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OMB APPROVAL |
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OMB Number:
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3235-0059 |
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Expires:
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February 28, 2006 |
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Estimated average burden hours per
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12.75 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box: |
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o Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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ý Definitive Proxy Statement |
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o Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
DEVRY INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
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ý No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11. |
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1) Title of each class of securities to which transaction applies: |
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2) Aggregate number of securities to which transaction applies: |
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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): |
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4) Proposed maximum aggregate value of transaction: |
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o Fee paid previously with preliminary materials. |
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o 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. |
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1) Amount Previously Paid: |
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2) Form, Schedule or Registration Statement No.: |
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SEC 1913 (02-02) |
Persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays a currently valid
OMB control number. |
October 5, 2005
Dear Stockholder:
On behalf of the Board of Directors of DeVry Inc., it is my
pleasure to invite you to attend your Companys Annual
Meeting of Stockholders at 9:00 a.m., Wednesday,
November 9, 2005, in the Crystal Room at Drury Lane
Theatre, 100 Drury Lane, Oakbrook Terrace, Illinois.
We will begin with a discussion of the items listed in the
enclosed proxy statement, followed by a report on the progress
of DeVry during the last fiscal year. DeVrys performance
is also discussed in the enclosed 2005 Annual Report to
Stockholders, which we think you will find to be interesting
reading.
We look forward to seeing you at the meeting.
Thank you.
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Sincerely, |
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Dennis Keller |
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Board Chair |
DeVRY INC.
One Tower Lane, Suite 1000
Oakbrook Terrace, Illinois 60181
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On
November 9, 2005
You are cordially invited to attend the Annual Meeting of
Stockholders of DeVry Inc. in the Crystal Room at Drury Lane
Theatre, 100 Drury Lane, Oakbrook Terrace, Illinois on
Wednesday, November 9, 2005, at 9:00 a.m. Central Standard
Time, for the following purposes:
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(1) To elect four Directors as Class II Directors to
serve until the 2008 Annual Meeting of Stockholders and one
Director as a Class III Director to serve until the 2006 Annual
Meeting of Stockholders; |
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(2) To approve the amendment and restatement of the DeVry
Inc. Employee Stock Purchase Plan; |
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(3) To approve the DeVry Inc. Incentive Plan of 2005; |
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(4) To ratify the selection of PricewaterhouseCoopers LLP
as independent public accountants for the Company for the
current fiscal year; and |
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(5) To consider such other business as may properly come
before the meeting or any adjournment thereof. |
You will find enclosed with this Notice a proxy card and a Proxy
Statement for the meeting and a copy of the DeVry Inc. Annual
Report for 2005.
The Board of Directors has fixed a record date of
September 16, 2005. Only stockholders of record on that
date are entitled to notice of, and to vote at, the meeting.
All stockholders are cordially invited to attend the meeting in
person. However, to assure representation at the meeting, you
are encouraged to vote by proxy by following the instructions on
the enclosed proxy card. Postage is not required for mailing in
the United States. Upon written request, the Company will
reimburse stockholders for the cost of mailing proxy cards from
outside the United States. You may also vote your shares by
telephone or through the Internet by following the instructions
set forth on the enclosed proxy card. You may attend the meeting
and vote in person even if you have returned a proxy in writing,
by telephone or through the Internet.
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By Order of the Board of Directors, |
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David M. Webster
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Secretary |
October 5, 2005
DeVRY INC.
One Tower Lane, Suite 1000
Oakbrook Terrace, Illinois 60181
ANNUAL MEETING OF STOCKHOLDERS, TO BE HELD ON NOVEMBER 9,
2005
PROXY STATEMENT
PROXIES AND VOTING INFORMATION
The Board of Directors of DeVry Inc. (the Company)
is sending you this Proxy Statement and the accompanying proxy
card to solicit your proxy to vote your shares at the
Companys Annual Meeting of Stockholders to be held on
November 9, 2005, and any adjournment thereof. The
solicitation of proxies gives every stockholder an opportunity
to vote because your shares can be voted only if you are present
or represented by proxy at the meeting. This Proxy Statement and
accompanying proxy card are first being sent to stockholders on
or about October 10, 2005.
When you have returned your proxy, the Proxy Committee (and each
of them, with full powers of substitution) will vote your shares
as you direct. Please follow the instructions on the enclosed
card, which explain how to submit your proxy by mail, by
telephone or through the Internet. If you submit a proxy by
telephone or through the Internet, you should not also mail in a
card. If you return your proxy to us by any of these means
without choices for each proposal, the Proxy Committee will vote
your shares on the unmarked proposals as recommended by the
Companys Board of Directors. Abstentions, directions to
withhold authority and broker non-votes (where a named entity
holds shares for a beneficial owner who has not provided voting
instructions) will be considered present at the meeting for
purposes of a quorum but will not be counted in determining the
total number of votes cast. A proxy may be revoked at any time
before the proxy is voted at the meeting by: (1) notifying
the Company in writing that the proxy has been revoked,
(2) submitting a later-dated proxy by mail, over the
telephone or through the Internet, or (3) voting in person
at the meeting. The election of five Directors, the approval of
the amendment and restatement of the DeVry Inc. Employee Stock
Purchase Plan, the approval of the DeVry Inc. Incentive Plan of
2005 and the ratification of the selection of the independent
public accountants will each require the affirmative vote of a
majority of the shares of Common Stock of the Company
outstanding on the record date.
If you are a Company employee who is a participant in the DeVry
Inc. Employee Stock Purchase Plan and/or the Profit Sharing
Retirement Plans DeVry Stock Fund, your proxy will serve
as direction to the Custodian of the Stock Purchase Plan or the
Trustee of the Stock Fund to vote your shares for your account
as you have directed. If you submit a proxy without indicating
your voting preference, your shares will be voted in the same
proportion as shares for which instructions have been received.
The Company will bear the expense of soliciting proxies and will
reimburse all stockholders for the expense of sending proxies
and proxy material to beneficial owners, including expenditures
for foreign mailings. The solicitation initially will be made by
mail but also may be made by Company employees by telephone,
electronic means or personal contact.
As of September 16, 2005, the Company had 70,527,024 shares
of Common Stock ($0.01 par value) outstanding. Stockholders are
entitled to one vote per share owned on the record date.
ELECTION OF DIRECTORS
The Companys Certificate of Incorporation provides for a
Board of Directors of not less than three nor more than
12 Directors, as determined by the Board, that is divided
into three classes serving staggered three-year terms. The
Companys Board of Directors is currently comprised of nine
directors. The current members of Class II, whose terms of
office expire in 2005, are David S. Brown, Dennis J.
Keller and Frederick A. Krehbiel, and the Board of
Directors recommends their re-election. The Board also
recommends the election of each of Fernando Ruiz, who has not
previously served on the Board, as a Class II Director, for
a term to
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expire in 2008, and William T. Keevan, who has not previously
served on the Board, as a Class III Director, for a term to
expire in 2006. As a result, the Board of Directors has acted to
increase the size of the Board of Directors to 11 members,
with such change to take effect immediately prior to the Annual
Meeting.
It is intended that all shares represented by a proxy in the
accompanying form will be voted for the election of each of
David S. Brown, Dennis J. Keller, Frederick A.
Krehbiel and Fernando Ruiz as a Class II Director and
William T. Keevan as a Class III Director unless
otherwise specified in such proxy. A proxy cannot be voted for
more than five persons. In the event that a nominee becomes
unable to serve as a Director, the Proxy Committee will vote for
the substitute nominee that the Board designates. The Board has
no reason to believe that the nominees will become unavailable
for election.
Each nominee for election as Director is listed below, along
with a brief statement of his current principal occupations,
business experience and other information, including
directorships in other public companies. All of the nominees
have consented to serve as directors if elected at the Annual
Meeting.
Approval by Stockholders
The election of the five nominees for director requires the
affirmative vote of a majority of the shares of Common Stock of
the Company outstanding on the record date. Unless otherwise
indicated on the proxy, the shares will be voted FOR each of the
nominees listed below.
The Board of Directors recommends a vote FOR the nominees
listed below.
NOMINEES
CLASS III TERM EXPIRES 2006
William T. Keevan, age 58
Mr. Keevan has been a Senior Managing Director of Navigant
Consulting, Inc. since June 2002. He is the leader of the
firms Government Contracts Consulting Group, which serves
client companies in a variety of industries that do substantial
business with the U.S. and foreign governments. His practice
entails advising clients on complex accounting, financial
reporting, regulatory compliance and governance matters. From
September 1982 to June 2002, Mr. Keevan was a partner at Arthur
Andersen LLP in a number of senior management positions.
CLASS IITERM EXPIRES 2008
David S. Brown, age 64
Mr. Brown has been a Director of the Company since 1987 and
was a founding stockholder and director of Keller Graduate
School of Management (KGSM) from 1973 to 1987.
Mr. Brown, formerly a practicing attorney (now retired),
was a partner in the Chicago law firm of McBride and Baker from
1972 to 1979 and served as General Counsel of the U.S. Office of
Minority Business Enterprise from 1971 to 1972. From 1980 to
1996, Mr. Brown was employed by United Laboratories, Inc.,
a manufacturer and seller of specialty chemicals, most recently
as Executive Vice President, Chief Financial Officer and General
Counsel.
Dennis J. Keller, age 64
Mr. Keller has been Board Chair since 1987 and was Chief
Executive Officer of the Company until November 2002, then
Co-Chief Executive Officer until July 2004. Mr. Keller
co-founded KGSM and was from 1973 to August 1987 its Chairman of
the Board and Chief Executive Officer. He is also a director of
NICOR Inc.
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Frederick A. Krehbiel, age 64
Mr. Krehbiel has been a Director of the Company since 1996.
Employed since 1965 by Molex Incorporated, an electronic
component manufacturer, he served as CEO from 1988 to 1999 and
as Chairman from 1993 to 1999. Since July 1999,
Mr. Krehbiel has served as Co-Chairman. Mr. Krehbiel
also served as Co-Chief Executive Officer from 1999-2001 and as
Chief Executive Officer from 2004 until July 2005.
Mr. Krehbiel is also a director of Tellabs, Inc. and Molex
Incorporated.
Fernando Ruiz, age 49
Mr. Ruiz has been an employee of The Dow Chemical Company
since 1980, and since 2001 he has been Vice President and
Treasurer of The Dow Chemical Company. Mr. Ruiz served as
Assistant Treasurer of The Dow Chemical Company from 1996-2001.
Mr. Ruiz serves as a director for a number of Dow
subsidiaries including Dow Financial Services Inc. and Equate
Petrochemical Company as well as serving as President and CEO of
Liana Ltd., a holding company for Dows insurance
subsidiaries.
INCUMBENT DIRECTORS
CLASS III TERM EXPIRES 2006
Charles A. Bowsher, age 74
Mr. Bowsher has been a Director of the Company since
February 1997. In 1996 Mr. Bowsher completed a 15-year term
as Comptroller General of the United States and head of the
General Accounting Office. Prior to that he was affiliated with
Arthur Andersen and Co. for 25 years, except for a
four-year period when he served as Assistant Secretary of the
Navy for Financial Management. Mr. Bowsher is also a
director of Washington Mutual Investors Fund and SI
International. Additionally, Mr. Bowsher serves as a public
member of the NASD board of directors.
Robert C. McCormack, age 66
Mr. McCormack has been a Director of the Company since
1995. He is a founding partner of Trident Capital, Inc., a
private equity firm established in 1993 to invest in information
and business service companies. He served as Co-Chairman and
Managing Director until 2005, when he became an Advisory
Director of the firm. From 1990 to 1993 Mr. McCormack was
the Assistant Secretary and Comptroller of the Navy, prior to
which time he served for 2 years in various positions on
the staff of the Secretary of Defense. Mr. McCormack spent
20 years in investment banking with Dillon, Read &
Co. Inc. and Morgan Stanley & Co. Incorporated before
his government service. He is also a director of Illinois Tool
Works Inc., Mead Westvaco Corporation and Northern Trust
Corporation.
Julia A. McGee, age 63
Ms. McGee has been a Director of the Company since 1994.
She became President and CEO of Harcourt Supplemental,
Professional and Trade in 2003 after serving as President, Basal
and Test Publishing, for McGraw Hill Education, and earlier as
Executive Vice President of Scholastic Inc., an education
publisher. From 1991 to November 2000 Ms. McGee was
President of McDougal, Littell & Co. and, upon its
acquisition by Houghton Mifflin in 1994, she also became
Executive Vice President, Houghton Mifflin, a publishing
company. Ms. McGee began her publishing career at McDougal
Littell in 1988 as an editorial director. From 1986 to 1988 she
held management positions at Ligature, Inc., prior to which she
was, for three years, Director of Marketing and Software
Development for a division of Tandy Corporation.
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CLASS I TERM EXPIRES 2007
Connie R. Curran, age 57
Dr. Curran has been a Director of the Company since 2003.
Dr. Curran has since September 2004 been the Executive
Director of C-Change (formerly the National Dialogue on Cancer),
an organization that brings together the public, private and
nonprofit sectors to focus on the eradication of cancer. She
spent the preceding 15+ years in other healthcare consulting and
management positions (President, Cardinal Health Consulting
Services, November 2000 to February 2002; President &
CEO, CurranCare, from 1995 until its acquisition by Cardinal
Health in 2000); Vice Chairman/ National Director for Patient
Care Services, APM Incorporated, 1990-1995; Vice President for
HealthCare Management and Patient Care Services, American
Hospital Association, 1985-1989). Prior to 1989, Dr. Curran
spent 16 years as a teacher of classroom and clinical
nursing courses and in academic management of nursing programs,
including service at Montefiore Medical Center of New York, the
Medical College of Wisconsin, University of San Francisco and
Loyola University of Chicago. Dr. Curran is also a director
of IDX Systems Corporation and Hospira, Inc.
Harold T. Shapiro, age 70
Dr. Shapiro has been a Director of the Company since 2001.
Dr. Shapiro is President Emeritus of Princeton University
and a professor of economics in its Woodrow Wilson School of
Public and International Affairs. He was the president and a
professor of economics and public affairs there from 1988 until
his retirement in June 2001. Dr. Shapiro joined the faculty
of the University of Michigan in 1964 and was that
universitys president from 1980 to 1988. He is also the
Presiding Director of The Dow Chemical Company and a director of
HCA Inc.
Ronald L. Taylor, age 62
Mr. Taylor has been a Director of the Company since 1987.
From August 1987 until his November 2002 appointment as Co-Chief
Executive Officer, he was also President and Chief Operating
Officer. In July 2004 he became the Companys Chief
Executive Officer. In 1973 Mr. Taylor co-founded KGSM and
was from 1973 to 1981 its Chief Operating Officer, and from 1981
to 1987 its President and Chief Operating Officer.
APPROVAL OF THE AMENDMENT AND RESTATEMENT OF
THE DEVRY INC. EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors of the Company established the DeVry Inc.
Employee Stock Purchase Plan (the ESPP), effective
August 1, 1993, and approved, subject to the approval of
stockholders, the amendment and restatement of the ESPP,
effective January 1, 2006. The ESPP is intended to qualify
as an employee stock purchase plan under
Section 423 of the Internal Revenue Code of 1986, as
amended (the Internal Revenue Code). The ESPP is
intended to encourage and facilitate the purchase of the
Companys Common Stock by eligible employees.
A summary of the principal features of the ESPP Plan is
provided below, but is qualified in its entirety by reference to
the full text of the ESPP that is attached to this proxy
statement as Appendix A.
Administration
The ESPP is administered by the Company, which has final
authority to decide any question of interpretation of the ESPP
or rights arising thereunder. The Company pays all expenses of
the ESPP. The Company has hired an independent, third-party
administrator to maintain the records of the ESPP.
Shares Reserved for Issuance
The ESPP reserves 200,000 shares for issuance pursuant to
employee purchases through payroll deductions under the ESPP,
subject to approval by the Companys stockholders at the
2005 Annual Meeting.
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Eligibility
Except as described below, all employees of the Company and
certain designated subsidiaries who customarily work more than
20 hours per week and more than five months during each
year are eligible to participate in the ESPP as of any
enrollment date after their first day of employment. Employees
who are ineligible to participate in the ESPP include those
(1) who are prohibited by the laws and regulations of the
country of their residence or employment from participating in
the ESPP, as determined by the Company, or to whom the Company
may not offer or sell Common Stock under the ESPP, (2) who
are executive officers or for whom the Company makes filings
pursuant to Section 16 of the Securities Exchange Act of
1934, or (3) who own or would be deemed to own five percent
or more of the voting power or value of all classes of stock of
the Company. Rights to purchase shares under the ESPP are not
transferable.
Purchase of Shares
The ESPP provides for monthly purchase dates on the last
business day of each month (the Purchase Date). Each
eligible employee may elect to purchase shares of Common Stock
pursuant to the ESPP by filing a payroll deduction
authorization. Shares may be purchased under the ESPP only
through payroll deductions of not more than 10% of an
employees base salary plus bonuses and commissions. On the
Purchase Date, the amounts withheld by payroll deduction for the
period beginning on the first business day following the most
recent Purchase Date and ending on the next Purchase Date (the
Purchase Period) are applied to purchase shares for
the employee from the Company, provided the employee is employed
by the Company on the Purchase Date. If the employee is not
employed by the Company on the Purchase Date, then the
employees accumulated payroll deductions are returned to
the employee.
The purchase price for the shares (the Purchase
Price) is 95% of the fair market value of a Common Share
on the Purchase Date. No participant may purchase Common Shares
in any calendar year having an aggregate value (determined at
time of purchase) exceeding $25,000. An employee may increase or
decrease, or cease, payroll deductions by submitting an
appropriate form to the Company at least 10 days before the
date a paycheck is issued; provided, however, only one change is
allowed in any Purchase Period.
Issuance and Delivery of Shares
Shares purchased by employees under the ESPP are delivered by
the Company to, and held by, the third-party administrator on
behalf of the purchasing employees.
Amendments
The Board of Directors may amend the ESPP, except that, without
the approval of the stockholders of the Company, the ESPP may
not be amended to increase the number of reserved shares. The
Board of Directors may terminate the ESPP at any time.
Tax Consequences
The following description is a summary of the federal income tax
consequences to the Company and employees participating in the
ESPP. Applicable state, local and foreign tax consequences may
differ.
