1
EXHIBIT 2.1
DISTRIBUTION AGREEMENT, dated as of February 11, 1994, by and
between ITT CORPORATION, a Delaware corporation ("ITT"), and ITT
RAYONIER INCORPORATED, a North Carolina corporation ("Rayonier").
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") and
Cumulative Preferred Stock, without par value, $2.25 Convertible Series N of
ITT (the "ITT Series N Preferred Stock") all the outstanding Common Shares of
Rayonier (the "Rayonier Common Shares"); and
WHEREAS, ITT and Rayonier have determined that it is necessary and
desirable to set forth the principal corporate transactions required to effect
such distribution and to set forth other agreements that will govern certain
other matters following such distribution.
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 GENERAL
As used in this 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):
AAA: As defined in Article V.
ACTION: any action, suit, arbitration, inquiry, proceeding or
investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal.
AFFILIATE: as defined in Rule 12b-2 promulgated under the Securities
Exchange Act of 1934, as such Rule is in effect on the date hereof.
AGENT: As defined in Section 2.01 (a).
ANCILLARY AGREEMENTS: this Agreement and the following other agreements,
each of which is between ITT or an ITT Subsidiary and Rayonier or a Rayonier
Subsidiary and a copy of each of which is attached hereto as an exhibit as
designated: the Administrative Services Agreement (Exhibit A), the Employee
Benefit Services and Liability Agreement
1
2
(Exhibit B), the Tax Allocation Agreement (Exhibit C) and the Canadian Assets
Purchase Agreement (Exhibit D).
CODE: the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations promulgated thereunder, including any successor legislation.
COMMISSION: as defined in Section 4.02(b).
DISTRIBUTION: the distribution on the Distribution Date to holders of
record of shares of ITT Common Stock and ITT Series N Preferred Stock as of the
Distribution Record Date of the Rayonier Common Shares owned by ITT on the
basis of one Rayonier Common Share for each outstanding four shares of ITT
Common Stock and one Rayonier Common Share for each outstanding 3.1595 shares
of ITT Series N Preferred Stock.
DISTRIBUTION DATE: February 28, 1994 or such other date as may
hereafter be determined by ITT's Board of Directors as the date as of which the
Distribution shall be effected.
DISTRIBUTION RECORD DATE: February 24, 1994 or such other date as may
hereafter be determined by ITT's Board of Directors as the record date for the
Distribution.
EFFECTIVE TIME: 11:59 p.m., New York time, on the Distribution Date.
ENVIRONMENTAL LAWS: laws, ordinances, codes, standards, administrative
rulings, regulations or guidances of any Federal, provincial, state or local
governmental authority relating to, and common law causes of action, such as
trespass and nuisance, based on, (i) the emission, discharge, release or
threatened release of Hazardous Substances into the environment (including,
without limitation, the air, surface water, ground water, land or subsurface
strata) or (ii) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Substances.
FENCOURT LOSSES: claims paid and expenses reasonably incurred by
Fencourt Reinsurance Company, Ltd., a Bermuda company and an ITT Subsidiary
engaged in the reinsurance business, and any successors thereto or assigns
thereof after the date hereof, which claims are paid or expenses incurred under
policies effective after January 1, 1986 involving the Rayonier Business or the
SWP Business and arise out of or are based upon Environmental Laws.
GHP: GHP Leasing Company, a Delaware corporation (formerly known as
Grays Harbor Paper Company), jointly owned by Rayonier and International Paper
Company.
HAZARDOUS SUBSTANCES: pollutants, contaminants or hazardous or toxic
substances, materials or wastes, including, but not limited to, those defined
in the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as
2
3
amended, the Resource Conservation and Recovery Act, as amended, the Toxic
Substances Control Act, as amended, petroleum, including crude oil or any
fraction thereof, and those substances regulated under any applicable law due
to their known or suspected ability to cause harm to human health or the
environment.
INDEMNIFIABLE LOSSES: any and all losses, liabilities, claims, damages,
demands, costs or expenses (including, without limitation, Fencourt Losses,
reasonable attorney's fees and any and all expenses whatsoever reasonably
incurred in investigating, preparing for or defending against any Actions or
potential Actions).
INDEMNIFYING PARTY: As defined in Section 3.03.
INDEMNITEE: As defined in Section 3.03.
INSURANCE ACTIONS: As defined in Section 2.09(b).
INSURANCE RECOVERY: As defined in Section 2.09(b).
INFORMATION STATEMENT: the Information Statement sent to the holders of
shares of ITT Common Stock and ITT Series N Preferred Stock in connection with
the Distribution.
ITT: ITT Corporation, a Delaware corporation and its predecessor
Maryland corporation.
ITT AGENT: any individual retained as a consultant, agent, advisor or
independent contractor by ITT or any ITT Subsidiary on, before or following the
Distribution Date, but only during the time such individual was or is retained
by ITT or any ITT Subsidiary.
ITT EMPLOYEE: any individual employed by ITT or any ITT Subsidiary on,
before or following the Distribution Date, but only during the time such
individual was or is employed by ITT or any ITT Subsidiary.
ITT INDEMNITEES: ITT, each of its directors, officers, employees and
agents, each Affiliate of ITT and each of the heirs, executors, successors and
assigns of any of the foregoing.
ITT LIABILITIES: collectively, (i) all the Liabilities of ITT and ITT
Subsidiaries under any of the Ancillary Agreements, (ii) all the Liabilities
(whenever arising whether prior to, on or following the Effective Time) arising
out of or in connection with or otherwise relating to the management or conduct
of any business conducted by ITT or any ITT Subsidiary in the past, at the date
hereof or in the future (other than the Rayonier Business and the SWP
Business), including without limitation, the products made, sold or distributed
by, and the operations of, ITT or any ITT Subsidiary prior to, on or following
the Distribution Date, the former, present or future assets of ITT or any such
ITT
3
4
Subsidiary or the former, present or future ITT Agents or ITT Employees (but
only with respect to the time any such Subsidiary or individual was an ITT
Subsidiary, ITT Agent or ITT Employee, respectively), and (iii) all the
Liabilities arising out of or based upon any untrue statement of material fact
contained in any portion of the Information Statement other than any portion of
the Information Statement set forth on Schedule 1.01, or the omission or
alleged omission to state in any such portion a material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of circumstances under which they were made, not misleading.
ITT RECORDS: As defined in Section 4.01(a).
ITT SUBSIDIARY: any entity which is or was a Subsidiary of ITT on or at
any time before the Distribution Date (including without limitation Eason Oil
Company and its Subsidiaries, Carbon Industries, Inc. and its Subsidiaries and
Pennsylvania Glass Sand Corporation and its Subsidiaries, but not including
Rayonier, any Rayonier Subsidiary or SWP), and any Subsidiary of ITT which may
thereafter be organized or acquired, but only during the time such entity was
or is an ITT Subsidiary.
LIABILITIES: any and all debts, liabilities and obligations, absolute
or contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, including, without limitation,
those debts, liabilities and obligations arising under any law, rule,
regulation, Action, threatened Action, order or consent decree of any court,
any governmental or other regulatory or administrative agency or commission or
any award of any arbitration tribunal, and those arising under any contract,
guarantee, commitment or undertaking. Without limiting the generality of the
foregoing, "Liabilities" specifically includes any debts, liabilities and
obligations, absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising, under
any Environmental Law.
RAYONIER: ITT Rayonier Incorporated, a North Carolina corporation to be
renamed "Rayonier Inc." in connection with the Distribution, and its
predecessor Delaware corporation.
RAYONIER AGENT: any individual retained as a consultant, agent, advisor
or independent contractor by Rayonier or any Rayonier Subsidiary on, before or
following the Distribution Date, but only during the time such individual was
or is retained by Rayonier or any Rayonier Subsidiary.
RAYONIER BUSINESS: the forest products and market pulp businesses and
any other businesses conducted by Rayonier or any Rayonier Subsidiary in the
past, at the date hereof or in the future, and any forest products or market
pulp business actually conducted by any ITT Subsidiary with the active
participation of Rayonier management.
4
5
RAYONIER EMPLOYEE: any individual employed by Rayonier or any Rayonier
Subsidiary on, before or following the Distribution Date, but only during the
time such individual was or is employed by Rayonier or any Rayonier Subsidiary.
RAYONIER INDEMNITEES: Rayonier, each of its directors, officers,
employees and agents, each Affiliate of Rayonier and each of the heirs,
executors, successors and assigns of any of the foregoing.
RAYONIER LIABILITIES: collectively, (i) all the Liabilities of Rayonier
and Rayonier Subsidiaries under any of the Ancillary Agreements, (ii) all the
Liabilities (whenever arising whether prior to, on or following the Effective
Time) arising out of or in connection with or otherwise relating to the
management or conduct of the Rayonier Business in the past, at the date hereof
or in the future, including without limitation, the products made, sold or
distributed by, and the operations of, Rayonier, GHP or any Rayonier Subsidiary
prior to, on or following the Distribution Date, the former, present or future
assets of Rayonier, GHP or any Rayonier Subsidiary or the former, present or
future Rayonier Agents and Rayonier Employees (but only with respect to the
time any such Subsidiary or individual was a Rayonier Subsidiary, Rayonier
Agent or Rayonier Employee, respectively), and (iii) all the Liabilities
arising out of or based upon any untrue statement of material fact contained in
any portion of the Information Statement set forth on Schedule 1.01 or the
omission or alleged omission to state in any such portion a material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of circumstances under which they were made, not misleading.
RAYONIER RECORDS: As defined in Section 4.01(b).
RAYONIER SUBSIDIARY: any entity which is or was a Subsidiary of
Rayonier at any time on or before the Distribution Date (including without
limitation Rayonier Timberlands, L.P. and Rayonier Timberlands Operating
Company, L.P., but not including Pennsylvania Glass Sand Corporation and its
Subsidiaries or SWP), and any Subsidiary of Rayonier which may thereafter be
organized or acquired, but only during the time such entity was or is a
Rayonier Subsidiary.
SUBSIDIARY: any corporation, partnership or other entity of which
another entity (i) owns, directly or indirectly, ownership interests sufficient
to elect a majority of the Board of Directors (or persons performing similar
functions) (irrespective of whether at the time any other class or classes of
ownership interests of such corporation, partnership or other entity shall or
might have such voting power upon the occurrence of any contingency) or (ii) is
a general partner or an entity performing similar functions (e.g., a trustee).
SWP: Southern Wood Piedmont Company, the current Subsidiary of
Rayonier, and all of its predecessors, including Southern Wood Piedmont
Company, the former Subsidiary of ITT, and all of its predecessors and
associated companies, any past present or future Subsidiary of any of the
foregoing companies, and any other companies or
5
6
entities engaged in the SWP Business at any time which, directly or indirectly,
are or were wholly or partly owned by or otherwise belonged to ITT.
SWP AGENT: any individual retained as a consultant, agent, advisor or
independent contractor by SWP or any Subsidiary of SWP on, before or following
the Distribution Date, but only during the time such individual was or is
retained by SWP or any Subsidiary of SWP.
SWP BUSINESS: the wood preserving business of SWP and any successors
thereto or assigns thereof after the date hereof.
SWP EMPLOYEE: any individual employed by SWP or any Subsidiary of SWP
on, before or following the Distribution Date, but only during the time such
individual was or is employed by SWP or any Subsidiary of SWP.
SWP LIABILITIES: all the Liabilities (whenever arising whether prior
to, on or following the Effective Time) arising out of or in connection with or
otherwise relating to the management or conduct of the SWP Business in the
past, at the date hereof or in the future, including without limitation, the
products made, sold or distributed by, the plants, properties and equipment
owned or used by, the operations of, and all other past, present or future
assets of, the SWP Business, or the former, present or future SWP Agents and
SWP Employees (but only with respect to the time any such individual was a SWP
Agent or SWP Employee).
THIRD PARTY CLAIM: As defined in Section 3.04.
SECTION 1.02 REFERENCES
References to an "Exhibit" or to a "Schedule" are, unless otherwise
specified, to one of the Exhibits or Schedules attached to this Agreement, and
references to a "Section" are, unless otherwise specified, to one of the
Sections of this Agreement.
ARTICLE II
DISTRIBUTION AND RELATED TRANSACTIONS
SECTION 2.01 THE DISTRIBUTION. On the Distribution Date, the following
transactions shall occur:
(a) Stock Dividend to ITT. Rayonier shall issue to ITT as a stock
dividend a number of Rayonier Common Shares certified by ITT's distribution
agent, ITT Corporate Stock Services (the "Agent"). In connection therewith ITT
shall deliver to Rayonier for cancellation the share certificate currently held
by it representing 79 Common Shares and
6
7
shall receive a new certificate representing the total number of Rayonier
Common Shares to be owned by ITT after giving effect to such stock dividend.
(b) Amendment to Rayonier Articles of Incorporation. Rayonier shall
have filed with the Secretary of State of North Carolina an amendment to its
Articles of Incorporation to change its name to "Rayonier Inc."
(c) Rayonier Directors. All existing directors of Rayonier shall have
submitted their written resignations. ITT as the sole shareholder of Rayonier
on and prior to the Distribution Date shall have taken action by written
consent in lieu of the 1994 Annual Meeting of Shareholder of Rayonier to elect
to Rayonier's Board of Directors the individuals identified in the Information
Statement as Rayonier directors for the terms specified in the Information
Statement.
(d) Delivery of Shares to Agent. ITT shall deliver to the Agent the
share certificate representing Rayonier Common Shares issued to ITT by Rayonier
pursuant to Section 2.01(a) and shall instruct the Agent to distribute, on or
as soon as practicable following the Distribution Date, such Rayonier Common
Shares to holders of record of shares of ITT Common Stock and ITT Series N
Preferred Stock on the Distribution Record Date. Rayonier shall provide all
share certificates that the Agent shall require in order to effect the
Distribution.
SECTION 2.02 CERTAIN FINANCIAL ARRANGEMENTS
(a) Intercompany Accounts. All intercompany receivables and payables
(other than receivables and payables otherwise specifically provided for in any
of the Ancillary Agreements) between Rayonier or any Rayonier Subsidiary, on
the one hand, and ITT or any ITT Subsidiary, on the other hand, shall, as of
the Effective Time, be settled or converted into ordinary trade accounts, as
may be agreed in writing prior to the Effective Time by duly authorized
representatives of ITT and Rayonier.
(b) Operations in Ordinary Course. Each of ITT and Rayonier covenants
and agrees that, except as otherwise provided in any Ancillary Agreement,
during the period from the date of this Agreement through the Distribution
Date, it will, and will cause any entity which is a Subsidiary of such party at
any time during such period to, conduct its business in a manner substantially
consistent with current operating practices and in the ordinary course,
including, without limitation, with respect to the payment and administration
of accounts payable and the administration of accounts receivable, the purchase
of capital assets and equipment and the management of inventories.
SECTION 2.03 ASSIGNMENT OF PATENTS.
