UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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 |
| Lincoln Educational Services Corporation | ||
| (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 computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |
| (1) | Title of each class of securities to which transaction applies: | |
| (2) | Aggregate number of securities to which transaction applies: | |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |
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| ☐ | Fee paid previously with preliminary materials. | |
| ☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
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200 Executive Drive, Suite 340
West Orange, New Jersey 07052
Dear Shareholder:
You are invited to attend the 20182019 Annual Meeting of Shareholders of Lincoln Educational Services Corporation (the “Company”) to be held on May 3, 2018June 13, 2019 at the Wilshire Grand Hotel, 350 Pleasant Valley Way, West Orange, New Jersey 07052, at 9:00 a.m. local time.
At this year’s meeting, you will be asked to elect seven directors, to conduct a non-binding advisory vote on the Company’s compensation of named executive officers, and to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2018.2019. The accompanying Notice of Meeting and Proxy Statement describe these matters. We urge you to read this information carefully.
Our boardBoard of directorsDirectors unanimously believes that the election of the nominees for directors, the non-binding advisory approval of the compensation of our named executive officers, and the ratification of the appointment of the independent registered public accounting firm are in the best interests of the Company and its shareholders and, accordingly, recommends a vote FOR the election of the nominees for directors, FOR the non-binding advisory vote on the Company’s compensation of named executive officers and FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018.2019.
In addition to the formal business to be transacted, management will report on the progress of our business and respond to comments and questions of general interest to shareholders.
We sincerely hope that you will be able to attend and participate in the meeting. Whether or not you plan to come to the meeting, it is important that your shares be represented and voted. You may vote your shares by completing the accompanying proxy card or by giving your proxy authorization via the Internet. Please read the instructions accompanying the proxy card for details on giving your proxy authorization via the Internet.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF
PROXY MATERIALS FOR OUR ANNUAL MEETING
Our proxy statement and our 20172018 annual report to shareholders are available at
www.lincolntech.edu/proxy
YOUR VOTE IS IMPORTANT!
Please vote as promptly as possible via the Internet or
by signing, dating and returning the proxy card
mailed to those who receive paper copies of thisthe accompanying proxy statement.statement.
BY COMPLETING AND RETURNING THE ACCOMPANYING PROXY CARD OR BY GIVING YOUR PROXY AUTHORIZATION VIA THE INTERNET, YOU AUTHORIZE MANAGEMENT OF THE COMPANY TO REPRESENT YOU AND VOTE YOUR SHARES ACCORDING TO YOUR INSTRUCTIONS. SUBMITTING YOUR PROXY NOW WILL NOT PREVENT YOU FROM VOTING IN PERSON AT THE ANNUAL MEETING, BUT WILL ASSURE THAT YOUR VOTE IS COUNTED IF YOUR PLANS CHANGE AND YOU ARE UNABLE TO ATTEND. TO ENSURE THAT YOUR VOTE WILL BE COUNTED, PLEASE CAST YOUR VOTE BEFORE 7:0011:59 P.M. (EASTERN TIME) ON MAY 2, 2018.JUNE 12, 2019.
| Sincerely, | |
  | |
| Scott M. Shaw | |
| Chief Executive Officer |
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LINCOLN EDUCATIONAL SERVICES CORPORATION
200 Executive Drive, Suite 340
West Orange, New Jersey 07052
NOTICE OF
TO BE HELD ON MAY 3, 2018JUNE 13, 2019
To the Shareholders of Lincoln Educational Services Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Lincoln Educational Services Corporation, a New Jersey corporation (the “Company”), will be held on May 3, 2018,June 13, 2019, at the Wilshire Grand Hotel, 350 Pleasant Valley Way, West Orange, New Jersey 07052, at 9:00 a.m. local time. At the annual meeting,Annual Meeting, shareholders will be asked:
| 1. | to elect seven directors to serve until the Company’s next annual meeting of shareholders and until their successors are duly elected and qualified; |
| 2. | to conduct an advisory vote on the Company’s compensation of its named executive officers (a non-binding “say-on- pay” vote); |
| 3. | to ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for our fiscal year ending December 31, |
| 4. | to transact such other business as may properly come before the |
The boardBoard of directorsDirectors of the Company has fixed the close of business on March 13, 2018,April 26, 2019 as the record date for the determination of shareholders entitled to notice of and to vote at the annual meetingAnnual Meeting and any adjournments or postponements thereof.
Shareholders of record as of the close of business on March 13, 2018, the Record Date,April 26, 2019 will be admitted to the annual meetingAnnual Meeting upon presentation of identification. Shareholders who own shares of the Company’s common stock beneficially through a bank, broker or other nominee will be admitted to the annual meetingAnnual Meeting upon presentation of identification and proof of ownership or a valid proxy signed by the record holder. A recent brokerage statement or a letter from a bank or broker are examples of proof of ownership. If you own shares of the Company’s common stock beneficially and want to vote in person at the annual meeting,Annual Meeting, you should contact your broker or applicable agent in whose name the shares are registered to obtain a broker’s proxy and bring it to the annual meetingAnnual Meeting in order to vote.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on June 13, 2019. The Company’s Proxy Statement for the 2019 Annual Meeting of Shareholders and the Company’s Annual Report to Shareholders for the fiscal year ended December 31, 2018 are available electronically at www.lincolntech.edu/proxy.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE RETURN YOUR PROXY (BY COMPLETING AND RETURNING THE ACCOMPANYING PROXY CARD OR BY GIVING PROXY AUTHORIZATION VIA THE INTERNET) AS PROMPTLY AS POSSIBLE TO ENSURE YOUR REPRESENTATION AT THE MEETING. EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE ANNUAL MEETING. TO ENSURE THAT YOUR VOTE WILL BE COUNTED, PLEASE CAST YOUR VOTE BEFORE 7:0011:59 P.M. (EASTERN TIME) ON MAY 2, 2018.JUNE 12, 2019.
| By Order of the Board of Directors | |
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| Alexandra M. Luster | |
| Corporate Secretary | |
| West Orange, New Jersey | |
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LINCOLN EDUCATIONAL SERVICES CORPORATION
200 Executive Drive, Suite 340
West Orange, New Jersey 07052
PROXY STATEMENT
FOR
TO BE HELD ON MAY 3, 2018JUNE 13, 2019
This proxy statement is provided to the shareholders of Lincoln Educational Services Corporation, a New Jersey corporation (the “Company” or “Lincoln”), to solicit proxies, in the form enclosed, for use at the Annual Meeting of Shareholders of the Company to be held on May 3, 2018,June 13, 2019, at the Wilshire Grand Hotel, 350 Pleasant Valley Way, West Orange, New Jersey 07052, at 9:00 a.m. local time, and any and all adjournments or postponements thereof. The boardBoard of directorsDirectors knows of no matters to come before the annual meetingAnnual Meeting other than those described in this proxy statement. This proxy statement and the enclosed form of proxy are first being mailed to shareholders on or about March 23, 2018.April 30, 2019.
Solicitation
This solicitation is made by mail on behalf of the boardBoard of directorsDirectors of the Company. The Company will pay for the costs of the solicitation. Further solicitation of proxies may be made, including by mail, telephone, fax, in person or other means, by the directors, officers or employees of the Company or its affiliates, none of whom will receive additional compensation for such solicitation. The Company will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to their customers or principals who are the beneficial owners of shares of the Company’s common stock, no par value per share.
Voting Procedures
Who May Vote at the Annual Meeting? Only those holders of our common stock of record as of the close of business on March 13, 2018, the record date,April 26, 2019 (the “Record Date) will be entitled to notice of and to vote at the annual meeting.Annual Meeting. A total of 24,703,97825,115,127 shares of the common stock were issued and outstanding as of the record date.Record Date. Each share of common stock entitles its holder to one vote. Cumulative voting of shares of common stock is not permitted.
What is the Difference Between Holding Shares as a Shareholder of Record and as a Beneficial Owner? If your shares are registered directly in your name with the Company’s registrar and transfer agent, Continental Stock Transfer & Trust Company, Inc., you are a shareholder of record with respect to those shares and, in such case, this proxy statement and the accompanying proxy materials have been provided directly to you by the Company. If your shares are held in a stock brokerage account or by a bank or nominee, your shares are held in “street name” and you are considered the “beneficial owner” of those shares and, in such case, this proxy statement and the accompanying proxy materials have been provided to you by your broker, bank or other nominee. As the beneficial owner, you have the right to direct your broker, bank or other nominee how to vote your shares held in “street name.”
What is Considered a Quorum to Conduct the Annual Meeting? The presence in person or by proxy of holders of a majority of the outstanding shares of the common stock entitled to vote will be necessary to constitute a quorum to transact business at the Annual Meeting. Abstentions and broker non-votes will be treated as present for purposes of determining the existence of a quorum.
What is a Broker Non-Vote?
