<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Information to be Included in Statements Filed Pursuant to 13d-1(a)
and Amendments Thereto Filed Pursuant to 13d-2(a)
(Amendment No. 3)*
ITT Educational Services, Inc.
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
45068B 10 9
(CUSIP Number)
Thomas C. Janson, Jr.
Executive Vice President, General Counsel and Secretary
Starwood Hotels & Resorts Worldwide, Inc.
777 Westchester Avenue, White Plains, New York 10604
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
February 1, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
(Continued on following page)
(Page 1 of 6 Pages)
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 45068B 10 9 PAGE 2 OF 6 PAGES
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Starwood Hotels & Resorts Worldwide, Inc.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Maryland
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER -
NUMBER OF
SHARES -0-
BENEFICIALLY -----------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON -----------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
SCHEDULE 13D
CUSIP NO. 45068B 10 9 PAGE 3 OF 6 PAGES
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
ITT Corporation
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -0-
BENEFICIALLY -----------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING -0-
PERSON -----------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 4
Schedule 13D
Issuer: ITT Educational Services, Inc.
Page 4 of 6
Starwood Hotels & Resorts Worldwide, Inc. and ITT Corporation hereby amend
and supplement their statement on Schedule 13D relating to the common stock, par
value $.01 per share ("ESI Common Stock"), of ITT Educational Services, Inc., a
Delaware corporation ("ESI"), as originally filed with the Securities and
Exchange Commission (the "Commission") on March 5, 1998, as amended by Amendment
No. 1 thereto, filed with the Commission on June 29, 1998, and Amendment No. 2
thereto, filed with the Commission on December 22, 1998. This is a final
amendment. This Schedule 13D of Starwood Hotels & Resorts Worldwide, Inc. and
ITT Corporation is hereinafter referred to as the "Statement." ITT Corporation
previously reported its ownership in the securities covered by this Statement on
its statement on Schedule 13D originally filed with the Commission on October
17, 1995, as amended by Amendment No. 1 thereto, filed with the Commission on
March 17, 1997, Amendment No. 2 thereto, filed with the Commission on July 23,
1997, and Amendment No. 3 thereto, filed with the Commission on November 19,
1997.
On February 23, 1998, Chess Acquisition Corp., a subsidiary of Starwood
Hotels & Resorts Worldwide, Inc. ("Merger Sub"), merged with ITT Corporation
(the "Merger") pursuant to an Amended and Restated Agreement and Plan of Merger
dated as of November 12, 1997 among Starwood Hotels & Resorts Worldwide, Inc.,
Merger Sub, Starwood Hotels & Resorts and ITT Corporation. As a result of the
Merger, Starwood Hotels & Resorts Worldwide, Inc. became the beneficial owner of
the 22,500,000 shares of ESI Common Stock then held by ITT Corporation.
On June 9, 1998, ITT Corporation sold 13,050,000 shares of ESI Common
Stock in a public offering.
ITEM 2 IDENTITY AND BACKGROUND.
Item 2 of the Statement is hereby amended to read in its entirety as
follows:
"The persons filing this statement are (1) Starwood Hotels & Resorts
Worldwide, Inc., a Maryland corporation (the "Corporation"), whose principal
business office is located at 777 Westchester Avenue, White Plains, NY 10604 and
(2) ITT Corporation, a Nevada corporation and a subsidiary of the Corporation
("ITT"), whose principal business office is also located at 777 Westchester
Avenue, White Plains, NY 10604. The Corporation is a hotel management and
operating company, whose shares of common stock trade together as a unit with
Class B Shares of beneficial interest of Starwood Hotels & Resorts, a Maryland
real estate investment trust (the "Trust" and, together with the Corporation,
"Starwood Hotels"). Prior to January 6, 1999, the shares of common stock of the
Corporation were paired with and traded together as a unit with the common
shares of beneficial of the Trust (together, "Paired Shares"). The Corporation
leases properties from the Trust and operates them directly, through its
subsidiaries or through third party management companies. The information with
respect to the directors and executive officers of the Corporation is set forth
on Appendix A attached hereto, and incorporated herein by reference. The
information with respect to the directors and executive officers of ITT is set
forth on Appendix B attached hereto, and incorporated herein by reference.
Neither the Corporation nor ITT has been convicted in any criminal
proceeding (excluding traffic violations or similar misdemeanors) during the
past five years, nor, to the knowledge of the Corporation and ITT, has anyone
listed in the attached Appendices A and B been convicted in such a proceeding.
