SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
Schedule 14D-1
Tender Offer Statement
(Amendment No. 12)
Pursuant to
Section 14(d)(1) of the Securities Exchange Act of 1934
_______________________
ITT CORPORATION
(Name of Subject Company)
HILTON HOTELS CORPORATION
HLT CORPORATION
(Bidders)
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
450912100
(CUSIP Number of Class of Securities)
MATTHEW J. HART
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
HILTON HOTELS CORPORATION
9336 CIVIC CENTER DRIVE
BEVERLY HILLS, CALIFORNIA 90210
(310) 278-4321
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications on Behalf of Bidders)
With a copy to:
STEVEN A. ROSENBLUM
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
TELEPHONE: (212) 403-1000<PAGE>
This Statement amends and supplements the Tender Of-
fer Statement on Schedule 14D-1 filed with the Securities and
Exchange Commission on January 31, 1997, as previously amended
(the "Schedule 14D-1"), relating to the offer by HLT Corpora-
tion, a Delaware corporation (the "Purchaser") and a wholly
owned subsidiary of Hilton Hotels Corporation, a Delaware cor-
poration ("Parent"), to purchase (i) 61,145,475 shares of Com-
mon Stock, no par value (the "Common Stock"), of ITT Corpora-
tion, a Nevada corporation (the "Company"), or such greater
number of shares of Common Stock which, when added to the num-
ber of shares of Common Stock owned by the Purchaser and its
affiliates, constitutes a majority of the total number of
shares of Common Stock outstanding on a fully diluted basis as
of the expiration of the Offer, and (ii) unless and until val-
idly redeemed by the Board of Directors of the Company, the
Series A Participating Cumulative Preferred Stock Purchase
Rights (the "Rights") associated therewith, upon the terms and
subject to the conditions set forth in the Offer to Purchase,
dated January 31, 1997 (the "Offer to Purchase"), and in the
related Letter of Transmittal, at a purchase price of $55 per
share (and associated Right), net to the tendering stockholder
in cash, without interest thereon. Capitalized terms used and
not defined herein shall have the meanings assigned such terms
in the Offer to Purchase and the Schedule 14D-1.
ITEM 10. ADDITIONAL INFORMATION.
In an order filed April 21, 1997, the Nevada court denied
a motion (the "Meeting Motion") filed by Parent that sought to
require the Company to hold its 1997 annual meeting in May
1997. A copy of the Nevada court's order, dated April 21,
1997, denying the Meeting Motion is filed herewith as Exhibit
(g)(16) and is incorporated herein by reference. The full text
of a press release, dated April 21, 1997, issued by Parent with
respect to the denial of the Meeting Motion is filed herewith
as Exhibit (a)(15) and is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(15) Press Release, dated April 21, 1997, issued by
Parent.
(g)(16) Order of the Nevada court, dated April 21, 1997,
denying the Meeting Motion.<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and be-
lief, I certify that the information set forth in this state-
ment is true, complete and correct.
Dated: April 22, 1997
HILTON HOTELS CORPORATION
By: /s/ Matthew J. Hart
Name: Matthew J. Hart
Title: Executive Vice President
and Chief Financial Officer
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SIGNATURE
After due inquiry and to the best of my knowledge and be-
lief, I certify that the information set forth in this state-
ment is true, complete and correct.
Dated: April 22, 1997
HLT CORPORATION
By: /s/ Arthur M. Goldberg
Name: Arthur M. Goldberg
Title: President
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EXHIBIT INDEX
Exhibit Description
(a)(15) Press Release, dated April 21, 1997, issued by
Parent.
(g)(16) Order of the Nevada court, dated April 21, 1997,
denying the Meeting Motion.
EXHIBIT (a)(15)
[Hilton Hotels Corporation Logo]
CORPORATE NEWS
Contacts: Marc A. Grossman
Sr. Vice President -
Corporate Affairs
310-205-4030
Kathy Shepard
Corporate Communications
310-205-7676
Joele Frank
The Abernathy MacGregor Group
212-371-5999
BEVERLY HILLS, Calif.--(BUSINESS WIRE)--April 21, 1997--Hilton
Hotels Corporation [NYSE:HLT], in response to the United States
District Court for the District of Nevada denying its motion for
a preliminary injunction requiring ITT Corporation to hold its
Annual Meeting in May, today issued the following statement from
Stephen F. Bollenbach, president and chief executive officer:
"ITT can run from its shareholders, but it cannot hide.
ITT's delay of its Annual Meeting in no way changes the fact
that Hilton has put a compelling offer on the table. While it
is unfortunate that ITT is denying its shareholders the right
to express their views at a May meeting, the company will still
have to face its shareholders. We are confident that ITT's
shareholders recognize the enormous benefits of a Hilton-ITT
combination, and we will continue to seek the earliest
opportunity to let the shareholders decide this matter. We are
committed to making this transaction a reality, and look
forward to taking this matter directly to ITT's shareholders to
decide for themselves how best to create value for their
investment in ITT."