Prior to or on the Distribution Date, ITT shall, or shall cause an ITT
Subsidiary to, assign to Rayonier or a Rayonier Subsidiary, as directed by
Rayonier, all right, title and interest to all letters patent and applications
therefor in any country owned by ITT or any
7
8
ITT Subsidiary which originated from Rayonier or any Rayonier Subsidiary,
including without limitation the patents set forth on Exhibit E hereto.
SECTION 2.04 ASSUMPTION AND SATISFACTION OF LIABILITIES
Except as otherwise set forth in any Ancillary Agreement, from and after
the Effective Time, (a) ITT shall, and shall cause the ITT Subsidiaries to,
pay, perform and discharge in due course all ITT Liabilities and (b) Rayonier
shall, and shall cause the Rayonier Subsidiaries and SWP to, assume, pay,
perform, and discharge in due course all Rayonier Liabilities and all SWP
Liabilities.
SECTION 2.05 RESIGNATIONS
ITT shall cause all ITT Employees to resign, effective as of the
Effective Time, from all positions as officers of Rayonier or as officers or
directors of any Rayonier Subsidiary in which they serve. Rayonier shall cause
all Rayonier Employees to resign, effective as of the Effective Time, from all
positions as officers of any ITT division or as officers or directors of any
ITT Subsidiary in which they serve.
SECTION 2.06 FURTHER ASSURANCES
In case at any time after the Effective Time any further action is
reasonably necessary or desirable to carry out the purposes of this Agreement
and the other Ancillary Agreements or to vest Rayonier with full title to all
properties, assets, rights, approvals, immunities and franchises pertaining to
the Rayonier Business and the SWP Business, the proper officers of each party
to this Agreement shall take all such necessary action. Without limiting the
foregoing, ITT and the ITT Subsidiaries and Rayonier and the Rayonier
Subsidiaries shall use their reasonable best efforts, and Rayonier will cause
SWP to use its reasonable best efforts, to obtain all consents and approvals,
to enter into all amendatory agreements and to make all filings and
applications which may be required for the consummation of the transactions
contemplated by this Agreement and the other Ancillary Agreements, including,
without limitation, all applicable regulatory filings.
SECTION 2.07 NO REPRESENTATIONS OR WARRANTIES
Each of the parties hereto understands and agrees that, except as
otherwise expressly provided, no party hereto is, in this Agreement or in any
other agreement or document contemplated by this Agreement or otherwise, making
any representation or warranty whatsoever, including, without limitation, as to
title, value or legal sufficiency.
SECTION 2.08 GUARANTEES.
ITT and Rayonier shall use their best efforts to have, on or prior to
the Distribution Date, or as soon as practicable thereafter, ITT or any ITT
Subsidiary removed as guarantor of or obligor for indebtedness or obligations
for which Rayonier,
8
9
any Rayonier Subsidiary or SWP is primarily liable. Any such indebtedness or
obligation of Rayonier, a Rayonier Subsidiary or SWP guaranteed by ITT shall be
considered a "Rayonier Liability" for purposes of this Agreement.
SECTION 2.09 PENDING ACTIONS
(a) At all times from and after the Distribution Date, each of Rayonier
and ITT shall use reasonable efforts to make available to the other upon
written request its and its Subsidiaries' officers, directors, employees and
agents as witnesses to the extent that such persons may reasonably be required
in connection with any Action (including without limitation the Insurance
Actions referred to in Section 2.09(b)) in which the requesting party may from
time to time be involved (without reimbursement for such persons' salaries).
(b) The parties recognize that ITT, certain ITT Subsidiaries, Rayonier
and SWP are currently engaged in Actions (the "Insurance Actions") relating to
the liability of their insurance carriers to indemnify them for damages and
remediation costs associated with past discharges or emissions into the
environment. The first Insurance Action, seeking indemnification, was brought
by ITT Fluid Technology Corporation as plaintiff in the Superior Court, Los
Angeles County, California against the carriers, and the insurance carriers are
contesting jurisdiction in that court. The insurance carriers in turn have
brought another Insurance Action as plaintiffs for declaratory judgment in the
Court of Common Pleas of Cuyahoga County, Ohio, naming the plaintiffs in the
California action and others as defendants. Rayonier will not pay any of ITT's
attorneys fees in either such Insurance Action or any Actions relating to
similar issues which may hereafter be brought to which ITT and/or any ITT
Subsidiaries are parties. Any recovery by ITT relating to any such Action,
whether received pursuant to court order, settlement or otherwise (herein
called the "Insurance Recovery") shall be shared by ITT with Rayonier on such
basis as ITT, in its sole discretion, shall determine taking into account the
following factors: (i) the gross dollar amount of claims by SWP and Rayonier
as opposed to claims by ITT or any ITT Subsidiary, (ii) the legal fees ITT has
expended in obtaining the Insurance Recovery and (iii) the relative strength
under California law of insurance company defenses regarding claims by SWP and
Rayonier as compared to claims by ITT or any ITT Subsidiary.
SECTION 2.10 CERTAIN POST-DISTRIBUTION TRANSACTIONS
(a)(i) ITT shall comply with each representation and statement made,
or to be made, to Cravath, Swaine & Moore in connection with such firm's
rendering an opinion to ITT and Rayonier as to certain tax aspects of the
Distribution and (ii) until February 28, 1996 ITT will maintain its status as a
company engaged in the active conduct of a trade or business, as defined in
Section 355(b) of the Code.
(b)(i) Rayonier shall comply with each representation and statement
made, or to be made, to Cravath, Swaine & Moore in connection with such firm's
rendering an opinion
9
10
to ITT and Rayonier as to certain tax aspects of the Distribution and (ii)
until February 28, 1996 Rayonier will maintain its status as a company engaged
in the active conduct of a trade or business, as defined in Section 355(b) of
the Code.
(c) ITT represents and warrants to Rayonier, and Rayonier represents and
warrants to ITT, that it has no present intention to take any action prohibited
to it by this Section 2.10.
SECTION 2.11 AFFILIATION AND IDENTIFICATION INDICATIONS
Except as otherwise hereafter provided, (1) any material of any kind
existing on the Distribution Date which implicitly or explicitly indicates any
affiliation or connection between ITT or an ITT Subsidiary and Rayonier or a
Rayonier Subsidiary or SWP may be used by ITT or said ITT Subsidiary and
Rayonier or said Rayonier Subsidiary or SWP only for a period of one year after
the Distribution Date, and (2) any material of any kind of Rayonier or a
Rayonier Subsidiary or SWP existing on the Distribution Date which incorporates
any name, mark or other proprietary identification of ITT or an ITT Subsidiary,
and any material of any kind of ITT or an ITT Subsidiary existing on the
Distribution Date which incorporates any name, mark or other proprietary
identification of Rayonier or a Rayonier Subsidiary or SWP, may be used
respectively by Rayonier or said Rayonier Subsidiary or SWP and by ITT or said
ITT Subsidiary only for a period of one year after the Distribution Date.
After the Distribution Date, neither party shall otherwise represent to third
parties that it has a present business affiliation with the other. Moreover,
in no instance may any of the aforementioned materials be used after the
Distribution Date if the use of any such material by Rayonier or a Rayonier
Subsidiary or SWP would give rise to a legal commitment by ITT or an ITT
Subsidiary or if the use of any such material by ITT or an ITT Subsidiary would
give rise to a legal commitment by Rayonier or a Rayonier Subsidiary or SWP.
ARTICLE III
INDEMNIFICATION
SECTION 3.01 INDEMNIFICATION BY ITT
Except as otherwise specifically set forth in any other provision of
this Agreement or of any other Ancillary Agreement, ITT shall indemnify, defend
and hold harmless the Rayonier Indemnitees from and against any and all
Indemnifiable Losses of the Rayonier Indemnitees arising out of, by reason of
or otherwise in connection with the ITT Liabilities.
10
11
SECTION 3.02 INDEMNIFICATION BY RAYONIER
Except as otherwise set forth in any other Ancillary Agreement, Rayonier
shall indemnify, defend and hold harmless the ITT Indemnitees from and against
any and all Indemnifiable Losses of the ITT Indemnitees arising out of, by
reason of or otherwise in connection with the Rayonier Liabilities and the SWP
Liabilities.
SECTION 3.03 LIMITATIONS ON INDEMNIFICATION OBLIGATIONS
The amount which any party (an "Indemnifying Party") is or may be
required to pay to any other party (an "Indemnitee") pursuant to Section 3.01
or Section 3.02 shall be reduced (retroactively or prospectively) by any
insurance proceeds or other amounts actually recovered by or on behalf of such
Indemnitee in reduction of the related Indemnifiable Loss and shall also be
reduced by the amount of any deductibles paid by the Indemnitee in connection
with recovering any such insurance proceeds. If an Indemnitee shall have
received the payment required by this Agreement from an Indemnifying Party in
respect of an Indemnifiable Loss and shall subsequently actually receive
insurance proceeds or other amounts in respect of such Indemnifiable Loss, then
such Indemnitee shall pay to such Indemnifying Party a sum equal to the amount
of such insurance proceeds or other amounts actually received, up to the
aggregate amount of any payments received from such Indemnifying Party pursuant
to this Agreement in respect of such Indemnifiable Loss.
SECTION 3.04 PROCEDURE FOR INDEMNIFICATION
(a) If an Indemnitee shall receive notice or otherwise learn of the
assertion by a person (including, without limitation, any governmental entity)
who is not a party to any of the Ancillary Agreements of any claim or of the
commencement by any such person of any Action (a "Third Party Claim") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to this Agreement, such Indemnitee shall give such
Indemnifying Party written notice thereof promptly after becoming aware of such
Third Party claim; provided, however, that the failure of any Indemnitee to
give notice as provided in this Section 3.04 or in the Tax Allocation Agreement
hereafter referred to shall not relieve the applicable Indemnifying Party of
its obligations under this Article III, except to the extent that such
Indemnifying Party is prejudiced by such failure to give notice. Such notice
shall describe the Third Party Claim in reasonable detail under the
circumstances. Sections 3.04(b), (c), (d) and (e) of this Agreement shall not
govern procedures for Third Party Claims relating to income tax deficiencies or
refund claims. Such procedures shall be governed by the Tax Allocation
Agreement between the parties in the form attached hereto as Exhibit C,
including Section 8(a) thereof.
(b) Subject to the proviso of the following sentence, an Indemnifying
Party shall (in the Indemnitee's name, if necessary) defend or seek to settle
or compromise any Third Party Claim, at such Indemnifying Party's own expense
and with counsel reasonably satisfactory to the Indemnitee. Within 30 days of
the receipt of notice from an Indemnitee in accordance with Section 3.04(a) (or
sooner, if the nature of such Third Party Claim so requires), the Indemnifying
Party shall notify the applicable Indemnitee whether the
11
12
Indemnifying Party will assume responsibility for defending such Third Party
Claim, which notice shall specify any reservations or exceptions with respect
to such assumption of responsibility; provided, however, that an Indemnifying
Party may elect not to assume responsibility for defending a Third Party Claim
only in the event of a good faith dispute as to whether a claim was
appropriately tendered under Section 3.01 or 3.02, as the case may be, and if
the Indemnifying Party makes such election, the Indemnitee may defend or seek
to compromise or settle such Third Party Claim with counsel reasonably
satisfactory to the Indemnifying Party. In the case of a Third Party Claim
described in the proviso to the preceding sentence, the costs of defense or
attempt to compromise or settle shall initially be paid by the Indemnitee
subject to ultimate determination pursuant to the dispute resolution provisions
of Article V of which party should bear such costs and pay any Liabilities with
respect to such Third Party Claim. After notice from an Indemnifying Party to
an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article III for any legal or other expenses (except expenses approved in
advance by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof. Notwithstanding the foregoing, the
Indemnifying Party shall not be liable for any settlement of any such Claim or
action effected without its written consent (which shall not be unreasonably
withheld).
(c) If an Indemnifying Party elects to defend or to seek to compromise
any Third Party Claim, the appropriate Indemnitee (x) shall cooperate in all
reasonable respects with the Indemnifying Party in connection with such
defense, (y) shall not admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim without the Indemnifying
Party's prior written consent (which shall not be unreasonably withheld) and
(z) shall agree to any settlement, compromise or discharge of such Third Party
Claim which the Indemnifying Party may recommend and which by its terms
obligates the Indemnifying Party to pay the full amount of the Liability in
connection with such Third Party Claim and which releases the Indemnitee
completely in connection with such Third Party Claim.
(d) In the event of payment by an Indemnifying Party to any Indemnitee
in connection with any Third Party Claim, such Indemnifying Party shall, to the
extent of such payment, be subrogated to and shall stand in the place of such
Indemnitee as to any events or circumstances with respect to which such
Indemnitee may have any right or claim relating to such Third Party Claim
against any claimant or plaintiff asserting such Third Party Claim. Such
Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner,
and at the cost and expense of such Indemnifying Party, in prosecuting any
subrogated right or claim.
(e) With respect to any Third Party Claim for which the Indemnifying
Party assumes responsibility for defense, the Indemnifying Party shall inform
the Indemnitee, upon the reasonable written request of the Indemnitee, of the
status of efforts to resolve such Third Party Claim. With respect to any Third
Party Claim for which the Indemnifying Party does not assume such
responsibility, the Indemnitee shall inform the
12
13
Indemnifying Party, upon the reasonable written request of the Indemnifying
Party, of the status of efforts to resolve such Third Party Claim.
SECTION 3.05 SURVIVAL OF INDEMNITIES
The obligations of ITT and Rayonier under this Article III shall survive
the sale or other transfer by either of them of any assets or businesses or the
assignment by either of them of any Liabilities, with respect to any
Indemnifiable Loss of the other related to such assets, businesses or
Liabilities.
ARTICLE IV
ACCESS TO INFORMATION
SECTION 4.01 PROVISION OF CORPORATE RECORDS
(a) ITT shall arrange, as soon as practicable following the
Distribution Date, for the transportation at Rayonier's cost to Rayonier of all
original agreements, documents, books, records and files (collectively
"Rayonier Records") relating to or affecting Rayonier, any Rayonier Subsidiary,
SWP, the Rayonier Business or GHP, to the extent such items are not already in
the possession of Rayonier, a Rayonier Subsidiary or SWP, subject to the
following exceptions:
(i) Rayonier recognizes that certain Rayonier Records may contain
incidental information relating to Rayonier, any Rayonier Subsidiary,
SWP, the Rayonier Business or GHP or may relate primarily to Subsidiaries
or divisions of ITT other than Rayonier, the Rayonier Subsidiaries, SWP
and GHP, and that ITT may retain such Rayonier Records and shall provide
copies of the relevant portions thereof to Rayonier; and
(ii) ITT may retain any tax returns, reports, forms or work papers,
and Rayonier shall be provided with copies of such returns, reports,
forms or work papers only to the extent that they relate to or affect
Rayonier's, the Rayonier Subsidiaries', SWP's and GHP's returns or tax
liability.
