Annual Report — Form 10-K Filing Table of Contents
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1: 10-K Annual Report HTML 935K
2: EX-10.H Amended 2005 Incentive Plan HTML 39K
3: EX-21 Subsidiaries of the Registrant HTML 15K
4: EX-23 Consent of Pricewaterhousecoopers LLP HTML 8K
5: EX-31 Certifications HTML 18K
6: EX-32 Section 1350 Certifications HTML 8K
1.Purpose. The purposes of the
DeVry Inc. Incentive Plan of 2005 (the “Plan”) are
(i) to encourage outstanding individuals to accept or
continue employment with DeVry Inc. (“DeVry” or the
“Company”) and its subsidiaries or to serve as
directors of DeVry, and (ii) to furnish maximum incentive
to those persons to improve operations and increase profits and
to strengthen the mutuality of interest between those persons
and DeVry’s stockholders by providing them stock options
and other stock and cash incentives.
2.Administration. The Plan will
be administered by the Compensation Committee (the
“Committee”) of the DeVry Board of Directors, which
consists of two or more directors as the Board may designate
from time to time, each of whom shall satisfy such requirements
as:
(a) the Securities and Exchange Commission may establish
for administrators acting under plans intended to qualify for
exemption under
Rule 16b-3
or its successor under the Securities Exchange Act of 1934 (the
“Exchange Act”);
(b) the New York Stock Exchange may establish pursuant to
its rule-making authority; and
(c) the Internal Revenue Service may establish for outside
directors acting under plans intended to qualify for exemption
under Section 162(m) of the Internal Revenue Code of 1986,
as amended (the “Code”).
The Committee shall have the authority to construe and interpret
the Plan and any awards granted thereunder, to establish and
amend rules for Plan administration, to change the terms and
conditions of options and other awards at or after grant, and to
make all other determinations which it deems necessary or
advisable for the administration of the Plan. The determinations
of the Committee shall be made in accordance with their judgment
as to the best interests of DeVry and its stockholders and in
accordance with the purposes of the Plan. A majority of the
members of the Committee shall constitute a quorum, and all
determinations of the Committee shall be made by a majority of
its members. Any determination of the Committee under the Plan
may be made without notice or meeting of the Committee, in
writing signed by all the Committee members. The Committee shall
authorize the Company’s chief executive officer (the
“CEO”) or one or more other officers of the Company to
(i) select employees to participate in the Plan,
(ii) determine, from the total number of option shares and
other awards approved by the Committee, the number of option
shares and other awards to be granted to such participants, and
(iii) determine the applicable terms and conditions of such
awards, except in each case with respect to awards to officers
subject to Section 16 of the Exchange Act or officers who
are or may become “covered employees” within the
meaning of Section 162(m) of the Code (“Covered
Employees”). Any reference in the Plan to the Committee
(other than in Section 19) shall include such
authorized officer or officers. The CEO or such other officer(s)
authorized to select employees to receive such option shares and
other awards shall provide written notice of all such action to
the Committee.
3.Participants. Participants may
consist of all employees of DeVry and its subsidiaries and all
non-employee directors of DeVry. Any corporation or other entity
in which a 50% or greater interest is at the time directly or
indirectly owned by DeVry shall be a subsidiary for purposes of
the Plan. Designation of a participant in any year shall not
require the Committee to designate that person to receive an
award in any other year or to receive the same type or size of
award as granted to the participant in any other year or as
granted to any other participant in any year. The Committee or,
if authorized pursuant to Section 2 hereof, the CEO or one
or more other officers of the Company shall consider all factors
deemed relevant in selecting participants and in determining the
type and amount of their respective awards.
