SCHEDULE 14A INFORMATION
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of 1934
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ITT CORPORATION
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[ITT LOGO] 1995
Notice of
Annual Meeting
and
Proxy Statement
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Letter from
RAND V. ARASKOG
Chairman, President
and Chief Executive
March 21, 1995
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held at 10:30 A.M. on Tuesday, May 9, 1995 in The Phoenician Grand Ballroom of
The Phoenician, Scottsdale, Arizona.
We urge you to participate in the business of the Annual Meeting by completing
and returning the enclosed proxy as promptly as possible. Your vote is
important.
The accompanying Notice of Annual Meeting and Proxy Statement provide
information about the matters to be acted upon by the Corporation's
shareholders. The Proxy Statement also contains information about the role and
responsibilities of the Board of Directors and the Committees of the Board and
provides important information about each nominee for election as director.
We are pleased to continue a communications service which affords shareholders
the opportunity to discuss ITT directly with senior financial staff. They will
be available from 10:00 A.M. to 12:00 Noon Eastern Time on April 24, July 31 and
November 6, 1995 to respond to your questions about ITT's financial results. The
toll free number to call at those times is 1-800-DIAL-ITT (1-800-342-5488).
Sincerely yours,
Rand V. Araskog
[ITT LOGO]
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NOTICE OF ANNUAL MEETING
March 21, 1995
The Seventy-Fifth Annual Meeting of the Shareholders of ITT Corporation will be
held in The Phoenician Grand Ballroom, The Phoenician, 6000 East Camelback Road,
Scottsdale, Arizona on Tuesday, May 9, 1995, at 10:30 A.M., local time, for the
following purposes:
1. to elect directors;
2. to ratify the reappointment of Arthur Andersen LLP as independent auditors of
the Corporation for 1995;
3. to approve the proposed amendments to the ITT Corporation Annual
Performance-Based Incentive Plan for Executive Officers;
4. to act upon the shareholder proposal set forth in the Proxy Statement; and
5. to act upon such other matters as may properly come before the meeting.
Shareholders of record at the close of business on March 13, 1995 will be
entitled to vote at the meeting.
Gwenn L. Carr
Vice President and Secretary
[ITT LOGO]
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ITT Corporation
1330 Avenue of the Americas
New York, NY 10019-5490
PROXY STATEMENT
[ITT LOGO]
This Proxy Statement and accompanying proxy are being mailed to shareholders
commencing March 21, 1995 in connection with the solicitation of proxies by the
Board of Directors of ITT Corporation for the 1995 Annual Meeting.
When your proxy is returned properly executed, the shares it represents will be
voted in accordance with your specifications. You have three choices as to your
vote on each of the items described in this Proxy Statement that are to be voted
upon at the Annual Meeting. As to the election of directors, by marking the
appropriate box you may (a) vote for all of the director nominees as a group;
(b) vote for all director nominees except those nominees whose names you
indicate; or (c) withhold your vote from all nominees as a group. As to the
other items, you may vote "for" or "against" each item or "abstain" from voting
by marking the appropriate box.
Your vote is important and the Board of Directors urges you to exercise your
right to vote.
If you sign and return your proxy but do not specify any choices you will
thereby confer discretionary authority for your shares to be voted as
recommended by the Board of Directors. The proxy also confers discretionary
authority on the individuals named therein to vote the shares on any matter that
was not known by the Board of Directors on the date of this Proxy Statement but
is presented at the Annual Meeting, including voting with respect to the
nomination or election of any person not identified as a nominee on pages 4
through 6 of this Proxy Statement. Discretionary authority is also conferred
with respect to voting on any shareholder proposals that have been omitted from
this Proxy Statement pursuant to the proxy regulations of the Securities and
Exchange Commission.
From time to time, the Nominating Committee of the Board of Directors receives
unsolicited applications from persons seeking to be nominated for election as
directors of the Corporation. Such applications received prior to the date
hereof do not comply with the specific procedural requirements set forth in the
Corporation's By-laws. Accordingly, such persons are not named herein.
Whether or not you plan to attend the meeting, you can assure that your shares
are voted by completing, signing, dating and returning the enclosed proxy. You
may revoke your proxy at any time before it is exercised by giving written
notice thereof to the vice president and secretary of ITT, by submitting a
subsequently dated proxy, by attending the meeting and withdrawing the proxy, or
by voting in person at the meeting.
If you hold shares of both Common and Preferred Stock of ITT, the accompanying
proxy represents all of the shares you are entitled to vote at the meeting. If
you are
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a participant in ITT's Dividend Reinvestment and Common Stock Purchase Plan, the
proxy indicates the number of shares registered in your name and the number of
full shares credited to your account in the Plan. If you participate in the ITT
Investment and Savings Plan for Salaried Employees or a savings plan for hourly
employees, the trustee under the plan will provide you with a proxy representing
the shares you are entitled to vote under the plan.
Each of the 105,572,188 shares of Common Stock and each of the 538,623 shares of
Cumulative Preferred Stock, $2.25 Convertible Series N, outstanding at the close
of business on March 13, 1995 are entitled to one vote at the Annual Meeting.
The shares of Cumulative Preferred Stock, ESOP Convertible Series, will be
treated for voting purposes as though they were converted into 9,763,779 shares
of Common Stock and voted accordingly. All such shares entitled to vote at the
Annual Meeting are referred to herein as "Record Shares." The presence in person
or by proxy of shareholders holding a majority of the Record Shares will
constitute a quorum for the transaction of business at the Annual Meeting.
The Board of Directors has appointed one current and one former officer of
Chemical Banking Corporation to act as inspectors of election at the Annual
Meeting. The By-laws of the Corporation provide that shareholders shall be
accorded privacy in voting and that the integrity of the balloting process shall
be assured. Among their other duties, the inspectors of election will certify as
to compliance with such confidentiality provisions.
BOARD OF DIRECTORS
The Board of Directors is responsible for establishing broad corporate policies
and for overseeing the overall performance of ITT. The Board reviews significant
developments affecting ITT and acts on matters requiring Board approval. During
1994, there were 11 meetings of the Board of Directors.
The standing committees of the Board are the Audit, Capital, Compensation and
Personnel, Executive and Policy, Legal Affairs, Nominating, and Public Affairs
Committees.
THE AUDIT COMMITTEE recommends the selection of independent auditors for the
Corporation, confirms the scope of audits to be performed by such auditors,
reviews audit results and internal accounting and control procedures and
policies, and reviews the fees paid to the Corporation's independent auditors.
The Committee reviews and recommends approval of the audited financial
statements of the Corporation and the annual reports to shareholders. It also
reviews the expense accounts of senior executives. The Committee held five
meetings during 1994. The members of the Audit Committee are: Bette B. Anderson,
Robert A. Burnett, S. Parker Gilbert, Paul G. Kirk, Jr., Edward C. Meyer, and
Benjamin F. Payton.
THE CAPITAL COMMITTEE is responsible for maximizing the effective use of the
assets of ITT and its subsidiaries and for reviewing capital expenditures and
appropriations. The Committee held eight meetings during 1994. The members of
the Committee are: Bette B. Anderson, Rand V. Araskog, Nolan D. Archibald,
Robert A. Burnett, S. Parker Gilbert, Paul G. Kirk, Jr., Edward C. Meyer,
Benjamin F. Payton, and Margita E. White.
THE COMPENSATION AND PERSONNEL COMMITTEE, which is comprised entirely of
non-employee directors, oversees the compensation and benefits of employees,
evaluates management performance and establishes executive compensation. In the
performance of its functions, the Committee has access to independent
compensation counsel. The Committee held eight meetings during 1994. Bette B.
Anderson, Nolan D. Archibald, Robert A. Burnett, Paul G. Kirk, Jr., Edward C.
Meyer, and Margita E. White are the members of the Committee.
THE EXECUTIVE AND POLICY COMMITTEE exercises the powers of the Board in the
management of the business and affairs of the Corporation in the intervals
between meetings of the Board. The Committee reviews the long-range corporate
strategies formulated by senior management and the non-employee directors meet
in executive session to review the overall performance of the chief executive,
particularly with respect to the Corporation's long-range strategies. Eleven
Committee meetings were held during 1994. The members of the Executive and
Policy Committee are: Bette B. Anderson, Rand V. Araskog, Nolan D. Archibald,
Robert A. Burnett, Michel David-Weill, S. Parker Gilbert, Paul G. Kirk, Jr.,
Edward C. Meyer, Benjamin F. Payton, and Margita E. White.
THE LEGAL AFFAIRS COMMITTEE reviews and considers major claims and litigation,
and legal, regulatory, patent and related governmental policy matters affecting
ITT and its subsidiaries. The Committee reviews and approves management policies
and programs relating to compliance with legal and regulatory requirements,
business ethics and environmental matters. The Committee held five meetings
during 1994. The members of the Committee are: Bette B. Anderson, Robert A.
Burnett, S. Parker Gilbert, Henry Gluck, Edward C. Meyer, Benjamin F. Payton,
and Margita E. White.
THE NOMINATING COMMITTEE makes recommendations concerning the organization,
size, and composition of the Board and its Committees, proposes nominees for
election to the Board and its Committees and considers the qualifications,
compensation, and retirement of directors. The Committee held four meetings
during
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1994 and its members are: Bette B. Anderson, Nolan D. Archibald, Edward C.
Meyer, Benjamin F. Payton, and Margita E. White.
The Nominating Committee will consider recommendations for director nominees
that are submitted by shareholders in writing to the vice president and
secretary of ITT in accordance with the requirements set forth in the By-laws of
the Corporation. A copy of the relevant provisions of the By-laws may be
obtained from the vice president and secretary.