(b) Rayonier shall arrange, as soon as practicable following the
Distribution Date, for the transportation at ITT's cost to ITT of all original
agreements, documents, books, records and files (collectively "ITT Records")
relating to or affecting ITT or any ITT Subsidiary which are in the possession
of Rayonier or a Rayonier Subsidiary, subject to the following exceptions:
(i) ITT recognizes that certain ITT Records may contain incidental
information relating to ITT and the ITT Subsidiaries or may relate
primarily to Rayonier, Rayonier Subsidiaries, SWP and/or GHP, and that
Rayonier may retain
13
14
such ITT Records and shall provide copies of the relevant portions
thereof to ITT; and
(ii) Rayonier may retain any tax returns, reports, forms or work
papers, and ITT shall be provided with copies of such returns, reports,
forms or work papers only to the extent that they relate to or affect
ITT's and the ITT Subsidiaries' returns or tax liability.
SECTION 4.02 ACCESS TO INFORMATION
(a) From and after the Distribution Date, each of ITT and Rayonier shall
afford to the other and its authorized accountants, counsel and other
designated representatives reasonable access during normal business hours,
subject to appropriate restrictions for classified information, to the
personnel, properties, books and records of such party and its Subsidiaries
insofar as such access is reasonably required by the other party.
(b) For a period of two years following the Distribution Date, each of
Rayonier and ITT shall provide to the other, promptly following such time at
which such documents shall be filed with the Securities and Exchange Commission
(the "Commission"), all documents which shall be filed by it (and, in the case
of Rayonier, by any of its Subsidiaries or SWP) with the Commission pursuant to
the periodic and interim reporting requirements of the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder.
SECTION 4.03 CONFIDENTIALITY
Each of ITT and the ITT Subsidiaries on the one hand, and Rayonier and
the Rayonier Subsidiaries on the other hand, shall not use or permit the use of
(without the prior written consent of the other) and shall hold, and shall
cause its consultants and advisors to hold, in strict confidence, all
information concerning the other in its possession or under its control (except
to the extent that (a) such information has been in the public domain through
no fault of such party or (b) such information has been later lawfully acquired
from other sources by such party or (c) this Agreement or any other Ancillary
Agreement or any other document entered into pursuant hereto permits the use or
disclosure of such information) to the extent such information (i) relates to
the period up to the Effective Time, (ii) relates to any Ancillary Agreement or
(iii) is obtained in the course of performing services for the other party
pursuant to any Ancillary Agreement, and each party shall not (without the
prior written consent of the other) otherwise release or disclose such
information to any other person, except its auditors and attorneys, unless
compelled to disclose by judicial or administrative process or, as advised by
its counsel, by other requirements of law. To the extent either party
discloses any such information concerning the other party under circumstances
where any evidentiary privilege (including without limitation the privilege for
communications between attorney and client) would be available, the party
disclosing such information agrees to assert such privilege.
14
15
ARTICLE V
DISPUTE RESOLUTION
In the event of any dispute between the parties hereto arising under
this Agreement, any other Ancillary Agreement or any other document entered
into pursuant hereto or any transaction contemplated hereby, the parties shall
attempt to resolve the dispute in an amicable fashion and shall continue to
perform their obligations hereunder. If the parties cannot reach an amicable
resolution of such a dispute within sixty days, the parties agree to first
endeavor in good faith to settle the dispute by mediation administered by the
American Arbitration Association ("AAA") under its Commercial Mediation Rules
before resorting to arbitration. Thereafter, if such dispute remains
unresolved, it shall be settled by arbitration by a single arbitrator having
expertise in the subject matter of the dispute, chosen from the AAA's Large
Complex Case panel administered by the AAA in accordance with its Commercial
Arbitration Rules and the Supplementary Procedures for Large Complex Disputes,
and judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. Any such arbitration shall be held in New
York, New York. Each party thereto shall pay its own expenses, and the fee of
the mediator and the arbitrator and the administrative fee of the AAA shall be
paid one half by ITT and one half by Rayonier.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01 COMPLETE AGREEMENT; CONSTRUCTION
This Agreement, including the Exhibits and Schedules, and the other
Ancillary Agreements 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 Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions
of this Agreement and the provisions of any other Ancillary Agreement, such
other Ancillary Agreement shall control.
SECTION 6.02 SURVIVAL OF AGREEMENTS
Except as otherwise contemplated by this Agreement, all covenants and
agreements of the parties contained in this Agreement shall survive the
Distribution Date.
SECTION 6.03 EXPENSES
(a) Except as otherwise set forth in this Agreement or any other
Ancillary Agreement, all costs and expenses incurred on or prior to the
Distribution Date (whether or not paid on or prior to the Distribution Date) in
connection with the preparation,
15
16
execution, delivery and implementation of this Agreement and any other
Ancillary Agreement, the Information Statement, the Distribution and the
consummation of the transactions contemplated thereby shall be paid by ITT,
except that Rayonier shall pay fees and expenses of counsel and other
consultants retained by Rayonier and expenses relating to the New York Stock
Exchange listing fees for the Rayonier Common Shares. Each party shall bear
its own costs and expenses incurred after the Distribution Date.
(b) A party seeking reimbursement of costs and expenses under this
Section 6.03 from another party shall render to such other party an invoice for
such costs and expenses, along with appropriate verification of such costs and
expenses, and such other party shall pay the other as soon as practicable, but
in any event within 30 days of the date of such invoice.
SECTION 6.04 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts executed in and to be
performed in that state.
SECTION 6.05 NOTICES
All notices and other communications hereunder shall be in writing and
hand delivered or mailed by registered or certified mail (return receipt
requested) or sent by any means of electronic message transmission with
delivery confirmed (by voice or otherwise) to the parties at the following
addresses (or at such other addresses for a party as shall be specified by like
notice) and will be deemed given on the date on which such notice is received:
To ITT Corporation:
1330 Avenue of the Americas
New York, NY 10019
Attn: Senior Vice President
and General Counsel
To Rayonier:
1177 Summer Street
Stamford, CT 06904
Attn: Vice President
and General Counsel
16
17
0SECTION 6.06 AMENDMENTS
This Agreement may not be modified or amended except by an agreement in
writing signed by the parties.
SECTION 6.07 SUCCESSORS AND ASSIGNS
This Agreement shall be assignable in whole in connection with a merger
or consolidation or the sale of all or substantially all the assets of a party
hereto. Otherwise this Agreement shall not be assignable, in whole or in part,
directly or indirectly, by either party hereto without the prior written
consent of the other, and any attempt to assign any rights or obligations
arising under this Agreement without such consent shall be void; provided,
however, that the provisions of this Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties and their respective
successors and permitted assigns.
SECTION 6.08 TERMINATION
This Agreement may be terminated and the Distribution may be amended,
modified or abandoned at any time prior to the Distribution Record Date by and
in the sole discretion of ITT without the approval of Rayonier. In the event
of such termination, neither party shall have any liability of any kind to any
other party.
SECTION 6.09 SUBSIDIARIES
Each of the parties hereto shall cause to be performed, and hereby
guarantees the performance of, all actions, agreements and obligations set
forth herein to be performed by any Subsidiary of such party which is
contemplated to be a Subsidiary of such party on and after the Distribution
Date.
SECTION 6.10 THIRD PARTY BENEFICIARIES
Except for the provisions of Article III relating to Indemnitees, this
Agreement is solely for the benefit of the parties hereto and their respective
Subsidiaries and Affiliates and should not be deemed to confer upon third
parties any remedy, claim, liability, reimbursement, claim of action or other
right in excess of those existing without reference to this Agreement.
SECTION 6.11 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.
17
18
SECTION 6.12 EXHIBITS AND SCHEDULES
The Exhibits and schedules shall be construed with and as an integral
part of this Agreement to the same extent as if the same had been set forth
verbatim herein.
SECTION 6.13 LEGAL ENFORCEABILITY
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Without prejudice to any rights or remedies otherwise
available to any party hereto, each party hereto acknowledges that damages
would be an inadequate remedy for any breach of the provisions of this
Agreement and agrees that the obligations of the parties hereunder shall be
specifically enforceable.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the day and year first above written.
ITT CORPORATION
By:/s/ Walter F. Diehl, Jr.
-------------------------------
Vice President
ITT RAYONIER INCORPORATED
By:/s/ Roger H. Watts
-------------------------------
Vice President and
General Counsel
18
19
EXHIBIT 10.1
EXHIBIT A
TO DISTRIBUTION AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement is made as of February 11, 1994 by ITT CORPORATION, a Delaware
corporation ("ITT"), and ITT RAYONIER INCORPORATED, a North Carolina
corporation to be renamed "Rayonier Inc." in connection with the Distribution
hereafter referred to ("Rayonier").
BACKGROUND
The Board of Directors of ITT has determined that it is appropriate and
desirable to make a distribution (the "Distribution") to the holders of shares
of Common Stock, par value $1.00 per share, of ITT and Cumulative Preferred
Stock, without par value, $2.25 Convertible Series N of ITT of all the
outstanding Common Shares of Rayonier; and
ITT and Rayonier recognize that it is advisable that ITT continue to provide
certain administrative and other services to Rayonier, and that Rayonier
continue to provide certain services to ITT with respect to particular ITT
subsidiaries which were formerly the management responsibility of Rayonier,
until Rayonier or ITT, as the case may be, has had a reasonable opportunity to
evaluate its continued need for the services and to investigate other sources
of the services.
AGREEMENT
The parties agree as follows:
Section 1. Performance of Services. Beginning on the date determined by ITT's
Board of Directors as the date as of which the Distribution shall be effected
(the "Distribution Date"), each party will provide, or cause one or more of its
subsidiaries to provide, to the other party and its subsidiaries on an
"as-needed" basis (as determined by the party to whom the services are to be
provided or its subsidiaries) such services as may be agreed upon between ITT
and Rayonier from time to time in writing. The party which is to provide the
services (the "Provider") will use (and will cause its subsidiaries to use) its
best efforts to provide such services to the other party (the "Recipient") and
its subsidiaries in a satisfactory and timely manner. ITT and Rayonier will
cooperate in planning the scope and timing of services provided under this
Agreement.
Section 2. Payment for Services, Expense Reimbursement.
(a) As compensation for the services performed hereunder, the Recipient will
pay the Provider (i) the allocated portion of the base salaries of the
Provider's employees providing such services and (ii) the amount of the
Provider's actual out-of-pocket costs, expenses and disbursements reasonably
incurred by the Provider related directly to the performance of any such
services and which would not reasonably have been incurred
20
by the Provider to deliver such services to the businesses of the Recipient but
for the Distribution.
(b) Notwithstanding subsection (a), the parties agree that
(i) with respect to each out-of-pocket expense provided under subsection
(a)(ii) which individually is greater than $2,500, the Provider will use
(and will cause its subsidiaries to use) reasonable efforts to notify
the Recipient, prior to incurring or assessing such expense, of the
scope and effect of such expense on the related services; and
(ii) with respect to each allocated salary provided under subsection
(a)(i) and each out-of pocket expense provided under subsection (a)(ii)
which individually is greater than $25,000, the Recipient shall have 30
days following the Provider's written notice to advise the Provider if
the Recipient does not want the Provider to incur or provide on the
Recipient's behalf the services to which such salary or expense relates.
If the Provider timely receives the Recipient's written notice, such
services shall be discontinued or modified as the Provider and the
Recipient determine is appropriate.
(c) Each party will periodically, but not less frequently than quarterly,
submit to the other party for payment statements of amounts due under this
Agreement. The statement will specify the nature of the services provided, the
identity of the Recipient's department or employee(s) requesting such services,
the identity of the Provider's department or employee(s) performing such
services and any other supporting detail which the Recipient reasonably
requests. The Recipient will pay the amounts due within 30 days after the
Recipient's receipt of each statement.
Section 3. Independence. All employees and representatives of the Provider
providing the scheduled services to the Recipient will be deemed for purposes
of all compensation and employee benefits to be employees or representatives of
the Provider and not employees or representatives of the Recipient. In
performing such services, such employees and representatives will be under the
direction, control and supervision of the Provider (and not the Recipient) and
the Provider will have the sole right to exercise all authority with respect to
the employment (including termination of employment), assignment and
compensation of such employees and representatives.
Section 4. Non-exclusivity. Nothing in this Agreement precludes either party
from obtaining, in whole or in part, services of any nature which may be
obtainable from the other party from its own employees or from providers other
than the other party.
Section 5. Confidentiality. Each party (the "first party") agrees to hold in
confidence, and to use its best efforts to cause its employees and
representatives to hold in confidence, all confidential information concerning
the other party furnished to or obtained by the first party after the
Distribution Date in the course of providing and
2
21
receiving services hereunder in a manner consistent with ITT's standard
policies in effect on the date hereof with respect to the preservation and
disclosure of confidential information concerning ITT and its subsidiaries and
operating divisions.
Section 6. Termination. Unless otherwise specifically provided in a separate
written agreement between the parties hereto (including without limitation any
other agreement entered into in connection with the Distribution), this
Agreement will continue in effect until December 31, 1994. Upon termination,
the parties will make all payments of compensation described in subsection 2(a)
to the extent that such compensation has not been fully paid prior to the
termination date.
Section 7. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
executed in and to be performed in that state.
Section 8. Notices. All notices and other communications hereunder must be in
writing and hand delivered or mailed by registered or certified mail (return
receipt requested) or sent by any means of electronic message transmission with
delivery confirmed (by voice or otherwise) to the parties at the following
addresses (or at such other address specified by like notice) and will be
deemed given on the date such notice is received:
To ITT:
ITT Corporation
1330 Avenue of the Americas
New York, NY 10019
Attn: Senior Vice President
and General Counsel
To Rayonier:
Rayonier Inc.
1177 Summer Street
Stamford, CT 06904
Attn: Vice President
and General Counsel
Section 9. Waivers. The failure of either party to require strict performance
by the other party of any provision in this Agreement will not waive or
diminish that party's right to demand strict performance thereafter of that or
any other provision hereof.
3
22
Section 10. Amendments. This Agreement may not be modified or amended except
by an agreement in writing signed by the parties.
Section 11. Successors and Assigns. This Agreement shall be assignable in
whole in connection with a merger or consolidation or the sale of all or
substantially all the assets of a party hereto. Otherwise this Agreement shall
not be assignable, in whole or in part, directly or indirectly, by either party
hereto without the prior written consent of the other, and any attempt to
assign any rights or obligations arising under this Agreement without such
consent shall be void; provided, however, that the provisions of this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the
parties and their respective successors and permitted assigns.
Section 12. Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and their respective subsidiaries and affiliates
and should not be deemed to confer upon third parties any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.
Section 13. 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.
Section 14. Legal Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the day and year first above written.
ITT CORPORATION
By: /S/ Walter F. Diehl, Jr.
-----------------------------
Vice President
ITT RAYONIER INCORPORATED
By: /s/ Roger H. Watts
-----------------------------
Vice President and
General Counsel
4
23
EXHIBIT 10.02
Exhibit B to
Distribution Agreement
Employee Benefit Services and Liability Agreement
AGREEMENT, dated as of February 11, 1994, by and between ITT
CORPORATION, a Delaware Corporation (which, together with its
subsidiaries, is hereinafter referred to as "ITT") and ITT RAYONIER
INCORPORATED, a North Carolina Corporation to be renamed "Rayonier
Inc." (which together with its subsidiaries is hereinafter referred
to as "Rayonier").
