<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 Section240.14a-11(c) or
Section240.14a-12
CALIBER LEARNING NETWORK, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
YOUR VOTE IS IMPORTANT. Please execute and return the enclosed proxy card
promptly, whether or not you plan to attend the Caliber Learning Network, Inc.
Annual Meeting.
CALIBER LEARNING NETWORK, INC.
LOGO
CALIBER LEARNING NETWORK, INC.
3600 Clipper Mill Road, Suite 300
Baltimore, Maryland 21211
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 20, 1999
To the Stockholders of Caliber Learning Network, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of Caliber
Learning Network, Inc. ("Caliber" or the "Company") will be held at the Harbor
Inn Pier 5, 711 Eastern Avenue, Baltimore, Maryland 21202, on May 20, 1999 at
1:00 p.m. for the following purposes:
I. To elect two directors of the Company.
II. To approve and ratify the adoption of the Company's Employee Stock
Purchase Plan.
III. To ratify the selection of Ernst & Young LLP as the independent
auditors of the Company for the fiscal year ending December 31, 1999.
IV. To transact such other business as may properly come before the meeting.
Accompanying this notice is a Proxy Card and Proxy Statement and a copy of
Caliber's Annual Report for the year ended December 31, 1998. WHETHER OR NOT YOU
EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE SIGN AND DATE THE PROXY CARD
AND RETURN IT IN THE ENCLOSED ENVELOPE PROVIDED FOR THAT PURPOSE PRIOR TO THE
DATE OF THE ANNUAL MEETING. The Proxy may be revoked at any time prior to the
time that it is voted at the Annual Meeting. April 9, 1999, was fixed by the
Board of Directors as the record date for determination of stockholders entitled
to notice of and to vote at the Annual Meeting or any adjournment thereof. Only
stockholders of record at the close of business on April 9, 1999, will be
entitled to vote at the Annual Meeting.
You are cordially invited to attend the Annual Meeting, and you may vote in
person even though you have returned your Proxy Card.
BY ORDER OF THE BOARD OF DIRECTORS
Douglas L. Becker
Secretary
Baltimore, Maryland
April 22, 1999
<PAGE>
CALIBER LEARNING NETWORK, INC.
3600 CLIPPER MILL ROAD, SUITE 300
BALTIMORE, MARYLAND 21211
(410) 843-1000
PROXY STATEMENT
INTRODUCTION
This Proxy Statement and the accompanying proxy are furnished to
stockholders of Caliber Learning Network, Inc. ("Caliber" or the "Company") in
connection with the solicitation of proxies by Caliber's Board of Directors to
be used at the Annual Meeting of Stockholders described in the accompanying
notice and at any adjournments thereof (the "Annual Meeting"). The purpose of
the Annual Meeting is: (1) to elect two directors of the Company; (2) to approve
and ratify the adoption of the Company's Employee Stock Purchase Plan; (3) to
ratify the selection of Ernst & Young LLP as independent auditors of the Company
for the fiscal year ending December 31, 1999; and (4) to transact such other
business as may properly come before the Annual Meeting. This Proxy Statement
and the accompanying proxy are first being sent to stockholders on or about
April 22, 1999.
The record of stockholders entitled to notice of and to vote at the Annual
Meeting was taken as of the close of business on April 9, 1999 (the "Record
Date"). On the Record Date, there were outstanding and entitled to vote
12,307,630 shares of Common Stock, par value $.01 per share ("Caliber Common
Stock" or "Common Stock").
The presence, in person or by proxy, of the holders of a majority of the
shares of Caliber Common Stock issued and outstanding and entitled to vote at
the Annual Meeting is necessary to constitute a quorum at the meeting. In the
election of directors, each share of Caliber Common Stock may be voted for as
many individuals as there are directors to be elected. Votes may only be cast
"FOR" the election of a director. Cumulative voting is not permitted. Those
individuals receiving the two highest number of votes "for" election to the
Board of Directors shall be considered duly elected. For all matters except the
election of directors, each share is entitled to one vote. The affirmative vote
of a majority of the shares of Caliber Common Stock present in person or
represented by proxy at the Annual Meeting is required for approval and/or
ratification of all matters (other than the election of directors) being
submitted to the stockholders for their consideration. An automated system
administered by Caliber's transfer agent will be used to tabulate the votes.
Abstentions, votes against or withholding approval and broker non-votes will be
counted to determine whether a quorum is present. Abstentions and votes against
or withholding approval will be counted as votes against any given proposal;
however, broker non-votes will not be counted in determining whether a
particular proposal has been approved by the stockholders.
This solicitation is being made primarily by mail, but directors, officers
and employees may also engage in the solicitation of proxies by telephone. The
cost of soliciting proxies will be borne by the Company. No compensation will be
paid by the Company in connection with the solicitation of proxies, except that
the Company may reimburse brokers, custodians, nominees and other record holders
for their reasonable out-of-pocket expenses in forwarding proxy material to
beneficial owners.
VOTING BY PROXY
The Board of Directors has selected R. Christopher Hoehn-Saric and Douglas
L. Becker, and each of them, to act as proxies with full power of substitution.
Any stockholder executing a proxy has the power to revoke the proxy at any time
before it is voted at the Annual Meeting. This right of revocation is not
limited or subject to compliance with any formal procedure. Any stockholder may
attend the meeting and vote in person, whether or not he has previously given a
proxy.
With respect to the proposal regarding election of directors, stockholders
may (a) vote in favor of all nominees, (b) withhold their votes as to all
nominees or (c) withhold their votes as to a specific nominee by so indicating
in the appropriate space on the enclosed proxy card. With respect to the
proposals to approve and ratify the adoption of the Employee Stock Purchase Plan
and the appointment of Ernst & Young LLP as Caliber's independent auditors for
the fiscal year ending December 31, 1999, stockholders may (i) vote
<PAGE>
"for", (ii) vote "against" or (iii) abstain from voting as to each such matter.
All properly executed proxy cards delivered by stockholders and not revoked will
be voted at the Annual Meeting in accordance with the directions given. IF NO
SPECIFIC INSTRUCTIONS ARE GIVEN WITH REGARD TO THE MATTERS TO BE VOTED UPON, THE
SHARES REPRESENTED BY A PROPERLY EXECUTED PROXY CARD WILL BE VOTED "FOR" THE
ELECTION OF ALL DIRECTOR-NOMINEES, THE APPROVAL AND RATIFICATION OF THE EMPLOYEE
STOCK PURCHASE PLAN, AND THE APPOINTMENT OF ERNST & YOUNG LLP AS CALIBER'S
INDEPENDENT AUDITORS. Management knows of no other matters that may come before
the Annual Meeting for consideration by the stockholders. However, if any other
matter properly comes before the Annual Meeting, the persons named in the
enclosed proxy card as proxies will vote upon such matters in accordance with
their judgment.
Stockholders who do not expect to attend the Annual Meeting in person are
urged to execute and return the enclosed proxy card promptly. Any stockholder
delivering a proxy has the power to revoke it at any time before it is voted by
giving written notice of revocation to the Secretary of the Company, by
executing and delivering to the Secretary a proxy card bearing a later date, or
by voting in person at the Annual Meeting. Any stockholder also may be
represented by another person at the Annual Meeting by executing a form of proxy
designating such person to act on the stockholder's behalf at the Annual
Meeting.
I. ELECTION OF CALIBER DIRECTORS
Caliber's Board of Directors is composed of six directorships separated into
three equal classes, with each class serving a three-year term. Two directors
serve in Class I and are subject to re-election for a three-year term beginning
at the 1999 Annual Meeting. Two directors serve in Class II and are subject to
re-election for a three-year term beginning at the 2000 Annual Meeting. Two
directors serve in Class III and are subject to re-election for a three-year
term beginning at the 2001 Annual Meeting.
During 1998, the Board of Directors approved an increase in the number of
directorships from five to six. As a result, a single vacancy was created in
Class I. To fill this vacancy, the directors elected Ernest Anastasio as a Class
I director on August 4, 1998. Mr. Anastasio was elected to serve until the 1999
Annual Meeting.
Two Class I directors are to be elected at the Annual Meeting to serve until
the 2002 Annual Meeting or until their successors are duly elected and
qualified. The Board of Directors has nominated the two persons named below to
serve as Class I directors for the term indicated. Both nominees are currently
members of the Board. Ms. Armstrong was elected to the Board by the stockholders
and has served as a director of Caliber since November 1996. As noted above, Mr.
Anastasio was elected by the directors to fill a vacancy created by the Board's
expansion to six directors in August 1998. Both nominees have consented to serve
on the Board of Directors through the 2002 Annual Meeting or until his or her
successor is duly elected and qualified. If either nominee should be unable to
serve for any reason (which management has no reason to anticipate at this
time), the Board of Directors may designate a substitute nominee or nominees (in
which case the persons named as proxies in the enclosed proxy card will vote all
valid proxy cards for the election of such substitute nominee or nominees),
allow the vacancy or vacancies to remain open until a suitable candidate or
candidates are located, or by resolution provide for a lesser number of
directors.
