PERDOCEO EDUCATION Corp (Form: 8-K, Received: 03/09/2021 16:16:31)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): March 8, 2021

Perdoceo Education Corporation

(Exact Name of Registrant as Specified in Charter)

Delaware

0-23245

36-3932190

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)



231 N. Martingale Rd., Schaumburg, IL		60173
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (847) 781-3600

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	PRDO	Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 5.02.	Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

New Director

On March 8, 2021, the Board of Directors of Perdoceo Education Corporation (the "Company") appointed Alan D. Wheat to the Company’s Board of Directors for a term expiring at the 2021 annual meeting of stockholders, or until his respective successor is elected or qualified or until his earlier resignation or removal.

A copy of the press release announcing Mr. Wheat’s appointment is attached as Exhibit 99.1.

As a non-employee director of the Company, Mr. Wheat will receive an annual retainer of $80,000, payable in quarterly installments. In addition, an individual meeting fee of $1,500 will be paid to non-employee directors for each Board and committee meeting commencing with the eighteenth Board or eighteenth committee meeting in the 12-month period following the annual meeting of the Company's stockholders. The final quarterly payment with respect to a calendar year is contingent on the director having attended at least 75% of the aggregate of the total number of Board meetings (held during the portion of the year for which such individual has been a director) plus the total number of meetings held by all committees of the Board on which such person served (during the portion of the year that the person served on such committee). In the event the director has not achieved this attendance level, the director will forfeit the entire amount of the final quarterly retainer payment. This forfeiture provision does not apply to (1) Board or committee meeting fees payable when the Board or committee holds 18 or more meetings during the 12-month period following the annual meeting of the Company's stockholders, or (2) equity awards (described below). All non-employee directors are reimbursed for their reasonable out-of-pocket expenses incurred in attending Board and committee meetings and associated with Board or committee responsibilities, including attendance at one director education program each year.

In addition, under the director compensation program adopted effective January 1, 2020, each non-employee director receives an annual grant of restricted stock units on the date of the annual meeting of stockholders with a target value at grant of $100,000, and new directors who join the Board during the year receive a pro rata equity award for their partial year of service. Each restricted stock unit represents the contingent right to receive one share of the Company’s common stock after one year, subject to continued Board service during the applicable director term. In accordance with this director compensation program, Mr. Wheat received a prorated award to purchase 1,931 restricted stock units which vests on March 14, 2022, subject to continued service on the Board through the 2021 annual meeting.

As a non-employee director, Mr. Wheat will be subject to the Company’s stock ownership guidelines (as described in the Company’s proxy statement for its 2020 annual meeting of stockholders).

Mr. Wheat is covered by our directors' and officers' insurance policy and also has an indemnification agreement providing indemnification and advancement of expenses to the fullest extent permitted by Delaware law (a form of which is filed as Exhibit 10.9 to our Quarterly Report on Form 10-Q for the period ended June 30, 2016).

There have been no transactions since the beginning of the last fiscal year, or any currently proposed transactions, in which the Company or any of its affiliates was or is to be a participant and in which Mr. Wheat has or had a direct or indirect material interest, nor does Mr. Wheat have any family relationship with any director or executive officer of the Company.

Mr. Wheat has not yet been named to any committees of the Board.

Annual Incentive Award Program

On March 8, 2021, the Compensation Committee (the “Committee”) of the Board of Directors of the Company approved the 2021 Annual Incentive Award Program (the “2021 AIP”) pursuant to the Career Education Corporation 2016 Incentive Compensation Plan (the “2016 Plan”). The 2021 AIP is similar to the Company’s 2020 annual incentive program, using a company-wide adjusted EBITDA performance component (80% weighting) and an individual goals performance component (20% weighting) for the most senior level participants, including the Company’s executive officers. Achievement of the target level of performance for the adjusted EBITDA performance component results in a payout factor of 100%, with achievement of a threshold adjusted EBITDA performance level required for any payments under the 2021 AIP and a payment cap of 200% of a participant’s AIP target value. In addition, the payout opportunity for the individual goals performance component will also vary based on the level of achievement of the adjusted EBITDA performance component to further support the achievement of the Company’s business objectives.

A copy of the 2021 AIP is attached as Exhibit 10.1 and is incorporated herein by reference.