The ESPP is intended to qualify as an employee stock
purchase plan within the meaning of Section 423 of
the Internal Revenue Code. Under the Internal Revenue Code,
employees are not taxed on income or gain with respect to the
ESPP either at the first day of the Purchase Period or at the
Purchase Date. If an employee disposes of the shares purchased
under the ESPP more than one year after the Purchase Date and
more than two years after the beginning of the Purchase Period,
the employee will be required to report as ordinary compensation
income for the taxable year of disposition an amount equal to
the lesser of (1) the gain on the disposition of the shares
or (2) the purchase price discount (five percent) applied
to the fair market value of the shares on the first day of the
Purchase Period. Any gain on the disposition in excess of the
amount treated as ordinary compensation income will be capital
gain. In the case of such a disposition, the Company will not be
entitled to any deduction from income.
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If an employee disposes of shares purchased under the ESPP
(including by way of gift, but not death, bequest or
inheritance) within either the one-year or the two-year holding
periods described above (a disqualifying
disposition), the employee will be required to report the
excess of the fair market value of the shares on the Purchase
Date over the Purchase Price as ordinary compensation income for
the year of disposition. Any difference between the fair market
value of the shares on the Purchase Date and the disposition
price will be capital gain or loss, either short-term or
long-term depending upon the employees holding period for
the shares. In the event of a disqualifying disposition, the
Company will be entitled to a deduction from income in the year
of such disposition equal to the amount that the employee is
required to report as ordinary compensation income. The Company
will treat any transfer of record ownership of shares as a
disposition, unless it is notified to the contrary.
The ESPP is not subject to any of the provisions of ERISA nor is
it qualified under Section 401(a) of the Internal Revenue
Code.
Miscellaneous
A new benefits table is not provided because no rights to
purchase shares have been granted under the ESPP. On September
30, 2005, the closing price of the Common Stock was $19.05.
Approval by Stockholders
In order to be adopted, the ESPP must be approved by the
affirmative vote of a majority of the shares of Common Stock of
the Company outstanding on the record date. Unless otherwise
indicated on the proxy, the shares will be voted FOR adoption of
the amendment and restatement of the DeVry Inc. Employee Stock
Purchase Plan.
The Board of Directors recommends a vote FOR the approval of
the amendment and restatement of the DeVry Inc. Employee Stock
Purchase Plan.
APPROVAL OF THE DEVRY INC. INCENTIVE PLAN OF 2005
The Board has adopted the DeVry Inc. Incentive Plan of 2005 (the
2005 Plan) and is recommending that stockholders
approve the 2005 Plan at the Annual Meeting. The 2005 Plan is
integral to the Companys compensation strategies and
programs. The 2005 Plan will maintain the flexibility that the
Company needs to keep pace with its competitors and effectively
recruit, motivate, and retain the caliber of employees essential
for achievement of the Companys success.
The 2005 Plan will permit the award of stock options, stock
appreciation rights (SARs), restricted stock,
restricted stock units, performance stock, stock awards,
performance cash awards, annual management incentive awards, and
other cash awards. In any given year, however, the Compensation
Committee expects to approve only those types of awards as the
Committee concludes are appropriate in light of the
Companys circumstances and requirements. The Committee
does not contemplate the award of all or even most of the
various types of awards in any given year to any one recipient.
Stockholder approval of the 2005 Plan will permit the
performance-based awards discussed below to qualify for
deductibility under Section 162(m) of the Internal Revenue
Code.
Awards under the 2005 Plan are referred to as
Benefits. Those eligible for Benefits under the 2005
Plan are referred to as Participants. Participants
include all employees of the Company and its subsidiaries and
all non-employee directors of the Company.
As of September 16, 2005, approximately 1,072,060 shares
were available for new grants under the Companys existing
stock incentive plans and there were approximately 3,634,498
shares subject to outstanding benefits under these and
predecessor plans. While the existing stock incentive plans will
remain in place, they may not provide sufficient shares for
market-competitive grant levels prior to the 2006 stockholder
meeting.
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A summary of the principal features of the 2005 Plan is
provided below, but is qualified in its entirety by reference to
the full text of the 2005 Plan that is attached to this proxy
statement as Appendix B.
Shares Available for Issuance
The aggregate number of shares of Common Stock that may be
issued under the 2005 Plan will not exceed 3,000,000 (subject to
the adjustment provisions discussed below). The 3,000,000 new
shares represent 4.3% of the currently outstanding shares of
Common Stock.
The number of shares that may be issued under the 2005 Plan for
Benefits other than stock options and SARs will not exceed a
total of 2,000,000 shares (subject to the adjustment provisions
discussed below).
Administration and Eligibility
The 2005 Plan will be administered by the Compensation Committee
of the Board (the Committee) which consists of two
or more directors, each of whom will satisfy the requirements
established for administrators acting under plans intended to
qualify for exemption under Rule 16b-3 under the Securities
Exchange Act of 1934 (Exchange Act), for outside
directors acting under plans intended to qualify for exemption
under Section 162(m) of the Internal Revenue Code and with
any applicable requirements established by the New York Stock
Exchange. The Committee will approve the aggregate Benefits and
the individual Benefits for the most senior elected officers and
non-employee directors. The Committee will delegate its
authority to grant Benefits to other Participants to the Chief
Executive Officer or other designated officers in accordance
with the terms of the 2005 Plan. The Chief Executive Officer or
such other officers authorized to select employees to receive
such option shares and other awards will provide written notice
of all such action to the Committee.
No Participant may receive in any calendar year: (i) stock
options relating to more than 150,000 shares,
(ii) restricted stock or restricted stock units relating to
more than 50,000 shares, (iii) SARs relating to more than
125,000 shares, or (iv) performance shares relating to more
than 50,000 shares. No non-employee director may receive in any
calendar year stock options relating to more than 15,000 shares
or restricted stock units relating to more than 5,000 shares.
(Each of the above limits is subject to the adjustment
provisions discussed below.) The maximum amount that may be
earned under performance cash awards by any Participant who is a
covered employee within the meaning of Section 162(m) of
the Internal Revenue Code (Covered Employee) in any
calendar year may not exceed $1,000,000.
Benefits
Stock Options
Stock options granted to Participants (Optionees)
may be either incentive stock options (ISOs) or
nonqualified stock options (NSOs). NSOs and ISOs are
collectively referred to as Stock Options. The
exercise price of any ISO must be equal to or greater than the
fair market value of the shares on the date of the grant. The
terms of a Stock Option cannot exceed 10 years.
For purposes of the 2005 Plan, fair market value shall be
determined in such manner as the Committee may deem equitable,
or as required by applicable law or regulation. Generally, fair
market value means the closing price on the last trading day
preceding the day of the transaction, as reported for the New
York Stock Exchange Composite Transactions in The Wall Street
Journal.
At the time of grant, the Committee, Chief Executive Officer or
other designated officer will determine when Options are
exercisable and when they expire.
Payment for shares purchased upon exercise of a Stock Option
must be made in full at the time of purchase. Payment may be
made in cash, by the transfer to the Company of shares owned by
the Participant having a fair market value on the date of
transfer equal to the option exercise price (or certification of
ownership of such shares) or in such other manner as may be
authorized by the Committee.
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SARs
The Committee, Chief Executive Officer or other designated
officer has the authority to grant SARs to Participants and to
determine the number of shares subject to each SAR, the term of
the SAR, the time or times at which the SAR may be exercised,
and all other terms and conditions of the SAR. A SAR is a right,
denominated in shares, to receive, upon exercise of the right,
in whole or in part, without payment to the Company an amount,
payable in shares, in cash or a combination thereof, that is
equal to the excess of: (i) the fair market value of Common
Stock on the date of exercise of the right; over (ii) the fair
market value of Common Stock on the date of grant of the right
multiplied by the number of shares for which the right is
exercised.
Restricted Stock and Restricted Stock Units
Restricted Stock consists of shares which are transferred by the
Company to a Participant, subject to substantial risk of
forfeiture and to restrictions on their sale or other transfer
by the Participant. Restricted Stock Units are the right to
receive shares at a future date in accordance with the terms of
such grant upon the attainment of certain conditions specified
by the Committee which are subject to substantial risk of
forfeiture and restrictions on their sale or other transfer by
the Participant. The Committee, Chief Executive Officer or other
designated officer determines the eligible Participants to whom,
and the time or times at which, grants of Restricted Stock or
Restricted Stock Units will be made, the number of shares or
units to be granted, the time or times within which the shares
covered by such grants will be subject to forfeiture, the time
or times at which the restrictions will terminate, and all other
terms and conditions of the grants. Restrictions or conditions
could include, but are not limited to, the attainment of
performance goals (as described below), continuous service with
the Company, the passage of time or other restrictions or
conditions.
Performance Stock
A Participant who is granted Performance Stock has the right to
receive shares or cash equal to the fair market value of such
shares at a future date in accordance with the terms of such
grant and upon the attainment of performance goals specified by
the Committee.
The award of Performance Stock to a Participant will not create
any rights in such Participant as a stockholder of the Company
until the issuance of Common Stock with respect to an award.
Performance Cash Awards
A Participant who is granted Performance Cash Awards has the
right to receive a payment in cash upon the attainment of
performance goals specified by the Committee. The Committee may
substitute shares of Common Stock for the cash payment otherwise
required to be made pursuant to a Performance Cash Award.
Performance Goals
Awards of Restricted Stock, Restricted Stock Units, Performance
Stock, Performance Cash Awards and other incentives under the
2005 Plan shall be made subject to the attainment of performance
goals relating to one or more business criteria within the
meaning of Section 162(m) of the Internal Revenue Code,
including, but not limited to: cash flow; cost; ratio of debt to
debt plus equity; profit before tax; economic profit; earnings
before interest and taxes; earnings before interest, taxes,
depreciation and amortization; earnings per share; operating
earnings; economic value added; ratio of operating earnings to
capital spending; free cash flow; net profit; net sales, sales
growth; price of the Common Stock; return on net assets, equity,
or stockholders equity; market share; or total return to
stockholders (Performance Criteria). Awards of Stock
Options under the 2005 Plan may be made subject to attainment of
such performance goals.
Any Performance Criteria may be used to measure the performance
of the Company as a whole or any business unit of the Company
and may be measured relative to a peer group or index. Any
Performance Criteria may be adjusted to include or exclude
special items as described below.
8
Annual Management Incentive Awards
The Committee has the authority to grant Management Incentive
Awards to designated executive officers of the Company or any
subsidiary.
Management Incentive Awards will be paid out of an incentive
pool equal to five percent of the Companys consolidated
operating earnings for each calendar year. The Committee will
allocate an incentive pool percentage to each designated
Participant for each calendar year. In no event may the
incentive pool percentage for any one Participant exceed 20% of
the total pool. For purposes of the 2005 Plan,
consolidated operating earnings will mean the
consolidated earnings before income taxes of the Company,
computed in accordance with generally accepted accounting
principles, but shall exclude the effects of special items.
Special items include: (i) gains or losses on the
disposition of a business, (ii) changes in tax or
accounting regulations or laws, or (iii) the effect of a
merger or acquisition, as determined in accordance with
generally accepted accounting principles. The Participants
incentive award then will be determined by the Committee based
on the Participants allocated portion of the incentive
pool subject to adjustment in the sole discretion of the
Committee. In no event may the portion of the incentive pool
allocated to a Participant who is a Covered Employee be
increased in any way, including as a result of the reduction of
any other Participants allocated portion.
Stock Awards
The Committee, Chief Executive Officer or other designated
officer may award shares of Common Stock to Participants without
payment therefor, as additional compensation for service to the
Company or a subsidiary. Stock awards may be subject to other
terms and conditions, which may vary from time to time and among
employees, as the Committee determines to be appropriate.
However, an outright grant of stock will not be made unless it
is offered in exchange for cash compensation that has otherwise
already been earned by the recipient.
Cash Awards
A cash award consists of a monetary payment made by the Company
to an employee as additional compensation for his or her
services to the Company or a subsidiary. A cash award may be
made in tandem with another Benefit or may be made independently
of any other Benefit. Cash awards may be subject to other terms
and conditions, which may vary from time to time and among
employees, as the Committee, Chief Executive Officer or other
designated officer determines to be appropriate.
Amendment of the 2005 Plan
The Board or the Committee has the right and power to amend the
2005 Plan, provided, however, that neither the Board nor the
Committee may amend the 2005 Plan in a manner which would impair
or adversely affect the rights of the holder of a Benefit
without the holders consent. No material amendment of the
Plan shall be made without stockholder approval.
Termination of the 2005 Plan
The Board may terminate the 2005 Plan at any time. Termination
will not in any manner impair or adversely affect any Benefit
outstanding at the time of termination. No award shall be made
more than ten years after the adoption of the Plan by the Board
of Directors.
Committees Right to Modify Benefits
Any Benefit granted may be modified, forfeited, or canceled, in
whole or in part, by the Committee if and to the extent
permitted in the 2005 Plan, or applicable agreement entered into
in connection with a Benefit grant or with the consent of the
Participant to whom such Benefit was granted. The Committee may
grant Benefits on terms and conditions different than those
specified in the 2005 Plan to comply with the laws and
regulations of any foreign jurisdiction, or to make the Benefits
more effective under such laws and regulations.
9
The Committee may require a Participant to have amounts or
shares of Common Stock that otherwise would be paid or delivered
to the Participant as a result of the exercise or settlement of
an award under the 2005 Plan credited to a deferred compensation
or stock unit account established for the Participant by the
Committee on the Companys books of account.
Neither the Board nor the Committee may cancel any outstanding
Stock Option for the purpose of reissuing the option to the
Participant at a lower exercise price, or reduce the option
price of an outstanding option.
Change in Control
Except as otherwise determined by the Committee at the time of
grant of an award, upon a Change in Control of the Company, all
performance goals shall be deemed achieved at target levels and
all other terms and conditions met; all outstanding Stock
Options and SARs shall become vested and exercisable; all
restrictions on Restricted Stock and Restricted Stock Units
shall lapse; all Performance Stock shall be delivered; all
Performance Cash Awards and Restricted Stock Units shall be paid
out as promptly as practicable; all Annual Management Incentive
Awards shall be paid out based on the consolidated operating
earnings of the immediately preceding year or such other method
of payment as may be determined by the Committee at the time of
award or thereafter but prior to the Change in Control; and all
Other Stock or Cash Awards shall be delivered or paid.
A Change in Control shall mean: (i) the sale or
disposition by the Company of all or substantially all of the
assets of the Company (or any transaction having a similar
effect); (ii) the consummation of a merger or consolidation
of the Company with any other entity other than (A) a
merger or consolidation which would result in the voting
interests of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting interests of the surviving entity)
at least 50% of the combined voting power of the voting
interests of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (B) a
merger or consolidation effected to implement a recapitalization
of the Company (or similar transaction); or (iii) the
acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act), of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 25% or more of the then outstanding voting interests of
the Company but excluding, for this purpose, any such
acquisition by the Company or any of its affiliates, or by any
employee benefit plan (or related trust) of the Company or any
of its affiliates.
Adjustments
In the event of any change affecting the shares of Common Stock
by reason of stock dividend, stock split, reverse stock split,
spin-off, recapitalization, merger, consolidation,
reorganization, share combination, exchange of shares, stock
rights offering, liquidation, extraordinary cash dividend,
disaffiliation of a subsidiary or similar event, the Committee
shall make such adjustments (if any) as it deems appropriate and
equitable, in its discretion, to outstanding awards to reflect
such event, including without limitation, (1) adjustments
in the aggregate number or class of shares which may be
distributed under the Plan, the maximum number of shares which
may be made subject to an award in any calendar year and in the
number, class and option price or other price of shares subject
to the outstanding awards granted under the Plan, (2) the
substitution of other property (including, without limitation,
other securities) for the stock covered by outstanding awards,
and (3) in connection with any disaffiliation of a
subsidiary, arrangement for the assumption, or replacement with
new awards, of awards held by Participants employed by the
affected subsidiary by the entity that controls the subsidiary
following the disaffiliation.
In the event of any merger, consolidation, or reorganization of
the Company with or into another corporation which results in
the Companys outstanding securities being converted into
or exchanged for different securities, cash, or other property,
there shall be substituted on an equitable basis as determined
by the Committee, for each share of common stock subject to a
Benefit, the number and kind of shares of stock,
10
other securities, cash, or other property to which holders of
Common Stock of the Company are entitled pursuant to the
transaction.
Substitution and Assumption of Benefits
Either the Board or the Committee may authorize the issuance of
Benefits in connection with the assumption of, or substitution
for, outstanding benefits previously granted to individuals who
become employees of the Company or any subsidiary as the result
of any merger, consolidation, acquisition of property or stock,
or reorganization other than a Change in Control, upon such
terms and conditions as it deems appropriate.
Reusage
If a Stock Option granted under the 2005 Plan expires or is
terminated, surrendered or canceled without having been fully
exercised, if Restricted Stock is forfeited, or if Restricted
Stock Units, Performance Shares or SARs are forfeited or
terminated without the issuance of all of the shares subject
thereto, the shares covered by such Benefits will again be
available for use under the 2005 Plan. Shares covered by a
Benefit granted under the 2005 Plan would not be counted as used
unless and until they are actually issued and delivered to a
Participant. Any Shares covered by a SAR shall be counted as
used only to the extent Shares are actually issued to the
Participant upon exercise of the SAR. Shares covered by a
Benefit granted under the 2005 Plan that is settled in cash will
not be counted as used.
Federal Income Tax Consequences
The Company has been advised by counsel that the federal income
tax consequences as they relate to Benefits are as follows:
ISOs
An optionee does not generally recognize taxable income upon the
grant or upon the exercise of an ISO. Upon the sale of ISO
shares, the Optionee recognizes income in an amount equal to the
difference, if any, between the exercise price of the ISO shares
and the fair market value of those shares on the date of sale.
The income is taxed at long-term capital gains rates if the
Optionee has not disposed of the stock within two years after
the date of the grant of the ISO and has held the shares for at
least one year after the date of exercise and the Company is not
entitled to a federal income tax deduction. The holding period
requirements are waived when an Optionee dies.
The exercise of an ISO may in some cases trigger liability for
the alternative minimum tax.
If an Optionee sells ISO shares before having held them for at
least one year after the date of exercise and two years after
the date of grant, the Optionee recognizes ordinary income to
the extent of the lesser of: (i) the gain realized upon the
sale, or (ii) the difference between the exercise price and
the fair market value of the shares on the date of exercise. Any
additional gain is treated as long-term or short-term capital
gain depending upon how long the Optionee has held the ISO
shares prior to disposition. In the year of disposition, the
Company receives a federal income tax deduction in an amount
equal to the ordinary income which the Optionee recognizes as a
result of the disposition.