THE PUBLIC AFFAIRS COMMITTEE reviews and defines the Corporation's social
responsibilities, including issues of significance to the Corporation and to its
shareholders and employees. The Committee held four meetings during 1994. The
members of the Committee are: Robert A. Burnett, S. Parker Gilbert, Henry Gluck,
Paul G. Kirk, Jr., Benjamin F. Payton, and Margita E. White.
During 1994, there were 11 meetings of the Board of Directors and 45 meetings of
the Board Committees. All of the incumbent directors attended at least 86% of
the meetings of the Board of Directors and the Committees on which they served.
There are currently 11 directors serving on the Board, all of whom are nominees
for election. If all 11 nominees for director are elected at the Annual Meeting,
the Board will consist of nine directors who are not officers or employees of
the Corporation or its subsidiaries, one director, Rand V. Araskog, who is an
officer of ITT and one director, Henry Gluck, who is an officer of Caesars
World, Inc., a subsidiary of ITT. Mr. Gluck has an employment agreement with
Caesars World, Inc. and ITT for a term of five years ending January 24, 2000.
Under such agreement, the Nominating Committee will nominate Mr. Gluck for
election as a director of ITT at each annual meeting of shareholders during the
term of the agreement.
The Board of Directors has adopted a retirement policy which provides (i) that
no person may be nominated for election or reelection as a non-employee director
after reaching age 72, and (ii) that no employee of ITT or of any of its
subsidiaries (other than an employee who has served as chief executive of ITT)
may be nominated for election or reelection as a director after reaching age 65,
unless there has been a specific waiver by the Board of Directors of these age
requirements.
DIRECTORS' COMPENSATION
Members of the Board who are employees of ITT or its subsidiaries are not
compensated for service on the Board or its Committees. Non-employee directors
receive a fee of $1,000 for attendance at each meeting of the Board and at each
meeting of the Committees on which such directors serve. Members of the
Executive and Policy Committee, except Mr. Araskog, receive an annual retainer
of $48,000. The non-employee directors of ITT who serve on the Board of
Directors of Hartford Fire Insurance Company or ITT Sheraton Corporation receive
annual retainers of $27,000 for such service and $1,000 for each board meeting
attended. The non-employee directors of ITT who serve on the Board of Directors
of ITT Educational Services, Inc. receive annual retainers of $18,000 and $750
for attendance at each meeting of the board and $500 for attendance at each
meeting of the committees on which such directors serve. Non-employee directors
of ITT who are directors of Caesars World, Inc. receive no annual retainer for
such service but receive attendance fees of $1,000 for each board meeting and
$500 for each committee meeting.
In 1994, the ITT Board of Directors adopted the 1995 ITT Deferred Compensation
Plan. Under this plan, non-employee directors may elect to defer receipt of all
or a portion of their ITT and ITT subsidiary retainer and attendance fees. ITT
will credit interest on the deferred compensation based upon the performance of
benchmark investment funds made available under the plan and selected by the
director.
ITT has an unfunded retirement benefit plan for non-employee directors who
retire from the Board at or after age 65 after completing at least five years of
service on the Board. The plan provides for an annual pension based on the ITT
Board annual retainer fee payable at retirement. Pensions range from 50% of such
fee after five years of service to 100% after ten years, with an additional 5%
for each year of service in excess of ten, to a maximum of 200% of the annual
retainer fee after 30 or more years of service. A director may indicate a
preference, subject to certain conditions, to receive any accrued benefit under
the plan in the form of a single (discounted) lump sum payment immediately
payable upon such director's retirement. During 1994, $492,000 was accrued for
this unfunded retirement benefit plan. Non-employee directors may participate in
a group life insurance plan that has been established for their benefit. The
plan provides $100,000 of non-contributory group life insurance to participating
non-employee directors during their service on the Board.
The non-employee directors also are covered under a non-contributory group
accidental death and dismemberment program which provides each of them $750,000
of coverage during their service on the Board. Additional benefits also may be
purchased.
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Item No. 1
ELECTION OF DIRECTORS
At the 1995 Annual Meeting, 11 directors are to be elected to hold office until
the next Annual Meeting of Shareholders and until their successors are elected
and qualified. Unless there is a contrary indication, the shares represented by
valid proxies will be voted for the election of all 11 nominees.
The Board has no reason to believe that any nominee will be unable to serve as a
director. If for any reason a nominee should become unable to serve, the shares
represented by valid proxies will be voted for the election of such other person
as the Board may recommend or the Board may reduce the number of directors to
eliminate the vacancy.
A brief summary of each nominee's principal occupation, business affiliations
and other information follows.
BETTE B. ANDERSON
Principal occupation --
President of Kelly, Anderson, Pethick &
Associates, Inc.,
Consultants
Director since 1981
Mrs. Anderson, 66, was elected president of Kelly, Anderson, Pethick &
Associates, Inc., a Washington-based management firm, in 1990. She had
previously been executive vice president of the firm. Mrs. Anderson was formerly
a partner in the public affairs company of Anderson, Benjamin, Read & Haney. She
was Undersecretary of the Treasury from 1977 to 1981. Mrs. Anderson was
affiliated for 27 years with the Citizens and Southern National Bank of
Savannah, having served as a vice president until she assumed the Treasury post.
Mrs. Anderson is a director of ITT Educational Services, Inc., a subsidiary of
ITT, Riverwood International Corporation and Manville Corporation. She is a
Director of the Miller Foundation and the University of Virginia and a member of
the Advisory Council of Girl Scouts of America. She attended Georgia Southern
and Armstrong State Colleges and is a graduate of the Stonier Graduate School of
Banking at Rutgers University.
RAND V. ARASKOG
Principal occupation --
Chairman, President and
Chief Executive of ITT
Director since 1977
Mr. Araskog, 63, joined ITT in 1966. He has been chief executive since 1979 and
chairman since 1980. In March 1991, he assumed the title of president. Mr.
Araskog is a director of Hartford Fire Insurance Company, ITT Sheraton
Corporation, Caesars World, Inc., and ITT Educational Services, Inc.,
subsidiaries of ITT. He is a director of Alcatel Alsthom of France, in which ITT
holds an interest of approximately six percent. He is a director of Dow Jones &
Company, Inc.; Dayton-Hudson Corporation; Rayonier Inc.; and Shell Oil Company.
He is a member of The Business Council, The Business Roundtable, the Council on
Foreign Relations, and the Trilateral Commission. He is a trustee of the New
York Zoological Society and the Salk Institute. Mr. Araskog is a graduate of the
U.S. Military Academy at West Point and attended the Harvard Graduate School of
Arts and Sciences.
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NOLAN D. ARCHIBALD
Principal occupation --
Chairman, President and
Chief Executive Officer of
The Black & Decker Corporation,
Consumer and Commercial
Products Company
Director since 1991
Mr. Archibald, 51, joined Black & Decker in 1985 as president and chief
operating officer, and since that time has been elected chief executive officer
and chairman. Prior to joining Black & Decker, he was senior vice president and
president of the Consumer and Commercial Products Group of the Beatrice
Companies, Inc. and held various executive and marketing positions with Beatrice
Companies, Inc. during the period 1977 to 1985. Mr. Archibald previously served
as a director of ITT from September 1986 to March 1988. Mr. Archibald serves as
a member of the Board of Trustees for The Johns Hopkins University and is a
member of The Business Roundtable. Mr. Archibald received a BS degree from Weber
State University and an MBA degree from The Harvard Business School.
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ROBERT A. BURNETT
Principal occupation --
Chairman and CEO (Retired)
of Meredith Corporation,
Diversified Media Company
Director since 1985
Mr. Burnett, 67, served as chairman of Meredith Corporation from 1988 until his
retirement in 1992. He served as president and chief executive officer from 1977
and relinquished the latter office in 1989. He is a director of Hartford Fire
Insurance Company, a subsidiary of ITT. Mr. Burnett is a director of
Dayton-Hudson Corporation, Meredith Corporation, Whirlpool Corporation, and
Midwest Resources Inc. He is a member of the Board of Trustees of Grinnell
College, Grinnell, Iowa. He also is a director of the Greater Des Moines
Committee and the Des Moines Art Center. Mr. Burnett has a BA degree in
economics from the University of Missouri.
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MICHEL DAVID-WEILL
Principal occupation --
Senior Partner of
Lazard Freres & Co.,
Investment Bankers
Director since 1981
Mr. David-Weill, 62, is Senior Partner of Lazard Freres & Co., a position he has
held since 1977. He became a partner in Lazard Freres & Co., New York, in 1961,
where he served until 1965. In 1965 he became a partner of Lazard Freres & Cie.,
Paris, and a director of Lazard Brothers & Co. Limited, London. Mr. David-Weill
is a director of a number of corporations, including Groupe Danone in France,
Fiat S.p.A. in Italy, Pearson plc in England, and The Dannon Company, Inc. in
the United States, as well as other companies of which Lazard Freres & Cie.,
Paris, or one of its affiliates, is the principal shareholder. He graduated from
the Institut des Sciences Politiques, Paris, France.
S. PARKER GILBERT
Principal occupation --
Chairman, Morgan Stanley
Advisory Board,
International Consultants
Director since 1991
Mr. Gilbert, 61, retired in 1990 from Morgan Stanley Group Inc., where he served
as chairman from 1984 until he retired. He joined Morgan Stanley in 1960, was
elected a partner in 1969, a managing director in 1970, and president in 1983.
Mr. Gilbert is a director of Morgan Stanley Group Inc., Burlington Resources
Inc., and Taubman Centers, Inc. He is president, Board of Trustees, the Pierpont
Morgan Library; member, Board of Trustees, the Metropolitan Museum of Art, the
Alfred P. Sloan Foundation and the John Simon Guggenheim Memorial Foundation;
and director, Josiah H. Macy Foundation. Mr. Gilbert is a graduate of Yale
University.
