At the upcoming annual meeting, IGT shareholders will make an important decision regarding the value of their investment: whether to (1) add shareholder representation and a fresh perspective focused on shareholder value creation to the IGT Board of Directors or (2) continue with the same board that has overseen a significant decline in shareholder value in recent years. We urge you to consider the facts carefully.
Since last September, we have sought a dialogue with the IGT board regarding our concerns with IGT's operating and share price performance and how we believe we can help create value for ALL shareholders. We have had no confidence that our views—which we believe are strongly aligned with all shareholders' interests—have been considered, and we are determined to seek the support of our fellow shareholders in order to gain better representation for all of us in the boardroom. Unfortunately, in response to our efforts, our Board and management have resorted to a series of cheap personal attacks designed, in our view, simply to distract shareholders from the real issue: Could our Board benefit from fresh perspectives and more relevant experience?
We believe the answer is a clear YES, and that the three Ader nominees will help rectify the core concerns which we believe have led to value destruction at IGT:
(i) a lack of focus on the core slot machine and systems business that we believe generated IGT's historic success and which we believe will be the foundation for its future growth;(ii) a lack of casino gaming industry experience in executive management ranks; and (iii) poor capital allocation decisions, highlighted by a series of costly non-strategic acquisitions. We urge all IGT shareholders to vote the GOLD proxy card today to ensure new, shareholder-focused voices in the IGT boardroom. WE ARE DEEPLY CONCERNED ABOUT IGT'S RECENT STRATEGY AND PERFORMANCE We recently released a detailed presentation which articulates the basis for our strong beliefs concerning the value destruction which has occurred under the watch of the management and board of IGT and our plan to halt the deterioration in IGT's stock price and to increase shareholder value. We encourage you to review the presentation (available at www.RESCUEIGT.com under the "Filings & Presentations" tab), and consider the following:
- IGT's stock price performance has lagged that of its core competitors;
- IGT's relative valuation, as compared to its core competitors, has deteriorated under current management and the incumbent board;
- Wall Street Research estimates forecast the company to achieve " middle of the pack " Revenue and EBITDA growth between 2011A-2014E;
- IGT's core Gaming Operations business has seen recent net declines in its installed base;
- IGT's "Premium Leased Games" have exhibited a declining trend in recent performance and upcoming games seem to have underwhelmed casino gaming operators;
- IGT's has failed to capitalize on its global presence in high growth international markets – especially in Asia and Latin America;
- IGT failed its "Say-on-Pay" in 2012, garnering support from only 34.2% of the company's shares; and
- Fifty percent of our current Board has preexisting relationships due to directors' previous service at other companies. We question whether the previous professional ties between our CEO and three of our other directors jeopardize the objective level of boardroom discussion that we as shareholders should expect.
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