i. Reinsurance and insurance market research and assistance
j. Runoff of liabilities for discontinued insurance operations
k. Servicing or administration of voluntary and residual market plans, pools and other
residual market mechanisms
l. Establishing and maintaining risk retention and purchasing group
m. Insurance-related information management
5. Surety and fidelity/burglary bonds including, but not limited to, contract,
miscellaneous and financial guarantee bonds and credit insurance.
6. The providing of investment advisory services to mutual funds and/or the operation of
mutual funds and/or any other pooled investment vehicles and/or the distribution of
interests in such funds or other vehicles
B. Closely Related Businesses:
1. Any insurance-related business permitted to be conducted by a company under applicable
regulatory authority and any other business which may only be conducted by companies
regulated by the applicable insurance regulatory authorities
2. Investment banking activities, including but not limited to the underwriting of
securities and stock brokerage activities
</TABLE>
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EXHIBIT A3
ITT INDUSTRIES BUSINESS
<TABLE>
<S> <C> <C> <C> <C>
1. Automotive Group
A. Scope of Business: Supplier of systems and components to automotive vehicle
manufacturers worldwide and related automotive aftermarket products
B. Major Automotive Product/Service Groupings:
1. Brake and Chassis Systems
(a) antilock brake systems and components
(b) traction control system and components
(c) chassis systems and components
(d) foundation brake system and components
(e) fluid handling systems and components
(f) shock absorbers
(g) brake activation systems and components
(h) friction products
2. Body and Electrical Systems
(a) electric motors and motor controllers
(b) wiper system and components
(c) activator systems and components
(d) switches and lamps
(e) body hardware
(f) seat sub-systems
(g) precision die cast products
(h) structural stampings
(i) door systems and components
(j) air management systems and components
(k) modular chassis systems
3. Front and Rear Corner Modules
(a) brake sub-systems and components
(b) suspension sub-systems and components
(c) bearings
(d) complete axle assemblies and sub-assemblies
(e) vehicle stability management systems and components
(f) steering systems and components
II. Defense & Electronics Group
A. Scope of Business: Develop, manufacture and support high technology electronic systems
and components specifically designed for military and defense application on a
worldwide basis.
B. Major Products/Service Groupings for Military and Defense Application:
1. communications systems, equipment, and components:
(a) military communications equipment;
(b) tactical radios and components;
(c) air traffic control radio equipment;
(d) networking equipment;
(e) air traffic control radio equipment;
(f) switches;
(g) military "Private Mobile Radio" equipment;
(h) communications software;
(i) wireless LANS;
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
(j) tactical data systems and components;
(k) communications security devices and software;
(l) computer security products;
(m) INFOSEC products;
(n) biometric authentication products;
(o) speech and speaker recognition, identification and verification systems and
components;
(p) communication intelligence workstation components and subsystems;
(q) language and dialect identification products;
(r) Communications-Navigation-Identification systems and components;
(s) secure voice/data communications systems and components;
(t) command and control systems and components;
(u) communications and signal intelligence systems and components;
(v) satellite payload systems and components;
(w) military "Personal Communications Services" radios
2. electronic warfare systems including:
(a) Advanced Threat Radar Jammar and components;
(b) Airborne Self-Protection Jammer and components;
(c) electronic countermeasures and counter-countermeasures systems and
components;
(d) decoy systems and components;
(e) electro-optical and infrared systems and components;
3. night vision devices incorporating image intensifiers including:
(a) infantrymen's night vision devices and components;
(b) aviator's night vision devices and components;
(c) image intensifier tubes;
(d) night vision weapon sights and components;
(e) special purpose photosensitive devices;
(f) vehicle mounted night vision devices and components;
4. radar systems including:
(a) shipboard radars and components;
(b) air-traffic radars and components;
(c) coastal defense radars and components;
(d) transmit/receive modules;
(e) bistatic radar systems and components;
5. space payload products including:
(a) navigation payloads;
(b) meteorological instruments;
(c) suites of meteorological and navigation instruments;
(d) RF/microwave/millimeter wave sensor systems and components;
(e) control segment integration software;
6. navigation systems including:
(a) global positioning satellite systems and components;
(b) TACAN systems and components;
(c) tactical navigation systems and components;
7. semiconductor IC devices:
(a) Gallium Arsenide integrated circuits;
(b) MMIC products;
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
(c) RF products;
(d) Silicon based integrated circuit semiconductor devices;
8. connectors and cable assemblies
C. Defense and Electronics Products for Commercial Application
1. night vision devices incorporating image intensifiers:
(a) personal image identifier night vision devices and components;
(b) commercial image intensifier tubes;
(c) vehicle-mounted image identifier night vision devices and components;
(d) Retinitis Pigmentosa image intensifier night vision devices and components;
