def14a
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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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)
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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,
2007
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., Central Standard
Time, Wednesday, November 7, 2007, at the Doubletree Guest
Suites & Conference Center, 2111 Butterfield Road,
Downers Grove, 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
also is discussed in the enclosed 2007 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.
Sincerely,
Dennis Keller
Board Chair
TABLE OF CONTENTS
DEVRY
INC.
One Tower Lane, Suite 1000
Oakbrook Terrace, Illinois 60181
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On
November 7, 2007
You are cordially invited to attend the Annual Meeting of
Stockholders of DeVry Inc. at the Doubletree Guest
Suites & Conference Center, 2111 Butterfield Road,
Downers Grove, Illinois, on Wednesday, November 7, 2007, at
9:00 a.m. Central Standard Time, for the following
purposes:
(1) To approve an amendment of Article Seventh of the
Companys Restated Certificate of Incorporation to change
the maximum number of directors the Company may have;
(2) To elect five Directors as Class I Directors to
serve until the 2010 Annual Meeting of Stockholders;
(3) To ratify the selection of PricewaterhouseCoopers LLP
as the independent registered public accounting firm for the
Company for the current fiscal year; and,
(4) 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 2007.
The Board of Directors has fixed a record date of
September 14, 2007. 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. The Company will broadcast
the Annual Meeting and its presentation by management live via
webcast. The webcast may be accessed by visiting the Investor
Relations section of the Companys web site at
www.devryinc.com. Participants are encouraged to visit the site
at least 15 minutes prior to the start of the meeting to
download and install any necessary audio software.
By Order of the Board of Directors,
GREGORY S. DAVIS
Secretary
October 5, 2007
DEVRY
INC.
One Tower Lane, Suite 1000
Oakbrook Terrace, Illinois 60181
ANNUAL MEETING OF STOCKHOLDERS, TO BE HELD ON NOVEMBER 7,
2007
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 7, 2007, 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 5, 2007.
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. Because each proposal (as required
by the Companys Restated Certificate of Incorporation (the
Certificate of Incorporation)) requires the
affirmative vote of a majority of the shares of Common Stock of
the Company outstanding on the record date, the effect of each
of these is the same as a no vote. 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 approval of the amendment to the
Certificate of Incorporation, the election of five Directors and
the ratification of the selection of the independent registered
public accounting firm 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 Employee
Stock Purchase Plan or the trustee of the Profit Sharing
Retirement Plan 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 14, 2007, the Company had
71,112,722 shares of Common Stock ($0.01 par value)
outstanding. Stockholders are entitled to one vote per share
owned on the record date.
AMENDMENT
OF THE CERTIFICATE OF INCORPORATION TO CHANGE THE MAXIMUM NUMBER
OF DIRECTORS THE COMPANY MAY HAVE
Article Seventh of the current Certificate of Incorporation
requires that the Companys Board of Directors be comprised
of between not less than 3 nor more than twelve Directors,
as determined by a majority vote of the whole Board. The Board
currently has fixed the number of Directors of the Company at
twelve. As of September 14, 2007, the Board of Directors
adopted a resolution to amend, and to recommend that the
stockholders approve an
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amendment to, Article Seventh of the Certificate of
Incorporation, which would change the maximum number of
Directors the Company may have to not more than
thirteen Directors. Also as of September 14, 2007, the
Board of Directors adopted a resolution, subject to stockholder
approval, of the amendment to the Certificate of Incorporation,
to amend the Companys Amended and Restated By-Laws (the
By-Laws) to fix the number of Directors of the
Company at thirteen. As described below under the caption
Election of Directors, the Board of Directors
recommends the election of Lyle Logan, who has not previously
served on the Board, to serve as a Class I Director and to
fill the vacancy that would be created by the increase in the
size of the Board of Directors to thirteen.
The first paragraph of Article Seventh of the Certificate
of Incorporation, as proposed to be amended would state:
The number of directors of the Corporation shall be
fixed from time to time by the vote of a majority of the entire
Board of Directors, but such number shall in no case be less
than 3 nor more than thirteen. Any such determination made by
the Board of Directors shall continue in effect unless and until
changed by the Board of Directors, but no such changes shall
affect the term of any directors then in office.
The Board of Directors believes that the proposed amendment is
in the best interests of the Company and the Companys
stockholders and that it is desirable to change the maximum
number of Directors the Company may have because it would allow
for the election of Mr. Logan and, over the longer term,
provide some additional flexibility in appointing Directors who
possess skills and abilities that would be helpful to the
Company and the Board of Directors in overseeing the business of
the Company.
If the stockholders approve the proposed amendment to the
Certificate of Incorporation, the amendment will become
effective upon the filing of a certificate of amendment to the
Certificate of Incorporation with the Secretary of State of the
State of Delaware, which would be filed shortly after the Annual
Meeting of Stockholders. In addition, immediately following the
effectiveness of the amendment to the Certificate of
Incorporation, the resolution of the Board of Directors amending
the By-Laws to fix the number of Directors of the Company at
thirteen would, by its terms, become effective.
If stockholders do not approve the amendment of
Article Seventh of the Certificate of Incorporation, then
the Article Seventh of the Certificate of Incorporation as
previously approved by stockholders will continue in effect, the
number of Directors will remain at twelve, and Mr. Logan
will withdraw as a nominee for election to the Board of
Directors.
Approval
by Stockholders
The adoption of the amendment to the Certificate of
Incorporation 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 the approval of the amendment of the
Companys Certificate of Incorporation to change the
maximum number of Directors the Company may have.
The Board of Directors recommends a vote FOR the approval of
the amendment of the Companys Certificate of Incorporation
to change the maximum number of Directors the Company may
have.
ELECTION
OF DIRECTORS
The Certificate of Incorporation provides for a Board of
Directors that is divided into three classes serving staggered
three-year terms. The current members of Class I, whose
terms of office expire in 2007, are Connie R. Curran,
Daniel Hamburger, Harold T. Shapiro and Ronald L. Taylor.
The Board of Directors recommends their re-election. The Board
also recommends the election of Lyle Logan, who has not
previously served on the Board, as a Class I Director, for
a term to expire in 2010.
It is intended that all shares represented by a proxy in the
accompanying form will be voted for the election of each of
Connie R. Curran, Daniel Hamburger, Harold T. Shapiro, Ronald L.
Taylor and Lyle Logan as Class I Directors unless otherwise
specified in such proxy. A proxy cannot be voted for more than
five persons. In the event
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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 or her 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 of Stockholders.
Under Article Seventh of the current Certificate of
Incorporation, the Companys Board of Directors may be
comprised of between not less than 3 nor more than
twelve Directors, as determined by a majority of the whole
Board.
As of September 14, 2007, the Board of Directors adopted a
resolution to submit to a vote of the stockholders a proposal to
amend the Certificate of Incorporation to change the maximum
number of Directors the Company may have to thirteen. In
addition, the Board of Directors adopted a resolution, subject
to stockholder approval of the amendment to the Certificate of
Incorporation, to amend the By-Laws to fix the number of
Directors of the Company at thirteen. If stockholders do not
approve the amendment of Article Seventh of the Certificate
of Incorporation, then Article Seventh as previously
approved by stockholders will continue in effect, the number of
Directors will remain at twelve, as previously fixed by the
Board of Directors, Mr. Logan will withdraw as a nominee
for election to the Board of Directors, and all shares
represented by a proxy in the accompanying form will be voted
for the election of the other four nominees.
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, or in the case of Mr. Logan as
described above, 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 I TERM EXPIRES 2010
Connie R.
Curran,
age 59
Dr. Curran has been a Director of the Company since 2003.
She is President of Curran Associates, a healthcare consulting
company. From September 2003 until June 2006, Dr. Curran
served as 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
several healthcare leadership positions President,
Cardinal Health Consulting Services,
2000-2003;
President and CEO, CurranCare, from 1995 until its acquisition
by Cardinal Health in 2000; Vice Chairman/ National Director for
Patient Care Services, APM Incorporated,
1990-1995;
and Vice President for HealthCare Management and Patient Care
Services, American Hospital Association,
1985-1989.
Prior to 1989, Dr. Curran was the Dean of the College of
Nursing at the Medical College of Wisconsin and held
professorships at the University of San Francisco and
Columbia University. She is a prolific author with over 200
publications and several research programs. She is chairman of
the Silver Cross Hospital Board and serves on the boards of
several nonprofit organizations. Dr. Curran is also a
director of Hospira, Inc. and Volcano, Inc.
Daniel
Hamburger,
age 43
Mr. Hamburger has been President and Chief Executive
Officer and a Director of the Company since November 2006. He
joined the Company as Executive Vice President in November 2002.
From January 2001 to November 2002, he served as Chairman and
CEO of an Accenture subsidiary, Indeliq Inc., which developed
education technology. Prior to that, Mr. Hamburger served
as President of the Internet Commerce division of W. W.
Grainger, Inc. Prior to that Mr. Hamburger was employed at
R.R. Donnelley and at Bain & Co.
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Lyle
Logan,
age 47
Mr. Logan has been Executive Vice President and Managing
Director, Institutional Sales and Client Servicing for Northern
Trust Global Investments (the asset management arm of
Northern Trust Corporation) at The Northern
Trust Company since 2005. He previously served as Senior
Vice President and Head of Chicago Private Banking within the
Personal Financial Services business unit of Northern Trust from
2000 to 2005. Prior to 2000, he was Senior Vice President in the
Private Bank and Domestic Portfolio Management Group at Bank of
America.
Harold T.
Shapiro,
age 72
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.
Ronald L.
Taylor,
age 64
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 and served in that capacity until November
2006. In 1973 Mr. Taylor co-founded Keller Graduate School
of Management (KGSM) and was from 1973 to 1981 its
Chief Operating Officer, and from 1981 to 1987 its President and
Chief Operating Officer.
INCUMBENT
DIRECTORS
CLASS II
TERM EXPIRES 2008
David S.
Brown,
age 66
Mr. Brown has been a Director of the Company since 1987 and
was a founding stockholder and director of KGSM from 1973 to
1987. Mr. Brown, a graduate of Stanford Law School
(1965) and a practicing attorney
(1965-1998),
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 66
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. and Ryerson, Inc.
Frederick
A. Krehbiel,
age 66
Mr. Krehbiel has been a Director of the Company since 1996.
Employed since 1965 by Molex Incorporated, an electronic
component manufacturer, he served as Chief Executive Officer
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 51
Mr. Ruiz has been a Director of the Company since November
2005. He has been employed by The Dow Chemical Company since
1980. He was appointed Vice President and Treasurer of The Dow
Chemical Company in 2001 and Corporate Vice President and
Treasurer in 2005. Mr. Ruiz served as Assistant Treasurer
of The Dow
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Chemical Company from
1996-2001.
Mr. Ruiz serves as a director for a number of Dow
subsidiaries including Dow Financial Services Inc. and Dow
Credit Corporation and serves as President and CEO of Liana
Ltd., a holding company for Dows insurance subsidiaries.
CLASS III
TERM EXPIRES 2009
Charles
A. Bowsher,
age 76
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 FINRA board of directors and serves on the
advisory board of the Public Company Accounting Oversight Board.
William
T. Keevan,
age 61
Mr. Keevan has been a Director of the Company since
November 2005. He is a Senior Managing Director of Kroll Inc.
(Kroll), a leading international risk consulting
firm, which he joined in December of 2006. He is the leader of
Krolls Forensic Accounting and Litigation Consulting
Practice in the Washington, D.C. area, and of the
firms Government Contractor Advisory Services Practice on
a national basis. From June 2002 to December 2006,
Mr. Keevan was with Navigant Consulting Inc., a specialty
consulting firm. 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 of Arthur Andersen LLP, a provider
of auditing, tax and consulting services, in a number of senior
management positions.
Robert C.
