SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e) (2))
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WHITMAN EDUCATION GROUP, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------
(Name of Persons(s) Filing Proxy Statement)
Payment of filing fee. (Check the appropriate box):
[X ] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1.) Title of each class of securities to which transaction applies:
2.) Aggregate number of securities to which transactions apply:
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 to:
3.) Filing party:
4.) Date filed:
<PAGE>
WHITMAN EDUCATION GROUP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 6, 1999
To the Shareholders of
Whitman Education Group, Inc.:
The 1999 annual shareholders meeting (the "Annual Meeting") of Whitman
Education Group, Inc. (the "Company") will be held at the Ultrasound Diagnostic
School located at 4780 N. State Road 7, Building E, Suite 100, Lauderdale Lakes,
Florida on August 6, 1999, at 10:00 a.m. local time, for the following purposes:
(1) to elect nine (9) directors to serve until the 2000 annual meeting of
shareholders; and
(2) to transact such other business as may properly come before the Annual
Meeting.
Only shareholders of record at the close of business on June 15, 1999 are
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof. A list of such shareholders will be available for inspection during
normal business hours at the offices of the Company located at 4400 Biscayne
Boulevard, Miami, Florida during the 10 days preceding the Annual Meeting.
Your attention is directed to the accompanying Proxy Statement for further
information regarding each proposal to be considered at the Annual Meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
DATE, SIGN AND RETURN THE PROXY CARD IN THE ENCLOSED POSTAGE- PREPAID ENVELOPE
TO ASSURE REPRESENTATION OF YOUR SHARES AND A QUORUM AT THE MEETING. YOU MAY
REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED BY PROVIDING WRITTEN NOTICE TO
THE COMPANY BEFORE THE MEETING OR BY ATTENDING THE ANNUAL MEETING AND VOTING.
By Order of the Board of Directors
Richard B. Salzman, Secretary
Miami, Florida
July 6, 1999
<PAGE>
WHITMAN EDUCATION GROUP, INC.
4400 BISCAYNE BOULEVARD
MIAMI, FLORIDA 33137
(305) 575-6534
PROXY STATEMENT
This proxy statement is furnished by the Board of Directors of Whitman
Education Group, Inc., a Florida corporation (the "Company"), in connection with
its solicitation of proxies for use at the annual meeting of shareholders to be
held on August 6, 1999 (the "Annual Meeting"), at the time and place set forth
in the accompanying Notice of Annual Meeting of Shareholders, and at any
adjournments thereof. Mailing of the proxy statement and the accompanying proxy
card to shareholders will commence on or about July 6, 1999.
Record holders of the Company's Common Stock, no par value per share (the
"Common Stock"), at the close of business on June 15, 1999 (the "Record Date")
are entitled to one vote for each share held on all matters to be considered at
the Annual Meeting. On the Record Date, 13,431,550 shares of Common Stock were
outstanding and entitled to vote.
VOTING
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted in accordance with the directions given and, in
connection with any other business that may properly come before the Annual
Meeting, in the discretion of the persons named in the proxy. With respect to
the proposal to elect nine directors to serve until the 2000 annual meeting,
shareholders may vote in favor of all nominees or withhold their votes as to all
or any specific nominees.
A proxy delivered pursuant to this solicitation is revocable at any time
prior to its exercise by giving written notice to the Secretary of the Company,
by delivering a later-dated proxy, or by voting in person at the Annual Meeting.
Attendance at the Annual Meeting will not, in itself, constitute revocation of a
proxy.
A majority of the outstanding shares of Common Stock, represented in person
or by proxy, constitutes a quorum for transaction of business at the Annual
Meeting. The election of directors will require the affirmative vote of a
plurality of the shares of Common Stock voting in person or by proxy at the
Annual Meeting; accordingly, votes that are withheld and broker non-votes,
relating to shares as to which a broker or nominee indicates that it does not
have discretionary authority to vote on a proposal, will not affect the outcome
of the election.
COSTS OF SOLICITATION
The Company will bear the costs of solicitation of
proxies from its shareholders. Solicitation of proxies may be
made in person, by mail or by telephone by officers, directors
and regular employees of the Company who will not be specially
compensated in such regard. Nominees, fiduciaries and other custodians
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<PAGE>
will be requested to forward solicitation materials to the beneficial owners and
secure their voting instructions, if necessary, and will be reimbursed for the
reasonable expenses incurred in sending proxy materials to the beneficial
owners.
