<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)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(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 MAY 22, 1997
TO ALL STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of the Stockholders (the
"Annual Meeting") of Concorde Career Colleges, Inc., a Delaware corporation (the
"Company"), will be held on the 22nd day of May, 1997, at 2:00 p.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 1997; and
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 8 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 14, 1997
IMPORTANT--YOUR PROXY IS ENCLOSED
You are urged to sign, date and mail your proxy even though you may plan to
attend the Annual 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 Annual 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 MAY 22, 1997
---------------------------------------
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 ("Annual Meeting") to be held on May 22, 1996, at
2:00 p.m., Central Time, at City Center Square, Suite 202, 1100 Main Street,
Kansas City, Missouri, and any adjournment or postponement thereof. Shares of
the Company's common stock, par value $0.10 per share ("Common Stock") and Class
B Voting Convertible Preferred Stock, par value $0.10 per share ("Voting
Preferred Stock") represented by duly executed proxies received prior to the
meeting will be voted at the meeting. If a holder of Common Stock or Voting
Preferred Stock ("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 Stockholder 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 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, facsimile or telegraph by the persons named in the accompanying form
of proxy, and the Company may reimburse brokers or other persons holding Common
Stock or Voting Preferred 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 14, 1997.
Only Stockholders of record at the close of business on April 8, 1997 (the
"Record Date") will be entitled to notice of, and to vote at, the Annual
Meeting. On the Record Date, the Company had 6,966,576 shares of Common Stock
and 55,147 shares of Voting Preferred Stock issued and outstanding and entitled
to vote at the Annual Meeting. Each outstanding share of Common Stock is
entitled to one vote and each outstanding share of Voting Preferred Stock is
entitled to twenty (20) votes on each matter brought to a vote. Provided a
quorum is present, the affirmative vote of a plurality of the shares of Common
Stock and Voting Preferred Stock voting together as a class is required for the
election of each nominee for director and the approval of independent
accountants. Stockholders do not have any dissenters' rights regarding any of
the above matters.
Proxy Statement -1-
<PAGE>
Votes that are cast against the proposals are counted both for purposes of
determining the presence or absence of a quorum for the transaction of business
and for purposes of determining the total number of votes cast on a given
proposal. Abstentions will be counted for purposes of determining both the
presence or absence of a quorum for the transaction of business and the total
number of votes cast on a given proposal, and therefore will have the same
effect as a vote against a given proposal. Broker non-votes (i.e., a proxy card
returned by a holder on behalf of its beneficial owner that is not voted on a
particular matter because voting instructions have not been received and the
broker has no discretionary authority to vote) are not counted for purposes of
determining the number of shares present or represented with respect to a
particular proposal for which there is no authorization to vote and will not be
considered as votes cast and thus will not affect the outcome of voting.
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 Annual
Meeting. If any other matters are properly presented for action at the Annual
Meeting, it is intended that the persons named in 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.
(The remainder of this page was left blank intentionally.)
Proxy Statement -2-
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The Company has two classes of voting securities, Common Stock and Voting
Preferred Stock (collectively, the "Voting Securities"). The Voting Preferred
Stock votes with the Common Stock, as a single class, on all matters brought
before a vote of the holders of Common Stock. Each share of Voting Preferred
Stock is convertible into twenty (20) shares of Common Stock and has voting
rights equal to twenty (20) shares of Common Stock (whether or not converted).
The following table sets forth the respective voting rights of the outstanding
shares of Voting Securities as of April 8, 1997.
<TABLE>
<CAPTION>
Outstanding Voting
Shares Rights
----------- ---------
<S> <C> <C>
Common Stock 6,966,576 6,966,576 (86%)
Voting Preferred Stock 55,147 1,102,940 (14%)
---------
Total Voting Rights 8,069,516 (100%)
</TABLE>
The following table sets forth with respect to Voting Securities (i) the
only persons known to be beneficial owners of more than five percent (5%) of the
Voting Securities, (ii) the shares of Voting Securities beneficially owned by
all directors and named executive officers of the Company and nominees for
director, and (iii) the shares of Voting Securities beneficially owned by
directors and executive officers as a group, as of April 8, 1997.