At the ITT Annual Meeting, Hilton plans to ask the
shareholders of ITT to elect up to 25 Hilton nominees to the
board of directors of ITT. The Hilton nominees are expected,
subject to their fiduciary duties, to facilitate Hilton's $55-
per-share offer to acquire ITT and the proposed Hilton-ITT
merger.
Hilton also plans to ask ITT shareholders to approve
resolutions to ask the ITT board to accept the offer and
merger, and to repeal any by-law amendments that ITT might
adopt before the annual meeting that could interfere with the
offer, the merger or the election of Hilton's nominees.
###
WORLD HEADQUARTERS
9336 Civic Center Drive, Beverly Hills, California 90210
Telephone 310-205-7676
Fax 310-205-7678
E-Mail [email protected] Internet http:www.hilton.com
Reservations 1-800-HILTONS
Exhibit (g)(16)
UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA
* * *
HILTON HOTELS CORPORATION and )
HLT CORPORATION, )
) CV-S-97-095-PMP (RLH)
Plaintiffs, )
)
v. )
)
ITT CORPORATION, ) O R D E R
) RE PRELIMINARY INJUNCTION
Defendant. )
)
Before the Court for consideration is the Motion of
Plaintiffs Hilton Hotels Corporation and HLT Corporation ("Hil-
ton") for a Preliminary Injunction (#34) requiring Defendant
ITT Corporation to conduct its annual meeting in May 1997.
Hilton's Motion seeks mandatory preliminary relief. It is,
therefore, subject to heightened scrutiny and the injunction
requested should not issue unless the facts and the law clearly
favor Hilton. Dahl v. HEM Pharmaceutical, 7 F.3d 1399, 1403
(9th Cir. 1993), and Anderson v. U.S., 612 F.2d, 1112, 1114
(9th Cir. 1979). For the reasons set forth below, the Court
finds that Hilton has not satisfied this burden and that its
Motion for Preliminary Injunction must, therefore, be denied.<PAGE>
First, neither Nevada law nor ITT's bylaws require
that the 1997 annual meeting be conducted in May.
Pursuant to NRS 78.330, annual meetings are held by
Nevada corporations to enable shareholders to elect directors
and to conduct other business of the corporation. However,
Hilton misapprehends the term "annual meeting" as used in the
Nevada Revised Statutes and ITT's bylaws as requiring that such
a meeting be conducted every twelve months. If that were the
intent of the Nevada Legislature or ITT, they could have easily
and clearly said so in the governing statutes and bylaws. In-
deed, an annual meeting every twelve months is precisely what
was provided for by the corporate bylaws at issue in the semi-
nal case relied upon by Hilton for the proposition that an an-
nual meeting is required every twelve months for Nevada corpo-
rations. Nevada ex. rel. Curtis v. McCullough, 3 Nev. 202
(1867). See also E.R. Holdings v. Norton Co., 735 F. Supp.
1094, 1097 (D. Mass. 1990). Instead, Section 1.2 of ITT's by-
laws conforms to NRS 78.330(1) and provides that ITT's annual
meeting shall be held at such date, time and place as deter-
mined by the Board of Directors.
The Court finds persuasive the Affidavit of Professor
John C. Coffee, Jr., that the term "annual meeting" at issue
must be understood as an adjective which "distinguishes the
regular meeting for the election of directors for other special
meetings called by the board for the stockholders." See Coffee
Affidavit, paragraph 32 appended to ITT's Memorandum in Opposi-
tion (#62).
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The Court's conclusion is reinforced by the provisions of NRS
78.345(1) which provide:
If any corporation fails to elect directors within 18
months after the last election of directors required
by NRS 78.330, the district court has jurisdiction in
equity, upon application of any one or more stock-
holders holding stock entitling them to exercise at
least 15 percent of the voting power, to order the
election of directors in the manner required by NRS
78.330.
Hilton has offered, and the Court can divine no rea-
son why the Nevada Legislature would postpone for six months a
shareholder's remedy for a corporation's failure to hold an
annual meeting which the Legislature intended to be held within
twelve months of the prior annual meeting. The Court concludes
that, subject to the right of a board of directors to specify a
shorter period, annual meetings for Nevada corporations are
contemplated to occur no later than eighteen months after the
last such meeting. See Ocilla Indus. v. Katz, 677 F. Supp.
1291, 1301 (E.D.N.Y., 1987).
Hilton alternatively argues that even if consistent
with Nevada law and ITT's bylaws, failure to conduct an annual
meeting in May 1997 would constitute a breach of the fiduciary
duty owed by ITT's incumbent Board of Directors to its share-
holders.
