Employee Benefit Services And Liability

EMPLOYEE BENEFIT SERVICES AND LIABILITY AGREEMENT dated as of
November 1, 1995, among ITT CORPORATION, a Delaware corporation (which,
together with its subsidiaries, is herein referred to as "ITT"), ITT
DESTINATIONS, INC., a Nevada corporation, (which, together with its
subsidiaries, is herein referred to as "ITT Destinations"), and ITT
HARTFORD GROUP, INC., a Delaware corporation (which, together with its
subsidiaries, is herein referred to as "ITT Hartford").


WHEREAS, the Board of Directors of ITT has determined that it is appropriate and desirable to distribute to the holders of shares of common stock, par value $1.00 per share, of ITT (the "ITT Common Stock") all the outstanding shares of common stock of ITT Destinations (the "ITT Destinations Common Stock") and all the outstanding shares of common stock of ITT Hartford (the "ITT Hartford Common Stock"); and


WHEREAS, each of ITT, ITT Destinations and ITT Hartford has determined that it is necessary and desirable to allocate and assign responsibility for certain employee benefit liabilities in respect of the activities of the businesses of such entities on the Distribution Date (as defined herein) and those liabilities in respect of other businesses and activities of ITT and its former subsidiaries and certain other matters.


NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, ITT, ITT Destinations and ITT Hartford agree as follows:


1. RETIREMENT PLANS. (a) Continuation of Retirement Plans. (i) Following the Distribution, (x) ITT Industries shall continue to sponsor the ITT Salaried Retirement Plan, which shall be renamed as the "ITT Industries Salaried Retirement Plan", (y) ITT Hartford shall continue to sponsor the ITT Hartford Retirement Plan and (z) ITT Destinations shall adopt the Sheraton Salaried Retirement Plan as the ITT Destinations Salaried Retirement Plan.


(ii) Amendment of Retirement Plans. Effective as of the Distribution Date, (x) ITT Industries shall cause the 2
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ITT Salaried Retirement Plan to be amended as provided pursuant to Section 1 of this Agreement; (y) ITT Destinations shall cause the ITT Destinations Salaried Retirement Plan to be amended as provided pursuant to Section 1 of this Agreement; and (z) ITT Hartford shall cause the ITT Hartford Retirement Plan to be amended as provided pursuant to Section 1 of this Agreement.


(b) Recognition of Service Rendered Prior to the Distribution Date. This paragraph (b) is intended to set forth the steps to be taken to provide for recognition of service rendered prior to the Distribution Date by ITT Employees who, immediately prior to the Distribution Date, (x) have an accrued benefit under more than one of the ITT Salaried Retirement Plan, the Sheraton Salaried Retirement Plan and the ITT Hartford Retirement Plan or (y) have an accrued benefit under any such plan and, on the Distribution Date, will be a participant in any other such plan.


(i) This clause (i) applies solely to ITT Employees who, immediately prior to the Distribution Date, have an accrued benefit under the ITT Salaried Retirement Plan and who, on such date, are employed by either ITT Destinations or ITT Hartford.


Each of the ITT Destinations Salaried Retirement Plan and the ITT Hartford Retirement Plan shall be amended to recognize all service rendered by such ITT Employees prior to the Distribution Date which is recognized as Eligibility Service (as defined in the ITT Salaried Retirement Plan, as in effect immediately prior to the Distribution Date) under the terms of the ITT Salaried Retirement Plan for purposes of determining eligibility and vesting, including, without limitation, eligibility service for purposes of determining eligibility for plan membership, preretirement survivor benefits, early retirement benefits and normal retirement benefits. Each of the ITT Destinations Salaried Retirement Plan and the ITT Hartford Retirement Plan shall further be amended to (A) recognize as service for benefit accrual purposes all service rendered by such ITT Employees prior to the Distribution Date which is recognized as Benefit Service (as defined in the ITT Salaried Retirement Plan, as in effect immediately prior to the Distribution Date) under the terms of the ITT Salaried Retirement Plan and (B) provide for an offset of any benefit payable with respect to service recognized under the ITT Salaried Retirement Plan or any other defined benefit 3
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retirement plan maintained by ITT or its Affiliates covering the same period of service.


