<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 Section 240.14a-11(c) or Section 240.14a-12
CONCORDE CAREER COLLEGES, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CONCORDE CAREER COLLEGES, INC.
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
CONCORDE CAREER COLLEGES, INC.
CITY CENTER SQUARE
1100 MAIN STREET
POST OFFICE BOX 26610
KANSAS CITY, MISSOURI 64196
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 2, 1995
TO ALL STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of the Stockholders of
Concorde Career Colleges, Inc., a Delaware corporation, will be held on the 2nd
day of June, 1995, at 9:00 a.m., Central Time, at City Center Square, Suite 202,
1100 Main Street, Kansas City, Missouri, for the following purposes:
(1) To elect the members of the Board of Directors for the ensuing year or
until their successors are duly elected and qualified;
(2) To approve the appointment of independent public accountants for the
Company for 1995; and
(3) To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 14 as the
record date for the determination of the stockholders entitled to notice of and
to vote at the Annual Meeting or any adjournment or postponement thereof.
BY THE BOARD OF DIRECTORS
Lisa M. Henak
Secretary
Dated: April 19, 1995
IMPORTANT--YOUR PROXY IS ENCLOSED
YOU ARE URGED TO SIGN, DATE AND MAIL YOUR PROXY EVEN THOUGH YOU MAY
PLAN TO ATTEND THE MEETING. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. IF YOU ATTEND THE MEETING, YOU MAY VOTE BY PROXY OR YOU MAY WITHDRAW
YOUR PROXY AND VOTE IN PERSON. BY RETURNING YOUR PROXY PROMPTLY, A QUORUM WILL
BE ASSURED AT THE MEETING, WHICH WILL PREVENT COSTLY FOLLOW-UP AND DELAYS.
<PAGE>
CONCORDE CAREER COLLEGES, INC.
CITY CENTER SQUARE
1100 MAIN STREET
POST OFFICE BOX 26610
KANSAS CITY, MISSOURI 64196
---------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 2, 1995
---------------------------------------
PROXY STATEMENT
The proposals in the accompanying proxy are solicited by the Board of
Directors of Concorde Career Colleges, Inc. (the "Company") for use at its
Annual Meeting of Stockholders to be held on June 2, 1995, at 9:00 a.m., Central
Time, at City Center Square, Suite 202, 1100 Main Street, Kansas City, Missouri,
and any adjournment or postponement thereof. Shares represented by duly
executed proxies received prior to the meeting will be voted at the meeting. If
a stockholder specifies a choice on the form of proxy with respect to any matter
to be acted upon, the shares will be voted in accordance with the
recommendations made therein with respect to the proposals described in this
Proxy Statement. None of the proposals are related to or conditioned upon the
approval of any other proposal. Any person giving a proxy has the power to
revoke it at any time before it is exercised by giving written notice to the
Secretary of the Company at any time prior to its use.
The Company will bear all the costs of solicitation of proxies. In
addition to the use of the mails, proxies may be solicited by personal contact,
telephone or telegraph by the persons named in the accompanying form of proxy,
and the Company may reimburse brokers or other persons holding stock in their
names or in the names of nominees for their expenses in sending proxy soliciting
material to beneficial owners. This Proxy Statement and the accompanying form
of proxy are being mailed or given to stockholders on or about April 19, 1995.
Only stockholders of record at the close of business on April 14, 1995 will
be entitled to notice of, and to vote at, the meeting. On the record date, the
Company had 6,952,176 shares of common stock issued and outstanding and entitled
to vote at the meeting. Each outstanding share of common stock is entitled to
one vote on each matter brought to a vote. Provided a quorum is present, the
affirmative vote of a plurality of the shares of common stock voting is required
for the election of each nominee.
Management does not know of any matter, other than those referred to in the
accompanying Notice of Annual Meeting, which is to come before the meeting. If
any other matters are properly presented to the meeting for action, it is
intended that the persons named in
<PAGE>
the accompanying form of proxy, or their substitutes, will vote in accordance
with their judgment of the best interests of the Company on such matters.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, with respect to the Company's common stock
(the only class of voting securities), (i) the only persons known to be
beneficial owners of more than five percent (5%) of any class of the Company's
voting securities, (ii) the shares beneficially owned by all directors and named
executive officers of the Company and nominees for director, and (iii) the
shares beneficially owned by directors and officers as a group, as of February
28, 1995.
