<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
STRAYER EDUCATION, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
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(4) Date filed:
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<PAGE> 2
STRAYER EDUCATION, INC.
1025 FIFTEENTH STREET, N.W.
WASHINGTON, D.C. 20005
(202) 408-2424
Dear Stockholder:
You are cordially invited to attend the 1999 Annual Meeting of
Stockholders of Strayer Education, Inc. to be held at 10:00 a.m. local time on
May 24, 1999, at the Sheraton National Hotel, Columbia Pike and Washington
Boulevard, in Arlington, Virginia.
The matters to be considered at the meeting are described in the
accompanying Proxy Statement. Regardless of your plans for attending in person,
it is important that your shares be represented at the meeting. On behalf of the
Board of Directors, I urge you to please complete, sign, date and return the
enclosed proxy card in the enclosed stamped envelope. Signing this proxy will
not prevent you from voting in person should you be able to attend the meeting,
but will assure that your vote is counted, if, for any reason, you are unable to
attend. If you wish to give a proxy to someone other than the persons named on
the enclosed proxy card, you may cross out their names and insert the name of
some other person who will be at the meeting. The signed proxy card should be
given to that person for his or her use at the meeting. If your shares are held
in the name of a broker, you should obtain a letter of identification from your
broker and bring it to the meeting. In order to vote personally shares held in
the name of your broker you must also obtain from the broker a proxy issued to
you.
We look forward to seeing you at the 1999 Annual Meeting of
Stockholders.
Sincerely,
/s/ RON K. BAILEY
Ron K. Bailey
President & Chief Executive Officer
April 9, 1999
<PAGE> 3
STRAYER EDUCATION, INC.
1025 FIFTEENTH STREET, N.W.
WASHINGTON, D.C. 20005
(202) 408-2424
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 1999 Annual Meeting of Stockholders of Strayer Education, Inc., will
be held at the Sheraton National Hotel, Columbia Pike and Washington Boulevard,
in Arlington, Virginia, on May 24, 1999, at 10:00 a.m. for the following
purposes:
1. To elect eight (8) directors to the Board of Directors to
serve for a term of one year and until their respective
successors are elected and qualified.
2. To consider and act upon such other business as may
properly come before the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN,
DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
STAMPED ENVELOPE.
By Order of the Board of Directors
/s/ JENNIE D. SEATON
Jennie D. Seaton
Secretary
Washington, D.C.
April 9, 1999
<PAGE> 4
STRAYER EDUCATION, INC.
1025 FIFTEENTH STREET, N.W.
WASHINGTON, D.C. 20005
(202) 408-2424
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 24, 1999
This Proxy Statement is furnished on or about April 9, 1999, to
stockholders of Strayer Education, Inc. (the "Corporation"), 1025 Fifteenth
Street, N.W., Washington, D.C. 20005, in connection with the solicitation by the
Board of Directors of the Corporation of proxies to be voted at the 1999 Annual
Meeting of Stockholders (the "Annual Meeting"). The Annual Meeting will be held
at 10:00 a.m. local time on May 24, 1999, at the Sheraton National Hotel,
Columbia Pike and Washington Boulevard, in Arlington, Virginia.
The cost of soliciting proxies will be borne by the Corporation.
Copies of solicitation material may be furnished to brokers, custodians,
nominees and other fiduciaries for forwarding to beneficial owners of shares of
the Corporation's Common Stock, and normal handling charges may be paid for such
forwarding service. Solicitation of proxies may be made by the Corporation by
mail or by personal interview, telephone and facsimile by officers and other
management employees of the Corporation, who will receive no additional
compensation for their services.
Any stockholder giving a proxy pursuant to this solicitation may
revoke it at any time prior to exercise of the proxy by giving notice of such
revocation to the Secretary of the Corporation at its executive offices at 1025
Fifteenth Street, N.W., Washington, D.C. 20005, or by attending the meeting and
voting in person.
At the close of business on March 31, 1999, there were 15,745,534
shares of the Common Stock of the Corporation outstanding and entitled to vote
at the meeting. Only stockholders of record on March 31, 1999 will be entitled
to vote at the meeting, and each share will have one vote.
