<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
CALIFORNIA CULINARY ACADEMY, INC.
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(Name of Issuer)
Common Stock, No Par Value
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(Title of Class of Securities)
129905105
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(CUSIP Number)
WILLIAM G. DE MAR THEODORE G. CROCKER
6 Steuben Bay 244 Valhalla Drive
Alameda, CA 94502 Solvang, CA 93463
(510) 521-1979 (805) 350-0340
________________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
December 6, 1999
----------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13(d)-1(g), check the following
box. [_]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
(1 of 25)
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If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [_]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SCHEDULE 13D
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
William G. De Mar SS####-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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(2 of 25)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A
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7 SOLE VOTING POWER
NUMBER OF 150,935
SHARES -----------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
1,350,283
OWNED BY
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 150,935
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
1,350,283
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,350,283
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
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(3 of 25)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.4%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
SCHEDULE 13D
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Theodore G. Crocker SS$ ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
(4 of 25)
<PAGE>
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
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7 SOLE VOTING POWER
NUMBER OF 1,199,348
SHARES -----------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
1,350,283
OWNED BY
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,199,348
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
1,350,283
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,350,283
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.4%
(5 of 25)
<PAGE>
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT
(6 of 25)
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15 Item 1: Security and Issuer.
This Statement relates to the Common Stock, no par value (the "Common
Stock"), of California Culinary Academy, Inc. (the "Company"). The address of
the principal executive office of the Company is 625 Polk Street, San Francisco,
California 94102.
Item 2: Identity and Background.
This Statement is filed on behalf of William G. De Mar and Theodore G.
Crocker (the "Shareholders").
The following sets forth as to each Shareholder: (a) his name; (b) his
residence or business address; (c) his present principal occupation or
employment and the name, principal business and address of any corporation or
other organization in which such employment is conducted; (d) whether or not,
during the last five years, such Shareholder was convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors); (e) whether
or not, during the last five years, such Purchaser was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which such Purchaser was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding violations with respect
to such laws; and (f) his citizenship.
1. (a) William G. De Mar.
(b) 6 Steuben Bay
Alameda, CA 94502
(c) Developer
Antelope Development LLC
8070 Soquel Drive
Aptos, CA 95003
(d) Not applicable
(e) Not applicable
(f) United States.
2. (a) Theodore G. Crocker.
(b) 244 Valhalla Drive
Solvang, CA 93463
(c) Retired. Former CEO of California Culinary Academy
625 Polk Street
San Francisco, CA 94102
(d) Not applicable
(e) Not applicable
(f) United States.
(7 of 25)
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Item 3: Source and Amount of Funds or Other Consideration.
Since the filing of the Schedule 13D on July 7, 1999, Theodore G. Crocker
and William G. De Mar, have not engaged in any transactions involving the Common
Shares of California Culinary Academy (the "Issuer") as described below in Item
5.
William G. De Mar currently has his shares in a Legg Mason Margin Account
which is subject to the client agreement between William G. De Mar and Legg
Mason.
Theodore G. Crocker currently has his shares in the following margin
accounts:
Sutro & Co., Legg Mason and U.S. Bancorp Piper Jeffrey and acquired beneficial
ownership of his Common Stock of California Culinary Academy through his
personal brokerage accounts at Sutro & Co., Legg Mason and U.S. Bancorp Piper
Jeffrey, which are subject to the client agreements between Theodore G. Crocker
and Sutro & Co., Legg Mason and U.S. Bancorp Piper Jeffrey.
Item 4: Purpose of Transaction.
On December 6, 1999, Career Education Corporation, a Delaware corporation,
and the Shareholders, entered into an option agreement as part of a merger
agreement between CCA Acquisition, LLC, a Delaware limited liability company and
an indirect wholly-owned subsidiary of Career Education Corporation, and
California Culinary Academy, Inc., a California corporation. A copy of this
agreement is attached hereto as Exhibit B.
Messrs. Crocker and DeMar continue to discuss, amongst themselves and with
other shareholders and/or others, the business, operations and affairs of the
Academy. As part of these discussions Messrs. Crocker and DeMar are continuing
to explore the possibility of changes to the Academy's board of directors and/or
management, including exploring the possibility of calling a special meeting of
the Academy's shareholders to change the Academy's board of directors. As part
of this process, on November 18, 1999, Mr. DeMar presented to the Academy, on
behalf of himself and Mr. Crocker, a call for a special meeting of shareholders
to be held on the earliest possible date. A copy of this letter is attached
hereto as Exhibit C.