PRINCIPAL SECURITY HOLDERS
The following table sets forth certain information as of June 15, 1999
concerning stock ownership of all persons known by the Company to own
beneficially in excess of five percent of the Company's Common Stock. Except as
otherwise indicated, all shares are beneficially owned and the sole investment
and voting power is held by each person set forth herein.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER PERCENT
BENEFICIAL HOLDER OF SHARES OF CLASS
- --------------------------- -------------- ------------
<S> <C> <C>
Frost-Nevada, 5,517,528 (1) 35.8
Limited Partnership
3500 Lakeside Court
Suite 200
Reno, Nevada 89509
_____________________
<FN>
(1) Includes 317,500 shares which may be acquired pursuant to stock
options held by Dr. Frost exercisable within 60 days of June 15, 1999
and 1,650,000 shares which may be acquired pursuant to stock purchase
warrants held by Frost-Nevada, Limited Partnership (of which Dr. Frost
is the sole limited partner and sole shareholder of Frost-Nevada
Corporation, the general partner), exercisable within 60 days of June
15, 1999. Dr. Frost is the Chairman of the Board of Directors of the
Company.
</FN>
</TABLE>
ELECTION OF DIRECTORS
(Item No. 1)
BOARD OF DIRECTORS
A Board of Directors consisting of nine directors will be elected at the
Annual Meeting to hold office for one year or until their successors are elected
and qualified. The persons named below were designated by the Board of Directors
as nominees. All of the nominees are incumbent directors. Although management
does not anticipate that any nominee will be unable or unwilling to serve as a
director, in the event of such an occurrence, proxies may be voted in the
discretion of the persons named in the proxy for a substitute designated by the
Board of Directors, unless the Board of Directors determines to reduce the
number of directors constituting the Board.
JACK R. BORSTING, PH.D. Dr. Borsting is the E. Morgan Stanley Professor
Director since 1994 of Business Administration at the University of
Age 70 Southern California and Director of its Center
for Telecommunication Management. From 1988 to
1994, Dr. Borsting was Dean of the University of
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<PAGE>
Southern California School of Business
Administration, and from 1983 to 1988,
he was Dean of the University of Miami School of
Business Administration. Dr. Borsting, a former
Assistant Secretary of Defense (Comptroller), is
a director of Northrop Grumman Corporation
(aerospace), TRO Learning, Inc. (proprietary
education) and Bristol Retail System
(point-of-sale software and service). Dr.
Borsting is a trustee of the Institute for
Defense Analysis, the Rose Hill Foundation and
Chairman of the Board of the Los Angeles
Orthopedic Hospital.
NEIL FLANZRAICH In May 1998, Mr. Flanzraich became Vice Chairman
Director since 1997 and President of IVAX Corporation
Age 55 (pharmaceuticals). From 1995 through 1998, Mr.
Flanzraich was a shareholder and Chairman of the
Life Sciences Legal Practice Group of Heller
Ehrman White & McAuliffe, Palo Alto, California.
From 1981 to 1994, Mr. Flanzraich was Senior
Vice President, General Counsel and member of
the Corporate Executive Committee of Syntex
Corporation, an international pharmaceutical
company that was acquired by Roche Holdings Ltd.
Mr. Flanzraich serves as Chairman of the Board
of North American Vaccine, Inc. (vaccines).
PHILLIP FROST, M.D. Dr. Frost has been a director of the Company
Director since 1992 since April 1992 and Chairman of the Board of
Age 62 Directors since November 1992. Dr. Frost has
been Chairman of the Board of Directors and
Chief Executive Officer of IVAX Corporation
(pharmaceuticals) since 1987. Dr. Frost served
as President of IVAX from 1991 until 1995. Dr.
Frost was Chairman of the Board of Directors of
Key Pharmaceuticals, Inc. from 1972 to 1986. Dr.
Frost is Vice Chairman of the Board of Directors
of North American Vaccine, Inc., Vice Chairman
of the Board of Directors of Continucare
Corporation (managed health care), and a
director of Northrop Grumman Corp. He is a
trustee of the University of Miami and a member
of the Board of Governors of the American Stock
Exchange.
PETER S. KNIGHT Mr. Knight is a partner in the law firm of
Director since 1994 Wunder, Knight, Levine, Thelen & Forscey, in
Age 48 Washington, D.C. In 1996, Mr. Knight took
a leave of absence from his firm to serve as
President Clinton's Campaign Manager for
Clinton/Gore '96. From 1989 to 1991, Mr. Knight
was General Counsel and Secretary of Medicis
Pharmaceutical Corporation. From 1977 to 1989,
Mr. Knight served as the Chief of Staff to
Congressman, and later Senator, Al Gore. Mr.
Knight is a director of COMSAT Corp. (an
international satellite services and
digital networking company), Medicis
Pharmaceutical Corporation ( a pharmaceutical
company specializing in dermatology ),
Healthworld Corp. ( an international
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<PAGE>
marketing and communications company
specializing in health care), and the
Schroder Series Trust (a mutual fund company).
