**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

**FORM 10-K/A**

**AmendmentNo. 1**

**x**                              ANNUALREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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**for the fiscal year endedDecember 31, 2006.**

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**OR**

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**o**                                 TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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**for the transition periodfrom                    to                    .**

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**CommissionFile Number 0-22844**

**LAUREATEEDUCATION, INC.**

(Exact name ofregistrant as specified in its charter)

| **Maryland**                                |   | **52-1492296**       |
|---------------------------------------------|--------|----------------------|
| (State or other  jurisdiction of            |   | (I.R.S. Employer     |
|  incorporation or organization)        |   | Identification  No.) |
|                                        |   |                 |
| **1001  Fleet Street, Baltimore, Maryland** |   | **21202**            |
| (Address of  principal executive offices)   |   | (Zip Code)           |

 

Registrant’stelephone number, including area code:** (410) 843-6100**

Securitiesregistered pursuant to Section 12(b) of the Act:
| **Title of each class**       | ** ** | **Name  of each exchange on which resgistered** |
|-------------------------------|------------|-------------------------------------------------|
| Common Stock, par value $0.01 |       | The NASDAQ Stock Market, LLC                    |

 

Securitiesregistered pursuant to the Section 12(g) of the Act:**None**

Indicate by check mark ifthe registrant is a well-known seasoned issuer, as defined in Rule 405 ofthe Securities Act   Yes x  No o.

Indicated by check markif the registrant is not required to file reports pursuant to Section 13or Section 15(d) of the Exchange Act.   Yes o  No x.

Indicate by check markwhether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d), of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.   Yes x  No o.

Indicate by check mark if disclosure of delinquentfilers pursuant to Item 405 of Regulation S-K is not contained herein, and willnot be contained, to the best of registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-Kor any amendment to this Form 10-K.   o

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer or a non-accelerated filer. Seedefinition of “accelerated filer” and “large accelerated filer” inRule 12b-2 of the Exchange Act.

| Large accelerated  filer  x |   | Accelerated  filer  o |   | Non-accelerated  filer  o |
|---------------------------------------|--------|---------------------------------|--------|-------------------------------------|

 

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Act).   Yes o  No x.

The aggregate market value of voting Common Stock heldby non-affiliates of the registrant was approximately $2,169,960,530 as of June30, 2006.

The registrant had 51,438,283 shares of Common Stockoutstanding as of February 26, 2007.

Circular 230 Notice: In accordance with TreasuryRegulations which became applicable to all tax practitioners as of June 20,2005, please note that any tax advice given herein (and in any attachments) isnot intended or written to be used, and cannot be used by any taxpayer, for thepurpose of (i) avoiding tax penalties or (ii) promoting, marketing orrecommending to another party any transaction or matter addressed herein

 

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**EXPLANATORYNOTE**

The registrant isfiling this Amendment No. 1 on Form 10-K/A to its annual report on Form 10-Kfor the fiscal year ended December 31, 2006, to include the informationrequired to be included in Part III of this Form 10-K, which the Company is nolonger incorporating by reference to its definitive proxy statement.  No other information contained in theoriginal filing is amended hereby. This amendment does not modify or updatedisclosures in the original filing. Furthermore, except for the mattersdescribed above, this amendment does not change any previously reportedfinancial results, nor does it reflect events occurring after the date of theoriginal filing.

 

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**PART III.**

**Item 10. Directors and Executive Officers of Laureate Education, Inc.**

**InformationRelating to Laureate Directors and Named Executive Officers**

The following information sets forth the names, agesand titles of the directors of Laureate Education, Inc. (the “Company” or “Laureate”)and the Company’s Chief Executive Officer, Chief Financial Officer and otherexecutive officers named in the Summary Compensation Table on page 14(collectively, the “Named Executive Officers”) and our directors, their presentprincipal occupations and their business experience during the past five years.During the last five years, none of Laureate, its Named Executive Officers ordirectors has been (i) convicted in a criminal proceeding (excludingtraffic violations and similar misdemeanors) or (ii) a party to anyjudicial or administrative proceeding (except for matters that were dismissedwithout sanction or settlement) that resulted in a judgment, decree or finalorder enjoining such person from future violations of, or prohibitingactivities subject to, federal or state securities laws, or a finding of anyviolation of federal or state securities laws. With the exception ofMs. Aguilera, who is a citizen of Spain, Mr. Appadoo, who is acitizen of the United Kingdom, and Mr. Pollock, who is a citizen ofCanada, all of the directors and Named Executive Officers listed below areU.S. citizens. The business address of each director or officer listedbelow is c/o Laureate Education, Inc., 1001 Fleet Street, Baltimore,Maryland, 21202; (410) 843-6100.