THE INDIVIDUALS RECEIVING THE TWO HIGHEST NUMBER OF VOTES "FOR" ELECTION TO
THE BOARD OF DIRECTORS SHALL BE CONSIDERED DULY ELECTED.
2
<PAGE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE FOR ITS NOMINEES FOR DIRECTORS.
INFORMATION CONCERNING NOMINEES
The following table presents information concerning persons nominated by the
Board of Directors for election at the Annual Meeting as Class I directors of
the Company. Data with respect to the number of shares of Caliber Common Stock
beneficially owned by each of the nominees, directly or indirectly, as of the
record date, appear on page 13 of this Proxy Statement.
<TABLE>
<CAPTION>
DIRECTOR NOMINATED FOR PRINCIPAL OCCUPATION, DIRECTORSHIPS WITH
NAME AND AGE SINCE TERM EXPIRING PUBLIC COMPANIES AND OTHER INFORMATION
- ------------------------------------ ------------- -------------- ----------------------------------------------
<S> <C> <C> <C>
Janeen M. Armstrong (35) November 1996 2002 Annual Ms. Armstrong has served as a director of
Meeting Caliber since November 1996. She has been
self-employed as a certified public accountant
and consultant since 1993. Ms. Armstrong is
the daughter of John P. Hill, also a director
of Caliber.
Ernest Anastasio (58) August 1998 2002 Annual Mr. Anastasio has served as a director of
Meeting Caliber since August 1998. He is currently
Senior Officer for International Development
at Educational Testing Service ("ETS"). He
originally joined ETS in 1966 as an associate
research scientist and thereafter held a
variety of positions until becoming Vice
President for Research Management in 1982, a
position he held until 1985. From 1985 to
1987, Mr. Anastasio was the president and
chief executive officer of Educom, a nonprofit
consortium of universities and corporations
formed to share information technology and
resources. He rejoined ETS in 1987 as Vice
President for Information Systems and
Technology.
</TABLE>
3
<PAGE>
INFORMATION CONCERNING REMAINING DIRECTORS
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION, DIRECTORSHIPS WITH
NAME AND AGE SINCE TERM EXPIRES PUBLIC COMPANIES AND OTHER INFORMATION
- ------------------------------------ ------------- -------------- ----------------------------------------------
<S> <C> <C> <C>
R. Christopher Hoehn-Saric (36) November 1996 2000 Annual Mr. Hoehn-Saric has served as Caliber's
Meeting Chairman of the Board of Directors since
November 1996. From November 1996 until
February 1998, Mr. Hoehn-Saric also served as
Caliber's Co-Chief Executive Officer. Mr.
Hoehn-Saric has served as Chairman and
Co-Chief Executive Officer of Sylvan Learning
Systems, Inc. ("Sylvan") since 1993. From 1988
to 1993, he served as Sylvan's President. He
is a principal in Sterling Capital, Ltd.
("Sterling"), the investment partnership that
led the 1986 acquisition of KEE Incorporated
("KEE"), the predecessor of Sylvan. He is also
a founder of Health Management Corporation, a
health services company. Before becoming
Sylvan's President, Mr. Hochn-Saric was
involved in Sterling's acquisition of several
distribution, broadcasting and photography
businesses.
John P. Hill (64) November 1996 2000 Annual Mr. Hill has served as a director of Caliber
Meeting since November 1996. Mr. Hill has been
self-employed as a financial consultant since
1975. Prior to 1975, Mr. Hill held various
staff and supervisory positions with public
accounting firms, the Board of Governors of
the Federal Reserve System, and the Securities
and Exchange Commission.
Douglas L. Becker (33) February 1996 2001 Annual Mr. Becker has served as Caliber's Vice
Meeting Chairman of the Board of Directors and
Secretary since February 1998. From November
1996 until February 1998, Mr. Becker served as
President, Co-Chief Executive Officer and a
director of Caliber. Mr. Becker has served as
President and Co-Chief Executive Officer of
Sylvan since 1993. He has been a director of
Sylvan since 1986. Mr. Becker served as Chief
Executive Officer of Sylvan's Learning Center
Division from February 1991 until April 1993.
Mr. Becker was a co-founder of Health
Management Corporation and Sterling. From
January 1987 to February 1991, Mr. Becker
directed KEE's marketing.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION, DIRECTORSHIPS WITH
NAME AND AGE SINCE TERM EXPIRES PUBLIC COMPANIES AND OTHER INFORMATION
- ------------------------------------ ------------- -------------- ----------------------------------------------
<S> <C> <C> <C>
Susan Mayer (49) November 1996 2001 Annual Ms. Mayer has served as a director of Caliber
Meeting since November 1996. Ms. Mayer became
President of MCI WorldCom Venture Fund in
November, 1998. Before that time, Ms. Mayer
served as Senior Vice President, Ventures and
Alliances, of MCI Communications Corporation,
and President and Chief Operating Officer of
Sky MCI. Ms. Mayer joined MCI in July 1993.
Ms. Mayer is also a director of Rhythms Net
Connections, Inc. (RTHM).
</TABLE>
INFORMATION REGARDING THE CALIBER BOARD, COMMITTEES AND REMUNERATION
During 1998, there were six meetings of the Board of Directors of Caliber.
Other than Ernest Anastasio, who was elected in August 1998, each director
attended all of the meetings of the Board held during 1998. Mr. Anastasio
attended all of the meetings of the Board following his election.
The Caliber Board has an Audit Committee and a Compensation Committee. The
purpose of the Audit Committee is to meet with Caliber's independent accountants
to review whether satisfactory accounting procedures are being followed by
Caliber and whether its internal accounting controls are adequate to monitor
non-audit services performed by the independent accountants, and to review fees
charged by the independent accountants. The Audit Committee also recommends to
the Board of Directors the selection of independent accountants. The members of
the Audit Committee are Douglas L. Becker, Susan Mayer, John P. Hill, and Ernest
Anastasio.
The Compensation Committee establishes the compensation for executive
officers of Caliber and generally reviews benefits and compensation for all
officers and employees. It also administers Caliber's stock option plans and
will administer the Employee Stock Purchase Plan if approved by the
stockholders. The report of the Compensation Committee required by the rules of
the Securities and Exchange Commission is included in this Proxy Statement. The
members of the Compensation Committee are Douglas L. Becker, John P. Hill, and
Ernest Anastasio.
Because the Board of Directors performed the functions of the Audit
Committee and the Compensation Committee during 1998, neither committee met
during 1998.
Directors currently do not receive any compensation for their service on the
Board of Directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, to file with the SEC
initial reports of beneficial ownership and reports of changes in beneficial
ownership of Common Stock and other equity securities of the Company.
Initial reports of beneficial ownership are required to be filed on Form 3
within ten days after the reporting person first becomes subject to the
reporting requirements of Section 16(a). R. Christopher Hoehn-Saric and David R.
Dobkin became subject to these requirements upon completion of the Company's
initial public offering in May 1998. Kevin M. Thibodeau became subject to these
requirements when he joined Caliber in July 1998. Ernest Anastasio became
subject to these requirements when he was elected to fill a vacancy on the Board
of Directors in August 1998. Initial reports of beneficial ownership on Form 3
for each of these directors and officers, other than Mr. Anastasio, were not
filed until March 1999. An initial report of beneficial ownership on Form 3 for
Mr. Anastasio was not filed until April 1999.
5
<PAGE>
Except as noted above, based solely upon a review of Forms 3, Forms 4 and
Forms 5 and amendments thereto furnished to the Company pursuant to Rule
16a-3(e) for the year ending December 31, 1998, and written representations of
certain of its directors and executive officers that no Forms 5 were required to
be filed, all directors and executive officers of Caliber have filed with the
SEC on a timely basis all reports required to be filed under Section 16(a) of
the Exchange Act.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
In 1998, the Board of Directors or senior management determined compensation
matters. R. Christopher Hoehn-Saric and Douglas L. Becker participated in these
decisions as directors of Caliber. Each is an employee and a director of Sylvan.
Mr. Becker currently serves on the Compensation Committee. Neither the Chief
Executive Officer nor any other executive officer of Caliber serves on the
Compensation Committee.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
COMPENSATION OF EXECUTIVE OFFICERS. The following table shows for the years
ended December 31, 1998, and December 31, 1997, compensation paid by Caliber,
including salary, bonuses, stock options, and certain other compensation, to its
Chief Executive Officer and each of its four other most highly compensated
executive officers at December 31, 1998 (collectively, the "Named Executive
Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------- -------------
<S> <C> <C> <C> <C> <C> <C>
SHARES OF
OTHER COMMON STOCK
ANNUAL UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS (#) COMPENSATION(2)
- ------------------------------------ --------- --------- --------- ----------------- ------------- -----------------
Chris L. Nguyen President, Chief 1998 $ 180,000 $ -- $ 6,600 -- $ --
Executive Officer 1997 140,833 16,625 6,600 306,846 --
Rick P. Frier 1998 130,625 -- 5,500 49,157 --
Vice President, Chief Financial 1997 -- -- -- -- --
Officer
David R. Dobkin 1998 180,000 53,300 6,600 -- --
Senior Vice President, 1997 124,846 41,500 4,675 49,157 58,935
Corporate Services
G. Bryan Polivka 1998 140,000 15,313 6,600 -- --
Senior Vice President, 1997 140,000 13,745 6,600 49,157 47,206
Programming and Production
R. Brady Locher, Jr. 1998 165,000 41,250 6,600 -- --
Vice President, Marketing Services 1997 74,462 25,000 3,025 49,157 56,909
</TABLE>
- ------------------------
(1) Amounts consist of car allowances.