W I T N E S S E T H
WHEREAS, ITT intends to spin off its forest products businesses by
consolidating those businesses into Rayonier (and its subsidiaries) and
distributing Rayonier stock to the stockholders of ITT as a dividend on
February 28, 1994 (the "Distribution Date"), and making Rayonier stock
available for public purchase on the New York Stock Exchange; and
WHEREAS, in connection with the foregoing transaction, ITT and
Rayonier desire to enter into an Employee Benefit Services and Liability
Agreement, signed as of February 11, 1994, (the "Benefit Agreement");
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, ITT and Rayonier agree as follows:
1. RETIREMENT PLAN FOR SALARIED EMPLOYEES (a) Rayonier Retirement
Plan for Salaried Employees. Rayonier shall establish, effective as of the
Distribution Date, a defined benefit salaried employee retirement plan (the
"Rayonier Retirement Plan") with terms similar in all material respects to the
Retirement Plan for Salaried Employees of ITT Corporation (the "ITT Retirement
Plan"), subject to such modifications as are considered appropriate to assure
that the Rayonier Retirement Plan will obtain a favorable determination letter
from the Internal Revenue Service (the "IRS"). Rayonier shall adopt such
amendments as the IRS shall require as a condition for issuing a favorable
determination letter.
(b) Rayonier Retirement Plan Eligibility Service and Benefit
Service. The Rayonier Retirement Plan shall
24
2
include as service for all purposes of determining eligibility and vesting,
including, without limitation, eligibility service for purposes of determining
eligibility for plan membership, preretirement survivor benefits, standard
early retirement benefits, special early retirement benefits and normal
retirement benefits, all service rendered prior to the Distribution Date which
is recognized as Eligibility Service under the terms of the ITT Retirement
Plan. The Rayonier Retirement Plan (i) shall include as service for benefit
accrual purposes all service rendered prior to the Distribution Date which is
recognized as Benefit Service under the terms of the ITT Retirement Plan and
(ii) shall provide for an offset of any benefit payable from the ITT Retirement
Plan as provided in Section 1 of this Agreement.
(c) ITT Retirement Plan--Retention of Liability and Accrued
Benefits. ITT agrees that the ITT Retirement Plan shall retain liability for
accrued benefits determined under the terms and conditions of said Plan as of
the Distribution Date for (i) all Rayonier Salaried Employees (including,
without limitation, those who, as of the Distribution Date, participate in, or
are in the process of satisfying the eligibility requirements for participation
in, the ITT Retirement Plan), (ii) any former Rayonier salaried employee who,
as of the Distribution Date, is retired or entitled to receive a deferred
vested benefit and (iii) all hourly employees of Rayonier who, as of the
Distribution Date, have an accrued benefit under the ITT Retirement Plan. For
purposes of this Benefit Agreement, the term "Rayonier Salaried Employees"
means all persons employed on a salaried basis by Rayonier on the Distribution
Date and in addition shall include persons who are absent from work at Rayonier
by reason of layoff, leave of absence, short-term disability or long-term
disability. For purposes of this Section 1, the term Rayonier Salaried
Employees will also include persons employed on a salaried basis by Rayonier on
December 1, 1993. Those employees listed in Annex A who have an accrued
benefit under the ITT Retirement Plan will also be accorded the treatment
provided for in Section 1(d).
(d) ITT Retirement Plan--Recognition of Post-Distribution Date
Service and Compensation Increases for Rayonier Salaried Employees. Subject to
Sections 1(e)-(i) hereof and to the extent permitted by applicable law, for all
Rayonier Salaried Employees referred to in Section 1(c) (but in no event with
respect to any former employee of ITT
25
3
or Rayonier whether or not such person is employed at any time after the
Distribution Date by Rayonier), (i) ITT shall recognize post-Distribution Date
service with Rayonier, but only to the extent such service is counted under
Section 1(g) hereof, of all such Rayonier Salaried Employees under the ITT
Retirement Plan for all purposes of eligibility and vesting, including, without
limitation, eligibility service for purposes of preretirement death benefits,
standard early retirement and special early retirement benefits, and normal
retirement benefits, and (ii) ITT shall recognize post-Distribution Date
compensation increases of such Rayonier Salaried Employees while they are
employed by Rayonier, but only for periods of service counted under Section
1(g) hereof, for purposes of the Average Final Compensation calculation under
the ITT Retirement Plan, provided that for each calendar year, starting in
1994, total compensation recognized for such pension purposes shall not exceed
105% of the total compensation recognized in the immediately preceding calendar
year, with pro-rata adjustment for partial years. In order to apply this
limitation consistent with the definition of Average Final Compensation under
the ITT Retirement Plan, the limit in any year will first be applied against
base salary and then against other forms of pensionable compensation.
Pensionable compensation shall generally fall within the definition of
compensation as applied by ITT in accordance with the administrative rules and
procedures for the ITT Retirement Plan.
(e) Effect of Employment with Rayonier. During any period while (i)
the arrangement under Section 1(d) continues in effect as provided herein and
(ii) any Rayonier Salaried Employee affected by the arrangement under Section
1(d) is employed with Rayonier or an affiliate thereof, including periods after
re-employment following a termination of employment occurring after the
Distribution Date, such Rayonier Salaried Employee (I) shall not be deemed
either to have terminated employment or to be in retirement status under the
ITT Retirement Plan and (II) shall not be eligible to receive payment of his or
her vested benefit or retirement allowance under the ITT Retirement Plan.
(f) Provision of Benefits. ITT at its option and in its sole
discretion, exercised for any or no reason, may satisfy its obligations under
Section 1(d) hereof by providing all or any portion of the benefits to be
provided under this Agreement (i) through the ITT Retirement Plan,
26
4
(ii) through any successor or other tax-qualified retirement plan, and/or (iii)
outside any qualified retirement plan, including, without limitation, any such
benefits which, by reason of the limits imposed by Section 415 of the Internal
Revenue Code of 1986, as amended (the "Code"), may not be paid from any
qualified retirement plan.
(g) Limited Obligation of ITT To Recognize Service and Compensation
Increases. With respect to any individual Rayonier Salaried Employee (i)
service required to be recognized and subject to the limitations under the
arrangement described in Section 1(d) hereof shall be the same years and
portions thereof of service recognized for similar purposes under the Rayonier
Retirement Plan, but no other; and (ii) compensation increases required to be
recognized and subject to the limitations under Section 1(d) hereof shall be
taken into account for the same years and portions thereof with respect to
which eligibility or benefit service is credited under the Rayonier Retirement
Plan, but no other.
(h) ITT Obligation--Effect of Post-Distribution Date Changes in the
ITT Retirement Plan. ITT's obligation under Section 1(d) hereof shall be to
maintain the arrangement under said Section in accordance with the terms of
such arrangement as applied with respect to the ITT Retirement Plan as in
effect as of the Distribution Date, without regard to any subsequent amendment
or other change to said Plan, except that any such change or amendment which
would reduce benefit accruals under said arrangement with respect to periods
after the effective date of the change or amendment but which is required
solely to comply with applicable legal requirements, and with respect to which
ITT has no optional means of compliance which if pursued would not reduce
future benefit accruals under said arrangement, shall be taken into account, to
the extent determined by ITT in its sole discretion, to reduce ITT's obligation
under Section 1(d). Any amendment to the ITT Retirement Plan (or other
arrangement provided in accordance with Section 1(f) hereof), that is identical
to an amendment to the Rayonier Retirement Plan shall not be treated as an
amendment that reduces benefit accruals.
(i) ITT Retirement Plan--Effect of Post-Distribution Date Changes in
Rayonier Retirement Plan. (1) This provision shall govern the period of time
during which the arrangement provided in Section 1(d) hereof shall
27
5
continue with respect to all or any portion of the Rayonier Salaried Employees.
(2)(A) The following definitions shall apply for purposes of this
Section 1(i):
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Information Event" means any failure by Rayonier to provide to ITT
information or data necessary or appropriate for ITT's administration and
implementation of the arrangement under Section 1(d) hereof, unless such
failure is cured by Rayonier within sixty (60) days after written notice by ITT
of such failure. The effective date of an "Information Event" shall be the
date sixty (60) days after such notice is received by Rayonier.
"Modification" means any amendment to or other change in the
Rayonier Retirement Plan (including, without limitation, any merger with
another plan or spin-off of any portion of the Rayonier Retirement Plan),
effective any time after the Distribution Date, which substantially reduces
benefit accruals under such plan for periods after the effective date of the
amendment or change, with respect to (i) the benefit formula, (ii) the
definition of average final compensation, (iii) the number of years taken into
account for purposes of benefit accrual, (iv) the percentage of average final
compensation taken into account for each year of service, (v) the method of
Social Security integration (to the extent discretionary on the part of
Rayonier), (vi) the optional forms of benefits, (vii) early retirement and
special early retirement provisions and/or (viii) the manner in which service
is taken into account including, without limitation, service with ITT. The
term "Modification" shall not include any amendment or other change to the
Rayonier Retirement Plan (I) required solely to comply with applicable legal
requirements and with respect to which Rayonier has no optional means of
compliance which if pursued would not result in a Modification (except for this
sentence) or (II) that is identical to an amendment to the ITT Retirement Plan
(or other arrangement provided in accordance with Section 1(f) hereof.
"Plan Termination" means any termination, under Title IV of ERISA, of
the Rayonier Retirement Plan.
28
6
"Partial Plan Termination" means any partial termination, under
Section 411 of the Code, of the Rayonier Retirement Plan.
"Rayonier Unit" means any subsidiary or business unit of Rayonier.
"Unit Sale" means any termination, whether by sale or otherwise, of
Rayonier's majority ownership or control of any Rayonier Unit.
(2)(B) At any time after the Distribution Date, Rayonier shall
promptly notify ITT in writing of any and all amendments and changes to the
Rayonier Retirement Plan, any Plan Termination or Partial Plan Termination,
under Title IV of ERISA or Section 411 of the Code, of the Rayonier Retirement
Plan and any Unit Sale (such events to be referred to as "Notice Events"), such
notice to be given as of the earlier of (i) the effective date of the Notice
Event or (ii) the date the Notice Event is adopted or has otherwise become
subject of a legally binding and noncancelable commitment to carry out such
Notice Event. Any failure of Rayonier (i) to give such notice or (ii) to
promptly provide upon ITT's request any information or data reasonably
necessary or appropriate to accomplish the determination referred to in Section
1(i) (5) shall constitute a "Failure to Notify". The effective date of a
Failure to Notify shall be the effective date of the Notice Event with respect
to which such failure occurs.
(3) Upon the occurrence (as determined under Section 1(i)(5) hereof)
of any Modification, Plan Termination, Partial Plan Termination, Unit Sale,
Failure to Notify or Information Event (any such event to be referred to as an
"Arrangement Termination Event"), and effective as of the effective date
thereof (a "Termination Date"), the arrangement provided in Section 1(d) hereof
shall automatically and of its own accord terminate. Upon such termination,
the obligations of Rayonier under Sections 1(i) and 1(j) hereof shall
terminate, but only with respect to service and compensation increases after
such termination. Upon such termination, ITT will cause any Rayonier salaried
employees then participating in and/or having an accrued benefit under the ITT
Retirement Plan and affected by such termination to be 100 percent vested in
their accrued benefits under the ITT Retirement Plan as of the applicable
Termination Date, for service and total compensation to the applicable
Termination Date, determined under the terms and
29
7
conditions of the ITT Retirement Plan as amended to provide for the arrangement
under Section 1(d), unless ITT shall determine, in its sole discretion, to
continue voluntarily, for such period as ITT determines, such arrangement upon
the terms provided in Section 1(d), or another arrangement upon such other
terms as ITT shall determine, but which continuation, in no event, shall be
less favorable to the affected Rayonier salaried employees than the arrangement
under Section 1(d) hereof, and provided that, upon termination by ITT of any
such voluntary continuation, which termination may occur at any time in ITT's
sole discretion, the above 100 percent vesting arrangement shall then become
effective.
(4) For any Arrangement Termination Event applicable to a particular
location or group or class of employees, this Section 1(i) will cause the
termination of the arrangement under Section 1(d) only with respect to such
location or group or class of employees, unless such Arrangement Termination
Event alone, or in combination with any prior or coincident Arrangement
Termination Event, would also constitute an Arrangement Termination Event with
respect to the entire Rayonier Retirement Plan.
(5) The occurrence of an Arrangement Termination Event shall be
determined by ITT, subject to review and agreement by Rayonier. In the event
ITT and Rayonier disagree as to such occurrence, any party may deliver to the
other a written demand for arbitration to determine such occurrence. In such
event, the American Arbitration Association shall be asked to appoint the
arbitrator to rule on the matter, such arbitrator to be a person familiar with
United States pension and employee benefit matters and such appointment to be
made and such arbitration to be held in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect. The
decision of the arbitrator so appointed as to the occurrence of an Arrangement
Termination Event shall be binding and conclusive upon the parties hereto.
Judgment upon any award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. Any such arbitration shall be held in New York,
New York. Each party to any arbitration shall pay its own expenses and the
fees of the arbitrator and the administrative fee of the American Arbitration
Association shall be paid one half by ITT and one half by Rayonier.
30
8
2. SAVINGS PROGRAM -- INVESTMENT & SAVINGS PROGRAMS (a) Effective
as of the Distribution Date, Rayonier will adopt a defined contribution
investment and savings plan (the "Rayonier Savings Plan") with terms similar in
all material respects to the ITT Investment and Savings Plan for Salaried
Employees (the "ITT Savings Plan"). ITT shall cause the transfer, as soon as
practicable on or after the Distribution Date, of the accounts of all Rayonier
Salaried Employees, plus the portion of any trust earnings attributable to such
employees, from the ITT Savings Plan to the Rayonier Savings Plan, on the
following terms:
(b) ITT Preferred Stock held in the ESOP portion of the ITT Savings
Plan shall be transferred in the form of ITT Common Stock.
(c) With respect to assets held in Funds A, B, C and R of the ITT
Savings Plan, assets will be transferred in kind to the maximum extent
practicable.
(d) With respect to the assets in Fund D in the ITT Savings Plan,
assets will be transferred in cash.
3. EXCESS NON-QUALIFIED SUPPLEMENTAL BENEFIT PLANS (a) Excess
Pension Plans: Rayonier shall adopt Excess Pension Plans identical to ITT
Excess Pension Plans and shall assume all liabilities with respect to Rayonier
Salaried Employees accrued under such Plans after the Distribution Date. ITT
shall be responsible for any Excess Pension Plan benefits attributable to
benefit service up to the Distribution Date subject to the provisions of
Section 1(d) of this Agreement.
(b) Excess Savings Plan: Rayonier shall adopt an Excess Savings
Plan identical to ITT's Excess Savings Plan. ITT shall transfer reserves
attributable to Rayonier Salaried Employees as of the Distribution Date.
