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 11, 2000
To the Shareholders of
Whitman Education Group, Inc.:
The 2000 annual shareholders meeting (the "Annual Meeting") of Whitman
Education Group, Inc. (the "Company") will be held at 4400 Biscayne Boulevard,
14th Floor, Miami, Florida 33137 on August 11, 2000, at 10:00 a.m. local time,
for the following purposes:
(1) to elect nine (9) directors to serve until the 2001
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 30, 2000 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 33137 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
Fernando L. Fernandez, Secretary
Miami, Florida
July 11, 2000
<PAGE>
Whitman Education Group, Inc.
4400 Biscayne Boulevard
Miami, Florida 33137
(305) 575-6510
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
the solicitation of proxies by the Company for use at the annual meeting of
shareholders to be held at 10:00 a.m. local time on August 11, 2000 (the "Annual
Meeting"), at the Company's executive offices located at 4400 Biscayne
Boulevard, 14th Floor, Miami, FL 33137, and at any adjournments thereof. Mailing
of the proxy statement and the accompanying proxy card to shareholders will
commence on or about July 11, 2000.
Record holders of the Company's Common Stock, no par value per share (the
"Common Stock"), at the close of business on June 30, 2000 (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, 13,424,917 shares of Common Stock were
outstanding and entitled to vote.
VOTING
All properly executed proxies delivered 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 2001 annual meeting, shareholders may vote in favor of all
nominees or withhold their votes as to all or any specific nominees.
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.
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 AND MANNER 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 employees of the Company who will not be
specially compensated in such regard. Nominees, fiduciaries and other custodians
will be requested to forward solicitation materials to the beneficial owners and
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<PAGE>
secure their voting instructions, if necessary, and will be reimbursed for the
reasonable expenses incurred in sending proxy materials to the beneficial
owners.
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 of
Director since 1994 Business Administration at the University of Southern
Age 71 California and Director of its Center for
Telecommunication Management. From 1988 to 1994, Dr.
Borsting was Dean of the University of 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), and TRO Learning, Inc. (proprietary
education). Dr. Borsting is a trustee of the
Institute for Defense Analysis, the Rose Hill
Foundation and the Los Angeles Orthopedic Hospital
Foundation.
NEIL FLANZRAICH In May 1998, Mr. Flanzraich became Vice Chairman and
Director since 1997 President of IVAX Corporation (pharmaceuticals).
Age 56 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.
PHILLIP FROST, M.D. Dr. Frost has been a director of the Company since
Director since 1992 April 1992 and Chairman of the Board of Directors
Age 63 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 Director
of Key Pharmaceuticals, Inc. from 1972 to 1986. Dr
Frost is 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.
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<PAGE>
PETER S. KNIGHT Mr. Knight is the President of Sage Venture Partners
Director since 1994 and formerly a partner in the law firm of Wunder,
Age 49 Knight, Levine, Thelen & Forscey, in Washington, D.C.
In 1996, Mr. Knight took a leave of absence from his
law 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 (dermatological
pharmaceuticals). 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
Medicis Pharmaceutical Corporation and the Schroder
Series Trust (a mutual fund company).
RICHARD M. KRASNO, PH.D. In October, 1999, Dr. Krasno became Executive
Director since 1996 Director of the William R. Kenan, Jr.Charitable
Age 58 Trust and President of the four William R. Kenan,
Jr. funds. From 1998 to October 1999, Dr.Krasno
was president of the Monterey Institute of
International Studies in Monterey, California.
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. Lipsett
Age 66 has served as aconsultant 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 also was Director for several
training and career development programs at the
National Institutes of Health.
RICHARD C. PFENNIGER, JR. Mr. Pfenniger has been Chief Executive Officer
Director since 1992 and Vice Chairman of the Company since March 1997
Age 44 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. Prior to joining
IVAX, Mr. Pfenniger was engaged in private law
practice.
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<PAGE>
PERCY A. PIERRE, PH.D. Dr. Pierre has been Professor of Electrical
Director since 1997 Engineering at the College of Engineering of Michigan
Age 61 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
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, C.P.A. Mr. Strait has served on the Board of Directors
Director since 1998 of Colorado Technical University since 1986. Mr.
Age 66 Strait presently practices as a Certified Public
Accountant under the name A. Marvin Strait, CPA. He
has practiced in the field of public accountancy
in Colorado for the past forty years. He also
presently serves as member of the Board of Directors
of Western National Bank, Colorado Springs, Colorado
and as a member of the Board of Trustees and for
Colorado Springs Fine Arts Center Foundation and the
Colorado Springs Symphony Orchestra Foundation.