2. Manufacture of Gallium Arsenide semiconductor IC devices and circuits
3. biometric authentication products
4. speech and speaker recognition, identification and verification systems and
devices
5. language and dialect identification products
6. Security Access Control Systems for accessing computer systems having application
in computer and financial networks
7. global positioning satellite products
8. connectors and cable assemblies
9. integrated circuit cards and components
10. switches
D. Services:
1. Gallium Arsenide discrete and integrated circuit design and foundry services.
2. System integration, engineering, maintenance and repair of radar systems,
military and government communications and information systems, and electronic
warfare systems.
3. Current principal business lines* of ITT Defense, Inc. and ITT Federal Services
Corporation, including, but not limited to, management and operation of:
a. military base operations support, equipment and maintenance and training
services;
b. U.S. Government Job Corps Program Centers, including administration,
placement, recruiting and training;
c. space and missile support operations and facilities;
d. system integration engineering and management of satellite payloads;
e. commercial satellite launch facilities;
f. government and semi-government sponsored training services; and
g. other current businesses of ITT Federal Services Corporation.
*Any overlap or commonality with the businesses in ITT Destinations Business will
coexist.
III. Fluid Technology Group
A. Business: Engaged in the design, development, production, marketing and sale of
products, systems and services used to move, handle, transfer, control and contain
fluids. The principal markets are water and wastewater treatment, industrial and
process, and construction. The other markets consist of chemical processing,
pharmaceutical and biotech sectors, selected segments of oil and gas and mining
markets, HVAC, commercial and leisure marine aerospace and power industry markets.
B. Major Product/Service Products:
1. Pump products including drivers, controllers, accessories and components thereof
for use in the markets specified in IIIA above.
2. Mixer products including drivers, controllers, accessories and components thereof
for use in the markets specified in IIIA above.
</TABLE>
21
<PAGE> 22
<TABLE>
<C> <C> <C> <C> <S>
3. Valve products including drivers, actuators and components thereof for use in the
markets specified in IIIA above.
4. Instrument and control products including drivers, actuators, sensors,
microprocessors, accessories and components thereof for use in the markets
specified in IIIA above.
5. Regulators, transducers, seals including drivers, actuators, sensors,
microprocessors, accessories and components thereof for use in the markets
specified in IIIA above.
6. Boiler and condensate equipment and products including drivers, controllers,
accessories and components thereof for use in the markets specified in IIIA
above.
7. Switches including actuators, sensors, controllers, and components thereof for
use in the markets specified in IIIA above.
8. Heat transfer products and components thereof for use in the markets specified in
IIIA above.
9. Lighting and sanitary products and components thereof for use in markets
specified in IIIA above.
10. Software programs for the selection and design of above specified products.
IV. Closely Related Businesses:
A. Transportation Products: The design, manufacture, sale, marketing and servicing of OEM
and aftermarket automotive, truck, train and other such transportation products.
B. Fluid Products: The design, manufacture, sale, marketing and servicing of fluid
handling products related to the types of products/service products set out in III B
above.
C. Military and Defense Products/Services: The design, manufacture, sale, marketing and
servicing of products, systems and operations specially designed for the military and
defense application.
D. Components: The design, manufacture, sale, marketing and servicing of components
consisting of connectors, cable assemblies, integrated circuit cards and components
thereof, and switches.
</TABLE>
22
<PAGE> 23
EXHIBIT B
[ITT LOGO]
23
<PAGE> 24
EXHIBIT C
ITT INDUSTRIES, INC. COMPANY NAMES
ITT Industries, Inc.
ITT Fluid Technology Division
ITT Flygt Limited (Australia)
ITT Aerospace Controls Division
ITT Controls and Instruments Division
ITT Fluid Technology International, Inc.
ITT Fluid Tech S.A. de C.V. (Mexico)
ITT Fluid Technology Asia Pte. Ltd. (Singapore)
ITT Fluid Transfer Division
ITT Flygt Corporation
ITT Flygt Ltd. (Japan)
ITT FTC Manufacturing Division
ITT Grindex U.S. Pump Division
ITT Automotive Inc.
ITT AES Enterprises, Inc.
ITT Automotive Electrical Systems, Inc.
ITT Automotive Division
ITT Autowize Distribution Centers, Inc.
ITT Hancock Industries, Inc.
ITT Higbie Manufacturing Co.
ITT Thompson Industries Inc.
ITT Industries of Canada Ltd.