RICHARD M. KRASNO, PH.D. In February 1998, Dr. Krasno became President
Director since 1996 of the Monterey Institute of International
Age 57 Studies in Monterey, California (independent
professional graduate school of international
studies). From 1983 to February 1998, Dr. Krasno
was President and Chief Executive Officer of the
Institute of International Education (private
not-for-profit education organization), New York
City, New York. He served as its Executive Vice
President and Chief Operating Officer from 1981
to 1983. Dr. Krasno was Deputy Assistant
Secretary of Education with the U.S. Department
of Education from 1980 to 1981.
LOIS F. LIPSETT, PH.D. Dr. Lipsett is the President of Health Education
Director since 1996 Associates, Washington, D.C. Since 1995, Dr.
Age 65 Lipsett has served as a consultant to several
companies, including the Robert Wood Johnson
Foundation. Dr. Lipsett was Vice President,
Scientific and Medical Affairs, American
Diabetes Association from 1992 to 1995. Prior to
1992, Dr. Lipsett founded and was Director of
the National Diabetes Information Clearinghouse
and the Combined Health Information Database and
also was a Health Scientist Administrator
overseeing several training, career development
and research programs at the National Institutes
of Health.
RICHARD C. PFENNIGER, JR. Mr. Pfenniger has been Chief Executive
Director since 1992 Officer and Vice Chairman of the Company since
Age 43 March 1997 and a director of the Company since
1992. Mr. Pfenniger was Chief Operating Officer
of IVAX Corporation from 1994 to March 1997. He
served as Senior Vice President--Legal Affairs
and General Counsel of IVAX from 1989 to 1994,
and as Secretary from 1990 to 1994. Prior to
joining IVAX, Mr. Pfenniger was engaged in
private law practice. Mr. Pfenniger is a
director of North American Vaccine, Inc.
PERCY A. PIERRE, PH.D. Dr. Pierre has been Professor of Electrical
Director since 1997 Engineering at the College of Engineering of
Age 60 Michigan State University since 1995. Prior to
1995, he was Vice President for Research and
Graduate Studies, as well as Professor of
Electrical Engineering at Michigan State
University from 1990 to 1995; President of
Prairie View A & M University from 1983 to 1989;
Assistant Secretary of the Army for Research,
Development and Acquisition, Department of the
U.S. Army, from 1977 to 1981; and Dean of the
School of Engineering at Howard University
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<PAGE>
from 1971 to 1977. Dr. Pierre serves as a
director of CMS Energy Corp. (diversified energy
company); is a director of Old Kent Financial
Corporation (bank holding company) and is a
Trustee of the University of Notre Dame.
A. MARVIN STRAIT Mr. Strait has served on the Board of
Director since 1998 Directors of Colorado Technical University
Age 65 since 1986. Mr. Strait presently practicesas a
Certified Public Accountant under the name A.
Marvin Strait, CPA. He has practiced in the
field of public accountancy in Colorado since
1960. He also presently serves as a member of
the Board of Directors of Western National Bank,
Colorado Springs, Colorado, and as a member of
the Audit Committee of the United States Olympic
Committee. Mr. Strait has previously served as
the Chairman of the Board of Directors of the
American Institute of Certified Public
Accountants and as President of the Colorado
Society of Certified Public Accountants.
DIRECTOR COMPENSATION
Each director who is not employed by the Company receives $4,800 per year
for his or her service as a director, $1,000 for each Board of Directors meeting
attended in person, and is reimbursed for expenses incurred in attending board
and committee meetings. In lieu of both the monthly retainer and the meeting
attendance fees, each director who is not employed by the Company may elect to
receive 2,500 options to purchase shares of the Company's Common Stock, to be
granted on the first business day after election at the annual meeting of
shareholders.
In addition, pursuant to the formula grant provision contained in the
Company's 1996 Stock Option Plan, non-employee directors automatically are
granted each year, on the first business day following the Company's annual
meeting of shareholders, non-qualified stock options to purchase 7,500 shares
(37,500 in the case of the Chairman of the Board) of the Company's Common Stock
at an exercise price equal to the fair market value of the Common Stock on the
date of the grant, and having a term of ten years. In fiscal 1999, pursuant to
that formula grant provision, options at an exercise price of $4.94 per share
were automatically granted to Dr. Frost (37,500 shares), and to Dr. Borsting,
Mr. Flanzraich, Mr. Knight, Dr. Lipsett, Dr. Krasno Dr. Pierre and Mr. Strait
(7,500 shares each). In addition, pursuant to the election described above, Dr.
