SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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ITT CORPORATION
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<PAGE>
[ITT Letterhead]
October 7, 1997
Dear Fellow Stockholders:
Attached for your information is the first of a series of
advertisements we will be running to inform you about the key issues ITT
stockholders face in deciding how to vote at the Annual Meeting of ITT
stockholders set for November 12, 1997.
We will soon be sending you ITT's proxy statement and ITT's blue proxy
card. The ITT proxy statement details the many reasons why we strongly
believe Hilton's $70 per share offer is inadequate and why we are convinced
that ITT's plan will deliver superior economic value to ITT stockholders.
We urge you to read carefully the ITT proxy statement. To vote for
directors committed to ITT's plan, you will need to use ITT's blue proxy
card. You may also receive a proxy statement from Hilton with a white proxy
card. To support ITT, simply ignore Hilton's white proxy card.
We need your support. If you have questions, or need information or
assistance, please call our proxy firm, Georgeson & Company, Inc., toll
free at (800) 223-2064.
Sincerely,
/s/ Rand V. Araskog
Rand V. Araskog
Chairman and Chief Executive
<PAGE>
Attention ITT Shareholders:
The Issue is Shareholder Value
Fact: ITT Shareholders Will Decide On November 12 Whether They Want
Directors Committed To ITT's Plan Or Hilton's Hand-Picked Nominees
Who Support Their Hostile Offer.
Shareholders of Record October 1 are eligible to vote at ITT's
November 12 meeting for Directors committed to ITT's Plan--split
tax-free into three focused companies and buy back 30 million ITT
shares for $70 per share--or for nominees who support Hilton's
hostile offer. There is no longer a staggered Board in ITT's Plan.
You can make a clear-cut choice based purely on economics.
Fact: ITT Believes Our Plan Will Deliver More Value To Shareholders Than
Hilton's Low-Ball Hostile Offer.
Hilton tried to steal ITT at $55 per share and only raised to $70
in response to ITT's Plan. Yet, Hilton's own CFO told its Board
that ITT is "conservatively" worth more than $70.
Fact: Had You Tendered When Hilton First Asked You To, You Would Have
Left Almost $2 Billion On The Table.
If you vote for Hilton, we believe you'll still be leaving money on
the table. Hilton is trying to steal ITT for the benefit of its own
shareholders. ITT is offering you, tax-free, participation in the
upside of owning three public companies: ITT Destinations, a
worldwide leader in hotels and gaming; ITT Educational Services, a
premier operator of technical schools; and ITT World Directories,
the #1 publisher of overseas telephone directories and classified
information. This is the same valuecreating approach we
successfully used two years ago.
Fact: ITT Actions Have Caused Hilton To Increase Its Hostile Offer From
$55 Per Share To $70 Per Share.
ITT will continue to enhance shareholder value.
ITT Is Working For You
<PAGE>
We thank the many ITT shareholders who support our plan. To those of
you who haven't made up your mind, we're eager to make our case to
you. We are convinced we can generate superior value to Hilton's
inadequate hostile offer.
You will soon receive a blue proxy card and voting instructions from
ITT. We urge our shareholders not to take any action before reviewing
ITT's proxy materials. Be certain you review proxy cards carefully and
know who you are voting for. If you have questions, or need additional
information, please call our proxy firm, GEORGESON & COMPANY INC
toll-free at (800) 223-2064.