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HENRY GLUCK
Principal occupation --
Chairman, and Chief Executive Officer, Caesars
World, Inc.
Hotel and Entertainment Company
Director since February 1995
Mr Gluck, 66, has been Chairman and Chief Executive Officer of Caesars World,
Inc., a subsidiary of ITT, since 1983. Prior to joining Caesars World, he was
president of Monogram Industries, Inc., and Chairman, President and Chief
Executive Officer of Magnasync-Moviola Inc. Mr. Gluck has a BS degree in
Economics, Finance and International Trade from the University of Pennsylvania,
Wharton School of Finance and Commerce.
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PAUL G. KIRK, JR.
Principal occupation --
of Counsel to
Sullivan & Worcester,
Law Firm
Director since 1989
Mr. Kirk, 57, became a partner in the law firm of Sullivan & Worcester in 1977
and is presently of Counsel to the firm. He served as chairman of the Democratic
National Committee from 1985 to 1989 and as treasurer from 1983 to 1985.
Following his resignation in 1989 as chairman of the Democratic National
Committee, he returned to Sullivan & Worcester as a partner in general corporate
practice at the firm's Boston and Washington offices. Mr. Kirk is a director of
Kirk-Sheppard & Co., Inc., of which he also is chairman and treasurer. He is a
director of the Bradley Real Estate Corporation, Hartford Fire Insurance
Company, a subsidiary of ITT, and Rayonier Inc. He is co-chairman of the
Commission on Presidential Debates, chairman of the John F. Kennedy Library
Foundation Board of Directors, Chairman of the Board of Directors of the
National Democratic Institute for International Affairs, and a trustee of
Stonehill College. He is a graduate of Harvard College and Harvard Law School.
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EDWARD C. MEYER
Principal occupation --
Chairman of GRC International,
Professional and Technical Services Provider
Director since 1986
General Meyer, 66, retired in 1983 as chief of staff of the United States Army.
He is a member of the supervisory board of Compagnie Financiere Alcatel. He is a
director of FMC Corporation and its joint venture company in Turkey, Savunma
Sanayii A.S.; the United Defense Group; the Brown Group; and GRC International.
He is a managing partner of Cilluffo Associates Limited Partnership, which owns
approximately 20% of GRC International. He is a trustee of The Mitre Corporation
and the George C. Marshall Foundation. He is president of the Army Emergency
Relief Association, the Board of Overseers of the Hoover Institution, and the
Board of Advisors of the Center for Strategic and International Studies, and a
board member of the Smith Richardson Foundation. General Meyer received a BS
degree in engineering from the U.S. Military Academy at West Point and an MS
degree in international affairs from George Washington University.
BENJAMIN F. PAYTON
Principal occupation --
President of Tuskegee
University
Director since 1987
Dr. Payton, 62, has been president of Tuskegee University in Alabama since 1981.
Previously he had served as president of Benedict College and as program
officer, education and public policy of the Ford Foundation. Dr. Payton is a
director of ITT Sheraton Corporation, and Caesars World, Inc., subsidiaries of
ITT. He is a director of Amsouth Bancorporation, Amsouth Bank, the Liberty
Corporation, Praxair Corporation, SONAT Inc., Morrisons, Inc., the Southern
Regional Council and the Alabama Shakespeare Festival. He is a member of the
Business-Higher Education Forum and of the Visiting Committee of the Board of
Overseers of Harvard College. He has been awarded honorary degrees from Eastern
Michigan University, Lehigh University, Morris Brown College, Morgan State
University, Benedict College, and the University of Maryland. He is a graduate
of South Carolina State College and received a Bachelor of Divinity degree from
Harvard University, an MA degree from Columbia University, and a PhD from Yale
University.
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MARGITA E. WHITE
Principal occupation --
President of the Association
for Maximum Service
Television, Inc.,
Television Trade
Association
Director since 1980
Mrs. White, 57, joined the Association for Maximum Service Television, Inc. as
president in 1987 after serving as an independent consultant and coordinator of
the Television Operators Caucus, Inc. She was a member of the Federal
Communications Commission between 1976 and 1979. Previously she served in the
federal government as director of the White House office of communications,
assistant press secretary to President Ford, and assistant director of the U.S.
Information Agency. She is a director of ITT Sheraton Corporation, Caesars
World, Inc. and ITT Educational Services, Inc., subsidiaries of ITT; The Growth
Fund of Washington; Leitch Technology Corp.; and Washington Mutual Investors
Fund. Mrs. White received BA and LLD degrees from the University of Redlands and
an MA degree from Rutgers University.
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Item No. 2
RATIFICATION OF THE REAPPOINTMENT
OF INDEPENDENT AUDITORS
In accordance with the recommendation of the Audit Committee, the Board of
Directors has reappointed Arthur Andersen LLP as independent auditors of the
Corporation for 1995, subject to ratification by the shareholders. If the
shareholders do not ratify the reappointment of Arthur Andersen LLP, the
selection of other independent auditors will be considered by the Audit
Committee and the Board of Directors.
Arthur Andersen LLP has served as independent auditors of ITT and most of its
subsidiaries for many years, and its long-term knowledge of ITT has enabled it
to carry out its audits with effectiveness and efficiency. In keeping with the
established policy of Arthur Andersen LLP, partners and employees of the firm
engaged in auditing ITT are periodically rotated, thus giving ITT the benefit of
new expertise and experience. Arthur Andersen LLP personnel regularly attend
meetings of the Audit Committee. Arthur Andersen LLP's fees for the 1994 audit
of ITT totalled approximately $8.5 million.
Representatives of Arthur Andersen LLP will attend the Annual Meeting, will have
the opportunity to make a statement if they desire to do so, and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
REAPPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS OF THE CORPORATION.
Item No. 3
APPROVAL OF AMENDMENTS TO THE ITT CORPORATION ANNUAL PERFORMANCE-BASED INCENTIVE
PLAN FOR EXECUTIVE OFFICERS
At the 1994 Annual Meeting, shareholders approved the ITT Corporation Annual
Performance-Based Incentive Plan for Executive Officers (the "Performance Plan")
which covers the five highest-paid named executives in ITT's annual proxy
statement. The Performance Plan is administered by the Compensation and
Personnel Committee of the ITT Board of Directors (the "Committee") as described
below under "Annual Incentive Bonus" in the "Report of the ITT Compensation and
Personnel Committee." The Performance Plan is intended to serve the dual
objectives of providing incentives for ITT's top management to achieve
preestablished performance goals and preserving the Corporation's tax deduction
for payments by meeting the requirements for performance-based compensation
under Section 162(m) of the Internal Revenue Code of 1986, as amended.
On December 1, 1994, the IRS published amendments to its earlier proposed
regulations under Section 162(m) adding the new requirement that when the
individual maximum amount payable is expressed as a percentage of salary, the
maximum amount that could be paid must be disclosed in terms of an absolute
dollar amount and approved by the shareholders. Accordingly, one of the proposed
amendments of the Performance Plan would establish a maximum amount of $4
million which may be paid to any covered executive for any year commencing with
1995.
The other proposed amendment would provide that a participant's target bonus
award for a particular performance year will be based upon the covered
employee's annual rate of salary and position as of the end of such performance
year rather than at the beginning thereof. This change is intended to put the
covered executives in the same position as other executive officers of the
company who are not "covered employees" under the proposed regulations of the
IRS.
All other terms and conditions of the Performance Plan will remain in effect. As
approved by the shareholders, the plan established two performance criteria:
earnings per share and return on equity. The Performance Plan contains an
objective formula comprised of three parts: (1) the participant's target bonus
award for the year which could range from 55% to 100% of salary; (2) the
weighted average performance factor which measures the degree of performance
goal attainment for the year; and (3) a leveraged target bonus award adjustment
fac-
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tor based upon the weighted average performance factor achieved for the year.
The amounts of awards to specific individuals under the Amended Performance Plan
for 1995 and any future year are not determinable at this time. Had the proposed
amendments been in effect at the time the performance bonuses for 1994 were
determined, the amount of the performance bonus payable to Mr. Rand V. Araskog
would still have been the amount actually paid as shown under "Bonus" in the
Summary Compensation Table on page 14; while the amounts of the bonuses payable
to Messrs. Robert A. Bowman, Dale R. Comey, D. Travis Engen and Richard S. Ward
would have been $555,000, $677,100, $777,000 and $444,000, respectively, instead
of the amounts shown opposite their respective names under "Bonus" in the
Summary Compensation Table.
FEDERAL TAX CONSEQUENCES.
Under the Internal Revenue Code as presently in effect, the payment of an award
is taxable to a participant as ordinary income. The amendment of the Performance
Plan to include a maximum amount payable is intended to assure the deductibility
by ITT of the amounts payable under the Performance Plan to the five highest
paid named executives in ITT's annual proxy statements.
APPROVAL OF THE AMENDMENTS TO THE
PERFORMANCE PLAN.
The proposal to adopt the amendments to the Performance Plan requires an
affirmative vote of a majority of the votes cast on the matter. If the
shareholders do not approve the amendments to the Performance Plan, the plan in
its current form will remain in effect.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE PROPOSED
AMENDMENTS TO THE ANNUAL PERFORMANCE-BASED INCENTIVE PLAN FOR EXECUTIVE
OFFICERS.
Item No. 4
SHAREHOLDER PROPOSAL
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue, N.W.,
Suite 215, Washington, D.C., the owner of 50 shares of Common Stock, plans to
introduce the following resolution at the forthcoming Annual Meeting:
"RESOLVED: That the shareholders recommend that the Board take the necessary
step that ITT specifically identify by name and corporate title in all future
proxy statements those executive officers, not otherwise so identified, who are
contractually entitled to receive in excess of $100,000 annually as a base
salary, together with whatever other additional compensation bonuses and other
cash payments were due them.