A broker “non-vote” occurs when a nominee, such as a bank or broker, holding shares in “street name” for a beneficial owner, abstains from voting on a particular proposal because, under most circumstances, the nominee does not have discretionary authority to vote on proposals unless it has received instructions from the beneficial owner of the securities on how to vote those securities. Under applicable law, nominees are prevented from casting votes on non-routine matters without instructions from the beneficial owner of the securities. Due to changes in law, Proposal 1 (the proposal concerning the election of directors) and Proposal 2 (the advisory vote on executive compensation) are considered “non-routine” matters, which means that your broker, bank or other nominee does not have discretion to vote your shares in regard to Proposals 1 and 2 in the absence of specific instructions from you as to how you would like your shares to be voted. Proposal 3 (the ratification of auditors) is considered a “routine” matter, which means that your broker, bank or other nominee may vote your shares in regard to Proposal 3 without instructions from you as to how you would like your shares to be voted. If you hold shares in “street name,” we strongly encourage you to provide your broker, bank or other nominee with instructions regarding the voting of your shares as your broker, bank or other nominee cannot vote your shares with respect to Proposals 1 and 2 without voting instructions from you.
How Many Votes are Required to Approve Each Proposal?
Proposal 1 (Election of Directors): At the Annual Meeting, directors will be elected by the affirmative vote of a plurality of the votes cast. This means that the director nominees who receive the greatest number of affirmative votes cast are elected as directors.
Proposal 2 (Non-Binding Advisory Vote on Executive Compensation): The affirmative vote of a majority of the votes cast will be required to approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers as described in this proxy statement.
Proposal 3 (Ratification of Appointment of Deloitte & Touche LLP): The affirmative vote of a majority of the votes cast will be required to approve the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019.
As Proposal 3 is a routine matter, there can be no broker “non-votes” as to this proposal; abstentions have no effect on the outcome of the vote on Proposal 3. As to Proposal 1 and Proposal 2, abstentions and broker non-votes have no effect on the outcome of the vote.
How Can I Vote My Shares? Shareholders of record can vote either in person at the annual meetingAnnual Meeting or by proxy whether or not they attend the meeting.Annual Meeting. To vote by proxy, a shareholder must either: (a) fill out the enclosed proxy card, date and sign it, and return it in the enclosed postage-paid envelope or (b) vote by Internet (instructions on Internet voting accompany the proxy card). If you hold your shares beneficially in “street name” through a broker, bank or other nominee, you may be able to authorize your proxy on the Internet as well as by mail, but you will need to obtain and follow instructions from your broker, bank or other nominee to vote these shares.
Proposals 1 and 2 are not considered to be routine matters, and your broker will not have discretion to vote with respect to these matters unless you specifically instruct your broker to do so by returning your signed voting instruction card. If you do not provide voting instructions to your broker, your shares will not be voted for any proposal on which your broker does not have discretionary authority (resulting in a broker non-vote).
Shares of the Company’s common stock represented by properly executed proxies in the form enclosed that are timely received by the Secretary of the Company and not validly revoked will be voted as specified on the proxy. If no specification is made on a properly executed and returned proxy, the shares represented thereby will be voted FOR the election of each of the seven nominees for director named in this proxy statement, FOR the advisory approval of compensation of our named executive officers and FOR the ratification of the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2018.2019. If any other matters properly come before the annual meeting,Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote such proxies in their discretion. In order to be voted, each proxy must be filed with the Secretary of the Company prior to exercise.
Revocability of Proxies
Shareholders may revoke a proxy at any time before the proxy is exercised. This may be done by filing a notice of revocation of the proxy with the Secretary of the Company, by filing a later-dated proxy with the Secretary of the Company or by voting in person at the annual meeting.Annual Meeting.
Shareholders will be asked at the annual meetingAnnual Meeting to elect seven directors. Our bylaws allow for a minimum of three directors and a maximum of 11 directors. The Board of Directors has fixed the number of directors comprising the Board of Directors at seven members. Each elected director will hold office until the next annual meeting of shareholders and until the director’s successor is duly elected and qualified. The boardBoard of directorsDirectors knows of no reason why any of the nominees would be unable or unwilling to serve, if elected, but if any nominee should for any reason be unable or unwilling to serve, if so elected, the proxies received by the Company will be voted for the election of such other person for the office of director as the boardBoard of directorsDirectors may recommend in the place of such nominee.
Shareholders may withhold authority to vote their proxies for either (i) the entire slate of nominated directors by checking the box marked WITHHOLD AUTHORITY on the proxy card or (ii) any one or more of the individual nominees, by following the instructions on the proxy card. Instructions on the accompanying proxy card that withhold authority to vote for one or more of the nominees will cause any such nominee to receive fewer votes.
Upon recommendation of the Nominating and Corporate Governance Committee, the following seven persons have been selected by the boardBoard of directorsDirectors as nominees for election to the boardBoard of directors:Directors: J. Barry Morrow, Scott M. Shaw, James J. Burke, Jr., Peter S. Burgess, Celia H. Currin, Alvin O. Austin and Ronald EE. Harbour. All of the nominees are incumbent directors. Additional information about these nominees is provided in the table and biographical information that follow.
Required Vote
A plurality of the votes cast at the annual meetingAnnual Meeting is required for the election of directors.
The boardBoard of directorsDirectors unanimously recommends a vote FOR each of the named nominees. Proxies that are executed and returned will be voted FOR each nominee, except to the extent that particular proxies contain instructions to withhold the vote for a particular nominee or nominees.
The following sets forth certain information concerning the directors and executive officers and senior management of the Company (ages are as of the record date for the annual meeting:April 30, 2019):
| Name | Age | Position Held | ||
| Scott M. Shaw | Chief Executive Officer, Director | |||
| Brian K. Meyers | Executive Vice President, Chief Financial Officer and Treasurer | |||
| Stephen M. Buchenot | Senior Vice President of Campus Operations | |||
| J. Barry Morrow | Non-Executive Chairman of the Board of Directors | |||
| James J. Burke, Jr. (1) (3) | Director | |||
| Peter S. Burgess (2) | Director | |||
| Celia H. Currin (1) (2) | Director | |||
| Alvin O. Austin (1) (3) | Director | |||
| Ronald E. Harbour (2) (3) | Director |
| (1) | Member of the Compensation Committee. |
| (2) | Member of the Audit Committee. |
| (3) | Member of the Nominating and Corporate Governance Committee. |
Scott M. Shaw joined us in 2001 and currently serves as our President and Chief Executive Officer. Mr. Shaw has served on our boardBoard of directorsDirectors from 2001 to 2006 and since July 2015. Prior to taking thisthe position of President and Chief Executive Officer, Mr. Shaw served asin the positions of President and Chief Operating Officer, Executive Vice President and Chief Administrative Officer and Senior Vice President of Strategic Planning and Business Development.Development of the Company. Prior to joining Lincoln, Mr. Shaw was a partner at Stonington Partners, Inc., where he had been since 1994. As a partner at Stonington, Mr. Shaw was responsible for identifying, evaluating and acquiring companies and then assisting in the oversight of these companies through participation on the board of directors of acquired companies. In addition, Mr. Shaw worked closely with senior management to develop long-term strategic plans, to evaluate acquisitions and new investment opportunities, to assist with refinancing, and to execute on the final sale of the company either to the public or to another company. Mr. Shaw also served as a consultant to Merrill Lynch Capital Partners Inc., a private investment firm associated with Merrill Lynch & Co., Inc., from 1994 through 2000. Mr. Shaw holds an M.B.A. from the Wharton School of Business and a B.A. from Duke University. His extensive financial and business management experience provides the board a unique perspective on the issues facing companies in our industry.
Brian K. Meyers joined us in 2002 and currently serves as our Executive Vice President, Chief Financial Officer and Treasurer. Mr. Meyers has more than 25 years of accounting and financial management experience. Prior to joining Lincoln, Mr. Meyers served as Vice President and Controller for Candie’s Inc. and began his career in 1989 with Richard A. Eisner (currently EisnerAmper LLP), a public accounting firm. He is a Certified Public Accountant and holds a B.S. in Accounting from Wagner College.
Stephen M. Buchenot has held various field and corporate positions since he joined Lincoln in 1992. He currently serves as Senior Vice President of Campus Operations and oversees the operations of all campuses and Admissions. He entered the vocational training industry in 1982. During his twenty-six years of service,1982 and he has held various positions, including Regional Controller, Campus President and Regional Operations Manager. Over the years, he has participated in and taken a leadership role with various state educational associations, including the Missouri Association of Private Career Schools and the Maryland Association of Private Career Schools. Mr. Buchenot is a graduate of Loyola University, Chicago, Illinois.
J. Barry Morrow has served on our boardBoard of directorsDirectors since 2006 and currently serves as our Non-Executive Chairman. He also serves as an advisor to Next Generation Insurance. He is the CEO and founder of BK Capital Group. He served as the Chief Executive Officer and Director of Collegiate Funding Services from 2002 until 2006 when the company was acquired by JPMorgan Chase. Mr. Morrow held the position of President and Chief Operating Officer of Collegiate Funding from 2000 to 2002. Prior to joining Collegiate Funding Services, Mr. Morrow served with the U.S. Department of Education as the General Manager of Financial Services for the Office of Student Financial Assistance and with SallieMae as Vice President of Regional Operations. Mr. Morrow holds a B.A. from Virginia Tech and an M.A. in public administration from George Washington University. Mr. Morrow has over 30 years’ experience in the education credit industry. His extensive management experience at the U.S. Department of Education, SallieMae and Collegiate Funding Services provides the board with a unique perspective on the issues facing companies in our industry.