McCormack,
age 68
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
21/2 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 65
Ms. McGee has been a Director of the Company since 1994. In
early 2007, she became a Senior Advisor at Harcourt Achieve,
Professional and Trade, a publisher of educational, trade and
professional materials. From 2003 until 2007, she was President
and CEO of Harcourt Achieve, Professional and Trade, after
serving as President, Basal and Test Publishing, for McGraw Hill
Education, an information service provider, 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.
BOARD OF
DIRECTORS AND BOARD COMMITTEE INFORMATION
Board of
Directors
The Companys Board of Directors held seven meetings during
fiscal year 2007, consisting of four regular meetings and three
special meetings. Board members are expected to attend Board
meetings, the meetings of the
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committees on which they serve and the Companys Annual
Meeting of Stockholders, except in unusual circumstances. During
fiscal year 2007 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. All of the
Directors attended the Companys 2006 Annual Meeting of
Stockholders. During fiscal year 2007, the Board met
periodically in executive session without management Directors
or other employees present. Robert C. McCormack was chosen to
serve as lead outside director and preside at such sessions.
Director
Independence
The Board of Directors has considered whether or not each
Director, and Mr. Logan, as a director nominee, 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, Mr. Taylor and Mr. Hamburger.
Mr. Keller is considered an inside Director because of his
employment as a Senior Advisor and Board Chair of the Company.
Mr. Taylor is considered an inside director because of his
employment as a Senior Advisor to the Company. In addition,
Mr. Hamburger is considered an inside Director because of
his employment as President and CEO of the Company.
The Board considered the relationship between the Company and
Northern Trust Corporation, with a subsidiary of which the
Company maintains the bulk of its depository accounts and
through which nearly all of the Companys disbursement
activity is made, because Mr. Logan is Executive Vice
President and Managing Director, Institutional Sales and Client
Servicing, with Northern Trust Global Investments, a
business unit of Northern Trust Corporation. In fiscal year
2007, the Company incurred approximately $805,000 in fees to
Northern Trust Corporation, which were fully offset against
compensating balance credits earned on an average outstanding
balance of approximately $46 million. The Board of
Directors concluded, after considering that Mr. Logan had
no involvement in the transactions, the lack of materiality of
the transactions to the Company and to Northern
Trust Corporation, and the fact that the terms of the
transactions are not preferential either to the Company or to
Northern Trust Corporation, that the relationship is not a
material one for purposes of the NYSE listing standards and
would not influence Mr. Logans actions or decisions
as a Director of 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 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 Securities and Exchange
Commission definitions of independent are appointed
to the Audit Committee.
Governance Committee. Directors Julia A. McGee
(Chair), Robert C. McCormack, and Fernando Ruiz serve as members
of the Companys Governance Committee, which met once
during fiscal year 2007. 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 Nominating Process, which is described
below under the caption Director Nominating Process.
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Mr. Logan was recommended as a director candidate by
Mr. McCormack. The Governance Committee evaluated
Mr. Logan against the criteria set forth in the policy on
Director Nominating Process, which is discussed below, and
recommended him to the full Board of Directors for nomination.
Audit Committee. Directors Charles A. Bowsher
(Chair), David S. Brown, William T. Keevan 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 seven times in fiscal year 2007.
The Board of Directors has 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 also has determined that the
Audit Committee has two audit committee financial
experts serving on that Committee; namely, Charles A.
Bowsher and William T. Keevan, whose business backgrounds may be
found on page 5 of this Proxy Statement.
Among the principal duties of the Audit Committee are:
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appointing the Companys independent registered public
accounting firm, subject to ratification by the stockholders;
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reviewing the scope, approach and results of the annual audits;
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reviewing the annual and quarterly financial statements; and,
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reviewing the representations of management and the findings and
suggestions of the independent public accounting firm regarding
internal controls, financial policies and procedures and
managements response thereto.
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Additional detail about the Committees activities are
spelled out in the Committees Charter, which was most
recently amended and restated by the Board of Directors on
May 2, 2005. The report of the Audit Committee appears on
page 29 of this Proxy Statement.
Compensation Committee. Directors Frederick A.
Krehbiel (Chair), Connie R. Curran, William T. Keevan and Julia
A. McGee serve as members of the Compensation Committee, which
held five meetings in fiscal year 2007, consisting of four
regular meetings and one special meeting. 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 discussed below in the section on
Compensation Discussion and Analysis. The report of
the Compensation Committee appears on page 12 of this Proxy
Statement.
Academic Committee. Directors Harold T.
Shapiro (Chair), David S. Brown, Connie R. Curran and Ronald L.
Taylor 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 two times in fiscal year 2007, is to
provide oversight of the Companys academic policy and
input to the Board regarding academic activities.
Finance Committee. Directors Robert C.
McCormack (Chair), Fernando Ruiz and Ronald L. Taylor serve as
members of the Companys Finance Committee, which met once
for a regular meeting and once for a special meeting during
fiscal year 2007. 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.
Director
Nominating Process
The Governance Committee 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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7
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Business judgment;
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Management;
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Industry knowledge;
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Leadership; and,
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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 stockholders
in accordance with the process for stockholder nominations
identified in the By-Laws. Under this process, all stockholder
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 of Stockholders. Such
stockholders notice shall be signed by the stockholder of
record who intends to make the nomination (or his duly
authorized proxy) and shall also include the following
information:
a. the name and address, as they appear on the
Companys books, of such stockholder and the beneficial
owner or owners, if any, on whose behalf the nomination is made;
b. the number of shares of the Companys Common Stock
which are beneficially owned by such stockholder or beneficial
owner or owners;
c. a representation that such stockholder 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;
d. the name and residence address of the person or persons
to be nominated;
e. a description of all arrangements or understandings
between such stockholder 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
stockholder;
f. such other information regarding each nominee proposed
by such stockholder 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 Securities Exchange Act of 1934,
as amended, 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
g. the written consent of each nominee to be named in a
proxy statement and to serve as a director if so elected.
In addition to candidates submitted through this By-Law process
for stockholder nominations, stockholders may also recommend
candidates by following the procedures set forth below under the
caption Stockholder Communications with Directors.
In identifying potential nominees and determining which nominees
to recommend to the Board, the Committee may in the future
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 stockholders on an equal basis
using these characteristics and the general criteria identified
above.
2007
DIRECTOR COMPENSATION
Directors, including employee Directors Taylor and Keller (but
not Hamburger), are each paid a retainer of $30,000 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 $10,000 for such
services. Also, Directors are eligible to receive options under
the Companys
8
1999 and 2003 Stock Incentive Plans and the Companys 2005
Incentive Plan. Non-employee Directors are currently granted
options for 10,500 shares upon election or re-election to
the Board (pro-rated for election to less than a full three-year
term). These options vest in three annual installments beginning
one year from the date of election or re-election. Directors are
reimbursed for any reasonable and appropriate expenditures
attendant to Board membership.
Under the DeVry Inc. Board of Directors Deferred
Compensation Plan, a Director may elect to defer all or a
portion of Board compensation. Any amount so deferred is, at the
Directors election, valued as if invested in the
Companys Common Stock
and/or the
average yield on corporate bonds as determined by Mergent Bond
Record (formerly Moodys), and is payable in cash in
installments or as a lump-sum on or after termination of service
as a Director.
In fiscal 2007, each non-employee director re-elected at the
2006 Annual Meeting of Stockholders received a grant of an
option to purchase 10,500 shares dated February 6,
2007. In addition, all Class I directors received a grant
of an option to purchase 1,500 shares and all Class II
directors received a grant of an option to purchase
3,000 shares. All of the options vest in three annual
installments beginning one year from the date of election or
re-election.
This table discloses all compensation provided to each
non-employee director of the Company in fiscal year 2007.
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|
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|
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Fees Earned
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
or Paid
|
|
|
Awards
|
|
|
All Other
|
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|
Total
|
|
Name
|
|
in Cash ($)
|
|
|
($)(1)
|
|
|
Compensation ($)
|
|
|
($)
|
|
|
Charles A. Bowsher
|
|
|
54,500
|
|
|
|
40,278
|
|
|
|
170,197
|
(2)
|
|
|
264,975
|
|
David S. Brown
|
|
|
49,000
|
|
|
|
32,153
|
|
|
|
0
|
|
|
|
81,153
|
|
Connie R. Curran
|
|
|
46,000
|
|
|
|
12,553
|
|
|
|
0
|
|
|
|
58,553
|
|
William T. Keevan
|
|
|
47,000
|
|
|
|
36,641
|
|
|
|
0
|
|
|
|
83,641
|
|
Frederick A. Krehbiel
|
|
|
40,000
|
|
|
|
32,153
|
|
|
|
0
|
|
|
|
72,153
|
|
Robert C. McCormack
|
|
|
39,500
|
|
|
|
40,278
|
|
|
|
0
|
|
|
|
79,778
|
|
Julie A. McGee
|
|
|
43,500
|
|
|
|
40,278
|
|
|
|
0
|
|
|
|
83,778
|
|
Fernando Ruiz
|
|
|
39,500
|
|
|
|
32,153
|
|
|
|
0
|
|
|
|
71,653
|
|
Harold T. Shapiro
|
|
|
48,000
|
|
|
|
27,813
|
|
|
|
0
|
|
|
|
75,813
|
|
|
|
|
(1) |
|
The amounts reported in the Options Awards column represent the
dollar amount, without any reduction for the risk of forfeiture,
recognized for financial statement purposes for the fiscal year
ended June 30, 2007, of option grants to each of the
non-employee directors, calculated in accordance with the
provisions of SFAS 123R. See Note 3: Stock Based
Compensation to DeVrys consolidated financial
statements set forth in the
Form 10-K
for fiscal year 2007, filed with the SEC on August 24,
2007, for the assumptions made in determining SFAS 123R
values. The SFAS 123R value as of the option grant date is
spread over the number of months of service required for the
grant to become fully vested. In addition to the expense for
current year grants, ratable amounts expensed for awards that
were granted in fiscal years 2004 through 2006 are also
included. There can be no assurance that the SFAS 123R
calculated amounts will represent the amounts that the directors
will actually realize from the awards. |
9
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The aggregate number of option awards outstanding at
June 30, 2007 for each of the non-employee directors was as
follows:
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Options
|
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Name
|
|
Outstanding (#)
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Charles A. Bowsher
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|
15,750
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David S. Brown
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15,750
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Connie R. Curran
|
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|
5,500
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|
William T. Keevan
|
|
|
12,500
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|
Frederick A. Krehbiel
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|
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20,500
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|
Robert C. McCormack
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|
|
25,500
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|
Julie A. McGee
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|
|
21,750
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|
Fernando Ruiz
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|
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9,000
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|
Harold T. Shapiro
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|
13,000
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|
|
|
(2) |
|
Represents a lump sum distribution in January 2007 from
Mr. Bowshers nonqualified deferred compensation plan. |
STOCKHOLDER
COMMUNICATION WITH DIRECTORS
Stockholders wishing to communicate with the Board of Directors
and other interested persons 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.
CERTAIN
TRANSACTIONS
Various Company policies and procedures, which include the Code
of Business Conduct and Ethics, which applies to the
Companys directors, officers (including the CEO, the Chief
Financial Officer and the Controller) and all other employees,
and annual questionnaires completed by all Company directors,
director nominees and executive officers, require disclosure of
transactions or relationships that may constitute conflicts of
interest or otherwise require disclosure under applicable
Securities and Exchange Commission rules. The Companys
Governance Committee considers and makes recommendations to the
Board of Directors with respect to possible conflicts of
interest or any other provisions of the Code of Business Conduct
and Ethics. The Governance Committee also annually reviews the
continuing independence of the Companys non-employee
directors under applicable law or rules of the NYSE and reports
its findings to the Board of Directors in connection with its
independence determinations. The Governance Committee reviews
and evaluates the transaction or relationship, including the
results of any investigation, and makes a recommendation to the
Board of Directors with respect to whether a conflict or
violation exists or will exist or whether a directors
independence is or would be impaired. The Board of Directors,
excluding any director who is the subject of the recommendation,
receives the report of the Governance Committee and makes the
relevant determination. These practices are not required by any
document.