ITT A-C Pump Canada Division
ITT Automotive Division
ITT Barton Instruments Division
ITT Cannon Division
ITT Engineered Valves-Canada Division
ITT Fluid Products Canada Division
ITT Flygt Division
ITT Standard Division
ITT Datacommunications Limited
ITT Defense & Electronics, Inc.
ITT Cannon, Inc.
ITT Cannon Division
ITT Pomona Division
ITT DCD Saudi Arabia, Inc.
ITT Defense, Inc.
ITT Aerospace Communications Division
ITT Avionics Division
ITT Defense Division
ITT Electro-Optical Products Division
ITT Gallium Arsenide Tech Center Division
ITT Gilfillan Division
ITT Semiconductors Division
ITT Defense International, Inc.
ITT Federal Services Corporation
ITT Antarctic Services Corporation
ITT Arctic Services Corporation
ITT Commercial Services Corporation
24
<PAGE> 25
ITT Employment and Training Systems Corporation
ITT Federal Electric GmbH
ITT Federal Electric International Espana
ITT Federal Services Inc.
ITT Federal Services International Inc.
ITT Job Training Services Corporation
ITT Gilfillan Inc.
ITT Schadow Inc.
ITT Cannon, Ltd.
ITT Auto Hungary KFT
ITT Automotive Czech Republic
ITT Composants et Instruments
ITT Teves Division
ITT Flygt AB
ITT Flygt Ltd. (UK)
ITT Flygt A/S
ITT Flygt GmbH
ITT Flygt Ltd. (Ireland)
ITT Flygt B.V. (Netherlands)
ITT Flygt Kft. (Hungary)
ITT Flygt Sp. Z.O.O. (Poland)
ITT Flygt NV/SA (Belgium)
ITT Flygt SA (France)
ITT Flygt SPA (Italy)
ITT Flygt SV
ITT Automotive Europe
ITT Reiss International
ITT Automotive Italy
ITT Automotive Spain
ITT Industrie-Beteiligungs
ITT Cannon GmbH
ITT Flygt Pumpen GmbH
ITT Flygt Werk GmbH
Deutsche ITT Industries
Deutsche ITT Industries Unterstutzungs
ITT Semiconductors Far East
ITT Industries Limited
ITT Barton Division
ITT Cannon U.K. Division
ITT Defence Limited
ITT Defence U.K. Division
ITT Jabsco Ltd.
ITT Switches (UK) Limited
ITT Community Development Corporation
ITT Community Realty
ITT Land Corporation
ITT Industries Belgium
ITT Manufacturing Enterprises, Inc.
ITT Hancock de Mexico
ITT South Florida Development Corporation
ITT Transportation Distribution Services
ITT-Sheng JIA Automotive Electric Systems, Co., Ltd.
ITT Industries (China) Investment Company, Limited
25
<PAGE> 26
EXHIBIT DI
ITT INDUSTRIES, INC. GUIDELINES
PERMITTED MANNER OF
USE ITT NAME
THE CORPORATE NAME
The corporate name includes the letters "ITT", which are licensed under the
Trade Name and Trademark License Agreement to ITT Manufacturing Enterprises,
Inc. ("ITT Enterprises") dated November 1, 1995. Under the terms of the
Agreement, ITT Enterprises has certain rights to grant sublicenses to use the
ITT Name (as defined therein) to its parent ITT Industries, Inc. and the ITT
Industries' Subsidiaries (e.g., ITT Automotive, Inc.). These guidelines are
provided to ensure proper use of "ITT" as part of the legal or corporate name
and the popular or trade name in accordance with the terms of that Agreement.
There are two versions of the corporate name: the legal version and the
popular version.
LEGAL OR CORPORATE NAME
The legal (or corporate) name of the parent corporation is "ITT Industries,
Inc.". The legal names of all other ITT Industries, Inc. entities authorized to
use the letters "ITT" are listed in Exhibit C to the Agreement. No abbreviations
or other modifications of these names are permitted when use of the corporate
name is required.
The applicable corporate name and relevant address is required on all
letterheads and other documents that can create legal commitments or obligations
with third parties, such as order forms, bills of sale, invoices, form contracts
and agreements, sales brochures and the like. The corporate name of the parent
may also be used on subsidiary letterheads and other forms when the words "ITT
Industries, Inc." would aid in the communication and clarification of corporate
parentage.
Under no circumstances should the ITT logo (ITT) be used as part of the
company or trade name.
POPULAR NAME
The popular (or trade) name of the parent corporation is "ITT Industries".
The popular (or trade) name of ITT Automotive, Inc., is "ITT Automotive".