Courts have consistently prevented actions by an in-
cumbent board of directors which were primarily designed to
impair or impede the shareholder franchise. In a recent case
recognizing the importance of the shareholder vote, but arising
from a substantially different factual context than is pre-
sented here,
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Judge Edward C. Reed, Jr., reiterated that shareholders of a
corporation generally have, "`only two protections against
perceived inadequate business performance. They may sell their
stock. . ., or they may vote to replace incumbent board
members.' Thus, interference with shareholder voting is an
especially serious matter, not to be left to the directors'
business judgment, precisely because it undercuts a primary
justification for allowing directors to rely on their judgment
in almost every other context." Shoen v. Americo, 885 F. Supp.
1332, 1340 (D. Nev. 1994), vacated by stip., (D. Nev. 1995)
(Citation omitted).
This Court fully embraces the foregoing principles
expressed in Shoen. However, given the saliently different
facts presented in this case, Hilton's reliance on Shoen is
misplaced. Shoen, among other things, involved a situation in
which the incumbent board of directors of Americo advanced an
already noticed annual meeting date by two months for the pri-
mary purpose of re-electing the incumbent board before an arbi-
tration decision was issued which might render the incumbent
board unable to control dissident shareholder shares for voting
purposes, and before Paul Shoen, a dissident shareholder, had
the opportunity to campaign for a seat on the board and seek
amendment to the bylaws. Relying principally on Blasius Indus.
v. Atlas Corp., 564 A.2d 651 (Del. Ch. 1988), the Shoen Court
found that the incumbent board demonstrated no compelling jus-
tification for its actions and had thus breached its fiduciary
duty to Americo's shareholders.
-4-<PAGE>
The circumstances presented here are far different
from those in Shoen or Blasius, but are not unlike those con-
fronted in Stahl v. Apple Bancorp Corp. 579 A.2d 1115 (Del. Ch.
1990). Here, as in Stahl, a majority shareholder claims the
incumbent Board of Directors has delayed its annual meeting to
frustrate a proxy contest and public tender offer. Moreover,
in Stahl, the incumbent board had set and then rescinded the
record date for the annual meeting, although no specific date
for the annual meeting had been scheduled. Stahl, 579 A.2d at
1118. The Stahl court concluded that, "the action of deferring
this company's annual meeting where no meeting date has yet
been set and no proxies even solicited does not impair or im-
pede the effective exercise of the franchise to any extent."
Id. at 1123. The Court's reasoning in Stahl is fully ap-
plicable to the instant case.
ITT has not yet set its annual meeting, nor is it
required by Nevada law or its bylaws to conduct that meeting in
May 1997. The failure to hold an annual meeting in May, which
has not even been set and is not yet required to be set, cannot
be viewed as an inequitable manipulation by the incumbent Board
primarily designed to impede the exercise of the shareholder
franchise. Further, in accord with NRS 78.138 and relevant
case authority, ITT's Board of Directors retains reasonable
discretion in setting in annual meeting to resist hostile take-
over offers. Shoen, 885 F. Supp. at 1341, n.22, and Stahl, 579
A.2d at 1124.
This Court adopts the view expressed by Chancellor
Allen, who authored the decisions in Stahl and Blasius that,
"inquiries
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concerning fiduciary duties are inherently particularized and
contextual. It is probably not possible to work out rules that
will be perfectly predictive of future cases involving claimed
impediments to the shareholder vote. It is sufficient to
express a reasoned judgment on the facts presented." Stahl,
579 A.2d at 1125. On the facts presented in this case, the
Court finds that Hilton has failed to demonstrate that ITT has
breached its fiduciary duty to shareholders by failing to
schedule an annual meeting for May 1997.
Finally, at the hearing on Hilton's Motion for Pre-
liminary Injunction conducted April 17, 1997, the Court permit-
ted counsel for the Plaintiff Shareholder Class in a related
action, Collins v. Anderson, Case No. CV-S-97-104-PMP (RLH), to
present oral argument in support of the mandatory relief re-
quested by Hilton. In that argument, the Shareholder Class
emphasized the importance of protecting the voting rights of
ITT's Board of Directors. As stated earlier, however, there is
no impairment of the shareholder franchise in this case because
no annual meeting of shareholders has yet been set and the time
for conducting the annual meeting has not yet expired.
Neither is this Court, as suggested by the Share-
holder Class, deciding when ITT's 1997 annual meeting should be
held. That is a matter for determination by the Board of ITT
within the parameters set by Nevada law and ITT's bylaws.
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Lastly, the argument of the Shareholder Class that a
delay of the annual meeting beyond May 1997 may cause Hilton to
withdraw its tender offer is simply not determinative as to
whether the mandatory relief requested should issue. Hilton,
ITT and ITT's shareholders are, within the limits of the law,
permitted to do as they deem advisable in the marketplace with
respect to their investment and business decisions.
IT IS THEREFORE ORDERED that Hilton's Motion for Pre-
liminary Injunction (#34) is denied.
DATED: April 21, 1997
/s/ Philip M. Pro
PHILIP M. PRO
United States District Judge
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