Messrs. Crocker and DeMar expect to continue to carefully monitor the
Academy's business, management and operations, and may take action in the future
which could include efforts to remove and/or replace some or all of the
Academy's board of directors. As part of these efforts, Messrs. Crocker and/or
DeMar are continually engaged in discussions with other Academy shareholders and
others concerning how to improve the Academy's operations and maximize
shareholder value. These discussions may also result in Mr. Crocker and/or Mr.
DeMar deciding to take further actions to improve shareholder value and/or the
Academy's operations, including taking action to influence and/or change
management of the Academy's business. However, there can be no assurance that
Messrs. Crocker and/or DeMar will take such action(s), and no final decisions
about any specific action has been taken. In addition, Mr. DeMar, as a member
of the Academy's board of directors, is continually involved in all aspects of
the Academy's business and operations, as well as discussions concerning the
Academy's management and its board. Mr. DeMar's involvement is expected to
continue for the foreseeable future.
(8 of 25)
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Other than as described above or in Item 5 below, none of the Reporting
Persons has any present plans or proposals which relate to or would result in
any transaction, change or even specified in clauses (a) through (j) of Item 4
of the Schedule 13D.
Except for the actions described above in this Schedule 13D, the
Shareholders have no intention, plan or proposal with respect to:
1. The acquisition by any person of additional securities of the issuer,
or the disposition of securities of the issuer;
2. An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the issuer of any of its
subsidiaries;
3. A sale or transfer of a material amount of assets of the issuer or any
of its subsidiaries;
4. Any change in the present Board of Directors or management of the
issuer, including any plan or proposals to change the number or term
of directors or to fill any existing vacancy on the Board;
5. Any material change in the present capitalization or dividend policy
of the issuer;
6. Any other material change in the issuer's business or corporate
structure;
7. Changes in the issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control
of the issuer by any person;
8. Causing a class of securities of the issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted
in an inter-dealer quotation system of a registered national
securities association;
9. A class of equity securities of the issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Act;
10. Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) As of December 3, 1999, each of the Shareholders beneficially owned
the following amounts of Common Stock (the percentage of the Common Stock owned
being indicated in parentheses and based upon 3,815,431 shares outstanding as
set forth in the Form 10-Q filed by the Company for the quarter ended March 21,
1999).
1. William G. De Mar beneficially owned 150,935 shares.
2. Theodore G. Crocker beneficially owned 1,199,348 shares.
As of December 3, 1999, the Shareholders beneficially owned an
aggregate of 1,350,283 shares (35.4%) of the outstanding Common Stock.
(b) The responses of each Purchaser to Items (7) through (11) of the
portions of the cover page of this Schedule 13D which relate to beneficial
ownership of shares of Common Stock are incorporated herein by reference.
(9 of 25)
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(c) The information concerning transactions in Common Stock effected
by the Shareholders during the past sixty days is set forth on Exhibit A
attached hereto and incorporated herein by reference.
(d) Not applicable.
(e) Not applicable.
Item 6: Contracts, Arrangements, Undertakings or Relationships with Respect to
Securities of the Issuer.
From time to time, in the ordinary course of their investments, Messrs.
De Mar and Crocker may have their shares on various margin accounts and/or use
their securities as collateral on other obligations. Other than as described
above, none of the Shareholders has any contracts, arrangements, understandings
or relationships with respect to any securities of the Company.
Item 7: Material to be Filed as Exhibits.
A. Information concerning transactions in shares of the Common Stock
effected by purchasing during the past sixty days
B. Option Agreement dated December 6, 1999 between Career Education
Corporation and California Culinary Academy
C. Letter dated November 18, 1999 Demanding Special Shareholders' Meeting
(10 of 25)
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: December 6, 1999.
/s/ William G. De Mar
----------------------------------
William G. De Mar
/s/ Theodore G. Crocker
-----------------------------------
Theodore G. Crocker
(11 of 25)
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Exhibit A
Information Concerning Transactions in
Shares of the Common Stock Effected by the
Shareholders During the Past Sixty Days
----------------------------------------
The following transactions were effected principally on the Nasdaq National
Market System. The price per share excludes brokerage commissions.
