<PAGE>
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
Concorde Career Colleges
- --------------------------------------------------------------------------------
(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.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
CONCORDE CAREER COLLEGES, INC.
5800 Foxridge
SUITE 500
Mission, Kansas 66202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 27, 1999
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 Thursday, May 27, 1999, at 9:00 a.m., Central
Time, at 5800 Foxridge, Suite 500, Mission, Kansas, 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 ratify the appointment of independent public accountants for
the Company for 1999; 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,
1999 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
/s/ Lisa M. Henak
Lisa M. Henak
Secretary
Dated: April 15, 1999
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 USING THE ENCLOSED ENVELOPE. IF YOU ATTEND THE ANNUAL 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 BETTER ASSURED AT THE ANNUAL MEETING,
WHICH WILL PREVENT COSTLY FOLLOW-UP AND DELAYS.
<PAGE>
CONCORDE CAREER COLLEGES, INC.
5800 FOXRIDGE
SUITE 500
MISSION, KANSAS 66202
--------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 27, 1999
---------------------------------------------------------------
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 Thursday, May
27, 1999, at 9:00 a.m., Central Time, at 5800 Foxridge, Suite 500, Mission,
Kansas, 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 Annual
Meeting will be voted at the Annual Meeting. If a holder of Common Stock or
Voting Preferred Stock ("Stockholder") specifies a choice on the proxy card with
respect to any matter to be acted upon, its, his or her shares will be voted in
accordance with the instructions 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 voted by giving
written notice of revocation or a properly executed proxy bearing a later date
to the Secretary of the Company. Attendance at the Annual Meeting will not in
and of itself constitute the revocation of a proxy.
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 proxy
card, 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 15, 1999.
Only Stockholders of record at the close of business on April 8, 1999
(the "Record Date") will be entitled to notice of, and to vote at, the Annual
Meeting. On the Record Date, the Company had 7,840,326 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 (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 (b) a majority of the votes
cast by the holders of Common Stock and Voting Preferred Stock present in
Proxy Statement - 1
<PAGE>
person or represented by proxy at the Annual Meeting and entitled to vote on the
subject matter is required for the ratification of the appointment of
independent public accountants for the Company for 1999. Stockholders do not
have any dissenters' rights regarding any of the above matters.
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. Shares held by a broker in "street
name" and for which the beneficial owner of such shares has not executed and
returned to such broker a proxy card indicating voting instructions may be voted
on a discretionary basis by such broker with respect to the election of
directors and ratification of the appointment of the auditors.
Management of the Company 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 proxy card, 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
outstandin g shares of Voting Securities as of April 8, 1999.
OUTSTANDING VOTING
SHARES RIGHTS %
----------------- ----------------- --------------
Common Stock 7,840,326 7,840,326 88%
Voting Preferred Stock 55,147 1,102,940 12%
-----------------
Total Voting Rights 8,943,266 100%
The following table sets forth with respect to Voting Securities (i)
the only persons known by the Company 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, 1999.
<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 31.7% --- --- 27.8%
Cahill, Warnock Strategic/(1)/ 508,333(4) 6.5 53,309(4) 96.7% 17.6
Partners Fund, L.P.
Nelson Obus/(1)/ 598,790(5) 7.6 --- --- 6.7
Jack L. Brozman/(1)/ 3,497,048(6) 43.3 --- --- 38.1
James R. Seward 28,333(7) * 1,838(7) 3.3 *
Thomas K. Sight 15,063(8) * * --- *
=======================================================================================================================
</TABLE>
Proxy Statement - 3
<PAGE>
<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>
David L. Warnock/(1)/ 508,333/(4)/ 6.5 % 53,309(4) 96.7% 17.6%
All Directors and Executive 4,048,777/(9)/ 50.0% 55,147 100% 55.9%
Officers as a Group
(4 persons)
=======================================================================================================================
</TABLE>
* Less than one percent (1%)
(1) Addresses: Robert F. Brozman Trust, 5800 Foxridge, Mission, Kansas
66202; 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, 5800
Foxridge, Mission, Kansas 66202; 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.,
2,895 shares of Voting Preferred Stock owned by Strategic Associates,
L.P and 8,333 Common shares exercisable pursuant to options held by
David L. Warnock. These Voting Securities have a total of 1,574,513
voting rights.