(2) Amounts consist of reimbursed relocation expenses.
6
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR. The following table sets forth certain
information relating to options granted to the Named Executive Officers to
purchase shares of Caliber Common Stock during 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZED
INDIVIDUAL GRANTS VALUE AT
-------------------------------------------------------- ASSUMED ANNUAL RATES
NUMBER OF PERCENT OF OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(1)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME AND POSITION GRANTED FISCAL YEAR PER SHARE DATE 5% 10%
- ---------------------------------------------- ----------- --------------- ------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Chris L. Nguyen............................... -- -- -- -- -- --
Rick P. Frier................................. 49,157 23.8% $ 8.00 3/16/08 $ 247,260 $ 626,752
David R. Dobkin............................... -- -- -- -- -- --
G. Bryan Polivka.............................. -- -- -- -- -- --
R. Brady Locher, Jr........................... -- -- -- -- -- --
</TABLE>
- ------------------------
(1) The assumed annual rate of appreciation of 5% and 10% would result in the
price of Caliber's Common Stock increasing to $13.03 and $20.75,
respectively from the exercise price.
The 5% and 10% assumed annual rates of price appreciation used to calculate
potential gains to optionees are mandated by the rules of the SEC. The potential
realizable value does not represent the Company's prediction of its stock price
performance.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES. The following table sets forth certain information concerning the
exercise of stock options, the number of unexercised options, and the value of
unexercised options at the end of 1998 for the Named Executive Officers. None of
the Named Executive Officers exercised any options to purchase Common Stock
during 1998.
<TABLE>
<CAPTION>
SECURITIES VALUE OF
SHARES UNDERLYING UNEXERCISED
ACQUIRED UNEXERCISED IN-THE-MONEY
UPON VALUE OPTIONS AT OPTIONS AT
NAME EXERCISE REALIZED YEAR-END (1) YEAR-END (2)
- --------------------------------------------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C>
Chris L. Nguyen.............................. -- $ -- 61,370(E) $ 198,225(E)
-- -- 245,476(U) $ 792,887(U)
Rick P. Frier................................ -- -- --(E) $ --(E)
-- -- 49,157(U) $ --(U)
David R. Dobkin.............................. -- -- 9,831(E) $ 31,754(E)
-- -- 39,926(U) $ 127,023(U)
G. Bryan Polivka............................. -- -- 9,831(E) $ 31,754(E)
-- -- 39,926(U) $ 127,023(U)
R. Brady Locher, Jr.......................... -- -- 9,831(E) $ 31,754(E)
-- -- 39,926(U) $ 127,023(U)
</TABLE>
- ------------------------
(1) (E) = Exercisable; (U) = Unexercisable.
(2) Value equals the price of a share of Common Stock on December 31, 1998, less
the per share exercise price.
7
<PAGE>
COMPENSATION COMMITTEE REPORT
INTRODUCTION. The function of the Compensation Committee is to recommend to
the Board of Directors policies regarding the Company's compensation of, and to
recommend specific compensation for, the Company's executive officers. The
Compensation Committee's responsibilities also include administering the
Company's stock option plans, and employee stock purchase plans, and making
decisions regarding option grants to officers and other key employees. The
Compensation Committee also periodically reviews the Company's employee benefit
plans that are intended to qualify under Section 401 of the Internal Revenue
Code to determine whether any changes to those plans may be appropriate. During
1998, these functions were performed by the Board of Directors. Going forward,
the Compensation Committee intends to meet at least once a year to review
management performance and compensation and to recommend to the Board bonuses
and option grants for current personnel. The Compensation Committee will also
meet on an as-needed basis to recommend compensation for newly created or
expanded executive positions.
COMPENSATION PHILOSOPHY AND APPROACH. The Company offers compensation
packages designed to attract and retain outstanding employees and to encourage
and reward the achievement of corporate goals. Compensation currently includes a
competitive combination of salaries and benefits. The Company also believes that
it is important to provide the Company's executive officers with significant
stock-based incentive compensation, which increases in value in direct
correlation with increases in the market price of the Company's Common Stock,
thereby aligning employee financial interests with long-term stockholder value.
BASE SALARIES. Salaries for the Company's executive officers are based on
the executive's contribution to Company performance, level of responsibility,
experience and breadth of knowledge, and contribution to the Company's overall
performance. The Compensation Committee may also utilize salary surveys for
reference purposes, but its salary determinations are not targeted to a specific
level of comparable compensation.
ANNUAL INCENTIVE CASH BONUS. In addition to base salaries, executive
officers of the Company are eligible to receive annual cash bonuses in the
discretion of the Board of Directors. Cash bonuses are determined on the basis
of (a) the overall financial performance of the Company and (b) annual personal
performance objectives for each officer, established by the Compensation
Committee at the beginning of the year.
LONG-TERM INCENTIVE STOCK OPTIONS. Options are granted to executive
officers and other key employees whom the Board of Directors determines to be
essential to the Company's future growth and profitability. Based upon
performance criteria similar to those applicable to the cash bonus payment, the
Board determines the employees to whom options will be granted, the number of
shares covered by each grant, and the exercise price and vesting period for each
grant. The Board typically grants stock options with relatively long vesting
periods, creating strong incentives for recipients of stock option grants to
remain in the employ of the Company. Grants are made on a case-by-case basis in
the discretion of the Board.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. The Company determined Mr.
Nguyen's 1998 annual salary applying the above factors and criteria in light of
Mr. Nguyen's expected contribution to the Company's continuing development.
During 1998, Mr. Nguyen received no cash bonus, stock option grants, or other
compensation based on the Company's performance.
The Compensation Committee will evaluate the Company's compensation policies
on an ongoing basis to determine whether they enable the Company to attract,
retain and motivate key personnel. To meet these objectives, the Company may
from time to time increase salaries, award additional stock options or provide
other short-term and long-term incentive compensation to executive officers,
including Mr. Nguyen. During 1999, the Committee may engage an independent
management consulting firm to
8
<PAGE>
review the compensation of the Named Executive Officers and to advise the
Compensation Committee as to the appropriate level of base salary, and
short-term and long-term incentive compensation, based on comparable public
companies' plans and the consultants' experience in assisting public companies
to establish management compensation plans. As a result, changes may made to the
Named Executive Officers' compensation for 1999, which may include salary
increases and the issuance of additional long-term incentive stock options.
John P. Hill
Ernest Anastasio
Douglas L. Becker
9
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on
Caliber Common Stock during the period beginning May 5, 1998 (the date of
Caliber's initial public offering) and ending December 31, 1998, with the
cumulative total return on the Russell 3000 Index, and a Caliber constructed
peer group index. The issuers included in this peer group index are CBT Group
PLC (CBTSY), Computer Learning Centers, Inc. (CLCX), EduTrek International, Inc.
(EDUT), Learning Tree International, Inc. (LTRE) and UOL Publishing, Inc.
(UOLP). The comparison assumes $100 was invested on May 5, 1998, in Caliber
Common Stock and in each of the foregoing indices. It also assumes reinvestment
of dividends.
Caliber does not make, nor does it endorse, any predictions as to future
stock performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF 8 MONTH CUMULATIVE TOTAL RETURN*
<S> <C> <C>
AMONG CALIBER LEARNING NETWORK, INC., THE RUSSELL 3000 INDEX
AND A PEER GROUP
CALIBER LEARNING NETWORK, INC. RUSSELL 3000
5/5/98 $100.00 $100.00
6/1/98 $88.81 $101.17
9/1/98 $35.02 $89.84
12/1/98 $24.55 $109.10
* $100 INVESTED ON 5/5/98 IN STOCK OR INDEX,
INCLUDING REINVESTMENT OR DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
<CAPTION>
COMPARISON OF 8 MONTH CUMULATIVE TOTAL RETURN*
<S> <C>
AMONG CALIBER LEARNING NETWORK, INC., THE RUSSELL 3000 INDEX
AND A PEER GROUP
PEER GROUP
5/5/98 $100.00
6/1/98 $104.70
9/1/98 $33.04
12/1/98 $31.65
* $100 INVESTED ON 5/5/98 IN STOCK OR INDEX,
INCLUDING REINVESTMENT OR DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
</TABLE>
10
<PAGE>
CALIBER MANAGEMENT
EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES. The executive officers,
directors and key employees of Caliber are as follows:
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS AND DIRECTORS AGE POSITION
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
R. Christopher Hoehn-Saric........................... 36 Chairman of the Board of Directors
Douglas L. Becker (1)(2)............................. 33 Vice Chairman of the Board of Directors Secretary,
Director
Chris L. Nguyen...................................... 37 President, Chief Executive Officer
Rick P. Frier........................................ 37 Vice President, Chief Financial Officer
David R. Dobkin...................................... 46 Senior Vice President, Corporate Services
Kevin M. Thibodeau................................... 36 Vice President, Academic Services
R. Brady Locher, Jr.................................. 44 Vice President, Marketing Services
Janeen M. Armstrong.................................. 35 Director
John P. Hill (1)(2).................................. 64 Director
Ernest Anastasio (1)(2).............................. 58 Director
Susan Mayer (1)...................................... 49 Director
Key Employees:
G. Bryan Polivka..................................... 41 Senior Vice President, Programming and Production
Richard F. Peterson.................................. 44 Vice President, Operations
</TABLE>
- ------------------------
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
Information relating to Caliber's executive officers and key employees is
set forth below. See "Information Concerning Nominees" and "Information
Concerning Remaining Directors," above, for information relating to Messrs.