<TABLE>
<CAPTION>
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Name of Purchaser Date of Purchase or (Sale) Shares Purchased or (Sold) Price Per Share
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<S> <C> <C> <C>
Theodore G. Crocker 10/06/99 500(S) $4 3/4
10/06/99 1,000(S) $4 1/2
10/07/99 8,132(S) $4 1/8
12/01/99 2,000(S) $3 1/2
12/02/99 1,425(S) $3 1/2
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</TABLE>
(12 of 25)
<PAGE>
EXHIBIT B
OPTION AGREEMENT DATED DECEMBER 6, 1999, BETWEEN CAREER EDUCATION CORPORATION
AND CALIFORNIA CULINARY ACADEMY
EXECUTION COPY
OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Agreement") dated as of December 6, 1999 is by
and between Career Education Corporation, a Delaware corporation (the
"Acquiror"), and the other parties signatory hereto (each a "Shareholder").
RECITALS
Acquiror, CCA Acquisition, LLC, a Delaware limited liability company and an
indirect wholly-owned subsidiary of Acquiror ("Acquisition Sub"), and California
Culinary Academy, Inc., a California corporation (the "Company"), are
negotiating an Agreement and Plan of Merger (as such agreement may be executed
and amended from time to time, the "Merger Agreement"; capitalized terms used
but not defined herein shall have the meanings set forth in the Merger
Agreement), a draft of which has been circulated to the parties, pursuant to
which (and subject to the terms and conditions specified therein) the
Acquisition Sub will be merged with and into the Company (the "Merger"), whereby
each share of common stock, no par value, of the Company ("Company Common
Stock") issued and outstanding immediately prior to the Effective Time will be
converted into the right to receive the Merger Consideration, other than (i)
shares of Company Common Stock owned, directly or indirectly, by the Company or
any subsidiary of the Company or by Acquiror and (ii) Dissenting Shares.
As a condition to Acquiror's negotiating and entering into the Merger
Agreement, Acquiror requires that each Shareholder enter into, and each such
Shareholder has agreed to enter into, this Agreement with Acquiror.
AGREEMENT
To implement the foregoing and in consideration of the mutual agreements
contained herein, the parties hereby agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS. Each Shareholder hereby
severally and not jointly represents and warrants to Acquiror as follows:
(a) OWNERSHIP OF SHARES. (i) Such Shareholder is either (a) the record
holder or beneficial owner, either alone or with such Shareholder's spouse, of
the number of or (b) trustee of a trust that is the record holder or beneficial
owner of, and whose beneficiaries are the beneficial owners (such trustee, a
"Trustee") of shares of Company Common Stock as is set forth opposite such
Shareholder's name on Schedule I hereto (such shares shall constitute the
"Existing Shares", and together with any shares of Company Common Stock acquired
of record or beneficially by such Shareholder in any capacity after the date
hereof and prior to the termination hereof, whether upon exercise of options,
conversion of convertible securities, purchase, exchange or otherwise, shall
constitute the "Shares").
(13 of 25)
<PAGE>
(ii) On the date hereof, the Existing Shares set forth opposite such
Shareholder's name on Schedule I hereto constitute all of the outstanding shares
of Company Common Stock owned of record or beneficially by such Shareholder.
Such Shareholder does not have record or beneficial ownership of any Shares not
set forth on Schedule I hereto.
(iii) Such Shareholder has sole power, or shared power with such
Shareholder's spouse, of disposition with respect to all of the Existing Shares
set forth opposite such Shareholder's name on Schedule I and sole power, or
shared power with such Shareholder's spouse, to demand dissenter's or appraisal
rights, in each case with respect to all of the Existing Shares set forth
opposite such Shareholder's name on Schedule I, with no restrictions on such
rights, subject to applicable federal securities laws and the terms of this
Agreement.
(b) POWER; BINDING AGREEMENT. Such Shareholder has the legal
capacity, power and authority to enter into and perform all of such
Shareholder's obligations under this Agreement. The execution, delivery and
performance of this Agreement by such Shareholder will not violate any other
agreement to which such Shareholder is a party or by which such Shareholder is
bound including, without limitation, any trust agreement, voting agreement,
Shareholders agreement, voting trust, partnership or other agreement. This
Agreement has been duly and validly executed and delivered by such Shareholder
and constitutes a valid and binding agreement of such Shareholder, enforceable
against such Shareholder in accordance with its terms. There is no beneficiary
of or holder of interest in any trust of which a Shareholder is Trustee whose
consent is required for the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby. If such Shareholder is
married and such Shareholder's Shares constitute community property, this
Agreement has been duly authorized, executed and delivered by, and constitutes a
valid and binding agreement of, such Shareholder's spouse, enforceable against
such person in accordance with its terms.
