10/27/2021 | Press release | Distributed by Public on 10/27/2021 14:34
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Definitive Proxy Statement
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Soliciting Material under §240.14a-12
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STRIDE, INC.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Sincerely,
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Nathaniel A. Davis
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Executive Chairman
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Important Information Regarding Meeting Attendance
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We are sensitive to the public health and travel concerns our stockholders may have regarding our in person Annual Meeting and recommendations that public health officials have issued and may issue in light of the continuing public health crisis caused by COVID-19. As a result, we will enforce appropriate protocols consistent with then applicable federal, state and local guidelines, mandates or recommendations or facility requirements. These requirements may include the use of face coverings, proof of vaccination and maintaining appropriate social distancing. We may also impose additional procedures or limitations on meeting attendees. We plan to announce any such updates on our website https://investors.stridelearning.com/governance/2021-annual-meeting/default.aspx, and we encourage you to check this website prior to the Annual Meeting if you plan to attend.
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1.
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Elect nine (9) directors to the Company's Board of Directors each to serve for a one-year term;
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2.
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Consider and vote upon the ratification of the appointment of BDO USA, LLP, as the Company's independent registered public accounting firm for the fiscal year ending June 30, 2022;
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Consider and vote upon a non-binding advisory resolution approving the compensation of the named executive officers of the Company ("Say-on-Pay");
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4.
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Consider and vote upon a stockholder proposal regarding a report on lobbying; and
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Act upon such other matters as may properly come before the Annual Meeting or any adjournments or postponements of the Annual Meeting.
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Sincerely,
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Vincent W. Mathis
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Executive Vice President, General Counsel and Secretary
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Your vote is important. Whether or not you plan to attend the Annual Meeting, please promptly submit your proxy or voting instructions by Internet, telephone, or mail. For specific instructions on how to vote your shares, please refer to the instructions found on the Notice of Internet Availability of Proxy Materials you received in the mail or, if you received a paper copy of the proxy materials, the enclosed proxy card or voting instruction form.
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PROXY STATEMENT
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1
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Record Date; Outstanding Shares; Shares Entitled to Vote
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1
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Quorum and Vote Required
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1
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Abstentions and Broker Non-Votes
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2
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Voting; Proxies
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2
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Revocation
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3
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Attending the Annual Meeting
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3
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Proxy Solicitation
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Business; Adjournments
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ELECTION OF DIRECTORS
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5
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Summary
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5
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Information Regarding Nominees
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Board Meetings; Attendance at Annual Meetings
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14
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Independence of Directors
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14
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Committees
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15
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Director Nomination Process
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18
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Communications with Directors
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Board Leadership Structure
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Risk Oversight
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Compensation of Directors
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21
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Director Stock Ownership Guidelines
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Deferred Compensation Plan for Non-Employee Directors
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Corporate Governance Guidelines and Code of Ethics and Business Conduct
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Related Party Transactions
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Compensation Committee Interlocks and Insider Participation
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Audit Committee Report
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Independent Registered Public Accounting Firm Fees and Services
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RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
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STOCKHOLDER PROPOSAL REGARDING A REPORT ON LOBBYING
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SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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EXECUTIVE COMPENSATION
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Compensation Discussion and Analysis
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Compensation Committee Report
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Summary Compensation Table for Fiscal 2021
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Grants of Plan-Based Awards During Fiscal 2021 Table
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Outstanding Equity Awards at End of Fiscal 2021 Table
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60
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Option Exercises and Stock Vested During Fiscal 2021 Table
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Fiscal 2021 Non-Qualified Deferred Compensation Table
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Potential Payments upon Termination or Change in Control
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CEO Pay Ratio
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GENERAL MATTERS
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68
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Delinquent Section 16(a) Reports
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Stockholder Proposals and Nominations
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Other Matters
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APPENDIX A - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
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70
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view our proxy materials for the Annual Meeting, including this Proxy Statement and the Stride, Inc. Annual Report to Stockholders for the fiscal year ended June 30, 2021 on the Internet and vote; and
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instruct us to send proxy materials to you by mail or email.
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Key
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Senior Leadership
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Experience serving in a senior leadership role of a complex organization
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Public Company Board
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Experience as a board member of another publicly traded company
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Current or Former CEO
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Experience serving as a current or former Chief Executive Officer ("CEO")
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Financial Expertise
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Experience or expertise in finance, accounting, financial management or financial reporting
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Technology
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Experience or expertise in the technology industry
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Education / Public Policy Expertise
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Knowledge of or experience in education or public policy
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International
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Experience with global business operations or with doing business internationally
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AIDA M. ALVAREZ
Age: 72
Director Since: 2017
Nominating and Corporate
Governance
Committee
Independent
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Professional Experience:
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Ms. Alvarez currently serves as Chair of the Latino Community Foundation. As Administrator of the U.S. Small Business Administration, she was a member of President Clinton's Cabinet from 1997 to 2001. Previously, Ms. Alvarez served as the Director of the Office of Federal Housing Enterprise Oversight from 1993 to 1997, where she was charged with financial oversight of the secondary housing market, the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac"). Prior to that, she worked for the New York City Health and Hospitals Corporation, Bear Stearns & Company, Inc. and the First Boston Corporation. She has served on the boards of directors of Fastly, Inc. since August 2019; Oportun, Inc. (formerly Progress Financial Corporation) since 2011; and HP Inc. since February 2016. From 2006 to June 2016, Ms. Alvarez served on the board of directors of Wal-Mart Stores Inc., and from 2004 to 2014, served on the boards of directors of MUFG Americas Holdings Corporation (formerly UnionBanCal Corporation) and MUFG Union Bank N.A. (formerly Union Bank N.A.). From 2014 to 2019, she served on the board of directors of Zoosk, Inc.
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Attributes, Skills and Qualifications:
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Ms. Alvarez holds a B.A. from Harvard College. Ms. Alvarez was selected as a director because of her financial expertise, government experience, and ability to bring diverse perspectives to the Board of Directors.
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CRAIG R. BARRETT
Age: 82
Director Since: 2010
Lead Independent Director
Academic Committee Chair
Independent
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Professional Experience:
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Dr. Barrett served as Chief Executive Officer of Intel Corporation from 1998, until his retirement in 2009, and was also Chairman of the Board of Intel from 2005 to 2009. He previously served in various roles at Intel Corporation, including Chief Operating Officer, since joining Intel in 1974. Prior to Intel Corporation, Dr. Barrett was a member of the Department of Materials Science and Engineering faculty of Stanford University. Dr. Barrett currently serves as Co-Chairman of Achieve, Inc., an independent, bipartisan, non-profit education reform organization; President and Chairman of BASIS Charter Schools, Inc.; Vice Chair of the Science Foundation Arizona; and a member of the Board of Trustees of Society for Science and the Public.
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Attributes, Skills and Qualifications:
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Dr. Barrett holds a B.S., M.S. and Ph.D. in Materials Science from Stanford University. Dr. Barrett was selected as a director because of his deep knowledge and experience in information technology innovation, as well as his global, operational, and leadership experience as Chairman and Chief Executive Officer of Intel Corporation. He also brings a unique perspective to the Board of Directors from his tenure as a professor and his volunteer work and support of numerous educational organizations.
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ROBERT L. COHEN
Age: 56
Director Since: 2019
Audit Committee Academic Committee
Independent
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Professional Experience:
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Mr. Cohen currently serves in various roles including strategic advisor, investor, and board observer to high growth education technology companies including 2U Inc. Since May 2020, Mr. Cohen has served as a director of SPiGlobal. Mr. Cohen served as President and Chief Operating Officer of 2U through January 2016. He was appointed President in November 2013 and Chief Operating Officer in April 2012. In addition, Mr. Cohen was 2U's founding Chief Financial Officer beginning in June 2008. From 2001 to 2008, Mr. Cohen held several senior roles at The Princeton Review, including Executive Vice President of Strategic Development and Executive Vice President and General Manager of K12 Services. From 1983 to 2001, Mr. Cohen founded and operated the largest network of franchises of The Princeton Review before selling them back to that company.
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Attributes, Skills and Qualifications:
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Mr. Cohen attended Princeton University. He was selected as a director because of his deep knowledge and experience in the education technology industry, as well as his operational and leadership experience as Chief Operating Officer of 2U.
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NATHANIEL A. DAVIS
Age: 67
Director Since: 2009
Stride, Inc. Executive Chairman
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Professional Experience:
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Mr. Davis joined us as a director in July 2009 and has served as our Chairman since June 2012. In January 2013, he became our Executive Chairman, and in January 2014, Mr. Davis was appointed to be our CEO, serving in that role through February 2016 and again beginning in March 2018 through January 2021. He again became our Executive Chairman in January 2021. Prior to joining the Company, he served as the Managing Director of RANND Advisory Group from 2003 until December 2012. Previously, Mr. Davis worked for XM Satellite Radio from June 2006 to November 2008, serving as President and then Chief Executive Officer until the company's merger with Sirius Radio. He also served on the XM Satellite Radio board of directors from 1999 through 2008. From 2000 to 2003, Mr. Davis was President and Chief Operating Officer and a board member of XO Communications Inc. Mr. Davis has also held senior executive positions at Nextel Communications (EVP, Network and Technical Service), MCI Telecommunications (Chief Financial Officer) and MCI Metro (President and Chief Operating Officer). Mr. Davis has served as a director of Unisys Corporation and RLJ Lodging Trust since 2011, and as a director of the National Alliance to End Homelessness since June 2021. Mr. Davis has also previously served on the board of several public and private firms including Mutual of America Capital Management Corporation, Charter Communications and Telica, Inc.
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Attributes, Skills and Qualifications:
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Mr. Davis holds an M.B.A. from the Wharton School of the University of Pennsylvania, an M.S. in Engineering Computer Science at the Moore School of the University of Pennsylvania, and a B.S. in Engineering from Stevens Institute of Technology. Mr. Davis was selected as a director based on his strong record of executive management, finance and systems engineering skills, as well as his insight into the considerations necessary to run a successful, diverse global business. The Board of Directors also benefits from his previous service on other public company boards and his experience in accounting and financial reporting.
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STEVEN B. FINK
Age: 70
Director Since: 2003
Audit Committee Chair Compensation Committee
Independent
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Professional Experience:
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Mr. Fink is the Co-Chairman of Heron International. He served as a director of Nobel Learning Communities, Inc. from 2003 to 2011 and as Chairman of the Board of Life Storage, LLC from 2013 to 2016. In addition, Mr. Fink is a member of the boards of The Jackson Laboratory, City of Hope, St. Helena Hospital, OLE Health Foundation, and the Herb Ritts Foundation. From 1999 to 2009, Mr. Fink served as a director of Leapfrog Enterprises, Inc. and was its Chairman from 2004 to 2009. From 2000 to 2008, Mr. Fink was the Chief Executive Officer of Lawrence Investments, LLC. Mr. Fink has also previously served as Chairman and Chief Executive Officer of Anthony Manufacturing, Chairman and Managing Director of Knowledge Universe and Chairman and Chief Executive Officer of Nextera Enterprises, Inc.
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Attributes, Skills and Qualifications:
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Mr. Fink holds a B.S. in Psychology from the University of California, Los Angeles and a J.D. and an L.L.M. from New York University. Mr. Fink was selected as a director based on his significant experience in operations and financial oversight gained as serving as director or chairman for various public and private companies, in addition to his membership on various company audit committees which enables him to contribute significantly to the financial oversight, risk oversight and governance of the Company.