Hoehn-Saric and Becker and the other Caliber directors.
CHRIS L. NGUYEN. Mr. Nguyen has served as Caliber's President and Chief
Executive Officer since February 1998. From November 1996 until February 1998,
Mr. Nguyen served as Caliber's Chief Operating Officer. From 1993 to November
1996, Mr. Nguyen was Vice President of Operations of Sylvan Prometric, the
computer-based testing division of Sylvan. He joined Sylvan's predecessor in
1987.
RICK P. FRIER. Mr. Frier has served as Vice President and Chief Financial
Officer of Caliber since March 1998. From 1991 through 1997, he served as Vice
President-Finance and Treasurer of Treasure Chest Advertising Company, Inc., a
company that provides advertising and marketing services to the retail industry.
From 1988 to 1991, Mr. Frier was a corporate banking officer at Wells Fargo
Bank.
DAVID R. DOBKIN. Mr. Dobkin has served as Caliber's Senior Vice President,
Corporate Services since April 1997. Mr. Dobkin was a principal with the
Connected Enterprise Solutions group of Ernst & Young LLP from 1996 to 1997.
From 1995 to 1996, Mr. Dobkin served as Vice President, Sales and Marketing for
The Times Mirror Company, and from 1979 to 1995, he held various
management-level sales and marketing positions with R. R. Donnelley & Sons.
KEVIN M. THIBODEAU. Mr. Thibodeau has served as Caliber's Vice President,
Academic Services since July 1998. Mr. Thibodeau was Vice President of Waverly
North America, now Wolters Kluwer company, from August 1986 to July 1998, and
prior thereto he held various positions in sales, marketing and product
development in the professional publishing industry.
11
<PAGE>
R. BRADY LOCHER, JR. Mr. Locher has served as Caliber's Vice President,
Marketing Services since July 1997. Mr. Locher served as Vice President of the
Marketing Services Group of Automatic Data Processing, Inc. from 1992 until July
1997, and prior thereto he held various positions in consumer products marketing
and advertising.
G. BRYAN POLIVKA. Mr. Polivka has served as Caliber's Senior Vice
President, Programming and Production since November 1996. Mr. Polivka served as
Vice President, Programming of Westcott Communications Inc. from 1991 through
September 1996. Prior to joining Westcott, Mr. Polivka was a producer with the
National Broadcasting Corporation and ProServ Television.
RICHARD F. PETERSON. Mr. Peterson has served as Caliber's Vice President,
Operations since July 1997. Mr. Peterson served as Vice President of Operations
and Administration of Service Merchandise Co., Inc. from 1982 to July 1997.
Ms. Armstrong is Mr. Hill's daughter. Other than Mr. Hill and Ms. Armstrong,
there are no family relationships among any of the executive officers or
directors of Caliber. Executive officers of Caliber are elected by the Board of
Director on an annual basis and serve at the discretion of the Caliber Board.
12
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of Caliber Common Stock as of the Record Date, by (i) each person who
owns beneficially more than 5% of Caliber Common Stock, (ii) each of the
director nominees and directors of Caliber, (iii) each of the Named Executive
Officers, and (iv) all directors and Named Executive Officers as a group. Unless
otherwise indicated, the named persons exercise sole voting and investment power
over the shares that are shown as beneficially owned by them.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
-----------------------
<S> <C> <C>
NAME OF BENEFICIAL OWNER(1) NUMBER PERCENT
- -------------------------------------------------------------------------------------------- ---------- -----------
Sylvan Learning Systems, Inc.(2)............................................................ 1,227,393 9.0%
MCI Communications Corp.(3)(4).............................................................. 1,856,086 13.6
R. Christopher Hoehn-Saric(5)(6)............................................................ 1,718,351 12.6
Douglas L. Becker(5)(6)..................................................................... 1,718,351 12.6
Chris L. Nguyen(7)(10)...................................................................... 319,207 2.3
Rick P. Frier(8)(10)........................................................................ 28,581 *
David R. Dobkin(9)(10)...................................................................... 93,397 *
G. Bryan Polivka(9)(10)..................................................................... 68,779 *
R. Brady Locher, Jr.(9)(10)................................................................. 93,428 *
Janeen M. Armstrong......................................................................... -- --
John P. Hill................................................................................ 10,000 *
Susan Mayer(11)............................................................................. -- --
Ernest Anastasio............................................................................ -- --
Baron Capital Group, Inc.(12)............................................................... 1,241,500 9.1
T. Rowe Price & Associates(13).............................................................. 791,000 5.8
Nevis Capital Management, Inc.(14).......................................................... 684,000 5.0
All directors and executive officers as a group (11 persons)................................ 4,050,094 29.7
</TABLE>
- ------------------------
(1) The address of each stockholder listed in the table is c/o Caliber Learning
Network, Inc., 3600 Clipper Mill Road, Suite 300, Baltimore, Maryland 21211,
except as otherwise noted.
(2) Excludes 5,167,328 shares of 6% Non-Voting Convertible Preferred Stock of
the Company convertible into Common Stock on a share-for-share basis
beginning in May 2000.
(3) The address of this stockholder is 1801 Pennsylvania Avenue, NW, Washington,
DC 20006.
(4) Includes 1,193,573 shares of Common Stock exercisable upon conversion of an
outstanding warrant at an aggregate exercise price of $3.78 million.
(5) In November 1996, Messrs. Hoehn-Saric and Becker each transferred the listed
shares to Sterling Caliber Investment, LLC, but retained voting power over
all of the transferred shares. The shares held by Sterling Caliber are owned
equally by Douglas L. Becker, R. Christopher Hoehn-Saric, Eric Becker
(Douglas L. Becker's brother) and Steven Taslitz, or trusts for the benefit
of their respective families.
(6) Excludes the 1,227,393 shares of Common Stock and 5,167,328 shares of 6%
Non-Voting Convertible Preferred Stock owned by Sylvan.
(7) Includes 49,094 shares held in two irrevocable educational trusts for the
benefit of Mr. Nguyen's children and 56,402 shares underlying options which
will be exercisable within 60 days of the date of this Proxy Statement.
(8) Includes 9,381 shares underlying options which will be exercisable within 60
days of the date of this Proxy Statement.
13
<PAGE>
(9) Includes 19,662 shares underlying options which will be exercisable within
60 days of the date of this Proxy Statement.
(10) Excludes outstanding options to purchase 127,706, 39,326, 29,495, 29,495,
and 29,495 shares of Common Stock held by Messrs. Nguyen, Frier, Dobkin,
Polivka and Locher, respectively, none of which is exercisable within 60
days of the date of this Proxy Statement.
(11) Excludes the 1,856,086 shares of Common Stock beneficially owned by MCI.
(12) Derived from a Schedule 13G and Amendment No. 1 thereto filed by this
stockholder on May 18, 1998, and April 9, 1999, respectively. The members of
this group are Baron Capital Group, Inc. ("BCG"), BAMCO, Inc., Baron Capital
Management, Inc. ("BCM"), Baron Asset Fund, and Ronald Baron. BAMCO and BCM
are subsidiaries of BCG. Baron Asset Fund is an investment advisory client
of BAMCO. Ronald Baron owns a controlling interest in BCG. BCG and Ronald
Baron disclaim beneficial ownership of shares held by their controlled
entities (or the investment advisory clients thereof) to the extent such
shares are held by persons other than BCG and Ronald Baron. BAMCO and BCM
disclaim beneficial ownership of shares held by their investment advisory
clients to the extent such shares are held by persons other than BAMCO, BCM
and their affiliates. The address of each member of this group is 767 Fifth
Avenue, 49(th) Floor, New York, New York 10153.
(13) Derived from a Schedule 13G filed by this stockholder on February 12, 1999.
These securities are owned by various individual and institutional investors
which T. Rowe Price Associates, Inc. ("Price Associates") serves as
investment adviser with power to direct investments and/or sole power to
vote the securities. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however, Price Associates disclaims
actual beneficial ownership of such securities. The address of this
stockholder is 100 East Pratt Street, Baltimore, Maryland 21202.