VOTING INFORMATION
At the Annual Meeting votes will be counted by written ballot. A
majority of the shares entitled to vote at the meeting, or 7,872,767 shares,
will constitute a quorum for purposes of the Annual Meeting. The election of the
Board of Directors' nominees for directors will require the affirmative vote of
a plurality of the shares present in person or represented by proxy and entitled
to vote in the election of directors. Approval of any other business which may
properly come before the Annual Meeting, or any adjournments thereof, will
require the affirmative vote of a majority of the shares present in person or
represented by proxy and entitled to vote thereon. Under Maryland law and the
Corporation's Articles of Incorporation and By-laws, the aggregate number of
votes entitled to be cast by all stockholders present in person or represented
by proxy at the Annual Meeting, whether those stockholders vote "For", "Against"
or abstain from voting, will be counted for purposes of determining the minimum
number of affirmative votes required for approval of such matters, and the total
number of votes cast "For" each of these matters will be counted for purposes of
determining whether sufficient affirmative votes have been cast. An abstention
from voting on a matter by a stockholder present in person or represented by
proxy at the meeting has the same legal effect as a vote "Against" the matter
even though the stockholder or interested parties analyzing the results of the
voting may interpret such a vote differently. Broker non-votes will have the
effect of reducing the number of shares considered present and entitled to vote
on the matter.
A stockholder may, with respect to the election of directors, (i)
vote for the election of all named director nominees, (ii) withhold authority to
vote for all named director nominees or (iii) vote for the election of all named
director nominees other than any nominee with respect to whom the stockholder
withholds authority to vote by so indicating in the appropriate space on the
proxy card.
<PAGE> 5
Proxies properly executed and received by the Corporation prior
to the meeting and not revoked, will be voted as directed therein on all matters
presented at the meeting. In the absence of specific direction from a
stockholder, proxies will be voted for the election of all named director
nominees. If a proxy indicates that all or a portion of the shares represented
by such proxy are not being voted with respect to a particular proposal, such
non-voted shares will not be considered present and entitled to vote on such
proposal, although such shares may be considered present and entitled to vote on
other proposals and will count for the purpose of determining the presence of a
quorum.
PROPOSAL I
ELECTION OF DIRECTORS
Eight directors are to be elected. It is intended that the votes
represented by the proxies will be cast for the election as directors (for a
term of one year or until their successors are chosen and qualified) of the
persons listed below. Each of the nominees is currently a director of the
Corporation.
The following table presents information concerning persons
nominated for election as directors of the Corporation, including their current
membership on committees of the Board of Directors, principal occupations or
affiliations during the last five years and certain other directorships held.
NOMINEES FOR DIRECTORS
Ron K. Bailey Mr. Bailey, age 58, is influential in the education
industry and the energetic leader of Strayer Education,
Inc. Mr. Bailey is the President and Chief Executive
Officer of the Corporation and has been the Chairman of
the Board of Trustees of Strayer University, Inc. (the
"University"), a subsidiary of the Corporation, since
1997. In addition, Mr. Bailey has been the President and
a director of Education Loan Processing, Inc. ("ELP"), a
subsidiary of the Corporation, since ELP's formation in
1994. From 1989 to 1997, Mr. Bailey was the President
and Treasurer of the Board of Trustees of Strayer
University. In addition, from 1980 to 1989, Mr. Bailey
held a variety of positions with the University,
including the position of Vice President of the
University. Before assuming his first full-time
position with the University in 1980, Mr. Bailey was a
part-time faculty member of the University and served as
Director of Data Processing of the National Association
of Home Builders.
Stanley G. Elmore Projects and Programs Manager, Citibank Mid-Atlantic,
since 1989. Mr. Elmore, age 57, has been a director and
Chairman of the Board of Directors of the Corporation
since July 1996. Mr. Elmore was the Chairman of the
Board of Trustees of the University from 1989 to 1998.
Todd A. Milano President and Chief Executive Officer of Central
Pennsylvania Business School since 1989. Mr. Milano,
age 46, has been a director of the Corporation since
July 1996 and the Vice Chairman of the Board of Trustees
of the University since 1992.
Dr. Jennie D. Seaton Dr. Seaton, age 69, is the Secretary of the Corporation.
Dr. Seaton has been a director of the Corporation since
July 1996 and has been a member of the Board of Trustees
of the University since 1990. Dr. Seaton retired as an
Assistant Dean of Virginia Commonwealth University
School of Allied Health Professions in 1994. She has
served in a variety of academic and administrative posts
at the University since 1974.