(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, 771,724 shares held directly and 240,000
shares exercisable pursuant to options.
(7) Includes 8,333 Common shares exercisable pursuant to options. These
Voting Securities, Common and Voting Preferred Stock have a combined
total of 65,093 voting rights.
(8) Includes 8,333 Common shares exercisable pursuant to options and 6,730
Common shares held jointly with Faye Sight, Mr. Sight's spouse.
(9) Includes 264,999 Common 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 1, 1999.
(The remainder of this page was left blank intentionally)
Proxy Statement - 4
<PAGE>
PROPOSAL ONE - ELECTION OF DIRECTORS
The number of directors constituting the Company's Board of Directors
may range from three to six. The Board currently consists of four directors
because of the resignation of one officer-director and the death of a non-
officer director. The Board has nominated four directors for election at the
Annual Meeting and may fill the vacancies for the two remaining director
positions at some later time. The shares of Voting Securities represented by the
enclosed proxy will be voted, unless otherwise indicated, for the election of
the four 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.
<TABLE>
<CAPTION>
NAME OF NOMINEE SERVED PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
FOR DIRECTOR SINCE AGE AND DIRECTORSHIPS
------------ ----- --- -----------------
<S> <C> <C> <C>
Jack L. Brozman 1986 48 Chairman of the Board and
Treasurer of the Company
and CenCor, Inc. ("CenCor")
since June 1991. President
and Chief Executive Officer
of the Company since
November 1998 and from June
1991 until April 1997. Mr.
Brozman has also been a
director of CenCor since
1979.
James R. Seward
(1)(2) 1997 46 Executive Vice President
and Chief Financial Officer
of Seafield Capital
Corporation from 1990 to
1997, a public holding
company located in Kansas
City, Missouri. President
and Chief Executive Officer
of the SLH Corporation from
1997 to 1998, a public
holding company located in
Shawnee Mission, Kansas,
and manager of Seward &
Company, L.L.C. since 1998.
Mr. Seward is a director of
Lab One Inc., Response
Oncology, Inc., and
Syntroleum Corporation,
each a public company.
Thomas K. Sight 1989 48 President of Bob Sight
(1)(2) Lincoln Mercury for more
than the prior five years,
an automobile dealership
located in Overland Park,
Kansas. Chief Executive
Officer of Bob Sight Ford
since January, 1992 located
in Lee's Summit, Missouri.
</TABLE>
Proxy Statement - 5
<PAGE>
<TABLE>
<CAPTION>
NAME OF NOMINEE SERVED PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
FOR DIRECTOR SINCE AGE AND DIRECTORSHIPS
------------ ----- --- -----------------
<S> <C> <C> <C>
David L. Warnock 1997 41 Managing Member of Cahill,
(1)(2) Warnock & Company, LLC and
a general partner of
Cahill, Warnock Strategic
Partners, L.P. from July
1995 to present, each is
located in Baltimore,
Maryland. Vice President,
T. Rowe Price Associates
from July 1983 to July
1995. Mr. Warnock is a
director of Environmental
Safeguards, Inc., Alliance
National Inc. and
Children's Comprehensive
Services, Inc., each a
public company.
</TABLE>
- ----------
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
"THE BOARD OF DIRECTORS RECOMMEND THAT YOU VOTE "FOR" THE
NOMINEES SET FORTH ABOVE."
The Board of Directors of the Company held three meetings and acted by
unanimous written consent on six occasions in 1998. The Compensation Committee
held one meeting in 1998. 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 in 1998. 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).
COMPENSATION OF DIRECTORS
-------------------------
Each non-officer director is paid an annual retainer of $2,500 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 non-officer directors elected not to accept the 1998 retainer, due
to the Company's performance. The Company paid a total of $3,500 in Director
fees during 1998. The Company awarded each non-officer director an option to
purchase 8,333 shares of Common Stock on March 30, 1999. The options vested
immediately and were awarded at a price of $0.563, the fair market value on the
date of grant.