"REASONS: In support of such proposed Resolution it is clear that the
shareholders have a right to comprehensively evaluate the management in the
manner in which the Corporation is being operated and its resources utilized. At
present only a few of the most senior executive officers are so identified, and
not the many other senior executive officers who should contribute to the
ultimate success of the Corporation. Through such additional identification the
shareholders will then be provided an opportunity to better evaluate the
soundness and efficacy of the overall management.
"Last year the owners of 10,985,499 shares, representing approximately 11% of
shares voting, voted FOR this proposal."
"If you AGREE, please mark your proxy FOR this proposal."
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL FOR THE
FOLLOWING REASONS:
Currently, the chairman, president and chief executive is the only executive
officer of ITT who has an employment contract with the Corporation. All of the
details of his compensation and the terms of his contract are set forth in this
Proxy Statement. Detailed information about the compensation of the four other
highest paid executive officers of the Corporation also is set forth herein.
Listing the names, corporate titles and compensation of other ITT executive
officers would not provide additional relevant information to shareholders and
would be inconsistent with the letter and spirit of the regulations of the
Securities and Exchange Commission, which limit required compensation
disclosures to the chief executive officer and the four other highest paid
executive officers.
THEREFORE, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THIS
PROPOSAL.
8
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VOTE REQUIRED TO APPROVE MATTERS
SUBMITTED TO SHAREHOLDERS
Approval of each of the items which are submitted to a vote of the shareholders
at the Annual Meeting will require the affirmative vote of the holders of a
majority of the Record Shares present in person or represented by proxy, voting
together as a single group and without regard to class or series.
Abstentions and broker non-votes will be included in the computation of the
number of Record Shares that are present for purposes of determining the
presence of a quorum but will not be counted as votes cast for or against items
submitted for a vote of shareholders. Accordingly, abstentions and broker
non-votes will have the same effect as a vote against such items.
SHAREHOLDER PROPOSALS FOR
1996 ANNUAL MEETING
Proposals submitted by shareholders for inclusion in next year's Proxy Statement
must be received by ITT no later than the close of business on November 22,
1995. Address your proposals to Gwenn L. Carr, vice president and secretary, ITT
Corporation, 1330 Avenue of the Americas, New York, NY 10019-5490. Proposals
must comply with all of the requirements of Rule 14a-8 under the Securities
Exchange Act of 1934 as well as the requirements set forth in ITT's By-laws. A
copy of the By-laws may be obtained from the vice president and secretary of
ITT.
9
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REPORT OF THE ITT COMPENSATION AND PERSONNEL COMMITTEE
- --------------------------------------------------------------------------------
This report sets forth the executive compensation policies of the Compensation
and Personnel Committee of the ITT Board of Directors with respect to ITT's
executive officers in general and the rationale for the specific decisions
affecting the compensation as reported for 1994 of Rand V. Araskog, ITT's chief
executive officer. This report also discusses the relationship between the named
officers' compensation and the performance of the Corporation. Immediately
following this report are performance graphs which compare the cumulative total
return of ITT's Common Stock to the cumulative total returns of the S&P 500
Index, the S&P Conglomerate Index and the S&P Conglomerate Index excluding ITT
(assuming the investment of $100 in (a) ITT Common Stock, (b) the S&P 500 Index,
(c) the S&P Conglomerate Index, and (d) the S&P Conglomerate Index excluding ITT
on December 31 of the first year of the measurement period).
The amounts of all compensation awarded to, earned by, or paid to the chief
executive officer and the other four most highly compensated executive officers
who were serving as executive officers at the end of the 1994 fiscal year are
set forth on the Summary Compensation Table following the performance graphs.
ITT, a diverse, multi-national company with assets in excess of $100 billion,
must compete for skilled executives in a highly competitive marketplace. In
setting and administering ITT's compensation policies and programs, the
Committee considers compensation provided to executives of corporations similar
to ITT in terms of assets, sales and revenues, and earnings. The companies
against which ITT compares compensation are not limited to the companies which
make up the S&P Conglomerate Index used in the performance graphs. Rather, ITT
compares its compensation practices against a panel of 50 leading companies with
sales greater than $10 billion in a cross section of industries. The ITT
executive compensation program is designed to attract, reward and retain skilled
executives and to provide incentives which vary depending upon the attainment of
short-term operating performance objectives and strategic long-term performance
goals. The major objective of the long-term incentive program, which has been
substantially modified in recent years, is to provide ITT executives with
incentives directly linked to the creation of shareholder value. The program
overall is intended to be highly leveraged so that when performance goals are
attained, executives can earn better than average compensation and, conversely,
when such goals are not achieved, compensation will be below competitive levels.
THE COMMITTEE'S ROLE.
The Committee is responsible for the administration of the executive
compensation program, and it reviews all proposed new or amended employee
benefit plans. The Committee is currently composed of the six non-employee
directors named below, none of whom is eligible to participate in any of the
plans which make up ITT's executive compensation program. It is the policy of
the ITT Board of Directors to periodically rotate the members and the post of
chairman of the Committee to assure that fresh points of view are part of the
Committee's deliberations.
The Committee may select consultants from nationally recognized independent
compensation and benefits consulting firms to provide expert advice on any
aspect of the ITT executive compensation program. The Committee may request
written reports or hold private meetings with such consultants in order to get
independent opinions on compensation proposals. The Committee often meets in
executive sessions which are not attended by any ITT executives or managers. The
Committee regularly reports its activities to the Executive and Policy Committee
of the ITT Board, on which all the non-employee directors serve.
PERFORMANCE EVALUATION.
The ITT Executive and Policy Committee met in executive session on February 6,
1995 to review the overall performance of the chief executive, particularly with
respect to ITT's long range strategies and the achievement of both financial and
non-financial objectives. Paramount consideration was given to the chief
executive's role in building value and improving the return on the shareholders'
investment.
THE COMPENSATION PROGRAM.
The compensation program for ITT executives presently consists of base salary,
annual incentive bonus, long-term incentives and employee benefits. It is the
intent of the Committee that incentives based upon long-term performance should
be the major component in the pay package for senior executives. Discussed below
is each element of the compensation program.
BASE SALARY. Salaries are set and administered to reflect the value of the job
in the marketplace and individual contribution and performance. Based on a major
survey of competitive practice, ITT executive salaries are approximately 6%
above the average going rate of competitor companies. Salaries provide a
necessary element of stability in the total pay program and, as such, are not
subject to significant variability. Salary increases are based primarily on
merit. During 1994, ITT executive salaries were evaluated in relation to a
competitive annualized merit increase guideline of 4% for expected
10
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levels of individual performance. Actual increases can vary from the guideline
depending primarily on individual performance. The normal interval between
salary reviews for senior executives is 18 months.
The Committee authorized a salary increase for Mr. Araskog effective January 1,
1995 of $375,000, bringing his current annual salary to $2,000,000. This merit
increase, which followed a 12-month interval since his last salary review, was
equivalent to 23% on an annualized basis and was based on the Committee's
evaluation of his performance during the measurement period. This increase for
Mr. Araskog is intended to be his last salary adjustment before his normal
retirement date on November 1, 1996.
Among the other named officers, Mr. Bowman's salary was raised to $500,000
effective August 1, 1994, an increase of $75,000 after 18 months. Mr. Comey's
salary of $610,000, effective March 1, 1994, reflected an increase of $35,000 in
18 months. Mr. Engen's annual salary was increased effective August 1, 1994 to
$625,000, an increase of $50,000 after 18 months. Mr. Engen received an
additional salary increase of $75,000 effective November 1, 1994 for an annual
salary rate of $700,000 in recognition of his expanded responsibilities in
directing the operations and businesses of ITT. Effective April 1, 1994, Mr.
Ward's salary was raised to $316,000, a $25,000 increase in 13 months. He
received an additional increase to $400,000 effective June 1, 1994 in
recognition of his election as Executive Vice President and General Counsel.
ANNUAL INCENTIVE BONUS. Under the ITT Annual Incentive Bonus Plan, the amounts
of annual bonus awards are based upon corporate financial performance for the
year compared to annual performance goals established by the Committee at the
beginning of the year. For 1994, such performance goals were earnings per share
compared to budget, earnings per share compared to the prior year and return on
equity compared to budget. These measures were weighted 40%, 40% and 20%,
respectively. The weighted average performance factor under the formula was
calculated at 116%. Under a leveraged performance/payout schedule, the
performance factor generated a standard bonus adjustment factor of 148%. The
calculated bonus amounts for 1994 performance are shown in the Summary
Compensation Table following this report.
The Committee awarded a bonus of $2,405,000 to Mr. Araskog for 1994. This
amount, as well as the awards for the other named officers, was determined
strictly in accordance with the above described formula and standard bonus
adjustment factor, except for Mr. Ward, who earned a 1994 bonus of $236,875
pursuant to the formula. In addition, the Committee authorized a special
discretionary bonus of $100,000 for Mr. Ward to recognize his contributions as
General Counsel in negotiating new business acquisitions in 1994.