(c) NO CONFLICTS. Except for filings under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), if applicable,
and the expiration or termination of any applicable waiting period thereunder,
(A) no filing with, and no permit, authorization, consent or approval of, any
state or federal public body or authority is necessary for the execution of this
Agreement by such Shareholder and the consummation by such Shareholder of the
transactions contemplated hereby and (B) neither the execution and delivery of
this Agreement by such Shareholder nor the consummation by such Shareholder of
the transactions contemplated hereby nor compliance by such Shareholder with any
of the provisions hereof shall (x) conflict with or result in any breach of any
applicable trust, partnership agreement or other agreements or organizational
documents applicable to such Shareholder, (y) result in a violation or breach
of, or constitute (with or without notice or lapse of time or both) a default
(or give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or obligation of any
kind to which such Shareholder is a party or by which such Shareholder or any of
such Shareholder's properties or assets may be bound or (z) violate any order,
writ, injunction, decree, judgment, statute, rule or regulation applicable to
such Shareholder or any of such Shareholder's properties or assets.
(d) LIENS. Such Shareholder's Shares and the certificates
representing such Shares are now and at all times during the term hereof will be
held by such Shareholder, or by a nominee or custodian for the benefit of such
Shareholder, free and clear of all liens, claims, security interests, proxies,
voting trusts or agreements, understandings or arrangements or any other
encumbrances whatsoever, except for any such encumbrances or proxies arising
hereunder or listed on Schedule 1(d).
-------------
(14 of 25)
<PAGE>
(e) BROKERS. No broker, investment banker, financial adviser or other
person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of such Shareholder in his
or her capacity as such.
(f) ACKNOWLEDGMENT. Such Shareholder understands and acknowledges
that Acquiror is entering into the Merger Agreement in reliance upon such
Shareholder's execution and delivery of this Agreement with Acquiror.
(g) REVIEW OF MERGER AGREEMENT. Such Shareholder has received and
reviewed a copy of the Merger Agreement and the Company Disclosure Letter
delivered therewith and, to the knowledge of such Shareholder, neither the
Merger Agreement or the Company Disclosure Letter contains any untrue statement
of a material fact or omits to state any material fact required to be state
therein or necessary to make the statements therein not misleading.
2. OPTION GRANTED TO ACQUIROR.
(a) Each Shareholder, severally and not jointly, hereby grants to
Acquiror an irrevocable option to purchase all, but not less than all, of such
Shareholder's Shares at any time prior to the termination of the Merger
Agreement in accordance with its terms, on the terms and subject to the
conditions set forth herein (collectively, with respect to all the Shareholder's
Shares, the "Acquiror Option"), which Acquiror Option shall attach to each
Shareholder's Shares and be binding upon any person or entity to which legal or
beneficial ownership of such Shares shall pass, whether by operation of law or
otherwise, including without limitation such Shareholder's heirs, guardians,
administrators or successors or as a result of any divorce.
(b) If Acquiror wishes to exercise the Acquiror Option, Acquiror
shall send a written notice to each Shareholder of its election to exercise the
Acquiror Option, any time prior to the Closing, which exercise shall be subject
to the fulfillment of the conditions specified in Section 2(e) hereof. The place
and date of the closing of the Acquiror Option ("Acquiror Option Closing") shall
be the same as the Closing, and the time of the Acquiror Option Closing shall be
immediately prior to the Closing.
(c) At the Acquiror Option Closing, each Shareholder shall deliver to
Acquiror all of such Shareholder's Shares by delivery of a certificate or
certificates evidencing such Shares, duly endorsed to Acquiror or accompanied by
stock powers duly executed in favor of Acquiror, with all necessary stock
transfer stamps affixed.
(d) At the Acquiror Option Closing, Acquiror shall pay to the
Shareholders, by wire transfer in immediately available funds to the account of
such Shareholders specified in writing no more than one business day prior to
the Acquiror Option Closing, an amount equal to the product of the Merger
Consideration and the number of Shares purchased pursuant to the exercise of the
Acquiror Option.
(e) Each of the following conditions must be satisfied at the time
the Acquiror Option is exercised and at the time of the Acquiror Option Closing:
(i) no court, arbitrator or governmental body, agency or
official shall have issued any order, decree or ruling (which has not been
stayed or suspended pending appeal) and there shall not be any effective
statute, rule or regulation, restraining, enjoining or prohibiting the
consummation of the purchase and sale of the Shares pursuant to the exercise of
the Acquiror Option;
(15 of 25)
<PAGE>
(ii) any waiting period applicable to the consummation of
the purchase and sale of the Shares pursuant to the exercise of the Acquiror
Option under the HSR Act shall have expired or been terminated; and
(iii) all of the conditions set forth in Article 6 of the
Merger Agreement shall have been satisfied or waived.