NSOs
An Optionee does not recognize taxable income upon the grant of
an NSO. Upon the exercise of such a Stock Option, the Optionee
recognizes ordinary income to the extent the fair market value
of the shares received upon exercise of the NSO on the date of
exercise exceeds the exercise price. The Company receives an
income tax deduction in an amount equal to the ordinary income
that the Optionee recognizes upon the exercise of the Stock
Option.
11
Restricted Stock
A Participant who receives an award of Restricted Stock does not
generally recognize taxable income at the time of the award.
Instead, the Participant recognizes ordinary income in the first
taxable year in which his or her interest in the shares becomes
either: (i) freely transferable, or (ii) no longer
subject to substantial risk of forfeiture. The amount of taxable
income is equal to the fair market value of the shares.
A Participant may elect to recognize the income at the time he
or she receives Restricted Stock in an amount equal to the fair
market value of the Restricted Stock (less any cash paid for the
shares) on the date of the award.
The Company receives a compensation expense deduction in an
amount equal to the ordinary income recognized by the
Participant in the taxable year in which restrictions lapse (or
in the taxable year of the award if, at that time, the
Participant had filed a timely election to accelerate
recognition of income).
Other Benefits
In the case of an exercise of an SAR or an award of Restricted
Stock Units, Performance Stock, Performance Units, or Common
Stock or cash, the Participant will generally recognize ordinary
income in an amount equal to any cash received and the fair
market value of any shares received on the date of payment or
delivery. In that taxable year, the Company will receive a
federal income tax deduction in an amount equal to the ordinary
income which the Participant has recognized.
Million Dollar Deduction Limit
Under Section 162(m) of the Internal Revenue Code, the
Company may not deduct compensation of more than $1,000,000 that
is paid to an individual who, on the last day of the taxable
year, is either the Companys chief executive officer or is
one of the four other most highly-compensated officers for that
taxable year as reported in the Companys proxy statement.
The limitation on deductions does not apply to certain types of
compensation, including qualified performance-based
compensation. The Company believes that Benefits in the form of
Stock Options, Performance Stock, Performance Cash Awards, SARs,
performance-based Restricted Stock and Restricted Stock Units
and cash payments under Management Incentive Awards under the
2005 Plan constitute qualified performance-based compensation
and, as such, will be exempt from the $1,000,000 limitation on
deductible compensation.
Miscellaneous
A new benefits table is not provided because no grants have been
made under the 2005 Plan and all Benefits are discretionary. On
September 30, 2005, the closing price of the Common Stock
was $19.05.
Approval by Stockholders
In order to be adopted, the 2005 Plan must be approved by the
affirmative vote of a majority of the shares of Common Stock of
the Company outstanding on the record date. Unless otherwise
indicated on the proxy, the shares will be voted FOR adoption of
the DeVry Inc. Incentive Plan of 2005.
The Board of Directors recommends a vote FOR the approval of
the DeVry Inc. Incentive Plan of 2005.
12
EQUITY COMPENSATION PLAN INFORMATION
The Company currently maintains five equity compensation plans:
the 1988 Stock Incentive Plan, the 1991 Stock Incentive Plan,
the 1994 Stock Incentive Plan, the 1999 Stock Incentive Plan and
the 2003 Stock Incentive Plan. Each of these plans has been
approved by the Companys stockholders. Stockholders are
being asked to approve the DeVry Inc. Incentive Plan of 2005, as
described above under the caption, Approval of the DeVry
Inc. Incentive Plan of 2005.
The following table summarizes information, as of June 30,
2005, relating to equity compensation plans of the Company under
which the Companys Common Stock is authorized for issuance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities | |
|
|
|
|
|
|
remaining available for | |
|
|
Number of securities to | |
|
Weighted-average | |
|
future issuance under | |
|
|
be issued upon exercise of | |
|
exercise price of | |
|
equity compensation plans | |
|
|
outstanding options, | |
|
outstanding options, | |
|
(excluding securities | |
|
|
warrants and rights | |
|
warrants and rights | |
|
reflected in column (a)) | |
Plan Category |
|
(a)(1) | |
|
(b) | |
|
(c)(2) | |
|
|
| |
|
| |
|
| |
Equity compensation plans approved by security holders
|
|
|
3,765,844 |
|
|
$ |
22.35 |
|
|
|
1,018,950 |
|
Equity compensation plans not approved by security holders
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
3,765,844 |
|
|
$ |
22.35 |
|
|
|
1,018,950 |
|
|
|
(1) |
The number shown in column (a) is the number of shares that
may be issued upon exercise of outstanding options under the
stockholder-approved 1988 Stock Incentive Plan (7,000 shares),
1991 Stock Incentive Plan (219,860 shares), 1994 Stock Incentive
Plan (1,075,004 shares), 1999 Stock Incentive Plan (1,483,080
shares) and 2003 Stock Incentive Plan (980,900 shares). All of
the shares that remained available for future issuance were
available under the 1999 Stock Incentive Plan and the 2003 Stock
Incentive Plan. No new awards may be granted under the 1988
Stock Incentive Plan, the 1991 Stock Incentive Plan or the 1994
Stock Incentive Plan. |
|
(2) |
The number shown in column (c) is the number of shares that
may be issued upon exercise of options and other equity awards
granted in the future under the 1999 Stock Incentive Plan (1,050
shares) and the 2003 Stock Incentive Plan (1,017,900 shares).
This table does not reflect (i) the 3,000,000 shares that
will be available under the DeVry Inc. Incentive Plan of 2005 if
stockholders approve the proposal to approve the DeVry Inc.
Incentive Plan of 2005 or (ii) the 200,000 shares that will
be available under the DeVry Inc. Employee Stock Purchase Plan
if stockholders approve the proposal to approve the amendment
and restatement of the DeVry Inc. Employee Stock Purchase Plan. |
13
BOARD OF DIRECTORS AND BOARD COMMITTEE INFORMATION
Board of Directors
The Companys Board of Directors held four regular meetings
and two special meetings during fiscal year 2005. Board members
are expected to attend Board meetings, the meetings of the
committees on which they serve and the Companys Annual
Meeting of Stockholders, except in unusual circumstances. During
fiscal 2005 all incumbent Directors attended 75% or more of the
aggregate of the total number of meetings of the Board of
Directors and of the committees on which they served. Eight of
the nine Directors attended the Companys 2004 Annual
Meeting. During fiscal 2005 the Board met four times in
executive session without management Directors or other
employees.
Director Independence
The Board of Directors has considered whether or not each
Director has any material relationship with the Company (either
directly or as a partner, shareholder or officer of an
organization that has a relationship with the Company) and has
otherwise complied with the requirements for independence under
the applicable listing standards of the New York Stock Exchange
(NYSE).
As a result of this review, the Board of Directors affirmatively
determined that all of the Companys current directors are
independent of the Company and its management within
the meaning of the applicable NYSE rules, with the exception of
Mr. Keller and Mr. Taylor. Mr. Keller is
considered an inside director because of his employment as Board
Chair of the Company. Mr. Taylor is considered an inside
director because of his employment as CEO of the Company.
The Board considered the relationship between the Company and
The Revere Group described under the caption Certain
Transactions because Mr. McCormack is a director of
The Revere Group and a founding partner of what is now Trident
Capital, Inc., an investor in The Revere Group. The Board
concluded that the relationship is not a material one for
purposes of the NYSE listing standards after considering the
small size of the investment in The Revere Group in relation to
Trident Capitals overall portfolio, the nature of
Mr. McCormacks relationships with The Revere Group
and Trident Capital, and the reasonable and competitive nature
of the terms on which The Revere Group rendered consulting
services to the Company.
Board Committees
The Board has standing governance, audit, compensation, finance
and academic committees. A current copy of the charters of each
of these committees and a current copy of each of the
Companys policy on the Director Nomination Process and the
Companys Corporate Governance Principles are available in
print from the Secretary of the Company to any stockholder upon
written request and can also be found on the Companys
website, www.devryinc.com. Only Directors who meet the NYSE
listing standards definition of independent are
appointed to the governance and compensation committees. Only
Directors who meet the NYSE listing standards and the SEC
definitions of independent are appointed to the
audit committee.
Governance Committee. Directors Julia A. McGee (Chair),
Robert C. McCormack and Harold T. Shapiro serve as
members of the Companys Governance Committee, which met
four times during fiscal 2005. The Board of Directors has
determined that all of the members of the Governance Committee
are independent, as defined in the applicable NYSE
listing standards. In accordance with the Committees
Charter, the Committees responsibilities include proposing
a slate of directors for election by the stockholders at each
annual meeting and proposing candidates to fill any vacancies on
the Board; reviewing the committee structure; and leading the
Board and Committee evaluation process. The Governance Committee
will consider stockholder recommendations of candidates for
Director. Such recommendations should be sent to the Secretary
of the Company. Detailed procedures, including minimum
qualifications and specific qualities or skills believed
necessary, and the Committees process (arising primarily
out of the Companys By-Laws) for identifying and
evaluating nominees, have been codified in the Companys
policy on the Director Nomination Process. The full text of that
policy is included in this Proxy Statement as Appendix C.
14
The Company may from time to time pay a fee to third parties to
help identify or evaluate potential nominees and has currently
retained such a consultant to help identify and evaluate
potential nominees. Boardroom Consultants, an executive search
firm, which was engaged by the Company to assist in identifying
and evaluating director candidates, identified Mr. Ruiz as
a director candidate and recommended his candidacy to the
Governance Committee in 2005. Mr. Bowsher identified
Mr. Keevan as a director candidate and recommended his
candidacy to the Governance Committee in 2005. The Governance
Committee evaluated Messrs. Keevan and Ruiz against the
criteria set forth in the policy on Director Nomination Process
and recommended them to the full Board of Directors for
nomination.
Audit Committee. Directors Charles A. Bowsher
(Chair), David S. Brown and Harold T. Shapiro serve as
members of the Audit Committee, which was established in
accordance with Section 3(a)(58)(A) of the Securities
Exchange Act. The Committee met 10 times in fiscal 2005. The
Board of Directors has, in its business judgment, determined
that all of the members of the Audit Committee are
independent as required by the applicable listing
standards of the NYSE and by the applicable rules and
regulations issued by the Securities and Exchange Commission.
The Board has also determined that the Audit Committee has at
least one audit committee financial expert serving
on that Committee, namely, the Committee Chair, Charles A.
Bowsher, whose business background may be found on page 3
of this Proxy Statement. Among the principal duties of the Audit
Committee are appointing the Companys independent
accountants, subject to ratification by the stockholders; review
of scope, approach and results of the annual audits; review of
annual and quarterly financial statements; and review of the
representations of management and the findings and suggestions
of the independent accountants regarding internal controls,
financial policies and procedures and managements response
thereto.
Additional detail about the Committees activities are
spelled out in the Committees Charter, which was amended
and restated by the Board of Directors on May 2, 2005. A
copy of the Committees Charter is attached to this Proxy
Statement as Appendix D. The report of the Audit Committee
appears on page 26 of this Proxy Statement.
Compensation Committee. Directors Frederick A. Krehbiel
(Chair), Julia A. McGee and Robert C. McCormack serve as members
of the Compensation Committee, which held four meetings in
fiscal 2005. The Board of Directors has determined that all of
the members of the Compensation Committee are
independent as defined in the applicable NYSE
listing standards. The role of the Compensation Committee is to
establish and oversee the policies that govern Company
compensation and benefit practices and includes review of the
salaries of the senior officers of the Company each year,
evaluation of the performance of the CEO and setting his
compensation level, and approval of management incentive awards
and stock option grants. The report of the Compensation
Committee on Executive Compensation appears on pages 22 to
24 of this Proxy Statement.
Academic Committee. Directors Harold T. Shapiro
(Chair), David S. Brown and Connie R. Curran serve as
members of the Companys Academic Committee, which was
established to assure that the academic perspective is heard and
represented at the highest policy-setting level, and
incorporated in all of the Companys activities and
operations. The purpose of the Committee, which met three times
in fiscal 2005, is to provide oversight of the Companys
academic policy and input to the Board regarding academic
activities.
Finance Committee. Directors Robert C. McCormack
(Chair), David S. Brown and Connie R. Curran serve as
members of the Companys Finance Committee, which met two
times during fiscal 2005. The Committees principal duties
include review and recommendation with respect to the
Companys financing policies, including cash flow, capital
structure and dividend policy, as well as risk management policy.
Compensation of Directors
Directors are each paid a retainer of $24,000 per annum plus
$1,500 for each Board of Directors meeting attended.
Non-employee committee members are also paid $1,000 per
committee meeting attended. In addition, the Chair of the Audit
Committee receives an annual retainer of $10,000 for such
services. Also, Directors are eligible to receive options under
the Companys 1999 and 2003 Stock Incentive Plans and are
currently granted options for 6,000 shares upon election or
re-election to the Board. These options vest in three
15
annual installments beginning one year from the date of
election. Directors are reimbursed for any reasonable and
appropriate expenditures attendant to Board membership.
Under the DeVry Inc. Board of Directors Deferred
Compensation Plan, a Director may elect to defer all or a
portion of Board compensation. Any amount so deferred is, at the
Directors election, valued as if invested in the
Companys Common Stock and/or the average yield on
corporate bonds as determined by Mergent Bond Record, and is
payable in cash in installments or as a lump-sum on or after
termination of services as a Director.
CERTAIN TRANSACTIONS
During fiscal year 2005 the Company paid The Revere Group, an
information systems consulting organization, approximately
$1.1 million for consulting services. Robert C. McCormack,
one the Companys Directors, is also a director of The
Revere Group, and Trident Capital, Inc., of which
Mr. McCormack is a founding partner, is an investor in the
Revere Group. Also, Dennis J. Keller, Chair, and Ronald L.
Taylor, CEO, are investors in Trident Capital, Inc.
During the same fiscal year, the Company paid $132,433, and is
expected to pay an additional $36,000 during fiscal 2006, to
Lawrence Associates Incorporated (LAI) for two pilot
tests of information technology services. Thomas Taylor, brother
of the Companys CEO, Ronald L. Taylor, is Executive Vice
President and Chief Operating Officer of LAI.
Management believes that these transactions and any
relationships during fiscal year 2005 were on terms that were
reasonable and competitive. Additional transactions and
relationships of this nature may be expected to take place in
the ordinary course of business in the future.
STOCKHOLDER COMMUNICATION WITH DIRECTORS
Stockholders wishing to communicate with the Board of Directors
should send any communication to: Secretary, DeVry Inc.,
One Tower Lane, Suite 1000, Oakbrook Terrace, Illinois
60181. Any such communication must be in writing, must set forth
the name and address of the stockholder (and the name and
address of the beneficial owner, if different), and must state
the form of stock ownership and the number of shares
beneficially owned by the stockholder making the communication.
The Companys Secretary will compile and periodically
forward all such communication to the Board of Directors.
CODE OF BUSINESS CONDUCT AND ETHICS
The Company has adopted a Code of Business Conduct and Ethics
(the Code) that applies to its Directors, officers
(including the CEO, the Chief Financial Officer and the
Controller) and all other employees. The Code is intended to
promote honest and ethical conduct; full, fair, accurate, timely
and understandable disclosure; compliance with applicable
governmental laws, rules and regulations; the prompt internal
reporting of violations of the Code; and accountability for
adherence to the Code. The Code is available in print, without
charge, from the Secretary of the Company to any stockholder
upon written request and is also available on the Companys
website, www.devryinc.com. The Company posts any amendments to
or waivers from the Code (to the extent applicable to the
Companys directors and executive officers) on the
Companys website, www.devryinc.com.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the
Companys Directors, executive officers and holders of more
than 10% of the Companys Common Stock file reports of
ownership and changes in ownership of Common Stock with the
Securities and Exchange Commission. During the fiscal year ended
June 30, 2005, all such persons filed on a timely basis all
reports required by Section 10(a) of the Exchange Act,
except that executive officer O. John Skubiak was inadvertently
late in filing one report on Form 4.
16
STOCK OWNERSHIP
The table below sets forth the number and percentage of
outstanding shares of Common Stock beneficially owned by
(1) each person known by the Company to own beneficially
more than five percent of the Common Stock, (2) each
Director of the Company, (3) each nominee for election as
Director, (4) each named executive officer, and
(5) all Directors and officers of the Company as a group,
in each case as of June 30, 2005, except as otherwise
noted. The Company believes that each individual or entity named
has sole investment and voting power with respect to the shares
of Common Stock indicated as beneficially owned by them, except
as otherwise noted.
