EDUTREK INT INC, DEF 14A, 1999-04-30

EDUTREK INT INC
DEF 14A, 1999-04-30
EDUCATIONAL SERVICES

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<PAGE>

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 (S) 240.14a-11(c) or (S) 240.14a-12

EDUTREK INTERNATIONAL, INC.
----------------------------------------
(Name of Registrant as Specified In Its Charter)

Not Applicable
----------------------------------
(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)(4) and 0-11.

i) Title of each class of securities to which transaction applies:
_______________________________________________________________

ii) Aggregate number of securities to which transaction applies:
_______________________________________________________________

iii) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: /1/
_______________________________________________

Set forth the amount on which the filing fee is calculated and state
how it was determined.

iv) Proposed maximum aggregate value of transaction: ____________________

v) 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.

i) Amount Previously Paid: ______________________________________________

ii) Form, Schedule or Registration Statement No.: ________________________

iii) Filing Party: ________________________________________________________

iv) Date Filed: __________________________________________________________

- -----------
/1/ Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>

April 30, 1999

Dear Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders of
your Company, which will be held on Thursday, June 10, 1999 at 10:00 a.m.,
Eastern Time, at the Company's offices at 6600 Peachtree-Dunwoody Road, Embassy
Row 500, Atlanta, Georgia.

The formal notice of the meeting and the proxy statement appear on the
following pages and describe the matters to be acted upon. Time will be
provided during the meeting for discussion and you will have an opportunity to
ask questions about your Company.

Whether or not you plan to attend the meeting in person, it is important
that your shares be represented and voted. After reading the enclosed notice of
the meeting and proxy statement, please complete, sign, date and return the
enclosed proxy card at your earliest convenience. Returning the signed and
dated proxy card will not prevent you from voting in person at the meeting
should you later decide to do so.

Sincerely,

/s/ Steve Bostic
--------------------------
Steve Bostic
Chairman of the Board
and Chief Executive Officer

[LOGO OF EDUTREK INTERNATIONAL APPEARS HERE]
<PAGE>

EDUTREK INTERNATIONAL, INC.
6600 Peachtree-Dunwoody Road
Embassy Row 500
Atlanta, Georgia 30328

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held June 10, 1999

To the Holders of Common Stock of EDUTREK INTERNATIONAL, INC.:

Notice is hereby given that the Annual Meeting of Shareholders of EduTrek
International, Inc., a Georgia corporation (the "Company"), will be held at the
Company's offices at 6600 Peachtree-Dunwoody Road, Embassy Row 500, Atlanta,
Georgia 30328 on Thursday, June 10, 1999 at 10:00 a.m. Eastern Time for the
following purposes:

(1) To elect eight (8) directors to serve until the next annual meeting of
shareholders and until their successors have been elected and qualified;

(2) To approve the adoption of an Employee Stock Purchase Plan for the Company;
and

(3) To conduct such other business as may properly come before the meeting or
any adjournments or postponements thereof.

Only shareholders of record as of the close of business on April 12, 1999
will be entitled to notice of and to vote at the meeting or any adjournments or
postponements thereof.

By Order of the Board of Directors

/S/ Douglas C. Chait
---------------------
Douglas C. Chait
Secretary
Atlanta, Georgia
April 30, 1999

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN
PERSON, YOU ARE URGED TO COMPLETE, SIGN, DATE AND PROMPTLY MAIL THE ENCLOSED
PROXY IN THE ACCOMPANYING POSTAGE PAID ENVELOPE. IF YOU ATTEND THE MEETING, YOU
MAY REVOKE THE PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE>

EDUTREK INTERNATIONAL, INC.

ANNUAL MEETING OF SHAREHOLDERS
June 10, 1999
______________________________________________

PROXY STATEMENT
______________________________________________

This proxy statement and form of proxy, which are first being mailed to
shareholders on or about April 30, 1999, are furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of EduTrek
International, Inc. (the "Company"), for use at the Annual Meeting of
Shareholders of the Company to be held at the Company's offices at 6600
Peachtree-Dunwoody Road, Embassy Row 500, Atlanta, Georgia, on Thursday, June
10, 1999, at 10:00 a.m. Eastern Time and at any or all adjournments or
postponements thereof. The address of the principal executive offices of the
Company is 6600 Peachtree-Dunwoody Road, Embassy Row 500, Atlanta, Georgia 30328
and the Company's telephone number is (404) 965-8000.

The cost of this solicitation will be borne by the Company. In addition to
the mails, proxies may be solicited by officers and regular employees of the
Company, without remuneration, by personal interviews, telephone and facsimile.
It is anticipated that banks, brokerage houses and other custodians, nominees
and fiduciaries will forward soliciting material to beneficial owners of stock
entitled to vote at the meeting, and such persons will be reimbursed for the
out-of-pocket expenses incurred by them in this connection.

Any proxy given pursuant to this solicitation may be revoked by any
shareholder who attends the meeting and gives oral notice of his election to
vote in person, without compliance with any other formalities. In addition, any
proxy given pursuant to this solicitation may be revoked prior to the meeting by
delivering to the Secretary of the Company an instrument revoking it or a duly
executed proxy for the same shares bearing a later date. Proxies which are
returned properly executed and not revoked will be voted and will be voted in
accordance with the shareholder's directions specified thereon. Where no
direction is specified, proxies will be voted FOR the election of the nominees
for director named herein, FOR the adoption of the Employee Stock Purchase Plan
and, on other matters presented for a vote, in accordance with the judgment of
the persons acting under the proxies. Abstentions and broker non-votes are
counted as present for the purpose of determining the presence of a quorum for
the transaction of business. For the purpose of determining the number of
shares voting on a particular proposal, abstentions are counted as shares
voting, whereas broker non-votes are not counted as shares voting.

Only shareholders of record at the close of business on April 12, 1999 will
be entitled to notice of and to vote at the Annual Meeting or any adjournments
or postponements thereof. As of April 12, 1999, the Company had outstanding
4,384,515 shares of Class A Common Stock and 6,293,000 shares of Class B Common
Stock. Each share of Class A Common Stock issued and outstanding on the Record
Date is entitled to one vote while each share of Class B Common Stock issued and
outstanding on the Record Date is entitled to ten votes.

The Company's fiscal year formerly ended on May 31. In November 1998,
the Board of Directors changed the Company's fiscal year-end to December 31.
The Company filed a Transition Report on Form 10-K for the seven month
transition period from June 1, 1998 to December 31, 1998 (the "Transition
Period"). Certain information is presented in this Proxy Statement for the
Transition Period.
<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Based solely on information made available to the Company, the following
table sets forth certain information as of April 12, 1999 with respect to the
beneficial ownership of the Company's Common Stock by (i) each person known by
the Company to own beneficially more than five percent (5%) of any class of
outstanding Common Stock of the Company, (ii) each director and director nominee
of the Company, (iii) each of the executive officers of the Company named in the
Summary Compensation table on page 6 of this Proxy Statement, and (iv) all
directors and executive officers of the Company as a group. Steve Bostic, the
Company's Chairman and Chief Executive Officer, and certain of his affiliates,
are the only holders of Class B Common Stock. Such shares are entitled to ten
votes per share. If at any time any shares of Class B Common Stock are
beneficially owned by any person other than Mr. Bostic (or entities controlled
by him) or upon his death, such shares automatically convert to an equal number
of shares of Class A Common Stock.
<TABLE>
<CAPTION> Percent of
Total Voting
Shares Beneficially Owned/1/ Percent of Class Power
--------------------------- ---------------------- ----------
Beneficial Owner Class A Class A Class B Class A Class B
<S> <C> <C> <C> <C> <C>
Steve Bostic ............................ 42,000/(2)/ 6,293,000/(3)/ * 100.0% 93.6%
Wellington Management
Company, LLP............................ 848,600/(4)/ -- 19.4% -- 1.2
Wellington Trust
Company, N.A............................ 535,600/(5)/ -- 12.2 -- *
J&W Seligman & Co.
Incorporated............................ 552,600/(6)/ -- 12.6 -- *
Stratford Capital Partners, L.P./(7)/.... 444,318 -- 10.1 -- *
Janus Capital Corporation................ 603,535/(8)/ -- 13.8 -- *
Firstar Corporation...................... 350,050/(9)/ -- 8.0 -- *
State Retirement and Pension
System of Maryland......................255,000/(10)/ -- 5.8 -- *
Stephen G. Franklin...................... 82,000/(11)/ -- 1.8 -- *
Paul D. Beckham.......................... 1,400/(12)/ -- * -- *
Fred C. Davison.......................... 1,400/(12)/ -- * -- *
Ronald P. Hogan.......................... 5,700/(13)/ -- * -- *
Gaylen D. Kemp........................... 1,600/(12)/ -- * -- *
Gerald Tellefsen......................... 3,200/(13)/ -- * -- *
J. Robert Fitzgerald..................... 5,700/(13)/ -- * -- *
A. Reza Jafari........................... 30,000/(14)/ -- * -- *
Donald J. Blankers....................... 22,607/(15)/ -- * -- *
Barbara S. Butterfield................... 11,150/(16)/ -- * -- *
Eric R. Fliegel.......................... 10,900 -- * -- *
All executive officers and
directors as a group (12
persons)................................102,150/(17)/ 6,293,000 2.3% 100.0% 93.6%
</TABLE>

- ----------------------
*Less than 1%.