(14) Derived from a Schedule 13G filed by this stockholder on February 2, 1999.
The address of this stockholder is 1119 Saint Paul Street, Baltimore,
Maryland 21202.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RELATIONSHIPS WITH SYLVAN. Douglas L. Becker and R. Christopher
Hoehn-Saric, directors, are Co-Chief Executive Officers of Sylvan and
concurrently serve as directors of Sylvan and Caliber. Sylvan owns 1,227,393
shares of Caliber Common Stock and 5,167,328 shares of 6% Non-Voting Convertible
Preferred Stock of the Company convertible into Common Stock on a
share-for-share basis beginning in May 2000.
Under an Intercompany Management and Facility Use Agreement between Sylvan
and Caliber, Sylvan provides Caliber with the use of certain facilities for
Caliber's corporate offices in Baltimore, Maryland, and certain administrative
support and executive management services, including financial management, tax
and accounting services, legal services, management information services, and
human resources support. During 1998, Caliber paid Sylvan a $2.0 million annual
fee for these facilities and services. This agreement is scheduled to expire at
the end of 1999.
Under a Testing Center Management and CBT Services Agreement between Caliber
and Sylvan, Caliber has assumed management and responsibility for all
obligations and operations of certain Sylvan Testing Centers ("STCs") and has
agreed to deliver computer-based testing services on behalf of Sylvan at those
STCs through December 31, 2000. These facilities may be converted into
classrooms capable of receiving Caliber programs. The Company receives a fixed
amount per month to manage these STCs and an additional fee per test delivered
above a specified number of tests. During 1998, Caliber received approximately
$2.1 million in management and testing fees under this agreement. Separately,
the Company is entitled under this agreement to 50% of earnings to Sylvan from
Sylvan's digital fingerprint joint venture with Identix Corporation.
14
<PAGE>
RELATIONSHIPS WITH MCI. Susan Mayer, director, is the President of MCI
WorldCom Venture Fund, an affiliate of MCI WorldCom, Inc., the successor by
merger to MCI Communications Corporation ("MCI"). MCI owns 662,513 shares of
Caliber Common Stock and holds a warrant to purchase 1,193,573 additional shares
of Common Stock at an aggregate exercise price of $3.78 million.
At its inception, Caliber decided to seek a strategic partner to whom it
could outsource the design, supply and support of the infrastructure of the
Caliber network. Accordingly, in July 1997, Caliber entered into a four-year
Enterprise Management Agreement with MCI Systemhouse, a systems integrator
affiliated with MCI. Under this agreement, MCI Systemhouse agreed to design the
network's infrastructure and supply and support at competitive rates the
infrastructure's components (other than the satellite system), including the
Caliber Data Center, and Caliber agreed to purchase all of these components
through MCI Systemhouse. Support services include individual component
maintenance, network fault and performance monitoring and help desk services.
During 1998, Caliber paid approximately $1.1 million in network support fees to
MCI Systemhouse under this agreement.
In connection with the Enterprise Management Agreement, MCI committed to
provide, directly or through a subsidiary, an aggregate of $20 million in (i)
five year capital leases for computer hardware and software, video equipment,
satellite equipment and other telecommunications equipment as well as furniture
required for the business of Caliber (collectively, the "Required Equipment") or
the procurement, installation and deployment, maintenance, financing, technology
upgrades and appropriate support service for the Required Equipment, including,
but not limited to, help desk services (collectively, the "Required Services");
(ii) guarantees by MCI of Caliber's obligations under other leases for Required
Equipment or Required Services; or (iii) a combination thereof (the "MCI Lease
and Guaranty Commitment"). As of December 31, 1998, the total value of
outstanding capital leases and guaranties under the MCI Lease and Guaranty
Commitment was approximately $17.3 million.
Under the MCI Lease and Guarantee Commitment, MCI Systemhouse has a first
security interest in all furniture and equipment provided by it under the
Enterprise Management Agreement and a first security interest in any furniture
and equipment provided in any subsequent MCI Systemhouse lease. Caliber is
required to notify MCI Systemhouse of the terms of other companies' bids to
provide Required Equipment or Required Services leases and to give MCI
Systemhouse the opportunity to furnish Caliber with the last bid for such
leases; however, Caliber is not required to accept MCI Systemhouse's bid if, in
Caliber's good faith judgment, a competitive bid is more advantageous to
Caliber. Upon certain events of default, MCI and MCI Systemhouse have the right
to terminate the MCI Lease and Guarantee Commitment, the Enterprise Management
Agreement and any other MCI Systemhouse leases.
During 1998, MCI Systemhouse contracted with Caliber to use the Caliber
network to deliver internal professional development classes, new employee
orientation classes and a series of topical seminars open to employees and the
public. Caliber received approximately $1.0 million in fees under this Agreement
during 1998.
In February 1999, MCI announced an agreement to sell MCI Systemhouse to EDS
for $1.65 billion, subject to final regulatory approval.
II. APPROVAL OF EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors adopted the Caliber Learning Network, Inc. Employee
Stock Purchase Plan (the "Purchase Plan" or the "Plan") on March 8, 1999,
subject to the approval of the Company's stockholders. If approved by the
stockholders, the Plan will become effective June 1, 1999. The Purchase Plan is
an employee benefit plan that offers eligible employees the opportunity to
purchase shares of Caliber Common Stock through regular payroll deductions. The
Purchase Plan is intended to encourage all Company employees to acquire an
equity interest in the Company in order to share in the Company's future growth
and success, and to align employee financial interests with long-term
stockholder value. The following summary description of the Purchase Plan is a
fair and complete summary of the Purchase Plan;
15
<PAGE>
however, it is qualified in its entirety by reference to the full text of the
Purchase Plan, which is attached to this Proxy Statement as Exhibit A.
GENERAL
ADMINISTRATION; AMENDMENT AND TERMINATION. The Purchase Plan operates
pursuant to procedures and guidelines set forth in the Plan. The Purchase Plan
is administered by the Board of Directors or a committee appointed by the Board
(the "Administrator"). The Board of Directors may, in its discretion, terminate
the Purchase Plan or amend it in any respect, except that (a) no amendment may
cause the Purchase Plan to fail to comply with Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"), unless expressly provided by the
Board of Directors; and (b) if stockholder approval of any amendment is required
by Section 423 of the Code, the amendment will become effective only upon
obtaining such approval.
ELIGIBILITY. All employees of the Company are eligible to participate in
the Purchase Plan except employees who beneficially own 5% or more of the total
combined voting power of all classes of stock of the Company. The Purchase Plan
authorizes the Administrator to adopt additional eligibility requirements,
consistent with the Code. In its capacity as Administrator of the Plan, the
Board of Directors has further restricted eligibility to full-time employees and
part-time employees regularly scheduled to work more than 20 hours per week. In
addition, employees hired after June 1, 1999, must be employed for at least six
months before the first day of an offering period before they will be eligible
to participate in the Plan. These eligibility requirements are subject to change
from time to time in the discretion of the Administrator. Based on current
employee data, the Company estimates that approximately 270 employees will be
eligible to participate in the Plan as of June 1, 1999.
AVAILABLE SHARES. The Purchase Plan authorizes the issuance of up to
200,000 shares of Common Stock, subject to adjustment for stock dividends, stock
splits, reclassifications and other changes affecting the Company's Common
Stock.
STOCK PURCHASES UNDER THE PURCHASE PLAN
PAYROLL DEDUCTION. Prior to an offering period, each eligible employee may
elect to purchase shares of Common Stock under the Plan by completing a payroll
deduction authorization form. Beginning on the offering period commencement
date, deductions are made from the pay of each participating employee in the
amount specified on the employee's payroll deduction form, up to a maximum of
15% of the employee's compensation. Deductions are allocated to the
participating employee's account. Interest is not accrued or paid on employee
payroll deduction accounts. During an offering period, a participating employee
may discontinue payroll deductions and may withdraw all, but not less than all,
of the accumulated balance of the employee's payroll deduction account. Other
than discontinuance, an employee may not change his or her payroll deduction
during an offering period.
PURCHASE OF SHARES; LIMITATIONS. On the last day of each offering period,
the aggregate amount allocated to each participating employee's payroll
deduction account is used to purchase shares of Common Stock from the Company.
In the discretion of the Board of Directors, these shares may be authorized but
unissued shares of Common Stock or shares purchased on the open market. The
purchase price is determined by the Administrator but may never be less than 85%
of the closing price of a share of Common Stock on the first or last day of an
offering period, whichever closing price is lower. In its capacity as
Administrator of the Plan, the Board of Directors has selected this minimum
purchase price as the applicable purchase price under the Plan. This purchase
price is subject to change from time to time in the discretion of the
Administrator. No employee may purchase under the Plan in any one calendar year
shares of Common Stock having an aggregate fair market value in excess of
$25,000.
OFFERING PERIODS. The Purchase Plan authorizes the Administrator to specify
offering periods under the Plan, not to exceed a maximum duration of 27 months.