Amount and Nature of Beneficial Ownership
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature of Beneficial Ownership | |
|
|
| |
|
|
|
|
Stock Options | |
|
Total Common | |
|
|
|
|
Common Shares | |
|
Exercisable | |
|
Stock | |
|
|
|
|
Beneficially Owned | |
|
within 60 days | |
|
Beneficially | |
|
Percentage | |
Name |
|
Excluding Options(1) | |
|
of Record Date(2) | |
|
Owned | |
|
Ownership | |
|
|
| |
|
| |
|
| |
|
| |
Ariel Capital Management, LLC
|
|
|
7,073,600 |
(3) |
|
|
|
|
|
|
7,073,600 |
|
|
|
10.0 |
|
|
200 E. Randolph Dr.
Suite 2900
Chicago, IL 60601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legg Mason Capital Management, Inc.
|
|
|
5,441,700 |
(3) |
|
|
|
|
|
|
5,441,700 |
|
|
|
7.7 |
|
|
100 Light Street
Baltimore, MD 21203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Baron Capital Management, Inc.
|
|
|
5,400,900 |
(3) |
|
|
|
|
|
|
5,400,900 |
|
|
|
7.6 |
|
|
767 Fifth Avenue
New York, NY 10153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Westport Asset Management Inc.
|
|
|
5,191,400 |
(3) |
|
|
|
|
|
|
5,191,400 |
|
|
|
7.3 |
|
|
253 Riverside Avenue
Westport, CT 06880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John W. Bristol & Company, Inc.
|
|
|
3,835,200 |
(3) |
|
|
|
|
|
|
3,835,200 |
|
|
|
5.4 |
|
|
48 Wall Street
New York, NY 10005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis J. Keller
|
|
|
8,901,976 |
|
|
|
298,925 |
|
|
|
9,200,901 |
|
|
|
12.6 |
|
Ronald L. Taylor
|
|
|
1,897,780 |
|
|
|
418,925 |
|
|
|
2,316,705 |
|
|
|
2.7 |
|
Charles A. Bowsher
|
|
|
6,076 |
(4) |
|
|
7,250 |
|
|
|
13,326 |
|
|
|
* |
|
David S. Brown
|
|
|
83,500 |
|
|
|
14,000 |
|
|
|
97,500 |
|
|
|
* |
|
Connie R. Curran
|
|
|
0 |
|
|
|
2,000 |
|
|
|
2,000 |
|
|
|
* |
|
William T. Keevan
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
* |
|
Frederick A. Krehbiel
|
|
|
14,100 |
|
|
|
23,250 |
|
|
|
37,350 |
|
|
|
* |
|
Robert C. McCormack
|
|
|
106,334 |
(4) |
|
|
11,500 |
|
|
|
117,834 |
|
|
|
* |
|
Julia A McGee
|
|
|
18,000 |
|
|
|
14,750 |
|
|
|
32,750 |
|
|
|
* |
|
Fernando Ruiz
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
* |
|
Harold T. Shapiro
|
|
|
250 |
|
|
|
5,500 |
|
|
|
5,750 |
|
|
|
* |
|
Daniel Hamburger
|
|
|
1,000 |
|
|
|
122,680 |
|
|
|
123,680 |
|
|
|
* |
|
Norman M. Levine
|
|
|
44,938 |
(5) |
|
|
80,725 |
|
|
|
125,663 |
|
|
|
* |
|
O. John Skubiak
|
|
|
90,135 |
|
|
|
218,985 |
|
|
|
309,120 |
|
|
|
* |
|
All Directors and Officers as a Group (36 persons)
|
|
|
11,200,149 |
(5)(6) |
|
|
1,621,811 |
|
|
|
12,821,960 |
|
|
|
15.8 |
|
17
|
|
|
|
* |
Represents less than one percent of the outstanding Common Stock. |
|
|
(1) |
Common Stock Beneficially Owned includes stock held
in joint tenancy, stock owned as tenants in common, stock owned
or held by spouse or other members of the holders
household, and stock in which the holder either has or shares
voting and/or investment power, even though the holder disclaims
any beneficial interest in such stock. Options exercisable
within 60 days after September 16, 2005, are shown
separately. |
|
(2) |
Option prices for these shares range from $5.4375 to $38.8125
per share. |
|
(3) |
Shares as of July 31, 2005. |
|
(4) |
Includes shares held as deferred stock by nonemployee Directors
as of June 30, 2005, that the Directors will receive upon
termination of membership on the Board of Directors for any
reason, as follows: Bowsher 6,074 shares and
McCormack 1,245 shares. These shares result from the
voluntary election by the Directors to defer the payment of
Directors fees. No shares of common stock have as yet been
issued, and the Directors have neither voting nor investment
powers in these shares of deferred stock. |
|
(5) |
Includes shares held in the DeVry Inc. Profit Sharing Retirement
Plan, as follows: Levine 2,338 shares and all
officers as a group 14,476 shares. |
|
(6) |
Includes shares held in the DeVry Employee Stock Purchase Plan
as follows: all officers as a group 1,461 shares. |
18
EXECUTIVE COMPENSATION
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Compensation | |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
Annual Compensation | |
|
Awards | |
|
Payouts | |
|
|
|
|
|
|
| |
|
| |
|
| |
|
|
|
|
|
|
|
|
|
|
Securities | |
|
|
|
|
|
|
|
|
|
|
Restricted | |
|
Underlying | |
|
|
|
|
|
|
|
|
|
|
Other Annual | |
|
Stock | |
|
Options/ | |
|
LTIP | |
|
All Other | |
Name and Principal Position |
|
Year | |
|
Salary($)(1) | |
|
Bonus($)(1)(2) | |
|
Compensation($)(3) | |
|
Award(s) | |
|
SARs(#)(4) | |
|
Payouts | |
|
Compensation($)(5) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Ronald L. Taylor,
|
|
|
2005 |
|
|
|
900,000 |
|
|
|
180,000 |
|
|
|
|
|
|
|
|
|
|
|
200,500 |
|
|
|
|
|
|
|
97,337 |
|
CEO
|
|
|
2004 |
|
|
|
627,270 |
|
|
|
475,000 |
|
|
|
|
|
|
|
|
|
|
|
50,500 |
|
|
|
|
|
|
|
84,711 |
|
|
|
|
2003 |
|
|
|
609,000 |
|
|
|
447,000 |
|
|
|
|
|
|
|
|
|
|
|
50,500 |
|
|
|
|
|
|
|
89,738 |
|
Dennis J. Keller,
|
|
|
2005 |
|
|
|
646,088 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
6,500 |
|
|
|
|
|
|
|
56,274 |
|
Board Chair
|
|
|
2004 |
|
|
|
627,270 |
|
|
|
475,000 |
|
|
|
|
|
|
|
|
|
|
|
50,500 |
|
|
|
|
|
|
|
61,944 |
|
|
|
|
2003 |
|
|
|
609,000 |
|
|
|
447,000 |
|
|
|
|
|
|
|
|
|
|
|
50,500 |
|
|
|
|
|
|
|
78,211 |
|
Daniel Hamburger,
|
|
|
2005 |
|
|
|
400,000 |
|
|
|
180,000 |
|
|
|
|
|
|
|
|
|
|
|
125,000 |
|
|
|
|
|
|
|
19,456 |
|
President(6)
|
|
|
2004 |
|
|
|
306,000 |
|
|
|
200,000 |
|
|
|
|
|
|
|
|
|
|
|
19,200 |
|
|
|
|
|
|
|
1,871 |
|
|
|
|
2003 |
|
|
|
192,857 |
|
|
|
128,000 |
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
|
|
|
|
|
156 |
|
O. John Skubiak,
|
|
|
2005 |
|
|
|
310,000 |
|
|
|
108,500 |
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
|
|
|
|
|
|
33,879 |
|
Executive Vice
|
|
|
2004 |
|
|
|
278,333 |
|
|
|
230,000 |
|
|
|
|
|
|
|
|
|
|
|
40,000 |
|
|
|
|
|
|
|
34,585 |
|
President
|
|
|
2003 |
|
|
|
250,000 |
|
|
|
225,000 |
|
|
|
|
|
|
|
|
|
|
|
30,000 |
|
|
|
|
|
|
|
23,636 |
|
Norman M. Levine,
|
|
|
2005 |
|
|
|
173,040 |
|
|
|
85,000 |
|
|
|
|
|
|
|
|
|
|
|
26,000 |
|
|
|
|
|
|
|
21,283 |
|
Sr. Vice President and
|
|
|
2004 |
|
|
|
168,000 |
|
|
|
90,000 |
|
|
|
|
|
|
|
|
|
|
|
12,500 |
|
|
|
|
|
|
|
28,938 |
|
Chief Financial Officer
|
|
|
2003 |
|
|
|
162,240 |
|
|
|
90,000 |
|
|
|
|
|
|
|
|
|
|
|
12,000 |
|
|
|
|
|
|
|
20,284 |
|
|
|
(1) |
Amounts shown include cash compensation earned by the named
executive officers during the year covered, including amounts
deferred at the election of those officers. Each of the eligible
named executive officers elected to defer a portion of his
salary and bonus for fiscal years 2005 and 2006. For a
description of the DeVry Inc. Deferred Compensation Plan, under
which all of the above deferrals were effected, see
Compensation Committee Report on Executive
Compensation on page 24. |
|
(2) |
Amount includes bonuses earned in fiscal year 2005 and paid in
fiscal year 2006. |
|
(3) |
During the covered fiscal years no named executive officer
received any other annual compensation in an amount in excess of
the lesser of either $50,000 or 10% of the total of annual
salary and bonus reported for him in the two preceding columns. |
|
(4) |
Options to acquire shares of Common Stock. |
|
(5) |
These amounts represent personal financial planning expenses
paid by the Company for the benefit of the named executive
officers and the dollar value of insurance premiums paid by the
Company with respect to term life insurance and supplemental
health insurance for the benefit of the named executive
officers. Under its group life insurance plan the Company
provides life insurance to all employees in the amount of their
annual salary up to $500,000. The following premiums were paid:
Mr. Taylor, $21,031; Mr. Keller, $4,721;
Mr. Hamburger, $800; Mr. Skubiak, $970; and
Mr. Levine, $975. |
|
(6) |
Mr. Hamburger joined the Company in November 2002. |
Option/ SAR Grants in Last Fiscal Year
The following table provides information about options granted
to the named executive officers during fiscal 2005 under the
Companys 1999 Stock Incentive Plan and 2003 Stock
Incentive Plan. Under these plans, the Plan Committee determines
the Directors or key employees eligible to participate and the
number of shares to be granted (subject to Compensation
Committee approval of employee grants of non-qualified and/or
incentive stock options) and the prices at which and periods
during which such options may be exercised (typically five-year
vesting for employees and three-year vesting for Directors, with
a 10-year exercise period). In no case may the exercise price be
less than 100% of fair market value on the date of grant or, in
the case of incentive stock options, the period of exercise be
longer than 10 years from the date of grant.
19
The plans do not limit the number of individuals who may
participate, and additional options may be granted to previous
recipients of options.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual Grants | |
|
|
|
|
|
Potential Realizable | |
|
|
| |
|
|
|
|
|
Value at Assumed | |
|
|
Number of | |
|
% of Total | |
|
|
|
|
|
Annual Rates of Stock | |
|
|
Securities | |
|
Options/SARs | |
|
|
|
|
|
Price Appreciation for | |
|
|
Underlying | |
|
Granted to | |
|
|
|
|
|
Option Term | |
|
|
Options/SARs | |
|
Employees in | |
|
Exercise or | |
|
Expiration | |
|
| |
Name |
|
Granted (#) | |
|
($/Sh) | |
|
Base Price | |
|
Date | |
|
5% ($) | |
|
10% ($) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Ronald L. Taylor
|
|
|
500 |
|
|
|
.03 |
% |
|
|
27.41 |
|
|
|
7/1/14 |
|
|
|
8,619 |
|
|
|
21,842 |
|
Ronald L. Taylor
|
|
|
100,000 |
|
|
|
6.8 |
% |
|
|
20.78 |
|
|
|
8/10/14 |
|
|
|
1,306,843 |
|
|
|
3,311,796 |
|
Ronald L. Taylor
|
|
|
100,000 |
|
|
|
6.8 |
% |
|
|
21.40 |
|
|
|
6/15/15 |
|
|
|
1,345,834 |
|
|
|
3,410,608 |
|
Dennis J. Keller
|
|
|
500 |
|
|
|
.03 |
% |
|
|
27.41 |
|
|
|
7/1/14 |
|
|
|
8,619 |
|
|
|
21,842 |
|
Dennis J. Keller
|
|
|
6,000 |
|
|
|
.41 |
% |
|
|
15.18 |
|
|
|
11/16/14 |
|
|
|
59,656 |
|
|
|
151,182 |
|
Daniel Hamburger
|
|
|
50,000 |
|
|
|
3.4 |
% |
|
|
20.78 |
|
|
|
8/10/14 |
|
|
|
653,421 |
|
|
|
1,655,898 |
|
Daniel Hamburger
|
|
|
75,000 |
|
|
|
5.1 |
% |
|
|
21.40 |
|
|
|
6/15/15 |
|
|
|
1,009,375 |
|
|
|
4,213,855 |
|
O. John Skubiak
|
|
|
50,000 |
|
|
|
3.4 |
% |
|
|
20.78 |
|
|
|
8/10/14 |
|
|
|
653,421 |
|
|
|
1,655,898 |
|
O. John Skubiak
|
|
|
50,000 |
|
|
|
3.4 |
% |
|
|
21.40 |
|
|
|
6/15/15 |
|
|
|
672,917 |
|
|
|
1,705,304 |
|
Norman M. Levine
|
|
|
12,000 |
|
|
|
.82 |
% |
|
|
20.78 |
|
|
|
8/10/14 |
|
|
|
156,821 |
|
|
|
397,415 |
|
Norman M. Levine
|
|
|
14,000 |
|
|
|
.96 |
% |
|
|
21.40 |
|
|
|
6/15/15 |
|
|
|
188,416 |
|
|
|
477,485 |
|
Aggregated Option/SAR Exercises in Last Fiscal Year and
FY-End Option/SAR Values
The following table provides information about options exercised
by the named executive officers during fiscal 2005 and the
number and value of options held at the end of fiscal 2005, many
of which are not yet exercisable. The Company does not have any
stock appreciation rights outstanding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of | |
|
|
|
|
|
|
|
|
Securities | |
|
Value of | |
|
|
|
|
|
|
Underlying | |
|
Unexercised | |
|
|
|
|
|
|
Unexercised | |
|
In-the-Money | |
|
|
|
|
|
|
Options/SARs at | |
|
Options/SARs at | |
|
|
Shares | |
|
|
|
FY-End (#) | |
|
FY-End ($)(1) | |
|
|
Acquired on | |
|
|
|
| |
|
| |
|
|
Exercise | |
|
Value | |
|
Exercisable/ | |
|
Exercisable/ | |
Name |
|
(#) | |
|
Realized ($) | |
|
Unexercisable | |
|
Unexercisable | |
|
|
| |
|
| |
|
| |
|
| |
Ronald L. Taylor
|
|
|
13,724 |
|
|
|
213,717 |
|
|
|
361,225/196,900 |
|
|
|
759,425/73,800 |
|
Dennis J. Keller
|
|
|
42,000 |
|
|
|
755,175 |
|
|
|
261,225/102,900 |
|
|
|
759,425/98,400 |
|
Daniel Hamburger
|
|
|
|
|
|
|
|
|
|
|
98,840/95,360 |
|
|
|
97,600/146,400 |
|
O. John Skubiak
|
|
|
19,200 |
|
|
|
330,912 |
|
|
|
205,585/116,000 |
|
|
|
614,758/44,280 |
|
Norman M. Levine
|
|
|
|
|
|
|
|
|
|
|
81,725/35,400 |
|
|
|
322,740/17,712 |
|
|
|
(1) |
Represents the difference between the closing price of the
Common Stock on the New York Stock Exchange on June 30,
2005 and the exercise price of the option. |
Profit Sharing Retirement Plan
Employees of the Company and its subsidiaries participate in the
401(k) component of the DeVry Inc. Profit Sharing Retirement
Plan (the Profit Sharing Retirement Plan), which, as
of June 30, 2005, covered 3,771 of the Companys
employees, including 662 former employees. Under the Profit
Sharing Retirement Plan, employees share in the success and
profitability of the Company through a combination of Company
matching and discretionary contributions to its eligible
employees. Regular full-time employees and regular part-time
employees who complete 1,000 hours of service during a Profit
Sharing Retirement Plan Year (July 1June 30) are
automatically enrolled in the Profit Sharing Retirement Plan
following their completion of one year of service to the
Company. Eligible employees may choose to open a 401(k) account
and contribute from one percent to 50% (one percent to six
percent in the case of highly-compensated employees)
20
of their annual eligible compensation, subject to IRS annual
contribution limitations. To those employees contributing one
percent to a 401(k) account, the Company makes a matching
contribution of one percent of their total annual eligible
compensation (including salary, overtime pay and bonuses); to
those employees contributing two percent or more, the Company
makes a matching contribution of two percent of their total
annual eligible compensation. Allocations of the Companys
discretionary profit sharing contribution under a formula based
on salary and seniority are made to eligible employees who have
completed one year of service as of the last day of any Profit
Sharing Retirement Plan year.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company has entered into employment agreements having
substantially identical terms with Dennis J. Keller and
Ronald L. Taylor (each an Executive). Each
agreement provides for an initial base salary, annual salary
increases and annual bonuses for an initial term of employment
ending on June 30, 2005, which thereafter continues until
either the Executive or the Company provides the other with at
least 150 days notice of termination. Each employment
agreement provides that it may be terminated by the Company upon
(1) the death of the Executive, (2) physical or mental
disability of the Executive that prevents him from performing
his duties for a continuous period of 180 days, or
(3) for cause (as defined in the employment agreement). The
Executive may terminate the agreement if (1) he is not
accorded the authority, duties, obligations and prerogatives set
forth in the agreement, (2) such authority, duties,
obligations or prerogatives are materially or substantially
reduced, (3) he is not paid or reimbursed amounts due him
under the agreement, (4) the Company fails to observe its
obligations under the agreement, or (5) a change of
control (as defined in each agreement) of the Company
occurs and the Executive resigns for any reason at any time
during the 12-month period following the occurrence of a
change of control after providing at least 30
days advance written notice of such resignation to the
Company.
Except in the case of death, disability, constructive dismissal
or a resignation or retirement, the Executive shall be employed
following the Executives termination of employment under
the employment agreement pursuant to a Senior Advisor Agreement,
beginning on the first day following the termination of the
Executives employment. Under the terms of the Senior
Advisor Agreement, the Executive serves as senior advisor to the
Company with responsibilities and duties that include focusing
on the strategy of and investor relations for the Company and
serving as a senior advisor to the Board. The term of the Senior
Advisor Agreement begins on the Senior Advisor employment date
and ends on the 15th anniversary of that date and is divided
into two periods, an initial five-year period and a final
ten-year period. The Executive will be provided with an
appropriate office and compensated for his services at the
annual rate of $420,000 during the initial period and, during
the final period, at an annual rate of $50,000, subject to
annual increases at the budgeted annual average percentage
increase for all Company employees, plus health, welfare and
pension benefits consistent with past practice, as well as other
fringe benefits on the same terms and to the same extent as
provided by the Company to senior management employees,
excluding special CEO benefits (e.g., incentive compensation, an
automobile and club dues). Subject to certain cost limitations,
the Company will also maintain an insurance policy providing
$1 million in death benefits payable to the
Executives designated beneficiary, and will reimburse
expenses consistent with past practices of the Company and
usages in effect from time to time. The Senior Advisor Agreement
will terminate upon the Executives death or permanent
disability or for cause. The Executive may terminate the
agreement at any time. If the Executives termination
occurs for any reason but cause, the Executive will be entitled
to payment and benefits through the end of the period (either
initial or final) in which the termination occurs and to
continuation of medical coverage for the remainder of the lives
of the Executive and his spouse. Such medical coverage is
subject to a tax gross up if taxed to the Executive and to the
requirement that the Executive secure Medicare coverage or
whatever other medical coverage may otherwise then be available,
which coverage shall, if lawful, be deemed primary.