To the knowledge of the Corporation and ITT, during the past five years,
none of the Corporation, ITT or any of the persons listed on the attached
Appendices A and B was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws."
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Statement is hereby amended to read in its entirety as
follows:
"As a result of the Merger, the Corporation became the beneficial owner of
the 22,500,000 shares of ESI Common Stock held by ITT. The Corporation has
previously announced that it is exploring a range of disposition strategies for
ESI. To that end, on February 13, 1998, ESI filed with the Commission a
registration statement on Form S-3 (as amended, the "Registration Statement")
for an underwritten public offering of 11,000,000 shares of the ESI Common Stock
held by ITT. The number of shares to be offered was subsequently increased to
11,350,000. The Registration Statement also covered
<PAGE> 5
Schedule 13D
Issuer: ITT Educational Services, Inc.
Page 5 of 6
an additional 1,700,000 shares of the ESI Common Stock held by ITT to cover
over-allotments, if any. The Commission declared the Registration Statement
effective on June 3, 1998, and on June 9, 1998, the Corporation closed the sale
(the "Sale") of the 11,350,000 shares of ESI Common Stock and the 1,700,000
shares subject to the over-allotment (a total of 13,050,000 shares of ESI Common
Stock).
On December 18, 1998, ESI filed a registration statement (the "Second
Registration Statement") for the underwritten public offering (the "Public
Offering") by ITT of 7,000,000 shares of ESI Common Stock. The registration
statement also included up to an additional 950,000 shares to cover
over-allotments, if any. In addition, ESI and ITT entered into a Stock
Repurchase Agreement dated as of December 18, 1998 (the "Stock Repurchase
Agreement"), pursuant to which ESI agreed to repurchase (the "Stock Repurchase")
from ITT 1,500,000 shares of ESI Common Stock at a price equal to the lesser of
(1) the public offering price per share, less underwriting discounts and
commissions and (2) $32.84 per share. The Commission declared the Second
Registration Statement effective on January 26, 1999, and on February 1, 1999,
the Corporation and ITT closed the sale of the 7,000,000 shares of ESI Common
Stock and the 950,000 shares subject to the over-allotment at a price per share
of $32.73 (net of understanding discounts and commissions). ITT and ESI closed
the Stock Repurchase, at a price per share of $32.73, simultaneously with the
closing of the Public Offering. Accordingly, ITT no longer owns any shares of
ESI Common Stock.
At the time the Merger was consummated, four of the ten members of the
Board of Directors of ESI (the "ESI Board") resigned, effective February 23,
1998. On February 25, 1998, the remaining members of the ESI Board elected Tony
Coelho, Robin Josephs, Merrick R. Kleeman and Barry S. Sternlicht to fill the
vacancies created by the foregoing resignations and to serve as directors of ESI
for terms expiring at the 2000, 1999, 2000 and 1998 Annual Meetings of
stockholders of ESI, respectively, and until such director's successor is duly
elected and qualified. Mr. Sternlicht was re-elected as a director at ESI's 1998
Annual Meeting of Shareholders for a term expiring at the 2001 Annual Meeting of
Shareholders.
A Stockholder Agreement (the "Stockholder Agreement") dated June 3, 1998
between ITT and ESI, among other things, provides that (a) the authorized number
of directors on the ESI Board shall not exceed 10, (b) the authorized number of
classes of directors of the ESI Board shall not exceed three, (c) in connection
with each annual meeting of ESI's shareholders the ESI Board shall nominate and
recommend such number of persons (rounded up to the next whole number but not to
exceed four) designated by ITT to be elected to the ESI Board so that the total
number of ITT designees on the ESI Board is in relative proportion to the
percentage of the outstanding shares of ESI Common Stock held by ITT and its
affiliates (collectively, the "ITT Group") and (d) the membership of the
standing Nominating Committee of the ESI Board shall be limited to four members,
two of whom must be directors who are ITT designees until the number of ITT
designees on the ESI Board is two, in which event only one ITT designated
director must be on the Nominating Committee, and if there is one ITT designee
on the ESI Board, such designee is not required to be on the Nominating
Committee (collectively, the "Board Rights"). The Stockholder Agreement also
provides that the Board Rights shall terminate when the ITT Group holds less
than 7.5% of the outstanding shares of ESI Common Stock. The ITT Group now holds
less than 7.5% of the outstanding shares of ESI Common Stock.