In its capacity as Administrator of the Plan, the
16
<PAGE>
Board of Directors has designated two six-month offering periods running from
June 1(st) to November 30(th) and from December 1(st) to May 31(st),
respectively. These offering periods are subject to change from time to time in
the discretion of the Administrator.
TERMINATION OF EMPLOYMENT. If an employee terminates employment for any
reason, retires, or dies during an offering period, no payroll deduction will be
taken from any pay due and owing to the employee, no stock will be purchased for
the employee, and the balance in the employee's payroll deduction account will
be paid to the employee, or, in the event of the employee's death, to the
employee's properly designated beneficiary. In the absence of a designated
beneficiary, the employee's payroll deduction account will be paid to the
executor or administrator of the employee's estate, or to such other person(s)
as may be designated by the Company in accordance with the terms of the Purchase
Plan.
Because the number of shares of Common Stock that may be purchased by any
participant in the Plan is based on the fair market value of such shares on
future dates and on the participant's decision to purchase shares, the benefits
or amounts that will be received by Plan participants are not currently
determinable. No purchases will be made under the Plan prior to approval of the
Plan by the stockholders.
TAX ASPECTS
The Plan is intended to qualify as an "employee stock purchase plan" under
the provisions of Code section 423. As such, neither the grant of options to
purchase shares under each offering period nor the actual purchase of shares at
the close of the offering period will result in taxable income to the employee
or a deduction to the Company.
If the employee disposes of shares acquired under the Plan (including by way
of gift) within two years after the commencement date of the offering period
under which the shares are purchased or within one year after the shares are
purchased, there will be a "disqualifying disposition" of the shares under the
Code. Upon a disqualifying disposition, the employee must recognize ordinary
income equal to the excess of the fair market value of the shares on their
purchase date over the purchase price paid to acquire the shares. This excess
will be taxed as ordinary income in the year of the disqualifying disposition
even if no gain is realized on the disposition or a gift of the shares is made.
Any gain realized on a disqualifying disposition in excess of the fair market
value of the shares on the purchase date generally will be treated as long-term
or short-term capital gain, depending on the holding period for such shares. If
the shares are sold for less than their fair market value measured as of the
purchase date, the same amount of ordinary income is attributed to the employee
and a capital loss is recognized equal to the difference between the purchase
price and the fair market value of the shares on the purchase date. The Company
will have a corresponding tax deduction at the time of the disqualifying
disposition equal to the amount of ordinary income recognized by the employee.
If an employee disposes of shares acquired under the Plan other than in a
disqualifying disposition (I.E., the disposition occurs after the holding
periods described above have been satisfied), the employee recognizes (1)
ordinary income equal to the difference between the employee's purchase price
and the fair market value of the shares on the commencement date of the Offering
Period under which the shares were purchased, or, if less, the difference
between the amount realized by the employee in the disposition and the purchase
price of the shares, and (2) a long-term capital gain for any additional gain
realized by the employee in the disposition. If the employee sells the shares
and the sale price is less than the purchase price, then there is no ordinary
income recognized and the employee recognizes a capital loss for the difference
between the sale price and the purchase price. The Company will not have a
corresponding tax deduction for the ordinary income recognized by the employee
if there is not a disqualifying disposition.
17
<PAGE>
STOCKHOLDER APPROVAL
Approval of the Purchase Plan will require the affirmative vote of the
holders of a majority of the shares of the Company's Common Stock present in
person or by proxy at the Annual Meeting. If the stockholders fail to approve
the Purchase Plan, the Purchase Plan will not go into effect.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
APPROVAL AND RATIFICATION OF THE EMPLOYEE STOCK PURCHASE PLAN.
III. AUDITOR CONFIRMATION
The Board of Directors has selected Ernst & Young LLP, independent auditors,
to examine and audit the financial statements of Caliber for the fiscal year
ending December 31, 1999. Ernst & Young LLP has served as independent auditors
of Caliber since the inception of the Company in 1996. A partner of the firm
will be present at the Annual Meeting and available to respond to appropriate
questions, and will have an opportunity to make a statement if he desires to do
so.
During 1998, Ernst & Young LLP performed various professional services for
Caliber. They included completion of the examination of 1997 financial
statements for Caliber, other review work of required filings with the SEC,
preliminary work on the examination of fiscal year 1998 financial statements,
preparation of corporate tax returns and other consultation with Caliber
personnel on accounting and related matters.
The affirmative vote of a majority of the shares of Caliber Common Stock
present in person or represented by proxy at the Annual Meeting is required for
ratification of the selection of Ernst & Young LLP as Caliber's independent
auditors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS CALIBER'S INDEPENDENT
AUDITORS.
VII. OTHER MATTERS
The Board of Directors knows of no other matters to be presented for action
at the Annual Meeting other than those mentioned above; however, if any other
matters properly come before the meeting, it is intended that the persons named
in the accompanying proxy will vote on such matters in accordance with their
judgment as to the best interests of Caliber.
STOCKHOLDER PROPOSALS
The Company has received no stockholder proposals for presentation at the
1999 Annual Meeting. Any stockholder proposals intended to be presented at
Caliber's 2000 Annual Meeting must be received by Caliber's Secretary no later
than December 31, 1999. Any proposal received by the Company after such date
will be considered untimely and may be excluded from the Proxy Statement and
form of proxy for the 2000 Annual Meeting.
MISCELLANEOUS
A copy of Caliber's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, as filed with the Securities and Exchange Commission,
excluding certain exhibits thereto, may be obtained without charge by writing
Investor Relations, Caliber Learning Network, Inc., 3600 Clipper Mill Road,
Suite 300, Baltimore, Maryland 21211 or by telephoning (410) 843-1000.
BY ORDER OF THE BOARD OF DIRECTORS
Douglas L. Becker
Secretary
Baltimore, Maryland
April 22, 1999
18
<PAGE>
EXHIBIT A
CALIBER LEARNING NETWORK, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
EFFECTIVE JUNE 1, 1999
The purpose of this Plan is to provide eligible employees of Caliber
Learning Network, Inc. (the "COMPANY") and certain of its subsidiaries with
opportunities to purchase, through payroll deductions, shares of the Company's
Common Stock, $0.01 par value per share (the "COMMON STOCK"). The Plan is
intended to benefit the Company by increasing the employees' interest in the
Company's growth and success and encouraging employees to remain in the employ
of the Company or its participating subsidiaries. The Plan is intended to
constitute an "employee stock purchase plan" within the meaning of section 423
of the Internal Revenue Code of 1986, as amended (the "CODE"), and shall be so
applied and interpreted.
1. Shares Subject to the Plan. Subject to adjustment as provided herein, the
aggregate number of shares of Common Stock that may be made available for
purchase under the Plan is 200,000 shares. The shares issuable under the
Plan may, in the discretion of the Board of Directors of the Company (the
"BOARD"), be authorized but unissued shares of Common Stock, shares
purchased on the open market, or shares from any other proper source.
2. Administration. The Plan will be administered by the Board or by a committee
appointed by the Board (the "ADMINISTRATOR"). The Administrator has
authority to interpret the Plan, to make, amend and rescind rules and
regulations for the administration of the Plan, and to make all other
determinations necessary or desirable in administering the Plan, all of
which will be final and conclusive. No member of the Administrator shall be
liable for any action or determination made in good faith with respect to
the Plan or any Option granted hereunder.
3. Eligibility. All employees of the Company, including directors who are
employees, and all employees of any subsidiary of the Company (as defined in
section 424(f) of the Code), now or hereafter existing, that is designated
by the Administrator from time to time as a participating employer under the
Plan (a "DESIGNATED SUBSIDIARY"), are eligible to participate in any
Offering (as defined below) to purchase Common Stock under the Plan, subject
to such further eligibility requirements as may be specified by the
Administrator consistent with section 423 of the Code. The Administrator at
any time, if it deems it advisable to do so, may terminate the participation
of the employees of a particular Designated Subsidiary.
4. Participation. An eligible employee may become a participating employee in
the Plan by completing an election to participate in the Plan on a form
provided by the Administrator and submitting that form to the appropriate
payroll location for such employee in accordance with such rules as may be
established by the Administrator from time to time. The form will authorize
a regular payroll deduction from the Compensation (as defined below)
received by the participating employee during the Offering Period (as
defined below) and will authorize the purchase of shares of Common Stock for
the participating employee's account in accordance with the terms of the
Plan.
Enrollment will become effective upon the first day of the first Offering
Period that commences after the Company's receipt of the form. Unless an
employee files a new form or withdraws from the Plan, the participating
employee's deductions and purchases will continue at the same percentage rate of
Compensation for future Offering Periods under the Plan as long as the Plan
remains in effect and the employee remains eligible to participate.
The term "COMPENSATION" means the participant's base salary and commissions
received during an Offering Period, determined without regard to salary
reduction contributions under arrangements pursuant to section 401(k) or section
125 of the Code.