Other Compensation Matters

On March 8, 2021, the Committee approved revised compensation arrangements for Ashish Ghia, the Company’s Chief Financial Officer. Mr. Ghia’s base salary was increased 10% to $440,000, effective March 1, 2021. In addition, his annual incentive target value was increased from 75% to 80% of base salary, effective for 2021.

On March 8, 2021, the Committee granted restricted stock units to certain of the Company’s “named executive officers” (as such term is defined in Item 402(a)(3) of Regulation S-K) in addition to the regular annual awards received in accordance with the officers’ previously established long-term incentive award target values. Ashish Ghia received 3,000 and Jeffrey Ayers, Andrew Hurst and John Kline each received 2,300. These additional stock-settled restricted stock unit awards vest in four equal installments on each of March 14, 2022, 2023, 2024 and 2025 and were made in recognition of the recipient’s contributions and as a retention tool given the recipient’s critical role within the organization. Other terms of these additional awards are consistent with the previously disclosed time-based restricted stock unit form award agreement filed as Exhibit 10.3 to our Current Report on Form 8-K filed on May 27, 2016.

Item 9.01Financial Statements and Exhibits

(d)Exhibits

The exhibits to this Current Report on Form 8-K are listed in the “Exhibit Index” which is contained herein and incorporated herein by reference.

Exhibit Index

Exhibit Number		Description of Exhibit

*10.1		2021 Annual Incentive Award Program pursuant to the Career Education Corporation 2016 Incentive Compensation Plan
99.1		Press Release of the Company dated March 9, 2021
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*Management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


PERDOCEO EDUCATION CORPORATION

By:		/s/ Ashish R. Ghia
		Ashish R. Ghia
		Senior Vice President and Chief Financial
		Officer


Dated:		March 9, 2021

Exhibit 10.1

Approved by the Compensation Committee 3/8/2021

Perdoceo Education Corporation

2021 Annual Incentive Award Program

pursuant to the

2016 Incentive Compensation Plan

ARTICLE 1

PURPOSE AND PERFORMANCE PERIOD

1.1Purpose. This document is created to set forth the terms and conditions for certain Participants who have been selected to participate in the Annual Incentive Award portion of the Plan for calendar year 2021. To the extent that there is any conflict between the terms of this document and the terms of the Plan, the Plan shall control.

1.2Performance Period. This document is effective for certain Annual Incentive Awards calculated for Participants under the Plan relating to calendar year 2021. The 2021 Annual Incentive Awards earned pursuant to this Program shall be paid no later than March 15, 2022.

1.3No Misconduct. If at any time prior to the date the 2021 Annual Incentive Award is paid by the Company or an Affiliate, a Participant is determined by the Administrator to have engaged in Misconduct, then no such Annual Incentive Award shall be paid to such Participant.

ARTICLE 2

DEFINITIONS

Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Plan. The following words and phrases shall have the following meanings:

2.1“Administrator” means a committee consisting of the Chief Financial Officer, the General Counsel and the designated representative from the Human Resources department (or their respective designees), and/or any other executive officer as determined by the Committee.

2.2“Affiliate” means any corporation, campus, or other entity that, directly or indirectly through one or more intermediaries, is owned by the Company.

2.3“AIP EBITDA” means the consolidated earnings, including both continuing and discontinued operations, of the total Company (and its Affiliates) for the year ended December 31, 2021, determined before interest, taxes, depreciation, amortization, asset impairments and non-operating miscellaneous income (expense). The amount for each of these items shall be as reported on the consolidated statement of income (loss) and comprehensive income (loss) within the Company’s Form 10-K for the year ending on December 31, 2021 (which is prepared in accordance with the generally accepted accounting principles in the U.S. and filed with the U.S. Securities and Exchange Commission). In addition, AIP EBITDA shall be (i) determined assuming that the EBITDA Performance Factor and Individual Goals Performance Factor are both 100% for all Participants eligible to receive a payment pursuant to this Program (i.e., assuming target payments), and (ii) subject to such adjustment, if any, as may be made by the Committee.

2.4“Covered Management Position” means a position within the Company which the Company has determined to be covered under 34 C.F.R. Section 668.14(b)(22)(iii)(C).

2.5“EBITDA Performance Factor” means a percentage (expressed to the second decimal place) determined pursuant to the table set forth in the applicable memorandum from the Company setting forth the criteria for a Participant’s Award. The EBITDA Performance Factor may not be less than 0% nor more than 200%.