STOCK OPTION AWARDS. Stock option awards provide long-term incentives which are
directly related to the performance of ITT Common Stock. Options generally have
10-year terms and closely align the executive's interests with those of other
shareholders. On October 11, 1994, an aggregate of 335,000 stock options were
granted to Messrs. Araskog, Bowman, Engen and Ward under the 1994 Plan at the
exercise price of $84.00 per share (the closing price of an ITT share on the New
York Stock Exchange on the October 11, 1994 grant date). The stock options
granted to senior executives, including the named officers, are subject to
certain exercisability thresholds. Specifically, the options will be exercisable
as to two-thirds when the closing price of ITT Common Stock has remained at or
above $105.00 or 125% of the grant price for ten consecutive trading days and as
to the remaining one-third when the closing price of ITT Common Stock has
remained at or above $117.60 or 140% of the grant price for ten consecutive
trading days. Notwithstanding the required threshold price requirements, the
options will become fully exercisable at any time after October 11, 2003, the
ninth anniversary of the grant date, but not beyond the option expiration date
of October 13, 2004. Further details on the option grants for Messrs. Araskog,
Bowman, Engen and Ward during 1994 are included in the table of Option Grants in
Last Fiscal year on page 15 herein.
The Committee awarded Mr. Araskog 180,000 stock options during 1994. This award
(and the option awards for the other named officers) was above the 90th
percentile of competitive practice based on a Towers Perrin survey of long-term
incentives among large public companies which measures grant size in terms of
the aggregate exercise price of the options (number of shares multiplied by the
option exercise price) expressed as a multiple of base salary. The Committee
elected to make the awards at this level of competitive practice to provide
significant incentive for management to continue its strategy for building
shareholder value.
EMPLOYEE BENEFITS. Executives also participate in ITT's broad-based employee
benefits program which includes a pension program, an investment and savings
plan, group medical and dental coverage, group life insurance and other benefit
plans. Further details on the ITT pension plan are provided on pages 17 and 18.
In 1994 the ITT Board of Directors adopted the 1995 ITT Deferred Compensation
Plan. Under this plan, executives with a base salary of $200,000 or more may
elect to defer receipt of all or a portion of their 1994 bonus and those with a
base salary of at least $300,000 may in addition defer up to 50% of their 1995
salary. ITT will credit interest on the deferred compensation based upon
11
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the performance of benchmark investment funds made available under the plan and
selected by the executive.
DISCUSSION OF THE COMMITTEE'S POLICY REGARDING QUALIFYING COMPENSATION FOR
DEDUCTIBILITY UNDER SECTION 162(M) OF THE INTERNAL REVENUE CODE.
Tax legislation known as the Omnibus Budget Reconciliation Act of 1993 ("OBRA")
was passed by Congress and signed into law by the President in August 1993.
Under OBRA, which created a new Code subsection 162(m), the allowable deduction
for compensation paid or accrued with respect to the chief executive officer and
each of the four most highly compensated executive officers of a publicly held
corporation will be limited to no more than $1 million per year for taxable
years beginning on or after January 1, 1994. Certain types of compensation are
exempted from this deduction limitation, including payments subject to: a) the
attainment of an objective performance goal or goals; b) an outside director
requirement; and c) a shareholder approval requirement. Proposed regulations
issued by the IRS in 1993 and 1994 provided broad guidance to companies, but
were not intended to be comprehensive.
It is the policy of the Committee to establish a competitive executive
compensation program and to design and administer incentive plans which relate
rewards directly to the overall performance of the Corporation and the
individual executive's specific contribution. Given the diversity of ITT and the
special demands caused by a complex multi-national business environment, the
Committee needs flexibility to determine the appropriate compensation package
for its senior executives. However, to qualify pay for exemption from section
162(m) as "performance-based compensation," the requirements of OBRA and the
proposed regulations generally preclude the use of discretion in determining
specific amounts of compensation. Accordingly, base salaries are subject to the
$1 million limit on deductible compensation as are annual bonus amounts where
discretion is used to increase an executive's payment above an amount determined
strictly by an objective formula.
In light of the new tax law, it is the policy of the Committee to modify where
practicable the executive incentive plans so as to maximize the tax
deductibility of compensation paid to its top executive officers. Accordingly,
the proposed amendments of the ITT Annual Performance-Based Incentive Plan for
Executive Officers, submitted for shareholder approval, will qualify annual
bonuses under that plan as "performance-based compensation".
Notwithstanding the above, the Committee believes that the overall performance
of its most senior executives cannot in all cases be reduced to a fixed formula
and that the prudent use of discretion in determining pay levels is in the best
interest of the Corporation and its shareholders. Under some circumstances
(other than in the context of the ITT Annual Performance-Based Incentive Plan
for Executive Officers), the Committee's use of discretion in determining
appropriate amounts of compensation may be essential. In those situations where
discretion is used by the Committee, compensation may not be fully deductible on
the Corporation's tax return. However, the Committee does not believe that such
loss of deductibility will have any material impact on the financial condition
of the Corporation.
This report is furnished by the members of the ITT Compensation and Personnel
Committee:
BETTE B. ANDERSON
NOLAN D. ARCHIBALD
PAUL G. KIRK, JR., Co-Chairman of the Committee
EDWARD C. MEYER
MARGITA E. WHITE
ROBERT A. BURNETT, Chairman of the Committee.
12
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COMPARISON OF ONE YEAR TOTAL RETURN
AMONG ITT CORPORATION, S&P 500, AND S&P CONGLOMERATES INDEX
CUMULATIVE TOTAL RETURN
BASED ON REINVESTMENT OF $100 BEGINNING DECEMBER 31, 1993
[CHART]
- ---------------------------------------------------------------------------------------------------------------------------
DEC-93 MAR-94 JUN-94 SEP-94 DEC-94
- ---------------------------------------------------------------------------------------------------------------------------
ITT Corp. $100 $103 $99 $101 $109
- ---------------------------------------------------------------------------------------------------------------------------
S&P 500Registered $100 $96 $97 $101 $101
- ---------------------------------------------------------------------------------------------------------------------------
S&PRegistered Conglomerates Index $100 $99 $93 $92 $95
- ---------------------------------------------------------------------------------------------------------------------------
Customized Index representing the
S&P Conglomerates Index, excl. ITT $100 $95 $88 $85 $85
- ---------------------------------------------------------------------------------------------------------------------------
ITT Comprised 42.4% of the S&PRegistered Conglomerates Index
based on market capitalization as of March 1995.
The Customized Index represents the composite return for the
companies in the S&P Conglomerates Index as of Dec. 31,
1994, excluding ITT Corp. On Dec. 31, 1994 such companies
were Teledyne Inc., Tenneco Inc., and Textron Inc.
COMPARISON OF FIVE YEAR TOTAL RETURN
AMONG ITT CORPORATION, S&P 500, AND S&P CONGLOMERATES INDEX
CUMULATIVE TOTAL RETURN
BASED ON REINVESTMENT OF $100 BEGINNING DECEMBER 31, 1989
[CHART]
- --------------------------------------------------------------------------------------------------------------------------
DEC-89 DEC-90 DEC-91 DEC-92 DEC-93 DEC-94
- --------------------------------------------------------------------------------------------------------------------------
ITT Corp. $100 $84 $104 $134 $174 $188
- --------------------------------------------------------------------------------------------------------------------------
S&P 500Registered $100 $97 $126 $136 $150 $152
- --------------------------------------------------------------------------------------------------------------------------
S&PRegistered Conglomerates Index $100 $84 $91 $112 $149 $141
- --------------------------------------------------------------------------------------------------------------------------
Customized Index representing the
S&P Conglomerates Index, excl. ITT $100 $78 $76 $94 $127 $107
- --------------------------------------------------------------------------------------------------------------------------
ITT Comprised 42.4% of the S&PRegistered Conglomerates Index
based on market capitalization as of March 1995.
The Customized Index represents the composite return for the
companies in the S&P Conglomerates Index as of Dec. 31,
1994, excluding ITT Corp. On Dec. 31, 1994 such companies
were Teledyne Inc., Tenneco Inc., and Textron Inc.
13
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SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------- ------------------------
PAYOUTS
OTHER ---------
ANNUAL SECURITIES LONG-TERM ALL OTHER
COMPEN- UNDERLYING INCENTIVE COMPEN-
NAME AND PRINCIPAL SALARY BONUS SATION(1) OPTIONS(2) PLAN SATION(3)
POSITION YEAR ($) ($) ($) (#) ($) ($)
- ------------------------ ---- --------- --------- ------- ---------- --------- ---------
Rand V. Araskog 1994 1,625,000 2,405,000 219,457 180,000 -0- 58,656
Chairman, 1993 1,525,000 2,584,900 185,793 163,968 -0- 54,346
President and 1992 1,462,500 -0- 210,459 -0- -0- 51,188
Chief Executive
Robert A. Bowman 1994 456,250 471,750 25,534 60,000 -0- 13,844
Executive 1993 416,667 540,300 368,537 65,587 -0- 11,388
Vice President and 1992 289,166 -0- 587 5,466 -0- 6,544
Chief Financial Officer
Dale R. Comey(4) 1994 604,167 638,250 19,100 -0- -0- 22,927
Executive 1993 575,000 731,000 18,890 54,656 -0- 21,096
Vice President 1992 541,667 -0- 11,445 -0- -0- 18,958
D. Travis Engen 1994 608,333 638,250 15,991 60,000 -0- 23,073
Executive 1993 541,667 731,000 13,043 54,656 -0- 19,930
Vice President 1992 504,167 -0- 9,645 -0- -0- 17,646
Richard S. Ward 1994 358,750 336,874 22,544 35,000 -0- 14,338
Executive 1993 285,833 200,000 30,953 27,328 -0- 10,976
Vice President and 1992 226,667 -0- 246,293 -0- -0- 7,986
General Counsel
- --------------------------------------------------------------------------------
(1) All amounts shown in this column are tax reimbursement allowances, which are
intended to offset the inclusion in taxable income of the value of certain
benefits, except that: (a) the amounts shown for Mr. Araskog also include
$128,873, $99,929, and $132,052 in 1994, 1993, and 1992, respectively, for
personal benefits including tax and financial counseling and transportation
services, (b) the amount shown for Mr. Bowman in 1993 also includes $205,373
in relocation allowance, (c) the amounts shown for Mr. Ward include $11,167
and $164,057 in relocation allowances in 1993 and 1992, respectively.
