Board at Grand Canyon Education (Nasdaq: LOPE) seeks approval for 2026 equity plan
Rhea-AI Filing Summary
Grand Canyon Education, Inc. is holding its 2026 Annual Meeting on June 10, 2026 at 10:30 a.m. in Phoenix, Arizona. Stockholders of record as of April 16, 2026 can vote in person, online, by phone or by mail.
They will vote on electing six directors, adopting a new 2026 Equity Incentive Plan, approving executive pay on an advisory basis, and ratifying KPMG LLP as auditor. The proxy describes a largely independent and diverse board, majority voting for directors, stock ownership and anti-hedging policies, and committee oversight of risk, cybersecurity, and climate-related matters.
Positive
- None.
Negative
- None.
Insights
Proxy centers on governance refresh and a new equity plan with controlled dilution.
The proxy asks stockholders to re-elect six directors and approve a 2026 Equity Incentive Plan replacing the 2017 plan. The new plan would authorize up to 1,498,282 shares, combining unused 2017 plan shares, a fresh pool, and potential forfeitures, against 26.7 million shares outstanding.
The company highlights governance practices such as a majority-independent board, a lead independent director, annual director elections, majority voting, independent key committees, and stock ownership and anti-hedging policies. It also details board oversight of cybersecurity and climate-related risks, plus robust human-capital and community programs.
Equity usage has been relatively modest, with a three-year average burn rate of 0.40% and overhang of 4.40% in 2025. Approval of the new plan would maintain equity as a core compensation tool; the actual impact depends on future grant levels set by the Compensation Committee.
Key Figures
Key Terms
majority voting for directors regulatory
lead independent director financial
burn rate financial
overhang financial
broker non-votes regulatory
Compensation Summary
- Election of six directors
- Adoption of 2026 Equity Incentive Plan
- Advisory approval of named executive officer compensation
- Ratification of KPMG LLP as independent registered public accounting firm
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ⌧ | |
Filed by a Party other than the Registrant ◻ | |
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 |
◻ | Definitive Additional Materials |
◻ | Soliciting Material Pursuant to §240.14a-12 |
(Name of Registrant as Specified in Its Charter) | ||
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) | ||
Payment of Filing Fee (Check the appropriate box): | ||
☒ | No fee required. | |
☐ | Fee paid previously with preliminary material. | |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11. | |
Table of Contents
2600 W. Camelback Road
Phoenix, Arizona 85017
(602) 247-4400
April 24, 2026
Dear Stockholder:
You are cordially invited to attend the 2026 Annual Meeting of Stockholders (the “Annual Meeting”) of Grand Canyon Education, Inc. (the “Company” or “GCE”) to be held at the offices of GCE located at 2600 W. Camelback Road, Phoenix, Arizona 85017, commencing at 10:30 a.m., Arizona time, on Wednesday, June 10, 2026.
The notice of annual meeting and the proxy statement that follow describe the matters to come before the Annual Meeting. Each holder of record of shares of the Company’s common stock (Nasdaq GS: LOPE) at the close of business on April 16, 2026 is entitled to receive notice of and to vote at the Annual Meeting, and any adjournment or postponement of the Annual Meeting. Shares of our common stock can be voted at the Annual Meeting only if the holder is present in person or by valid proxy.
Our Annual Meeting materials are available over the Internet. We believe that this delivery process expedites stockholders’ receipt of proxy materials as well as lowers the costs and reduces the environmental impact of our Annual Meeting. All stockholders as of the record date were mailed a Notice of Internet Availability (the “Notice”) with instructions on how to access our Annual Meeting materials online and how to request a paper copy of the materials by mail. The Notice also includes instructions on how to vote online or by telephone. Internet voting must be completed before midnight, Arizona time, prior to the meeting.
Sincerely, |
Brian E. Mueller |
Chief Executive Officer and Chairman |
This proxy statement is dated April 24, 2026 and is first being sent or made available to stockholders on or about April 28, 2026.
Table of Contents
Notice of Annual Meeting of Stockholders
to be held on June 10, 2026
Date and Time: | | Wednesday, June 10, 2026, at 10:30 a.m., Arizona time |
Place: | Grand Canyon Education, Inc. at 2600 W. Camelback Road, Phoenix, Arizona 85017. | |
Items of Business: | At the Annual Meeting, holders of our common stock will be asked to consider and vote upon the following proposals, all of which are discussed in greater detail in the accompanying proxy statement: | |
1. To elect a Board of Directors of six directors, each to serve until the 2027 annual meeting of stockholders or until his or her successor has been duly elected and qualified or until his or her earlier resignation or removal; | ||
2. To adopt our 2026 Equity Incentive Plan; | ||
3. To approve, on an advisory basis, the compensation of our named executive officers as disclosed in the enclosed Proxy Statement; | ||
4. To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2026; and | ||
5. To transact such other business as may properly be brought before the meeting or any adjournments or postponements thereof. | ||
Record Date: | Only stockholders of record at the close of business on April 16, 2026, the record date for the Annual Meeting, will be entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements thereof. | |
Delivery of Proxy Materials: | On April 28, 2026, we will begin mailing a Notice of Internet Availability of Proxy Materials to our stockholders rather than a full paper set of the proxy materials. The Notice of Internet Availability of Proxy Materials contains instructions on how to access our proxy materials over the Internet, as well as instructions on how stockholders may obtain a paper copy of our proxy materials. | |
Internet Availability of Proxy Materials: | Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on June 10, 2026. Our Proxy Statement is attached. Financial and other information concerning Grand Canyon Education, Inc. is contained in our Annual Report to Stockholders for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission on February 18, 2026. A complete set of proxy materials relating to our Annual Meeting is available on the Internet. These materials, consisting of the Notice of Annual Meeting, Proxy Statement, Proxy Card and Annual Report to Stockholders, are available and may be viewed at www.edocumentview.com/LOPE. | |
Voting: | To make it easier for you to vote, Internet and telephone voting are available. The instructions on the Notice of Internet Availability of Proxy Materials or, if you received a paper copy of the proxy materials, the proxy card describe how to use these convenient services. |
BY ORDER OF THE BOARD OF DIRECTORS | |
Phoenix, Arizona | /s/ BRIAN E. MUELLER |
April 24, 2026 | Brian E. Mueller |
Chief Executive Officer and Chairman |
Table of Contents
GENERAL INFORMATION | 13 |
Notice of Internet Availability | 13 |
Record Date and Quorum | 13 |
Submission of Proxies; Revocation | 13 |
Deadlines for Stockholder Proposals | 13 |
Quorum | 14 |
Vote Required | 15 |
Adjournment or Postponement of Meeting | 15 |
Expenses of Soliciting Proxies | 16 |
CORPORATE GOVERNANCE AND BOARD MATTERS | 16 |
Corporate Governance Philosophy | 16 |
Board of Directors Meetings and Attendance | 16 |
Director Independence | 16 |
Board Leadership Structure | 16 |
Committees of Our Board of Directors During 2025 | 17 |
Information About the Board of Directors | 19 |
Code of Conduct | 19 |
Risk Oversight | 19 |
Director Nomination Process | 20 |
Annual Elections of Directors | 21 |
Policy on Majority Voting | 22 |
Compensation Committee Interlocks and Insider Participation | 22 |
Stockholder Communications with the Board of Directors | 22 |
Stock Ownership Policy | 23 |
Anti-Hedging and Anti-Pledging Policy | 23 |
Compensation of Directors | 24 |
2025 Director Compensation | 24 |
PROPOSAL NO. 1 ELECTION OF DIRECTORS | 25 |
Composition of our Board of Directors | 25 |
Directors and Director Nominees | 25 |
PROPOSAL NO. 2 APPROVAL OF THE ADOPTION OF THE 2026 EQUITY INCENTIVE PLAN | 30 |
Summary of the 2026 Equity Incentive Plan | 33 |
PROPOSAL NO. 3 ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION | 40 |
EXECUTIVE OFFICERS | 42 |
EXECUTIVE COMPENSATION | 43 |
Compensation Discussion and Analysis | 43 |
Clawback Policy | 52 |
Compensation of Named Executive Officers | 54 |
Executive Employment Agreements | 57 |
Potential Payments upon Termination or Change in Control | 59 |
Pay vs. Performance Comparison | 60 |
Compensation Committee Report | 64 |
PROPOSAL NO. 4 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 65 |
Fees | 65 |
Approval of Independent Registered Public Accounting Firm Services and Fees | 66 |
Table of Contents
AUDIT COMMITTEE REPORT | 66 |
Primary Responsibilities of the Audit Committee and the Audit Committee’s Activities in 2025 | 66 |
2025 Audited Financial Statements | 67 |
BENEFICIAL OWNERSHIP OF COMMON STOCK | 68 |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | 69 |
Policies and Procedures for Related Party Transactions | 69 |
Certain Transactions | 69 |
HOUSEHOLDING OF PROXY MATERIALS | 70 |
ADDITIONAL INFORMATION | 70 |
APPENDIX A | A-71 |
Table of Contents
Proxy Statement Summary |
This summary highlights information contained elsewhere in the accompanying Proxy Statement (this “Proxy Statement”). This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement before voting. For more complete information regarding the Company’s 2025 performance, please review the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on February 18, 2026.
GENERAL | |
Date and Time: | Wednesday, June 10, 2026 10:30 a.m., Arizona time |
Record Date: | Only stockholders of record at the close of business on April 16, 2026, the record date for the Annual Meeting (the “Record Date”), will be entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements thereof. |
Place: | Grand Canyon Education, Inc. 2600 W. Camelback Road Phoenix, Arizona 85017 |
Voting: | The accompanying Proxy Statement describes important issues affecting Grand Canyon Education, Inc. If you are a stockholder of record as of the Record Date, you have the right to submit your proxy through the Internet, by telephone or by mail. Please help us save time and administrative costs by submitting your proxy through the Internet or by telephone. Each method is generally available 24 hours a day and will ensure that your voting instructions are confirmed and posted immediately. Stockholders of record as of the Record Date may cast their votes in any of the following ways: |
| |
| |
| |
|
Internet | Phone | In Person | ||||
Visit www.investorvote.com/LOPE, 24 hours a day, seven days a week, through 11:00 p.m. (PT) on June 9, 2026. Please have available your notice card. Follow the simple instructions provided. | Call 1-800-652-VOTE (8683), 24 hours a day, seven days a week, through 11:00 p.m. (PT) on June 9, 2026. Please have available your notice card. Follow the simple instructions provided. | Mark, sign and date your proxy card. Return it in the enclosed postage-paid envelope | If you plan to attend the meeting in person, you will need to bring a picture ID and proof of ownership of Grand Canyon Education, Inc. common stock as of the Record Date. |
6
Table of Contents
SUMMARY OF MATTERS TO BE VOTED UPON AND BOARD RECOMMENDATIONS
Stockholders are being asked to vote on the following matters at the Annual Meeting:
Proposal | | Description | | Board | | Page Reference for |
1 To elect six directors to our Board of Directors. | The Company’s Board of Directors (“Board” or “Board of Directors”) and the Nominating and Corporate Governance Committee believe that the six director nominees possess the necessary qualifications, attributes, skills and experiences to provide quality advice and counsel to the Company’s management and effectively oversee the business and long-term interests of our stockholders. | “FOR” each director nominee | 25 | |||
2 To adopt our 2026 Equity Incentive Plan. | At the Annual Meeting, stockholders will be asked to approve a new equity incentive plan to replace our existing plan, pursuant to which no new awards may be granted as of the tenth anniversary of its adoption in June 2027. | “FOR” | 30 | |||
3 To approve, on an advisory basis, the compensation of our named executive officers. | The Company seeks the approval, on an advisory, basis, of the compensation of its named executive officers as described in the section titled “Compensation Discussion and Analysis” and the related tables. | “FOR” | 40 | |||
4 To ratify the appointment of KPMG LLP as our independent registered public accounting firm. | The Audit Committee and the Board believe that the retention of KPMG LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2026 is in the best interests of the Company and its stockholders and we are asking our stockholders to ratify the Audit Committee’s selection of KPMG LLP to serve in that capacity. | “FOR” | 65 |
7
Table of Contents
DIRECTOR NOMINEES
The following provides summary information regarding our director nominees:
Name | Age | Director | Primary Occupation | Committee Memberships(1) | Other Public | ||||||||||
| | | | A | | C | | NCG | | ||||||
Brian E. Mueller* | 72 | 2009 | Chairman of the Board of Directors and Chief Executive Officer, Grand Canyon Education, Inc. | None |
| ||||||||||
Sara Ward+≠ | 62 | 2013 | President and Chief Executive Officer, Sara Ward & Associates | ⌧ | ⌧ | ⌧ | None | ||||||||
Jack A. Henry+ | 82 | 2008 | Managing Director, Sierra Blanca Ventures, LLC | ⌧* | ⌧ | ⌧ | None | ||||||||
Lisa Graham Keegan+ | 66 | 2019 | Principal Partner at The Keegan Company | ⌧ | ⌧ | ⌧* | None | ||||||||
Chevy Humphrey+ | 61 | 2019 | President and Chief Executive Officer, Museum of Science and Industry Chicago | ⌧ | ⌧* | ⌧ | None | ||||||||
Kevin F. Warren+ | 62 | 2024 | President and Chief Executive Officer of the Chicago Bears Football Club | ⌧ | ⌧ | ⌧ | None | ||||||||
* | Chair |
+ | Independent director |
≠ | Lead independent director |
| (1) | A= Audit Committee; C=Compensation Committee; and NCG=Nominating and Corporate Governance Committee |
OUR CORPORATE GOVERNANCE HIGHLIGHTS
We believe that effective corporate governance is critical to our ability to create long term value for our stockholders. The following highlights certain key aspects of our corporate governance framework:
| ◻ | We Have An Independent and Diverse Board. Five of our six directors are independent. | | ◻ | Our Independent Directors Meet Without Management. Our independent directors meet regularly in executive sessions without management present. |
◻ | We Have Majority Voting for Directors. We have adopted majority voting for directors pursuant to which nominees who fail to achieve an affirmative majority of votes cast must submit their resignation. | ◻ | We Have a Stock Ownership Policy. We require both our named executive officers and our directors to maintain a meaningful ownership stake at levels specified in our stock ownership policy. | ||
◻ | We Hold Annual Elections for Directors. We do not have a staggered board. | ◻ | Our Key Committees are Independent. We have fully independent Audit, Compensation and Nominating and Corporate Governance Committees. | ||
◻ | We Assess Board Performance. We conduct regular evaluations of our Board of Directors and Committees. | ◻ | We Do Not Have a “Poison Pill.” We do not maintain a stockholder rights plan. | ||
8
Table of Contents
FOCUS ON EDUCATION AND HUMAN CAPITAL DEVELOPMENT
Social responsibility and human capital development are a significant focus of the Company. Our efforts are led by our Chief Executive Officer and a portion of his compensation is tied to our success in these areas. To this end, our business was created and continues to evolve to meet the needs of the local community in which we operate as well as those outside our community. We started by identifying what we believe to be the educational challenges that our country is facing and then worked to find solutions to these challenges. We believe these challenges include:
| ● | University education is too expensive; |
| ● | Students are taking on too much debt; |
| ● | Bachelor’s degrees are taking too long to complete; |
| ● | Programs are not targeted enough toward careers. Recent surveys show that a large percentage of college students would change majors if starting over, and a significant number of recent graduates are underemployed or are in jobs that don’t require degrees; |
| ● | As tuition increases, diversity decreases; |
| ● | Universities have inadequate counseling and support services, especially for distance learners; |
| ● | Most university professors have no formal training in teaching, learning or course design; |
| ● | Universities are under significant financial pressure, which has only been enhanced due to the pandemic and a declining number of high school graduates attending college. |
We provide the capital, technology and expertise to our university partners to lessen the challenges in each of the areas listed above. We work with these university partners to develop educational models that allow them the ability to decrease tuition or increase scholarships to their students which will often lower the debt their students incur. We work with our university partners and thousands of high schools across the country on dual credit, online prerequisite courses and other programs that shorten the time to completion thereby lowering cost and debt levels. We focus with our university partners and their local communities to develop programs where there are skills shortages such as healthcare, teacher education, science, technology, engineering and math. GCE provides expanded academic counseling services and support to the students of our university partners which has proven to increase retention and completion. Our faculty services and curriculum development teams assist not only our university partners but other universities and K12 schools in improving their online education pedagogy. And our business model has helped our university partners as changes in the educational landscape has put pressure on their financial condition.
GCE is committed to hiring policies and practices that identify the most qualified candidate for a given position. We believe that we must have the best talent, including employees who possess a diverse range of experiences, backgrounds and skills, in order to anticipate and meet the needs of our business and those of our university partners. We provide employees with training, development, and educational resources that promote learning and lead to real career advancement opportunities. We believe that our success in attracting, retaining, and developing human capital is directly correlated to our ability to provide employees both an interesting and engaging work experience as well as opportunities for meaningful involvement in the surrounding community. Our employees take advantage of these opportunities and share our commitment to and enthusiasm for community service projects, as well as charitable organizations throughout the Phoenix area. Through these activities, our employees have the opportunity to volunteer and provide servant leadership that benefits the surrounding neighborhoods and West Phoenix community.
Employee Learning and Development (ELD) Services – We provide learning and development support to our employees through numerous ELD initiatives. Onboarding Programs provide new employees a foundation from which one can progress in his or her career at GCE. Leadership Development, Team Development, Advanced Skills, and Self-Development Programs help employees improve their skills, assist management in identifying potential talent for leadership roles, and support those employees already in leadership roles. Finally, our Compliance Curriculum ensures that employees stay current with regulatory and other compliance requirements. These programs and curricula are offered virtually in both synchronous and self-paced formats.
Employee Tuition Benefit – GCE promotes the concept of lifelong learning and supports this concept by offering its employees a generous Tuition Benefit program through its university partner, Grand Canyon University (“GCU”). After 3 months of continuous service, full-time employees admitted to GCU receive a 100% tuition reduction on undergraduate and graduate programs. Additionally, the tuition benefit is available for an eligible employee’s spouse or up to two children with no more than two participants receiving the benefits at any one time. An eligible employee’s
9
Table of Contents
spouse or child admitted to GCU receives a 100% tuition reduction on undergraduate programs and a 50% tuition reduction on graduate programs.
Monitoring employee engagement and satisfaction – GCE periodically administers a survey of all of its employees to assess employee engagement and satisfaction. GCE received responses from 1,330 employees on the 2024 survey. The survey asked a number of questions regarding employee engagement and satisfaction including whether they are actively engaged with their work, whether they have a sense of pride in what they do and whether they enjoy the type of work assigned to them. The responses to each question were overwhelmingly positive. To the prompt, “I plan to continue my career at GCE for at least two more years”; “I would recommend employment at GCE to a friend”; “I am actively engaged with my work at GCE”; and “Overall I am satisfied with GCE as an employer,” less than 12% of the responders disagreed with any of these statements.
We also participate with our employees in a number of activities to benefit our communities including:
● Improving Our Neighborhood and Increased Home Values. Together with Habitat for Humanity and in concert with our largest university partner, GCU, we are participating in the largest home renovation project in the country in the West Phoenix area surrounding GCU’s campus. As of December 31, 2025, 1,535 projects have been completed in which 39,155 hours have been logged by volunteers. These efforts, combined with GCE and GCU’s expanded presence in the community, have contributed to a significant increase in home values since 2011 in the 85017 zip code. ● Furthering Job Creation. We, along with GCU, have launched a number of new business enterprises that have reduced costs, provided management opportunities for recent graduates and employment opportunities for students and neighborhood residents, while spurring economic growth in the area. ● Continuing Community Involvement. GCE and our employees partner in countless community events and projects throughout the year. The Company offers its full-time employees a maximum of 16 hours of PTO annually for community service. This time is used to volunteer at more than 40 approved charitable organizations. | ● Funding of Student Tuition Organizations. The Company contributes to private school tuition organizations and in 2025 its annual contribution was $5.0 million. Financial contributions are allocated toward tuition assistance and awarding low-income Arizona students with scholarships to attend Arizona private schools. ● Encouraging Employee Giving. We participate in Donate to Elevate, a program that encourages employees to contribute money in lieu of state income tax payments to benefit private schools in Arizona and the partnership with Habitat for Humanity and GCU CityServe, as well as local public schools’ and public charter schools’ extracurricular programs. ● Sponsoring K-12 Educational Development. GCE supports GCU’s K-12 Educational Development Department through sponsorship of GCU Canyon Professional Development and K-12 Targeted School Assistance programs. Canyon Professional Development offers professional development opportunities for educators and administrators, and their student/parent engagement programs aim to help students become college ready. K-12 Targeted School Assistance programs also offer tutoring and mentorship and more to community schools to improve learning environments and outcomes. |
10
Table of Contents
Our Workforce
The Company believes that it must have the best talent, including employees who possess a diverse range of experiences, backgrounds and skills, in order to anticipate and meet the needs of our business and those of our university partners. Over time, we have hired, developed and retained a diverse management and workforce that reflects our surrounding community and that is a key component in GCE’s success and an important part of the Company’s culture.
A growing body of evidence suggests that diverse teams improve financial outcomes and support innovation, resiliency, and productivity. GCE’s commitment to fostering diversity among its workforce in its community is evident in the following:
| ● | GCE maintains hiring policies and practices that include Equal Employment Opportunity Policy, Nondiscrimination and Anti-Harassment Policy and Complaint Procedure, and a Disability Accommodation Policy. We post all open positions to a variety of job boards to ensure we attract a wide pool of candidates. We also collect and analyze employee demographic data to identify current trends. |
| ● | GCE provides employees and management with regular training. New hires all complete anti-discrimination and harassment training within three months of starting at GCE. Thereafter, all employees complete the training every other year, while management undertakes it annually. |
ENVIRONMENTAL AWARENESS
Online education is inherently more environmentally friendly than traditional campus education due to a reduction in greenhouse gas production caused by avoiding traveling to and from a brick-and-mortar campus. It also increases student capacity while eliminating the need for construction of a physical campus. A majority of our university partners’ students are enrolled in hybrid or online educational models. In addition, a significant number of our university partners’ students utilize an ebook format versus paper textbooks, which is more environmentally friendly in that it saves paper and other material and there is no shipment required.
The Company owns, and operates its business from, a four-story 325,000 square foot administrative building, which includes office space for approximately 2,700 employees and a parking garage. We constructed these facilities in 2016 and, as with every one of our projects over the past ten years, we designed them to maximize energy efficiency and minimize electricity usage and environmental impact. Our headquarters building includes the following design features:
◻ | North/South Building Orientation. The Company’s office building is orientated with north/south exposure in order to minimize direct sun and thereby reduce power usage. Exterior courtyards were arranged to ensure summer shade thus creating outdoor areas that can be used by our employees throughout the year. | ◻ | Reducing Water Consumption. Water usage is another environmental factor for office space that is magnified by the Arizona sun. The Company’s office building utilizes numerous water conservation methods including push-tap faucets, waterless urinals, and a rooftop rain water collection system for irrigating the landscaping below, which significantly reduces our water consumption. |
◻ | Use of Window Glazing. Our building utilizes significant window glazing to allow for daylighting thus reducing the need for supplemental electrical lighting. As a result, the building is designed to use just .41 watts per square foot of electrical energy for lighting, which is half of what a typical environmentally efficient building uses. | ◻ | Other Design Features. Additional environment-friendly design features include low VOC paints, use of recycled building materials, interior and exterior LED light bulbs, motion sensor lighting and implementation of an energy-efficient VRF mechanical system. |
11
Table of Contents
In addition to its efficient facilities, the Company has undertaken other measures to minimize its environmental impact, including, among others:
| ● | allowing a significant portion of our workforce to continue to work remotely; |
| ● | implementing a Trip Reduction Program, which provides incentives to employees who participate in carpooling or take public transportation to work; |
| ● | providing a telecommute option for a significant number of positions; and |
| ● | participating in a recycling program aimed at minimizing the volume of waste products generated by the Company. |
The above measures, among others, have resulted in savings in the areas of waste, janitorial costs, and travel costs related to business travel and commuting.
Other Corporate Policy Matters
We maintain a whistleblower hotline available to both internal and external parties. The whistleblower policy is disclosed on the GCE intranet for employees and disclosed on the GCE investor relations website for external parties. Hotline activity is managed by a third party and all calls are reviewed and monitored by the Chief Risk Officer and General Counsel and discussed at the quarterly Audit Committee meetings.
Questions and Answers
Please see the General Information section for important information about the proxy materials, voting, the annual meeting, Company documents, communications and the deadlines to submit stockholder proposals and director nominees for the 2026 Annual Meeting of Stockholders. Additional questions may be directed to our General Counsel, Grand Canyon Education, Inc., 2600 W. Camelback Road, Phoenix, Arizona 85017.
Learn More About Our Company
You can learn more about the Company, view our governance materials and much more by visiting our website, www.gce.com.
12
Table of Contents
Grand Canyon Education, Inc.
2600 West Camelback Road
Phoenix, Arizona 85017
PROXY STATEMENT
GENERAL INFORMATION
The enclosed proxy is being solicited by our Board of Directors for use in connection with the Annual Meeting to be held on Wednesday, June 10, 2026, at the offices of Grand Canyon Education, Inc. located at 2600 W. Camelback Road, Phoenix, Arizona 85017, commencing at 10:30 a.m., Arizona time, and at any adjournment or postponement thereof.
Notice of Internet Availability
In accordance with the electronic delivery rules adopted by the SEC, the Company is permitted to furnish proxy materials to its stockholders on the Internet, in lieu of mailing a printed copy of proxy materials to each stockholder of record. You will not receive a printed copy of proxy materials unless you request a printed copy. The Notice, which was first mailed to our stockholders on or about April 28, 2026, instructs you as to how you may access and review on the Internet all of the important information contained in the proxy materials. The Notice also instructs you as to how you may vote your proxy. If you received a Notice by mail and would like to receive a printed copy of the Company’s proxy materials and annual report, you must follow the instructions for requesting such materials included in the Notice. Alternatively, you may download or print these materials, or any portion thereof, from any computer with Internet access and a printer. The Company believes this process provides its stockholders the information they need in a more timely manner, while reducing the environmental impact and lowering the costs of printing and delivering the proxy materials. To access the Company’s proxy statement and annual report electronically, please visit www.edocumentview.com/LOPE or the Company’s Investor Relations website at www.gce.com.
Record Date and Quorum
Only stockholders of record at the close of business on April 16, 2026, the Record Date, will be entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof. At the close of business on the Record Date, we had approximately 26,596,943 shares of our common stock outstanding and entitled to vote, with each such outstanding share entitled to one vote per share on each matter to be voted upon by stockholders. A majority of the shares outstanding on the Record Date, present in person or represented by proxy, will constitute a quorum for the transaction of business at the meeting.
Submission of Proxies; Revocation
All valid proxies received prior to the Annual Meeting will be exercised. All shares represented by a proxy will be voted, and where a proxy specifies a stockholder’s choice with respect to any matter to be acted upon, the shares will be voted in accordance with that specification. If no choice is indicated on the proxy, the shares will be voted in favor of the proposal. You may revoke your proxy at any time before it is exercised by submitting to our Secretary a written notice of revocation, submitting a properly executed proxy bearing a later date, voting by telephone or via the Internet at a later time (if initially able to vote in that manner) so long as such vote or voting direction is received by the applicable date and time set forth above for stockholders of record, or by attending the Annual Meeting and voting in person. If you hold your shares through a bank, broker, trustee or nominee and you have instructed the bank, broker, trustee or nominee to vote your shares, you must follow the directions received from your bank, broker, trustee or nominee to change those instructions.
Deadlines for Stockholder Proposals
Stockholder proposals may be included in our proxy materials for an annual meeting so long as they are provided to us on a timely basis and satisfy certain other conditions established by the SEC, including specifically under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). To be timely, a proposal to be
13
Table of Contents
included in our proxy statement must be received at our principal executive offices, addressed to our Secretary, not less than 120 calendar days before the first anniversary of the date that our proxy statement was released to stockholders in connection with the previous year’s annual meeting. Accordingly, for a stockholder proposal to be included in our proxy materials for our 2027 Annual Meeting of Stockholders, the proposal must be received at our principal executive offices, addressed to our Secretary, not later than the close of business on Tuesday, December 29, 2026. Subject to certain exceptions, stockholder business that is not intended for inclusion in our proxy materials may be brought before an annual meeting so long as we receive notice of the proposal as specified by, and subject to the conditions set forth in, our bylaws, addressed to our Secretary at our principal executive offices, not earlier than the close of business on the 120th day, nor later than the close of business on the 90th day, prior to the first anniversary of the date of the preceding year’s annual meeting as first specified in the Company’s notice of meeting (without regard to any postponements or adjournments of such meeting after such notice was first sent), except that if no annual meeting was held in the previous year or the date of the annual meeting is more than 30 days earlier or later than such anniversary date, notice by the stockholders to be timely must be received not later than the close of business on the later of 90th day prior to the annual meeting or the 10th day following the date on which public announcement of the date of such meeting is first made. For our 2027 Annual Meeting of Stockholders, proper notice of business that is not intended for inclusion in our proxy statement must be received not earlier than the close of business on Wednesday, February 10, 2027, nor later than the close of business on Friday, March 12, 2027.
A stockholder’s notice to our Secretary must set forth as to each matter the stockholder proposes to bring before the meeting (i) a brief description of the business desired to be brought before the meeting and the text of the proposal or business, including the text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend the Company’s bylaws, the language of the proposed amendment, (ii) the name and address, as they appear on the Company’s books, of the stockholder proposing such business and the names and addresses of the beneficial owners, if any, on whose behalf the business is being brought, (iii) a representation that the stockholder is a holder of record of stock of the Company entitled to vote at the meeting on the date of such notice and intends to appear in person or by proxy at the meeting to propose the business specified in the notice, (iv) any material interest of the stockholder and any such other beneficial owner in such business, and (v) the following information regarding the ownership interests of the stockholder or any such other beneficial owner, which shall be supplemented in writing by the stockholder not later than ten (10) days after the record date for voting at the meeting to disclose such interests as of such record date: (A) the class and number of shares of the Company that are owned beneficially and of record by the stockholder and any such other beneficial owner; (B) any “derivative instrument” (which is defined as any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Company or with a value derived in whole or in part from the value of any class or series of shares of the Company, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Company or otherwise directly or indirectly owned beneficially by such stockholder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Company); (C) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder has a right to vote any shares of any security of the Company; (D) any short interest in any security of the Company (meaning a person shall be deemed to have a short interest in a security if such person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security); (E) any rights to dividends on the shares of the Company owned beneficially by such stockholder that are separated or separable from the underlying shares of the Company; (F) any proportionate interest in shares of the Company or derivative instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner; and (G) any performance-related fees (other than an asset-based fee) to which such stockholder is entitled based on any increase or decrease in the value of shares of the Company or derivative instruments, if any, as of the date of such notice, including, without limitation, any such interests held by members of such stockholder’s immediate family sharing the same household.
Quorum
The presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the shares of common stock outstanding on the record date will constitute a quorum for the transaction of business at the meeting. Abstentions and broker non-votes are included in determining whether a quorum is present. Abstentions include shares present in person but not voting and shares represented by proxy but with respect to which the holder has
14
Table of Contents
abstained. Broker non-votes occur when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power on that item and has not received instructions from the beneficial owner.
Vote Required
If you hold your shares in “street name,” and you do not give your bank, broker or other holder of record specific voting instructions for your shares, your record holder can vote your shares on routine matters, which include only the proposal to ratify the appointment of our independent registered public accounting firm (Proposal No. 4). However, your record holder cannot vote your shares without your specific instructions on the election of directors (Proposal No. 1), the vote to approve our 2026 Equity Incentive Plan (Proposal No. 2) or on matters related to executive compensation, including the advisory votes described below on the compensation of our named executive officers (Proposal No. 3). If you hold your shares in “street name,” please refer to the information forwarded by your bank, broker or other holder of record for procedures on revoking or changing your proxy. In the absence of instructions, shares subject to such broker non-votes will not be counted as voted or as present or represented on any of the proposals offered at the Annual Meeting other than ratification of our auditors and so will have no effect on the vote. We encourage you to provide instructions to your bank, broker or other holder of record regarding the voting of your shares. Our stockholders have no dissenter’s or appraisal rights in connection with any of the proposals described herein.
The vote required to approve each of the proposals presented in this Proxy Statement is set forth below:
| ● | Election of Directors (Proposal No. 1). The affirmative vote of a majority of the votes cast with respect to a nominee is required for the election to the Board of Directors of each of the nominees for director. For this purpose, “a majority of the votes cast” means that the number of votes cast “for” a nominee exceeds the number of votes cast “against” that nominee. Stockholders do not have the right to cumulate their votes in the election of directors. Abstentions and broker non-votes will have no effect on the outcome of the election because abstentions and broker non-votes are not considered to be votes cast. |
| ● | Approval of the adoption of the 2026 Equity Incentive Plan (Proposal No. 2). Approval of the adoption of the 2026 Equity Incentive Plan requires the affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote. Broker non-votes will have no effect on the outcome of this proposal, while abstentions will have the effect of a vote against this proposal. |
| ● | Approval, on an advisory basis, of the compensation of our named executive officers (Proposal No. 3). Approval, on an advisory basis, of the compensation of our named executive officers requires the affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote. Broker non-votes will have no effect on the outcome of this proposal, while abstentions will have the effect of a vote against this proposal. Although this vote is advisory and is not binding on our Board of Directors or Compensation Committee, the Board of Directors and the Compensation Committee will consider the voting results, along with other relevant factors, in connection with their ongoing evaluation of our compensation program. |
| ● | Ratification of the appointment of the Independent Registered Public Accounting Firm (Proposal No. 4). Approval of the proposal to ratify the Audit Committee’s appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2026 requires the affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote. Brokers have discretion to vote on the ratification of our independent auditors and, as such, no votes on this proposal will be considered broker non-votes. Abstentions will have the effect of a vote against this proposal. |
Adjournment or Postponement of Meeting
The Annual Meeting may be adjourned or postponed to any other time and to any other place at which a meeting of stockholders may be held by the chairman of the Annual Meeting or, in the absence of such person, by any officer entitled to preside at or to act as Secretary of the Annual Meeting, or by the holders of a majority of the shares of stock present or represented by proxy at the meeting and entitled to vote, although less than a quorum.
15
Table of Contents
Expenses of Soliciting Proxies
We will bear the cost of soliciting proxies. In addition to solicitation by the use of mail or via the Internet, certain directors, officers and regular employees may solicit proxies by telephone or personal interview. No such persons will receive any additional compensation for their services.
CORPORATE GOVERNANCE AND BOARD MATTERS
Corporate Governance Philosophy
The business affairs of the Company are managed under the direction of the Board of Directors in accordance with the Delaware General Corporation Law, as implemented by the Company’s certificate of incorporation and bylaws. The role of the Board of Directors is to effectively govern the affairs of the Company for the benefit of its stockholders and other constituencies. The Board of Directors strives to ensure the success and continuity of business of the Company through the selection of qualified management. It is also responsible for ensuring that the Company’s activities are conducted in a responsible and ethical manner. The Company is committed to having sound corporate governance principles.
Board of Directors Meetings and Attendance
During our 2025 fiscal year, our Board of Directors held four meetings. All of our directors attended 100% of such meetings. We do not have a formal policy regarding attendance of our directors at annual meetings of our stockholders, but we do encourage each of our directors to attend. All of our directors in 2025 attended our 2025 annual meeting in person or telephonically.