2.6“Eligible Earned Wages” means compensation for services performed in an incentive-eligible position (as determined pursuant to Article 3) that is eligible for inclusion when determining a Participant’s Annual Incentive Award. Eligible Earned Wages are based on base earnings during the Performance Period only and exclude any other payments made during the Performance Period (i.e., teach pay, allowances, reimbursements,

Program Effective January 1, 2021Page 2 of 6

equity grants, bonuses, incentive payments, short-term disability payments, long-term disability payments, etc.). For the avoidance of doubt, ~~Eligible Earned Wages for the Performance Period shall be determined consistent with Article 3 and any Participant~~ ~~who is not eligible for an award or payment pursuant to Article 3 shall have no~~ Eligible Earned Wages for the Performance Period.

2.7“Individual Goals Performance Factor” means, with respect to each Participant, the Participant’s overall performance rating (expressed as a percentage and as determined by the Participant’s manager) based on the individual performance goals and competency rating, and weighting of such factors, established by the Participant’s manager or department head, as applicable, and recorded in the Company’s performance management system for the Performance Period. The Individual Goals Performance Factor may not be less than 0% nor more than 200%.

2.8“Misconduct” means any one of the following in which a Participant may engage prior to or during the Performance Period or any time thereafter, but prior to the date the 2021 Annual Incentive Award is paid: (a) any act of intentional misconduct, dishonesty, gross negligence, conscious abandonment, or neglect of duty; (b) any violation of the Company’s Code of Conduct, policies on maintaining confidentiality of proprietary information, Code of Ethics or non-discrimination or anti-harassment policy; (c) any commission of a criminal activity, fraud, or embezzlement; (d) any failure to reasonably cooperate in any investigation or proceeding concerning the Company or any of its Affiliates; (e) any unauthorized disclosure or use of confidential information or trade secrets; (f) any violation of any enforceable restrictive covenant, such as a non-compete, non-solicit, or non-disclosure agreement between the Participant and the Company or an Affiliate; or (g) any conduct that causes the Participant to be ineligible for benefits pursuant to the applicable Company severance plan.

2.9“Performance Period” means the calendar year ending December 31, 2021.

2.10“Plan” means the Career Education Corporation 2016 Incentive Compensation Plan, as amended.

2.11“Program” means this 2021 Annual Incentive Award Program, which is established under the Plan.

2.12“Target Incentive Percentage” means a Participant’s target Annual Incentive Award percentage of Eligible Earned Wages as communicated to the Participant.

2.13“Targeted AIP EBITDA” means the targeted AIP EBITDA for the Performance Period as approved by the Committee, which shall be consistent with the Company’s 2021 operating plan approved by the Board of Directors of the Company on January 29, 2021.

ARTICLE 3

ELIGIBILITY

3.1General Eligibility Requirements. The Participants for the Performance Period consist of employees who are (a) not in a Covered Management Position; and (b) classified by the Company as (i) Grade E55 or higher or (ii) Grade T09, T10 or T12. The Committee may designate additional Participants. Participants are separately notified of their eligibility to participate in the Program. If an individual is in a Covered Management Position at any point during the Performance Period, then such individual will not be eligible for an award or payment under this Program.

3.2Employment Changes. To the extent an individual is newly hired by the Company or any of its Affiliates or first moves into an incentive-eligible position on or after October 1, 2021, such individual shall not be eligible to receive an Annual Incentive Award pursuant to this Program. Subject to Section 1.3 hereof and unless otherwise determined by the Committee, a Participant must be employed by the Company or an Affiliate on March 1, 2022 in order to be eligible to receive an Annual Incentive Award payment hereunder. Notwithstanding the foregoing,

Program Effective January 1, 2021Page 3 of 6

and subject to Section 1.3 hereof, if a Participant’s employment with the Company is terminated by the Company without Cause as part of a reduction in force on or after October 1, 2021, then such Participant shall remain eligible to receive an Annual Incentive Award payment pursuant to this Program and such Participant’s Eligible Earned Wages earned during the Performance Period prior to his or her termination shall continue to be Eligible Earned Wages for purposes of this Program; provided that, unless otherwise determined by the Committee, such Participant shall not be eligible for a payment hereunder to the extent such Participant received a severance package in connection with such termination and such severance package contained a payment related to or otherwise based on annual bonus. In all cases, to the extent a Participant is no longer employed by the Company or an Affiliate on March 1, 2022 (a “Separated Participant”), then any Annual Incentive Award amount shall only be paid to such Separated Participant to the extent the Separated Participant has executed a release of claims against the Company and its Affiliates, which release must be in a form satisfactory to the Administrator, prior to the payment date for such Annual Incentive Award. In addition, if applicable law requires that any such release be subject to a revocation period in order to become fully effective, payment of the Annual Incentive Award to a Separated Participant shall only be required if, prior to the payment date for the Annual Incentive Award, the applicable revocation period for the release has lapsed without any such revocation occurring.

ARTICLE 4

AWARD AMOUNT

4.1Annual Incentive Award Weightings. The following table identifies the Annual Incentive Award element weightings based on the performance components and Participant classification. Participant classification will be determined by the Administrator and communicated to the Participant.


Participant Classification	Adjusted EBITDA	Individual Goals	Total
E61 and Above	80%	20%	100%
E58 - E60, T12	75%	25%	100%
E55 – E57, T09, T10	70%	30%	100%

For Participants performing services during the Performance Period in multiple Participant classifications, the percentages set forth in the tables above may be subject to proration pursuant to Section 5.2 hereof.

4.2EBITDA Performance Component. In respect of the EBITDA performance component, each Participant will be eligible to receive a payment equal to the result of applying the following formula to such Participant:

A x B x C x D:

Where:

“A” equals such Participant’s Eligible Earned Wages;

“B” equals such Participant’s Target Incentive Percentage;

“C” equals the percentage set forth in the applicable box set forth in the “Adjusted EBITDA” column in the table in Section 4.1 hereof; and

“D” equals the applicable EBITDA Performance Factor.

4.3Individual Goals Performance Component. In respect of the individual goals performance component, each Participant will be eligible to receive a payment equal to the result of applying the following formula to such Participant:

Program Effective January 1, 2021Page 4 of 6

A x B x Y x D x Z:

Where:

“A” equals such Participant’s Eligible Earned Wages;

“B” equals such Participant’s Target Incentive Percentage;

“D” equals the applicable EBITDA Performance Factor;

“Y” equals the percentage set forth in the applicable box set forth in the “Individual Goals” column in the table in Section 4.1 hereof; and

“Z” equals the applicable Individual Goals Performance Factor.

Notwithstanding the foregoing, the product of D x Z may not be greater than 200%, and any payment pursuant to this Section 4.3 shall be adjusted accordingly to implement a 200% payout cap with respect to the individual goals performance component.

4.4Adjustment. The individual goals performance component of each Participant’s Annual Incentive Award (determined without application of this Section 4.4) is subject to the aggregate funded amount for the individual goals performance component of all Participants (determined based on the EBITDA Performance Factor) and to adjustment by managers. Such adjustment may be negative for those Participants who do not achieve the applicable goals, and positive for those Participants who demonstrate outstanding accomplishments. For purposes of applying this Section 4.4, any positive adjustment made to the individual goals performance component of the Annual Incentive Award of one Participant must result in a dollar-for-dollar negative adjustment to the individual goals performance component of the Annual Incentive Award of one or more other Participants so that, in the aggregate, the application of the manager adjustment described in this Section 4.4 to all the Participants shall not result in any additional cost to the Company and its Affiliates for the group of Participants over which a particular manager retains authority.

ARTICLE 5

MISCELLANEOUS

5.1Miscellaneous. The Committee may modify or terminate this Program at any time and for any reason, effective at such date as the Committee may determine, without the approval of the Participants or stockholders of the Company. Without limiting the foregoing, the Committee reserves the right to adjust AIP EBITDA, the EBITDA Performance Factor, Targeted AIP EBITDA, the Target Incentive Percentage and the applicable individual goals, and to adjust, make or interpret any other determination or classification, for any or all Participants for any reason, including if, in the Committee’s sole discretion, any unforeseen or unplanned event results in a positive or negative impact on the performance of the Company (or its Affiliates) during the Performance Period or its overall financial position. All such modifications, terminations, adjustments, determinations and interpretations relating to this Program shall be binding on all Participants.