James J. Burke, Jr. has served on our boardBoard of directorsDirectors since 1999. He is the founder and managing member of J Burke Capital Partners LLC, a private investment firm, since 2007. He was also the co-founder, partner and director of Stonington Partners, Inc. since 1994 and co-founder of Merrill Lynch Capital Partners, Inc., a private equity fund for which he was the President and CEO from 1987 to 1999. He received a B.A. from Brown University and an M.B.A. with Distinction from Harvard University Graduate School of Business Administration. Mr. Burke also serves on the board of directors of a number of privately owned companies and several non-profit organizations. Mr. Burke brings extensive financial and business knowledge to the board through his engagement in private equity investing since 1981. For 19 years, he was also a director of Educational Management Corporation, a publicly-traded provider of career education. Throughout his career, he has been responsible for sourcing and analyzing investment opportunities, where he has developed both expertise and significant knowledge regarding the managerial, operational and financial aspects of a business.
Peter S. Burgess has served on our boardBoard of directorsDirectors since 2004. In 1999, Mr. Burgess retired from Arthur Andersen LLP where he was an accounting and business advisory partner serving numerous manufacturing, insurance and financial services enterprises. Following his retirement, he has provided consulting services specializing in litigation support, mergers and acquisitions and Audit Committee responsibilities under securities exchange requirements and the Sarbanes-Oxley Act. Mr. Burgess is also a trustee and chair of the audit committee of John Hancock Funds. Mr. Burgess, a licensed CPA, earned a B.S. in Business Administration from Lehigh University. He previously served on the board of directors of PMA Capital Corporation and Symetra Financial Corporation. Mr. Burgess’ prior employment at Arthur Andersen, as well as his experience dealing with accounting principles, financial reporting rules and regulations and evaluating financial results, makes him a skilled advisor and a valuable asset, both on our boardBoard of directorsDirectors and on our Audit Committee.
Celia H. Currin has served on our boardBoard of directorsDirectors since 2006. Ms. CurrinShe started her career as a staff writer for Forbes Magazine followed by a foray into product management at the International Paper Company. She then spent 25 years in a variety of senior management roles with at Dow Jones/The Wall Street Journal / Dow Jones & Company before her retirement. She was one of the first women writers at Forbes Magazinewhere she held senior management roles in Marketing, Sales, HR and spent several years in marketing with International Paper Group. She now manages an Executive and Career Coaching Practice.Operations. Ms. Currin is President ofhas served on the Board of Directorsboard of Poets & Writers, the nation’s largest non-profit organization serving creative writers, for over 20 years including 12 as Board President. She has a boutique private practice providing executive and co-chair of the Career and Professional Development Committee for the HBS Club of New York.career coaching. Ms. Currin received her M.B.A. from Harvard Business School and her B.SB.S. from the University of Oregon.
Alvin O. Austin has served on our boardBoard of directorsDirectors since 2010. Mr. Austin has over 40 years of experience in higher education, which includes his tenure as President and Chancellor of LeTourneau University in Longview, Texas, where the institution grew its academic programs, funding levels, and campus footprint under his leadership. Prior to that role, he served as Vice President at North Park College and Seminary, Chicago, Illinois, and at Seattle Pacific University. In addition, he was the Dean of Student Programs at California State University, Northridge, California. He was a member of the Commission on Colleges of the Southern Association of Colleges and Schools and a member of the Executive Committee of the Commission. Mr. Austin has also served on the board of a major bank and on the advisory board of Texas Eastman Chemical Company. He is also involved in numerous non-profit and community organizations. Mr. Austin earned his Ph.DPh.D. in Higher Education Administration at the University of Mississippi, an M.A. in Education at the California State University, and Master Studies and Secondary Teaching Credential at the University of California at Santa Barbara. He continues to consult with colleges and universities particularly as to board development and executive evaluation. Mr. Austin’s distinguished career in higher education and his involvement in a number of educational organizations position him well to serve as a board member.
Ronald E. Harbour was appointed to our boardBoard of directorsDirectors on December 4, 2014. Mr. Harbour is Senior Partner overseeing Global Automotive Manufacturing for Oliver Wyman, a global management consulting firm and a division of Marsh & McClennan Corporation. Mr. Harbour co-authored and developed “The Harbour Report” in 1989, a publication that has grown to be the preeminent annual assessment of automotive manufacturing performance around the globe. Mr. Harbour currently serves as a director, the chair of the compensation committee and as a member of the corporate governance and nominating committee of Spartan Motors.Motors, Inc., a public company engaged in specialty vehicle manufacturing and assembly. He previously served on the board of directors of Techform Products from 1996 until its sale in October 2014 and the board of directors of U.S. Manufacturing Corporation from 2009 until its sale in June 2014. Mr. Harbour received a B.S. from Haworth College of Business of Western Michigan University. Mr. Harbour’s extensive experience and knowledge of the automotive manufacturing industry provides an invaluable perspective on matters impacting our Company.
Directors are expected to attend our annual meetings of shareholders, board meetings and meetings of the committees on which they serve. They are also expected to prepare for meetings in advance and to dedicate the time at each meeting as necessary to properly discharge their responsibilities. Informational materials, useful in preparing for meetings, are distributed in advance of each meeting. In 2017,2018, there were sixnine meetings of the board,Board of Directors, and each of the directors attended all of the meetings of the boardBoard of Directors and its committees on which he or she served. In addition, all of our directors attended our 20172018 Annual Meeting of Shareholders.
Director Qualifications
The boardBoard of directorsDirectors believes that its members possess a variety of skills, qualifications, experience and experienceattributes that contribute to the boardBoard of directors’Directors’ ability to oversee our operations and the growth of our business. The following chart sets forth the various skills, qualifications, experience and attributes that our board of directors has identified with respect to each of our directors that led the board of directors to conclude that the person should serve on the board of directors. For additional information regarding each of our directors, see “Board of Directors and Executive Officers.”Officers” above.
Board of Directors Skills Matrix
| Director | CEO/ Senior Officer(1) | Industry Experience (2) | Governance/ Board Experience(3) | Financial Acumen(4) | Business Development/ M&A Experience(5) | Independent(6) |
| Scott M. Shaw | P | P | P | P | P | |
| J. Barry Morrow | P | P | P | P | P | |
| James J. Burke, Jr. | P | P | P | P | P | P |
| Peter S. Burgess | P | P | P | P | ||
| Celia H. Currin | P | P | ||||
| Alvin O. Austin | P | P | P | P | ||
| Ronald E. Harbour | P | P | P | P | P |
| (1) | CEO/Senior Officer – Experience working as a CEO or senior officer of an organization. |
| (2) | Industry Experience – Senior executive experience in one or more of the Company’s primary or related industries. |
| (3) | Governance/Board Experience – Prior or current experience as a board member of an organization (public, private, or non-profit sectors). |
| (4) | Financial Acumen – Experience in financial accounting and reporting, including persons designated by the |
| (5) | Business Development/ M&A Experience – Experience with business development, mergers and acquisitions and/or divestitures. |
| (6) | Independent – Determined by the |
Board Diversity
The Nominating and Corporate Governance Committee, in accordance with the board’s governance principles, seeks to create a board that, as a whole, is strong in its collective knowledge and has a diversity of skills and experience with respect to vision and strategy, management and leadership, business operations, business judgment, crisis management, risk assessment, industry knowledge, accounting and finance, corporate governance and markets in general. The Nominating and Corporate Governance Committee does not have a formal policy with respect to diversity; however, the Board of Directors and the Nominating and Corporate Governance Committee believe that it is essential that the members of our Board of Directors represent diverse viewpoints. The Nominating and Corporate Governance Committee focuses on diversity of gender, race and national origin, education, professional experience and differences in viewpoints and skills. In considering candidates for the Board of Directors, the Nominating and Corporate Governance Committee considers the entirety of each candidate’s credentials in the context of these standards.
The Board of Directors has an Audit Committee, a Nominating and Corporate Governance Committee and a Compensation Committee.
Audit Committee
The Audit Committee consists of directors Burgess (Chairman), Currin and Harbour. The Audit Committee held four meetings in 2017.2018. The boardBoard of directorsDirectors has adopted a written charter for the Audit Committee, which is available on our website at www.lincolntech.edu.www.lincolntech.edu. The Audit Committee is directly responsible for the oversight of, among other things, our accounting and financial reporting processes; the quality and integrity of our financial statements; the quality and integrity of our system of internal controls; our compliance with laws and regulations; our independent auditor'sauditor’s qualifications and independence; and the audit of our financial statements by a qualified independent auditor.
To fulfill these responsibilities, the Audit Committee will be aware of the current areas of greatest financial risk to us and understand management'smanagement’s assessment and management of the risks; consider the effectiveness of our disclosure controls and procedures to promote timely, accurate, compliant and meaningful disclosure in our periodic reports filed with the Securities and Exchange Commission (“SEC”); periodically review with the independent auditors their assessment as to the adequacy of our structure of internal controls over financial accounting and reporting, and their qualitative judgments as to the accounting principles employed and related disclosures by us and the conclusions expressed in our financial reports; review with management and the independent auditors our accounting policies and practices to ensure they meet the requirements with respect to the Financial Accounting Standards Board, the SEC, the American Institute of Certified Public Accountants and the Public Company Accounting Oversight Board; select, evaluate and, if necessary, replace our independent auditors; actively engage in dialogue with the independent auditors with respect to any disclosed relationships or services that may impact the objectivity or independence of the independent auditors; engage advisors, as the committee determines is necessary, to carry out its duties; meet with the independent auditors, the internal auditors and senior management to review the scope and methodology of the proposed audit; discuss with management policies and practices regarding earnings press releases, as well as financial information and earnings guidelines provided to analysts and rating agencies to the extent required by applicable law or listing standards; set clear hiring policies with respect to any current or former employees of our independent auditors; and establish procedures for the receipt, retention and treatment of complaints we receive regarding our internal accounting controls or auditing matters and for the confidential, anonymous submission by employees of their concerns regarding our internal accounting controls and auditing matters. The Audit Committee is also charged with reviewing and approving all related person transactions.