Effective with the closing of the Public Offering and the Stock
Repurchase, the ITT designees on the ESI Board, Mr. Coelho, Ms. Josephs, Mr.
Kleeman and Mr. Sternlicht, resigned from the ESI Board."
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 of the Statement is hereby amended to read in its entirety as
follows:
"ITT owns no shares (0.0%) of ESI Common Stock. The Corporation is not the
record owner of any of ESI's capital stock.
Other than the sales pursuant to the Public Offering and the Stock
Repurchase as described in Item 4, which description is incorporated by
reference in this Item, there have been no transactions by ITT or the
Corporation in the securities of ESI during the past sixty days.
To the knowledge of ITT and the Corporation, no executive officer or
director of ITT or the Corporation, except as indicated on Appendices A and B,
(a) owns any shares of ESI Common Stock; (b) has a right to acquire shares of
ESI Common Stock; or (c) has engaged in any transaction in ESI Common Stock
during the past sixty days."
<PAGE> 6
Schedule 13D
Issuer: ITT Educational Services, Inc.
Page 6 of 6
* * * * * *
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated as of March 3, 1999.
STARWOOD HOTELS & RESORTS ITT CORPORATION
WORLDWIDE, INC.
By: /s/ Thomas C. Janson, Jr. By: /s/ James P. Gallagher
-------------------------------- --------------------------------
Name: Thomas C. Janson, Jr. Name: James P. Gallagher
Title: Executive Vice President, Title: Vice President
General Counsel and Secretary
<PAGE> 7
Schedule 13D
Issuer: ITT Educational Services, Inc.
Page 1 of 6 of Appendix A
Appendix A of the Statement is hereby amended and supplemented by deleting it in
its entirety and substituting the following:
APPENDIX A
DIRECTORS AND EXECUTIVE OFFICERS OF THE CORPORATION
(I) (a) Name:
Brenda C. Barnes (Director)
(b) Residence Address:
4230 Palmer Drive
Naperville, Illinois 60564
(c) Present Principal Occupation or Employment:
Member of the Boards of Directors of The New York Times Company,
229 West 43rd Street, New York, New York 10036; Sears, Roebuck
and Co., 3333 Beverly Road, Hoffman Estates, Illinois 60179; Avon
Products, Inc., 1345 Avenue of the Americas, New York, New York
10105; and the Corporation.
(d) Citizenship:
United States
(II) (a) Name:
Juergen Bartels (Director)
(b) Business Address:
Starwood Hotels & Resorts Worldwide, Inc.
777 Westchester Avenue
White Plains, New York 10604
(c) Present Principal Occupation or Employment:
Chief Executive Officer of the Hotel Group of the Corporation
(d) Citizenship:
Germany
<PAGE> 8
Schedule 13D
Issuer: ITT Educational Services, Inc.
Page 2 of 6 of Appendix A
(III) (a) Name:
Jonathan D. Eilian (Director)
(b) Business Address:
Starwood Capital Group, L.L.C.
Three Pickwick Plaza, Suite 250
Greenwich, Connecticut 06830
(c) Present Principal Occupation or Employment:
Managing Director of Starwood Capital Group, L.L.C.
(d) Citizenship:
United States
(IV) (a) Name:
Graeme W. Henderson (Director)
(b) Residence Address:
1777 La Cresta Drive
Pasadena, California 91103
(c) Present Principal Occupation or Employment:
Private Investor
(d) Citizenship:
United States
<PAGE> 9
Schedule 13D
Issuer: ITT Educational Services, Inc.
Page 3 of 6 of Appendix A
(V) (a) Name:
Earle F. Jones (Director)
(b) Business Address:
MMI Hotel Group
1000 Red Fern Place
Flowood, Mississippi 39208
(c) Present Principal Occupation or Employment:
Co-Chairman of MMI Hotel Group/Dining Systems, a hotel company
(d) Citizenship:
United States
(VI) (a) Name:
Michael A. Leven (Director)
(b) Business Address:
U.S. Franchise Systems, Inc.
13 Corporate Square, Suite 250
Atlanta, Georgia 30329
(c) Present Principal Occupation or Employment:
Chairman of the Board, President and Chief Executive Officer of
U.S. Franchise Systems, a hotel franchising and development
company
(d) Citizenship:
United States
(VII) (a) Name:
Daniel H. Stern (Director)
(b) Business Address:
Reservoir Capital Group, L. L.C.