4. RAYONIER SALARIED EMPLOYEE WELFARE BENEFIT PLANS (a) Rayonier
shall establish, effective as of the Distribution Date, Salaried Employee
Welfare Benefit Plans identical to those covering the Rayonier Salaried
Employees immediately preceding the Distribution Date. Such Salaried Employee
Welfare Benefit Plans shall include coverage for life insurance, disability,
health, accident and post-retirement health and life insurance.
31
9
(b) ITT will retain liability for post-retirement health and life
insurance benefits with respect to any former Rayonier salaried employee
covered by the ITT Salaried Medical and Dental Plan and the ITT Salaried Life
Insurance Plan who has retired as of the Distribution Date.
(c) Rayonier agrees to reimburse ITT for the present value of any
net liability for post-retirement health benefits which hereafter may be
imposed upon ITT by virtue of any legislation or regulation with respect to any
Rayonier Salaried Employee.
5. SEVERANCE As of the Distribution Date, Rayonier will provide
Severance Plans for all Rayonier Salaried Employees which are substantially
equivalent to those ITT Severance Plans covering such employees prior to the
Distribution Date. The Rayonier Severance Plans will be maintained without
modification for a minimum of one year.
6. LIFE INSURANCE (a)As of the Distribution Date, Rayonier will
establish a Life Insurance Plan for Rayonier Salaried Employees identical to
the ITT Salaried Life Insurance Plan. ITT will retain the liability for
post-retirement life insurance for any employee covered by the ITT Salaried
Life Insurance Plan who (i) has retired prior to the Distribution Date or (ii)
is eligible to retire as of the Distribution Date. ITT will transfer to
Rayonier a proportionate share of the reserves it maintains for providing
post-retirement life insurance for any other active Rayonier salaried employee
not referred to in (ii) above.
(b) As of the Distribution Date, Rayonier will establish a
supplemental, company-paid death benefit plan covering Mr. R. M. Gross,
identical to the plan which he has with ITT. ITT will transfer its reserve for
this benefit to Rayonier.
7. EXCESS LONG-TERM DISABILITY INSURANCE As of the Distribution
Date, Rayonier will establish an Excess Long-Term Disability Insurance Plan,
identical to the ITT Excess Long-Term Disability Insurance Plan covering those
eligible Rayonier salaried employees. ITT will transfer to Rayonier its
proportionate share of the reserves for this benefit.
8. BENEFIT PROGRAM PARTICIPATION (a) Except as specifically
provided herein, all Rayonier employees
32
10
(including Rayonier Salaried Employees) will cease participation in all ITT
Benefit Plans and Programs as of the Distribution Date. ITT will remain
responsible for life insurance and medical and dental claims incurred prior to
the Distribution Date. As soon as practicable, ITT will provide an accounting
of the 1993 claims experience for Rayonier's Welfare Plans and determine any
reconciliation payment necessary.
(b) Rayonier shall recognize each Rayonier Salaried Employee's
service with ITT for purposes of determining (i) eligibility for vacation
benefits, short-term disability, and severance benefits and (ii) eligibility
for vesting under all other employee benefit plans and policies of Rayonier
applicable to Rayonier Salaried Employees, to the extent such service was
recognized by ITT for such purposes.
(c) Nothing in this Agreement shall be construed or interpreted to
restrict ITT's or Rayonier's right or authority to amend or terminate any of
its employee Benefit plans, policies or programs effective as of a date
following the Distribution Date, except as explicitly stated within this
Agreement.
9. BENEFIT COMMUNICATIONS AND ADMINISTRATIVE SERVICES ITT shall be
responsible for providing communications and administrative services for
individuals who are, as of the Distribution Date, former salaried employees of
Rayonier (and their eligible dependents and survivors) who, as of the
Distribution Date, retain a benefit under ITT's Salaried Benefit Program.
10. HOLD HARMLESS/INDEMNIFICATION (a) Rayonier shall hold
harmless, indemnify and defend ITT from and against any and all costs,
expenses, claims, damages, lawsuits, reasonable attorneys' and accountants'
fees and costs, losses, deficiencies, assessments, administrative orders,
fines, penalties, actions, proceedings, judgments, liabilities and obligations
of any kind or description (a "Claim" or "Claims") asserted against, incurred
or required to be paid by ITT (regardless of when asserted or by whom),
associated with or arising under any employee benefit plan, policy, program or
arrangement established or adopted by Rayonier effective on or after the
Distribution Date or liability assumed by Rayonier, pursuant to the terms and
conditions set forth in this Agreement.
33
11
(b) ITT shall hold harmless, indemnify and defend Rayonier from and
against any and all Claims, asserted against, incurred or required to be paid
by Rayonier (regardless of when asserted or by whom), associated with or
arising under any employee benefit plan, policy, program or arrangement
maintained by ITT and not expressly assumed by Rayonier pursuant to this
Agreement, regardless of whether such Claim is asserted before, on or after the
Distribution Date.
11. INFORMATION AND DATA EXCHANGE Each party shall furnish, or
shall cause to be furnished to the other party, a list of all Benefit Plan
participants and employee data or information in its possession which is
necessary for such other party to maintain and implement any Benefit Plan or
arrangement covered by this Benefit Agreement, or to comply with the provisions
of this Benefit Agreement, and which is not otherwise readily available to such
other party. Each shall have the right, at its own cost and expense, at any
reasonable time, with reasonable intervals, during normal business hours, upon
reasonable prior written notice, to examine employee records in connection with
legitimate business purposes, and to audit, examine and make copies of or
extracts from the books, accounts and other records of the other in order to
verify the accuracy of such records insofar as they are relevant to this
Benefit Agreement. Such audit, examination, copying and extracting may be
conducted by employees of ITT or Rayonier or a firm of independent public
accountants or other experts designated by the remaining party; provided that,
prior thereto, such firm's executives deliver to the party to be audited an
appropriate confidentiality agreement.
12. SCOPE OF AGREEMENT (a) This Benefit Agreement shall be binding
upon, and inure to the benefit of, the parties and their respective successors
and permitted assigns. Nothing contained herein shall be deemed to create any
third-party beneficiary rights in any individual who or entity which is not a
party to this Benefit Agreement. Any assignment or delegation of this Benefit
Agreement by either party without the prior written consent of the other party
shall be void, except that no such consent shall be required with respect to an
assignment or delegation made in connection with the sale, transfer or other
disposition of all or substantially all of the businesses of either party.
34
12
(b) This Benefit 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.
(c) This Benefit Agreement and the Annexes attached hereto
constitute the entire understanding of the parties with respect to the subject
matter hereof and supersede as of the Distribution Date any and all previous
agreements and understandings, oral or written, between the parties to the
extent such previous agreements and understandings address such subject matter.
No modification of this Benefit Agreement or waiver of any provision hereof or
right hereunder will be binding upon either party unless signed in writing by
an authorized representative of such party.
(d) This Benefit Agreement will continue in force on the terms and
conditions described herein until terminated or amended by mutual agreement of
the parties.
(e) Notwithstanding anything in this Benefit Agreement to the
contrary, all actions contemplated herein with respect to Benefit Plans which
are to be consummated pursuant to this Benefit Agreement shall be subject to
such notices to, and/or approvals by, the IRS (or other governmental agency or
entity) as are required or deemed appropriate by such Benefit Plan's sponsor.
ITT and Rayonier each agrees to use its best efforts to cause all such notices
and/or approvals to be filed or obtained, as the case may be.
(f) Any provision of this Benefit Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(g) From and after the Distribution Date, each of ITT and Rayonier
shall cause to be performed, and hereby guarantees the performance and payment
of, all actions, agreements, obligations and liabilities set forth herein to be
performed or paid by its subsidiaries.
35
13
(h) No failure or delay on the part of ITT or Rayonier in exercising
any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other
right or power. No modification or waiver of any provision of this Benefit
Agreement nor consent to any departure by ITT or Rayonier therefrom shall in
any event be effective unless the same shall be in writing, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given.
(i) For the convenience of the parties, any number of copies of this
Benefit Agreement may be executed by the parties hereto, and each such executed
counterpart shall be deemed to be an original instrument.
13. NOTICE All notices and other communications hereunder must be
in writing and hand delivered or mailed by registered or certified mail (return
receipt requested) or sent by any means of electronic message transmission with
delivery confirmed (by voice or otherwise) to the parties at the following
addresses (or at such other address specified by like notice) and will be
deemed given on the date such notice is received:
To ITT:
ITT Corporation
1330 Avenue of the Americas
New York, NY 10019
Attn: Senior Vice President, Human Resources
36
14
To Rayonier:
Rayonier Inc.
1177 Summer Street
Stamford, CT 06904
Attn: Senior Vice President, Human Resources
IN WITNESS WHEREOF, the parties have duly executed and entered into
this Benefit Agreement, as of the date first above written.
ITT Corporation
By: /s/ Walter F. Diehl, Jr.
---------------------------
Name: Walter F. Diehl, Jr.
-------------------------
Title: Vice President
------------------------
ITT Rayonier Incorporated
By: /s/ John P. O'Grady
---------------------------
Name: John P. O'Grady
-------------------------
Title: Senior Vice President -
------------------------
Human Resources
37
ANNEX A
RAYONIER FROZEN SALARIED BENEFIT CASES
COLO LNAM FINT STDT FBDA
348003 COLLINS R 8/9/82 8/9/82
348004 BOWERS K 1/1/90 1/1/90
348004 CALHOUN R 5/1/89 5/1/89
348004 COLE T 9/4/89 9/4/89
348008 FORD D 11/19/90 11/19/90
348008 MACK D 3/9/81 3/9/81
348017 HAMPTON J 9/4/85 9/4/85
348019 LANDRY F 9/13/84 9/13/84
348008 BAILY J 10/7/85 10/7/85
348003 MURRAY F 9/12/77 9/12/77
38
EXHIBIT 10.03
EXHIBIT C
TO DISTRIBUTION AGREEMENT
T A X A L L O C A T I O N A G R E E M E N T
THIS AGREEMENT (the "Agreement"), dated as of February 11, 1994 by and
between ITT Corporation ("ITT") and ITT Rayonier Incorporated ("Rayonier"), on
behalf of itself and its directly or indirectly owned domestic subsidiaries
which would be eligible to join in a consolidated Federal income tax return, or
which have joined in any consolidated Federal income tax return, of ITT
(collectively the "Rayonier Group" and individually a "Rayonier Subsidiary").
WHEREAS, ITT is the common parent of an affiliated group of domestic
corporations including the Rayonier Group (the "ITT Group") which has elected
to file a consolidated Federal income tax return ("Consolidated Return");
WHEREAS, the Rayonier Group members will cease to be members of the ITT
Group upon the proposed distribution by ITT of all of its stock interest in
Rayonier to ITT's common and Series N preferred shareholders (the
"Distribution") on or about February 28, 1994 (the "Closing Date");
WHEREAS, ITT and Rayonier have entered into a Distribution Agreement
setting forth agreements governing matters following the distribution; and
WHEREAS, ITT and Rayonier desire to provide tax allocation arrangements
between each other which afford the same allocation of tax burdens and benefits
to ITT and Rayonier for transactions which occurred prior to the Closing Date
as would have been afforded to each other absent the Distribution and to
provide for certain other tax matters.
1
39
EXHIBIT C
TO DISTRIBUTION AGREEMENT
NOW, THEREFORE, in consideration of the premises and the agreements
herein set forth, ITT and Rayonier (on its own behalf and on behalf of each
Rayonier Subsidiary) hereby agree as follows:
1. Rayonier will join, and will cause each Rayonier Subsidiary to
join, in the Consolidated Returns for the calendar years 1993 and 1994 to the
extent they are eligible to join in such returns under the provisions of the
Internal Revenue Code of 1986, as amended, (the "Code") and the regulations
thereunder. Rayonier will neither elect to file separate returns for such
periods nor will it cause or permit any of the Rayonier Subsidiaries to so
elect.
2. Rayonier hereby irrevocably designates, and Rayonier agrees to
cause each of the Rayonier Subsidiaries to so designate, ITT as its agent to
take any and all actions necessary or incidental to the filing of Treasury
Form 1122 (or any amendment thereto) with respect to any taxable period in
which Rayonier or any of the Rayonier Subsidiaries is a member of the ITT Group
(a "Consolidated Return Year") and Rayonier agrees to deliver, and to cause
each of the Rayonier Subsidiaries to deliver, executed copies of said Form 1122
(or any amendment thereto) to ITT, if required, with respect to any such year.
3. Rayonier agrees to cooperate with ITT, and will cause each of the
Rayonier Subsidiaries to so cooperate, in a timely manner consistent with
existing practice in filing any return or consent contemplated by this
Agreement. Rayonier also agrees to take, and will cause the appropriate
Rayonier Subsidiary to take, such action as ITT may reasonably request,
including but not limited to the filing of requests for the extension of time
within which to file tax returns, and to cooperate in connection with any
refund claim with respect to any year it is included in the ITT Group.
Rayonier further agrees to furnish timely, and to cause each of the Rayonier
Subsidiaries to so furnish, ITT with any
2
40
EXHIBIT C
TO DISTRIBUTION AGREEMENT
and all information reasonably requested by ITT in order to carry out the
provisions of this Agreement. ITT agrees to furnish timely to Rayonier any and
all information requested by Rayonier in order to carry out the provisions of
this Agreement.
4. (a) ITT will file a Consolidated Return for its year ending
December 31, 1993. ITT and Rayonier agree to make a settlement on or before
March 1, 1994 equal to an interim amount approximating the aggregate amount of
the separate consolidated Federal income tax liability which the Rayonier Group
would have incurred if that group constituted an affiliated group eligible to
file a consolidated return for 1993 and filed a return for such period. An
appropriate adjusting payment shall be made by Rayonier or ITT on or before
October 15, 1994, based on ITT's 1993 Consolidated Return as filed.
(b) ITT will file a Consolidated Return for the period ending
December 31, 1994, which will include the Rayonier Group for the period
beginning on January 1 , 1994, and ending on the Closing Date (the "Short
Year"). Rayonier agrees to pay to ITT on or before 60 days after the Closing
Date an interim amount equal to the aggregate amount of the separate
consolidated Federal income tax liability which the Rayonier Group would have
incurred if the Rayonier Group constituted an affiliated group of corporations
eligible to file a Consolidated Return for the Short Year (based on a closing
of the books of the Rayonier Group as of the close of business on the Closing
Date) and filed such a return for such period. An appropriate adjusting
payment shall be made by Rayonier or ITT on or before October 15, 1995 based on
ITT's 1994 Consolidated Return as filed. ITT agrees to elect, to the extent
legally permitted, the depreciation method allowed in Section 168(b)(1) of the
Code and the shortest recovery periods permitted by Section 168(c) of the Code
for the Rayonier Group for any recovery property placed in service during the
Short Year. Rayonier shall refrain, and shall cause
3
41
EXHIBIT C
TO DISTRIBUTION AGREEMENT
each of the Rayonier Subsidiaries to refrain, from making any election under
Section 13261(g)(2) of the Revenue Reconciliation Act of 1993 without the prior
written consent of ITT.
