<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
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 sec. 240.14a-11(c) or sec. 240.14a-12
Strayer Education, Inc.
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(Name of Registrant as Specified In Its Charter)
Strayer Education, Inc.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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Notes:
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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 2000 Annual Meeting of Stockholders
of Strayer Education, Inc. to be held at 10:00 a.m. local time on May 22, 2000,
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 2000 Annual Meeting of Stockholders.
Sincerely,
/s/ RON K. BAILEY
Ron K. Bailey
President & Chief Executive Officer
April 14, 2000
<PAGE> 3
STRAYER EDUCATION, INC.
1025 FIFTEENTH STREET, N.W.
WASHINGTON, D.C. 20005
(202) 408-2424
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
The 2000 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 22, 2000, at 10:00 a.m. for the following purposes:
1. To elect nine (9) 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/ MARILYN BISHOP
Marilyn Bishop
Secretary
Washington, D.C.
April 14, 2000
<PAGE> 4
STRAYER EDUCATION, INC.
1025 FIFTEENTH STREET, N.W.
WASHINGTON, D.C. 20005
(202) 408-2424
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 22, 2000
------------------------
This Proxy Statement is furnished on or about April 14, 2000, 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 2000 Annual
Meeting of Stockholders (the "Annual Meeting"). The Annual Meeting will be held
at 10:00 a.m. local time on May 22, 2000, 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, 2000, there were 15,332,665 shares of
the Common Stock of the Corporation outstanding and entitled to vote at the
meeting. Only stockholders of record on March 31, 2000 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 7,666,333 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.
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<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
Nine 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 59, is the President and Chief Executive
Officer of the Strayer Education, Inc. Mr. Bailey serves as
Chairman of the Board of Trustees of Strayer University,
Inc. (the "University"), a subsidiary of the Corporation,
since 1997. In addition, Mr. Bailey served as the President
and a director of Education Loan Processing, Inc. ("ELP"), a
subsidiary of the Corporation, since ELP's formation in
1994. Mr. Bailey was the President of Strayer University
from 1989 to 1997. He also held a variety of positions with
the University, including the position of Vice President of
the University from 1980 to 1989. 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 Retired in 1998 from his position as Vice President,
Citibank Mid-Atlantic, a position he had held since 1989.
Mr. Elmore, age 58, has been a director and Chairman of the
Board of Directors of the Corporation since July 1996. Mr.
Elmore served as the Chairman of the Board of Trustees of
the University from 1989 to 1997.
Todd A. Milano President and Chief Executive Officer of Central
Pennsylvania College since 1989. Mr. Milano, age 47, has
been a director of the Corporation since July 1996 and
served as the Vice Chairman of the Board of Trustees of the
University from 1992 to 1999.
Dr. Jennie D.
Seaton Retired in 1994 from her position as Assistant Dean of
Virginia Commonwealth University School of Allied Health
Professions. She served in a variety of academic and
administrative posts at the University since 1975. Dr.
Seaton, age 70, 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. In addition, Dr. Seaton was
elected to Vice Chairman of the Board of Trustees of the
University in 1999.
Roland Carey Instructor with the Louisa County Public School System of
Virginia and Chairman of the Middle School Building
Leadership Team since August 1999. Prior to his current
position, Mr. Carey was the Program Coordinator at the Carl
Sandburg School for more than twelve years. Mr. Carey, age
60, has been a director of the
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<PAGE> 6
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 and Real Estate
Investment, 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 Vice President, Human Resources, of Connecticut
General Insurance Corp. (Cigna). Mr. Benson, age 56, 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 and Chief Financial Officer, 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 48, 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, since
1992. Dr. Beason, age 52, 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.
Stephen C. Eastham Sole proprietor of Eastham & Associates since 1989. Mr.
Eastham, 55, assists early-stage companies in fund raising
and financial strategy. From 1974-1989, Mr. Eastham served
as President, General Counsel and Director of Finalco Group,
Inc. Mr. Eastham serves as an adjunct professor at Johns
Hopkins University, where he teaches graduate courses in
emerging markets and transitional economics. Mr. Eastham
received his B.S. in Accounting and a J.D. degree from
Indiana University.
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 once
during the year ended December 31, 1999; 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, 1999; 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 met once during the year ended December 31, 1999.
