What changed in this filing

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Item 9A. Controls and Procedures

2021-03-01 compared with 2020-03-02 · 94 added, 86 removed, 215 unchanged (46% of the section changed)

2 unchanged sentences

Based upon such review, the Chief Executive Officer and Chief Financial Officer have concluded that the Company had in place, as of December 31, 2020, effective controls and procedures designed to ensure that information required to be disclosed by the Company (including consolidated subsidiaries) in the reports it files or submits under the Securities Exchange Act of 1934, as amended, and the rules thereunder, is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The company completed its acquisition of Torrens University and related assets in Australia and New Zealand ("ANZ") on November 3, 2020.

As a result, management has excluded this business from its assessment of internal control over financial reporting as of December 31, 2020.

The total assets of ANZ that were excluded from management's assessment represented approximately 10% of the company's total assets as of December 31, 2020.

The total revenues of ANZ that were excluded from the assessment represented approximately 2% of the company's total revenues for the year ended December 31, 2020.

Under the supervision, and with the participation of the Company’s principal executive officer and principal financial officer, the Company’s management assessed the effectiveness of the registrant’s internal control over financial reporting as of December 31, 2020, based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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Other Information

On February 22, 2021, Thomas J.

Aprahamian, 52, the Company’s Senior Vice President, Controller and Chief Accounting Officer, informed the Company of his decision to resign from those positions effective March 22, 2021 to serve the Company in a different position.

On February 26, 2021, the Company announced that Tal Darmon, age 46, will join the Company as Senior Vice President, Controller and Chief Accounting Officer on March 22, 2021.

Darmon currently serves as Chief Accounting Officer of Laureate Education, Inc., a position he has held since December 2016.

Prior to serving as Chief Accounting Officer, he served at Laureate as Global Corporate Controller from August 2015 to December 2016.

Darmon has no family relationship with any directors or executive officers of the Company, nor are there any arrangements or understandings between Mr.

Darmon and any other persons pursuant to which he was selected as an officer of the Company.

In connection with his appointment, Mr.

Darmon will receive a base salary of $400,000 per year;

a one-time signing bonus of $300,000 paid in two equal installments at hire and 6 months after service begins, subject to a clawback for termination within 24 months of hire;

and a one-time equity award grant of $300,000 with shares cliff-vesting on the fourth anniversary of the grant date.

In addition, Mr.

Darmon will be eligible to participate in the compensation programs described under “Compensation Discussion and Analysis” in the Company’s proxy statement relating to its 2020 annual meeting of stockholders filed with the SEC on March 16, 2020, which

description is incorporated herein by reference.

Aprahamian will remain the Company’s principal accounting officer until March 22, 2021.

Directors, Executive Officers, and Corporate Governance

The following table sets forth certain information with respect to the Company’s directors, executive officers, and significant employees:

Executive Chairman

Kevin Gilligan

Vice Chairman

Presiding Independent Director

Karl McDonnell

Director, Chief Executive Officer

Thomas Waite, III

Name Age Position

Silberman 63 Executive Chairman

Kevin Gilligan 66 Vice Chairman

Grusky 63 Presiding Independent Director

Beason 73 Director

Brogley 55 Director

Casteen III 77 Director

James Dallas 62 Director

Fick 43 Director

Johnson 50 Director

Karl McDonnell 54 Director, Chief Executive Officer

Thomas Waite, III 69 Director

Executive Officers:

Executive Vice President and Chief Financial Officer

Senior Vice President and General Counsel

Senior Vice President, Chief Operating Officer

Senior Vice President, Chief Human Resources Officer

Senior Vice President, Controller and Chief Accounting Officer

Jackson 46 Executive Vice President and Chief Financial Officer

Herraiz 46 Senior Vice President and General Counsel

Hokenson 50 Senior Vice President, Chief Human Resources Officer

Silberman has been a Director of the Company since March 2001.

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Since 2014, he has served as a Managing Director of Equity Group Investments.

