SEC Info - Bostic R Steven - ‘DFAN14A’ on 5/2/06 re: Career Education Corp

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Bostic R Steven – ‘DFAN14A’ on 5/2/06 re: Career Education Corp

On: Tuesday, 5/2/06, at 5:14pm ET · Effective: 5/2/06 · Accession #: 914121-6-1270 · File #: 0-23245

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 5/02/06  Bostic R Steven                   DFAN14A     5/02/06    1:23K  Career Education Corp             Cadwalader Wickersh… LLP

Additional Definitive Non-Management Proxy Solicitation Material — Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DFAN14A     Additional Definitive Non-Management Proxy             8     38K 
                          Solicitation Material                                  

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SCHEDULE 14A

 INFORMATION REQUIRED IN PROXY STATEMENT
 SCHEDULE 14 INFORMATION

Proxy Statement Pursuant To Section 14(A) Of The Securities Exchange Act of 1934

Filed by the registrant  / /                                                    

Filed by party other than the registrant /X/                                    

Check the appropriate box:                                                      

/ /   Preliminary Proxy Statement                                               

/ /   Confidential, for Use of the Commission Only (as permitted by             
Rule 14a-6(e)(2))                                                   

/ /   Definitive Proxy Statement                                                

/X/   Definitive Additional Materials                                           

/ /   Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12             

 CAREER EDUCATION CORPORATION.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

 BOSTIC R STEVEN
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):                              

/X/    No fee required                                                          

/ /    Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11  

(1) Title of each class of securities to which transaction applies:             

________________________________________________________________________________

(2) Aggregate number of securities to which transactions applies:               

________________________________________________________________________________

(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:                                                         

________________________________________________________________________________

(4) Proposed maximum aggregate value of transaction:                            

________________________________________________________________________________

(5)   Total fee paid                                                            

________________________________________________________________________________

/ /   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.                                

(1) Amount Previously Paid:                                                     

________________________________________________________________________________

(2) Form, Schedule or Registration Statement no.:                               

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(3) Filing Party:                                                               

________________________________________________________________________________

(4) Date Filed:                                                                 

________________________________________________________________________________

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The following is a press release issued by Steve Bostic on May 2, 2006:         

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FOR IMMEDIATE RELEASE                                                           

 Steve Bostic Mails Letter Urging Career Education Corp. Stockholders to
Vote For Alternative Directors to Return Company to the Right Path

 Urges Fellow Stockholders to Vote the BLUE Proxy Card

SEA ISLAND, GA, May 2, 2006 -- Steve Bostic, the beneficial owner of            
approximately 1% of the outstanding stock of Career Education Corporation       
(NASDAQ: CECO), today issued the following letter to his fellow stockholders.   
The letter urges stockholders to vote for the alternative slate of directors,   
comprised of James E. Copeland, Jr., R. William Ide III and himself, in order to
ensure effective Board oversight, and restore integrity and sound educational   
values to the company:                                                          

May 2, 2006                                                                     

Dear Fellow Stockholder,                                                        

Your vote at this year's annual meeting of stockholders is critical to the
future of CEC. I am seeking your support for not only my slate of nominees, but 
for a mandate for necessary change in the management, policies and direction of 
the Company. Your vote can decide whether the failed leadership of John Larson  
and his management team is to continue, or whether CEC can be set on the path to
real growth and the sustainable profitability it is capable of.                 

Consider the Company's record under Larson's management:                  

o  Probationary status imposed on American InterContinental University (AIU) by 
the Southern Association of Colleges and Schools (SACS);                  

o  Four ongoing inquiries or investigations by: the U.S. Department of          
  Education; the U.S. Department of Justice; the Bureau of Consumer Protection
of the Office of the Attorney General in PA; the Texas Higher Education   
Coordinating Board, and the New Jersey Department of Labor and Workforce  
Development;                                                              

o  Litigation against the Company's California regulatory body;                 

o  Ongoing lawsuits by stockholders, employees and former students; and         

o  What we believe is the result of Larson's mismanagement - the loss of $3.4   
billion in shareholder value.                                             

   Consider the above and decide how much more of this record of failure you can
afford. I own over a million shares of CEC, and I have had enough. I am asking  
for your vote to elect myself and my two nominees to the CEC Board. I believe   
that with sufficient support from the stockholders we will have a mandate for   
change that the other independent directors on the Board will not be able to    
ignore. As the former Chairman and CEO of AIU, the Company's flagship school, I 
believe that I have the experience and know-how to fix what is wrong with CEC. I
have a plan and the will to execute it, but I need your vote. No matter how many
shares you own, your vote is important. Your clear support for our slate will be
the base upon which a new, revitalized CEC can grow.                            