3. CERTAIN COVENANTS OF SHAREHOLDERS. Except in accordance with the terms of
this Agreement, each Shareholder hereby severally covenants and agrees as
follows:
(a) NO SOLICITATION. Prior to the termination of the Merger Agreement
in accordance with its terms, no Shareholder shall, in its capacity as such,
directly or indirectly (including through advisors, agents or other
intermediaries), solicit (including by way of furnishing information) or respond
to any inquiries or the making of any proposal by any person or entity (other
than Acquiror, Acquisition Sub or any affiliate thereof) with respect to the
Company that constitutes or could reasonably be expected to lead to an
Acquisition Proposal (as defined in the Merger Agreement). If any Shareholder in
its capacity as such receives any such inquiry or proposal, then such
Shareholder shall promptly inform Acquiror in writing of the terms and
conditions, if any, of such inquiry or proposal and the identity of the person
making it. Each Shareholder, in its capacity as such, will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to any of the foregoing.
(b) RESTRICTION ON TRANSFER, PROXIES AND NONINTERFERENCE; RESTRICTION
ON WITHDRAWAL. Prior to the termination of the Merger Agreement in accordance
with its terms, no Shareholder shall, directly or indirectly: (i) except
pursuant to the terms of the Merger Agreement and to Acquiror pursuant to this
Agreement, offer for sale, sell, transfer, tender, pledge, encumber, assign or
otherwise dispose of, enforce or permit the execution of the provisions of any
redemption agreement with the Company or enter into any contract, option or
other arrangement or understanding with respect to or consent to the offer for
sale, sale, transfer, tender, pledge, encumbrance, assignment or other
disposition of, or exercise any discretionary powers to distribute, any or all
of such Shareholder's Shares or any interest therein, including any trust income
or principal, except in each case to a Permitted Transferee who is or agrees in
a writing executed by the Acquiror to become bound by this Agreement; (ii) grant
any proxies or powers of attorney with respect to any Shares, deposit any Shares
into a voting trust or enter into a voting agreement with respect to any Shares;
or (iii) take any action that would make any representation or warranty of such
Shareholder contained herein untrue or incorrect or have the effect of
preventing or disabling such Shareholder from performing such Shareholder's
obligations under this Agreement. For purposes of the Agreement, "Permitted
Transferees" means, with respect to a Shareholder, any of the following persons:
(a) the spouse of such Shareholder, provided that at all relevant times of
determination such Shareholder is not separated or divorced from, or is not
involved in separation or divorce proceedings with, such spouse; (b) the issue
of such Shareholder; (c) any charitable foundation or similar organization
founded by such Shareholder; (d) a trust of which there are no principal
beneficiaries other than (i) such Shareholder, (ii) such Shareholder's spouse
(provided that at all relevant times of determination such Shareholder is not
separated or divorced from, or is not involved in separation or divorce
proceedings with, such spouse), (iii) the issue of such Shareholder, or (iv) any
charitable foundation or similar organization founded by such Shareholder; (e)
the legal representative of such Shareholder in the event such Shareholder
becomes mentally incompetent; and (f) the beneficiaries under (i) the will of
such Shareholder or the will of such Shareholder's spouse, or (ii) a trust
described in clause (d) above.
(c) WAIVER OF APPRAISAL AND DISSENTER'S RIGHTS. Each Shareholder
hereby waives any rights of appraisal or rights to dissent from the Merger that
such Shareholder may
(16 of 25)
<PAGE>
have. Each Trustee represents that no beneficiary who is a beneficial owner of
Shares under any trust has any right of appraisal or right to dissent from the
Merger which has not been so waived.
(d) NO TERMINATION OR CLOSURE OF TRUSTS. Unless, in connection
therewith, the Shares held by any trust which are presently subject to the terms
of this Agreement are transferred upon termination to one or more Shareholders
and remain subject in all respects to the terms of this Agreement, or other
Permitted Transferees who upon receipt of such Shares become signatories to this
Agreement, the Shareholders who are Trustees shall not take any action to
terminate, close or liquidate any such trust and shall take all steps necessary
to maintain the existence thereof at least until the termination of the Merger
Agreement in accordance with its terms.