Frost, Dr. Borsting and Messrs. Knight and Flanzraich also received options to
purchase an additional 2,500 shares at $4.94 per share.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held four meetings during fiscal 1999. All directors
attended at least 75% of the meetings of the Board of Directors and committees
of the Board of Directors on which they served during the period in which they
were a member of the Board of Directors or the committee, as applicable, except
Phillip Frost, who attended 63% of such meetings. The Board of Directors has
three standing committees, described below. The Board of Directors does not have
a nominating committee, and the usual functions of such a committee are
performed by the entire Board of Directors.
-5-
<PAGE>
EXECUTIVE COMMITTEE. The Executive Committee of the Board of Directors acts
on certain matters during intervals between meetings of the Board of Directors.
The current members of the Executive Committee are Mr. Pfenniger, Dr. Frost, Dr.
Borsting and Mr. Flanzraich. The Executive Committee took no action during
fiscal 1999.
AUDIT COMMITTEE. The principal functions of the Audit Committee include
reviewing the adequacy of the Company's internal systems of accounting controls,
recommending to the Board of Directors the appointment of independent auditors,
conferring with independent auditors and internal auditors concerning the scope
of their examinations of the books and records of the Company and their
independence, reviewing the financial statements of the Company and management's
disclosures, reviewing the independent auditors' findings and recommendations,
and considering other appropriate matters regarding the financial affairs of the
Company. The current members of the Audit Committee are Dr. Borsting, Mr.
Knight, Dr. Lipsett, Dr. Pierre and A. Marvin Strait. The Audit Committee held
four meetings during fiscal 1999.
COMPENSATION COMMITTEE. The principal functions of the Compensation
Committee are to approve or recommend to the Board of Directors remuneration
arrangements and compensation plans involving the Company's directors and
executive officers and to review with management the Company's employee and
stock benefit programs. The current members of the Compensation Committee are
Dr. Frost, Dr. Krasno and Mr. Flanzraich. The Compensation Committee held three
meetings during fiscal 1999 and acted once by written consent.
EXECUTIVE OFFICERS WHO ARE NOT NOMINEES
The Company's executive officers are elected annually at the first meeting
of the Board of Directors following each annual meeting of Shareholders. Set
forth below is a summary of the background and business experience of the
executive officers of the Company who are not nominees for director.
RANDY S. PROTO. Mr. Proto, age 41, has been President of Whitman since
1994. In March 1997, Mr. Proto also assumed the duties of Chief Operating
Officer. For seven years prior thereto, Mr. Proto was Chief Executive Officer
and had ownership interests in eleven proprietary schools in four states. For
eight years prior thereto, Mr. Proto was employed by Computer Processing
Institute. Among the positions he held at that institution were Vice President
and School Director, Director of Admissions and Marketing, Director of Finance
and Financial Aid, Director of Placement and Director of Education.
DAVID D. O'DONNELL. Mr. O'Donnell, age 57, has been President and Chairman
of the Board of Colorado Tech since 1986. Since 1997, Mr. O'Donnell has also
been Acting Chancellor of Huron University, a campus of Colorado Technical
University in Huron, South Dakota. Prior to 1986, Mr. O'Donnell was employed by
ITT Educational Services, Inc., another provider of proprietary education, from
1975 through February 1986 when he left to join Colorado Technical University.
While at ITT Educational Services, Mr. O'Donnell served in many capacities
including Director of Marketing and Vice President and General Manager of ITT
Employment Training Systems, a subsidiary of ITT Educational Services.
FERNANDO L. FERNANDEZ. Mr. Fernandez, age 38, has served as Vice
President--Finance, Treasurer and Chief Financial Officer of Whitman
since 1996. Prior to joining the Company, Mr. Fernandez, a certified
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<PAGE>
public accountant, served as Chief Financial Officer of Frost-Nevada Limited
Partnership from 1991 to 1996. Previously, Mr. Fernandez served as Audit Manager
for Coopers & Lybrand in Miami.
RICHARD B. SALZMAN. Mr. Salzman, age 38, has served as Vice
President--Legal Affairs and General Counsel and Secretary of Whitman since
1996. For approximately ten years prior to joining Whitman, Mr. Salzman was
engaged in private law practice in Miami, Florida, primarily with the firm of
Homer & Bonner, P.A.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and 10% shareholders to file initial
reports of ownership and reports of changes in ownership of the Company's Common
Stock and other equity securities with the Securities and Exchange Commission
and the American Stock Exchange. Directors, executive officers and 10%
shareholders are required to furnish the Company with copies of all Section
16(a) forms they file. Based on a review of the copies of such reports furnished
to the Company and written representations from the Company's directors and
executive officers that no other reports were required, the Company believes
that during fiscal 1999 the Company's directors, executive officers and 10%
shareholders complied with all Section 16(a) filing requirements applicable to
them.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company currently occupies administrative offices in Miami, Florida
which are owned by IVAX Corporation. The lease between the Company and IVAX
provides for an annual rental of $146,442. The Chairman of the Board of the
Company is also the Chairman of the Board and a principal shareholder of IVAX
and Neil Flanzraich, a director of the Company, is Vice Chairman and President
of IVAX.