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. Certain stockholders of the Company have agreed to vote the Voting
Securities held by them in favor of certain directors. See "Certain
Transactions".
Proxy Statement - 6
<PAGE>
EXECUTIVE OFFICERS
In addition to Jack L. Brozman, listed in the previous table, the
following persons served as executive officers of the Company during 1998. Each
executive officer is appointed by the Board of Directors annually and will serve
until reappointed or until his successor is appointed and qualified.
<TABLE>
<CAPTION>
NAME OF
EXECUTIVE OFFICER AGE PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
----------------- --- -------------------------------------
<S> <C> <C>
Vickey S. Cook 44 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, also Vice
President Compliance and
Financial Aid.
Diana D. Hawkins-Jenks 48 Employed by the Company since
December 1997 as Vice President
Human Resources. Vice President
Human Resources of LaPetite
Academy, Inc. from 1989 to
1997.
William A. Johnson, Jr. 48 Executive Vice President and
Chief Operating Officer of the
Company since September 1998.
Director of Heald Colleges
School of Technology,
Sacramento, California from
1993 to 1998.
Paul R. Gardner 39 Vice President and Chief
Financial Officer of the
Company since November 1998.
Controller of the Company from
September 1994 to November
1998. Employed as Controller
and Assistant Controller of
LaPetite Academy Inc. from
September 1988 to August 1994.
Robert R. Roehrich 52 President, Chief Executive
Officer and a Director of the
Company from April 1997 to
November 1998. Vice President
Academic Affairs for DeVry,
Inc. from January 1984 until
March 1997.
M. Gregg Gimlin 52 Employed by the Company from
July 1993 to September 1998,
serving as Vice President and
Chief Financial Officer.
Patrick J. Debold 47 Employed by the Company from
November 1989 to February 1998,
serving as School Director of
Education, National Director of
Education, and, from July 1993
to February 1998, as Vice
President of Education.
</TABLE>
Proxy Statement - 7
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
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 of the Company whose salary and bonus exceeded $100,000 for the years
ended December 31, 1998, 1997, and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Name and All Other
Principal Position Year Salary ($) Bonus ($) Options Compensation
------------------ ---- ---------- --------- -------
($)
<S> <C> <C> <C> <C> <C>
Jack L. Brozman, 1998 157,000 0 80,000/(2)/ 0
Chairman of the Board and Treasurer of 1997 145,000 19,000 80,000/(2)/ 0
the Company/(1)/ 1996 135,000 36,000 150,000/(3)/ 0
Dr. Robert R. Roehrich, /(4)/ 1998 193,000 0 115,000/(5)/ 15,000
President and Chief Executive Officer 1997 167,000 40,000 115,000/(5)/ 0
Michael S. Savely/(6)/ 1998 0 0 0 0
Sr. Vice President-Operations 1997 67,000 7,000 0 52,000
1996 104,000 28,000 0 0
M. Gregg Gimlin/(7)/ 1998 66,000 0 0 41,000
Vice President, Chief Financial Officer 1997 * * 0 0
1996 79,000 23,000 0 0
</TABLE>
- ---------
* Salary, bonus and all other compensation did not exceed $100,000.
(1) Mr. Brozman also received compensation as CEO of CenCor in 1998, 1997
and 1996, which compensation is not reflected in the above Summary
Compensation Table. From January 1, 1998 to November 12, 1998 Mr.
Brozman devoted approximately 50% of his time on Company matters.
Subsequent to his appointment to President and CEO, Mr. Brozman devotes
approximately 90% of his time to Company matters.
(2) On February 25, 1997, the Company's Compensation Committee granted to
Mr. Brozman an option to purchase 400,000 shares of the Company's
Common Stock under the 1994 Incentive Stock Option Plan (the "1994
Plan"), of which 80,000 shares vested in 1997 and 80,000 shares vested
in 1998. See "Option Grants, Exercises and Holdings".