(ii) This clause (ii) applies solely to ITT Employees who, immediately prior to the Distribution Date, have an accrued benefit under the Sheraton Salaried Retirement Plan and who, on such date, are employed by either ITT Industries or ITT Hartford.


Each of the ITT Salaried Retirement Plan and the ITT Hartford Retirement Plan shall be amended to recognize all service rendered by such ITT Employees prior to the Distribution Date which is recognized as Eligibility Service (as defined in the Sheraton Salaried Retirement Plan, as in effect immediately prior to the Distribution Date) under the terms of the Sheraton Salaried Retirement Plan for purposes of determining eligibility and vesting, including, without limitation, eligibility service for purposes of determining eligibility for plan membership, preretirement survivor benefits, early retirement benefits and normal retirement benefits. Each of the ITT Salaried Retirement Plan and the ITT Hartford Retirement Plan shall further be amended to (A) recognize as service for benefit accrual purposes all service rendered by such ITT Employees prior to the Distribution Date which is recognized as Benefit Service (as defined in the Sheraton Salaried Retirement Plan, as in effect immediately prior to the Distribution Date) under the terms of the Sheraton Salaried Retirement Plan and (B) provide for an offset of any benefit payable with respect to service recognized under the Sheraton Salaried Retirement Plan or any other defined benefit retirement plan maintained by ITT or its Affiliates covering the same period of service.


(iii) This clause (iii) applies solely to ITT Employees who, immediately prior to the Distribution Date, have an accrued benefit under the ITT Hartford Retirement Plan and who, on such date, are employed by either ITT Industries or ITT Destinations.


Each of the ITT Salaried Retirement Plan and the ITT Destinations Salaried Retirement Plan shall be amended to recognize all service rendered by such ITT Employees prior to the Distribution Date which is recognized as Eligibility Service (as defined in the ITT Hartford Retirement Plan, as in effect immediately prior to the Distribution Date) under the terms of the ITT Hartford Retirement Plan for purposes of determining eligibility and 4
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vesting, including, without limitation, eligibility service for purposes of determining eligibility for plan membership, preretirement survivor benefits, early retirement benefits and normal retirement benefits. Each of the ITT Salaried Retirement Plan and the ITT Destinations Salaried Retirement Plan shall further be amended to (A) recognize as service for benefit accrual purposes all service rendered by such ITT Employees prior to the Distribution Date which is recognized as Benefit Service (as defined in the ITT Hartford Retirement Plan, as in effect immediately prior to the Distribution Date) under the terms of the ITT Hartford Retirement Plan and (B) provide for an offset of any benefit payable with respect to service recognized under the ITT Hartford Retirement Plan or any other defined benefit retirement plan maintained by ITT or its Affiliates covering the same period of service.


(iv) For purposes of determining the offset to be provided pursuant to subclause (B) of each of clauses (i), (ii) and (iii) of this paragraph (b), the benefits payable under each plan shall be determined as a straight life annuity payable at normal or postponed retirement age, and the offset shall be applied to reduce the benefit payable under the appropriate plan. The offset shall be taken as of the date benefits commence under the plan against which the offset is applied, and the offset shall be computed as if the benefit being offset commenced as of the same date.


(c) Recognition of Service Rendered On and After the Distribution Date. This paragraph (c) is intended to set forth the steps to be taken to provide for recognition of service rendered on and after the Distribution Date by ITT Employees who, immediately prior to the Distribution Date (x) have an accrued benefit under more than one of the ITT Salaried Retirement Plan, the Sheraton Salaried Retirement Plan and the ITT Hartford Retirement Plan or (y) have an accrued benefit under any such plan and, on the Distribution Date, will be a participant in any other such plan.


(i) This clause (i) applies solely to ITT Employees who, on the Distribution Date, are employed by ITT Industries and have an accrued benefit under either the Sheraton Salaried Retirement Plan or the ITT Hartford Retirement Plan.