<TABLE>
<CAPTION>
==================================================================================================================================
Common Stock Voting Preferred Stock Total Voting Securities
Name of ----------------------------------------------------------------------------------------------
Beneficial Owner Amount/(2)/ % of Class/(3)/ Amount /(2)/ % of Class/(3)/ Voting Rights (%)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert F. Brozman Trust/(1)/ 2,485,324 35.7% -- -- 30.8%
Cahill, Warnock Strategic/(1)/ 500,000/(4)/ 7.2 53,309/(4)/ 96.7% 19.4
Partners Fund, L.P.
Nelson Obus/(1)/ 598,790/(5)/ 8.6 -- -- 7.4
Jack L. Brozman/(1)/ 3,337,048/(6)/ 46.4 -- -- 38.1
David A. Nichols 62,000/(7)/ * -- -- *
Robert R. Roehrich 115,000/(8)/ 1.6 -- -- 1.4
James R. Seward 20,000/(9)/ * 1,838/(8)/ 3.3 *
==================================================================================================================================
</TABLE>
Proxy Statement -3-
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================================================
Name of Common Stock Voting Preferred Stock Total Voting Securities
Beneficial Owner ----------------------------------------------------------------------------------------------------
Amount/(2)/ % of Class/(3)/ Amount/(2)/ % of Class/(3)/ Voting Rights (%)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Thomas K. Sight 730/(10)/ * * --- *
David L. Warnock/(1)/ 500,000/(4)/ 7.2% 53,309/(4)/ 96.7% 19.4%
Vickey S. Cook 7,000/(11)/ * --- --- *
Patrick J. Debold 25,500/(12)/ * --- --- *
Gregg Gimlin 27,500/(13)/ * --- --- *
Asa E. Johnson 20,000/(14)/ * --- --- *
Michael S. Savely 52,500/(15)/ * --- --- *
All Directors and 4,167,278/(16)/ 52.8 55,147 100 58.6
Executive Officers
as a Group (11 persons)
=================================================================================================================================
</TABLE>
* Less than one percent (1%).
(1) Addresses: Robert F. Brozman Trust, 1100 Main Street, Kansas City,
Missouri 64105; Cahill, Warnock Strategic Partners Fund, L.P., One South
Street, Suite 2150, Baltimore, Maryland 21202; Nelson Obus, One Penn
Plaza, Suite 4720, New York, New York 10119-0002; Jack L. Brozman, 1100
Main Street, Kansas City, Missouri 64105; and David L. Warnock, One
South Street, Suite 2150, Baltimore, Maryland 21202.
(2) 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 and investment power.
(3) The percentage of class is calculated pursuant to Rule 13d-3(d) of the
Securities Exchange Act of 1934 ("Exchange Act").
(4) Includes 500,000 shares of Common Stock, 50,414 shares of Voting
Preferred Stock owned by Cahill, Warnock Strategic Partners Fund, L.P.
and 2,895 shares of Voting Preferred Stock owned by Strategic
Associates, L.P.
(5) Includes 70,000 shares held jointly with Eve E. Coulson, the spouse of
Mr. Obus, 350,790 shares owned by Wynnefield Partners Small Cap Value,
L.P., 149,000 shares owned by Channel Partnership II, L.P., and 29,000
shares owned by Wynnefield Partners Small Cap Off Shore, L.P. Mr. Obus
is general partner of these partnerships.
(6) Includes 2,485,324 shares held by the Robert F. Brozman Trust, of which
Jack L. Brozman is trustee, 171,724 shares held directly and 680,000
shares exercisable pursuant to options.
(7) Includes 22,000 shares held directly and 40,000 shares held in the Joyce
A. Nichols Trust of which Mr. Nichols is a beneficiary.
================================================================================
Proxy Statement -4-
<PAGE>
===============================================================================
(9) These Voting Securities have a total of 56,760 voting rights.
(10) Held jointly with Fay Sight, Mr. Sight's spouse.
(11) Includes 7,000 shares exercisable pursuant to options. Ms. Cook was
named an executive officer of the Company February 1997.
(12) Includes 24,500 shares exercisable pursuant to options.
(13) Includes 3,000 shares held jointly with Terri Gimlin, Mr. Gimlin's
spouse and 24,500 shares exercisable pursuant to options.
(14) Includes 20,000 shares exercisable pursuant to options.