4.Shares Available under the
Plan. There is hereby reserved for issuance
under the Plan an aggregate of 3 million shares of DeVry
common stock. If there is (i) a lapse, expiration,
termination or cancellation of any Stock Option or other award
prior to the issuance of shares thereunder or (ii) a
forfeiture of any shares of restricted stock or shares subject
to stock awards prior to vesting, the shares subject to these
options or other awards shall be added to the shares available
for awards under the Plan. Shares covered by an award granted
under the Plan shall not be counted as used unless and until
they are actually issued and delivered to a participant. Any
shares covered by a Stock Appreciation Right shall be counted as
used only to the extent shares are actually issued to the
participant
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upon exercise of the right. In addition, any shares covered by
an award which is settled in cash, shall be added to the shares
available for awards under the Plan. All shares issued under the
Plan may be either authorized and unissued shares or issued
shares reacquired by DeVry. Under the Plan, no participant may
receive in any fiscal year (i) Stock Options relating to
more than 150,000 shares, (ii) Restricted Stock or
Restricted Stock Units relating to more than 50,000 shares,
(iii) Stock Appreciation Rights relating to more than
125,000 shares, or (iv) Performance Shares relating to
more than 50,000 shares. No non-employee director may
receive in any fiscal year Stock Options relating to more than
15,000 shares or Restricted Stock Units relating to more
than 5,000 shares. The shares reserved for issuance and the
limitations set forth above shall be subject to adjustment in
accordance with Section 15 hereof. All of the available
shares may, but need not, be issued pursuant to the exercise of
Incentive Stock Options. Notwithstanding anything else contained
in this Section 4 the number of shares that may be issued
under the Plan for awards other than Stock Options or Stock
Appreciation Rights shall not exceed a total of 2 million
shares (subject to adjustment in accordance with Section 15
hereof).
5.Types of Awards. Awards under
the Plan shall consist of Stock Options, Stock Appreciation
Rights, Restricted Stock, Restricted Stock Units, Performance
Stock, Performance Cash Awards, Annual Management Incentive
Awards and Other Stock or Cash Awards, all as described below.
6.Stock Options. Stock Options
may be granted to participants, at any time as determined by the
Committee. The Committee or, if authorized pursuant to
Section 2 hereof, the CEO or one or more other officers of
the Company shall determine the number of shares subject to each
option and whether the option is an Incentive Stock Option. The
option price for each option shall be determined by the
Committee, but shall not be less than 100% of the fair market
value of DeVry’s common stock on the date the option is
granted. Each option shall expire at such time as the Committee
shall determine at the time of grant. Options shall be
exercisable at such time and subject to such terms and
conditions as the Committee shall determine; provided, however,
that no option shall be exercisable later than the tenth
anniversary of its grant. The option price, upon exercise of any
option, shall be payable to DeVry in full by (a) cash
payment or its equivalent, (b) tendering previously
acquired shares having a fair market value at the time of
exercise equal to the option price or certification of ownership
of such previously-acquired shares, (c) delivery of a
properly executed exercise notice, together with irrevocable
instructions to a broker to promptly deliver to DeVry the amount
of sale proceeds from the option shares or loan proceeds to pay
the exercise price and any withholding taxes due to DeVry, and
(d) such other methods of payment as the Committee, at its
discretion, deems appropriate. In no event shall the Committee
cancel any outstanding Stock Option for the purpose of reissuing
the option to the participant at a lower exercise price or
reduce the option price of an outstanding option.
7.Stock Appreciation
Rights. Stock Appreciation Rights
(“SARs”) may be granted to participants at any time as
determined by the Committee. The Committee or, if authorized
pursuant to Section 2 hereof, the CEO or one or more other
officers of the Company shall determine the number of SARs to be
granted to each participant. A SAR may be granted in tandem with
a Stock Option granted under this Plan or on a free-standing
basis. The grant price of a tandem SAR shall be equal to the
option price of the related option. The grant price of a
free-standing SAR shall be equal to the fair market value of
DeVry’s common stock on the date of its grant. A SAR may be
exercised upon such terms and conditions and for the term as the
Committee in its sole discretion determines; provided, however,
that the term shall not exceed the option term in the case of a
tandem SAR or ten years in the case of a free-standing SAR. Upon
exercise of a SAR, the participant shall be entitled to receive
payment from DeVry in an amount determined by multiplying the
excess of the fair market value of a share of common stock on
the date of exercise over the grant price of the SAR by the
number of shares with respect to which the SAR is exercised. The
payment may be made in cash or stock, at the discretion of the
Committee. In no event shall the Committee cancel any
outstanding SAR for the purpose of reissuing the right to the
participant at a lower exercise price or reduce the exercise
price of an outstanding SAR.
8.Restricted Stock and Restricted Stock
Units. Restricted Stock and Restricted Stock
Units may be awarded to participants under such terms and
conditions as shall be established by the Committee. The
Committee or, if authorized pursuant to Section 2 hereof,
the CEO or one or more other officers of the Company shall
determine the amount or number of Restricted Stock and
Restricted Stock Units to be granted to each participant.