No relationships or transactions occurred between the Company
and any officer, director or nominee for director, or any
affiliate of or person related to any of them, since the
beginning of the Companys last fiscal year of the type and
amount that are required to be disclosed under applicable
Securities and Exchange Commission rules.
POLICY
FOR COMMUNICATING ALLEGATIONS RELATED TO ACCOUNTING
COMPLAINTS
Stockholders and employees of the Company and other interested
persons may communicate or report any complaint or concern
regarding financial statement disclosures, accounting, internal
accounting controls, auditing
10
matters or violations of the Companys Code of Business
Conduct and Ethics (collectively, Accounting
Complaints) to the General Counsel of DeVry Inc. at the
following address:
General Counsel
DeVry Inc.
One Tower Lane
Oakbrook Terrace, IL
60181-4624
Accounting Complaints may also be submitted in a sealed envelope
addressed to the chair of the Audit Committee, in care of the
General Counsel, at the address indicated above, and labeled
with a legend such as: To Be Opened Only by the Audit
Committee. Any person making such a submission who would
like to discuss an Accounting Complaint with the Audit Committee
should indicate this in the submission and should include a
telephone number at which he or she may be contacted if the
Audit Committee deems it appropriate.
Employees may also report Accounting Complaints using any of the
reporting procedures specified in the Companys Code of
Business Conduct and Ethics. All reports by employees shall be
treated confidentially and may be made anonymously. The Company
will not discharge, demote, suspend, threaten, harass or in any
manner discriminate against any employee in the terms and
conditions of his or her employment based upon any lawful
actions taken by such employee with respect to the good faith
submission of Accounting Complaints.
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:
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honest and ethical conduct;
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full, fair, accurate, timely and understandable disclosure;
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compliance with applicable governmental laws, rules and
regulations;
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|
the prompt internal reporting of violations of the Code; and
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|
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.
11
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 NEO, and (5) all Directors and
officers of the Company as a group, in each case as of
June 30, 2007, 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
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|
Amount and Nature of Beneficial Ownership
|
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|
|
|
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
|
|
Fidelity Management & Research
|
|
|
10,546,000
|
|
|
|
|
|
|
|
10,546,000
|
|
|
|
14.8
|
|
82 Devonshire Street
Boston, MA 02109
|
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|
|
|
|
|
|
|
|
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|
|
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Baron Capital Management, Inc.
|
|
|
6,602,800
|
|
|
|
|
|
|
|
6,602,800
|
|
|
|
9.2
|
|
767 Fifth Avenue
New York, NY 10153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Westport Asset Management Inc.
|
|
|
5,065,400
|
|
|
|
|
|
|
|
5,065,400
|
|
|
|
7.1
|
|
253 Riverside Avenue
Westport, CT 06880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis J. Keller
|
|
|
8,317,389
|
(3)(4)
|
|
|
250,025
|
|
|
|
8,567,414
|
|
|
|
12.0
|
|
Ronald L. Taylor
|
|
|
1,514,062
|
(3)
|
|
|
427,625
|
|
|
|
1,941,687
|
|
|
|
2.7
|
|
Charles A. Bowsher
|
|
|
2
|
|
|
|
8,750
|
|
|
|
8,752
|
|
|
|
*
|
|
David S. Brown
|
|
|
48,500
|
(3)
|
|
|
12,250
|
|
|
|
60,750
|
|
|
|
*
|
|
Connie R. Curran
|
|
|
0
|
|
|
|
5,500
|
|
|
|
5,500
|
|
|
|
*
|
|
William T. Keevan
|
|
|
0
|
|
|
|
5,500
|
|
|
|
5,500
|
|
|
|
*
|
|
Frederick A. Krehbiel
|
|
|
26,100
|
|
|
|
17,000
|
|
|
|
43,100
|
|
|
|
*
|
|
Lyle Logan
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
*
|
|
Robert C. McCormack
|
|
|
25,284
|
|
|
|
18,500
|
|
|
|
43,784
|
|
|
|
*
|
|
Julia A McGee
|
|
|
22,526
|
|
|
|
14,750
|
|
|
|
37,276
|
|
|
|
*
|
|
Fernando Ruiz
|
|
|
0
|
|
|
|
5,500
|
|
|
|
5,500
|
|
|
|
*
|
|
Harold T. Shapiro
|
|
|
250
|
|
|
|
13,000
|
|
|
|
13,250
|
|
|
|
*
|
|
Daniel Hamburger
|
|
|
1,000
|
|
|
|
191,360
|
|
|
|
192,360
|
|
|
|
*
|
|
Richard M. Gunst
|
|
|
0
|
|
|
|
7,000
|
|
|
|
7,000
|
|
|
|
*
|
|
Norman M. Levine
|
|
|
44,548
|
|
|
|
50,115
|
|
|
|
94,663
|
|
|
|
*
|
|
David J. Pauldine
|
|
|
29,595
|
|
|
|
19,405
|
|
|
|
49,000
|
|
|
|
*
|
|
Thomas Shepherd
|
|
|
0
|
|
|
|
27,500
|
|
|
|
27,500
|
|
|
|
*
|
|
All Directors and Officers as a Group (23 persons)
|
|
|
10,030,121
|
|
|
|
1,150,495
|
|
|
|
11,180,616
|
|
|
|
15.7
|
|
|
|
|
* |
|
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 June 30, 2007, are shown
separately. |
|
(2) |
|
Option prices for these shares range from $13.4688 to $38.8125
per share. |
12
|
|
|
(3) |
|
As of June 30, 2007 the outstanding pledge amounts pursuant
to a 10b5-1 trading plan are as follows:
Mr. Keller 150,000 shares;
Mr. Taylor 134,800 shares and
Mr. Brown 10,000 shares. |
|
(4) |
|
Mr. Keller has 2,069,922 shares pledged to secure various
personal lines of credit. |
COMPENSATION
COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the
Committee) has furnished the following report to the
stockholders of the Company in accordance with rules adopted by
the Securities and Exchange Commission. The Committee has
reviewed and discussed the Compensation Discussion and Analysis
of this Proxy Statement with the Companys management and,
based on such review and discussions, the Committee recommended
to the Board of Directors that the Compensation Discussion and
Analysis be included in this Proxy Statement.
This report is submitted on behalf of the members of the
Compensation Committee:
Frederick A. Krehbiel, Chair
Connie R. Curran
William T. Keevan
Julia A. McGee
COMPENSATION
DISCUSSION AND ANALYSIS
This section provides an overview and analysis of our
compensation program and policies, the material compensation
decisions we have made under those programs and policies, and
the material factors that we considered in making those
decisions. Later in this Proxy Statement, under the heading,
Executive Compensation you will find a series of
tables containing specific information about the compensation
earned or paid in fiscal year 2007 to the following individuals,
whom we refer to as our NEOs:
|
|
|
|
|
Dennis, J. Keller, Senior Advisor and Board Chair
|
|
|
|
Daniel Hamburger, President and Chief Executive Officer
|
|
|
|
Ronald L. Taylor, Senior Advisor and Former Chief Executive
Officer
|
|
|
|
Richard M. Gunst, Sr. Vice President and Chief Financial
Officer
|
|
|
|
Norman M. Levine, Former Sr. Vice President and Chief
Financial Officer
|
|
|
|
David J. Pauldine, Executive Vice President
|
|
|
|
Thomas C. Shepherd, Executive Vice President
|
The discussion below is intended to help you understand the
detailed information provided in those tables and put that
information into context within our overall compensation program.
Role of
the Compensation Committee
The Committee has responsibility for establishing, implementing
and monitoring adherence with the Companys compensation
program. The Committees role is to oversee, on behalf of
the Board and for the benefit of the Company and its
stockholders, our compensation and benefit plans and policies,
review and approve stock awards to directors and NEOs, and
review and approve annually all compensation decisions relating
to our NEOs. The Committee meets periodically to review our
executive compensation programs, approve compensation levels and
performance targets, review management performance, and approve
annual cash incentive compensation distributions. The Committee
met five times in fiscal year 2007. The Committee operates under
a written charter, a copy of which is available on the
Companys website, www.devryinc.com.
13
Role of
Executive Officers and Management
The Compensation Committee invites select members of management
to participate in its meetings. The CEO and Vice President of
Human Resources were regular attendees at Committee meetings.
The Committee also invited the CFO, Controller, and General
Counsel to provide perspective and participate in its meetings
from time to time. Managements role was to contribute
input and analysis to the Committees discussions. At the
Committees direction and request, management also
establishes the overall Company merit pool and guidelines, as
well as the overall annual incentive compensation and option
award pools. After listening to the recommendations of the CEO
and receiving input from others, the Committee gave feedback on
the recommendations, and regularly met in executive session for
further discussion and analysis.
Executive
Compensation Philosophy and Objectives
The Companys compensation philosophy with respect to its
NEOs is predicated on the notion that the total compensation of
high-performing executives should be competitive with other
alternatives available to them in the marketplace. Another
aspect of the Companys compensation philosophy is that a
significant portion of each executives total compensation
should be variable with both upside potential and
downside risk depending upon the performance of the
Company and the individual.
The overall goal of the Companys compensation program is
to create the maximum long-term return to our stockholders. It
was designed to attract and motivate high-quality executives who
see great opportunity for themselves at the Company because of
their confidence in their ability to perform and belief in the
Companys prospects. It was designed to align NEO
compensation with the Companys business objectives. It
also was designed to reward individual and Company performance
and provide incentives consistent with the overall goal of
enhancing stockholder value.
Performance
Mr. Kellers total compensation for fiscal year 2007
was partly to compensate him for his Board service and otherwise
was determined by the Senior Advisor Agreement between
Mr. Keller and the Company, which is discussed below in the
section on Employment Agreements, Severance and
Change-in-Control
Payments. Mr. Levine resigned as the
Companys Senior Vice President and Chief Financial Officer
on July 24, 2006 and retired from the Company on
April 30, 2007. His compensation for fiscal year 2007
should be viewed in the context of his mid-year retirement. He
received stock options in fiscal year 2007, yet the grant was
based upon his fiscal 2006 activities, and he received no annual
incentive payment. Thus references to NEOs in the
following discussion on performance are directed to the NEOs
other than Mr. Keller and Mr. Levine.
A significant portion of the total compensation of the NEOs was
performance-based for fiscal year 2007. Part of this related to
individual performance, and part of it related to Company
performance. Performance-based payments were determined based
upon pre-established performance measures from various sources.
The Company has a confidential five-year strategic plan
containing various milestones, which was developed by the CEO,
management and the Board. Executive management of the Company
established an operating plan at the beginning of fiscal year
2007, which was approved by the Board. It included confidential
revenue and earnings per share goals for the Company and each of
its business units. Mr. Taylor and Mr. Hamburger
established performance goals and objectives for the Company and
the CEO at the beginning of fiscal year 2007. They also worked
collaboratively with the other NEOs in developing their
individual performance goals and objectives. These individual
performance goals and objectives reflected functional results or
business unit performance appropriate for each NEOs
respective role. Each stressed the building of organizational
strength and advancement of the Companys core values.
Individual goals and objectives were regularly reviewed by each
NEO with the CEO throughout the fiscal year (the specific goals
and objectives are discussed in more detail below).
Many of the performance measures utilized in the Companys
compensation program are discussed below. Some are not
discussed, where doing so would cause competitive harm to the
Company and come into direct conflict with the Companys
practice of not providing forward guidance to the investment
community. The internal revenue and earnings per share targets
for the Company and its various business segments for the fiscal
year 2007, that played a role in determining each NEOs
incentive compensation, fall into this category. They flowed
from the
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Companys internal operating plans, which were closely
linked with the Companys long-term strategic planning.