-2-
<PAGE>

(1) Unless otherwise indicated, each person has sole voting and investment
power as to all such shares. Shares of Common Stock underlying exercisable
options to purchase Common Stock are deemed to be outstanding for the
purpose of computing the outstanding Common Stock owned by the particular
person and by the group, but are not deemed outstanding for any other
purpose.
(2) Shares held by The Bostic Family Foundation, Inc. over which Mr. Bostic
exercises voting and investment power.
(3) Includes 2,866,150 shares of Class B Common Stock owned by Mr. Bostic's
wife and 602,700 shares of Class B Common Stock owned by the Bostic Family
Limited Partnership over which Mr. Bostic exercises voting and investment
power. Mr. Bostic's business address is 6600 Peachtree-Dunwoody Road,
Embassy Row 500, Atlanta, Georgia 30328.
(4) Based upon a Schedule 13G/A dated February 9, 1999 filed by Wellington
Management Company, LLP ("WMC"). Of the 848,600 shares beneficially owned,
WMC reports shared voting power with respect to 483,600 shares. The
Schedule 13G/A reports that it is filed by WMC in its capacity as
investment advisor; that the referenced shares are owned of record by
clients of WMC; and that those clients have the right to receive or the
power to direct the receipt of, dividends from, or the proceeds from the
sale of, such securities. The Company makes no representation as to the
accuracy or completeness of the information reported. The business address
of WMC is 75 State Street, Boston, Massachusetts 02109.
(5) Based on a Schedule 13G/A dated February 11, 1999 filed by Wellington Trust
Company, N.A. ("WTC"). Of the 535,600 shares beneficially owned, WTC
reports shared voting power with respect to 280,600 shares. The Schedule
13G/A reports that it is filed by WTC in its capacity as investment
advisor; that the referenced shares are owned of record by clients of WTC;
and that those clients have the right to receive or the power to direct the
receipt of, dividends from, or the proceeds from the sale of, such
securities. The Company make no representation as to the accuracy or
completeness of the information reported. The business address of WTC is
75 State Street, Boston, Massachusetts 02109.
(6) Based upon Schedule 13G/A dated February 9, 1999 filed by J&W Seligman &
Co. Incorporated ("Seligman"). The Schedule 13G/A reports that Seligman is
an investment advisor for Seligman Frontier Fund, Inc. (the "Seligman
Fund") and as such may be deemed to beneficially own the shares held by the
Seligman Fund. In addition, the Schedule 13G/A reports that William C.
Morris, as the owner of a majority of the outstanding voting securities of
Seligman, may also be deemed to beneficially own the referenced shares. Of
the shares reported, the Seligman Fund beneficially owns 304,000 shares.
The Company makes no representation as to the accuracy or completeness of
the information reported. The business address of Seligman is 100 Park
Avenue, 8th Floor, New York, New York 10006.
(7) The business address of Stratford Capital Partners, L.P. is 200 Crescent
Court, 16th Floor, Dallas, Texas 75201.
(8) Based upon a Schedule 13G/A dated February 12, 1999 filed by Janus Capital
Corporation ("Janus Capital"). The Schedule 13G/A reports that Janus
Capital beneficially owns all of the indicated shares by virtue of acting
as an investment advisor, but does not have the right to receive any
dividends from, or the proceeds from the sale of, the securities. The
Schedule 13G/A is also filed on behalf of Thomas H. Bailey, who owns
approximately 12.2% of Janus Capital and serves as its Chairman of the
Board and President. Mr. Bailey disclaims beneficial ownership over any
shares of EduTrek Common Stock that he or Janus Capital may be deemed to
beneficially own. The Schedule 13G/A is also filed on behalf of Janus
Enterprise Fund, a registered investment company to which Janus Capital
provides investment advice, with respect to 600,000 shares out of the
603,535 beneficially owned. The Company makes no representation as to the
accuracy or completeness of the information reported. The business address
of Janus Capital, Janus Enterprise Fund and Thomas H. Bailey is 100
Fillmore Street, Denver, Colorado 80206.
(9) Based upon a Schedule 13G dated February 16, 1999 filed by Firstar
Corporation ("Firstar"). The Schedule 13G states that Firstar has sole
voting power with respect to 349,100 shares and shared voting power with
respect to 950 shares. The Company makes no representation as to the
accuracy or completeness of the information reported. The business address
of Firstar is 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
(10) Based upon a Schedule 13G dated February 10, 1999 filed by the State
Retirement and Pension System of Maryland ("SRPSM"). The Schedule 13G
states that SRPSM has sole voting and shared dispositive power with respect
to the shares. The 13G also states that Wellington Management Company, LLP
acts as investment advisor to SRPSM. The Company makes no representation
as to the accuracy or completeness of the information reported. The
business address of SRPSM is 301 West Preston Street, Room 901-A,
Baltimore, Maryland 21201.
(11) Includes 77,000 shares of Class A Common Stock subject to presently
exercisable stock options granted pursuant to Mr. Franklin's employment
agreement. Dr. Franklin resigned as an officer and director of the Company
effective April 19, 1999.
(12) Includes 1,400 shares of Class A Common Stock subject to presently
exercisable stock options.
(13) Includes 700 shares of Class A Common Stock subject to presently
exercisable stock options.
(14) Represents shares subject to presently exercisable stock options.
(15) Includes 8,600 shares of Class A Common Stock subject to presently
exercisable stock options.
(16) Includes 8,800 shares of Class A Common Stock subject to presently
exercisable stock options.
(17) Includes 42,300 shares of Class A Common Stock subject to presently
exercisable stock options.

There are no arrangements known to the Company, the operation of which may,
at a subsequent date, result in a change in control of the Company.

-3-
<PAGE>

AGENDA ITEM ONE
ELECTION OF DIRECTORS

The Board of Directors of the Company, pursuant to the Company's Bylaws, has
set the number of directors to serve for the next year at eight, all of whom are
to be elected at the Annual Meeting. Proxies received will be voted for all the
nominees named below, unless authority to do so is withheld. In the event any
nominee is unable or declines to serve as a director at the time of the meeting,
the persons named as proxies therein will have discretionary authority to vote
the proxies for the election of such person or persons as may be nominated in
substitution by the present Board of Directors. Management knows of no current
circumstances which would render any nominee named herein unable to accept
nomination or to serve if elected.

Members of the Board of Directors are elected annually to serve until the
next annual meeting of shareholders and until their successors are elected and
qualified. Directors will be elected by a plurality of the votes cast by the
shares entitled to vote on the election of directors.

The following persons have been nominated by management for election to the
Board of Directors:

Steve Bostic, age 55, has served as Chairman of the Board and Chief
Executive Officer of the Company since its inception in July 1996. Since
October 1996, Mr. Bostic has also served on the Governing Board of American
Intercontinental University ("AIU"), and since June 1997, Mr. Bostic has served
as the President of AIU. Prior to founding the Company in 1996, from 1993 to
1996, Mr. Bostic was the Chairman of the Board of EduTrek Systems, Inc. and,
from 1989 to 1993, Mr. Bostic was the Chairman of the Board of Delphi
Technology, Inc., a company specializing in the scientific development and
application of cognitive-based learning systems. Mr. Bostic was the principal
owner and Chairman of American Photo Group, an operator of consumer photo
processing labs, from 1981 to 1987. In addition, Mr. Bostic serves as a member
of the Board of Trustees of Presbyterian College, the Dean's Advisory Council of
the Indiana University School of Business and the Board of the School of Public
Policy at Georgia Institute of Technology. Mr. Bostic has more than ten years
of experience in the educational arena.

Paul D. Beckham, age 55, has served as a Director of the Company since June
1997. Mr. Beckham currently serves as a consultant to Wireless Communications,
Inc., and since 1993 has been the co-owner of Hope-Beckham, Inc., a sports
marketing firm. From 1970 to 1993, Mr. Beckham served in various capacities
with Turner Broadcasting System, Inc., including most recently, President of
Turner Cable Sales, a wholly-owned subsidiary of Turner Broadcasting System,
Inc.

Fred C. Davison, age 69, has served as a Director of the Company since June
1997 and has served on AIU's Governing Board since October 1996. Dr. Davison
has a Ph.D. in biochemistry and pathology and has served as the President and
Chief Executive Officer of the National Science Foundation, Augusta, Georgia
since 1988. From July 1967 through June 1986, Dr. Davison served as the
President of the University of Georgia. Dr. Davison is currently a member of
the Board of Trustees of Presbyterian College as well as a member of the Board
of Directors of First Union Bank of Georgia, the Augusta Chamber of Commerce and
the Business Higher Education Forum.