(15) Includes 52,500 shares exercisable pursuant to options.
(16) Includes 923,500 shares which are exercisable pursuant to options.
For purpose of this table and pursuant to Rule 13d-3(d) of the
Exchange Act, shares underlying options are deemed beneficially owned
if such options are exercisable within 60 days of April 8, 1997.
===============================================================================
(The remainder of this page was left blank intentionally.)
Proxy Statement -5-
<PAGE>
ELECTION OF DIRECTORS
The number of Directors constituting the Board of Directors has been fixed
in the Bylaws of the Company at six. The shares of Voting Securities represented
by the enclosed proxy will be voted, unless otherwise indicated, for the
election of the six 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
six 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 1986 47 Chairman of the Board and Treasurer
(2) of the Company and CenCor, Inc.
("CenCor") since June 1991. President
and Chief Executive Officer of the
Company from June 1991 until April 7,
1997. Mr. Brozman was Chairman of
the Board, President, and Treasurer
of La Petite Academy, Inc. from
October 1991 until July 1993. Mr.
Brozman has also been a director of
CenCor since 1979.
David A. Nichols 1988 66 President and sole stockholder of
(1)(2)(3) Midwest Bank Management, Inc., a
private banking management service
firm located in Kansas City,
Missouri, since 1978. Mr. Nichols is
a director of United Oklahoma
BancShares, Inc. Mr. Nichols is also
a private consultant providing
services to other banking entities.
Dr. Robert R. Roehrich 1997 50 President and Chief Executive Officer
of the Company since April 7, 1997.
Vice President Academic Affairs for
DeVry, Inc., a public company which
operates private, degree granting
post-secondary educational
institutions, headquartered in
Oakbrook Terrace, Illinois, from
January 1984 until March 1997.
James R. Seward 1997 44 Executive Vice President and Chief
Financial Officer of Seafield Capital
Corporation, a holding company
located in Kansas City, Missouri,
since 1990. President and Chief
Executive Officer of the SLH
Corporation, a public real estate and
energy company located in Kansas
City, Missouri, since 1997. Mr.
Seward is a director of Seafield
Capital Corporation, Lab One, Inc.,
Response Oncology, Inc., and SLH
Corporation.
</TABLE>
Proxy Statement -6-
<PAGE>
<TABLE>
<CAPTION>
Name of Nominee Served Principal Occupation for
for Director Since Age Last Five Years and Directorships(1)
------------ ------ --- ------------------------------------
<S> <C> <C> <C>
Thomas K. Sight 1989 46 President of Bob Sight Lincoln
(1)(2)(4) Mercury, an 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.
David L. Warnock 1997 39 Managing Member of Cahill, Warnock &
Company, LLC and a general partner of
Cahill, Warnock Strategic Partners,
L.P., investment management firms
located in Baltimore, Maryland, from
July 1995 to present. Vice President,
T. Rowe Price Associates from July
1983 to July 1995. Mr. Warnock is a
director of The Right Start, Inc. and
Children's Comprehensive Services,
Inc.
</TABLE>
- ------------
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
(3) Chairman of Special Committee of the Board.
(4) Member of Special Committee of the Board.
The Board of Directors of the Company held six meetings and acted by
unanimous written consent on six occasions in 1996. The Compensation Committee
held one meeting in 1996. 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 two meetings 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). The Special Committee consisted of the independent Directors
of the Board.
Certain stockholders of the Company have agreed to vote the Voting
Securities held by them in favor of certain directors. See "Certain
Transactions".
(The remainder of this page was left blank intentionally.)
Proxy Statement -7-
<PAGE>
EXECUTIVE OFFICERS
In addition to Jack L. Brozman and Robert R. Roehrich, 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 58 Employed by the Company since December 1985,
serving in various capacities. Since August
1989 was the Vice President-Operations and,
since March 1996, Senior Vice
President-Operations
M. Gregg Gimlin 51 Employed by the Company since July 1993,
serving as Vice President and Chief Financial
Officer. Consultant to CenCor from January
1993 until employed by CenCor as Special
Projects Coordinator from March through June
1993. Formerly employed by Simon-RO, a
manufacturing company, from October 1988
through November 1992 as a director (from
March 1990) and Vice President-Finance,
Treasurer and Assistant Secretary (from June
1991).