On August 9, 2005, the Company entered into a letter
agreement with Dennis J. Keller that amended
Mr. Kellers employment agreement. The letter
agreement provides for, among other things, an agreement that
Mr. Keller is not obligated to devote more than one-half of
his business time (as opposed to substantially all of his
business time, as required pursuant to his original employment
agreement) to the performance of his
21
duties and as a result Mr. Kellers annual base salary
was reduced to one-half of its previous amount and an agreement
and acknowledgment by the Company and Mr. Keller that
Mr. Kellers current term of employment with the
Company shall be terminated on June 30, 2006 and that such
termination shall not be deemed a termination for
Cause, a resignation or retirement that is not
a Qualified Resignation or Retirement or a
Constructive Dismissal (as those terms are defined
in the employment agreement). Except in the case of death,
disability, constructive dismissal or a resignation or
retirement, following June 30, 2006, Mr. Keller shall
be employed by the Company as a senior advisor pursuant to his
Senior Advisor Agreement and will remain as Board Chair of the
Company.
The Company has also entered into an employment agreement with
Daniel Hamburger. The agreement provides for an initial base
salary, annual salary increases and annual bonuses for an
initial term of employment ending November 10, 2005, which
continues thereafter until either Mr. Hamburger or the
Company provides the other with at least 180 days
notice. Mr. Hamburgers employment terminates
180 days after the delivery of such notice, unless earlier
terminated. The employment agreement provides that it may be
terminated by the Company upon (1) the death of
Mr. Hamburger, (2) his physical or mental disability
that prevents him from performing his duties for a continuous
period of 180 days, or (3) for cause (as defined in
the employment agreement). Mr. Hamburger may terminate the
agreement if (1) he is not accorded the authority, duties,
obligations and prerogatives set forth in the agreement,
(2) such authority, duties, obligations or prerogatives are
materially or substantially reduced, (3) he is not paid or
reimbursed amounts due him under the agreement, or (4) the
Company otherwise fails to observe its obligations under the
agreement. In the event the Company terminates the agreement or
fails to continue or renew the agreement, or Mr. Hamburger
terminates the agreement for any reason stated in the preceding
sentence, he is entitled to severance payments equal to 12 times
his monthly base salary. In the event of his termination
following a change in control, as defined in the agreement, any
unvested stock options will immediately vest and the severance
payment will be 24 times the monthly base salary, plus prorated
bonus.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
To Our Stockholders:
Compensation Philosophy
The Company applies a consistent philosophy to compensation for
all employees, including senior management. This philosophy is
based on the premise that the achievements of the Company result
from the combined efforts of all employees working toward common
objectives.
The Company seeks to achieve these objectives through teamwork
that is focused on meeting the expectations of its customers
(students and their employers), various outside agencies
(regulators and accreditors) and its stockholders. The
Compensation Committee believes that the ability, skills and
motivation of Company executive officers is critical to creating
the maximum long-term return to our shareholders.
The Committee has the responsibility, with respect to the
Companys executive officers, to implement that philosophy
in a manner that will align executive compensation with the
business objectives and performance of the Company and will also
enable the Company to attract, retain and motivate executive
officers to ensure its long-term success. To that end, the
Committee is responsible for evaluating the performance of
senior management, reviewing with senior management the
performance of executive officers generally, and making
recommendations to the Board of Directors for their compensation
levels in terms of salaries, stock options, bonuses and related
benefits.
Under the current program, there are three principal components
to the compensation of senior management: salary, annual
incentive compensation and long-term incentive compensation. The
Compensation Committee considers the total compensation of each
executive in establishing the elements of senior management
compensation. The Compensation Committee also determined that
the Board Chair should receive for executive service as Board
Chair a base salary only, and that the CEO and other members of
senior
22
management should be eligible to receive for executive service
all three current components of compensation salary,
annual incentive compensation and long-term incentive
compensation.
The salary, annual incentive compensation and long-term
incentive compensation paid by the Company to the CEO and the
four other named executive officers of the Company in fiscal
2005 are set forth on page 19. The Compensation Committee
believes that the executive officers of the Company continue to
be dedicated to increasing stockholder value and that the
Committees compensation policies contribute to this focus.
Salary
In its annual review of the salaries of senior management, the
Compensation Committee considers, among other factors, the
responsibilities and individual performance (both in the current
year and over time) of the executive, the Companys
performance and the performance of the executives business
unit. Salaries at companies of comparable size, with whom the
Company must compete for talent, are also considered.
With respect to the CEO, the Committees policy is to
provide total cash compensation that represents reasonable
salary plus additional compensation determined by its view of
his performance and the results of the Company. The primary
factor leading the Committee to recommend an increase in
Mr. Taylors salary of 44% for fiscal year 2005
compared to fiscal year 2004 was the fact that he assumed
significant additional responsibilities when he became the
Companys sole CEO at the beginning of the year after
serving as co-CEO.
Annual Incentive Compensation
Annual incentive compensation for senior management other than
the CEO consists of discretionary cash bonuses awarded annually
to executives (and certain other management employees) based on
the achievement of certain Company targets and personal
objectives. These bonuses are the primary vehicle for
recognizing and rewarding accomplishments in a given year. The
specific bonus an executive receives is dependent on individual
performance, level of responsibility and achievement of certain
company targets.
The Compensation Committee has adopted the premise that
long-term growth is the single best proxy for stockholder
interests. Annual incentive compensation for the CEO is set with
this consideration in mind. Additionally, the Committee
considers the nature, scope and level of the executives
responsibilities. For fiscal year 2005, the Committee
recommended to the Board that Mr. Taylor receive a cash
bonus of $180,000, a decline from $475,000 paid in fiscal 2004.
Although earnings declined for the year, the Committee concluded
that a cash bonus in this amount was appropriate to reflect
Mr. Taylors leadership, accomplishments and
contributions, including the reorganization of the
Companys operations and structure, the development or
acquisition of new or expanded programs, and the repositioning
of some of the Companys existing businesses, which are
intended to position the Company for long-term growth. Although
we consider compensation levels at companies most likely to
compete with us for executive talent, our compensation decisions
do not reflect any particular compensation level at those
companies.
Long-term Incentive Compensation
Stock options are used as the primary long-term incentive
vehicle. Options provide executives and other key employees with
the opportunity to acquire and maintain an equity interest in
the Company and to share in the appreciation in value of its
Common Stock. To assure that the value of every
stockholders interest must appreciate before the option
holder receives any benefit from the option, options have been
granted at no less than the fair market value of the
Companys Common Stock on the date of grant. Additionally,
options are generally granted with a 5-year vesting period and a
10-year exercise period so as to encourage executives and others
to take a longer-term view of their individual contributions to
the Company. However, for 2005 the Company granted stock options
with immediate vesting, offering a greater short-term upside
benefit to senior managers who are subject to salary freezes
and/or reduction of bonuses compared to the previous year. The
Compensation Committee believes that stock options are an
important tool to align the long-term interests of management
and stockholders.
23
The CEO, the four other named executive officers and certain
other executive officers were among the 616 Company employees
granted stock options based on their performance during fiscal
year 2005. Mr. Taylors award of options for 200,500
shares was made to reflect the achievements and contributions
described above under Annual Incentive Compensation.
Deferred Compensation Plan
In August 1999, the Committee approved another component of
DeVrys executive compensation program, the DeVry Inc,
Deferred Compensation Plan (the Deferred Plan). The
Deferred Plan is a voluntary, non-tax qualified, deferred
compensation plan available to executive officers and certain
other members of DeVry management that enable such individuals
to save for retirement by deferring a portion of their current
compensation. Under the Deferred Plan, participants are entitled
to defer compensation until termination of service with DeVry or
certain other specified dates. Participants may elect to have
their deferred amounts credited with earnings based on various
investment choices made available by the Committee for this
purpose. Also, participants dependents are eligible to
receive a pre-retirement death benefit. The purpose of this
Deferred Plan is to encourage participants to remain in the
service of DeVry as benefits of the Deferred Plan increase over
time.
Deductibility
Section 162(m) of the Internal Revenue Code generally
disallows a tax deduction to public companies for compensation
in excess of $1,000,000 per year paid to the chief executive
officer and the four other most highly compensated executive
officers employed at year-end. Certain compensation, including
performance-based compensation, may qualify for an
exemption from the deduction limit if it satisfies various
technical requirements under Section 162(m). The Committee
views the tax deductibility of executive compensation as one
factor to be considered in the context of its overall
compensation philosophy. The Committee reviews each material
element of compensation on a continuing basis and takes steps to
assure deductibility if that can be accomplished without
sacrificing flexibility and other important elements of the
overall executive compensation program.
Base salary and the amounts reflected in the other annual
compensation and all other compensation columns of the Summary
Compensation Table do not by their nature qualify as performance
based compensation under Section 162(m). Annual incentive
compensation has not previously qualified as
performance-based compensation, although the DeVry
Incentive Plan of 2005 proposed for adoption by stockholders at
the 2005 Annual Meeting of Stockholders contains a feature that
would permit annual incentive compensation to qualify in the
future. The DeVry Incentive Plan of 2005, unlike the
Companys prior Stock Incentive Plans, also contains
features that would allow option awards under the new plan to
qualify as performance-based compensation so that
any gain recognized by the option holder upon the exercise of
options granted under that plan would not be subject to the
Section 162(m) limitations on deductibility. See
Adoption of the DeVry Incentive Plan of 2005,
Benefits Annual Management
Incentive Awards and Million Dollar
Deduction Limit. The Committee believes that all
compensation received or recognized by the executive officers
named in the Summary Compensation Table was deductible, except
for a portion of the compensation of Mr. Taylor and Mr. Keller.
This Compensation Committee Report is not to be deemed
incorporated by reference by any general statement incorporating
by reference this Proxy Statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the Company specifically
incorporates this Report by reference, and is not otherwise to
be deemed filed under such Acts.
|
|
|
COMPENSATION COMMITTEE |
|
|
Frederick A. Krehbiel, Chair |
|
Julia A. McGee |
|
Robert C. McCormack |
24
PERFORMANCE GRAPH
The following graph and chart compare the total cumulative
return (assuming dividend reinvestment) on the Companys
Common Stock during the period from June 30, 2000 through
June 30, 2005 with the cumulative return on the NYSE Stock
Market Index (U.S. Companies), and two industry group indices.
COMPARISON OF CUMULATIVE TOTAL RETURN SINCE JUNE 30, 2000
AMONG DEVRY INC., NYSE MARKET INDEX,
AND INDUSTRY GROUP INDICES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30 | |
|
|
| |
|
|
2000 | |
|
2001 | |
|
2002 | |
|
2003 | |
|
2004 | |
|
2005 | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
DeVry Inc.
|
|
|
100.0 |
|
|
|
136.6 |
|
|
|
86.4 |
|
|
|
88.1 |
|
|
|
103.7 |
|
|
|
75.3 |
|
NYSE Market Index U.S. Companies
|
|
|
100.0 |
|
|
|
91.8 |
|
|
|
73.4 |
|
|
|
70.9 |
|
|
|
79.7 |
|
|
|
84.3 |
|
Industry Group Index Current
|
|
|
100.0 |
|
|
|
232.4 |
|
|
|
297.5 |
|
|
|
438.8 |
|
|
|
601.0 |
|
|
|
543.6 |
|
Industry Group Index Prior
|
|
|
100.0 |
|
|
|
232.4 |
|
|
|
297.5 |
|
|
|
438.8 |
|
|
|
601.0 |
|
|
|
542.9 |
|
Data for this graph was prepared by Zacks Investment Research.
Assumes $100 was invested on June 30, 2000 in DeVry Inc.
Common Stock, the NYSE Stock Market Index (U.S. Companies), the
Industry Group-Current(1) and the Industry Group-Prior(1), and
that all dividends were reinvested.
|
|
(1) |
The Industry Group-Current consists of the following companies
selected on the basis of the similarity in the nature of their
business: Apollo Group, Inc., Apollo Group, Inc.-University of
Phoenix, Career Education Corp., Concorde Career Colleges,
Corinthian Colleges, Inc., Education Management Corp., ITT
Educational Services, Inc., Laureate Education Inc., Lincoln
Educational Services, Strayer Education, Inc., and Universal
Technical Institute. The Company believes that, including
itself, these companies represent the majority of the market
value of publicly traded companies whose primary business is
education. The only change to the index was the addition of a
company considered to operate in the education industry whose
stock was initially traded in the current fiscal year. |
25
The Industry Group-Prior consists of the following companies
selected on the basis of the similarity in the nature of their
business: Apollo Group, Inc., Apollo Group, Inc.-University of
Phoenix, Career Education Corp., Concorde Career Colleges,
Corinthian Colleges, Inc., Education Management Corp., ITT
Educational Services, Inc., Laureate Education Inc., Strayer
Education, Inc., and Universal Technical Institute.
AUDIT COMMITTEE REPORT
To Our Stockholders:
The Audit Committee of DeVry Inc., which met 10 times during the
last fiscal year, consists of three independent Directors and
operates under a written charter that conforms to the NYSE
listing standards and the Securities and Exchange
Commissions implementing regulations.
Management is responsible for the Companys internal
controls and the financial reporting process from which it
prepares the financial statements. The Companys
independent accountants are responsible for performing an
independent audit of the annual financial statements of the
Company and expressing an opinion on those statements. The Audit
Committee monitors the Companys financial reporting
processes, including its internal control systems.
The principal duties of the Audit Committee include the
selection of the Companys independent accountants, subject
to ratification by the stockholders; discussing with the
independent accountants the independent accountants
independence; monitoring the scope, approach and results of the
annual audits; reviewing and discussing the annual audited and
quarterly unaudited financial statements with management and the
independent accountants; and discussing with management and the
independent accountants the Companys internal control
systems.
With respect to the Companys audited financial statements
for the fiscal year ended June 30, 2005:
|
|
|
|
|
The Audit Committee has reviewed and discussed the audited
financial statements with management; |
|
|
|
The Audit Committee has met with PricewaterhouseCoopers LLP, the
Companys independent accountants, and discussed the
matters required by Statement of Auditing Standards No. 61,
as amended, and Securities and Exchange Commission
Regulation S-X, Rule 2-07; and |
|
|
|
The Audit Committee has received the written disclosures and the
letter from PricewaterhouseCoopers LLP required by Independence
Standards Board Standard No. 1, Independence
Discussions with Audit Committees, and has discussed with
PricewaterhouseCoopers LLP their independence. |
In reliance upon the Audit Committees reviews and
discussions with both management and PricewaterhouseCoopers LLP
referred to above, managements representations and the
report of PricewaterhouseCoopers LLP on the Companys
audited financial statements, the Audit Committee has
recommended to the Board of Directors that the audited financial
statements for the fiscal year ended June 30, 2005 be
included in the Companys Annual Report on Form 10-K
to be filed with the Securities and Exchange Commission.
In addition, the Audit Committee has appointed, subject to
stockholder ratification, PricewaterhouseCoopers LLP as the
Companys independent accountants for the fiscal year 2006.
This Audit Committee Report is not to be deemed incorporated by
reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of
1933 or under the Securities Exchange Act of 1934, except to the
extent that the Company specifically incorporates this Report by
reference, and is not otherwise to be deemed filed under such
Acts.
|
|
|
Charles A. Bowsher (Chair) |
|
David S. Brown |
|
Harold T. Shapiro |
26
AUDIT FEES
The Audit Committee appointed PricewaterhouseCooopers LLP
(PwC) as the Companys independent public
accountants for the fiscal year ended June 30, 2005. The
Companys stockholders ratified the engagement at the
Annual Meeting of Stockholders on November 16, 2004. In
addition to engaging PwC to audit the consolidated financial
statements for the Company and its subsidiaries for the year and
review the interim financial statements included in the
Companys Quarterly Reports on Form 10-Q filed with
the Securities and Exchange Commission, the Audit Committee also
engaged PwC to provide various other audit and audit related
services e.g., auditing of the Companys compliance
with student financial aid program regulations.
The Sarbanes-Oxley Act of 2002 prohibits an independent public
accountant from providing certain non-audit services for an
audit client. These rules became effective in May 2003. The
Company engages various other professional service providers for
these non-audit services as required. Other professional
advisory and consulting service providers are engaged where the
required technical expertise is specialized and cannot be
economically provided by employee staffing. Such services
include, from time to time, business and asset valuation
studies, and services in the fields of law, human resources,
information technology, employee benefits and tax structure and
compliance.
The aggregate amounts included in the Companys financial
statements for fiscal 2005 and 2004 for fees billed or to be
billed by PwC for audit and other professional services,
respectively, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2005 | |
|
Fiscal 2004 | |
|
|
| |
|
| |
Audit Fees
|
|
$ |
1,641,821 |
|
|
$ |
1,081,717 |
|
Audit Related Fees
|
|
|
|
|
|
|
|
|
Tax Fees
|
|
|
179,082 |
|
|
|
325,304 |
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
1,820,903 |
|
|
$ |
1,407,021 |
|
|
|
|
|
|
|
|
Audit Fees Includes all services performed to
comply with generally accepted auditing standards
(GAAS) in conjunction with the annual audit of the
Companys financial statements and the audit of internal
control over financial reporting. In addition, this category
includes fees for services in connection with the Companys
statutory and regulatory filings, consents and review of filings
with the Securities and Exchange Commission such as the annual
report on Form 10-K, quarterly reports on Form 10-Q
and Current Reports on Form 8-K. Also included are services
rendered in connection with the required annual audits of the
Companys compliance with the rules and procedures
promulgated for the administration of federal and state student
financial aid programs.
Audit Related Fees Includes all assurance and
related services such as for employee benefit plan audits and
due diligence related to acquisitions.
Tax Fees Includes all services related to tax
compliance, tax planning, tax advice, assistance with tax audits
and responding to requests from the Companys tax
department regarding technical interpretations, applicable laws
and regulations, and tax accounting. The Companys Audit
Committee has considered the nature of these services and
concluded that these services may be provided by the independent
public accountant without impairing their independence.
All Other Fees None.
For fiscal year 2005, none of the services provided by PwC were
provided pursuant to the de minimis exception to the
pre-approval requirements contained the applicable rules of the
Securities and Exchange Commission.
The Audit Committee, at each of its regularly scheduled
meetings, and on an interim basis as required, reviews all
engagements of PwC for audit and all other services. This review
includes a description of the services to be performed and the
estimated fees for such services. Following such review, each
proposed service is approved, modified or denied as appropriate.
A record of all such approvals is maintained in the files
27
of the Audit Committee for future reference. All services
provided by PwC during the past year were approved by the Audit
Committee prior to their undertaking.