(3) 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 Plan. Options for 600,000 shares have vested and
options for 150,000 shares have lapsed and were returned to the 1994
Plan for reissuance. See, "Option Grants, Exercises and Holdings" and
"Compensation Committee Report on Executive Compensation, CEO
Compensation".
(4) Dr. Roehrich resigned effective November 12, 1998 and was paid
severance compensation of $15,000 in 1998. The remainder of Dr.
Roehrich's severance compensation will be paid during 1999.
(5) On April 1, 1997, the Compensation Committee granted to Dr. Roehrich an
option to purchase 575,000 shares of Common Stock under the 1994 Plan,
of which 115,000 shares vested in both 1997 and 1998. See, "Option
Grants, Exercises and Holdings."
(6) Mr. Savely resigned from the Company in July 1997 and was paid
severance compensation in the amount of $52,000.
(7) Mr. Gimlin resigned effective September 21, 1998 and was paid severance
compensation in the amount of $41,000.
Proxy Statement - 8
<PAGE>
Option Grants, Exercises and Holdings
The Company did not grant any options to named executive officers during 1998.
The following table provides information with respect to the named executive
officers concerning options exercised during 1998 and unexercised options held
as of the end of the Company's last fiscal year:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
LAST FISCAL YEAR END OPTION VALUES
- --------------------------------------------------------------------------------------------------------------------------
Value of Unexercised
Number of securities In-the-Money Options
Shares underlying Unexercised at FY-End ($)/(1)/
Acquired on Value Options at FY-End (#)
Name Exercise (#) Realized($) Exercisable/Unexercisable
Exercisable/Unexercisable
- ---------------------------- -------------- --------------- ---------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Jack L. Brozman, 0 0 760,000/240,000 208,000/0
Chairman of the Board
and Treasurer
- ---------------------------- -------------- --------------- ---------------------------- ---------------------------------
Dr. Robert R. Roehrich, 0 0 230,000/0 0/0
Chief Executive Officer/(2)/
- ---------------------------- -------------- --------------- ---------------------------- ---------------------------------
M. Gregg Gimlin, Vice 35,000 $33,000/(4)/ 0/0 0/0
President and Chief
Financial Officer/(3)/
- ---------------------------- -------------- --------------- ---------------------------- ---------------------------------
</TABLE>
(1) Based on the difference between the mean of the closing bid and asked
prices of the Company's Common Stock on December 31, 1997 ($ 0.50) and
the exercise price of the options.
(2) Resigned effective November 12, 1998. The 230,000 options expired and
were cancelled in February 1999.
(3) Resigned effective September 21, 1998.
(4) Based on the difference between the closing price of the Company's
Common Stock on October 16, 1998 ($1.03) and the exercise price of the
options.
Employment Contract, Termination of Employment and Change in Control
- --------------------------------------------------------------------
Arrangements
- ------------
The Company entered into an employment agreement (the "Employment
Agreement") with Dr. Robert R. Roehrich effective April 1, 1997. The Employment
Agreement had no stated term and provided that Dr. Roehrich would receive a
$200,000 base salary, adjusted annually, for serving as the Company's President
and Chief Executive Officer. Dr. Roehrich would receive annual bonus payments of
at least $40,000 to be adjusted upward upon the Company's achievement of
performance-based objectives, and options to purchase 575,000 shares of Common
Stock vesting in 115,000 increments each year until 2001. The Agreement also
provided that Dr. Roehrich would receive certain benefits including medical,
dental and life insurance benefits provided under the Company standard benefit
plans, four weeks of paid vacation per year and a leased Company car. The
Employment Agreement also provided that in the event that Dr. Roehrich was
terminated by the Company other than for cause, or if Dr. Roehrich should decide
to leave employment with the Company, the Company would pay Dr.