Subject to Section 1(e) hereof and to the extent permitted by applicable law, each of the ITT Destinations Salaried Retirement Plan and the ITT Hartford Retirement 5
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Plan shall be amended to recognize service rendered on and after the Distribution Date with ITT Industries for each such ITT Employee for purposes of eligibility and vesting, including, without limitation, eligibility service for purposes of preretirement death benefits, early retirement benefits and normal retirement benefits. For purposes of the ITT Destinations Salaried Retirement Plan and the ITT Hartford Retirement Plan, the final average pay of such ITT Employees shall be determined immediately prior to the Distribution Date.


(ii) This clause (ii) applies solely to ITT Employees who, on the Distribution Date, are employed by ITT Destinations and have an accrued benefit under either the ITT Salaried Retirement Plan or the ITT Hartford Retirement Plan.


Subject to Section 1(e) hereof and to the extent permitted by applicable law, each of the ITT Salaried Retirement Plan and the ITT Hartford Retirement Plan shall be amended to recognize service rendered on and after the Distribution Date with ITT Destinations for each such ITT Employee for purposes of eligibility and vesting, including, without limitation, eligibility service for purposes of preretirement death benefits, early retirement benefits and normal retirement benefits. For purposes of the ITT Salaried Retirement Plan and the ITT Hartford Retirement Plan, the final average pay of such ITT Employees shall be determined immediately prior to the Distribution Date.


(iii) This clause (iii) applies solely to ITT Employees who, on the Distribution Date, are employed by ITT Hartford and have an accrued benefit under either the ITT Salaried Retirement Plan or the Sheraton Salaried Retirement Plan.


Subject to Section 1(e) hereof and to the extent permitted by applicable law, each of the ITT Salaried Retirement Plan and the ITT Destinations Salaried Retirement Plan shall be amended to recognize service rendered on and after the Distribution Date with ITT Hartford for each such ITT Employee for purposes of eligibility and vesting, including, without limitation, eligibility service for purposes of preretirement death benefits, early retirement benefits and normal retirement benefits. For purposes of the ITT Salaried Retirement Plan and the ITT Destinations Salaried Retirement Plan, the final average pay of such ITT 6
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Employees shall be determined immediately prior to the Distribution Date.


(d) Effect of Employment On and After the Distribution Date with ITT Industries, ITT Destinations or ITT Hartford. (i) Any ITT Employee who, on the Distribution Date, is employed by ITT Industries and for whom service rendered on and after the Distribution Date is recognized pursuant to Section 1(c) under the ITT Destinations Salaried Retirement Plan or the ITT Hartford Retirement Plan while such person is employed with ITT Industries (including periods after re-employment following a termination of employment occurring after the Distribution Date), (I) shall not be deemed either to have terminated employment or to be in retirement status under the ITT Destinations Salaried Retirement Plan or the ITT Hartford Retirement Plan and (II) except to the extent required by law, shall not be eligible to receive payment of his or her vested benefit or retirement allowance under the ITT Destinations Salaried Retirement Plan or the ITT Hartford Retirement Plan.


(ii) Any ITT Employee who, on the Distribution Date, is employed by ITT Destinations and for whom service rendered on and after the Distribution Date is recognized pursuant to Section 1(c) under the ITT Salaried Retirement Plan or the ITT Hartford Retirement Plan while such person is employed with ITT Destinations (including periods after re-employment following a termination of employment occurring after the Distribution Date) (I) shall not be deemed either to have terminated employment or to be in retirement status under the ITT Salaried Retirement Plan or the ITT Hartford Retirement Plan and (II) except to the extent required by law, shall not be eligible to receive payment of his or her vested benefit or retirement allowance under the ITT Salaried Retirement Plan or the ITT Hartford Retirement Plan.


(iii) Any ITT Employee who, on the Distribution Date, is employed by ITT Hartford and for whom service rendered on and after the Distribution Date is recognized pursuant to Section 1(c) under the ITT Salaried Retirement Plan or the ITT Destinations Salaried Retirement Plan while such person is employed with ITT Hartford (including periods after re-employment following a termination of employment occurring after the Distribution Date) (I) shall not be deemed either to have terminated employment or to be in retirement status under the ITT Salaried Retirement Plan or 7
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the ITT Destinations Salaried Retirement Plan and (II) except to the extent required by law, shall not be eligible to receive payment of his or her vested benefit or retirement allowance under the ITT Salaried Retirement Plan or the ITT Destinations Salaried Retirement Plan.