(c) In making computations of the separate consolidated Federal
income tax liability of the Rayonier Group for purposes of the Agreement, the
Rayonier Group will be deemed to have filed a separate consolidated Federal
income tax return for the Short Year and all prior taxable periods to the
extent it would have been permitted to do so as an affiliated group of
corporations.
5. (a) The computation of the amount of Federal income tax
liability of the Rayonier Group for any period in which any member of the
Rayonier Group joins in ITT's Consolidated Return shall be adjusted when
payments are made, or refunds are received, as a result of an adjustment by the
Internal Revenue Service with respect to the taxable income, loss or deduction
or tax credits of the Rayonier Group. Rayonier agrees to pay to ITT any
additional amounts (including penalties and additions to tax) on account of
increases in the Federal income tax of the Rayonier Group resulting from any
such adjustment, and ITT will pay to Rayonier any refunds to which the Rayonier
Group (or any member thereof) may be entitled, in each case, together with any
interest relating thereto at the Federal statutory rate used by the Internal
Revenue Service in computing the interest payable by or to it.
(b) Amounts due to ITT by Rayonier under this paragraph shall be
paid within 30 days of the receipt from ITT of written request therefor
provided that prior to such request there has been a payment by ITT of Federal
income tax pursuant to an adjustment as described in subparagraph (a); and any
amounts due by ITT to Rayonier as a result of the receipt of a refund shall be
paid within 30 days after such receipt. After
4
42
expiration of either 30 day period any amounts unpaid shall bear interest
computed from the date of receipt of a request at the Federal statutory rate as
described in this paragraph.
6. (a) In the event that Rayonier, any Rayonier Subsidiary or the
Rayonier Group, in any consolidated income tax return filed for periods after
the Closing Date, incurs a Net Operating Loss ("NOL") for tax purposes, that
NOL will not be carried back to any ITT Group tax return without the specific
consent of ITT. ITT need consent only if the carryback of such NOL to an ITT
Group return will cause no detriment to ITT's tax position.
(b) For purposes of this Agreement, the term "tax credits" shall
include, but shall not be limited to, the rehabilitation tax credit, foreign
tax credit, research tax credit, WIN tax credit, targeted jobs tax credit, and
the alternative minimum tax credit. ITT will reimburse Rayonier for carrybacks
of Rayonier Group NOLs or tax credits into any ITT Group return only to the
extent that such carrybacks reduce the ITT Group's tax burden after taking into
account all other tax credits and carrybacks available to the ITT Group. In
the event that ITT pays an amount to Rayonier for an NOL or tax credit
carryback and the benefit of such NOL or tax credit carryback is subsequently
modified (whether as the result of an Internal Revenue Service or foreign tax
authority's adjustment, a carryback from a subsequent year or for any other
reason), the amount previously paid shall be appropriately increased or
decreased as the case may be with interest, penalties and additions to tax as
provided in paragraph 5(a).
(c) Under the ITT Group's intercompany tax settlement rules
applicable to years in which ITT incurred Alternative Minimum Tax ("AMT"), a
portion of the ITT Group's AMT may have been charged to and paid by Rayonier
("Rayonier AMT"). Some portion of the Rayonier AMT may not yet have been
reimbursed by ITT to Rayonier after
5
43
EXHIBIT C
TO DISTRIBUTION AGREEMENT
the tax settlements contemplated in paragraphs 4(a) and (b). After filing the
Consolidated Return which includes the Short Year, the ITT Group may have an
AMT credit carryforward, a portion of which may be allocated to Rayonier
("Rayonier AMTC C/F"). If the Rayonier AMTC C/F exceeds the unreimbursed
Rayonier AMT, Rayonier will reimburse ITT for such excess when Rayonier
realizes a tax benefit in respect of the Rayonier AMTC C/F in any Rayonier
Group tax return. If the unreimbursed Rayonier AMT exceeds the Rayonier AMTC
C/F, ITT will reimburse Rayonier for such excess when the ITT Group realizes a
tax benefit in respect of the Rayonier AMTC C/F in any tax return. In either
case, the determination of the extent to which such excess produces a benefit
in any year shall be made as if such excess were the last item to be considered
in computing the ITT Group or the Rayonier Group tax liability.
(d) Amounts equal to allowable research credits attributable to
the Rayonier Group's activities as a part of the ITT Group will be paid to
Rayonier by ITT. However, if no credit is allowed to the ITT Group, ITT will
make no payment to Rayonier. If a portion of the total credit claimed on an
ITT Group return is not allowed by the Internal Revenue Service, only a pro
rata amount (based upon that year's expenditures as finally allowed) will be
paid to Rayonier by ITT.
7. (a) Rayonier and the Rayonier Subsidiaries file income and
franchise tax returns in those states of the United States and in certain local
jurisdictions in which they carry on their business. In several states,
Rayonier and the Rayonier Subsidiaries file consolidated state tax returns with
ITT and certain ITT Subsidiaries. If any state or local income or franchise
tax audit adjustment attributable to Rayonier or a Rayonier Subsidiary
increases or decreases such consolidated tax liability for a taxable period
ending on or before the Closing Date, an amount in respect of that adjustment
shall be paid as provided in paragraph 7(c).
6
44
EXHIBIT C
TO DISTRIBUTION AGREEMENT
(b) Tax liabilities incurred and refunds received by Rayonier or
a Rayonier Subsidiary (other than those relating to Federal, state and local
income or franchise taxes) for all foreign taxes and all taxes not measured by
income, including, but not limited to, ad valorem, capital stock, sales, use,
real and property, special assessment, franchise, automobile registration,
employment, earnings, duty and import taxes (plus interest) shall be for the
account of Rayonier.
(c) ITT will reimburse Rayonier and Rayonier will reimburse ITT,
as the case may be, for any payment by Rayonier or ITT, respectively, to a
state or local tax authority determined to be for the account of ITT or
Rayonier, respectively. The rules of paragraph 5(b) will apply to amounts
either party must pay.
8. (a) (i) Any income tax deficiencies or refund claims which arise
with respect to the tax liability of the ITT Group are attributable to
Rayonier, a Rayonier Subsidiary or the Rayonier Group and are severable from
issues not involving Rayonier, a Rayonier Subsidiary or the Rayonier Group may,
at the option of Rayonier, be defended or prosecuted by Rayonier at its own
cost and expense and with counsel and accountants of its own selection. ITT
may participate in any such prosecution or defense at its own cost and expense
(in either event such cost or expense not to include the amount of any payment
of any tax claim, interest or penalties, or of any compromise settlement or
other disposition thereof). Rayonier shall, if it exercises its option, have
control of the proceedings, but Rayonier shall not compromise or settle any
deficiency of tax or refund claim of the ITT Group without the prior written
consent of ITT, which will not be unreasonably withheld. If Rayonier exercises
its option, Rayonier shall keep ITT reasonably informed of matters relating to
such defense or prosecution. (ii) Any income tax deficiencies or refund claims
which arise with respect to the tax liability of Rayonier, a
7
45
EXHIBIT C
TO DISTRIBUTION AGREEMENT
Rayonier Subsidiary or the Rayonier Group and which are attributable to ITT or
the ITT Group (or any member thereof) may, at the option of ITT, be defended or
prosecuted by ITT at its own cost and expense and with counsel and accountants
of its own selection. Rayonier may participate in any such prosecution or
defense at its own cost and expense (in either event such cost or expense not
to include the amount of any payment of any tax claim, interest or penalties,
or of any compromise settlement or other disposition thereof that is for the
account of ITT under this Agreement) to the extent such defense or prosecution
is severable from issues not involving Rayonier, a Rayonier Subsidiary or the
Rayonier Group. ITT shall, if it exercises its option, have control of the
proceedings, but ITT shall not compromise or settle any deficiency of tax or
refund claim of Rayonier, a Rayonier Subsidiary or the Rayonier Group without
the prior written consent of Rayonier, which will not be unreasonably withheld.
If ITT exercises its option, ITT shall keep Rayonier reasonably informed of
matters relating to such defense or prosecution. (iii) ITT and Rayonier agree
to cooperate in all reasonable respects with respect to tax deficiencies or
refund claims described in Section 8(a)(i) or (ii), which cooperation shall
include executing and filing such waivers, consents, other Treasury Department
forms, state tax authority forms, court petitions, refund claims, complaints,
powers of attorney and other documents needed from time to time in order to
defend, prosecute or resolve any such asserted income tax deficiencies or
refund claims.
(b) All computations or recomputations of Federal or state and
local income and franchise tax liability, and all computations or
recomputations of any amount or any payment (including, but not limited to,
computations of the amount of the tax liability, any loss or credit or
deduction, Federal statutory tax rate change for a year, interest, penalties,
and adjustments) and all determinations of the amount of payments or
repayments, or determinations of any other nature required to be made pursuant
to this Agreement are subject to review by Arthur Andersen & Co. If any
disagreement remains
8
46
EXHIBIT C
TO DISTRIBUTION AGREEMENT
after any Arthur Andersen & Co. review, that disagreement will be resolved as
provided by the Distribution Agreement entered into between ITT and Rayonier in
connection with the distribution of Rayonier stock.
9. (a) In computing any Rayonier payment to ITT under paragraphs 4,
5 and 7, Rayonier, the Rayonier Group and the Rayonier Subsidiaries will
determine their tax liability as if their tax benefit transfer leases were not
in effect.
(b) Rayonier agrees to maintain, and shall cause each Rayonier
subsidiary to maintain, accurate records identifying each asset it owns subject
to a tax benefit transfer lease. Rayonier will indemnify ITT if ITT is
required to make any termination payments to any lessor with respect to such a
lease.
10. The provisions of this Agreement shall survive the Closing Date
and remain in full force until all periods of limitations, including any
extensions or waiver periods, for all of ITT's taxable periods prior to or
including the Closing Date have expired. At that time all payments required
under this Agreement shall become immediately due.
11. In the event that the Distribution is ultimately held to be a
taxable transaction, ITT will bear the entire tax liability on any gain
recognized to it. ITT will not require Rayonier to bear the cost of additional
taxes paid by ITT shareholders receiving Rayonier stock in the Distribution,
except as provided below. If Rayonier or any Rayonier Subsidiary takes any
action which materially contributes to a final determination that the
Distribution is a taxable event, Rayonier will indemnify ITT for its tax
liability and for any resulting payments ITT makes to its shareholders that
received Rayonier stock in the Distribution, whether or not ITT is legally
obligated to make such payments (it being
9
47
EXHIBIT C
TO DISTRIBUTION AGREEMENT
understood that, although ITT may not be obligated to make such payments to
shareholders, ITT may choose to do so in settlement of an actual or threatened
claim).
12. Any notices, payments or other communications required by this
Agreement shall be made as provided in the Distribution Agreement; however,
copies of such shall, for both ITT and Rayonier, be sent to the attention of
the Director of Taxes.
13. ITT shall indemnify Rayonier for any Federal or state income or
franchise taxes for any taxable period (or portion of a taxable period) ending
before or including the Closing Date for which the Rayonier Group or any
Rayonier Subsidiary may be liable solely as a result of the operation of
Treasury Regulation Sections 1.1502-6 and 1.1502-77 or any state counterpart
statute or regulation.
14. This Agreement shall be governed 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, and shall be binding on the successors and assignees
of the parties hereto.
15. This Agreement contains the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior
written tax sharing or tax allocation agreements, memoranda, negotiations and
oral understandings, if any, and may not be amended, supplemented or discharged
except by performance or by an instrument in writing signed by both of the
parties hereto.
16. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
10
48
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.
ITT Corporation
BY /s/ Richard T. Irwin
---------------------------------
Vice President
ITT Rayonier Incorporated
BY /s/ Gerald J. Pollack
---------------------------------
Senior Vice President
and Chief Financial Officer
11
49
EXHIBIT 10.04
EXHIBIT D
TO DISTRIBUTION AGREEMENT
CANADIAN ASSETS PURCHASE AGREEMENT
THIS ASSETS PURCHASE AGREEMENT made as of February 11, 1994 by and between
ITT Industries of Canada Ltd., a federal corporation incorporated under the
laws of Canada (the "Seller"), and Rayonier Canada Limited, a federal
corporation incorporated under the laws of Canada (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Seller owns the Purchased Assets (as hereinafter defined);
WHEREAS, the parties hereto desire that the Seller sell the Purchased
Assets to the Purchaser, and that the Purchaser purchase the Purchased Assets
from the Seller;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I. Definitions.
Whenever used in this Agreement the following terms shall have the
following respective meanings:
"Adjusted Net Worth" has the meaning ascribed thereto in Section 2.1(b);
"Associate" means with respect to any entity any other entity directly or
indirectly controlling, controlled by or under common control with such
specified entity. For purposes of this definition control means ownership of
more than 50% of the shares having power to elect directors or persons
performing a similar function;
50
"Assumed Liabilities" means the liabilities of the Seller set forth in
Exhibit A;
"Benefit Plans" means plans, contracts, agreements, practices, policies or
arrangements, whether oral or written, providing for any bonuses, deferred
compensation, pension, retirement benefits, excess benefits, profit sharing,
stock bonuses, stock options, stock purchases, life, accident and health
insurance, hospitalization, savings, holiday, vacation, severance pay, sick
pay, sick leave, disability, tuition refund, service awards, company car,
scholarship, relocation, or any other employee or executive benefits;
"Business" means the business of the Seller relating to the growing,
purchase and sale of timber;
"Closing" has the meaning ascribed thereto in Section 2.2;
"Closing Balance Sheet" has the meaning ascribed thereto in Section
2.4(a)(ii);
"Closing Date" has the meaning ascribed thereto in Section 2.2;
"Closing Payment" has the meaning ascribed thereto in Section 2.3(b);
"Contracts" means contracts, agreements, plans, leases, licenses and
franchises;
"Controlled Real Property" means Real Property and Improvements owned,
leased or controlled on or prior to the Closing Date by the Seller in respect
of the Business or any predecessor thereof and the Quebec Real Property;
2
51
"Distribution Agreement" means the agreement of that name dated as of
February 11, 1994 by and between ITT Corporation ("ITT") and ITT Rayonier
Incorporated ("Rayonier") providing for the principal corporate transactions
required to effect the distribution of all the outstanding common shares of
Rayonier to the holders of shares of common stock and cumulative preferred
stock $2.25 convertible series N of ITT;
"Distribution Date" shall have the same meaning as in the Distribution
Agreement;
"Environmental Laws" means Laws relating to, and common law causes of
action, such as trespass and nuisance, based on, (i) emission, discharge,
release or threatened release of Hazardous Substances, into the environment
(including, without limitation, the air, surface water, ground water, land or
subsurface strata) or (ii) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of Hazardous Substances;
"Excluded Assets" means the assets set forth in Exhibit B;
"Hazardous Substances" means pollutants, contaminants or hazardous or toxic
substances, materials or wastes including, but not limited to, those defined in
the Waste Management Act, S.B.C. Chapter 41, as amended or replaced, petroleum,
including crude oil or any fraction thereof and those substances regulated
under any applicable Law due to their known or suspected ability to cause harm
to human health or the environment;
3
52
"Improvements" means buildings and other improvements;
"Indemnifying Party" means an indemnitor under this Agreement;
"Indemnitee" means a Purchaser Indemnitee or a Seller Indemnitee;
"Laws" means laws, ordinances, codes, standards, administrative rulings or
regulations of any federal, provincial, state or local governmental authority;
"Losses" has the meaning ascribed thereto in Section 4.2;
"Purchase Price" has the meaning ascribed thereto in Section 2.1(b);
"Purchased Assets" means: (i) all the assets of the Seller used or held for
use primarily or exclusively in the Business, other than Excluded Assets,
including but not limited to the following:
(a) Land and land improvements;
(b) Buildings and other improvements;
(c) Machinery and equipment;
(d) Furniture and fixtures;
(e) Inventories of finished goods, raw material and work in
process;
(f) Accounts receivable;
(g) Prepaid expenses;
(h) Contracts, including leases;
(i) Customer lists and business records;
(j) goodwill; and,
4
53
(ii) the Quebec Real Property;
"Purchaser" has the meaning ascribed thereto on page 1 of this Agreement;
"Purchaser Indemnitee" has the meaning ascribed thereto in Section 4.1;
"Quebec Real Property" means the Real Property identified on Exhibit C;
"Real Property" means real property and interests in real property;
"Reference Balance Sheet" means the three column balance sheet attached
hereto as Exhibit D showing for illustrative purposes in the second column
thereof the adjustments which should have been made to determine Adjusted Net
Worth if the Closing had taken place on the date of such balance sheet;
"Seller" has the meaning ascribed thereto on page 1 of this Agreement;
"Seller Indemnitee" has the meaning ascribed thereto in Section 4.1.