(2) The named executives do not hold any stock appreciation rights in connection
with the options shown.
The number and exercise prices of all options outstanding at the time of the
spin-off to shareholders of Rayonier Inc., a former subsidiary of the
Corporation, were adjusted for decreases in the economic value of the
options as a result of the distribution to shareholders. This adjustment
increased the number of options by 9.3% and decreased the exercise prices of
the options then outstanding by approximately 8.5%.
(3) All amounts shown in this column are company contributions under the ITT
Investment and Savings Plan and the ITT Excess Savings Plan, which are
defined contribution plans. The Corporation makes a matching contribution in
an amount equal to 50% of an employee's contribution, such matching
contribution not to exceed three percent (3%) of such employee's salary.
Under these plans, the Corporation also makes a non-matching contribution
equal to one-half of one percent (1/2 of 1%) of an employee's salary.
(4) Mr. Comey resigned as an executive officer of the Corporation and ceased
providing services effective January 13, 1995. The Compensation and
Personnel Committee agreed to pay Mr. Comey's salary of $610,000 through
March 31, 1996, at which time Mr. Comey will be 55 years old. Mr. Comey will
be eligible to elect early retirement on April 1, 1996.
14
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OPTION GRANTS IN LAST FISCAL YEAR
- --------------------------------------------------------------------------------
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF RATES OF STOCK PRICE
SECURITIES APPRECIATION FOR OPTION
UNDERLYING % OF TOTAL TERM(4)
OPTIONS OPTIONS GRANTED EXERCISE ------------------------
GRANTED(1) TO EMPLOYEES PRICE (3) EXPIRATION 5% 10%
NAME (#) IN 1994 (2) ($/SHR) DATE ($) ($)
- -------------------------- ----------- --------------- ---------- ---------- --------- ----------
Rand V. Araskog 180,000 9.6 84.00 10/13/2004 9,509,400 24,096,600
Robert A. Bowman 60,000 3.2 84.00 10/13/2004 3,169,800 8,032,200
Dale R. Comey -0- -0- -- -- -0- -0-
D. Travis Engen 60,000 3.2 84.00 10/13/2004 3,169,800 8,032,200
Richard S. Ward 35,000 1.9 84.00 10/13/2004 1,849,050 4,685,450
- --------------------------------------------------------------------------------
(1) The numbers in this column represent the options to purchase ITT Common
Stock.
(2) Percentages indicated are based on a total of 1,876,198 options granted to
656 employees during 1994.
(3) The exercise price per share is 100% of the fair market value of a share of
ITT Common Stock on the date of grant. The exercise price may be paid in
cash or in shares of ITT Common Stock valued at their fair market value on
the date of exercise.
Options granted on October 11, 1994 at the exercise price of $84.00 per
share are not exercisable until the trading price of ITT Common Stock equals
or exceeds $105.00 per share for 10 consecutive trading days at which time
two-thirds of the options will be exercisable; when the trading price equals
or exceeds $117.60 per share for 10 consecutive trading days, the options
will be fully exercisable. Notwithstanding the above, the options will be
fully exercisable after October 11, 2003, but no later than October 13,
2004.
(4) At the end of the term of the options granted October 11, 1994, the
projected price per share of ITT Common Stock would be $136.83 and $217.87
at an assumed annual appreciation rate of 5% and 10%, respectively.
- --------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES(1)
- --------------------------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED,
SHARES OPTIONS AT IN-THE-MONEY OPTIONS HELD
ACQUIRED ON VALUE FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)
NAME EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
- ------------------ ------------- ------------ -------------------------- -----------------------------
Rand V. Araskog -0- -0- -0- / 343,968 -0- / 1,566,337
Robert A. Bowman -0- -0- 34,615 / 123,766 1,249,083 / 736,343
Dale R. Comey -0- -0- 178,507 / 54,656 7,428,585 / 244,312
D. Travis Engen -0- -0- 141,887 / 114,656 5,972,719 / 522,112
Richard S. Ward -0- -0- 12,352 / 62,328 518,413 / 284,206
- --------------------------------------------------------------------------------
(1) The number and exercise prices of all options outstanding at the time of the
spin-off to shareholders of Rayonier Inc., a former subsidiary of the
Corporation, were adjusted for decreases in the economic value of the
options as a result of the distribution to shareholders. This adjustment
increased the number of options by 9.3% and decreased the exercise prices of
the options then outstanding by approximately 8.5%.
(2) Based on the New York Stock Exchange consolidated trading closing price of
ITT Common Stock on that date of $88.63.
15
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SEVERANCE PAY PLAN
The Compensation and Personnel Committee of the ITT Board of Directors has
adopted a policy that it will not authorize the execution of any executive
employment contracts which would provide for severance payments constituting
"parachute payments" as defined in the Internal Revenue Code, unless the
shareholders of the Corporation are afforded the opportunity to approve such
contracts.
A severance pay plan applies to ITT senior executives who are U.S. citizens or
who are employed in the U.S., including all executive officers of ITT other than
Mr. Araskog. Under the plan, if a participant's employment is terminated by ITT,
other than for cause or as a result of other occurrences specified in the plan,
the participant is entitled to severance pay in an amount up to 24 months of
base salary depending upon his or her length of service. In no event shall such
severance pay exceed the amount of base salary for the number of months
remaining between the termination of employment and the participant's normal
retirement date or two times the participant's total annual compensation during
the year immediately preceding such termination. The plan includes offset
provisions for other compensation from ITT and requirements on the part of
executives with respect to non-competition and compliance with the ITT Code of
Corporate Conduct. Under the plan, severance payments would ordinarily be made
monthly over the scheduled term of such payments; however, ITT has the option to
make such payments in the form of a single lump sum payment discounted to
present value.
The annual salaries of Messrs. Bowman, Engen and Ward as of March 1, 1995 were
$500,000, $700,000 and $400,000, respectively.
EMPLOYMENT CONTRACT
ITT has an employment contract with Mr. Araskog which provides for: (i) in
addition to salary, participation in ITT's benefit plans, and contractual
disability and death benefits, his employment as chairman and chief executive of
ITT until October 31, 1996 (when he will have reached age 65); (ii) his service
as consultant to his successor as chief executive of ITT from November 1, 1996
through October 31, 2001 for a fee of not less than $400,000 per year; (iii) his
nomination as a director of ITT at each annual meeting of ITT shareholders
commencing with the annual meeting for 1997 to and including the annual meeting
to be held in 2003 and, upon election, payment to him of the usual director's
fees for service in such capacity; (iv) the provision of office space and
certain staff and transportation assistance in connection with his service as a
director and consultant subsequent to October 31, 1996; (v) certain payments in
the event that (A) at any time prior to October 31, 1996, Mr. Araskog is not
re-elected as chairman and chief executive, which payments would be made (I) in
monthly installments over the term of the contract remaining through October 31,
1996 in amounts equal per annum to the salary received by Mr. Araskog for the
calendar year immediately preceding such event plus a percentage of the average
bonus received by Mr. Araskog with respect to the three calendar years
immediately preceding such event, and (II) in the form of a discounted lump sum
payment on or about October 31, 1996 equal to the then present value of the
consulting fee and the director's fees referred to above, or (B) after
completion of services through October 31, 1996 in accordance with the terms of
the contract, Mr. Araskog at any time prior to October 31, 2003 is not nominated
as a director of ITT, which payment would be in the form of a discounted lump
sum payment equal to the then present value of the balance remaining of the
consulting fee and the director's fees referred to above; and (vi) covenants by
Mr. Araskog against competition with any business actively conducted by ITT or
any of its subsidiaries and for compliance with the ITT Code of Corporate
Conduct. Mr. Araskog's annual salary as of March 1, 1995 was $2,000,000.
CHANGE-IN-CONTROL ARRANGEMENTS
Acceleration of the exercisability, payment or vesting of awards or benefits is
provided for under the ITT Stock Option Incentive Plan (1977), the ITT 1986
Incentive Stock Plan, the ITT Long-Term Performance Plan, the 1994 Incentive
Stock Plan and the retirement excess benefit plan upon the occurrence of a
change in corporate control, which is generally defined in such plans as the
occurrence of any of the following events: (i) a report on Schedule 13D shall be
filed with the Securities and Exchange Commission pursuant to Section 13(d) of
the Securities Exchange Act of 1934 (the "Act") disclosing that any person
(within the meaning of Section 13(d) of the Act), other than ITT or a subsidiary
of ITT or any employee benefit plan sponsored by ITT or a subsidiary of ITT, is
the beneficial owner directly or indirectly of twenty percent or more of the
outstanding Common Stock of ITT; (ii) any person (within the meaning of Section
13(d) of the Act), other than ITT or a subsidiary of ITT or any employee benefit
plan sponsored by ITT or a subsidiary of ITT, shall purchase shares pursuant to
a tender offer or exchange offer to acquire any Common Stock of ITT (or
securities convertible into such Common Stock) for cash, securities or any other
consideration, provided that after consummation of the offer, the person in
question is the beneficial owner (as such term is defined in Rule 13d-3 under
the Act) directly or indirectly of fifteen percent or more of the outstanding
Common Stock of ITT (calculated as provided in paragraph (d) of Rule 13d-3 under
the Act in the case of
16
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rights to acquire Common Stock); (iii) the stockholders of ITT shall approve (A)
any consolidation or merger of ITT in which ITT is not the continuing or
surviving corporation or pursuant to which shares of Common Stock of ITT would
be converted into cash, securities or other property, other than a merger of ITT
in which holders of Common Stock of ITT immediately prior to the merger have the
same proportionate ownership of common stock of the surviving corporation
immediately after the merger as immediately before, or (B) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of ITT; or (iv) there shall
have been a change in a majority of the members of the Board of Directors of ITT
within a 12-month period unless the election or nomination for election by ITT's
shareholders of each new director during such 12-month period was approved by
the vote of two-thirds of the directors then still in office who were directors
at the beginning of such 12-month period.