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 a retainer of
$4,800 per year for his or her service as a director, a meeting attendance fee
of $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 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 Common Stock, to be granted on the first business day after election
at the annual meeting of shareholders at an exercise price equal to the fair
market value of the Common Stock on the date of grant. On June 9, 2000, the
Board of Directors elected to increase the number of options payable to
directors in lieu of their retainer and meeting attendance fees to 10,000
options beginning in fiscal 2001. The increase will be effective immediately
following the 2000 annual meeting.
In addition, pursuant to the formula grant provision contained in the
Company's Amended and Restated 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 shares in the case of the Chairman of the Board)
of Common Stock at an exercise price equal to the fair market value of Common
Stock on the date of the grant, and having a term of ten years. In fiscal 2000,
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<PAGE>
pursuant to that formula grant provision, options at an exercise price of $3.12
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, Dr. Frost, Dr. Borsting and Messrs.
Knight and Flanzraich also received options to purchase an additional 2,500
shares at $3.12 per share in lieu of their retainer and meeting attendance fees
as discussed above.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held five meetings during fiscal 2000. 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. 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.
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 2000.
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, C.P.A. The Audit Committee
held four meetings during fiscal 2000.
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 four
meetings during fiscal 2000 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 42, has been President of the Company 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.
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<PAGE>
FERNANDO L. FERNANDEZ. Mr. Fernandez, age 39, has served as Vice
President--Finance, Treasurer and Chief Financial Officer of the Company since
1996. Prior to joining the Company, Mr. Fernandez, a certified 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.
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 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
2000 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. Dr. Frost, 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, 2000, 1999 and 1998, the
Company purchased $148,800, $120,300 and $120,300 in textbooks and materials
from that entity.
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<PAGE>
STOCK OWNERSHIP BY PRINCIPAL SECURITY HOLDERS AND MANAGEMENT
The following table sets forth certain information as of June 1, 2000
concerning the number of shares of Common Stock beneficially owned by (a) each
director, (b) each nominee for director, (c) each executive officer named below
in the "Summary Compensation Table", (d) all directors and executive officers as
a group, and (e) each person known to the Company to be the beneficial owners of
more than 5% of the Common Stock, 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. 64,100 (2) *
Neil Flanzraich 34,375 (2) *
Phillip Frost, M.D. 5,358,228 (3) 35.5
Peter S. Knight 57,500 (2) *
Richard M. Krasno, Ph.D. 30,000 (2) *
Lois F. Lipsett, Ph.D. 30,200 (2) *
Richard C. Pfenniger, Jr. 437,174 (2) 3.2
Percy A. Pierre, Ph.D. 30,725 (2) *
A. Marvin Strait, C.P.A. 64,528 (2) *
Randy S. Proto 631,329 (2) 4.5
Fernando L. Fernandez 193,846 (2) 1.4
All directors and executive officers
as a group (11 persons) 6,932,005 (4) 42.2%
<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.
(2) Includes shares which may be acquired pursuant to stock options exercisable
within 60 days of June 1, 2000: Dr. Borsting (57,500); Mr. Knight (57,500);
Dr. Krasno (30,000); Mr. Flanzraich (34,375); Dr. Lipsett (30,000); Dr.
Pierre (28,125); Mr. Strait (15,000); Mr. Pfenniger (341,250); Mr. Proto
(572,500); and Mr. Fernandez (190,000).
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(3) Includes (a) 357,500 shares which may be acquired pursuant to stock
options held by Dr. Frost exercisable within 60 days of June 1, 2000, (b)
3,237,638 shares held by Frost-Nevada, Limited Partnership, ("FNLP"), and
(c) 1,300,000 shares which may be acquired pursuant to stock purchase
warrants held by FNLP, exercisable within 60 days of June 1, 2000. Dr.
Frost is the sole limited partner of FNLP and the sole shareholder of the
general partner of FNLP. FNLP's business address is 3500 Lakeside Court,
Suite 200, Reno, Nevado 89509. Dr. Frost's business address is 4400
Biscayne Blvd., Miami, Florida 33137.
(4) Includes shares described in footnotes (1) through (3) as beneficially
owned.
</FN>
</TABLE>
EXECUTIVE COMPENSATION
The following table contains certain information regarding aggregate
compensation paid or accrued by the Company during fiscal 2000 to the Chief
Executive Officer of the Company and to each of the Company's other two
executive officers whose combined salary and bonus during fiscal 2000 exceeded
$100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
------------------------- ------------ ------------
NAME AND YEAR ENDED
PRINCIPAL POSITION MARCH 31, SALARY BONUS STOCK OPTIONS
---------------------- -------- -------- ------ --------------
<S> <C> <C> <C> <C> <C>
($) ($) (#) ($)(1)
Richard C. 2000 291,000 0 30,000 4,800
Pfenniger, Jr. 1999 283,000 0 75,000 4,800
Chief Executive Officer 1998 275,000 0 0 1,200
Randy S. Proto 2000 183,000 0 20,000 4,800
President and Chief 1999 175,000 0 40,000 4,800
Operating Officer 1998 165,833 0 25,000 2,727
Fernando L. Fernandez 2000 138,000 0 10,000 4,516
Vice President - Finance, 1999 134,000 0 20,000 3,990
Chief Financial Officer 1998 127,916 0 10,000 1,968
and Treasurer
------------------
<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.