(e) VOTING OF COMPANY STOCK. Each Shareholder hereby agrees that,
prior to the termination of the Merger Agreement in accordance with its terms,
at any meeting (whether annual or special and whether or not an adjourned or
postponed meeting) of the holders of Company Common Stock, however called, or in
connection with any written consent of the holders of the Company Common Stock,
he will appear at the meeting or otherwise cause the Shares to be counted as
present thereat for purposes of establishing a quorum and vote or consent (or
cause to be voted or consented) the Shares, except as otherwise agreed to in
writing in advance by the Acquiror in its sole discretion, in favor of any
business combination with Acquiror and against the following actions: (a) any
Acquisition Proposal (as defined in the Merger Agreement) or (b) any other
action which is intended, or could reasonably be expected, to impede, interfere
with, delay, postpone or materially adversely affect the transactions
contemplated by this Agreement or the Merger Agreement. Each Shareholder agrees
that he will not enter into any agreement or understanding with any Person the
intended or reasonably anticipated effect of which would be inconsistent with or
violative of any provision contained in this Section 3(e).
(f) GRANT OF PROXY; APPOINTMENT OF PROXY. Each Shareholder hereby
revokes any and all previous proxies granted with respect to the Shares. Prior
to the termination of the Merger Agreement in accordance with its terms, each
Shareholder hereby irrevocably grants to, and appoints, Acquiror, or any nominee
of Acquiror, such Shareholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of such Shareholder, to vote
the Existing Shares at every annual, special, or adjourned meeting, or grant a
consent or approval in respect of the Shares in favor of any business
combination proposed by Acquiror, and against the following actions (a) any
Acquisition Proposal (as defined in the Merger Agreement) or (b) any other
action which is intended, or could reasonably be expected, to impede, interfere
with, delay, postpone or materially adversely affect the transactions
contemplated by this Agreement or the Merger Agreement. Each Shareholder shall
have no claim against such proxy and attorney-in-fact, for any action taken,
decision made or instruction given by such proxy and attorney-in-fact on
accordance with this Agreement or the Merger Agreement. Such proxy is
irrevocable and the appointment is coupled with an interest in the Shares.
4. FURTHER ASSURANCES. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
5. CERTAIN EVENTS. Each Shareholder agrees that this Agreement and the
obligations hereunder shall attach to such Shareholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of such
Shares shall pass, whether by operation of law or otherwise, including without
limitation such Shareholder's heirs, guardians, administrators or successors or
as a result of any divorce.
(17 of 25)
<PAGE>
6. STOP TRANSFER. Each Shareholder agrees with, and covenants to, Acquiror
that such Shareholder shall not request that the Company register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest
representing any of such Shareholder's Shares, unless such transfer is made in
compliance with this Agreement.
7. TERMINATION. If the Merger Agreement is signed by December 15, 1999, then
in the event the Merger Agreement is terminated in accordance with its terms,
the obligations set forth in this Agreement shall also terminate. If the Merger
Agreement is not signed by December 15, 1999, then the obligations set forth in
this Agreement will terminate upon the later to occur of: (a) December 15, 1999;
or (b) December 15, 2000, if an Acquisition Proposal is announced or consummated
before December 15, 2000.
8. MISCELLANEOUS.
(a) ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, together with the
Merger Agreement (and the Exhibits and Schedule thereto) (i) constitute the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof and (ii)
shall not be assigned by operation of law or otherwise without the prior written
consent of the other party.
(b) AMENDMENTS. This Agreement may not be modified, amended, altered
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto; provided that Schedule I may be supplemented by
Acquiror by adding the name and other relevant information concerning any
Shareholder of the Company who is or agrees to be bound by the terms of this
Agreement without the agreement of any other party hereto, and thereafter such
added Shareholder shall be treated as a "Shareholder" for all purposes of this
Agreement.
(c) NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given; as of the date of
delivery, if delivered personally; upon receipt of confirmation, if telecopied
or upon the next business day when delivered during normal business hours to an
overnight courier service, such as Federal Express, in each case to the parties
at the following addresses or at such other addresses as shall be specified by
the parties by like notice; unless the sending party has knowledge that such
notice or other communication hereunder was not received by the intended
recipient:
If to the Shareholders:
Theodore G. Crocker
244 Valhalla Drive
Solvang, CA 93463
William G. DeMar
6 Steuban Bay
Alameda, CA 94502
Thomas C. Green
c/o Thomas Green Securities
601 S. Figueroa Street, Suite 2750
Los Angeles, CA 90017
(18 of 25)
<PAGE>
with a copy to:
William E. Waterman, Jr.