Gaylen D. Kemp, age 46, has served as a Director of the Company since June
1997 and has served on AIU's Governing Board since October 1996. Ms. Kemp has
been Of Counsel in the Atlanta, Georgia office of the law firm of Dow, Lohnes &
Albertson since January 1996. From 1987 to December 1995, Ms. Kemp was a
partner in the law office of Dow, Lohnes & Albertson practicing with a focus on
mergers and divestitures, financial transactions and public and private
securities offerings. Ms. Kemp has been a member of the Executive Committee of
the Corporate and Banking Law Section of the State Bar of Georgia since 1989 and
served as Chairperson of the Section from 1993 to 1994. Ms. Kemp is currently a
member of the Executive Committee of the Board of Directors of the Atlanta Legal
Aid Society.

-4-
<PAGE>

J. Robert Fitzgerald, age 59, has served as a Director of the Company since
October 1997. Mr. Fitzgerald retired as Vice President - Corporate
Responsibility and Compliance with BellSouth Corporation in October 1996. Mr.
Fitzgerald served in various capacities with BellSouth and its predecessors from
1970 to 1996. Since his retirement, Mr. Fitzgerald has been involved in
numerous civic activities.

Ronald P. Hogan, age 58, has served as a Director of the Company since
October 1997. Since August 1995, Mr. Hogan has served as President and Chief
Executive Officer of Saint Joseph's Health System, Atlanta, Georgia. From April
1994 to August 1995, Mr. Hogan was an investment advisor with the Wilkinson
Group, Atlanta, Georgia.

Gerald Tellefsen, age 60, has served as a Director of the Company since
October 1997. Since 1984, Mr. Tellefsen has been Chief Executive Officer of the
Tellefsen Consulting Group, Inc., a company based in New York City which serves
as a consultant to the financial industry.

A. Reza Jafari, age 51, was appointed as a director on April 21, 1999 to
fill the vacancy on the Board of Directors created by the April 19, 1999
resignation of Steven G. Franklin. Dr. Jafari was also elected as President and
Chief Operating Officer on April 21, 1999. Prior to joining the Company, Dr.
Jafari was Managing Director of Media and Communications Industries for
Electronic Data Systems, Inc. ("EDS") in Europe, Middle East and Africa. Dr.
Jafari held a variety of management positions since joining EDS in 1990.

Stephen G. Franklin, who served as a director and as President and Chief
Academic Officer of the Company since 1997, resigned from those positions
effective April 19, 1999. He is not nominated for election as a director at the
1999 Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF
THE NOMINEES FOR DIRECTOR NAMED IN THIS PROXY STATEMENT.

Committees of the Board and Meetings

The Company's Board of Directors presently has the following standing
committees:

(A) The Audit Committee, currently composed of Ms. Kemp and Messrs. Beckham
and Davison. The Audit Committee, which held two meetings during the Transition
Period, is responsible for reviewing the internal and external financial
reporting of the Company, reviewing the scope of the independent audit and
considering comments by the auditors regarding internal controls and accounting
procedures and management's response to these comments.

(B) The Compensation Committee, currently composed of Ms. Kemp and Messrs.
Fitzgerald and Tellefsen. The Compensation Committee, which held two meetings
during the Transition Period, is responsible for reviewing and making
recommendations to the Board of Directors regarding salaries, compensation and
benefits of executive officers and key employees of the Company.

The Company does not have a Directors Nominating Committee, that function
being reserved to the entire Board of Directors.

During the Transition Period, the Board of Directors held a total of two
meetings and acted once by unanimous written consent. Each incumbent director
attended at least 75% of the aggregate number of meetings held by the Board and
by the Committees of the Board on which he or she served during the Transition
Period.

-5-
<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, certain officers and persons who own more than 10% of the outstanding
Common Stock of the Company, to file with the Securities and Exchange Commission
reports of changes in ownership of the Common Stock of the Company held by such
persons. Officers, directors and greater than 10% shareholders are also
required to furnish the Company with copies of all forms they file under this
regulation. To the Company's knowledge, based solely on a review of the copies
of such reports furnished to the Company and representations that no other
reports were required, during Transition Period, all Section 16(a) filing
requirements applicable to its officers, directors and greater than 10%
shareholders were complied with.

EXECUTIVE COMPENSATION

The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and the four next most highly compensated officers whose
cash compensation during the 12-month period ended December 31, 1998 exceeded
$100,000 (the "Named Executive Officers"), for (i) the 12-month period ended
December 31, 1998, (ii) fiscal 1998, which ended May 31, 1998, and (iii) fiscal
1997, which ended May 31, 1997. The Company was organized in July 1996 and had
only minimal operations prior to October 1996.

Summary Compensation Table

<TABLE>
<CAPTION>
Long-Term
Annual Compensation
Compensation Awards
------------------- ------------
Securities
Underlying All Other
Name and Principal Position Period Salary Bonus Options Compensation/(1)/
- --------------------------- ------ ------ ----- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Steve Bostic 12/31/97-12/31/98 $250,007/(2)/ -- -- --
Chairman and Chief Fiscal 1998 250,000 -- -- --
Executive Officer Fiscal 1997/(3)/ 166,667 -- -- --
Stephen G. Franklin/(4)/ 12/31/97-12/31/98 $198,126/(5)/ $95,000 -- $3,163
President and Chief Fiscal 1998 186,261 50,000 -- 3,954
Academic Officer Fiscal 1997/(3)/ 27,500 -- 140,000

Donald J. Blankers 12/31/97-12/31/98 $137,032 /(7)/ -- 3,000 $2,398
Chief Financial Officer/(6)/ Fiscal 1998 135,844 -- 3,000 2,853
Fiscal 1997/(3)/ 93,958 -- 14,000
Barbara S. Butterfield 12/31/97-12/31/98 $135,007 /(8)/ $25,000 14,000 --
Senior Vice President, Fiscal 1998 124,439 -- 14,000 --
Human Resources Fiscal 1997 -- -- 16,000 --
Eric R. Fliegel/(9)/ 12/31/97-12/31/98 $164,983/(10)/ $25,000 -- $1,937
Chief Information Officer Fiscal 1998 123,773 -- -- 473
Fiscal 1997 -- -- 14,000
</TABLE>
- ----------------

(1) Represents matching contribution paid by the Company under the Company's
profit sharing plan.
(2) Includes $104,167 of salary which is also included in the salary amount
listed for fiscal 1998.
(3) Represents only a portion of fiscal 1997.
(4) Dr. Franklin resigned as an officer and director of the Company effective
April 19, 1999.
(5) Includes $80,636 of salary which is also included in the salary amount
listed for fiscal 1998.
(6) Mr. Blankers ceased to be an executive officer of the Company in September
1998.
(7) Includes $57,094 of salary which is also included in the salary amount
listed for fiscal 1998.
(8) Includes $56,250 of salary which is also included in the salary amount
listed for fiscal 1998.
(9) Mr. Fliegel resigned all positions with the Company on November 30, 1998.
(10) Includes $56,250 of salary which is also included in the salary amount
listed for fiscal 1998.

-6-
<PAGE>

Employment and Noncompetition Agreement

On March 21, 1997, the Company and Stephen G. Franklin, Sr. entered into an
Employment Agreement. Dr. Franklin served as the President and Chief Academic
Officer of the Company and as a member of the Company's Board of Directors. Dr.
Franklin resigned these positions with the Company effective April 19, 1999.
The Employment Agreement had a five year term and provided for a base annual
salary of $165,000. Under the terms of the Employment Agreement, Dr. Franklin's
salary was required to be increased annually by an amount not less than the
percentage increase in the consumer price index. Dr. Franklin was further
entitled to receive certain performance bonuses based on the performance of
AIU's business schools, the Company's financial performance and Dr. Franklin's
achievement of certain business objectives. The Employment Agreement also
provided that Dr. Franklin be granted an option to purchase 105,000 shares of
the Company's Class A Common Stock to vest in equal increments over a period of
five years. In addition, the Employment Agreement provided that Dr. Franklin
was to be granted options to purchase up to an additional 35,000 shares of Class
A Common Stock, the vesting of which was to be contingent on the Company's
obtaining certain financial goals. By virtue of these provisions, Dr. Franklin
was granted an aggregate of 140,000 options, of which 77,000 had vested and
63,000 were forfeited upon his resignation. By virtue of the termination of the
Employment Agreement, Dr. Franklin is entitled to continue to receive his base
salary for twelve months. The Employment Agreement contained additional
provisions restricting Dr. Franklin's ability to compete with the Company and
solicit its employees. The Employment Agreement further obligated Dr. Franklin
to protect the confidentiality of the Company's proprietary information
following termination of his employment.