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<PAGE> 7
ATTENDANCE AT MEETINGS
During the year ended December 31, 1999, 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 $1,700 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 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, 1999 all such filling
requirements were met.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the ownership
of Common Stock as of March 31, 2000, 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. Except as noted below, the address for all 5% beneficial owners is:
1025 Fifteenth Street, N.W., Washington, D.C. 20005.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
----------------------------
NAMES OF BENEFICIAL OWNERS (1) NUMBER PERCENT OF CLASS
------------------------------ --------- ----------------
<S> <C> <C>
Ron K. Bailey and Beverly W. Bailey (2)............. 8,175,000 53.3%
Kayne Anderson Investment Management, LLC. (3)
1800 Avenue of the Stars
Los Angeles, CA 90067............................. 1,602,137 10.4%
T. Rowe Price Associates, Inc. (4)
100 East Pratt Street
Baltimore, MD 21202............................... 1,485,700 9.7%
Harry T. Wilkins.................................... 182,000 *
Todd A. Milano...................................... 12,320 *
Stanley G. Elmore................................... 11,850 *
Roland Carey........................................ 10,500 *
Donald T. Benson.................................... 9,075 *
Jennie D. Seaton.................................... 7,950 *
Stephen C. Eastham.................................. 7,500 *
G. Thomas Waite III................................. 3,128 *
</TABLE>
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<PAGE> 8
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
----------------------------
NAMES OF BENEFICIAL OWNERS (1) NUMBER PERCENT OF CLASS
------------------------------ --------- ----------------
<S> <C> <C>
Charlotte Beason.................................... 3,000 *
--------- ----
All directors and executive officers as a group (9
persons)(5)....................................... 8,414,823 54.9%
========= ====
</TABLE>
- ---------------
* Less than one percent
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission 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 Securities and Exchange Commission on
February 1, 2000. These securities are owned by various individual and
institutional investors, which Kayne Anderson Investment Management, LLC.
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 Securities and Exchange Act of 1934, Kayne Anderson Investment
Management is deemed to be a beneficial owner of such securities; however,
Kayne Anderson Investment Management expressly disclaims that it is, in
fact, the beneficial owner of such securities.
(4) Based on a Schedule 13G filed with the Securities and Exchange Commission on
February 14, 2000. 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 Securities and Exchange Act of 1934, 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.
(5) Includes currently exercisable options to purchase the following shares for
each listed individual: Wilkins (150,000); Elmore (10,500); Milano (2,500);
Seaton (1,600); 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, 1997, 1998 and 1999 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 year 1997.
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<PAGE> 9
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
----------------------- -----------------------------------------
SECURITIES UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY BONUS OPTIONS/SAR'S COMPENSATION(1,2)
----------------- ---- -------- ----- --------------------- -----------------
<S> <C> <C> <C> <C> <C>
Ron K. Bailey....................... 1997 $127,038 -- -- $2,679
President 1998 $107,546 -- -- $2,289
1999 $ 54,900 -- -- $1,236
Harry Wilkins....................... 1998 $104,000 -- -- $2,218
Chief Financial Officer 1999 $105,120 -- -- $2,240
</TABLE>
- ---------------
(1) Reflects (i) $2,541, $2,151 and $1,098 in matching contributions made by the
University to the University's 401(k) plan for Mr. Bailey in 1997, 1998 and
1999 respectively, and (ii) $138 in premiums paid by the University for life
insurance for Mr. Bailey in each of 1997, 1998 and 1999.
(2) Reflects $2,080 and $2,102 in matching contributions made by the University
to the University's 401(k) plan for Mr. Wilkins in 1998 and 1999,
respectively, and $138 in premiums paid by the University for life insurance
for Mr. Wilkins in 1998 and 1999.
OPTION GRANTS
The Option Plan was adopted in July 1996. There were no options granted to
the Chief Executive Officer or Chief Financial Officer during the years ended
December 31, 1997, 1998 and 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS
FISCAL YEAR END AT FISCAL YEAR END
SHARES VALUE --------------------------- ---------------------------
NAME ACQUIRED REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ron K Bailey.............. -- -- -- -- -- --
Harry T. Wilkins.......... 75,000 $1,481,250 150,000 0 $2,962,500 $0
</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
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<PAGE> 10
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.
[LINE GRAPH]
<TABLE>
<CAPTION>
STRAYER S&P 500 PEER INDEX
------- ------- ----------
<S> <C> <C> <C>
Jul-96 100.00 100.00 100.00
Dec-96 215.40 118.60 117.20
Dec-97 466.30 158.20 151.40
Dec-98 500.90 204.20 204.90
Dec-99 283.00 247.50 119.10
</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 1999 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
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<PAGE> 11
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.
