UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): July 16, 2012
Career Education Corporation
(Exact Name of Registrant as Specified in Charter)
Delaware | 0-23245 | 36-3932190 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
231 N. Martingale Rd., Schaumburg, IL | 60173 | |||
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code: (847) 781-3600
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On July 16, 2012, Career Education Corporation (the Company) received a resignation letter from Jeremy Wheaton, Senior Vice President and Chief Executive Officer of Colorado Technical University (CTU), effective as of the close of business on July 16, 2012. The resignation is not a result of any disagreement with the Company on any matter relating to the Companys operation, policies or practices.
To help ensure a smooth and orderly transition, Mr. Wheaton will remain on the CTU Board of Trustees, and also serve through the end of the year as a consultant to CEC. In this regard, the Company and Mr. Wheaton have entered into an independent contractor agreement pursuant to which Mr. Wheaton will receive compensation equivalent to his current salary. He will not receive any bonus or additional compensation during the term of the agreement, although the Company will provide a partial subsidy of his health insurance premiums which will reduce the monthly contribution he must pay for the coverage to the same monthly contribution that similarly situated active employees of the Company pay for the same insurance coverage. The Company has also agreed to amend the non-compete periods in Mr. Wheatons equity award agreements under the Companys 2008 Incentive Compensation Plan to provide that the non-compete periods shall expire on December 31, 2012.
As disclosed pursuant to Item 8.01 of this Current Report on Form 8-K, the Company publicly announced certain changes in its executive management team on July 17, 2012, including Jason Friesens promotion to Senior Vice President, Chief University Education Officer. In connection with this promotion, the Compensation Committee of the Companys Board of Directors approved the following compensation for Mr. Friesen: (i) a base salary of $355,000 per year, (ii) a 2012 Annual Incentive Award Program (the Companys annual performance-based cash incentive compensation program) target award of 60% of base salary, to be calculated according to the terms of such program, and (iii) a long term equity incentive compensation award target of 125% of base salary for awards to be made in 2013. In addition, the Compensation Committee approved a one-time bonus payment of $25,000 to Mr. Friesen in recognition of his contributions to the Company as Senior Vice President of Health Education.
Item 8.01. | Other Events. |
The Company issued a press release regarding changes in its executive management team on July 17, 2012, a copy of which is attached as Exhibit 99.1, and the information contained therein is incorporated herein by reference.
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit Number |
Description of Exhibits | |
99.1 | Press release of the Company dated July 17, 2012 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CAREER EDUCATION CORPORATION | ||
By: | /s/ Jeffrey D. Ayers | |
Jeffrey D. Ayers | ||
Senior Vice President, General Counsel and Corporate Secretary |
Dated: July 17, 2012
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Exhibit Index
Exhibit Number |
Description of Exhibits | |
99.1 | Press release of the Company dated July 17, 2012 |
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Exhibit 99.1
CONTACT: Mark Spencer 847.585.3802 mdspencer@careered.com |
Career Education Corporation Appoints New Leaders & Establishes New Roles on Executive Team
Schaumburg, Ill., July 17, 2012 Career Education Corporation (CEC) (NASDAQ: CECO), a global provider of postsecondary education programs and services, today announced a number of executive moves to bolster the companys management team, realign and simplify the organization structure, and help CEC navigate its regulatory, legal and political environment consistent with strategies outlined earlier in the year.
As part of these changes, the company will organize its more than 90 campuses serving approximately 95,000 students into University, Career, and International Education Groups. The previously announced plan to establish three education segments, versus the current six, will concentrate and enhance academic focus, consolidate and align similar institutions and better position the company in a competitive marketplace through fewer, stronger institutional brands.
University Education Group
Jason T. Friesen, who has held a number of leadership roles at CEC, has been named Senior Vice President, Chief University Education Officer. The new organization Friesen leads includes CECs two flagship higher education institutions Colorado Technical University (CTU) and American InterContinental University (AIU).