**Directors**

*Douglas L. Becker, 41,  DirectorSince 1986*

Mr. Beckerhas been Chairman and Chief Executive Officer of Laureate sinceFebruary 2000. From April 1993 until February 2000, served asthe Company’s President and Co-Chief Executive Officer.

*R. Christopher Hoehn-Saric, 44, Director Since 1986*

Mr. Hoehn-Saricassumed the position of Chief Executive Officer and a Director ofEducate, Inc. in June 2003. From February 2000 toJune 2003, Mr. Hoehn-Saric was the Chairman and Chief ExecutiveOfficer of Sylvan Ventures, LLC, an affiliate of Laureate.

*James H. McGuire, 63,  DirectorSince 1995*

Mr. McGuirehas served as President of NJK Holding Company since 1992.

*R. William Pollock, 78,  DirectorSince 1995*

Mr. Pollockserves as Chairman of the Board of Drake Holdings Limited, a company that ownsinterests in various businesses throughout the world, and has served in thatcapacity for more than the past five years. Mr. Pollock is also a directorof DiscoverWare Inc. in Canada.

*John A. Miller, 53,  DirectorSince 2001*

Mr. Milleris the President and Chief Executive Officer of North American Corporation ofIllinois. Mr. Miller has served in this capacity for more than the pastfive years. Mr. Miller is also a director of Atlantic PremiumBrands, Inc. and Sally Beauty Holdings (previously Alberto Culver Company).

*Richard W. Riley, 74,  DirectorSince 2001*

Mr. Rileyis currently a senior partner with the law firm of Nelson MullinsRiley & Scarborough, L.L.P. and has been a partner at that firm forthe past five years. From 1993 until 2001, Mr. Riley served as U.S.Secretary of Education. Mr. Riley was Governor of South Carolina from 1979through 1987.

*David A. Wilson, 65,  DirectorSince 2002*

Mr. Wilsonhas been President and Chief Executive Officer of the Graduate ManagementAdmission Council, a not-for-profit education association which provides theGMAT (Graduate Management Admission Test), since 1995.

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*Wolf H. Hengst, 63,  DirectorSince 2003*

Mr. Hengstwas President of Worldwide Hotel Operations for Four Seasons Hotels and Resortsfrom 1998 until his retirement in December 2006.

*Isabel Aguilera, 46,  Director Since 2005*

Ms. Aguilera has been Managing Director ofGoogle, Inc. for Spain and Portugal since January 2006. From May 2002through July 2005, Ms. Aguilera was the Chief Operating Officer of NHHoteles. For five years prior to that, Ms. Aguilera was Chief ExecutiveOfficer and Director of Dell Computer Corporation for Spain, Italy andPortugal. Ms. Aguilera also serves as a director and member of theExecutive Committee for Indra Sistemas in Spain.

**ExecutiveOfficers**

*Raph Appadoo, 57*

Mr. Appadoohas served as President of Laureate and President of Laureate’s Campus-BasedEurope division since June 2003. From February 2000 throughMay 2003, Mr. Appadoo served as President and Chief Executive Officerof Sylvan International Universities, Inc., a predecessor to Laureate’sCampus-Based Europe division.

*William C. Dennis, Jr., 63*

Mr. Dennishas served as President of Laureate’s Campus-Based Latin America division sinceJune 2003. From October 2001, when Mr. Dennis joined the Company,through May 2003, he served as Chief Operating Officer and Chief FinancialOfficer of Laureate’s campus-based operations.

*Rosemarie Mecca, 51*

Ms. Meccajoined Laureate on October 1, 2005 as its Executive Vice President andChief Financial Officer. From September 2001 to September 2005,Ms. Mecca served as Executive Vice President, Chief Financial Officer andChief Information Officer of the Shell Chemicals companies.

*Paula R. Singer, 52*

Ms. Singerhas been President and Chief Executive Officer of Laureate’s On-Line Educationdivision since July 2001.

**InformationRegarding the Laureate Board and Committees**

TheLaureate Board has three standing committees: an Audit Committee, aCompensation Committee, and a Nominating and Corporate Governance Committee. Eachmember of the Audit, Compensation, and Nominating and Corporate GovernanceCommittees is independent as defined under current National Association ofSecurities Dealers Automated Quotation (“Nasdaq”) Global Market listingstandards.

TheAudit Committee meets with Laureate’s independent auditors to: (i) reviewwhether satisfactory accounting procedures are being followed by Laureate andwhether its internal accounting controls are adequate, (ii) monitor auditand non-audit services performed by the independent auditors,(iii) approve fees charged by the independent auditors, and (iv) performall other oversight and review of the Company’s financial reporting process.The Audit Committee also reviews the performance of the independent auditorsand annually selects the firm of independent auditors to recommend to thestockholders to audit the Company’s financial statements. During 2006,independent directors David A. Wilson, James H. McGuire, and John A. Millerwere the members of the Audit Committee. David A. Wilson serves as the Chairman of the Audit Committee, and theBoard of Directors has determined that Mr. Wilson is a financial expert forpurposes of Securities and Exchange Commission (“SEC”) Regulation S-K, Item401(h). There were nine meetings of the Audit Committee during 2006. The AuditCommittee Charter is available on the Laureate website at www.Laureate-inc.com.