PLEASE SHOW YOUR SUPPORT. SIGN, DATE AND RETURN THE ENCLOSED BLUE PROXY CARD
TODAY.

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LARSON, OGATA AND DOWDELL - HISTORY REPEATS ITSELF

The failure of management and oversight that threatens the future of CEC is only
the culmination of a pattern of failed education companies that Jack Larson,    
Keith Ogata and Robert Dowdell have left in their wake.                         

Prior to forming CEC in 1994, Larson, from 1980 to 1993, served in senior       
executive positions with two large, but now defunct, national school companies -
National Education Centers (Education Centers), a subsidiary of National        
Education Corporation (NEC) and Phillips Colleges, Inc. (Phillips). Ogata and   
Dowdell were fellow executives with Larson at Education Centers - Dowdell       
serving as President of Education Centers from 1984 to 1988 and Ogata serving as
Chief Financial Officer, Treasurer and Vice President of NEC from 1987 to 1998  
and as President of Education Centers from 1996 to 1998. During the tenure of   
Larson and Dowdell, in the late 1980s, Education Centers' schools began to      
develop excessive federal student loan default rates, which by the early 1990s  
impaired the access of many of the schools to federal student aid programs.     
During Ogata's tenure at NEC in the 1990s, NEC shut down its Education Centers  
business, closing 25 schools and selling off the rest by 1996. The closure and  
sale of schools resulted in a $70 million loss at NEC.                          

At Phillips, Larson held the position of Senior Vice President of College       
Operations from 1989 to 1993, which included oversight of all of Phillips'      
admissions and sales activities. By the late 1980s, Phillips had become the     
largest national operator of postsecondary institutions, owning close to 100    
schools at its zenith. Phillips developed extensive regulatory and operational  
problems in the early 1990s and faced multi-million dollar liability assessments
by the U.S. Department of Education (DOE) for improper administration of federal
student aid programs, including unpaid refunds, lack of proper documentation,   
excessive cash drawdowns, high loan default rates and use of commissioned sales 
representatives in a "Onestop Shopping" sales program from 1987 to 1990 to      
improperly promote federal student loans. The Onestop Shopping sales program,   
which Phillips used in 1989 and 1990 after Larson took over admissions and sales
at Phillips, eventually led to a DOE audit determination in early 1993 that the 
program violated federal regulations and required repayment of $155 million to  
federal lenders. This $155 million liability was later upheld in 1994 and 1995  
by an administrative law judge, the Secretary of Education and the courts. Also 
during Larson's watch, in 1992 the DOE determined that Phillips was in such poor
financial condition that it could not continue to participate in the federal    
student aid programs unless it posted a $5 million letter of credit. Larson left
Phillips in 1993, but the regulatory problems which began under Larson's tenure 
ultimately led Phillips to close 43 schools and to sell off the rest.           

It is not too late to prevent CEC from joining NEC and Phillips on the          
scrap-heap of failed education companies on Jack Larson's resume.               

I have attached to this letter two charts chronicling in detail the time periods
in which Larson, Ogata and Dowdell served with NEC and Larson served with       
Phillips, as well as school closings and other adverse developments during those
time periods, together with sources for each item listed in the charts.         

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 WHO IS RESPONSIBLE FOR AIU'S PROBATIONARY STATUS?