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 $54,900 per year pursuant to the
terms of his employment agreement. See "Employment Agreements." At the request
of Ron K. Bailey, the Compensation Committee reduced Mr. Bailey's salary from
$107,546 in 1998 to $54,900 in 1999.
Harry T. Wilkins -- Compensation.
Mr. Wilkins is paid an annual salary of $105,120 per year, $2,102 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 1999.
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 $54,900. 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.
Submitted by the Members of the Compensation Committee:
Donald T. Benson
Todd A. Milano
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<PAGE> 12
CERTAIN TRANSACTIONS WITH MANAGEMENT
Lease of Campus Facilities
The Company has long-term non-cancelable operating leases for ten of its
various campus locations. The rents on these leases are subject to an annual
increase based on a stipulated price index. Of the ten leased campus locations,
four of the campuses, including the Washington, D.C. campus 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 corporations
owned by Mr. Bailey under these operating leases and the Takoma Park lease prior
to its purchase for the years ended December 31, 1997, 1998 and 1999 was
$2,126,000, $2,199,363, and $2,040,167, respectively. During 1999, the Company
acquired its Takoma Park Campus from its majority stockholder for $1,024,000.
Future minimum rental commitments for all of the Company's ten leases and the
four campuses leased from corporations owned by Mr. Bailey as of December 31,
1999 was as follows (in thousands):
<TABLE>
<CAPTION>
AMOUNT PAYABLE TO AN
TOTAL LEASE AFFILIATE OF MR. BAILEY
COMMITMENTS INCLUDED IN TOTAL
----------- -----------------------
<S> <C> <C>
2000......... $ 4,501 $ 1,849
2001......... 4,382 1,849
2002......... 3,930 1,849
2003......... 3,486 1,849
2004......... 3,010 1,849
Thereafter... 4,824 2,619
------- -------
$24,133 $11,864
======= =======
</TABLE>
Each of the four leases with corporations owned by 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.
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, 1999. 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 2001 Annual Meeting of
Stockholders must be received no later than December 10, 2000 [120 days before
April 8, 2001] 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 2001 annual meeting as to which the
proponent fails to notify the Corporation on or before February 23, 2001 [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.
-9-
<PAGE> 13
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.
-10-
<PAGE> 14
REVOCABLE PROXY
STRAYER EDUCATION, INC.
ANNUAL MEETING OF STOCKHOLDERS MAY 22, 2000
THIS PROXY IS BEING 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 May 22, 2000, 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:
1. ELECTION OF NINE DIRECTORS BY ALL STOCKHOLDERS: --
Nominees: Ron K. Bailey, Stanley G. Elmore, Todd A. Milano,
Dr. Jennie D. Seaton, Roland Carey, Donald T. Benson, G.
Thomas Waite, III, Dr. Charlotte Beason and Stephen C.
Eastham
[ ] FOR ALL (except nominees written below)
[ ] AGAINST
-----------------------------------------------------------
2. The proxies are authorized to vote in their discretion on
any other matters which may properly come before the Annual
Meeting to the extent set forth in the proxy statement.
(Continued and to be dated and signed on reverse side.)
<PAGE> 15
(continued from other side)
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 FOR THE APPROVAL OF THE CORPORATION'S
EMPLOYEE STOCK PURCHASE PLAN, AND IN THE BEST DISCRETION OF THE PROXY HOLDERS AS
TO ANY OTHER MATTERS.
The undersigned hereby acknowledges prior receipt of a copy of the Notice
of Annual Meeting of Stockholders and proxy statement dated March 31, 2000 and
hereby revokes any proxy or proxies heretofore given. This Proxy may be revoked
at any time before it is voted by delivering to the Secretary of the Corporation
either a written revocation of proxy or a duly executed proxy bearing a later
date, or by appearing at the Annual Meeting and voting in person.
If you receive more than one proxy card, please sign and return all cards
in the accompanying envelope.
[ ] I PLAN TO ATTEND THE MAY 22, 2000 ANNUAL STOCKHOLDERS MEETING
Date: ____________________, 2000.
------------------------------------
Signature of Stockholder or Authorized
Representative
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. In the case of stock
ownership in the name of two or more
persons, both persons should sign.
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY TO ENSURE A QUORUM
AT THE MEETING. IT IS IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES. DELAY IN
RETURNING YOUR PROXY MAY SUBJECT THE CORPORATION TO ADDITIONAL EXPENSE.