Roland Carey Program Coordinator, Carl Sandburg School, for more than
twelve years. Mr. Carey, age 59, has been a director of
the Corporation since July 1996 and a member of the
Board of Trustees of the University since 1990.
Donald T. Benson Senior Vice President Human Resources, Methodist Health
Care System in Houston, Texas. From 1997 to 1998, Mr.
Benson was Vice President, Human Resources and
Administration, of Coventry Corporation. From 1992 to
1997, Mr. Benson was Vice President, Human Resources, of
Aetna Inc. From 1976 to 1992, Mr. Benson was Senior
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<PAGE> 6
Vice President, Human Resources, of Connecticut General
Insurance Corp. (Cigna). Mr. Benson, age 55, has been a
director of the Corporation since July 1996 and has been
a member of the Board of Trustees of the University
since 1992.
G. Thomas Waite, III Treasurer, Humane Society of the United States, since
1993. In 1992, Mr. Waite was the Director of Commercial
Management of The National Housing Partnership. Mr.
Waite, age 47, has been a director of the Corporation
since July 1996 and has been a member of the Board of
Trustees of the University since 1994.
Dr. Charlotte Beason Nurse at the U.S. Department of Veterans Affairs/Office
of Patient Care Services, since 1992. Dr. Beason, age
51, has been a director of the Corporation since July
1996 and has been a member of the Board of Trustees of
the University since 1995.
BOARD COMMITTEES
The Board of Directors has established an Audit Committee, an
Executive Committee and a Compensation Committee and has no nominating
committee. Selection of nominees for the Board is made by the entire Board of
Directors.
The Audit Committee is composed of Dr. Beason and Messrs. Carey
and Waite. The Audit Committee is responsible for reviewing the internal
accounting procedures of the Corporation and the results and scope of the audit
and other services provided by the Corporation's independent auditors,
consulting with the Corporation's independent auditors and recommending the
appointment of independent auditors to the Board of Directors. The Audit
Committee met two times during the year ended December 31, 1998; each member of
the Audit Committee attended all of these meetings.
The Compensation Committee is composed of Messrs. Milano and
Benson. The Compensation Committee has the authority and performs all of the
duties related to the compensation of management of the Corporation, including
determining policies and practices, changes in compensation and benefits for
management, determination of employee benefits and all other matters relating to
employee compensation, including matters relating to the administration of the
Corporation's 1996 Stock Option Plan (the "Option Plan"). The Compensation
Committee met once during the year ended December 31, 1998; each member of the
Compensation Committee attended this meeting.
The Executive Committee is composed of Messrs. Bailey, Elmore,
and Dr. Seaton. The Executive Committee has the authority to perform all of
the duties of the Board of Directors on urgent issues requiring immediate
action. The Executive Committee did not meet during the year ended December 31,
1998.
ATTENDANCE AT MEETINGS
During the year ended December 31, 1998, the Board of Directors
held four meetings, which were attended by all of the directors.
DIRECTORS' FEES
Directors are reimbursed for expenses incurred in connection with
their attendance at Board and Committee meetings, and they currently receive
$1,600 in compensation for each meeting attended. Mr. Bailey donates 100% of his
director compensation to the Strayer University Educational Foundation, a
non-profit organization that provides scholarships and grants to college
students, active duty military personnel and high school students in the greater
Washington, D.C. area. Non-employee directors also have received options to
purchase an aggregate of 58,500 shares of Common Stock under the Option Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Securities Exchange Act of 1934 requires the Corporation's
directors, executive officers and 10% stockholders to file reports of beneficial
ownership of equity securities of the Corporation and to furnish
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<PAGE> 7
copies of such reports to the Corporation. Based on a review of such reports,
the Corporation believes that, during the fiscal year ended December 31, 1998
Todd Milano filed one Form 5 late, reporting one transaction.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the
ownership of Common Stock as of March 31, 1999, by each person known by the
Corporation to be the beneficial owner of more than five percent (5%) of the
outstanding shares of Common Stock, each director of the Corporation, and all
executive officers and directors as a group. The information presented in the
table is based upon the most recent filings with the Securities and Exchange
Commission by such persons or upon information otherwise provided by such
persons to the Corporation.