Founded in 1965, CTU offers associate, bachelors, masters and doctoral degrees through a combination of online and ground-based campuses. AIU, founded in 1970, provides a wide range of undergraduate and graduate degrees that also can be achieved online and through traditional coursework. Both institutions offer students award-winning Online Virtual Campuses.
Friesen has led CECs health institutions since the beginning of the year. He implemented significant improvements in academic quality, program integrity and operational excellence of those career-focused institutions. Friesen, who holds an M.B.A. degree from the University of Chicago, has broad financial experience at CEC and other publicly-traded companies. His recent role at the company included management and operational responsibility for 43 career health institutions.
CTU will be led by Jack Koehn as Acting President. Koehn, who serves as President of CTU Online and as the universitys Chief Operating Officer, holds a bachelors degree in Accounting from Indiana University. He will be supported by CTUs veteran academic leadership team that includes Dr. Constance Johnson, Provost and Chief Academic Officer, and Dr. David Leasure, Chancellor. Koehn replaces Jeremy Wheaton who, after 17 years of diverse experience at CEC as well as the past year leading CTU, has resigned to pursue his own entrepreneurial interests. To help ensure a smooth and orderly transition, Wheaton will remain on the CTU Board of Trustees, and also serve through the end of the year as a consultant to CEC.
AIU continues to be led by University President Dr. George Miller, who has served that institution for eight years and played a pivotal role in building and enhancing AIUs academic programs and student services. He holds a doctorate in Higher Education from the University of Virginia and a masters degree in Educational Psychology from the University of Tennessee. A former professor, Miller earlier served as president of two colleges.
Career Education Group
As previously announced, Daniel J. Hurdle recently joined CEC as Senior Vice President, Chief Career Education Officer. Hurdle leads the new, consolidated Career Education Group, encompassing more than 70 culinary, health, and art, design and technology education institutions serving more than 40,000 students across the United States. The Career Education Group includes the renowned Le Cordon Bleu culinary education programs in the U.S., Sanford-Brown allied health institutions and the International Academy of Design & Technology.
Hurdle brings a successful operating and strategic background to the task of consolidating the companys career-focused campuses, as well as considerable experience with complex business turnarounds. Hurdle will lead efforts to gain synergies and greater competitive advantage from fewer, more focused institutional brands.
During the course of the next few months, Friesen, who had been leading CECs health campuses, will help support the transition of responsibility for these institutions, which will be directly led by Hurdle.
Hurdle joined CEC from Caribou Coffee Company, the second largest premium coffeehouse in the United States, where he most recently served as Senior Vice President, Retail. Hurdle led Caribous more than 580 coffeehouses, including all company-operated and franchise locations in the U.S., as well as international franchise stores. Previously, Hurdle held senior positions at Washington Mutual and Starbucks Coffeehouse Company. He holds a masters degree in Management Science from Cambridge University, where he was a Marshall Scholar, and a B.S. degree in Control Systems Engineering from the U.S. Naval Academy.
International Education Group
Michael J. Graham, CECs Executive Vice President and Chief Financial Officer (CFO), will continue to lead the companys International Education Group, in addition to his role as CFO. Graham, who holds an M.B.A. degree from the University of Chicago, has held key financial and management positions at other publicly-traded companies as well as his five-year tenure as an executive at CEC.
CECs international academic offerings include the Paris-based INSEEC institutions, which offer high quality undergraduate and masters programs in business as well as executive education programs across France. Catherine Lespine continues to lead these institutions as Managing Director, INSEEC Group. A graduate of the ESCP Business School, Lespine initially joined INSEEC as a member of its faculty, and previously taught Management and Strategy at two other French universities. The international group also offers campuses and programs in London as well as the International University of Monaco, which recently began offering an online Executive MBA program leveraging CECs award-winning Virtual Campus technology. Graham and his leadership team will seek to expand CECs international footprint, leveraging the companys base in Western Europe.