ARTICLE II. Purchase and Sale
2.1. Terms of Purchase and Sale.
Subject to the terms and conditions of this Agreement at the Closing:
(a) The Seller shall sell, assign and transfer the Purchased Assets
to the Purchaser and the Purchaser shall purchase the Purchased Assets from the
Seller.
(b) In consideration for the Purchased Assets, the Purchaser shall
pay to the Seller a purchase price (the "Purchase
5
54
Price") equal to the Adjusted Net Worth as of the Closing Date, as determined
pursuant to Section 2.4. The term "Adjusted Net Worth" shall mean the book
value as of the close of business on the Closing Date of the Purchased Assets
less the Assumed Liabilities determined in accordance with Canadian generally
accepted accounting principles.
(c) The Purchaser shall assume and agree to pay, perform and
discharge when due the assumed Liabilities.
2.2. The Closing. Consummation of the sale and purchase of the Business
(the "Closing") shall take place on the Distribution Date at the offices of ITT
Corporation, 1330 Avenue of the Americas, New York, NY 10019. The date of
Closing is herein called the "Closing Date."
2.3. Closing Deliveries. At the Closing:
(a) The Seller shall deliver to the Purchaser the documents referred
to in Section 2.8 and shall deliver to the Purchaser possession of the
Purchased Assets;
(b) The Purchaser shall deliver to the Seller CDN $3,668,529 (the
"Closing Payment") by wire transfer in immediately available funds; and
(c) The Seller and the Purchaser each shall deliver such other
documents as may be reasonably requested by the other.
2.4. Determination of Adjusted Net Worth.
Adjusted Net Worth shall be determined following the Closing Date as
follows:
(a) As soon as practicable after the Closing Date the Seller shall
deliver to the Purchaser an adjusted balance sheet
6
55
(the "Closing Balance Sheet") which shall be presented in the same three-column
format as the Reference Balance Sheet and shall present:
(i) in column 1 a balance sheet of the assets and liabilities of the
Business as of the Closing Date,
(ii) in column 2 the assets in column 1 which are not Purchased Assets
and the liabilities in column 1 which are not Assumed Liabilities, and
(iii) in column 3 the Adjusted Net Worth.
Columns 1 and 3 of the Closing Balance Sheet shall present fairly in all
material respects the assets and liabilities of the Business and the Adjusted
Net Worth, respectively, as of the Closing Date in conformity with Canadian
generally accepted accounting principles. The Purchaser shall cooperate fully
with the Seller in the preparation of the Closing Balance Sheet. Further,
during such period employees of the Purchaser shall be entitled to access to
the Seller's work papers prepared in connection with the Closing Balance Sheet
and shall be entitled to review and discuss such work papers with the Seller.
(b) The Purchaser may dispute the Adjusted Net Worth as shown on the
Closing Balance Sheet by notifying the Seller in writing within 30 days after
receipt of the Closing Balance Sheet. If the Purchaser does not so notify the
Seller within such period, the Adjusted Net Worth as shown on the Closing
Balance Sheet shall be final, binding and conclusive on the parties. If the
Purchaser does so notify the Seller, the
7
56
Purchaser and the Seller shall attempt to reconcile their differences, and any
resolution by them as to any disputed amounts shall be final, binding and
conclusive on the parties.
(c) If the Purchaser and the Seller are unable to reach a resolution
with respect to all of the items specified in the notice referred to in Section
2.4(b) within 20 days after the date of receipt by the Seller of such notice,
then either party may submit the items remaining in dispute for resolution to
Arthur Andersen or to such other accounting firm of national recognition
mutually acceptable to the Purchaser and the Seller (the "Independent
Accounting Firm"), which shall, within 20 days after such submission or such
longer period as the Independent Accounting Firm may require, determine and
report to the Seller and the Purchaser upon such remaining disputed items, and
such determination shall be final, binding and conclusive on the parties
hereto. The fees and disbursements of the Independent Accounting Firm shall be
borne half by the Purchaser and half by the Seller.
2.5. Settlement of Purchase Price.
If the Adjusted Net Worth as finally determined pursuant to Sections
2.4 (b) or (c) results in a Purchase Price which exceeds the Closing Payment,
the Purchaser shall, within five business days after such final determination,
pay such excess to the Seller. If the Adjusted Net Worth as finally determined
pursuant to Sections 2.4 (b) or (c) results in a Purchase price which is less
than the Closing Payment, the Seller shall, within five business days after
such final determination, pay such
8
57
difference to the Purchaser. The party making such payment shall pay interest
thereon to the other party for the period from the Closing Date to the date of
payment at the annual rate announced from time to time by Royal Bank of Canada,
Toronto, Ontario, as the base rate charged by it for loans to prime commercial
customers. Payment of such excess (or difference) and interest thereon shall
be made by wire transfer in immediately available funds.
2.6. Assignment and Assumption.
Except as otherwise provided in Article III hereof (relating to
employees and employee benefits), the Contracts which are Purchased Assets
shall be assigned to the Purchaser at the Closing. Nothing in this Agreement
shall be construed as an attempt to assign any Contract which by its terms or
by law is not assignable without the consent of the other party or parties
thereto, unless such consent shall have been given. If any required consent is
not obtained, the Seller will cooperate with the Purchaser in any reasonable
arrangement designed to provide for the Purchaser the benefits under any such
Contract.
2.7. No Representations or Warranties. Each of the parties hereto
understands and agrees that no party hereto is in this Agreement or in any
other document contemplated by this Agreement or otherwise making any
representation or warranty whatsoever including, without limitation, as to
title, value or legal sufficiency.
2.8. Instruments of Conveyance. In order to effectuate the sale,
conveyance, transfers and assignments contemplated by Sections 2.1 and 2.6
hereof, the Seller will execute and deliver
9
58
at the Closing all such deeds, bills of sale and other documents or instruments
of conveyance, transfer or assignment as shall be necessary or appropriate to
vest in or to confirm in the Purchaser such title to all of the Purchased
Assets as the Seller has.
ARTICLE III. Employees and Employee Benefits
3.1. Employees and Employee Benefit Definitions.
"Effective Date" means the day next following the Closing Date;
"Effective Time" shall mean 12:01 a.m. Vancouver, B.C. time of the
Effective Date;
"Employment Payments" has the meaning ascribed thereto in Section
3.3(b);
"Employees" means all persons employed or engaged by Seller in
connection with the Business on the Closing Date including without limitation
those persons who are absent from work on account of disability, illness or
injury, but specifically excluding from the meaning thereof Former Employees as
defined below;
"Former Employees" means all persons (a) who were not employed by
Seller on the Closing Date but who were formerly employed by Seller in
connection with the Business and (b) whose service with Seller ceased prior to
the Closing Date as a result of retirement or other termination of employment.
"Transferred Employees" means all the Employees who become employees
of Purchaser effective as of the Effective Time;
"Vacation Pay" has the meaning ascribed thereto in Section 3.3(c).
10
59
3.2. Employment and Employee Benefits.
(a) Purchaser shall on or prior to the Closing Date and effective as of
the Effective Time offer to employ each and all of the Employees on
substantially equivalent terms and conditions of employment, including, without
limitation, compensation, working conditions and employee benefits, as applied
to such Employees on the Closing Date.
(b) Except to the extent provided otherwise in Section 3.3., Purchaser
shall not adopt any of the employee plans, benefits, policies, agreements or
arrangements of Seller covering the Employees or assume any liabilities arising
thereunder.
(c) Purchaser shall not assume any obligations for any benefits payable or
any other liabilities with respect to Former Employees and their dependents.
(d) Nothing in this Agreement shall require Purchaser to retain any
Transferred Employee for any period of time after the Closing Date and, subject
to Sections 3.3. and 3.5., and requirements of applicable law, Purchaser
reserves the right, at any time after the Closing Date, to terminate such
employment and amend, modify or terminate any term and condition of employment
including, without limitation, any employee benefit plan, program, policy,
practice or arrangement or the compensation of any of the Employees.
3.3 Purchaser Liability - Transferred Employees.
(a) In the event any Transferred Employee's employment with the Purchaser
is terminated after the Closing Date, the Purchaser shall pay and provide
notice and severance pay benefits calculated and determined as required by
applicable employment laws;
11
60
(b) Purchaser shall bear and discharge any and all liability for:
(i) wages, salaries, commission, bonuses; and
(ii) premiums for unemployment insurance, workers Compensation,
benefit plan payments and other employee benefits or claims, (collectively,
the "Employment Payments"),
accrued or earned after the Effective Time by Transferred Employees.
All other Employment Payments in respect of Transferred Employees accrued
or earned prior to the Effective Time shall remain the responsibility of
Seller.
(c) Purchaser shall bear and discharge any and all liability for holiday
pay and accumulated vacation with pay credits or entitlements (collectively,
"Vacation Pay") accrued or earned prior to the Effective Time for Transferred
Employees.
(d) Appropriate adjustments in respect of the Employment Payments and
Vacation Pay as of the Effective Time shall be made on the Closing Date.
3.4. Group Insurance Benefits.
(a) Seller shall be responsible for any liability for all claims,
expenses, and treatments, including administrative expenses related thereto,
which are in fact covered and payable under the terms of the Seller's group
insurance contracts incurred prior to the Effective Time irrespective of
whether any such claim is filed or submitted after the Effective Time.
12
61
(b) The Purchaser shall be responsible for any liability for all claims,
expenses and treatments, including administrative expenses related thereto,
which are in fact covered and payable under the terms of the Purchaser's group
insurance contracts incurred from and subsequent to the Effective Time.
3.5. Recognition of Prior Service. Purchaser shall recognize each
Transferred Employee's service with the Seller for purposes of determining:
(i) eligibility for vacation benefits, short term disability or weekly
accident and sickness benefits, and severance benefits; and
(ii) eligibility and vesting under all other employee benefit plans
and policies of Purchaser applicable to Transferred Employees.
3.6. Retirees. Notwithstanding anything otherwise set forth above, the
parties agree that the Purchaser shall assume no liability for assets,
liabilities or administrative services, costs or expenses for employees of the
Business who have effectively retired prior to the Closing Date.
ARTICLE IV. Indemnification
4.1. Indemnification.
(a) From and after the Closing the Purchaser agrees to indemnify the
Seller, and its officers, directors, employees and agents (individually a
"Seller Indemnitee" and collectively the
13
62
"Seller Indemnitees") and to hold each Seller Indemnitee harmless from and
against all damages, losses and expenses (including reasonable expenses of
investigation and attorneys' fees) ("Losses") caused by or arising out of any:
(i) breach of the covenants of the Purchaser set forth in Article III;
(ii) liability under, violation of or non-compliance with any
Environmental Law (whether now existing or hereinafter enacted or adopted)
resulting from acts or omissions on or prior to the Closing Date of the
Seller in respect of the Business, any predecessor thereof or any
predecessor in interest to the Controlled Real Property;
(iii) liability under any Environmental Law (whether now existing or
hereinafter enacted or adopted) resulting from the presence on or prior to
the Closing Date of any Hazardous Substance on any Controlled Real
Property;
(iv) liability for removal, remediation, cleanup or costs of response
required under any Environmental Law (whether now existing or hereinafter
enacted or adopted) resulting from the manufacture, processing, use,
generation, storage, transport, disposal, emission or discharge on or prior
to the Closing Date of any Hazardous Substance by the Seller in respect of
the Business, any predecessor thereof or any predecessor in interest to any
Controlled Real Property; and,
(v) failure of the Purchaser to discharge any Assumed Liabilities.
14
63
(b) From and after the Closing the Seller agrees to indemnify the
Purchaser and its officers, directors, employees and agents (individually a
"Purchaser Indemnitee" and collectively the "Purchaser Indemnitees") and to
hold each Purchaser Indemnitee harmless from and against all Losses caused by
or arising out of any breach of the covenants of the Seller set forth in
Article III.
4.2. Indemnification Procedure as to Third Party Claims. The provisions of
Section 3.04 of the Distribution Agreement shall apply with respect to any
third party claim indemnified pursuant to this Agreement.
ARTICLE V Miscellaneous
5.1. Books and Records. At reasonable times after the Closing (a) the
Purchaser shall make available to the Seller for inspection and copying the
books and records which are Purchased Assets to the extent reasonably required
by the Seller for tax, financial reporting and other purposes and (b) the
Seller shall make available to the Purchaser for inspection and copying any of
Seller's books and records relating to the Business which are not Purchased
Assets to the extent reasonably required by the Purchaser for such purposes.
Neither the Seller on the one hand nor the Purchaser on the other hand will
dispose of any of such books and records without first offering them to the
other.
5.2. Further Assurances and Assistance. The Seller and the Purchaser agree
that after the Closing each will execute and deliver to the other any and all
documents, and take such further
15
64
acts, in addition to those expressly provided for herein, that may be necessary
or appropriate to effectuate the provisions of this Agreement.
5.3. Notices. All notices and other communications hereunder shall be in
writing and hand delivered or mailed by registered or certified mail (return
receipt requested) or sent by any means of electronic message transmission with
delivery confirmed (by voice or otherwise) to the parties at the following
addresses (or at such other addresses for a party as shall be specified by like
notice) and will be deemed given on the date on which such notice is received:
if to Purchaser, to:
Rayonier Canada Ltd.
c/o Rayonier Inc.