He also serves as the Chairman of the Board of Directors of Par Pacific Holdings and as Lead Director of the Board of Covanta Holding Company.

He also serves as the Chairman of the Board of Directors of Par Pacific Holdings and as Lead Director of the Board of Covanta Holding Company, and previously served on the Board of Twenty-First Century Fox, Inc.

from 2013 to 2019.

He is a member of the Council on Foreign Relations.

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Grusky is the Founder and has been the Managing Member of Hope Capital Management, LLC, an investment manager, since 2000.

He co-founded New Mountain Capital, LLC, a private equity firm, in 2000, was a Principal and Member from 2000 to 2005, was a Senior Advisor from 2005 to 2019, and has served on the Executive Leadership Council since then.

He co-founded New Mountain Capital, LLC, a private equity firm, in 2000, was a Principal

and Member from 2000 to 2005, was a Senior Advisor from 2005 to 2019, and has served on the Executive Leadership Council since then.

From 1998 to 2000, Mr.

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Brogley served as Director of Business Development and Marketing Europe for Microsoft TV from 1997 to 2000 and was a management consultant with Bain and Company from 1995 to 1997.

Brogley presently serves on the Board of Trinity Health, a healthcare system based in Michigan.

Brogley presently serves on the Board of Trinity Health, a healthcare system with headquarters in Michigan.

Brogley served on the Board of Capella Education Company from 2014 until her appointment to the Board of Strategic Education, Inc.

on August 1, 2018.

She is a member of the Compensation Committee.

She is the Chair of the Compensation Committee.

Brogley holds a bachelor’s degree in industrial engineering from Northwestern University and a master’s degree in business administration from the Harvard Business School.

Casteen III is the President Emeritus and University Professor at the University of Virginia, where he teaches courses in literature, cultural history, and public policy.

Casteen III is the President Emeritus and a retired University Professor and Professor of English at the University of Virginia, where he taught literature, cultural history, and public policy.

He served as President of the University of Virginia from 1990 through 2010.

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Casteen served as the Secretary of Education for the Commonwealth of Virginia.

Casteen is on the board of directors of Altria, Inc.

Casteen is on the board of directors of Altria Group, Inc.

Casteen is also director of a number of charitable and privately-held business entities, including ECHO 360.

He has chaired the boards of both the College Entrance Examination Board and the Association of American Universities.

Casteen has been a member of the Board since 2011, and is on the Nominating Committee of the Board.

Casteen has been a member of the Board since 2011, and is on the Nominating Committee and Compensation Committee of the Board.

Casteen holds a bachelor’s degree, master’s degree and a Ph.D.

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Prior to joining the Board of Strategic Education on August 1, 2018, on which he serves as a member of the Audit Committee, he served on the Board of Capella Education Company.

He also serves on the boards of KeyCorp and Centene Corporation, and formally served on the board of WellCare Health Plans, Inc.

He also serves on the boards of KeyCorp and Centene Corporation, and formerly served on the board of WellCare Health Plans, Inc.

from September 2016 until its acquisition by Centene in January 2020.

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ESTC) in 2019.

Endgame’s professional services business through its acquisition by Accenture in 2017.

Fick spent nearly a decade as an operating partner at Bessemer Venture Partners, where he worked with management teams to build durable businesses.

He also led Endgame’s professional services business through its acquisition by Accenture in 2017.

Fick spent nearly a decade as an

operating partner at Bessemer Venture Partners, where he worked with management teams to build durable businesses.

Fick writes and speaks regularly on entrepreneurship, leadership, corporate governance, and technology issues, and his commentary has been featured in the New York Times , Washington Post , Bloomberg, CNBC, NPR and CNN.

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He serves as a Trustee of Dartmouth, and as a member of the Military and Veterans Advisory Council at JPMorgan Chase & Co.

Fick was elected to the Board in 2016, and serves on the Audit Committee.

Fick was elected to the Board in 2016, and serves as the Chair of the Audit Committee.