The Company purchases certain textbooks and materials for resale to its
students from an entity that is 40% owned by Randy S. Proto, the Company's Chief
Operating Officer. In the fiscal years ended March 31, 1999, 1998 and 1997, the
Company purchased $120,300, $120,300 and $78,900 in textbooks and materials from
that entity.
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<PAGE>
STOCK OWNERSHIP BY MANAGEMENT
The following table sets forth certain information as of June 15, 1999
concerning the number of shares of Common Stock beneficially owned by each
director, each nominee for director, each executive officer named below in the
"Summary Compensation Table" under "Executive Compensation" and all directors
and executive officers as a group, and the percentage such shares represent of
the total outstanding shares of Common Stock. Unless otherwise indicated, all
shares are owned directly by the person indicated who holds sole voting and
investment power.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY PERCENT
NAME OF BENEFICIAL HOLDER OWNED(1) OF CLASS
- ---------------------------- ------------------- ----------
<S> <C> <C>
Jack R. Borsting, Ph.D. 53,100 (2) *
Neil Flanzraich 24,375 (2) *
Phillip Frost, M.D. 5,517,528 (3) 35.8
Peter S. Knight 47,500 (2) *
Richard M. Krasno, Ph.D. 22,500 (2) *
Lois F. Lipsett, Ph.D. 22,700 (2) *
Richard C. Pfenniger, Jr. 304,999 (2) 2.2
Percy A. Pierre, Ph.D. 23,225 (2) *
A. Marvin Strait 71,528 (2) *
Randy S. Proto 515,195 (2) 3.7
David D. O'Donnell 657,309 (4) 4.8
Fernando L. Fernandez 162,204 (2) 1.2
Richard B. Salzman 86,193 (2) *
All directors and executive officers
as a group (13 persons) 7,508,356 (5) 44.8%
_____________________
<FN>
* Represents beneficial ownership of less than one percent.
(1) For purposes of this table, beneficial ownership is computed pursuant
to Rule 13d-3 under the Securities Exchange Act of 1934; the inclusion
of shares as beneficially owned should not be construed as an
admission that such shares are beneficially owned for purposes of
Section 16 of the Securities Exchange Act of 1934.
-8-
<PAGE>
(2) Includes shares which may be acquired pursuant to stock options
exercisable within 60 days of June 15, 1999: Dr. Borsting (47,500); Mr.
Knight (47,500); Dr. Krasno (22,500); Mr. Flanzraich (24,375); Dr.
Lipsett (22,500); Dr. Pierre (20,625); Mr. Strait (7,500); Mr.
Pfenniger (266,250); Mr. Proto (477,500); Mr. Fernandez (160,000); and
Mr. Salzman (85,000).
(3) Includes 317,500 shares which may be acquired pursuant to stock options
held by Dr. Frost exercisable within 60 days of June 15, 1999 and
1,650,000 shares which may be acquired pursuant to stock purchase
warrants held by Frost-Nevada, Limited Partnership (of which Dr. Frost
is the sole limited partner and sole shareholder of Frost-Nevada
Corporation, the general partner), exercisable within 60 days of June
15, 1999. Dr. Frost is the Chairman of the Board of Directors of the
Company.
(4) Includes 165,000 shares which may be acquired pursuant to stock options
exercisable within 60 days of June 15, 1999, 211,000 shares held in
trust by Mr. O'Donnell for various family members and 1,185 shares held
of record by his wife.
(5) Includes shares described in footnotes (1) through (4) as beneficially
owned.
</FN>
</TABLE>
EXECUTIVE COMPENSATION
The following table contains certain information regarding aggregate
compensation paid or accrued by the Company during fiscal 1999 to the Chief
Executive Officer of the Company and to each of the four most highly compensated
executive officers other than the Chief Executive Officer.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
------------------------ ------------ ------------
NAME AND YEAR
PRINCIPAL POSITION ENDED STOCK
MARCH 31, SALARY BONUS OPTIONS
- ------------------------- --------- ------ ----- ------------
<S> <C> <C> <C> <C> <C>
($) ($) (#) ($)(1)
Richard C.