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VICTORIA D. HARKER
Age: 57
Director Since: 2020
Audit Committee
Independent
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Professional Experience:
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Ms. Harker serves as Executive Vice President and Chief Financial Officer for TEGNA Inc., formerly Gannett Co., Inc. She was named Chief Financial Officer of Gannett in July 2012 and is responsible for TEGNA's financial functions and operations company-wide. Prior to this role, Ms. Harker served as CFO and President of global business services of the AES Corporation. Previously, Ms. Harker worked for MCI Inc. in a variety of executive roles, including Acting Corporate Chief Financial Officer and Chief Financial Officer, Mass Market Division. In 2019, she was also appointed to the State Council of Higher Education for Virginia by Governor Ralph Northam. She is also a member of the Virginia Business Higher Education Council. Ms. Harker has served on the boards of directors of Huntington Ingalls Industries, Inc. since 2012 and of Xylem Inc. since 2011.
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Attributes, Skills and Qualifications:
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Ms. Harker holds a B.A. in English from the University of Virginia and a Master of Business Administration from American University. Ms. Harker was selected as a director because of her executive, operational and financial expertise gained through various roles in private and public companies.
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ROBERT E. KNOWLING, JR.
Age: 66
Director Since: 2018
Compensation Committee Chair
Independent
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Professional Experience:
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Mr. Knowling serves as Chairman of Eagles Landing Partners, which specializes in helping senior management formulate strategy, lead organizational transformations, and re-engineer businesses. From 2002 to 2005 he served as Chief Executive Officer of the NYC Leadership Academy, an independent non-profit corporation created by Chancellor Joel I. Klein and Mayor Michael R. Bloomberg that is chartered with developing the next generation of principals in the New York City public school system. Mr. Knowling has also held roles as Chief Executive Officer of Telwares, Chairman and Chief Executive Officer of SimDesk Technologies, Inc. and Chairman, President and Chief Executive Officer of Covad Communications. He was awarded the Wall Street Project's Reginald Lewis Trailblazers Award by President Clinton and the Reverend Jesse Jackson in 1999. Mr. Knowling serves on the board of directors for Citrix Systems Inc., Rite Aid Corporation and Stream Companies. He also previously served on the board of directors of Heidrick & Struggles, Inc. from 2010 to 2015, Convergys Corporation from 2017 to 2018, and Roper Technologies, Inc. from 2008 to 2021.
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Attributes, Skills and Qualifications:
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Mr. Knowling holds a B.A. in theology from Wabash College and an M.B.A. from Kellogg School of Management, Northwestern University. He was selected as a director based on his experience in public education, public company leadership roles, technology and organizational development.
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LIZA MCFADDEN
Age: 59
Director Since: 2017
Nominating and
Corporate
Governance
Committee Chair
Independent
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Professional Experience:
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Ms. McFadden leads LIZA and Partners LLC and serves on the boards of Reading Partners and the Florida State Parks Foundation. Previously, she was President and Chief Executive Officer of the Barbara Bush Foundation for Family Literacy from 2012 to 2018. She is a former high school teacher, Florida Department of Education administrator and served in Governor Jeb Bush's administration. Additionally, Ms. McFadden was appointed by President George W. Bush to serve on the National Institute for Literacy Board.
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Attributes, Skills and Qualifications:
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Ms. McFadden holds an M.A. from Florida State University and a B.A. from Fitchburg State University. She was selected as a director because of her dedication to the education community and expertise in literacy.
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JAMES J. RHYU
Age: 51
Director Since: 2021
Stride, Inc. Chief Executive Officer
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Professional Experience:
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Mr. Rhyu joined us in June 2013, serving as the Company's Chief Financial Officer until April 2020. In April 2020, he was appointed the Company's President, Corporate Strategy, Marketing and Technology. In January 2021, Mr. Rhyu was appointed and currently serves as Chief Executive Officer. Prior to joining the Company, Mr. Rhyu served as Chief Financial Officer and Chief Administrative Officer of Match.com, a subsidiary of publicly traded IAC/InterActiveCorp, since June 2011. In those roles, he was responsible for overseeing a broad range of functions, including finance, human resources, legal, information technology and operations, certain international operations and product development. Prior to his roles at Match.com, Mr. Rhyu was a Senior Vice President of Finance at Dow Jones & Company from January 2009 until May 2011, where he ran the global financial function. Previously, Mr. Rhyu served for three years as the Corporate Controller of Sirius XM Radio Inc. and its predecessor company, XM Satellite Radio, as well as serving in the same role for Graftech International. Mr. Rhyu also served six years as an auditor with Ernst & Young LLP in the United States and South America.
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Attributes, Skills and Qualifications:
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Mr. Rhyu holds a B.S. from the Wharton School of Business at the University of Pennsylvania and an M.B.A. from the London Business School.
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KEVIN P. CHAVOUS
Age: 65
President, Academic Policy and External Affairs
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Professional Experience:
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Mr. Chavous joined us in January 2017 and currently serves as President, Academic Policy and External Affairs. He was a member of our Board of Directors from January 2017 to October 2017 before resigning to take his current position. Previously, he was the Founder and Chief Executive Officer of The Chavous Group, an educational consulting firm, a position he held from January 2012 until January 2018 and was a founding board member of the American Federation for Children ("AFC"). He served as AFC's Executive Counsel from 2012 to 2016. Previously, Mr. Chavous was a partner at the SNR Denton law firm from 2002 to 2012 and served as a member of the Council of the District of Columbia from 1993 to 2005, where he was Chair of the Council's Education Committee. He also has served on the boards of various charter schools across the country, including the Friendship Charter Schools in Washington, D.C. Mr. Chavous holds a B.A. from Wabash College and a J.D. from the Howard University School of Law.
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VINCENT M. MATHIS
Age: 57
Executive Vice President, General Counsel and Secretary
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Professional Experience:
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Mr. Mathis joined us in September 2018 and serves as Executive Vice President, General Counsel and Secretary. In this role, he has executive responsibility for providing comprehensive legal counsel for our business, including matters relating to securities, litigation, regulatory compliance, intellectual property, contracts and licensing, and corporate governance. Mr. Mathis has more than 30 years of legal experience counseling diverse global businesses. Prior to joining the Company, Mr. Mathis served as Senior Vice President, Corporate Affairs, Corporate Secretary and Chief of Staff to the CEO at The AES Corporation where he earlier was Vice President and Deputy General Counsel. Prior to his roles at The AES Corporation, Mr. Mathis was an Executive Vice President and General Counsel at ContourGlobal, LLC, a private international energy company. Previously, Mr. Mathis worked for Venable, LLP, Shearman and Sterling, LLP, and the United States Securities and Exchange Commission. Mr. Mathis formerly served on the board of directors of Indianapolis Power and Light Company Enterprises, Inc., AES Tietê Energia S.A., and AES Elpa S.A. In addition, he previously served on the board of directors at IPALCO Enterprises, Inc., DPL Inc. and The Dayton Power and Light Company and was Chairman of Eletropaulo Metropolitana Eletricidade de São Paulo S.A. Mr. Mathis holds a J.D. from the University of Virginia and a B.A. in Economics and Political Science from The University of Richmond.
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DR. SHAUN E. MCALMONT
Age: 55
President, Career
Learning Solutions
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Professional Experience:
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Dr. McAlmont joined us in August 2018 and serves as President, Career Learning Solutions. In this role, he has executive responsibility for managing all aspects of the Company's career readiness education programs, including development of the Career Academies and Programs, and related market expansion. Since August 2020, Dr. McAlmont has served as a director of BorgWarner (NYSE: BWA). Prior to joining the Company, Dr. McAlmont served as President and CEO of Neumont College of Computer Science. Previously, Dr. McAlmont served as President and CEO of Lincoln Educational Services (NASDAQ: LINC), a national provider of career training programs, where he earlier was President and Chief Operating Officer. Prior to his roles at Lincoln, Dr. McAlmont served as President of the Online Learning Division at Alta Colleges following a role as regional vice president over multiple school campuses. Dr. McAlmont holds a doctorate in Higher Education Management, with distinction, from the University of Pennsylvania, an M.A. in Education Administration from the University of San Francisco, and a B.S. from Brigham Young University.
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TIMOTHY J. MEDINA
Age: 55
Chief Financial Officer
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Professional Experience:
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Mr. Medina joined us in April 2020 and serves as Chief Financial Officer. Prior to joining the Company, Mr. Medina served as Executive Vice President and Chief Financial Officer of TPx Communications, a premier managed services company. Before that, Mr. Medina served as CFO of ECI Conference Call Services, an audio and web conferencing services provider, as well as CFO of, and in senior leadership positions for, Independent Wireless One Holdings, Verizon Communications, CTI Holdings, CANTV, and GTE Corporation. Mr. Medina holds a B.A. in International Affairs from the George Washington University and an M.S. in taxation from the McDonough School of Business at Georgetown University.
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Director
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Audit
Committee
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Compensation
Committee
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Nominating and Corporate
Governance Committee
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Academic
Committee
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Aida M. Alvarez
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Craig R. Barrett
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Chair
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Guillermo Bron
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Robert L. Cohen
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Nathaniel A. Davis
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John M. Engler
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Stephen B. Fink
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Chair
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Victoria D. Harker
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Robert E. Knowling, Jr.
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Chair
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Liza McFadden
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Chair
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James J. Rhyu
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AUDIT COMMITTEE
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Members: Mr. Cohen, Mr. Fink (Chair) and Ms. Harker
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Number of Meetings: 12, including numerous informal meetings throughout the year
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Independence and Qualifications: The Board of Directors has determined that each of Mr. Cohen, Mr. Fink and Ms. Harker qualifies as independent under the listing standards of the NYSE and SEC regulations and that each are an "audit committee financial expert" as defined by the SEC.