CEC's management has made much of the fact that the SACS placed AIU "on         
sanction", in their words, for six months in 1997, while it was being operated  
by EduTrek, the company of which I was CEO. This is yet another attempt to      
distract you from the gravity of the problems that are facing CEC today. The    
fact is that of all of the measures that can be taken by SACS against an        
educational institution, there are five "negative actions" that are the most    
serious, and these include the extremely serious public sanction of Probation.  
SACS has confirmed to us in writing that during the time period that EduTrek    
operated SACS, there were no such negative actions taken by SACS against AIU.   
This is in stark contrast to what has occurred on Jack Larson's watch. SACS     
initially imposed the public sanction of Warning status on CEC. AIU is now on   
Probation and its accreditation is at risk. This is unprecedented in AIU's      
history and threatens its very existence, and it is Jack Larson's fault, not    
mine.                                                                           

 THE REAL "HEAVY LOSSES"

Jack Larson has also said that EduTrek suffered "heavy losses" during my time as
its CEO and that in 1996, it reported a $5.5 million loss for nine months.      
Again, this is an attempt to distract your focus from the real "heavy losses",  
namely the loss of $3.4 BILLION in shareholder value under Jack Larson's        
management of CEC. In 1996, as CEC management acknowledges in its investor      
presentation, EduTrek was a start-up company. As a result, it had significant   
start-up expenses, in this case related to opening four new AIU campuses and    
establishing the AIU Online university - in other words, building what is now   
CEC's principal asset, accounting for more than 75% of its market value. Without
AIU, CEC would resemble what Larson, Ogata and Dowdell built in the 1980s and   
1990s - career colleges with a fraction of CEC's current market value. And now, 
under the leadership of Larson, Ogata and Dowdell, this valuable asset is in    
grave jeopardy.                                                                 

RHETORIC VS. REALITY

The title of management's recent investor presentations has been "The Year of   
the Graduate". These materials state that "CEC prepares more than 100,000       
students annually for career success in their chosen field". Elsewhere, they    
talk about CEC's "strong student outcomes" and strong graduation rate. But what 
is behind all of this rhetoric? In support of CEC's supposedly high graduation  
rate, management cites a Banc of America research report from October 2004 that 
shows graduation rates for 2001 through 2003. Why does management need to rely  
on a three-year old, secondhand estimate of graduation rates? We have repeatedly
asked management to disclose both current graduation and drop-out rates. They   
have not done so. What are they trying to hide? Had management disclosed the    
conclusions in the most recent Banc of America research report on CEC, from     
February 21, 2006, they would have revealed "the company's first ever year/year 
decline in new student growth." The February 2006 report adds that the          
new-student decline "bodes poorly for the future". There is an endemic lack of  
transparency at CEC. Management is playing a game of smoke and mirrors - trying 
to conceal the ugly truth behind upbeat rhetoric.                               

In CEC's 2005 annual report, Jack Larson makes the following statements in his  
letter to stockholders: "CEC provides students with the skills they need to     
pursue rewarding careers in the fields that they love. Graduates enter their    
professions prepared not only for today but for a lifetime of success." Contrast
Larson's words with the stark conclusions presented in The                      

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Chronicle of Higher Education's January 13, 2006 article on CEC, entitled       
"Promises and Profits". The Chronicle undertook a three-month investigation into
the recruiting practices at the Los Angeles branch of AIU. Here is what it      
found: "The sources painted a picture of a college devoted to enrolling students
by any means necessary, but that did little for them once they were enrolled and
their financial aid was collected. As a result, the sources said, hundreds of   
dissatisfied students dropped out each year, heavily in debt with student loans,
but without the skills they needed to pursue careers in the fields in which they
sought training. Even many of those who have graduated are unhappy. Despite the 
promises made in its advertisements, Career Education Corporation offered them  
little help in finding jobs.... The problems identified by The Chronicle do not 
appear to be isolated to the one campus." In fact, SACS has cited AIU for lack  
of "integrity of student academic records and accuracy in recruiting and        
admissions practices", among the 15 violations of SACS' Principles of           
Accreditation for which SACS has placed AIU on Probation.                       

I and my nominees share a commitment to the ethical renewal of CEC and the      
restoration of its reputation and standing in the educational community. We have
a clear and practical plan we believe will get us to that goal. We believe that 
with a mandate from CEC stockholders, we will be able to work with the          
independent directors on the CEC Board to effectuate it. It is only your vote   
that will give us that mandate. We therefore urge you to SIGN, DATE and RETURN  
YOUR BLUE PROXY CARD TODAY.                                                     

Thank you for your support,                                                     

Sincerely,                                                                
/s/                                                                       
Steve Bostic                                                              

 IMPORTANT

If your shares are held in your own name, please sign, date and return the
 enclosed BLUE proxy card today. If your shares are held in "Street-Name,"
 only your broker or bank can vote your shares and only upon your specific
instructions. Please return the enclosed BLUE proxy card to your broker or
 bank and contact the person responsible for your account to ensure that a
 BLUE proxy is voted on your behalf.