Options

No options were granted during the Transition Period to the Named Executive
Officers.

The following table presents information regarding stock options exercised
by the Named Executive Officers during the Transition Period and the value of
options outstanding at December 31, 1998.

<TABLE>
<CAPTION>
Aggregated Option Exercises in Transition Period and
Fiscal Year-End Option Values

Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
Shares Acquired at Fiscal Year-End at Fiscal Year-End
Name on Exercise Value Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ---- --------------- -------------- ------------------------------ -------------------------
<S> <C> <C> <C> <C>
Steve Bostic -- -- 0/0 $ 0/$0
Stephen G. Franklin/(1)/ 4,000 $20,539 66,000/70,000 $328,588/$348,502
Donald J. Blankers/(2)/ -- -- 2,800/14,200 $ 13,940/$70,696
Barbara S. Butterfield 1,800 $12,786 1,000/27,200 $ 4,979/$135,418
Eric R. Fliegel/(3)/ -- -- 8,400/0 $ 41,820/$0
</TABLE>
___________

(1) Dr. Franklin resigned as an officer and director of the Company effective
April 19, 1999.
(2) Mr. Blankers ceased to be an executive officer of the Company in September
1998.
(3) Mr. Fliegel resigned all positions with the Company effective November 30,
1998.

-7-
<PAGE>

Compensation of Directors

Non-management directors of the Company receive an annual retainer of
$5,000 and are entitled to receive awards under the Company's 1997 Incentive
Plan. Directors are not separately compensated for serving on the Committees of
the Board of Directors and no director who is an officer or employee of the
Company receives compensation for services rendered as a director.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee currently consists of Gaylen D. Kemp, J. Robert
Fitzgerald and Gerald Tellefsen. During the Transition Period, none of such
individuals engaged in transactions with the Company requiring disclosure.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Steve Bostic, the Chairman and Chief Executive Officer of the Company, and
Stephen G. Franklin, Sr., the former President and Chief Academic Officer and a
former director of the Company, were both members of, and served as independent
sales agents for, EduTrek Partners, LLC ("EduTrek Partners") during the
Transition Period. The Company has engaged EduTrek Partners to assist it in
marketing and selling corporate education programs. The Company has agreed to
pay EduTrek Partners or the independent sales agents employed by EduTrek
Partners, a commission ranging from 10% to 30% of the net revenues derived from
corporate education program accounts secured by EduTrek Partners for the
independent sales agents on behalf of the Company. During the Transition
Period, Mr. Bostic earned an aggregate of $23,100 in commissions (which have
net yet been paid) from the Company for such sales.

It is the policy of the Company not to enter into any transaction with a
related party, without the approval of a majority of disinterested directors.

-8-
<PAGE>

Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this proxy statement, in whole or in part, the following Report of the
Compensation Committee of the Board of Directors on Executive Compensation and
the Shareholder Return Performance Graph shall not be incorporated by reference
into any such filings.

REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION

In accordance with the proxy statement rules of the Securities and Exchange
Commission, the Compensation Committee of the Board of Directors of the Company
offers the following report regarding compensation policies for executive
officers and the Chief Executive Officer of the Company, and information with
respect to compensation paid to such persons during the last fiscal year.

The Compensation Committee of the Board of Directors is composed of three
non-employee directors of the Company. It is the Committee's responsibility to
make decisions or develop recommendations for the Board of Directors regarding
the salaries, bonuses and other compensation of the chief executive and other
executive officers of the Company and to administer, along with the Board of
Directors, the Company's incentive plan through which executives may receive
long-term incentive compensation.

The Compensation Committee utilizes the following compensation principles
to link the individual compensation elements into an integrated compensation
strategy: a compensation structure that has a direct relationship between pay
levels and corporate performance and returns to shareholders with the goal of
aligning the executives with the interests and concerns of shareholders;
competitive pay levels payable to the Company's executives, evaluated within
industry and peer companies, that create proper incentives to enhance
shareholder value; reward superior competency and performance, consistent with
the returns available to shareholders, particularly when compared to the returns
received by the shareholders of the Company's principal competitors.

The Company's executive compensation program generally consists of base
salary and annual incentive compensation and long-term equity incentives in the
form of stock options. Base salaries for executive officers are reviewed
annually. To align executive officers' interests more closely with the
interests of the shareholders of the Company, the Company's long-term
compensation program emphasizes the grant of stock options exercisable for
shares of the Company's Class A Common Stock. The amount of such awards, if
any, is determined one or more times each year by the Compensation Committee
and/or the Board of Directors. In making such awards, the Board or Committee
may take into account various factors in determining the size of stock option
grants, including the need to attract and retain individuals who will provide
valuable service to the Company.

The Compensation Committee believes that providing executives with the
opportunities to acquire significant stakes in the growth and prosperity of the
Company (through grants of stock options), while maintaining other elements of
the Company's compensation program at conservative levels, will enable the
Company to attract and retain executives with the outstanding management
abilities and entrepreneurial spirit which are essential to the Company's
ongoing success. Furthermore, the Compensation Committee believes that this
approach to compensation motivates executives to perform to their full
potential.

At least annually, the Compensation Committee reviews salary
recommendations for the Company's executives and then approves such
recommendations, with any modifications it has deemed appropriate. The annual
salary recommendations are based on evaluations of the individual executive's
past and expected

-9-
<PAGE>

future performance. Similarly, the Compensation Committee fixes the base salary
of the Chief Executive Officer based on a review of competitive compensation
data, the Chief Executive Officer's overall compensation package, and the
Compensation Committee's assessment of his past performance and its expectation
as to his future performance in leading the Company. The Compensation Committee
believes that, generally, such salaries have been commensurate with those paid
to executives with comparable qualifications, experience and responsibilities at
other similarly situated companies.

Bonuses paid during the last completed fiscal year were made pursuant to
employment agreements existing prior to that time. Future bonuses will be
determined based upon an evaluation of such factors as individual performance,
increases in the Company's revenue, net income, net income per share and market
penetration, as well as improvements in operating efficiencies. The
Compensation Committee applies similar criteria in setting the amount of annual
bonus, if any, earned by the Chief Executive Officer.

Stock options represent a substantial portion of compensation for the
Company's executive officers, other than the Chief Executive Officer.
Outstanding stock options have been granted at the prevailing market price on
the date of grant. The outstanding options of certain employees, who are not
executive officers, were repriced during fiscal 1998 to the prevailing market
price on the date of repricing. Generally, grants vest in equal amounts over a
period of five years (although certain grants may vest either immediately or
over a shorter period) and executives generally must be employed by the Company
at the time of vesting in order to exercise the options. Grants of stock
options generally are based upon the level of the executive's position with the
Company and an evaluation of the executive's past and expected future
performance. The Compensation Committee believes that dependence on stock
options for a significant portion of executives' compensation more closely
aligns such executives' interests with those of the Company's shareholders,
since the ultimate value of such compensation is linked directly to stock price.

For the last completed fiscal year, the compensation of Steve Bostic, the
Company's President and Chief Executive Officer, was set by the Compensation
Committee at $250,000, plus a bonus to be determined in the discretion of the
Board of Directors. The Board of Directors elected not to grant a bonus to Mr.
Bostic.

In approving the compensation paid to Mr. Bostic, the Compensation
Committee considered the following factors:

(i) the reasonableness of Mr. Bostic's salary in amount relative to the
chief executive officers of similarly placed public companies; and
(ii) the fact that Mr. Bostic was already amply incentivised to have the
Company perform well by virtue of his ownership of a substantial
percentage of the Common Stock of the Company.

With respect to the other executive officers of the Company, the
Compensation Committee considered the compensation levels to be commensurate
with those of similarly positioned executives in similar companies.

The Compensation Committee evaluates the Company's compensation policies
and procedures with respect to executives. Although the Compensation Committee
believes that current compensation policies have been successful in aligning the
financial interests of executive officers with those of the Company's
shareholders and with Company performance, it continues to examine what
modifications, if any, should be implemented to further link executive
compensation with both individual and Company performance.

Gaylen D. Kemp, Chair
J. Robert Fitzgerald
Gerald Tellefsen

-10-
<PAGE>

SHAREHOLDER RETURN PERFORMANCE GRAPH

Set forth below is a line graph comparing the percentage change in the
cumulative total shareholder return on the Company's Class A Common Stock
against the cumulative total return of the Nasdaq Market Index and an index of
peer companies selected by the Company on the basis of having similar business
formats as the Company (the "Education Peer Group") during the approximately 15-
month period from September 23, 1997 (the effective date of the Company's
initial public offering) through December 31, 1998. The Education Peer Group
is composed of the following companies: Apollo Group, Inc., Computer Learning
Systems, Inc., DeVry, Inc., Education Management Corp., Quest Educational Corp.,
ITT Educational Services, Inc., Strayer Education, Inc. and Sylvan Learning
Systems, Inc. In developing the Education Peer Group index, the returns of all
the companies in such index were weighted according to stock market
capitalization at the beginning of the period. The graph assumes that the value
of the investment in the Company's Class A Common Stock and each index was $100
on September 23, 1997 and that all dividends paid by the companies in each index
were reinvested.