A-1
<PAGE>
5. Payroll Deductions; Withdrawals From Accounts.
(a) The Company will maintain payroll deduction accounts for all
participating employees. With respect to any Offering Period under this
Plan, an eligible employee may authorize a payroll deduction to be made
on each payday during the Offering Period in any whole number percentage,
up to a maximum of 15%, of such employee's Compensation on each such
payday. Payroll deductions with respect to an Offering Period shall
commence on the first payroll paid within the Offering Period and shall
end on the last payroll paid on or prior to the last Trading Day (as
defined below) of such Offering Period, unless sooner terminated by the
employee as provided herein.
(b) An employee may discontinue his or her payroll deduction once during an
Offering Period by filing a new payroll deduction authorization form in
accordance with such rules as may be established by the Administrator
from time to time. Other than discontinuance, an employee may not change
his or her payroll deduction during an Offering Period. If an employee
elects to discontinue payroll deductions during an Offering Period, but
does not elect to withdraw funds pursuant to subsection 5(d) below, funds
deducted prior to the election to discontinue payroll deductions will be
applied to the purchase of Common Stock pursuant to Section 9. If the
employee discontinues payroll deduction during an Offering Period, the
employee will thereby withdraw from participation in the Offering and may
not begin participation again during the remainder of the Offering
Period.
(c) An employee may increase or decrease his or her payroll deduction, to
take effect on the first day of the next Offering Period, by delivering
to the appropriate payroll location a new form regarding election to
participate in the Plan under Section 4 above prior to such date and in
accordance with such rules as may be established by the Administrator
from time to time.
(d) Unless determined otherwise by the Administrator, an employee may on any
one occasion during an Offering Period and for any reason withdraw all,
but not less than all, of the balance accumulated in the employee's
payroll deduction account. Any such withdrawal must be effected prior to
the close of business on the day immediately preceding the last Trading
Day of the Offering Period, or such earlier date designated by the
Administrator in its discretion, by delivering a written notice of
withdrawal to the appropriate payroll location for such employee in
accordance with such rules as may be established by the Administrator
from time to time. If the employee withdraws his or her accumulated
balance, the employee will thereby withdraw from participation in the
Offering and may not make payroll deductions during the remainder of the
Offering Period. Withdrawal of all or part of such balance will not
affect the employee's right to participate in any subsequent Offering
Period. An eligible employee must re-enroll in order to participate in a
subsequent Offering Period after having withdrawn his or her accumulated
balance pursuant to this Section 5(d).
6. Interest. Interest will not be paid on any employee payroll deduction
accounts, unless the Administrator determines otherwise.
7. Offering Periods. Options granted pursuant to the Plan ("OFFERINGS") are
made for an offering period which begins on the first day on which the
National Association of Securities Dealers Automated Quotation ("NASDAQ")
system is open for trading ("TRADING DAY") on or after January 1 of each
year or such other date specified by the Administrator and terminates on the
last Trading Day of a period specified by the Administrator (each such
period referred to herein as an "OFFERING PERIOD"). The duration of an
Offering Period shall be determined by the Administrator, in its discretion,
prior to the deadline for submission of employee election forms for such
Offering Period; provided, however, that no Offering Period shall have a
duration in excess of 27 months. Unless the Administrator determines
otherwise, subsequent Offering Periods of equal duration shall follow
consecutively thereafter, each
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<PAGE>
commencing on the first Trading Day occurring immediately after the
expiration of the preceding Offering Period.
An eligible employee must be employed by the Company or a Designated
Subsidiary on the first Trading Day of an Offering Period in order to
participate in that Offering Period. However, in the case of an individual who
becomes an eligible employee after the first Trading Day of an Offering Period,
the Administrator may designate a subsequent Trading Day within the Offering
Period upon which the employee shall be eligible to commence participation for
that Offering Period and such Trading Day shall constitute the first Trading Day
of the Offering Period for all purposes under the Plan with respect to such
employee. In addition, the Administrator may designate any Trading Day on or
after the last Trading Day of such Offering Period that shall constitute the
last day of the Offering Period (i.e., a "SPECIAL OFFERING PERIOD") for such
employee and such Trading Day shall constitute the last Trading Day of the
Offering Period for all purposes under the Plan with respect to such employee
for this initial Special Offering Period only.
8. Rights to Purchase Common Stock; Purchase Price.
Options to purchase shares of Common Stock will be granted (each, an
"OPTION") to participating employees as of the first Trading Day of each
Offering Period. Each Option shall represent a right to purchase on the last
Trading Day of such Offering Period, at the Purchase Price hereinafter provided
for, whole shares of Common Stock reserved for purposes of this Plan up to such
number of shares as is determined by dividing $12,500 by the Fair Market Value
of the Common Stock on the first Trading Day of the Offering Period.
Participants granted Options under the Plan shall have the same rights and
privileges with respect to such Options. The purchase price of each share of
Common Stock (the "PURCHASE PRICE") during an Offering Period shall be
determined by the Administrator, in its discretion, prior to the deadline for
submission of employee election forms for such Offering Period; provided,
however, that the Purchase Price for an Offering Period shall never be less than
the lesser of 85 percent of the Fair Market Value of the Common Stock on the (i)
first Trading Day of the Offering Period or (ii) last Trading Day of such
Offering Period, and shall never be less than the par value of the Common Stock.
For purposes of the Plan, "FAIR MARKET VALUE" on a Trading Day means the
closing sale price per share of Common Stock as reflected on the principal
consolidated transaction reporting system for securities listed on any national
securities exchange or other market quotation system on which the Common Stock
may be principally listed or quoted or, if there are no transactions on a
Trading Day, then such closing sale price for the preceding Trading Day upon
which transactions occurred.
No employee may be granted an Option hereunder if such employee, immediately
after the Option is granted, owns 5% or more of the total combined voting power
or value of the stock of the Company or any subsidiary. For purposes of the
preceding sentence, the attribution rules of section 424(d) of the Code will
apply in determining the stock ownership of an employee, and all stock which the
employee has a contractual right to purchase will be treated as stock owned by
the employee.
No employee may be granted an Option which permits his rights to purchase
Common Stock under this Plan and all other stock purchase plans of the Company
and its subsidiaries to accrue at a rate which exceeds $25,000 of the fair
market value of such Common Stock (determined at the time such Option is
granted) for each calendar year in which the Option is outstanding at any time,
as required by section 423 of the Code.
9. Timing of Purchase. Unless a participating employee has withdrawn all funds
from his or her account by the close of business on the day preceding the
last Trading Day of the Offering Period or such earlier date designated by
the Administrator, or the employee's participation in the Plan has otherwise
been terminated, such employee will be deemed to have exercised
automatically his or her Option to purchase Common Stock on the last Trading
Day of the Offering Period for that number of whole shares of Common Stock
which the accumulated funds in the employee's account at that time will
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<PAGE>
purchase at the Purchase Price, subject to applicable adjustments as
provided herein. Any balance remaining in an employee's payroll deduction
account after such purchase of Common Stock will be refunded automatically
to the employee, except that any balance which is less than the purchase
price of one share of Common Stock will be carried forward into the
employee's payroll deduction account for the following Offering Period,
unless the employee elects not to participate in the following Offering
Period under the Plan, in which case the balance in the employee's account
will be refunded.
10. Issuance of Certificates. As soon as practicable following the end of each
Offering Period, certificates representing shares of Common Stock purchased
under the Plan for such Offering Period shall be issued only in the name of
the employee, in the name of the employee and another person of legal age as
joint tenants with rights of survivorship, or (in the Administrator's sole
discretion) in the street name of a brokerage firm, bank or other nominee
holder designated the Administrator or the employee.
11. Rights on Retirement, Death or Termination of Employment. In the event of a
participating employee's termination of employment prior to the last Trading
Day of an Offering Period (whether as a result of the employee's voluntary
or involuntary termination, retirement, death or otherwise), no payroll
deduction will be taken from any pay due and owing to the employee and the
balance in the employee's payroll deduction account will be paid to the
employee or, in the event of the employee's death, (a) to a beneficiary
previously designated in a revocable notice signed by the employee (with any
spousal consent required under state law) or (b) in the absence of such a
designated beneficiary, to the executor or administrator of the employee's
estate or (c) if no such executor or administrator has been appointed to the
knowledge of the Company, to such other person(s) as the Company may, in its
discretion, designate. If, prior to the last Trading Day of an Offering
Period, the Designated Subsidiary by which an employee is employed will
cease to be a subsidiary of the Company, or if the employee is transferred
to a subsidiary of the Company that is not a Designated Subsidiary, the
employee will be deemed to have terminated employment for the purposes of
this Plan.
12. Termination of Participation. A participating employee will be refunded all
monies in his or her account, and his or her participation in the Plan will
be terminated if either (a) the Board elects to terminate the Plan except as
otherwise provided in Section 17(c) hereof, or (b) the employee ceases to be
eligible to participate in the Plan. As soon as practicable following
termination of an employee's participation in the Plan, the Company will
deliver to the employee a check representing the amount in the employee's
account. Once terminated, participation may not be reinstated for the then
current Offering Period but, if otherwise eligible, the employee may elect
to participate in any subsequent Offering Period.