<TABLE>
<CAPTION>
==========================================================================================
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS
<S> <C> <C>
- - ------------------------------------------------------------------------------------------
Jack L. Brozman 3,457,048(2) 47.67%
1100 Main Street
Kansas City, Missouri 64105
Estate of Robert F. Brozman 2,985,324 41.17%
1100 Main Street
Kansas City, Missouri 64105
David A. Nichols 62,000(3) .89%
Thomas K. Sight 730(4) .01%
Samuel Person -0- -0-
Michael S. Savely -0- -0-
All Directors and Officers as Group 3,523,778(5) 48.58%
(7 persons)
- - ------------------------------------------------------------------------------------------
</TABLE>
(1) Unless otherwise indicated by footnote, nature of beneficial ownership of
securities is direct, and beneficial ownership as shown in the table arises
from sole voting power and sole investment power.
(2) Includes 2,985,324 shares held by the Estate of Robert F. Brozman, of which
Jack L. Brozman is executor, 171,724 shares held directly and 300,000
shares issuable pursuant to an option which is currently exercisable.
(3) Includes 20,000 shares held directly and 42,000 shares held in the Joyce A.
Nichols Trust of which Mr. Nichols is a beneficiary.
(4) Held jointly with Fay Sight, Mr. Sight's spouse.
(5) Includes 300,000 shares which are subject to options exercisable within 60
days of February 28, 1995, for all directors and officers as a group.
===============================================================================
Proxy Statement -2-
<PAGE>
DIRECTORS
The number of Directors constituting the Board of Directors has been fixed in
the Bylaws of the Company at three. The shares represented by the enclosed
proxy will be voted, unless otherwise indicated, for the election of the three
nominees for director named below. The directors to be elected at the Annual
Meeting will serve for one year or until their successors are duly elected and
qualified. In the unanticipated event that any nominee for director should
become unavailable, the Board of Directors, at its discretion, may designate a
substitute nominee, in which event such shares will be voted for such substitute
nominee. MANAGEMENT RECOMMENDS A VOTE FOR THE ELECTION OF THE THREE NOMINEES
FOR DIRECTOR NAMED BELOW.
<TABLE>
<CAPTION>
NAME OF NOMINEE SERVED PRINCIPAL OCCUPATION FOR
FOR DIRECTOR SINCE AGE LAST FIVE YEARS AND DIRECTORSHIPS(1)
- - -------------------- ------ --- ------------------------------------
<S> <C> <C> <C>
Jack L. Brozman(3) 1986 44 Chairman of the Board, President and Treasurer of the
Company and CenCor, Inc. ("CenCor") since June
1991. Mr. Brozman was Chairman of the Board,
President and Treasurer of La Petite Academy, Inc.
("La Petite") from June 1981 until July 1993.
Mr. Brozman is also a director of CenCor.
David A. Nichols 1988 64 President of Midwest Bank Management, Inc. since
(2)(3) 1978. Midwest Bank Management, Inc. is a private
banking management service firm located in Kansas
City, Missouri, of which Mr. Nichols is the sole
stockholder. Mr. Nichols is also a private consultant
providing services to other banking entities.
Thomas K. Sight 1989 44 President of Bob Sight Lincoln Mercury, an
(2)(3) automobile dealership located in Overland Park,
Kansas for more than the prior five years. Since
January 1992, Chief Executive Officer of Bob Sight
Ford in Lee's Summit, Missouri.
- - ----------
</TABLE>
(1) CenCor is affiliated with the Company; in July 1993, La Petite ceased to be
affiliated with the Company.
(2) Member of Compensation Committee (Mr. Brozman resigned from the Compensation
Committee on January 6, 1994).
(3) Member of Audit Committee.
The Board of Directors of the Company held eight meetings and acted by
unanimous written consent on twenty occasions last year. The Compensation
Committee held one meeting last year. The Compensation Committee reviews
salaries of certain officers and bonuses of executive officers, administers the
Company's stock option plans and generally administers the Company's
compensation program. The Audit Committee, which is responsible for oversight of
the Company's financial reports, held one meeting last year. The Company's Board
of Directors does not have a nominating committee. Last year, each director
attended at least 75% of the Board meetings (and at least 75% of the meetings of
committees on which he served) during the period for which he was a director (or
committee member).
Proxy Statement -3-
<PAGE>
EXECUTIVE OFFICERS
In addition to Jack L. Brozman, the following persons serve as executive
officers of the Company.
<TABLE>
<CAPTION>
NAME OF
EXECUTIVE OFFICER AGE PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
- - ------------------- --- ----------------------------------------
<S> <C> <C>
Michael S. Savely 56 Employed by the Company since December 1985, serving in various
capacities as School Director, Regional Marketing Director, Regional
Director, General Manager, Assistant Vice President and, most
recently, Vice President-Operations since August 1989, except from
March to April 1989 when he was Western Regional Director of
Operations of National Education Corporation, Irvine, California.
M. Gregg Gimlin 49 Employed by Simon-RO (formerly, "RO Corporation"), a
manufacturing company, from October 1988 through November 1992.