Proxy Statement - 9
<PAGE>
Roehrich severance pay equal to one year of his base salary. Dr. Roehrich
resigned effective November 12, 1998. The severance pay will be ratably paid bi-
monthly through November 1999. Unexercisable options for 345,000 shares of
common stock were canceled as a result of Dr. Roehrich's resignation and 230,000
vested options expired and were cancelled in February 1999.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is comprised of
Thomas K. Sight, James R. Seward and David L. Warnock. On an annual basis, the
Compensation Committee reviews the salaries and bonuses of the executive
officers and other employees, administers the 1998 Stock Option Plan, and 1994
Incentive Stock Option Plan (collectively, the "Stock Option Plans"), and any
non-qualified stock options, 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 1998.
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), while at the same time taking into account 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 the 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 1998 Compensation. To accomplish this compensation policy in
--------------------------
1998, the Company's executive compensation package integrates: (i) annual base
salary, (ii) bonuses based upon individual agreements utilizing various
objective performance goals, and (iii) stock option grants or vesting under the
Stock Option Plans. The compensation policies, as
Proxy Statement - 10
<PAGE>
implemented, endeavor to enhance the profitability of the Company (and, thus,
stockholder value) by tying the financial interests of 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 1998 raises to the executive officer's base salaries was
subjectively determined by the Chairman of the Board, Mr. Brozman, and
President, Dr. Roehrich with the approval of the Compensation Committee. The
decisions to raise the base salary was, in part, based on Mr. Brozman's and Dr.
Roehrich's subjective evaluation of each officer's performance. Such raises in
base salaries were approximately 5% of their previous year's base salary in
1998.
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 executive officers receive a specified percentage of
revenue increases after a minimum revenue level, as set by the Compensation
Committee, is achieved. The aggregate bonuses are capped. The performance
criteria in the bonus agreements of the executive officers differ depending on
the amount of responsibility maintained by such executive officers. The Company
granted no such bonuses to any of its executive officers in 1998. The Company
granted to one officer during 1998 a $4,000 bonus for temporarily assuming
additional duties above and beyond normal expectations. In addition the Company
paid a $40,000 bonus due Dr. Roehrich under the terms of his employment
agreement.
Incentive Stock Option Awards. The Board of Directors and Compensation
-----------------------------
Committee also award stock options to executive officers, as well as 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 option becomes more
valuable.
The determination of whether to grant stock options to executive
officers, whether on an aggregate or individual basis, is in the sole 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, except with respect to Mr. Brozman's compensation, with respect to
which the Compensation Committee evaluates such performance), 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.
Proxy Statement - 11
<PAGE>
With respect to such criteria, especially stock options granted to the
executives as a whole, the Compensation Committee granted options for 50,000
shares to a new officer and 11,500 additional options to other officers during
1998. The Chairman of the Board and Chief Executive Officer were not granted any
options during 1998.
The options granted were incentive stock options under the Internal
Revenue Service Tax 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.
Chief Executive Officer Compensation. Jack L. Brozman, Chief Executive
------------------------------------
Officer of the Company since November 1998, is subject to the same general
compensation package as the other executives. For 1998, Mr. Brozman declined an
increase in his base annual salary.
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 focus. The Compensation Committee believes that the
compensation levels during 1998 adequately reflect the Company's compensation
goals and policies.
The Compensation Committee report is submitted by:
Thomas K. Sight, David L. Warnock and James R. Seward
RELATIONSHIP WITH CENCOR
There can be no assurance that 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 between 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.
Proxy Statement - 12
<PAGE>
COMPANY PERFORMANCE
The following graph shows a comparison of cumulative total returns for
the Company, the Nasdaq market index and the Company's Peer Group (defined
below) since the close of business on December 31, 1993.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG CONCORDE CAREER COLLEGES, INC.,
NASDAQ INDEX AND PEER GROUP
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMPANY/INDEX/MARKET 12/31/1993 12/30/1994 12/29/1995 12/31/1996 13/31/1997 12/31/1998
CONCORDE CAREER COLLEGES 100.00 192.86 446.43 647.14 1,160.71 357.14
PEER GROUP 100.00 83.82 434.63 836.42 1,206.95 1,251.48
NASDAQ MARKET INDEX 100.00 104.99 136.18 169.23 207.00 291.96
</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,
Nasdaq market index and the Company's peer group is based on the stock prices at
the close of business on December 31, 1993, assuming a $100 investment. The
return for the Company is based on a December 31, 1993 per share price of $0.13
and a December 31, 1998 per share price of $.50. The above performance graph,
prepared by Media General Financial Services, Inc., compares the annual
performance of the Company with that of the Nasdaq market index and the Peer
Group with investment weighted on market capitalization. The Company changed its
Peer Group during 1998 to more appropriately reflect comparisons to other
similarly capitalized colleges & universities. This "Peer Group" includes the
following companies: Apollo Group, Inc., Caliber Learning Network, Career
Education Corp., Edutrek International, Inc., Quest Educational Corp., Strayer
Education, Inc. and Whitman Education Group. Caliber Learning Network and Career
Education Corp. were added to the Peer Group in 1998.