Patrick J. Debold 45 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.
Asa E. Johnson 54 Employed by the Company since January 1989,
serving as School Director, Director of
Admissions, Regional Director, National
Director of Admissions and Marketing,
National Director of Field Operations and,
since March 1996, Vice President-Operations.
Vickey S. Cook 42 Employed by the Company since 1988, serving
as Regional Compliance Administrator,
National Compliance Administrator, Operations
Manager-SCI, Special Projects Coordinator,
National Director Financial Aid and
Compliance, and since May 1996, Vice
President Compliance and Financial Aid.
</TABLE>
(The remainder of this page was left blank intentionally.)
Proxy Statement -8-
<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 $100,000
(determined as of the end of last year) for the years ended December 31, 1996,
1995, and 1994:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
Name and All Other
Principal Options Compensation
Position Year Salary($) Bonus ($) (#) ($)
---------- ---- --------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Jack L. Brozman, 1996 135,000 36,000 150,000/(2)/ 0
Chairman of the Board, 1995 135,000 51,000 150,000/(2)/ 0
President and Treasurer 1994 125,000 0 300,000/(2)/ 0
of the Company/(1)/
Samuel Person/(3)/ 1996 149,000 0 0 45,000 /(3)/
President of 1995 198,000 0 0 0
Person/Wolinsky 1994 198,000 7,500 0 0
Michael S. Savely, 1996 104,000 28,000 0
Sr. Vice President-Operations 1995 98,000 42,000 0 0
1994 93,000 8,000 0 0
Asa E. Johnson 1996 84,000 16,000 0 0
Vice President 1995 *
Operations 1994 *
M. Gregg Gimlin 1996 79,000 23,000 0 0
Vice President, 1995 75,000 33,000 0 0
Chief Financial Officer 1994 *
- -----------------------
</TABLE>
* Salary and bonus did not exceed $100,000.
(1) Mr. Brozman also received compensation as CEO of CenCor in 1996, 1995, and
1994, which compensation is not reflected in the above Summary Compensation
Table.
(2) On February 3, 1994, the Company's Compensation Committee granted to Mr.
Brozman an option to purchase 750,000 shares of Common Stock under the
Company's 1994 Incentive Stock Option Plan. Options for 600,000 shares have
vested and options for 150,000 shares have lapsed. See, "Option Grants,
Exercises and Holdings" and "Compensation Committee Report on Executive
Compensation - Chairman and CEO Compensation - Option Grant."
(3) Mr. Person received compensation for finding buyers of Person/Wolinsky,
which was sold in August 1996.
Proxy Statement -9-
<PAGE>
Option Grants, Exercises and Holdings
- -------------------------------------
The Company did not grant any options or SARs in 1996.
No options were exercised by any of the named executive officers during
1996. The following table provides information with respect to the named
executive officers concerning unexercised options held as of the end of the
Company's last fiscal year:
<TABLE>
<CAPTION>
LAST FISCAL YEAR END OPTION VALUES
Value of Unexercised
Number of Unexercised In-the-Money
Options Options
at FY-End (#) at FY-End ($)(1)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- -------------------------- -----------------------------
<S> <C> <C>
Jack L. Brozman, CEO 600,000/0 470,000/0
Michael S. Savely 52,500/22,500 44,000/19,000
M. Gregg Gimlin 24,500/10,500 20,000/9,000
- ----------------------
</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, 1996 ($.9375) and the
exercise price of the options.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors is 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 1996.
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.
Proxy Statement -10-
<PAGE>
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; and
* Compensation should reflect the executive officers' abilities to
effectively direct the Company during difficult economic conditions.
Calendar 1996 Compensation. To accomplish this compensation policy in 1996,
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 or vesting 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 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.
The amount of raises to the executive officers' base salaries was
subjectively determined by the Chairman of the Board, 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. Such raises in base salaries ranged from approximately 4.7% to
10.0% of their previous year's base salary. Mr. Brozman proposed no increase in
his salary for 1996. See, "Chairman and CEO Compensation."
Bonuses. The Company has certain bonus agreements in place with executive
officers 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 1996.
The performance criteria in the bonus agreements of the executive officers
differ depending on the amount 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.