[GRAPH APPEARS HERE]

<TABLE>
<CAPTION>
September 23, November 30, February 28, May 31, December 31,
1997 1997 1998 1998 1998
------------- ------------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C>
EduTrek International, Inc..... $100.00 $166.96 $157.14 $191.07 $ 41.07
Nasdaq Market Index............ $100.00 $ 95.38 $105.80 $105.41 $131.80
Education Peer Group........... $100.00 $104.59 $118.72 $122.64 $140.35
</TABLE>

-11-
<PAGE>

AGENDA ITEM TWO
PROPOSAL TO ADOPT
EMPLOYEE STOCK PURCHASE PLAN

General

On April 13, 1999, the Board of Directors of the Company adopted the
EduTrek International, Inc. 1999 Employee Stock Purchase Plan (the "Plan") for
the benefit of the employees of the Company. Reference is hereby made to the
Plan which is attached to this Proxy Statement as Appendix A and incorporated
herein by reference. The description contained herein is subject to and
qualified by the terms of the Plan contained in Appendix A.

The Board of Directors believes it is in the best interest of the Company
and its employees to implement the Plan and recommends shareholders vote FOR
approval of the Plan. The affirmative vote of a majority of the shares of
Common Stock represented in person or by proxy at the annual meeting is
necessary for approval of the Plan.

The Company estimates that there are approximately 350 persons eligible to
participate in the Plan.

Description of the Plan

The Plan provides for the sale of not more than 500,000 shares of Common
Stock to Eligible Employees of the Company (see "Certain Important Definitions")
pursuant to one or more offerings under the Plan.

The purpose of the Plan is to encourage and enable Eligible Employees of
the Company and any of its subsidiaries (within the meaning of Code Section
424(f)) to acquire a proprietary interest in the Company through the ownership
of Common Stock. The Company believes that employees who participate in the
Plan will have a closer identification with the Company by virtue of their
ability as shareholders to participate in the Company's growth and earnings. It
is the intention of the Company that the Plan qualify as an "employee stock
purchase plan" under Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"). No employee is required to participate in the Plan.

From time to time the Company will commence offerings under the Plan and
Eligible Employees may become participants under the Plan by electing to
participate in the Plan (as provided thereunder) during subscription periods
designated by the Board of Directors, which administers the Plan. Eligible
Employees may elect to purchase shares through payroll deductions.

The Plan is not subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").

Effective Date. The Effective Date of the Plan is April 13, 1999, the date
--------------
the Plan was adopted by the Board of Directors. The Plan must be approved by
the Company's shareholders within 12 months of the date of adoption by the Board
of Directors.

Certain Important Definitions. Following are certain key definitions:
-----------------------------

-12-
<PAGE>

"BASE PAY" means, with respect to any Eligible Employee, regular base or
straight time earnings, not including review cycle bonuses and overtime
payments, payments for incentive compensation, and other special payments except
to the extent that any such item is specifically included by the Board of
Directors (subject to compliance with the requirements of the Plan).

"ELIGIBLE EMPLOYEE" means a person regularly employed by the Company or a
subsidiary who has been employed by the Company or a subsidiary for at least one
year on the effective date of any offering of stock pursuant to the Plan;
provided, however, that employees whose customary employment is less than 20
hours per week or is for not more than five months in any calendar year shall
not be considered Eligible Employees.

"EXERCISE DATE" means the termination date of the applicable Offer Period.

"GRANT DATE" means the commencement date of the applicable Offer Period.

"OFFER PERIOD" means, with respect to any offering of stock under the Plan,
the six-month period specified by the Board during which such offering is
effective and outstanding.

"OPTIONS" shall mean the right or rights granted to Eligible Employees to
purchase Common Stock under an offering made under the Plan and pursuant to such
employees' elections to participate in the offering.

Shares Reserved for the Plan. The shares of Common Stock to be sold to
----------------------------
Eligible Employees under the Plan may at the election of the Company be either
treasury shares or shares originally issued for such purpose. The maximum
number of shares of Common Stock to be reserved and made available for sale
under the Plan shall be 500,000. The shares may be issued and sold pursuant to
one or more offerings under the Plan.

In the event of reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, offerings of rights, or
other change in the structure of the common shares of the Company, the Board may
make such adjustment, if any, as it may deem appropriate in the number, kind and
the price of shares available for purchase under the Plan, and in the number of
shares which an employee is entitled to purchase, in each case, in order to
properly reflect the change in the capitalization of the Company.

Administration of the Plan. The Plan shall be administered by the Board of
--------------------------
Directors of the Company, although the Board may delegate its authority to a
committee of the Board. The Board is vested with full authority to make,
administer and interpret such rules and regulations regarding the Plan as it
deems advisable to administer the Plan in accordance with the requirements of
Code Section 423. Any determination, decision or action of the Board in
connection with the construction, interpretation, administration or application
of the Plan shall be final, conclusive and binding upon all participants and any
and all persons claiming under or through any participant.

Offerings. There will be eleven separate consecutive six-month offerings
---------
pursuant to the Plan. The first offering will commence on June 1, 1999.
Thereafter, offerings shall commence on each subsequent June 1 and January 1,
and the final offering will commence on June 1, 2004 and terminate on December
31, 2004. Participation in any offering under the Plan shall neither limit nor
require participation in any other offering. No more than one offering will be
in effect at any time.

-13-
<PAGE>

Participation in the Plan. Options to purchase the Company's stock under
-------------------------
the Plan shall be granted only to Eligible Employees. Options to purchase
Common Stock shall be granted to all Eligible Employees of the Company who have
elected to participate in an offering as provided under the Plan. With respect
to any offering under the Plan, each participating Eligible Employee shall have
the same rights and privileges. The use of Base Pay (which varies among Eligible
Employees) as the basis for determining the number of shares for which an
Eligible Employee may be granted an option shall not be construed to create a
difference in such rights and privileges so long as each Eligible Employee has
the right to elect the same percentage of his Base Pay as a payroll deduction.

An Eligible Employee may become a participant by completing the form
provided by the Company for such purpose in connection with the applicable
offering and filing it with the plan administrator (or such other person as may
be designated by the Company on such form) prior to the commencement date of the
applicable offering and in accordance with instructions provided by the Company.

Purchase Price. The Purchase Price for shares of Common Stock purchased
--------------
pursuant to the Plan will be the lesser of (a) an amount equal to 85% of the
fair market value of the Common Stock on the Grant Date, or if no shares were
traded on that day, on the last day prior thereto on which shares were traded,
or (b) an amount equal to 85% of the fair market value of the Common Stock on
the Exercise Date, or if no shares were traded on that day, on the last day
prior thereto on which shares were traded. On April 12, 1999, the closing price
for the Common Stock, as reported on the Nasdaq National Market, was $6.625 per
share.

Payroll Deductions. An Eligible Employee shall specify an amount to be
------------------
deducted from his pay which in the aggregate is not less than 2% and not more
than 10% of his Base Pay during the applicable Offer Period. Deductions will be
made from such employee's pay in equal (or as nearly equal as is practicable)
installments on each payday during the time such employee is a participant in
the offering. Payroll deductions will commence on the commencement date of the
offering and shall end on the termination date of the offering unless sooner
terminated by the employee as provided under the Plan.

Payroll deductions shall be credited to each participant's account under
the Plan. A participant may not make separate cash payments into his account
with respect to such offering.

Grants of Options. Subsequent to the receipt by the Company of the
-----------------
election forms from all Eligible Employees electing to participate in an
offering, each Eligible Employee participating in the offering shall be granted
an option to purchase a fixed maximum number of shares determined as follows:

1. There shall be determined the aggregate amount which would be withheld
from the Eligible Employee's pay during the applicable Offer Period (assuming
for this purpose that the rate of Base Pay in effect for such Eligible Employee
on the commencement date of the offering remains applicable throughout the
offering) in accordance with such employee's authorization for payroll
deduction;

2. There shall be determined the figure which represents 85% of the fair
market value of the Common Stock on the Grant Date; and

3. The figure determined in step 1 shall be divided by the figure
determined in step 2 and rounded off to the nearest whole number.

In the event that the total maximum number of shares which Eligible
Employees desire to purchase in any applicable offering exceeds the number of
shares offered by the Company in such offering, the Company shall reduce the
maximum number of shares for which Eligible Employees may be granted options

-14-
<PAGE>

by allotting the shares available on a pro rata basis and shall grant options to
purchase only for the reduced number of shares. In that event, payroll
deductions shall be reduced accordingly and the Company will give written notice
of such reduction to each employee affected.