Similar adaptations may be applied to other divisions and subsidiaries of ITT
Industries, Inc. "ITT" must not be used as the Popular or trade name. Again, no
periods or abbreviations are used.
These popular (or trade) names may be used in all instances where the legal
name of the corporation is not required.
TYPE FACE AND SIZE OF LEGAL AND POPULAR NAMES
When the letters "ITT" are used as part of the corporate or trade name,
they must be set in the same type face as the other letters or words in the full
name. The "ITT" portion of any such use must be separated from the remaining
portion of the name by at least a normal "word space". The first letter of the
words of the name, other than "ITT", must be of the same size as "ITT". Either
all caps or upper and lower case may be used. Except in the case of text
material where standard typefaces may be used, the lower case portion of the
words must be at least two-thirds the size of the capital letters. Examples are
as follows:
ITT INDUSTRIES
ITT AUTOMOTIVE
ITT INDUSTRIES
ITT AUTOMOTIVE
26
<PAGE> 27
USE OF THE ITT NAME IN TEXT
Standard formats for letterheads, envelopes, and business cards are
discussed below. The examples represent the relationships between ITT Industries
and its subsidiaries, divisions, and operations in the clearest, simplest, most
straightforward manner. It is preferable to identify the relevant corporate
legal entity on the upper right of a letterhead, but if necessary the placement
may be varied so long as the corporate entity is readily identifiable.
The ITT Logo or ITT Industries Design Mark should not be used in text to
indicate corporate identity, e.g.
Correct: Now, ITT Industries initiative has eliminated the problem.
Wrong: Now, ITT Industries initiative has eliminated the problem.
The ITT name or logo should never be used as part of a coined word.
Correct: RELIABILITY from ITT Industries
Wrong: RELIABILITTY from ITT Industries
Correct: ITT INDUSTRIES COMMITMENT
Wrong: CommITTment of ITT Industries
The ITT Logo and the ITT Industries Design Mark are trademarks that must be
used as specified in the applicable Graphic Standards Manuals. Those Logos (or
any portion thereof) should never be used to replace the letters "ITT" in an
official corporate or popular name:
Correct: ITT Industries, Inc.
Wrong: ITT Industries, Inc.
Correct: ITT Name Division
Wrong: ITT Name Division
Correct: ITT Name Corporation
Wrong: ITT Name Corporation
Under no circumstances should a corporate or popular name be set in a
typeface that looks similar to that of the ITT Logo or the ITT Industries Design
Mark.
TITLES
Business cards and items that include the ITT Name must use the applicable
full entity name listed in Exhibit C to the Agreement.
PROPER CORPORATE NAME AND LOGO PLACEMENT
The unit name may be placed beneath the ITT Logo or ITT Industries Design
Mark where necessary due to space requirements.
In connection with the types of usage referenced above, when ITT is part of
a unit's name, the ITT Logo or ITT Industries Design Mark should be placed at
the opposite end of the signature for better visual presentation.
CONFLICTING TRADEMARK OR LOGOTYPES
Never connect the ITT Logo or the ITT Industries Design Mark with a unit
name or the ITT Name in such a manner as to create a new combination.
27
<PAGE> 28
SIZE RELATIONSHIP WITH LOGOS
When the ITT Logo is used with a subsidiary, division or operation name,
the capital letters in such unit names should never be larger than two-thirds
the height of the Logo.
*The ITT Logo has been used in these Guidelines for illustrative purposes.
28
<PAGE> 29
EXHIBIT E
ITT INDUSTRIES MAJOR SUBSIDIARIES
Automotive, Inc.
Flygt Holdings Pty Limited
ITT Canada Limited
ITT Defense & Electronics, Inc.
ITT Industries Limited
ITT Automotive Europe
29
<PAGE> 30
INDUSTRIES
EXHIBIT F
SUBLICENSEE ACKNOWLEDGEMENT AND AGREEMENT
SUBLICENSEE ACKNOWLEDGEMENT AND AGREEMENT ("Agreement") dated as
of between , a ("ITT Enterprises
Sublicensee"), ITT Manufacturing Enterprises, Inc., a Delaware corporation ("ITT
Enterprises") with a principal address at 1105 North Market Street, Suite 1217,
Wilmington, Delaware 19801, and ITT Corporation, a Nevada corporation ("ITT
Corporation") with a principal address at 1330 Avenue of the Americas, New York,
New York 10019 (the "Parties").