</FN>
</TABLE>
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<PAGE>
The following table sets forth information concerning stock option grants made
during fiscal 2000 to the executive officers named in the "Summary Compensation
Table."
Stock Option Grants During the Year Ended
March 31, 2000
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED
ANNUAL RATES OF
NUMBER OF STOCK PRICE
SECURITIES PERCENT OF APPRECIATION FOR
UNDERLYING TOTAL OPTIONS OPTION TERM
OPTIONS GRANTED TO EXERCISE EXPIRATION ----------------
GRANTED EMPLOYEES PRICE DATE 5% 10%
---------- ------------- -------- ---------- ------ ------
(#) % $ $ $
<S> <C> <C> <C> <C> <C> <C>
Richard C.
Pfenniger 30,000 5.2 5.125 6/10/2006 62,592 145,865
Chief Executive
Officer
Randy S. Proto 20,000 3.5 5.125 6/10/2006 41,728 97,244
President and
Chief Operating
Officer
Fernando L. 10,000 1.7 5.125 6/10/2006 20,864 48,622
Fernandez
Vice President -
Finance, CFO and
Treasurer
</TABLE>
The following table sets forth information concerning the fiscal year-end
value of unexercised options held by each of the executive officers named in the
"Summary Compensation Table" above. There were no option exercises by such
officers in fiscal 2000.
Aggregated Stock Option Exercises in
Fiscal 2000 And Fiscal Year-End Option Values
<TABLE>
<CAPTION>
SECURITIES UNDERLYING 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 341,250 161,250 3,125 0
Chief Executive Officer
Randy S. Proto 572,500 62,500 68,750 0
President and Chief
Operating Officer
Fernando L. Fernandez 190,000 30,000 625 0
Vice President - Finance,
Chief Financial Officer
and Treasurer
--------------------
<FN>
(1) The value of unexercised in-the-money options represents the number of
options held at March 31, 2000 multiplied by the difference between the
exercise price and $2.25, the closing price of the Common Stock at March 31,
2000.
</FN>
</TABLE>
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<PAGE>
PERFORMANCE GRAPH
The graph and table set forth below compares the cumulative total
shareholder return on the Common Stock for fiscal 1996 through fiscal 2000 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 Common Stock and
each index on March 31, 1995 (the last trading day in fiscal 1995), and the
reinvestment of all dividends.
PERFORMANCE GRAPH HERE
<TABLE>
<CAPTION>
Fiscal Year Ended March 31,
March 31, ----------------------------
1995 1996 1997 1998 1999 2000
--------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Whitman 100 178 165 178 118 71
Industry Peer Group 100 291 335 573 706 572
S&P 500 100 132 158 234 278 327
</TABLE>
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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 Securities Act of 1933 or the Securities Exchange Act of 1934, 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. Such recommendations are
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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. For fiscal 2001, after discussions with Mr.
Pfenniger, a review of the performance of the executive officers and considering
the Company's fiscal 2000 financial performance, the Compensation Committee
decided not to make any increases to the base salaries of the executive
officers. 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. The amount of any bonus is based upon the
recommendation of the Chief Executive Officer. No cash bonuses were paid to
executive officers for fiscal 2000.
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 generally 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 recommendation 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. While the
Company's executive officers each hold options to acquire the Company's stock as
indicated under the "Executive Compensation", no additional options were granted
to the executive officers related to their fiscal 2000 performance.
CHIEF EXECUTIVE OFFICER. For the past fiscal year, Mr. Pfenniger's base
salary was set at $291,000. After discussions with Mr. Pfenniger, a review of
his past performance and in light of the Company's fiscal 2000 financial
performance, it was decided not to increase his base salary for fiscal 2001. The
determination of Mr. Pfenniger's compensation package was subjective, with no
specific weight given to any particular factor. Mr. Pfenniger's compensation
package was reviewed 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 and no additional stock options
were granted to Mr. Pfenniger for fiscal 2000.
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.
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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 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 2000, 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 2000 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 2000.
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 2001
annual meeting of shareholders must be received by the Secretary, Whitman
Education Group, Inc., 4400 Biscayne Boulevard, Miami, Florida 33137, no later
than March 13, 2001, 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 2001 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
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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 Securities Exchange Act of 1934 in his or her capacity
as a proponent of the shareholder proposal.
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.
Fernando L. Fernandez, Secretary
July 11, 2000
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