PENSION PLAN
Pensions for regularly employed salaried personnel are provided through a
defined benefit pension plan. The annual pension amounts to 2% of a member's
average final compensation for each of the first 25 years of benefit service
plus 1 1/2% of a member's average final compensation for each of the next 15
years of benefit service, reduced by 1 1/4% of the member's primary Social
Security benefit for each year of benefit service to a maximum of 40 years;
provided that no more than one-half of the member's primary Social Security
benefit is used for such reduction. A member's average final compensation
(including salary plus approved bonus payments) is defined under the plan as the
total of (i) a member's average annual base salary for the five calendar years
of the last 120 consecutive calendar months of eligibility service affording the
highest such average plus (ii) a member's average annual compensation not
including base salary for the five calendar years of the member's last 120
consecutive calendar months of eligibility service affording the highest such
average. The plan also provides for undiscounted early retirement pensions for
members who retire at or after age 60 following completion of 15 years of
eligibility service.
There will be taken into account in the calculation of the average final
compensation of Mr. Araskog, who will reach age 65 in October 1996, the $2.4
million value of the bonus awarded to Mr. Araskog in 1990 which was paid in the
form of restricted shares of ITT common stock. The value of this bonus was not
included in the amount reported in ITT's 1991 proxy statement as Mr. Araskog's
total compensation for 1990 to be used for purposes of determining average final
compensation under the plan. The omission came to the attention of the
Compensation and Personnel Committee of the ITT Board of Directors in 1994. The
Committee (the current chairman of which was a member of the Committee in 1990),
after consultation with the former ITT director who was chairman of the
Committee in 1990, confirmed that it was the understanding of the Committee in
1990 that the $2.4 million bonus paid in restricted stock would be treated as an
approved bonus payment under the plan. The Committee thereupon directed that
this corrective disclosure be made.
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Annual amounts of normal retirement pension commencing at age 65 based upon
average final compensation and benefit service, but before Social Security
reductions, are illustrated in the following table.
PENSION PLAN TABLE
- --------------------------------------------------------------------------------
YEARS OF SERVICE
AVERAGE FINAL ---------------------------------------------------------------------------------
COMPENSATION 20 25 30 35 40
- -------------------- ------------- ------------- ------------- ------------- -------------
$ 50,000 $ 20,000 $ 25,000 $ 28,750 $ 32,500 $ 36,250
100,000 40,000 50,000 57,500 65,000 72,500
300,000 120,000 150,000 172,500 195,000 217,500
500,000 200,000 250,000 287,500 325,000 362,500
750,000 300,000 375,000 431,250 487,500 543,750
1,000,000 400,000 500,000 575,000 650,000 725,000
1,500,000 600,000 750,000 862,500 975,000 1,087,500
2,000,000 800,000 1,000,000 1,150,000 1,300,000 1,450,000
2,500,000 1,000,000 1,250,000 1,437,500 1,625,000 1,812,500
3,000,000 1,200,000 1,500,000 1,725,000 1,950,000 2,175,000
3,500,000 1,400,000 1,750,000 2,012,500 2,275,000 2,537,500
4,000,000 1,600,000 2,000,000 2,300,000 2,600,000 2,900,000
5,000,000 2,000,000 2,500,000 2,875,000 3,250,000 3,625,000
- --------------------------------------------------------------------------------
The amounts shown under "Salary" and "Bonus" opposite the names of the
individuals in the Summary Compensation Table comprise their compensation which
is used for purposes of determining "average final compensation" under the plan.
Their respective covered years of benefit service under the plan, through
December 31, 1994, are as follows: Mr. Araskog, 28.09 years; Mr. Bowman, 2.33
years; Mr. Comey, 4.58 years; Mr. Engen, 9.73 years; and Mr. Ward, 25.44 years.
In addition to the service indicated above under the ITT pension plan, Mr. Comey
also participated in the pension plan of Hartford Fire Insurance Company for
24.58 years and Mr. Bowman participated in the pension plan of ITT Sheraton
Corporation for 1.40 years. Upon their respective retirements, Mr. Comey, who
has resigned as an executive officer of the Corporation, and Mr. Bowman will be
entitled to combined benefits from such plans which will be approximately equal
to the benefit they would have earned had all of their service been under the
ITT plan. Mr. Comey will be eligible to elect early retirement on April 1, 1996.
Applicable federal legislation limits the annual benefits which may be paid and
the compensation which may be recognized under a tax-qualified retirement plan.
As permitted by such legislation, the portion of any benefit which is in excess
of the limit payable from a tax-qualified retirement plan is payable out of
general funds of ITT. Officers of ITT at the level of vice president or higher
may indicate a preference, subject to certain conditions, to receive any
"excess" benefit in the form of a single discounted lump sum payment. Any
"excess" benefit accrued to any such officer will be immediately payable in the
form of a single discounted lump sum payment upon the occurrence of a change in
corporate control (as defined in the excess benefit plan).
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The following table shows as of January 31, 1995 the beneficial ownership of
persons known to the Corporation to be the beneficial owners of more than five
percent of any class of ITT's voting securities.
NAME AND AMOUNT AND
ADDRESS OF NATURE OF
BENEFICIAL BENEFICIAL PERCENT OF
OWNER TITLE OF CLASS OWNERSHIP CLASS
- ------------------------------------------------------------------------------------------------
Bankers Trust Company 8,748,519 100% (12% of
280 Park Avenue shares, as ITT's voting
New York, NY 10017 ESOP Preferred Stock Trustee securities)
- ------------------------------------------------------------------------------------------------
The following table shows as of January 31, 1995 the beneficial ownership of
each class of ITT equity securities by each director and nominee, by each of the
executive officers named in the Summary Compensation Table, and by the directors
and executive officers as a group.
AMOUNT AND
NAME OF NATURE OF
BENEFICIAL BENEFICIAL PERCENT OF
OWNER TITLE OF CLASS OWNERSHIP (1) CLASS(2)
- ------------------------------------------------------------------------------------------------
Bette B. Anderson Common 2,000
Rand V. Araskog Common 423,235
ESOP Preferred 491
Nolan D. Archibald Common 8,350
Robert A. Burnett Common 1,160
Michel David-Weill Common 1,000
S. Parker Gilbert Common 5,000
Henry Gluck (3) Common 1,000
Paul G. Kirk, Jr. Common 1,010
Edward C. Meyer Common 2,500
Benjamin F. Payton Common 488
Margita E. White Common 2,000
Robert A. Bowman Common 38,574
ESOP Preferred 242
Dale R. Comey Common 179,051
ESOP Preferred 461
D. Travis Engen Common 152,011
ESOP Preferred 469
Richard S. Ward Common 26,841
ESOP Preferred 545
All directors and executive Common 1,018,858
officers as a group (25) ESOP Preferred 5,229
- ------------------------------------------------------------------------------------------------
NOTES:
(1) All shares are owned directly except as hereinafter otherwise indicated.
Pursuant to regulations of the Securities and Exchange Commission, shares (i)
receivable by directors and executive officers upon exercise of employee stock
options exercisable within 60 days after January 31, 1995, (ii) allocated to the
accounts of certain directors and executive officers under ITT's Investment and
Savings Plan at January 31, 1995, and (iii) acquired by directors and executive
officers under ITT's Dividend Reinvestment and Common Stock Purchase Plan
through January 31, 1995, are deemed to be beneficially owned by such directors
and executive officers at said date. Of the number of shares shown above, (i)
the following represent shares that may be acquired upon exercise of employee
stock options for the accounts of: Mr. Bowman, 38,259 common shares; Mr. Comey,
162,110 common shares; Mr. Engen, 141,887 common shares; and Mr. Ward, 12,352
common shares; and all present directors and executive officers as a group,
493,500 common shares; (ii) the following amounts were
19
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allocated under the ITT Investment and Savings Plan to the accounts of: Mr.
Araskog, 17,427 common shares and 491 ESOP preferred shares; Mr. Bowman, 315
common shares and 242 ESOP preferred shares; Mr. Comey, 2,675 common shares and
461 ESOP preferred shares; Mr. Engen, 464 common shares and 469 ESOP preferred
shares; and Mr. Ward, 1,908 common shares and 545 ESOP preferred shares; and all
present directors and executive officers as a group, 28,202 common shares and
5,229 ESOP preferred shares; and (iii) the following amounts were acquired under
ITT's Dividend Reinvestment and Common Stock Purchase Plan for the accounts of:
Mr. Burnett, 160 common shares; Dr. Payton, 88 common shares; Mr. Ward, 1,794
common shares; and all present directors and executive officers as a group,
2,241 common shares.
(2) Share ownership does not exceed one percent of the class so owned.
(3) Mr. Gluck acquired 1,000 shares in March 1995.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
An Agreement and Plan of Merger dated as of December 19, 1994, among ITT, an ITT
subsidiary, and Caesars World, Inc. provided, among other things, for (i) an
offer by the ITT subsidiary to purchase all the outstanding shares of common
stock of Caesars World for $67.50 per share in cash, and (ii) a subsequent
merger of the ITT subsidiary into Caesars World (which would result in Caesars
World's becoming a wholly owned direct subsidiary of ITT). Concurrently with the
execution of the Agreement and Plan of Merger, Mr. Henry Gluck, the chairman and
chief executive officer of Caesars World, entered into an amended and restated
employment agreement with Caesars World and ITT. The amended agreement became
effective on January 24, 1995, when the ITT subsidiary acquired Caesars World
shares pursuant to the aforementioned offer to purchase.