WHEREAS, ITT Corporation is the owner of the company and trade name "ITT"
and the trademark and service mark "ITT", and of all rights worldwide in such
name and marks and the goodwill associated therewith;
WHEREAS, ITT Corporation is the owner of a Trade Name and Trademark License
Agreement dated with ITT Enterprises ("License Agreement"), which
License Agreement is the sole source of rights for ITT Enterprises to use and to
grant sublicensees to use the ITT Name and Marks (as defined in the License
Agreement);
WHEREAS, ITT Enterprises Sublicensee is desirous of obtaining from ITT
Enterprises the right to use one or more of the ITT Name and/or Marks and ITT
Enterprises is willing to grant such rights to ITT Enterprises Sublicensee under
Section 2.03 of the License Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
acknowledgements, agreements and covenants herein, the Parties hereto hereby
agree as follows:
1. ITT Enterprises has determined that ITT Enterprises Sublicensee
qualifies as an ITT Enterprises Sublicensee, as that term is defined in Section
1.01(v) of the License Agreement.
2. ITT Enterprises has prepared a written agreement pursuant to which ITT
Enterprises Sublicensee is to be granted the right to use certain of the ITT
Name and Marks ("Sublicense") as more fully set forth in said Sublicense.
3. ITT Enterprises and ITT Enterprises Sublicensee acknowledge that the ITT
Enterprises Sublicensee requires ITT Enterprises Sublicensee to comply with and
observe the terms and conditions of the License Agreement, and ITT Enterprises
Sublicensee covenants that it has read, understands and will comply with those
terms and conditions.
4. ITT Enterprises Sublicensee acknowledges its obligation to ITT
Corporation to comply with the terms and conditions of the License Agreement,
and acknowledges that ITT Enterprises and its parent ITT Industries, Inc., is
guaranteeing to ITT Corporation ITT Enterprises Sublicensee's performance of
those terms and conditions.
5. ITT Enterprises Sublicensee further acknowledges that the rights granted
to it under the Sublicense are 1) personal, non-assignable, non-transferable; 2)
do not include the right to grant sublicenses, and 3) may be restricted or
terminated pursuant to the terms of the License Agreement.
30
<PAGE> 31
6. ITT Corporation acknowledges ITT Enterprises Sublicensee's rights under
the Sublicense, subject to the terms and conditions of the License Agreement and
subject to this Agreement.
--------------------------------------
[ITT Enterprises Sublicensee]
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Date:
- ---------------------
ITT MANUFACTURING
ENTERPRISES, INC.
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Date:
- ---------------------
ITT CORPORATION
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Date:
- ---------------------
ITT INDUSTRIES, INC.
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Date:
- ---------------------
31
<PAGE> 1
EXHIBIT 10(S)
ITT INDUSTRIES
ENHANCED SEVERANCE PAY PLAN
1. PURPOSE
The purpose of this ITT Industries Enhanced Severance Pay Plan ("Plan") is
to assist in occupational transition by providing Severance Benefits, as defined
herein, for employees covered by this Plan whose employment is terminated under
conditions set forth in this Plan within two years after an Acceleration Event,
as defined herein.
2. COVERED EMPLOYEES
Covered employees under this Plan ("Employees") are full-time, regular
salaried employees of ITT Industries, Inc. ("ITT Industries") and of any
subsidiary company ("ITT Industries Subsidiary") (collectively or individually
as the context requires "Company") who are United States or Canadian citizens,
or who are employed in the United States or Canada, whose primary employment
location is at ITT Industries Headquarters, White Plains, New York (and
satellite locations, including, without limitation, Allentown, Pennsylvania,
Secaucus, New Jersey and Washington, D.C.); ITT Automotive Headquarters, Auburn
Hills, Michigan who are worldwide staff whose primary responsibility is in
support of all ITT Automotive Business Units; Mississauga, Ontario, Canada whose
primary responsibility is in support of all of ITT Industries of Canada Ltd.;
ITT Defense and Electronics, McLean, Virginia; and ITT Fluid Technology
Corporation, Midland Park, New Jersey at any time within the two year period
immediately preceding the Employee's termination of employment (other than
executives covered by the ITT Industries Special Senior Executive Severance Pay
Plan) and such other employees of the Company who shall be designated as covered
employees thereunder by the Chief Executive or the Senior Vice President,
Director-Human Resources of ITT Industries or a designee of such officers
("Authorized Officers or Designees"). No person who is employed on a temporary,
occasional or seasonal basis is eligible under this Plan.
After the occurrence of an Acceleration Event, the terms "ITT Industries",
"ITT Industries Subsidiary" and "Company" as used herein shall also include,
respectively and as the context requires, any successor company to ITT
Industries or any successor company to any ITT Industries Subsidiary and any
affiliate of any such successor company.