Elected a director of Simon-RO in March 1990, served as Vice
President-Finance, Treasurer and Assistant Secretary from June 1991.
Served as consultant to CenCor from January 1993 until employed by
CenCor as Special Projects Coordinator from March through June
1993. Vice President and Chief Financial Officer of the Company
since July 1993.
Samuel Person 64 President and co-founder of Person/Wolinsky Associates, Inc.
("Person/Wolinsky"), the Company's subsidiary which operates CPA
Review Courses. He has served as its President since its formation in
1968.
Patrick J. Debold 43 Employed by Brown Mackie College, a proprietary college, from
September 1986 through October 1989 as Academic Dean. Employed
by the Company since November, 1989, serving as School Director
of Education, National Director of Education, and, since July 1993,
Vice President of Education.
</TABLE>
Proxy Statement -4-
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
--------------------------------------------
Summary
- - -------
The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Chief
Executive Officer of the Company and the other most highly compensated executive
officers affiliated with the Company whose salary and bonus exceeded $100,000
(determined as of the end of last year) for the years ended December 31, 1994,
1993 and 1992:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
-------------------------------------
Annual Compensation Awards Payouts
Name and Other Annual Restricted All Other
Principal Compensation Stock Options LTIP Compensation
Position Year Salary ($) Bonus ($) ($) Award(s) ($) (#) Payouts ($) ($)
- - ------------------- ---- ---------- --------- ------------- ------------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jack L. Brozman, 1994 125,000 0 0 0 450,000(2) 0 0
Chairman of the 1993 125,000 25,000 0 0 300,000(2) 0 0
Board, President 1992 125,000 0 0 0 0(2) 0 0
and Treasurer of
the Company(1)
Samuel Person 1994 198,000 7,500 0 0 0 0 0
President of 1993 197,000 0 0 0 0 0 0
Person/Wolinsky 1992 129,000 169,000 0 0 0 0 0
Michael S. 1994 93,000 8,000 0 0 0 0 0
Savely, Vice 1993 83,000 26,000 0 0 75,000 0 0
President- 1992 78,000 7,000 0 0 0 0 0
Operations
- - ----------------------
</TABLE>
(1) Mr. Brozman also received compensation as CEO of CenCor in 1994 and CEO of
both La Petite and CenCor in 1993 and 1992, which compensation is not
reflected in the above Summary Compensation Table.
(2) On February 3, 1994, the Company's Compensation Committee granted to Mr.
Brozman an option to purchase 750,000 shares of the Company's common stock
under the Company's 1994 Incentive Stock Option Plan. Part of the option,
the right to purchase 300,000 shares, was granted as compensation for Mr.
Brozman's efforts in 1991, 1992 and 1993. The remaining 450,000 shares are
subject to vesting based on Company performance in 1994, 1995 and 1996.
See, "Option Grants, Exercises and Holdings" and "Compensation Committee
Report on Executive Compensation - Chairman and CEO Compensation - Option
Grant."
Proxy Statement -5-
<PAGE>
Option Grants, Exercises and Holdings
The following table provides further information concerning grants of stock
options pursuant to the stock option plans during the 1994 calendar year to the
named executive officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term
- - ------------------------------------------------------------------------------------ --------------------------
Percent of Total
Options
Granted to Exercise or
Options Employees in Base Price
Name Granted (#) Fiscal Year ($/Sh) Expiration Date 5% ($) 10% ($)
- - ------------------ ----------- ---------------- ----------- --------------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Jack L. Brozman(1) 450,000 88% .154 2/3/99 79,615 111,553
Samuel Person 0 0 0 0 0 0
Michael S. Savely 0 0 0 0 0 0
</TABLE>
- - --------------------
(1) On February 3, 1994, the Company's Compensation Committee granted to Mr.
Brozman an option to purchase 750,000 shares of the Company's common stock
under the Company's 1994 Incentive Stock Option Plan. The option was
granted at an exercise price equal to 110% of the closing price for the
Company's common stock on February 3, 1994, and expires on February 3,
1999. Except in the event of death or disability, if Mr. Brozman ceases to
be employed by the Company, his option shall terminate three months from
the date of termination of employment. Upon a merger, consolidation,
reorganization or liquidation of the Company, the option shall become
immediately exercisable until the date of expiration of the option or the
date the contemplated transaction is consummated. Part of the option, the
right to purchase 300,000 shares, was granted as compensation for Mr.
Brozman's efforts in 1991, 1992 and 1993 and is immediately exercisable.