Public disclosure of these measures could give the
Companys competitors critical commercial and financial
insight into these matters. It also could provide potentially
harmful insight into the Companys competitive strategy as
it relates to attracting investment capital, and even undermine
a competitive advantage the Company has
built-up in
that regard. The Company has a proven ability to raise
investment capital, in part because its approach to long-term
growth is viewed as attractive to capital sources with a
long-term, risk-adjusted outlook. Disclosure of short-term
performance measures would introduce confidential commercial and
financial information inconsistent with this approach, and would
undermine this competitive advantage.
Many of the performance measures utilized in the Companys
compensation program were outgrowths of the Companys
operating plan for fiscal year 2007. They were considered to be
the best estimate of what the Company could deliver, if
management were to materially satisfy its goals and objectives
for the year. They were intended to be aggressive yet achievable
goals. At the time these goals were set, it was expected that it
would take extraordinary performance on the part of management
to exceed them to the extent necessary to yield maximum
incentive payouts under the Companys annual cash incentive
plan. Only in years in which the Company has out-performed its
goals, have incentive payments been made above established
targets. When this has not been the case, incentive payouts have
been lower. For example, the annual incentive payment for the
CEO in fiscal year 2006 was $810,000, when net income increased
139%, compared to fiscal 2005 when net income decreased and the
annual incentive payment for the CEO was $180,000. The
Companys incentive plans have successfully implemented our
philosophy of pay for performance.
Mr. Taylor was the CEO for the first
41/2
months of the Companys fiscal year 2007. His compensation
for that period was determined under a previously existing
employment agreement. Mr. Taylor became a Senior Advisor to
the Company on November 15, 2006, pursuant to a Senior
Advisor Agreement between Mr. Taylor and the Company.
However, at the request of the Companys Board,
Mr. Taylor continued to devote substantial attention to
supporting the transition of CEO responsibilities to
Mr. Hamburger through approximately March 15, 2007.
His compensation in this transition period was determined under
a letter agreement with the Company dated August 15, 2006,
which included provisions entitling him to receive annual
incentive compensation as if he had been CEO for the first half
of the fiscal year. His compensation for the period from
March 15, 2007, through the end of the fiscal year was
determined exclusively under his Senior Advisor Agreement.
Mr. Taylors previously existing employment agreement,
the August 15, 2006, letter agreement, and the Senior
Advisor Agreement, each between Mr. Taylor and the Company,
are described below in the section on Employment
Agreements, Severance and
Change-in-Control
Payments. The Committee evaluated
Mr. Taylors performance as CEO at the end of 2007
fiscal year. Its evaluation took into account actual results
versus the performance measures and goals that had been set for
him and the Company at the beginning of the 2007 fiscal year.
The Committee also considered its interaction with Taylor and
observation of his performance while he was CEO. Based upon this
evaluation, the Committee determined Mr. Taylors
annual incentive compensation and long-term incentive
compensation. The Company did exceptionally well in fiscal year
2007 and Mr. Taylor contributed materially to this result.
Fiscal year 2007 total consolidated revenues for the Company
increased 11.2% and net income increased 77% as compared to the
prior year, which also compared very favorably to the
Companys internal operating plans. Mr. Taylor also
was successful in achieving his individual performance
objectives while serving as CEO of the Company.
Mr. Hamburger was COO of the Company through
November 15, 2006, and then CEO for the remainder of the
2007 fiscal year. The Committee evaluated
Mr. Hamburgers performance at the end of fiscal year,
taking into account his performance as COO and CEO, for the
respective time-periods. Its evaluation took into account actual
results versus the performance measures and goals set for him in
the roles of COO and CEO, respectively. The Committee also
considered its interaction with Mr. Hamburger and
observation of his performance throughout the fiscal year, thus
adding a discretionary element to its evaluation. We believe
that the Companys executive compensation program was
better because of this element, as it allowed for the
consideration of factors that could not be measured with
precision. Based upon this evaluation, the Committee determined
Mr. Hamburgers annual incentive compensation and
long-term incentive compensation. As noted above with respect to
Mr. Taylor, the Company did exceptionally well in fiscal
year 2007. Mr. Hamburger contributed materially to its
favorable results and was successful in achieving his individual
performance objectives.
15
Mr. Taylor, Mr. Hamburger and the other NEOs
collaborated in setting individual goals and objectives for the
(non-CEO) NEOs at the beginning of the 2007 fiscal year. The
individual performance goals and objectives set for
Mr. Gunst, in his role as the head of a critical Company
function, focused on:
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Transitioning of all CFO functions from the prior CFO;
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Leading the strategic and financial planning processes,
providing analytical insights, and regularly monitoring key
performance indicators;
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Ensuring the financial perspective is provided on all the issues
that are being considered by the Company;
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Representing the company externally to media, investors,
government agencies, and the general public;
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Monitoring and enhancing internal control processes;
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Recruiting, training, supervising, and evaluating department
staff; and,
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Continuously evaluating the Companys capital structure
from a strategic perspective.
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The individual performance goals and objectives set for
Mr. Pauldine and Dr. Shepherd, as operating division
heads, focused on:
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Optimizing operational and financial performance; and,
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Executing strategic plans, particularly concerning facilities,
student services and relationships with accreditation,
government and other education professionals.
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The CEO and the other NEOs met regularly throughout the year to
assess progress against goals and objectives. At the conclusion
of fiscal year, Mr. Hamburger evaluated the performance of
the other NEOs for the complete fiscal year. His evaluation was
based upon their individual performances, the performance of
their business unit or functional area, and the financial
performance of the Company. His evaluation took into account his
day-to-day observation of each other NEOs performance in a
number of areas felt to be important to all executives of the
Company, such as behaviors that:
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Reinforce the Companys core values;
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Attract, motivate, reward and retain employees who consistently
deliver strong performance to ensure the Companys long
term success;
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Promote teamwork that is focused on meeting the expectations of
our customers (students and employers of graduates), various
outside agencies (regulators and accreditors) and its
stockholders; and,
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Promote dedication to the empowerment of our students to achieve
their educational and career goals.
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The review process was the same for the other NEOs as it was for
the CEOs, except that Mr. Hamburger evaluated the other
NEOs individual performances and reported to the
Committee, which reviewed and approved his conclusions.
Mr. Hamburger judged and reported that Mr. Gunst,
Mr. Pauldine and Dr. Shepherd each attained overall
success in achieving his individual goals and objectives, and
the Committee agreed.
In making its various determinations discussed above, the
Committee took into account the relationship between the
compensation paid by the Company to its CEO in fiscal year 2007,
and that paid to the Companys other NEOs. The Committee
considered the nature and magnitude of their respective roles
and responsibilities, as well as distinctions the market
recognizes for CEO compensation generally. Overall, the
Committee found the relationship to be reasonable and
appropriate.
Elements
of Executive Compensation
The Companys goal was to maintain a clear, straightforward
and transparent approach to its executive compensation program
in fiscal year 2007. The key elements of the Companys
program were:
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Annual cash incentive compensation; and,
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Long-term incentive compensation (stock options).
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The Company also provided severance protection for certain
situations, such as change in control, and a few perquisites and
other personal benefits to its NEOs.
The Committee aimed to provide total cash compensation to each
NEO that was market-competitive, beginning with a competitive
base salary, with the remainder largely at-risk, to be earned
based upon individual and Company performance. Stock options
were included in the program to provide a strong incentive for
the NEOs to focus on the creation of stockholder value over the
long-term. For example, of Mr. Hamburgers total
compensation, approximately two-thirds was at-risk, in the form
of annual incentive pay and stock options.
The following is a description of the three main components of
the Companys compensation program, the purpose of each,
and the role each plays in meeting the overarching objectives of
the Companys compensation program for its NEOs.
Annual
Base Salary
The Company pays base salaries as a secure, predictable
component of cash compensation, which is essential for
attracting and retaining talented executives. The Company
constantly monitors market salaries for executives within its
industry and among organizations of similar size and
characteristics (e.g., service-based, and geographically
dispersed). Base salaries are adjusted in the early part of each
fiscal year to reflect the executives performance during
the year and keep the Company competitive in relation to market
changes.
The Committee set the CEOs base salaries on a basis
consistent with the Companys compensation philosophy and,
therefore, with careful attention to market-competitiveness.
Similarly, Mr. Taylor recommended the annual base salary of
each of the other NEOs for the fiscal year 2007 based on his
experience, extensive knowledge of competitive practices in the
industry, intelligence gathering and analysis of the market at
that time, and his assessment of each NEOs performance for
the fiscal year 2006. Generally, Mr. Taylor made his
assessments for adjustment of the other NEOs fiscal year
2007 salaries, based on the following:
(1) The Companys financial performance compared to
its fiscal 2006 operating plan;
(2) Each NEOs performance against individual goals
and objectives established in collaboration with the CEO at the
beginning of fiscal 2007;
(3) Each NEOs effectiveness in instilling a culture
of teamwork, student service and integrity;
(4) Each NEOs expected future contributions;
(5) The compensation practices of other similar or
competitor companies; and,
(6) Discretion based on interaction and observation
throughout the year.
Annual
Cash Incentive Compensation
The Companys Management Incentive Program for paying
annual incentive compensation is referred to internally as
MIP. It was designed to motivate and reward the
Companys NEOs, and other management employees, by putting
a substantial portion of cash compensation at risk, and paying
annual incentives when individual performance goals and Company
financial objectives are met or exceeded. MIP incentive payments
for a fiscal year are determined and paid in the beginning of
the subsequent fiscal year. For fiscal year 2007,
Mr. Hamburger and Mr. Taylor each received a MIP award
based upon the portion of the 2007 fiscal year in which each was
CEO, but also taking into account their roles and
responsibilities during the portion of the year in which each
was not the CEO.
Three items went into the Committees determination of MIP
awards for fiscal year 2007: (1) individual target amounts
calculated as a percentage of base salary set by the Committee
for the CEO, and by the CEO for the other NEOs (with the
approval of the Committee) (MIP Target);
(2) performance against fiscal year 2007 goals set for
17
the Company and the business segment or functional area of each
respective NEO; and, (3) to a limited extent discretion.
For fiscal year 2007, MIP Targets for the NEOs were: for
Mr. Hamburger 80% of base salary for the period in which he
functioned as COO and 100% of base salary for the period in
which he functioned as CEO; for Mr. Taylor 100% of base
salary for the period in which he functioned as CEO, but
adjusted to a six month proration pursuant to the
August 15, 2006 letter agreement; for Mr. Gunst 50% of
base salary prorated for the 11 months he was with the
Company during fiscal year 2007; for Mr. Pauldine 63% of
base salary; and for Dr. Shepherd 45% of base salary.
The Committee approved the fiscal year 2007 MIP performance
measures at the outset of the fiscal year. They were carefully
selected with long-term growth in mind, as follows: for
Mr. Hamburger, Mr. Taylor and Mr. Gunst, 40% of
the annual MIP based upon achievement of the Companys
earnings per share goal, 30% upon achievement of revenue goals
and 30% based upon achievement of individual goals. For
Mr. Pauldine and Dr. Shepherd, 18% of the annual MIP
was to be based upon achievement of the earnings per share goal,
12% upon achievement of corporate revenue goals, 25% upon
business unit operating income, 15% on business unit revenue
goals and 30% upon achievement of individual performance goals.
The Committee reviewed the performance of Mr. Taylor and
Mr. Hamburger against these pre-established goals at the
end of the fiscal year 2007 and made its decision accordingly.
MIP payouts can be as low as zero but also have an
overachievement opportunity of 150% of MIP Target, which rewards
exceptional performance compared to expectations, over-delivery
of strategic initiatives,
and/or
achievement of initiatives not contemplated at the time goals
were set. The Committee awarded 115% of Mr. Taylors
MIP Target, based on the Companys performance against its
fiscal year 2007 operating plan. It awarded 130% of
Mr. Hamburgers MIP Target, based also on the
Companys performance against its fiscal year 2007
operating plan and his success in accelerating the
Companys progress toward its strategic objectives. The
process was essentially the same for the other NEOs, except
Mr. Hamburger reviewed their performance, and his
recommendations were reviewed and approved by the Committee. The
amounts determined by the Committee to be paid to each
respective NEO as an annual incentive awards for fiscal year
2007 appear in the Non-Equity Incentive Plan Compensation column
of the 2007 Summary Compensation Table.