[ITT Logo]
<PAGE>
CERTAIN INFORMATION CONCERNING PARTICIPANTS
The participants in this solicitation include ITT
Corporation (the "Company") and the following individuals, each of
whom is a director of the Company: Bette B. Anderson, Rand V. Araskog,
Nolan D. Archibald, Robert A. Bowman, Robert A. Burnett, Paul G. Kirk,
Jr., Edward C. Meyer, Benjamin F. Payton, Vin Weber, Margita E. White
and Kendrick R. Wilson III. Ms. Anderson is the direct owner of 2,811
shares of common stock of the Company ("Common Stock") and may be
deemed to beneficially own 83 additional shares. Mr. Araskog is the
beneficial owner of 1,748,398 shares of Common Stock. Mr. Archibald is
the direct owner of 1,811 shares of Common Stock. Mr. Bowman is the
beneficial owner of 550,046 shares of Common Stock. Mr. Burnett is the
direct owner of 2,981 shares of Common Stock. Mr. Kirk is the direct
owner of 1,821 shares of Common Stock. Gen. Meyer is the direct owner
of 3,311 shares of Common Stock. Dr. Payton is the direct owner of
1,303 shares of Common Stock. Mr. Weber is the direct owner of 844
shares of Common Stock. Ms. White is the direct owner of 2,811 shares
of Common Stock. Mr. Wilson is the direct owner of 3,000 shares of
Common Stock. The foregoing share ownership figures are as of August
31, 1997.
The Company has retained Goldman, Sachs & Co. ("Goldman
Sachs") and Lazard Freres & Co. LLC ("Lazard Freres") to act as
financial advisors to the Company in connection with the Hilton offer
and other matters arising in connection therewith, including assisting
the Company in exploring possible strategic alternatives in light of
the
<PAGE>
Hilton offer. Pursuant to an engagement letter with Goldman Sachs and
Lazard Freres, the Company has agreed to pay each of Goldman Sachs and
Lazard Freres for their services 50% of (a) an initial fee equal to
$1,000,000 and (b) an additional advisory fee equal to $19,000,000.
The Company has also agreed to reimburse Goldman Sachs and Lazard
Freres for their reasonable out-of-pocket expenses, including fees of
counsel and any sales, use or similar taxes, and to indemnify Goldman
Sachs and Lazard Freres against certain liabilities in connection with
their engagement, including certain liabilities arising under the
Federal securities laws. In addition, Goldman Sachs and Lazard Freres
are involved in arranging certain financings to be incurred by ITT
Destinations, Inc., a new corporation formed to hold the Company's
hotel and gaming assets, in connection with the Comprehensive Plan and
Goldman Sachs Credit Partners L.P., an affiliate of Goldman Sachs, is
providing certain portions of such financings. Although Goldman Sachs
and Lazard Freres do not admit that they or any of their directors,
officers, employees or affiliates are a "participant," as defined in
Schedule 14A promulgated under the Securities Exchange Act of 1934, as
amended, by the Securities and Exchange Commission, or that Schedule
14A requires the disclosure of certain information concerning them,
Robert Kaplan (Managing Director), Cody Smith (Managing Director),
William Crowley (Managing Director), Eduardo Cruz (Vice President) and
Marc Nachmann (Associate), in each case of Goldman Sachs, and Gerald
Rosenfeld (Managing Director), Robert Hougie (Vice President) and
Antonio Weiss (Vice President), in each case of Lazard Freres
(collectively, the "Financial Advisor Participants"), may assist the
Company in the solicitation of proxies for the annual meeting.
Goldman Sachs and Lazard Freres have provided financial
advisory and investment banking services to the Company from time to
time for which they have received customary compensation. Kendrick R.
Wilson III is a Managing Director of Lazard Freres. In the ordinary
course of their business, Goldman Sachs and Lazard Freres may actively
trade securities of the Company for their own account and the account
of their customers and, accordingly, may at any time hold a long or
short position in such securities. Goldman Sachs has advised the
Company that as of September 29, 1997, Goldman Sachs held a net long
position of approximately 12,221 shares of Common Stock. Lazard Freres
has advised the Company that as of September 29, 1997, Lazard Freres
held a net long position of approximately 12,785 shares of Common
Stock over which
<PAGE>
Lazard Freres exercised investment discretion. Except as set forth
above, to the Company's knowledge, none of Goldman Sachs, Lazard
Freres or any of the Financial Advisor Participants has any interest,
direct or indirect, by security holdings or otherwise, in the Company.