Do not sign any White proxy card you may receive from CEC.

If you have any questions, or need assistance in voting your shares,
please contact the firm assisting us in the solicitation of proxies:

INNISFREE M&A INCORPORATED

 TOLL-FREE: (877) 750-9499

Banks and Brokers call collect: (212) 750-5833

     ###
The charts referenced in the above letter are available attached to this press  
release.                                                                        

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                                                        [Enlarge/Download Table]

EXPERIENCE AT NEC AND EDUCATION CENTERS                                                                                       
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------
Yrs at NEC                                                                                                                    
& Education                                                                                                                   
Centers            Larson            Ogata                Dowdell             Adverse Developments  Source                    
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------
                                                                                                                              

1980-83          VP Mktg,                                                                         Forbes.com,                 
                 Admissions                                                                       MtkGuideIdPerson Tearsheet  
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------
1984-86          Same                                   President                                 Forbes.com                  
                                                        Education Centers                                                     
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------
1987             Same              Fin. Officer &       Same                                      Forbes.com                  
                                   Treasurer of NEC                                               NEC 10K FYE 12/31/04, p.13  
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------
1988             Same              Same                 Same                                      Same                        
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------
1989             Same (left in     VP, Treas. of NEC                        High student loan     USDOE default records       
                 March, 1989)                                               default rates; 2      USDOE closed schools        
                                                                            schools closed        website                     
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------
1990                               Same                                     High default rates    USDOE default records       
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------
1991                               VP, Treasurer and                        Same; 1 school        USDOE closed schools        
                                   CFO of NEC                               closed                website                     
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------
1992                               Same                                     Same; 2 schools       Same                        
                                                                            closed                                            
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------
1993                               Same                                     $23.6 Million Est.    NEC 10K FYE 12/31/94, p.3   
                                                                            Charge for closing                                
                                                                            13 schools                                        
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------
1994                               Same                                     Plan adopted to       NEC 10K FYE 12/31/94, pp    
                                                                            dispose of            11-12 & 22                  
                                                                            Education Centers;    USDOE closed schools        
                                                                            $40 Million Charge;   webpage                     
                                                                            10 schools closed                                 
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------
1995                               Same                                     10 schools closed     USDOE closed schools        
                                                                            28 schools sold       webpage                     
                                                                                                  NEC FYE 12/31/95, p.12      
                                                                                                  Newsroom, Educational       
                                                                                                  marketer, 7/17/95           
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------
1996                               Same; President                          3 former NEC campus   OIG Semiannual Rpt to       
                                   Education Centers                        officials plead       Congress for period 4/1/96  
                                                                            guilty to Title IV    to 9/30/96                  
                                                                            fraud                                             
---------------- ----------------- -------------------- ------------------- --------------------- ----------------------------

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                                                        [Enlarge/Download Table]

EXPERIENCE AT PHILLIPS                                                                                                             

-------------- ----------------- --------------------------------------------  -------------------------------------------------   
Year           Larson Position   Adverse Developments at Phillips                 Source Information                               
-------------- ----------------- --------------------------------------------  -------------------------------------------------   
                                                                                                                                   