Long-Term
Incentive Compensation Stock Options
Although the Compensation Committee regularly evaluates other
cash and stock-based incentive compensation vehicles, the
Committee has a longstanding reliance upon stock options as the
primary long-term incentive vehicle to align the long-term
interests of management and stockholders. In doing so, the
Committee encourages executive focus on the behaviors and
initiatives that will lead to increased long-term stockholder
value. Long-term equity compensation is an important retention
tool and, thus, the Company has chosen a graduated five-year
vesting schedule for stock options to encourage longer-term
focus and retention.
The Committee made grants to each of the NEOs as part of its
regular annual review process, taking into account the same five
criteria described in the Annual Base Salary
section, above. The Committee targeted the value of the
long-term equity compensation to represent a substantial portion
of each NEOs total compensation. The NEOs were among a
group of 173 Company employees who received stock option grants.
Details concerning fiscal year 2007 stock option grants for the
NEOs appear in the 2007 Grants of Plan-Based Awards table.
The Committee granted Incentive Stock Options (ISOs) up to the
$100,000 IRS limitation applicable to each one-year vesting
period. If this limitation is met for any NEO, then the
remaining award is issued as a non-qualified stock option. The
Committee recognizes that the Company may not receive a tax
deduction for ISOs. However, given the relatively small amounts
allowed under the IRS limits and the opportunity to provide a
benefit to employees, the Company decided to grant ISOs to
enhance the Companys ability to attract and retain
executives.
18
All Other
Compensation
In general, the Company does not provide perquisites to its CEO
or NEOs that are not available to other employees, with the
exception of those listed below:
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Company matching contributions made or credited in fiscal year
2007 under the DeVry Inc. Deferred Compensation Plan;
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Life/disability insurance premiums for Messrs. Taylor and
Keller beyond the group life insurance benefit afforded other
NEOs, although Mr. Keller elected not to take advantage of
this benefit in fiscal year 2007;
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A company leased automobile or cash automobile
allowance; and,
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Other medical insurance and out-of-pocket medical costs.
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Perquisites make up the smallest portion of each NEOs
total compensation package, but provide a competitive level of
retirement savings, healthcare and life/disability protection,
in order to attract and retain executives. The nature and
quantity of perquisites provided by the Company did not change
materially in fiscal year 2007 versus 2006, although the Company
discontinued its practice of reimbursing Mr. Taylor and
Mr. Hamburger for certain limited financial planning fees.
The Compensation Committee periodically reviews the perquisite
program and allowances provided to each NEO to determine if
adjustments are appropriate.
The All Other Compensation column of the 2007
Summary Compensation Table shows the amounts of such
compensation paid for fiscal year 2007 to each of the NEOs.
Deferred
Compensation
In August 1999, the Committee approved the DeVry Inc. Deferred
Compensation Plan (the Deferred Plan). The Deferred
Plan is a voluntary, non-tax qualified, deferred compensation
plan for executives to save for retirement by deferring a
portion of their current compensation until termination of
service with the Company or other specified dates. The Company
credits matching contributions to participants accounts
under the Deferred Plan to the extent their matching
contributions to the Companys tax-qualified Profit Sharing
Retirement Plan are limited by the Internal Revenue Code. The
Deferred Plan makes the NEOs and other higher compensated
employees whole for amounts they could not contribute to the
Profit Sharing Retirement Plan because of IRS limits. The
Company did not contribute to the Deferred Plan except as a
matching contribution to amounts the NEOs contributed during the
2007 fiscal year. The Company does not have a defined benefit
pension plan, so the Companys Profit Sharing Retirement
Plan and the Deferred Plan are the only retirement savings
vehicles for executives. We also do not have a supplemental
retirement plan (SERP).
Employment
Agreements, Severance and
Change-in-Control
Payments
The Company entered into the 2002 Employment Agreement with
Ronald Taylor while he was CEO of the Company. It provided for
an initial base salary, annual salary increases and annual
bonuses for an initial term of employment ending on
June 30, 2005, which thereafter continued until either
Mr. Taylor or the Company gave the other at least
150 days notice of termination. The 2002 Employment
Agreement provided that it could be terminated by the Company
upon (1) the death of Mr. Taylor, (2) physical or
mental disability of Mr. Taylor that prevented him from
performing his duties for a continuous period of 180 days,
or (3) for cause (as defined in the 2002 Employment
Agreement). Mr. Taylor could terminate the 2002 Employment
Agreement if (1) he was not accorded the authority, duties,
obligations and prerogatives set forth in the 2002 Employment
Agreement, (2) such authority, duties, obligations or
prerogatives were materially or substantially reduced,
(3) he was not paid or reimbursed amounts due him under the
2002 Employment Agreement, (4) the Company failed to
observe its obligations under the 2002 Employment Agreement, or
(5) a change of control (as defined in the 2002
Employment Agreement) of the Company occurred and
Mr. Taylor resigned 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.
In July of 2002, the Company also entered into Senior Advisor
Agreements with Mr. Taylor and Mr. Keller that defined
the future relationship each executive would have with the
Company following the termination of his then
19
existing employment arrangement. Under the terms of these
agreements, each executive was to have duties and
responsibilities 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 Agreements
is 15 years, divided into an initial five-year period and a
final ten-year period. Each executive is to be provided with an
appropriate office and compensated for his services at the
annual rate of $420,000 during the initial five-year 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. Subject to certain cost
limitations, the Company also is required to maintain an
insurance policy providing $1 million in death benefits
payable to the executives designated beneficiary, and
reimbursement of expenses consistent with past practices of the
Company and usages in effect from time to time. Each Senior
Advisor Agreement terminates 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 is 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 June 30, 2006, Mr. Kellers employment with
the Company pursuant to his previous employment agreement
terminated, and he immediately became employed by the Company as
a Senior Advisor pursuant to his Senior Advisor Agreement.
Mr. Keller remained the Chair of the Companys Board.
On February 23, 2006, Mr. Taylor gave notice in
accordance with the terms of the 2002 Employment Agreement that
his term of employment with the Company under that agreement
would end on November 15, 2006, at which time he would
become a Senior Advisor to the Company pursuant to his July,
2002, Senior Advisor Agreement. On August 15, 2006, the
Company entered into a supplemental letter agreement with
Mr. Taylor, which provided the following: (i) during
the period beginning on November 15, 2006 and ending on
March 15, 2007, Mr. Taylor would make himself
available for up to 40 hours to provide any advice, counsel
and assistance the Board of Directors might request to
facilitate the transition of CEO responsibilities; (ii) in
return for such services, the Company would pay Mr. Taylor
$140,000 in additional salary, and a bonus which, together with
the MIP annual incentive payment Mr. Taylor was to receive
pursuant to his 2002 Employment Agreement would equal the amount
he would have received as a MIP annual incentive payment had his
employment under the 2002 Employment Agreement terminated on
December 31, 2006; and (iii) the compensation provided
for in the letter agreement was to be in addition to the
compensation provided for in his Senior Advisor Agreement.
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 through November 10, 2005, and
continuing 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.
The Senior Advisor Agreements the Company has with
Mr. Keller and Mr. Taylor, and the employment
agreement the Company has with Mr. Hamburger contain
provisions regarding potential payments by the Company in the
event of the termination of employment. The Company also has
made certain contractual commitments to
20
Mr. Gunst regarding severance. Mr. Hamburgers
employment agreement contains provisions regarding potential
payments to him by the Company following a
change-in-control
of the Company. These employment agreements are summarized in
the narrative accompanying the Summary Compensation Table under
the caption Employment Agreements and the
Companys obligations under them with respect to severance
and
change-in-control
scenarios are discussed in the narrative accompanying the
Potential Payments Upon Termination or
Change-in-Control
table.
Deductibility
of Compensation
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 Covered
Employees, defined as the Chief Executive Officer and the
three other most highly compensated 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 salaries do not qualify as performance-based
compensation under Section 162(m), although the base
salaries of the Companys NEOs are substantially below the
$1 million level. Amounts paid to an executive that are
excludable from gross income, such as Profit Sharing Retirement
Plan contributions reflected in the All Other
Compensation column in the Summary Compensation Table, are
not subject to Section 162(m). Incentive compensation
accrued by the Company in fiscal year 2007 under the provisions
of the DeVry Incentive Plan of 2005 are expected to qualify as
performance-based compensation. Gains on the
exercise of stock options in fiscal year 2007 by persons who
were Covered Employees at the end of the fiscal year did not
qualify as performance-based where the Section 162(m)
limitations on deductibility were relevant.
Role of
Independent Consultant
The Compensation Committee has engaged Sibson Consulting as a
compensation consultant to work collaboratively with the
Committee for the fiscal year beginning July 1, 2007.
Sibson reports solely to the Committee. Sibson performs no other
services for the Company. Sibson provides the Committee with
data and insights that ensure that our executive compensation
program and directors compensation program are fair,
reasonable, and consistent with our compensation objectives, but
ultimately the Committee makes its own decisions. Sibson also is
assisting the Committee in selecting compensation and
performance benchmarks, and evaluating the suitability of its
peer group.
21
Changes
for Fiscal Year
2007-2008
The Compensation Committee is evaluating possible changes for
the fiscal year 2008 that began July 1, 2007, but no
determinations have been made as of this time.
EXECUTIVE
COMPENSATION
2007 SUMMARY COMPENSATION TABLE
This table shows the compensation of the Companys Chief
Executive Officer, Chief Financial Officer and each of the other
executive officers named in this section for the fiscal year
2007, which ended June 30, 2007.
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|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
Incentive Plan
|
|
All Other
|
|
|
|
|
|
|
Salary
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
Total
|
Name and Principal Position(1)
|
|
Year
|
|
($)(2)
|
|
($)(3)
|
|
($)(4)
|
|
($)
|
|
($)
|
|
Dennis J. Keller
|
|
|
2007
|
|
|
|
420,000
|
|
|
|
25,110
|
|
|
|
0
|
|
|
|
58,657
|
(5)
|
|
|
503,767
|
|
Board Chair
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel Hamburger
|
|
|
2007
|
|
|
|
577,125
|
|
|
|
425,956
|
|
|
|
708,701
|
|
|
|
15,968
|
(6)
|
|
|
1,727,750
|
|
Chief Executive Officer
and President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald L. Taylor
|
|
|
2007
|
|
|
|
751,813
|
|
|
|
1,030,110
|
|
|
|
579,859
|
|
|
|
72,400
|
(7)
|
|
|
2,434,182
|
|
Former Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard M. Gunst
|
|
|
2007
|
|
|
|
258,430
|
|
|
|
64,488
|
|
|
|
169,085
|
|
|
|
9,321
|
(8)
|
|
|
501,324
|
|
Sr. Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Norman M. Levine
|
|
|
2007
|
|
|
|
132,000
|
|
|
|
100,500
|
|
|
|
0
|
|
|
|
14,244
|
(9)
|
|
|
246,744
|
|
Former Sr. Vice President and former Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David J. Pauldine
|
|
|
2007
|
|
|
|
330,000
|
|
|
|
139,095
|
|
|
|
201,923
|
|
|
|
10,939
|
(10)
|
|
|
681,957
|
|
Executive Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas C. Shepherd
|
|
|
2007
|
|
|
|
247,500
|
|
|
|
55,661
|
|
|
|
157,916
|
|
|
|
28,410
|
(11)
|
|
|
489,487
|
|
Executive Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Hamburger was elected Chief Executive Officer and
President on November 15, 2006. Previously
Mr. Hamburger was Chief Operating Officer. Mr. Taylor
was Chief Executive Officer through November 15, 2006 and
is currently a Senior Advisor. Mr. Gunst was appointed Sr.