The boardBoard of directorsDirectors has determined that Mr. Burgess is an “audit committee financial expert” within the meaning of the regulations of the SEC. Messrs. Burgess, Harbour and Ms. Currin are independent directors under the Sarbanes Oxley Act of 2002 and the NASDAQ listing standards.
The Nominating and Corporate Governance Committee consists of directors Austin (Chair), Burke and Harbour. The Nominating and Corporate Governance Committee held twothree meetings in 2017.2018. The charter for the Nominating and Corporate Governance Committee is published on our website at www.lincolntech.edu.www.lincolntech.edu. The Nominating and Corporate Governance Committee is responsible for, among other things, making recommendations to the boardBoard of directorsDirectors with respect to corporate governance policies and reviewing and recommending changes to the Company’s corporate governance guidelines that have been adopted by the boardBoard of directors.Directors. The Nominating and Corporate Governance Committee also recommends to the boardBoard of directorsDirectors candidates for nomination for election as directors of the Company and appointments of directors as members of the committees of the boardBoard of directors.Directors.
Nomination Process. The Nominating and Corporate Governance Committee considers candidates for directors suggested by shareholders for elections to be held at an annual meeting of shareholders. Shareholders can suggest qualified candidates for directors by complying with the advance notification and other requirements of the Company’s bylaws regarding director nominations. Director nomination materials submitted in accordance with the Company’s bylaws will be forwarded to the Chair of the Nominating and Corporate Governance Committee for review and consideration. Director nominees suggested by shareholders will be evaluated in the same manner, and subject to the same criteria, as other nominees evaluated by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee also considers candidates for director suggested by its members, other directors and management and may from time to time retain a third-party executive search firm to identify director candidates for the Nominating and Corporate Governance Committee.
Generally, once the Nominating and Corporate Governance Committee has identified a prospective nominee, it will make an initial determination as to whether to conduct a full evaluation of the candidate based on information provided to it with the recommendation of the candidate, as well as the Nominating and Corporate Governance Committee’s own knowledge of the candidate, which may be supplemented by inquiries to the person making the recommendation or others. The initial determination is based primarily on the need for additional directors to fill vacancies or expand the size of the boardBoard of directorsDirectors and the likelihood that the candidate can satisfy the evaluation factors described below. If the Nominating and Corporate Governance Committee determines, in consultation with the Chairman of the board and other directors, as appropriate, that additional consideration is warranted, it may request a third-party search firm to gather additional information about the candidate’s background and experience and to report its findings to the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee then evaluates the candidate against the standards and qualifications set out in guidelines for director candidates adopted by the boardBoard of directors,Directors, including, without limitation, the nominee’s management, leadership and business experience, skills such as financial literacy and knowledge of directorial duties, diversity, integrity and professionalism.
The Nominating and Corporate Governance Committee also considers such other relevant factors as it deems appropriate, including the current composition of the boardBoard of directors,Directors, the balance of management and independent directors, the need for particular expertise (such as audit committee expertise) and the evaluations of other prospective nominees. In connection with this evaluation, the Nominating and Corporate Governance Committee determines whether to interview the prospective nominee, and, if warranted, one or more members of the Nominating and Corporate Governance Committee, and others as appropriate, interview prospective nominees in person or by telephone. After completing this evaluation and interview, the Nominating and Corporate Governance Committee makes a recommendation to the full boardBoard of directorsDirectors as to the persons who should be nominated by the boardBoard of directorsDirectors and the boardBoard of directorsDirectors determines the nominees after considering the recommendation of the Nominating and Corporate Governance Committee.
The Compensation Committee consists of directors Currin (Chairwoman), Burke and Austin. The Compensation Committee held two meetings in 2017.2018. Each member of the Compensation Committee meets the independence requirements under the NASDAQ listing standards. The charter for the Compensation Committee is published on our website at www.lincolntech.edu.www.lincolntech.edu. The Compensation Committee has the authority to develop and maintain a compensation policy and strategy that creates a direct relationship between pay levels and corporate performance and returns to shareholders; recommend compensation, special benefits, perquisites, and incidental benefits to our board for approval; review and approve annual corporate and personal goals and objectives to serve as the basis for the chief executive officer'sofficer’s compensation, evaluate the chief executive officer'sofficer’s performance in light of the goals and, based on such evaluation, determine the chief executive officer'sofficer’s compensation; determine the annual total compensation for our named executive officers; with respect to our equity-based compensation plans, approve the grants of stock options and other equity-based incentives as permitted under our compensation plans; review and recommend compensation for non-employee directors to our board; and review and recommend employment agreements, severance arrangements and change in control plans that provide for benefits upon a change in control, or other provisions for our executive officers and directors, to our board. The Compensation Committee may retain compensation consultants having special competence to assist it in evaluating director and executive compensation and may also retain counsel, accountants or other advisors, in its sole discretion. In 2017, management of the Company retained Willis-Towers-Watson as its independent consultant to conduct a limited scope competitive compensation assessment for executive-level roles of twenty in-scope positions. The consultant was asked to provide benchmarking of the Company’s compensation levels of such positions as compared to its peers. The results of the assessment were presented to management and to the Compensation Committee for consideration and possible action.did not retain a compensation consultant in 2018. The Compensation Committee also has the power to delegate its authority and duties to subcommittees or individual members of the committee, as it deems appropriate in accordance with applicable laws and regulations.
Committee Membership
The table below lists the current membership of each committee and the number of committee meetings held in 2017:2018:
| Name | Audit | Nominating and Corporate Governance | Compensation | Audit | Nominating and Corporate Governance | Compensation |
| Scott M. Shaw | ||||||
| J. Barry Morrow | ||||||
| James J. Burke, Jr. | P | P | ||||
| Peter S. Burgess | Chair | Chair | ||||
| Celia H. Currin | P | Chair | P | Chair | ||
| Alvin O. Austin | Chair | P | Chair | P | ||
| Ronald E. Harbour | P | P | P | P | ||
| 2017 Meetings | 4 | 2 | ||||
| 2018 Meetings | 4 | 3 | 2 | |||
Our boardBoard of directorsDirectors has a majority of independent directors as is required by the NASDAQ Marketplace Rules. Our boardBoard of directorsDirectors has determined that each of our director nominees other than Scott M. Shaw, our Chief Executive Officer, is an “independent director” as such term is defined under the NASDAQ listing rules. All of the members of the Audit Committee, the Nominating and Corporate Governance Committee and the Compensation Committee are independent directors.
Currently, the roles of Chief Executive Officer and Chairman of the boardBoard of directorsDirectors are held by different individuals. In the past, the position of Chief Executive Officer and Chairman were combined when deemed appropriate by the boardBoard of directors.Directors.
Our boardBoard of directorsDirectors has adopted a flexible policy regarding the issue of whether the positions of Chairman and Chief Executive Officer should be separate or combined. Our boardBoard of directorsDirectors regularly evaluates whether the interest of the Company and its shareholders are best served at any particular time by having the Company’s Chief Executive Officer or another director hold the position of Chairman. Our boardBoard of directorsDirectors believes that no single, one-size fits all, board-leadership model is universally or permanently appropriate. This structure has proven especially useful to facilitate executive leadership training, succession, and orderly transitions. At present, the boardBoard of directorsDirectors believes that its current structure effectively maintains independent oversight of management.
As Non-Executive Chairman of the boardBoard of directors,Directors, J. Barry Morrow ensures that the boardBoard of directorsDirectors fulfills its oversight and governance responsibilities and directs the activities and meetings of the boardBoard of directors.Directors. In addition, Mr. Morrow is responsible for coordinating the activities of the non-employee directors and leading executive sessions of the non-employee directors, which are generally held in conjunction with each regularly scheduled boardBoard of directorsDirectors meeting.
Our boardBoard of directorsDirectors has an active role, as a whole and also at the committee level, in overseeing the risk management of the Company. This is designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational value. A fundamental part of risk management is not only understanding the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the company.Company. The involvement of the full boardBoard of directorsDirectors in setting the Company’s business strategy is a key part of its assessment of management’s appetite for risk and also a determination of what constitutes an appropriate level of risk for the Company.
Fundamental aspects of the boardBoard of directors’Directors’ risk management oversight activities include:
understanding the key drivers of success for our business and the associated major risks inherent in our operations and corporate strategy;
overseeing that appropriate risk management and control procedures are implemented by management and developing and maintaining an effective risk dialogue with management; and
crafting the right Board of Directors for our Company, including ensuring that the Board of Directors has the right mix of background, skills and experience and an appropriate committee structure to carry out its oversight responsibilities effectively.