The option for the remaining 450,000 shares vests ratably over the three
years 1994, 1995 and 1996 based on the Company's achievement of a
consolidated pre-tax income benchmark for each of those years. In 1994,
the option to purchase 150,000 of those 450,000 shares lapsed due to the
Company's pre-tax income falling below the required benchmark. See,
"Compensation Committee Report on Executive Compensation - Chairman and CEO
Compensation - Option Grant."
Proxy Statement -6-
<PAGE>
No options were exercised by any of the named executive officers during
1994. The following table provides information with respect to the named
executive officers concerning unexercised options held as of the end of the
Company's last calendar year:
LAST FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Options Options
at FY-End (#) at FY-End ($)(1)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- - ----------------------- -------------------------- -----------------------------
<S> <C> <C>
Jack L. Brozman, CEO(2) 300,000/300,000 34,800/34,800
Samuel Person 0/0 0/0
Michael S. Savely 0/75,000 0/12,750
</TABLE>
- - -----------------------
(1) Based on the difference between the mean of the closing bid and asked
prices of the Company's common stock on December 31, 1994 and the exercise
price of the options.
(2) On February 3, 1994, the Company's Compensation Committee granted to Mr.
Brozman an option to purchase 750,000 shares of the Company's common stock
under the Company's 1994 Incentive Stock Option Plan. The above table does
not reflect the 150,000 shares underlying a portion of that option which
lapsed. See, "Compensation Committee Report on Executive Compensation -
Chairman and CEO Compensation - Option Grant."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
On January 6, 1994, Mr. Brozman resigned from the Compensation Committee.
At 1994 calendar year end, the Compensation Committee of the Board of Directors
was comprised of David A. Nichols and Thomas K. Sight. On an annual basis, the
Compensation Committee reviews the salaries and bonuses of the executive
officers and other employees, administers the 1988 Incentive Stock Option Plan
and the 1994 Incentive Stock Option Plan ("Stock Option Plans") and oversees the
administration of the Company's compensation program.
In accordance with Securities and Exchange Commission rules designed to
enhance disclosure of companies' policies toward executive compensation, the
following report is submitted by the above listed committee members in their
capacity as the Board's Compensation Committee. The report addresses the
Company's compensation policy as it related to the executive officers for 1994.
Proxy Statement -7-
<PAGE>
GENERAL COMPENSATION POLICY. The Compensation Committee of the Board of
Directors was, and continues to be, guided by a belief that executive
compensation should reflect the profitability and appreciation in the value of
the Company (as reflected by the Company's net income or loss and market value
of common stock, respectively), while at the same time considering surrounding
economic pressures, individual performance and retention of key executive
officers. The Compensation Committee has not yet adopted a policy with respect
to the $1,000,000 limitation on deductibility of executive compensation under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
since current compensation levels fall significantly below that amount.
The Compensation Committee believes that the following are the important
qualitative considerations in setting executive compensation:
* Compensation should reflect overall performance of the Company and the
executive officer and his or her contribution to the Company's
profitability
* Compensation should correlate to measurable performance criteria
* Compensation should attract and retain valued executive officers
* Compensation should reflect the executive officers' ability to
effectively direct the Company during difficult economic conditions
CALENDAR 1994 COMPENSATION. To accomplish this compensation policy in
1994, the Company's executive compensation integrated (i) annual base salary,
(ii) bonuses based upon individual agreements utilizing various objective
performance goals, and (iii) stock option grants under the Company's Stock
Option Plans. The compensation policies, as implemented, endeavor to enhance
the profitability of the Company (and, thus, stockholder value) by tying the
financial interests of the management with those of the Company.
Base Salary. As a general matter, an executive officer's base salary is
subjectively positioned so as to reflect the experience and performance of such
executive officer and the performance of the Company. The Compensation
Committee initially determines the amount of base salary based on factors such
as prior level of pay, quality of experience, and responsibilities of position.
Thereafter, the Compensation Committee grants raises subjectively based on
overall Company performance (net income or loss, earnings per share and market
value of common stock) and the executive officer's individual performance (based
on performance reviews by Jack L. Brozman and/or other executives).
The amount of raises to the executive officers' base salaries was
subjectively determined by Mr. Brozman, with the approval of the Compensation
Committee. The decision to raise the base salary was, in part, based on Mr.
Brozman's subjective evaluation of each officer's performance and due to the
fact that no across the board raises were implemented for 1993. Such raises in
base salaries ranged from approximately 7.7% to 18.2% of their previous year's
base salary. Mr. Brozman did not receive any increase in salary for 1994. See,
"Chairman and CEO Compensation."