Vice President and Chief Financial Officer on July 24,
2006. Mr. Levine retired from the Company on April 30,
2007. |
|
|
|
(2) |
|
This shows the salaries paid in fiscal year 2007. The following
have elected to defer a portion of their salary under the
Deferred Plan: Mr. Gunst $27,500 and
Mr. Levine $840. Mr. Hamburger received an
annualized salary of $414,000 while he was Chief Operating
Officer for 4.5 months and received an annualized salary of
$675,000 as Chief Executive Officer for the remaining
7.5 months of fiscal year 2007. Mr. Gunst received an
annualized salary of $275,000 in fiscal year 2007. |
|
|
|
(3) |
|
The amounts reported in the Options Awards column represent the
dollar amount, without any reduction for the risk of forfeiture,
recognized for financial statement purposes for the fiscal year
ended June 30, 2007, of option grants to each of the NEOs,
calculated in accordance with the provisions of Statement of
Financial Accounting Standards Number 123R
(SFAS 123R). See Note 3: Stock Based
Compensation to DeVrys consolidated financial
statements set forth in the
Form 10-K
for fiscal year 2007, filed with the SEC on August 24,
2007, for the assumptions made in determining SFAS 123R
values. The SFAS 123R value as of the option grant date is
expensed over the number of months of service required for the
grant to become fully vested. For retirement eligible grantees,
the entire amount is expensed in the year of the grant. In
addition to the expense for current year grants, ratable amounts
expensed for awards that were granted in fiscal years 2003
through 2006 are also included. |
|
(4) |
|
The MIP compensation was earned in fiscal year 2007 and paid in
fiscal year 2008 based upon the MIP guidelines. The following
have elected to defer a portion of their MIP compensation under
the Deferred Plan: Mr. Hamburger $141,740;
Mr. Gunst $33,817; and
Mr. Pauldine $30,288. |
|
(5) |
|
All other compensation reported for Mr. Keller represents
(i) the Companys matching and profit sharing
contributions credited under the Profit Sharing Retirement Plan,
$9,100; (ii) leased car value, $1,271; (iii) group
life insurance, $5,639; (iv) executive medical benefits,
$3,647; and (v) directors fees, $39,000. |
22
|
|
|
(6) |
|
All other compensation reported for Mr. Hamburger
represents (i) the Companys matching and profit
sharing contributions credited under the Profit Sharing
Retirement Plan, $7,650; (ii) leased car value, $4,083;
(iii) group life insurance, $500; and (iv) executive
medical benefits, $3,735. |
|
(7) |
|
All other compensation reported for Mr. Taylor represents
(i) the Companys matching and profit sharing
contributions credited under the Profit Sharing Retirement Plan,
$10,500; (ii) leased car value, $2,285; (iii) group
life insurance, $3,406; (iv) additional life insurance,
$12,100; (v) executive medical benefits, $2,609;
(vi) personal financial planning, $2,500; and
(vii) director fees, $39,000. |
|
(8) |
|
All other compensation reported for Mr. Gunst represents
(i) car allowance, $7,894; (ii) group life insurance,
$621; and (iii) executive medical benefits, $806. |
|
(9) |
|
All other compensation reported for Mr. Levine represents
(i) the Companys matching and profit sharing
contributions credited under the Profit Sharing Retirement Plan,
$9,521; (ii) group life insurance, $697; and
(iii) executive medical benefits, $4,026. |
|
(10) |
|
All other compensation reported for Mr. Pauldine represents
(i) the Companys matching and profit sharing
contributions credited under the Profit Sharing Retirement Plan,
$3,300; (ii) leased car value, $3,917; (iii) group
life insurance, $629; and (iv) executive medical benefits,
$3,093. |
|
(11) |
|
All other compensation reported for Mr. Shepherd represents
(i) the Companys matching and profit sharing
contributions credited under the Profit Sharing Retirement Plan,
$4,372; (ii) car allowance, $6,000; (iii) group life
insurance, $792; and (iv) medical insurance, $17,246. |
2007
GRANTS OF PLAN-BASED AWARDS
This table sets forth information for each NEO with respect to
stock options granted in fiscal year 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Option
|
|
|
|
|
|
|
|
|
Awards: Number of
|
|
Exercise or Base
|
|
Grant Date Fair
|
|
|
|
|
Securities
|
|
Price of Option
|
|
Value of Stock and
|
Name
|
|
Grant Date
|
|
Underlying Options
|
|
Award ($/Sh)(6)
|
|
Option Awards(7)
|
|
Dennis J. Keller
|
|
|
8/24/2006
|
|
|
|
500
|
(1)
|
|
|
22.22
|
|
|
$
|
5,025
|
|
|
|
|
2/6/2007
|
|
|
|
1,500
|
(2)
|
|
|
28.80
|
|
|
$
|
20,085
|
|
Daniel Hamburger
|
|
|
10/3/2006
|
|
|
|
55,000
|
(3)
|
|
|
21.62
|
|
|
$
|
552,750
|
|
|
|
|
2/6/2007
|
|
|
|
50,000
|
(4)
|
|
|
28.80
|
|
|
$
|
669,500
|
|
Ronald L. Taylor
|
|
|
8/24/2006
|
|
|
|
500
|
(1)
|
|
|
22.22
|
|
|
$
|
5,025
|
|
|
|
|
10/3/2006
|
|
|
|
100,000
|
(3)
|
|
|
21.62
|
|
|
$
|
1,005,000
|
|
|
|
|
2/6/2007
|
|
|
|
1,500
|
(2)
|
|
|
28.80
|
|
|
$
|
20,085
|
|
Richard M. Gunst
|
|
|
7/24/2006
|
|
|
|
35,000
|
(5)
|
|
|
20.97
|
|
|
$
|
351,750
|
|
Norman M. Levine
|
|
|
10/3/2006
|
|
|
|
10,000
|
(3)
|
|
|
21.62
|
|
|
$
|
100,500
|
|
David J. Pauldine
|
|
|
10/3/2006
|
|
|
|
30,000
|
(3)
|
|
|
21.62
|
|
|
$
|
301,500
|
|
Thomas C. Shepherd
|
|
|
10/3/2006
|
|
|
|
17,500
|
(3)
|
|
|
21.62
|
|
|
$
|
175,875
|
|
|
|
|
(1) |
|
Option grant issued to Plan Committee members under the 1999
Stock Incentive Plan. Options become exercisable one year after
the date of grant and have a maximum term of ten years. |
|
(2) |
|
Option grant issued to members of the Board of Directors under
the 2003 Stock Incentive Plan. Options become exercisable at
thirty three and one third percent for each of the first three
years of grant and have a maximum term of ten years. |
|
(3) |
|
Option grant issued as part of the performance based annual
incentive grant under the 2003 Stock Incentive Plan. Options
become exercisable at twenty percent per year for five years
from grant and have a maximum term of ten years. |
|
(4) |
|
Option grant issued for promotion and part of employment
agreement under the 2003 Stock Incentive Plan and become
exercisable at twenty percent per year for five years from grant
and have a maximum term of ten years. |
|
(5) |
|
New hire option grant issued under the 2003 Stock Incentive
Plan. Options become exercisable at twenty percent per year for
five years from grant and have a maximum term of ten years. |
23
|
|
|
(6) |
|
All options granted to the NEOs in fiscal year 2007 have an
exercise price equal to the closing sale price of the common
stock on the date of grant. |
|
(7) |
|
This column shows the grant date fair value of options awarded
to each of the NEOs in fiscal year 2007, computed in accordance
with FAS 123R. Also see Note 3: Stock Based
Compensation to the Consolidated Financial Statements
contained in the Companys Annual Report on Form
10-K for the
year ended June 30, 2007 for an explanation of the
assumptions made by the Company in the valuation of these awards. |
2007
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
This table sets forth information for each NEO with respect to
each grant of options to purchase Company common stock that was
made at any time, has not yet been not exercised, and remained
outstanding at June 30, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Number of
|
|
Number of
|
|
|
|
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
|
|
|
Options
|
|
Options
|
|
Exercise
|
|
Option
|
|
|
(#)
|
|
(#)
|
|
Price
|
|
Expiration
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
($)(6)
|
|
Date
|
|
Dennis J. Keller
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
22.6875
|
|
|
|
7/1/2008
|
|
|
|
|
625
|
(2)
|
|
|
0
|
|
|
|
20.9375
|
|
|
|
7/24/2008
|
|
|
|
|
30,000
|
(2)
|
|
|
0
|
|
|
|
22.25
|
|
|
|
8/18/2008
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
24.00
|
|
|
|
7/1/2009
|
|
|
|
|
35,000
|
(2)
|
|
|
0
|
|
|
|
21.2188
|
|
|
|
8/17/2009
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
28.875
|
|
|
|
7/3/2010
|
|
|
|
|
40,000
|
(2)
|
|
|
0
|
|
|
|
31.75
|
|
|
|
8/21/2010
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
35.22
|
|
|
|
7/2/2011
|
|
|
|
|
46,000
|
(2)
|
|
|
0
|
|
|
|
35.10
|
|
|
|
8/24/2011
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
22.07
|
|
|
|
7/1/2012
|
|
|
|
|
40,000
|
(2)
|
|
|
10,000
|
(2)
|
|
|
17.45
|
|
|
|
8/13/2012
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
23.93
|
|
|
|
7/1/2013
|
|
|
|
|
30,000
|
(2)
|
|
|
20,000
|
(2)
|
|
|
27.16
|
|
|
|
8/15/2013
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
27.41
|
|
|
|
7/1/2014
|
|
|
|
|
2,400
|
(2)
|
|
|
3,600
|
(2)
|
|
|
15.81
|
|
|
|
11/16/2014
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
20.33
|
|
|
|
7/1/2015
|
|
|
|
|
0
|
|
|
|
500
|
(1)
|
|
|
22.22
|
|
|
|
8/24/2016
|
|
|
|
|
0
|
|
|
|
1,500
|
(3)
|
|
|
28.80
|
|
|
|
2/6/2017
|
|
Daniel Hamburger
|
|
|
40,000
|
(2)
|
|
|
10,000
|
(2)
|
|
|
15.03
|
|
|
|
11/12/2012
|
|
|
|
|
11,520
|
(2)
|
|
|
7,680
|
(2)
|
|
|
27.16
|
|
|
|
8/15/2013
|
|
|
|
|
20,000
|
(2)
|
|
|
30,000
|
(2)
|
|
|
20.78
|
|
|
|
8/10/2014
|
|
|
|
|
75,000
|
(4)
|
|
|
0
|
|
|
|
21.40
|
|
|
|
6/15/2015
|
|
|
|
|
0
|
|
|
|
55,000
|
(2)
|
|
|
21.62
|
|
|
|
10/3/2016
|
|
|
|
|
0
|
|
|
|
50,000
|
(2)
|
|
|
28.80
|
|
|
|
2/6/2017
|
|
Ronald L. Taylor
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
22.6875
|
|
|
|
7/1/2008
|
|
|
|
|
625
|
(2)
|
|
|
0
|
|
|
|
20.9375
|
|
|
|
7/24/2008
|
|
|
|
|
30,000
|
(2)
|
|
|
0
|
|
|
|
22.25
|
|
|
|
8/18/2008
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
24.00
|
|
|
|
7/1/2009
|
|
|
|
|
35,000
|
(2)
|
|
|
0
|
|
|
|
21.2188
|
|
|
|
8/17/2009
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
28.875
|
|
|
|
7/3/2010
|
|
|
|
|
40,000
|
(2)
|
|
|
0
|
|
|
|
31.75
|
|
|
|
8/21/2010
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
35.22
|
|
|
|
7/2/2011
|
|
|
|
|
46,000
|
(2)
|
|
|
0
|
|
|
|
35.10
|
|
|
|
8/24/2011
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
22.07
|
|
|
|
7/1/2012
|
|
|
|
|
40,000
|
(2)
|
|
|
10,000
|
(2)
|
|
|
17.45
|
|
|
|
8/13/2012
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
23.93
|
|
|
|
7/1/2013
|
|
|
|
|
30,000
|
(2)
|
|
|
20,000
|
(2)
|
|
|
27.16
|
|
|
|
8/15/2013
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Number of
|
|
Number of
|
|
|
|
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
|
|
|
Options
|
|
Options
|
|
Exercise
|
|
Option
|
|
|
(#)
|
|
(#)
|
|
Price
|
|
Expiration
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
($)(6)
|
|
Date
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