Subject to the limitations described below, on the Grant Date each
participating Eligible Employee shall be granted an option to purchase the
number of shares as determined above. Notice that an option has been granted
shall be given to each participating employee and such notice shall show the
maximum number of shares subject to the option and the amount, if any, to be
deducted from the employee's pay for each payroll period during the offering.

Shares included in any offering in excess of the total number of shares for
which options are granted and all shares with respect to which options granted
are not exercised shall continue to be reserved for issuance under the Plan and
shall be available for inclusion in any subsequent offering.

Limitations on Number of Options which may be Granted and Shares which may
--------------------------------------------------------------------------
be Purchased. No Eligible Employee may purchase shares under any one offering
- ------------
for an aggregate purchase price in excess of 10% of his Base Pay.

No employee may be granted an option under the Plan if such employee,
immediately after an option is granted, owns common stock possessing 5% or more
of the total combined voting power or value of all classes of capital stock of
the Company or a subsidiary of the Company. The determination of stock
ownership shall be made in accordance with Section 424(d) of the Code, and stock
which an employee may purchase under all outstanding options (whether or not
issued under the Plan) shall be treated as stock owned by the employee.

In addition, no Eligible Employee shall be granted an option to purchase
shares under the Plan which permits the employee rights to purchase shares under
all "employee stock purchase plans" of the Company and its subsidiaries to
accrue at a rate which exceeds $25,000 in fair market value of such shares
(determined at the time such option is granted) for each calendar year in which
any such option is outstanding at any time.

Exercise of Option. Unless a participant who has authorized payroll
------------------
deductions with respect to an offering gives written notice to the Company as
described below, his option to purchase shares with payroll deductions will be
exercised automatically for him on the termination date of the offering for the
purchase of the number of whole shares subject to such participant's option
which the accumulated payroll deductions in his account at that time will
purchase at the applicable option price.

An employee may withdraw from an offering, in whole but not in part, at any
time prior to the last business day of such offering by delivering a withdrawal
notice to the Company, in which event the Company will refund the entire balance
of the employee's deductions as soon as practicable thereafter.

Delivery. Promptly following the end of each offering, the number of
--------
shares of common stock purchased by each participant shall be deposited into an
account established in the participant's name at a stock brokerage or other
financial services firm designated by the Company (the "ESPP Broker"). The
participant may direct, by written notice to the Company at the time of
enrollment of the Plan, that the ESPP Broker account shall established of the
name of the participant and one other person or entity designated by the
participant, as joint tenants with right of survivorship, tenants in common, or
community property, to the extent and in the manner permitted by applicable law.

-15-
<PAGE>

Termination of Employment. Upon termination of a participant's employment
-------------------------
for any reason, including death or retirement, the balance in the account of a
participating employee shall be paid to the employee or the employee's estate.

Interest. No interest will be paid on any money in the accounts of
--------
participating employees.

Rights as a Shareholder. An Eligible Employee shall have no rights as a
-----------------------
shareholder with respect to shares of Common Stock subject to an option under
the Plan until the option has been exercised in accordance with the terms of the
Plan.

Options Not Transferable. No employee shall be permitted to sell, assign,
------------------------
transfer, pledge or otherwise dispose of or encumber either the payroll
deductions credited to his account or any rights with regard to the exercise of
an option or to receive shares under the Plan other than by will or the laws of
descent and distribution, and such right and interest shall not be liable for,
or subject to, the debts, contracts or liabilities of the employee. If any such
action is taken by the employee or any claim is asserted by any other party in
respect of such right in interest whether by garnishment, levy attachment or
otherwise, such action or claim will be treated as an election to withdraw funds
in accordance with the Plan. Any option granted under the Plan shall, during
the lifetime of the Eligible Employee to whom the option was granted, be
exercisable only by that Eligible Employee.

Governmental Approvals or Consents. The Board of Directors of the Company
----------------------------------
may make such changes in the Plan and include such terms in any offering under
the Plan as may be necessary or desirable, in the opinion of counsel, so that
the Plan will comply with the rules and regulations of any governmental
authority and so that Eligible Employees participating in the Plan will be
eligible for tax benefits under the Code or the laws of any state.

Amendment or Discontinuance of the Plan. The Board shall have the right to
---------------------------------------
amend, modify or terminate the Plan at any time without notice, provided that no
employee's existing rights under any offering already made under the Plan may be
adversely affected thereby, and provided further that no such amendment of the
Plan shall, except as provided in the Plan, increase above 500,000 shares the
total number of shares to be offered or change the designation of corporations
whose employees may be offered options under the Plan unless shareholder
approval is obtained therefor.

Limitations on Resale of Common Stock. The Plan contains no provisions
-------------------------------------
restricting the resale of Common Stock purchased pursuant to exercise of options
granted under the Plan. However, unfavorable tax consequences may result if a
participant resells shares acquired upon the exercise of an option during the
holding periods prescribed by federal income tax laws. See "Federal Income Tax
Consequences."

Affiliates of the Company who purchase shares under the Plan will be
restricted in the resale of such securities to transactions which satisfy all of
the conditions of Rule 144 under the Securities Act of 1933, as amended (except
that no holding period specified in that rule will be applicable to shares
purchased under the Plan).

Federal Income Tax Consequences

All Options to be granted under the Plan are intended to constitute Options
granted pursuant to an "employee stock purchase plan" under Section 423 of the
Code.

-16-
<PAGE>

Under the provisions of Section 423 of the Code, neither the holder of an
option granted pursuant to the plan (an "Option") nor the Company will recognize
income, gain, deduction or loss upon the grant of such Option or the purchase of
Common Stock pursuant to the exercise of such Option. An optionee generally
will be taxed only when the Common Stock acquired upon exercise of his Option is
sold or otherwise disposed of in a taxable transaction or the optionee dies
while still owning such Common Stock.

If the optionee sells or disposes of the shares of Common Stock prior to
two years from the date the Option was granted and one year from the date of the
transfer of such shares to him pursuant to the exercise of his Option, the
optionee will recognize ordinary income in the year of such sale or disposition
in an amount equal to the difference between the Option exercise price and the
fair market value of such shares on the Exercise Date (whether or not that
amount of ordinary income is more than the total amount of gain which would
otherwise be recognized on such sale or disposition). The optionee's tax basis
in the shares will be increased by the amount of ordinary income recognized on
such sale or disposition and the Company generally will be allowed a deduction
in that amount. The difference between the optionee's increased basis in such
shares and the amount realized by such optionee on the sale or disposition will
constitute a capital gain or loss (which will be long-term capital gain or loss
if such shares were held by such optionee for more than one year).

If the optionee holds the shares until after the expiration of two years
from the date the Option was granted and one year from the date of the transfer
of such shares to him pursuant to the exercise of his Option, in the event of a
sale or disposition of such stock, or in the event of the death of the optionee
while owning such Common Stock (whether or not such Common Stock has been held
until the expiration of such period), the optionee will recognize ordinary
income in the year of such death or such sale or disposition, whichever is
applicable, in an amount equal to the lesser of (i) the excess of the fair
market value of such Common Stock at the time of such death or such sale or
disposition over the Option exercise price for such stock, or (ii) the excess of
the fair market value of such stock at the time the Option was granted over such
Option exercise price. In the case of such a sale or disposition by the
optionee (but not in the case of the death of such optionee), the optionee's tax
basis in such Common Stock at the time of such sale or distribution will be
increased by the amount of ordinary income so realized by the optionee. Any
amount realized by such optionee on such sale or disposition in excess of such
increased basis will be treated as long-term capital gain.

All amounts withheld by the Company as payroll deductions authorized under
the Plan are taxable to the participant and deductible by the Company as
ordinary compensation and will have been subject to federal and state income tax
and social security tax withholding.

The Plan is not qualified under Section 401(a) of the Code.

The preceding discussion is based upon federal tax laws and regulations in
effect on the date of this Proxy Statement, which are subject to change.
Furthermore, the foregoing is only a general discussion of the federal income
tax consequences of the Plan and does not purport to be a complete description
of all federal income tax aspects of the Plan. Each employee should consult
with his or her personal tax advisor regarding federal, state and local tax
consequences of participating in the Plan.

The approval of the holders of a majority of the shares of Common Stock
present and voting at the Annual Meeting is necessary to approve the adoption of
the Employee Stock Purchase Plan. THE BOARD OF DIRECTORS RECOMMENDS THAT THE
COMPANY'S SHAREHOLDERS APPROVE THE ADOPTION OF THE EMPLOYEE STOCK PURCHASE PLAN.

-17-
<PAGE>

INDEPENDENT PUBLIC ACCOUNTANTS

Deloitte & Touche LLP served as the independent auditors of the Company for
the fiscal year ended December 31, 1998 and has been appointed by the Board of
Directors to continue in that capacity in fiscal 1999. A representative of
Deloitte & Touche LLP is expected to be present at the Annual Meeting, will have
an opportunity to make a statement, if desired, and will be available to respond
to appropriate questions from shareholders.