The Audit Committee has adopted a policy for approving all
permitted audit, audit-related, tax and non-audit services to be
provided by PwC in advance of the commencement of such services,
except for those considered to be de minimis by law for
non-audit services. Information regarding services performed by
the independent auditors under this de minimis exception
is presented to the Audit Committee for information purposes at
each of its meetings. There is no blanket pre-approval provision
within this policy. Prior to the Audit Committees
consideration for approval, management provides the Audit
Committee with a description of the reason for and nature of the
services to be provided along with an estimate of the time
required and approximate cost. Audit Committee consideration and
approval generally occurs at a regularly scheduled Audit
Committee meeting. For projects that require an expedited
decision because they should begin prior to the next regularly
scheduled meeting, requests for approval may be circulated to
the Audit Committee by mail, telephonically or by other means
for their consideration and approval. When deemed necessary, the
Audit Committee has delegated pre-approval authority to its
Board Chair. Any engagement of the independent accountants under
this delegation will be presented for informational purposes to
the full Audit Committee at their next meeting.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has appointed
PricewaterhouseCoopers LLP, as independent public accountants
for the Company and its subsidiaries for fiscal year 2006. The
Board of Directors recommends to the stockholders that the
selection of PricewaterhouseCoopers LLP as independent public
accountants for the Company and its subsidiaries be ratified. If
the stockholders do not ratify the selection of
PricewaterhouseCoopers LLP, the selection of independent public
accountants will be reconsidered by the Audit Committee.
Representatives of PricewaterhouseCoopers LLP are expected to be
present at the Annual Meeting of Stockholders with the
opportunity to make a statement, if they desire to do so, and to
be available to respond to appropriate questions from
stockholders.
Approval by Stockholders
The ratification of the selection of PricewaterhouseCoopers LLP
as independent public accountants for the Company for fiscal
year 2006 will require the affirmative vote of a majority of the
shares of Common Stock of the Company outstanding on the record
date. Unless otherwise indicated on the proxy, the shares will
be voted FOR ratification of the selection of
PricewaterhouseCoopers LLP as independent public accountants for
the Company for fiscal year 2006.
The Board of Directors recommends a vote FOR ratification of
the selection of PricewaterhouseCoopers LLP as independent
public accountants for the Company for fiscal year 2006.
STOCKHOLDER PROPOSALS 2006 ANNUAL MEETING
Stockholder proposals intended to be presented at the 2006
Annual Meeting must be received by the Company no later than
June 22, 2006, to be eligible for inclusion in the Proxy
Statement and form of proxy for the meeting. Also, under the
Companys By-Laws, other proposals that are not included in
the proxy statement will be considered timely and may be
eligible for presentation at that meeting only if they are
received by the Company in the form of a written notice,
directed to the attention of the Companys Secretary, not
later than September 11, 2006. The notice must contain the
information required by the By-Laws.
28
OTHER BUSINESS
The Board of Directors is aware of no other matter that will be
presented for action at this meeting. If any other matter
requiring a vote of the stockholders properly comes before the
meeting, the Proxy Committee will vote and act according to
their best judgment.
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By Order of the Board of Directors |
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David M. Webster |
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Secretary |
29
Appendix A
DeVry Inc.
Employee Stock Purchase Plan
SECTION 1. PURPOSE.
The DeVry Inc. Employee Stock Purchase Plan, established
effective August 1, 1993 and amended and restated effective
January 1, 2006, is intended to encourage and facilitate
the purchase of the Companys common stock by eligible
employees. It is the intention of the Company to have the Plan
qualify as an employee stock purchase plan within
the meaning of Code Section 423.
SECTION
2. DEFINITIONS.
(a) Board means the board of directors
of the Company.
(b) Code means the Internal Revenue Code
of 1986, as amended.
(c) Common Shares means the shares of
the Companys common stock, par value $0.01 per share.
(d) Company means DeVry Inc., a Delaware
corporation, and any successor thereto.
(e) Compensation means total gross
compensation including salary, bonuses and commissions of an
employee, but excluding any amounts realized from the exercise
of a stock option, or from the sale, exchange or other
disposition of Common Shares acquired under the Plan.
(f) Employer means the Company and any
Subsidiary for which the Board approves participation in the
Plan.
(g) Enrollment Date means the first day
of each Purchase Period.
(h) Fair Market Value means the closing
price of the Companys common stock on the New York Stock
Exchange on the Purchase Date, as reported for New York Stock
Exchange Composite Transactions in the Wall Street Journal or
such other source as the Company shall specify.
(i) Participant means any employee of an
Employer who meets the eligibility requirements of
Section 5 and who has enrolled in the Plan pursuant to
Section 6.
(j) Plan means the DeVry Inc. Employee
Stock Purchase Plan herein set forth and any amendment thereto.
(k) Purchase Date means the last
business day of each month.
(l) Purchase Period means the period
commencing on the first business day following the most recent
Purchase Date and ending on the next Purchase Date.
(m) Purchase Price means ninety-five
percent (95%) of the Fair Market Value of a Common Share.
(n) Subsidiary means a subsidiary of the
Company as defined in Code Section 424(f).
SECTION
3. ADMINISTRATION.
The Plan shall be administered by the Company or its designee or
designees. Subject to the express provisions of the Plan, the
Company shall have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to
it and to make all other determinations necessary or advisable
for the administration of the Plan. The Companys
determinations on the matters referred to in this Section shall
be conclusive. No employee of the Company shall be personally
liable for any decision or determination made in good faith
under the Plan.
A-1
SECTION 4. NUMBER OF COMMON
SHARES OFFERED.
(a) The maximum number of Common Shares that shall be
available for purchase under the Plan shall be 200,000, subject
to adjustment as provided in Section 11. The Common Shares
to be sold under the Plan may at the election of the Company be
either treasury shares (including Common Shares acquired by the
Company directly or through a broker or other agent for use
pursuant to the Plan) or shares originally issued for such
purpose.
(b) No Participant may purchase Common Shares under the
Plan as of any Purchase Date that would result in the aggregate
Fair Market Value (determined as of each applicable Purchase
Date) of all Common Shares purchased under the Plan by the
Participant in the current calendar year to exceed $25,000.
(c) In the event that, as of any Purchase Date,
Participants would purchase more Common Shares than are
currently available under Section 4(a), the maximum number
of Common Shares that any Participant shall be permitted to
purchase on such Purchase Date shall be reduced until the total
number of Common Shares that all Participants purchase in the
aggregate equals the number of Common Shares available under
Section 4(a). The reduction shall be made proportionately
based upon by each Participants accumulated payroll
deductions.
SECTION
5. ELIGIBILITY.
(a) Employees of an Employer shall be eligible to
participate in the Plan as of their first day of employment,
except for those employees (1) whose customary employment
is twenty (20) hours or less per week, (2) whose
customary employment is not for more than five (5) months
in any calendar year, (3) who are prohibited by the laws
and regulations of the nation of their residence or employment
from participating in the Plan, as determined by the Company, or
to whom the Company may not offer or sell Common Shares under
the Plan, or (4) who are executive officers of the Company
or other individuals for whom the Company is required to make
filings pursuant to Section 16 of the Securities Exchange
Act of 1934, as amended.
(b) Notwithstanding anything in the Plan to the contrary,
no employee shall be entitled to participate in the Plan if such
employee, immediately after a purchase of Common Shares, would
own (within the meaning of Code Section 423(b)(3)) Common
Shares possessing five (5%) percent or more of the total
combined voting power of value of all classes of stock of the
Company or its Subsidiaries, actually issued and outstanding
immediately after such purchase.
SECTION 6. ENROLLMENT.
(a) On any Enrollment Date coincident with or next
following the date on which an employee becomes eligible to
participate pursuant to Section 5, the employee may execute
and submit to the Company an agreement in the form approved by
the Company, in order to purchase Common Shares under the Plan.
(b) An election to purchase Common Shares shall not
constitute a contract to purchase. Such an election shall merely
notify the Company of the amount of the payroll deduction
authorized by the Participant for the Purchase Period and each
succeeding Purchase Period until the Participant submits a
subsequent election pursuant to Section 7(b).
SECTION 7. PAYMENT FOR
SHARES.
(a) Concurrently with submitting an election to participate
in the Plan, the Participant shall authorize a payroll deduction
during each Purchase Period. A Participant may elect to have
deducted from payroll a stated whole dollar amount of the
Participants Compensation, subject to the following: (1)
the minimum dollar amount deducted each payroll period must be
at least five dollars ($5.00), and (2) the stated dollar
amount must not exceed ten percent (10%) of the
Participants Compensation for each payroll period. Subject
to the reductions provided in Sections 4(b) and (c), the
total amount of payroll deductions shall be used to purchase
Common Shares. No interest will accrue or be paid on
Participants payroll deductions.
A-2
(b) Each Participants election shall remain in effect
for each Purchase Period subsequent thereto until the
Participant elects either to (1) cease future payroll
deductions, or (2) increase or decrease payroll deductions
by completing and submitting a new agreement to the Company. Any
change shall be permitted only once per calendar month and shall
be effective as of the next issued payroll check, if submitted
to the Company, in writing, no later than ten (10) business
days prior to the issuance of such check.
(c) On each Purchase Date, each Participants
accumulated payroll deductions shall be used to purchase Common
Shares for the Participant, the number of whole or fractional
Common Shares to be determined by dividing the
Participants accumulated payroll deductions by the
Purchase Price on the Purchase Date.
SECTION 8. ISSUANCE AND
DELIVERY OF SHARES.
As soon as practicable after each Purchase Date, the Company
shall initiate a transfer to the third-party administrator of
the Common Shares purchased on behalf of each Participant. The
third-party administrator shall maintain a recordkeeping account
for each Participant to specify the number of Common Shares
purchased for such Participant. The third-party administrator
shall transfer any Common Shares owned by a Participant to such
other account as the Participant shall direct upon compliance by
the Participant with such procedures and payment of such
reasonable fees as the third-party administrator shall establish.
SECTION 9. TERMINATION OF
EMPLOYMENT.
Upon termination of employment with an Employer for any reason
(including death), the Participants accumulated payroll
deductions currently being held by the Company or its designee
that have not been used to purchase Common Shares shall be
returned to the Participant (or Beneficiary) as soon as
administratively practicable.
SECTION 10. RIGHTS NOT
TRANSFERABLE.
The right to purchase Common Shares under the Plan shall not be
transferable by any Participant or exercisable, during the
Participants lifetime, by any person other than the
Participant.
SECTION 11. CHANGES AFFECTING
THE COMMON SHARES.
(a) In the event of a split, subdivision or consolidation
of outstanding Common Shares, or in the event of any
corporate transaction as defined in Treasury
Regulations Section 1.424-1(a)(3), other than a transaction
described in Section 11(b), the number of Common Shares
subject to purchase under Section 4, in the sole discretion of
the Board, may be adjusted in such manner as may be deemed
necessary or equitable by the Board to give proper effect to
such event. Notwithstanding anything in the Plan to the
contrary, all adjustments to the Common Shares shall be made in
such a manner as to comply with the requirements of Code
Sections 423 and 424.
(b) Upon dissolution or liquidation of the Company, or a
merger or consolidation in which the Company is not the
surviving corporation, the Company or its designee shall pay
each Participant the amount of the Participants
accumulated payroll deductions that have not been used to
purchase Common Shares.
SECTION 12. RIGHTS OF A
SHAREHOLDER.
No Participant shall have the rights or privileges of a
shareholder of the Company with respect to Common Shares
purchasable under the Plan unless and until the Participant
shall become the holder of record of the Common Shares.
SECTION 13. AMENDMENT OF THE
PLAN.
The Board may at any time, and from time to time, amend the Plan
in any respect, except that, without the approval of the
shareholders of the Company, no amendment may be made that
changes the number of Common Shares reserved for issuance under
the Plan (other than as provided in Section 11).
A-3
SECTION 14. TERMINATION OF
THE PLAN.
The Board may terminate the Plan at any time in its discretion.
Upon termination of the Plan, the current Purchase Period shall
terminate immediately without additional purchases of Common
Shares, the Company shall terminate payroll deductions, and the
Company or its designee shall refund to the Participants any
accumulated payroll deductions that have not been used to
purchase Common Shares.
SECTION 15. COMPLIANCE WITH
STATUTES AND REGULATIONS.
The issuance of Common Shares under the Plan shall be in
compliance with relevant statutes and regulations of
governmental authorities, including federal and state securities
laws and regulations, and with the rules of the New York
Stock Exchange.
SECTION 16. CHOICE OF
LAW.
All questions concerning the construction, validity and
interpretation of the Plan shall be governed by and construed in
accordance with the internal laws of the State of Delaware,
without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of Delaware.
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Appendix B
DeVry Inc.
Incentive Plan of 2005
1. Purpose. The purposes of the DeVry Inc. Incentive
Plan of 2005 (the Plan) are (i) to encourage
outstanding individuals to accept or continue employment with
DeVry Inc. (DeVry or the Company) and
its subsidiaries or to serve as directors of DeVry, and
(ii) to furnish maximum incentive to those persons to
improve operations and increase profits and to strengthen the
mutuality of interest between those persons and DeVrys
stockholders by providing them stock options and other stock and
cash incentives.
2. Administration. The Plan will be administered by
the Compensation Committee (the Committee) of the
DeVry Board of Directors, which consists of two or more
directors as the Board may designate from time to time, each of
whom shall satisfy such requirements as:
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(a) the Securities and Exchange Commission may establish
for administrators acting under plans intended to qualify for
exemption under Rule 16b-3 or its successor under the
Securities Exchange Act of 1934 (the Exchange Act); |
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(b) the New York Stock Exchange may establish pursuant to
its rule-making authority; and |
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(c) the Internal Revenue Service may establish for outside
directors acting under plans intended to qualify for exemption
under Section 162(m) of the Internal Revenue Code of 1986,
as amended (the Code). |
The Committee shall have the authority to construe and interpret
the Plan and any awards granted thereunder, to establish and
amend rules for Plan administration, to change the terms and
conditions of options and other awards at or after grant, and to
make all other determinations which it deems necessary or
advisable for the administration of the Plan. The determinations
of the Committee shall be made in accordance with their judgment
as to the best interests of DeVry and its stockholders and in
accordance with the purposes of the Plan. A majority of the
members of the Committee shall constitute a quorum, and all
determinations of the Committee shall be made by a majority of
its members. Any determination of the Committee under the Plan
may be made without notice or meeting of the Committee, in
writing signed by all the Committee members. The Committee shall
authorize the Companys chief executive officer (the
CEO) or one or more other officers of the Company to
select employees to participate in the Plan and, from the total
number of option shares and other awards approved by the
Committee, to determine the number of option shares and other
awards to be granted to such participants, except with respect
to awards to officers subject to Section 16 of the Exchange
Act or officers who are or may become covered
employees within the meaning of Section 162(m) of the
Code (Covered Employees). Any reference in the Plan
to the Committee shall include such authorized officer or
officers. The CEO or such other officer(s) authorized to select
employees to receive such option shares and other awards shall
provide written notice of all such action to the Committee.
3. Participants. Participants may consist of all
employees of DeVry and its subsidiaries and all non-employee
directors of DeVry. Any corporation or other entity in which a
50% or greater interest is at the time directly or indirectly
owned by DeVry shall be a subsidiary for purposes of the Plan.
Designation of a participant in any year shall not require the
Committee to designate that person to receive an award in any
other year or to receive the same type or size of award as
granted to the participant in any other year or as granted to
any other participant in any year. The Committee or, if
authorized pursuant to Section 2 hereof, the CEO or one or
more other officers of the Company shall consider all factors
deemed relevant in selecting participants and in determining the
type and amount of their respective awards.
4. Shares Available under the Plan. There is hereby
reserved for issuance under the Plan an aggregate of
3 million shares of DeVry common stock. If there is
(i) a lapse, expiration, termination or cancellation of any
Stock Option or other award prior to the issuance of shares
thereunder or (ii) a forfeiture of any shares of restricted
stock or shares subject to stock awards prior to vesting, the
shares subject to these options or other awards shall be added
to the shares available for awards under the Plan. Shares
covered by an award granted under the Plan shall not be counted
as used unless and until they are actually issued and delivered
to a
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participant. Any shares covered by a Stock Appreciation Right
shall be counted as used only to the extent shares are actually
issued to the participant upon exercise of the right. In
addition, any shares covered by an award which is settled in
cash, shall be added to the shares available for awards under
the Plan. All shares issued under the Plan may be either
authorized and unissued shares or issued shares reacquired by
DeVry. Under the Plan, no participant may receive in any
calendar year (i) Stock Options relating to more than 150,000
shares, (ii) Restricted Stock or Restricted Stock Units
relating to more than 50,000 shares, (iii) Stock
Appreciation Rights relating to more than 125,000 shares, or
(iv) Performance Shares relating to more than 50,000
shares. No non-employee director may receive in any calendar
year Stock Options relating to more than 15,000 shares or
Restricted Stock Units relating to more than 5,000 shares. The
shares reserved for issuance and the limitations set forth above
shall be subject to adjustment in accordance with
Section 15 hereof. All of the available shares may, but
need not, be issued pursuant to the exercise of Incentive Stock
Options. Notwithstanding anything else contained in this
Section 4 the number of shares that may be issued under the
Plan for awards other than Stock Options or Stock Appreciation
Rights shall not exceed a total of 2 million shares
(subject to adjustment in accordance with Section 15
hereof).
5. Types of Awards. Awards under the Plan shall
consist of Stock Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Performance Stock, Performance
Cash Awards, Annual Management Incentive Awards and Other Stock
or Cash Awards, all as described below.
6. Stock Options. Stock Options may be granted to
participants, at any time as determined by the Committee. The
Committee or, if authorized pursuant to Section 2 hereof,
the CEO or one or more other officers of the Company shall
determine the number of shares subject to each option and
whether the option is an Incentive Stock Option. The option
price for each option shall be determined by the Committee but
in the case of an Incentive Stock Option shall not be less than
100% of the fair market value of DeVrys common stock on
the date the option is granted. Each option shall expire at such
time as the Committee shall determine at the time of grant.
Options shall be exercisable at such time and subject to such
terms and conditions as the Committee shall determine; provided,
however, that no option shall be exercisable later than the
tenth anniversary of its grant. The option price, upon exercise
of any option, shall be payable to DeVry in full by
(a) cash payment or its equivalent, (b) tendering
previously acquired shares having a fair market value at the
time of exercise equal to the option price or certification of
ownership of such previously-acquired shares, (c) delivery
of a properly executed exercise notice, together with
irrevocable instructions to a broker to promptly deliver to
DeVry the amount of sale proceeds from the option shares or loan
proceeds to pay the exercise price and any withholding taxes due
to DeVry, and (d) such other methods of payment as the
Committee, at its discretion, deems appropriate. In no event
shall the Committee cancel any outstanding Stock Option for the
purpose of reissuing the option to the participant at a lower
exercise price or reduce the option price of an outstanding
option.