Proxy Statement -8-
<PAGE>
Bonuses. The Company has certain bonus agreements in place with
executive officers (except for Mr. Brozman) which couple objective corporate
performance criteria, based on such officer's area of responsibilities, with
annual cash compensation. Under such bonus agreements, the named executive
officers received a specified percentage of the pre-tax net income of the
Company and/or net cash flow from the various Company schools. Based upon the
pre-arranged formula contained in each officer's agreement, the Company granted
bonuses to certain of its executive officers in 1994. In one instance, a
discretionary bonus was subjectively given to an executive officer for such
officer's substantial contribution during 1994.
The performance criteria in the bonus agreements of the executive officers
differ depending on the ambit of responsibility for such executive officers.
For example, certain senior executive officers' bonuses are based on either a
percent of pre-tax income of the Company or operating income from schools, while
the bonuses of executives with direct responsibilities over education functions
are based on a percentage of student retention and placement.
Incentive Stock Option Awards. The Board of Directors and Compensation
Committee also award stock options to executive officers under the Stock Option
Plans. The Committee believes that stock options are an effective incentive
for executives to create value for stockholders since the value of an option
bears a direct relationship to appreciation in the Company's stock price.
Obviously, when stockholder value decreases, stock options granted to management
either decrease in value or have no value. Inversely, when stock prices
increase, the stock options become more valuable.
The determination of whether to grant stock options, whether on an
aggregate or individual basis, is in the discretion of the Compensation
Committee. In making the determination, the Committee examines (i) the
Company's performance, as determined by its operating and net income (loss),
earnings per share and the market price of its common stock, (ii) the relation
of long-term compensation to short term (cash) compensation, (iii) the number
and exercise price of options held by each executive officer, (iv) the total
stock holdings of the executive officer, (v) the individual performance of the
executive (subjectively determined by Mr. Brozman and other executives), and
(vi) the potential contribution of the executive to the Company. The
Compensation Committee does not separately weigh such criteria, but rather
subjectively and informally views the mix of information with respect to each
executive officer.
With respect to such criteria, the Compensation Committee decided to grant
options to certain executive officers. During 1994, excluding the option
granted to Mr. Brozman, the Compensation Committee granted options to purchase
60,000 shares of common stock to executive officers at an exercise price of $.13
per share, which equalled the fair market value of the stock on the date of
grant. Since the Company is in the process of attempting to turn the Company
around from its financial difficulties over the past several years, the
Compensation Committee believes that the long-term nature of granting options is
an outstanding vehicle in which to reward executive officers for their efforts
to increase stockholder value in the Company.
The options granted were incentive stock options under the Code which means
that the officers will not have to pay taxes upon exercise of the options and
the Company will not receive a tax deduction.
Proxy Statement -9-
<PAGE>
CHAIRMAN AND CEO COMPENSATION. Jack L. Brozman, Chairman and CEO of the
Company, is subject to the same general compensation package as the other
executives, except that Mr. Brozman is eligible for an annual bonus in such
amount as the Compensation Committee may determine based on such factors as the
Compensation Committee deems appropriate.
For 1994, the Compensation Committee decided not to increase Mr. Brozman's
base annual salary. While the Compensation Committee believes that Mr.
Brozman's leadership and commitment level to the Company was excellent during
such difficult times, the Committee did not feel it appropriate to raise Mr.
Brozman's base salary, but rather more directly tie Mr. Brozman's financial
interests with the performance of the Company. For the same reasons, the
Compensation Committee decided not to grant Mr. Brozman a bonus in 1994.
Option Grant. At the July 1993 annual meeting of the Compensation
Committee, the Committee decided to engage (and in September 1993 did engage) an
outside compensation consultant to address Mr. Brozman's compensation package.
Mr. Brozman abstained from such vote. The Compensation Committee believed that
Mr. Brozman should have a reasonable compensation package reflecting both his
past contributions over the last two and one-half years and his future
performance. Pursuant to the compensation consultant's recommendation, on
February 3, 1994, the Committee granted Mr. Brozman an option to purchase
750,000 shares of Company common stock. Part of the option, the right to
purchase 300,000 shares, was granted as compensation for Mr. Brozman's
leadership, as described below, in 1991, 1992 and 1993, which the Committee
believes was critical in the Company's survival. The option for the remaining
450,000 shares vests ratably over the three years 1994, 1995 and 1996 based on
the Company's achievement of a consolidated pre-tax income benchmark for each of
those years. In 1994, the option to purchase 150,000 of those 450,000 shares
lapsed due to the Company's pre-tax income falling below that benchmark.
In evaluating Mr. Brozman's performance over the last two and one-half
years, the Committee specifically recognized the following: (i) Mr. Brozman
spearheaded the disposition of Southern Career Institute and closure of the
Company's schools in Texas. Those schools did not have lenders for financial
aid and, therefore, the Company was required to take sizable write-downs of the
Company's accounts receivable. (ii) Mr. Brozman implemented effective short and
long term expense reduction programs to trim the Company's expenditures. With
the loss of the revenue from the closure and sale of various schools, such cost
reduction programs are an integral part of the Company's turnaround strategy.