<TABLE>
<CAPTION>
NAMES OF BENEFICIAL SHARES BENEFICIALLY
OWNERS OWNED (1) PERCENTAGE OWNED
- ------------------- ----------------- ----------------
<S> <C> <C>
Ron K. Bailey and Beverly W. Bailey (2)............................. 8,175,000 51.8%
T. Rowe Price Associates, Inc. (3).................................. 1,292,800 8.2
100 East Pratt Street
Baltimore, Maryland 21202
Harry T. Wilkins.................................................... 80,000 *
Stanley G. Elmore................................................... 10,500 *
Todd A. Milano...................................................... 9,718 *
Jennie D. Seaton.................................................... 9,750 *
Roland Carey........................................................ 10,500 *
Donald T. Benson.................................................... 9,075 *
G. Thomas Waite, III................................................ 3,339 *
Charlotte Beason.................................................... 3,000 *
All directors and executive officers as a group (9 persons) (4)..... 8,310,882 52.9%
</TABLE>
- -------------
*Less than one percent
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission ("SEC") and generally includes
voting or investment power with respect to securities. Shares of Common
Stock subject to options or warrants currently exercisable or
exercisable within 60 days are deemed outstanding for purposes of
computing the percentage ownership of the person holding such option or
warrant but are not deemed outstanding for purposes of computing the
percentage ownership of any other person. Except where indicated
otherwise, and subject to community property laws where applicable, the
persons named in the table above have sole voting and investment power
with respect to all shares of Common Stock shown as beneficially owned
by them.
(2) Includes 292,500 shares held by the Bailey Family Foundation.
(3) Based on a Schedule 13G filed with the SEC on February 11, 1999. These
securities are owned by various individual and institutional investors,
which T. Rowe Price Associates, Inc. ("Price Associates") serves as
investment adviser with power to direct investments and/or sole power
to vote the securities. For purposes of the reporting requirements of
the 1934 Act, Price Associates is deemed to be a beneficial owner of
such securities, however, Price Associates expressly disclaims that it
is, in fact, the beneficial owner of such securities.
(4) Includes currently exercisable options to purchase the following shares
for each listed individual: Wilkins (50,000); Elmore (10,500); Milano
(5,000); Seaton (5,200); Carey (10,500); Benson (7,500); Waite (0) and
Beason (3,000).
COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth annual and long-term compensation for the
fiscal years ended December 31, 1996, 1997 and 1998 for services in all
capacities to the Corporation of the Chief Executive Officer and Chief Financial
Officer. The total annual salary and bonus for Harry Wilkins did not exceed
$100,000 for the fiscal years
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<PAGE> 8
of 1996 and 1997. None of the Corporation's other executive officers received a
total annual salary and bonus in excess of $100,000 during such periods.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG- TERM COMPENSATION AWARDS
------------------- ------------------------------
NAME AND SECURITIES UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS OPTIONS/SAR'S COMPENSATION(1,2)
- -------- ---- ------ ----- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Ron K. Bailey
President 1996 $150,000 ---- -- $3,138
1997 $127,038 ---- -- $2,679
1998 $107,546 ---- -- $2,289
Harry Wilkins
Chief Financial Officer 1998 $104,000 ---- -- $2,218
</TABLE>
- --------------------------------
(1) Reflects (i) $3,000, $2,541 and $2,151 in matching contributions made by
the University to the University's 401(k) plan for Mr. Bailey in 1996,
1997 and 1998 respectively, and (ii) $138 in premiums paid by the
University for life insurance for Mr. Bailey in each of 1996, 1997 and
1998.
(2) Reflects $2,080 in matching contributions made by the University to the
University's 401(k) plan for Mr. Wilkins in 1998 and $138 in premiums paid
by the University for life insurance for Mr. Wilkins in 1998.
OPTION GRANTS
The Option Plan was adopted in July 1996. There were no options granted to
the Chief Executive Officer during the year ended December 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FICAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS
FISCAL YEAR END AT FISCAL YEAR END
SHARES VALUE
NAME ACQUIRED REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ron K Bailey --- --- --- --- --- ---