While the boardBoard of directorsDirectors has the ultimate oversight responsibility for the risk management process, various committees of the boardBoard of directorsDirectors also have responsibility for risk management. In particular, the Audit Committee focuses on financial risk, including internal controls, and receives an annual risk assessment report from the Company’s internal auditors. The Audit Committee also assists the boardBoard of directorsDirectors in fulfilling its oversight responsibility with respect to legal and compliance issues. The Nominating and Corporate Governance Committee, in addition to making recommendations with respect to corporate governance matters and nominations of directors, manages risks associated with the independence of the boardBoard of directorsDirectors and potential conflicts of interest. The Compensation Committee strives to create incentives that encourage a level of risk-taking behavior consistent with the Company’s business which are appropriately balanced and do not motivate employees to take imprudent risks. All committees report to the full board as appropriate, including when a matter rises to the level of a material or enterprise level risk.
The Company has reviewed its compensation programs and considered the extent to which its compensation policies and practices influence the behaviors of our executives and other employees with respect to taking business risks that could affect the Company. We believe that our compensation policies and practices are not reasonably likely to have a material adverse effect on the Company, either individually or in the aggregate.
Ms. Currin and Messrs. Burke and Austin served on the Compensation Committee during the entire 20172018 fiscal year.
During the 20172018 fiscal year:
none of the members of the Compensation Committee was an officer (or former officer) or employee of the Company or any of its subsidiaries;
none of the members of the Compensation Committee had a direct or indirect material interest in any transaction in which the Company was a participant and the amount involved exceeded $120,000;
none of the Company’s executive officers served on the compensation committee (or another board committee with similar functions or, if none, the entire board of directors) of another entity where one of that entity’s executive officers served on the Company’s Compensation Committee;
none of the Company’s executive officers was a director of another entity where one of that entity’s executive officers served on the Company’s Compensation Committee; and
none of the Company’s executive officers served on the compensation committee (or another board committee with similar functions or, if none, the entire board of directors) of another entity where one of that entity’s executive officers served as a director on the Company’s board of directors.
The following tables provide information regarding the beneficial ownership of our common stock as of the record date for the annual meetingRecord Date by (1) each of our directors, (2) each of our named executive officers, (3) all directors and executive officers as a group, and (4) each person known to us to be the beneficial owner of more than 5% of the outstanding shares of our common stock. This table is based on information provided to us or filed with the SEC by our directors, executive officers and principal shareholders named below. Except as otherwise indicated, we believe, based on information furnished by such owners, that the beneficial owners of our common stock listed below have sole investment and voting power with respect to such shares, subject to community property laws where applicable.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of March 13, 2018,the Record Date, the only persons or groups that are known to us to be the beneficial owners of more than 5% of the outstanding shares of our common stock are:
| Name and Address of Beneficial Owner | Number of Shares of Common Stock Beneficially Owned | Percent of Common Stock Beneficially Owned | Number of Shares of Common Stock Beneficially Owned | Percent of Common Stock Beneficially Owned | ||||||||
| Heartland Advisors, Inc. (1) | 3,634,011 | 14.7% | 3,423,110 | 13.6% | ||||||||
| Paradice Investment Management, LLC. (2) | 2,614,753 | 10.6% | 2,614,753 | 10.4% | ||||||||
| Nantahala Capital Management, LLC (3) | 2,159,705 | 8.7% | 2,436,805 | 9.7% | ||||||||
| Alyeska Investment Group, L.P. (4) | 1,836,224 | 7.4% | 1,936,539 | 7.7% | ||||||||
| Talanta Investment Group, LLC (5) | 1,650,732 | 6.7% | 1,650,732 | 6.6% | ||||||||
| 22NW, LP (6) | 1,453,783 | 5.8% | ||||||||||
| (1) | Based on the information reported in a statement on Schedule 13G/A filed with the SEC on February |
| (2) | Based on the information reported in a statement on Schedule 13G/A filed with the SEC on February 13, 2018 by Paradice Investment Management LLC (“Paradice LLC”) and Paradice Investment Management Pty Ltd (“Paradice Ltd”). The amendment states that Paradice LLC and Paradice Ltd have shared voting power as to 2,132,290 of these shares and shared dispositive power as to all of these shares. The principal business office address of Paradice LLC is 257 Fillmore Street, Suite 200, Denver, CO 80206. The principal business office address of Paradice Ltd is The Chifley Tower, Level 27, 2 Chifley Square, Sydney, NSW 2000, Australia. We have not attempted to independently verify any of the foregoing information, which is based solely upon the information contained in the Schedule 13G/A. |
| (3) | Based on the information reported in a statement on Schedule 13G/A filed with the SEC on February |
| (4) | Based on the information reported in a statement on Schedule 13G filed with the SEC on February 14, |
| (5) | Based on the information in a statement on Schedule 13D/A filed with the SEC on December 12, 2017 by Talanta Investment Group, LLC, Talanta Fund, L.P. (collectively, “Talanta”) and Justyn R. Putnam. The amendment states that Talanta and Justyn R. Putnam have shared voting and dispositive power as to all of these shares. The principal business office address of Talanta and Mr. Putnam is 401 N. Tryon Street, 10th Floor, Charlotte, NC 28202. We have not attempted to independently verify any of the foregoing information, which is based solely upon the information contained in the Schedule 13D/A. |
| (6) | Based on the information in a statement on Schedule 13G filed with the SEC on February 8, 2019 by 22NW, LP (“22NW”). The Schedule 13G indicates that 22NW has sole voting and sole dispositive power as to all of these shares. The principal business office address of 22NW is 1455 NW Leary Way, Suite 400, Seattle, WA 98107. We have not attempted to independently verify any of the foregoing information, which is based solely upon the information contained in the Schedule 13G. |
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as to the beneficial ownership of shares of our common stock as of March 13, 2018the Record Date of each director and each named executive officer and all directors and executive officers of the Company, as a group. Except as otherwise indicated in the footnotes to the table, each individual has sole investment and voting power with respect to the shares of common stock set forth.
| Name of Beneficial Owner (1) | Number of Shares of Common Stock Beneficially Owned | Percent of Common Stock Beneficially Owned | Number of Shares of Common Stock Beneficially Owned (1) | Percent of Common Stock Beneficially Owned (1) | ||||
| Scott M. Shaw (2) | 556,755 | 2.3% | 604,418 | 2.4% | ||||
| Brian K. Meyers (3) | 114,460 | * | 130,992 | * | ||||
| Deborah M. Ramentol (4) | 15,581 | * | ||||||
| Stephen M. Buchenot (4) | 84,214 | * | ||||||
| J. Barry Morrow | 155,372 | * | 176,994 | * | ||||
| James J. Burke, Jr. | 198,262 | * | 198,262 | * | ||||
| Peter S. Burgess | 123,119 | * | 123,119 | * | ||||
| Celia H. Currin | 121,675 | * | 121,675 | * | ||||
| Alvin O. Austin | 107,678 | * | 107,678 | * | ||||
| Ronald E. Harbour | 70,456 | * | ||||||
| All executive officers and directors as a group (10) | 1,535,032 | 6.2% | ||||||
| Ronald E. Harbour (10) | 35,228 | * | ||||||
| All executive officers and directors as a group (9) | 1,582,580 | 6.3% | ||||||
| * | Less than 1%. |
| (1) | Applicable percentages are based on 25,115,127 shares of common stock outstanding as of April 26, 2019. For purposes of this table, (i) a person or group of persons is deemed to have “beneficial ownership” of any shares as of a given date that such person or group has the right to acquire within 60 days after such date and (ii) the address for each named person is 200 Executive Drive, Suite 340, West Orange, New Jersey 07052. |
| (2) | Includes (i) |
| (3) | Includes (i) |
| (4) | Includes (i) |
| (5) | Includes (i) 155,372 shares of common stock held by Mr. Morrow and (ii) 21,622 shares of restricted common stock. |
| (6) | Consists of 198,262 shares of common stock held by Mr. Burke. |
| (7) | Consists of 123,119 shares of common stock held by Mr. Burgess. |
| (8) | Consists of 121,675 shares of common stock held by Ms. |
| (9) | Consists of 107,678 shares of common stock held by Mr. Austin. |
| (10) | Consists of 35,228 shares of common stock held by Mr. Harbour. |
Section 16(a) of the Exchange Act requires that the Company’s directors and officers, and beneficial ownerspersons who beneficially own more than 10% of 10% or morea registered class of the Company’s equity securities, file with the SEC reports of initial ownership of the Company’s common stock toand subsequent changes in that ownership and furnish the Company with copies of all forms they file reports of ownership of, and transactions in, the Company’s securities with the SEC pursuant to Section 16(a) of the NASDAQ Global Select Market and the Company. The Company believes that all SEC filing requirements applicableExchange Act. A late report was filed on April 16, 2019 to the Company’s directors and executive officers and beneficial ownersreport a transfer of 10% or more35,228 shares of the Company’s common stock for 2017by Ronald E. Harbour to his spouse as a division of assets pursuant to a settlement of divorce agreement dated as of December 17, 2018. Subject to the foregoing, to the Company’s knowledge based solely on a review of the copies of the reports furnished to the Company and/or written representations received from the Company’s directors, officers and greater than 10% beneficial owners that no other reports were timely met.required, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% beneficial owners were complied with during, or in respect of, the Company’s 2018 fiscal year.
| Plan Category | Number of Securities to be issued upon exercise of outstanding options, warrants and rights | Weighted- average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
| (a) | ||||||||||||
Equity compensation plans approved by security holders | 139,000 | $ | 12.14 | 2,050,638 | ||||||||
Equity compensation plans not approved by security holders | - | - | - | |||||||||
Total | 139,000 | $ | 12.14 | 2,050,638 | ||||||||
This section provides an overview and analysis of our executive officer compensation program and policies, the material compensation decisions we have made under those programs and policies, and the material factors that we considered in making those decisions. Later in this proxy statement under the heading “Executive Compensation,” you will findare a series of tables containing specific information about the compensation earned or paid in 20172018 to the following individuals, whom we refer to as “our namedour “named executive officers” or “NEOs.”
In 2017,2018, the Company had threefour named executive officers:
Scott M. Shaw, our President and Chief Executive Officer;
Brian K. Meyers, our Executive Vice President, Chief Financial Officer and Treasurer;
Stephen M. Buchenot, our Senior Vice President of Campus Operations; and
Deborah M. Ramentol, our former Senior Group President.
The discussion below is intended to help you understandaid in understanding the detailed information provided in the tables that follow and put that information into context within our overall compensation program.
Executive Summary
At the 20172018 Annual Meeting of the Company’s shareholders, we held a non-binding advisory “say-on-pay” vote on our executive compensation program as set forth in our 2017 proxy statement.statement dated March 23, 2018, which was filed with the SEC on that date. Approximately 76%99% of the votes cast on the say-on-pay proposal voted in favor of the program.
11
Performance-Based Executive Compensation
For 2018, the Company did not award any performance-based or time-based restricted stock.
For 2017, the Company did not award any performance-based or time-based restricted stock.
For 2014, 40% of equity compensation was comprised of performance-based restricted stock, which vested annually in 25% installments over a four-year performance period (subject to possible roll forwards) based upon the attainment of both (i) a threshold operating income margin target and (ii) annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) target in each year of the four-year performance period. The terms of these awards are described in more detail below under “Long-Term Stock Incentives.
| Performance-based shares issued in 2014 – In 2018, because we had met the EBITDA and operating income margin targets for the 2017 |
We maintain an annual performance-based Management Incentive Compensation Plan (the “MIC Plan”). Payments under the MIC Plan are based on the attainment of predetermined net income, revenue and company-wide quality focused outcome targets. The terms of these awards are described in more detail below under “2018 Annual Performance-Based Incentive Compensation.”
The Compensation Committee believes that these practices highlight the close link between pay and performance under our executive officer compensation program. Recent Changes to Compensation Over the past few years, we
The Compensation Committee continually reviews the executive compensation program and may, from time to time, modify certain aspects of the program to ensure that it remains aligned with the interests of the Company’s shareholders. Sound Compensation Governance The Company seeks to implement and maintain sound compensation governance practices to ensure adherence to our pay-for-performance philosophy while appropriately managing risk and aligning our executive compensation program with the financial interests of the Company’s shareholders. Highlights of our practices include:
Compensation Philosophy and Objectives The Company and the Compensation Committee believe that compensation paid to executive officers should be closely aligned with our performance on both a short-term and long-term basis, and that such compensation should assist us in attracting and retaining key executives that are critical to our long-term success. Our compensation program is designed to offer executive officers competitive compensation based on our performance and the individual’s contribution, performance and leadership in the execution of our business model. Our compensation policies are intended to motivate, reward and retain highly qualified executives for long-term strategic management and enhancement of shareholder value, to support a performance-oriented environment that rewards achievement of specific internal Company goals, and to attract and retain executives whose abilities are critical to our long-term success and competitiveness. Our compensation goals are further intended to mitigate incentives for our executives who take excessive risks that may be adverse to the Company and our shareholders in the long-term. The Compensation Committee has reviewed all components of the compensation for the named executive officers, including salary, annual incentives, equity and long-term incentive compensation, accumulated realized and unrealized stock options, the dollar value to the executive and cost to the Company of all perquisites, and the actual projected payout obligations under potential severance and Setting Executive Compensation We intend to continue our strategy of compensating our executives through programs that emphasize performance-based incentive compensation. We have structured annual cash and long-term equity incentive compensation to both motivate executives to achieve the business goals set by the Company and to reward the executives for achieving such goals. Our executive compensation program is further designed to discourage excessive risk taking by assessing performance across multiple dimensions and metrics, including both regulatory performance and student outcomes. For the named executive officers, the main components of our compensation program are base salary, an annual performance-based cash incentive and long-term performance-based restricted stock. In allocating compensation among these components, the Compensation Committee believes that the compensation of senior management, the levels of management having the greatest ability to influence our performance, should be predominately performance-based. Base salary is intended to provide a certain level of income commensurate with an executive’s position, responsibilities, and contributions to the Company. The annual performance-based cash incentive compensation focuses on short-term performance while the performance-based restricted stock is tied to achievement of performance over a longer period of time. This mix of short- and long-term incentives provides sufficient rewards to motivate near-term performance, while at the same time providing significant incentives to keep our executives focused on longer term corporate goals that drive shareholder value. In addition, we believe this balance of short-term and long-term incentive compensation and the mix of varied performance metrics helps mitigate the incentive for executives to take excessive risk that may have the potential to harm the Company in the long-term. Compensation for Base Salary Base salaries for our named executive officers are based on job responsibilities and individual contribution with reference to base salary levels of executives at comparable publicly held companies. The Compensation Committee also considers several other factors in setting base salaries, including the executive’s experience and tenure, our overall annual budget for merit increases and pre-tax profit, the executive’s individual performance, changes in the executive’s responsibility and the executive’s overall contribution to our success. We review salary levels annually to recognize these factors. We do not target base salary at any particular percentage of total compensation. 2018 Annual Performance-Based Incentive Compensation Our named executive officers are eligible to participate in the MIC Plan. Under the MIC Plan, the Compensation Committee approves the calculation of performance-based cash incentive opportunity for our named executive officers by taking into account certain financial performance targets and as well as The
At the beginning of Net Income / Loss Component. For For Revenue Component. For For Company-Wide Quality Focused Outcomes Component. Each of our named executive officers could earn No payments are made with respect to each initiative of the company-wide quality focused outcomes component if the specified target for such initiative was not attained. Our named executive officers could earn more than their target incentive opportunity for this component if performance with respect to one or more of the initiatives was greater than the target goal. The percentage increases by 8% for each percentage point that actual performance was above the target goal for the initiative. For Aggregate Incentive Compensation Paid under MIC Plan. For
Long-Term Stock Incentives Stock incentives focus executives’ attention on the Company from the perspective of an owner with an equity stake in the business. The Compensation Committee believes that the Company’s long-term performance is achieved through an ownership culture that encourages long-term performance by our named executive officers through grants of stock-based awards. Our shareholder-approved 2005 Long-Term Incentive Plan provides for the grant of stock options, restricted stock, performance stock and other equity-based awards. Equity awards are generally made at the discretion of the Compensation Committee based on a multiplicity of factors, including total compensation at peer companies, the level of equity ownership of the executives, and judgments of individual performance during the year. In 2011, the Compensation Committee implemented a restricted stock program pursuant to which Time-Based Restricted The Company did not award any time-based restricted stock to any of our NEOs in The Company did not award any performance-based restricted stock to any of our NEOs in 2018 or 2017. 2014 Performance Shares. In 2014, the Compensation Committee awarded performance-based restricted stock to Mr. Meyers (the “2014 Performance Shares”). Mr. Meyers’ 2014 Performance Shares vest in equal installments over four years based upon the attainment of both (i) a threshold operating income margin of at least 4.65% during any one or more of the fiscal years in the period beginning January 1, 2015 and ending December 31, 2018 and (ii) annual EBITDA targets during each of the four fiscal year performance periods. 2017 EBITDA Goals. The Compensation Committee set an EBITDA target of $7.3 million for the 2017 performance As the Company did not attain the 2017 EBITDA target, 25% of the 2014 Performance Shares issued to Mr. Meyers did not vest in 2017, but such shares 2018 EBITDA Goals. The Compensation Committee set an EBITDA target of $6.4 million for the No Backdating or Spring Loading The Company does not backdate options or grant options retroactively. In addition, we do not plan to coordinate grants of options, restricted stock or other equity awards so that they are made before announcement of favorable information or after announcement of unfavorable information. Stock options are granted at fair market value on the date the option grants are approved by our Compensation Committee. Fair market value has been consistently determined as the closing price on the NASDAQ Global Select Market on the grant date. All option grants and restricted stock awards require the approval of the Compensation Committee. The Company’s general practice is to grant options and restricted stock only on the date of a regularly scheduled Compensation Committee meeting, although there are occasions when grants have been made on other dates. Comparative Data The Company has not implemented a formal benchmarking process and does not target named executive officer compensation at a specified level of a peer group. In The purpose of this review was to determine whether the level of compensation proposed to be paid to the Company’s named executive officers during The Compensation Committee also reviewed general survey data across a broad cross-section of industries for companies with revenues similar to ours. Employment Agreements and Change in Control Benefits The Company has entered into employment agreements with Messrs. Shaw, Meyers and The employment We do not provide our executive officers with tax gross-ups for “excess parachute payments” under Section 280G of the Internal Revenue Code upon a change in control. In the event that any payment or distribution by us to or for the benefit of our named executive officers would be considered a “parachute payment” for purposes of Section 280G, the amount of such payments may be reduced to the largest amount permissible without triggering excise taxes under Section 4999 of the Internal Revenue Code. Retirement Plans The Company maintains a plan qualified under Section 401(k) of the Internal Revenue Code for the benefit of all employees. Our named executive officers are eligible to participate in this plan on the same terms and conditions as all other employees. At the discretion of our We do not provide any additional retirement benefits for our named executive officers. None of our named executive officers participate in a non-qualified deferred compensation program or pension arrangement. Welfare Benefits and Perquisites Our named executive officers are eligible to participate in our medical and dental health insurance plans, our life insurance plan and our long-term disability insurance plan on the same terms and conditions offered to all other employees. We also provide our named executive officers with supplemental life insurance. We believe that the benefits we offer are important components of our comprehensive benefit package, which encourages employees to remain with us. We do not provide any other perquisites or benefits to our named executive officers and we do not pay any tax gross-ups with respect to any compensation. Tax Deductibility of Compensation; Accounting Section 162(m) of the Internal Revenue Code generally precludes a public corporation from taking a deduction for compensation in excess of $1 million with respect to each of the named executive officers. The Compensation Committee strives to provide our named executive officers with compensation programs that will preserve the tax deductibility of compensation paid by the Company, to the extent reasonably practicable and to the extent consistent with the Company’s other compensation objectives. However, the Compensation Committee believes that shareholder interests are best served if it retains the flexibility to compensate executives in a manner intended to promote varying corporate goals, even if certain amounts that may be payable in excess of $1 million may not be deductible under Section 162(m). The Compensation Committee also takes accounting considerations, including the impact of Financial Accounting Standards Board Accounting Standards Codification 718 Compensation – Stock Compensation, into account in structuring compensation programs and determining the form and amount of compensation awarded. The Compensation Committee has reviewed and discussed with the Company’s management the Compensation Discussion and Analysis included in this proxy statement. Based on that review and discussion, the Compensation Committee has recommended to the
17 SUMMARY COMPENSATION TABLE
Oustanding Equity Awards at Fiscal Year End December 31,
Potential Payments upon a Termination or Change in Control The following table summarizes the value of the termination payments and benefits that the executive’s Involuntary Termination (as defined below); a Change in Control (as defined below); or the executive’s death or disability. In each case, the amounts are determined as if the trigger event occurred on December 31, Payment upon Termination at Fiscal Year End December 31,
20 Employment Agreements The Company is party to employment agreements with Messrs. Shaw, Meyers and Employment Agreement dated November 7, 2018 with Scott M. Shaw Employment Period. The agreement provides that Mr. Shaw will serve as our President and Chief Executive Officer through December 31, Compensation and Benefits. Mr. Shaw will receive a minimum annual base salary of $500,000, will be eligible to participate in the MIC Plan and, to the extent eligible, in all of our employee benefit plans, programs and arrangements that are established for, or made available to, our senior executives. The Company provides to Mr. Shaw a vehicle for his business and personal use and pays the associated costs, including automobile insurance, parking and fuel; Mr. Shaw is responsible for all taxes related to this benefit. Involuntary Termination. In the event of an “Involuntary Termination” (as defined below) of Mr. Shaw’s employment, in addition to Mr. Shaw’s right to receive payment of all accrued and unpaid compensation and benefits due to him through the date of termination or resignation of employment, including any accrued unpaid bonuses for a completed year, we will pay him: (1) two times the sum of (a) his base salary, as is then in effect; and (b) the target amount of the annual performance bonus for him in the year in which the termination occurs; (2) unreimbursed expenses for reasonable travel and other business expenses incurred by him through the date of termination; and (3) the estimated employer portion of premiums that would be necessary to Mr. Shaw’s coverage under the Company’s healthcare plan until the first anniversary of the date of termination (subject to proration should Mr. Shaw become insured under a subsequent healthcare plan). Mr. Shaw would receive the sum of these amounts in a lump-sum payment 60 days following his Involuntary Termination. In addition, Mr. Shaw would receive a prorated annual award under the MIC Plan for the year in which the Involuntary Termination occurs based on actual performance, payable at the time that awards are generally paid to employees for the applicable year. Termination for Cause; Resignation Other than for Good Reason. In the event that Mr. Shaw’s employment is terminated by us for Cause or Mr. Shaw resigns from his employment other than for “Good Reason” (as defined below), we will pay him his accrued but unpaid base salary, unreimbursed expenses and employee benefits earned through the date of his termination, including, without limitation, any MIC Plan award due but not yet paid for a completed calendar year. Death or Disability. In the event that Mr. Shaw dies or his employment is terminated as a result of his disability, we will pay him (or his estate, if applicable) his accrued but unpaid base salary and employee benefits earned through the date of his termination, including, without limitation, any MIC Plan award due but not yet paid for a completed calendar year. In addition, (i) Mr. Shaw will receive a prorated target MIC Plan award for the year of termination and (ii) all of Mr. Shaw’s outstanding stock options and restricted stock shall become fully vested, and stock options shall become immediately exercisable and remain exercisable for one year (or until the option’s normal expiration date, if earlier). Change in Control. Upon a “Change in Control” (as defined below), we (or our successor) will continue the employment of Mr. Shaw for a period of two years commencing on the date of the Change in Control and ending on the second anniversary thereof. In addition, all of Mr. Shaw’s restricted stock and stock options will vest in full and the stock options will become immediately exercisable on the date of the Change in Control. In the event that any payment or distribution by us to or for the benefit of Mr. Shaw pursuant to the terms of the employment agreement or otherwise would be considered a “parachute payment” and the amount of the parachute payment, after deduction of all relevant taxes, including excise taxes imposed by Section 4999 of the Internal Revenue Code, is less than the amount Mr. Shaw would receive if he was paid three times his average “base amount” less $1.00, then the aggregate amounts constituting the parachute payment will be reduced (or returned by Mr. Shaw if already paid to him) to an amount that will equal three times his average “base amount” less $1.00. Noncompetition. Mr. Shaw is subject to a noncompetition restrictive covenant during the term of his employment and for a period of two years thereafter, although the covenant will not apply if his employment is terminated due to an Involuntary Termination. Nonsolicitation. Mr. Shaw is subject to a nonsolicitation restrictive covenant of clients, employees and key consultants during the term of his employment and for one year thereafter. Confidentiality. Mr. Shaw is subject to a confidentiality restrictive covenant of unlimited duration. Waiver and Release. Our obligations upon a termination of employment under Mr. Shaw’s employment agreement are subject to Mr. Shaw executing and delivering a waiver and release of claims against us. Employment Agreement dated November 7, 2018 with Brian K. Meyers The terms of the Company’s employment agreement for Mr. Meyers are identical to those set forth in Mr. Shaw’s employment agreement described above, except that: (a) Mr. Meyers will serve as Executive Vice President, Chief Financial Officer and Treasurer, and will receive a minimum annual base salary of Employment Agreement dated April 3, 2019 with Stephen M. Buchenot The terms of the Company’s employment agreement for Mr. Buchenot are identical to those set forth in Mr. Shaw’s employment agreement described above, except that: (a) Mr. Buchenot will serve as Senior Vice President of Campus Operations and will receive a minimum annual base salary of $289,893, (b) in the event of an Involuntary Termination, Mr. Buchenot will be entitled to receive a payment of one and one-half times the sum of (1) his annual base salary and (2) the target amount of the annual performance bonus for him in the year in which the termination of employment occurs and (c) Mr. Buchenot is not provided the use of an automobile. The employment agreement supersedes and replaces a Change in Control Agreement dated November 7, 2018 between the Company and Mr. Buchenot. “Involuntary Termination” generally means the termination of the executive’s employment by the executive for Good Reason or by the Company without Cause. Prior to a “Change in Control” (as defined below), “Cause” generally means any of the following: (i) the executive’s willful failure to perform his duties in any material respect, (ii) malfeasance or gross negligence in the performance of his duties, (iii) the executive’s conviction of a felony, (iv) the executive’s intentional or reckless disclosure of confidential information, (v) the executive’s commission of an act of sexual harassment that would normally constitute grounds for termination, or (vi) any other act or omission by the executive which is materially injurious to the financial condition or business reputation of the Company or any of its affiliates. The definition also requires that the executive be given 30 days’ notice to cure a breach of (i) and (ii) above. After a Change in Control, Cause would not include (v) and (vi) above. “Good Reason” generally means the occurrence of any of the following without the executive’s written consent: (i) a reduction in the executive’s base salary or target annual incentive compensation award; (ii) an adverse change in the executive’s title, authority, duties or responsibilities; (iii) the relocation of the executive’s principal place of employment to a location more than 10 miles from West Orange, New Jersey; (iv) a failure by the Company to pay material compensation when due; or (v) a material breach of the executive’s employment agreement by the Company. The definition also requires that the Company be given 10 days’ notice to cure any Good Reason that is susceptible to cure. “Change in Control” generally means any of the following: (i) when a person directly or indirectly becomes the beneficial owner of 25% or more of either (1) the then outstanding common stock or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (other than any acquisition directly from the Company, by the Company, or by an employee benefit plan sponsored by the Company); (ii) when, during any period of 24 consecutive months, the individuals who constitute the Separation Agreement with Deborah M. Ramentol In connection with The following chart summarizes the compensation of the Company’s non-employee directors during the fiscal year ended December 31,