(e) Limited Obligation To Recognize Service Rendered On and After the Distribution Date. (i) With respect to any ITT Employee, service rendered on and after the Distribution Date that is required to be recognized by ITT Industries under the ITT Salaried Retirement Plan pursuant to Section 1(c) hereof shall be the same years and portions thereof of service recognized for similar purposes under the ITT Hartford Retirement Plan, as in effect immediately prior to the Distribution Date, with respect to ITT Hartford Employees, and under the ITT Destinations Salaried Retirement Plan, as in effect immediately prior to the Distribution Date, with respect to ITT Destinations Salaried Employees. In no event shall the ITT Salaried Retirement Plan be required to recognize any enhanced service benefits that might be provided on and after the Distribution Date under the ITT Destinations Salaried Retirement Plan or the ITT Hartford Retirement Plan.


(ii) With respect to any ITT Employee, service rendered on and after the Distribution Date that is required to be recognized by ITT Destinations under the ITT Destinations Salaried Retirement Plan pursuant to Section 1(c) hereof shall be the same years and portions thereof of service recognized for similar purposes under the ITT Salaried Retirement Plan, as in effect immediately prior to the Distribution Date, with respect to ITT Industries Salaried Employees, and under the ITT Hartford Retirement Plan, as in effect immediately prior to the Distribution Date, with respect to ITT Hartford Employees. In no event shall the ITT Destinations Salaried Retirement Plan be required to recognize any enhanced service benefits that might be provided on and after the Distribution Date under the ITT Salaried Retirement Plan or the ITT Hartford Retirement Plan.


(iii) With respect to any ITT Employee, service rendered on and after the Distribution Date that is required to be recognized by ITT Hartford under the ITT Hartford Retirement Plan pursuant to Section 1(c) hereof shall be the same years and portions thereof of service recognized for similar purposes under the ITT Salaried Retirement Plan, as in effect immediately prior to the Distribution Date, with 8
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respect to ITT Industries Salaried Employees, and under the ITT Destinations Salaried Retirement Plan, as in effect immediately prior to the Distribution Date, with respect to ITT Destinations Salaried Employees. In no event shall the ITT Hartford Retirement Plan be required to recognize any enhanced service benefits that might be provided on and after the Distribution Date under the ITT Salaried Retirement Plan or the ITT Destinations Salaried Retirement Plan.


(f) Plan Asset Transfers. It is intended that, at any time or from time to time following the Distribution, ITT Industries, ITT Destinations and ITT Hartford may cause to occur transfers of assets from the ITT Salaried Retirement Plan, the ITT Destinations Salaried Retirement Plan and/or the ITT Hartford Retirement Plan, to any other such plan, subject to agreement by the sponsor of the transferor plan and the sponsor of the transferee plan, with respect to benefits that have accrued as of the Distribution Date and that are attributable to a person no longer employed by the sponsor of the transferor plan or its affiliates.


2. INVESTMENT AND SAVINGS PROGRAMS.


(a) Effective as of the Distribution Date, ITT Destinations shall adopt the ITT Destinations Savings Plan, which shall have terms similar in all material respects to the ITT Savings Plan. ITT Industries shall cause the transfer, as soon as practicable on or after the Distribution Date, of the accounts of all ITT Destinations Salaried Employees from the ITT Savings Plan to the ITT Destinations Savings Plan. Such assets will be transferred in kind to the maximum extent practicable.


(b) Effective as of the Distribution Date, ITT Hartford shall adopt the ITT Hartford Savings Plan, which shall have terms similar in all material respects to the ITT Savings Plan. ITT Industries shall cause the transfer, as soon as practicable on or after the Distribution Date, of the accounts of all ITT Hartford Employees from the ITT Savings Plan to the ITT Hartford Savings Plan. Such assets will be transferred in kind to the maximum extent practicable.