Johnson is Senior Vice President of Strategy, Corporate Development and Investor Relations at EnPro Industries, a leading technology company using materials science to push the boundaries of the semiconductor, life sciences, and other technology-enabled sectors.

Johnson is a founding member and previously served as a Partner at RLJ Equity Partners since 2007.

His career also includes service as a White House Fellow, and as a management consultant at McKinsey & Company.

Johnson previously served on the Board of Directors of Command Security Corporation from 2017 through February of 2019.

Johnson graduated from the University of Tennessee with a bachelor’s degree in chemical engineering, holds an MBA from Harvard Business School, and serves on The Council of Foreign Relations.

Johnson was elected to Board on November 3, 2020, with service beginning on January 4, 2021, and serves on the Audit Committee.

Karl McDonnell was named Chief Executive Officer of the Company in May 2013, and served as President and Chief Operating Officer from 2006 to 2013.

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McDonnell holds a bachelor’s degree from Virginia Wesleyan College and a master’s degree in business administration from Duke University.

Milano is President Emeritus and Ambassador of Central Penn College, where he served as President and Chief Executive Officer from 1989 to 2012.

Milano has served on the Board since 1996 and is a member of the Compensation Committee of the Board.

Milano served as a member of the Strayer University Board of Trustees from 1992 until December 2018.

Milano holds a bachelor’s degree in industrial management from Purdue University.

Thomas Waite, III , now retired, was the Treasurer and Chief Financial Officer of the Humane Society of the United States from 1997 until January 2020.

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Waite was the Director of Commercial Management of The National Housing Partnership.

Waite has served on the Board since 1996, is Chair of the Audit Committee, and is a former member of the Strayer University Board of Trustees.

Waite has served on the Board since 1996, is a member of the Audit Committee and the Compensation Committee, and is a former member of the Strayer University Board of Trustees.

Waite holds a bachelor’s degree in commerce from the University of Virginia and is a Certified Public Accountant, and a Chartered Global Management Accountant.

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Herraiz earned a Bachelor of Arts in Government from the University of Virginia, and her Juris Doctor from the George Mason University School of Law.

Watt is Senior Vice President, Chief Operating Officer.

Watt previously served as Senior Vice President of Post-Secondary Education to SEI, and previously under the same title to Capella Education Company.

Prior to service as SVP of Post-Secondary Education, Andy served as vice president of Colleges and University Operations and Capella University’s chief operations officer from 2014 to 2019.

He has held a variety of leadership positions across Capella University, including roles in Operations, Finance, Analytics and its Markets & Products team.

Before joining Capella, he worked in transaction advisory services at both Deloitte & Touche LLP and Arthur Andersen LLP.

Watt graduated from the University of St.

Thomas with a bachelor’s degree in finance and accounting.

Hokenson i s Senior Vice President, Chief Human Resources Officer.

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She earned a Bachelor of Arts degree from The College of William & Mary.

Aprahamian is Senior Vice President, Controller and Chief Accounting Officer.

Aprahamian has been with the Company since 2009 and has served as University Controller and Vice President and Controller.

Aprahamian previously held a variety of accounting operations and financial reporting roles including the Chief Accounting Officer at The Advisory Board Company, where he served from 2001 to 2007.

Prior to that he spent seven years in the telecommunications industry and began his career at Arthur Andersen & Co.

Aprahamian passed the CPA exam in 1992 and earned his bachelor of business administration degree from James Madison University.

Additional information responsive to this item is hereby incorporated by reference from the sections titled “Election of Directors,” “Board Structure,” “Code of Ethics” and “Delinquent Section 16(a) Reports” contained in the Company’s Proxy Statement, which will be filed no later than 120 days following December 31, 2020.

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Exhibit Index

Number Description

2.1 Sale and Purchase Agreement, dated July 29, 2020, between the Company, SEI Newco Inc., LEI AMEA INVESTMENTS B.V.

and Laureate Education, Inc.

(incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K/A filed with the Commission on August 5, 2020).

2.2* Sale and Purchase Agreement - Side Letter, dated November 3, 2020, between the Company, SEI Newco, Inc., LEI AMEA INVESTMENTS B.V.

and Laureate Education, Inc.

3.1 Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Commission on August 1, 2018).

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333-3967) filed with the Commission on July 16, 1996).

Description of the Company's securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.

4.2 Description of the Company's securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.2 of the Company’s Annual Report on Form 10-K filed with the Commission on March 2, 2020).

10.1 Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of November 8, 2012, among the Company, SunTrust Bank, as Administrative Agent, and the other lenders and agents party thereto (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on November 9, 2012).

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10.3 Second Amendment to Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of August 1, 2018, among the Company, certain subsidiaries of the Company party thereto as subsidiary guarantors, SunTrust Bank, as Administrative Agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Commission on August 1, 2018).

10.4 Third Amendment to Second Amended and Restated Revolving Credit and Term Loan Agreement and Amendment to Other Loan Documents, dated November 3, 2020, among Strategic Education Inc., certain subsidiaries of Strategic Education Inc.

party thereto as subsidiary guarantors, Truist Bank, as Administrative Agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 5, 2020).

10.5 Supplement and Joinder Agreement, dated as of July 2, 2015, among the Company, Strayer University, LLC, SunTrust Bank, as Administrative Agent, and other lenders party thereto (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Commission on July 8, 2015).

10.6 Supplement Agreement, dated August 10, 2020, among the Company, certain of its subsidiaries party thereto as subsidiary loan parties, Truist Bank, as administrative agent, and Truist Bank and Bank of America, N.A., as lenders (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on August 10, 2020).

10.7† Employment Agreement, dated as of April 6, 2001, between Strayer Education, Inc.

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000-21039) filed with the Commission on November 8, 2018).

Amended Strayer Education, Inc.

1996 Stock Option Plan (incorporated by reference to Exhibit 10.01 to the Company's Registration Statement on Form S-8 filed with the Commission on October 5, 2001).

10.9† Strayer Education, Inc.

2011 Equity Compensation Plan (incorporated by reference to Exhibit A to the Company’s definitive Proxy Statement (File No.

000-21039) filed with the Commission on March 29, 2011).

Strayer Education, Inc.

2015 Equity Compensation Plan (incorporated by reference to Exhibit A to the Company’s definitive proxy statement filed on March 13, 2015).

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10.11† Form of Restricted Stock Award Agreement — Performance Based — under the 2015 Equity Compensation Plan (incorporated by reference to Exhibit 99.3 to the Company’s Registration Statement on Form S-8 filed with the Commission on May 5, 2015).

Form of Nonqualified Stock Option Agreement under the 2015 Equity Compensation Plan (incorporated by reference to Exhibit 99.5 to the Company’s Registration Statement on Form S-8 filed with the Commission on May 5, 2015).

10.12† Form of Restricted Stock Award Agreement for Non-Employee Directors (incorporated by reference to Exhibit 99.4 to the Company’s Registration Statement on Form S-8 filed with the Commission on May 5, 2015).

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2018 Equity Compensation Plan (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 filed with the Commission on November 8, 2018).

Form of Restricted Stock Award Agreement — Time Based — under the 2018 Equity Compensation Plan (incorporated by reference to Exhibit 10.14 of the Company’s Annual Report on Form 10-K (File No.

000-21039) filed with the Commission on March 1, 2019).

10.14† Form of Restricted Stock Award Agreement — Performance Based — under the 2018 Equity Compensation Plan (incorporated by reference to Exhibit 10.15 of the Company’s Annual Report on Form 10-K (File No.

000-21039) filed with the Commission on March 1, 2019).

Form of Nonqualified Stock Option Agreement under the 2018 Equity Compensation Plan (incorporated by reference to Exhibit 10.16 of the Company’s Annual Report on Form 10-K (File No.