(iii) Mr. Brozman undertook an aggressive and successful reorganization of the
Company's management team and home office. See, "Compensation Committee
Interlocks and Insider Participation - Mr. Brozman's relationship with CenCor,"
below. (iv) Mr. Brozman was able to attract school lenders to provide loans to
aid students in paying the tuition at the Company's various schools. (v) Mr.
Brozman was integrally involved with the successful resolution of certain
lawsuits against the Company. (vi) Mr. Brozman successfully worked with the
Company's bank lenders to restructure certain of the Company's secured debt.
(vii) Mr. Brozman developed the Company's turnaround strategy and ongoing
strategic plan. (viii) Finally, Mr. Brozman has excelled in managing the
Company's responses to the Department of Education ("DOE") in connection with
the Company's ongoing disputes regarding the DOE's published default rates,
Title IV funding, as well as other matters.
Proxy Statement -10-
<PAGE>
For more information regarding the DOE disputes, see the Annual Report on Form
10-K of the Company.
SUMMARY. The Compensation Committee believes that the executive officers
of the Company are dedicated to achieving significant improvements in long-term
financial performance and that the compensation policies and programs contribute
to achieving this senior management focus. The Compensation Committee believes
that the compensation levels during 1994 adequately reflect the Company's
compensation goals and policies.
The Compensation Committee report is submitted by:
David A. Nichols Thomas K. Sight
Compensation of Directors
Each non-officer director is paid a director's fee of $250 for meetings of
the Board of Directors which he attends. Officer-directors do not receive fees
for attendance at meetings. The Company paid a total of $3,500 in Board of
Director and special committee fees during 1994.
Employment Contract, Termination of Employment and Change in Control
Arrangements
Mr. Person has conducted the business of Person/Wolinsky under an
employment agreement since Person/Wolinsky was acquired by CenCor in 1984. The
employment agreement has been amended from time to time subsequent to 1984 to
revise salary and bonus compensation.
The employment agreement currently in effect was amended May 1, 1993 and
November 1, 1994. These agreements provided that Mr. Person receive $16,500 per
month in salary for the periods May 1, 1993 through October 31, 1994, and
November 1, 1994 through April 30, 1995.
Mr. Person is expected to devote only two and one-half days per week to the
business of Person/Wolinsky. Mr. Person may devote his remaining time to
activities which do not conflict with the Company's business. In addition, Mr.
Person has agreed not to compete with Person/Wolinsky for a three year period in
certain areas following termination of his employment.
The amendment currently in effect further stipulates that for the period
May 1, 1995 through April 30, 1996, Mr. Person will receive $10,000 per month in
salary, and will devote an average of forty hours per month to the business of
Person/Wolinsky.
Proxy Statement -11-
<PAGE>
Compensation Committee Interlocks and Insider Participation
At December 31, 1994, the Compensation Committee consisted of David A.
Nichols and Thomas K. Sight. Mr. Brozman, an officer of the Company in the
capacities of Chairman of the Board, President and Treasurer, served on the
Compensation Committee until January 6, 1994, and directly participated in
decisions affecting compensation of executives while on the Compensation
Committee.
MR. BROZMAN'S RELATIONSHIP WITH CENCOR. To the extent certain officers,
directors or beneficial holders of 5% of the Company's voting securities hold
positions as officers of CenCor, or own more than 5% of CenCor's voting
securities, these individuals have an indirect interest in the various
transactions between the Company and CenCor. Jack L. Brozman, who is Chairman
of the Board, President and Treasurer and holds voting rights for more than 5%
of the Company's voting securities (by virtue of his position as executor and
trustee of the Estate of Robert F. Brozman (the "Estate") and R. F. Brozman
trust, respectively), is also Chairman of the Board, President and Treasurer of
CenCor and beneficially owns more than 5% of the voting securities of CenCor.
As of March 31, 1988, the Company acquired, at book value, all the assets
and assumed all the liabilities of the career training division of CenCor. As
of June 30, 1988, the Company was spun-off to the stockholders of CenCor. In
connection with its spin-off, the Company agreed to act as obligor on certain
publicly-issued debt of CenCor, in the original principal amount of $6,500,000
(the "CenCor Debt"), pursuant to an Agreement for Transfer of Assets and
Assumption of Liabilities entered into in March of 1988. In that agreement, the
Company agreed to be responsible for the payments to the CenCor Debt noteholders
and to indemnify CenCor with respect to such payments. The Company suspended
principal and interest payments on the CenCor Debt in the fall of 1992. In that
connection, the Company and CenCor decided to restructure the arrangement so
that the Company would not be responsible for the payments on the CenCor Debt.