Pursuant to the ITT subsidiary's offer to purchase with respect to the Caesars
World common stock, Mr. Gluck caused the tender of 433,356 shares of common
stock owned by Mr. Gluck and 10,000 shares of Caesars World common stock owned
by a foundation controlled by Mr. Gluck. These shares constituted Mr. Gluck's
entire holdings of such shares. All such shares were purchased by the ITT
subsidiary pursuant to the offer.
The principal financial terms of Mr. Gluck's amended and restated employment
agreement are substantially the same as those in his previous agreement with
Caesars World, except that (i) an evergreen five-year term has been replaced by
a fixed five-year term; (ii) Mr. Gluck's annual incentive bonus will be the
higher of the amount computed under his previous employment agreement or the
amount computed under an ITT incentive bonus formula; (iii) Mr. Gluck is to
receive an annual grant (the first of which was effective January 24, 1995) of
an ITT employee stock option for 35,000 shares of ITT common stock with an
exercise price equal to the fair market value of such shares on the date of
grant; and (iv) the amended agreement confirms that the ITT subsidiary's
acquisition of Caesars World shares pursuant to the offer to purchase would
constitute a change in control event under the agreement which would entitle Mr.
Gluck to the receipt of certain severance payments and the acceleration of
vesting of certain benefits were he to elect to terminate his employment within
one year after such event.
Lazard Freres & Co., of which Mr. David-Weill is Senior Partner, performed
various investment banking services for ITT and its subsidiaries in 1994. It is
anticipated that such firm will perform similar services for ITT and its
subsidiaries during 1995. In 1988, the ITT Master Retirement Trust, Hartford
Accident and Indemnity Company and Hartford Life Insurance Company (the "ITT
Investment Vehicles") committed to invest an aggregate of $35 million in, and
became limited partners of, Corporate Partners, L.P., a fund organized by Lazard
Freres & Co. With certain exceptions, such commitment expired in 1994. Under the
terms of the limited partnership agreement, the ITT Investment Vehicles have
agreed to pay Corporate Advisors, L.P., the general partner of Corporate
Partners, L.P., certain amounts in connection with their investment. During
1994, the ITT Investment Vehicles paid Corporate Advisors, L.P. fees aggregating
$204,377.
A By-law of ITT provides for mandatory indemnification of ITT directors and
officers (including payment of legal fees) to the fullest extent permitted by
applicable law. The By-law also provides that ITT may maintain insurance to
indemnify its directors and officers against liabilities whether or not ITT
would be permitted to indemnify them. This type of insurance, as well as
policies under which ITT may be reimbursed for amounts paid in indemnification
of its directors and officers, are in force. The premiums thereon, which
aggregate $2,989,984 for a nineteen month period are paid by ITT. As authorized
by such By-law, ITT has entered into indemnification agreements with its
directors pursuant to which ITT agrees to indemnify them against all expenses,
liabilities or losses incurred by the directors in their capacity as such: (i)
to the fullest extent permitted by applicable law; (ii) as provided in the
By-laws of ITT as in effect on the date of such agreement; and (iii) in the
event ITT does not maintain the aforementioned insurance or comparable coverage,
to the full extent provided in the applicable policies as in effect on the date
of such agreement (ITT's obligations described in (ii) and (iii) being subject
to certain exceptions). Con-
20
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tractual rights under such indemnification agreements are believed to provide
the directors more protection than the indemnification By-law which is subject
to change.
GENERAL
In addition to the matters described above, there will be an address by the
chairman, president and chief executive at the Annual Meeting of Shareholders
and a general discussion period during which shareholders will have an
opportunity to ask questions about the business and operations of ITT.
As of the date of this proxy statement, the Board of Directors has no knowledge
of any business which will be presented for consideration at the meeting other
than that described above or shareholder proposals that have been omitted from
this proxy statement pursuant to the proxy regulations of the Securities and
Exchange Commission. As to such omitted proposals and other business, if any,
that may properly come before the meeting, the proxies will vote in accordance
with their judgment.
Present and former officers, directors and other employees of ITT may solicit
proxies by telephone, telegram or mail, or by meetings with shareholders or
their representatives. ITT will reimburse brokers, banks or other custodians,
nominees and fiduciaries for their charges and expenses in forwarding proxy
material to beneficial owners. All expenses of solicitation of proxies will be
borne by ITT.
By Order of the Board of Directors.
Gwenn L. Carr
Vice President and Secretary
Dated: March 21, 1995
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN, DATE, AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE SELF-ADDRESSED ENVELOPE (WHICH IS POSTAGE-PAID FOR SHAREHOLDERS
IN THE UNITED STATES, CANADA, AND THE UNITED KINGDOM) WHETHER OR NOT THEY EXPECT
TO ATTEND THE MEETING. A SHAREHOLDER MAY NEVERTHELESS VOTE IN PERSON IF HE OR
SHE DOES ATTEND.
21
[ITT LOGO] [ITT LOGO]
ITT CORPORATION
1330 AVENUE OF THE AMERICAS
NEW YORK, NY 10019-5490
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING OF SHAREHOLDERS
THE UNDERSIGNED HEREBY APPOINTS GWENN L. CARR OR WALTER F. DIEHL JR., OR
RICHARD S. WARD, AS PROXY, EACH WITH POWER TO APPOINT HIS OR HER SUBSTITUTE AND
HEREBY AUTHORIZES EACH OF THEM AT THE ANNUAL MEETING OF SHAREHOLDERS OF ITT
CORPORATION TO BE HELD AT 10:30 A.M. ON MAY 9, 1995 IN THE PHOENICIAN GRAND
BALLROOM OF THE PHOENICIAN, 6000 EAST CAMELBACK ROAD, SCOTTSDALE, AZ 85251
AND AT ANY ADJOURNMENTS THEREOF TO VOTE ALL SHARES OF ITT COMMON AND PREFERRED
STOCK, INCLUDING ALL SHARES HELD IN THE ITT DIVIDEND REINVESTMENT AND COMMON
STOCK PURCHASE PLAN, WHICH THE UNDERSIGNED COULD VOTE IF PERSONALLY PRESENT AS
DESIGNATED ON THE REVERSE SIDE OF THIS PROXY AND CONFERS DISCRETIONARY
AUTHORITY UPON EACH SUCH PROXY TO VOTE UPON ANY OTHER MATTER PROPERLY BROUGHT
BEFORE THE MEETING.
THE NOMINEES FOR ELECTION AS DIRECTORS ARE
(B.B. ANDERSON, R.V. ARASKOG, N.D. ARCHIBALD, R.A. BURNETT, M. DAVID-WEIL,
S.P. GILBERT, H. GLUCK, P.G. KIRK, JR.
E.C. MEYER, B.F. PAYTON, AND M.E. WHITE.)
PLEASE SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES ON THE REVERSE
SIDE OF THIS PROXY. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS
DESIGNATED BY YOU ON THE REVERSE SIDE, OR IF NO DESIGNATION IS MADE WILL BE
VOTED FOR ITEMS 1, 2, AND 3, AND AGAINST ITEM 4.
THE PROXY COMMITTEE CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS
PROXY.
SEE REVERSE
SIDE
PROXY
PLEASE MARK YOUR CHOICE LIKE THIS /X/
IN DARK INK AND SIGN AND DATE BELOW.
DIRECTORS RECOMMEND A
VOTE FOR ITEMS 1-2 AND 3
- ---------------------------------------------------------------
FOR ALL EXCEPT* WITHHELD
1. ELECTION OF DIRECTORS. / / / / / /
(NOMINEES ARE LISTED ON
THE REVERSE SIDE OF
THIS PROXY)
* LIST EXCEPTIONS. ----------------------------
FOR AGAINST ABSTAIN
2. RATIFICATION OF / / / / / /
AUDITORS.
3. TO APPROVE THE AMENDMENT / / / / / /
OF THE ANNUAL PERFORMANCE
BASED INCENTIVE PLAN.
- ---------------------------------------------------------------
DIRECTORS RECOMMEND A
VOTE AGAINST ITEM 4.
- ---------------------------------------------------------------
FOR AGAINST ABSTAIN
4. SHAREHOLDER PROPOSAL TO / / / / / /
LIST EXECUTIVES EARNING
MORE THAN $100,000
- ---------------------------------------------------------------
/ / MARK THIS BOX IF YOU WANT
TO RECEIVE AN ADMISSION CARD.
, 1995.
- ------------------------------- ----------------------------
SIGNATURE DATE
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
NOTE PLEASE ADD YOUR TITLE IF YOUR ARE SIGNING AS ATTORNEY, ADMINISTRATOR,
EXECUTOR, GUARDIAN, TRUSTEE OR IN ANY OTHER REPRESENTATIVE CAPACITY.
DETACH HERE AND RETURN UPPER PORTION IN SELF-ADDRESSED ENVELOPE.
ITT
ANNUAL MEETING INFORMATION
--------------------------
YOUR VOTE IS IMPORTANT RECORD DATE: MARCH 13, 1995
- ---------------------- MEETING DATE: MAY 9, 1995
10:30 AM
TO ITT CORPORATION
- ------------------ MEETING SITE:
THE PHOENICIAN
PLEASE VOTE YOUR PROXY THE PHOENICIAN GRAND BALLROOM
6000 EAST CAMELBACK ROAD
SCOTTSDALE, AZ 85251