Pfenniger, Jr. (2) 1999 283,000 0 75,000 1,449
Chief Executive Officer 1998 275,000 0 0 1,200
1997 17,187 0 300,000(3) -
Randy S. Proto 1999 175,000 0 40,000 1,449
President and Chief 1998 165,833 0 25,000 2,727
Operating Officer 1997 150,000 0 0 10,000
David D. O'Donnell 1999 165,000 0 20,000 9,634
President - Colorado Tech 1998 156,875 0 20,000 24,904
1997 145,315 0 0 31,031
Fernando L. Fernandez 1999 134,000 0 20,000 1,204
Vice President - Finance, 1998 127,916 0 10,000 1,968
CFO and Treasurer 1997 120,000 0 0 0
Richard B. Salzman 1999 134,000 0 20,000 1,193
Vice President - Legal 1998 127,916 0 10,000 1,925
Affairs and General Counsel 1997 120,000 0 0 0
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<PAGE>
____________________
<FN>
(1) The amounts included in the "All Other Compensation" column represent
matching contributions made by the Company under the Whitman Employee
Retirement Savings Plan maintained under Section 401(k) of the Internal
Revenue Code. The amount listed for Mr. O'Donnell for 1999 also
includes $8,288 in reimbursement for life insurance premiums.
(2) Mr. Pfenniger's employment with the Company commenced in March 1997.
Mr. Pfenniger has served as a director of the Company since 1992.
(3) Excludes options to purchase 7,500 shares granted automatically to Mr.
Pfenniger in fiscal 1997 pursuant to the Company's 1996 Stock Option
Plan in connection with his services as a director of the Company.
(4) The Company entered into an employment agreement with Mr. O'Donnell on
March 29, 1996 in connection with the acquisition of Colorado Tech. The
agreement expires December 31, 1999.
</FN>
</TABLE>
The following table sets forth information concerning stock option grants
made during fiscal 1999 to the executive officers named in the "Summary
Compensation Table."
<TABLE>
<CAPTION>
Stock Option Grants During the Year Ended
March 31, 1999
POTENTIAL REALIZABLE
PERCENT VALUE AT ASSUMED
OF TOTAL ANNUAL RATES OF
OPTIONS STOCK PRICE
GRANTED APPRECIATION FOR
OPTIONS TO EXERCISE EXPIRATION OPTION TERM
GRANTED EMPLOYEES PRICE DATE 5% 10%
-------- --------- -------- ---------- -------- --------
(#) % $ $ $
<S> <C> <C> <C> <C> <C> <C>
Richard C. Pfenniger 75,000 12.8 5.0625 6/14/2005 155,000 360,000
Chief Executive Officer
Randy S. Proto 40,000 6.8 5.0625 6/14/2005 82,000 192,000
President and Chief
Operating Officer
David D. O'Donnell 20,000 3.4 5.0625 6/14/2005 41,000 96,000
President -
Colorado Tech
Fernando L. Fernandez 20,000 3.4 5.0625 6/14/2005 41,000 96,000
Vice President -
Finance, CFO and
Treasurer
Richard B. Salzman 20,000 3.4 5.0625 6/14/2005 41,000 96,000
Vice President - Legal
Affairs and
General Counsel
</TABLE>
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<PAGE>
The following table sets forth information concerning stock option
exercises during fiscal 1999 by each of the executive officers named in the
"Summary Compensation Table" above and the fiscal year-end value of unexercised
options held by each such executive officer.
STOCK OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
--------------------------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ -------------- ------------ -------------
(#) (#) ($)(1) ($)(1)
<S> <C> <C> <C> <C>
Richard C. Pfenniger 247,500 225,000 96,850 0
Chief Executive Officer
Randy S. Proto 461,250 153,750 739,375 154, 375
President and Chief
Operating Officer
David D. O'Donnell 155,000 35,000 0 0
President - Colorado Tech
Fernando L. Fernandez 152,500 57,500 36,250 0
Vice President - Finance,
Chief Financial Officer
and Treasurer
Richard B. Salzman 77,500 52, 500 0 0
Vice President - Legal
Affairs and General
Counsel
____________________
<FN>
(1) The value of unexercised in-the-money options represents the number of
options held at year-end 1999 multiplied by the difference between the
exercise price and $3.75, the closing price of the Company's Common
Stock at March 31, 1999.
</FN>
</TABLE>
-11-
<PAGE>
PERFORMANCE GRAPH
The graph and table set forth below compares the cumulative total
shareholder return on the Company's Common Stock for fiscal 1995 through fiscal
1999 with the S&P 500 Index and an industry peer group index for the same
period. The industry peer group index is comprised of the following companies,
each of which was selected on the basis of the similarity of its business with
that of the Company: Apollo Group, Inc., DeVry, Inc., ITT Educational Services,
Inc., Computer Learning Centers, Inc., Strayer Education, Inc., Education
Management Corp. and Quest Education Corporation (formerly known as Educational
Medical, Inc). The graph and table assume an investment of $100 in the Company's
Common Stock and each index on March 31, 1994 (the last trading day in fiscal
1994), and the reinvestment of all dividends.