Accordingly, the Company and CenCor executed a restructuring agreement (the
"Restructuring Agreement") and agreed, effective October 30, 1992, as follows:
(i) the Company will not be obligated to pay the noteholders of the CenCor Debt;
(ii) the Company delivered a Junior Secured Debenture (the "Debenture") to
CenCor in the principal amount of $5,422,000 (the amount of principal and
interest due on the CenCor Debt as of October 30, 1992) which Debenture is
secured by a lien on substantially all the Company's assets and junior to the
Company's secured bank lender; (iii) the Debenture bears interest ranging from
prime plus 1-1/2% to prime plus 2-1/2% per annum and provides for principal and
interest payments commencing September 30, 1995 based on a ten year amortization
schedule; (iv) the Company will make an additional contingent payment to CenCor
on August 31, 1997 in an amount equal to 25% of the market value of the
Company's outstanding common stock in excess of $3,500,000; and (v) the Company
will reimburse CenCor $100,000 for the expenses incurred by CenCor in connection
with the Restructuring Agreement.
Proxy Statement -12-
<PAGE>
As of December 31, 1993, the Company and CenCor agreed to amend the
Restructuring Agreement to provide for the assignment of certain of the
Company's receivables to CenCor as payment for all interest accrued on the
Debenture through December 31, 1993, totaling $559,353.
Effective November 15, 1994 CenCor exchanged $3,000,000 face value of the
Debenture for 300,000 shares of Cumulative Preferred Stock (the "Preferred
Stock") with a $.10 par value and a per share liquidation preference of $10.00.
Cumulative quarterly dividends will accrue at a rate equal to 73% of the then
current interest rate on the Debenture. The Preferred Stock has no mandatory
redemption date but the Company may redeem the Preferred Stock, in whole or in
part, at any time, at liquidation value plus accrued cumulative dividends. In
addition, the Company assigned to CenCor additional accounts and notes
receivable with a face value of approximately $15,000,000 that had been charged-
off by the Company in the normal course of business. This assignment was on
terms and conditions similar to those set forth in the December 31, 1993
amendment, and discharged approximately $495,000 of interest, which represents
the amount of interest that accrued through December 31, 1994. Management
believes that the amount of receivables assigned to CenCor in 1994 and 1993 were
reflective of the estimated collectability of the related receivables. The
balance of the debenture was $2,422,000 at December 31, 1994.
Except as otherwise provided above, to the extent any interest of Jack L.
Brozman in the transactions between the Company and CenCor arose solely from his
position as an officer in CenCor and his attributed ownership of more than 5%
equity ownership in CenCor, a value cannot be assigned to such indirect
interest.
There can be no assurance that other potential conflicts will not arise
among the Company and CenCor as a result of their sharing certain personnel.
The resolution of any such conflicts will be through negotiation among the
Company and CenCor, based upon the conflicting needs of the two companies, the
financial condition of the Company, if relevant, and overall fairness to each of
the parties. Management believes that the terms of the arrangements between the
Company and CenCor described have been fair and reasonable to the Company.
Proxy Statement -13-
<PAGE>
COMPANY PERFORMANCE
The following graph shows a comparison of cumulative total returns for the
Company, broad market NASDAQ index and an industry index since close of business
on December 31, 1989.
COMPARISON OF CUMULATIVE TOTAL RETURN
(CONCORDE CAREER COLLEGES, INC., NASDAQ INDEX AND INDUSTRY INDEX)
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period CONCORDE
(Fiscal Year Covered) CAREER COLLEGES NASDAQ INDEX INDUSTRY INDEX
- - ------------------- --------------- ------------ --------------
<S> <C> <C> <C>
Measurement Pt-
12/31/89 $100.00 $100.00 $100.00
FYE 12/31/90 $ 65.05 $ 81.12 $ 63.61
FYE 12/31/91 $ 36.14 $104.14 $134.03
FYE 12/31/92 $ 0.91 $105.16 $108.89
FYE 12/31/93 $ 2.70 $126.14 $ 98.63
FYE 12/31/94 $ 5.20 $132.44 $ 63.35
</TABLE>
The total cumulative return on investment (change in the year end stock
price plus reinvested dividends) for each of the periods for the Company, broad
based NASDAQ index and industry index is based on the stock prices at the close
of business on December 31, 1989, assuming a $100 investment. The above
performance graph, prepared by Media General Financial Services, Inc., compares
the annual performance of the Company with that of the broad market NASDAQ index
and an industry index with investment weighted on market capitalization. The
industry index is comprised of all those companies with a four digit Standard
Industrial Classification ("SIC") code of 8249 (Vocational Schools).