Restricted Stock Units provide participants the right to receive
shares at a future date upon the attainment of certain
conditions
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specified by the Committee. Restricted Stock and Restricted
Stock Units shall be subject to such restrictions and conditions
as the Committee determines, including, without limitation, any
of the following:
(a) a prohibition against sale, assignment, transfer,
pledge, hypothecation or other encumbrance for a specified
period;
(b) a requirement that the holder forfeit such shares or
units in the event of termination of employment during the
period of restriction; or
(c) the attainment of performance goals described in
Section 13 hereof.
All restrictions shall expire at such times as the Committee
shall specify.
9.Performance Stock. The
Committee or, if authorized pursuant to Section 2 hereof,
the CEO or one or more other officers of the Company shall
designate the participants to whom performance stock
(“Performance Stock”) is to be awarded and determine
the number of shares, the length of the performance period and
the other terms and conditions of each such award; provided the
stated performance period will not be less than 12 months.
Each award of Performance Stock shall entitle the participant to
a payment in the form of shares of common stock upon the
attainment of performance goals and other terms and conditions
specified by the Committee.
Notwithstanding satisfaction of any performance goals, the
number of shares issued under a Performance Stock award may be
adjusted by the Committee on the basis of such further
consideration as the Committee in its sole discretion shall
determine. However, the Committee may not, in any event,
increase the number of shares earned upon satisfaction of any
performance goal by any participant who is a Covered Employee.
The Committee may, in its discretion, make a cash payment equal
to the fair market value of shares of common stock otherwise
required to be issued to a participant pursuant to a Performance
Stock award.
10.Performance Cash Awards. The
Committee or, if authorized pursuant to Section 2 hereof,
the CEO or one or more other officers of the Company shall
designate the participants to whom Performance Cash Awards
(“Performance Cash Awards”) are to be awarded and
determine the number of units and the terms and conditions of
each such award; provided the stated performance period will not
be less than 12 months. Each Performance Cash Award shall
entitle the participant to a payment in cash upon the attainment
of performance goals and other terms and conditions specified by
the Committee.
Notwithstanding the satisfaction of any performance goals, the
amount to be paid under a Performance Cash Award may be adjusted
by the Committee on the basis of such further consideration as
the Committee in its sole discretion shall determine. However,
the Committee may not, in any event, increase the amount earned
under Performance Cash Awards upon satisfaction of any
performance goal by any participant who is a Covered Employee
and the maximum amount earned by a Covered Employee in any
fiscal year may not exceed $1,000,000. The Committee may, in its
discretion, substitute actual shares of common stock for the
cash payment otherwise required to be made to a participant
pursuant to a Performance Cash Award.
11.Annual Management Incentive
Awards. The Committee may designate DeVry
executive officers who are eligible to receive a monetary
payment in any fiscal year based on a percentage of an incentive
pool equal to 5% of DeVry’s consolidated operating earnings
for the fiscal year. The Committee shall allocate an incentive
pool percentage to each designated participant for each fiscal
year. In no event may the incentive pool percentage for any one
participant exceed 20% of the total pool. Consolidated operating
earnings shall mean the consolidated earnings before income
taxes of the Company, computed in accordance with generally
accepted accounting principles, but shall exclude the effects of
Special Items. Special Items shall include (i) gains or
losses on the disposition of a business, (ii) changes in
tax or accounting regulations or laws, or (iii) the effect
of a merger or acquisition, as determined in accordance with
generally accepted accounting principles.
As soon as possible after the determination of the incentive
pool for a fiscal year, the Committee shall calculate the
participant’s allocated portion of the incentive pool based
upon the percentage established at the beginning of the fiscal
year. The participant’s incentive award then shall be
determined by the Committee based on the participant’s
allocated portion of the incentive pool subject to adjustment in
the sole discretion of the Committee. In no event may the
portion of the incentive pool allocated to a participant who is
a Covered Employee be increased in any way, including as a
result of the reduction of any other participant’s
allocated portion.
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12.Other Stock or Cash Awards. In
addition to the incentives described in sections 6 through
11 above, the Committee may grant other incentives payable in
cash or in common stock under the Plan as it determines to be in
the best interests of DeVry and subject to such other terms and
conditions as it deems appropriate; provided an outright grant
of stock will not be made unless it is offered in exchange for
cash compensation that has otherwise already been earned by the
recipient.