TheCompensation Committee establishes the compensation for the Chief ExecutiveOfficer and approves recommendations for the other executive officers ofLaureate and generally reviews benefits and compensation for all officers andemployees. It also administers Laureate’s stock option plans. During 2006,independent directors James H. McGuire (Chairman), John A. Miller, Wolf H.Hengst and Isabel Aguilera comprised the Compensation Committee. There werefour meetings of the Compensation Committee during 2006. The report of theCompensation Committee required by the rules of the SEC follows beginningon page 4. The Compensation Committee Charter is available on the Laureatewebsite at www.Laureate-inc.com.

TheNominating and Corporate Governance Committee screens and evaluates candidatesfor vacancies on the Laureate Board of Directors and committees thereof,reviews Board compensation matters, and reviews and monitors corporategovernance matters. During 2006, independent directors Richard W. Riley(Chairman), R. William Pollock and David A. Wilson were the members of theNominating and Corporate Governance Committee, which met on five occasions. TheNominating and Corporate Governance Committee Charter is available on theLaureate website at www.Laureate-inc.com.

Inevaluating and determining whether to nominate a candidate for a position onLaureate’s Board, the Nominating and Corporate Governance Committee willconsider the criteria outlined in the Company’s corporate governance policy,which include high professional ethics and values, relevant management and/oreducational experience and a commitment to enhancing shareholder value. Inevaluating candidates for nomination, the Nominating and Corporate GovernanceCommittee utilizes a variety of methods. The Nominating and CorporateGovernance Committee regularly assesses the size of the Board, whether anyvacancies are

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expected due toretirement or otherwise, and the need for particular expertise on the Board.Candidates may come to the attention of the Nominating and Corporate GovernanceCommittee from current Board members, shareholders, professional search firms,officers or other persons. The Nominating and Corporate Governance Committeewill review all candidates in the same manner regardless of the source of therecommendation, including a shareholder.

Underthe Bylaws, as amended, nominations for Director may be made only by the Boardof Directors or a committee thereof or by a shareholder of record who deliversnotice along with the additional information and materials required by theBylaws to the Corporate Secretary not less than 90 days and no more than 120days before the first anniversary date of the mailing date for the precedingyear’s annual meeting.  Interestedparties may obtain a copy of the Bylaws by writing to the GeneralCounsel/Corporate Secretary at Laureate Education, Inc., 1001 Fleet Street,Baltimore, Maryland 21202. A copy of the Bylaws, as amended, has been filedwith the SEC.  The Board has adoptedCorporate Governance Guidelines drafted by the Nominating and CorporateGovernance Committee. These guidelines are available on the Laureate website atwww.Laureate-inc.com.

Laureatehas adopted a Code of Ethics and Conduct that applies to all of its Directors,officers (including its Chief Executive Officer, Chief Financial Officer,Controller and any person performing similar functions) and employees,generally. The Company has conducted training sessions at each of its locationsand at each of its universities for all levels of employees and officers. TheCompany provides all of its significant vendors with a copy of the Code andmaintains a hotline in four languages to allow for communication of anyconcerns. In satisfaction of the requirements of SEC Regulation S-K, Item406(d), the Company intends to post on its website, www.Laureate-inc.com,any amendment to, or waiver of, any provision of the Code that applies to theCompany’s principal executive officer, principal financial officer, principalaccounting officer or controller or persons performing similar functions. TheCompany has not granted any such waiver and does not anticipate ever grantingsuch a waiver. Laureate has made the Code of Ethics and Conduct available onits website at www.Laureate-inc.com.

**Section 16(a) BeneficialOwnership Reporting Compliance**

Basedupon the Company’s records and other information, the Company believes all ofits Directors and Executive Officers and other stockholders who may own 10% ormore of Laureate Common Stock have complied with the requirements of theSecurities and Exchange Commission to report ownership and transactions thatchange ownership, with the following exceptions.  Ms. Aguilera and Ms. Mecca becamesubject to the requirements of Section 16(a) of the Securities Exchange Act, asamended in February 2005 and October 2005, respectively, and did not file therequired Forms 3 until January 2007 and September 2006, respectively.  Mr. Miller filed a Form 4 reporting changesin ownership on April 27, 2007 to disclose (i) Laureate common stock he heldwhen he became a Laureate director but which had not been previously reported,(ii) two August 2005 open-market acquisitions of options to acquire Laureatecommon stock, (iii) his January 2006 annual non-employee director stockoption grant, (iv) the February 2006 acquisition of Laureate common stockthrough exercise of his August 2005 market-purchased options, (v) the February2007 acquisition of Laureate common stock through exercise of August 2006market-purchased options and (vi) the January 2007 disposition of indirectlyheld shares of Laureate Common Stock. Additionally, Ms. Aguilera and Messrs. Hengst, McGuire, Hoehn-Saric, Rileyand Wilson did not report their January 2006 annual non-employee director stockoption grant until January 2007.

**CompensationCommittee Interlocks and Insider Participation in Compensation Decisions**

The Compensation Committee consists ofMessrs. Hengst, McGuire and Miller and Ms. Aguilera. All of themembers of the Compensation Committee as presently constituted are independentDirectors and do not have compensation committee interlocks.

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**Item 11. ExecutiveCompensation**

**CompensationCommittee Report**

The Compensation Committee of the Board of Directorsof the Company has reviewed and discussed the Compensation Discussion andAnalysis required by Item 402(b) of Regulation S-K with management.  Based on its review and discussions withmanagement, the Compensation Committee recommended to the Board that theCompensation Discussion and Analysis be included in this Amendment No. 1 to theCompany’ s Annual Report on Form 10-K/A for the year ended December 31,2006.  This report is provided by thefollowing independent directors, who comprise the committee:

 
| ** ** | **THE COMPENSATION COMMITTEE** |
|------------|--------------------------------|
| ** ** | ** **                     | ** ** |
| ** ** | ** **                     | **James H. McGuire, Chairman** |
| ** ** | ** **                     | **Isabel Aguilera** |
| ** ** | ** **                     | **Wolf H. Hengst** |
| ** ** | ** **                     | **John A. Miller** |

 

**CompensationDiscussion and Analysis**

TheCompensation Committee is responsible for establishing, implementing andevaluating the Company’s employee compensation and benefit programs. TheCompensation Committee annually evaluates the performance of the ChiefExecutive Officer and the other executive officers of the Company. TheCompensation Committee ensures that the total compensation paid to the NamedExecutive Officers as well as other senior officers of the Company(collectively with the Named Executive Officers, the “Executive Team”) is fair,reasonable and competitive.  Generally,the types of compensation and benefits provided to the Named Executive Officersare similar to those provided to other members of the Executive Team.

**ExecutiveCompensation Strategy**

The goal of our executive compensation program is tocreate long-term value for our shareholders while at the same time rewardingour executives for superior financial and operating performance and encouragingthem to remain with the Company for long, productive careers.  The Compensation Committee believes that themost effective way to achieve this goal is to design an executive compensationprogram that rewards the achievement of specific annual, long-term andstrategic goals by the Company, and which aligns executives’ interests withthose of the shareholders by rewarding performance above established goals,with the ultimate objective of improving shareholder value.  This philosophy is used by the CompensationCommittee as the foundation for evaluating and improving the effectiveness ofthe executive pay program. The following are the core elements of the Company’sexecutive compensation strategy:

·                                          *Market Competitive*.   Executive compensationlevels and programs should be competitive with companies of similar size andperformance to Laureate on a global basis;

·                                          *Performance Based*.   A majority of executivecompensation should be performance-based, resulting in pay that is “at risk,”based on short-term and long-term goals and objectives;

·                                          *Shareholder Aligned*.   Incentives should bestructured to create a strong alignment between executives and shareholders onboth a short-term and a long-term basis; and

·                                          *Financially Efficient*.   Pay programs and featuresshould attempt to minimize the impact on earnings and maximize tax benefits tothe Company, all other things being equal.

By incorporating theseelements, the Compensation Committee believes that the executive compensationprogram is responsible and effective in attracting, motivating and retainingthe level of talent necessary to successfully grow and manage the Company’sbusiness.

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**Process forDetermining Compensation**

The Compensation Committee is responsible forestablishing the compensation policies for the Named Executive Officers andother members of the Executive Team, evaluating performance of the ExecutiveTeam and setting compensation for each of the Named Executive Officers based onthose policies and the performance of each executive.   In addition, the Compensation Committeeapproves all equity awards for the Named Executive Officers. Each year, theCompany’s compensation process begins in September, when the Company’s seniormanagement meets to set the next year’s budgets.  Ninety percent of the performance goalsrelated to compensation are linked to the Company’s annual budget.  Using the budgets set in September, inDecember each year, the Board of Directors approves the Company’s targetEarnings per Share, Operating Income and Student Enrollment for the followingyear.  In February, the CompensationCommittee meets to review the Executive Team’s past year’s performance and tofinalize new individual goals for the Company’s Executive Team.  In March, the Compensation Committeecertifies the extent to which the prior year’s performance goals have beenachieved and authorizes the payment of any earned incentive compensation.

Each year, prior to the February CompensationCommittee meeting, the Chief Executive Officer and Executive Vice President—Directorof Corporate Operations review the performance of each member of the ExecutiveTeam (other than the Chief Executive Officer, whose performance is reviewedonly by the Compensation Committee).  Theconclusions reached and recommendations based on these reviews, includingwith respect to salary adjustments and annual award amounts, are then presentedto the Compensation Committee at its February meeting. The CompensationCommittee reviews those recommendations and exercises its discretion inmodifying any recommended adjustments or awards to executives. Decisions regarding the non-equity incentive compensation of otheremployees are made by the Chief Executive Officer and Executive Vice President—Directorof Corporate Operations.

The Compensation Committee works with MercerHuman Resource Consulting (“Mercer”), an outside global human resourcesconsulting firm, for advice and perspective regarding market trends that mayimpact decisions the Company makes about its executive compensation program andpractices.  Some of the services Mercerprovides to the Compensation Committee include meeting with senior executivesof the Company to understand current and future business objectives andcompensation design implications; reviewing existing equity compensationdocuments with the Compensation Committee and proposing changes, if necessary,to keep the Company current with industry trends and requirements and concernsof the Company’s shareholders, including its institutional shareholders;assisting with the development of conceptual designs for future equityincentive programs; and providing the Compensation Committee with relevantmarket data and alternatives to consider when making compensation decisions forthe Chief Executive Officer and other members of the Executive Team.

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In conducting its latest review of executivecompensation levels, the Compensation Committee compared executive compensationagainst two different groups.  The firstgroup consisted of the following 7 U.S.-based education companies:  Apollo Group, Inc.; Career EducationCorporation, Corinthian Colleges, Inc.; Devry Inc.; Education ManagementCorporation; ITT Educational Services Inc.; and Strayer Education, Inc.However, the Compensation Committee believes that, as a general rule, theCompany does not compete for talent among domestic education companies.  Rather, the Compensation Committee believesthe market for the Company’s executive talent includes large international,financially complex companies with revenues between $500 million and $2 billionand double-digit growth and profitability over the last three years. Therefore,the second group studied consisted of the following 17 companies in variousindustry groups, each of which has significant global operations and highsustained growth rates, profitability and total shareholder returns (the “High-PerformingPeer Group”):

**High-PerformingPeer Group**

| ·  Invitrogen Corporation                    |   | ·  MEMC Electronic Materials, Inc.             |
|--------------------------------------------------------|--------|----------------------------------------------------------|
| ·  Albemarle Corporation                     |   | ·  MKS Instruments, Inc.                       |
| ·  Sandisk Corporation                       |   | ·  Skyworks Solutions, Inc.                    |
| ·  Roper Industries Inc. / DE                |   | ·  Mercury Interactive Corporation             |
| ·  Littlefuse, Inc.                          |   | ·  Coach Incorporated                          |
| ·  Scientific Games Corporation              |   | ·  Quiksilver, Inc.                            |
| ·  Tempur Pedic Intl. Inc.                   |   | ·  NII Holdings, Inc.                          |
| ·  Lincoln Electric Holdings, Inc.           |   | ·  Western Wireless Corporation – Class A |
| ·  Schnitzer Steel Industries – Class A |   |                                                     |

 

Given the CompensationCommittee’s expectation that, over the long term, Laureate will continue togenerate shareholder returns in excess of the average of its peer group, theCompensation Committee set 2006 compensation for the Named Executive Officersat the 50th percentile of compensation paid to similarly situated executives ofthe companies comprising the High-Performing Peer Group. A significantpercentage of total compensation is allocated to variable compensation that ispaid only upon achievement of performance objectives as a result of theCompensation Committee’s “at-risk” philosophy. Based on the results of a competitive market study prepared by Mercer,the Compensation Committee believes that the total compensation*opportunity* for the Company’s executives(including the Chief Executive Officer and the other Named Executive Officersin the Summary Compensation Table) is fully competitive while being responsibleto the Company’s shareholders.

**CompensationProgram Components and Performance Measures**

Laureate’sexecutive compensation program consists of the following core components:

·         Base Salary

·         Annual Incentive Opportunity

·         Long-TermIncentive Opportunity

Whenreviewing executive compensation levels, each component of compensation isreviewed independently, and the total pay package is reviewed in the aggregate.However, the Compensation Committee believes that an important component ofaligning the interests of shareholders and executives is to place a strongemphasis on “at risk” compensation linked to Company performance.  In 2006, the mix of the three components ofexecutive compensation was:  base salary,23.8%; annual incentive opportunity, 24.8%; and long-term incentiveopportunity, 51.4%.  Therefore, in 2006,approximately 76.2% of the compensation for the Named Executive Officers was “at-risk.”

TheCompensation Committee has identified several factors that are critical to thesuccess of the business, including revenue growth, enrollment growth, earningsper share growth and return on invested capital. These types of measures, invarious combinations, are incorporated into the Company’s variable payplans—including annual incentives, stock options, restricted stock andlong-term cash incentives. Depending on the plan and the participant,performance is measured on both a short-term (typically one year) and a long-term(typically 3-4 years) basis, for the entire Company and for divisions withinthe Company (based on business and/or geography), and these factors areintended to address both absolute and relative performance.

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TheCompensation Committee also reviews non-financial factors as part of theoverall evaluation of performance. Such non-financial factors typically includecustomer outcomes (e.g. graduation rates), personal stretch objectives,leadership effectiveness, process excellence and talent management. TheCompensation Committee believes that non-financial measures are often “leadingindicators” of financial performance and are especially important to a rapidlygrowing and geographically dispersed company like Laureate.

***BaseSalary****.*  The Company provides the Named ExecutiveOfficers and its other employees with base salary to compensate them forservices rendered during the fiscal year. Base salary for each member of theExecutive Team is determined for each executive based on his or her positionand responsibility after considering the following primary factors:

·         marketdata provided by our outside consultant;

·         internalreview of the executive’s compensation, both individually and relative to otherofficers; and

·         individualperformance of the executive.

Salary levels aretypically considered annually as part of the Company’s performance reviewprocess as well as upon a promotion or other change in job responsibility.Merit-based increases to salaries of members of the Executive Team are based onthe Compensation Committee’s assessment of the individual’s performance.  Base salaries are the smallest component ofexecutive compensation at Laureate. Current base salaries are believed to becompetitive at the market median. In 2006, the average salary increase for the NamedExecutive Officers in the Summary Compensation Table, excluding the ChiefExecutive Officer, was 4.3%.  The ChiefExecutive Officer’s base salary increased by 4.0% from 2005 to 2006.  A more complete discussion of the ChiefExecutive Officer’s compensation follows on page 11, under the heading “Chairmanand Chief Executive Officer Compensation.”

***IncentiveOpportunity****.*  Company executives are given the opportunityto earn annual and long-term incentive compensation if certain business andindividual performance goals are met. Each December, the Board of Directorsapproves the Company’s official business plan for the coming year.  The Board believes that the targets set inthe business plan should be attainable, but only with considerable effort.  Based on the Company’s official business planand the Company’s short- and long-term “stretch” targets contained therein, theCompensation Committee sets annual and long-term threshold, target and maximumincentive compensation levels for each member of the Executive Team.  The “threshold” level is that performancelevel below which the Compensation Committee has determined no incentivecompensation should be paid.  Therefore,the Compensation Committee sets the incentive threshold at a level it believesthere is a 90% probability of achieving. Typically, the “target” level is that level which the CompensationCommittee believes there is a 50% - 60% probability of reaching.  The “maximum” incentive level is thatperformance level which the Compensation Committee anticipates there is only a10% probability of attaining.  Indetermining the probabilities of achieving various performance goals, theCompensation Committee, with Mercer’s assistance, studies historicalperformance and volatility, projected business plans, size of operation,anticipated market conditions and the opinions of the Company’s operating andfinancial staffs.

*Annual Incentive Opportunity*.  The 2006 Executive Annual Incentive Plan (the“AIP”) is an annual cash incentive program designed to create a link betweenexecutive compensation and individual and business performance. The AIPprovides guidelines for the calculation of annual non-equity incentive basedcompensation after assessing the executive’s performance against pre-determinedquantitative and qualitative measures within the context of the Company’soverall performance.

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At its October meetingeach year, the Compensation Committee considers whether an AIP should beestablished for the succeeding year and, if so, approves the group of employeeseligible to participate in the AIP for that year. The AIP includes variousincentive levels based on the participant’s accountability and impact onCompany operations, with target award opportunities that are established as apercentage of base salary. In 2006, these targets ranged from 75% of basesalary to 120% of base salary for the Named Executive Officers and werecompetitive with annual incentives provided by other companies in theHigh-Performing Peer Group. Actual non-equity incentive awards are based on theassessment of each executive’s individual performance for the year, theassessment of the Company’s overall performance and/or the financial,operational and strategic performance of the business unit for which theexecutive is responsible.

For the year endedDecember 31, 2006 (“fiscal 2006”), in addition to having to meet certainindividual goals, the AIP required pre-set threshold, target or maximum levelsfor Earnings per Share, Enrollment Growth and Operating Income to have been metbefore any annual incentive compensation could be earned by the ExecutiveTeam.  The impact each of these goals hadon whether and how much a particular executive earned for his or her annualincentive compensation depended on the executive.  In February and March 2007, theCompensation Committee approved annual incentive awards for the Named ExecutiveOfficers, each of whom met or exceeded the target Company and individualperformance levels set for fiscal 2006. These incentive awards are included in the column of the SummaryCompensation Table labeled “Non-Equity Incentive Plan Compensation” on page 14.  The Compensation Committee believes thatthese award levels appropriately reflect the performance of the Company and itsexecutives given significant improvements in enrollment, operating income andearnings per share during the year.

Below is informationsetting forth, for each of the Named Executive Officers, the weight of each ofthe components and the amount of incentive compensation earned in fiscal 2006,as a percentage of the Named Executive Officer’s base salary, the amounts eachof the Named Executive Officers earned using this formula and the amountsawarded to the Named Executive Officers for 2006 performance under the AIP:

| Executive       | ** ** | **Annual  Bonus  % of  Base** | ** ** | ** ** | ** ** | **EPS  % of  Bonus** | ** ** | **Enrollment  % of  Bonus** | ** ** | **Operating  Income  % of  Bonus** | ** ** | **Individual  Goals  % of  Bonus** | ** ** | **Calculated  Bonus** | ** ** | **Approved  Bonus** | ** ** |
|-----------------|------------|------------------------------------|------------|------------|------------|---------------------------|------------|----------------------------------|------------|-----------------------------------------|------------|-----------------------------------------|------------|-----------------------|------------|---------------------|------------|
| Doug Becker     |       | 120%                               |       |       |       | 50%                       |       | 25%                              |       | 0%                                      |       | 25%                                     |       | $                     | 954,472    |                | $          | 900,000 |   |
| Raph Appadoo    |       | 100%                               |       |       |       | 25%                       |       | 25%                              |       | 25%                                     |       | 25%                                     |       | $                     | 507,585    |                | $          | 507,000 |   |
| Bill Dennis     |       | 120%                               |       |       |       | 25%                       |       | 25%                              |       | 25%                                     |       | 25%                                     |       | $                     | 797,939    |                | $          | 797,000 |   |
| Rosemarie Mecca |       | 75%                                |       |       |       | 50%                       |       | 0%                               |       | 0%                                      |       | 50%                                     |       | $                     | 572,464    |                | $          | 572,000 |   |
| Paula Singer    |       | 100%                               |       |       |       | 25%                       |       | 25%                              |       | 25%                                     |       | 25%                                     |       | $                     | 414,131    |                | $          | 414,000 |   |

 

The CompensationCommittee determined that the Chief Executive Officer’s bonus should be reducedfrom the calculated amount because the audit of the Company’s financialstatements resulted in the disclosure by management of certain materialweaknesses in oversight functions.  Amore complete discussion of the Chief Executive Officer’s compensation followson page 11, under the heading “Chairman and Chief Executive OfficerCompensation.”

*Long-Term Incentive Opportunity*.  The use of long-term incentives creates alink between executive compensation and long-term performance and createsalignment between executive and shareholder interests. Long-term incentiveawards are currently granted under Laureate’s 2005 Stock Incentive Plan. The2005 Stock Incentive Plan is an omnibus plan providing the flexibility to granta variety of long-term incentive award types, including stock options,restricted stock, restricted stock units, stock appreciation rights and cashawards. A total of 5,250,000 shares have been approved by our shareholders forissuance under the 2005 Stock Incentive Plan, with a maximum of 1,312,500shares to be granted in the form of non-option awards.

The Compensation Committee considers the followingcriteria in determining the long-term incentive opportunities for the ExecutiveTeam:  Performance orientation,shareholder alignment, shareholder dilution, annual share consumption, shareavailability, accounting cost, tax efficiency, retention power and overallprogram effectiveness. The following is a description of each element of theCompany’s long-term incentive program:

8

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·*             *StockOptions.   Historically, stock options have been a core elementof long-term incentive opportunity at Laureate. Stock options granted under the2005 Stock Incentive Plan have an exercise price at least equal to fair marketvalue on the date of grant, have a 7-year term and vest over a four yearperiod, with 25% vesting on the one year anniversary of grant and an additional6.25% vesting each quarter thereafter for the remaining three years. The valueof stock options to each grantee is entirely dependent on stock priceappreciation beyond the date of grant. With the exception of options granted to new hires, which are generallygranted effective the date employment begins, stock options are granted to theExecutive Team and all other employees only at regularly scheduled CompensationCommittee or Board meetings. In light of factors such as share constraints,option expensing and equity overhang, beginning in 2006, the CompensationCommittee is committed to following a “portfolio” approach toward long-termcompensation.  As a result, stock optionsare now a smaller part of long-term executive compensation, with 2006 stockoption value representing, as of December 31, 2006, only 33.1% of totaltargeted long-term compensation opportunities.