Proxy Statement - 13
<PAGE>
PROPOSAL TWO - RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
For 1998, PricewaterhouseCoopers LLP examined the financial statements
of the Company and its subsidiaries, including reports to Stockholders, the
Securities and Exchange Commission and other.
The Board of Directors has selected and appointed
PricewaterhouseCoopers LLP as the independent public accountants for the
Company for the year ending December 31, 1999.
The following resolution will be offered at the Annual Meeting:
"RESOLVED, the action of the Board of Directors in appointing
PricewaterhouseCoopers LLP as the independent public accountants of the
Company for the year ending December 31, 1999 is hereby ratified."
It is not anticipated that representatives of PricewaterhouseCoopers
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.
"THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE
RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S PUBLIC ACCOUNTANTS
FOR THE YEAR ENDING DECEMBER 31, 1999."
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and holders of more than 10% of the
Company's common stock to file with the Securities and Exchange Commission
reports of their respective beneficial ownership, and changes in such beneficial
ownership, in the Company's voting securities, and the Company is required to
identify any of those persons who fail to file such reports on a timely basis.
Based solely upon a review of Forms 3, 4 and 5 and amendments thereto furnished
to the Company with respect to the Company's last fiscal year, all required
filings were filed on a timely basis.
STOCKHOLDER PROPOSALS
In the event any Stockholder intends to present a proposal at the
annual meeting of Stockholders to be held in 2000, such proposal must be
received by the Company, in writing, on or before December 19, 1999, to be
considered for inclusion in the Company's next proxy statement for such meeting.
Proxy Statement - 14
<PAGE>
VOTING PROXIES AND OTHER MATTERS
Proxies will be voted in accordance with the choices specified on the
proxy card. If no choice is specified, shares will be voted: (i) "FOR" the
nominees for director listed on the proxy and in this Proxy Statement; (ii)
"FOR" ratification of the appointment of PricewaterhouseCoopers LLP as the
independent public accountants for the Company for the year ending December
31,1999.
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 proxy card 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 CARD. IF
YOU ARE PRESENT AT THE ANNUAL MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR
SHARES IN PERSON.
BY THE BOARD OF DIRECTORS
/s/ Lisa M. Henak
Lisa M. Henak, Secretary
April 15, 1999
Proxy Statement - 15
<PAGE>
CONCORDE CAREER COLLEGES, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 27, 1999
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 27, 1999 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, JAMES R. SEWARD, THOMAS K. SIGHT, and DAVID L. WARNOCK
2. Ratification and approval of the appointment of PricewaterhouseCoopers LLP as
the independent public accountants for 1999.
[ ] 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 SET FORTH IN PROPOSAL 1 AND "FOR"
PROPOSAL 2.
Please date, sign and return this Proxy card by mail, postage prepaid.
DATED:___________________________________, 1999
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 27, 1999
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 27, 1999 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, JAMES R. SEWARD, THOMAS K. SIGHT, and DAVID L. WARNOCK
2. Ratification and approval of the appointment of PricewaterhouseCoopers LLP as
the independent public accountants for 1999.
[ ] 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 SET FORTH IN PROPOSAL 1 AND "FOR"
PROPOSAL 2.
Please date, sign and return this Proxy card by mail, postage prepaid.
DATED:___________________________________, 1999
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.)