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Responsibilities: The Audit Committee has a charter, available on our website at https://investors.stridelearning.com/governance, setting forth its structure, powers and responsibilities. Pursuant to the charter, the Audit Committee is comprised of at least three members appointed by our Board of Directors, each of whom satisfies the requirements of independence and financial literacy. Under its charter, the responsibilities of the Audit Committee include, among other things:
|
| ||||||
| | |||||||
| | |
•
|
| |
discussing with our independent registered public accounting firm the conduct of the annual audit, the adequacy and effectiveness of our accounting, the effectiveness of internal control over financial reporting, and applicable requirements regarding auditor independence;
|
| |
| | |
•
|
| |
reviewing and recommending to the Board of Directors that the audited financial statements of the Company be included in our Annual Report on Form 10-K;
|
| |
| | |
•
|
| |
selecting annually an independent registered public accounting firm;
|
| |
| | |
•
|
| |
pre-approving all audit and non-audit services and fees associated with our independent registered public accounting firm; and
|
| |
| | |
•
|
| |
reviewing and discussing with management significant accounting matters and disclosures.
|
| |
| | | | | | |||
|
In addition, our Corporate Governance Guidelines provide that members of the Audit Committee may not serve on the audit committees of more than two other companies at the same time as they serve on our Audit Committee.
|
|
|
COMPENSATION COMMITTEE
|
| ||||||
|
Members: Mr. Engler, Mr. Fink and Mr. Knowling (Chair)
|
| ||||||
| | |||||||
|
Number of Meetings: 5
|
| ||||||
| | |||||||
|
Independence and Qualifications: The Board of Directors has determined that each of Mr. Engler, Mr. Fink and Mr. Knowling qualifies as independent under the listing standards of the NYSE.
|
| ||||||
| | |||||||
|
Responsibilities: The Compensation Committee has a charter, available on our website at https://investors.stridelearning.com/governance, setting forth its structure, powers and responsibilities. These include, among other things:
|
| ||||||
| | |||||||
| | |
•
|
| |
reviewing the compensation philosophy of our Company;
|
| |
| | |
•
|
| |
reviewing, approving and recommending corporate goals and objectives relating to the compensation of our Executive Chairman and CEO and, based upon an evaluation of the achievement of these goals, recommending to the Board of Directors our Executive Chairman and CEO's total compensation;
|
| |
| | |
•
|
| |
reviewing and approving salaries, bonuses and other forms of compensation for our other executive officers, including without limitation stock options, restricted shares, and other forms of equity compensation;
|
| |
| | |
•
|
| |
considering and adopting changes to our compensation structure as applicable to all non-executive officer employees, including, but not limited to, salaries and benefits; and
|
| |
| | |
•
|
| |
performing such duties and exercising such authority as may be assigned by the Board of Directors, including under the terms of our equity incentive and bonus plans; and
|
| |
| | |
•
|
| |
discussing the Compensation Committee's views and initiatives around Environmental, Social and Governance ("ESG") for the Company.
|
|
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|
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
|
| ||||||
|
Members: Ms. Alvarez, Mr. Bron, Mr. Engler and Ms. McFadden (Chair)
|
| ||||||
| | |||||||
|
Number of Meetings: 3
|
| ||||||
| | |||||||
|
Independence and Qualifications: The Board of Directors has determined that each of Ms. Alvarez, Mr. Bron, Mr. Engler and Ms. McFadden qualifies as independent under the listing standards of the NYSE.
|
| ||||||
| | |||||||
|
Responsibilities: The Nominating and Corporate Governance Committee has a charter, available on our website at https://investors.stridelearning.com/governance, setting forth its structure, powers and responsibilities. These include, among other things:
|
| ||||||
| | |||||||
| | |
•
|
| |
recommending to the Board of Directors nominees to stand for election at the annual meeting of stockholders and recommending individuals to fill vacancies on the Board;
|
| |
| | |
•
|
| |
reviewing the performance of each current director and overseeing the Board of Directors in the Board's annual review of its performance (including its composition and organization) and the performance of management;
|
| |
| | |
•
|
| |
reviewing the Board committee structure and recommending to the Board of Directors the directors to serve as members of each committee;
|
| |
| | |
•
|
| |
making recommendations to the Board of Directors regarding governance matters; and
|
| |
| | |
•
|
| |
recommending to the Board of Directors any proposed change to the Corporate Governance Guidelines.
|
| |
| | | | | | |||
|
The director nomination process and the factors considered by the committee when reviewing candidates are described below in "Director Nomination Process."
|
| ||||||
| | | | | | |||
|
The Nominating and Corporate Governance Committee also discussed and determined the allocation of responsibilities for the entire Board of Directors and each committee around ESG actions and performance and tasked a management team with a regular evaluation of all metrics in this area.
|
|
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|
ACADEMIC COMMITTEE
|
| ||||||
|
Members: Dr. Barrett (Chair), Mr. Cohen and Mr. Engler
|
| ||||||
| | |||||||
|
Number of Meetings: 3
|
| ||||||
| | |||||||
|
Responsibilities: The primary role of the Academic Committee is to make recommendations and assist management in discharging its responsibility to ensure continuous improvement in academic outcomes for the students and schools we serve.
|
| ||||||
| | |||||||
|
The Academic Committee has a charter, available on our website at https://investors.stridelearning.com/governance, setting forth the structure, powers and responsibilities of the Academic Committee. Members of the Academic Committee participated in three meetings of the Company's Educational Advisory Committee ("EAC") during fiscal 2021. Under its charter, the responsibilities of the Academic Committee include, among other things:
|
| ||||||
| | |||||||
| | |
•
|
| |
monitoring the effectiveness of the Company's education products and services;
|
| |
| | |
•
|
| |
participating in the meetings of the Company's EAC;
|
| |
| | |
•
|
| |
obtaining information, data, and recommendations from the Company's Chief Academic Officer to assist in its decision making;
|
| |
| | |
•
|
| |
evaluating and implementing, as necessary, the proposals of the EAC; and
|
| |
| | |
•
|
| |
reporting and recommending to the Board of Directors to maximize the Company's ability to provide an effective education to students enrolled in the schools served by the Company.
|
|
•
|
personal and professional integrity, ethics and values;
|
•
|
experience in corporate management, such as serving as an officer or former officer of a publicly traded company, and a general understanding of marketing, finance, operations, governance and other elements relevant to the success of the Company in today's business environment;
|
•
|
experience in the field of education policy and administration;
|
•
|
whether the candidate has the time required for preparation, participation and attendance at Board meetings and, if applicable, committee meetings;
|
•
|
potential conflicts of interest with the candidate's other professional and personal pursuits;
|
•
|
service as a board member of another publicly traded company;
|
•
|
practical and mature business judgment, including the ability to make independent analytical inquiries; and
|
•
|
diversity of the Board of Directors, which includes gender, racial and ethnic diversity, as well as a diversity of backgrounds and experiences.
|
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19
|
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20
|
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| | |
Additional Cash Retainer
|
| ||||
|
Committee
|
| |
Chair
|
| |
Member
|
|
|
Audit Committee
|
| |
$35,000
|
| |
$10,000
|
|
|
Compensation Committee
|
| |
$15,000
|
| |
$5,000
|
|
|
Nominating and Corporate Governance Committee
|
| |
$10,000
|
| |
$5,000
|
|
|
Academic Committee
|
| |
$5,000
|
| |
$5,000
|
|
21
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|
Name
|
| |
Fees Earned or
Paid in Cash ($)
|
| |
Stock Awards
($)(1)
|
| |
Total ($)
|
|
|
Aida M. Alvarez(2)
|
| |
75,000
|
| |
145,000
|
| |
220,000
|
|
|
Craig R. Barrett(3)
|
| |
75,000
|
| |
145,000
|
| |
220,000
|
|
|
Guillermo Bron(4)
|
| |
75,000
|
| |
145,000
|
| |
220,000
|
|
|
Robert L. Cohen(5)
|
| |
85,000
|
| |
145,000
|
| |
230,000
|
|
|
John M. Engler(6)
|
| |
85,000
|
| |
145,000
|
| |
230,000
|
|
|
Steven B. Fink(7)
|
| |
110,000
|
| |
145,000
|
| |
255,000
|
|
|
Victoria D. Harker(8)
|
| |
80,000
|
| |
145,000
|
| |
225,000
|
|
|
Robert E. Knowling, Jr.(9)
|
| |
85,000
|
| |
145,000
|
| |
230,000
|
|
|
Liza McFadden(10)
|
| |
80,000
|
| |
145,000
|
| |
225,000
|
|
(1)
|
Represents the aggregate grant date fair values of stock awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") Topic 718. On January 4, 2021, each non-employee director who held such position at the beginning of the calendar year, was eligible to receive an award of 6,901 shares of restricted stock. Mr. Cohen and Mr. Knowling elected to receive their awards in deferred stock units under the Directors Deferred Compensation Plan. Ms. McFadden elected to receive 50% of her award in deferred stock units under the same plan. The restricted stock and deferred stock units vest on January 4, 2022.
|
(2)
|
As of June 30, 2021, Ms. Alvarez held 6,901 unvested restricted shares.
|
(3)
|
As of June 30, 2021, Mr. Barrett held 6,901 unvested restricted shares.
|
(4)
|
As of June 30, 2021, Mr. Bron held 6,901 unvested restricted shares.
|
(5)
|
As of June 30, 2021, Mr. Cohen held 6,901 unvested deferred stock units.
|
(6)
|
As of June 30, 2021, Mr. Engler held 6,901 unvested restricted shares.
|
(7)
|
As of June 30, 2021, Mr. Fink held 6,901 unvested restricted shares.
|
(8)
|
As of June 30, 2021, Ms. Harker held 6,901 unvested restricted shares.
|
(9)
|
As of June 30, 2021, Mr. Knowling held 6,901 unvested deferred stock units.
|
(10)
|
As of June 30, 2021, Ms. McFadden held 3,450 unvested deferred stock units and 3,451 unvested restricted shares.
|
22
|
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•
|
regular executive sessions of non-management directors;
|
•
|
independent directors except our Executive Chairman and CEO;
|
•
|
an over-boarding policy limiting other board service;
|
•
|
a Lead Independent Director with delineated authority and responsibility;
|
•
|
director and executive officer stock ownership guidelines; and
|
•
|
a policy prohibiting hedging, pledging and short sales of our stock.
|
23
|
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24
|
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| | |
Members of the Audit Committee
|
|
| | | ||
| | |
Steven B. Fink (Chairman)
|
|
| | |
Robert L. Cohen
|
|
| | |
Victoria D. Harker
|
| | |
2021
|
| |
2020
|
| |
|
Audit Fees
|
| |
$1,227,008
|
| |
$1,400,200
|
|
|
Audit-Related Fees
|
| |
47,272
|
| |
25,000
|
|
|
Tax Fees
|
| |
-
|
| |
-
|
|
|
All Other Fees
|
| |
-
|
| |
-
|
|
|
Total
|
| |
$1,274,280
|
| |
$1,425,200
|
|
25
|
TABLE OF CONTENTS
26
|
TABLE OF CONTENTS
27
|
TABLE OF CONTENTS
1.
|
Company policies and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.
|
2.
|
Payments by Stride or any subsidiary used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.
|
3.
|
Stride or any subsidiary's membership in and payments to any tax-exempt organization that writes and endorses model legislation.
|
4.
|
Description of management's and the Board's decision-making process and oversight for making payments described in sections 2 and 3 above.
|
1
|
See https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2018&id=D000044946 and https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2020&id=D000044946
|
2
|
https://www.edweek.org/policy-politics/outsized-influence-online-charters-bring-lobbying-a-game-to-states/2016/11
|
28
|
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3
|
https://www.the74million.org/article/3-states-tried-to-shutter-failing-for-profit-online-charter-schools-a-suspicious-pattern-of-allegationsccusations-and-legal-complaints-quickly-follow
|
4
|
https://www.alec.org/article/emergency-crisis-remote-learning-is-not-virtual-schooling/
|
5
|
https://theintercept.com/2018/11/29/alec-corporate-funders-charles-koch/
|
29
|
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•
|
files regular, publicly available reports with the U.S. House of Representatives and the U.S. Senate disclosing overall federal lobbying expenses, the specific legislative and regulatory issues that were the subject of the Company's federal lobbying efforts, the houses of Congress and federal agencies lobbied by the Company and the names of those individuals lobbying on behalf of the Company; and
|
•
|
files regular, publicly available reports with state agencies which disclose the Company's state lobbying activities according to pertinent state laws.