PERFORMANCE GRAPH HERE
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31,
MARCH 31, -----------------------------------------------
1994 1995 1996 1997 1998 1999
---------- --------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Whitman 100 88 157 145 157 103
Industry Peer Group 100 132 354 425 710 916
S&P 500 100 116 153 183 271 321
</TABLE>
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<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following report of the Company's Compensation Committee shall not be
deemed to be soliciting material or incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing under
the 1933 Act or the 1934 Act, except to the extent that the Company specifically
incorporates this information by reference, and it shall not be otherwise deemed
filed under such Acts.
To the Company's Shareholders:
The Compensation Committee of the Company's Board of Directors, which is
composed of three non-employee directors, is charged with reviewing the
compensation of the Chief Executive Officer of the Company and making
recommendations with respect thereto to the Board of Directors. The Compensation
Committee also reviews and approves the compensation of the other executive
officers. The Committee's compensation policies are based on a desire to enhance
long-term shareholder value. To achieve this goal, the Committee recognizes that
it must adopt compensation policies which will attract, retain and motivate
qualified and experienced executive officers. In attracting and retaining
executives, the Committee recognizes that the Company must compete for the
services of executives with many other companies which possess significantly
greater financial resources than the Company and have available more
comprehensive compensation plans and arrangements than are presently utilized by
the Company. To adequately motivate executives in view of the goal of enhancing
shareholder value, the Committee recognizes that it must design compensation
policies which align the financial interests of the Company's executive officers
with those of its shareholders.
In light of these factors, the Committee believes that the best manner
presently available to the Company to attract, retain and motivate talented
executives is through the award of significant long-term compensation in the
form of stock options at the time the executive joins the Company and
periodically thereafter. The Compensation Committee believes that providing
executives with opportunities to acquire significant stakes in the growth and
prosperity of the Company through the grant of stock options will enable the
Company to attract and retain qualified and experienced executive officers. In
addition, the Compensation Committee believes that this approach to compensation
creates an entrepreneurial atmosphere which motivates executives to perform to
their full potential. The Compensation Committee believes that dependence on
stock options for a significant portion of executive compensation more closely
aligns the executives' interests with those of the Company's shareholders, since
the ultimate value of such compensation is directly dependent on the stock
price.
Accordingly, the Compensation Committee designs the compensation of
executive officers to consist of a reasonable annual salary with long-term
compensation in the form of stock options. The Compensation Committee has also
approved an incentive bonus plan for all employees of the Company with bonus
potential dependent upon the financial performance of the Company as a whole,
the financial performance of an employee's school or division and the
discretionary evaluation of each employee's performance during the fiscal year.
EXECUTIVE OFFICERS (OTHER THAN THE CHIEF EXECUTIVE OFFICER). The Chief
Executive Officer, with the assistance of other executive officers, makes salary
recommendations to the Compensation Committee for the executive officers of the
Company (other than the Chief Executive Officer whose salary determination
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<PAGE>
is set forth below). Such recommendations are reviewed and approved by the
Compensation Committee with any modifications deemed appropriate. In reviewing
and approving salary recommendations, the Compensation Committee considers
several factors, including individual performance, the executive's
responsibilities, compensation offered by competitors, the cost of living, and
the financial performance of the Company. The Company has not, however,
established specific performance goals or tied executive compensation to the
achievement of specific performance goals. The compensation determination is
largely subjective, and no specific weight is given to any particular factor.
The Compensation Committee may, in certain circumstances, recommend that a cash
bonus be paid to executives whose individual performance during a particular
year was outstanding, in the subjective opinion of the Compensation Committee.
The amount of any bonus is based upon the recommendation of the Chief Executive
Officer. The Company has not set specific goals for executives or tied the
payment of bonuses to specific goals.
Stock options represent a significant portion of total compensation for the
Company's executive officers. Options are generally awarded to executive
officers at the time that they join the Company and periodically thereafter.
Stock options are granted at the prevailing market price on the date of grant,
and will only have value if the value of the Company's stock price increases
from that date. Generally, grants vest in equal amounts over a four-year period
and have seven-year terms. Executives must be employed by the Company at the
time of vesting in order to exercise the options. Grants of stock options to
executive officers are generally made upon the recommendations of the Chief
Executive Officer based on the level of the executive's position with the
Company, an evaluation of the executive's past and expected performance, the
number of outstanding and previously granted options, and discussions with the
executive. The determination of the timing and number of stock options granted
to the executive officers is made by the Compensation Committee on a subjective
basis, with no specific weight given to any particular factor.
CHIEF EXECUTIVE OFFICER. For fiscal 2000, after discussions with Mr.
Pfenniger, and a review of his performance in fiscal 1999, the Committee set Mr.