3. DEFINITIONS
An "ACCELERATION EVENT" shall occur 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 ITT Industries or a
subsidiary of ITT Industries or any employee benefit plan sponsored by ITT
Industries or a subsidiary of ITT Industries, is the beneficial owner directly
or indirectly of twenty percent or more of the outstanding Common Stock, $1 par
value, of ITT Industries (the "Stock"); (ii) any person (within the meaning of
Section 13(d) of the Act), other than ITT Industries or a subsidiary of ITT
Industries, or any employee benefit plan sponsored by ITT Industries or a
subsidiary of ITT Industries, shall purchase shares pursuant to a tender offer
or exchange offer to acquire any Stock of ITT Industries (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 ITT
Industries (calculated as provided in paragraph (d) of Rule 13d-3 under the Act
in the case of rights to acquire Stock); (iii) the stockholders of ITT
Industries shall approve (A) any consolidation or merger of ITT Industries in
which ITT Industries is not the continuing or surviving corporation or pursuant
to which shares of Stock of ITT Industries would be converted into cash,
securities or other property, other than a
<PAGE> 2
merger of ITT Industries in which holders of Stock of ITT Industries 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 ITT Industries,
or (iv) there shall have been a change in a majority of the members of the Board
of Directors of ITT Industries within a 12-month period unless the election or
nomination for election by ITT Industries' 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.
"CAUSE" shall mean action by the Employee involving willful malfeasance or
gross negligence or the Employee's failure to act involving material nonfeasance
that would tend to have a materially adverse effect on the Company. No act or
omission on the part of the Employee 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.
"GOOD REASON" shall mean (i) without the Employee'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 Employee, (A) a reduction
in the Employee's annual base salary or annual bonus or service recognition
award (as measured by the highest bonus or highest service recognition award
paid or awarded, in respect of the three calendar years preceding an
Acceleration Event, including, among the bonuses and service recognition awards
taken into account for this purpose, any bonus or service recognition award paid
or awarded by reason of an Acceleration Event, without regard to whether such
bonus or service recognition award is paid during such three year period or
after an Acceleration Event) or any reduction in any material compensation or
benefits arrangement, (B) the assignment to the Employee of any duties
inconsistent in any respect with the Employee's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities, or (C) any other action by the Company or its affiliates which
results in a diminution in such position, authority, duties or responsibilities;
(ii) without the Employee's express written consent, the Company's requiring the
Employee's work location to be other than within twenty-five (25) miles of the
location where such Employee was principally working immediately prior to the
Acceleration Event; or (iii) any failure by the Company to obtain the express
written assumption of this Plan from any successor to the Company.
"ENHANCED SEVERANCE PERIOD" shall mean the period, expressed in weeks,
equal to the sum of (x) two times the normal severance pay or termination pay
period of weeks for the Employee, determined as if the Employee were an employee
of the same grade, and having the same years of service, covered by and eligible
for the severance pay or termination pay plans or policies at ITT Industries
Headquarters, White Plains, New York, as in effect immediately preceding an
Acceleration Event and (y) four weeks (in lieu of notice of termination),
provided that the Enhanced Severance Period shall not exceed 104 weeks.
"ENHANCED WEEK'S PAY" shall mean the sum of (x) the highest annual base
salary rate paid to the Employee at any time during the three year period
immediately preceding the Employee's termination of employment and (y) the
highest annual bonus or service recognition award paid or awarded to the
Employee in respect of the three years preceding an Acceleration Event,
including, among the bonuses and service recognition awards taken into account
for this purpose, any bonus or service recognition award paid or awarded by
reason of an Acceleration Event, without regard to whether such bonus or service
recognition award is paid during such three year period or after an Acceleration
Event, divided by 52 weeks.
4. SEVERANCE BENEFITS UPON TERMINATION OF EMPLOYMENT
If, within two years after an Acceleration Event, the Company terminates
the employment of a Employee other than for Cause or if the Employee terminates
his or her employment for Good Reason, he or she shall receive the severance
benefits set forth in Section 5 hereof ("Severance Benefits"). For
2
<PAGE> 3
purposes hereof, a determination by an Employee that he or she has "Good Reason"
hereunder shall be final and binding on the parties hereto absent a showing of
bad faith on the Employee's part.
5. SEVERANCE BENEFITS
Severance Benefits for Employees:
- Severance Pay -- The number of weeks of the Employee's Enhanced
Severance Period times the Employee's Enhanced Week's Pay.
- Benefits
- Continued health and life insurance benefits for a period equal to
the Employee's Enhanced Severance Period following the Employee's
termination of employment at the same cost to the Employee, and at the same
coverage levels, as provided to the Employee (and the Employee's eligible
dependents) immediately prior to his or her termination of employment.