13. Optionees Not Stockholders. Neither the granting of an Option to an employee
nor the deductions from his pay will constitute such employee a stockholder
of the shares of Common Stock covered by an Option under this Plan until
such shares have been purchased by and issued to the employee.
14. Options Not Transferable. Options under this Plan are not transferable by a
participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee.
15. Withholding of Taxes. To the extent that a participating employee realizes
ordinary income in connection with the purchase, sale or other transfer of
any shares of Common Stock purchased under the Plan or the crediting of
interest to the employee's account, the Company may withhold amounts needed
to cover such taxes from any payments otherwise due and owing to the
participating employee or from shares that would otherwise be issued to the
participating employee hereunder. Any participating employee who sells or
otherwise transfers shares purchased under the Plan within one year after
the shares were transferred to the participating employee or within two
years after the beginning of the Offering Period in which the shares were
purchased, whichever is later, must within 30 days of such sale or transfer
notify the Company in writing of the sale or transfer.
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<PAGE>
16. Application of Funds. All funds received or held by the Company under the
Plan may be used for any corporate purpose until applied to the purchase of
Common Stock and/or refunded to participating employees and can be
commingled with other general corporate funds. Participating employees'
accounts will not be segregated.
17. Effect of Changes in Capitalization.
(a) Changes in Stock. If the number of outstanding shares of Common Stock is
increased or decreased or the shares of Common Stock are changed into or
exchanged for a different number or kind of shares or other securities of
the Company by reason of any recapitalization, reclassification, stock
split, reverse split, combination of shares, exchange of shares, stock
dividend, or other distribution payable in capital stock, or other
increase or decrease in such shares effected without receipt of
consideration by the Company occurring after the effective date of the
Plan, the number and kind of shares that may be purchased under the Plan
shall be adjusted proportionately and accordingly by the Company. In
addition, the number and kind of shares for which Options are outstanding
shall be similarly adjusted so that the proportionate interest, if any,
of a participating employee immediately following such event shall, to
the extent practicable, be the same as immediately prior to such event.
Any such adjustment in outstanding Options shall not change the aggregate
Purchase Price payable by a participating employee with respect to shares
subject to such Options, but shall include a corresponding proportionate
adjustment in the Purchase Price per share.
(b) Reorganization in Which the Company Is the Surviving Corporation.
Subject to Subsection (c) of this Section 17, if the Company shall be the
surviving corporation in any reorganization, merger or consolidation of
the Company with one or more other corporations, all outstanding Options
under the Plan shall pertain to and apply to the securities to which a
holder of the number of shares of Common Stock subject to such Options
would have been entitled immediately following such reorganization,
merger or consolidation, with a corresponding proportionate adjustment of
the Purchase Price per share so that the aggregate Purchase Price
thereafter shall be the same as the aggregate Purchase Price of the
shares subject to such Options immediately prior to such reorganization,
merger or consolidation.
(c) Reorganization in Which the Company Is Not the Surviving Corporation or
Sale of Assets or Stock. Upon any dissolution or liquidation of the
Company, or upon a merger, consolidation or reorganization of the Company
with one or more other corporations in which the Company is not the
surviving corporation, or upon a sale of all or substantially all of the
assets of the Company to another corporation, or upon any transaction
(including, without limitation, a merger or reorganization in which the
Company is the surviving corporation) approved by the Board that results
in any person or entity owning more than 50 percent of the combined
voting power of all classes of stock of the Company, the Plan and all
Options outstanding hereunder shall terminate, except to the extent
provision is made in writing in connection with such transaction for the
continuation of the Plan and/or the assumption of the Options theretofore
granted, or for the substitution for such Options of new Options covering
the stock of a successor corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kinds of shares and
exercise prices, in which event the Plan and Options theretofore granted
shall continue in the manner and under the terms so provided. In the
event of any such termination of the Plan, the Offering Period shall be
deemed to have ended on the last Trading Day prior to such termination
and, unless the Administrator determines otherwise in its discretion,
each participating employee shall have the ability to choose either to
(i) have all monies then credited to such employee's account (including
interest, to the extent any has accrued) returned to such participating
employee or (ii) exercise his or her Options in accordance with Section 9
on such last Trading Day; provided, however, that if a participating
employee does not exercise his or her right of choice, his or her Options
shall be deemed to have been automatically exercised in accordance
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<PAGE>
with Section 9 on such last Trading Day. The Administrator shall send
written notice of an event that will result in such a termination to all
participating employees not later than the time at which the Company
gives notice thereof to its stockholders.
(d) Adjustments. Adjustments under this Section 17 related to stock or
securities of the Company shall be made by the Committee, whose
determination in that respect shall be final, binding, and conclusive.
(e) No Limitations on Company. The grant of an Option pursuant to the Plan
shall not affect or limit in any way the right or power of the Company to
make adjustments, reclassifications, reorganizations or changes of its
capital or business structure or to merge, consolidate, dissolve or
liquidate, or to sell or transfer all or any part of its business or
assets.
18. Amendment of the Plan. The Board may at any time, and from time to time,
amend this Plan in any respect, except that (a) if the approval of any such
amendment by the stockholders of the Company is required by section 423 of
the Code, such amendment will not be effected without such approval, and (b)
in no event may any amendment be made which would cause the Plan to fail to
comply with section 423 of the Code unless expressly so provided by the
Board.
19. Insufficient Shares. In the event that the total number of shares of Common
Stock specified in elections to be purchased under any Offering plus the
number of shares purchased under previous Offerings under this Plan exceeds
the maximum number of shares issuable under this Plan, the Administrator
will allot the shares then available on a pro rata basis. Any funds then
remaining in a participating employee's account after purchase of the
employee's pro-rata number of shares will be refunded.
20. Termination of the Plan. This Plan may be terminated at any time by the
Board. Except as otherwise provided in Section 17(c) hereof, upon
termination of this Plan all amounts in the payroll deduction accounts of
participating employees will be promptly refunded.
21. Governmental Regulations.
(a) The Company's obligation to sell and deliver Common Stock under this
Plan is subject to listing on a national stock exchange or quotation on
Nasdaq and the approval of all governmental authorities required in
connection with the authorization, issuance or sale of such stock.
(b) The Plan will be governed by the laws of the State of Maryland except to
the extent that such law is preempted by federal law.
(c) The Plan is intended to comply with the provisions of Rule 16b-3(b)(5)
promulgated under the Exchange Act as a "Stock Purchase Plan". Any
provision inconsistent with such Rule will to that extent be inoperative
and will not affect the validity of the Plan.
22. Effective Date. The Plan is effective as of June 1, 1999, subject to
approval by the shareholders of the Company within 12 months of such date.
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<PAGE>
1766-PS-99
<PAGE>
PROXY
CALIBER LEARNING NETWORK, INC.
3600 Clipper Mill Road, Suite 300, Baltimore, Maryland 21211
The undersigned hereby constitutes and appoints R. Christopher
Hoehn-Saric and Douglas L. Becker, and each of them, as Proxies for the
undersigned, with full power to appoint their substitutes, and authorizes
each of them to represent and to vote all shares of Common Stock of Caliber
Learning Network, Inc. (the "Company") held by the undersigned as of the
close of business on April 9, 1999, at the Annual Meeting of Stockholders to
be held at the Harbor Inn Pier 5, 711 Eastern Avenue, Baltimore, Maryland
21202, on Thursday, May 20, 1999 at 1:00 p.m., local time, and at any
adjournments or postponements thereof.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
<PAGE>
CALIBER LEARNING NETWORK, INC.
Dear Stockholder,
Please take note of the important information with this Proxy Ballot. There
are a number of issues related to the management and operation of your
Company that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted, then sign the card, detach it and return your proxy vote in the
enclosed prepaid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, May
20, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Douglas L. Becker
Secretary
Please mark
[X] votes as in
this example.
1. Proposal to elect the following persons as directors for the class
indicated, and until their successors are duly elected and qualified.
CLASS 1-3 YEARS
NOMINEES: Janeen M. Armstrong and Ernest Anastasio
FOR WITHHELD
ALL FROM ALL
NOMINEES [ ] [ ] NOMINEES
[ ]
---------------------------------------
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. Proposal to approve and ratify the adoption
of the Caliber Learning Network, Inc.
Employee Stock Purchase Plan. [ ] [ ] [ ]
3. Proposal to ratify the selection of Ernst
& Young LLP as the independent auditors
of the Company for the fiscal year
ending December 31, 1999. [ ] [ ] [ ]
The undersigned hereby acknowledges receipt of a copy of the accompanying
Notice of Annual Meeting of Stockholders, the Proxy Statement with respect
thereto and the Company's 1998 Annual Report, and hereby revokes any proxy or
provides heretofore given. This proxy may be revoked at any time before it is
exercised.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as your name(s) appear(s) on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one name
appears, a majority must sign. If a corporation, this signature must be that
of an authorized officer who should state his or her title.
Signature: Date: Signature: Date:
---------------- ------ ----------------- ------