13.Performance Goals. Awards of
Restricted Stock, Restricted Stock Units, Performance Stock,
Performance Cash Awards and other incentives under the Plan
shall be made subject to the attainment of performance goals
relating to one or more business criteria within the meaning of
Section 162(m) of the Code, including, but not limited to,
cash flow; cost; ratio of debt to debt plus equity; profit
before tax; economic profit; earnings before interest and taxes;
earnings before interest, taxes, depreciation and amortization;
earnings per share; operating earnings; economic value added;
ratio of operating earnings to capital spending; free cash flow;
net profit; net sales; sales growth; price of DeVry common
stock; return on net assets, equity or stockholders’
equity; market share; or total return to stockholders
(“Performance Criteria”). Awards of Stock Options
under the Plan may be made subject to attainment of such
performance goals. Any Performance Criteria may be used to
measure the performance of the Company as a whole or any
business unit of the Company and may be measured relative to a
peer group or index. Any Performance Criteria may include or
exclude Special Items (as defined in section 11 above). In
all other respects, Performance Criteria shall be calculated in
accordance with the Company’s financial statements,
generally accepted accounting principles, or under a methodology
established by the Committee prior to the issuance of an award
which is consistently applied and identified in the audited
financial statements, including footnotes, or the Management
Discussion and Analysis section of the Company’s annual
report. However, the Committee may not in any event increase the
amount of compensation payable to a Covered Employee upon the
attainment of a performance goal.
14.Change in Control. Except as
otherwise determined by the Committee at the time of grant of an
award, upon a Change in Control of DeVry, all performance goals
shall be deemed achieved at target levels and all other terms
and conditions met; all outstanding Stock Options and SARs shall
become vested and exercisable; all restrictions on Restricted
Stock and Restricted Stock Units shall lapse; all Performance
Stock shall be delivered; all Performance Cash Awards and
Restricted Stock Units shall be paid out as promptly as
practicable; all Annual Management Incentive Awards shall be
paid out based on the consolidated operating earnings of the
immediately preceding year or such other method of payment as
may be determined by the Committee at the time of award or
thereafter but prior to the Change in Control; and all Other
Stock or Cash Awards shall be delivered or paid. A “Change
in Control” shall mean:
(i) the sale or disposition by the Company of all or
substantially all of the assets of the Company (or any
transaction having a similar effect);
(ii) the consummation of a merger or consolidation of the
Company with any other entity other than (A) a merger or
consolidation which would result in the voting interests of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting interests of the surviving entity) at least 50% of
the combined voting power of the voting interests of the Company
or such surviving entity outstanding immediately after such
merger or consolidation, or (B) a merger or consolidation
effected to implement a recapitalization of the Company (or
similar transaction); or
(iii) the acquisition, other than from the Company, by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)), of
beneficial ownership (within the meaning of
Rule 13d-3
promulgated under the Exchange Act) of 25% or more of the then
outstanding voting interests of the Company but excluding, for
this purpose, any such acquisition by the Company or any of its
affiliates, or by any employee benefit plan (or related trust)
of the Company or any of its affiliates.
15.Adjustment Provisions.
(a) In the event of any change affecting the shares of
DeVry Common Stock by reason of stock dividend, stock split,
reverse stock split, spin-off, recapitalization, merger,
consolidation, reorganization, share combination, exchange of
shares, stock rights offering, liquidation, extraordinary cash
dividend, disaffiliation of a subsidiary or
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similar event, the Committee shall make such adjustments (if
any) as it deems appropriate and equitable, in its discretion,
to outstanding awards to reflect such event, including without
limitation, (1) adjustments in the aggregate number or
class of shares which may be distributed under the Plan, the
maximum number of shares which may be made subject to an award
in any year and in the number, class and option price or other
price of shares subject to the outstanding awards granted under
the Plan; (2) the substitution of other property
(including, without limitation, other securities) for the stock
covered by outstanding awards; and (3) in connection with
any disaffiliation of a subsidiary, arrangement for the
assumption, or replacement with new awards, of awards held by
participants employed by the affected subsidiary by the entity
that controls the subsidiary following the disaffiliation.