(c) With respect to any former ITT employee who is entitled to a benefit as of the Distribution Date under the ITT Destinations Salaried Retirement Plan or any other 9
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defined benefit retirement plan to be maintained by ITT Destinations following the Distribution or who was a participant in any such plan on such employee's last day of service with ITT, ITT Industries shall cause the account of such former employee under the ITT Savings Plan to be transferred in the manner described in Section 2(a) hereof.


(d) With respect to any former ITT employee entitled to a benefit as of the Distribution Date under the ITT Hartford Retirement Plan or any other defined benefit retirement plan to be maintained by ITT Hartford following the Distribution or who was a participant in any such plan on such employee's last day of service with ITT, ITT Industries shall cause the account of such former employee under the ITT Savings Plan to be transferred in the manner described in Section 2(b) hereof.


(e) The account of any other current or former ITT employee shall remain in the ITT Savings Plan, which shall continue to be sponsored by ITT Industries and shall be renamed as the "ITT Industries Investment and Savings Plan."


3. EXCESS NON-QUALIFIED SUPPLEMENTAL BENEFIT PLANS. (a) Excess Pension Plans. (i) Effective as of the Distribution Date, ITT Industries shall continue to sponsor the ITT Excess Pension Plan and ITT Excess Pension Plan Trust. Effective as of the Distribution Date, ITT Destinations shall adopt the Sheraton Excess Pension Plan as the ITT Destinations Excess Pension Plan and shall adopt the ITT Destinations Excess Pension Plan Trust under which excess pension benefits for certain officers will be funded. Effective as of the Distribution Date, ITT Hartford shall continue to sponsor the ITT Hartford Excess Pension Plan and the ITT Hartford Excess Pension Plan Trust.


(ii) ITT Industries does hereby assume all liability for benefits (whether funded or unfunded) that have accrued prior to the Distribution Date under the Sheraton Excess Pension Plan and the ITT Hartford Excess Pension Plan with respect to ITT Industries Salaried Employees, except that, to the extent such benefits are funded under the ITT Hartford Excess Pension Plan Trust, ITT Industries' assumption of liability for benefits to any ITT Industries Salaried Employee shall be effective only if and to the extent that such employee waives his or her right to receive such benefits under the ITT Hartford Excess Pension Plan and ITT Hartford Excess Pension Plan Trust. ITT 10
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Industries and ITT Hartford shall each use its commercially reasonable efforts to obtain such waivers from ITT Industries Salaried Employees, and ITT Hartford shall notify ITT Industries upon receipt of any such waiver.


(iii) ITT Destinations does hereby assume all liability for benefits (whether funded or unfunded) that have accrued prior to the Distribution Date under the ITT Excess Pension Plan and the ITT Hartford Excess Pension Plan with respect to ITT Destinations Salaried Employees, except that, to the extent such benefits are funded under the ITT Excess Pension Plan Trust or the ITT Hartford Excess Plan Trust, ITT Destinations' assumption of liability for benefits to any ITT Destinations Salaried Employee shall be effective only if and to the extent that such employee waives his or her right to receive such benefits under the ITT Excess Pension Plan and ITT Excess Pension Plan Trust or the ITT Hartford Excess Pension Plan and ITT Hartford Excess Pension Plan Trust, as the case may be. ITT Industries, ITT Destinations and ITT Hartford shall each use its commercially reasonable efforts to obtain such waivers from ITT Destinations Salaried Employees, and ITT Industries and ITT Hartford shall notify ITT Destinations upon receipt of any such waiver.


(iv) ITT Hartford does hereby assume all liability for benefits (whether funded or unfunded) that have accrued prior to the Distribution Date under the ITT Excess Pension Plan and the Sheraton Excess Pension Plan with respect to ITT Hartford Employees, except that, to the extent such benefits are funded under the ITT Excess Pension Plan Trust, ITT Hartford's assumption of liability for benefits to any ITT Hartford Employee shall be effective only if and to the extent that such employee waives his or her right to receive such benefits under the ITT Excess Pension Plan and ITT Excess Pension Plan Trust. ITT Industries and ITT Hartford shall each use its commercially reasonable efforts to obtain such waivers from ITT Hartford Employees, and ITT Industries shall notify ITT Hartford upon receipt of any such waiver.