27.41
|
|
|
|
7/1/2014
|
|
|
|
|
40,000
|
(2)
|
|
|
60,000
|
(2)
|
|
|
20.78
|
|
|
|
8/10/2014
|
|
|
|
|
100,000
|
(4)
|
|
|
0
|
|
|
|
21.40
|
|
|
|
6/15/2015
|
|
|
|
|
500
|
(1)
|
|
|
0
|
|
|
|
20.33
|
|
|
|
7/1/2015
|
|
|
|
|
0
|
|
|
|
500
|
(1)
|
|
|
22.22
|
|
|
|
8/24/2016
|
|
|
|
|
0
|
|
|
|
100,000
|
(2)
|
|
|
21.62
|
|
|
|
10/3/2016
|
|
|
|
|
0
|
|
|
|
1,500
|
(3)
|
|
|
28.80
|
|
|
|
2/6/2017
|
|
Richard M. Gunst
|
|
|
0
|
(2)
|
|
|
35,000
|
(2)
|
|
|
20.97
|
|
|
|
7/24/2016
|
|
Norman M. Levine
|
|
|
337
|
(5)
|
|
|
0
|
|
|
|
22.25
|
|
|
|
8/18/2008
|
|
|
|
|
1,713
|
(5)
|
|
|
0
|
|
|
|
21.2188
|
|
|
|
8/17/2009
|
|
|
|
|
8,500
|
(5)
|
|
|
0
|
|
|
|
31.75
|
|
|
|
8/21/2010
|
|
|
|
|
2,500
|
|
|
|
0
|
|
|
|
37.75
|
|
|
|
1/3/2011
|
|
|
|
|
10,000
|
(5)
|
|
|
0
|
|
|
|
35.10
|
|
|
|
8/24/2011
|
|
|
|
|
8,972
|
(5)
|
|
|
0
|
|
|
|
17.45
|
|
|
|
8/13/2012
|
|
|
|
|
7,861
|
(5)
|
|
|
0
|
|
|
|
27.16
|
|
|
|
8/15/2013
|
|
|
|
|
8,055
|
(5)
|
|
|
0
|
|
|
|
20.78
|
|
|
|
8/10/2014
|
|
|
|
|
14,000
|
(5)
|
|
|
0
|
|
|
|
21.40
|
|
|
|
6/15/2015
|
|
|
|
|
4,000
|
(5)
|
|
|
0
|
|
|
|
21.62
|
|
|
|
10/3/2016
|
|
David J. Pauldine
|
|
|
4,405
|
(2)
|
|
|
36,000
|
(2)
|
|
|
21.76
|
|
|
|
10/24/2015
|
|
|
|
|
0
|
|
|
|
30,000
|
(2)
|
|
|
21.62
|
|
|
|
10/3/2016
|
|
Thomas C. Shepherd
|
|
|
6,000
|
(2)
|
|
|
9,000
|
(2)
|
|
|
20.12
|
|
|
|
10/18/2014
|
|
|
|
|
15,000
|
(4)
|
|
|
0
|
|
|
|
21.40
|
|
|
|
6/15/2015
|
|
|
|
|
0
|
|
|
|
17,500
|
(2)
|
|
|
21.62
|
|
|
|
10/3/2016
|
|
|
|
|
(1) |
|
Options vest 100 percent after the first year of the
10-year
option term. |
|
(2) |
|
Options vest 20 percent per year after each of the first
five years of the
10-year
option term. |
|
(3) |
|
Options vest at 33.33 percent per year after each of the
first three years of the
10-year
option term. |
|
(4) |
|
Options vested 100 percent on date of grant of the
10-year
option term. |
|
(5) |
|
Mr. Levine retired on April 30, 2007. These options
contained an accelerated vesting provision and will expire at
the expiration date of the option. |
|
(6) |
|
All options were granted at market value on the date of grant
based on the closing market price of the common stock for such
date as reported in The Wall Street Journal. |
2007
Option Exercises and Stock Vested
This table sets forth information concerning (1) the
exercise during fiscal year 2007 of options to purchase shares
of common stock by each of the NEOs and (2) the dollar
amount realized on exercise of the exercised options.
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Number of
|
|
|
|
|
|
|
Shares Acquired
|
|
|
Value Realized
|
|
|
|
on Exercise
|
|
|
on Exercise
|
|
Name
|
|
(#)
|
|
|
($)(1)
|
|
|
Dennis J. Keller
|
|
|
51,000
|
|
|
|
1,005,150
|
|
Ronald L. Taylor
|
|
|
51,000
|
|
|
|
721,080
|
|
Norman M. Levine
|
|
|
49,187
|
|
|
|
546,014
|
|
David J. Pauldine
|
|
|
4,595
|
|
|
|
20,172
|
|
25
|
|
|
(1) |
|
Represents the pre-tax difference between the closing market
price of the common stock as reported in The Wall Street Journal
for the date of exercise of the option and the option exercise
price multiplied by the number of shares of common stock covered
by the options held. |
2007
Nonqualified Deferred Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
Contributions
|
|
|
Earnings
|
|
|
Balance at
|
|
|
|
in Last
|
|
|
in Last
|
|
|
Last Fiscal
|
|
|
|
Fiscal Year
|
|
|
Fiscal Year
|
|
|
Year End
|
|
Name
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
Dennis J. Keller
|
|
|
0
|
|
|
|
81,820
|
|
|
|
767,985
|
|
Daniel Hamburger
|
|
|
141,740
|
|
|
|
8,961
|
|
|
|
204,042
|
|
Ronald L. Taylor
|
|
|
0
|
|
|
|
41,115
|
|
|
|
851,376
|
|
Richard M. Gunst
|
|
|
61,317
|
|
|
|
128
|
|
|
|
27,628
|
|
Norman M. Levine
|
|
|
840
|
|
|
|
17,346
|
|
|
|
133,050
|
|
David J. Pauldine
|
|
|
30,288
|
|
|
|
0
|
|
|
|
0
|
|
Thomas C. Shepherd
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
(1) |
|
Executive Contributions in Last Fiscal Year. The amount
of executive contributions made by each NEO and reported in this
column is included in each NEOs compensation reported on
the 2007 Summary Compensation Table, either in the
Salary or Non-Equity Incentive Plan
Compensation column. Mr. Levines amount is
related to salary in fiscal year 2007. Mr. Gunst deferred
$27,500 of his fiscal year 2007 salary and deferred $33,817 of
his MIP compensation. The amounts reported for
Mr. Hamburger and Mr. Pauldine represent deferrals of
a portion of their MIP compensation. Each item of MIP
compensation was earned in fiscal year 2007, but paid in fiscal
year 2008. |
|
|
|
(2) |
|
Aggregate Earnings in Last Fiscal Year. These amounts
represent the earnings in the Deferred Plan for fiscal year
2007. These amounts are not reported in the Summary Compensation
Table. |
|
(3) |
|
Aggregate Balance at Last Fiscal Year End. The aggregate
balance as of June 30, 2007 reported in this column for
each NEO reflects amounts that have been previously reported as
compensation on the Summary Compensation Table for prior years
except for earnings on such balances. |
Deferred
Compensation Plan
Under the Deferred Plan, participants are entitled to defer
compensation until termination of service with the Company or
certain other specified dates. The Company credits matching
contributions to participants accounts under the Deferred
Plan to the extent their matching contributions to the
Companys Profit Sharing Retirement Plan are limited by
various Internal Revenue Code limitations. The Company may also
credit participants accounts with discretionary profit
sharing contributions. Participants may elect to have their
Deferred Plan accounts credited with earnings based on various
investment choices made available by the Compensation Committee
for this purpose. Also, participants dependents are
eligible to receive a pre-retirement death benefit.
2007
Potential Payments Upon Termination or
Change-in-Control
The Management Incentive Plan (MIP) provides that the annual
incentive will be paid at target upon a change in control,
prorated for the actual number of months worked in the year.
Outstanding stock option vesting will be accelerated on certain
stock option agreements at the time of a change in control. The
Compensation Committee believes that these provisions in our MIP
and stock options are appropriate, since an executives
position and ability to earn the award could be adversely
affected by a change in control, even if he or she is not
terminated. The Company is contractually committed to provide
benefits to certain of the NEOs should their employment with the
Company be terminated. These benefits are in addition to the
benefits to which the executives otherwise would be
26
entitled upon a termination of employment. The incremental
benefits payable to the executives are described as follows:
Employment
Agreements
The employment agreement of Mr. Hamburger, which was
effective as of November 15, 2006 in connection with his
assumption of the duties of President and Chief Executive
Officer of the Company, provides the following severance
benefits:
|
|
|
|
|
If a change in control of the Company has not occurred and
Mr. Hamburgers employment is terminated by the
Company for other than cause or retirement at
age 65, or Mr. Hamburger terminates his employment for
good reason, he is entitled to an immediate payment
equal to 12 months of his base salary.
|
|
|
|
If the Company terminates Mr. Hamburgers employment
following a change in control of the Company (i.e., a sale of
substantially all of the Companys assets or the
acquisition by another entity of a majority of the
Companys common stock), he is entitled to the following:
|
i. An immediate payment equal to two times annual salary;
ii. An immediate payment equal to a pro rata portion
of the average bonuses paid to him for the two years prior to
his termination; and,
iii. Immediate vesting of all outstanding stock options.
Cause means Mr. Hamburgers conviction of
a felony or a crime involving monies, other property, fraud or
embezzlement. Good reason exists if
Mr. Hamburger is not accorded the duties and
responsibilities described in the agreement, if his duties or
responsibilities are materially or substantially reduced, if he
is not paid amounts owed under the agreement within
10 days notice to the Company, or if the Company
otherwise breaches the agreement.
The Companys employment arrangement with Mr. Gunst,
which was effective as of July 24, 2006 in connection with
the commencement of his employment as Chief Financial Officer of
the Company, provides that if he is terminated by the Company
for other than death, disability or cause, the
Company will pay him 12 months of continued salary.
Cause means Mr. Gunsts willful disregard
of a Company policy after written notice, his willful and
continued failure to perform his duties after a written demand
for performance, or his willful engagement in conduct materially
injurious to the Company. The receipt of these payments is
conditioned on his signing an appropriate release of claims.
MR.
KELLER AND MR. TAYLOR
Mr. Keller and Mr. Taylor each have entered into
Senior Advisor Agreements with the Company, which became
effective June 30, 2006 and November 15, 2006
respectively. The agreements provide the following severance
benefits in the event the executives employment with the
Company is terminated by either party without cause within the
15-year term
of their respective Senior Advisor Agreement:
|
|
|
|
|
Continued salary for the remainder of such period (salary is
$420,000 per year for the first five years as a Senior Advisor
and $50,000 per year for the next ten years, adjusted annually
by the salary increase taken on average by the Company for other
employees; and,
|
|
|
|
|
|
Continued health coverage for the executive and his spouse under
the Company-sponsored plan for the duration of their lives, with
the Company paying any required premiums (provided that the
executive and his wife obtain any health coverage available from
any other employer or Medicare) and participation in the
executive medical coverage program, which reimburses up to
$50,000 per annum in out-of-pocket medical costs. The
Company also provides a tax gross up with respect to any income
tax liability incurred by the executive as a result of such
coverage.
|
27
Cause means the executives conviction of a
felony or a crime involving monies, other property, fraud or
embezzlement. The executive is not entitled to any other
severance under any other plan or arrangement of the Company.