7. Stock Appreciation Rights. Stock Appreciation
Rights (SARs) may be granted to participants at any
time as determined by the Committee. The Committee or, if
authorized pursuant to Section 2 hereof, the CEO or one or
more other officers of the Company shall determine the number of
SARs to be granted to each participant. A SAR may be granted in
tandem with a Stock Option granted under this Plan or on a
free-standing basis. The grant price of a tandem SAR shall be
equal to the option price of the related option. The grant price
of a free-standing SAR shall be equal to the fair market value
of DeVrys common stock on the date of its grant. A SAR may
be exercised upon such terms and conditions and for the term as
the Committee in its sole discretion determines; provided,
however, that the term shall not exceed the option term in the
case of a tandem SAR or ten years in the case of a free-standing
SAR. Upon exercise of a SAR, the participant shall be entitled
to receive payment from DeVry in an amount determined by
multiplying the excess of the fair market value of a share of
common stock on the date of exercise over the grant price of the
SAR by the number of shares with respect to which the SAR is
exercised. The payment may be made in cash or stock, at the
discretion of the Committee. In no event shall the Committee
cancel any outstanding SAR for the purpose of reissuing the
right to the participant at a lower exercise price or reduce the
exercise price of an outstanding SAR.
8. Restricted Stock and Restricted Stock Units.
Restricted Stock and Restricted Stock Units may be awarded to
participants under such terms and conditions as shall be
established by the Committee. The
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Committee or, if authorized pursuant to Section 2 hereof,
the CEO or one or more other officers of the Company shall
determine the amount or number of Restricted Stock and
Restricted Stock Units to be granted to each participant.
Restricted Stock Units provide participants the right to receive
shares at a future date upon the attainment of certain
conditions specified by the Committee. Restricted Stock and
Restricted Stock Units shall be subject to such restrictions and
conditions as the Committee determines, including, without
limitation, any of the following:
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(a) a prohibition against sale, assignment, transfer,
pledge, hypothecation or other encumbrance for a specified
period; |
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(b) a requirement that the holder forfeit such shares or
units in the event of termination of employment during the
period of restriction; or |
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(c) the attainment of performance goals described in
Section 13 hereof. |
All restrictions shall expire at such times as the Committee
shall specify.
9. Performance Stock. The Committee or, if
authorized pursuant to Section 2 hereof, the CEO or one or more
other officers of the Company shall designate the participants
to whom performance stock (Performance Stock) is to
be awarded and determine the number of shares, the length of the
performance period and the other terms and conditions of each
such award; provided the stated performance period will not be
less than 12 months. Each award of Performance Stock shall
entitle the participant to a payment in the form of shares of
common stock upon the attainment of performance goals and other
terms and conditions specified by the Committee.
Notwithstanding satisfaction of any performance goals, the
number of shares issued under a Performance Stock award may be
adjusted by the Committee on the basis of such further
consideration as the Committee in its sole discretion shall
determine. However, the Committee may not, in any event,
increase the number of shares earned upon satisfaction of any
performance goal by any participant who is a Covered Employee.
The Committee may, in its discretion, make a cash payment equal
to the fair market value of shares of common stock otherwise
required to be issued to a participant pursuant to a Performance
Stock award.
10. Performance Cash Awards. The Committee or, if
authorized pursuant to Section 2 hereof, the CEO or one or
more other officers of the Company shall designate the
participants to whom Performance Cash Awards (Performance
Cash Awards) are to be awarded and determine the number of
units and the terms and conditions of each such award; provided
the stated performance period will not be less than
12 months. Each Performance Cash Award shall entitle the
participant to a payment in cash upon the attainment of
performance goals and other terms and conditions specified by
the Committee.
Notwithstanding the satisfaction of any performance goals, the
amount to be paid under a Performance Cash Award may be adjusted
by the Committee on the basis of such further consideration as
the Committee in its sole discretion shall determine. However,
the Committee may not, in any event, increase the amount earned
under Performance Cash Awards upon satisfaction of any
performance goal by any participant who is a Covered Employee
and the maximum amount earned by a Covered Employee in any
calendar year may not exceed $1,000,000. The Committee may, in
its discretion, substitute actual shares of common stock for the
cash payment otherwise required to be made to a participant
pursuant to a Performance Cash Award.
11. Annual Management Incentive Awards. The
Committee may designate DeVry executive officers who are
eligible to receive a monetary payment in any calendar year
based on a percentage of an incentive pool equal to 5% of
DeVrys consolidated operating earnings for the calendar
year. The Committee shall allocate an incentive pool percentage
to each designated participant for each calendar year. In no
event may the incentive pool percentage for any one participant
exceed 20% of the total pool. Consolidated operating earnings
shall mean the consolidated earnings before income taxes of the
Company, computed in accordance with generally accepted
accounting principles, but shall exclude the effects of Special
Items. Special Items shall include (i) gains or losses on
the disposition of a business, (ii) changes in tax or
accounting regulations or laws, or (iii) the effect of a
merger or acquisition, as determined in accordance with
generally accepted accounting principles.
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As soon as possible after the determination of the incentive
pool for a Plan year, the Committee shall calculate the
participants allocated portion of the incentive pool based
upon the percentage established at the beginning of the calendar
year. The participants incentive award then shall be
determined by the Committee based on the participants
allocated portion of the incentive pool subject to adjustment in
the sole discretion of the Committee. In no event may the
portion of the incentive pool allocated to a participant who is
a Covered Employee be increased in any way, including as a
result of the reduction of any other participants
allocated portion.
12. Other Stock or Cash Awards. In addition to the
incentives described in sections 6 through 11 above, the
Committee may grant other incentives payable in cash or in
common stock under the Plan as it determines to be in the best
interests of DeVry and subject to such other terms and
conditions as it deems appropriate; provided an outright grant
of stock will not be made unless it is offered in exchange for
cash compensation that has otherwise already been earned by the
recipient.
13. Performance Goals. Awards of Restricted Stock,
Restricted Stock Units, Performance Stock, Performance Cash
Awards and other incentives under the Plan shall be made subject
to the attainment of performance goals relating to one or more
business criteria within the meaning of Section 162(m) of
the Code, including, but not limited to, cash flow; cost; ratio
of debt to debt plus equity; profit before tax; economic profit;
earnings before interest and taxes; earnings before interest,
taxes, depreciation and amortization; earnings per share;
operating earnings; economic value added; ratio of operating
earnings to capital spending; free cash flow; net profit; net
sales; sales growth; price of DeVry common stock; return on net
assets, equity or stockholders equity; market share; or
total return to stockholders (Performance Criteria).
Awards of Stock Options under the Plan may be made subject to
attainment of such performance goals. Any Performance Criteria
may be used to measure the performance of the Company as a whole
or any business unit of the Company and may be measured relative
to a peer group or index. Any Performance Criteria may include
or exclude Special Items (as defined in section 11 above). In
all other respects, Performance Criteria shall be calculated in
accordance with the Companys financial statements,
generally accepted accounting principles, or under a methodology
established by the Committee prior to the issuance of an award
which is consistently applied and identified in the audited
financial statements, including footnotes, or the Management
Discussion and Analysis section of the Companys annual
report. However, the Committee may not in any event increase the
amount of compensation payable to a Covered Employee upon the
attainment of a performance goal.
14. Change in Control. Except as otherwise
determined by the Committee at the time of grant of an award,
upon a Change in Control of DeVry, all performance goals shall
be deemed achieved at target levels and all other terms and
conditions met; all outstanding Stock Options and SARs shall
become vested and exercisable; all restrictions on Restricted
Stock and Restricted Stock Units shall lapse; all Performance
Stock shall be delivered; all Performance Cash Awards and
Restricted Stock Units shall be paid out as promptly as
practicable; all Annual Management Incentive Awards shall be
paid out based on the consolidated operating earnings of the
immediately preceding year or such other method of payment as
may be determined by the Committee at the time of award or
thereafter but prior to the Change in Control; and all Other
Stock or Cash Awards shall be delivered or paid. A Change
in Control shall mean:
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(i) the sale or disposition by the Company of all or
substantially all of the assets of the Company (or any
transaction having a similar effect); |
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(ii) the consummation of a merger or consolidation of the
Company with any other entity other than (A) a merger or
consolidation which would result in the voting interests of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting interests of the surviving entity) at least 50% of
the combined voting power of the voting interests of the Company
or such surviving entity outstanding immediately after such
merger or consolidation, or (B) a merger or consolidation
effected to implement a recapitalization of the Company (or
similar transaction); or |
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(iii) the acquisition, other than from the Company, by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, |
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as amended (the Exchange Act)), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of the then outstanding
voting interests of the Company but excluding, for this purpose,
any such acquisition by the Company or any of its affiliates, or
by any employee benefit plan (or related trust) of the Company
or any of its affiliates. |
15. Adjustment Provisions.
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(a) In the event of any change affecting the shares of
DeVry Common Stock by reason of stock dividend, stock split,
reverse stock split, spin-off, recapitalization, merger,
consolidation, reorganization, share combination, exchange of
shares, stock rights offering, liquidation, extraordinary cash
dividend, disaffiliation of a subsidiary or similar event, the
Committee shall make such adjustments (if any) as it deems
appropriate and equitable, in its discretion, to outstanding
awards to reflect such event, including without limitation,
(1) adjustments in the aggregate number or class of shares
which may be distributed under the Plan, the maximum number of
shares which may be made subject to an award in any calendar
year and in the number, class and option price or other price of
shares subject to the outstanding awards granted under the Plan;
(2) the substitution of other property (including, without
limitation, other securities) for the stock covered by
outstanding awards; and (3) in connection with any
disaffiliation of a subsidiary, arrangement for the assumption,
or replacement with new awards, of awards held by participants
employed by the affected subsidiary by the entity that controls
the subsidiary following the disaffiliation. |
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(b) In the event of any merger, consolidation or
reorganization of DeVry with or into another corporation which
results in the outstanding common stock of DeVry being converted
into or exchanged for different securities, cash or other
property, or any combination thereof, there shall be
substituted, on an equitable basis as determined by the
Committee in its discretion, for each share of common stock then
subject to an award granted under the Plan, the number and kind
of shares of stock, other securities, cash or other property to
which holders of common stock of DeVry will be entitled pursuant
to the transaction. |
16. Substitution and Assumption of Awards. The Board
of Directors or the Committee may authorize the issuance of
awards under this Plan in connection with the assumption of, or
substitution for, outstanding awards previously granted to
individuals who become employees of DeVry or any subsidiary as a
result of any merger, consolidation, acquisition of property or
stock, or reorganization other than a Change in Control, upon
such terms and conditions as the Committee may deem appropriate.
17. Nontransferability. Each award granted under the
Plan shall not be transferable otherwise than by will or the
laws of descent and distribution and each Stock Option and SAR
shall be exercisable during the participants lifetime only
by the participant or, in the event of disability, by the
participants personal representative. In the event of the
death of a participant, exercise of any award or payment with
respect to any award shall be made only by or to the executor or
administrator of the estate of the deceased participant or the
person or persons to whom the deceased participants rights
under the award shall pass by will or the laws of descent and
distribution. Notwithstanding the foregoing, at its discretion,
the Committee may permit the transfer of a Stock Option by the
participant, on a general or specific basis, subject to such
terms and conditions as may be established by the Committee.
18. Taxes. DeVry shall be entitled to withhold the
amount of any tax attributable to any amounts payable or shares
deliverable under the Plan, after giving the person entitled to
receive such payment or delivery notice and DeVry may defer
making payment or delivery as to any award, if any such tax is
payable until indemnified to its satisfaction. A participant may
pay all or a portion of any required withholding taxes arising
in connection with the exercise of a Stock Option or SAR or the
receipt of shares hereunder by electing to have DeVry withhold
shares of common stock, having a fair market value equal to the
amount required to be withheld.
19. Duration, Amendment and Termination. No award
shall be granted more than ten years after the date of adoption
of this Plan by the Board of Directors; provided, however, that
the terms and conditions
B-5
applicable to any award granted on or before such date may
thereafter be amended or modified by mutual agreement between
DeVry and the participant, or such other person as may then have
an interest therein. The Board of Directors or the Committee may
amend the Plan from time to time or terminate the Plan at any
time. However, no such action shall reduce the amount of any
existing award or change the terms and conditions thereof
without the participants consent. No material amendment of
the Plan shall be made without stockholder approval.
20. Fair Market Value. The fair market value of
DeVrys common stock at any time shall be determined in
such manner as the Committee may deem equitable, or as required
by applicable law or regulation.
21. Other Provisions.
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(a) Any award under the Plan may also be subject to other
provisions (whether or not applicable to an award granted to any
other participant) as the Committee determines appropriate,
including provisions intended to comply with federal or state
securities laws and stock exchange requirements, understandings
or conditions as to the participants employment,
requirements or inducements for continued ownership of common
stock after exercise or vesting of awards, forfeiture of awards
in the event of termination of employment shortly after exercise
or vesting, or breach of noncompetition or confidentiality
agreements following termination of employment, or provisions
permitting the deferral of the receipt of an award for such
period and upon such terms as the Committee shall determine. |
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(b) In the event any award under this Plan is granted to an
employee who is employed or providing services outside the
United States and who is not compensated from a payroll
maintained in the United States, the Committee may, in its sole
discretion, modify the provisions of the Plan as they pertain to
such individuals to comply with applicable law, regulation or
accounting rules. |
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(c) The Committee, in its sole discretion, may require a
participant to have amounts or shares of common stock that
otherwise would be paid or delivered to the participant as a
result of the exercise or settlement of an award under the Plan
credited to a deferred compensation or stock unit account
established for the participant by the Committee on the
Companys books of account. |
22. Governing Law. The Plan and any actions taken in
connection herewith shall be governed by and construed in
accordance with the laws of the state of Delaware (without
regard to applicable Delaware principles of conflict of laws).
23. Stockholder Approval. The Plan was adopted by
the Board of Directors on September 13, 2005, subject to
stockholder approval. The Plan and any awards granted thereunder
shall be null and void if stockholder approval is not obtained
at the next annual meeting of stockholders.
B-6
Appendix C
DeVry Inc.
Director Nominating Process
(Adopted by the Board of Directors on August 10,
2004)
The Governance Committee (Committee) of the Board of
Directors (Board) is responsible for making
recommendations of nominees for directors to the Board. Nominees
are selected on the basis of, among other things, knowledge,
experience, skills, expertise, diversity, personal and
professional integrity, business judgment, time availability in
light of other commitments, absence of conflicts of interest and
such other relevant factors that the Committee considers
appropriate in the context of the needs of the Board. When
considering nominees the Committee seeks to ensure that the
Board as a whole possesses, and individual members possess at
least one of the following competencies:
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accounting and finance, |
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business judgment, |
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management, |
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industry knowledge, |
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leadership, |
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strategy/vision. |
In screening director nominees, the Committee will review
potential conflicts of interest, including interlocking
directorships and substantial business, civic, and social
relationships with other members of the Board that could impair
the prospective nominees ability to act independently.
The Committee will not only consider nominees that it
identifies, but will consider nominees submitted by shareholders
in accordance with the process for shareholder nominees
identified in our By-laws. All shareholder nominees are to be
submitted in writing to the Corporate Secretary, DeVry Inc., One
Tower Lane, Oakbrook Terrace, IL 60181-4624, not less than
60 days prior to the anniversary of the immediately
preceding annual meeting. Such shareholders notice shall
be signed by the shareholder of record who intends to make the
nomination (or his duly authorized proxy):
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a. |
the name and address, as they appear on our books, of such
shareholder and the beneficial owner or owners, if any, on whose
behalf the nomination is made; |
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b. |
the number of shares of DeVry Inc. common stock which are
beneficially owned by such shareholder or beneficial owner or
owners; |
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c. |
a representation that such shareholder is a holder of record
entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to make the nomination; |
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the name and residence address of the person or persons to be
nominated, |
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e. |
a description of all arrangements or understandings between such
shareholder or beneficial owner or owners and each nominee and
any other person or persons (naming such person or persons)
pursuant to which the nomination is to be made by such
shareholder, |
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f. |
such other information regarding each nominee proposed by such
shareholder as would be required to be disclosed in
solicitations of proxies for elections of directors, or would be
otherwise required to be disclosed, in each case pursuant to
Regulation 14A under the Exchange Act, including any information
that would be required to be included in a proxy statement filed
pursuant to Regulation 14A had the nominee been nominated
by the Board of Directors and |
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g. |
the written consent of each nominees to be named in a proxy
statement and to serve as a director if so elected; and |
C-1
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in the case of any other business that such shareholder proposes
to bring before the meeting, |
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a brief description of the business desired to be brought before
the meeting and, if such business includes a proposal to amend
these By-laws, the language of the proposed amendment, |
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such shareholders and beneficial owners or
owners reasons for conducting such business at the meeting
and |
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any material interest in such business of such shareholder and
beneficial owner or owners. |
In identifying potential nominees and determining which nominees
to recommend to the Board, the Committee may retain the services
of a professional search firm or other third party advisor. In
connection with each vacancy, the Committee will develop a
specific set of ideal characteristics for the vacant director
position. The Committee will look at nominees it identifies and
any identified by shareholders on an equal basis using these
characteristics and the general criteria identified above.
C-2
Appendix D
DeVry Inc.
Audit Committee Charter
I. Authority
The Audit Committee (the Committee) of DeVry
Inc. (the Company) is established, pursuant
to the Bylaws of the Company, to assist the Board of Directors
(the Board) in fulfilling its oversight
responsibilities for the Company.
II. Purpose
The purpose of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities of the
Company, including, but not limited to oversight of the
following:
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1. quality and integrity of the Companys financial
statements; |
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2. the disclosure and financial reporting process,
including the Companys disclosure controls and procedures; |
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3. the Companys compliance with policies under the
Companys Code of Business Conduct and Ethics
(Code) and with legal and regulatory
requirements; |
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4. qualifications, independence and performance of the
Companys independent accountants; |
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5. performance of the Companys internal audit
function; and |
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6. maintenance of internal controls regarding financial,
accounting and legal compliance consistent with good business
practices. |
In so doing, it is the responsibility of the Committee to
encourage open communication between the Committee, the outside
auditors, the internal auditors (or other persons carrying on
the internal audit function) and management of the Company.
The Committees responsibilities are ones of thoughtful
oversight, recognizing that the Companys management is
responsible for the integrity and preparation of the
Companys financial statements and that the Companys
outside auditors are responsible for auditing those financial
statements.