153 East 53rd Street, 43rd Floor
New York, New York 10022
(c) Present Principal Occupation or Employment:
President of Reservoir Capital Group, L.L.C., a New York based
investment management firm
(d) Citizenship:
United States
<PAGE> 10
Schedule 13D
Issuer: ITT Educational Services, Inc.
Page 4 of 6 of Appendix A
(VIII) (a) Name:
Barry S. Sternlicht (Chairman of the Board and Executive Officer)
(b) Business Address:
Starwood Capital Group, L.L.C.
Three Pickwick Plaza, Suite 250
Greenwich, Connecticut 06830
(c) Present Principal Occupation or Employment:
Chairman and Chief Executive Officer of the Trust and Chairman of
the Board of Directors of the Corporation; General Manager of
Starwood Capital Group, L.L.C. and President and Chief Executive
Officer of Starwood Capital Group, L.P.
(d) Citizenship
United States
(e) Ownership of ESI Common Stock
Mr. Sternlicht sold 2,000 shares of ESI Common Stock on February
19, 1999, at a price per share of $34.37, in a transaction
effected on the New York Stock Exchange. Mr. Sternlicht is no
longer the beneficial owner of any shares of ESI Common Stock.
<PAGE> 11
Schedule 13D
Issuer: ITT Educational Services, Inc.
Page 5 of 6 of Appendix A
(IX) (a) Name:
Daniel W. Yih (Director)
(b) Business Address:
c/o Chilmark Partners
875 North Michigan Avenue, #2100
Chicago, Illinois 60611
(c) Present Principal Occupation or Employment:
General Partner of Chilmark Partners, L.P., an investment firm
(d) Citizenship:
United States
(X) (a) Name:
Susan Bolger (Executive Officer)
(b) Business Address:
Starwood Hotels & Resorts Worldwide, Inc.
777 Westchester Avenue
White Plains, New York 10604
(c) Present Principal Occupation or Employment:
Executive Vice President, Human Resources of the Corporation
(d) Citizenship:
United States
(XI) (a) Name:
Ronald C. Brown (Executive Officer)
(b) Business Address:
Starwood Hotels & Resorts Worldwide, Inc.
2231 East Camelback Road, Suite 400
Phoenix, Arizona 85016
(c) Present Principal Occupation or Employment:
Executive Vice President and Chief Financial Officer of the
Corporation
(d) Citizenship:
Canada
<PAGE> 12
Schedule 13D
Issuer: ITT Educational Services, Inc.
Page 6 of 6 of Appendix A
(XII) (a) Name:
Thomas C. Janson, Jr. (Executive Officer)
(b) Business Address:
Starwood Hotels & Resorts Worldwide, Inc.
777 Westchester Avenue
White Plains, New York 10604
(c) Present Principal Occupation or Employment:
Executive Vice President, General Counsel and Secretary
(d) Citizenship:
United States
<PAGE> 13
Schedule 13D
Issuer: ITT Educational Services, Inc.
Page 1 of 1 of Appendix B
Appendix B of the Statement is hereby amended and supplemented by deleting it in
its entirety and substituting the following:
APPENDIX B
DIRECTORS AND EXECUTIVE OFFICERS OF ITT
(I) (a) Name:
Peter G. Boynton (Director and Executive Officer)
(b) Business Address:
Caesars World, Inc.
3800 Howard Hughes Parkway
Suite 1600
Las Vegas, Nevada 89109
(c) Present Principal Occupation or Employment:
Chairman and Chief Executive Officer of Caesars World, Inc., a
subsidiary of ITT
(d) Citizenship:
United States
(II) (a) Name:
Barry S. Sternlicht (Director)
(b) Business Address:
Starwood Capital Group, L.L.C.
Three Pickwick Plaza, Suite 250
Greenwich, Connecticut 06830
(c) Present Principal Occupation or Employment:
Chairman and Chief Executive Officer of the Trust and Chairman of
the Board of Directors of the Corporation; General Manager of
Starwood Capital Group, L.L.C. and President and Chief Executive
Officer of Starwood Capital Group, L.P.
(d) Citizenship
United States
(e) Ownership of ESI Common Stock
Mr. Sternlicht is the beneficial owner of 2,000 shares of ESI
Common Stock.