(b) In the event of any merger, consolidation or
reorganization of DeVry with or into another corporation which
results in the outstanding common stock of DeVry being converted
into or exchanged for different securities, cash or other
property, or any combination thereof, there shall be
substituted, on an equitable basis as determined by the
Committee in its discretion, for each share of common stock then
subject to an award granted under the Plan, the number and kind
of shares of stock, other securities, cash or other property to
which holders of common stock of DeVry will be entitled pursuant
to the transaction.
16.Substitution and Assumption of
Awards. The Board of Directors or the
Committee may authorize the issuance of awards under this Plan
in connection with the assumption of, or substitution for,
outstanding awards previously granted to individuals who become
employees of DeVry or any subsidiary as a result of any merger,
consolidation, acquisition of property or stock, or
reorganization other than a Change in Control, upon such terms
and conditions as the Committee may deem appropriate.
17.Nontransferability. Each award
granted under the Plan shall not be transferable otherwise than
by will or the laws of descent and distribution and each Stock
Option and SAR shall be exercisable during the
participant’s lifetime only by the participant or, in the
event of disability, by the participant’s personal
representative. In the event of the death of a participant,
exercise of any award or payment with respect to any award shall
be made only by or to the executor or administrator of the
estate of the deceased participant or the person or persons to
whom the deceased participant’s rights under the award
shall pass by will or the laws of descent and distribution.
Notwithstanding the foregoing, at its discretion, the Committee
may permit the transfer of a Stock Option by the participant, on
a general or specific basis, subject to such terms and
conditions as may be established by the Committee.
18.Taxes. DeVry shall be entitled
to withhold the amount of any tax attributable to any amounts
payable or shares deliverable under the Plan, after giving the
person entitled to receive such payment or delivery notice and
DeVry may defer making payment or delivery as to any award, if
any such tax is payable until indemnified to its satisfaction. A
participant may pay all or a portion of any required withholding
taxes arising in connection with the exercise of a Stock Option
or SAR or the receipt of shares hereunder by electing to have
DeVry withhold shares of common stock, having a fair market
value equal to the amount required to be withheld.
19.Duration, Amendment and
Termination. No award shall be granted more
than ten years after the date of adoption of this Plan by the
Board of Directors; provided, however, that the terms and
conditions applicable to any award granted on or before such
date may thereafter be amended or modified by mutual agreement
between DeVry and the participant, or such other person as may
then have an interest therein. The Board of Directors or the
Committee may amend the Plan from time to time or terminate the
Plan at any time. However, no such action shall reduce the
amount of any existing award or change the terms and conditions
thereof without the participant’s consent. No material
amendment of the Plan shall be made without stockholder approval.
20.Fair Market Value. The fair
market value of DeVry’s common stock at any time shall be
determined in such manner as the Committee may deem equitable,
or as required by applicable law or regulation.
(a) Any award under the Plan may also be subject to other
provisions (whether or not applicable to an award granted to any
other participant) as the Committee determines appropriate,
including provisions intended to comply with federal or state
securities laws and stock exchange requirements, understandings
or conditions as to the participant’s employment,
requirements or inducements for continued ownership of common
stock after exercise or vesting of awards, forfeiture of awards
in the event of termination of employment shortly after exercise
or vesting,
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or breach of noncompetition or confidentiality agreements
following termination of employment, or provisions permitting
the deferral of the receipt of an award for such period and upon
such terms as the Committee shall determine.
(b) In the event any award under this Plan is granted to an
employee who is employed or providing services outside the
United States and who is not compensated from a payroll
maintained in the United States, the Committee may, in its sole
discretion, modify the provisions of the Plan as they pertain to
such individuals to comply with applicable law, regulation or
accounting rules.
(c) The Committee, in its sole discretion, may require a
participant to have amounts or shares of common stock that
otherwise would be paid or delivered to the participant as a
result of the exercise or settlement of an award under the Plan
credited to a deferred compensation or stock unit account
established for the participant by the Committee on the
Company’s books of account.
22.Governing Law. The Plan and
any actions taken in connection herewith shall be governed by
and construed in accordance with the laws of the state of
Delaware (without regard to applicable Delaware principles of
conflict of laws).
23.Stockholder Approval. The Plan
was adopted by the Board of Directors on September 13,2005, subject to stockholder approval. The Plan and any awards
granted thereunder shall be null and void if stockholder
approval is not obtained at the next annual meeting of
stockholders.