Pfenniger's base salary in fiscal 2000 at $291,000 and awarded him stock options
to purchase 30,000 shares of the Company's Common Stock at $5.125 per share, the
fair market value of the Company's Common Stock on the date of grant. The stock
options have a seven- year term and vest ratably over four years. Mr. Pfenniger
will also be entitled to participate in the Company's incentive bonus program
and be eligible to receive a bonus of up to 30% of annual salary. In setting Mr.
Pfenniger's salary and awarding the stock options for fiscal 2000, the Committee
considered the Company's financial performance in fiscal 1999 and Mr.
Pfenniger's contribution to the Company's improved financial performance over
fiscal 1998, the quality of his services and the salaries paid to similarly
situated chief executive officers. The determination of his compensation package
was subjective, with no specific weight given to any particular factor. Mr.
Pfenniger's compensation package was reviewed and approved by the Board of
Directors who believe that the compensation is fair and reasonable in light of
the factors considered by the Compensation Committee. No performance bonus award
was made to Mr. Pfenniger for fiscal 1999.
TAX MATTERS. Section 162(m) of the Internal Revenue Code of 1986, as
amended, generally disallows a deduction for federal income tax purposes to
public companies for compensation over $1 million paid in any taxable year to
the Company's Chief Executive Officer or to any of the four other most highly
compensated executive officers of the Company. Qualifying performance-based
compensation is not subject to the limitation if certain requirements are
satisfied. Based upon applicable regulations, the Company believes that
compensation expenses relating to options granted under its stock option plans
will not be subject to the Section 162(m) limitations.
The Compensation Committee continually evaluates the Company's compensation
policies and procedures with respect to its executive officers
in light of the overall financial performance of the Company
-14-
<PAGE>
and its effect on shareholder value.
The Compensation Committee of the Board of Directors
Phillip Frost, Chairman Richard M. Krasno Neil Flanzraich
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1999, the following directors served on the Compensation
Committee of the Board of Directors: Dr. Frost, Mr. Flanzraich and Dr. Krasno.
No person serving as a member of the Committee during fiscal 1999 was an
executive officer of the Company at the time of service on the Committee, and no
interlocking relationships exist between such persons and any director or
executive officer of the Company.
INDEPENDENT AUDITORS
Ernst & Young, LLP, independent public accountants, was appointed by the
Board of Directors to audit the Company's financial statements for fiscal 1999.
This firm has acted as independent public accountants for the Company since
1992. Representatives of Ernst & Young are expected to attend the Annual Meeting
and will have an opportunity to make a statement if they desire and to respond
to appropriate questions raised by shareholders.
OTHER INFORMATION
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Any shareholder proposals intended to be presented at the Company's 2000
annual meeting of shareholders must be received by the Secretary, Whitman
Education Group, Inc., 4400 Biscayne Boulevard, Miami, Florida 33137, no later
than March 8, 2000, in order to be considered for inclusion in the Company's
proxy statement and form of proxy card relating to such meeting.
Shareholders who do not present proposals for inclusion in the Proxy
Statement but who still intend to submit a proposal at the 2000 Annual Meeting
must, in accordance with the Company's Bylaws, provide timely notice of the
matter to the Secretary of the Company. To be timely, written notice must be
received by the Secretary no less than 60 days nor more than 90 days prior to
the annual meeting. If less than 70 days' notice or prior public disclosure of
the date of the scheduled annual meeting is given, then notice of the proposed
business matter must be received by the Secretary not later than the close of
business on the tenth day following the day on which such notice of the date of
the scheduled annual meeting was mailed or the day on which such public
disclosure was made. Any notice to the Secretary must include as to each matter
the shareholder proposes to bring before the meeting: (a) a brief description of
the proposal desired to be brought before the meeting and the reason for
conducting such business at the annual meeting, (b) the shareholder's name and
address, as they appear on the Company's books, (c) the class and number of
shares of the Company which are beneficially owned by the shareholder, (d) any
material interest of the shareholder in such business and (e) any other
information that is required to be provided by the shareholder pursuant to
Regulation 14A under the Exchange Act in his or her capacity as a proponent of
the shareholder proposal.
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<PAGE>
OTHER BUSINESS
As of the date of this proxy statement, the Board of Directors knows of no
business to be presented at the Annual Meeting other than as set forth in this
proxy statement. If other matters properly come before the meeting, the persons
named as proxies will vote on such matters in their discretion.
GENERAL
All properly executed proxies delivered pursuant to this solicitation and
not revoked shall be voted at the Annual Meeting in accordance with the
directions given. In voting by proxy in regard to the election of nine directors
who shall serve until the 2000 Annual Meeting of Shareholders, shareholders may
vote in favor of each nominee or withhold their votes as to a specific nominee.
Shareholders should specify their choices on the enclosed proxy card. If no
specific instructions are given, the shares represented by the proxy will be
voted FOR the election of all directors.
Richard B. Salzman, Secretary
July 6, 1999
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