000-21039) filed with the Commission on March 1, 2019).

10.15† Form of Restricted Stock Award Agreement – Non-Employee Director – under the 2018 Equity Compensation Plan (incorporated by reference to Exhibit 10.17 of the Company’s Annual Report on Form 10-K (File No.

000-21039) filed with the Commission on March 1, 2019).

Capella Education Company 2005 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to Capella Education Company’s Registration Statement on Form S-1/A filed with the Commission on June 6, 2005).

10.16†* Form of Restricted Stock Award Agreement — Performance Based — under the 2018 Equity Compensation Plan (2021).

10.17†* Form of Restricted Stock Award Agreement – Non-Employee Director – under the 2018 Equity Compensation Plan (2021).

10.18† Capella Education Company 2014 Equity Incentive Plan (incorporated by reference to Exhibit A to Capella Education Company’s definitive Proxy Statement (File No.

1-33140) for its 2014 annual meeting of shareholders filed with the Commission on March 24, 2014).

Form of Restricted Stock Award Agreement – Time Based – under the Capella Education Company 2014 Equity Compensation Plan (incorporated by reference to Exhibit 10.20 of the Company’s Annual Report on Form 10-K (File No.

000-21039) filed with the Commission on March 1, 2019).

10.19† Form of Restricted Stock Award Agreement – Performance Based – under the Capella Education Company 2014 Equity Compensation Plan (incorporated by reference to Exhibit 10.21 of the Company’s Annual Report on Form 10-K (File No.

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000-21039) filed with the Commission on March 1, 2019).

10.21†* Form of Restricted Stock Award Agreement — Performance Based — under the Capella Education Company 2014 Equity Compensation Plan (2021).

10.22†* Form of Restricted Stock Award Agreement — Non-Employee Director — under the Capella Education Company 2014 Equity Compensation Plan (2021).

21.1* Subsidiaries of Registrant.

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XBRL Instance Document

XBRL Schema Document

XBRL Calculation Linkbase Document

XBRL Labels Linkbase Document

XBRL Presentation Linkbase Document

XBRL Definition Linkbase Document

101.INS* XBRL Instance Document

101.SCH* XBRL Schema Document

101.CAL* XBRL Calculation Linkbase Document

101.LAB* XBRL Labels Linkbase Document

101.PRE* XBRL Presentation Linkbase Document

101.DEF* XBRL Definition Linkbase Document

104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant in the capacities and on the date indicated.

SIGNATURES TITLE DATE

/s/ Robert S.

Executive Chairman

March 2, 2020

Kevin Gilligan

Vice Chairman

March 2, 2020

Silberman Executive Chairman March 1, 2021

Kevin Gilligan Vice Chairman March 1, 2021

Kevin Gilligan

/s/ Karl McDonnell

Chief Executive Officer and Director

March 2, 2020

Karl McDonnell

(Principal Executive Officer)

/s/ Karl McDonnell Chief Executive Officer and Director March 1, 2021

Karl McDonnell (Principal Executive Officer)

/s/ Daniel W.

Chief Financial Officer

March 2, 2020

(Principal Financial Officer)

Jackson Chief Financial Officer March 1, 2021

Jackson (Principal Financial Officer)

/s/ Thomas J.

Controller and Chief Accounting Officer

March 2, 2020

(Principal Accounting Officer)

Aprahamian Controller and Chief Accounting Officer March 1, 2021

Aprahamian (Principal Accounting Officer)

/s/ Charlotte F.

March 2, 2020

Beason Director March 1, 2021

Brogley Director March 1, 2021

Casteen, III Director March 1, 2021

James Dallas Director March 1, 2021

/s/ Nathaniel C.

March 2, 2020

Fick Director March 1, 2021

/s/ Robert R.

March 2, 2020

Thomas Waite, III

March 2, 2020

Grusky Director March 1, 2021

Johnson Director March 1, 2021

Thomas Waite, III Director March 1, 2021

Thomas Waite, III

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures