-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DNA7bAnIMwLcPL+q66I/qXOhYbuvb1rD9dqCAOy3FDGNHA6jG7ENaBlHoO6oVqtJ toqG+8JmzfHwQBr/6GgmQQ== 0000922475-05-000049.txt : 20051101 0000922475-05-000049.hdr.sgml : 20051101 20051101085930 ACCESSION NUMBER: 0000922475-05-000049 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051028 ITEM INFORMATION: Entry into a Material Definitive Agreement FILED AS OF DATE: 20051101 DATE AS OF CHANGE: 20051101 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ITT EDUCATIONAL SERVICES INC CENTRAL INDEX KEY: 0000922475 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 362061311 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13144 FILM NUMBER: 051167968 BUSINESS ADDRESS: STREET 1: 13000 NORTH MERIDIAN CITY: CARMEL STATE: IN ZIP: 46032-1404 BUSINESS PHONE: 317 706 9200 MAIL ADDRESS: STREET 1: 13000 NORTH MERIDIAN STREET STREET 2: - CITY: CARMEL STATE: IN ZIP: 46032-1404 8-K 1 form8_k.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

DATE OF REPORT (Date of earliest event reported): October 28, 2005

 

 

ITT EDUCATIONAL SERVICES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware

1-13144

36-2061311

 

(State or other

(Commission

(IRS Employer

 

jurisdiction of

File Number)

Identification No.)

incorporation)

 

 

 

13000 North Meridian Street

Carmel, Indiana

46032-1404

(Address of principal executive offices) (Zip Code)

 

Registrant's telephone number, including area code: (317) 706-9200

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR

 

240.14d-2(b))

 

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR

240.13e-4(c))

 

 


 

 

 

Item 1.01.

Entry into a Material Definitive Agreement.

 

On October 24, 2005, the Compensation Committee of the Registrant’s Board of Directors determined to award the Registrant’s executives, including the Registrant’s named executive officers, non-qualified stock options under the 1997 ITT Educational Services, Inc. Incentive Stock Plan (the “1997 Plan”). On October 28, 2005, the Compensation Committee awarded the Registrant’s executives non-qualified stock options under the 1997 Plan as of November 2, 2005 to purchase 219,350 shares of the Registrant’s common stock at a price equal to the fair market value of the stock as of the close of business on November 1, 2005 (the “Stock Options”). The Stock Options were fully vested and immediately exercisable as of November 2, 2005.

 

The Stock Options represent a portion of the annual stock option awards to the Registrant’s executives that the Registrant’s Compensation Committee will grant in January 2006 to become effective in February 2006. The early award and full vesting of the Stock Options to the Registrant’s executives was conditioned upon each executive agreeing, in the applicable award agreement between the executive and the Registrant (the “Award Agreement”), that he/she will not, subject to limited exceptions, sell, transfer or otherwise dispose of any shares of the Registrant’s common stock acquired by the executive upon exercising the Stock Option until:

 

•

on or after November 2, 2006, with respect to one-third of the shares of the Registrant’s common stock underlying the Stock Option;

 

•

on or after November 2, 2007, with respect to an additional one-third of the shares of the Registrant’s common stock underlying the Stock Option; and

 

•

on or after November 2, 2008, with respect to the remaining one-third of the shares of the Registrant’s common stock underlying the Stock Option.

 

The foregoing summary of the terms of the form of the Award Agreement is qualified in its entirety by reference to the text of the form of the Award Agreement, which is incorporated herein by reference and filed with the Securities and Exchange Commission with this report as Exhibit 10.52.

 

The Stock Option awarded to each of the Registrant’s named executive officers is as follows:

 

 

Number of Shares

 

Name and Principal Position

Subject to the Stock Option

 

Rene R. Champagne

47,600

Chairman and Chief Executive

 

 

Officer

 

 

 

 

-2-

 

 


 

 

Kevin M. Modany

40,140

President and Chief Operating

 

 

Officer

 

 

Clark D. Elwood

19,790

Senior Vice President, General

 

 

Counsel and Secretary

 

 

Eugene W. Feichtner

15,840

Senior Vice President, Operations

 

 

Daniel M. Fitzpatrick

19,790

Senior Vice President, Chief

 

 

Financial Officer

 

 

The purpose for accelerating the award and vesting of the Stock Options was to reduce the Registrant’s future compensation costs associated with the Stock Options upon its adoption in 2006 of Statement of Financial Accounting Standards No. 123R, “Share-Based Payments.” The Registrant estimates that the accelerated award and vesting of the Stock Options will reduce its compensation costs, net of tax, by approximately $1,127,000 in 2006, $1,127,000 in 2007 and $939,000 in 2008.

 

 

-3-

 

 


 

 

 

Item 9.01

Financial Statements and Exhibits

 

(c)

Exhibits:

 

Exhibit No.

Description

 

10.52

1997 ITT Educational Services, Inc. Incentive Stock Plan – Form of Nonqualified Stock Option Award Agreement for November 2, 2005 Award to Executives.

 

-4-

 

 


 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: November 1, 2005

 

 

ITT Educational Services, Inc.

 

 

By:         /s/ Clark D. Elwood 

Name: Clark D. Elwood

 

Title: Senior Vice President,

General Counsel and Secretary

 

-5-

 

 


 

 

INDEX TO EXHIBITS

 

 

Exhibit No.

Description

 

10.52

1997 ITT Educational Services, Inc. Incentive Stock Plan – Form of Nonqualified Stock Option Award Agreement for November 2, 2005 Award to Executives.

 

 

 

-6-

 

 

 

 

 EX-99 2 exhibit10_52.htm

Exhibit 10.52

 

1997

ITT EDUCATIONAL SERVICES, INC.

INCENTIVE STOCK PLAN –

FORM OF NONQUALIFIED STOCK OPTION AWARD AGREEMENT

FOR NOVEMBER 2, 2005 AWARD TO EXECUTIVES

 

THIS AGREEMENT, effective as of the __ day of _________ 20__ by and between ITT Educational Services, Inc. (the “Corporation”) and _________________(the “Optionee”),

 

WITNESSETH:

 

WHEREAS, the Optionee is now employed by the Corporation or a Participating Company (as defined in the Plan as hereinafter defined) as an executive and a key employee, and in recognition of the Optionee’s valued services, the Corporation, through the Compensation Committee of its Board of Directors (the “Committee”), desires to provide an opportunity for the Optionee to acquire or enlarge stock ownership in the Corporation pursuant to the provisions of the 1997 ITT Educational Services, Inc. Incentive Stock Plan (the “Plan”);

 

NOW, THEREFORE, in consideration of the terms and conditions set forth in this Agreement and pursuant to the provisions of the Plan and the administrative rules and regulations relative to the Plan (the “Rules”), the terms and provisions of which are incorporated herein as a part of this Agreement, the parties hereto hereby agree as follows:

 

1.

Grant of Options. Pursuant to the provisions of the Plan and this Agreement (and as approved by the Committee), the Corporation hereby confirms the grant on November 2, 2005 to the Optionee of the option to purchase from the Corporation all or any part of an aggregate of _____ shares of Common Stock (the “Common Stock”) of the Corporation, as constituted on the date of grant, at the purchase price of $_____ per share, such option to purchase shares to be designated as a Nonqualified Stock Option.

 

2.

Terms and Conditions. It is understood and agreed that the option evidenced hereby is subject to the following terms and conditions:

 

A.

Expiration Date:

 

The option shall expire not later than November 2, 2012.

 

B.

Exercise of Option:

 

Exercise Schedule and Restriction on Transfer. The option granted hereby shall be exercisable immediately, but Optionee will not sell, transfer, assign, pledge or otherwise dispose of, alienate or encumber, either voluntarily or involuntarily any shares of the Common Stock acquired by the Optionee from the exercise of the option granted hereby until:

 

•

on or after November 2, 2006, with respect to one-third of the shares of Common Stock underlying the option granted hereby;

 

 

-7-

 


 

 

•

on or after November 2, 2007, with respect to an additional one-third of the shares of Common Stock underlying the option granted hereby; and

 

•

on or after November 2, 2008, with respect to the remaining one-third of the shares of Common Stock underlying the option granted hereby.

 

Except as provided below, any sale or transfer or purported sale or transfer, of any shares that Optionee acquires upon exercising the option granted hereby, or any interest therein, that does not conform to the schedule above will be null and void. This restriction on the transfer of shares will not apply in the event that, if the option granted hereby had not been exercisable immediately upon grant, the vesting thereof would have been accelerated upon an acceleration event (as defined in the Plan).

 

In any event, the option granted hereby will be exercisable only during the continuance of the Optionee’s said employment, or as otherwise provided in the Plan.

 

If Optionee decides to exercise any portion of the option granted hereby prior to the time that Optionee can transfer that portion in accordance with the schedule above, the Corporation will issue the shares only in certificate form evidencing the shares the Optionee acquires upon exercise with the following legend and such other legends as may be required or appropriate under applicable law:

 

“THE OWNERSHIP OF THIS CERTIFICATE AND THE SHARES OF STOCK EVIDENCED HEREBY AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER AN AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND ITT EDUCATIONAL SERVICES, INC. A COPY OF SUCH AGREEMENT IS ON FILE IN THE OFFICE OF THE SECRETARY OF ITT EDUCATIONAL SERVICES, INC.”

 

The certificates will be delivered to the Corporation to be held by the Corporation until the restrictions on transfer of the shares subject to certificates have lapsed. Promptly after the transfer restrictions on any such shares have lapsed, the Corporation will deliver to the Optionee a certificate or certificates, free of the restrictive legend described above, evidencing such shares. Upon the occurrence of a stock split, reverse stock split, stock dividend or any other change in capitalization, reorganization, merger or similar event affecting the Corporation’s common stock, the transfer restrictions set forth above applicable to any stock that the Optionee may have acquired upon exercise of the option granted hereby will continue in effect with respect to any consideration or other securities received in respect of such stock.

 

Payment. The purchase price of the shares upon the exercise of the option granted hereby shall be paid to the Corporation at the time of exercise either in cash or Common Stock already owned by the Optionee having a total Fair Market Value equal to the purchase price, or a combination of cash and Common Stock having a total fair market value, as so determined, equal to the purchase price. The option granted hereby may be exercised in accordance with instructions as may from time to time be issued by the Corporation to the Optionee.

 

C.

Compliance with Laws and Regulations. An option shall not be exercised at any time when its exercise or delivery of shares hereunder would be a violation of any law or governmental regulation, which the Corporation may find to be valid and applicable.

 

D.

Optionee Bound by Plan. Optionee hereby agrees to be bound by the terms and provisions of the Plan and Rules.

 

 

-8-

 


 

 

This Stock Option Award Agreement is issued, and the option evidenced hereby is granted, in Carmel, Indiana, and shall be governed and construed in accordance with the laws of the State of Indiana.

 

IN WITNESS WHEREOF, the Corporation has caused this instrument to be executed by an authorized officer on this ____ day of _________ 20__.

 

Agreed to:

ITT EDUCATIONAL SERVICES, INC.

 

By:

_________________________________

Optionee

Title: Senior Vice President, Director Human Resources

[Print Name: ______________________]

Date:

Date: ____________________________

 

 

 

-9-

 

 

 

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