Proxy Statement -11-
<PAGE>
Incentive Stock Option Awards. The Board of Directors and Compensation
Committee also award stock options to executive officers, as well as school
management personnel, 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. Conversely, when stock prices increase, the stock options become more
valuable.
The determination of whether to grant stock options to executive officers,
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 the 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, especially stock options previously granted,
the Compensation Committee decided not to grant additional options during 1996
to executive officers.
The options previously granted were incentive stock options under the Code
which means that the officers will not have to pay taxes, and the Company will
not receive a tax deduction upon exercise of the options.
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.
For 1996, Mr. Brozman proposed that he not receive an increase in his base
annual salary until such time as the Company resolved its financial obligation
to CenCor (which it did in February 1997). See "Certain Transactions". The
Compensation Committee believes that the continuing success of the Company is a
direct result of Mr. Brozman's excellent leadership and commitment level. The
Committee specifically recognized the following: (i) the Company's continuing
profitability, (ii) the strong cash position that allowed its bank debt to be
prepaid in full during 1996, and (iii) substantially improved school operations.
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 Common Stock. Part of the option, the right to purchase
300,000 shares, was fully vested and was granted as compensation for Mr.
Brozman's
Proxy Statement -12-
<PAGE>
leadership, in 1991, 1992 and 1993, which the Committee believed 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 both 1995 and
1996, the Company achieved 100% or more of the benchmark, which caused the
option to purchase 150,000 shares in each of 1995 and 1996 to immediately vest.
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 1996 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 retainer fee of $2,500 annually, and a
director's fee of $250 for meetings of the Board of Directors and Committees
which he attends. Officer-directors do not receive fees for attendance at
meetings. The Company paid a total of $8,000 in Director fees during 1996. In
addition, Mr. Nichols also received approximately $3,300 for his services on the
Special Committee of the Board, which assisted in negotiations of the CenCor
Repayment.
Employment Contract, Termination of Employment and Change in Control
- --------------------------------------------------------------------
Arrangements
- ------------
Mr. Samuel Person conducted the business of Person/Wolinsky under an
employment agreement since Person/Wolinsky was acquired by CenCor in 1984. The
employment agreement was amended from time to time subsequent to 1984 to revise
salary and bonus compensation. The employment agreement was last amended May 1,
1995, and provided that Mr. Person receive $16,500 per month in salary for the
periods May 1, 1995 through April 30, 1996. Mr. Person agreed to extend this
agreement on the same terms through October 1996. Mr. Person also received
$45,000 in compensation for finding buyers of Person/Wolinsky which was sold in
August 1996.
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
The Compensation Committee consists entirely of non-employee directors of
the Company and there are no Compensation Committee interlocks with other
companies.
(The remainder of this page was left blank intentionally.)
Proxy Statement -13-
<PAGE>
CERTAIN TRANSACTIONS
Cahill Transaction
- ------------------
On February 25, 1997, the Company entered into agreements, which soon
thereafter closed, with Cahill, Warnock Strategic Partners Fund, L.P. and
Strategic Associates, L.P., affiliated Baltimore-based venture capital funds
("Cahill-Warnock"), for the issuance by the Company and purchase by Cahill-
Warnock of (i) 55,147 shares of the Company's new Class B Voting Convertible
Preferred Stock ("Voting Preferred Stock") for $1.5 million and (ii) 5%
Debentures due 2003 ("New Debentures") for $3.5 million (collectively, the
"Cahill Transaction"). Cahill-Warnock subsequently assigned (with the Company's
consent) its rights and obligations to acquire 1,838 shares of Voting Preferred
Stock to James Seward, a Director of the Company, and Mr. Seward purchased such
shares for their purchase price of approximately $50,000. The New Debentures
have nondetachable warrants ("Warrants") for approximately 2,573,529 shares of
Common Stock, exercisable beginning August 25, 1998 at an exercise price of
$1.36 per share of Common Stock.
The Voting Preferred Stock has the right to vote as a class with the Common
Stock (with each share of Voting Preferred Stock having the equivalent voting
power of 20 shares of Common Stock), on all matters presented to holders of
Common Stock. Each share of Voting Preferred Stock is convertible into 20 shares
of Common Stock at the election of the holder for no additional consideration.