|
30
|
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| | |
Shares Beneficially Owned(1)
|
| ||||
| | |
Shares of
Common
Stock
|
| |
Percent
|
| |
|
James J. Rhyu(2)
|
| |
525,778
|
| |
1.23%
|
|
|
Kevin P. Chavous(3)
|
| |
250,025
|
| |
*
|
|
|
Shaun E. McAlmont(4)
|
| |
120,091
|
| |
*
|
|
|
Vincent W. Mathis(5)
|
| |
95,876
|
| |
*
|
|
|
Timothy J. Medina(6)
|
| |
96,242
|
| |
*
|
|
|
Nathaniel A. Davis(7)
|
| |
1,096,027
|
| |
2.56%
|
|
|
Aida M. Alvarez(8)
|
| |
27,946
|
| |
*
|
|
|
Craig R. Barrett(9)
|
| |
63,595
|
| |
*
|
|
|
Guillermo Bron(10)
|
| |
66,103
|
| |
*
|
|
|
Robert L. Cohen(11)
|
| |
16,102
|
| |
*
|
|
|
John M. Engler(12)
|
| |
58,284
|
| |
*
|
|
|
Steven B. Fink(13)
|
| |
155,391
|
| |
*
|
|
|
Victoria D. Harker(14)
|
| |
12,185
|
| |
*
|
|
|
Robert E. Knowling, Jr.(15)
|
| |
17,868
|
| |
*
|
|
|
Liza McFadden(16)
|
| |
26,394
|
| |
*
|
|
|
All Directors and Executive Officers as a Group (15 persons)(17)
|
| |
2,627,907
|
| |
6.14%
|
|
|
BlackRock, Inc.(18)
|
| |
3,001,694
|
| |
7.02%
|
|
|
The Vanguard Group(19)
|
| |
3,554,797
|
| |
8.31%
|
|
|
Dimensional Fund Advisors(20)
|
| |
3,174,839
|
| |
7.42%
|
|
*
|
Denotes less than 1%.
|
(1)
|
Beneficial ownership of shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person or entity exercises sole or shared voting or investment power. Except as indicated by footnote, and subject to applicable community property laws, to our knowledge, each stockholder identified in the table possesses sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by the stockholder. The number of shares beneficially owned by a person or entity includes shares of Common Stock subject to options held by that person or entity that are currently exercisable or exercisable within 60 days of October 18, 2021 and not subject to repurchase as of that date. Shares issuable pursuant to options and deferred stock units are deemed outstanding for calculating the percentage ownership of the person holding the options but are not deemed outstanding for the purposes of calculating the percentage ownership of any other person.
|
(2)
|
Includes 116,510 unvested shares of restricted Common Stock that are subject to forfeiture.
|
31
|
TABLE OF CONTENTS
(3)
|
Includes 32,920 unvested shares of restricted Common Stock that are subject to forfeiture.
|
(4)
|
Includes 31,486 unvested shares of restricted Common Stock that are subject to forfeiture.
|
(5)
|
Includes 34,014 unvested shares of restricted Common Stock that are subject to forfeiture.
|
(6)
|
Includes 56,639 unvested shares of restricted Common Stock that are subject to forfeiture.
|
(7)
|
Includes 104,862 unvested shares of restricted Common Stock that are subject to forfeiture.
|
(8)
|
Includes 6,901 unvested shares of restricted Common Stock that are subject to forfeiture.
|
(9)
|
Includes 6,901 unvested shares of restricted Common Stock that are subject to forfeiture.
|
(10)
|
Includes 6,901 unvested shares of Common Stock that are subject to forfeiture.
|
(11)
|
Includes 6,901 deferred stock units that are subject to forfeiture.
|
(12)
|
Includes 6,901 unvested shares of restricted Common Stock that are subject to forfeiture.
|
(13)
|
Includes 6,901 unvested shares of restricted Common Stock that are subject to forfeiture. Mr. Fink has voting and investment control with respect to the securities held by S&C Fink Living Trust.
|
(14)
|
Includes 6,901 unvested shares of restricted Common Stock that are subject to forfeiture.
|
(15)
|
Includes 6,901 deferred stock units that are subject to forfeiture.
|
(16)
|
Includes 3,450 deferred stock units and 3,451 unvested shares of Common Stock that are subject to forfeiture.
|
(17)
|
Includes 421,288 unvested shares of restricted Common Stock and 17,252 deferred stock units. The unvested shares of restricted Common Stock and deferred stock units are subject to forfeiture.
|
(18)
|
Based solely on publicly available filings with the SEC, including the Schedule 13G/A filed on February 5, 2021. The address for BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.
|
(19)
|
Based solely on publicly available filings with the SEC, including the Schedule 13G/A filed on February 10, 2021. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.
|
(20)
|
Based solely on publicly available filings with the SEC, including the Schedule 13G/A filed on February 12, 2021. The address for Dimensional Fund Advisors, LP is Building One 6300, Bee Cave Road, Austin, TX 78746.
|
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|
Section
|
| |
Page
|
|
|
Executive Summary
|
| |
33
|
|
|
What Guides our Program
|
| |
40
|
|
|
Compensation-Setting Process
|
| |
42
|
|
|
Fiscal 2021 Executive Compensation Program in Detail
|
| |
45
|
|
|
Severance and Change in Control Arrangements
|
| |
54
|
|
|
Other Executive Compensation Practices and Policies
|
| |
55
|
|
|
Named Executive Officer
|
| |
Role
|
|
Nathaniel A. Davis
|
| |
Executive Chairman(1)
|
|
James J. Rhyu
|
| |
Chief Executive Officer(2)
|
|
Timothy J. Medina
|
| |
Chief Financial Officer
|
|
Kevin P. Chavous
|
| |
President, Academic Policy and External Affairs
|
|
Shaun E. McAlmont
|
| |
President, Career Learning Solutions(3)
|
|
Vincent W. Mathis
|
| |
Executive Vice President, General Counsel and Secretary
|
(1)
|
On January 20, 2021, Mr. Davis, Chairman of our Board of Directors and Chief Executive Officer of our Company, notified our Board of Directors that he would retire from his position as Chief Executive Officer, effective January 26, 2021. Mr. Davis continues to serve as Executive Chairman of the Company, effective January 26, 2021.
|
(2)
|
On January 20, 2021, our Board of Directors appointed Mr. Rhyu to succeed Mr. Davis as Chief Executive Officer of our Company, effective January 26, 2021.
|
(3)
|
On October 14, 2021, Dr. McAlmont notified us of his decision to resign from his position effective October 29, 2021 to pursue other opportunities.
|
33
|
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|
What We Heard
|
| |
Action Taken
|
| |
Effective
|
|
Long-term incentive compensation awards have only a one-year performance period
|
| |
- Going forward, 60% of total annual equity award value granted in the form of PSU awards, with performance to be based on three-year metrics
- For fiscal 2022, the metrics selected are related to gross margin percentage and the compound annual growth rate ("CAGR") of our stock price measured at the end of a three-year performance period
|
| |
- Equity awards granted for fiscal 2022
|
34
|
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|
What We Heard
|
| |
Action Taken
|
| |
Effective
|
|
Long-term incentive compensation awards use only a single, absolute-based metric
|
| |
- PSU awards use multiple absolute performance metrics:
gross margin and a stock price CAGR for fiscal 2022 |
| |
- Equity awards granted for fiscal 2022
|
|
Size of equity awards granted to named executive officers in view of size of prior years' awards
|
| |
- Overall size of equity awards granted to Mr. Chavous and Dr. McAlmont in fiscal 2022 were smaller than equity awards granted to them in fiscal 2021
|
| |
- Equity awards granted for fiscal 2022
|
|
One-time award with performance metric enabling missed interim payments to be earned at end of the performance period
|
| |
- Feedback received was in reference to a one-time award granted to our then-CEO and has not been and will not be repeated in future years. Further, any multi-year awards granted to an executive officer will not contain a "catch-up" feature similar to the award cited. One-time PSU award granted to Dr. McAlmont to accelerate growth of Career Learning business does not contain "catch-up" feature and shares not earned due to not meeting threshold revenue goal for fiscal 2021 were forfeited.
|
| |
- Equity awards granted in fiscal 2021
|
35
|
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•
|
Strong Operating Performance. We set rigorous goals for the financial performance metrics under our Executive Bonus Plan and long-term performance awards and delivered solid results for the year. The following table illustrates our strong financial performance for fiscal 2021.
|
|
Metric
|
| |
Fiscal 2020
Actual
Performance
|
| |
Fiscal 2021
Actual
Performance
|
| |
Percentage
Increase over
Fiscal 2020
|
|
|
Adjusted Operating Income
|
| |
$62.1M
|
| |
$161.4M
|
| |
159.9%
|
|
|
Revenue
|
| |
$1,040.8M
|
| |
$1,536.8M
|
| |
47.7%
|
|
|
Adjusted EBITDA
|
| |
$128.2M
|
| |
$239.9M
|
| |
87.1%
|
|
36
|
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•
|
Expanding Our Career Learning Offering. We continued to build upon our Career Learning offering, highlights of which included expanding our career readiness training into the adult education and corporate training markets and acquiring MedCerts and Tech Elevator, which provide talent development for individuals and enterprises in the medical and information technology fields, respectively. The Career Learning offering expansions was seen in the Career Learning revenue growth of 415% from fiscal year 2019 to fiscal year 2021. Dr. McAlmont, the President of our Career Readiness Education programs, was granted a one-time PSU award tied to the growth of our Career Learning business.
|
37
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What We Do
|
| |
What We Don't Do
|
||||||
✔
|
| |
Pay for performance. A significant portion of our executive officers' potential compensation is not guaranteed but is linked to our financial and operational performance. In the case of our Chief Executive Officer, 52% of his potential compensation is performance-based, while 48% is retention-oriented. As for our other NEOs, on average, 59% of their potential compensation is performance-based, while 41% is retention-oriented.
|
| |
✘
|
| |
Grant Guaranteed Bonuses or Equity Awards. We do not pay guaranteed bonuses and have no guaranteed equity-based awards. This ensures that we are able to base all compensation awards (other than retention-based equity awards) on measurable performance factors and operational results.
|
✔
|
| |
Align Compensation to Growth in Stockholder Value. A portion of our multi-year performance-based compensation program is tied to growth in our stock price which directly aligns to stockholder interests.
|
| |
✘
|
| |
Limited Executive Perquisites. We provide nominal perquisites to our executive officers, which are limited to supplemental long-term disability and life insurance premiums, the opportunity to receive a Company-paid physical examination and, from time to time, reimbursement of relocation expenses and temporary housing expenses.
|
✔
|
| |
Establish Performance Goals Aligned to Business Strategy. Our Executive Bonus Plan and long-term equity incentive program utilize performance-based goals that the Committee believes are rigorous and challenging.
|
| |
✘
|
| |
Offer Tax Reimbursements or Gross-Ups. We do not provide income tax gross-ups for personal or broad-based benefits nor excise tax gross-ups for change in control payments or benefits.
|
✔
|
| |
Target Pay Competitively. We seek to target compensation within a competitive range of our compensation peer group and seek to deliver greater compensation only for superior performance.
|
| |
✘
|
| |
Offer Pension or Supplemental Retirement Plans. We do not provide retirement benefits to our executive officers that reward longevity rather than contributions to Company performance.
|
✔
|
| |
Use Meaningful Vesting Conditions to Promote Retention. Performance-based equity awards under our long-term equity incentive program are earned and vest only to the extent that the applicable performance conditions are attained and remain subject to additional time-based vesting thereafter to encourage retention if the performance period is less than three years. Generally, time-based restricted stock awards vest over three years.
|
| |
✘
|
| |
Reprice Options. Our 2016 Incentive Award Plan ("2016 Plan") specifically prohibits repricing of options and we can only do so with stockholder approval.