1989           Senior VP                                                          Forbes.com                                       
               College                                                                                                             
               Operations                                                                                                          
-------------- ----------------- --------------------------------------------   ------------------------------------------------   
1990           Same              *4 schools closed                                USDOE closed schools website                     
-------------- ----------------- --------------------------------------------   -------------------------------------------------  
1991           Same              *12 schools closed                               USDOE closed schools website                     
                                 *DOE program review at Phillips                  Phillips Colleges, Inc. v Riley, 844 F. Supp.    
                                 headquarters finds high occurrence of            808, 809 (D.D.C. 1994), aff'd, 50 F.3d 1096      
                                 late refunds of Title IV aid for                 (D.C. Cir. 1995)                                 
                                 dropped students                                                                                  
-------------- ----------------- --------------------------------------------    ------------------------------------------------- 
1992           Same              *6 schools closed                                USDOE closed schools website                     
                                 *4/29/92 DOE finding that Phillips               Phillips Colleges, No. 94-27-ST                  
                                 failed to meet financial responsibility                                                           
                                 requirements for Title IV aid programs                                                            
                                 *7/24/92 -  Phillips avoids termination                                                           
                                 by DOE from Title IV programs by                                                                  
                                 agreement to post $5 Million letter of                                                            
                                 credit                                                                                            
-------------- ----------------- --------------------------------------------  -------------------------------------------------   
1993           Same (left in     *7 schools closed                                Forbes.com                                       
               Jan, 1993)        *2/11/93 final audit determination that          Phillips Colleges, 93-48-SP                      
                                 Phillips "OneStop Shopping" sales                Phillips Colleges, No. 94-27-ST; Phillips        
                                 policy used from 1987-1990 violated DOE          Colleges, 844 F. Supp. at 811.                   
                                 regulations " and imposition of $155 Million                                                      
                                 liability to repay GSL Lenders                                                                    
                                 *8/26/93 DOE draw of $2.19 Million on Phillips                                                    
                                 letter of credit to pay delinquent Title                                                          
                                 IV refunds                                                                                        
-------------- ----------------- --------------------------------------------  ---------------------------------------------       
1994                             *2/28/94 ALJ ruling for repayment of             Phillips Colleges, 91-96-SA                      
                                 $2.8 Million to GSL lenders                      Phillips Colleges, 92-64-SA                      
                                 *4/24/94 Secretary DOE ruling ordering           Phillips Colleges, 93-39-SP                      
                                 Phillips to make $3.19 Million payment           Phillips Colleges, 93-48-SP                      
                                 to replenish DOE letter of credit, in            Phillips Colleges, 93-58-SP                      
                                 order to maintain Title IV eligibility           Phillips Colleges, 94-4-SP                       
                                 for 40 campuses and 16,000 students,             Phillips Colleges, 94-33-SP                      
                                 *5/15/94 ALJ ruling to repay $110,356 of campus                                                   
                                 based Title IVaid due to lack of documentation                                                    
                                 *8/23/04 ALJ ruling upholding $155 Million                                                        
                                 audit finding                                                                                     
                                 *8/24/94 AJ ruling for Phillips to pay $586,700                                                   
                                 as interest for excessive drawdowns of Title                                                      
                                 IV aid                                                                                            
                                 *11/2/94 ALJ ruling for Phillips to repay                                                         
                                 $242,962 of fair share of campus based Title                                                      
                                 IV aid due to lack of documentation                                                               
                                 *11/14/94 ALJ ruling for Phillips to repay                                                        
                                 $692,632 to GSL lenders and $256,799 to DOE                                                       
                                 due to improper sales practices                                                                   
                                 *11/16/94 ALJ ruling to repay $102,952 of Title                                                   
                                 IV aid due to student ineligibility                                                               
-------------- ----------------- --------------------------------------------     -------------------------------------------------
1995                             *9 schools closed                                USDOE closed schools webpage                     
-------------- ----------------- --------------------------------------------     -------------------------------------------------
1996                             *5 schools closed; sale of 18 schools            USDOE closed schools webpage                     
                                                                                  Chronicle of Higher Education , 11/15/96         
-------------- ----------------- --------------------------------------------     -------------------------------------------------

Media Inquiries:                                                                

Peter Duda                                                                      
Weber Shandwick                                                                 
212-445-8213                                                                    
pduda@webershandwick.com                                                        

J.J. Rissi                                                                      
Weber Shandwick                                                                 
917-587-7090                                                                    
jjrissi@webershandwick.com

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘DFAN14A’ Filing	Date	First	Last	Other Filings

Filed on / Effective on:	5/2/06	2	3	DFAN14A
	2/21/06	5		8-K/A, DFAN14A
	1/13/06	6
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Filing Submission 0000914121-06-001270 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Bostic R Steven – ‘DFAN14A’ on 5/2/06 re: Career Education Corp

On: Tuesday, 5/2/06, at 5:14pm ET · Effective: 5/2/06 · Accession #: 914121-6-1270 · File #: 0-23245

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Additional Definitive Non-Management Proxy Solicitation Material — Schedule 14AFiling Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Additional Definitive Non-Management Proxy Solicitation Material — Schedule 14A
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