In discharging its oversight role, the Committee is empowered to
(i) investigate any matter brought to its attention with
full access to all books, records, facilities and personnel of
the Company and (ii) engage and, on behalf of the Company,
compensate, or require the compensation of, independent counsel
and other advisers, including accounting advisers, as it
determines necessary to carry out its duties.
III. Membership
The Committee shall be comprised of not less than three members
of the Board. The Companys Nominating and Governance
Committee (Nominating Committee) shall
recommend nominees for appointment to the Committee annually and
as vacancies or newly created positions occur. Committee members
shall be appointed by the Board and may be removed by the Board
at any time. The Nominating Committee shall recommend to the
Board, and the Board shall designate, the Chair of the
Committee. Members of the Committee shall serve for one year or
until their successors are duly elected and qualified.
Each member of the Committee shall be independent in accordance
with the rules of the Securities and Exchange Commission (the
SEC), New York Stock Exchange (the
NYSE) and any other regulatory body having
jurisdiction over the Companys financial reporting. All
members shall be financially literate in accordance with the
rules of the NYSE. At least one member of the Committee shall
have auditing, accounting or related financial management
expertise, as the Board interprets such qualification in its
business judgment. In addition, no member of the Committee may
serve on the audit committee of more than three
D-1
public companies, including the Company, unless the Board
determines that such simultaneous service will not impair the
ability of such member to effectively serve on the Committee.
IV. Responsibilities
The duties and responsibilities of a member of the Committee
contained herein shall be in addition to those required for a
member of the Board.
The primary general responsibility of the Committee is to
oversee the Companys financial reporting process on behalf
of the Board and report the results of its activities to the
Board. While the Committee has the responsibilities and powers
set forth in this charter, it is not the duty of the Committee
to plan or conduct audits or to determine that the
Companys financial statements are complete and accurate
and are in accordance with generally accepted accounting
principles (GAAP) and requirements of law.
Management is responsible for the preparation, presentation and
integrity of the Companys financial statements, and for
the appropriateness and legality of the accounting principles
and reporting policies that are used by the Company and, along
with the internal auditors, for developing and maintaining
systems of internal accounting and financial controls. The
outside auditors are responsible for auditing the Companys
financial statements annually, for reviewing the Companys
unaudited interim financial statements and for reporting on
certain matters to the Committee. The Committee expects the
auditors and management to call to their attention any
accounting, auditing, internal accounting control, regulatory or
other related matters that they believe warrant consideration or
action.
While the fundamental responsibility for the Companys
financial statements and disclosures rests with management, as
reviewed by the outside auditors, the Committee should request
management, internal auditors and outside auditors to inform
them of, and should review:
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major issues regarding accounting principles and financial
statement presentations, including any significant changes in
the Companys selection or application of accounting
principles, and major issues as to the adequacy of the
Companys internal controls and any special audit steps
adopted in light of material control deficiencies; |
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analyses prepared by management and/or the independent auditors
setting forth significant financial reporting issues and
judgments made in connection with the preparation of the
financial statements, including analyses of the effects of
alternative GAAP methods on the financial statements; |
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the effect of regulatory and accounting initiatives, as well as
off-balance sheet structures, on the financial statements of the
Company; |
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the effect of insider transactions on the financial statements
of the Company under Section 401 of the Sarbanes-Oxley Act
of 2002 (Sarbanes-Oxley); |
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earnings press releases and other reports or written or
electronic material (including website posted material)
disclosing pro forma, or adjusted
non-GAAP, information; and |
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communications received from and Company responses to
governmental officials and generally reliable published reports,
including such communications and responses concerning
significant litigation, contingencies and claims against the
Company, that raise material issues regarding the Companys
financial statements or accounting matters. |
Within the overall general responsibility the following shall be
specific duties and responsibilities of the Committee. These are
set forth as a guide with the understanding that the Committee
may supplement them as appropriate, but shall have them reviewed
and approved annually by the Board.
1. Financial Statements
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Meet to review and discuss with management and the outside
auditor the annual audited and quarterly unaudited financial
statements of the Company prior to their being filed with the
SEC, including: (a) an analysis of the outside
auditors judgment as to the quality of the Companys
accounting |
D-2
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principles and judgments made in connection with the preparation
of the financial statements, including analyses of the effect of
alternative GAAP methods on the financial statements;
(b) significant financial reporting issues and judgments
made in connection with the preparation of the financial
statements, including any significant changes in the
Companys selection or application of accounting principles
and financial statement presentations; (c) the effect of
regulatory and accounting initiatives, as well as off-balance
sheet structures, on the Companys financial statements;
and (d) the Companys specific disclosures under
Managements Discussion and Analysis of Financial
Condition and Results of Operations. |
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Receive, review and discuss reports from the outside auditors
on: (a) all critical accounting policies and practices to
be used; (b) all alternative treatments of financial
information within GAAP that have been discussed with
management, ramifications of the use of such alternative
disclosures and treatments, and the treatment preferred by the
outside auditors; (c) any communications between the
outside auditors and its national office respecting auditing or
accounting issues presented by the audit engagement; and
(d) other material written communications between the
outside auditors and management, such as any management letter,
schedule of unadjusted differences, reports on observations and
recommendations on internal controls or a listing of adjustments
and reclassifications not recorded. |
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Review and discuss with management and the outside auditor
information regarding any second opinions sought by
management from an outside auditor with respect to the
accounting treatment of a particular event or transaction. |
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Review, prior to issuance, earnings releases, and review and
discuss generally the types of information to be disclosed, and
the type of presentations to be made, including the use of
non-GAAP financial measures, in the Companys
earnings press releases, as well as financial information and
earnings guidance provided to analysts and ratings agencies. The
Chair of the Committee may represent the entire Committee for
purposes of the review of earnings release and such other
information. |
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Review and discuss with the co-CEOs and CFO the basis for the
certifications to be provided in the Companys
Form 10-K and Form 10-Qs. |
2. Internal Control
Environment
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Review and discuss with the outside auditors, the head of the
internal audit department (or other persons responsible for the
internal audit function) and management the adequacy and
effectiveness of the Companys internal accounting and
financial controls, including: |
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any significant deficiencies in the design or operation of the
internal controls; |
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any material weaknesses in the internal controls; |
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any special steps adopted in light of any material control
deficiencies; |
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any alleged fraud (whether or not material) that involves
management or the Companys employees who have a
significant role in the Companys internal controls; and |
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the Company disclosure controls and procedures and management
reports thereon. |
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Review managements periodic assessments of the
effectiveness of the Companys internal controls over
financial reporting and procedures for financial reporting and
the outside auditors attestations as to managements
assessments, as well as managements periodic
certifications as to internal controls over financial reporting
and related matters, including disclosures to the Committee as
to deficiencies or weaknesses in internal controls and
procedures for financial reporting or fraud by persons involved
therewith. |
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Discuss with management, the head of the internal audit
department (or other persons responsible for the internal audit
function) and the outside auditors the adequacy and
effectiveness of the Companys accounting and financial
controls, including the Companys policies and procedures
to assess, monitor |
D-3
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and manage the Companys exposure to risk (business and
financial) and the steps management has taken with respect
thereto. |
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Review all related party transactions and the controls that
require such transactions to be appropriately reviewed, approved
and disclosed as required. |
3. Internal Audit
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Oversee and discuss the internal auditing activities and
performance, including the appointment, and replacement when
appropriate, of the head of the Companys internal audit
department (or other persons responsible for the internal audit
function), the internal audit charter and the budget and
staffing for the internal audit department. |
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Review with the head of the internal audit department (or other
persons responsible for the internal audit function) the scope
of the annual operational audit plan and receive, on a periodic
basis, summary audit reports from completed audits, progress
reports on the annual audit plan and a status report detailing
actions taken, or to be taken, by management to address
outstanding issues or findings. |
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Review reports of internal audit activity and recommendations. |
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Review with the outside auditors the performance and
effectiveness of the internal audit function and its role in the
internal control environment. |
4. External Audit
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The Committee shall be directly responsible for, and have sole
authority as to, the appointment (subject to shareholder
ratification), retention, termination and compensation (on
behalf of the Company) and oversight of the work of the outside
auditors, including resolution of disagreements between
management and the auditors regarding accounting matters and
financial reporting, all for the purpose of such outside
auditors preparation and issuance of audit reports,
periodic reports, attestations, comfort letters and other
related work as to the Companys financial statements,
financial information and accounting matters. The outside
auditors shall report directly to the Committee. |
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The Committee shall have sole authority to, and must,
pre-approve all audit and non-audit services provided by the
outside auditors to the Company (including all fees and terms of
service but subject to any de minimis exceptions permitted by
law for non-audit services, which must, in any event, be
approved annually by the Committee prior to completion of the
annual audit). The Committee may take any measures that it
determines to be appropriate to assure that the independent
auditors are not engaged to perform specific non-audit services
proscribed by law or regulation. The Committee may delegate
pre-approval authority to a member or members of the Committee
or to a subcommittee of the Committee. The decisions of any
Committee members or subcommittee to whom pre-approval authority
is delegated must be presented to the full Committee at its next
scheduled meeting. |
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At least annually, consider the independence of the outside
auditors, including whether the outside auditors
performance of permissible non-audit services is compatible with
the auditors independence, and obtain from the outside
auditors a written statement delineating all relationships
between the outside auditors and the Company and any other
relationships that may adversely affect the independence of the
auditor. Discuss with the outside auditors any disclosed
relationships or services that may impact the objectivity and
independence of the outside auditors. |
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At least annually, the Committee shall obtain and review a
report by the outside auditors describing |
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the outside auditing firms internal quality control
procedures; |
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any material issues raised by the most recent internal quality
control review or reviews by the Public Company Accounting
Oversight Board of the auditing firm, or by any inquiry or
investigation by governmental or professional authorities,
within the preceding five years, respecting one or more |
D-4
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independent audits carried out by the auditing firm, and any
steps taken to deal with any such issues; and |
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all relationships between the outside auditors and the Company
(to assess the auditors independence). |
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Based upon the foregoing two paragraphs, the outside
auditors work throughout the year, and any other relevant
factors, evaluate the performance of the Companys outside
auditors in the fulfillment of their role, including a review
and evaluation of the lead partner of the Companys outside
auditors. In making its evaluation, the Committee shall take
into account the opinions of management and the head of the
Companys internal audit department (or other persons
responsible for the internal audit function). |
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Ensure the rotation of the lead and concurring audit partners
required under Section 203 of Sarbanes-Oxley and applicable
SEC and NYSE rules. In addition, from time to time the Committee
shall further consider whether there should be a regular
rotation of the annual audit among independent outside auditors. |
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Meet separately with the independent accountants to discuss any
matters that the Committee or the outside auditors believe
should be discussed privately, including any audit problems or
difficulties and managements response. |
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Review periodic communications required by external audit
regulators between the outside auditors and the Audit Committee
including relevant matters in Statement on Auditing Standards
(SAS) No. 61 and SAS No. 100 (as modified,
amended or supplemented from time to time). The communication
shall include the outside auditors judgements about the
quality and applicability of the Companys accounting
principles, appropriateness of underlying estimates, and the
effect of significant events, transactions and changes in
accounting estimate applied to the Companys financial
reporting. |
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Review with management and the outside auditors the scope and
results of the annual audit, including any problems,
difficulties or restrictions encountered during the audit,
including any written communications between the outside
auditors and management. |
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Recommend to the Board whether the audited financial statements
should be included in the annual report on Form 10-K. |
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Set, and recommend for Board approval, clear hiring policies for
the Company as to employees or former employees of the outside
auditors that meet legal requirements and NYSE rules. |
5. Compliance
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Establish procedures for receipt, retention and handling of
confidential and anonymous submission by employees or others
relating to controls, accounting or auditing matters and any
other matters as might materially affect the Company
(Reports). |
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Discuss with management, the head of the internal audit
department (or other persons responsible for the internal audit
function) and the outside auditors the Companys adherence
to legal, regulatory and ethics compliance programs, including
its Code, and the steps management has taken to require and
monitor such adherence by Company employees and agents. |
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Review and discuss with the Companys Chief Compliance
Officer, Chief Financial Officer, General Counsel and other
persons responsible for monitoring compliance with the Code the
Companys annual reports on the Code, including
investigations, if any, and corrective measures taken in
response to Reports received by the Company. Review and discuss
with such persons, at least annually, the Companys
procedures for reviewing, granting and, to the extent required
by law, regulation or NYSE rules, promptly disclosing any
waivers of the Code for directors and executive officers. |
D-5
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Review with the Companys General Counsel legal matters
that may have a material impact on the Companys financial
statements, the Companys compliance policies and any
material reports or inquiries received from regulators or
governmental agencies. |
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Report to the Board at least annually on the performance of the
Chief Compliance Officer. |
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Review and discuss the status of compliance with accounting,
legal, regulatory, tax and other developments of major
significance to the Company. |
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Obtain assurances from the outside auditor that Section 10A
of the Securities Exchange Act of 1934 has not been implicated. |
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Ensure that the Code is distributed annually to Company
employees, Directors and others covered by its contents. |
6. Other
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Review and reassess this Charter of the Committee on an annual
basis, or more frequently as appropriate, and recommend required
changes to the Board. |
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Maintain minutes and records of all meetings and activities of
the Committee. |
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Have included in the Companys annual proxy relating to
meetings of shareholders, all reports and information as may be
required by SEC or other regulations. |
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Perform an annual evaluation of the Committees performance. |
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Require each of its members to certify annually that such person
meets the independence requirements prescribed by law and/or
stock exchange rules, including that such person has received no
compensation from the Company other than director and Board
committee fees. |
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Perform any other activities and special reviews consistent with
the Charter, the Companys Bylaws and governing law as the
Committee or the Board deems necessary or appropriate. |
V. Committee Meetings
The Committee shall meet at least four times a year, or more
frequently as circumstances dictate at the discretion of the
Chair. The Committee shall establish an agenda for each meeting.
The Committee may ask representatives of the Companys
management and/or others to attend Committee meetings and to
provide pertinent information as appropriate. The Committee
shall periodically meet separately in executive session with
each of management, the head of the internal audit department
(or other personnel responsible for the internal audit function)
and the outside auditors.
VI. Meetings with the Board
of Directors
The Committee shall meet with the Board at each regularly
scheduled Board meeting, or such additional times as the Board
deems appropriate, to discuss the status of its work. The
Committee will provide the Board with a report of its activities
following each meeting of the Committee at the next regularly
scheduled meeting of the Board, or sooner depending on the
circumstances. The Committee shall review with the Board any
issues that arise as to the quality or integrity of the
Companys financial statements, the Companys
compliance with legal or regulatory requirements, the
performance and independence of the Companys outside
auditors or the performance of the internal audit function.
VII. Access to the
Corporation and Resources
The Committee shall have access to all Company books, records,
facilities and personnel needed to perform its responsibilities,
including meetings with the independent accountants, the
personnel performing the internal auditing function, General
Counsels office and any other personnel deemed necessary.
The Committee shall have the authority to engage independent
legal, accounting and other advisers, as it
D-6
determines necessary to carry out its duties, and be provided by
the Company with appropriate funding, as determined by the
Committee, in order to discharge its responsibilities.
VIII. Certification
This Charter of the Audit Committee, as amended, was duly
approved and adopted by the Board of Directors on the 3rd day of
May, 2005.
D-7
DeVry Inc.
ONE TOWER LANE
SUITE 1000
OAKBROOK TERRACE, IL 60181
AUTO DATA PROCESSING
INVESTOR COMM SERVICES
ATTENTION:
TEST PRINT
51 MERCEDES WAY
EDGEWOOD, NY
11717
NAME
DEVRY INC. COMMON
DEVRY INC. COMMON
DEVRY INC. COMMON
DEVRY INC. COMMON
DEVRY INC. COMMON
DEVRY INC. COMMON
DEVRY INC. COMMON
DEVRY INC. COMMON
VOTE BY INTERNET-www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up
until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card
in hand when you access the web site.
VOTE BY PHONE -1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time
the day before the cut-off date or meeting date. Have your proxy card in hand when you call and
then follow the simple instructions the Vote Voice provides you.
VOTE BY MAIL
Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided
or return it to DeVry Inc., c/o ADP, 51 Mercedes Way, Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: x
DVINC1 KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
DeVry Inc.
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1.
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Election of Directors: |
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Nominees: Class III (2006) |
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01 William T. Keevan |
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For |
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Withhold |
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For All |
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To withhold authority to vote, mark For All Except |
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Nominees: Class II (2008) |
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All |
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All |
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Except |
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and write the nominees number on the line below. |
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02 David S. Brown |
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03 Dennis J. Keller |
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04 Frederick A. Krehbiel |
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05 Fernando Ruiz |
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Vote On Proposals |
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For |
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Against |
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Abstain |
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2.
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Approval of the Amendment and Restatement of the DeVry Inc. Employee Stock Purchase Plan.
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3.
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Approval of the DeVry Inc. Incentive Plan of 2005.
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4.
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Ratification of selection of PriceWaterhouseCoopers LLP as Independent Public Accountants.
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Please date and sign below exactly as your name(s)
appear(s) hereon. Joint owners should all sign. When signing
in a representative capacity (such as for an estate, trust,
corporation or partnership), please indicate title or
capacity. |
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For comments, please check this box and write them
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AUTO DATA PROCESSING |
on the back where indicated
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INVESTOR COMM SERVICES |
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ATTENTION: |
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TEST PRINT |
Please indicate if you plan to attend this meeting
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51 MERCEDES WAY |
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EDGEWOOD, NY |
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11717 |
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Yes |
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No |
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251893103 |
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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P20658
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Signature (Joint Owners)
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Date
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86 |
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PROXY
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DeVry Inc.
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PROXY |
This Proxy is solicited on behalf of the Board of Directors.
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The undersigned hereby appoints David M. Webster and Norman M. Levine as proxies, each with the
power to act alone and with full power of substitution and revocation, to represent and vote, as
specified on the other side of this Proxy, all shares of Common Stock of DeVry Inc. that the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be held on Wednesday,
November 9, 2005 at 9:00 a.m. Central Standard Time at Drury Lane Theatre, Crystal Room, 100 Drury
Lane, Oakbrook Terrace, IL 60181, and all adjournments thereof.
The shares represented by this Proxy will be voted as specified. If no choice is specified, this
Proxy will be voted FOR Proposals 1,2, 3 and 4.
The proxies are authorized, in their discretion, to vote such shares upon any other business that
may properly come before the Annual Meeting.
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Comments: |
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(If you noted any comments above, please check the corresponding box on the reverse side.) |
PLEASE SIGN, DATE AND RETURN PROMPTLY IN ENCLOSED PREPAID ENVELOPE.
(Continued and to be signed on reverse side.)