ANNUAL REPORT TO SHAREHOLDERS AND REPORT ON FORM 10-K

Additional information concerning the Company, including financial
statements of the Company, is provided in the Company's 1998 Annual Report to
Shareholders that accompanies this proxy statement. The Company's Transition
Report on Form 10-K for the seven-month period ended December 31, 1998, as filed
with the Securities and Exchange Commission, is available to shareholders who
make a written request therefor to Mr. Douglas C. Chait, at the offices of the
Company, 6600 Peachtree-Dunwoody Road, Embassy Row 500, Atlanta, Georgia 30328.
Copies of exhibits filed with that report or referenced therein will be
furnished to shareholders of record upon request and payment of the Company's
expenses in furnishing such documents.

SHAREHOLDER PROPOSALS

Any proposal of shareholders intended to be presented at next year's Annual
Meeting must be received at the principal executive offices of the Company not
later than January 1, 2000, directed to the attention of the Corporate
Secretary, in order to be eligible for inclusion in the Company's proxy
statement and form of proxy relating to that meeting. Proxies solicited by the
Company for the 2000 Annual Meeting may confer discretionary authority to vote
on proposals submitted after March 17, 2000 without a description of them in the
proxy materials for that meeting. Any shareholder proposals must comply in all
respects with the rules and regulations of the Securities and Exchange
Commission and the Company's bylaws. A Copy of the Company's bylaws may be
obtained by writing to the Corporate Secretary.

OTHER MATTERS

Management does not know of any matters to be brought before the meeting
other than those referred to above. If any other matter properly comes before
the meeting, the persons designated as proxies will vote on each such matter in
accordance with their best judgment.

By Order of the Board of Directors

/s/ Douglas C. Chait

Douglas C. Chait
Secretary
Atlanta, Georgia
April 30, 1999

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APPENDIX "A"

EDUTREK INTERNATIONAL, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN

EduTrek International, Inc. (the "Company") does hereby establish its 1999
Employee Stock Purchase Plan as follows:

1. Purpose of the Plan. The purpose of this Plan is to provide eligible
employees who wish to become shareholders in the Company a convenient method of
doing so. It is believed that employee participation in the ownership of the
business will be to the mutual benefit of both the employees and the Company.
It is the intention of the Company to have the Plan qualify as an "employee
stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, the provisions of the Plan shall be
construed so as to extend and limit participation in a manner consistent with
the requirements of that Section of the Code.

2. Definitions.

2.1 "Base pay" means regular straight time earnings, plus review cycle
bonuses and overtime payments, payments for incentive compensation, and other
special payments except to the extent that any such item is specifically
excluded by the Board of Directors of the Company (the "Board"); provided that
any such specific inclusion by the Board shall be consistent with the provisions
of Section 8.3 hereof.

2.2 "Account" shall mean the funds accumulated with respect to an
individual employee as a result of deductions from his paycheck for the purpose
of purchasing stock under this Plan. The funds allocated to an employee's
account shall remain the property of the respective employee at all times but
may be commingled with the general funds of the Company.

2.3 "Subsidiary" shall mean a subsidiary corporation as defined in Code
Section 424(f).

3. Employees Eligible to Participate. Any employee of the Company or any
of its Subsidiaries who is in the employ of the Company or a Subsidiary on an
offering commencement date is eligible to participate in that offering, except
(a) employees whose customary employment is less than 20 hours per week, and (b)
employees whose customary employment is for not more than five months in any
calendar year.

4. Offerings. There will be eleven separate consecutive six-month
offerings pursuant to the Plan. The first offering shall commence on July 1,
1999 and shall end on December 31, 1998. Thereafter, offerings shall commence on
each subsequent January 1 and July 1, and the final offering under this Plan
shall commence on July 1, 2004 and terminate on December 31, 2004.
Participation in one offering under the Plan shall neither limit, nor require,
participation in any other offering.

5. Price. The purchase price per share shall be the lesser of (1) 85% of
the fair market value of the stock on the offering date; or (2) 85% of the fair
market value of the stock on the last business day of the offering or, in each
case, if no shares of the stock were traded on that day, on the last day prior
thereto on which shares of the stock were traded. Fair market value shall mean
the closing bid price as reported on the National Association of Securities
Dealers Automated Quotation System or, if the stock is traded on a stock
exchange, the closing price for the stock on the principal such exchange.

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6. Offering Date. The "offering date" as used in this Plan shall be the
commencement date of the offering, if such date is a regular business day, or
the first regular business day following such commencement date if such
commencement date is not a regular business day. A different date may be set by
resolution of the Board prior to the commencement of the applicable offering.

7. Number of Shares to be Offered. The maximum number of shares that will
be offered under the Plan is 500,000 shares. The shares to be sold to
participants under the Plan will be Common Stock Class A of the Company and may,
at the election of the Company, be either treasury shares or shares originally
issued for such purpose. If the total number of shares for which options are to
be granted on any date in accordance with Section 10 exceeds the number of
shares then available under the Plan (after deduction of all shares for which
options have been exercised or are then outstanding), the Company shall make a
pro rata allocation of the shares remaining available in as nearly a uniform
manner as shall be practicable and as it shall determine to be equitable. In
such event, the payroll deductions to be made pursuant to the authorizations
therefor shall be reduced accordingly and the Company shall give written notice
of such reduction to each employee affected thereby. All shares of stock for
which options granted hereunder expire unexercised shall continue to be reserved
for the Plan and shall be available for inclusion in any subsequent offering
under the Plan.

8. Participation.

8.1 Options to purchase the Company's stock under the Plan shall be
granted only to employees who are eligible to participate in the Plan in
accordance with Section 3 hereof. An eligible employee may become a participant
by completing an Enrollment Agreement for the applicable offering provided by
the Company and filing it with Human Resources prior to the commencement date of
the offering to which it relates.

8.2 Payroll deductions for a participant shall commence on the offering
date, and shall end on the termination date of such offering unless earlier
terminated by the employee as provided in Paragraph 14.

8.3 With respect to any offering hereunder, each participating
eligible employee shall have the same rights and privileges subject to the
limitations set forth in Section 21 hereof; provided, that the use of base pay
(which varies among eligible employees) as the basis for determining the number
of shares for which an eligible employee may be granted an option shall not be
construed to create a difference in such rights and privileges so long as each
eligible employee has the right to elect the same percentage of his base pay as
a payroll deduction under Section 9.1 hereof.

9. Payroll Deductions.

9.1 At the time a participant files his authorization for a payroll
deduction, he shall elect to have deductions made from his pay on each payday
during the time he is a participant in the applicable offering at the rate of
2%, 4%, 6%, 8%, or 10% of his base pay during the applicable offering period.

9.2 All payroll deductions made for a participant shall be credited to
his account under the Plan. A participant may not make any separate cash
payment into such account nor may payment for shares be made other than by
payroll deduction.

9.3 A participant may discontinue his participation in the Plan as
provided in Section 14, but no other change can be made during an offering and,
specifically, a participant may not alter the rate of his payroll deductions for
that offering.

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10. Granting of Option. Subject to the limitations set forth below in this
Section 10 or in Section 21, on the applicable offering date each eligible
employee participating in an offering shall be granted an option to purchase a
fixed maximum number of shares determined by the following procedure:

Step 1 - Determine (a) the aggregate amount which would be withheld from the
eligible employee's pay during the applicable offering (assuming
for this purpose that the rate of base pay in effect for such
eligible employee on such offering date remains applicable
throughout the offering) in accordance with such eligible
employee's authorization for a payroll deduction;

Step 2 - Determine the figure which represents 85% of the fair market value
of a share of the Company's stock on the offering date as provided
in Section 5 hereof;

Step 3 - Divide the figure determined in Step 1 by the figure determined
in Step 2 and round off the quotient to the nearest whole number.
Subject to the limitations set forth herein, this final figure
shall be the fixed maximum number of shares for which the eligible
employee shall be granted an option to purchase under the
applicable offering.

11. Exercise of Option. Each employee who continues to be a participant in
an offering on the last business day of that offering shall be deemed to have
exercised his option on such date and shall be deemed to have purchased from the
Company such number of full shares of common stock reserved for the purpose of
the Plan as his accumulated payroll deductions on such date will pay for at the
option price. No option granted hereunder may be exercised after the end of the
offering period with respect to which such option was granted.

12. Employee's Rights as a Shareholder. No participating employee shall
have any right as a shareholder with respect to any shares until the shares have
been purchased in accordance with Section 11 above and the stock has been issued
by the Company.

13. Evidence of Stock Ownership.

13.1 Promptly following the end of each offering, the number of shares
of common stock purchased by each participant shall be deposited into an account
established in the participant's name at a stock brokerage or other financial
services firm designated by the Company (the "ESPP Broker").