In J. Barry Morrow, our Non-Executive Chairman, received an additional annual retainer of $10,000. Non-employee directors are also eligible to receive awards of shares of restricted common stock under the Amended and Restated 2005 Non-Employee Directors Restricted Stock Plan as compensation for their services as directors. Annual Grants of Restricted Stock. On the date of each annual meeting, each non-employee director receives an award of shares of restricted common stock equal to $55,000 (based on the fair market value of a share of the Company’s common stock on the date of grant) for service as a director of the Company, provided that such non-employee director continues to serve as a director of the Company immediately after such annual meeting. In 2018, the non-employee directors advised the full board that they believed it was in the best interests of the Company that they forgo the 2018 annual award of shares of restricted stock for the financial benefit of the Company. The All awards of common stock under the Amended and Restated 2005 Non-Employee Directors Restricted Stock Plan granted since 2010 vest on the first anniversary of the grant date. There is no vesting period on the right to vote or the right to receive dividends on these shares. The Audit Committee assists the In this context, the Audit Committee has met and held discussions with management, the independent registered public accounting firm and the internal auditors, separately and together, with and without management present, regarding the Company’s audited consolidated financial statements as of December 31, The Audit Committee reviewed and discussed with the independent registered public accounting firm the auditor’s independence from the Company and its management. As part of that review, the Company’s independent registered public accounting firm submitted to the Audit Committee the written disclosures and the letter required by PCAOB Rule 3526 (Independence Discussions with Audit Committees) in which Deloitte & Touche LLP affirmed its independence from the Company. Further, the Audit Committee discussed with Deloitte Based upon the considerations described above and subject to the limitations upon the role and responsibilities of the Audit Committee as set forth in the Audit Committee’s charter, the Audit Committee recommended to the
COMPENSATION OF NAMED EXECUTIVE OFFICERS Pursuant to the rules of the Securities and Exchange Commission adopted under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are providing shareholders with a non-binding advisory “say-on-pay” vote to approve the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis and tabular and narrative disclosures of this proxy statement. We encourage shareholders to read the Compensation Discussion and Analysis beginning on page The board unanimously recommends a vote for the following resolution: “RESOLVED, that the shareholders hereby approve the compensation of the named executive officers as disclosed pursuant to Item 402 of Regulation S-K under the Securities Act of 1933, as amended, including the Compensation Discussion and Analysis, the accompanying compensation disclosure tables and any related narrative disclosure in this proxy statement.” Although the vote on this Proposal 2 is advisory and non-binding, the Compensation Committee and the Required Vote A majority of the votes cast at the Our INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee has appointed Deloitte & Touche LLP, which has served as the Company’s independent registered public accounting firm since 1999, to be the Company’s independent registered public accounting firm for the fiscal year ending December 31, Before appointing Deloitte & Touche LLP, the Audit Committee carefully considered Deloitte & Touche LLP’s qualifications, including the firm’s performance as independent registered public accounting firm for the Company in prior years and its reputation for integrity and competence in the fields of accounting and auditing. The Audit Committee also considered whether Deloitte & Touche LLP’s provision of non-audit services to the Company is compatible with its independence from the Company. Shareholders will be asked at the As more fully described below, all services to be provided by Deloitte & Touche LLP are pre-approved by the Audit Committee, including audit services, tax services and certain other services. The SEC requires disclosure of fees billed by the Company’s independent registered public accounting firm for certain services. The following table sets forth the aggregate fees billed
Audit and Audit Related Fees consisted principally of audit services of our consolidated financial statements, review of our quarterly financial statements, services that are normally provided by the independent auditors in connection with statutory and regulatory filings and the audit of the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002. Tax Fees consisted principally of professional services rendered by Deloitte & Touche LLP in connection with the Company’s tax compliance activities, including technical and tax advice related to the preparation of tax returns. All Other Fees primarily consisted of professional services rendered in connection with the Company’s employee benefit plan. The Audit Committee approves, prior to engagement, all audit and non-audit services provided by Deloitte & Touche LLP and all fees to be paid for such services. All services are considered and approved on an individual basis. In its pre-approval and review of non-audit service fees, the Audit Committee considers, among other factors, the possible effect of the performance of such services on the auditors’ independence. Required Vote A majority of the votes cast at the Our COMMITTEE AND CORPORATE GOVERNANCE MATERIALS OF THE COMPANY Copies of the Company’s Annual Report filed with the SEC The A copy of the Code of Conduct is posted on our website at www.lincolntech.edu The Company recognizes that related person transactions present a heightened risk of conflicts of interest. As a general matter, it is the preference of the Company to avoid related person transactions. The term “related person transaction” refers to a transaction required to be disclosed pursuant to Item 404 of Regulation S-K, under the Securities Act of 1933, as amended. Nevertheless, the Company recognizes that there are situations where related person transactions may be in, or may not be inconsistent with, the best interests of the Company and its shareholders. As a result, pursuant to the Company’s Audit Committee charter, the Audit Committee is charged with the responsibility to review and approve all related person transactions on an ongoing basis. All such transactions must be approved in advance by the Audit Committee. In addition, the Company’s Code of Conduct contains policies and procedures with respect to conflicts of interest and related person transactions. The Code of Conduct requires that all directors, officers, employees and certain other persons subject to the Code of Conduct, adhere to it and prohibits certain arrangements that may be relevant to related person transactions including, but not limited to, prohibitions against: obtaining a substantial interest in any entity which does or seeks to do business with, or is a competitor of, the Company; entering into various arrangements (including family or other relationships) which might dissuade such director, officer, employee or other person from acting in the best interest of the Company; entering into a financial transaction or relationship with a student, prospect, vendor, agent or competitor of the Company; benefiting, or seeking to benefit, (directly or indirectly) from such person’s position with the Company from any sale, purchase or other activity of the Company; using Company property or information for personal gain; obtaining loans or guarantees for personal obligations from the Company; and competing with the Company. The Company is a party to an agreement (the “Matco Agreement”) with Matco Tools Corporation (“Matco”), a tool distributor for the automotive and other industries, which provides to Matco the exclusive right to offer for sale its products to the students and instructors at 12 of the Company’s campuses, which exclusivity includes, but is not limited to, all other tool manufacturers and tool distributors. The Matco Agreement also provides to the Company, on an advance commission basis, credits based on tool purchases by the Company’s students, which credits are redeemable in Matco-branded tools, tool storage, equipment, and diagnostics products over the term of the Matco is a subsidiary of Fortive Corporation, a NYSE-listed company (“Fortive”). James A. Lico, the President and Chief Executive Officer of Fortive, is the brother-in-law of Ronald Shareholder proposals that are intended to be presented at the You may contact any non-employee director, or the entire Communications are distributed to the Some banks, brokers and other nominee record holders may participate in the practice of “householding” proxy statements and annual reports. This means that unless shareholders give contrary instructions, only one copy of our proxy statement or annual report may be sent to multiple shareholders in each household who share an address. We will promptly deliver a separate copy of either document to you if you call or write to us at the following address or telephone number: Lincoln Educational Services Corporation, c/o Corporate Secretary, 200 Executive Drive, Suite 340, West Orange, New Jersey 07052; telephone (973) 736-9340. If you wish to receive separate copies of our proxy statement or annual report in the future, or if you are receiving multiple copies and would like to receive only one copy per household, please contact your bank, broker or other record holder, or you may contact us at the above address or telephone number. Proxy authorizations submitted via the Internet must be received by
  YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY. Vote by Internet – QUICK EASY IMMEDIATE – 24 Hours a Day, 7 Days a Week or by Mail LINCOLN EDUCATIONAL SERVICES CORPORATION Your Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. Votes submitted electronically over the Internet must be received by 11:59 p.m., Eastern Time, on such ANNUAL MEETING OF SHAREHOLDERS OF LINCOLN EDUCATIONAL SERVICES CORPORATION The Shareholders are available at: Please date, sign and mail your proxy card in the envelope provided as soon as possible. ▲ FOLD HERE ● DO NOT SEPARATE ● INSERT IN ENVELOPE PROVIDED ▲ PROXY LINCOLN EDUCATIONAL SERVICES CORPORATION Proxy For Annual Meeting of Shareholders THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned shareholder of Lincoln Educational Services Corporation, a New Jersey corporation (the “Company”), hereby appoints Scott M. Shaw and Brian K. Meyers, and each of them, as proxies for the undersigned, with full power of substitution in each of them, to attend the Annual Meeting of Shareholders of the Company to be held on Thursday, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST IN ACCORDANCE WITH THE SPECIFICATIONS MADE BY THE UNDERSIGNED. IF THIS PROXY IS EXECUTED, BUT NO SPECIFICATION IS MADE BY THE UNDERSIGNED, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST “FOR” ALL NOMINEES AND “FOR” PROPOSALS 2 AND 3, OTHERWISE IN THE DISCRETION OF THE PROXIES AT THE ANNUAL MEETING OR ANY ADJOURNMENT(S) OR POSTPONEMENT(S) THEREOF. (Continued, and to be marked, dated and signed, on the other side) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||