600 West Ninth Street
Suite 1109
Los Angeles, CA 90015
Fax: 213/891-9335
If to Acquiror:
Career Education Corporation
2800 West Higgins Road, Suite 790
Hoffman Estates, IL 60195
Attn: John M. Larson, President and Chief Executive Officer
Fax: 847/781-3610
with a copy to:
Katten Muchin & Zavis
525 West Monroe Street, Suite 1600
Chicago, IL 60661-3693
Attn: Lawrence D. Levin
David J. Kaufman
Fax: 312/577-8641
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(d) GOVERNING LAW. The validity, interpretation and effect of this
Agreement shall be governed exclusively by the laws of the State of California,
without giving effect to the principles of conflict of laws thereof.
(e) COSTS. The parties will each be solely responsible for and bear
all of its own respective expenses, including, without limitation, expenses of
legal counsel, accountants, and other advisors, incurred at any time in
connection with pursuing or consummating the Agreement and the transactions
contemplated thereby.
(f) ENFORCEMENT. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement.
(g) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but both of which
shall constitute one and the same Agreement.
(h) DESCRIPTIVE HEADINGS. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
(19 of 25)
<PAGE>
(i) SEVERABILITY. If any term or provision of this Agreement or the
application thereof to any party or set of circumstances shall, in any
jurisdiction and to any extent, be finally held invalid or unenforceable, such
term or provision shall only be ineffective as to such jurisdiction, and only to
the extent of such invalidity or unenforceability, without invalidating or
rendering unenforceable any other terms or provisions of this Agreement under
any other circumstances, and the parties shall negotiate in good faith a
substitute provision which comes as close as possible to the invalidated or
unenforceable term or provision, and which puts each party in a position as
nearly comparable as possible to the position it would have been in but for the
finding of invalidity or unenforceability, while remaining valid and
enforceable.
(j) DEFINITIONS; CONSTRUCTION. For purposes of this Agreement:
(i) "Beneficially Own" or "Beneficial Ownership" with
respect to any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Exchange Act),
including pursuant to any agreement, arrangement or understanding, whether or
not in writing. Without duplicative counting of the same securities by the same
holder, securities Beneficially Owned by a Person shall include securities
Beneficially Owned by all other Persons with whom such Person would constitute a
"group" as described in Section 13(d)(3) of the Exchange Act.
(ii) "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization or
other entity.
(iii) In the event of a stock dividend or distribution, or
any change in the Company Common Stock by reason of any stock dividend, split-
up, recapitalization, combination, exchange of shares or the like, the term
"Shares" shall be deemed to refer to and include the Shares as well as all such
stock dividends and distributions and any shares into which or for which any or
all of the Shares may be changed or exchanged. In addition, in the event of any
change in the Company's capital stock by reason of stock dividends, stock
splits, mergers, consolidations, recapitalizations, combinations, conversions,
exchanges of shares, extraordinary or liquidating dividends, or other changes in
the corporate or capital structure of the Company which would have the effect of
diluting or changing the Acquiror's rights hereunder, the number and kind of
shares or securities subject to the Option and the purchase price per Share (but
not the total purchase price) shall be appropriately and equitably adjusted so
that the Acquiror shall receive upon exercise or the Acquiror Option the number
and class of shares or other securities or property that the Acquiror would have
received in respect of the Shares purchasable upon exercise of the Acquiror
Option if the Acquiror Option had been exercised immediately prior to such
event. Each Shareholder shall take such steps in connection with such
consolidation, merger, liquidation or other such action as may be necessary to
assure that the provisions hereof shall thereafter apply as nearly as possible
to any securities or property thereafter deliverable upon exercise of the
Acquiror Option.
(k) SHAREHOLDER CAPACITY. Notwithstanding anything herein to the
contrary, no person executing this Agreement who is, or becomes during the term
hereof, a director of the Company makes any agreement or understanding herein in
his or her capacity as such director, and the agreements set forth herein shall
in no way restrict any director in the exercise of his or her fiduciary duties
as a director of the Company. Each Shareholder has executed this Agreement
solely in his or her capacity as the record or beneficial holder of such
Shareholder's Shares or as the trustee of a trust whose beneficiaries are the
beneficial owners of such Shareholder's Shares.
[Signature Page Follows]
(20 of 25)
<PAGE>
IN WITNESS WHEREOF, Acquiror and each Shareholder have caused this
Agreement to be duly executed as of the day and year first above written.