13.2 The participant may direct, by written notice to the Company at
the time of his enrollment in the Plan, that his ESPP Broker account be
established in the names of the participant and one other person designated by
the participant, as joint tenants with right of survivorship, tenants in common,
or community property, to the extent and in the manner permitted by applicable
law.

13.3 A participant shall be free to undertake a disposition (as that
term is defined in Section 424(c) of the Code) of the shares in his account at
any time, whether by sale, exchange, gift, or other transfer of legal title, but
in the absence of such a disposition of the shares, the shares must remain in
the participant's account at the ESPP Broker until the holding period set forth
in Section 423(a) of the Code has been satisfied. With respect to shares for
which the Section 423(a) holding period has been satisfied, the participant may
move those shares to another brokerage account of participant's choosing or
request that a stock certificate be issued and delivered to him.

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13.4 A participant who is not subject to payment of U.S. income taxes
may move his shares to another brokerage account of his choosing or request that
a stock certificate be issued and delivered to him at any time, without regard
to the satisfaction of the Section 423(a) holding period.

14. Withdrawal.

14.1 An employee may withdraw from an offering, in whole but not in
part, at any time prior to the last business day of such offering by delivering
a Withdrawal Notice to the Company, in which event the Company will refund the
entire balance of his deductions as soon as practicable thereafter.

14.2 To re-enter the Plan, an employee who has previously withdrawn
must file a new Enrollment Agreement in accordance with Section 8.1. The
employee's re-entry into the Plan will not become effective before the beginning
of the next offering following his withdrawal, and if the withdrawing employee
is an officer of the Company within the meaning of Section 16 of the Securities
Exchange Act of 1934, the employee may not re-enter the Plan before the
beginning of the second offering following his withdrawal.

15. Refund of Account Balance. At the termination of each offering, the
balance, if any, of each employee's account remaining after the payment of the
exercise price for options exercised as provided herein shall be refunded to
him.

16. Interest. No interest will be paid or allowed on any money in the
accounts of participating employees.

17. Rights Not Transferable. No employee shall be permitted to sell,
assign, transfer, pledge, or otherwise dispose of or encumber either the payroll
deductions credited to his account or any rights with regard to the exercise of
an option or to receive shares under the Plan other than by will or the laws of
descent and distribution, and such right and interest shall not be liable for,
or subject to, the debts, contracts, or liabilities of the employee. If any
such action is taken by the employee, or any claim is asserted by any other
party in respect of such right and interest whether by garnishment, levy,
attachment or otherwise, such action or claim will be treated as an election to
withdraw funds in accordance with Section 14. Any option granted hereunder
shall, during the lifetime of the eligible employee to whom such option was
granted, be exercisable only by such eligible employee.

18. Termination of Employment. Upon termination of employment for any
reason whatsoever, including but not limited to death or retirement, the balance
in the account of a participating employee shall be paid to the employee or his
estate. Determinations with respect to the employment status of any employee
for purposes of the Plan shall be made in accordance with the provisions of
Treas. Reg. (S)1.421-7(h)

19. Amendment or Discontinuance of the Plan. The Board shall have the
right to amend, modify, or terminate the Plan at any time without notice,
provided that no employee's existing rights under any offering already made
under Section 4 hereof may be adversely affected thereby, and provided further
that no such amendment of the Plan shall, except as provided in Section 20,
increase above 500,000 shares the total number of shares to be offered or change
the designation of corporations whose employees may be offered options under the
Plan unless shareholder approval is obtained therefor within 12 months of such
amendment.

20. Changes in Capitalization. In the event of reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, offerings of rights, or any other change in the structure of the
common shares of the Company, the Board may make such adjustment, if any, as it
may deem appropriate

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in the number, kind, and the price of shares available for purchase under the
Plan, and in the number of shares which an employee is entitled to purchase, in
each case, in order to properly reflect the change in the capitalization of the
Company.

21. Share Ownership. Notwithstanding anything herein to the contrary, no
employee shall be granted an option to purchase any shares under the Plan if
such employee, immediately after the grant of such option, owns shares
(including all shares which may be purchased under outstanding options, whether
or not issued under the Plan) possessing 5% or more of the total combined voting
power or value of all classes of shares of the Company or of its parent or a
Subsidiary. For the foregoing purposes the rules of Code Section 424(d) shall
apply in determining share ownership. In addition, no employee shall be granted
an option to purchase shares under the Plan which permits his rights to purchase
shares under all "employee stock purchase plans" of the Company and its
Subsidiary corporations to accrue at a rate which exceeds $25,000 of the fair
market value of such shares (determined at the time such option is granted) for
each calendar year in which any such option is outstanding at any time.

22. Administration. The Plan shall be administered by the Board. The Board
may delegate any or all of its authority hereunder to such committee of the
Board or officer of the Company as it may designate. The administrator shall be
vested with full authority to make, administer, and interpret such rules and
regulations as it deems necessary to administer the Plan in accordance with the
requirements of Code Section 423 and Section 8.3 hereof, and any determination,
decision, or action of the administrator in connection with the construction,
interpretation, administration, or application of the Plan shall be final,
conclusive, and binding upon all participants and any and all persons claiming
under or through any participant.

23. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received by Human Resources of the Company or when received in the
form specified by the Company at the location, or by the person, designated by
the Company for the receipt thereof.

24. Termination of the Plan. This Plan shall terminate at the earliest of
the following:

24.1 December 31, 2004;

24.2 The date of the filing of a Statement of Intent to Dissolve by the
Company or the effective date of a merger or consolidation wherein the Company
is not to be the surviving corporation, which merger or consolidation is not
between or among corporations related to the Company. Prior to the occurrence
of either of such events, on such date as the Company may determine, the Company
may permit a participating employee to exercise the option to purchase shares
for as many full shares as the balance of his account will allow at the price
set forth in accordance with Section 5. If the employee elects to purchase
shares, the remaining balance of his account will be refunded to him after such
purchase.

24.3 The date the Board acts to terminate the Plan in accordance with
Section 19 above.

24.4 The date when all shares reserved under the Plan have been
purchased.

24.5 The date which is twelve months after the date of adoption of the
Plan by the Board if the shareholders of the Company have not before then
approved the Plan.

25. Limitations on Sale of Stock Purchased Under the Plan. The Plan is
intended to provide common stock for investment and not for resale. The Company
does not, however, intend to restrict or influence any

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employee in the conduct of his own affairs. An employee, therefore, may sell
stock purchased under the Plan at any time he chooses, subject to compliance
with any applicable Federal or state securities laws. THE EMPLOYEE ASSUMES THE
RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK.

26. Governmental Regulation. The Company's obligation to sell and deliver
shares of the Company's common stock under this Plan is subject to the approval
of any governmental authority required in connection with the authorization,
issuance, or sale of such shares.

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EDUTREK INTERNATIONAL, INC.
6600 Peachtree-Dunwoody Road
Embassy Row 500
Atlanta, Georgia 30328
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE 1999
ANNUAL MEETING OF SHAREHOLDERS.
The undersigned hereby appoints Steve Bostic and Daniel D. Moore, or either
of them, with power of substitution to each, the proxies of the undersigned to
vote the Common Stock of the undersigned at the Annual Meeting of Shareholders
of EDUTREK INTERNATIONAL, INC. to be held on Thursday, June 10, 1999 at 10:00
a.m. at the Company's offices, 6600 Peachtree-Dunwoody Road, Embassy Row 500,
Atlanta, Georgia, and any adjournment or postponement thereof:
1. To elect eight (8) directors until the next annual meeting of shareholders
and until their successors are elected and have qualified.
<TABLE>
<S> <C>
[_] FOR all nominees listed below (except as [_] WITHOLD AUTHORITY to vote
marked to the contrary below) for all nominees
listed below
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STEVE BOSTIC, PAUL D. BECKHAM, FRED C. DAVISON, J. ROBERT FITZGERALD, RONALD
P. HOGAN, A. REZA JAFARI, GAYLEN D. KEMP, GERALD TELLEFSEN

INSTRUCTION: To withhold authority to vote for any individual nominee write
the nominee's name in the space provided below.

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2. To approve the adoption of the EduTrek International, Inc. Employee Stock
Purchase Plan.
[_] FOR [_] AGAINST [_] ABSTAIN

3. To vote in accordance with their best judgment with respect to any other
matters that may properly come before the meeting.
(continued and to be signed on reverse)

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THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" EACH OF THE ABOVE PROPOSALS AND
UNLESS INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN THE SPACE PROVIDED, THIS
PROXY WILL BE SO VOTED.

Please date and sign this Proxy
exactly as name(s) appears on the
mailing label.

------------------------------------

Printed Name(s): ___________________

NOTE: When signing as an attorney,
trustee, executor, administrator or
guardian, please give your title as
such. If a corporation or
partnership, give full name by
authorized officer. In the case of
joint tenants, each joint owner
must sign.

Dated: _____________________________