- Payment of a lump sum amount ("Pension Lump Sum Amount") equal to
the difference between (i) the total lump sum value of the Employee's
pension benefit under the ITT Industries Salaried Retirement Plan and, as
applicable, ITT Industries Excess Pension Plan II (or corresponding pension
arrangements (i) outside the United States or (ii) as may be designated by
an Authorized Officer or Designee) ("Pension Plans") as of the Employee's
termination of employment and (ii) the total lump sum value of the
Employee's pension benefit under the Pension Plans after crediting to the
Employee an additional number of weeks of age equal to the Employee's
Enhanced Severance Period and an additional number of weeks of eligibility
and benefit service equal to the Employee's Enhanced Severance Period and
applying the highest annual base salary rate and highest bonus or service
recognition award determined above under "Enhanced Week's Pay" with respect
to the additional period of service so credited for purposes of determining
Final Average Compensation under the Pension Plans. The above total lump
sum values shall be determined in the manner provided in the Excess Pension
Plans of the Company for determination of lump sum benefits upon the
occurrence of an Acceleration Event, as defined in said Plans. This
provision shall apply to any Employee having a pension benefit under any of
the Pension Plans as of the Employee's termination of employment.
- Crediting of an additional number of weeks of age equal to the
Employee's Enhanced Severance Period and an additional number of weeks of
eligibility service equal to the Employee's Enhanced Severance Period for
purposes of the Company's retiree health and retiree life insurance
benefits. This provision shall apply to any Employees covered under such
benefits any time during the three year period immediately preceding the
Employee's termination of employment.
- Payment of a lump sum amount ("Savings Plan Lump Sum Amount") equal
to the number of weeks of the Employee's Enhanced Severance Period times
the following amount: the highest annual base salary rate determined above
under "Enhanced Week's Pay", divided by 52 weeks, times the highest
percentage rate of Company Contributions (not to exceed 3 1/2%) with
respect to the Employee under the ITT Industries Investment and Savings
Plan for Salaried Employees and/or the ITT Industries Excess Savings Plan
(or corresponding savings plan arrangements (i) outside the United States
or (ii) as may be designated by an Authorized Officer or Designee)
("Savings Plans") (including matching contributions and floor
contributions) at any time during the three year period immediately
preceding the Employee's termination of employment. This provision shall
apply to any Employee who is a member of any of the Savings Plans at any
time during such three year period.
- Outplacement -- Outplacement services for one year.
With respect to the provision of benefits during the above period
equal to the Employee's Enhanced Severance Period, if, for any reason at
any time the Company is unable to treat the Employee as being eligible for
ongoing participation in any Company employee benefit plans in
3
<PAGE> 4
existence immediately prior to the termination of employment of the
Employee, and if, as a result thereof, the Employee does not receive a
benefit or receives a reduced benefit the Company shall provide such
benefits by (i) direct payment to the Employee of the amounts the Employee
would have received from such benefit plan had the Employee continued to be
eligible or (ii) at the Company's option, making available equivalent
benefits from other sources.
6. FORM OF PAYMENT OF SEVERANCE PAY AND LUMP SUM PAYMENTS
Severance Pay shall be paid in cash, in a non-discounted lump sum within
five business days after the date the employment of the Employee terminates. The
Pension Lump Sum Amount and the Savings Plan Lump Sum Amount shall be paid in
cash within thirty calendar days after the date the employment of the Employee
terminates.
7. TERMINATION OF EMPLOYMENT FOR CAUSE
The only basis upon which the Severance Benefits shall not be provided to
an Employee terminated by the Company within two years after an Acceleration
Event is upon a termination of employment for Cause, as defined herein.
8. ADMINISTRATION OF PLAN
This Plan shall be administered by ITT Industries, who shall have the
exclusive right to interpret this Plan, adopt any rules and regulations for
carrying out this Plan as may be appropriate and decide any and all matters
arising under this Plan, including but not limited to the right to determine
appeals. Subject to applicable Federal and state law, all interpretations and
decisions by ITT Industries shall be final, conclusive and binding on all
parties affected thereby.
Notwithstanding the preceding paragraph, following an Acceleration Event,
any controversy or claim arising out of or relating to this Plan, or the breach
thereof, shall be settled by arbitration administered by the American
Arbitration Association under its Commercial Arbitration Rules and the entire
cost thereof shall be borne by the Company. Judgment on the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction thereof. The
Company shall pay all legal fees, costs of litigation, prejudgment interest, and
other expenses which are incurred in good faith by the Employee as a result of
the Company's refusal to provide any of the Severance Benefits to which the
Employee becomes entitled under this Plan, or as a result of the Company's (or
any third party's) contesting the validity, enforceability, or interpretation of
this Plan, or as a result of any conflict between the Employee and the Company
pertaining to this Plan. The Company shall pay such fees and expenses from the
general assets of the Company.