The Voting Preferred Stock is entitled to a 12% annual dividend beginning
February 25, 2001 and a 15% annual dividend beginning February 25, 2003. The
Voting Preferred Stock is mandatorily convertible into Common Stock upon the
successful completion by the Company of a common equity offering greater than
$20 million at a price greater than $4 per share of Common Stock. Cahill-Warnock
also has certain preemptive rights in future issuances of stock by the Company.
The New Debentures bear an interest rate of 5% per annum, payable
quarterly, with principal due in February 2003, when the attached Warrants
expire. The Warrants are not exercisable until August 25, 1998, subject to
earlier conversion (at the holder's election) in the event of the successful
completion by the Company of a common equity offering greater than $20 million
at a price greater than $4 per share of Common Stock.
Cahill-Warnock is also entitled to certain registration rights with respect
to the Common Stock underlying the Voting Preferred Stock and Warrants it holds.
As part of the Cahill Transaction, the Board of Directors of the Company
was increased from three to six members, with Cahill-Warnock having the right to
nominate two Directors. The sixth Director is Dr. Robert Roehrich, the Company's
new President and Chief Executive Officer effective April 7, 1997.
Pursuant to a Stockholders' Agreement among Cahill-Warnock, Messrs. Brozman
and Seward, the Robert F. Brozman Trust (who, together, hold an aggregate of
52.8% of the outstanding Voting Securities of the Company and options to
purchase 1,000,000 shares of Common Stock) and the Company, such holders have
agreed to certain restrictions on the transfer and voting of voting securities
held by them and have agreed to vote such Voting Securities at the Annual
Meeting in favor of the six nominees for director.
Proxy Statement -14-
<PAGE>
Pursuant to the Fourth Amendment with CenCor, the Company used
approximately $4.4 million of the funds from the Cahill Transaction to redeem
the 260,385 outstanding shares of its Class A Preferred Stock, the Old Debenture
and Unsecured Debt which were held by CenCor (the "CenCor Repayment"). As part
of the CenCor Repayment, CenCor waived its right to a payment from the Company
equal to 25% of the amount by which the Company's market capitalization exceeds
$3.5 million on August 31, 1997. At September 30, 1996, the Company had accrued
$457,000 for this purpose. After the CenCor Repayment, the only outstanding
obligation of the Company to CenCor is to continue to replace written-off
receivables of the Company which had been conveyed to CenCor to discharge
interest that had accrued but was unpaid on the Old Debenture until such time as
CenCor recovers all discharged interest. At December 31, 1996, the amount
remaining to be recovered by CenCor was approximately $382,000.
Jack L. Brozman, the Chairman of the Board and Treasurer of the Company, is
the Chairman of the Board, President, and Treasurer of CenCor.
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 held 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.
The Company and CenCor, the Company's parent prior to 1988, executed a
restructuring agreement (the "Restructuring Agreement") effective October 30,
1992. As a result of the Restructuring Agreement, the Company (i) was relieved
of certain obligations incurred in its spin-off from CenCor, (ii) issued a
variable interest rate Junior Secured Debenture (the "Old Debenture") to CenCor
in the principal amount of $5,422,000,( iii) was obligated to make an additional
contingent payment based on the market value of the Company's outstanding Common
Stock, and (iv) agreed to reimburse CenCor $100,000 for its expenses in
connection with the Restructuring Agreement. The Restructuring Agreement has
been amended from time to time. These include amendments:
1. As of December 31, 1993, which provided for the assignment of certain of
the Company's receivables to CenCor as payment for all interest accrued
on the Old Debenture through December 31, 1993, totaling $559,353.
2. Effective November 15, 1994, whereby CenCor exchanged $3,000,000 face
value of the Debenture for 300,000 shares of Cumulative Preferred Stock
(the "Class A Preferred Stock") of the Company with a $.10 par value and
a per share liquidation preference of $10.00 and cumulative quarterly
dividends. The Class A Preferred Stock had no mandatory redemption
date, and was redeemable at liquidation value plus accrued cumulative
dividends. In addition, the Company assigned to CenCor certain
receivables
Proxy Statement -15-
<PAGE>
and discharged approximately $495,000 of interest that accrued on the
Old Debenture through December 31, 1994. In return for CenCor's release
of assets sold by the Company, prior to the Cahill Transaction, the
Company redeemed 39,615 shares of Class A Preferred Stock.