|
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What We Do
|
| |
What We Don't Do
|
||||||
✔
|
| |
Carefully Consider Stockholder Input.We regularly seek and engage in dialogue with our stockholders on executive compensation matters. Ongoing enhancements to our executive compensation program are influenced by these discussions.
|
| |
✘
|
| |
Increase Shares without Stockholder Approval. Our 2016 Plan does not contain an "evergreen" provision to increase the number of shares of Common Stock available for grants each year. Any increase to the number of shares available requires stockholder approval.
|
✔
|
| |
Maintain a Compensation Recovery ("Clawback") Policy. We can recover incentive compensation wrongly awarded to an executive officer where fraud or intentional misconduct occurs.
|
| |
✘
|
| |
Provide Non-Performance Based "Single Trigger" Change in Control Payments. We maintain a "double trigger" vesting policy with respect to our equity awards whereby accelerated vesting in connection with a change in control of the Company also generally requires a qualifying termination of employment.
|
✔
|
| |
Require Mandatory Stock Ownership. All of our executive officers and our non-employee directors are required to maintain a minimum ownership level of our Common Stock. For fiscal 2021, we increased our share ownership requirements for our CEO from three times base salary to five times base salary and all other executive officers must now maintain a minimum share ownership of two times base salary.
|
| |
✘
|
| |
Allow Hedging or Pledging. Our insider trading policy specifically prohibits short sales, hedging and margin transactions and our 2016 Plan prohibits pledging of any award granted under the plan unless otherwise determined by the plan administrator.
|
✔
|
| |
Perform Competitive Market Analysis.The Committee reviews competitive market data provided by its independent compensation consultant for our executive officers prior to making annual executive compensation decisions.
|
| | | | ||
✔
|
| |
Analyze Compensation Program Risk.We review our executive and other compensation programs annually to ensure that they do not encourage excessive or unnecessary risk taking.
|
| | | |
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Link Compensation to Performance, Stockholder Interests and Student Success
|
| |
Compensation levels should reflect actual performance, consistent with our business strategy, and be aligned with stockholder interests.
|
Maintain Competitive Compensation Levels
|
| |
Levels of compensation should be competitive with those offered by comparable companies in our industry to attract, retain and reward our executives. We set base salary levels near the median of our compensation peer group and provide above-peer median compensation opportunities to executives only if performance is attained at levels above rigorously set target-level goals.
|
Reflect our Industry Circumstances and Unique Business
|
| |
As the only publicly traded company in the K-12 space, our executive compensation program must be tailored to address the interests of stockholders and our public education obligations as we execute on our long-term strategy of creating schools of academic excellence with innovative technologies, inspired teaching and personalized learning.
|
Engage Independent Compensation Consultant
|
| |
The Committee engages an independent compensation consultant to inform the Committee and evaluate the alignment of pay and performance relative to our compensation peer group, and compensation risk.
|
40
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|
Metric
|
| |
Determination and Link to Performance
|
| |
Purpose
|
|
Base Salary
|
| |
Evaluated annually by the Committee and reviewed in light of market pay practices.
|
| |
Provide a monthly income necessary to retain executives.
|
|
Executive Bonus Plan
|
| |
Annual performance determines payouts. Ties a meaningful portion of target annual cash compensation to attaining pre-established performance goals.
|
| |
Focus executives on attaining financial and strategic performance objectives from year to year.
|
|
Long-Term Incentives
|
| |
Time-based restricted stock awards: Encourage retention of executives. Time-based restricted stock awards vest over three years.
Performance-based restricted stock awards: Performance targets are established based on meaningful and rigorous metrics that drive stockholder value. No awards will be earned if performance falls below threshold levels.
|
| |
Enhance retention of key executives who drive consistent performance.
Motivate and reward executives for achievement of long-term goals that increase stockholder value.
|
|
Other Compensation
|
| |
Executives may participate in benefit programs on the same terms as other employees, such as health and welfare benefit plans, 401(k) plan, life insurance and executive life and disability plans.
Executives may elect to participate in a non-qualified deferred compensation plan providing tax-efficient savings, but receive no additional Company contributions.
Premiums for executive disability and life insurance benefits are paid by the Company.
|
| |
Provides benefits having high perceived values and offers tax advantages.
|
41
|
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•
|
Determining and approving the compensation of our executive officers and recommending the compensation for our Executive Chairman and CEO, subject to approval by the independent members of our Board of Directors.
|
•
|
Establishing and approving compensation plans for our NEOs. Our CEO makes recommendations, but the final decisions rest with the Committee.
|
•
|
Proposing revisions to the Committee's charter for our Board of Directors' approval to ensure compliance with SEC regulations and NYSE listing standards.
|
42
|
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•
|
Examining management's performance around ESG efforts including, but not limited to, diversity and inclusion at all levels of the Company and employee policies that drive the Company's involvement in the community.
|
43
|
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•
|
Industry and business focus - companies in the education services, software and human resources or employment services sectors;
|
•
|
Revenue - companies with revenue ranging from approximately 0.4x to approximately 3.0x the Company's last four quarters revenue (which produced a target range of approximately $410 million to $3.1 billion);
|
•
|
Market capitalization - companies with market capitalizations ranging from approximately 0.25x to approximately 7.0x the Company's market capitalization (which produced a target range of approximately $210 million to $5.9 billion);
|
•
|
Companies with subscription business models;
|
•
|
Companies in industries suggested by the executive team;
|
•
|
Companies in the gaming/artificial intelligence industries; and
|
•
|
Companies that are peers of companies that have selected Stride as a peer.
|
|
2U
|
| |
Graham Holdings Company
|
| |
RealPage
|
|
ACI Worldwide
|
| |
Houghton Mifflin Harcourt
|
| |
Scholastic
|
|
Adtalem Global Education
|
| |
Kforce
|
| |
Strategic Education
|
|
Blackbaud
|
| |
Laureate Education
|
| |
WW International
|
|
Chegg
|
| |
Perdoceo Education
|
| |
Zovio
|
|
Cornerstone OnDemand
|
| |
Pluralsight
|
| |
Zynga
|
44
|
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|
Named Executive
Officer
|
| |
Fiscal 2020
Base Salary
|
| |
Fiscal 2021
Base Salary
|
| |
Percentage
Increase
|
|
|
Nathaniel A. Davis
|
| |
$935,000
|
| |
$935,000(1)
|
| |
-
|
|
|
James J. Rhyu
|
| |
$575,000
|
| |
$585,000(2)
|
| |
1.7%
|
|
|
Timothy J. Medina
|
| |
$475,000
|
| |
$475,000
|
| |
-
|
|
|
Kevin P. Chavous
|
| |
$511,850
|
| |
$520,000
|
| |
1.6%
|
|
|
Shaun E. McAlmont
|
| |
$480,000
|
| |
$520,000
|
| |
8.3%
|
|
|
Vincent W. Mathis
|
| |
$415,000
|
| |
$445,000
|
| |
7.2%
|
|
(1)
|
Mr. Davis' annual base salary was reduced to $500,000 when he retired from his position as our Chief Executive Officer, effective January 26, 2021.
|
(2)
|
Mr. Rhyu's annual base salary was increased to $700,000 when he was appointed our Chief Executive Officer, effective January 26, 2021.
|
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|
Named Executive Officer
|
| |
Fiscal 2021 Target Annual Bonus Opportunity
(as a percentage of actual earned base salary)
|
|
|
Nathaniel A. Davis
|
| |
150%
|
|
|
James J. Rhyu
|
| |
100%(1)
|
|
|
Timothy J. Medina
|
| |
80%
|
|
|
Kevin P. Chavous
|
| |
80%
|
|
|
Shaun E. McAlmont
|
| |
80%
|
|
|
Vincent W. Mathis
|
| |
80%
|
|
(1)
|
Mr. Rhyu's target bonus opportunity was originally set at 100% of his actual earned base salary. However, in connection with his promotion to Chief Executive Officer, his target bonus opportunity was increased to 150% of his actual earned base salary, effective January 26, 2021.
|
|
Category
|
| |
Corresponding Metric
|
|
Profitability
|
| |
Adjusted Operating Income
|
|
Growth
|
| |
Revenue
|
46
|
TABLE OF CONTENTS
|
Metric
|
| |
Weighting
|
| |
Performance
Level
(Threshold)
|
| |
Performance
Level
(Target)
|
| |
Performance
Level
(Outperform)
|
| |
Actual
Results
|
| |
Payment
Percentage
|
|
|
Revenue(1)
|
| |
50%
|
| |
$1,306.3
|
| |
$1,375.0
|
| |
$1,443.8
|
| |
$1,514.9
|
| |
200%(3)
|
|
|
Adjusted Operating Income(2)
|
| |
50%
|
| |
$117.0
|
| |
$130.0
|
| |
$143.0
|
| |
$161.0
|
| |
200%(3)
|
|
|
Overall Weighted Payment Percentage
|
| |
200%
|
|
(1)
|
For purposes of the fiscal 2021 Executive Bonus Plan, "revenue" may be adjusted at the Committee's discretion for any unusual, non-recurring event that is separately identified and quantified in our financial statements.
|
(2)
|
For purposes of the fiscal 2021 Executive Bonus Plan, "adjusted operating income" was operating income determined in accordance with GAAP adjusted for stock-based compensation expense and amortization of intangibles, and may, at the Committee's discretion, exclude any acquisition related charges (which would include amortization subsequent to an acquisition transaction) and any other unusual, non-recurring gain or loss that is separately identified and quantified in our financial statements.
|
(3)
|
Each payment percentage was reduced from 200% to 100% to reflect a 50% weighting of the corporate PMO in the Fiscal 2021 Executive Bonus Plan formula.
|
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|
Named
Executive Officer
|
| |
Revenue
Achievement(1)
(50% Weighting)
|
| |
Adjusted
Operating
Income
Achievement(1)
(50% Weighting)
|
| |
Percentage of
Target Annual
Bonus Earned
(%) (1)
|
| |
Bonus
Amount
($)
|
|
|
Nathaniel A. Davis
|
| |
100%
|
| |
100%
|
| |
200%
|
| |
$2,236,521(2)
|
|
|
James J. Rhyu
|
| |
100%
|
| |
100%
|
| |
200%
|
| |
$1,575,123(2)
|
|
|
Timothy J. Medina
|
| |
100%
|
| |
100%
|
| |
200%
|
| |
$760,000
|
|
|
Kevin P. Chavous
|
| |
100%
|
| |
100%
|
| |
200%
|
| |
$832,000
|
|
|
Shaun E. McAlmont
|
| |
100%
|
| |
100%
|
| |
200%
|
| |
$832,000
|
|
|
Vincent W. Mathis
|
| |
100%
|
| |
100%
|
| |
200%
|
| |
$712,000
|
|
(1)
|
Our revenue and adjusted operating income payment percentages were each 200%. Based on their respective weighting of 50%, each metric resulted in a 100% achievement percentage, resulting in each NEO earning 200% of their target annual bonus opportunity.
|
(2)
|
Messrs. Davis and Rhyu's bonus payments were pro-rated for their mid-year changes in role and compensation. As a result of their respective mid-year changes in role and responsibilities, Mr. Davis' bonus payment was reduced from $2,805,000 to $2,236,521 and Mr. Rhyu's bonus payment was increased from $1,170,000 to $1,575,123.