5.2Proration. If a Participant’s move between two or more incentive-eligible positions during the Performance Period impacts Participant classification for purposes of Section 4.1, then a proration may be applied to determine the amount due to such Participant pursuant to Article 4 hereof. To the extent it applies, such proration shall be determined in the discretion of the Administrator, and shall be based on relevant factors, which may include, but shall not be limited to (a) the relative time spent by such Participant working at each level, and (b) the extent to which corporate or an education group was charged for the services of such Participant. Unless otherwise determined by the Administrator, such proration will be based on whole months (rather than a day-by-day basis), and for purposes of such proration, actions taken prior to the fifteenth day of any month will be deemed to have happened on the first day of that month, while action taken on or after the fifteenth day of any month will be deemed to have happened on the first day of the following month.

5.3Compliance with Laws. This Program was created to comply with the “incentive compensation” provisions of the Higher Education Act, 20 U.S.C.§ 1094(a)(20), and with the implementing regulations of the

Program Effective January 1, 2021Page 5 of 6

U.S. Department of Education (“ED”), located at 34 C.F.R.§ 668.14(b)(22). The Company is aware that the ED regulations changed, effective July 1, 2011, and this Program has been created to comply with changed regulations that took effect July 1, 2011. All provisions of this Program will be interpreted and applied so as to be consistent with that statute and those regulations. If at any time the Committee determines that any potential compensation action would, or in the Committee’s sole discretion might, violate that statute or those regulations, the Committee may in its sole discretion elect not to pay such compensation. If the statute or regulations change or if ED provides guidance that changes the Committee’s understanding of how the statute and regulations will be applied, the Committee will make appropriate changes to this Program, or may terminate this Program, in its sole discretion, with or without advance notice to the Participants. The Committee reserves the right to modify any element of this Program, to decline to make any payments under this Program, or to terminate this Program in its entirety, at any time for any reason, in its sole discretion, with or without advance notice to the Participants.

Program Effective January 1, 2021Page 6 of 6

Exhibit 99.1

Alan Wheat Joins Perdoceo Education Corporation Board of Directors

Schaumburg, Ill. (March 9, 2021) – Perdoceo Education Corporation (NASDAQ: PRDO), a provider of postsecondary education programs, today announced that Alan D. Wheat has been appointed to the Company’s Board of Directors. Mr. Wheat’s appointment follows a March 8, 2021 vote by the Board of Directors to expand the number of eligible board seats from eight to nine.

Former Congressman Alan Wheat currently serves as the chair of the Polsinelli law firm’s national Public Policy Practice. In 1982, he was elected to the United States House of Representatives, where he became part of the House leadership as the youngest member in Congressional history to be appointed to the powerful Rules Committee. While in Congress, he was one of the nation's first African-Americans to represent a district with a white majority. Congressman Wheat left the House in 1994 to run for a seat in the United States Senate. He was the first minority candidate selected as a major party nominee for statewide office in Missouri. After his unsuccessful Senate race, Mr. Wheat accepted the position of vice president of Public Policy and Government Relations with CARE, one of the largest and most vital global relief and development organizations. After CARE, he served as Deputy Campaign Manager in the 1996 Clinton-Gore campaign and later formed Wheat Government Relations which he headed until joining Polsinelli in 2013. Mr. Wheat is the Chairman of Public Policy at Polsinelli where he continues to manage a bi-partisan team of public policy professionals.

“We are extremely pleased to have Alan Wheat join our board,” said Thomas Lally, Chairman of the Board of Directors. “With his extensive knowledge of the legislative and regulatory processes, Mr. Wheat will add invaluable experience and insight to our board.”

About Perdoceo Education Corporation

Perdoceo’s academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. The Company’s accredited institutions – Colorado Technical University (“CTU”) and the American InterContinental University System (“AIU”) – provide degree programs through the master’s or doctoral level as well as associate and bachelor’s levels. Perdoceo’s universities offer students industry-relevant and career-focused degree programs that are designed to meet the educational needs of today’s busy adults. CTU and AIU continue to show innovation in higher education, advancing personalized learning technologies like their intellipath^® learning platform and using data analytics and technology to support students and enhance learning. Perdoceo is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.

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CONTACT

Investors:
Alpha IR Group
Wyatt Turk or Chris Hodges
(312) 445-2870

PRDO@alpha-ir.com

Media:
Perdoceo Education Corporation
(847) 585-2600
media@perdoceoed.com

Source: Perdoceo Education Corporation