Harry T, Wilkins 75,000 $2,143,500 50,000 100,000 $1,429,000 $2,858,000
</TABLE>
PERFORMANCE GRAPH
The following performance graph compares the Corporation's cumulative
stockholder return on its Common Stock since the Corporation's initial public
offering on July 25, 1996 with the S&P 500 Composite Index and a self-determined
peer group consisting of Apollo Group Inc., ITT Educational Services Inc., Devry
Inc. and Whitman Education Group Inc. At present there is no comparative index
for the education industry. Although the Securities and Exchange Commission
requires the Corporation to present such a graph for a five-year period, the
Common Stock has been publicly traded only since July 25, 1996 and, as a result,
the following graph commences as of such date. This graph is not deemed to be
"soliciting material" or to be filed with the SEC or subject to the SEC's proxy
rules or to the liabilities of Section 18 of the Securities Act of 1934, and the
graph shall not be deemed to be incorporated by reference into any prior or
subsequent filing by the Corporation under the Securities Act of 1933 or the
1934 Act.
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<PAGE> 9
[GRAPH]
<TABLE>
<CAPTION>
Jul-96 Dec-96 Dec-97 Dec-98
<S> <C> <C> <C> <C>
Strayer 100.0 215.4 466.3 500.9
S&P 500 100.0 118.6 158.3 203.9
Peer Index 100.0 117.2 151.4 205.0
</TABLE>
* Assumes $100 invested on July 25, 1996 in Strayer Education, Inc., the S&P 500
Composite Index and the self -determined peer group.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on its policies with respect to the compensation of executive
officers. The report is not deemed to be "soliciting material" or to be "filed"
with the SEC or subject to the SEC's proxy rules or to the liabilities of
Section 18 of the 1934 Act, and the report shall not be deemed to be
incorporated by reference into any prior or subsequent filing by the Corporation
under the Securities Act of 1933 or the 1934 Act.
The Corporation's Board of Directors established the Compensation
Committee in July 1996, and the Committee determined and acted upon compensation
decisions as described below in 1998 and will continue to do so in future years.
Decisions on compensation of the Corporation's executives officers generally
will be made by the Compensation Committee of the Board of Directors. No member
of the Compensation Committee is an employee of the Corporation. The Committee
currently consists of Messrs. Milano and Benson. All decisions by the
Compensation Committee relating to the compensation of the Corporation's
executive officers will be reviewed by its full Board, except for decisions
concerning grants under the Option Plan, which will be made solely by the
Committee in order for the grants to satisfy certain requirements under the 1934
Act.
Compensation Policies Regarding Executive Officers
The Compensation Committee believes that the Corporation's executive
compensation policies and programs serve the interests of the Corporation and
its stockholders. The Compensation Committee's executive compensation policies
are intended to provide competitive levels of compensation that reflect the
Corporation's annual and long-term performance goals, reward superior corporate
performance, recognize individual initiative and achievements, and assist the
Corporation in attracting and retaining qualified executives. Compensation
levels are based on a number of factors, including a comparison of compensation
levels with other educational institutions. The Board of Directors and the
Compensation Committee also believe that longer-term incentives are appropriate
to motivate and retain key personnel and that stock ownership by management is
beneficial in aligning management's and stockholders' interests in the
enhancement of stockholder value.
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<PAGE> 10
Long-Term Stock Option Incentives. The Option Plan provides for the
grant of options that are intended to qualify as "incentive stock options"
under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code")
to full time employees as well as the grant of non-qualifying options to
directors and employees of the Corporation. The Option Plan authorizes the
issuance of up to 1,500,000 shares of Common Stock pursuant to options granted
under the Option Plan (subject to anti-dilution adjustments in the event of a
stock split, recapitalization or similar transaction). The Compensation
Committee of the Board of Directors administers the Option Plan.
In addition, the Option Plan provides for formula grants of options to
non-employee directors (an "Eligible Director"). At the time of the
Corporation's initial public offering, each Eligible Director was granted an
initial option to purchase a number of shares of Common Stock equal to 1,500
times the number of years the Eligible Director served as a trustee of the
University. Options granted to Eligible Directors under the Option Plan may be
exercised with respect to the shares subject to such option one year after the
option is granted. All options expire five years after the date of grant.
Other Compensation Plans. The Corporation maintains a retirement plan
(the "401(k) Plan") intended to qualify under Sections 401(a) and 401(k) of the
Internal Revenue Code. The 401(k) Plan is a defined contribution plan that
covers all full-time employees of the Corporation of at least 21 years of age,
employed by the Corporation for at least one year. Employees may contribute up
to 10% of their annual wages (subject to an annual limit prescribed by the Code)
as pretax, salary deferral contributions. The Corporation may, in its
discretion, match employee contributions up to a maximum of 15% of annual wages.
Benefits. Benefits offered to key executives are largely those that are
offered to the general employee population, such as group health and life
insurance coverage and participation in the Corporation's 401(k) Plan.