|
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|
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|
Named
Executive
Officer
|
| |
Annual
Equity Award
Value
|
| |
Time-Based
Shares
(#)
|
| |
Performance-Based Shares
|
| ||||||
|
Threshold
(#)
|
| |
Target
(#)
|
| |
Outperform
(#)
|
| |||||||||
|
Nathaniel A. Davis
|
| |
$3,000,000
|
| |
32,785
|
| |
26,228
|
| |
32,785
|
| |
43,604
|
|
|
James J. Rhyu
|
| |
$1,000,000
|
| |
11,095
|
| |
8,876
|
| |
11,095
|
| |
14,756
|
|
|
Timothy J. Medina
|
| |
$700,000
|
| |
7,765
|
| |
6,212
|
| |
7,765
|
| |
10,327
|
|
|
Kevin P. Chavous
|
| |
$1,000,000
|
| |
11,095
|
| |
8,876
|
| |
11,095
|
| |
14,756
|
|
|
Shaun E. McAlmont
|
| |
$1,000,000
|
| |
11,095
|
| |
8,876
|
| |
11,095
|
| |
14,756
|
|
|
Vincent W. Mathis
|
| |
$800,000
|
| |
8,875
|
| |
7,100
|
| |
8,875
|
| |
11,804
|
|
|
Performance Level
|
| |
Adjusted EBITDA
|
| |
Percentage of Target
Award Earned
|
|
|
Below Threshold
|
| |
<$184.3 million
|
| |
0%
|
|
|
Threshold
|
| |
$184.3 million
|
| |
80%
|
|
|
Target
|
| |
$194.0 million
|
| |
100%
|
|
|
Outperform
|
| |
$203.7 million
|
| |
133%
|
|
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|
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|
Named Executive Officer
|
| |
Number of Performance-Based Shares Earned
(#)
|
|
|
Nathaniel A. Davis
|
| |
43,604
|
|
|
James J. Rhyu
|
| |
14,756
|
|
|
Timothy J. Medina
|
| |
10,327
|
|
|
Kevin P. Chavous
|
| |
14,756
|
|
|
Shaun E. McAlmont
|
| |
14,756
|
|
|
Vincent W. Mathis
|
| |
11,804
|
|
|
Performance Level
|
| |
Adjusted EBITDA
|
| |
Percentage of Target
Award Earned
|
|
|
Below Threshold
|
| |
<$194.0 million
|
| |
0%
|
|
|
Threshold
|
| |
$194.0 million
|
| |
80%
|
|
|
Target
|
| |
$215.0 million
|
| |
100%
|
|
|
Outperform
|
| |
$236.0 million
|
| |
133%
|
|
50
|
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|
Fiscal
Year
|
| |
Career Learning Revenue Goal
($ millions)
|
| |
Growth Over Prior Year
($ millions)
|
| |
Cumulative Number of PSUs Earned
(#)
|
| ||||||||||||||||||
|
Threshold
|
| |
Target
|
| |
Maximum
|
| |
Threshold
|
| |
Target
|
| |
Maximum
|
| |
Threshold
|
| |
Target
|
| |
Maximum
|
| |||
|
2021
|
| |
$237.0
|
| |
$260.0
|
| |
$273.0
|
| |
$127.0
|
| |
$150.0
|
| |
$163.0
|
| |
0
|
| |
77,690
|
| |
116,535
|
|
|
2022
|
| |
$326.0
|
| |
$360.0
|
| |
$378.0
|
| |
$89.0
|
| |
$123.0
|
| |
$141.0
|
| |
0
|
| |
122,080
|
| |
183,120
|
|
|
2023
|
| |
$450.0
|
| |
$520.0
|
| |
$546.0
|
| |
$124.0
|
| |
$194.0
|
| |
$220.0
|
| |
0
|
| |
166,480
|
| |
249,720
|
|
•
|
the PSUs earned based on fiscal 2021 revenue will vest as to 1/3 of the shares on the date Career Learning Revenue for fiscal 2021 is determined, and as to an additional 1/3 of the shares on each of June 30, 2022 and June 30, 2023;
|
•
|
the PSUs earned based on fiscal 2022 revenue will vest as to 2/3 of the shares on the date Career Learning Revenue for fiscal 2022 is determined, and as to an additional 1/3 of the shares on June 30, 2023; and
|
•
|
the PSUs earned based on fiscal 2023 revenue will vest in full on the date Career Learning Revenue for fiscal 2023 is determined.
|
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|
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|
Performance Year
|
| |
Performance
Level
|
| |
Portion of
Award Earned
|
| |
Vesting Date
|
|
|
Fiscal 2020
|
| |
$60.0 million
|
| |
1/3rd
|
| |
August 15, 2021
|
|
|
Fiscal 2021
|
| |
$65.0 million
|
| |
1/3rd
|
| |
August 15, 2021
|
|
|
Fiscal 2022
|
| |
$70.0 million
|
| |
1/3rd
|
| |
August 15, 2022
|
|
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|
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|
Named Executive Officer
|
| |
Shares of Common
Stock Earned
(#)
|
| |
Shares of Common
Stock Earned
($ millions)
|
|
|
Mr. Davis
|
| |
692,439
|
| |
$25.3
|
|
|
Mr. Rhyu
|
| |
350,167
|
| |
$12.8
|
|
|
Mr. Chavous
|
| |
350,167
|
| |
$12.8
|
|
|
Dr. McAlmont
|
| |
117,277
|
| |
$4.3
|
|
|
Mr. Mathis
|
| |
87,958
|
| |
$3.2
|
|
|
Mr. Medina
|
| |
58,946
|
| |
$2.2
|
|
53
|
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54
|
TABLE OF CONTENTS
|
Role
|
| |
Ownership Requirement
|
|
Executive Chairman and CEO
|
| |
5.0x base salary
|
|
Presidents and Chief Operating Officer
|
| |
3.0x base salary
|
|
Chief Financial Officer
|
| |
2.0x base salary
|
|
Other Executive Officers
|
| |
2.0x base salary
|
55
|
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56
|
TABLE OF CONTENTS
| | |
Members of the Compensation Committee
Robert E. Knowling, Jr. (Chairman)
John M. Engler
Steven B. Fink
|
57
|
TABLE OF CONTENTS
|
Name
|
| |
Fiscal
Year
|
| |
Base
Salary
|
| |
Bonus
|
| |
Stock
Awards(1)
|
| |
Nonequity
Incentive Plan
Compensation(2)
|
| |
All Other
Compensation(3)
|
| |
Total
|
|
|
James J. Rhyu
Chief Executive Officer
|
| |
2021
|
| |
$628,404
|
| |
$-
|
| |
$2,499,642
|
| |
$1,575,123
|
| |
$12,941
|
| |
$4,716,110
|
|
|
2020
|
| |
572,692
|
| |
-
|
| |
1,999,974
|
| |
817,029
|
| |
9,546
|
| |
3,399,241
|
| |||
|
2019
|
| |
495,192
|
| |
-
|
| |
3,654,349
|
| |
517,673
|
| |
9,211
|
| |
4,676,425
|
| |||
|
Nathaniel A. Davis
Executive Chairman
|
| |
2021
|
| |
$769,365
|
| |
$-
|
| |
$2,999,828
|
| |
$2,236,521
|
| |
$11,843
|
| |
$6,017,557
|
|
|
2020
|
| |
927,308
|
| |
-
|
| |
12,999,976
|
| |
1,992,841
|
| |
12,555
|
| |
15,932,680
|
| |||
|
2019
|
| |
706,731
|
| |
-
|
| |
7,676,558
|
| |
1,385,277
|
| |
17,131
|
| |
9,785,697
|
| |||
|
Timothy J. Medina
Chief Financial Officer
|
| |
2021
|
| |
$475,000
|
| |
$-
|
| |
$699,626
|
| |
$760,000
|
| |
$11,225
|
| |
$1,945,851
|
|
|
2020
|
| |
82,212
|
| |
-
|
| |
1,640,985
|
| |
-
|
| |
137
|
| |
1,723,334
|
| |||
|
Shaun E. McAlmont
President, Career Readiness Education
|
| |
2021
|
| |
$518,462
|
| |
$-
|
| |
$17,499,223
|
| |
$832,000
|
| |
$12,527
|
| |
$18,862,212
|
|
|
2020
|
| |
477,500
|
| |
-
|
| |
999,960
|
| |
545,634
|
| |
11,474
|
| |
2,034,568
|
| |||
|
2019
|
| |
332,000
|
| |
85,000
|
| |
4,334,902
|
| |
334,366
|
| |
100,014
|
| |
5,186,282
|
| |||
|
Kevin P. Chavous
President, Academic Policy and
External Affairs
|
| |
2021
|
| |
$519,687
|
| |
$-
|
| |
$999,660
|
| |
$832,000
|
| |
$16,283
|
| |
$2,367,630
|
|
|
2020
|
| |
511,292
|
| |
-
|
| |
1,199,962
|
| |
581,839
|
| |
12,391
|
| |
2,305,484
|
| |||
|
2019
|
| |
487,644
|
| |
-
|
| |
3,329,353
|
| |
499,931
|
| |
14,943
|
| |
4,331,871
|
| |||
|
Vincent W. Mathis
Executive Vice President,
General Counsel and Secretary
|
| |
2021
|
| |
$443,846
|
| |
$-
|
| |
$799,638
|
| |
$712,000
|
| |
$11,538
|
| |
$1,967,022
|
|
|
2020
|
| |
414,615
|
| |
-
|
| |
699,982
|
| |
383,293
|
| |
43,787
|
| |
1,541,677
|
| |||
|
2019
|
| |
317,769
|
| |
50,000
|
| |
3,265,637
|
| |
316,042
|
| |
45,286
|
| |
3,994,734
|
|
(1)
|
This column represents the aggregate grant date fair value of stock awards computed in accordance with FASB ASC Topic 718. For performance-based restricted stock awards, amounts are shown based on the probable outcome of the performance condition, which are shown based on the target award level. If maximum performance is assumed for the performance-based restricted stock awards, the total grant date value of stock awards for each NEO would be as follows: Mr. Rhyu: $2,912,082, Mr. Davis: $3,494,799, Mr. Medina: $815,065, Dr. McAlmont: $25,913,947, Mr. Chavous: $1,164,603, and Mr. Mathis: $931,578.
|
(2)
|
All amounts are reported in the year earned, regardless of when they are paid.
|
(3)
|
The amounts in this column for fiscal year 2021 consist of 401(k) plan matching contributions, Company-paid life insurance and long-term disability premiums.