18000 International Blvd., Suite 900
SeaTac, WA 98118-4283
Attn: Northeast Counsel
with a copy to:
Rayonier Incorporated
1177 Summer Street
Stamford, CT 06904
Attn: Vice President
and General Counsel
if to Seller to:
ITT Industries of Canada, Ltd.
Suite 1800 Royal Trust Tower
P.O. Box 138
Toronto-Dominion Centre
Toronto, Ontario M5K 1H1
Attn: General Counsel
16
65
with a copy to
ITT Corporation
1330 Avenue of the Americas
New York, New York 10019
Attn: Senior Vice President
and General Counsel
5.4. Transaction Expenses. Costs and expenses (including, without
limitation, legal and accounting fees and expenses) incurred by the parties
with respect to the negotiation of this Agreement and the consummation of the
transactions contemplated hereby shall be paid as provided in Section 6.03 of
the Distribution Agreement.
5.5. Miscellaneous Taxes and Expenses. Any sales, use or other tax or
recording cost imposed upon the transfer of the assets and business to be
acquired by the Purchaser pursuant to this Agreement shall be paid by the
Purchaser. All ad valorem property taxes and all rentals, water, electricity,
gas, telephone and other similar and usual expenses in respect of the Business
shall be apportioned as of the Closing Date to the extent not provided for on
the Closing Balance Sheet.
5.6. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that neither party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other party hereto, except that the
Purchaser may assign, delegate or otherwise transfer its rights
17
66
under this Agreement to an Associate of the Purchaser, provided that such
assignment, delegation or transfer shall not relieve the Purchaser of its
obligations hereunder.
5.7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
executed and to be performed in that state.
5.8. Disputes. Any controversy or claim arising out of this Agreement, or
the breach thereof, shall be resolved in accordance with the provisions of
Article V of the Distribution Agreement provided, however, the provisions of
Article V of such Agreement shall not apply with respect to controversies or
claims arising out of the provisions of Section 2.4 of this Agreement or breach
thereof.
5.9. Entire Agreement; Third Party Rights. This Agreement and the
Schedules hereto constitute the entire understanding of the parties, supersede
any prior agreements or understandings, written or oral, between the parties
with respect to the subject matter thereof, and are not intended to confer upon
any other person any rights or remedies.
5.10. Amendment; Waiver. This Agreement shall not be amended or modified
except by written agreement executed by each of the parties hereto. No
provision hereof shall be deemed waived except in writing executed by the
waiving party.
5.11. Effect of Captions. The captions in this Agreement are included for
convenience only and shall not in any way affect the interpretation or
construction of any of the provisions hereof.
18
67
5.12. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized representatives as of the day and year
first above written.
ITT INDUSTRIES OF CANADA LTD.
BY: /s/ Robert G. Eisner
---------------------------
RAYONIER CANADA LIMITED
By: /s/ Wallace L. Nutter
---------------------------
19
68
Exhibit A
Assumed Liabilities
All liabilities of the Seller in respect of the Business other than
liabilities in respect of:
income taxes relating to the period prior to
Closing
intercompany borrowings.
20
69
Exhibit B
Excluded Assets
Cash, except the following:
Petty cash
Royal Bank of Canada Account #122-172-0 Mill Fund
Royal Bank of Canada Account #122-163-9 Forestry Fund
Royal Bank of Canada Account #122-165-4 Silvicultural Fund
Insurance policies and coverages
Any rights to the name or mark "ITT".
Refunds for income taxes paid or relating to the period prior to
Closing.
21
70
Exhibit C
Quebec Real Property
The follwoing lands registered in the Cadastre Renove du Canton de
Babel, division d'enrigstrement de Saguenay, Ville Port Cartier:
LOT NUMBER AREA (SQ. METRES)
---------- -----------------
1079-1 25,757
1079-3 53,140
1089-1 25,953
1089-2 627
1174-1 3,717
1174-2 86,499
1174-3 16,180
2706 778
2707 19,980
2803 28,180
2894 2,250
1153 19,520
1154 18,640
22
71
Exhibit D - Reference Balance Sheet
COMPUTATION OF RAYONIER CANADA NET BOOK VALUE
CLOSING BALANCE SHEET
AS OF DECEMBER 31, 1993 - PERIOD 13 LEDGER
ADJUSTED
BALANCE ASSETS NOT BALANCE
AS OF PURCHASED/ AS OF
12/31/93 LIABILITIES NOT 12/31/93
ACCOUNT DESCRIPTION CD$ ASSUMED CD$
REVOLVING FUND - OUTSTANDING CHECKS (3,571,480.45) (3,571,480.45) 0.00
PETTY CASH 200.00 0.00 200.00
NOTES RECEIVABLE 264,677.49 0.00 264,677.49
ACCOUNTS RECEIVABLE - TRADE 1,600,395.52 0.00 1,600,395.52
ACCRUED RECEIVABLE - TRADE 0.00 0.00 0.00
ACCOUNTS RECEIVABLE - TORONTO 650,668.56 650,668.56 0.00
ACCOUNTS RECEIVABLE - RAYONIER 29,845.76 0.00 29,845.76
ACCRUED INTEREST RECEIVABLE 6,490.04 0.00 6,490.04
SUNDRY RECEIVABLES 101,521.58 0.00 101,521.58
RAW MATERIALS - LOGS 585,816.20 0.00 585,816.20
FINISHED GOODS - LUMBER 2,783.58 0.00 2,783.58
OTHER INVENTORIES 386,022.68 0.00 386,022.68
CONTRACTOR ADVANCES 5,181.87 0.00 5,181.87
STUMPAGE 1,353,550.19 0.00 1,353,550.19
OTHER SPECIAL DEPOSITS
FUND ACCOUNTS (HELD IN TRUST) 441,538.92 0.00 441,538.92
CORRESPONDING LIABILITY (441,538.92) 0.00 (441,538.92)
OTHER DEPOSITS 113,036.11 0.00 113,036.11
ADVANCES TO EMPLOYEES 1,081.42 0.00 1,081.42
PREPAID ACCOUNTS 97,588.26 0.00 97,588.26
OTHER CURRENT ASSETS 72,351.73 0.00 72,351.73
------------------ ------------------ ------------------
TOTAL CURRENT ASSETS 1,699,730.54 (2,920,811.89) 4,620,542.43
QUEBEC LAND 0.00 (120,600.00) 120,600.00
GROSS PLANT, PROP. & EQUIP. 197,644.48 0.00 197,644.48
ACCUMULATED DEPRECIATION (43,950.11) 0.00 (43,950.11)
------------------ ------------------ ------------------
NET PLANT, PROP. & EQUIP. 153,694.37 (120,600.00) 274,294.37
LONG-TERM ASSETS 156,721.50 0.00 156,721.50
------------------ ------------------ ------------------
TOTAL ADJUSTED ASSETS 2,010,146.41 (3,041,411.89) 5,051,558.30
================== ================== ==================
REVOLVING FUND - OUTSTDING CHECKS 0.00 0.00 0.00
ACCOUNTS PAYABLE - RAYONIER 0.00 0.00 0.00
ACCOUNTS PAYABLE - TORONTO 0.00 0.00 0.00
ACCOUNTS PAYABLE - TRADE 268,238.22 0.00 268,238.22
ACCOUNTS PAYABLE - STUMPAGE 14,804.57 0.00 14,804.57
OTHER CURRENT LIABILITIES 1,099,986.84 0.00 1,099,986.84
------------------ ------------------ ------------------
TOTAL CURRENT LIABILITIES 1,383,029.63 0.00 1,383,029.63
LONG-TERM LIABILITIES 0.00 0.00 0.00
------------------ ------------------ ------------------
TOTAL ADJUSTED LIABILITIES 1,383,029.63 0.00 1,383,029.63
================== ================== ==================
NET BOOK VALUE 627,116.78 (3,041,411.89) 3,668,528.67
23
72
EXHIBIT E
TO DISTRIBUTION AGREEMENT
PART 1 - Issued Patents
==========================================================================================================================
Country Patent Issue Application Filing
Number Date Number Date
- --------------------------------------------------------------------------------------------------------------------------
AUSTR
120471 06/12/91 84103167.7 03/22/84
372412 02/15/83 3832 07/24/80
BELGM
120471 06/12/91 84103167.7 03/22/84
820891 04/10/75 10/10/74
CANAD
1007648 03/29/77 188328 12/17/73
1025850 02/07/78 179175 08/20/73
1037468 08/29/78 233677 08/18/75
1037469 08/29/78 233680 08/18/75
1048055 02/06/79 256054 06/30/76
1050225 03/13/79 211228 10/11/74
1050255 03/13/79 211110 10/09/74
1053878 05/08/79 233988 08/22/75
1061336 08/28/79 256564 07/08/76
1067263 10/04/79 211262 10/11/74
1069746 01/15/80 231546 06/15/75
1074027 03/18/80 262893 10/07/76
1082403 07/29/80 248028 03/16/76
1082691 07/29/80 272650 02/25/77
1082692 07/29/80 272651 02/25/77
1082693 07/29/80 272675 02/25/77
1082694 07/29/80 272714 02/25/77
1087771 10/14/80 311232 09/13/78
1087772 10/14/80 311233 09/13/78
1095673 02/17/81 252808 05/18/76
1097253 03/10/81 184857 08/17/77
1097254 03/10/81 284912 08/17/77
1101589 05/19/81 303967 05/24/78
1105365 07/21/81 310586 09/05/78
1106364 08/04/81 323363 03/13/79
1117669 02/02/82 320880 02/06/79
1119388 03/09/82 347068 03/05/80
1141758 02/22/83 367506 12/23/80
1142305 03/08/83 356554 07/18/80
1149219 07/05/83 389138 10/30/81
1153852 09/20/83 355377 07/03/80
1162819 02/28/84 389140 10/30/81
1184904 04/02/85 418999 01/06/83
1208631 07/29/86 449964 03/20/84
1283406 04/23/91 556888 01/20/88
FINLN
68529 10/10/85 812964 09/23/81
69311 01/10/86 830038 01/06/83
69549 03/10/86 812965 09/23/81
74309 01/11/88 811968 06/23/81
79725 02/12/90 841220 03/27/84
FRANC
51230 07/04/84 81108847.5 10/24/81
120471 06/12/91 84103167.7 03/22/84
7902456 10/15/84 7902456 01/31/79
73
EXHIBIT E
PART 1 - Issued Patents
==========================================================================================================================
Country Patent Issue Application Filing
Number Date Number Date
- --------------------------------------------------------------------------------------------------------------------------
8016008 03/09/87 8016008 07/21/80
8026894 04/07/86 8026894 12/18/80
GERWE
3027033 10/11/90 3027033 07/16/80
3047351 01/03/91 3017351 12/16/80
3164599 07/04/84 3164599 10/24/81
3484688.3 06/12/91 P 34 84 688.3 03/22/84
HOLLN
8102857 06/15/81
51230 07/04/84 81108847.5 10/24/81
120471 06/12/91 84103167.7 03/22/84
188810 09/08/92 8004199 07/22/80
ITALY
51230 07/04/84 81108847.5 10/24/81
120471 06/12/91 84103167.7 03/22/84
1193545 07/08/88 23633A/80 07/23/80
1194822 09/28/88 26850 12/22/80
JAPAN
1306435 03/13/86 102302 07/25/80
1339238 09/29/86 189393 12/26/80
1339252 09/29/86 173161 10/30/81
1495456 05/16/89 56022 03/13/86
1506557 07/13/89 173162 10/30/81
1587435 11/19/90 40287 02/28/85
LIECH
51230 07/04/84 81108847.5 10/24/81
120471 06/12/91 84103167.7 03/22/84
LUXMB
120471 06/12/91 84103167.7 03/22/84
MEXIC
7152 11/13/87 9723 10/26/81
7287 04/14/88 9724 10/26/81
161160 08/09/90 200247 02/06/84
162684 06/17/91 187926 06/22/81
NORWA
153343 02/26/86 811900 06/04/81
158810 11/02/88 813664 10/29/81
165932 05/02/91 840717 02/24/84
SPAIN
503323 02/15/82 503323 06/23/81
506718 04/21/92 506718 10/30/81
SWEDN
51230 07/04/84 81108847.5 10/24/81
120471 06/12/91 84103167.7 03/22/84
SWITZ
51230 07/04/84 81108847.5 10/24/81
120471 06/12/91 84103167.7 03/22/84
648071 02/28/85 3923 06/15/81
TAIWN
21588 03/27/85 73100320 01/27/84
UNIKN
51230 07/04/84 81108847.5 10/24/81
120471 06/12/91 84103167.7 03/22/84
74
EXHIBIT E
PART 1 - Issued Patents
============================================================================================================================
Country Patent Issue Application Filing
Number Date Number Date
- ----------------------------------------------------------------------------------------------------------------------------
2013646 07/12/82 7903226 01/30/79
2055107 04/13/83 8023958 07/22/80
2066145 05/25/83 8040179 12/16/80
USA
4018681 04/19/77 631370 11/12/75
4022631 05/10/77 578934 05/19/75
4044090 08/23/88 594325 07/09/75
4056675 11/01/77 662132 02/27/76
4064166 12/20/77 673614 04/05/76
4073660 02/14/78 715223 08/18/76
4076932 02/28/78 662137 02/27/76
4076933 02/28/78 662138 02/27/76
4082617 04/04/78 715422 08/18/76
4086418 04/25/78 662134 02/27/76
4118350 10/03/78 833077 09/14/77
4120836 10/17/78 833076 09/14/77
4123398 10/31/78 800186 05/25/77
4131705 12/26/78 830471 09/06/77
4155804 05/22/79 559174 03/17/75
4162359 07/24/79 886285 03/13/78
4248842 02/03/81 17388 03/05/79
4295929 10/20/81 131813 03/19/80
4302252 11/24/81 145333 04/30/80
4341807 07/17/82 202741 10/31/80
4374027 02/15/83 14853 02/26/79
4374702 02/22/83 313726 10/22/81
4378381 03/29/83 202740 10/31/80
4399275 08/16/83 337447 01/06/82
4402899 09/06/83 283069 07/13/81
4452721 06/05/84 441689 11/15/82
4452722 06/05/84 441628 11/15/82
4464287 08/07/84 441550 11/15/82
4481076 11/06/84 479555 03/28/83
4481077 11/06/84 479556 03/28/83
4483743 11/20/84 434724 10/18/82
4487634 12/11/84 441684 11/15/82
4500546 02/19/85 441686 11/15/82
4551305 11/05/85 544384 10/21/83
4728727 03/01/88 007772 01/28/87
5169931 12/08/92 704448 05/23/91
- ---------------------------------------------------------------------------------------------------------------------------
75
EXHIBIT E
PART 2 - Pending Applications
=====================================
Country Application Filing
Number Date
-------------------------------------
JAPAN
4-150001 05/19/92
NORWA
P921878 05/12/92
USA 07/942507 09/09/92
07/963853 10/20/92
07/960483 10/09/92
08/007741 01/22/93
08/164624 12/08/93
=====================================