Ron K. Bailey - Compensation.
Mr. Bailey is paid an annual salary of $107,546 per year pursuant to
the terms of his employment agreement. See "Employment Agreements."
Submitted by the Members of the Compensation Committee:
Donald T. Benson
Todd A. Milano
Harry T. Wilkins - Compensation.
Mr. Wilkins is paid an annual salary of $104,000 per year, $2,080 in
matching contributions made by the University to the University's 401(k) plan
for Mr. Wilkins, and $138 in premiums paid by the University for life insurance
for Mr. Wilkins in 1998.
EMPLOYMENT AGREEMENTS
Mr. Bailey and the Corporation entered into an Employment Agreement in
July 1996, which provides that Mr. Bailey will serve as President and Chief
Executive Officer of Strayer Education, Inc. For his services, Mr. Bailey is
entitled to receive an annual salary of $107,546. According to the terms of the
Employment Agreement, Mr. Bailey's salary for successive years may be increased
at the discretion of the Corporation's Compensation Committee. The Corporation
does not currently contemplate payment of bonuses to Mr. Bailey. Future bonuses,
if any, paid to Mr. Bailey will be awarded pursuant to guidelines approved by
the Compensation Committee of the Corporation's Board of Directors and will be
at levels commensurate with any bonuses paid to other executive officers.
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<PAGE> 11
CERTAIN TRANSACTIONS WITH MANAGEMENT
Lease of Campus Facilities
The Company has long-term non-cancelable operating leases for nine of its
various campus locations. The rents on these leases are subject to an annual
increase based on a stipulated price index. Of the nine leased campus locations,
five of the campuses, including the Washington, D.C. campuses and three of the
Virginia campuses, were leased from corporations which are owned by Mr. Bailey,
the Company's President, CEO and majority stockholder. Rent paid to Mr. Bailey
under these five operating leases for the years ended December 31, 1996, 1997
and 1998 was $2,279,000, $2,126,000, and $2,199.363, respectively. Future
minimum rental commitments for all of the Company's nine leases and the five
campuses leased from Mr. Bailey as of December 31, 1998 was as follows (in
thousands):
<TABLE>
<CAPTION>
AMOUNT PAYABLE TO AN
TOTAL LEASE AFFILIATE OF MR. BAILEY
COMMITMENTS INCLUDED IN TOTAL
<S> <C> <C>
1999 $ 4,090 $ 2,198
2000 4,016 2,198
2001 3,921 2,198
2002 3,563 2,198
2003 3,183 2,198
Thereafter 6,897 5,496
------- -------
$26,670 $16,486
======= =======
</TABLE>
Each of the five leases with Mr. Bailey has a 10-year term expiring in May
2006. The Company has the option under each such lease to purchase at any time
during the term of the lease the related campus facility at its discretion at
the fair market value of such facility as determined by independent appraisers.
The Company may lease additional campus facilities from entities owned or
controlled by Mr. Bailey. Any such leases will have market terms as determined
by an independent appraiser and be subject to the approval by a majority of
independent directors.
Reorganization Transactions
On July 30, 1996, the Corporation completed an initial public offering of its
common stock. The Corporation sold 5,175,000 shares in the offering at a price
of $6.67 per share. Net proceeds to the Corporation were $31,313,000. Prior to
the closing of the offering, the Corporation exchanged 8,998,500 shares of its
common stock for 100% of the outstanding common stock of the University, which
was held jointly by Mr. and Mrs. Ron K. Bailey. Approximately $19,838,000 of the
net proceeds of the offering were paid to the Baileys as a distribution of
earnings on which they had previously paid income taxes during the period the
University was an S Corporation.
Contemporaneously with the closing of the initial public offering, the
Corporation acquired ELP at a purchase price of $1,060,000, ELP's net book
value. ELP was wholly owned by Mr. Ron K. Bailey, the Corporation's President
and a director of the Corporation.