Director Independence
Our Board of Directors periodically, and no less frequently than annually, reviews the independence of each director as determined by the Nasdaq Stock Market Rules (the “Nasdaq Rules”). During these reviews, our Board of Directors considers transactions and relationships between each director (and his or her immediate family and affiliates) and the Company and management to determine whether any such transactions or relationships are inconsistent with a determination that the director was independent. Under the Nasdaq Rules, a director can be independent only if the director does not trigger a categorical bar to independence and our Board of Directors affirmatively determines that the director does not have a relationship which, in the opinion of our Board of Directors, would interfere with the exercise of independent judgment by the director in carrying out the responsibilities of a director. Our Board of Directors has affirmatively determined that each director other than Brian E. Mueller, who serves as our Chief Executive Officer, is “independent,” as defined by the Nasdaq Rules.
Board Leadership Structure
The Company’s governance framework provides the Board with flexibility to select the appropriate Board leadership structure for the Company. In making leadership structure determinations, the Board considers many factors, including the specific needs of the business and what is in the best interests of the Company’s stockholders. Having the flexibility to select the appropriate structure based on the specific needs of the business is critical, and it is part of the judgment the Board believes it should exercise. The Board understands that Board leadership structure is an important topic for many stockholders, and the Board takes stockholder feedback into account when making determinations around Board leadership structure.
Our Board leadership structure comprises a “combined” Chairman of the Board and Chief Executive Officer, a lead independent director, Board committees led entirely by independent directors and active engagement by all directors. In selecting Mr. Mueller to serve as Chairman, the Board determined that having Mr. Mueller serve in the combined role provides certain synergies and efficiencies that can serve to enhance the functioning of the Board and serve the business and stockholders well over time. The Company operates in a complex business and regulatory environment, which requires a chief executive officer with deep knowledge of the business and the industry within which we operate. Because the Chief Executive Officer is the Board member closest to our complex business, he is best able to identify many of the business issues that need to be on the Board agenda, and, as Chairman of the Board, he can focus directors’ attention on the most critical business matters. Further, the Board believes that, at this time, a combined Chairman of the Board and Chief Executive Officer will facilitate timely and unfiltered communication with the Board on critical business and regulatory issues. The Board also believes that there are benefits in having the same person represent both the Company and the Board with regulators, stockholders and other stakeholders.
16
Table of Contents
In accordance with our Corporate Governance Principles and Practices, in the event the positions of Chairman and Chief Executive Officer are held by the same person, or if the position of Chairman is also held by a non-independent person, a lead independent director is appointed annually by the affirmative vote of a majority of those directors who have been determined to be “independent” under the Nasdaq Rules. The lead independent director, a position currently held by Ms. Sara Ward, has the following duties:
| ● | Setting the agenda and serving as chairman for the executive sessions of the independent directors; |
| ● | Serving as liaison between the Chairman and the independent directors, including, communicating to the Chairman, as appropriate, the results of executive sessions of the independent directors; |
| ● | Ensuring that independent directors have adequate opportunities to meet without management present, including authority to call meetings of the independent directors; |
| ● | Serving as designated contact for communication to independent directors as required by the SEC and Nasdaq’s listing standards, including being available for consultation and direct communication with major stockholders; |
| ● | Approving the agenda and information sent in connection with Board meetings and ensuring that the other independent directors also have an opportunity to provide input on the agenda; |
| ● | Approving meeting schedules to assure that there is sufficient time for discussion of all agenda items; and |
| ● | Chairing Board meetings if the Chairman is unable to attend. |
Importantly, all of our directors play an active role in overseeing the Company’s business both at the Board and committee levels. As part of each regularly scheduled Board meeting, the independent directors meet in executive session without the Chief Executive Officer present. These sessions allow our independent directors to discuss issues of importance to the Company, including the business and affairs of the Company as well as matters concerning management, without any member of management present.
Committees of Our Board of Directors During 2025
Our Board of Directors directs the management of our business affairs, as provided by Delaware law, and conducts its business through meetings of the Board of Directors. Our Board of Directors has established three standing committees: an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. During 2025, each director attended 100% of the meetings of the Board committees on which he or she served. In addition, from time to time, special committees may be established under the direction of the Board of Directors when necessary to address specific issues. The composition of the Board committees complies with the applicable Nasdaq Rules and applicable law. Our Board of Directors has adopted written charters for each of the standing committees, which are available in the Corporate Governance section of the Investor Relations page on our website at www.investors.gce.com.
Audit Committee (Number of meetings held during 2025: Six). During 2025, our Audit Committee consisted of Mr. Henry (chair), Ms. Ward, Ms. Keegan, Dr. Humphrey and Mr. Warren, each of whom our Board of Directors determined to be “independent,” as defined under and required by the Nasdaq Rules and the federal securities laws. In addition, our Board has determined that each of Mr. Henry, Dr. Humphrey and Mr. Warren qualify as an “audit committee financial expert,” as defined under applicable federal securities laws. Our Audit Committee is directly responsible for, among other things, the appointment, compensation and related audit fee negotiations, retention, and oversight, including selection of the lead engagement partner, and tenure of our independent registered public accounting firm. The oversight includes reviewing the plans and results of the audit engagement with the firm, approving and negotiating any additional professional services provided by the firm and reviewing the independence of the firm. In addition, the Audit Committee is responsible for discussing the effectiveness of the internal controls over financial reporting, review of significant accounting policies, and discussion of significant judgements or accounting estimates during the audit with the firm and relevant financial management.
The Audit Committee is also tasked with oversight of the cybersecurity controls in place at the Company. The Company employs a dedicated Chief Information Security Officer, with an experienced and competent security team, and works closely with the Chief Risk Officer to provide risk reporting and ensure security and compliance. The Company regularly engages third party experts to perform cybersecurity assessments, which are normally performed on
17
Table of Contents
an annual basis. The Chief Information Security Officer prepares cybersecurity reports for the Audit Committee on a monthly basis, and Security, Risk and Compliance updates on a quarterly basis, with oversight and input from the Audit Committee and management. The Company has implemented policies and procedures for all employees including: information security/cybersecurity policies (which are internally available for all employees); information security/cybersecurity awareness training; a clear escalation process which employees can follow in the event an employee notices something suspicious; and ensuring that information security/cybersecurity is a part of the employee performance evaluation and/or disciplinary process.
The Audit Committee also provides oversight of the climate related risks at the Company. We do not operate in a high-risk industry for climate risks. We believe that we have low climate risk with respect to our physical environment (e.g. fires, drought, hailstorms, increasing weather pattern changes). A significant portion of our workforce is continuing to work remotely. We have insurance policies in place to cover any damage for our property, plant and equipment. We currently do not have any regulatory emissions reporting obligations. We do not have significant risk from a transition to a low-carbon economy, which could result in changing customer behavior.
Compensation Committee (Number of meetings held during 2025: Five). During 2025, our Compensation Committee consisted of Dr. Humphrey (chair), Mr. Henry, Ms. Ward, Ms. Keegan and Mr. Warren, each of whom the Board of Directors determined to be “independent,” as defined under and required by the Nasdaq Rules. The Compensation Committee is responsible for, among other things, supervising and reviewing our affairs as they relate to the compensation and benefits of our executive officers and directors, as well as overseeing succession planning for executive officers. In carrying out these responsibilities, the Compensation Committee reviews all components of executive compensation for consistency with our compensation philosophy and with the interests of our stockholders.
The Compensation Committee’s charter allows it to delegate any matters within its authority to individuals or subcommittees as it deems appropriate. In addition, the Compensation Committee has the authority under its charter to retain outside advisors to assist it in the performance of its duties. The Compensation Committee periodically engages an independent compensation consultant and advisor to:
| ● | Provide recommendations regarding executive compensation consistent with the Company’s business needs, pay philosophy, market trends and latest legal and regulatory considerations; |
| ● | Provide market data for base salary, short-term incentive and long-term incentive decisions; and |
| ● | Advise the Compensation Committee as to best practices. |
Nominating and Corporate Governance Committee (Number of meetings held during 2025: Four). During 2025, our Nominating and Corporate Governance Committee consisted of Ms. Keegan (chair), Ms. Ward, Dr. Humphrey, Mr. Henry, and Mr. Warren, each of whom our Board of Directors determined to be “independent,” as defined under and required by the Nasdaq Rules. The Nominating and Corporate Governance Committee is responsible for, among other things, identifying individuals qualified to become members of the Board of Directors; recommending to the Board of Directors nominees for each election of directors; developing and recommending to the Board of Directors criteria for selecting qualified director candidates; considering committee member qualifications, appointment and removal; recommending corporate governance principles, codes of conduct and compliance mechanisms; providing oversight in the annual evaluation of the Board of Directors and each committee; and overseeing the Company’s environmental and social sustainability initiatives.
18
Table of Contents
Information About the Board of Directors
The following matrix provides information regarding the members of our Board of Directors, including certain types of knowledge, skills, experiences and attributes possessed by one or more of our directors which our Board of Directors believes are relevant to our business or industry. The matrix does not encompass all of the knowledge, skills, experiences or attributes of our directors, and the fact that a particular knowledge, skill, experience or attribute is not listed does not mean that a director does not possess it. In addition, the absence of a particular knowledge, skill, experience or attribute with respect to any of our directors does not mean the director in question is unable to contribute to the decision-making process in that area. The type and degree of knowledge, skill and experience listed below may vary among the members of the Board of Directors.
Brian E. Mueller | Sara Ward | Jack A. | Lisa Graham Keegan | Chevy Humphrey | Kevin F. Warren | ||||||
Knowledge, Skills and Experience | |||||||||||
Public Company Board Experience | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | |||||
Financial | ⚫ | ⚫ | ⚫ | ⚫ | |||||||
Risk Management | ⚫ | ⚫ | ⚫ | ||||||||
Accounting | ⚫ | ⚫ | ⚫ | ||||||||
Corporate Governance/Ethics | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | |||||
Legal/Regulatory | ⚫ | ⚫ | ⚫ | ⚫ | |||||||
HR/Compensation | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ||||||
Executive Experience | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | |||||
Operations | ⚫ | ⚫ | ⚫ | ⚫ | |||||||
Strategic Planning/Oversight | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | ⚫ | |||||
Technology | ⚫ | ||||||||||
Mergers and Acquisitions | ⚫ | ⚫ | ⚫ | ⚫ | |||||||
Cybersecurity | ⚫ | ||||||||||
Academia/Education | ⚫ | ⚫ | ⚫ | ⚫ | |||||||
Board Tenure | |||||||||||
Years | 16 | 12 | 17 | 6 | 6 | 2 |
Code of Conduct
We have adopted a business code of conduct, which applies to all of our employees, directors, and consultants. The code of conduct includes particular provisions applicable to our senior financial management, which includes our Chief Executive Officer, Chief Financial Officer, and other employees including our principal accounting officer, performing similar functions. A copy of our code of conduct is available on the Corporate Governance section of the Investor Relations page on our website at www.investors.gce.com. We intend to post on our website any amendment to, or waiver from, a provision of our code of conduct that applies to any director or officer, including our Chief Executive Officer, Chief Financial Officer, and other persons including our principal accounting officer performing similar functions, promptly following the date of such amendment or waiver.
Risk Oversight
Our Board of Directors is responsible for oversight of our risk assessment and management processes. The Board of Directors has delegated to the Compensation Committee basic responsibility for oversight of management’s compensation risk assessment and has delegated to the Audit Committee tasks related to risk process oversight. In exercising its oversight duties, the Board of Directors receives reports from each committee regarding the committee’s considerations and actions. The Audit Committee’s process includes working with the Company’s Chief Risk Officer and other members of the Company’s enterprise risk management team, meeting periodically with the Chief Risk Officer and other members of management and receiving reports on enterprise risk management, including management’s assessment of risk exposures (including risks related to liquidity, credit, operations, cybersecurity, climate, and regulatory compliance, among others), and the processes in place to monitor and control such exposures. The Audit Committee may also, from time to time, receive updates between meetings from the Chief Risk Officer, the Chief Executive Officer, the Chief Financial Officer and other members of management relating to risk oversight matters.
19
Table of Contents
Director Nomination Process
When selecting nominees for appointment or election to our Board of Directors, our Nominating and Corporate Governance Committee makes such selections pursuant to the following process:
| ● | Identification of director candidates by our Nominating and Corporate Governance Committee based upon suggestions from current directors and senior management, recommendations by stockholders and/or use of a director search firm; |
| ● | Review of the candidates’ qualifications by our Nominating and Corporate Governance Committee to determine which candidates best meet our Board of Directors’ required and desired criteria; |
| ● | Interviews of interested candidates who best meet these criteria by the chair of the Nominating and Corporate Governance Committee, the Chair of our Board of Directors, and/or certain other directors and management; |
| ● | The recommendation by our Nominating and Corporate Governance Committee for inclusion in the slate of directors for the annual meeting of stockholders or for appointment by our Board of Directors to fill a vacancy during the interval between stockholder meetings; and |
| ● | Formal nomination by our Board of Directors. |
Although our Nominating and Corporate Governance Committee will review each candidate’s qualifications to determine whether such candidate is appropriate for our Board of Directors, candidates need not possess any minimum qualifications or specific qualities or skills. In accordance with its charter, the Nominating and Corporate Governance Committee’s review and assessment of incumbent directors and proposed nominees includes the consideration of a candidate’s skills, business experiences, and background, which may include with respect to any particular incumbent or proposed nominee consideration of one or more of the following criteria:
| ● | The extent of the director’s/proposed nominee’s educational, business, non-profit or professional acumen and experience; |
| ● | Whether the director/proposed nominee assists in achieving a mix of members on our Board of Directors that represents a diversity of background, perspective and experience; |
| ● | Whether the director/proposed nominee meets the independence requirements of Nasdaq’s listing standards; |
| ● | Whether the director/proposed nominee has the business experience relevant to an understanding of our business; |
| ● | Whether the director/proposed nominee would be considered a “financial expert” or “financially literate” as defined in applicable listing standards or applicable law; |
| ● | Whether the director/proposed nominee, by virtue of particular technical expertise, experience or specialized skill relevant to our current or future business, will add specific value as a Board member; and |
| ● | Whether the director/proposed nominee possesses a willingness to challenge and stimulate management and the ability to work as part of a team in an environment of trust. |
With respect to existing members of the Board of Directors, our Nominating and Corporate Governance Committee will reassess the qualifications of a director, including the director’s performance on our Board of Directors to date, the director’s current employment, the director’s service on other boards of directors and the director’s independence, prior to recommending a director for reelection to another term. All director-nominees were recommended for election at the Annual Meeting by our Nominating and Corporate Governance Committee, and such recommendations were formally approved by our Board of Directors.
Stockholders who wish to recommend individuals for consideration by our Nominating and Corporate Governance Committee to become nominees for election to our Board of Directors may do so by submitting a written recommendation to our Nominating and Corporate Governance Committee, c/o General Counsel, Grand Canyon Education, Inc., 2600 W. Camelback Road, Phoenix, Arizona 85017. Submissions must be received at the Company’s
20
Table of Contents
principal executive offices not earlier than the close of business on the 120th day, nor later than the close of business on the 90th day, prior to the first anniversary of the date of the preceding year’s annual meeting as first specified in the Company’s notice of meeting (without regard to any postponements or adjournments of such meeting after such notice was first sent), except that if no annual meeting was held in the previous year or the date of the annual meeting is more than 30 days earlier or later than such anniversary date, notice by the stockholders to be timely must be received at the Company’s principal executive offices not later than the close of business on the later of the 90th day prior to the annual meeting or the 10th day following the date on which public announcement of the date of such meeting is first made. For our 2027 Annual Meeting of Stockholders, stockholder nominations must be received not earlier than the close of business on Wednesday, February 10, 2027, and not later than the close of business on Friday, March 12, 2027.
Each submission must set forth: (i) the name and address of the stockholder who intends to make the nomination, or the beneficial owner, if any, on whose behalf the nomination is being made and of the person or persons to be nominated; (ii) a representation that the stockholder is a holder of record of stock of the Company entitled to vote for the election of directors on the date of such notice and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iii) the following information regarding the ownership interests of the stockholder and such other beneficial owners, which shall be supplemented in writing by the stockholder not later than ten (10) days after the record date for notice of the meeting to disclose such interests as of such record date: (A) the class and number of shares of the Company that are owned beneficially and of record by the stockholder or any such beneficial owner; (B) any derivative instrument directly or indirectly owned beneficially by such stockholder or any such beneficial owner and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Company; (C) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder or any such beneficial owner has a right to vote any shares of any security of the Company; (D) any short interest in any security of the Company; (E) any rights to dividends on the shares of the Company owned beneficially by such stockholder or any such beneficial owner that are separated or separable from the underlying shares of the Company; (F) any proportionate interest in shares of the Company or derivative instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or any such beneficial owner is a general partner or, directly or indirectly, beneficially owns an interest in a general partner; and (G) any performance-related fees (other than an asset-based fee) to which such stockholder or any such beneficial owner is entitled based on any increase or decrease in the value of shares of the Company or derivative instruments, if any, as of the date of such notice, including, without limitation, any such interests held by members of such stockholder’s or beneficial owner’s immediate family sharing the same household, (iv) a description of all arrangements or understandings between the stockholder or such beneficial owner and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (v) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three (3) years, and any other material relationships, between or among such stockholder and such other beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee was a director or executive officer of such registrant, (vi) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC, had the nominee been nominated, or intended to be nominated, by the Board of Directors; and (vii) the consent of each nominee to serve as a director of the Company if so elected.
We did not receive any director nominations from stockholders for the Annual Meeting.
Annual Elections of Directors
Our directors are elected each year at the annual meeting of stockholders to hold office until the next annual meeting of stockholders or the director’s earlier resignation or removal. Because term limits may cause the loss of experience and expertise important to the optimal operation of the Board, we currently do not impose limits on the number of terms a director may serve. The Nominating and Corporate Governance Committee, however, does evaluate the qualifications and performance of each incumbent director before recommending the nomination of that director for an additional term.
21
Table of Contents
Policy on Majority Voting
Pursuant to our bylaws, at any meeting of stockholders for the election of one or more directors at which a quorum is present, each director must be elected by the vote of a majority of the votes cast with respect to the director, provided that if the number of nominees exceeds the number of directors to be elected, the directors will be elected by the vote of a plurality of the votes cast by the stockholders entitled to vote at the election. For purposes of the foregoing, a majority of the votes cast means that the number of votes cast “for” a director exceeds the number of votes cast “against” that director. Under our Corporate Governance Principles and Practices, the Board may nominate for election or re-election as director only candidates who agree to execute, in connection with their nomination, irrevocable resignations that will be effective upon (1) the failure to receive a majority vote in an uncontested election at an annual meeting and (2) the Board’s acceptance of such resignation within ninety (90) days following certification of the stockholder vote. If a director then serving on the Board of Directors does not receive the required majority vote, the director must tender his or her resignation to the Board. Within ninety (90) days after the date of the certification of the election results, the Nominating and Corporate Governance Committee or other committee that may be designated by the Board will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken, taking into account such factors as it deems relevant. Such factors may include the stated reasons why stockholders voted against such director’s reelection, the qualifications of the director and whether accepting the resignation would cause us to fail to meet any applicable listing standards or would violate state law. Within such ninety (90) day period, the Board will act on the committee’s recommendation and publicly disclose its decision and the rationale behind it.
In addition, pursuant to our Corporate Governance Principles and Practices, a Board member, including the Chief Executive Officer, who ceases to be actively employed in his or her principal business or profession, or experiences other changed circumstances that could pose a conflict of interest, diminish his or her effectiveness as a Board member, or otherwise be detrimental to the Company, is expected to offer his or her resignation to the Board. The Board in its discretion will determine whether such member should continue to serve as a director for an unexpired term or any future terms.
Compensation Committee Interlocks and Insider Participation
During 2025, Mr. Henry, Ms. Ward, Ms. Keegan, Dr. Humphrey and Mr. Warren served as the members of our Compensation Committee. No executive officer serves, or in the past has served, as a member of the Board of Directors or Compensation Committee of any entity that has any of its executive officers serving as a member of our Board of Directors or Compensation Committee.
Stockholder Communications with the Board of Directors
Stockholders may communicate with any of our directors, including our lead independent director, the chair of any of the committees of the Board of Directors, or the non-management directors as a group by writing to them c/o Secretary, Grand Canyon Education, Inc., 2600 West Camelback Road, Phoenix, Arizona 85017. Please specify to whom your correspondence should be directed. The Secretary will promptly forward all correspondence to the Board of Directors or any specific director, as indicated in the correspondence, except for junk mail, mass mailings, job inquiries, surveys, business solicitations or advertisements, or patently offensive or otherwise inappropriate material. The Secretary may forward certain correspondence, such as product-related or service-related inquiries, elsewhere within the Company for review and possible response.
22
Table of Contents
Stock Ownership Policy
The Board of Directors believes that each outside director and executive officer should develop a meaningful ownership position in the Company. Effective January 26, 2017, the Board of Directors adopted a stock ownership policy which included a stock ownership policy for our executive officers and an updated stock ownership policy for our outside directors. This policy, which is set forth in our Corporate Governance Principles and Practices and available on the Corporate Governance section of the Investor Relations page on our website at www.investors.gce.com, establishes the following ownership levels for each category of person covered by the policy:
| Covered Person | | Required Salary Multiple | |
Chairman and Chief Executive Officer | 5x base salary | |||
All other Named Executive Officers | 3x base salary | |||
Outside Directors | 3x annual cash retainer (exclusive of any cash retainer payable for service as lead director, chairperson of the Board or any committee thereof) |
Under the policy, the following may be used in determining share ownership for purposes of the ownership requirement:
| ● | Shares owned directly (including shares acquired through open market purchases or acquired and held upon, or subject to, vesting of restricted stock, restricted stock units or performance-based awards, and shares received and held upon exercise of stock option awards); |
| ● | Shares owned jointly with or separately by the director’s spouse; |
| ● | Shares held in trust for the benefit of the Covered Person, or one or more family members of the Covered Person; |
| ● | Shares held in qualified or nonqualified savings, profit-sharing, or deferred compensation accounts; |
| ● | Shares underlying vested but unexercised stock options (based on the excess of the market price of the stock over the exercise price and after deducting any tax withholding obligations); and |
| ● | Shares underlying vested but unexercised warrants. |
Each person covered by the policy is expected to achieve the target ownership threshold within five years of the date such person first becomes subject to the policy. The Compensation Committee will receive periodic reports of the ownership achieved by each covered person. Until such time as the covered person satisfies the share ownership requirement, the achievement level of share ownership will be determined by reference to the average closing stock price of the shares during the fiscal year ended immediately prior to the determination date. Once the share ownership requirement has been satisfied, future declines in share price will not impact the covered person’s compliance with this guideline, as long as the covered person holds the number of shares he or she had at the time he or she achieved the required ownership level. As of December 31, 2025, all persons covered by the policy were in compliance with the stock ownership requirements.
Anti-Hedging and Anti-Pledging Policy
23
Table of Contents
where a person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities. Any person wishing to enter into such an arrangement must first receive pre-approval for the proposed transaction from the Company’s compliance officer in accordance with the pre-approval procedures set forth in the policy.
Compensation of Directors
We have a compensation program in place for our non-employee directors that utilizes annual retainers and restricted stock grants. New non-employee directors, upon appointment or election to the Board of Directors, receive an award of restricted stock under our equity incentive plan valued at $20,000 on the date of grant, which vests on the one-year anniversary of the date of grant, subject to accelerated vesting in the event of a change in control. For serving on the Board of Directors, our non-employee directors also receive an annual retainer of $50,000 in cash and an award of restricted stock under our equity incentive plan valued at $75,000 on the date of grant. The cash portion of the annual retainer is paid quarterly while the restricted stock grants to our non-employee directors are made after our annual meeting of stockholders each year and vest on the earlier of the one-year anniversary of the date of grant or immediately prior to the following year’s annual meeting of stockholders, subject to acceleration in the event of a change in control. In addition, our lead independent director receives an additional annual cash retainer of $33,333, each non-employee director receives an additional annual cash retainer for service on a Board committee of $5,000, and each committee chair receives an additional annual cash retainer of $10,000, except for the chair of the Audit Committee, whose additional annual cash retainer for service as chair is $15,000. We reimburse all of our directors for reasonable expenses incurred to attend our Board of Directors and committee meetings.
2025 Director Compensation
The following table provides information regarding the compensation paid to the persons who served as non-employee directors in 2025:
Name | | Fees Earned or | | Stock Awards ($)(2) | | Total ($) |
| |||
Sara Ward | $ | 98,333 | $ | 75,000 | $ | 173,333 | ||||
Jack A. Henry | $ | 80,000 | $ | 75,000 | $ | 155,000 | ||||
Lisa Graham Keegan | $ | 75,000 | $ | 75,000 | $ | 150,000 | ||||
Chevy Humphrey | $ | 75,000 | $ | 75,000 | $ | 150,000 | ||||
Kevin F. Warren | $ | 65,000 | $ | 75,000 | $ | 140,000 | ||||
The following table provides a breakdown of the cash compensation paid to our non-employee directors in 2025 in respect of their annual retainers for service on the Board of Directors, for service on Board committees, and for services as a Board committee chair or as lead independent director:
Name | | Board of | | Board | | Committee | | Total |
| ||||
Sara Ward(1) | $ | 50,000 | $ | 15,000 | $ | 33,333 | $ | 98,333 | |||||
Jack A. Henry | $ | 50,000 | $ | 15,000 | $ | 15,000 | $ | 80,000 | |||||
Lisa Graham Keegan | $ | 50,000 | $ | 15,000 | $ | 10,000 | $ | 75,000 | |||||
Chevy Humphrey | $ | 50,000 | $ | 15,000 | $ | 10,000 | $ | 75,000 | |||||
Kevin F. Warren | $ | 50,000 | $ | 15,000 | $ |
| $ | 65,000 | |||||
| (1) | The amount for Ms. Ward includes the additional annual retainer of $33,333 that she received in her capacity as lead independent director. |
| (2) | Represents the aggregate grant date fair value of the shares of restricted stock granted during the fiscal year as computed in accordance with ASC 718. Each director received an annual grant of restricted stock with the number of shares granted determined by dividing the grant date value of the award, $75,000, by $183.45, the closing price of the Company’s common stock on June 10, 2025, the date of grant, rounded up to the nearest whole share. Each director held 409 unvested shares at December 31, 2025. All unvested shares will vest on the earlier of the one-year anniversary of the date of grant or immediately prior to the Annual Meeting, subject to accelerated vesting upon a change in control. |
24
Table of Contents
PROPOSAL NO. 1
ELECTION OF DIRECTORS
◻ What am I voting on? | | Stockholders are being asked to elect six directors to serve for a one-year term. |
◻ Voting recommendation: | Our Board of Directors unanimously recommends that you vote “FOR” the election of each director nominee. The Board and the Nominating and Corporate Governance Committee believe that the six director nominees each possess the necessary qualifications, attributes, skills and experiences to provide quality advice and counsel to the Company’s management and effectively oversee the business and the long-term interests of our stockholders. | |
◻ Vote required: | The affirmative vote of a majority of the votes cast at the Annual Meeting is required for the election of each director. Stockholders of the Company are not permitted to cumulate their votes for the election of directors. Abstentions and broker non-votes will have no effect on the results of the election of directors. Unless contrary instructions are given, shares represented by proxies solicited by the Board of Directors will be voted for the election of each of the director nominees identified below. |
Composition of our Board of Directors
Our bylaws provide that our business will be managed by or under the direction of the Board of Directors. The number of directors constituting our Board of Directors is determined from time to time by our Board of Directors. Currently, our Board of Directors consists of six members. Each of our six nominees for the position of director will be elected at the Annual Meeting to hold office until the next annual meeting of stockholders or the director’s earlier resignation or removal. Upon the recommendation of the Nominating and Corporate Governance Committee of the Board of Directors, the Board of Directors has nominated the six persons named below for election as directors. Proxies solicited by our Board of Directors will, unless otherwise directed, be voted to elect the six nominees named below to constitute the entire Board of Directors.
Directors and Director Nominees
All of the nominees named below served as directors during 2025 and each is currently serving on the Board of Directors. Each nominee has indicated a willingness to serve as a director for the ensuing year, but in case any nominee is not a candidate at the meeting for any reason, the proxies named in the enclosed proxy form may vote for a substitute nominee recommended by the Nominating and Corporate Governance Committee and approved by the Board of Directors.
The following table sets forth certain information regarding each director nominee:
Name | | Age | | Position | | Committee Membership |
Brian E. Mueller | 72 | Chairman and Chief Executive Officer | None | |||
Sara Ward | 62 | Director (Lead Independent Director) | Nominating and Corporate Governance; Compensation; and Audit | |||
Jack A. Henry | 82 | Director | Audit (chair); Nominating and Corporate Governance; and Compensation | |||
Lisa Graham Keegan | 66 | Director | Nominating and Corporate Governance (chair); Compensation; and Audit | |||
Chevy Humphrey | 61 | Director | Compensation (chair); Nominating and Corporate Governance; and Audit | |||
Kevin F. Warren | 62 | Director | Nominating and Corporate Governance; Compensation; and Audit |
25
Table of Contents
| | Brian E. Mueller has been serving as our Chief Executive Officer since July 1, 2008, as a director since March 2009, and as the Chairman of our Board since January 2017. Since July 1, 2018, Mr. Mueller has also served as the President of Grand Canyon University, an independent non-profit Arizona corporation that is our most significant university partner. From 2012 to 2018, Mr. Mueller served as the President of Grand Canyon University when it was owned and operated by the Company. See the section titled “Policies and Procedures for Related Party Transactions” for additional information. From 1987 to 2008, Mr. Mueller was employed by Apollo Education Group, Inc., a for-profit, postsecondary education company and the parent company of the University of Phoenix, serving between January 2006 and June 2008 as its President and a Director. Mr. Mueller previously served as the Chief Operating Officer of Apollo Education Group, Inc. from December 2005 to January 2006, as Chief Executive Officer of the University of Phoenix Online, a unit of the University of Phoenix, from March 2002 to November 2005, and as Chief Operating Officer and Senior Vice President of the University of Phoenix Online from May 1997 to March 2002. From 1987 to May 1997, Mr. Mueller held several positions in operations management for Apollo Education Group, Inc. From 1983 to 1987, Mr. Mueller was a professor at Concordia University. Mr. Mueller received a Bachelor of Arts degree in Education and a Master of Arts in Education degree from Concordia University. We believe that Mr. Mueller’s past experience working for both universities focused on traditional students and working adults, as well as his day-to-day leadership and intimate knowledge of our business and operations, provide the Board of Directors with both industry-wide and Company-specific experience and expertise. |
| Sara Ward has been serving as a member of our Board of Directors since March 2013, and as the lead independent director since January 2017. Ms. Ward has served as President and Chief Executive Officer of Sara Ward & Associates, an executive coaching and economic development consulting firm specializing in site selection and government relations since 1996. From 1993 to 1996, Ms. Ward served as the director of the Arizona Department of Commerce, having previously served as the finance director from 1991 to 1993. Prior to her work in the public sector, Ms. Ward worked in the investment banking industry. From 2014 to 2023 Ms. Ward served as a director for WillScot Mobile Mini Holdings Corp., a publicly traded provider of portable storage and mobile office solutions. Since 2023 Ms. Ward has served as a director of Banner Health, a non-profit healthcare system, and is chair of the compensation committee. Ms. Ward was previously a member of the board of trustees at Seattle Pacific University. Ms. Ward is a graduate of Stanford University with a Bachelor of Arts degree in international relations. Ms. Ward is NACD (National Association of Corporate Directors) Directorship Certified. The NACD Directorship Certification program equips directors with the foundation of knowledge sought by boards to effectively contribute in the boardroom. NACD Directorship Certified directors pass a foundational exam developed by experienced directors and, via continuing recertification requirements, commit to continuing education on governance and emerging issues impacting the businesses they service in order to elevate the profession of directorship. We believe Ms. Ward’s extensive experience with government, higher education and economic development provides a tremendous resource to our Board of Directors and management team, particularly in the areas of government relations, finance and corporate governance. | |
26
Table of Contents
| Jack A. Henry has been serving as a member of our Board of Directors since November 2008. Since 2000, Mr. Henry has served as the Managing Director of Sierra Blanca Ventures, LLC, a private investment and consulting firm. From 1966 to 2000, Mr. Henry worked as a certified public accountant for Arthur Andersen, a national accounting firm, retiring in 2000 as the Managing Partner of the Phoenix, Arizona office. Mr. Henry has previously served on the boards of directors of nine other publicly traded companies and seven private companies. He is past President and founder of the Arizona Chapter of the National Association of Corporate Directors, having served in that capacity for 16 years. Mr. Henry previously served on numerous community and nonprofit organizations including chairman of the Arizona Chamber of Commerce, Greater Phoenix Leadership, Greater Phoenix Economic Council, and Junior Achievement of Central Arizona. Mr. Henry also was a member of the Super Bowl ’96 Executive Committee, Arizona Business Hall of Fame, Arizona Economic Forum and the Violence Prevention Initiative. Mr. Henry has spoken and consulted on audit committee and corporate governance matters. Mr. Henry received a Bachelor of Business Administration degree and a Master of Business Administration degree from the University of Michigan. We believe that Mr. Henry’s extensive experience with public and financial accounting matters for corporate organizations, as well as experience as a consultant to and director of other public companies, provide significant insight and expertise to our Board of Directors. | |
| Lisa Graham Keegan has been serving as a member of our Board of Directors since August 2019. Since 2001, Ms. Keegan has served as the Principal Partner at The Keegan Company, an education policy consulting firm, where she leads numerous projects, writes, and speaks on critical issues in American education. From 1991 to 2001, Ms. Keegan served as an Arizona elected official, first in the Arizona House of Representatives from 1991 to 1995, where she chaired the House Education Committee and oversaw the K-12, community college and university education budgets on the Appropriations Committee, and later as the Arizona Superintendent of Public Instruction from 1995 to 2001, where she oversaw Arizona’s public school system and directed the state’s Department of Education. In 2000 and 2008, respectively, Ms. Keegan served as education advisor to the John McCain campaigns for President. Ms. Keegan serves on the boards of the Grand Canyon Council Boy Scouts of America: 50 CAN, The 50-State Campaign for Achievement Now education advocacy organization; the National School Choice Awareness Foundation, an education organization focused on increasing parental awareness of school options; The Foundation For Advancing Alcohol Responsibility (Responsibility.org) National Advisory Board; and as Chairman of NavigatEd AZ, a non-profit organization that helps families in Arizona choose the right school for their child. Ms. Keegan received a Bachelor of Arts degree from Stanford University and a Masters Degree from Arizona State University. We believe Ms. Keegan’s extensive experience with education and public office experience provides a tremendous resource to our Board of Directors and management team, particularly in the areas of operations and finance. | |
27
Table of Contents
| Chevy Humphrey, DBA, has been serving as a member of our Board of Directors since August 2019. Dr. Humphrey has served as the President and CEO of the Kenneth C. Griffin Museum of Science and Industry (“Griffin MSI”) since January 2021. In this role, she oversees all aspects of executing the strategic vision of Griffin MSI, including guest experience, transformational exhibits, education programming, community engagement, and financial sustainability and growth. Dr. Humphrey is an international leader in the field of informal science education. Before joining Griffin MSI, she served for 15 years as CEO of Arizona Science Center. She serves as the Past Chair of the Board of the American Alliance of Museums, the world’s largest museum association, serving 35,000 members. She is Past Chair of the Board of the Association of Science and Technology Centers, which serves more than 500 science centers in more than 50 countries and has also served as the Chair of the Selection and Annual Review Committee for the National Science Foundation’s then-largest informal science initiative, Nanoscale Informal Science Education Network (NISE-Net). Dr. Humphrey has a long history serving on a wide variety of boards. Currently, she is a member of the Board of Governors for Argonne National Laboratory, a science and engineering research national laboratory operated by U-Chicago Argonne LLC for the United States Department of Energy. She also serves on the Economic Club of Chicago, Choose Chicago, the Civic Committee and the Commercial Club of Chicago, the Theodore Roosevelt Presidential Library, the Sandra Day O’Connor Institute, Helios Education Foundation, and Education Forward Arizona. Dr. Humphrey was named to Crain’s Chicago Business’s 2023 Notable Women in STEM list and its 2023 Who’s Who list, she participated in Leadership Greater Chicago’s Daniel Burnham Fellowship, Forbes’ 2024 50 and over 50 list, and she has received numerous awards from Chicago community organizations, including Girls Inc. Chicago’s 2023 Strong Smart Bold award and the Illinois Black Chamber, Cook County Black Chamber and Garfield Park Chamber of Commerce’s 2022 Business Leader of the Year award. Dr. Humphrey is originally from Houston, Texas. She earned a Doctorate in Business Administration from Grand Canyon University and an honorary Doctor of Science and Technology degree from the University of Advancing Technology. She holds a Master of Business Administration—with specializations in innovation entrepreneurship and marketing—from Northeastern University and a Bachelor of Science in Business with a concentration in Marketing from the University of Phoenix. Dr. Humphrey also received Executive Education certifications from The Wharton School at the University of Pennsylvania, Stanford University Graduate School of Business, and Yale School of Management. We believe Dr. Humphrey’s extensive experience, particularly her STEM related experience, provides a tremendous resource to our Board of Directors and management team, particularly in the areas of operations, finance, and corporate governance. | |
28
Table of Contents
| Kevin F. Warren has been serving as a member of our Board of Directors since his appointment on April 24, 2024. He served previously as a member of our Board of Directors from September 2012 through August 27, 2019. Mr. Warren has served as President and Chief Executive Officer of the Chicago Bears Football Club, a National Football League (“NFL”) franchise, since April 2023, with responsibility for football and business operations. Mr. Warren is the first black President and CEO of the Chicago Bears and only the fifth President in the history of the Chicago Bears. Mr. Warren served as the Commissioner-Elect of the Big Ten Conference from September 2019 to January 2020. On January 2, 2020, Mr. Warren officially began his tenure as Commissioner of the Big Ten Conference and served in that role until April 2023. From 2005 to 2019, Mr. Warren served as a senior officer of the Minnesota Vikings, an NFL franchise. Prior to joining the Vikings, from 2003 to 2005, Mr. Warren worked for the international law firm of Greenberg Traurig LLP, which included representing the Wilf ownership group during its acquisition of the Vikings. From 2001 to 2003, Mr. Warren served as Senior Vice President of Business Operations & General Counsel of the Detroit Lions, an NFL franchise. Prior to that time, Mr. Warren worked with the St. Louis Rams, an NFL franchise, as Vice President of Football Administration in 2001 and as Vice President of Player Development & Football Legal Counsel from 1997 to 2000. Mr. Warren earned his bachelor’s degree in business administration from Grand Canyon University, his master’s degree in business administration from Arizona State University, and his Juris Doctor degree from the University of Notre Dame School of Law. We believe Mr. Warren’s extensive experience with legal, financial and marketing matters provides an exceptional resource to our Board of Directors and management team, particularly in the areas of operations, finance and corporate governance. |
Our Board of Directors unanimously recommends that the stockholders vote “FOR” the election of each of the six nominees listed above to constitute our Board of Directors.
29
Table of Contents
PROPOSAL NO. 2
APPROVAL OF THE ADOPTION OF THE 2026 EQUITY INCENTIVE PLAN
● What am I voting on? | Stockholders are being asked to approve the adoption of our 2026 Equity Incentive Plan. |
● Voting recommendation: | Our Board of Directors unanimously recommends that you vote “FOR” approval of the adoption of our 2026 Equity Incentive Plan. |
● Vote required: | The affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote. Broker non-votes will have no effect on the outcome of this proposal, while abstentions will have the effect of a vote against this proposal. |
At the Annual Meeting, stockholders will be asked to approve the Grand Canyon Education, Inc. 2026 Equity Incentive Plan (the “2026 Plan”). The Board of Directors adopted the 2026 Plan on April 21, 2026, subject to and effective upon its approval by our stockholders. The 2026 Plan is intended to replace our 2017 Equity Incentive Plan (the “2017 Plan”), pursuant to which no new awards may be granted as of the tenth anniversary of its adoption in June 2017. If the stockholders approve the 2026 Plan, it will become effective on the day of the Annual Meeting, and no further awards will be granted under the 2017 Plan, which will be terminated.
Equity Incentive Plan
We operate in a challenging marketplace in which our success depends to a great extent on our ability to attract and retain employees, directors and other service providers of the highest caliber. One of the tools our Board of Directors regards as essential in addressing these human resource challenges is a competitive equity incentive program. Our employee equity incentive program provides a range of incentive tools and sufficient flexibility to permit the Board’s Compensation Committee to implement the program in ways that will make the most effective use of the shares our stockholders authorize for incentive purposes. We intend to use these incentives to attract new key employees and to continue to retain existing key employees, directors and other service providers for the long-term benefit of the Company and its stockholders. If the stockholders do not approve the 2026 Plan, we will be unable to continue our employee stock incentive program after May 13, 2027.
Requested Share Authorization
The 2026 Plan authorizes the Compensation Committee to provide incentive compensation in the form of stock options, stock appreciation rights, restricted stock and stock units, performance shares and units, other stock-based awards and cash-based awards. Under the 2026 Plan, we will be authorized to issue up to 1,498,282 shares, consisting of (i) 788,282 shares that remain available for grant under the 2017 Plan as of the effective date of the 2026 Plan, plus (ii) 710,000 shares, increased by not more than 294,239 shares comprised of:
As of March 31, 2026, a total of 294,239 shares remained subject to unvested awards of restricted stock outstanding under the 2017 Plan. The 2017 Plan will be terminated upon stockholder approval of the 2026 Plan. Awards granted pursuant to the 2017 Plan remain subject to the terms of the 2017 Plan.
30
Table of Contents
Grant Practices under the 2017 Plan and Key Data Relating to Outstanding Equity Awards
Common measures of a stock plan’s cost include burn rate (as calculated by Institutional Shareholder Services, Inc.), dilution and overhang. The burn rate refers to how fast a company uses the supply of shares authorized for issuance under its stock plan. Dilution measures the degree to which stockholder ownership has been diluted by stock-based compensation awarded under stock plans. Overhang measures the number of shares that may be awarded under stock plans in the future relative to a company’s outstanding shares.
The following table shows how our key equity metrics have changed over the past three years:
Key Equity Metrics | 2023 | 2024 | 2025 | ||||||||
Burn Rate | 0.47% | 0.41% | 0.32% | ||||||||
Dilution | 1.50% | 1.40% | 1.21% | ||||||||
Overhang | 5.11% | 4.73% | 4.40% | ||||||||
_________________
| * | The Company did not grant any stock options during the three-year period in the table. |
| (1) | Burn rate is calculated by dividing (a) the gross number of shares subject to equity awards granted during the year for full value awards, by (b) the basic weighted-average number of common shares outstanding at the end of the fiscal year. |
| (2) | Dilution is calculated by dividing the number of shares subject to equity awards outstanding at the end of the fiscal year by the number of shares outstanding at the end of the fiscal year. |
| (3) | Overhang is calculated by dividing (a) the sum of (i) the number of shares subject to equity awards outstanding at the end of the fiscal year and (ii) the number of shares available for future grants, by (b) the number of shares outstanding at the end of the fiscal year. |
In operating our 2017 Plan, the Compensation Committee has monitored and managed its burn rate and dilution to reasonable levels. Our average annual burn rate for the three years ended December 31, 2025 was 0.40%. The Institutional Shareholder Services, Inc. value-adjusted burn rate benchmarks are calculated as the approximately 86th percentile of three-year burn rates within the company's four-digit Global Industry Classification Standard group (Consumer Services) and is 2.40%.
The following table provides additional information regarding our equity incentive program as of March 31, 2026:
Total number of shares of common stock subject to outstanding stock options | 0 |
Weighted-average exercise price of outstanding stock options | $0 |
Weighted-average remaining term of outstanding stock options | 0 years |
Total number of shares of common stock subject to outstanding full value awards(1) | 294,239 |
Total number of shares of common stock available for grant under the 2017 Plan | 788,282 |
Total number of shares of common stock available for grant under other equity incentive plans | — |
Total number of shares of common stock outstanding | 26,704,660 |
Per-share closing price of common stock as reported on Nasdaq Global Select Market | $170.03 |
_________________
| (1) | A “full value award” means restricted stock or restricted stock unit awards. |
31
Table of Contents
Factors Considered by Board
Our Board of Directors considered a number of factors in determining the appropriate size of the 2026 Plan share authorization:
| ● | The Company’s use of restricted stock, and not options, in its equity incentive grants over the past five years and its intention to continue to use restricted stock in the future; |
| ● | The Company’s historical grant practices, including the Company’s average annual burn rate over the past three years, as detailed above, in relation to the Company’s expected future annual burn rate; and |
| ● | The desire to authorize a number of shares sufficient to provide for a reasonable incentive program for the next three to five years. |
Key Features of 2026 Plan
Key features of the 2026 Plan of particular interest to our stockholders reflect the following best practices:
| ● | The 2026 Plan prohibits the repricing of stock options and stock appreciation rights without the approval of our stockholders. |
| ● | No discount from fair market value is permitted in setting the exercise price of stock options and stock appreciation rights. |
| ● | The 2026 Plan generally provides for gross share counting. The number of shares remaining available for grant under the 2026 Plan is reduced by the gross number of shares subject to options and stock appreciation rights settled on a net basis. |
| ● | Any shares of our common stock we repurchase in the open market with option exercise proceeds will not increase the maximum number of shares that may be issued under the 2026 Plan. |
| ● | The number of shares for which awards may be granted to any nonemployee member of our Board of Directors in a fiscal year is limited. |
| ● | The 2026 Plan requires each award to have a minimum vesting period of one year, except for 5% of the authorized shares. |
| ● | The 2026 Plan does not contain a “liberal” change in control definition (e.g., mergers require actual consummation). |
| ● | Performance awards require the achievement of pre-established goals. |
| ● | The 2026 Plan provides that awards may only be granted within ten years following the effective date of the 2026 Plan. |
| ● | 2026 Plan provides that (i) no dividends or dividend equivalent rights may be paid with respect to any shares of our common stock subject to an award before the date such shares have vested, (ii) any dividends or dividend equivalent rights that are credited with respect to any such shares will be subject to all of the terms and conditions applicable to such shares under the terms of the applicable award agreement (including any vesting conditions), (iii) any dividends or dividend equivalent rights that are credited with respect to any such shares will be forfeited to us on the date such shares are forfeited to or repurchased by us due to a failure to vest and (iv) dividends and dividend equivalent rights will not be credited or paid with respect to options and stock appreciation rights. |
In addition, our Board of Directors has adopted director and officer stock ownership guidelines and an incentive based compensation recoupment policy that applies to awards granted under the 2026 Plan. See the description of these policies in “Compensation Discussion and Analysis.”
The Board of Directors believes that adoption of the 2026 Plan is necessary to meet the Company’s anticipated equity compensation needs. The proposed share reserve authorized for issuance under the 2026 Plan was determined
32
Table of Contents
based on a forecast that takes into account our anticipated rate of growth in hiring, an estimated range of our stock price over time, and our historical burn rates.
If the proposed 2026 Plan is not approved, awards may no longer be granted under the 2017 Plan after May 13, 2027, and the Company will lose a critical tool for recruiting, retaining and motivating employees. The Company would thus be at a competitive disadvantage in attracting and retaining talent. The only way to make up this shortfall would be to increase the cash-based component of employee compensation, which would reduce the resources we are able to allocate to meet our business needs and objectives and could also reduce the future alignment of employee and stockholder interests.
The Board of Directors believes that the 2026 Plan will serve a critical role in attracting and retaining the high caliber employees, directors, and consultants essential to our success and in motivating these individuals to strive to meet our goals. Therefore, the Board urges you to vote to approve the adoption of the 2026 Plan.
Summary of the 2026 Plan
The following summary of the 2026 Plan is qualified in its entirety by the specific language of the 2026 Plan, a copy of which is attached to this proxy statement as Appendix A.
General. The purpose of the 2026 Plan is to advance the interests of the Company and its stockholders by providing an incentive program that will enable the Company to attract and retain employees, directors and consultants and to provide them with an equity interest in the growth and profitability of the Company. These incentives are provided through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, other stock-based awards and cash-based awards.
Authorized Shares. The maximum aggregate number of shares authorized for issuance under the 2026 Plan is 1,498,282 shares, consisting of (i) 788,282 shares that remain available for grant under the 2017 Plan as of the Annual Meeting (the effective date of the 2026 Plan), plus (ii) 710,000 shares, plus up to 294,239 additional shares that are subject to awards currently outstanding under the 2017 Plan or were acquired pursuant to awards granted under the 2017 Plan and remain unvested, to the extent that after the Annual Meeting such awards expire or are forfeited for any reason or such unvested shares are forfeited and reacquired by the Company for not more than their holder’s purchase price.
As of March 31, 2026, 788,282 shares remained available for grant under the 2017 Plan. If the stockholders approve adoption of the 2026 Plan, the Board of Directors will immediately terminate the 2017 Plan, and any of these shares that are not then subject to outstanding awards will cease to be available for grant. As of March 31, 2026, 294,239 shares remained subject to unvested awards subject to potential forfeiture under the 2017 Plan.
Share Counting. Each share made subject to an award will reduce the number of shares remaining available for grant under the 2026 Plan by one share. If any award granted under the 2026 Plan expires or otherwise terminates for any reason without having been exercised or settled in full, or if shares subject to forfeiture or repurchase are forfeited or repurchased by the Company for not more than the participant’s purchase price, any such shares reacquired or subject to a terminated award will again become available for issuance under the 2026 Plan. Shares will not be treated as having been issued under the 2026 Plan and will therefore not reduce the number of shares available for issuance to the extent an award is settled in cash. Shares that are withheld or that are tendered in payment of the exercise price of an option will not be made available for new awards under the 2026 Plan. Shares purchased in the open market with option exercise proceeds will not increase the maximum number of shares that may be issued under the 2026 Plan. Shares withheld or reacquired by the Company in satisfaction of a tax withholding obligation in connection with the vesting or settlement of any full value award will not again be available for the future grant of awards. Upon the exercise of a stock appreciation right or net-exercise of an option, the number of shares available under the 2026 Plan will be reduced by the gross number of shares for which the award is exercised.
Adjustments for Capital Structure Changes. Appropriate and proportionate adjustments will be made to the number of shares authorized under the 2026 Plan, to the numerical limits on certain types of awards described below, and to outstanding awards in the event of any change in our common stock through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares or similar change in our capital structure, or if we make a distribution to our stockholders in a form other than common stock (excluding regular, periodic cash dividends) that has a material effect on the fair market value of our common stock. In such circumstances, the Compensation Committee also has the discretion under the 2026 Plan to adjust other terms of outstanding awards as it deems appropriate.
33
Table of Contents
Nonemployee Director Award Limits. The sum of any cash compensation and the grant date fair value of awards (as determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) granted under the 2026 Plan to a nonemployee director as compensation for services as a nonemployee director during any calendar year of the Company may not exceed $750,000 annually, or $1,000,000 in the nonemployee director’s first year of service. The Committee may make exceptions to this limit for individual nonemployee directors in extraordinary circumstances, as the Committee may determine in its discretion, provided that the nonemployee director receiving such additional compensation may not participate in the decision to award such compensation or in other compensation decisions involving nonemployee director.
Administration. The 2026 Plan generally will be administered by the Compensation Committee of the Board of Directors, although the Board of Directors retains the right to appoint another of its committees to administer the 2026 Plan or to administer the 2026 Plan directly. (For purposes of this summary, the term “Committee” will refer to either such duly appointed committee or the Board of Directors). Subject to the provisions of the 2026 Plan, the Committee determines in its discretion the persons to whom and the times at which awards are granted, the types and sizes of awards, and all of their terms and conditions. The Committee may, subject to certain limitations provided by the 2026 Plan, amend, cancel or renew any award, waive any restrictions or conditions applicable to any award, and accelerate, continue, extend or defer the vesting of any award.
The 2026 Plan provides, subject to certain limitations, for indemnification by the Company of any director, officer or employee against all reasonable expenses, including attorneys’ fees, incurred in connection with any legal action arising from such person’s action or failure to act in administering the 2026 Plan. All awards granted under the 2026 Plan will be evidenced by a written or digitally signed agreement between the Company and the participant specifying the terms and conditions of the award, consistent with the requirements of the 2026 Plan. The Committee will interpret the 2026 Plan and awards granted thereunder, and all determinations of the Committee generally will be final and binding on all persons having an interest in the 2026 Plan or any award.
Dividends and Dividend Equivalent Rights. The 2026 Plan provides that dividends or dividend equivalent rights may be paid or credited with respect to any shares of our common stock subject to an award, as determined by the Committee and contained in the applicable award agreement; provided, however, that (i) no dividends or dividend equivalent rights may be paid with respect to any such shares before the date such shares have vested, (ii) any dividends or dividend equivalent rights that are credited with respect to any such shares will be subject to all of the terms and conditions applicable to such shares under the terms of the applicable award agreement (including any vesting conditions), (iii) any dividends or dividend equivalent rights that are credited with respect to any such shares will be forfeited to us on the date such shares are forfeited to or repurchased by us due to a failure to vest and (iv) dividends and dividend equivalent rights will not be paid with respect to options and stock appreciation rights.
Prohibition of Option and SAR Repricing. The 2026 Plan expressly provides that, without the approval of a majority of the votes cast in person or by proxy at a meeting of our stockholders, the Committee may not provide for any of the following with respect to underwater options or stock appreciation rights: (1) either the cancellation of such outstanding options or stock appreciation rights in exchange for the grant of new options or stock appreciation rights at a lower exercise price or the amendment of outstanding options or stock appreciation rights to reduce the exercise price, (2) the issuance of new full value awards in exchange for the cancellation of such outstanding options or stock appreciation rights, or (3) the cancellation of such outstanding options or stock appreciation rights in exchange for payments in cash.
Minimum Vesting. No more than 5% of the aggregate number of shares authorized under the 2026 Plan may be issued pursuant to awards that provide for service-based vesting over a period of less than one year or performance-based vesting over a performance period of less than one year.
Eligibility. Awards may be granted to employees, directors and consultants of the Company or any present or future parent or subsidiary corporation or other affiliated entity of the Company. Incentive stock options may be granted only to employees who, as of the time of grant, are employees of the Company or any parent or subsidiary corporation of the Company. As of March 31, 2026, we had approximately 5,850 employees, including the four named executive officers, consultants and five non-employee directors who would be eligible under the 2026 Plan.
Stock Options. The Committee may grant nonstatutory stock options, incentive stock options within the meaning of Section 422 of the Code, or any combination of these. The exercise price of each option may not be less than the fair market value of a share of our common stock on the date of grant. However, any incentive stock option granted
34
Table of Contents
to a person who at the time of grant owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company (a “10% Stockholder”) must have an exercise price equal to at least 110% of the fair market value of a share of common stock on the date of grant. On March 31, 2026, the closing price of our common stock as reported on the NASDAQ Global Select Market was $170.03 per share.
The 2026 Plan provides that the option exercise price may be paid in cash, by check, or cash equivalent; by means of a broker-assisted cashless exercise; by means of a net-exercise procedure; to the extent legally permitted, by tender to the Company of shares of common stock owned by the participant having a fair market value not less than the exercise price; by such other lawful consideration as approved by the Committee; or by any combination of these. Nevertheless, the Committee may restrict the forms of payment permitted in connection with any option grant. No option may be exercised unless the participant has made adequate provision for federal, state, local and foreign taxes, if any, relating to the exercise of the option, including, if permitted or required by the Company, through the participant’s surrender of a portion of the option shares to the Company.
Options will become vested and exercisable at such times or upon such events and subject to such terms, conditions, performance criteria or restrictions as specified by the Committee. The maximum term of any option granted under the 2026 Plan is ten years, provided that an incentive stock option granted to a 10% Stockholder must have a term not exceeding five years. Unless otherwise permitted by the Committee, an option generally will remain exercisable for three months following the participant’s termination of service, provided that if service terminates as a result of the participant’s death or disability, the option generally will remain exercisable for 12 months, but in any event the option must be exercised no later than its expiration date.
Options are nontransferable by the participant other than by will or by the laws of descent and distribution, and are exercisable during the participant’s lifetime only by the participant. However, an option may be assigned or transferred to certain family members or trusts for their benefit to the extent permitted by the Committee and, in the case of an incentive stock option, only to the extent that the transfer will not terminate its tax qualification.
Stock Appreciation Rights. The Committee may grant stock appreciation rights either in tandem with a related option (a “Tandem SAR”) or independently of any option (a “Freestanding SAR”). A Tandem SAR requires the option holder to elect between the exercise of the underlying option for shares of common stock or the surrender of the option and the exercise of the related stock appreciation right. A Tandem SAR is exercisable only at the time and only to the extent that the related stock option is exercisable, while a Freestanding SAR is exercisable at such times or upon such events and subject to such terms, conditions, performance criteria or restrictions as specified by the Committee. The exercise price of each stock appreciation right may not be less than the fair market value of a share of our common stock on the date of grant.
Upon the exercise of any stock appreciation right, the participant is entitled to receive an amount equal to the excess of the fair market value of the underlying shares of common stock as to which the right is exercised over the aggregate exercise price for such shares. Payment of this amount upon the exercise of a Tandem SAR may be made only in shares of common stock whose fair market value on the exercise date equals the payment amount. At the Committee’s discretion, payment of this amount upon the exercise of a Freestanding SAR may be made in cash or shares of common stock. The maximum term of any stock appreciation right granted under the 2026 Plan is ten years.
Stock appreciation rights are generally nontransferable by the participant other than by will or by the laws of descent and distribution, and are generally exercisable during the participant’s lifetime only by the participant. If permitted by the Committee, a Tandem SAR related to a nonstatutory stock option and a Freestanding SAR may be assigned or transferred to certain family members or trusts for their benefit to the extent permitted by the Committee. Other terms of stock appreciation rights are generally similar to the terms of comparable stock options.
Restricted Stock Awards. The Committee may grant restricted stock awards under the 2026 Plan either in the form of a restricted stock purchase right, giving a participant an immediate right to purchase common stock, or in the form of a restricted stock bonus, in which stock is issued in consideration for services to the Company rendered by the participant. The Committee determines the purchase price payable under restricted stock purchase awards, which may be less than the then current fair market value of our common stock. Restricted stock awards may be subject to vesting conditions based on such service or performance criteria as the Committee specifies, including the attainment of one or more performance goals similar to those described below in connection with performance awards. Shares acquired pursuant to a restricted stock award may not be transferred by the participant until vested. Unless otherwise provided by
35
Table of Contents
the Committee, a participant will forfeit any shares of restricted stock as to which the vesting restrictions have not lapsed prior to the participant’s termination of service. Participants holding restricted stock will have the right to vote the shares and to receive any dividends paid, except that dividends or other distributions paid in shares will be subject to the same restrictions as the original award and dividends paid in cash may be made subject to such restrictions. The Company may require repayment of dividends received in cash with respect to unvested shares subsequently forfeited upon the participant’s termination of service.
Restricted Stock Units. The Committee may grant restricted stock units under the 2026 Plan, which represent rights to receive shares of our common stock at a future date determined in accordance with the participant’s award agreement. No monetary payment is required for receipt of restricted stock units or the shares issued in settlement of the award, the consideration for which is furnished in the form of the participant’s services to the Company. The Committee may grant restricted stock unit awards subject to the attainment of one or more performance goals similar to those described below in connection with performance awards, or may make the awards subject to vesting conditions similar to those applicable to restricted stock awards. Restricted stock units may not be transferred by the participant. Unless otherwise provided by the Committee, a participant will forfeit any restricted stock units which have not vested prior to the participant’s termination of service. Participants have no voting rights or rights to receive cash dividends with respect to restricted stock unit awards until shares of common stock are issued in settlement of such awards. However, the Committee may grant restricted stock units that entitle their holders to dividend equivalent rights, which are rights to receive cash or additional restricted stock units whose value is equal to any cash dividends the Company pays. Dividend equivalent rights may be made subject to the same vesting conditions and settlement terms as the original award. However, if dividend equivalents are paid in cash with respect to unvested restricted stock units and those units are subsequently forfeited upon the participant’s termination of service, the Company may require repayment of the cash dividend equivalents applicable to the forfeited units.
Performance Awards. The Committee may grant performance awards subject to such conditions and the attainment of such performance goals over such periods as the Committee determines in writing and sets forth in a written agreement between the Company and the participant. These awards may be designated as performance shares or performance units, which consist of unfunded bookkeeping entries generally having initial values equal to the fair market value determined on the grant date of a share of common stock in the case of performance shares and a monetary value established by the Committee at the time of grant in the case of performance units. Performance awards will specify a predetermined amount of performance shares or performance units that may be earned by the participant to the extent that one or more performance goals are attained within a predetermined performance period. To the extent earned, performance awards may be settled in cash, shares of common stock (including shares of restricted stock that are subject to additional vesting) or any combination of these.
The Committee will establish one or more performance goals applicable to the award. Performance goals will be based on the attainment of specified target levels with respect to one or more measures of business or financial performance of the Company and each subsidiary corporation consolidated with the Company for financial reporting purposes, or such division or business unit of the Company as may be selected by the Committee.
The target levels with respect to applicable performance measures may be expressed on an absolute basis or relative to an index, budget or other standard specified by the Committee. The degree of attainment of performance measures will be calculated in accordance with the Company’s financial statements, generally accepted accounting principles, if applicable, or other methodology established by the Committee, but prior to the accrual or payment of any performance award for the same performance period, and, according to criteria established by the Committee, excluding the effect (whether positive or negative) of changes in accounting standards or any unusual or infrequently occurring event or transaction occurring after the establishment of the performance goals applicable to a performance award.
Following completion of the applicable performance period, the Committee will certify in writing the extent to which the applicable performance goals have been attained and the resulting value to be paid to the participant. The Committee retains the discretion to adjust the amount that would otherwise be payable on the basis of the performance goals attained. The Committee may make positive or negative adjustments to performance award payments to participants to reflect the participant’s individual job performance or other factors determined by the Committee. In its discretion, the Committee may provide for a participant awarded performance shares to receive dividend equivalent rights with respect to cash dividends paid on the Company’s common stock to the extent that the performance shares become vested. The Committee may provide for performance award payments in lump sums or installments.
36
Table of Contents
Unless otherwise provided by the Committee, if a participant’s service terminates due to the participant’s death or disability prior to completion of the applicable performance period, the final award value will be determined at the end of the performance period on the basis of the performance goals attained during the entire performance period but will be prorated for the number of days of the participant’s service during the performance period. The Committee may provide similar treatment for a participant whose service is involuntarily terminated. If a participant’s service terminates prior to completion of the applicable performance period for any other reason, the 2026 Plan provides that the performance award will be forfeited. No performance award may be sold or transferred other than by will or the laws of descent and distribution prior to the end of the applicable performance period.
Cash-Based Awards and Other Stock-Based Awards. The Committee may grant cash-based awards or other stock-based awards in such amounts and subject to such terms and conditions as the Committee determines. Cash-based awards will specify a monetary payment or range of payments, while other stock-based awards will specify a number of shares or units based on shares or other equity-related awards. Such awards may be subject to vesting conditions based on continued performance of service or subject to the attainment of one or more performance goals similar to those described above in connection with performance awards. Settlement of awards may be in cash or shares of common stock, as determined by the Committee. A participant will have no voting rights with respect to any such award unless and until shares are issued pursuant to the award. The Committee may grant dividend equivalent rights with respect to other stock-based awards. The effect on such awards of the participant’s termination of service will be determined by the Committee and set forth in the participant’s award agreement.
Change in Control. Unless otherwise defined in a participant’s award or other agreement with the Company, the 2026 Plan provides that a “Change in Control” occurs upon (a) a person or entity (with certain exceptions described in the 2026 Plan) becoming the direct or indirect beneficial owner of more than 50% of the Company’s voting stock; (b) stockholder approval of a liquidation or dissolution of the Company; or (c) the occurrence of any of the following events upon which the stockholders of the Company immediately before the event do not retain immediately after the event direct or indirect beneficial ownership of more than 50% of the voting securities of the Company, its successor or the entity to which the assets of the company were transferred: (i) a sale or exchange by the stockholders in a single transaction or series of related transactions of more than 50% of the Company’s voting stock; (ii) a merger or consolidation in which the Company is a party; or (iii) the sale, exchange or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries of the Company).
If a Change in Control occurs, the surviving, continuing, successor or purchasing entity or its parent may, without the consent of any participant, either assume or continue outstanding awards or substitute substantially equivalent awards for its stock. If so determined by the Committee, stock-based awards will be deemed assumed if, for each share subject to the award prior to the Change in Control, its holder is given the right to receive the same amount of consideration that a stockholder would receive as a result of the Change in Control. Any awards which are not assumed or continued in connection with a Change in Control or exercised or settled prior to the Change in Control will terminate effective as of the time of the Change in Control.
Subject to the restrictions of Section 409A of the Code, the Committee may provide for the acceleration of vesting or settlement of any or all outstanding awards upon such terms and to such extent as it determines. The vesting of all awards held by non-employee directors will be accelerated in full upon a Change in Control.
The 2026 Plan also authorizes the Committee, in its discretion and without the consent of any participant, to cancel each or any award denominated in shares of stock upon a Change in Control in exchange for a payment to the participant with respect each vested share (and each unvested share if so determined by the Committee) subject to the cancelled award of an amount equal to the excess of the consideration to be paid per share of common stock in the Change in Control transaction over the exercise or purchase price per share, if any, under the award.
Awards Subject to Section 409A of the Code. Certain awards granted under the 2026 Plan may be deemed to constitute “deferred compensation” within the meaning of Section 409A of the Code, which provides rules regarding the taxation of nonqualified deferred compensation plans, and the regulations and other administrative guidance issued pursuant to Section 409A. Any such awards will be required to comply with the requirements of Section 409A. Notwithstanding any provision of the 2026 Plan to the contrary, the Committee is authorized, in its sole discretion and without the consent of any participant, to amend the 2026 Plan or any award agreement as it deems necessary or advisable to comply with Section 409A.
37
Table of Contents
Amendment, Suspension or Termination. The 2026 Plan will continue in effect until its termination by the Committee, provided that no awards may be granted under the 2026 Plan following the tenth anniversary of the 2026 Plan’s effective date, which will be the date on which it is approved by the stockholders. The Committee may amend, suspend or terminate the 2026 Plan at any time, provided that no amendment may be made without stockholder approval that would increase the maximum aggregate number of shares of stock authorized for issuance under the 2026 Plan, change the class of persons eligible to receive incentive stock options or require stockholder approval under any applicable law or the rules of any stock exchange on which the Company’s shares are then listed. No amendment, suspension or termination of the 2026 Plan may affect any outstanding award unless expressly provided by the Committee, and, in any event, may not have a materially adverse effect an outstanding award without the consent of the participant unless necessary to comply with any applicable law, regulation or rule, including, but not limited to, Section 409A of the Code.
Summary of U.S. Federal Income Tax Consequences
The following summary is intended only as a general guide to the U.S. federal income tax consequences of participation in the 2026 Plan and does not attempt to describe all possible federal or other tax consequences of such participation or tax consequences based on particular circumstances.
Incentive Stock Options. A participant recognizes no taxable income for regular income tax purposes as a result of the grant or exercise of an incentive stock option qualifying under Section 422 of the Code. Participants who neither dispose of their shares within two years following the date the option was granted nor within one year following the exercise of the option will normally recognize a capital gain or loss upon the sale of the shares equal to the difference, if any, between the sale price and the purchase price of the shares. If a participant satisfies such holding periods upon a sale of the shares, we will not be entitled to any deduction for federal income tax purposes. If a participant disposes of shares within two years after the date of grant or within one year after the date of exercise (a “disqualifying disposition”), the difference between the fair market value of the shares on the option exercise date and the exercise price (not to exceed the gain realized on the sale if the disposition is a transaction with respect to which a loss, if sustained, would be recognized) will be taxed as ordinary income at the time of disposition. Any gain in excess of that amount will be a capital gain. If a loss is recognized, there will be no ordinary income, and such loss will be a capital loss. Any ordinary income recognized by the participant upon the disqualifying disposition of the shares generally should be deductible by us for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code.
In general, the difference between the option exercise price and the fair market value of the shares on the date of exercise of an incentive stock option is treated as an adjustment in computing the participant’s alternative minimum taxable income and may be subject to an alternative minimum tax which is paid if such tax exceeds the regular tax for the year. Special rules may apply with respect to certain subsequent sales of the shares in a disqualifying disposition, certain basis adjustments for purposes of computing the alternative minimum taxable income on a subsequent sale of the shares and certain tax credits which may arise with respect to participants subject to the alternative minimum tax.
Nonstatutory Stock Options. Options not designated or qualifying as incentive stock options are nonstatutory stock options having no special tax status. A participant generally recognizes no taxable income upon receipt of such an option. Upon exercising a nonstatutory stock option, the participant normally recognizes ordinary income equal to the difference between the exercise price paid and the fair market value of the shares on the date when the option is exercised. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of stock acquired by the exercise of a nonstatutory stock option, any gain or loss, based on the difference between the sale price and the fair market value of the shares on the exercise date, will be taxed as capital gain or loss. We generally should be entitled to a tax deduction equal to the amount of ordinary income recognized by the participant as a result of the exercise of a nonstatutory stock option, except to the extent such deduction is limited by applicable provisions of the Code.
Stock Appreciation Rights. A participant recognizes no taxable income upon the receipt of a stock appreciation right. Upon the exercise of a stock appreciation right, the participant generally will recognize ordinary income in an amount equal to the excess of the fair market value of the underlying shares of common stock on the exercise date over the exercise price. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. We generally should be entitled to a deduction equal to the amount of ordinary income
38
Table of Contents
recognized by the participant in connection with the exercise of the stock appreciation right, except to the extent such deduction is limited by applicable provisions of the Code.
Restricted Stock. A participant acquiring restricted stock generally will recognize ordinary income equal to the excess of the fair market value of the shares on the “determination date” over the price paid, if any, for such shares. The “determination date” is the date on which the participant acquires the shares unless the shares are subject to a substantial risk of forfeiture and are not transferable, in which case the determination date is the earlier of (i) the date on which the shares become transferable or (ii) the date on which the shares are no longer subject to a substantial risk of forfeiture (e.g., when they become vested). If the determination date follows the date on which the participant acquires the shares, the participant may elect, pursuant to Section 83(b) of the Code, to designate the date of acquisition as the determination date by filing an election with the Internal Revenue Service no later than 30 days after the date on which the shares are acquired. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of shares acquired pursuant to a restricted stock award, any gain or loss, based on the difference between the sale price and the fair market value of the shares on the determination date, will be taxed as capital gain or loss. We generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code.
Restricted Stock Unit, Performance, Cash-Based and Other Stock-Based Awards. A participant generally will recognize no income upon the receipt of a restricted stock unit, performance share, performance unit, cash-based or other stock-based award. Upon the settlement of such awards, participants normally will recognize ordinary income in the year of settlement in an amount equal to the cash received and the fair market value of any substantially vested shares of stock received. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. If the participant receives shares of restricted stock, the participant generally will be taxed in the same manner as described above under “Restricted Stock.” Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value of the shares on the determination date (as defined above under “Restricted Stock”), will be taxed as capital gain or loss. We generally should be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code.
New 2026 Plan Benefits
No awards will be granted under the 2026 Plan prior to its approval by the stockholders of the Company. All awards will be granted at the discretion of the Committee, and, accordingly, are not yet determinable.
Required Vote and Board of Directors Recommendation
Approval of this proposal requires the affirmative vote of a majority of the shares present or represented by proxy and entitled to vote on this proposal. If you hold your shares in your own name and abstain from voting on this matter, your abstention will have the same effect as a negative vote. If you hold your shares through a broker and you do not instruct the broker on how to vote on this proposal, your broker will not have authority to vote your shares. Broker non-votes will have no effect on the outcome of this vote. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum.
The Board believes that the proposed adoption of the 2026 Plan is in the best interests of the Company and its stockholders for the reasons stated above.
Our Board of Directors unanimously recommends that the stockholders vote FOR approval of the adoption of the 2026 Plan.
39
Table of Contents
PROPOSAL NO. 3
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
◻ What am I voting on? | | Stockholders are being asked to approve, on an advisory basis, the compensation of the named executive officers as described in the section titled “Compensation Discussion and Analysis” and the related tables. |
◻ Voting recommendation: | Our Board of Directors unanimously recommends that you vote “FOR” the advisory vote to approve the compensation of our named executive officers. The Compensation Committee takes very seriously its role in the governance of the Company’s compensation programs and will take into account the outcome of the advisory vote when considering future executive compensation decisions. | |
◻ Vote required: | The affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote. Broker non-votes will have no effect on the outcome of this proposal, while abstentions will have the effect of a vote against this proposal. |
The Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, enacted in 2010, requires that companies provide their stockholders with the opportunity to vote, on an advisory basis, whether to approve the compensation of companies’ named executive officers, commonly referred to as a “Say-on-Pay” vote, at least once every three years. In a vote held at our 2017 Annual Meeting, our stockholders voted in favor of holding Say-on-Pay votes annually. In light of this result and other factors considered by the Board, the Board has determined that the Company will hold Say-on-Pay votes on an annual basis.
The Say-on-Pay vote is a non-binding advisory vote on the compensation of our named executive officers as described in the section titled “Compensation Discussion and Analysis”, including the tabular disclosure and accompanying narrative disclosure regarding such compensation, set forth in this Proxy Statement. It is not a vote to approve our general compensation policies, the compensation of our Board of Directors, or our compensation policies as they relate to risk management. Please read the section titled “Compensation Discussion and Analysis” of this Proxy Statement for a detailed discussion about our executive compensation programs, including information about the fiscal year 2025 compensation of our named executive officers.
The objectives of our compensation program are to attract, motivate, retain, and reward our executive officers by relating compensation to performance and making our compensation package competitive and cost-effective. We pay our executive officers based on business performance and individual performance, and, in setting compensation levels, we take into consideration our past practices, our current and anticipated future needs, and the relative skills and experience of each individual executive officer. The section titled “Compensation Discussion and Analysis” of this Proxy Statement provides a more detailed discussion of our executive compensation program. We believe that the compensation program we follow helps us achieve our principal compensation objectives.
The vote solicited by this Proposal No. 3 is advisory, and therefore is not binding on us, our Board of Directors or our Compensation Committee, nor will its outcome require us, our Board of Directors or our Compensation Committee to take any action. Moreover, the outcome of the vote will not be construed as overruling any decision by us or our Board of Directors. Furthermore, because this non-binding, advisory vote primarily relates to the compensation of our named executive officers that we have already paid or are otherwise contractually committed to pay, there is generally no opportunity for us to revisit these decisions. However, our Board of Directors, including our Compensation Committee, values the opinions of our stockholders and, to the extent there is any significant vote against the named executive officer compensation as disclosed in this Proxy Statement, we will consider our stockholders’ concerns and evaluate what actions, if any, may be appropriate for us to take in the future to address those concerns.
40
Table of Contents
Stockholders will be asked at the Annual Meeting to approve the following resolution pursuant to this Proposal No. 3:
“RESOLVED, that the stockholders of Grand Canyon Education, Inc. approve, on an advisory basis, the compensation of the Company’s named executive officers, disclosed pursuant to Item 402 of Regulation S-K in the Company’s definitive Proxy Statement for the 2026 Annual Meeting of Stockholders.”
Our Board of Directors unanimously recommends that you vote “FOR” the resolution approving the compensation of our named executive officers as disclosed in this Proxy Statement.
41
Table of Contents
EXECUTIVE OFFICERS
The following section sets forth information regarding our non-director executive officers as of the date of this Proxy Statement. For information regarding Brian E. Mueller, our Chairman and our Chief Executive Officer, see “Proposal No. 1 — Election of Directors — Directors and Director Nominees.”
Name | | Age | | Position |
Dr. W. Stan Meyer | 65 | Chief Operating Officer | ||
Daniel E. Bachus | 55 | Chief Financial Officer | ||
Dilek Marsh | 52 | Chief Information Officer |
| | Dr. W. Stan Meyer has been serving as our Chief Operating Officer since July 26, 2012, having previously served in the position of Executive Vice President from June 2008 to July 2012. From August 2002 to June 2008, Dr. Meyer was employed by Apollo Education Group, Inc., a for-profit, postsecondary education company and the parent company of the University of Phoenix, serving between June 2006 to June 2008 as its executive vice president of marketing and enrollment. Dr. Meyer previously served as a regional vice president of the University of Phoenix Online, a unit of the University of Phoenix, and division director of Axia College and of the School of Advanced Studies, also units of the University of Phoenix. From 1983 to 2002, Dr. Meyer held several positions with the Concordia University system, including director of operations for Concordia University’s education network. Dr. Meyer received a Bachelor of Arts in Communications degree from Concordia University and a Master of Business Administration degree and a Doctor of Education in Institutional Management degree from Pepperdine University. | ||
| Daniel E. Bachus has been serving as our Chief Financial Officer since July 2008. From January 2007 until June 2008, Mr. Bachus served as chief financial officer for Loreto Bay Company, a real estate developer. From 2000 to 2006, Mr. Bachus served as the chief accounting officer and controller of Apollo Education Group, Inc., a for-profit, postsecondary education company and the parent company of the University of Phoenix. From 1992 to 2000, Mr. Bachus was employed by Deloitte & Touche LLP, most recently as an audit senior manager. Mr. Bachus received a Bachelor of Science degree in Accountancy from the University of Arizona and a Master of Business Administration degree from the University of Phoenix. | |||
| Dilek Marsh has been serving as our Chief Information Officer since February 2026, having previously served as Chief Technology Officer since July 2021, as Chief Data Officer since July 2018, as Executive Vice President since July 2012 and as Senior Vice President since August 2008. Ms. Marsh has been in higher education for more than 20 years. Ms. Marsh has served in information technology roles since 1999, including software development project management, business process design and business analytics. Ms. Marsh holds a Bachelor of Arts in Sociology from Bogazici University in Turkey, a Master of Arts in Anthropology from Arizona State University and a Master of Business Administration in Technology Management from the University of Phoenix. | |||
42
Table of Contents
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The following discussion and analysis should be read in conjunction with the section titled “Compensation of Named Executive Officers” and the related tables that follow.
In this section, we describe the material components of our executive compensation program for our named executive officers (the “named executive officers”), whose compensation is set forth in the 2025 Summary Compensation Table and other compensation tables contained in this Proxy Statement. We also provide an overview of our executive compensation philosophy and our overall program. In addition, we explain how and why the Compensation Committee of our Board arrived at the specific compensation decisions involving the named executive officers for 2025.
For 2025, our named executive officers were:
| ◾ | Brian E. Mueller, our Chief Executive Officer; |
| ◾ | Dr. W. Stan Meyer, our Chief Operating Officer; |
| ◾ | Daniel E. Bachus, our Chief Financial Officer; and |
| ◾ | Dilek Marsh, our Chief Information Officer |
Ms. Kathy J. Claypatch, former Chief Information Officer, is also a named executive officer for 2025. Ms. Claypatch resigned from her position with the Company effective October 30, 2025.
2025 Business Highlights
Our Business. We are an education services company dedicated to serving colleges and universities. We have developed significant technological solutions, infrastructure and operational processes to provide services to these institutions on a large scale. Our largest university partner is GCU, an Arizona non-profit corporation that operates a comprehensive regionally accredited university that offers graduate and undergraduate degree programs, emphases and certificates across ten colleges both online and on ground at its campus in Phoenix, Arizona and at 11 off-site campus classroom and laboratory sites. As of December 31, 2025, we provided education services and support to over 136,200 students with more than 131,800 students enrolled in GCU’s programs, emphases and certificates.
We also provide education services to numerous university partners across the United States. In the healthcare field, we work in partnership with a growing number of top universities and healthcare networks across the country, offering healthcare-related academic programs at off-campus classroom and laboratory sites located near healthcare providers and developing high-quality, career-ready graduates to enter the workforce ready to meet the demands of the healthcare industry. In addition, we have provided certain services to a university partner to assist them in expanding their online graduate programs. As of December 31, 2025, GCE provided education services to 20 university partners across the United States.
The decisions made by the Compensation Committee and the Board on the compensation of our named executive officers reflect their role in the organic growth of the Company during 2025, which included increased enrollment growth, revenue growth and margin expansion, all while navigating through the continuing impacts that a declining number of high school graduates attending college and a tight job market have had on our ability to grow and operate our business.
43
Table of Contents
Our Compensation Practices Highlights
The following summarizes key aspects of our compensation policies and programs:
What We Do: | | What We Don’t Do: | ||
◻ | We Pay for Performance. A significant portion of our cash compensation is based on achievement of key financial metrics that are disclosed to our stockholders. | ◻ | We Do Not Have Tax Gross-Ups. We do not provide tax gross-ups on any severance or change-in-control type payments. | |
◻ | We Seek Alignment with Our Stockholders. We require both our named executive officers and our directors to maintain a meaningful ownership stake at levels specified in our stock ownership policy. | ◻ | We Do Not Permit Hedging, Short Sales, or Pledging. Under our insider trading policy, our officers and directors are prohibited from hedging, effecting short sales of, and (except in extremely limited circumstances) pledging our stock. | |
◻ | We Balance Our Incentive Compensation. Our incentive compensation programs provide a balance of short-term cash incentives that are based on achievement of annual financial metrics and time-based equity incentives that vest over five years and provide value as a long-term retention tool. | ◻ | We Do Not Automatically Increase Salaries or Bonuses. Our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer have not accepted base salary increases in over ten years, and their bonuses are strictly performance based. | |
◻ | We Can Claw Back Compensation. We have the ability to recoup incentive compensation if the Company’s financial results are restated or materially misstated due in whole or in part to misconduct by one or more of our named executive officers. | ◻ | We Do Not Provide Excessive Perquisites. Our named executive officers receive limited perquisites and benefits. | |
◻ | We Retain an Independent Compensation Consultant: Our Compensation Committee engages an independent consultant from time to time to provide guidance on peer group composition and compensation levels. | ◻ | We Do Not Provide for Change of Control Acceleration. We do not provide “single-trigger” accelerated vesting of equity-based awards upon a change in control. | |
Response to Advisory Vote on Executive Compensation
We have held stockholder advisory votes on the compensation of our named executive officers, commonly referred to as a Say-on-Pay vote, since 2011 and, in each case, our stockholders approved the compensation of our named executive officers by wide margins, including receiving the support of 93.7% of shares voted in 2025. As we evaluate our compensation practices in light of such votes, we give great consideration to the strong support our stockholders continue to express for our overall compensation philosophy and practices. As a result, our Compensation Committee retained our general approach to executive compensation in 2025 and into 2026, as discussed below.
Compensation Philosophy and Objectives
We believe our executive pay is reasonable and provides appropriate incentives to our executives to achieve our financial and strategic goals without encouraging them to take excessive risks in their business decisions. We regularly evaluate the major risks to our business, including how risks taken by management could impact the amount and value of the compensation that our executives receive. To this end, we continue practices that are considered standard for good corporate governance and executive compensation, including:
| ● | Strong alignment between company-wide performance and payouts under our annual cash incentive plan (“Annual Cash Incentive Plan”); |
| ● | The absence of any guaranteed cash bonuses; |
| ● | As a tool to retain key personnel, all stock-based awards are subject to five-year vesting periods, with 20% of each grant vesting annually on each of the first five anniversaries of the date of grant; |
| ● | Severance arrangements with our named executive officers that are limited to one year of compensation and benefits and limited acceleration of vesting; and |
44
Table of Contents
| ● | Double-trigger change-in-control arrangements with our named executive officers. |
In light of the foregoing factors and practices, we believe our executive compensation in fiscal year 2025 appropriately reflected the economic and regulatory environments, the performance of the Company and the relationship with market compensation necessary to retain and motivate our executives, and that the continuation of these practices in 2026 is appropriate given the continued regulatory, economic and competitive challenges that we expect to face.
A Note About the Compensation of Our Management Team
Over the years, the Compensation Committee has periodically engaged an independent compensation consultant to provide recommendations regarding executive compensation consistent with the Company’s business needs, pay philosophy, market trends and latest legal and regulatory considerations; provide market data for base salary, short-term incentive and long-term incentive decisions; and advise the Compensation Committee as to best practices. Recent analyses of peer group data show that our named executive officers are compensated well below their peers. The reasons for this are twofold:
| ● | As of December 31, 2025, each of our executive officers has been with the Company for a decade or more and, overall, our top management ranks have been extremely stable over time. This means that the compensation structure has not been forced to re-set due to the hiring of new management level personnel; and |
| ● | In the area of compensation, our senior executives firmly believe that compensation should be based on performance: thus, base salaries should be relatively stable, cash bonuses should reflect annual performance, and equity incentives should be granted in appropriate amounts and provide upside value only if that value is shared by all of our stockholders. |
This belief has been backed up by actions, as our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer have not accepted base salary increases in over ten years, even though their cash compensation substantially lags behind peers. In addition, the grant date value of their annual long-term equity incentive grants substantially lags behind peers. The Compensation Committee applauds the leadership and performance of our executive management team and the example they set for the Company.
Overview of 2025 Executive Compensation
The purpose of this Compensation Discussion and Analysis is to provide information about each material element of compensation that we pay or award to, or that is earned by, our named executive officers.
This Compensation Discussion and Analysis addresses and explains the compensation practices we followed in 2025, the numerical and related information contained in the summary compensation and related tables presented below, and actions we have taken regarding executive compensation since the end of our 2025 fiscal year. Specifically, this Compensation Discussion and Analysis addresses:
| ● | The objectives of our compensation program (found in the section titled “Objectives of Compensation Programs”); |
| ● | What our compensation program is designed to reward (also described in the section titled “Objectives of Compensation Programs”); |
| ● | Each element of compensation (set forth in the section titled “Compensation Program Design and Elements of Compensation”); |
| ● | Why each element was chosen (described with each element of compensation, including base pay, short-term incentives and long-term incentives); |
| ● | How amounts and formulas for pay are calculated and determined (also described with each element of compensation, including base pay, short-term incentives and long-term incentives); and |
| ● | How each compensation element and our decisions regarding that element fit into our overall compensation objectives and affect decisions regarding other elements (described with each element of compensation). |
45
Table of Contents
Compensation Determinations
All of our named executive officers who appear in the Summary Compensation Table are parties to employment agreements. With respect to each named executive officer, the level of base salary to be paid to those officers over the term of their respective employment agreements and their individual target bonus percentages were initially determined as part of the negotiation process relating to such agreements and are subject to annual review by the Compensation Committee.
Our Compensation Committee’s charter empowers it to set all compensation, including, but not limited to, salary, bonus, incentive compensation, equity awards, benefits and perquisites, for our named executive officers. Our Compensation Committee makes such determinations with respect to our Chief Executive Officer and, for all other executive officers, makes such determinations in consultation with our Chief Executive Officer. For additional information regarding the Compensation Committee, please see the section titled “Corporate Governance and Board Matters — Committees of Our Board of Directors — Compensation Committee.”
Objectives of Compensation Programs
We pay our executive officers based on company-wide business performance, subject to adjustment based on their achievement of individual performance goals, and, in setting compensation levels, we take into consideration our past practices, our current and anticipated future needs, and the relative skills and experience of each individual executive.
Compensation philosophy. Under our compensation philosophy, a named executive officer’s total compensation will vary based on the Company’s overall performance, as well as the Compensation Committee’s assessment of the particular named executive officer’s personal performance and contribution to our overall results. This philosophy generally applies to all of our employees, although the degree of variability and compensation at risk increases as an employee’s function and level of responsibility increases. Our overall goals in implementing this philosophy are to attract, motivate, and retain highly qualified individuals responsible for guiding us and creating value for our investors.
Compensation objectives. We believe that the compensation program we follow helps us achieve the following objectives:
| ● | Compensation should be related to performance. We believe that the performance-based portion of an individual’s total compensation should increase as the individual’s business responsibilities increase. Thus, a material portion of executive compensation is linked to our financial performance, which also serves to align the named executive officers’ interests with those of our stockholders. |
| ● | Compensation should be competitive and cost effective. We believe that our compensation program should foster an innovative, high integrity, and performance-oriented culture that serves to attract, motivate, and retain executives and other key employees with the appropriate skill sets to lead us through expected future growth in a dynamic, competitive, and highly regulated environment. Accordingly, we seek to provide compensation, in amounts and based on performance targets, necessary to achieve these goals and which is of fair value relative to other positions at the Company. |
Company compensation policies. During 2025, our named executive officers’ total in-service compensation consisted of base salaries, cash bonuses, share-based compensation, and other benefits generally available to all employees. With regard to these components, we adhere to the following compensation policies:
| ● | Cash should be a significant component of compensation. The Company’s compensation policy focuses on providing the opportunity for its named executive officers to earn total cash compensation at levels that enable the Company to achieve the motivation and retention goals described above. |
| ● | Base salaries should generally be the largest component of cash compensation. Our compensation programs generally reflect our view that base salaries reflect compensation for the named executive officers to perform the essential elements of their respective jobs, and that cash bonuses are a reward for superior company performance. In this regard, absent clear outperformance of financial goals, for all of our named executive officers other than our Chief Executive Officer, base salary should generally be the largest component of cash compensation. |
46
Table of Contents
| ● | Cash incentives should be linked to performance. Under our Annual Cash Incentive Plan, bonuses paid to our named executive officers are based on overall company financial performance, but are subject to reduction based on the Compensation Committee’s assessment of the particular named executive officer’s personal performance and contribution to our overall results. |
| ● | Equity awards should be utilized as a means to retain key management and to align their interests with those of our stockholders. We utilize time-based equity awards that vest ratably over five years. We believe a long vesting period encourages retention and focuses our management team on the long-term interests of our Company and stockholders. |
We believe our policies have helped us achieve our compensation objectives of attracting, motivating, retaining, and rewarding our key officers.
Compensation Programs Design and Elements of Compensation
We choose to pay each element of compensation to further the objectives of our compensation program, which, as noted, include the need to attract, motivate, retain, and reward key leaders critical to our success by providing competitive total compensation.
Elements of In-Service Compensation. For our 2025 fiscal year, our executive compensation mix included base salaries, performance-based cash bonuses, share-based compensation with vesting periods, and other benefits generally available to all employees. We seek to compensate our named executive officers at levels that eliminate the need for material perquisites and enable each individual officer to provide for his or her own needs, and in 2025, we did not provide any perquisites to our named executive officers. We generally determine the nature and amount of each element of compensation as follows:
| ● | Base salary. We typically agree upon a base salary with a named executive officer at the time of initial employment. The amount of base salary agreed upon, which is not at risk, reflects our views as to the individual executive’s past experience, future potential, knowledge, scope of anticipated responsibilities, skills, expertise, and potential to add value through performance, as well as competitive industry salary practices. Although minimum base salaries for each of our current named executive officers are set by their respective employment agreements, as described below, we review executive officer salaries annually and may increase them based on an evaluation of the Company’s performance for the year and the performance of the functional areas under a named executive officer’s scope of responsibility. We also consider qualitative criteria, such as education and experience requirements, complexity, and scope or impact of the position compared to other executive positions internally. |
| ● | Bonuses. We provide cash bonuses, which typically are at-risk, to recognize and reward our named executive officers based on our success in a given year. For 2025, we awarded performance-related bonuses under our Annual Cash Incentive Plan. The operation of this plan as it relates to our named executive officers is described in more detail below. |
| ● | Share-based compensation. We make equity incentive grants pursuant to our 2017 Plan. In 2025, our named executive officers received grants of restricted stock under the 2017 Plan, as part of an overall, annual equity incentive grant made to Company employees. |
| ● | Other. We offer other employee benefits to named executive officers for the purpose of meeting current and future health and security needs for the executives and their families. These benefits, which we generally offer to all eligible employees, include medical, dental, and life insurance benefits; short-term disability pay; long-term disability insurance; flexible spending accounts for medical expense reimbursements; a 401(k)-retirement savings plan; and tuition benefits for a spouse or up to two children with no more than two participants receiving the benefits at any one time. The 401(k)-retirement savings plan is a defined contribution plan under Section 401(a) of the Internal Revenue Code of 1986 (the “Code”), into which employees may make pre-tax contributions into the plan, expressed as a percentage of compensation, up to prescribed IRS annual limits, with such contributions subject to a matching Company contribution up to prescribed limits. Other than the 401(k) plan, we do not provide any qualified or non-qualified retirement or deferred compensation benefits to our employees, including our named executive officers. |
47
Table of Contents
Elements of Post-Termination Compensation and Benefits. The employment agreements of our named executive officers provide for post-termination salary and benefit continuation in the event of a termination by us without Cause (as defined below) or by the executive for Good Reason (as defined below) or in the event of any such termination within twelve (12) months following a Change in Control (as defined below), and for so long as the named executive officer abides by customary confidentiality, non-competition, and non-solicitation covenants and executes a full release of all claims, known or unknown, that the executive may have against the Company. We believe that the amounts of these payments and benefits and the periods of time during which they would be provided are fair and reasonable, and we have not historically taken into account any amounts that may be received by a named executive officer following termination when establishing current compensation levels. The elements of post-termination compensation that were in effect during 2025 pursuant to the written employment agreements consisted of the following:
| ● | Salary continuation. Each named executive officer would continue to receive 100% of their base salary payable over a period of twelve (12) months following any qualifying termination of employment. |
| ● | Payment of target bonus. Each named executive officer would receive an additional amount equal to 100% of the named executive officer’s annual target bonus for the year in which such termination occurs, with such amount also payable over twelve (12) months following any qualifying termination of employment. |
| ● | Benefits continuation. Each named executive officer would continue to receive Company-paid premiums for continued group health benefits under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) during the severance period. |
| ● | Partially accelerated vesting of equity incentives. Each named executive officer would receive partial acceleration of the vesting of any outstanding restricted stock awards to the next annual vesting date immediately following the date of termination. |
| ● | Fully accelerated vesting of equity incentives. In the event of a termination by us without Cause or by the executive for Good Reason within twelve (12) months following a Change in Control, each named executive officer would receive full acceleration of the vesting of their outstanding restricted stock awards. |
See the sections titled “Executive Employment Agreements” and “Potential Payments Upon Termination or Change in Control” for additional detail.
Impact of Performance on Compensation
For 2025, each of our named executive officers participated in the Annual Cash Incentive Plan, other than Ms. Claypatch (who participated in the Senior Management Plan as further described below). Under the Annual Cash Incentive Plan as in effect for 2025, a named executive officer’s bonus is based on the Company’s achievement of revenue and Adjusted EBITDA targets, with the resulting amount subject to reduction based on the Compensation Committee’s assessment of the particular named executive officer’s personal performance and contribution to our overall results. For 2025, we defined Adjusted EBITDA for purposes of the Annual Cash Incentive Plan in a manner consistent with the definition we use when reporting our financial results. See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations – Adjusted EBITDA (Non- GAAP Financial Measure), beginning on page 58 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for information regarding our use and calculation of Adjusted EBITDA. As such, we believe it is fair and reasonable to our executives to assess their individual performance on the same basis as our performance is assessed by our Board of Directors and investors.
Company performance. For our named executive officers on the Annual Cash Incentive Plan, the financial metrics account for 100% of the target bonus, with the resulting amount subject to reduction based on the Compensation Committee’s assessment of the particular named executive officer’s personal performance and contribution to our overall results. For other plan participants on the Senior Management Plan (as defined below), the financial metrics account for 60% of the target bonus and specific individual performance goals account for 40% of the target bonus.
Individual performance. In reviewing individual performance, we look at an executive’s achievement of non-financial objectives that, with respect to a given participant, may include achieving objectives related to, among other things, program development and expansion, regulatory compliance, student retention and academic outcomes.
48
Table of Contents
Calculation of bonuses. For each named executive officer on the Annual Cash Incentive Plan, the Compensation Committee establishes a target bonus, which is stated as a percentage of the named executive officer’s base salary. For 2025, the bonus opportunity as a percentage of base salary for each of the named executive officers on the Annual Cash Incentive Plan was as follows:
| Bonus Opportunity as a |
| |||||
Name(1) | Threshold | Target | Maximum | ||||
Brian E. Mueller | 50.0 | % | 100.0 | % | 150.0 | % | |
Dr. W. Stan Meyer | 37.5 | % | 75.0 | % | 112.5 | % | |
Daniel E. Bachus | 37.5 | % | 75.0 | % | 112.5 | % | |
Dilek Marsh | 16.5 | % | 33.1 | % | 49.6 | % | |
For these executive officers, the financial metrics account for 100% of the target bonus, with the revenue target and the Adjusted EBITDA target accounting for 50% each. The actual percentage is determined on the basis of the Company’s achievement of the revenue and Adjusted EBITDA targets that the Compensation Committee establishes for the applicable fiscal year. For participants to earn any payout under the plan, the Company must achieve at least the threshold targets established for both the revenue and Adjusted EBITDA goals. Assuming both of these thresholds are achieved, payouts are made based on the Company’s achievement of the revenue goal and Adjusted EBITDA goal, with achievement of both goals at the threshold level resulting in a bonus of 50% of the target bonus and achievement of both goals at the maximum level resulting in a bonus of 150% of the target bonus. Performance between threshold and maximum levels results in prorated payments using straight-line interpolation.
Shown below is a summary of the matrix described above:
Goal | | Achievement of Financial Metric at Threshold Level | | Achievement of Financial Metric at Target Level | | Achievement of Financial Metric at Maximum Level |
Revenue goal (50.0% of financial metric) | 50% of target bonus attributable to goal | 100% of target bonus attributable to goal | 150% of target bonus attributable to goal | |||
Adjusted EBITDA (50.0% of financial metric) | 50% of target bonus attributable to goal | 100% of target bonus attributable to goal | 150% of target bonus attributable to goal | |||
Bonus payout as a % of target bonus | 50% | 100% | 150% |
Under the Annual Cash Incentive Plan, the actual bonus that a named executive officer could earn for a given fiscal year ranges from 0% to a maximum of 150% of his or her annual target bonus. To illustrate how the plan functions, assume that a named executive officer’s base salary for 2025 is $300,000 and that the target bonus is 50% of base salary. Of this target bonus of $150,000, $75,000 (or 50%) would be paid based upon the Company’s achievement of the revenue target and $75,000 (or 50%) would be paid based on the Company’s achievement of the Adjusted EBITDA target. If the revenue target is achieved at the threshold level (so only 50% of the revenue component of the bonus is payable at that level) and the Adjusted EBITDA target is achieved at the target level (so that 100% of the Adjusted EBITDA component of the bonus is payable at that level) the participant would be entitled to a potential bonus of $112,500, calculated as $37,500 (50% of the revenue component) plus $75,000 (100% of the Adjusted EBITDA component).
The plan for eligible senior management (the “Senior Management Plan”), in which Ms. Claypatch participated in 2025, 2024 and 2023, differs from the Annual Cash Incentive Plan in that it includes achievement of individual performance targets as a primary element of the bonus calculation, such that achievement of revenue and Adjusted EBITDA targets each account for 30% of target bonus opportunity and the achievement of individual performance targets accounts for 40% of target bonus opportunity. In addition, for eligible senior management participating in this plan, the bonus under the Senior Management Plan is calculated based on two six-month cycles, such that the determination of the bonus payable for each half of the applicable year is determined on the basis of the achievement of the revenue, Adjusted EBITDA and individual performance targets established for each such period.
49
Table of Contents
Changes to performance goals and target awards. In accordance with the terms of the Annual Cash Incentive Plan, at any time prior to the final determination of bonuses earned, the Compensation Committee may adjust the performance goals and target awards to reflect a change in corporate capitalization (such as a stock split or stock dividend), or a corporate transaction (such as a merger, consolidation, separation, reorganization or partial or complete liquidation), or to reflect equitably the occurrence of any extraordinary event (including the financial impacts of a unique circumstance), any change in applicable accounting rules or principles, any change in the Company’s method of accounting, any change in applicable law, or any other change of a similar nature. In addition, under the Annual Cash Incentive Plan, the Compensation Committee may reduce (but not increase) the bonus amount for each named executive officer based on the committee’s determination of the participant’s achievement of personal and other performance goals established by the Compensation Committee and other factors as the committee determines.
2025 financial goals. The following table shows the Company-wide financial goals established for the named executive officers for 2025. These financial goals were selected based upon a combination of the Company’s internal budget and analyst estimates, which the Compensation Committee believes establishes an appropriate level at which to set goals in order to maximize the incentive for superior performance.
| Threshold | | Target | | Maximum | ||||
Revenue | $ | 1,077,750,000 | $ | 1,085,750,000 | $ | 1,093,750,000 | |||
Adjusted EBITDA | $ | 351,600,000 | $ | 359,600,000 | $ | 367,600,000 | |||
Actual performance vs. compensation paid for 2025. For 2025, the Company achieved revenue of $1,106.1 million and Adjusted EBITDA of $368.6 million, both of which exceeded the maximum level of achievement, resulting in performance payout percentages for our named executive officers (other than Ms. Claypatch) under the Annual Cash Incentive Plan equal to 150.0% for the revenue component of the incentive bonus and 150.0% for the Adjusted EBITDA component of the incentive target bonus. Accordingly, the named executive officers achieved incentive bonuses as follows:
Name | | Revenue | | Adjusted | | 2025 Bonus as | | 2025 Bonus | | 2025 | |
Brian E. Mueller | 150.0 | % | 150.0 | % | 150.0 | % | 150.0 | % | $ | 481,500 | |
Dr. W. Stan Meyer | 150.0 | % | 150.0 | % | 150.0 | % | 112.5 | % | $ | 438,750 | |
Daniel E. Bachus | 150.0 | % | 150.0 | % | 150.0 | % | 112.5 | % | $ | 438,750 | |
Dilek Marsh | 150.0 | % | 150.0 | % | 150.0 | % | 49.6 | % | $ | 165,000 | |
2025 individual goals. The individual performance goals applicable to the named executive officers in 2025 focused on each executive’s achievement of one or more objectives that related to their specific duties and responsibilities on behalf of the Company. These individual goals included:
| ● | For Dr. Meyer and Mr. Bachus, collectively: to manage their individual departments within budget. |
| ● | For Mr. Mueller, Dr. Meyer and Mr. Bachus, collectively: to work on key strategic initiatives for the Company including the future growth of the hybrid healthcare partnerships with new and existing university partners and new off-campus classroom and laboratory sites, continue to achieve growth goals set by our most significant partner and participate in a specified number of investor conferences and/or investor meetings. |
| ● | For Mr. Mueller, Dr. Meyer and Mr. Bachus: to lead the Company’s corporate responsibility initiatives, including its efforts in expanding its environmental awareness, social responsibility and human capital, and governance initiatives. |
| ● | For Dr. Meyer: to demonstrate leadership over key functional areas such as marketing, online operations and campus operations. |
| ● | For Mr. Bachus: to manage the financial and reporting functions to ensure that no material weaknesses occurred within the Company’s financial reporting structure. |
50
Table of Contents
| ● | For Ms. Marsh: to manage process improvements, manage data reporting and analytics for the company and our university partners, and manage the full development lifecycle of software tools necessary for operations teams in the Company to help educate, manage and support students. |
Based on each individual named executive officer’s achievement or substantial achievement of their individual performance goals, and in light of the superior financial performance achieved by the Company in 2025, the Compensation Committee determined that cash bonuses under the Annual Cash Incentive Plan should be paid out at the level achieved as a result of the achievement of the Company-wide financial goals, and that no reductions were otherwise merited.
Bonus Paid to Ms. Claypatch. Ms. Claypatch earned an annual cash incentive bonus under the Senior Management Plan for 2025. Ms. Claypatch’s goals under the Senior Management Plan included managing departments within budget, elevating cloud security, enhancing off-campus classroom and laboratory technology services, researching artificial intelligence uses and managing internal software development projects. Based on the financial performance of the Company during 2025 and the percentage of her individual goals determined to be achieved, Ms. Claypatch was awarded a bonus of $45,430, which was equal to approximately 25.9% of her base salary during the first half of 2025. Ms. Claypatch resigned from her position within the Company effective October 30, 2025. In accordance with the Senior Management Plan, no bonus was paid for the second half of 2025 due to her resignation.
2017 Equity Incentive Plan
The following table provides information as of December 31, 2025, with respect to shares of our common stock that may be issued under our existing equity compensation plan:
Equity Compensation Plan Information
Number of | ||||||||
securities | ||||||||
Weighted | remaining | |||||||
Number of securities | average | available | ||||||
to be | exercise price of | for future | ||||||
issued upon exercise | outstanding | issuance under | ||||||
of | options, | equity | ||||||
outstanding options, | warrants and | compensation | ||||||
Plan Category | | warrants and rights | | rights | | plans | ||
Equity Compensation Plans Approved by Securityholders | — | $ | 0.00 | 873,041 (1) | ||||
Equity Compensation Plans Not Approved by Securityholders | None | — | None | |||||
Total | — | $ | 0.0 | 873,041 (1) | ||||
New Equity Incentive Plan
At the Annual Meeting, stockholders will be asked to approve the new 2026 Plan. The Board of Directors adopted the 2026 Plan on April 21, 2026, subject to and effective upon its approval by our stockholders. The 2026 Plan is intended to replace the 2017 plan, which would otherwise terminate automatically on the tenth anniversary of its initial adoption in June 2017. If the stockholders approve the 2026 Plan, it will become effective on the day of the Annual Meeting, and no further awards will be granted under the 2017 plan, which will be terminated. See “Proposal No. 2 – Approval of 2026 Equity Incentive Plan.”
Equity Award Grant Policy
Our Board of Directors has approved a policy relating to the granting of stock options and other equity-based awards. Under this policy:
| ● | All stock option grants, restricted stock awards, and other equity based awards, which we collectively refer to as stock-based awards, must be approved by the Compensation Committee; |
| ● |
51
Table of Contents
| ● | The Compensation Committee will approve stock-based grants only for persons specifically identified at the meeting by management. |
Since 2011, our equity awards have consisted solely of time-based restricted stock grants. If, in the future, we determine to grant stock options or other similar stock-based awards, we will only approve such stock-based grants (i) during open quarterly windows under the Company's Insider Trading Policy (subject to limited exceptions under the Policy) and (ii) when the Company otherwise does not have possession of material nonpublic information, whether qualitative or quantitative.
Severance and Change in Control Arrangements
Our named executive officers are eligible for severance payments and benefits in the event of an involuntary termination of employment without “cause” or for “good reason,” as well as certain benefits in connection with a change in control of the Company. Our named executive officers are also eligible for “double trigger” severance payments and benefits in the event of an involuntary termination of employment without “cause” or a termination of employment with “good reason” in connection with, or within twelve (12) months immediately following, a change in control of the Company. Our equity awards are also designed to be “double trigger,” so long as such awards are allowed to continue in effect following any change in control transaction on substantially equivalent terms and conditions to those applicable prior to such transaction. For detailed information on the estimated potential payments and benefits payable to the named executive officers in the event of their termination of employment, including following a change in control of the Company, see the section titled “Potential Payments Upon Termination or Change in Control.”
Perquisites and Other Personal Benefits
We generally do not provide our named executive officers with perquisites or other personal benefits, except for Company paid life insurance and a 401(k) plan match, both of which are available to employees of the Company generally. The value of these benefits is reported in the Summary Compensation Table. We generally do not provide tax reimbursements or any other tax payments, including excise tax “gross-ups,” to any of our executive officers.
Clawback Policy
The clawback policy is compliant with Exchange Act Rule 10D-1 and Nasdaq Listing Rule 5608. On October 25, 2023, the Board of Directors adopted the Recovery of Erroneously-Awarded Incentive Compensation Policy (the “Revised Clawback Policy”) in order to comply with Section 10D of the Exchange Act and the listing standards adopted by Nasdaq. Effective October 25, 2023, the Revised Clawback Policy, which replaced in its entirety a prior clawback policy originally adopted in January 2017, provides for the mandatory recovery of all Erroneously Awarded Compensation (as defined in the policy) from current and former executive officers of the Company in the event that the Company is required to prepare an accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.
Role of the Compensation Consultant
The Compensation Committee has the sole authority, delegated from the Board of Directors, to appoint, compensate and oversee the work of an independent compensation consultant. Historically, the Compensation Committee has retained Mercer as its consultant to assist the Compensation Committee with its responsibilities related to our executive compensation programs. The Compensation Committee did not utilize Mercer’s services in 2025.
Effect of Accounting and Tax Treatment on Compensation Decisions
Internal Revenue Code Section 409A
Section 409A of the Code requires that “nonqualified deferred compensation” be deferred and paid under plans or arrangements that satisfy the requirements of the statute with respect to the timing of deferral elections, timing of payments and certain other matters. Failure to satisfy these requirements can expose employees and other service
52
Table of Contents
providers to accelerated income tax liabilities, penalties and interest on their vested compensation under such plans. Accordingly, as a general matter, it is our intention to design and administer our compensation and benefits plans and arrangements for all of our employees and other service providers, including our named executive officers, so that they are either exempt from, or satisfy the requirements of, Section 409A. With respect to our compensation and benefit plans that are subject to Section 409A, in accordance with Section 409A and regulatory guidance issued by the Internal Revenue Service, we believe we are currently operating such plans in compliance with Section 409A.
Accounting Standards
Grants of equity awards under our equity plan are recognized as compensation expense for the fair value of equity-based compensation awards. The Compensation Committee considers the accounting implications of significant compensation decisions, including in connection with decisions that relate to our equity award programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.
Conclusion
We believe that the compensation amounts paid to our named executive officers for their service in 2025 were reasonable and appropriate and in our best interests.
Compensation Policies and Practices as Related to Risk Management
In connection with the preparation of this Proxy Statement, our Compensation Committee reviewed and discussed our compensation policies and practices for senior management, including our named executive officers. In this regard, the Compensation Committee took note of the fact that:
| ● | We pay base salaries we believe are competitive and that are generally intended to constitute the largest component of cash compensation. We believe that this emphasis on paying competitive base salaries that are not at risk for performance discourages inappropriate risk taking; |
| ● | Our Annual Cash Incentive Plan focuses on the achievement of company-wide revenue and Adjusted EBITDA targets, which prevents participants from being able to materially enhance their bonus prospects through excessive or inappropriate risk-taking; |
| ● | The cash payments that may be made to our named executive officers under the Annual Cash Incentive Plan are subject to stated maximum limits, which we believe mitigates any risks that our named executive officers may take; and |
| ● | The equity grants made to our named executive officers, and all other employees, under our 2017 Plan all vest in annual increments over a period of five years, which we believe discourages excessive or inappropriate short-term risk taking. |
Based on that review, and with input from management, the Compensation Committee has determined that there are no known potential risks arising from our compensation policies or practices that are reasonably likely to have a material adverse effect on us.
53
Table of Contents
Compensation of Named Executive Officers
Summary Compensation Table
The following table sets forth the total compensation earned for services rendered by our named executive officers for the fiscal year ended December 31, 2025, 2024 and 2023. In accordance with the rules promulgated by the SEC, certain columns relating to information that is not applicable have been omitted from this table.
Name and Position | | Year | | Salary | | Stock | | Non-Equity | | All Other | | Total | |||||
Brian E. Mueller | |||||||||||||||||
Chief Executive Officer and Chairman | 2025 | $ | 321,000 | $ | 1,211,668 | $ | 481,500 | $ | 6,699 | $ | 2,020,867 | ||||||
(Principal Executive Officer) | 2024 | $ | 321,000 | $ | 1,211,483 | $ | 467,597 | $ | 6,699 | $ | 2,006,779 | ||||||
2023 | $ | 321,000 | $ | 1,211,643 | $ | 481,500 | $ | 2,744 | $ | 2,016,887 | |||||||
Dr. W. Stan Meyer | 2025 | $ | 390,000 | $ | 646,603 | $ | 438,750 | $ | 6,893 | $ | 1,482,246 | ||||||
Chief Operating Officer | 2024 | $ | 390,000 | $ | 646,421 | $ | 426,081 | $ | 6,833 | $ | 1,469,335 | ||||||
2023 | $ | 390,000 | $ | 646,578 | $ | 438,750 | $ | 6,653 | $ | 1,481,981 | |||||||
Daniel E. Bachus | 2025 | $ | 390,000 | $ | 646,603 | $ | 438,750 | $ | 1,754 | $ | 1,477,107 | ||||||
Chief Financial Officer | 2024 | $ | 390,000 | $ | 646,421 | $ | 426,081 | $ | 938 | $ | 1,463,440 | ||||||
(Principal Financial Officer) | 2023 | $ | 390,000 | $ | 646,578 | $ | 438,750 | $ | 938 | $ | 1,476,266 | ||||||
Dilek Marsh | 2025 | $ | 332,505 | $ | 450,014 | $ | 165,000 | $ | 4,989 | $ | 952,508 | ||||||
Chief Information Officer | 2024 | $ | 322,821 | $ | 449,883 | $ | 160,236 | $ | 4,905 | $ | 937,845 | ||||||
2023 | $ | 313,418 | $ | 450,019 | $ | 165,000 | $ | 4,441 | $ | 932,878 | |||||||
Kathy J. Claypatch (5) | 2025 | $ | 292,456 | $ | 252,215 | $ | 45,430 | $ | 85,861 | $ | 675,962 | ||||||
Former Chief Information Officer | 2024 | $ | 322,821 | $ | 252,169 | $ | 88,999 | $ | 2,194 | $ | 666,183 | ||||||
2023 | $ | 313,418 | $ | 252,219 | $ | 90,161 | $ | 2,114 | $ | 657,912 | |||||||
| (1) | The amounts in this column reflect the base salary cash payments made in each year. |
| (2) | The amounts shown in this column reflect the compensation costs attributable to the restricted stock awards granted in 2025, 2024 and 2023. The compensation costs are based on the grant date fair value of each restricted stock award and do not take into account any estimated forfeitures related to service-based vesting conditions, if any. Assumptions used in the calculation of the grant date fair value of each restricted stock award granted during the 2025, 2024, and 2023 fiscal years are set forth in Notes 2 and 11 to our financial statements for the fiscal year ended December 31, 2025 included in our Annual Report on Form 10-K for the year ended December 31, 2025. |
| (3) | The amounts in this column reflect non-equity incentive payments earned pursuant to our Annual Cash Incentive Plan in 2025, 2024 and 2023, except for Ms. Claypatch in 2025, 2024 and 2023, whose non-equity incentive payments were based on the Senior Management Plan. |
| (4) | In 2025, 2024, and 2023, the amounts in this column include company paid life insurance premiums for all named executive officers. For Dr. Meyer and Ms. Marsh, the amounts in this column also reflect matching payments made by the Company under our 401(k) plan. |
| (5) | Ms. Claypatch resigned from her position with the Company effective October 30, 2025. The amounts shown for Ms. Claypatch for 2025 give effect to her base salary of $335,892 prorated based on her last day of employment. . In addition to company paid life insurance premiums, the amount included in All Other Compensation consists of a lump sum payment of $83,973 that we made to Ms. Claypatch to resolve claims for severance that were raised following her resignation. Additionally, pursuant to the Senior Management Plan no bonus was payable to Ms. Claypatch for the second half of 2025 due to her resignation. |
54
Table of Contents
2025 Grants of Plan-Based Awards
The following table sets forth certain information with respect to incentive plan awards under our Annual Cash Incentive Plan and our 2017 Plan for the fiscal year ended December 31, 2025 to each of our named executive officers:
Estimated Future Payouts Under Non- | ||||||||||||||||
Name | | Grant Date | | Threshold($) | | Target | | Maximum | | All Other | | Grant Date | ||||
Brian E. Mueller | — | $ | 160,500 | $ | 321,000 | $ | 481,500 | — | — | |||||||
January 29, 2025 | — | — | — | 7,014 | $ | 1,211,668 | ||||||||||
Dr. W. Stan Meyer | — | $ | 146,250 | $ | 292,500 | $ | 438,750 | — | — | |||||||
January 29, 2025 | — | — | — | 3,743 | $ | 646,603 | ||||||||||
Daniel E. Bachus | — | $ | 146,250 | $ | 292,500 | $ | 438,750 | — | — | |||||||
January 29, 2025 | — | — | — | 3,743 | $ | 646,603 | ||||||||||
Dilek Marsh | — | $ | 55,000 | $ | 110,000 | $ | 165,000 | — | — | |||||||
January 29, 2025 | — | — | — | 2,605 | $ | 450,014 | ||||||||||
Kathy J. Claypatch | — | — | — | — | — | — | ||||||||||
January 29, 2025 | — | — | — | 1,460 | $ | 252,215 | ||||||||||
| (1) | These amounts reflect the Threshold, Target and Maximum bonuses payable to our named executive officers under our Annual Cash Incentive Plan or Senior Management Plan, as applicable (based on their base salaries as in effect at year end). All such awards have been paid, and the actual amounts paid are set forth in the Summary Compensation Table above. Ms. Claypatch did not have threshold, target or maximum amounts due to her resignation in October 2025. |
| (2) | The amounts shown in this column reflect the compensation costs attributable to the restricted stock awards granted in 2025. The compensation costs are based on the grant date fair value of each restricted stock award and do not take into account any estimated forfeitures related to service-based vesting conditions, if any. Assumptions used in the calculation of the grant date fair value of each restricted stock award granted during 2025 are set forth in Notes 2 and 11 to our financial statements for the fiscal year ended December 31, 2025 included in our 2025 Annual Report on Form 10-K. |
2025 Outstanding Equity Awards at Fiscal Year-End
The following table provides certain summary information concerning outstanding unvested restricted stock awards held by the named executive officers as of December 31, 2025. The Company does not have any outstanding stock options or other types of equity incentive awards.
Stock Awards | |||||
Name | | Number of | | Market Value | |
Brian E. Mueller | 29,535 | $ | 4,911,966 | ||
Dr. W. Stan Meyer | 15,760 | $ | 2,621,046 | ||
Daniel E. Bachus | 15,760 | $ | 2,621,046 | ||
Dilek Marsh | 10,900 | $ | 1,812,779 | ||
Kathy J. Claypatch | 0 | $ | 0 | ||
55
Table of Contents
| (1) | The restricted stock awards granted to Mr. Mueller, Dr. Meyer, Mr. Bachus and Ms. Marsh vest in five successive equal annual installments upon the completion of each year of service with us over the five year period measured from the respective date of grant, subject to fully accelerated vesting in the event of a termination of employment without Cause or by the executive for Good Reason (each as defined and discussed below) within twelve (12) months following a change in control of the Company. Mr. Mueller, Dr. Meyer, Mr. Bachus and Ms. Marsh also receive partial accelerated vesting through the next annual vesting date immediately following the date of termination, upon the termination of employment by us without Cause or by the executive for Good Reason (as further discussed below). The following table sets forth the vesting schedule of the shares of restricted stock reported in this column for each named executive officer: |
Vesting Date | Brian E. Mueller | Dr. W. Stan Meyer | Daniel E. Bachus | Dilek Marsh | |
March 1, 2026 | 11,143 | 5,946 | 5,946 | 4,069 | |
March 1, 2027 | 8,325 | 4,442 | 4,442 | 3,092 | |
March 1, 2028 | 5,405 | 2,884 | 2,884 | 2,008 | |
March 1, 2029 | 3,259 | 1,739 | 1,739 | 1,210 | |
March 1, 2030 | 1,403 | 749 | 749 | 521 |
| (2) | The market value of the unvested shares is equal to the number of shares listed multiplied by $166.31, which was the closing market price of our common stock on December 31, 2025, the last trading day of the last completed fiscal year. |
2025 Stock Vested
The following table provides certain summary information concerning restricted stock awards made to our named executive officers that vested, during the fiscal year ended December 31, 2025.
Restricted Stock Awards | ||||||
Name | | Number of Shares | | Value Realized | ||
Mr. Brian E. Mueller | 12,622 | $ | 2,269,688 | |||
Dr. W. Stan Meyer | 6,735 | $ | 1,211,088 | |||
Mr. Daniel E. Bachus | 6,735 | $ | 1,211,088 | |||
Ms. Dilek Marsh | 4,183 | $ | 752,187 | |||
Ms. Kathy J. Claypatch | 2,432 | $ | 437,322 | |||
| (1) | The value realized on vesting of restricted stock equals the closing trading price of our common stock on the date of vesting (or if such day is not a trading day, the immediately preceding trading day), multiplied by the number of shares vesting. |
Pay Ratio Disclosure
Under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to provide the ratio of the annual total compensation of Mr. Mueller, our Chief Executive Officer, to the annual total compensation of the median employee of the Company (the “Pay Ratio Disclosure”).
For 2025, our last completed fiscal year:
| ● | the annual total compensation of our median employee (other than the Chief Executive Officer) was $62,115: and |
| ● | the annual total compensation of Mr. Mueller, as reported above in the Summary Compensation Table, was $2,020,867. |
Based on this information, for 2025 the ratio of the annual total compensation of Mr. Mueller, our Chief Executive Officer, to the annual total compensation of our median employee was 32.5 to 1. |
56
Table of Contents
To identify the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee, we took the following steps:
| ● | During the 2025 fiscal year, there were no such changes in employee population or compensation arrangements generally that would significantly change our Pay Ratio Disclosure. Therefore, as permitted by Item 402(u) of Regulation S-K, we used the same median employee for 2025 that we used for our 2024 pay ratio calculation. See our proxy statement for our 2025 annual meeting of stockholders for information regarding the process we utilized to identify our “median employee.” |
| ● | We then combined all of the elements of such employee’s compensation for 2025 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $62,115. The difference between such employee’s base salary and the employee’s annual total compensation represents the employee’s overtime pay, annual bonus and company matching contributions on behalf of the employee to our 401(k) plan. Since we do not maintain a defined benefit or other actuarial plan for our employees, and do not otherwise provide a plan for payments or other benefits at, following, or in connection with retirement, the “median employee’s” annual total compensation did not include amounts attributable to those types of arrangements. |
Because the SEC rules for identifying the “median employee” and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies including companies in our peer group may not be comparable to the pay ratio reported above. Other companies may have different employment and compensation practices, different geographic breadth, perform different types of work, and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
This information is being provided for compliance purposes only. Neither the Compensation Committee nor management of the Company used the pay ratio measure in making compensation decisions.
Executive Employment Agreements
We are party to employment agreements with each of our named executive officers. Each of the agreements has a five-year term from the effective date. Prior to her resignation, Ms. Claypatch had an employment agreement with a
three-year term that automatically renewed for one-year periods after the initial term unless either party provided written
notice that it would not renew. The terms of each agreement are similar in all material respects and, among other things, provide for each executive to:
| ● | Receive a base salary and a target incentive bonus; |
| ● | Receive customary and usual fringe benefits generally available to our senior management, and to be reimbursed for reasonable out-of-pocket business expenses; and |
| ● | Receive certain benefits upon his or her termination of employment under specified circumstances. |
In addition, each of the above employment agreements provides for payments upon certain terminations of the executive’s employment, as described below.
Termination for Cause
Each of the employment agreements provides that if the named executive officer is terminated by us for “Cause,” the named executive officer will be entitled to receive only his or her base salary then in effect, prorated to the date of termination, and all fringe benefits through the date of termination, and all of such officer’s unvested options and unvested restricted stock awards will terminate. For purposes of each of the employment agreements, “Cause” is defined as (a) acts or omissions constituting gross negligence, recklessness or willful misconduct on the part of the executive with respect to the executive’s obligations or otherwise relating to the business of the Company; (b) the executive’s material breach of the employment agreement; (c) the executive’s breach of the Company’s employee nondisclosure and assignment agreement; (d) the executive’s conviction or entry of a plea of nolo contendere for fraud, misappropriation or embezzlement, or any felony or crime of moral turpitude; (e) the executive’s inability to perform the essential functions of the executive’s position, with or without reasonable accommodation, due to a mental or physical disability; (f) the executive’s willful neglect of duties as determined in the sole and exclusive discretion of the Board of Directors,
57
Table of Contents
provided that the executive has received written notice of the action or omission giving rise to such determination and has failed to remedy such situation to the satisfaction of the Board of Directors within thirty (30) days following receipt of such written notice, unless the executive’s action or omission is not subject to cure, in which case no such notice shall be required; or (g) the executive’s death.
Termination Without Cause or Termination for Good Reason
Each of the employment agreements provides that if the named executive officer’s employment is terminated by us without Cause, or by the executive for “Good Reason,” the named executive officer will be entitled to receive his or her base salary then in effect, pro-rated to the date of termination, as well as a severance package consisting of the following:
| ● | A severance payment in an amount equal to the sum of (i) twelve (12) months of the executive’s base salary then in effect on the date of termination, and (ii) 100% of the executive’s target bonus for the fiscal year in which the termination occurs, with the total of such amounts to be payable over twelve (12) months in equal installments in accordance with the Company’s regular payroll cycle, commencing with the first payroll date occurring on or after the sixtieth (60th) day following the date of the executive’s termination of employment; |
| ● | Payment by us of the premiums required to continue the executive’s group health care coverage for a period of twelve (12) months following the executive’s termination under the applicable provisions of the COBRA, provided that the executive timely elects to continue and remains eligible for these benefits under COBRA, and does not become eligible for health coverage through another employer during this period; and |
| ● | Acceleration of the vesting of the next annual installment under any outstanding restricted stock award that otherwise would have vested on the next annual vesting date following the named executive officer’s termination. |
To receive the severance package, the executive must: (i) comply with all surviving provisions of his or her agreement, including the non-competition, non-solicitation, and confidentiality provisions described below, and (ii) execute a full general release, releasing all claims, known or unknown, that executive may have against us arising out of or in any way related to executive’s employment or termination of employment with us. In addition, for options that previously vested, the executive has until the earlier of three months from the date of separation and the expiration of the applicable option to exercise such options.
For purposes of each of the employment agreements, “Good Reason” is defined as the occurrence of any of the following conditions without the executive’s written consent, which condition remains in effect ninety (90) days after the executive provides written notice to us of such condition: (a) a material reduction in the executive’s base salary as then in effect prior to such reduction, other than as part of a salary reduction program among similar management employees, (b) a material diminution in the executive’s authority, duties or responsibilities as an employee of the Company as they existed prior to such change; or (c) a relocation of the executive’s principal place of work that increases the executive’s one-way commute distance by more than fifty (50) miles; provided that the executive will be deemed to have given consent to any such condition if the executive does not provide written notice to us of his or her intent to exercise such rights within thirty (30) days following the first occurrence of such condition.
Termination Upon a Change in Control
Each of the employment agreements provides that if the named executive officer’s employment is terminated by us without Cause or by the executive for Good Reason, in each case upon or within twelve (12) months following a “Change in Control,” then, in addition to receiving his or her base salary then in effect, pro-rated to the date of termination, and the severance package described above, the named executive officer will also be entitled to acceleration of the vesting of all stock option and restricted stock awards held by such executive that have not yet vested as of the date of such termination. For purposes of each of the employment agreements, “Change in Control” is defined as any one of the following occurrences: (a) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), becomes the “beneficial owner” (as such term is defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the total fair market value or total combined voting power of our then-outstanding securities entitled to vote generally in the election of directors, provided,
58
Table of Contents
however, that a Change in Control shall not be deemed to have occurred if such degree of beneficial ownership results from any of the following: (i) an acquisition of securities by any person who on the effective date of the employment agreement was the beneficial owner of more than 50% of such voting power, (ii) any acquisition of securities directly from us including, without limitation, pursuant to or in connection with a public offering of securities, (iii) any acquisition of securities by us, (iv) any acquisition of securities by a trustee or other fiduciary under a Company employee benefit plan, or (v) any acquisition of securities by an entity owned directly or indirectly by stockholders of the Company in substantially the same proportions as their ownership of the voting securities of the Company; (b) the sale or disposition of all or substantially all of the Company’s assets (other than a sale or disposition to one or more subsidiaries of the Company), or any transaction having similar effect is consummated; (c) the Company is party to a merger or consolidation that results in the holders of voting securities of the Company outstanding immediately prior thereto failing to continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or (d) the dissolution or liquidation of the Company.
Non-Competition and Non-Solicitation Obligations
Each of the employment agreements prohibits the executives from engaging in any work that creates an actual conflict of interest with us, and includes customary non-competition and non-solicitation covenants that prohibit the executives, during their employment with us and for a period of twelve (12) months thereafter, from (a) owning (except ownership of less than 1% of any class of securities which are listed for trading on any securities exchange or which are traded in the over-the-counter market), managing, controlling, participating in, consulting with, rendering services for, being employed by, or in any manner engaging in the operation of (i) any business that develops or administers services to degree-granting institutions of higher education, or (ii) any other business of the Company in which the executive had significant involvement prior to the executive’s separation; (b) inducing or attempting to induce any employee of the Company to leave the employ of the Company, or in any way interfering with the relationship between the Company and any employee thereof; or (c) inducing or attempting to induce any customer, supplier, licensee or other business relation of the Company to cease doing business with, or modify its business relationship with, the Company, or in any way interfering with or hindering the relationship between any such customer, supplier, licensee or business relation and the Company. Each of the executives has separately entered into a confidentiality agreement with us.
Potential Payments upon Termination or Change in Control
The following table provides information regarding the potential payments upon termination without Cause or for Good Reason, as well as upon termination without Cause or for Good Reason after a Change in Control of the Company, which would have been paid to each executive in the event he or she had been terminated as of December 31, 2025, the last business day of fiscal year 2025. All payments in connection with any such termination will comply with Section 409A of the Code, to the extent Section 409A applies. The actual amounts to be paid out can only be determined at the time of such executive’s separation from the Company.
Termination without Cause or for Good Reason | Termination without Cause or for Good Reason | |||||||||||||||||
| Cash | | Benefits | | Acceleration of | | Cash Payment | | Benefits | | Acceleration of | |||||||
Brian E. Mueller | $ | 642,000 | $ | 22,804 | $ | 1,853,192 | $ | 642,000 | $ | 22,804 | $ | 4,911,966 | ||||||
Dr. W. Stan Meyer | $ | 682,500 | $ | 20,498 | $ | 988,879 | $ | 682,500 | $ | 20,498 | $ | 2,621,046 | ||||||
Daniel E. Bachus | $ | 682,500 | $ | 27,510 | $ | 988,879 | $ | 682,500 | $ | 27,510 | $ | 2,621,046 | ||||||
Dilek Marsh | $ | 442,505 | $ | 27,510 | $ | 676,715 | $ | 442,505 | $ | 27,510 | $ | 1,812,779 | ||||||
| (1) | Assumes a termination date of December 31, 2025, and is based on the executive’s salary and target bonus in effect at such date. |
| (2) | Reflects the cost related to the continuation of the executive’s health benefits for the period specified. |
| (3) | Calculated based on an assumed termination date of December 31, 2025 and the closing market price of our common stock on the Nasdaq Global Select Market on such date. |
59
Table of Contents
Pay vs. Performance Comparison
As discussed in the Compensation Discussion and Analysis above, our Compensation Committee has implemented an executive compensation program designed to align a substantial portion of our named executive officers’ realized compensation to the achievement of GCE’s financial, operational, and strategic objectives, and to align our executive pay with changes in the value of our stockholders’ investments. The following table sets forth additional compensation information for our named executive officers, calculated in accordance with SEC regulations, for fiscal years 2025, 2024, 2023, 2022 and 2021.
Value of Initial Fixed $100 | ||||||||||||||||||||||||
Average | Average | Investment Based on: | ||||||||||||||||||||||
Summary | Summary | Compensation | Peer Group | |||||||||||||||||||||
Compensation | Compensation | Compensation | Actually Paid | Total | Total | |||||||||||||||||||
Table | Actually Paid | Table Total for | to Non-CEO | Shareholder | Shareholder | Net | Adjusted | |||||||||||||||||
Year | Total for CEO (1) | to CEO (2) | Non-CEO NEOs (3) | NEOs (2) (3) | Return | Return (4) | Income (5) | EBITDA (6) | ||||||||||||||||
2025 | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
2024 | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
2023 | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
2022 | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
2021 | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||
| (1) | The dollar amounts reported are the amounts of total compensation reported for our CEO, |
| (2) | The dollar amounts reported represent the amount of “compensation actually paid” or “CAP”, as computed in accordance with SEC rules. The dollar amounts do not reflect the actual amounts of compensation paid to our CEO or other named executive officers during the applicable years, but include (i) the year-end value of equity awards granted during the reported year, and (ii) the change in the value of equity awards that were unvested at the end of the prior year, measured through the date the awards vested or were forfeited, or through the end of the reported fiscal year. |
| (3) | For 2025 and 2024, reflects compensation information for our named executive officers, other than our Chief Executive Officer, as described in the Compensation Discussion and Analysis of this Proxy Statement, who were our named executive officers for both 2025 and 2024. For 2023, 2022 and 2021, reflects compensation information for Dr. Meyer, Mr. Bachus, Ms. Marsh and Mr. Briggs, our prior chief executive officer for Orbis Education (each of whom served as named executive officers for 2023, 2022 and 2021). |
| (4) | Reflects cumulative total shareholder return for the seven companies included in the customized peer group used by GCE for purposes of Item 201 (e) of Regulation S-K under the Exchange Act in GCE’s Annual Report on Form 10-K for the year ended December 31, 2025. Those seven companies are: Adtalem Global Education, Inc, Chegg, Inc., Coursera Inc., Wiley Education Services, Laureate Education, Inc., Pearson Plc and Strategic Education, Inc. |
| (5) | The decline in net income between 2024 and 2025 is primarily due to a $ |
| (6) | We defined |
60
Table of Contents
To calculate the amounts in the “Compensation Actually Paid to CEO” column in the table above, the following amounts were deducted from and added to (as applicable) our Chief Executive Officer’s “Total” compensation as reported in the Summary Compensation Table:
Summary | ||||||||||||
Compensation | Reported | Equity Award | ||||||||||
Table Total for | Value of Equity | Adjustments | Compensation | |||||||||
Year | | CEO | | Awards for CEO (1) | | for CEO (2) | | Actually Paid to CEO | ||||
2025 | $ | | $ | ( | $ | | $ | | ||||
2024 | $ | | $ | ( | $ | | $ | | ||||
2023 | $ | | $ | ( | $ | | $ | | ||||
2022 | $ | | $ | ( | $ | | $ | | ||||
2021 | $ | | $ | ( | $ | | $ | | ||||
| (1) | Represents the grant date fair value of the equity awards to our Chief Executive Officer, as reported in the “Stock Awards” column in the Summary Compensation Table for each applicable year. |
| (2) | Represents the adjustments to equity awards granted to our Chief Executive Officer to arrive at CAP, as itemized in the table below. No awards vested in the year they were granted. |
Fair Value of Equity Awards for CEO | 2025 | 2024 |
| 2023 | 2022 | 2021 | |||||||||
As of year-end for awards granted during the year | $ | | $ | | $ | | $ | | $ | | |||||
Year-over-year increase (decrease) of unvested awards granted in prior years | $ | | $ | | $ | | $ | | $ | ( | |||||
Increase (decrease) from prior fiscal year-end for awards that vested during the year | $ | | $ | | $ | | $ | | $ | | |||||
Total Equity Award Adjustments | $ | | $ | | $ | | $ | | $ | | |||||
To calculate the amounts in the “Average Compensation Actually Paid to Non-Chief Executive Officer NEOs” column in the table above, the following amounts were deducted from and added to (as applicable) the average of the “Total” compensation of our non-Chief Executive Officer named executive officers for each applicable year, as reported in the Summary Compensation Table for that year:
Average Summary | Average | Average | ||||||||||
Compensation | Reported Value of | Equity Award | Average | |||||||||
Table Total for | Equity Awards for | Adjustments | Compensation Actually | |||||||||
Year | | Non-CEO NEOs | | Non-CEO NEOs (1) | | for Non-CEO NEOs (2) | | Paid to Non-CEO NEOs | ||||
2025 | $ | | $ | ( | $ | | $ | | ||||
2024 | $ | | $ | ( | $ | | $ | | ||||
2023 | $ | | $ | ( | $ | | $ | | ||||
2022 | $ | | $ | ( | $ | | $ | | ||||
2021 | $ | | $ | ( | $ | | $ | | ||||
| (1) | Represents the average of the grant date fair value of the equity awards to our named executive officers (other than our Chief Executive Officer), as reported in the “Stock Awards” column in the Summary Compensation Table for each applicable year. |
| (2) | Represents adjustments for the equity awards granted to our named executive officers (other than our Chief Executive Officer) to arrive at CAP, as itemized in the table below. No awards vested in the year they were granted. |
Fair Value of Equity Awards for Non-CEO NEOs | 2025 | 2024 | 2023 | 2022 | 2021 | ||||||||||
As of year-end for awards granted during the year | $ | | $ | | $ | | $ | | $ | | |||||
Year-over-year increase (decrease) of unvested awards granted in prior years | $ | ( | $ | | $ | | $ | | $ | ( | |||||
Increase (decrease) from prior fiscal year-end for awards that vested during the year | $ | | $ | | $ | | $ | | $ | | |||||
Total Equity Award Adjustments | $ | | $ | | $ | | $ | | $ | | |||||
61
Table of Contents
Pay-for-Performance Alignment
The following table identifies the seven most important financial performance measures used by our Compensation Committee to link the CAP to our Chief Executive Officer and other named executive officers in 2025, calculated in accordance with SEC regulations, to company performance.
Most Important Financial Performance Measures
| ● |
| ● |
| ● |
| ● |
| ● |
| ● |
| ● |
Company Selected Metric
We present Adjusted EBITDA because we consider it to be an important supplemental measure of our operating performance. We also make certain compensation decisions based, in part, on our operating performance, as measured by Adjusted EBITDA. All of the adjustments made in our calculation of Adjusted EBITDA are adjustments to items that management does not consider to be reflective of our core operating performance. Management considers our core operating performance to be that which can be affected by our managers in any particular period through their management of the resources that affect our underlying revenue and profit generating operations during that period and does not consider the items for which we make adjustments (as listed above) to be reflective of our core performance.
We believe Adjusted EBITDA allows us to compare our current operating results with corresponding historical periods and with the operational performance of other companies in our industry because it does not give effect to potential differences caused by variations in capital structures (affecting relative interest expense, including the impact of write-offs of deferred financing costs when companies refinance their indebtedness), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), the book amortization of intangibles (affecting relative amortization expense), and other items that we do not consider reflective of underlying operating performance. We also present Adjusted EBITDA because we believe it is frequently used by securities analysts, investors, and other interest parties as a measure of performance.
62
Table of Contents
63
Table of Contents
Compensation Committee Report
The Compensation Committee has discussed and reviewed the Compensation Discussion and Analysis with management. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
Compensation Committee: | |
Chevy Humphrey (Chair) | |
Jack A. Henry | |
Sara Ward Lisa Graham Keegan Kevin F. Warren |
64
Table of Contents
PROPOSAL NO. 4
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
◻ What am I voting on? | | Stockholders are being asked to ratify the appointment of KPMG LLP, a registered public accounting firm, to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2026. |
◻ Voting recommendation: | Our Board of Directors unanimously recommends that you vote “FOR” the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2026. | |
◻ Vote required: | The affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote. Brokers have discretion to vote on the ratification of our independent auditors and, as such, no votes on this proposal will be considered broker non-votes. Abstentions will have the effect of a vote “against” this proposal. |
The Audit Committee of the Board of Directors has selected KPMG LLP (“KPMG”), an independent registered public accounting firm, to audit our consolidated financial statements for the year ending December 31, 2026. While it is not required to do so, our Audit Committee is submitting the selection of that firm for ratification in order to ascertain the view of our stockholders. In the event the stockholders fail to ratify the selection of KPMG, the adverse vote will be considered a direction to the Audit Committee to consider other auditors for next year. However, because of the difficulty in making any substitution so long after the beginning of the current year, the appointment of KPMG for fiscal 2026 will stand, unless the Audit Committee finds other good reason for making a change. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the Company’s and its stockholders’ best interests. Proxies solicited by our Board of Directors will, unless otherwise directed, be voted to ratify the appointment of KPMG as our independent registered public accounting firm for the fiscal year ending December 31, 2026.
A representative of KPMG will be present at the meeting, will be afforded an opportunity to make a statement if the representative so desires, and will be available to respond to appropriate questions during the meeting.
Our Board of Directors unanimously recommends that the stockholders vote “FOR” the ratification of the appointment of KPMG as our independent registered public accounting firm for the fiscal year ending December 31, 2026.
Fees
For the years ended December 31, 2025 and 2024, KPMG billed us the amounts set forth below for professional services rendered in connection with audit, audit-related, tax and other professional services. All of the fees for audit, audit-related, tax and other services performed by KPMG were pre-approved by the Audit Committee in accordance with the pre-approval policies and procedures described below.
Services Rendered | | 2025 | | 2024 | ||
Audit Fees(1) | $ | 845,000 | $ | 805,000 | ||
Audit-Related Fees | — | — | ||||
Tax Fees | — | — | ||||
All Other Fees | — | — | ||||
Total Fees | $ | 845,000 | $ | 805,000 | ||
| (1) | Audit Fees in 2025 and 2024 relate to services rendered for the audits of our annual consolidated financial statements including accounting and reporting consultations, for the review of our quarterly financial statements, and for services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements. |
65
Table of Contents
Approval of Independent Registered Public Accounting Firm Services and Fees
The Audit Committee has adopted a policy regarding pre-approval of audit and non-audit services performed by our independent registered public accounting firm. The Audit Committee is responsible for pre-approving all engagements of our independent registered public accounting firm. The policy also highlights services the Audit Committee will and will not approve for audit and non-audit services. The policy requires that written documentation be provided by the independent registered accounting firm to the Audit Committee for all tax services.
The Audit Committee may, annually or from time to time, set fee levels for certain non-audit services, as defined in the policy, or for all non-audit services. Any engagements that exceed those fee levels must receive specific pre-approval from the Audit Committee. The Audit Committee may delegate to the Audit Committee chair authority to grant pre-approvals of permissible audit and non-audit services, provided that any pre-approvals by the chair must be reported to the full Audit Committee at the next scheduled meeting.
On a regular basis, management provides written updates to the Audit Committee regarding the amount of audit and non-audit service fees incurred to date. All of the services described above for fiscal years 2025 and 2024 were approved by our Audit Committee.
AUDIT COMMITTEE REPORT
The Audit Committee operates under a written charter adopted by the Board that outlines its responsibilities and the practices it follows. You can view the charter on the Company’s website, www.investors.gce.com. The Audit Committee reviews and assesses the adequacy of its charter at least annually and, when appropriate, recommends changes to the Board to reflect the evolving role of the Audit Committee. The duties of the Audit Committee as set forth in its charter are summarized in this Proxy Statement under the section titled “Committees of Our Board of Directors.”
The Audit Committee is composed of five, non-employee directors, each of whom the Board has determined meet the independence and financial literacy requirements of Nasdaq and additional, heightened independence criteria applicable to members of the Audit Committee under SEC and Nasdaq Rules. The Board has designated each of Mr. Henry, Dr. Humphrey and Mr. Warren as “audit committee financial experts” under the SEC rules.
Primary Responsibilities of the Audit Committee and the Audit Committee’s Activities in 2025
The Audit Committee represents and assists the Board in fulfilling its oversight responsibility relating to the integrity of the Company’s financial statements and the financial reporting process, the systems of internal accounting and financial controls, the internal audit function and the annual independent audit of the Company’s financial statements. The Audit Committee oversees the Company’s compliance with legal and regulatory requirements, the independent auditors’ qualifications and independence, the performance of the Company’s internal audit function and the independent auditors, and the Company’s ethical compliance programs, including the Company’s codes of conduct. The Audit Committee’s process includes working with the Company’s Chief Risk Officer and other members of the Company’s enterprise risk management team, meeting periodically with the Chief Risk Officer and other members of management and receiving reports on enterprise risk management, including management’s assessment of risk exposures (including risks related to liquidity, credit, operations, regulatory compliance and cybersecurity, among others), and the processes in place to monitor and control such exposures.
During 2025, among other things, the Audit Committee:
| ● | Engaged KPMG as our independent auditors; |
| ● | Was involved in the selection of the lead engagement partner and negotiation of audit fees; |
| ● | Evaluated the tenure of the independent audit firm; |
| ● | Met with the senior members of the Company’s financial management team at each regularly scheduled meeting; |
| ● | Held separate private sessions, during its regularly scheduled meetings, with each of KPMG and our Chief Risk Officer, at which candid discussions regarding financial management, legal, accounting, auditing and internal control issues took place; |
66
Table of Contents
| ● | Received periodic updates on management’s process to assess the adequacy of the Company’s system of internal control over financial reporting, the framework used to make the assessment and management’s conclusions on the effectiveness of the Company’s internal control over financial reporting; |
| ● | Discussed with KPMG the Company’s internal control assessment process, management’s assessment with respect thereto and KPMG’s evaluation of the Company’s system of internal control over financial reporting; |
| ● | Reviewed and discussed with management and KPMG the Company’s periodic reports prior to filing with the SEC, including matters such as significant accounting policies, management judgements and accounting estimates; |
| ● | Reviewed the Company’s internal audit plan and the performance of the Company’s internal audit function; |
| ● | Reviewed with senior members of the Company’s financial management team, KPMG, and our Chief Risk Officer the overall audit scope and plans, the results of internal and external audits, evaluations by management and the independent auditors of the Company’s internal controls over financial reporting and the quality of the Company’s financial reporting; and |
| ● | Reviewed with management, including our Chief Risk Officer, Chief Information Security Officer and General Counsel, and KPMG significant risks and exposures identified by management, the overall adequacy and effectiveness of the Company’s legal, regulatory and ethical compliance programs, including the Company’s code of conduct, cybersecurity programs and climate-related risks for the Company. |
2025 Audited Financial Statements
One of the Audit Committee’s primary responsibilities is to assist the Board in overseeing the Company’s management and independent registered public accounting firm in regard to our financial reporting and internal controls over financial reporting. In performing our oversight function, we relied upon advice and information received in our discussions with management and the independent registered public accounting firm.
We have (a) reviewed and discussed our Company’s audited financial statements for the fiscal year ended December 31, 2025, with management; (b) discussed with our Company’s independent registered public accounting firm the matters required to be discussed by Public Company Oversight Board (PCAOB) Auditing Standard Number 1301, Communications with Audit Committees (PCAOB General Auditing Standards 1300, Auditor Communications); (c) received the written disclosures and presentation from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence; and (d) discussed with the independent registered public accounting firm its independence.
Based on the review and discussions with management and our independent registered public accounting firm referred to above, we recommended to our Board of Directors that the audited financial statements be included in our Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, for filing with the Securities and Exchange Commission.
Audit Committee: | |
Jack A. Henry (Chair) | |
Sara Ward Lisa Graham Keegan Chevy Humphrey Kevin F. Warren | |
67
Table of Contents
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information regarding the beneficial ownership of our common stock as of March 31, 2026 for:
| ● | each person, or group of affiliated persons, known to us to own beneficially 5% or more of our outstanding common stock; |
| ● | each of our directors; |
| ● | each of our named executive officers; and |
| ● | all of our directors and named executive officers as a group. |
The information in the following table has been presented in accordance with the rules of the SEC. Under SEC rules, beneficial ownership of a class of capital stock includes any shares of such class as to which a person, directly or indirectly, has or shares voting power or investment power and also includes any shares as to which a person has the right to acquire such voting or investment power within 60 days of the date set forth above through the exercise of any stock option, warrant or other right. If two or more persons share voting power or investment power with respect to specific securities, each such person is deemed to be the beneficial owner of such securities. Except as we otherwise indicate below and under applicable community property laws, we believe that the beneficial owners of the common stock listed below, based on information they have furnished to us, have sole voting and investment power with respect to the shares shown. Unless otherwise noted below, the address for each holder listed below is 2600 W. Camelback Road, Phoenix, Arizona 85017.
The calculations of beneficial ownership in this table are based on 26,704,660 shares outstanding at March 31, 2026.
Common Stock | |||||
| Amount and Nature of | | Percent of Class(1) |
| |
Principal Stockholders: | |||||
BlackRock, Inc.(2) | 2,602,233 | 9.7 | % | ||
FMR LLC(3) | 1,800,609 | 6.7 | % | ||
Riverbridge Partners LLC(4) | 1,428,922 | 5.4 | % | ||
Directors and Named Executive Officers: | |||||
Brian E. Mueller | 295,628 | 1.1 | % | ||
Dr. W. Stan Meyer | 105,919 | 0.4 | % | ||
Daniel E. Bachus | 111,469 | 0.4 | % | ||
Dilek Marsh | 23,263 | 0.1 | % | ||
Sara Ward | 5,657 | * | |||
Jack A. Henry | 14,168 | 0.1 | % | ||
Lisa Graham Keegan | 3,081 | * | |||
Chevy Humphrey | 3,131 | * | |||
Kevin F. Warren | 1,102 | * | |||
All directors and executive officers as a group (9 persons) | 563,418 | 2.1 | % | ||
* | Represents beneficial ownership of less than 0.1% |
| (1) | The percentage of beneficial ownership as to any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days after such date, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days after such date. Consequently, the denominator for calculating beneficial ownership percentages may be different for each beneficial owner. |
| (2) | This information for the BlackRock, Inc. (“BlackRock”) is based on a Schedule 13G/A filed with the Securities and Exchange Commission on April 17, 2025. The address for BlackRock is 50 Hudson Yards, New York, NY 10001. |
68
Table of Contents
| BlackRock reported that it had sole voting power over 2,453,769 shares, shared voting power over 0 shares, sole dispositive power over 2,602,233 shares, and shared dispositive power over 0 shares. |
| (3) | This information for FMR LLC (“FMR”) is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 5, 2026. The address for FMR is 245 Summer Street, Boston, Massachusetts 02210. FMR reported that it had sole voting power over 1,795,474 shares, shared voting power over 0 shares, sole dispositive power over 1,800,609 shares, and shared dispositive power over 0 shares. |
| (4) | This information for Riverbridge Partners LLC (“Riverbridge”) is based on a Schedule 13G/A filed with the Securities and Exchange Commission on January 16, 2025. The address for Riverbridge is 80 South Eighth St., Suite 1500, Minneapolis, MN 55402. Riverbridge reported that it had sole voting power over 1,181,518 shares, shared voting power over 0 shares, sole dispositive power over 1,428,922 shares, and shared dispositive power over 0 shares. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Policies and Procedures for Related Party Transactions
We have adopted a written related party transactions policy, pursuant to which our executive officers, directors and principal stockholders, including their immediate family members, are not permitted to enter into a related party transaction with us without the prior consent of our Audit Committee. Any request for us to enter into a transaction with an executive officer, director, principal stockholder or any of such persons’ immediate family members or affiliates, in which the amount involved exceeds $120,000, must be presented to our Audit Committee for review, consideration and approval. All of our directors, executive officers and employees are required to report to our Audit Committee any such related party transaction. In approving or rejecting the proposed agreement, our Audit Committee will take into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction. Under the policy, should we discover related party transactions that have not been pre-approved, the Audit Committee will be notified and will determine the appropriate action, including ratification, rescission or amendment of the transaction. In addition, under the policy, certain types of transactions have been pre-approved by the Audit Committee, including employment arrangements with executive officers, director compensation, transactions where all stockholders receive proportional benefits, transactions involving competitive bids, regulated transactions, and banking-related service transactions.
Relationship to Grand Canyon University
Mr. Brian E. Mueller has served as the Chief Executive Officer of the Company since 2008 and the Chairman of the Board since 2017 and has also served as the President of GCU since 2012. In connection with the sale of GCU to Grand Canyon University, an Arizona non-profit corporation, in 2018, the Board of Directors of the Company and the board of trustees of GCU each independently determined that Mr. Mueller should retain those roles. Accordingly, Mr. Mueller remains the Chairman of the Board and Chief Executive Officer of the Company and as the President of GCU, although he is prohibited from serving on the board of trustees of GCU. Our Board and the board of trustees of GCU each recognized that Mr. Mueller’s dual role could raise conflict of interest issues. Accordingly, at the time of the sale of GCU, GCU adopted governance provisions that prohibit Mr. Mueller from serving on the board of trustees of GCU. We also jointly imposed a structure, through GCU’s governance documents and through express provisions of our Master Services Agreement with GCU, which prevent Mr. Mueller from participating in day-to-day management of, or negotiations between the Company and GCU relating to, the Master Services Agreement. Aside from Mr. Mueller, no other employee of GCU or GCE has a dual role in both organizations. Beginning July 1, 2018, the base salary under Mr. Mueller’s employment agreement with the Company was decreased by 50% to $321,000, reflecting his dual employment by GCE and GCU.
Certain Transactions
Set forth below is a summary of certain transactions since January 1, 2025, in which the Company was or is to be a participant and involving our directors, executive officers, beneficial owners of more than 5% of our common stock, and some of the entities with which the foregoing persons are affiliated or associated, and in which the amount involved exceeds or will exceed $120,000.
69
Table of Contents
GCE Community Fund (“GCECF”) – GCECF was initially formed in 2014. GCECF makes grants for charitable, educational, literary, religious or scientific purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code. Mr. Mueller serves as the president of GCECF, and the board of directors of GCECF is composed of Company executives. The Company is not the primary beneficiary of GCECF, and accordingly, the Company does not consolidate GCECF’s statement of activities with its financial results. The Company contributed $0.5 million for the year ended December 31, 2025, of which no amounts were owed at December 31, 2025.
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for annual reports, proxy statements, and Notices of Internet Availability of Proxy Materials with respect to two or more stockholders sharing the same address by delivering a single annual report, proxy statement, or Notice of Internet Availability of Proxy Materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. Brokers with account holders who are stockholders of the Company may be householding the Company’s proxy materials. Once you have received notice from your broker that it will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate annual report, proxy statement, or Notice of Internet Availability of Proxy Materials or if you are receiving multiple copies thereof and wish to receive only one, please notify your broker or notify the Company by sending a written request to Grand Canyon Education, Inc., 2600 W. Camelback Road, Phoenix, Arizona, 85017, Attn: Investor Relations, or by calling (602) 247-4400.
ADDITIONAL INFORMATION
Our 2025 annual report and our Annual Report on Form 10-K for the year ended December 31, 2025, including financial statements, are available electronically along with our Proxy Statement to all stockholders of record as of April 16, 2026, including those stockholders whose shares are held in a brokerage, bank or similar account, who will receive the same mailing from the organization holding the account. Stockholders who wish to obtain a copy of our Annual Report on Form 10-K, for the fiscal year ended December 31, 2025, and our Proxy Statement may do so without charge by writing to Investor Relations, Grand Canyon Education, Inc., 2600 W. Camelback Road, Phoenix, Arizona 85017.
As of the date of this Proxy Statement, management knows of no matters that will be presented for determination at the Annual Meeting other than those referred to herein. If any other matters properly come before the Annual Meeting calling for a vote of stockholders, it is intended that the persons named in the proxies solicited by our Board of Directors, in accordance with their best judgment, will vote the shares represented by these proxies.
By Order of the Board of Directors, | |
Brian E. Mueller | |
Chief Executive Officer and Chairman | |
Dated: April 24, 2026 |
70
Table of Contents
Appendix A
GRAND CANYON EDUCATION, INC.
2026 EQUITY INCENTIVE PLAN
Table of Contents
TABLE OF CONTENTS
Page | |||
|---|---|---|---|
1. | Establishment, Purpose and Term of Plan. | A-1 | |
1.1 | Establishment | A-1 | |
1.2 | Purpose | A-1 | |
1.3 | Term of Plan | A-1 | |
2. | Definitions and Construction. | A-1 | |
2.1 | Definitions | A-1 | |
2.2 | Construction | A-7 | |
3. | Administration. | A-7 | |
3.1 | Administration by the Committee | A-7 | |
3.2 | Authority of Officers | A-7 | |
3.3 | Administration with Respect to Insiders | A-8 | |
3.4 | Powers of the Committee | A-8 | |
3.5 | Option or SAR Repricing | A-8 | |
3.6 | Indemnification | A-9 | |
3.7 | Dividends and Dividend Equivalent Rights | A-9 | |
4. | Shares Subject to Plan. | A-9 | |
4.1 | Maximum Number of Shares Issuable | A-9 | |
4.2 | Adjustment for Unissued or Forfeited Predecessor Plan Shares | A-9 | |
4.3 | Share Counting | A-10 | |
4.4 | Adjustments for Changes in Capital Structure | A-10 | |
4.5 | Assumption or Substitution of Awards | A-10 | |
5. | Eligibility, Participation and Award Limitations. | A-10 | |
5.1 | Persons Eligible for Awards | A-10 | |
5.2 | Participation in the Plan | A-11 | |
5.3 | Incentive Stock Option Limitations. | A-11 | |
5.4 | Nonemployee Director Award Limit | A-11 | |
5.5 | Minimum Vesting | A-11 | |
6. | Stock Options. | A-12 | |
6.1 | Exercise Price | A-12 | |
6.2 | Exercisability and Term of Options | A-12 | |
6.3 | Payment of Exercise Price. | A-12 | |
6.4 | Effect of Termination of Service. | A-13 | |
6.5 | Transferability of Options | A-14 | |
7. | Stock Appreciation Rights. | A-14 | |
7.1 | Types of SARs Authorized | A-14 | |
7.2 | Exercise Price | A-14 | |
7.3 | Exercisability and Term of SARs. | A-14 | |
7.4 | Exercise of SARs | A-15 | |
7.5 | Deemed Exercise of SARs | A-15 | |
7.6 | Effect of Termination of Service | A-15 | |
A-i
Table of Contents
TABLE OF CONTENTS
(continued)
Page | |||
|---|---|---|---|
7.7 | Transferability of SARs | A-15 | |
8. | Restricted Stock Awards. | A-15 | |
8.1 | Types of Restricted Stock Awards Authorized | A-15 | |
8.2 | Purchase Price | A-15 | |
8.3 | Purchase Period | A-16 | |
8.4 | Payment of Purchase Price | A-16 | |
8.5 | Vesting and Restrictions on Transfer | A-16 | |
8.6 | Voting Rights; Dividends and Distributions | A-16 | |
8.7 | Effect of Termination of Service | A-16 | |
8.8 | Nontransferability of Restricted Stock Award Rights | A-16 | |
9. | Restricted Stock Units. | A-17 | |
9.1 | Grant of Restricted Stock Unit Awards | A-17 | |
9.2 | Purchase Price | A-17 | |
9.3 | Vesting | A-17 | |
9.4 | Voting Rights, Dividend Equivalent Rights and Distributions | A-17 | |
9.5 | Effect of Termination of Service | A-18 | |
9.6 | Settlement of Restricted Stock Unit Awards | A-18 | |
9.7 | Nontransferability of Restricted Stock Unit Awards | A-18 | |
10. | Performance Awards. | A-18 | |
10.1 | Types of Performance Awards Authorized | A-18 | |
10.2 | Initial Value of Performance Shares and Performance Units | A-18 | |
10.3 | Establishment of Performance Period, Performance Goals and Performance Award Formula | A-18 | |
10.4 | Measurement of Performance Goals | A-19 | |
10.5 | Settlement of Performance Awards. | A-19 | |
10.6 | Voting Rights; Dividend Equivalent Rights and Distributions | A-20 | |
10.7 | Effect of Termination of Service | A-21 | |
10.8 | Nontransferability of Performance Awards | A-21 | |
11. | Cash-Based Awards and Other Stock-Based Awards. | A-21 | |
11.1 | Grant of Cash-Based Awards | A-21 | |
11.2 | Grant of Other Stock-Based Awards | A-21 | |
11.3 | Value of Cash-Based and Other Stock-Based Awards | A-21 | |
11.4 | Payment or Settlement of Cash-Based Awards and Other Stock-Based Awards | A-22 | |
11.5 | Voting Rights; Dividend Equivalent Rights and Distributions | A-22 | |
11.6 | Effect of Termination of Service | A-22 | |
11.7 | Nontransferability of Cash-Based Awards and Other Stock-Based Awards | A-22 | |
12. | Standard Forms of Award Agreement. | A-22 | |
12.1 | Award Agreements | A-22 | |
12.2 | Authority to Vary Terms | A-22 | |
13. | Change in Control. | A-23 | |
13.1 | Effect of Change in Control on Nonemployee Director Awards | A-23 | |
13.2 | Effect of Change in Control on Awards | A-23 | |
13.3 | Federal Excise Tax Under Section 4999 of the Code. | A-24 | |
A-ii
Table of Contents
TABLE OF CONTENTS
(continued)
Page | |||
|---|---|---|---|
14. | Compliance with Securities Law. | A-24 | |
15. | Compliance with Section 409A. | A-25 | |
15.1 | Awards Subject to Section 409A | A-25 | |
15.2 | Deferral and/or Distribution Elections | A-25 | |
15.3 | Subsequent Elections | A-25 | |
15.4 | Payment of Section 409A Deferred Compensation. | A-26 | |
16. | Tax Withholding. | A-27 | |
16.1 | Tax Withholding in General | A-27 | |
16.2 | Withholding in or Directed Sale of Shares | A-28 | |
17. | Amendment, Suspension or Termination of Plan. | A-28 | |
18. | Miscellaneous Provisions. | A-28 | |
18.1 | Repurchase Rights | A-28 | |
18.2 | Forfeiture Events. | A-28 | |
18.3 | Provision of Information | A-29 | |
18.4 | Rights as Employee, Consultant or Director | A-29 | |
18.5 | Rights as a Stockholder | A-29 | |
18.6 | Delivery of Title to Shares | A-29 | |
18.7 | Fractional Shares | A-29 | |
18.8 | Retirement and Welfare Plans | A-29 | |
18.9 | Beneficiary Designation | A-29 | |
18.10 | Severability | A-29 | |
18.11 | No Constraint on Corporate Action | A-30 | |
18.12 | Unfunded Obligation | A-30 | |
18.13 | Choice of Law | A-30 | |
A-iii
Table of Contents
Grand Canyon Education, Inc.
2026 Equity Incentive Plan
1.ESTABLISHMENT, PURPOSE AND TERM OF PLAN.
1.1Establishment. The Grand Canyon Education, Inc. 2026 Equity Incentive Plan (the “Plan”) is hereby established effective as of , 2026, the date of its approval by the stockholders of the Company (the “Effective Date”).
1.2Purpose. The purpose of the Plan is to advance the interests of the Participating Company Group and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Participating Company Group and by motivating such persons to contribute to the growth and profitability of the Participating Company Group. The Plan seeks to achieve this purpose by providing for Awards in the form of Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards and Other Stock-Based Awards.
1.3Term of Plan. The Plan shall continue in effect until its termination by the Committee; provided, however, that all Awards shall be granted, if at all, within ten (10) years from the Effective Date.
2.DEFINITIONS AND CONSTRUCTION.
2.1Definitions. Whenever used herein, the following terms shall have their respective meanings set forth below:
(a)“Affiliate” means (i) a parent entity, other than a Parent Corporation, that directly, or indirectly through one or more intermediary entities, controls the Company or (ii) a subsidiary entity, other than a Subsidiary Corporation, that is controlled by the Company directly or indirectly through one or more intermediary entities. For this purpose, the terms “parent,” “subsidiary,” “control” and “controlled by” shall have the meanings assigned such terms for the purposes of registration of securities on Form S-8 under the Securities Act.
(b)“Award” means any Option, Stock Appreciation Right, Restricted Stock Purchase Right, Restricted Stock Bonus, Restricted Stock Unit, Performance Share, Performance Unit, Cash-Based Award or Other Stock-Based Award granted under the Plan.
(c)“Award Agreement” means a written or electronic agreement between the Company and a Participant setting forth the terms, conditions and restrictions applicable to an Award.
(d)“Board” means the Board of Directors of the Company.
(e)“Cash-Based Award” means an Award denominated in cash and granted pursuant to Section 11.
(f)“Cashless Exercise” means a Cashless Exercise as defined in Section 6.3(b)(i).
(g)“Cause” means, unless such term or an equivalent term is otherwise defined by the applicable Award Agreement or other written agreement between a Participant and a Participating Company applicable to an Award, any of the following: (i) the Participant’s theft, dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or falsification of any Participating Company documents or records; (ii) the Participant’s material failure to abide by a Participating Company’s code of conduct or other policies (including, without limitation, policies relating to confidentiality and reasonable workplace conduct); (iii) the Participant’s unauthorized use, misappropriation, destruction or diversion of any tangible or intangible asset or corporate opportunity of a Participating Company (including, without limitation, the Participant’s improper use or disclosure of a Participating Company’s confidential or
A-1
Table of Contents
proprietary information); (iv) any intentional act by the Participant which has a material detrimental effect on a Participating Company’s reputation or business; (v) the Participant’s repeated failure or inability to perform any reasonable assigned duties after written notice from a Participating Company of, and a reasonable opportunity to cure, such failure or inability; (vi) any material breach by the Participant of any employment, service, non-disclosure, non-competition, non-solicitation or other similar agreement between the Participant and a Participating Company, which breach is not cured pursuant to the terms of such agreement; or (vii) the Participant’s conviction (including any plea of guilty or nolo contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the Participant’s ability to perform his or her duties with a Participating Company.
(h)“Change in Control” means the occurrence of any one or a combination of the following:
(i)any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total Fair Market Value or total combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of Directors; provided, however, that a Change in Control shall not be deemed to have occurred if such degree of beneficial ownership results from any of the following: (A) an acquisition by any person who on the Effective Date is the beneficial owner of more than fifty percent (50%) of such voting power, (B) any acquisition directly from the Company, including, without limitation, pursuant to or in connection with a public offering of securities, (C) any acquisition by the Company, (D) any acquisition by a trustee or other fiduciary under an employee benefit plan of a Participating Company or (E) any acquisition by an entity owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the voting securities of the Company; or
(ii)an Ownership Change Event or series of related Ownership Change Events (collectively, a “Transaction”) in which the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding securities entitled to vote generally in the election of Directors or, in the case of an Ownership Change Event described in Section 2.1(ff)(iii), the entity to which the assets of the Company were transferred (the “Transferee”), as the case may be; or
(iii)a date specified by the Committee following approval by the stockholders of a plan of complete liquidation or dissolution of the Company;
For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Committee shall determine whether multiple events described in subsections (i), (ii) and (iii) of this Section 2.1(h) are related and to be treated in the aggregate as a single Change in Control, and its determination shall be final, binding and conclusive.
(i)“Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations and administrative guidelines promulgated thereunder.
(j)“Committee” means the Compensation Committee and such other committee or subcommittee of the Board, if any, duly appointed to administer the Plan and having such powers in each instance as shall be specified by the Board. If, at any time, there is no committee of the Board then authorized or properly constituted to administer the Plan, the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its discretion exercise any or all of such powers.
(k)“Company” means Grand Canyon Education, Inc., a Delaware corporation, and any successor corporation thereto.
A-2
Table of Contents
(l)“Consultant” means a person engaged to provide consulting or advisory services (other than as an Employee or a Director) to a Participating Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided would not preclude the Company from offering or selling securities to such person pursuant to the Plan in reliance on registration on Form S-8 under the Securities Act.
(m)“Director” means a member of the Board.
(n)“Disability” means, unless such term or an equivalent term is otherwise defined by the applicable Award Agreement or other written agreement between the Participant and a Participating Company applicable to an Award, the permanent and total disability of the Participant, within the meaning of Section 22(e)(3) of the Code.
(o)“Dividend Equivalent Right” means the right of a Participant, granted at the discretion of the Committee or as otherwise provided by the Plan, to receive a credit for the account of such Participant in an amount equal to the cash dividends paid on one share of Stock for each share of Stock represented by an Award held by such Participant.
(p)“Employee” means any person treated as an employee (including an Officer or a Director who is also treated as an employee) in the records of a Participating Company and, with respect to any Incentive Stock Option granted to such person, who is an employee for purposes of Section 422 of the Code; provided, however, that neither service as a Director nor payment of a Director’s fee shall be sufficient to constitute employment for purposes of the Plan. The Company shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be. For purposes of an individual’s rights, if any, under the terms of the Plan as of the time of the Company’s determination of whether or not the individual is an Employee, all such determinations by the Company shall be final, binding and conclusive as to such rights, if any, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination as to such individual’s status as an Employee.
(q)“Exchange Act” means the Securities Exchange Act of 1934, as amended.
(r)“Fair Market Value” means, as of any date, the value of a share of Stock or other property as determined by the Committee, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following:
(i)Except as otherwise determined by the Committee, if, on such date, the Stock is listed or quoted on a national or regional securities exchange or quotation system, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock as quoted on the national or regional securities exchange or quotation system constituting the primary market for the Stock, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or quotation system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded or quoted prior to the relevant date, or such other appropriate day as shall be determined by the Committee, in its discretion.
(ii)Notwithstanding the foregoing, the Committee may, in its discretion, determine the Fair Market Value of a share of Stock on the basis of the opening, closing, or average of the high and low sale prices of a share of Stock on such date or the preceding trading day, the actual sale price of a share of Stock received by a Participant, any other reasonable basis using actual transactions in the Stock as reported on a national or regional securities exchange or quotation system, or on any other basis consistent with the requirements of Section 409A. The Committee may also determine the Fair Market Value upon the average selling price of the Stock during a specified period that is within thirty (30) days before or thirty (30) days after such date, provided that, with respect to the grant of an Option or SAR, the commitment to grant such Award based on such valuation method must be irrevocable before the beginning of the specified period. The Committee may vary its method of determination of the Fair Market Value as
A-3
Table of Contents
provided in this Section for different purposes under the Plan to the extent consistent with the requirements of Section 409A.
(iii)If, on such date, the Stock is not listed or quoted on a national or regional securities exchange or quotation system, the Fair Market Value of a share of Stock shall be as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse, and in a manner consistent with the requirements of Section 409A.
(s)“Full Value Award” means any Award settled in Stock, other than (i) an Option, (ii) a Stock Appreciation Right, or (iii) a Restricted Stock Purchase Right or an Other Stock-Based Award under which the Company will receive monetary consideration equal to the Fair Market Value (determined on the effective date of grant) of the shares subject to such Award.
(t)“Good Reason” means, unless such term or an equivalent term is otherwise defined by the applicable Award Agreement or other written agreement between a Participant and a Participating Company applicable to an Award, any of the following with respect to a particular Participant without the Participant’s informed written consent: (i) a material diminution of the Participant’s authority, duties or responsibilities causing the Participant’s authority, duties or responsibilities to be of materially lesser rank within the Company or an equivalent business unit of its parent, as measured against the Participant’s authority, duties and responsibilities immediately prior to such diminution (provided, however, that any such reduction will not constitute “Good Reason” in the context of a Change in Control if the Participant is asked to assume substantially similar duties and responsibilities in a larger entity after such Change in Control and such reduction will not be deemed to have occurred solely because of a change in title); (ii) a material reduction by the Company of the Participant’s base salary or annual bonus opportunity, other than any such material reduction that occurs in connection with a reduction that is imposed on all Participants at the time of such reduction; (iii) the relocation of the Participant’s work place for the Company to a location that increases the Participant’s regular one-way commute distance between the Participant’s residence and work place by more than thirty-five (35) miles. The existence of Good Reason shall not be affected by the Participant’s temporary incapacity due to physical or mental illness not constituting a Disability. The Participant’s continued employment for a period not exceeding six (6) months following the initial occurrence of any condition constituting Good Reason shall not constitute consent to, or a waiver of rights with respect to, such condition.
(u)“Incentive Stock Option” means an Option intended to be (as set forth in the Award Agreement) and which qualifies as an incentive stock option within the meaning of Section 422(b) of the Code.
(v)“Incumbent Director” means a director who either (i) is a member of the Board as of the Effective Date or (ii) is elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but excluding a director who was elected or nominated in connection with an actual or threatened proxy contest relating to the election of directors of the Company).
(w)“Insider” means an Officer, a Director or other person whose transactions in Stock are subject to Section 16 of the Exchange Act.
(x)“Involuntary Termination” means as to a particular Participant, the occurrence of any of the following upon or within a period of time established by the Committee (not exceeding twenty-four (24) months) following a Change in Control: (i) the Participant’s
Service is terminated without Cause or (ii) the Participant terminates his or her Service for Good Reason; provided the Participant has given the Company written notice of the existence of a condition constituting Good Reason within sixty (60) days following the initial occurrence of such condition, the Company fails to remedy such condition within thirty (30) days following such written notice, and the Participant’s resignation from Service is effective no later than six (6) months following the initial occurrence of such condition. Involuntary Termination shall not include any termination of the Participant’s Service which is (i) for Cause, (ii) a result of the Participant’s death or Disability, or (iii) a result of the Participant’s voluntary termination of Service other than for Good Reason.
A-4
Table of Contents
(y)“Net Exercise” means a Net Exercise as defined in Section 6.3(b)(iii).
(z)“Nonemployee Director” means a Director who is not an Employee.
(aa)“Nonemployee Director Award” means any Award granted to a Nonemployee Director.
(bb)“Nonstatutory Stock Option” means an Option not intended to be (as set forth in the Award Agreement) or which does not qualify as an incentive stock option within the meaning of Section 422(b) of the Code.
(cc)“Officer” means any person designated by the Board as an officer of the Company.
(dd)“Option” means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the Plan.
(ee)“Other Stock-Based Award” means an Award denominated in shares of Stock and granted pursuant to Section 11.
(ff)“Ownership Change Event” means the occurrence of any of the following with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of securities of the Company representing more than fifty percent (50%) of the total combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of Directors; (ii) a merger or consolidation in which the Company is a party; or (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries of the Company).
(gg)“Parent Corporation” means any present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code.
(hh)“Participant” means any eligible person who has been granted one or more Awards.
(ii)“Participating Company” means the Company or any Parent Corporation, Subsidiary Corporation or Affiliate.
(jj)“Participating Company Group” means, at any point in time, the Company and all other entities collectively which are then Participating Companies.
(kk)“Performance Award” means an Award of Performance Shares or Performance Units.
(ll)“Performance Award Formula” means, for any Performance Award, a formula or table established by the Committee pursuant to Section 10.3 which provides the basis for computing the value of a Performance Award at one or more levels of attainment of the applicable Performance Goal(s) measured as of the end of the applicable Performance Period.
(mm)“Performance Goal” means a performance goal established by the Committee pursuant to Section 10.3.
(nn)“Performance Period” means a period established by the Committee pursuant to Section 10.3 at the end of which one or more Performance Goals are to be measured.
A-5
Table of Contents
(oo)“Performance Share” means a right granted to a Participant pursuant to Section 10 to receive a payment equal to the value of a Performance Share, as determined by the Committee, based upon attainment of applicable Performance Goal(s).
(pp)“Performance Unit” means a right granted to a Participant pursuant to Section 10 to receive a payment equal to the value of a Performance Unit, as determined by the Committee, based upon attainment of applicable Performance Goal(s).
(qq)“Performance-Vesting Award” means an Award granted to a Participant, the vesting or earning of which is conditioned in whole or in part upon the achievement of one or more performance goals (including, without limitation, Performance Goals established pursuant to Section 10.3), notwithstanding that the vesting or earning of such Award may also be conditioned upon the continued Service of the Participant.
(rr)“Predecessor Plan” means the Company’s 2017 Equity Incentive Plan.
(ss)“Restricted Stock Award” means an Award of a Restricted Stock Bonus or a Restricted Stock Purchase Right.
(tt)“Restricted Stock Bonus” means Stock granted to a Participant pursuant to Section 8.
(uu)“Restricted Stock Purchase Right” means a right to purchase Stock granted to a Participant pursuant to Section 8.
(vv)“Restricted Stock Unit” means a right granted to a Participant pursuant to Section 9 to receive on a future date or occurrence of a future event a share of Stock or cash in lieu thereof, as determined by the Committee.
(ww)“Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or regulation.
(xx)“SAR” or “Stock Appreciation Right” means a right granted to a Participant pursuant to Section 7 to receive payment, for each share of Stock subject to such Award, of an amount equal to the excess, if any, of the Fair Market Value of a share of Stock on the date of exercise of the Award over the exercise price thereof.
(yy)“Section 409A” means Section 409A of the Code.
(zz)“Section 409A Deferred Compensation” means compensation provided pursuant to an Award that constitutes nonqualified deferred compensation within the meaning of Section 409A.
(aaa)“Securities Act” means the Securities Act of 1933, as amended.
(bbb)“Service” means a Participant’s employment or service with the Participating Company Group, whether as an Employee, a Director or a Consultant. Unless otherwise provided by the Committee, a Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders Service or a change in the Participating Company for which the Participant renders Service, provided that there is no interruption or termination of the Participant’s Service. Furthermore, a Participant’s Service shall not be deemed to have been interrupted or terminated if the Participant takes any military leave, sick leave, or other bona fide leave of absence approved by the Company. However, unless otherwise provided by the Committee, if any such leave taken by a Participant exceeds ninety (90) days, then on the ninety-first (91st) day following the commencement of such leave the Participant’s Service shall be deemed to have terminated, unless the Participant’s right to return to Service is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, an unpaid leave of absence shall not be treated as Service for purposes of determining vesting under the
A-6
Table of Contents
Participant’s Award Agreement. A Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the business entity for which the Participant performs Service ceasing to be a Participating Company. Subject to the foregoing, the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of and reason for such termination.
(ccc)“Stock” means the common stock of the Company, as adjusted from time to time in accordance with Section 4.4.
(ddd)“Stock Tender Exercise” means a Stock Tender Exercise as defined in Section 6.3(b)(ii).
(eee)“Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code.
(fff)“Ten Percent Owner” means a Participant who, at the time an Option is granted to the Participant, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of a Participating Company (other than an Affiliate) within the meaning of Section 422(b)(6) of the Code.
(ggg)“Time-Vesting Award” means any Award granted to a Participant, the vesting or earning of which is based solely upon the continued Service of the Participant over a specified period of time.
(hhh)“Trading Compliance Policy” means the written policy of the Company pertaining to the purchase, sale, transfer or other disposition of the Company’s equity securities by Directors, Officers, Employees or other service providers who may possess material, nonpublic information regarding the Company or its securities.
(iii)“Vesting Conditions” mean those conditions established in accordance with the Plan prior to the satisfaction of which an Award or shares subject to an Award remain subject to forfeiture or a repurchase option in favor of the Company exercisable for the Participant’s monetary purchase price, if any, for such shares upon the Participant’s termination of Service or failure of a performance condition to be satisfied.
2.2Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.
3.ADMINISTRATION.
3.1Administration by the Committee. The Plan shall be administered by the Committee. All questions of interpretation of the Plan, of any Award Agreement or of any other form of agreement or other document employed by the Company in the administration of the Plan or of any Award shall be determined by the Committee, and such determinations shall be final, binding and conclusive upon all persons having an interest in the Plan or such Award, unless fraudulent or made in bad faith. Any and all actions, decisions and determinations taken or made by the Committee in the exercise of its discretion pursuant to the Plan or Award Agreement or other agreement thereunder (other than determining questions of interpretation pursuant to the preceding sentence) shall be final, binding and conclusive upon all persons having an interest therein. All expenses incurred in connection with the administration of the Plan shall be paid by the Company.
3.2Authority of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election that is the responsibility of or that is allocated to the Company herein, provided that the Officer has apparent authority with respect to such matter, right, obligation, determination or election.
A-7
Table of Contents
3.3Administration with Respect to Insiders. With respect to participation by Insiders in the Plan, at any time that any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of Rule 16b-3.
3.4Powers of the Committee. In addition to any other powers set forth in the Plan and subject to the provisions of the Plan, the Committee shall have the full and final power and authority, in its discretion:
(a)to determine the persons to whom, and the time or times at which, Awards shall be granted and the number of shares of Stock, units or monetary value to be subject to each Award;
(b)to determine the type of Award granted;
(c)to determine the Fair Market Value of shares of Stock or other property;
(d)to determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares acquired pursuant thereto, including, without limitation, (i) the exercise or purchase price of shares pursuant to any Award, (ii) the method of payment for shares purchased pursuant to any Award, (iii) the method for satisfaction of any tax withholding obligation arising in connection with any Award, including by the withholding or delivery of shares of Stock, (iv) the timing, terms and conditions of the exercisability or vesting of any Award or any shares acquired pursuant thereto, (v) the Performance Measures, Performance Period, Performance Award Formula and Performance Goals applicable to any Award and the extent to which such Performance Goals have been attained, (vi) the time of expiration of any Award, (vii) the effect of any Participant’s termination of Service on any of the foregoing, and (viii) all other terms, conditions and restrictions applicable to any Award or shares acquired pursuant thereto not inconsistent with the terms of the Plan;
(e)to determine whether an Award will be settled in shares of Stock, cash, other property or in any combination thereof;
(f)to approve one or more forms of Award Agreement;
(g)to amend, modify, extend, cancel or renew any Award or to waive any restrictions or conditions applicable to any Award or any shares acquired pursuant thereto, provided that no such amendment or waiver shall accelerate the vesting of any Award unless the power of the Committee to accelerate the vesting of such Award is expressly provided by another provision of the Plan;
(h)to accelerate, continue, extend or defer the exercisability or vesting of any Award or any shares acquired pursuant thereto, including with respect to the period following a Participant’s termination of Service;
(i)to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt sub-plans or supplements to, or alternative versions of, the Plan, including, without limitation, as the Committee deems necessary or desirable to comply with the laws of, or to accommodate the tax policy, accounting principles or custom of, foreign jurisdictions whose residents may be granted Awards; and
(j)to correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement and to make all other determinations and take such other actions with respect to the Plan or any Award as the Committee may deem advisable to the extent not inconsistent with the provisions of the Plan or applicable law.
3.5Option or SAR Repricing. Without the affirmative vote of holders of a majority of the shares of Stock cast in person or by proxy at a meeting of the stockholders of the Company at which a quorum representing a majority of all outstanding shares of Stock is present or represented by proxy, the Committee shall not approve a program providing for either (a) the cancellation of outstanding Options or SARs having exercise prices per share greater than the then Fair Market Value of a share of Stock (“Underwater Awards”) and the grant in substitution
A-8
Table of Contents
therefor of new Options or SARs having a lower exercise price, Full Value Awards or payments in cash, or (b) the amendment of outstanding Underwater Awards to reduce the exercise price thereof. This Section shall not be construed to apply to (i) “issuing or assuming a stock option in a transaction to which Section 424(a) applies,” within the meaning of Section 424 of the Code, (ii) adjustments pursuant to the assumption of or substitution for an Option or SAR in a manner that would comply with Section 409A, or (iii) an adjustment pursuant to Section 4.4.
3.6Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or the Committee or as officers or employees of the Participating Company Group, to the extent permitted by applicable law, members of the Board or the Committee and any officers or employees of the Participating Company Group to whom authority to act for the Board, the Committee or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.
3.7Dividends and Dividend Equivalent Rights. Dividends or Dividend Equivalent Rights may be paid or credited, as applicable, with respect to any shares of Common Stock subject to an Award, as determined by the Committee and contained in the applicable Award Agreement; provided, however, that (i) no dividends or Dividend Equivalent Rights may be paid with respect to any such shares before the date such shares have vested under the terms of such Award Agreement, (ii) any dividends or Dividend Equivalent Rights that are credited with respect to any such shares will be subject to all of the terms and conditions applicable to such shares under the terms of such Award Agreement (including, but not limited to, any vesting conditions), (iii) any dividends or Dividend Equivalent Rights that are credited with respect to 11 1621451549.41621451549.51621451549.5 any such shares will be forfeited to the Company on the date, if any, such shares are forfeited to or repurchased by the Company due to a failure to meet any vesting conditions under the terms of such Award Agreement and (iv) no Dividends or Dividend Equivalent Rights shall be credited or paid with respect to Options or SARs.
4.SHARES SUBJECT TO PLAN.
4.1Maximum Number of Shares Issuable. Subject to adjustment as provided in Sections 4.2, 4.3 and 4.4, the maximum aggregate number of shares of Stock that may be issued under the Plan shall be equal to 1,498,282 shares, which is the sum of (i) 788,282 shares remaining available for grant under the Predecessor Plan as of the Effective Date, plus (ii) 710,000 shares, and such shares shall consist of authorized but unissued or reacquired shares of Stock or any combination thereof.
4.2Adjustment for Unissued or Forfeited Predecessor Plan Shares. The maximum aggregate number of shares of Stock that may be issued under the Plan as set forth in Section 4.1 shall be cumulatively increased from time to time by:
(a)the number of shares of Stock subject to that portion of any option or other award outstanding pursuant to the Predecessor Plan as of the Effective Date which, on or after the Effective Date, expires or is terminated or canceled for any reason without having been exercised or settled in full; and
(b)the number of shares of Stock acquired pursuant to the Predecessor Plan subject to forfeiture or repurchase by the Company for an amount not greater than the Participant’s purchase price which, on or after the Effective Date, is so forfeited or repurchased;
provided, however, that the aggregate number of shares of Stock authorized for issuance under the Predecessor Plan that may become authorized for issuance under the Plan pursuant to this Section 4.2 shall not exceed 294,239 shares.
A-9
Table of Contents
4.3Share Counting. If an outstanding Award for any reason expires or is terminated or canceled without having been exercised or settled in full, or if shares of Stock acquired pursuant to an Award subject to forfeiture or repurchase are forfeited or repurchased by the Company for an amount not greater than the Participant’s purchase price, the shares of Stock allocable to the terminated portion of such Award or such forfeited or repurchased shares of Stock shall again be available for issuance under the Plan. Shares of Stock shall not be deemed to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash. Upon payment in shares of Stock pursuant to the exercise of an SAR, the number of shares available for issuance under the Plan shall be reduced by the gross number of shares for which the SAR is exercised. If the exercise price of an Option is paid by tender to the Company, or attestation to the ownership, of shares of Stock owned by the Participant, or by means of a Net Exercise, the number of shares available for issuance under the Plan shall be reduced by the gross number of shares for which the Option is exercised. Shares purchased in the open market with proceeds from the exercise of Options shall not be added to the limit set forth in Section 4.1. Shares withheld or reacquired by the Company in satisfaction of tax withholding obligations pursuant to the exercise or settlement of Options or SARs pursuant to Section 16.2 shall not again be available for issuance under the Plan. Shares withheld or reacquired by the Company in satisfaction of tax withholding obligations pursuant to the vesting or settlement of Full Value Awards pursuant to Section 16.2 shall not again be available for issuance under the Plan.
4.4Adjustments for Changes in Capital Structure. Subject to any required action by the stockholders of the Company and the requirements of Sections 409A and 424 of the Code to the extent applicable, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting regular, periodic cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number and kind of shares subject to the Plan and to any outstanding Awards, the Award limits set forth in Section 5.3 and Section 5.4, and in the exercise or purchase price per share under any outstanding Award in order to prevent dilution or enlargement of Participants’ rights under the Plan. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” If a majority of the shares which are of the same class as the shares that are subject to outstanding Awards are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation (the “New Shares”), the Committee may unilaterally amend the outstanding Awards to provide that such Awards are for New Shares. In the event of any such amendment, the number of shares subject to, and the exercise or purchase price per share of, the outstanding Awards shall be adjusted in a fair and equitable manner as determined by the Committee, in its discretion. Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number and the exercise or purchase price per share shall be rounded up to the nearest whole cent. In no event may the exercise or purchase price, if any, under any Award be decreased to an amount less than the par value, if any, of the stock subject to such Award. The Committee in its discretion, may also make such adjustments in the terms of any Award to reflect, or related to, such changes in the capital structure of the Company or distributions as it deems appropriate, including modification of Performance Goals, Performance Award Formulas and Performance Periods. The adjustments determined by the Committee pursuant to this Section shall be final, binding and conclusive.
4.5Assumption or Substitution of Awards. The Committee may, without affecting the number of shares of Stock reserved or available hereunder, authorize the issuance or assumption of benefits under this Plan in connection with any merger, consolidation, acquisition of property or stock, or reorganization upon such terms and conditions as it may deem appropriate, subject to compliance with Section 409A and any other applicable provisions of the Code.
5.ELIGIBILITY, PARTICIPATION AND AWARD LIMITATIONS.
5.1Persons Eligible for Awards. Awards may be granted only to Employees, Consultants and Directors.
A-10
Table of Contents
5.2Participation in the Plan. Awards are granted solely at the discretion of the Committee. Eligible persons may be granted more than one Award. However, eligibility in accordance with this Section shall not entitle any person to be granted an Award, or, having been granted an Award, to be granted an additional Award.
5.3Incentive Stock Option Limitations.
(a)Maximum Number of Shares Issuable Pursuant to Incentive Stock Options. Subject to adjustment as provided in Section 4.4, the maximum aggregate number of shares of Stock that may be issued under the Plan pursuant to the exercise of Incentive Stock Options shall not exceed three million (3,000,000) shares. The maximum aggregate number of shares of Stock that may be issued under the Plan pursuant to all Awards other than Incentive Stock Options shall be the number of shares determined in accordance with Section 4.1, subject to adjustment as provided in Sections 4.2, 4.3 and 4.4.
(b)Persons Eligible. An Incentive Stock Option may be granted only to a person who, on the effective date of grant, is an Employee of the Company, a Parent Corporation or a Subsidiary Corporation (each being an “ISO-Qualifying Corporation”). Any person who is not an Employee of an ISO-Qualifying Corporation on the effective date of the grant of an Option to such person may be granted only a Nonstatutory Stock Option.
(c)Fair Market Value Limitation. To the extent that options designated as Incentive Stock Options (granted under all stock plans of the Participating Company Group, including the Plan) become exercisable by a Participant for the first time during any calendar year for stock having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portion of such options which exceeds such amount shall be treated as Nonstatutory Stock Options. For purposes of this Section, options designated as Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of stock shall be determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a limitation different from that set forth in this Section, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code. If an Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section, the Participant may designate which portion of such Option the Participant is exercising. In the absence of such designation, the Participant shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Upon exercise of the Option, shares issued pursuant to each such portion shall be separately identified.
5.4Nonemployee Director Award Limit. The Committee may establish compensation for Nonemployee Directors from time to time, subject to the limitations in the Plan. The Committee will from time to time determine the terms, conditions and amounts of all such Nonemployee Director compensation in its discretion and pursuant to the exercise of its business judgment, taking into account such factors, circumstances and considerations as it shall deem relevant from time to time, provided that the sum of any cash compensation and the grant date fair value of Awards (as determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) granted under the Plan to a Nonemployee Director as compensation for services as a Nonemployee Director during any calendar year of the Company may not exceed $750,000 annually, provided however, in a Non-Employee Director’s first year of service compensation for services may not exceed $1,000,000 (such limits, the “Director Limits”). The Committee may make exceptions to this limit for individual Nonemployee Directors in extraordinary circumstances, as the Committee may determine in its discretion, provided that the Nonemployee Director receiving such additional compensation may not participate in the decision to award such compensation or in other compensation decisions involving such Nonemployee Director.
5.5Minimum Vesting. Except with respect to five percent (5%) of the maximum aggregate number of shares of Stock that may be issued under the Plan, as provided in Section 4, no Award which vests on the basis of the Participant’s continued Service shall vest earlier than one year following the date of grant of such Award and no Award which vests on the basis of attainment of performance goals shall provide for a performance period of less than one year; provided, however, that such limitations shall not preclude the acceleration of vesting of such Award upon the death, disability, or in connection with a Change in Control, as provided herein.
A-11
Table of Contents
6.STOCK OPTIONS.
Options shall be evidenced by Award Agreements specifying the number of shares of Stock covered thereby, in such form as the Committee shall establish. Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:
6.1Exercise Price. The exercise price for each Option shall be established in the discretion of the Committee; provided, however, that (a) the exercise price per share shall be not less than the Fair Market Value of a share of Stock on the effective date of grant of the Option and (b) no Incentive Stock Option granted to a Ten Percent Owner shall have an exercise price per share less than one hundred ten percent (110%) of the Fair Market Value of a share of Stock on the effective date of grant of the Option. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an exercise price less than the minimum exercise price set forth above if such Option is granted pursuant to an assumption or substitution for another option in a manner that would qualify under the provisions of Section 409A or Section 424(a) of the Code.
6.2Exercisability and Term of Options. Subject to the minimum vesting provisions of Section 5.5, Options shall be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the Award Agreement evidencing such Option; provided, however, that (a) no Option shall be exercisable after the expiration of ten (10) years after the effective date of grant of such Option, (b) no Incentive Stock Option granted to a Ten Percent Owner shall be exercisable after the expiration of five (5) years after the effective date of grant of such Option and (c) no Option granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, shall be first exercisable until at least six (6) months following the date of grant of such Option (except in the event of such Employee’s death, disability or retirement, upon a Change in Control, or as otherwise permitted by the Worker Economic Opportunity Act). Subject to the foregoing, unless otherwise specified by the Committee in the grant of an Option, each Option shall terminate ten (10) years after the effective date of grant of the Option, unless earlier terminated in accordance with its provisions.
6.3Payment of Exercise Price.
(a)Forms of Consideration Authorized. Except as otherwise provided below, payment of the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check or in cash equivalent; (ii) if permitted by the Committee and subject to the limitations contained in Section 6.3(b), by means of (1) a Cashless Exercise, (2) a Stock Tender Exercise or (3) a Net Exercise; (iii) by such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable law, or (iv) by any combination thereof. The Committee may at any time or from time-to-time grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one or more forms of consideration.
(b)Limitations on Forms of Consideration.
(i)Cashless Exercise. A “Cashless Exercise” means the delivery of a properly executed notice of exercise together with irrevocable instructions to a broker providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System). The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise, including with respect to one or more Participants specified by the Company notwithstanding that such program or procedures may be available to other Participants.
(ii)Stock Tender Exercise. A “Stock Tender Exercise” means the delivery of a properly executed exercise notice accompanied by a Participant’s tender to the Company, or attestation to the ownership, in a form acceptable to the Company of whole shares of Stock owned by the Participant having a Fair Market
A-12
Table of Contents
Value that does not exceed the aggregate exercise price for the shares with respect to which the Option is exercised. A Stock Tender Exercise shall not be permitted if it would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. If required by the Company, an Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Participant for a period of time required by the Company (and not used for another option exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company.
(iii)Net Exercise. A “Net Exercise” means the delivery of a properly executed exercise notice followed by a procedure pursuant to which (1) the Company will reduce the number of shares otherwise issuable to a Participant upon the exercise of an Option by the largest whole number of shares having a Fair Market Value that does not exceed the aggregate exercise price for the shares with respect to which the Option is exercised, and (2) the Participant shall pay to the Company in cash the remaining balance of such aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued.
6.4Effect of Termination of Service.
(a)Option Exercisability. Subject to earlier termination of the Option as otherwise provided by this Plan and unless otherwise provided by the Committee, an Option shall terminate immediately upon the Participant’s termination of Service to the extent that it is then unvested and shall be exercisable after the Participant’s termination of Service to the extent it is then vested only during the applicable time period determined in accordance with this Section and thereafter shall terminate.
(i)Disability. If the Participant’s Service terminates because of the Disability of the Participant, the Option, to the extent unexercised and exercisable for vested shares on the date on which the Participant’s Service terminated, may be exercised by the Participant (or the Participant’s guardian or legal representative) at any time prior to the expiration of twelve (12) months (or such longer or shorter period provided by the Award Agreement) after the date on which the Participant’s Service terminated, but in any event no later than the date of expiration of the Option’s term as set forth in the Award Agreement evidencing such Option (the “Option Expiration Date”).
(ii)Death. If the Participant’s Service terminates because of the death of the Participant, the Option, to the extent unexercised and exercisable for vested shares on the date on which the Participant’s Service terminated, may be exercised by the Participant’s legal representative or other person who acquired the right to exercise the Option by reason of the Participant’s death at any time prior to the expiration of twelve (12) months (or such longer or shorter period provided by the Award Agreement) after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date. The Participant’s Service shall be deemed to have terminated on account of death if the Participant dies within three (3) months (or such longer or shorter period provided by the Award Agreement) after the Participant’s termination of Service.
(iii)Termination for Cause. Notwithstanding any other provision of the Plan to the contrary, if the Participant’s Service is terminated for Cause or if, following the Participant’s termination of Service and during any period in which the Option otherwise would remain exercisable, the Participant engages in any act that would constitute Cause, the Option shall terminate in its entirety and cease to be exercisable immediately upon such termination of Service or act.
(iv)Other Termination of Service. If the Participant’s Service terminates for any reason, except Disability, death or Cause, the Option, to the extent unexercised and exercisable for vested shares on the date on which the Participant’s Service terminated, may be exercised by the Participant at any time prior to the expiration of three (3) months (or such longer or shorter period provided by the Award Agreement) after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.
(b)Extension if Exercise Prevented by Law. Notwithstanding the foregoing, other than termination of Service for Cause, if the exercise of an Option within the applicable time periods set forth in Section 6.4(a) is prevented by the provisions of Section 14 below, the Option shall remain exercisable until the later of
A-13
Table of Contents
(i) thirty (30) days after the date such exercise first would no longer be prevented by such provisions or (ii) the end of the applicable time period under Section 6.4(a), but in any event no later than the Option Expiration Date.
6.5Transferability of Options. During the lifetime of the Participant, an Option shall be exercisable only by the Participant or the Participant’s guardian or legal representative. An Option shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the Committee, in its discretion, and set forth in the Award Agreement evidencing such Option, an Option shall be assignable or transferable subject to the applicable limitations, if any, described in the General Instructions to Form S-8 under the Securities Act or, in the case of an Incentive Stock Option, only as permitted by applicable regulations under Section 421 of the Code in a manner that does not disqualify such Option as an Incentive Stock Option.
7.STOCK APPRECIATION RIGHTS.
Stock Appreciation Rights shall be evidenced by Award Agreements specifying the number of shares of Stock subject to the Award, in such form as the Committee shall establish. Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:
7.1Types of SARs Authorized. SARs may be granted in tandem with all or any portion of a related Option (a “Tandem SAR”) or may be granted independently of any Option (a “Freestanding SAR”). A Tandem SAR may only be granted concurrently with the grant of the related Option.
7.2Exercise Price. The exercise price for each SAR shall be established in the discretion of the Committee; provided, however, that (a) the exercise price per share subject to a Tandem SAR shall be the exercise price per share under the related Option and (b) the exercise price per share subject to a Freestanding SAR shall be not less than the Fair Market Value of a share of Stock on the effective date of grant of the SAR. Notwithstanding the foregoing, an SAR may be granted with an exercise price lower than the minimum exercise price set forth above if such SAR is granted pursuant to an assumption or substitution for another stock appreciation right in a manner that would qualify under the provisions of Section 409A of the Code.
7.3Exercisability and Term of SARs.
(a)Tandem SARs. Tandem SARs shall be exercisable only at the time and to the extent, and only to the extent, that the related Option is exercisable, subject to such provisions as the Committee may specify where the Tandem SAR is granted with respect to less than the full number of shares of Stock subject to the related Option. The Committee may, in its discretion, provide in any Award Agreement evidencing a Tandem SAR that such SAR may not be exercised without the advance approval of the Company and, if such approval is not given, then the Option shall nevertheless remain exercisable in accordance with its terms. A Tandem SAR shall terminate and cease to be exercisable no later than the date on which the related Option expires or is terminated or canceled. Upon the exercise of a Tandem SAR with respect to some or all of the shares subject to such SAR, the related Option shall be canceled automatically as to the number of shares with respect to which the Tandem SAR was exercised. Upon the exercise of an Option related to a Tandem SAR as to some or all of the shares subject to such Option, the related Tandem SAR shall be canceled automatically as to the number of shares with respect to which the related Option was exercised.
(b)Freestanding SARs. Subject to the minimum vesting provisions of Section 5.5, freestanding SARs shall be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the Award Agreement evidencing such SAR; provided, however, that (i) no Freestanding SAR shall be exercisable after the expiration of ten (10) years after the effective date of grant of such SAR and (ii) no Freestanding SAR granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, shall be first exercisable until at least six (6) months following the date of grant of such SAR (except in the event of such
A-14
Table of Contents
Employee’s death, disability or retirement, upon a Change in Control, or as otherwise permitted by the Worker Economic Opportunity Act). Subject to the foregoing, unless otherwise specified by the Committee in the grant of a Freestanding SAR, each Freestanding SAR shall terminate ten (10) years after the effective date of grant of the SAR, unless earlier terminated in accordance with its provisions.
7.4Exercise of SARs. Upon the exercise (or deemed exercise pursuant to Section 7.5) of an SAR, the Participant (or the Participant’s legal representative or other person who acquired the right to exercise the SAR by reason of the Participant’s death) shall be entitled to receive payment of an amount for each share with respect to which the SAR is exercised equal to the excess, if any, of the Fair Market Value of a share of Stock on the date of exercise of the SAR over the exercise price. Payment of such amount shall be made (a) in the case of a Tandem SAR, solely in shares of Stock in a lump sum upon the date of exercise of the SAR and (b) in the case of a Freestanding SAR, in cash, shares of Stock, or any combination thereof as determined by the Committee, in a lump sum upon the date of exercise of the SAR. When payment is to be made in shares of Stock, the number of shares to be issued shall be determined on the basis of the Fair Market Value of a share of Stock on the date of exercise of the SAR. For purposes of Section 7, an SAR shall be deemed exercised on the date on which the Company receives notice of exercise from the Participant or as otherwise provided in Section 7.5.
7.5Deemed Exercise of SARs. If, on the date on which an SAR would otherwise terminate or expire, the SAR by its terms remains exercisable immediately prior to such termination or expiration and, if so exercised, would result in a payment to the holder of such SAR, then any portion of such SAR which has not previously been exercised shall automatically be deemed to be exercised as of such date with respect to such portion.
7.6Effect of Termination of Service. Subject to earlier termination of the SAR as otherwise provided herein and unless otherwise provided by the Committee, an SAR shall be exercisable after a Participant’s termination of Service only to the extent and during the applicable time period determined in accordance with Section 6.4 (treating the SAR as if it were an Option) and thereafter shall terminate.
7.7Transferability of SARs. During the lifetime of the Participant, an SAR shall be exercisable only by the Participant or the Participant’s guardian or legal representative. An SAR shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the Committee, in its discretion, and set forth in the Award Agreement evidencing such Award, a Tandem SAR related to a Nonstatutory Stock Option or a Freestanding SAR shall be assignable or transferable subject to the applicable limitations, if any, described in the General Instructions to Form S-8 under the Securities Act.
8.RESTRICTED STOCK AWARDS.
Restricted Stock Awards shall be evidenced by Award Agreements specifying whether the Award is a Restricted Stock Bonus or a Restricted Stock Purchase Right and the number of shares of Stock subject to the Award, in such form as the Committee shall establish. Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:
8.1Types of Restricted Stock Awards Authorized. Restricted Stock Awards may be granted in the form of either a Restricted Stock Bonus or a Restricted Stock Purchase Right. Restricted Stock Awards may be granted upon such conditions as the Committee shall determine, including, without limitation, upon the attainment of one or more Performance Goals described in Section 10.4. If either the grant of or satisfaction of Vesting Conditions applicable to a Restricted Stock Award is to be contingent upon the attainment of one or more Performance Goals, the Committee shall follow procedures substantially equivalent to those set forth in Sections 10.3 through 10.5(a).
8.2Purchase Price. The purchase price for shares of Stock issuable under each Restricted Stock Purchase Right shall be established by the Committee in its discretion. No monetary payment (other than applicable tax withholding) shall be required as a condition of receiving shares of Stock pursuant to a Restricted Stock Bonus, the consideration for which shall be services actually rendered to a Participating Company or for its benefit.
A-15
Table of Contents
Notwithstanding the foregoing, if required by applicable state corporate law, the Participant shall furnish consideration in the form of cash or past services rendered to a Participating Company or for its benefit having a value not less than the par value of the shares of Stock subject to a Restricted Stock Award.
8.3Purchase Period. A Restricted Stock Purchase Right shall be exercisable within a period established by the Committee, which shall in no event exceed thirty (30) days from the effective date of the grant of the Restricted Stock Purchase Right.
8.4Payment of Purchase Price. Except as otherwise provided below, payment of the purchase price for the number of shares of Stock being purchased pursuant to any Restricted Stock Purchase Right shall be made (a) in cash, by check or in cash equivalent, (b) by such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable law, or (c) by any combination thereof.
8.5Vesting and Restrictions on Transfer. Subject to the minimum vesting provisions of Section 5.5, shares issued pursuant to any Restricted Stock Award may (but need not) be made subject to Vesting Conditions based upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 10.4, as shall be established by the Committee and set forth in the Award Agreement evidencing such Award. During any period in which shares acquired pursuant to a Restricted Stock Award remain subject to Vesting Conditions, such shares may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of other than pursuant to an Ownership Change Event or as provided in Section 8.8. The Committee, in its discretion, may provide in any Award Agreement evidencing a Restricted Stock Award that, if the satisfaction of Vesting Conditions with respect to any shares subject to such Restricted Stock Award would otherwise occur on a day on which the sale of such shares would violate the provisions of the Trading Compliance Policy, then satisfaction of the Vesting Conditions automatically shall be determined on the next trading day on which the sale of such shares would not violate the Trading Compliance Policy. Upon request by the Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and all certificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions.
8.6Voting Rights; Dividends and Distributions. Except as provided in this Section, Section 8.5 and any Award Agreement, during any period in which shares acquired pursuant to a Restricted Stock Award remain subject to Vesting Conditions, the Participant shall have all of the rights of a stockholder of the Company holding shares of Stock, including the right to vote such shares and to receive all dividends and other distributions paid with respect to such shares; provided, however, that subject to Section 3.7 such dividends and distributions shall be subject to the same Vesting Conditions as the shares subject to the Restricted Stock Award with respect to which such dividends or distributions were paid. In the event of a dividend or distribution paid in shares of Stock or other property or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.4, any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends) to which the Participant is entitled by reason of the Participant’s Restricted Stock Award shall be immediately subject to the same Vesting Conditions as the shares subject to the Restricted Stock Award with respect to which such dividends or distributions were paid or adjustments were made.
8.7Effect of Termination of Service. Unless otherwise provided by the Committee in the Award Agreement evidencing a Restricted Stock Award, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (including the Participant’s death or disability), then (a) the Company shall have the option to repurchase for the purchase price paid by the Participant any shares acquired by the Participant pursuant to a Restricted Stock Purchase Right which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service and (b) the Participant shall forfeit to the Company any shares acquired by the Participant pursuant to a Restricted Stock Bonus which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service. The Company shall have the right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more persons as may be selected by the Company.
8.8Nontransferability of Restricted Stock Award Rights. Rights to acquire shares of Stock pursuant to a Restricted Stock Award shall not be subject in any manner to anticipation, alienation, sale, exchange,
A-16
Table of Contents
transfer, assignment, pledge, encumbrance or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or the laws of descent and distribution. All rights with respect to a Restricted Stock Award granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.
9.RESTRICTED STOCK UNITS.
Restricted Stock Unit Awards shall be evidenced by Award Agreements specifying the number of Restricted Stock Units subject to the Award, in such form as the Committee shall establish. Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:
9.1Grant of Restricted Stock Unit Awards. Restricted Stock Unit Awards may be granted upon such conditions as the Committee shall determine, including, without limitation, upon the attainment of one or more Performance Goals described in Section 10.4. If either the grant of a Restricted Stock Unit Award or the Vesting Conditions with respect to such Award is to be contingent upon the attainment of one or more Performance Goals, the Committee shall follow procedures substantially equivalent to those set forth in Sections 10.3 through 10.5(a).
9.2Purchase Price. No monetary payment (other than applicable tax withholding, if any) shall be required as a condition of receiving a Restricted Stock Unit Award, the consideration for which shall be services actually rendered to a Participating Company or for its benefit. Notwithstanding the foregoing, if required by applicable state corporate law, the Participant shall furnish consideration in the form of cash or past services rendered to a Participating Company or for its benefit having a value not less than the par value of the shares of Stock issued upon settlement of the Restricted Stock Unit Award.
9.3Vesting. Subject to the minimum vesting provisions of Section 5.5, Restricted Stock Unit Awards may (but need not) be made subject to Vesting Conditions based upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 10.4, as shall be established by the Committee and set forth in the Award Agreement evidencing such Award.
9.4Voting Rights, Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to shares of Stock represented by Restricted Stock Units until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). However, the Committee, in its discretion, may provide in the Award Agreement evidencing any Restricted Stock Unit Award that the Participant shall be entitled to Dividend Equivalent Rights with respect to the payment of cash dividends on Stock during the period beginning on the date such Award is granted and ending, with respect to each share subject to the Award, on the earlier of the date the Award is settled or the date on which it is terminated. Dividend Equivalent Rights, if any, shall be paid by crediting the Participant with a cash amount or with additional whole Restricted Stock Units as of the date of payment of such cash dividends on Stock, as determined by the Committee. The number of additional Restricted Stock Units (rounded to the nearest whole number), if any, to be credited shall be determined by dividing (a) the amount of cash dividends paid on the dividend payment date with respect to the number of shares of Stock represented by the Restricted Stock Units previously credited to the Participant by (b) the Fair Market Value per share of Stock on such date. Subject to Section 3.7, such cash amount or additional Restricted Stock Units shall be subject to the same terms and conditions and shall be settled in the same manner and at the same time as the Restricted Stock Units originally subject to the Restricted Stock Unit Award. In the event of a dividend or distribution paid in shares of Stock or other property or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.4, appropriate adjustments shall be made in the Participant’s Restricted Stock Unit Award so that it represents the right to receive upon settlement any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends) to which the Participant would be entitled by reason of the shares of Stock issuable upon settlement of the Award, and all such new, substituted or additional securities or other property shall be immediately subject to the same Vesting Conditions as are applicable to the Award.
A-17
Table of Contents
9.5Effect of Termination of Service. Unless otherwise provided by the Committee and set forth in the Award Agreement evidencing a Restricted Stock Unit Award, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (including the Participant’s death or disability), then the Participant shall forfeit to the Company any Restricted Stock Units pursuant to the Award which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service.
9.6Settlement of Restricted Stock Unit Awards. The Company shall issue to a Participant on the date on which Restricted Stock Units subject to the Participant’s Restricted Stock Unit Award vest or on such other date determined by the Committee in compliance with Section 409A, if applicable, and set forth in the Award Agreement one (1) share of Stock (and/or any other new, substituted or additional securities or other property pursuant to an adjustment described in Section 9.4) for each Restricted Stock Unit then becoming vested or otherwise to be settled on such date, subject to the withholding of applicable taxes, if any. The Committee, in its discretion, may provide in any Award Agreement evidencing a Restricted Stock Unit Award that if the settlement date with respect to any shares issuable upon vesting of Restricted Stock Units would otherwise occur on a day on which the sale of such shares would violate the provisions of the Trading Compliance Policy, then the settlement date shall be deferred until the next trading day on which the sale of such shares would not violate the Trading Compliance Policy but in any event no later than the 15th day of the third calendar month following the year in which such Restricted Stock Units vest. If permitted by the Committee, the Participant may elect, consistent with the requirements of Section 409A, to defer receipt of all or any portion of the shares of Stock or other property otherwise issuable to the Participant pursuant to this Section, and such deferred issuance date(s) and amount(s) elected by the Participant shall be set forth in the Award Agreement. Notwithstanding the foregoing, the Committee, in its discretion, may provide for settlement of any Restricted Stock Unit Award by payment to the Participant in cash of an amount equal to the Fair Market Value on the payment date of the shares of Stock or other property otherwise issuable to the Participant pursuant to this Section.
9.7Nontransferability of Restricted Stock Unit Awards. The right to receive shares pursuant to a Restricted Stock Unit Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. All rights with respect to a Restricted Stock Unit Award granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.
10.PERFORMANCE AWARDS.
Performance Awards shall be evidenced by Award Agreements in such form as the Committee shall establish. Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:
10.1Types of Performance Awards Authorized. Performance Awards may be granted in the form of either Performance Shares or Performance Units. Each Award Agreement evidencing a Performance Award shall specify the number of Performance Shares or Performance Units subject thereto, the Performance Award Formula, the Performance Goal(s) and Performance Period applicable to the Award, and the other terms, conditions and restrictions of the Award.
10.2Initial Value of Performance Shares and Performance Units. Unless otherwise provided by the Committee in granting a Performance Award, each Performance Share shall have an initial monetary value equal to the Fair Market Value of one (1) share of Stock, subject to adjustment as provided in Section 4.4, on the effective date of grant of the Performance Share, and each Performance Unit shall have an initial monetary value established by the Committee at the time of grant. The final value payable to the Participant in settlement of a Performance Award determined on the basis of the applicable Performance Award Formula will depend on the extent to which Performance Goals established by the Committee are attained within the applicable Performance Period established by the Committee.
10.3Establishment of Performance Period, Performance Goals and Performance Award Formula. In granting each Performance Award, the Committee shall establish in writing the applicable Performance
A-18
Table of Contents
Period (subject to the minimum vesting provisions of Section 5.5), Performance Award Formula and one or more Performance Goals which, when measured at the end of the Performance Period, shall determine on the basis of the Performance Award Formula the final value of the Performance Award to be paid to the Participant. The Committee shall establish the Performance Goal(s) and Performance Award Formula applicable to each Performance Award at a time when the outcome of the Performance Goals remains substantially uncertain. The Company shall notify each Participant granted a Performance Award of the terms of such Award, including the Performance Period, Performance Goal(s) and Performance Award Formula.
10.4Measurement of Performance Goals. Performance Goals shall be established by the Committee on the basis of targets to be attained (“Performance Targets”) with respect to one or more measures of business or financial performance (each, a “Performance Measure”), subject to the following:
(a)Performance Measures. Performance Measures shall be calculated in accordance with the Company’s financial statements, or, if such measures are not reported in the Company’s financial statements, they shall be calculated in accordance with generally accepted accounting principles, a method used generally in the Company’s industry, or in accordance with a methodology established by the Committee prior to the grant of the Performance Award. As specified by the Committee, Performance Measures may be calculated with respect to the Company and each Subsidiary Corporation consolidated therewith for financial reporting purposes, one or more Subsidiary Corporations or such division or other business unit of any of them selected by the Committee. Unless otherwise determined by the Committee prior to the grant of the Performance Award, the Performance Measures applicable to the Performance Award shall be calculated prior to the accrual of expense for any Performance Award for the same Performance Period and excluding the effect (whether positive or negative) on the Performance Measures of any change in accounting standards or any unusual or infrequently occurring event or transaction, as determined by the Committee, occurring after the establishment of the Performance Goals applicable to the Performance Award. Each such adjustment, if any, shall be made solely for the purpose of providing a consistent basis from period to period for the calculation of Performance Measures in order to prevent the dilution or enlargement of the Participant’s rights with respect to a Performance Award. Performance Measures may be based upon any metrics determined by the Committee.
(b)Performance Targets. Performance Targets may include a minimum, maximum, target level and intermediate levels of performance, with the final value of a Performance Award determined under the applicable Performance Award Formula by the Performance Target level attained during the applicable Performance Period. A Performance Target may be stated as an absolute value, an increase or decrease in a value, or as a value determined relative to an index, budget or other standard selected by the Committee.
10.5Settlement of Performance Awards.
(a)Determination of Final Value. As soon as practicable following the completion of the Performance Period applicable to a Performance Award, the Committee shall certify in writing the extent to which the applicable Performance Goals have been attained and the resulting final value of the Award earned by the Participant and to be paid upon its settlement in accordance with the applicable Performance Award Formula.
(b)Discretionary Adjustment of Award Formula. In its discretion, the Committee may, either at the time it grants a Performance Award or at any time thereafter, provide for the positive or negative adjustment of the Performance Award Formula applicable to a Performance Award granted to any Participant who is not a Covered Employee to reflect such Participant’s individual performance in his or her position with the Company or such other factors as the Committee may determine. If permitted under a Covered Employee’s Award Agreement, the Committee shall have the discretion, on the basis of such criteria as may be established by the Committee, to reduce some or all of the value of the Performance Award that would otherwise be paid to the Covered Employee upon its settlement notwithstanding the attainment of any Performance Goal and the resulting value of the Performance Award determined in accordance with the Performance Award Formula.
(c)Effect of Leaves of Absence. Unless otherwise required by law or a Participant’s Award Agreement, payment of the final value, if any, of a Performance Award held by a Participant who has taken in excess of thirty (30) days in unpaid leaves of absence during a Performance Period shall be prorated on the basis of the
A-19
Table of Contents
number of days of the Participant’s Service during the Performance Period during which the Participant was not on an unpaid leave of absence.
(d)Notice to Participants. As soon as practicable following the Committee’s determination and certification in accordance with Sections 10.5(a) and (b), the Company shall notify each Participant of the determination of the Committee.
(e)Payment in Settlement of Performance Awards. As soon as practicable following the Committee’s determination and certification in accordance with Sections 10.5(a) and (b), but in any event within the Short-Term Deferral Period described in Section 15.1 (except as otherwise provided below or consistent with the requirements of Section 409A), payment shall be made to each eligible Participant (or such Participant’s legal representative or other person who acquired the right to receive such payment by reason of the Participant’s death) of the final value of the Participant’s Performance Award. Payment of such amount shall be made in cash, shares of Stock, or a combination thereof as determined by the Committee. Unless otherwise provided in the Award Agreement evidencing a Performance Award, payment shall be made in a lump sum. If permitted by the Committee, the Participant may elect, consistent with the requirements of Section 409A, to defer receipt of all or any portion of the payment to be made to the Participant pursuant to this Section, and such deferred payment date(s) elected by the Participant shall be set forth in the Award Agreement. If any payment is to be made on a deferred basis, the Committee may, but shall not be obligated to, provide for the payment during the deferral period of Dividend Equivalent Rights or interest.
(f)Provisions Applicable to Payment in Shares. If payment is to be made in shares of Stock, the number of such shares shall be determined by dividing the final value of the Performance Award by the Fair Market Value of a share of Stock determined by the method specified in the Award Agreement. Shares of Stock issued in payment of any Performance Award may be fully vested and freely transferable shares or may be shares of Stock subject to Vesting Conditions as provided in Section 8.5. Any shares subject to Vesting Conditions shall be evidenced by an appropriate Award Agreement and shall be subject to the provisions of Sections 8.5 through 8.8 above.
10.6Voting Rights; Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to shares of Stock represented by Performance Share Awards until the date of the issuance of such shares, if any (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). However, the Committee, in its discretion, may provide in the Award Agreement evidencing any Performance Share Award that the Participant shall be entitled to Dividend Equivalent Rights with respect to the payment of cash dividends on Stock during the period beginning on the date the Award is granted and ending, with respect to each share subject to the Award, on the earlier of the date on which the Performance Shares are settled or the date on which they are forfeited. Such Dividend Equivalent Rights, if any, shall be credited to the Participant either in cash or in the form of additional whole Performance Shares as of the date of payment of such cash dividends on Stock, as determined by the Committee. The number of additional Performance Shares (rounded to the nearest whole number), if any, to be so credited shall be determined by dividing (a) the amount of cash dividends paid on the dividend payment date with respect to the number of shares of Stock represented by the Performance Shares previously credited to the Participant by (b) the Fair Market Value per share of Stock on such date. Dividend Equivalent Rights, if any, shall be subject to Section 3.7 and shall be accumulated and paid to the extent that the related Performance Shares become nonforfeitable. Settlement of Dividend Equivalent Rights may be made in cash, shares of Stock, or a combination thereof as determined by the Committee, and may be paid on the same basis as settlement of the related Performance Share as provided in Section 10.5. Dividend Equivalent Rights shall not be paid with respect to Performance Units. In the event of a dividend or distribution paid in shares of Stock or other property or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.4, appropriate adjustments shall be made in the Participant’s Performance Share Award so that it represents the right to receive upon settlement any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends) to which the Participant would be entitled by reason of the shares of Stock issuable upon settlement of the Performance Share Award, and all such new, substituted or additional securities or other property shall be immediately subject to the same Performance Goals as are applicable to the Award.
A-20
Table of Contents
10.7Effect of Termination of Service. Unless otherwise provided by the Committee and set forth in the Award Agreement evidencing a Performance Award, the effect of a Participant’s termination of Service on the Performance Award shall be as follows:
(a)Death or Disability. If the Participant’s Service terminates because of the death or Disability of the Participant before the completion of the Performance Period applicable to the Performance Award, the final value of the Participant’s Performance Award shall be determined by the extent to which the applicable Performance Goals have been attained with respect to the entire Performance Period and shall be prorated based on the number of months of the Participant’s Service during the Performance Period. Payment shall be made following the end of the Performance Period in any manner permitted by Section 10.5.
(b)Other Termination of Service. If the Participant’s Service terminates for any reason except death or Disability before the completion of the Performance Period applicable to the Performance Award, such Award shall be forfeited in its entirety; provided, however, that in the event of an involuntary termination of the Participant’s Service, the Committee, in its discretion, may waive the automatic forfeiture of all or any portion of any such Award and determine the final value of the Performance Award in the manner provided by Section 10.7(a). Payment of any amount pursuant to this Section shall be made following the end of the Performance Period in any manner permitted by Section 10.5.
10.8Nontransferability of Performance Awards. Prior to settlement in accordance with the provisions of the Plan, no Performance Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. All rights with respect to a Performance Award granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.
11.CASH-BASED AWARDS AND OTHER STOCK-BASED AWARDS.
Cash-Based Awards and Other Stock-Based Awards shall be evidenced by Award Agreements in such form as the Committee shall establish. Such Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:
11.1Grant of Cash-Based Awards. Subject to the provisions of the Plan, the Committee, at any time and from time to time, may grant Cash-Based Awards to Participants in such amounts and upon such terms and conditions, including the achievement of performance criteria, as the Committee may determine.
11.2Grant of Other Stock-Based Awards. The Committee may grant other types of equity-based or equity-related Awards not otherwise described by the terms of this Plan (including the grant or offer for sale of unrestricted securities, stock-equivalent units, stock appreciation units, securities or debentures convertible into common stock or other forms determined by the Committee) in such amounts and subject to such terms and conditions as the Committee shall determine. Other Stock-Based Awards may be made available as a form of payment in the settlement of other Awards or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock-Based Awards may involve the transfer of actual shares of Stock to Participants, or payment in cash or otherwise of amounts based on the value of Stock and may include, without limitation, Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States.
11.3Value of Cash-Based and Other Stock-Based Awards. Each Cash-Based Award shall specify a monetary payment amount or payment range as determined by the Committee. Each Other Stock-Based Award shall be expressed in terms of shares of Stock or units based on such shares of Stock, as determined by the Committee. Subject to the minimum vesting provisions of Section 5.5, the Committee may require the satisfaction of such Service requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 10.4, as shall be established by the Committee and set forth in the Award Agreement evidencing such Award. If the Committee exercises its discretion to establish performance criteria, the final value of
A-21
Table of Contents
Cash-Based Awards or Other Stock-Based Awards that will be paid to the Participant will depend on the extent to which the performance criteria are met.
11.4Payment or Settlement of Cash-Based Awards and Other Stock-Based Awards. Payment or settlement, if any, with respect to a Cash-Based Award or an Other Stock-Based Award shall be made in accordance with the terms of the Award, in cash, shares of Stock or other securities or any combination thereof as the Committee determines. To the extent applicable, payment or settlement with respect to each Cash-Based Award and Other Stock-Based Award shall be made in compliance with the requirements of Section 409A.
11.5Voting Rights; Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to shares of Stock represented by Other Stock-Based Awards until the date of the issuance of such shares of Stock (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), if any, in settlement of such Award. However, the Committee, in its discretion, may provide in the Award Agreement evidencing any Other Stock-Based Award that the Participant shall be entitled to Dividend Equivalent Rights with respect to the payment of cash dividends on Stock during the period beginning on the date such Award is granted and ending, with respect to each share subject to the Award, on the earlier of the date the Award is settled or the date on which it is terminated. Such Dividend Equivalent Rights, if any, shall be paid in accordance with the provisions set forth in Section 3.7 and Section 9.4. Dividend Equivalent Rights shall not be granted with respect to Cash-Based Awards. In the event of a dividend or distribution paid in shares of Stock or other property or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.4, appropriate adjustments shall be made in the Participant’s Other Stock-Based Award so that it represents the right to receive upon settlement any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends) to which the Participant would be entitled by reason of the shares of Stock issuable upon settlement of such Award, and all such new, substituted or additional securities or other property shall be immediately subject to the same Vesting Conditions and performance criteria, if any, as are applicable to the Award.
11.6Effect of Termination of Service. Each Award Agreement evidencing a Cash-Based Award or Other Stock-Based Award shall set forth the extent to which the Participant shall have the right to retain such Award following termination of the Participant’s Service. Such provisions shall be determined in the discretion of the Committee, need not be uniform among all Cash-Based Awards or Other Stock-Based Awards, and may reflect distinctions based on the reasons for termination, subject to the requirements of Section 409A, if applicable.
11.7Nontransferability of Cash-Based Awards and Other Stock-Based Awards. Prior to the payment or settlement of a Cash-Based Award or Other Stock-Based Award, the Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. The Committee may impose such additional restrictions on any shares of Stock issued in settlement of Cash-Based Awards and Other Stock-Based Awards as it may deem advisable, including, without limitation, minimum holding period requirements, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such shares of Stock are then listed and/or traded, or under any state securities laws or foreign law applicable to such shares of Stock.
12.STANDARD FORMS OF AWARD AGREEMENT.
12.1Award Agreements. Each Award shall comply with and be subject to the terms and conditions set forth in the appropriate form of Award Agreement approved by the Committee and as amended from time to time. No Award or purported Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement, which execution may be evidenced by electronic means.
12.2Authority to Vary Terms. The Committee shall have the authority from time to time to vary the terms of any standard form of Award Agreement either in connection with the grant or amendment of an individual Award or in connection with the authorization of a new standard form or forms; provided, however, that the terms and conditions of any such new, revised or amended standard form or forms of Award Agreement are not inconsistent with the terms of the Plan.
A-22
Table of Contents
13.CHANGE IN CONTROL.
13.1Effect of Change in Control on Nonemployee Director Awards. Subject to the requirements and limitations of Section 409A, if applicable, including as provided by Section 15.4(f), in the event of a Change in Control, each outstanding Nonemployee Director Award shall become immediately exercisable and vested in full and, except to the extent assumed, continued or substituted for pursuant to Section 13.2(a), shall be settled effective immediately prior to the time of consummation of the Change in Control.
13.2Effect of Change in Control on Awards. In the event of a Change in Control, outstanding Awards shall be subject to the definitive agreement entered into by the Company in connection with the Change in Control. Subject to the requirements and limitations of Section 409A, if applicable, the Committee may provide pursuant to such agreement for any one or more of the following:
(a)Assumption, Continuation or Substitution. In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of any Participant, assume or continue the Company’s rights and obligations under each or any Award or portion thereof outstanding immediately prior to the Change in Control or substitute for each or any such outstanding Award or portion thereof a substantially equivalent award with respect to the Acquiror’s stock, as applicable. For purposes of this Section, if so determined by the Committee in its discretion, an Award denominated in shares of Stock shall be deemed assumed if, following the Change in Control, the Award confers the right to receive, subject to the terms and conditions of the Plan and the applicable Award Agreement, for each share of Stock subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of a share of Stock on the effective date of the Change in Control was entitled (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Stock); provided, however, that if such consideration is not solely common stock of the Acquiror, the Committee may, with the consent of the Acquiror, provide for the consideration to be received upon the exercise or settlement of the Award, for each share of Stock subject to the Award, to consist solely of common stock of the Acquiror equal in Fair Market Value to the per share consideration received by holders of Stock pursuant to the Change in Control. Any Award or portion thereof which is neither assumed or continued by the Acquiror in connection with the Change in Control nor exercised or settled as of the time of consummation of the Change in Control shall terminate and cease to be outstanding effective as of the time of consummation of the Change in Control.
(b)Cash-Out of Outstanding Stock-Based Awards. The Committee may, in its discretion and without the consent of any Participant, determine that, upon the occurrence of a Change in Control, each or any Award denominated in shares of Stock or portion thereof outstanding immediately prior to the Change in Control and not previously exercised or settled shall be canceled in exchange for a payment with respect to each vested share of Stock subject to such canceled Award in (i) cash, (ii) stock of the Company or of a corporation or other business entity a party to the Change in Control, or (iii) other property which, in any such case, shall be in an amount having a Fair Market Value equal to the Fair Market Value of the consideration to be paid per share of Stock in the Change in Control, reduced (but not below zero) by the exercise or purchase price per share, if any, under such Award. In the event such determination is made by the Committee, an Award having an exercise or purchase price per share equal to or greater than the Fair Market Value of the consideration to be paid per share of Stock in the Change in Control may be canceled without payment of consideration to the holder thereof. Payment pursuant to this Section (reduced by applicable withholding taxes, if any) shall be made to Participants in respect of the vested portions of their canceled Awards as soon as practicable following the date of the Change in Control and in respect of the unvested portions of their canceled Awards in accordance with the vesting schedules applicable to such Awards.
(c)Accelerated Vesting of Time-Vesting Awards. The Committee may, in its discretion, provide that if either:
(i)the Acquiror will not assume or continue the Time-Vesting Award or substitute a substantially equivalent award pursuant to Section 13.2(a), in each case for equity securities of the Acquiror which are or promptly will be registered under the Securities Act and tradable on an established United States securities exchange, or
A-23
Table of Contents
(ii)the Acquiror has so assumed, continued or substituted for the Time-Vesting Award, but the Participant’s Service terminates as a result of Involuntary Termination, then the exercisability, vesting and/or settlement of the Time-Vesting Award and shares acquired pursuant thereto will accelerate in full or in part to such extent as the Committee determines.
(d)Accelerated or Pro Rata Settlement of Performance-Vesting Awards. The Committee may, in its discretion, provide that if either:
(i)the Acquiror will not assume or continue the Performance-Vesting Award or substitute a substantially equivalent award pursuant to Section 13.2(a), in each case for equity securities of the Acquiror which are or promptly will be registered under the Securities Act and tradable on an established United States securities exchange, or
(ii)the Acquiror has so assumed, continued or substituted for the Performance-Vesting Award, but the Participant’s Service terminates as a result of Involuntary Termination, then the exercisability, vesting and/or settlement of the Performance-Vesting Award and shares acquired pursuant thereto will be determined, as specified by the Committee, either (A) based upon the actual achievement of the applicable performance goals(s) under the terms of the Performance-Based Award through the date of the Change in Control or the Involuntary Termination, as applicable or (B) to such extent as would occur under the terms of the Performance-Vesting Award had 100% of the target level of the applicable performance goals(s) been achieved but with the result prorated based on the period of the Participant’s actual Service during the applicable full performance period.
13.3Federal Excise Tax Under Section 4999 of the Code.
(a)Excess Parachute Payment. If any acceleration of vesting pursuant to an Award and any other payment or benefit received or to be received by a Participant would subject the Participant to any excise tax pursuant to Section 4999 of the Code due to the characterization of such acceleration of vesting, payment or benefit as an “excess parachute payment” under Section 280G of the Code, then, provided such election would not subject the Participant to taxation under Section 409A, the Participant may elect to reduce the amount of any acceleration of vesting called for under the Award in order to avoid such characterization.
(b)Determination by Tax Firm. To aid the Participant in making any election called for under Section 13.3(a), no later than the date of the occurrence of any event that might reasonably be anticipated to result in an “excess parachute payment” to the Participant as described in Section 13.3(a), the Company shall request a determination in writing by the professional firm engaged by the Company for general tax purposes, or, if the tax firm so engaged by the Company is serving as accountant or auditor for the Acquiror, the Company will appoint a nationally recognized tax firm to make the determinations required by this Section (the “Tax Firm”). As soon as practicable thereafter, the Tax Firm shall determine and report to the Company and the Participant the amount of such acceleration of vesting, payments and benefits which would produce the greatest after-tax benefit to the Participant. For the purposes of such determination, the Tax Firm may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Participant shall furnish to the Tax Firm such information and documents as the Tax Firm may reasonably request in order to make its required determination. The Company shall bear all fees and expenses the Tax Firm charges in connection with its services contemplated by this Section.
14.COMPLIANCE WITH SECURITIES LAW.
The grant of Awards and the issuance of shares of Stock pursuant to any Award shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities and the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, no Award may be exercised or shares issued pursuant to an Award unless (a) a registration statement under the Securities Act shall at the time of such exercise or issuance be in effect with respect to the shares issuable pursuant to the Award, or (b) in the opinion of legal counsel to the Company, the shares issuable pursuant to the Award may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal
A-24
Table of Contents
counsel to be necessary to the lawful issuance and sale of any shares under the Plan shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to issuance of any Stock, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.
15.COMPLIANCE WITH SECTION 409A.
15.1Awards Subject to Section 409A. The Company intends that Awards granted pursuant to the Plan shall either be exempt from or comply with Section 409A, and the Plan shall be so construed. The provisions of this Section 15 shall apply to any Award or portion thereof that constitutes or provides for payment of Section 409A Deferred Compensation. Such Awards may include, without limitation:
(a)A Nonstatutory Stock Option or SAR that includes any feature for the deferral of compensation other than the deferral of recognition of income until the later of (i) the exercise or disposition of the Award or (ii) the time the stock acquired pursuant to the exercise of the Award first becomes substantially vested.
(b)Any Restricted Stock Unit Award, Performance Award, Cash-Based Award or Other Stock-Based Award that either (i) provides by its terms for settlement of all or any portion of the Award at a time or upon an event that will or may occur later than the end of the Short-Term Deferral Period (as defined below) or (ii) permits the Participant granted the Award to elect one or more dates or events upon which the Award will be settled after the end of the Short-Term Deferral Period.
Subject to the provisions of Section 409A, the term “Short-Term Deferral Period” means the 2½ month period ending on the later of (i) the 15th day of the third month following the end of the Participant’s taxable year in which the right to payment under the applicable portion of the Award is no longer subject to a substantial risk of forfeiture or (ii) the 15th day of the third month following the end of the Company’s taxable year in which the right to payment under the applicable portion of the Award is no longer subject to a substantial risk of forfeiture. For this purpose, the term “substantial risk of forfeiture” shall have the meaning provided by Section 409A.
15.2Deferral and/or Distribution Elections. Except as otherwise permitted or required by Section 409A, the following rules shall apply to any compensation deferral and/or payment elections (each, an “Election”) that may be permitted or required by the Committee pursuant to an Award providing Section 409A Deferred Compensation:
(a)Elections must be in writing and specify the amount of the payment in settlement of an Award being deferred, as well as the time and form of payment as permitted by this Plan.
(b)Elections shall be made by the end of the Participant’s taxable year prior to the year in which services commence for which an Award may be granted to the Participant.
(c)Elections shall continue in effect until a written revocation or change in Election is received by the Company, except that a written revocation or change in Election must be received by the Company prior to the last day for making the Election determined in accordance with paragraph (b) above or as permitted by Section 15.3.
15.3Subsequent Elections. Except as otherwise permitted or required by Section 409A, any Award providing Section 409A Deferred Compensation which permits a subsequent Election to delay the payment or change the form of payment in settlement of such Award shall comply with the following requirements:
(a)No subsequent Election may take effect until at least twelve (12) months after the date on which the subsequent Election is made.
A-25
Table of Contents
(b)Each subsequent Election related to a payment in settlement of an Award not described in Section 15.4(a)(ii), 15.4(a)(iii) or 15.4(a)(vi) must result in a delay of the payment for a period of not less than five (5) years from the date on which such payment would otherwise have been made.
(c)No subsequent Election related to a payment pursuant to Section 15.4(a)(iv) shall be made less than twelve (12) months before the date on which such payment would otherwise have been made.
(d)Subsequent Elections shall continue in effect until a written revocation or change in the subsequent Election is received by the Company, except that a written revocation or change in a subsequent Election must be received by the Company prior to the last day for making the subsequent Election determined in accordance the preceding paragraphs of this Section 15.3.
15.4Payment of Section 409A Deferred Compensation.
(a)Permissible Payments. Except as otherwise permitted or required by Section 409A, an Award providing Section 409A Deferred Compensation must provide for payment in settlement of the Award only upon one or more of the following:
(i)The Participant’s “separation from service” (as defined by Section 409A);
(ii)The Participant’s becoming “disabled” (as defined by Section 409A);
(iii)The Participant’s death;
(iv)A time or fixed schedule that is either (i) specified by the Committee upon the grant of an Award and set forth in the Award Agreement evidencing such Award or (ii) specified by the Participant in an Election complying with the requirements of Section 15.2 or 15.3, as applicable;
(v)A change in the ownership or effective control or the Company or in the ownership of a substantial portion of the assets of the Company determined in accordance with Section 409A; or
(vi)The occurrence of an “unforeseeable emergency” (as defined by Section 409A).
(b)Installment Payments. It is the intent of this Plan that any right of a Participant to receive installment payments (within the meaning of Section 409A) shall, for all purposes of Section 409A, be treated as a right to a series of separate payments.
(c)Required Delay in Payment to Specified Employee Pursuant to Separation from Service. Notwithstanding any provision of the Plan or an Award Agreement to the contrary, except as otherwise permitted by Section 409A, no payment pursuant to Section 15.4(a)(i) in settlement of an Award providing for Section 409A Deferred Compensation may be made to a Participant who is a “specified employee” (as defined by Section 409A) as of the date of the Participant’s separation from service before the date (the “Delayed Payment Date”) that is six (6) months after the date of such Participant’s separation from service, or, if earlier, the date of the Participant’s death. All such amounts that would, but for this paragraph, become payable prior to the Delayed Payment Date shall be accumulated and paid on the Delayed Payment Date.
(d)Payment Upon Disability. All distributions of Section 409A Deferred Compensation payable pursuant to Section 15.4(a)(ii) by reason of a Participant becoming disabled shall be paid in a lump sum or in periodic installments as established by the Participant’s Election. If the Participant has made no Election with respect to distributions of Section 409A Deferred Compensation upon becoming disabled, all such distributions shall be paid in a lump sum upon the determination that the Participant has become disabled.
A-26
Table of Contents
(e)Payment Upon Death. If a Participant dies before complete distribution of amounts payable upon settlement of an Award subject to Section 409A, such undistributed amounts shall be distributed to his or her beneficiary under the distribution method for death established by the Participant’s Election upon receipt by the Committee of satisfactory notice and confirmation of the Participant’s death. If the Participant has made no Election with respect to distributions of Section 409A Deferred Compensation upon death, all such distributions shall be paid in a lump sum upon receipt by the Committee of satisfactory notice and confirmation of the Participant’s death.
(f)Payment Upon Change in Control. Notwithstanding any provision of the Plan or an Award Agreement to the contrary, to the extent that any amount constituting Section 409A Deferred Compensation would become payable under this Plan by reason of a Change in Control, such amount shall become payable only if the event constituting a Change in Control would also constitute a change in ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Section 409A. Any Award which constitutes Section 409A Deferred Compensation and which would vest and otherwise become payable upon a Change in Control as a result of the failure of the Acquiror to assume, continue or substitute for such Award in accordance with Section 13.2(a) shall vest to the extent provided by such Award but shall be converted automatically at the effective time of such Change in Control into a right to receive, in cash on the date or dates such award would have been settled in accordance with its then existing settlement schedule (or as required by Section 15.4(c)), an amount or amounts equal in the aggregate to the intrinsic value of the Award at the time of the Change in Control.
(g)Payment Upon Unforeseeable Emergency. The Committee shall have the authority to provide in the Award Agreement evidencing any Award providing for Section 409A Deferred Compensation for payment pursuant to Section 15.4(a)(vi) in settlement of all or a portion of such Award in the event that a Participant establishes, to the satisfaction of the Committee, the occurrence of an unforeseeable emergency. In such event, the amount(s) distributed with respect to such unforeseeable emergency cannot exceed the amounts reasonably necessary to satisfy the emergency need plus amounts necessary to pay taxes reasonably anticipated as a result of such distribution(s), after taking into account the extent to which such emergency need is or may be relieved through reimbursement or compensation by insurance or otherwise, by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship) or by cessation of deferrals under the Award. All distributions with respect to an unforeseeable emergency shall be made in a lump sum upon the Committee’s determination that an unforeseeable emergency has occurred. The Committee’s decision with respect to whether an unforeseeable emergency has occurred and the manner in which, if at all, the payment in settlement of an Award shall be altered or modified, shall be final, conclusive, and not subject to approval or appeal.
(h)Prohibition of Acceleration of Payments. Notwithstanding any provision of the Plan or an Award Agreement to the contrary, this Plan does not permit the acceleration of the time or schedule of any payment under an Award providing Section 409A Deferred Compensation, except as permitted by Section 409A.
(i)No Representation Regarding Section 409A Compliance. Notwithstanding any other provision of the Plan, the Company makes no representation that Awards shall be exempt from or comply with Section 409A. No Participating Company shall be liable for any tax, penalty or interest imposed on a Participant by Section 409A.
16.TAX WITHHOLDING.
16.1Tax Withholding in General. The Company shall have the right to deduct from any and all payments made under the Plan, or to require the Participant, through payroll withholding, cash payment or otherwise, to make adequate provision for, the federal, state, local and foreign taxes (including social insurance), if any, required by law to be withheld by any Participating Company with respect to an Award or the shares acquired pursuant thereto. The Company shall have no obligation to deliver shares of Stock, to release shares of Stock from an escrow established pursuant to an Award Agreement, or to make any payment in cash under the Plan until the Participating Company Group’s tax withholding obligations have been satisfied by the Participant.
A-27
Table of Contents
16.2Withholding in or Directed Sale of Shares. The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable to a Participant upon the exercise or settlement of an Award, or to accept from the Participant the tender of, a number of whole shares of Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholding obligations of any Participating Company. The Fair Market Value of any shares of Stock withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding rates (or the maximum individual statutory withholding rates for the applicable jurisdiction if use of such rates would not result in adverse accounting consequences or cost). The Company may require a Participant to direct a broker, upon the vesting, exercise or settlement of an Award, to sell a portion of the shares subject to the Award determined by the Company in its discretion to be sufficient to cover the tax withholding obligations of any Participating Company and to remit an amount equal to such tax withholding obligations to such Participating Company in cash.
17.AMENDMENT, SUSPENSION OR TERMINATION OF PLAN.
The Committee may amend, suspend or terminate the Plan at any time. However, without the approval of the Company’s stockholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of the provisions of Sections 4.2, 4.3 and 4.4), (b) no change in the class of persons eligible to receive Incentive Stock Options, and (c) no other amendment of the Plan that would require approval of the Company’s stockholders under any applicable law, regulation or rule, including the rules of any stock exchange or quotation system upon which the Stock may then be listed or quoted. No amendment, suspension or termination of the Plan shall affect any then outstanding Award unless expressly provided by the Committee. Except as provided by the next sentence, no amendment, suspension or termination of the Plan may have a materially adverse effect on any then outstanding Award without the consent of the Participant. Notwithstanding any other provision of the Plan or any Award Agreement to the contrary, the Committee may, in its sole and absolute discretion and without the consent of any Participant, amend the Plan or any Award Agreement, to take effect retroactively or otherwise, as it deems necessary or advisable for the purpose of conforming the Plan or such Award Agreement to any present or future law, regulation or rule applicable to the Plan, including, but not limited to, Section 409A.
18.MISCELLANEOUS PROVISIONS.
18.1Repurchase Rights. Shares issued under the Plan may be subject to one or more repurchase options, or other conditions and restrictions as determined by the Committee in its discretion at the time the Award is granted. The Company shall have the right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more persons as may be selected by the Company. Upon request by the Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and all certificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions.
18.2Forfeiture Events.
(a)The Committee may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall not be limited to, termination of Service for Cause or any act by a Participant, whether before or after termination of Service, that would constitute Cause for termination of Service, or any accounting restatement due to material noncompliance of the Company with any financial reporting requirements of securities laws as a result of which, and to the extent that, such reduction, cancellation, forfeiture, or recoupment is required by applicable securities laws.
(b)If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, any Participant who knowingly or through gross negligence engaged in the misconduct, or who knowingly or through gross negligence failed to prevent the misconduct, and any Participant who is one of the individuals subject to
A-28
Table of Contents
automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, shall reimburse the Company for (i) the amount of any payment in settlement of an Award received by such Participant during the twelve- (12-) month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document embodying such financial reporting requirement, and (ii) any profits realized by such Participant from the sale of securities of the Company during such twelve- (12-) month period.
18.3Provision of Information. Each Participant shall be given access to information concerning the Company equivalent to that information generally made available to the Company’s common stockholders.
18.4Rights as Employee, Consultant or Director. No person, even though eligible pursuant to Section 5, shall have a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant. Nothing in the Plan or any Award granted under the Plan shall confer on any Participant a right to remain an Employee, Consultant or Director or interfere with or limit in any way any right of a Participating Company to terminate the Participant’s Service at any time. To the extent that an Employee of a Participating Company other than the Company receives an Award under the Plan, that Award shall in no event be understood or interpreted to mean that the Company is the Employee’s employer or that the Employee has an employment relationship with the Company.
18.5Rights as a Stockholder. A Participant shall have no rights as a stockholder with respect to any shares covered by an Award until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such shares are issued, except as provided in Section 4.4 or another provision of the Plan.
18.6Delivery of Title to Shares. Subject to any governing rules or regulations, the Company shall issue or cause to be issued the shares of Stock acquired pursuant to an Award and shall deliver such shares to or for the benefit of the Participant by means of one or more of the following: (a) by delivering to the Participant evidence of book entry shares of Stock credited to the account of the Participant, (b) by depositing such shares of Stock for the benefit of the Participant with any broker with which the Participant has an account relationship, or (c) by delivering such shares of Stock to the Participant in certificate form.
18.7Fractional Shares. The Company shall not be required to issue fractional shares upon the exercise or settlement of any Award.
18.8Retirement and Welfare Plans. Neither Awards made under this Plan nor shares of Stock or cash paid pursuant to such Awards may be included as “compensation” for purposes of computing the benefits payable to any Participant under any Participating Company’s retirement plans (both qualified and non-qualified) or welfare benefit plans unless such other plan expressly provides that such compensation shall be taken into account in computing a Participant’s benefit.
18.9Beneficiary Designation. Subject to local laws and procedures, each Participant may file with the Company a written designation of a beneficiary who is to receive any benefit under the Plan to which the Participant is entitled in the event of such Participant’s death before he or she receives any or all of such benefit. Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. If a married Participant designates a beneficiary other than the Participant’s spouse, the effectiveness of such designation may be subject to the consent of the Participant’s spouse. If a Participant dies without an effective designation of a beneficiary who is living at the time of the Participant’s death, the Company will pay any remaining unpaid benefits to the Participant’s legal representative.
18.10Severability. If any one or more of the provisions (or any part thereof) of this Plan shall be held invalid, illegal or unenforceable in any respect, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions (or any part thereof) of the Plan shall not in any way be affected or impaired thereby.
A-29
Table of Contents
18.11No Constraint on Corporate Action. Nothing in this Plan shall be construed to: (a) limit, impair, or otherwise affect the Company’s or another Participating Company’s right or power to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets; or (b) limit the right or power of the Company or another Participating Company to take any action which such entity deems to be necessary or appropriate.
18.12Unfunded Obligation. Participants shall have the status of general unsecured creditors of the Company. Any amounts payable to Participants pursuant to the Plan shall be considered unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974. No Participating Company shall be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Participant account shall not create or constitute a trust or fiduciary relationship between the Committee or any Participating Company and a Participant, or otherwise create any vested or beneficial interest in any Participant or the Participant’s creditors in any assets of any Participating Company. The Participants shall have no claim against any Participating Company for any changes in the value of any assets which may be invested or reinvested by the Company with respect to the Plan.
18.13Choice of Law. Except to the extent governed by applicable federal law, the validity, interpretation, construction and performance of the Plan and each Award Agreement shall be governed by the laws of the State of Arizona, without regard to its conflict of law rules.
A-30
| 01 - Brian E. Mueller 04 - Lisa Graham Keegan 02 - Sara Ward 05 - Chevy Humphrey 03 - Jack A. Henry 06 - Kevin F. Warren 1UPX For Against Abstain For Against Abstain For Against Abstain A Proposals — The Board of Directors recommends a vote FOR all the nominees listed. 04A2OA 2. To adopt our 2026 Equity Incentive Plan. 4. To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2026. 3. To approve, on an advisory basis, the compensation of our named executive officers as disclosed in the Proxy Statement. 1. Election of Directors: For Against Abstain For Against Abstain For Against Abstain Please sign exactly as your name(s) appear on the proxy. If held in joint tenancy, all persons must sign. Trustee, administrators, etc., should include title and authority. Corporations should provide the full name of corporation and the title of the authorized officer signing the proxy. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. 2026 Annual Meeting Proxy Card Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q The Board of Directors recommends a vote FOR Proposals 2, 3 and 4. You may vote online or by phone instead of mailing this card. Online Go to www.envisionreports.com/LOPE or scan the QR code — login details are located in the shaded bar below. Your vote matters – here’s how to vote! Votes submitted electronically must be received by 11:00 p.m., Pacific Time, on Tuesday, June 9, 2026. Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/LOPE Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada |
| Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/LOPE Notice of 2026 Annual Meeting of Stockholders Grand Canyon Education, Inc. 2600 W. Camelback Road Phoenix, Arizona 85017 Proxy Solicited by the Board of Directors for the Annual Meeting of Stockholders — Wednesday, June 10, 2026 Brian E. Mueller, Daniel E. Bachus, and Sarah S. Collins, or any of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Grand Canyon Education, Inc. to be held on Wednesday, June 10, 2026 at 10:30 a.m. Arizona Time or at any postponement or adjournment thereof. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED “FOR” EACH OF THE NOMINEES LISTED ON THE REVERSE SIDE OF THIS PROXY CARD AND “FOR” PROPOSALS 2, 3 AND 4. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side) Grand Canyon Education, Inc. C Non-Voting Items q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q Change of Address — Please print new address below. Comments — Please print your comments below. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on June 10, 2026. This proxy statement and annual report for the year ended December 31, 2025, are available and may be viewed at: www.edocumentview.com/LOPE Annual Meeting of Stockholders Wednesday, June 10, 2026 10:30 a.m. Arizona time Grand Canyon Education, Inc. 2600 W. Camelback Road Phoenix, Arizona 85017 |