/s/ Theodore G. Crocker CAREER EDUCATION CORPORATION
_______________________________
Theodore G. Crocker
/s/ William G. DeMar
_______________________________ By: /s/ John M. Larson
William G. DeMar ____________________________________
Name: John M. Larson
Title: President and Chief Executive
Officer
/s/ Thomas C. Green
_______________________________
Thomas C. Green
(22 of 25)
<PAGE>
SCHEDULE I(d)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Record Holder Number of Shares Account Type of Account
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Theodore G. Crocker 313,550 Wells Fargo Bank (Line Collateral for lines of
of Credit) credit
- ----------------------------------------------------------------------------------------------------------
403,538 Mid Peninsula Bank (Line Collateral for lines of
of Credit) credit
- ----------------------------------------------------------------------------------------------------------
200,000 First National Bank (Line Collateral for lines of
of Credit) credit
- ----------------------------------------------------------------------------------------------------------
63,550 Co-America Bank (Line Collateral for lines of
of Credit) credit
- ----------------------------------------------------------------------------------------------------------
208,408 Legg Mason General margin account
- ----------------------------------------------------------------------------------------------------------
3,702 Piper Jaffray General margin account
- ----------------------------------------------------------------------------------------------------------
6,600 Sutro Shares unencumbered
- ----------------------------------------------------------------------------------------------------------
TOTAL 1,199,348
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Record Holder Number of Shares Account Type of Account
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
William DeMar 900 Investec General margin account
- ----------------------------------------------------------------------------------------------------------
100 MDG General margin account
- ----------------------------------------------------------------------------------------------------------
149,935 Legg Mason General margin account
- ----------------------------------------------------------------------------------------------------------
TOTAL 150,935
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Record Holder Number of Shares Account Type of Account
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Thomas C. Green 177,127 Thomas Green Securities, General margin account
Inc.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(23 of 25)
<PAGE>
CONSENT OF SPOUSE
-----------------
The undersigned, __________, does hereby certify that: I am the spouse of
_________; I have carefully read the foregoing Option Agreement (the
"Agreement") to which this consent is attached relating to the granting of an
option with respect to the stock of California Culinary Academy, Inc. (the "CCA
Stock"). I fully and completely understand its meaning and effect; I fully and
completely consent to and approve the purposes and wisdom of its provisions and
agree to be bound by the terms thereof to the extent that it may affect any
community property that I may have together with my spouse or any separate
property interest that I may have in the CCA Stock; I agree to be bound by the
terms and conditions of said instrument as surviving spouse, heir, devisee or
legatee of my spouse, to the extent that my interest may be affected; and I
acknowledge that the parties to the Agreement to which this consent is attached
are entering into it in reliance on the consent herein given by me. I have been
advised of my right to obtain separate counsel.
Dated: ___________________________ ______________________________
(24 of 25)
<PAGE>
EXHIBIT C
LETTER dated NOVEMBER 18, 1999, DEMANDING SPECIAL SHAREHOLDERS' MEETING
November 18, 1999
Mr. Keith H. Keogh
President
California Culinary Academy, Inc.
625 Polk Street
San Francisco, California 94102
Dear Mr. Keogh:
The undersigned are shareholders of California Culinary Academy, Inc. ("CCA" or
the "Company"), and together own more than 10 percent (10%) of the issued and
outstanding common shares of the Company.
The undersigned shareholders hereby request that a special meeting of the CCA
shareholders be called at the earliest date possible and set for 4:00 P.M.,
California time, on the earliest possible date. There is one item of business to
be transacted at the special meeting of shareholders: the election of a new CCA
Board of Directors.
Reference is made to Article II, Section 5 (Special Meetings), of the CCA
Bylaws. "A special meeting of the shareholders may be called at any time by . .
. one or more shareholders holding shares in the aggregate entitled to cast not
less than 10% of the votes at that meeting. . . If a special meeting is called
by any person or persons other than the Board of Directors, the request shall be
in writing, specifying the time of such meeting and the general nature of the
business proposed to be transacted. . . The officer receiving the request shall
cause notice to be promptly given to the shareholders entitled to vote, in
accordance with the provisions of Section 6 and 7 of this Article II, that a
meeting will be held at the time requested by the person or persons calling the
meeting, not less than thirty-five (35) days nor more than sixty (60) days after
the receipt of the request. If the notice is not given within twenty (20) days
after receipt of the request, the person or persons requesting the meeting may
give the notice. . ." It is the intention of the undersigned to give notice to
CCA shareholders, if you have not given notice before December 8, 1999.
If you have any questions, please feel free to contact Mr. DeMar.
Sincerely,
Theodore G. Crocker
William G. DeMar
(25 of 25)