External Relations & Regulatory Affairs
Given CECs complex and multi-tiered regulatory environment coupled with the political and public scrutiny of all private postsecondary institutions the company also has taken measures to help better address these influences. Tony Mitchell, a veteran public affairs and public relations executive with nearly two decades of political and government experience in Washington, D.C., was recently named the companys Senior Vice President, Chief Communications and Public Affairs Officer. Mitchell leads CECs
corporate and employee communications, government relations, public affairs, and community relations functions. Additionally, Diane Auer Jones, who served as Assistant Secretary for Postsecondary Education with the U.S. Department of Education and as senior staff at the White House and on Capitol Hill, has expanded her responsibilities as the companys Vice President for External and Regulatory Affairs. Jones now oversees the corporate and campus regulatory teams and will help drive CECs regulatory compliance as well as its engagement with state education bodies, regional and national accreditors and the U.S. Department of Education. The company also is conducting a national search to add a Chief Compliance Officer to CECs leadership team.
I am confident this executive team of leaders will further enhance academic excellence at our higher education institutions to support our broad and diverse student population, said Steven H. Lesnik, Chairman, President and Chief Executive Officer of CEC. Together, these executives will put our students first, strengthen our stakeholder relationships and regulatory compliance and drive greater synergies and growth opportunities for CEC. I am excited to have this leadership team in place to advance and execute the companys business plans and strategies.
Lesnik added: Further, I want to thank Jeremy Wheaton for his many contributions to our organization and his stewardship at CTU for the past year. Jeremy is an energetic leader who will be missed by the team at CTU and his colleagues at CEC. I am pleased that he has decided to continue his role on the CTU Board of Trustees and to consult with CEC, which will greatly contribute to an orderly and effective transition. I am confident that Jack Koehn and the strong academic leadership team in place at CTU will continue to provide our students high quality programs, state-of-the-art education technology and an outstanding education experience.
About Career Education Corporation
The colleges, schools and universities that are part of the Career Education Corporation (CEC) family offer high-quality education to a diverse population of approximately 95,000 students across the world in a variety of career-oriented disciplines through online, on-ground and hybrid learning program offerings. The more than 90 campuses that serve these students are located throughout the United States and in France, the United Kingdom and Monaco, and offer doctoral, masters, bachelors and associate degrees and diploma and certificate programs.
CEC is an industry leader whose institutions are recognized globally. Those institutions include, among others, American InterContinental University (AIU); Brooks Institute; Colorado Technical University (CTU); Harrington College of Design; INSEEC Group (INSEEC) Schools; International University of Monaco (IUM); International Academy of Design & Technology (IADT); Le Cordon Bleu North America (LCB); and Sanford-Brown Institutes and Colleges. Through its schools, CEC is committed to providing high-quality education, enabling students to graduate and pursue rewarding career opportunities.
For more information, see CECs website at www.careered.com. The website includes a detailed listing of individual campus locations and web links to CECs colleges, schools, and universities.
Except for the historical and present factual information contained herein, the matters set forth in this release, including statements identified by words such as will, anticipate, believe, plan, expect, intend, should, potential and similar expressions, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on information currently available to us and are subject to various assumptions, risks, uncertainties and other factors that could cause our results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update or revise such factors or any of the forward-looking statements contained herein to reflect future events, developments or changed circumstances, or for any other reason. These risks and uncertainties, the
outcomes of which could materially and adversely affect our financial condition and operations, include, but are not limited to, the following: our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the 90-10 Rule), as well as regional and national accreditation standards and state regulatory requirements; our ability to obtain accrediting agency approvals for existing, changed or new programs and to successfully defend litigation and other claims brought against us; rulemaking by the U.S. Department of Education and increased focus by the U.S. Congress and governmental agencies on for-profit education institutions; changes in enrollment, student mix and average registered credits taken by students; our ability to implement effective cost reduction strategies; and changes in the overall U.S. or global economy. Further information about these and other relevant risks and uncertainties may be found in CECs Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and its subsequent filings with the Securities and Exchange Commission.
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