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<PAGE> 12
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of PricewaterhouseCoopers LLP has acted as the
Corporation's independent public accountants for the fiscal year ended December
31, 1998. Representatives of PricewaterhouseCoopers LLP are expected to be
present at the stockholders' meeting and will have an opportunity to make a
statement if they desire and to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Stockholder proposals for the Corporation's 2000 Annual Meeting of
Stockholders must be received no later than December 10, 1999 [120 days before
April 9, 2000] at the Corporation's principal executive offices, 1025 Fifteenth
Street, NW, Washington, D.C. 20005, in order to be considered for inclusion in
next year's annual meeting proxy materials under the SEC's proxy rules. In
accordance with Rule 14a-4(c)(1) of the 1934 Act, management proxyholders intend
to use their discretionary voting authority with respect to any stockholder
proposal raised at the Corporation's 2000 annual meeting as to which the
proponent fails to notify the Corporation on or before February 23, 2000 [45
days prior to the date which the proxy statement was first mailed to
stockholders]. Notifications should be sent to the Corporation's principal
executive offices at the address set forth above.
OTHER MATTERS
The Corporation knows of no other matters to be presented for action at
the Annual Meeting other than those mentioned above. However, if any other
matters should properly come before the meeting, it is intended that the persons
named in the accompanying proxy card will vote on such matters in accordance
with their best judgment.
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<PAGE> 13
REVOCABLE PROXY
STRAYER EDUCATION, INC.
ANNUAL MEETING OF STOCKHOLDERS MAY 24, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder hereby appoints Ron K. Bailey, Harry T.
Wilkins and Jennie D. Seaton, or any of them, attorneys and proxies of the
undersigned, with full power of substitution and with authority in each of them
to act in the absence of the other, to vote and act for the undersigned at the
Annual Meeting of Stockholders of the Corporation to be held on Monday, May 24,
1999, at 10:00 a.m., (Eastern time) at the Sheraton National Hotel, Columbia
Pike and Washington Boulevard, in Arlington, Virginia, and at any adjournments
thereof, in respect of all shares of the Common Stock of the Corporation which
the undersigned may be entitled to vote, on the following matters:
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. HOWEVER, IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF DIRECTORS, AND IN THE BEST DISCRETION OF THE PROXY
HOLDERS AS TO ANY OTHER MATTERS.
(CONTINUED AND TO BE DATED AND SIGNED ON REVERSE SIDE)
<TABLE>
<S> <C>
____
A [X] Please mark your | |
votes as in this |
example using 9 99999999999 9 ------
dark ink only.
99999999.999
For all (except
nominees on line
below Withhold
1. Election of
eight Directors [ ] [ ] NOMINEES: Ron K. Bailey 2. The proxies are authorized to vote in their
by all Stanley G. Elmore discretion on any other matters which may
Stockholders: Todd A. Milano properly come before the Annual Meeting to
Dr. Jennie D. Seaton the extent set forth in the proxy
INSTRUCTION: To withhold authority to vote Roland Carey statement.
for any individual nominee, write that nominee's Donald T. Benson
name on the line provided below: G. Thomas Waite, III The undersigned hereby acknowledges prior
Dr. Charlotte Beason receipt of a copy of the Notice of Annual
Meeting of Stockholders and proxy statement
- ------------------------------------------------ dated April 9, 1999, and hereby revokes any
proxy or proxies heretofore given. This Proxy
999-999999 may be revoked at any time before it is voted
by delivering to the Secretary of the
P ***** HEADER CARD ********** Corporation either a written revocation of
STRAYER EDUCATION INC proxy or a duly executed proxy bearing a later
STRAYER EDUCATION INC date, or by appearing at the Annual Meeting
STRAYER EDUCATION INC and voting in person.
STRAYER EDUCATION INC
P ***** HEADER CARD ********** If you receive more than one proxy card,
please sign and return all cards in the
accompanying envelope.
PLEASE MARK, DATE AND SIGN THIS PROXY AND
RETURN IT TO ENSURE A QUORUM AT THE MEETING.
IT IS IMPORTANT WHETHER OR NOT YOU OWN FEW OR
MANY SHARES. DELAY IN RETURNING YOUR PROXY MAY
SUBJECT THE CORPORATION TO ADDITIONAL EXPENSE.
I PLAN TO ATTEND THE MAY 24, 1999 [ ]
ANNUAL STOCKHOLDERS MEETING
Signature of Stockholder or Authorized Representative______________________________________________ DATE:__________________, 1999
Note: PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS HEREON. EACH EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN, ATTORNEY-IN-FACT AND
OTHER FIDUCIARY SHOULD SIGN AND INDICATE HIS OR HER FULL TITLE. IF THE CASE OF STOCK OWNERSHIP IN THE NAME OF TWO OR MORE
PERSONS, BOTH PERSONS SHOULD SIGN.
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