9. TERMINATION OR AMENDMENT
ITT Industries may terminate or amend this Plan ("Plan Change") at any time
except, that following an Acceleration Event, no Plan Change that would
adversely affect any Employee may be made without the prior written consent of
such Employee affected thereby.
10. OFFSET
Any Severance Benefits provided to an Employee under this Plan shall be
offset by reducing (x) any Severance Pay hereunder by any severance pay, salary
continuation pay, termination pay or similar pay or allowance and (y) any other
Severance Benefits hereunder by corresponding employee benefits, or outplacement
services, which the Employee receives or is entitled to receive, (i) pursuant to
any other Company policy, practice, program or arrangement; (ii) pursuant to any
Company employment agreement or other agreement with the Company; or (iii) by
virtue of any law, custom or practice excluding, however, any unemployment
compensation in the United States, unless the Employee voluntarily expressly
waives (which the Employee shall have the exclusive right to do) in writing any
such respective entitlement.
4
<PAGE> 5
11. EXCISE TAX
In the event that it shall be determined that any payment or distribution
by the Company to or for the benefit of the Employee (whether paid or payable or
distributed or distributable pursuant to the terms of this Plan or otherwise,
but determined without regard to any additional payments required under this
paragraph 11, such payments or distributions being referred to herein as
"Payments") would give rise to liability of the Employee for the excise tax
imposed by Section 4999 of the Internal Revenue Code, as amended (the "Code"),
or that any interest or penalties are incurred by the Employee with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then the Employee
shall be entitled to receive an additional payment (the "Gross-Up Payment") in
an amount such that after payment by the Employee of all Federal, state and
local taxes (including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income and employment taxes (and any
interest and penalties imposed with respect to such taxes) and Excise Tax
imposed upon the Gross-Up Payment, the Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments. For this
purpose, the Employee shall be deemed to be in the highest marginal rate of
Federal, state and local taxes. This payment shall be made as soon as possible
following the date of the Employee's termination of employment, but in no event
later than thirty calendar days of such date.
In the event the Gross-Up Payment shall fail to make the Employee whole on
an after-tax basis, the Gross-Up Payment shall be recalculated ("Recalculated
Gross-Up Payment"), using the Employee's actual effective tax rate, once it is
known for the calendar year in which the Gross-Up Payment is made, and the
Company shall reimburse the Employee for the full amount of any amount by which
the Recalculated Gross-Up Payment exceeds the Gross-Up Payment ("Additional
Gross-Up Payment").
The Gross-Up Payment and any Additional Gross-Up Payment shall be paid out
of the general assets of the Company.
In the event the Internal Revenue Service subsequently adjusts the excise
tax computation herein described, the Company shall reimburse the Employee for
the full amount necessary to make the Employee whole on an after-tax basis (less
any amounts received by the Employee that the Employee would not have received
had the computations initially been computed as subsequently adjusted),
including the value of any underpaid excise tax, and any related interest and/or
penalties due to the Internal Revenue Service.
12. MISCELLANEOUS
The Employee shall not be entitled to any notice of termination or pay in
lieu thereof except as included as part of Severance Pay as provided herein.
In cases where Severance Benefits are provided under this Plan, pay in lieu
of any unused current year vacation entitlement will be paid to the Employee in
a lump sum, in cash within five business days after the date the employment of
the Employee terminates.
Severance Benefits under this Plan are paid entirely by the Company from
its general assets.
This Plan is not a contract of employment, does not guarantee the Employee
employment for any specified period and does not limit the right of the Company
to terminate the employment of the Employee at any time.
If an Employee should die while any amount is still payable to the Employee
hereunder had the Employee continued to live, all such amounts shall be paid in
accordance with this Plan to the Employee's designated heirs or, in the absence
of such designation, to the Employee's estate.
The numbered section headings contained in this Plan are included solely
for convenience of reference and shall not in any way affect the meaning of any
provision of this Plan.
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If, for any reason, any one or more of the provisions or part of a
provision contained in this Plan shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of this Plan not
held so invalid, illegal or unenforceable, and each other provision or part of a
provision shall to the full extent consistent with law remain in full force and
effect.
13. ADOPTION DATE
This Plan was adopted by ITT Industries on April 15, 1997 ("Adoption Date")
and does not apply to any termination of employment which occurred or which was
communicated to the Employee prior to the Adoption Date.
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