3. On December 30, 1996, which extended the due date of the Old Debenture
and unsecured debt to January 1, 1998, which increased quarterly
principal payments approximately $30,000 to $100,000 and which waived
the capital expenditures limitation with respect to the North Hollywood,
California lease. The amendment also specified the terms and allocation
of the CenCor Repayment. In addition, the Company agreed to pay CenCor
$1,333 per day for the number of days the refinancing closing date
extends beyond December 20, 1996.
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 of 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,
namely Jack L. Brozman (in the positions described above), and Lisa M. Henak who
is Secretary and Assistant Treasurer of both companies. 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.
Person/Wolinsky
- ---------------
Person/Wolinsky Associates, Inc. ("Person/Wolinsky"), a subsidiary of the
Company, offered review courses in the Spring and Fall for candidates preparing
for the CPA Examination administered by the American Institute of Certified
Public Accountants ("AICPA"). The assets of the CPA Review Courses were sold
August 2, 1996 to a group of educators and editorial writers associated with
Person/Wolinsky. Samuel Person, who started the business in 1967 and created the
study materials retired in 1996. Mr. Person also received $45,000 in
compensation for finding buyers of Person/Wolinsky which was sold in August
1996.
(The remainder of this page was left blank intentionally.)
Proxy Statement -16-
<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, 1991.
Comparison of Cumulative Total Return
(Concorde Career Colleges, Inc., Nasdaq index and industry index)
<TABLE>
<CAPTION>
- ------------------------------FISCAL YEAR ENDING-------------------------------------
COMPANY 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
CONCORDE CAREER COLLEGES 100 2.51 7.47 14.40 33.33 48.32
INDUSTRY INDEX 100 81.24 73.59 47.26 85.28 147.47
BROAD MARKET 100 100.98 121.13 127.17 164.96 204.98
</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, 1991, 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 -17-
<PAGE>
APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS
For 1996, 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 1997.
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
1997 is hereby approved."
It is not anticipated that representatives of Price Waterhouse LLP will
attend the Annual Meeting. If, however, representatives are present at the
Annual Meeting there will be an opportunity for them to make a statement and 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 1998, such proposal must be received by
the Company, in writing, on or before December 15, 1997, to be considered for
inclusion in the Company's next Proxy Statement for such meeting.
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 for director 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 1997.
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 ANNUAL MEETING, PLEASE
COMPLETE, SIGN, DATE AND RETURN TO THE COMPANY THE ACCOMPANYING PROXY. IF YOU
ARE PRESENT AT THE ANNUAL MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR
SHARES IN PERSON.
BY THE BOARD OF DIRECTORS
April 14, 1997 Lisa M. Henak, Secretary
Proxy Statement -18-
<PAGE>
CONCORDE CAREER COLLEGES, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 22, 1997
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 May 22, 1997 or any adjournment or postponement thereof.
1. Election of Directors.
[_] FOR ALL NOMINEES LISTED BELOW
(except as marked to the contrary below)
[_] WITHHOLD AUTHORITY
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, ROBERT R. ROEHRICH,
JAMES R. SEWARD, THOMAS K. SIGHT, and DAVID L. WARNOCK
2. Ratification and approval of the appointment of Price Waterhouse LLP as the
independent public accountants for 1997.
[_] 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:__________________________________, 1997
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.)
<PAGE>
CONCORDE CAREER COLLEGES, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 22, 1997
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
Class B Voting Convertible Preferred 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 May 22, 1997 or any adjournment or
postponement thereof.
1. Election of Directors.
[_] FOR ALL NOMINEES LISTED BELOW
(except as marked to the contrary below)
[_] WITHHOLD AUTHORITY
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, ROBERT R. ROEHRICH,
JAMES R. SEWARD, THOMAS K. SIGHT, and DAVID L. WARNOCK
2. Ratification and approval of the appointment of Price Waterhouse LLP as the
independent public accountants for 1997.
[_] FOR [_] AGAINST [_] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
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 THE NOMINEES AND FOR THE PROPOSAL.
Please date, sign and return this Proxy card by mail, postage prepaid.
Dated:___________________________________, 1997
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.)