|
58
|
TABLE OF CONTENTS
|
Name
|
| |
Grant Date
|
| |
Estimated Possible
Payouts under
Nonequity Incentive
Plan Awards(1)
|
| |
Estimated Possible Payouts under
Equity Incentive Plan Awards
|
| |
All Other
Stock
Awards:
Number
of Shares
of Stock
(#)
|
| |
Grant Date
Fair Value
of Stock
Awards (#)
|
| |||||||||
|
Target
($)
|
| |
Maximum
($)
|
| |
Threshold
(#)
|
| |
Target
(#)
|
| |
Maximum
(#)
|
| ||||||||||||
|
James J. Rhyu
Chief Executive Officer
|
| |
-
|
| |
787,562
|
| |
1,575,123
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
|
|
8/12/2020(2)
|
| |
-
|
| |
-
|
| |
8,876
|
| |
11,095
|
| |
14,756
|
| |
-
|
| |
499,830
|
| |||
|
8/12/2020(4)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
11,095
|
| |
499,830
|
| |||
|
1/22/2021(3)
|
| |
-
|
| |
-
|
| |
24,291
|
| |
30,364
|
| |
40,384
|
| |
-
|
| |
749,991
|
| |||
|
1/22/2021(4)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
30,364
|
| |
749,991
|
| |||
|
Nathaniel A. Davis
Executive Chairman
|
| |
-
|
| |
1,118,260
|
| |
2,236,521
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
|
|
8/14/2020(2)
|
| |
-
|
| |
-
|
| |
26,228
|
| |
32,785
|
| |
43,604
|
| |
-
|
| |
1,499,914
|
| |||
|
8/14/2020(4)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
32,785
|
| |
1,499,914
|
| |||
|
Timothy J. Medina
Chief Financial Officer
|
| |
-
|
| |
380,000
|
| |
760,000
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
|
|
8/12/2020(2)
|
| |
-
|
| |
-
|
| |
6,212
|
| |
7,765
|
| |
10,327
|
| |
-
|
| |
349,813
|
| |||
|
8/12/2020(4)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
7,765
|
| |
349,813
|
| |||
|
Shaun E. McAlmont
President, Career
Readiness Education
|
| |
-
|
| |
416,000
|
| |
832,000
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
|
|
8/12/2020(2)
|
| |
-
|
| |
-
|
| |
8,876
|
| |
11,095
|
| |
14,756
|
| |
-
|
| |
499,830
|
| |||
|
8/12/2020(4)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
11,095
|
| |
499,830
|
| |||
|
8/12/2020(5)
|
| |
-
|
| |
-
|
| |
-
|
| |
366,250
|
| |
549,375
|
| |
-
|
| |
16,499,563
|
| |||
|
Kevin P. Chavous
President, Academic Policy
and External Affairs
|
| |
-
|
| |
416,000
|
| |
832,000
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
|
|
8/12/2020(2)
|
| |
-
|
| |
-
|
| |
8,876
|
| |
11,095
|
| |
14,756
|
| |
-
|
| |
499,830
|
| |||
|
8/12/2020(4)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
11,095
|
| |
499,830
|
| |||
|
Vincent W. Mathis
Executive Vice President,
General Counsel and Secretary
|
| |
-
|
| |
356,000
|
| |
712,000
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
|
|
8/12/2020(2)
|
| |
-
|
| |
-
|
| |
7,100
|
| |
8,875
|
| |
11,804
|
| |
-
|
| |
399,819
|
| |||
|
8/12/2020(4)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
8,875
|
| |
399,819
|
|
(1)
|
Represents the target and maximum incentive awards payable under our Executive Bonus Plan based on fiscal 2021 base salaries for each NEO. For additional information regarding our Executive Bonus Plan, see "Fiscal 2021 Compensation Decisions-Determination of Annual Incentive Compensation" above.
|
(2)
|
Represents performance-based restricted stock awards that will be earned based on the attainment of Adjusted EBITDA performance levels for fiscal 2021, with any earned shares vesting in equal annual installments over three years from the date of grant.
|
(3)
|
Represents performance-based restricted stock awards that will be earned based on the attainment of Adjusted EBITDA performance levels for calendar year 2021, with any earned shares vesting in equal annual installments over three years from the date of grant.
|
(4)
|
Represents restricted stock awards vesting semi-annually over a three-year period, with 20% vesting in the first year and 40% vesting in each of the next two years following the grant date.
|
(5)
|
Represents PSUs that will be earned based on the attainment of career learning revenue targets for each of fiscal 2021, 2022, and 2023. The PSUs do not have threshold award levels. See "Fiscal 2021 Compensation Decisions - Long-Term Incentive Compensation - Dr. McAlmont One-Time Equity Award" for additional information.
|
59
|
TABLE OF CONTENTS
| | |
Stock Awards
|
| ||||||||||
|
Name
|
| |
Equity Incentive
Plan Awards:
Amount of
Unearned Shares,
Units or Other
Rights That Have
Not Vested (#)
|
| |
Equity Incentive
Plan Awards:
Payout Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
($)
|
| |
Number of
Shares or Units
of Stock That
Have Not Vested
(#)
|
| |
Market Value of
Shares or Units of
Stock That Have Not
Vested
($)
|
|
|
James J. Rhyu
Chief Executive Officer
|
| |
382,433(1)
|
| |
12,287,572
|
| |
-
|
| |
-
|
|
|
-
|
| |
-
|
| |
114,817(2)
|
| |
3,689,070
|
| |||
|
-
|
| |
-
|
| |
30,364(3)
|
| |
975,595
|
| |||
|
Nathaniel A. Davis
Executive Chairman
|
| |
727,673(1)
|
| |
23,380,133
|
| |
-
|
| |
-
|
|
|
-
|
| |
-
|
| |
167,697(4)
|
| |
5,388,105
|
| |||
|
358,294(5)
|
| |
11,511,986
|
| |
-
|
| |
-
|
| |||
|
Timothy J. Medina
Chief Financial Officer
|
| |
66,934(1)
|
| |
2,150,589
|
| |
-
|
| |
-
|
|
|
-
|
| |
-
|
| |
45,139(6)
|
| |
1,450,316
|
| |||
|
Shaun E. McAlmont
President, Career Readiness
Education
|
| |
138,606(1)
|
| |
4,453,411
|
| |
-
|
| |
-
|
|
|
-
|
| |
-
|
| |
57,556(7)
|
| |
1,849,274
|
| |||
|
288,560(8)
|
| |
9,271,433
|
| |
-
|
| |
-
|
| |||
|
Kevin P. Chavous
President, Academic Policy and
External Affairs
|
| |
382,433(1)
|
| |
12,287,572
|
| |
-
|
| |
-
|
|
|
-
|
| |
-
|
| |
61,774(9)
|
| |
1,984,799
|
| |||
|
-
|
| |
-
|
| |
-
|
| |
-
|
| |||
|
Vincent W. Mathis
Executive Vice President,
General Counsel and Secretary
|
| |
103,954(1)
|
| |
3,340,042
|
| |
-
|
| |
-
|
|
|
-
|
| |
-
|
| |
43,463(10)
|
| |
1,396,466
|
| |||
|
-
|
| |
-
|
| |
-
|
| |
-
|
|
(1)
|
Represents PSUs that will be earned based on the attainment of stock price growth measured at the end of fiscal 2021. The number of shares is based on the three-year CAGR of 30.0% and a stock price hurdle of $37.35 per share.
|
(2)
|
Mr. Rhyu's outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date:
|
•
|
12,077 shares vested on August 31, 2021;
|
•
|
26,138 restricted shares represent performance-based restricted stock granted to Mr. Rhyu in fiscal 2020. The shares were deemed earned in early fiscal 2021. 13,069 of the shares vested on August 10, 2021 and 13,069 shares will vest on August 10, 2022;
|
•
|
7,166 shares vested on August 15, 2021, 7,166 shares will vest on February 15, 2022 and 7,165 shares will vest on August 15, 2022;
|
•
|
14,756 restricted shares represent performance-based restricted stock granted to Mr. Rhyu in fiscal 2021. The shares were deemed earned in early fiscal 2022. 4,920 of the shares vested on August 12, 2021 and the remaining two-thirds will vest in annual installments over the following two years;
|
•
|
1,109 shares vested on August 12, 2021, 8,876 shares will vest semi-annually in four equal installments beginning on February 12, 2022; and
|
•
|
3,037 shares vested on July 26, 2021, 3,037 shares will vest on January 26, 2022 and 24,290 shares will vest semi-annually in four equal installments beginning on July 26, 2022.
|
(3)
|
30,364 restricted shares represent performance-based restricted stock granted to Mr. Rhyu in fiscal 2021. The restricted shares vest based on attaining adjusted EBITDA performance goals for calendar year 2021. To the extent earned, awards will vest in annual installments beginning in January 2022.
|
60
|
TABLE OF CONTENTS
(4)
|
Mr. Davis' outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date:
|
•
|
23,135 shares vested on September 18, 2021;
|
•
|
39,207 restricted shares represent performance-based restricted stock granted to Mr. Davis in fiscal 2020. The shares were deemed earned in early fiscal 2021. 19,604 of the shares vested on August 10, 2021 and 19,603 shares will vest on August 10, 2022;
|
•
|
10,749 shares vested on August 15, 2021 and 21,496 shares will vest in two equal installments beginning on February 15, 2022;
|
•
|
43,604 restricted shares represent performance-based restricted stock granted to Mr. Davis in fiscal 2021. The shares were deemed earned in early fiscal 2022. 14,536 of the shares vested on August 12, 2021 and the remaining two-thirds will vest in annual installments over the following two years; and
|
•
|
3,278 shares vested on August 14, 2021, and 26,228 shares will vest semi-annually in four equal installments beginning on February 14, 2022.
|
(5)
|
Represents performance-based restricted stock granted to Mr. Davis in fiscal 2020. The restricted shares vest based on attaining free cash flow performance goals for each of fiscal year 2020, 2021 and 2022 or based on attaining a cumulative three-year free cash flow goal for fiscal 2020-2022. The free cash flow performance goal for fiscal year 2021 was deemed earned in early fiscal 2022 and 119,431 shares vested on August 15, 2021. To the extent earned, 238,863 shares related to the cumulative three-year free cash flow goal will vest on August 15, 2022.
|
(6)
|
Mr. Medina's outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date:
|
•
|
6,956 shares vested on October 15, 2021, 20,868 shares will vest semi-annually in three equal installments beginning on April 15, 2022;
|
•
|
10,327 restricted shares represent performance-based restricted stock granted to Mr. Medina in fiscal 2021. The shares were deemed earned in early fiscal 2022. 3,444 of the shares vested on August 12, 2021 and the remaining two-thirds will vest in annual installments over the following two years; and
|
•
|
776 shares vested on August 12, 2021, and 6,212 shares will vest semi-annually in four equal installments beginning on February 12, 2022.
|
(7)
|
Dr. McAlmont's outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date:
|
•
|
9,000 shares vested on August 15, 2021;
|
•
|
13,068 restricted shares represent performance-based restricted stock granted to Dr. McAlmont in fiscal 2020. The shares were deemed earned in early fiscal 2021. 6,534 of the shares vested on August 10, 2021 and 6,534 shares will vest on August 10, 2022;
|
•
|
3,583 shares vested on August 15, 2021 and 7,164 shares will vest semi-annually in two equal installments beginning on February 15, 2022;
|
•
|
14,756 restricted shares represent performance-based restricted stock granted to Mr. Chavous in fiscal 2021. The shares were deemed earned in early fiscal 2022. 4,920 of the shares vested on August 12, 2021 and the remaining two-thirds will vest in annual installments over the following two years; and
|
•
|
1,109 shares vested on August 12, 2021, and 8,876 shares will vest semi-annually in four equal installments beginning on February 12, 2022.
|
(8)
|
Represents PSUs that will be earned based on the attainment of career learning revenue targets for each of fiscal 2021, 2022, and 2023:
|
•
|
In early fiscal 2022, 77,690 shares were forfeited because the fiscal 2021 target was not attained;
|
•
|
For the fiscal 2022 award, to the extent earned, 81,387 shares will vest in August 2022 and 40,693 shares will vest in August 2023; and
|
•
|
For the fiscal 2023 award, to the extent earned, 166,480 shares will vest in August 2023.