Proxy Statement -14-
<PAGE>
TRANSACTIONS WITH CENCOR
See, "Compensation Committee Interlocks and Insider Participation - Mr.
Brozman's Relationship with CenCor."
OTHER TRANSACTIONS
Person/Wolinsky, the Company's subsidiary which operates the CPA review
courses, has an arrangement with subsidiaries of Century Acceptance Corporation
("CAC"), a wholly owned subsidiary of CenCor. In consideration for CAC being
willing to finance Person/Wolinsky's students' tuition at a 14% interest rate,
Person/Wolinsky guaranteed repayment of the loans in the event of default.
During 1994, Person/Wolinsky paid approximately $17,500 to CAC on such
guarantees. Less than 10% of its student tuition is currently financed through
CAC. As of December 31, 1994, CAC had approximately $296,000 of gross
installment receivables outstanding relating to students of the CPA Review
Courses.
Management believes that these transactions with the Company and other
affiliates of the Company have been made on no less favorable terms than could
be obtained from unaffiliated third parties.
APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS
For 1994, Price Waterhouse LLP examined the financial statements of the
Company and its subsidiaries, including reports to stockholders, the Securities
and Exchange Commission and others.
The Board of Directors has selected and appointed Price Waterhouse LLP as
the independent public accountants for the Company for the year 1995.
The following resolution will be offered at the Annual Meeting:
"RESOLVED, the action of the Board of Directors in appointing Price
Waterhouse LLP as the independent public accountants of the Company for
1995 is hereby approved."
It is not anticipated that representatives of Price Waterhouse LLP will
attend the Annual Meeting. Thus, there will be no opportunity for them to make
a statement or to be available to respond to questions by stockholders.
STOCKHOLDER PROPOSALS
In the event any stockholder intends to present a proposal at the Annual
Meeting of Stockholders to be held in 1996, such proposal must be received by
the Company, in writing, on or before December 12, 1995, to be considered for
inclusion in the Company's next Proxy Statement.
Proxy Statement -15-
<PAGE>
VOTING PROXIES AND OTHER MATTERS
Proxies will be voted in accordance with the choices specified on the form
of proxy. If no choice is specified, shares will be voted: (i) "FOR" the
nominees listed on the proxy and in this Proxy Statement; and (ii) "FOR"
approval of the appointment of Price Waterhouse LLP as the independent public
accountants for the Company for 1995.
Management of the Company does not intend to present any business to the
Annual Meeting except as indicated herein and presently knows of no other
business to be presented at the Annual Meeting. Should any other business come
before the Annual Meeting, the persons named in the accompanying form of proxy
will vote the proxy in accordance with their judgment of the best interests of
the Company on such matters.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE,
SIGN, DATE AND RETURN TO THE COMPANY THE ACCOMPANYING PROXY. IF YOU ARE PRESENT
AT THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
BY THE BOARD OF DIRECTORS
Lisa M. Henak
Secretary
APRIL 19, 1995
Proxy Statement -16-
<PAGE>
CONCORDE CAREER COLLEGES, INC.
ANNUAL MEETING OF STOCKHOLDERS
JUNE 2, 1995
THIS PROXY AND EACH OF THE PROPOSALS ARE SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
The undersigned hereby appoints Jack L. Brozman and Lisa M. Henak, jointly
and individually, as Proxies with full power of substitution and hereby
authorizes them to represent and to vote, as designated below, all the shares of
common stock of Concorde Career Colleges, Inc., which the undersigned would be
entitled to vote if personally present at the Annual Meeting of Stockholders to
be held on June 2, 1995 or any adjournment or postponement thereof.
1. Election of Directors.
[_] FOR ALL NOMINEES LISTED BELOW [_] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees
listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME.)
JACK L. BROZMAN, DAVID A. NICHOLS and THOMAS K. SIGHT
2. Ratification and approval of the appointment of Price Waterhouse LLP as the
independent public accountants for 1995.
[_] FOR [_] AGAINST [_] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Please see reverse side.)
<PAGE>
(See reverse side for matters to be voted on.)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDERS. NONE OF THE PROPOSALS ARE RELATED TO OR
CONDITIONED ON THE APPROVAL OF ANY OTHER PROPOSAL. IF NO DIRECTION IS GIVEN,
THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
Please date, sign and return this Proxy card by mail, postage prepaid.
DATED: , 1995
--------------------------------
Signature
------------------------------------
Signature if held jointly
--------------------
(Please sign exactly as name appears to the
left. When stock is registered jointly, all
owners must sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full corporate
name by the President or other authorized
officer. If a partnership, please sign in
partnership name by an authorized person.)
-------------------