(b) Excess Savings Plans. Effective as of the Distribution Date, ITT Industries shall remain liable for benefits accrued under the ITT Excess Savings Plan prior to the Distribution Date with respect to ITT Industries Salaried Employees. Effective as of the Distribution Date, ITT Destinations shall adopt the ITT Destinations Excess Savings Plan, which shall be identical in all material respects to the ITT Excess Savings Plan as in effect 11
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immediately prior to the Distribution Date. Effective as of the Distribution Date, ITT Hartford shall continue to sponsor the ITT Hartford Excess Savings Plan. ITT Destinations does hereby assume liability for benefits accrued prior to the Distribution Date under the ITT Excess Savings Plan with respect to ITT Destinations Salaried Employees, and ITT Hartford does hereby assume liability for benefits accrued prior to the Distribution Date under the ITT Excess Savings Plan with respect to ITT Hartford Employees.


(c) Guarantee. (i) ITT Destinations and ITT Hartford jointly and severally guarantee and agree, in the event ITT Industries fails to satisfy its obligations in respect of benefits that have accrued prior to the Distribution Date under the ITT Excess Pension Plan (including, without limitation, to the extent that ITT Industries has assumed any such liability pursuant to an employee's waiver of benefits under the ITT Hartford Excess Pension Plan Trust, as contemplated by Section 3(a) above) or benefits that have accrued prior to the Distribution Date under the ITT Excess Savings Plan, to make payment when due in respect of all such obligations of ITT Industries in respect of the ITT Excess Pension Plan or the ITT Excess Savings Plan, as applicable. To the extent ITT Destinations or ITT Hartford makes payment in respect of this guarantee, it will have a right of contribution from the nonpaying guarantor of 50% of the payment made.


(ii) ITT Industries and ITT Hartford jointly and severally guarantee and agree, in the event ITT Destinations fails to satisfy its obligations in respect of benefits under the ITT Destinations Excess Pension Plan that have accrued prior to the Distribution Date (including, without limitation, to the extent that ITT Destinations has assumed any such liability pursuant to an employee's waiver of benefits under the ITT Excess Pension Plan Trust or the ITT Hartford Excess Pension Plan Trust, as contemplated by Section 3(a) above) or benefits that have accrued prior to the Distribution Date under the ITT Destinations Excess Savings Plan with respect to ITT Destinations Salaried Employees (including, without limitation, by reason of the assumption by ITT Destinations of liability for such benefits under Section 3(b) above), to make payment when due in respect of all such obligations of ITT Destinations in respect of the ITT Destinations Excess Pension Plan or the ITT Destinations Excess Savings Plan, as applicable. To the extent ITT Industries or ITT Hartford makes payment in 12
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respect of this guarantee, it will have a right of contribution from the nonpaying guarantor of 50% of the payment made.


(iii) ITT Destinations and ITT Industries jointly and severally guarantee and agree, in the event ITT Hartford fails to satisfy its obligations in respect of benefits under the ITT Hartford Excess Plan that have accrued prior to the Distribution Date (including, without limitation, to the extent that ITT Hartford has assumed any such liability pursuant to an employee's waiver of benefits under the ITT Excess Pension Plan Trust, as contemplated by Section 3(a) above) or benefits that have accrued prior to the Distribution Date under the ITT Hartford Excess Savings Plan with respect to ITT Hartford Employees (including, without limitation, by reason of the assumption by ITT Hartford of liability for such benefits under Section 3(b) above), to make payment when due in respect of all such obligations of ITT Hartford in respect of the ITT Hartford Excess Pension Plan or the ITT Hartford Excess Savings Plan, as applicable. To the extent ITT Destinations or ITT Industries makes payment in respect of this guarantee, it will have a right of contribution from the nonpaying guarantor of 50% of the payment made.


(iv) This Section 3(c) is not intended to modify the allocation and assumption of liabilities in respect of the excess pension plans and excess savings plans contemplated by Section 3(a) and Section 3(b) hereof. ...