|
(9)
|
Mr. Chavous' outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date:
|
•
|
8,454 shares vested on August 31, 2021;
|
61
|
TABLE OF CONTENTS
•
|
15,682 restricted shares represent performance-based restricted stock granted to Mr. Chavous in fiscal 2020. The shares were deemed earned in early fiscal 2021. 7,842 of the shares vested on August 10, 2021 and 7,840 shares will vest on August 10, 2022;
|
•
|
4,299 shares vested on August 15, 2021 and 8,598 shares will vest semi-annually in two equal installments beginning on February 15, 2022;
|
•
|
14,756 restricted shares represent performance-based restricted stock granted to Mr. Chavous in fiscal 2021. The shares were deemed earned in early fiscal 2022. 4,920 of the shares vested on August 12, 2021 and the remaining two-thirds will vest in annual installments over the following two years; and
|
•
|
1,109 shares vested on August 12, 2021, and 8,876 shares will vest semi-annually in four equal installments beginning on February 12, 2022.
|
(10)
|
Mr. Mathis' outstanding shares of restricted stock vest as follows, subject to his continued employment through the applicable vesting date:
|
•
|
7,000 shares vested on September 15, 2021;
|
•
|
9,148 restricted shares represent performance-based restricted stock granted to Mr. Mathis in fiscal 2020. The shares were deemed earned in early fiscal 2021. 4,574 of the shares vested on August 10, 2021 and 4,574 shares will vest on August 10, 2022;
|
•
|
2,508 shares vested on August 15, 2021 and 5,016 shares will vest semi-annually in two equal installments beginning on February 15, 2022;
|
•
|
11,804 restricted shares represent performance-based restricted stock granted to Mr. Mathis in fiscal 2021. The shares were deemed earned in early fiscal 2022. 3,936 of the shares vested on August 12, 2021 and the remaining two-thirds will vest in annual installments over the following two years; and
|
•
|
887 shares vested on August 12, 2021, and 7,100 shares will vest semi-annually in four equal installments beginning on February 12, 2022.
|
| | |
Option Awards
|
| |
Stock Awards
|
| |||||||
|
Name
|
| |
Number of
Shares
Acquired
on Exercise
(#)
|
| |
Value Realized
on Exercise(1)
($)
|
| |
Number of
Shares
Acquired
on Vesting
(#)
|
| |
Value Realized
on Vesting(2)
($)
|
|
|
James J. Rhyu
|
| |
-
|
| |
-
|
| |
57,624
|
| |
2,029,196
|
|
|
Nathaniel A. Davis
|
| |
946,817(3)
|
| |
24,135,160
|
| |
131,577
|
| |
4,973,658
|
|
|
Timothy J. Medina
|
| |
-
|
| |
-
|
| |
7,735
|
| |
235,959
|
|
|
Shaun E. McAlmont
|
| |
-
|
| |
-
|
| |
31,020
|
| |
1,194,515
|
|
|
Kevin P. Chavous
|
| |
-
|
| |
-
|
| |
46,510
|
| |
1,663,207
|
|
|
Vincent W. Mathis
|
| |
-
|
| |
-
|
| |
23,224
|
| |
787,047
|
|
(1)
|
Represents the value of exercised shares calculated by multiplying (i) the gross number of options exercised by (ii) the difference between the closing market price of our Common Stock on the date of exercise and the exercise price of the option.
|
(2)
|
Represents the value of vested shares calculated by multiplying (i) the gross number of shares acquired on vesting by (ii) the closing market price of our Common Stock on the date of vesting.
|
(3)
|
Of the 946,817 shares acquired on the exercise of such options, 415,673 shares were surrendered by Mr. Davis at the time of exercise to cover the exercise price of such options, and 239,546 shares were surrendered by Mr. Davis at the time of exercise to cover Mr. Davis' tax withholding obligations, resulting in 291,598 net shares to Mr. Davis as a result of such exercise.
|
62
|
TABLE OF CONTENTS
|
Name
|
| |
Executive
Contributions
in Last
Fiscal Year
($)(1)
|
| |
Company
Contributions
in Last
Fiscal Year
($)
|
| |
Aggregate
Earnings /
(Losses) in
Last Fiscal
Year ($)
|
| |
Aggregate
Withdrawals /
Distributions
($)
|
| |
Aggregate
Balance at
Last FYE
($)
|
|
|
James J. Rhyu
|
| |
57,899
|
| |
-
|
| |
261,405
|
| |
-
|
| |
836,634
|
|
|
Nathaniel A. Davis
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
|
|
Timothy J. Medina
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
|
|
Shaun E. McAlmont
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
|
|
Kevin P. Chavous
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
|
|
Vincent W. Mathis
|
| |
79,628
|
| |
-
|
| |
30,270
|
| |
-
|
| |
131,114
|
|
(1)
|
All contributions have been previously reported within the Summary Compensation Table.
|
63
|
TABLE OF CONTENTS
64
|
TABLE OF CONTENTS
65
|
TABLE OF CONTENTS
|
Name
|
| |
Payment
|
| |
Death
|
| |
Disability
|
| |
Termination
Without
Cause
|
| |
Constructive
Termination
/ Good
Reason
|
| |
Change in
Control (no
Termination)
|
| |
Change in
Control (and
Qualifying
Termination)(1)
|
|
|
James J. Rhyu
|
| |
Salary Continuation
|
| |
-
|
| |
-
|
| |
$1,400,000
|
| |
$1,400,000
|
| |
-
|
| |
$1,400,000
|
|
|
Bonus
|
| |
-
|
| |
-
|
| |
1,050,000
|
| |
1,050,000
|
| |
-
|
| |
1,050,000
|
| |||
|
Benefit Continuation(2)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
14,850
|
| |||
|
Restricted Stock Vesting(3)
|
| |
$4,664,666
|
| |
$4,664,666
|
| |
-
|
| |
-
|
| |
-
|
| |
4,664,666
|
| |||
|
PSU Vesting(4)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
$10,562,540
|
| |
-
|
| |||
|
Nathaniel A. Davis
|
| |
Salary Continuation
|
| |
125,000
|
| |
125,000
|
| |
1,500,000
|
| |
1,500,000
|
| |
-
|
| |
1,500,000
|
|
|
Bonus
|
| |
2,236,521
|
| |
2,236,521
|
| |
750,000
|
| |
750,000
|
| |
-
|
| |
2,236,521
|
| |||
|
Benefit Continuation(2)
|
| |
7,612
|
| |
7,612
|
| |
7,612
|
| |
7,612
|
| |
-
|
| |
7,612
|
| |||
|
Restricted Stock Vesting(3)
|
| |
6,684,261
|
| |
6,684,261
|
| |
8,547,769
|
| |
8,547,769
|
| |
-
|
| |
9,225,423
|
| |||
|
PSU Vesting(4)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
22,106,887
|
| |
-
|
| |||
|
Timothy J. Medina
|
| |
Salary Continuation
|
| |
-
|
| |
-
|
| |
475,000
|
| |
475,000
|
| |
-
|
| |
712,500
|
|
|
Bonus
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
570,000
|
| |||
|
Benefit Continuation(2)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
13,289
|
| |||
|
Restricted Stock Vesting(3)
|
| |
1,450,316
|
| |
1,450,316
|
| |
-
|
| |
-
|
| |
-
|
| |
1,450,316
|
| |||
|
PSU Vesting(4)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
1,851,901
|
| |
-
|
| |||
|
Shaun E. McAlmont
|
| |
Salary Continuation
|
| |
-
|
| |
-
|
| |
520,000
|
| |
520,000
|
| |
-
|
| |
780,000
|
|
|
Bonus
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
624,000
|
| |||
|
Benefit Continuation(2)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
14,850
|
| |||
|
Restricted Stock Vesting(3)
|
| |
1,849,274
|
| |
1,849,274
|
| |
-
|
| |
-
|
| |
-
|
| |
1,849,274
|
| |||
|
PSU Vesting(4)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
2,728,355
|
| |
-
|
| |||
|
Kevin P. Chavous
|
| |
Salary Continuation
|
| |
-
|
| |
-
|
| |
520,000
|
| |
520,000
|
| |
-
|
| |
780,000
|
|
|
Bonus
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
624,000
|
| |||
|
Benefit Continuation(2)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
13,289
|
| |||
|
Restricted Stock Vesting(3)
|
| |
1,984,799
|
| |
1,984,799
|
| |
-
|
| |
-
|
| |
-
|
| |
1,984,799
|
| |||
|
PSU Vesting(4)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
10,562,540
|
| |
-
|
| |||
|
Vincent W. Mathis
|
| |
Salary Continuation
|
| |
-
|
| |
-
|
| |
445,000
|
| |
445,000
|
| |
-
|
| |
667,500
|
|
|
Bonus
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
534,000
|
| |||
|
Benefit Continuation(2)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
13,076
|
| |||
|
Restricted Stock Vesting(3)
|
| |
1,396,466
|
| |
1,396,466
|
| |
-
|
| |
-
|
| |
-
|
| |
1,396,466
|
| |||
|
PSU Vesting(4)
|
| |
-
|
| |
-
|
| |
-
|
| |
-
|
| |
2,046,272
|
| |
-
|
|
(1)
|
Amount shown assumes that the Company or a successor to the Company does not require Mr. Davis' continued compliance with the non-compete provision of his employment agreement after his termination of employment. If the Company does require his continued compliance with the non-compete provision of his employment agreement after his termination, he would receive an additional payment of an amount equal to one time his base salary, which was equal to $500,000 as of June 30, 2021.
|
(2)
|
Amounts shown represent an estimate of the cost to provide continued health, medical, dental and vision benefits.
|
(3)
|
Amounts shown include the dollar value of the portion of outstanding restricted shares that would vest in each of the circumstances described above.
|
(4)
|
Amounts shown include the dollar value of the portion of PSUs that would vest in a change in control based on the closing price of our Common Stock on June 30, 2021.
|
66
|
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67
|
TABLE OF CONTENTS
68
|
TABLE OF CONTENTS
| | |
By Order of the Board of Directors,
|
|
| | |
|
|
| | |
Vincent W. Mathis
|
|
| | |
Executive Vice President, General Counsel
|
|
| | |
and Secretary
|
69
|
TABLE OF CONTENTS
| | |
Year Ended June 30,
|
| |||||||
| | |
2019
|
| |
2020
|
| |
2021
|
| |
| | |
($ thousands)
|
| |||||||
|
Net income
|
| |
$37,209
|
| |
$24,506
|
| |
$71,451
|
|
|
(Income) loss from equity method investments
|
| |
632
|
| |
380
|
| |
(684)
|
|
|
Income tax (benefit) expense
|
| |
10,520
|
| |
8,541
|
| |
24,539
|
|
|
Other (income) expense, net
|
| |
(114)
|
| |
(272)
|
| |
(2,829)
|
|
|
Interest (income) expense, net
|
| |
(2,761)
|
| |
(698)
|
| |
17,979
|
|
|
Income from operations
|
| |
45,486
|
| |
32,457
|
| |
110,456
|
|
|
Stock-based compensation expense
|
| |
16,676
|
| |
23,609
|
| |
39,333
|
|
|
Amortization of intangible assets
|
| |
2,971
|
| |
6,013
|
| |
11,642
|
|
|
Adjusted operating income
|
| |
65,133
|
| |
62,079
|
| |
161,431
|
|
|
Depreciation and other amortization
|
| |
68,429
|
| |
66,078
|
| |
78,435
|
|
|
Adjusted EBITDA
|
| |
$133,562
|
| |
$128,157
|
| |
$239,866
|
|
70
|
TABLE OF CONTENTS
TABLE OF CONTENTS