The agreements contain restrictive covenants that prohibit the
executive from (i) revealing confidential information and
(ii) for 24 months after termination of employment,
providing services to competitors (as defined in the agreement),
soliciting certain persons who were customers or suppliers of
the Company within 24 months prior to such solicitation, or
soliciting other employees.
Stock
Option Plans
In the event Mr. Hamburger is terminated following a change
of control, any of his stock options that are then unvested,
vest immediately pursuant to his Employment Agreement and vest
upon a change in control (without regard to termination) under
the provisions of the agreements by which his currently
outstanding options were granted. The provisions of the
agreements under which options are held by Mr. Pauldine,
Mr. Gunst and Mr. Shepherd also call for the vesting
of unvested options in the event of a change in control. Options
held by the other NEOs were fully vested at June 30, 2007.
None of the NEOs, including Mr. Hamburger, have unique
post-termination exercise rights.
The tables set forth below quantifies the additional benefits as
described above that would be paid to each NEO in a separation
context or assuming a change in control of the Company (if
applicable) occurred and the executives subsequently become
eligible for benefits following a termination of employment on
June 30, 2007.
2007
Potential Severance Payments
No Change
in Control(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel
|
|
|
Richard
|
|
|
Ronald
|
|
|
Dennis
|
|
Name:
|
|
Hamburger
|
|
|
Gunst
|
|
|
Taylor
|
|
|
Keller
|
|
Salary:
|
|
$
|
675,000
|
|
|
$
|
275,000
|
|
|
$
|
2,659,100
|
|
|
$
|
2,501,600
|
|
Continued Health Coverage:
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
301,100
|
|
|
$
|
297,000
|
|
Change in
Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel
|
|
|
Richard
|
|
|
Ronald
|
|
|
Dennis
|
|
Name:
|
|
Hamburger
|
|
|
Gunst
|
|
|
Taylor
|
|
|
Keller
|
|
Salary:
|
|
$
|
1,350,000
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Bonus:
|
|
$
|
490,791
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Continued Health Coverage:
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Value of Vesting of Unvested Stock Options(2):
|
|
$
|
1,582,785
|
|
|
$
|
456,750
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
(1) |
|
Employment is terminated by DeVry other than in the event of
death or disability or for Cause. |
|
(2) |
|
Based on the difference between the exercise price and the
closing market price of the common stock for such date as
reported in The Wall Street Journal. These options vest
upon a change in control, without regard to termination of
employment. The value of vesting of unvested stock options for
other NEOs, assuming a change in control at June 30, 2007,
would be $813,360 for Mr. Pauldine and $342,100 for
Mr. Shepherd. |
Profit
Sharing Retirement Plan
Employees of the Company and its subsidiaries participate in the
DeVry Inc. Profit Sharing Retirement Plan (the Profit
Sharing Retirement Plan), which, as of June 30, 2007,
covered 3,717 of the Companys employees, including 826
former employees. Under the Profit Sharing Retirement Plan,
eligible employees share in the success and profitability of the
Company through a combination of Company matching and
discretionary contributions. Regular full-time employees and
regular part-time employees who complete 1,000 hours of
service during a Profit Sharing Retirement Plan Year (July
1 June 30) become automatically enrolled in the
Profit Sharing Retirement Plan. Eligible employees may choose to
contribute to a 401(k) account from one percent to 50% (one
percent to six percent in the case of highly compensated
employees) of their annual eligible compensation (including
salary, overtime pay and bonuses), subject to IRS annual
contribution limitations. To those employees contributing one
28
percent to a 401(k) account, the Company makes a matching
contribution of one percent of their total annual eligible
compensation; 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 compensation 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. The matching and
discretionary contributions by the Company vest ratably over
five years.
EQUITY
COMPENSATION PLAN INFORMATION
The Company currently maintains six equity compensation plans:
the Amended and Restated Stock Incentive Plan, established in
1988, the 1991 Stock Incentive Plan, the 1994 Stock Incentive
Plan, the 1999 Stock Incentive Plan, the 2003 Stock Incentive
Plan and the DeVry Inc. Incentive Plan of 2005. The
Companys stockholders have approved each of these plans.
The following table summarizes information, as of June 30,
2007, relating to these equity compensation plans 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
|
|
|
3,316,210
|
|
|
$
|
23.61
|
|
|
|
3,395,828
|
|
Equity compensation plans not approved by security holders
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
3,316,210
|
|
|
$
|
23.61
|
|
|
|
3,395,828
|
|
|
|
|
(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
(800 shares), 1991 Stock Incentive Plan
(11,550 shares), 1994 Stock Incentive Plan
(609,998 shares), 1999 Stock Incentive Plan
(1,205,418 shares), 2003 Stock Incentive Plan
(1,488,444 shares) and the DeVry Inc. Incentive Plan of
2005 (0 shares). |
|
(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
(5,312 shares), the 2003 Stock Incentive Plan
(390,516 shares) and the DeVry Inc. Incentive Plan of 2005
(3,000,000 shares). All of the shares remaining available
for the grant of future awards of options, warrants and rights
are available under the 1999 Stock Incentive Plan, the 2003
Stock Incentive Plan and the DeVry Inc. Incentive Plan of 2005.
No new awards may be granted under the 1988 Stock Incentive
Plan, the 1991 Stock Incentive Plan or the 1994 Stock Incentive
Plan. |
29
AUDIT
COMMITTEE REPORT
To Our Stockholders:
The Audit Committee of DeVry Inc., which met seven times during
the last fiscal year, consists of four independent Directors and
operates under a written charter that conforms to the Securities
and Exchange Commissions implementing regulations and to
the NYSE listing standards.
Management is responsible for the Companys internal
controls and the financial reporting process from which it
prepares the financial statements. The Companys
independent registered public accounting firm is 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 registered
public accounting firm, subject to ratification by the
stockholders;
|
|
|
|
discussing with the independent registered public accounting
firm the independent registered public accounting firms
independence;
|
|
|
|
monitoring the scope, approach and results of the annual audits
and quarterly reviews of financial statements;
|
|
|
|
reviewing and discussing the annual audited and quarterly
unaudited financial statements with management and the
independent registered public accounting firm; and
|
|
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discussing with management and the independent registered public
accounting firm the nature and effectiveness of the
Companys internal control systems.
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With respect to the Companys audited financial statements
for the fiscal year ended June 30, 2007:
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The Audit Committee has reviewed and discussed the audited
financial statements with management;
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The Audit Committee has met with PricewaterhouseCoopers LLP, the
Companys independent registered public accounting firm,
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
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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.
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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, 2007 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 registered public accounting firm for
the fiscal year 2008.
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
William T. Keevan
Harold T. Shapiro
30
AUDIT
FEES
The Audit Committee appointed PricewaterhouseCoopers LLP
(PwC) as the Companys independent registered
public accounting firm for the fiscal year ended June 30,
2007. The Companys stockholders ratified the engagement at
the Annual Meeting of Stockholders on November 15, 2006. 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. 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 year 2007 and 2006 for fees billed or to
be billed by PwC for audit and other professional services,
respectively, were as follows:
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Fiscal 2007
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Fiscal 2006
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Audit Fees
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$
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1,453,375
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$
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1,582,100
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Audit Related Fees
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445,088
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Tax Fees
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456,562
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138,708
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All Other Fees
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2,400
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Total
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$
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2,357,425
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$
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1,720,808
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Audit Fees Includes all services performed to
comply with generally accepted auditing standards 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
registered public accounting firm without impairing its
independence.
All Other Fees Includes subscriptions for
on-line accounting research services.
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. 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.
Following such review, each proposed service is approved,
modified or denied as appropriate. A record of all such
approvals is maintained in the files 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 registered
31
public accounting firm 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. For fiscal year 2007, none of the services
provided by PwC were provided pursuant to the de minimis
exception to the pre-approval requirements contained in the
applicable rules of the Securities and Exchange Commission.
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 its consideration and approval. When deemed
necessary, the Audit Committee has delegated pre-approval
authority to its Chair. Any engagement of the independent
registered public accounting firm under this delegation will be
presented for informational purposes to the full Audit Committee
at their next meeting.
SELECTION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed
PricewaterhouseCoopers LLP, as independent registered public
accounting firm for the Company and its subsidiaries for fiscal
year 2008. The Board of Directors recommends to the stockholders
that the selection of PricewaterhouseCoopers LLP as independent
registered public accounting firm for the Company and its
subsidiaries be ratified. If the stockholders do not ratify the
selection of PricewaterhouseCoopers LLP, the selection of
independent registered public accounting firm 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 registered public accounting firm for the Company
for fiscal year 2008 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
registered public accounting firm for the Company for fiscal
year 2008.
The Board of Directors recommends a vote FOR ratification of
the selection of PricewaterhouseCoopers LLP as independent
registered public accounting firm for the Company for fiscal
year 2008.
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, 2007, all such persons filed on a timely basis all
reports required by Section 16(a) of the Exchange Act,
except that Director Robert C. McCormack was inadvertently late
in filing one report on Form 4.
STOCKHOLDER
PROPOSALS 2008 ANNUAL MEETING
Stockholder proposals intended to be presented at the 2008
Annual Meeting must be received by the Company no later than
June 12, 2008 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 12, 2008. The notice must contain the
information required by the By-Laws.
SEC
REPORTS
A copy of the Companys 2007 Annual Report on
Form 10-K
(including the financial statements and financial statement
schedules), as filed with the Securities and Exchange
Commission, may be obtained without charge upon
32
written request to the office of the Secretary of the Company at
DeVry Inc., One Tower Lane, Oakbrook Terrace, IL
60181-4624.
A copy of the Companys
Form 10-K
and other periodic filings also may be obtained on the
Companys website at www.devryinc.com and from the
Securities and Exchange Commissions EDGAR database at
www.sec.gov.
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.
By Order of the Board of Directors
Secretary
33
VOTE BY INTERNET www.proxyvote.com Use the Internet to transmit your voting instructions and
for electronic delivery of information up until DEVRY INC. 11:59 P.M. Eastern Time the day before
the meeting ONE TOWER LANE date. Have your proxy card in hand when you access the web site. SUITE
1000 OAKBROOK TERRACE, IL 60181 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 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 Broadridge, 51 Mercedes Way, Edgewood, NY
11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: 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. The Board of Directors recommends a vote FOR items 1, 2 and 3. 2. Election of
Directors: For Withhold For All To withhold authority to vote for any individual All All Except
nominee(s), mark For All Except and write the Nominee: Class I (2010) number(s) of the
nominee(s) on the line below. 01 Connie R. Curran 02 Daniel Hamburger 0 0 0 03 Lyle Logan 04
- Harold T. Shapiro 05 Ronald L. Taylor For Against Abstain Vote On Proposals 1. To approve an
amendment of Article Seventh of the Companys Restated Certificate of Incorporation to change the
maximum 0 0 0 number of directors the Company may have. 3. Ratification of selection of
PricewaterhouseCoopers LLP as independent registered public accounting firm. 0 0 0 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. For address changes and/or comments, please check this box 0 and write
them on the back where indicated. Please indicate if you plan to attend this meeting. 0 0 Yes No
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date |
PROXY DeVry Inc. PROXY This Proxy is solicited on behalf of the Board of Directors. The undersigned
hereby appoints Gregory S. Davis and Richard M. Gunst 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 7, 2007 at 9:00
a.m. Central Standard Time at Doubletree Guest Suites and Conference Center, Grand Ballroom, 2111
Butterfield Road, Downers Grove, IL 60515, 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 and 3. The proxies are authorized, in their discretion, to vote such shares upon any
other business that may properly come before the Annual Meeting. Address Changes/Comments: (If you
noted any address changes and/or 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.) |