·              Performance-Based VestingRestricted Stock.   In late 2005 and, in the case of the ChiefExecutive Officer, in June 2006, the Compensation Committee granted members ofthe Executive Team, including the Named Executive Officers, an aggregate of140,000 shares of performance-based vesting restricted stock (collectively, the“restricted shares”).  This equitycompensation is deemed to be “restricted” because, although the grantees canvote the restricted shares, the restricted shares cannot be transferred and aresubject to forfeit unless and until certain financial goals are achieved.Generally, the restrictions on the restricted shares lapse ratably on March 31each year, beginning in 2007, assuming the Company’s financial results for theimmediately preceding year met the goals stated in the executive’s grantagreement.  The restrictions lapse forNamed Executive Officer-restricted shares if earnings per share and totalrevenue goals for 2006, 2007, 2008 and 2009 are met.  These goals were based on the Company’sbusiness plan adopted in December 2005. The four-year goals for certain other executives are, in many cases,more directly related to division operating goals, also as set forth in theCompany’s December 2005 business plan. On March 21, 2007, the Compensation Committee certified that the 2006goals for all restricted shares had been met, and all transfer andforfeitability restrictions on 25% of the restricted shares lapsed on March 31,2007.  In the event restrictions do notlapse as to 25% of the restricted shares in either March 2008 or 2009 becauseperformance goals are not achieved in 2007 or 2008, respectively, therestrictions for that share tranche will lapse on the first to occur of March31, 2009, 2010 or 2011, if the financial goals for 2008, 2009 or 2010, asapplicable, are achieved.  If thefinancial goals for 2010 are not achieved, any restricted shares for whichrestrictions have not lapsed will be forfeited. The value of the restrictedshares represented, as of December 31, 2006, 31.7% of the total 2006 targetedlong-term compensation opportunities. The Compensation Committee believes thatdisclosing the actual targets in this Amendment would put the Company at acompetitive disadvantage; however, the performance objectives which must be metin order for the restrictions to lapse each year parallel the performanceobjectives in the AIP and the Cash LTIP.

·              CashLTIP.   In early 2006, the Compensation Committee approved forthe members of the Executive Team and other key employees a cash awardopportunity (expressed as a percent of 2006 base salary) tied to a combinationof three financial and operating goals over a 3-year period, ending December31, 2008 (the “Cash LTIP”).  A targetedlong-term incentive value is allocated among the various elements of the CashLTIP for each participant. The mix of elements determining a participant’saward depends on his or her scope of responsibility, performance impact andgeography.  For certain key employees,including the Named Executive Officers, the targeted value used to determinecurrent award levels reflects approximately four times the targeted annualizedlong-term incentive value. This essentially “front-loads” the long-termincentive grants into the current year in lieu of receiving equity grants ineach of the next four years. The Compensation Committee believes thefront-loaded grant allocation is consistent with its pay strategy and theCompany’s business imperatives because of the strong performance-orientation ofthe program, the focus this creates on performance over the next four years,the proven ability of the core leadership team and the need to motivate andretain these key leaders. Maximum award levels under the Cash LTIP are cappedat 200% of target for each participant. The value of the Cash LTIP represented, as of December 31, 2006, 35.2%of the total 2006 targeted long-term compensation opportunities.  The Compensation Committee believes thatdisclosing the actual targets would put the Company at a competitivedisadvantage.

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For the Named Executive Officers, the Cash LTIP goalcombination and proportionate weighting of those goals is set forth below:

| Performance Criteria         | ** ** | **Criteria Definition**                                                            | ** ** | **Bonus  Weighting** | ** ** | **Bonus  Factor**                            |
|------------------------------|------------|------------------------------------------------------------------------------------|------------|----------------------|------------|----------------------------------------------|
| ** **                   | ** ** | ** **                                                                         | ** ** | ** **           | ** ** | ** **                                   | ** ** | ** ** |
| Earnings per

Share          |       | The Company’s  Earnings

Per Share f or  the year-

ended December  31, 2008. |       | 50%                  |       | Maximum:

Target:

Threshold:                |   | 200%

100%

50% |
|                         |       |                                                                               |       |                 |       |                                         |   |   |
| Enrollment

Growth           |       | Net enrollment  growth from

January 1, 2006  through

December 31,  2008          |       | 30%                  |       | Maximum:

Above Target:

Target:

Threshold: |   | 200%

+5% for every  [xx] above target

100%

50% |
|                         |       |                                                                               |       |                 |       |                                         |   |   |
| Return on

Invested

Capital |       | Return on  capital invested in

Board approved  projects

through 2008             |       | 20%                  |       | Maximum

Above-Target

Target:

Threshold:   |   | 200%

+5% for every  [xx] above target

100%

50% |

 

While the CompensationCommittee originally determined to adjust award levels up or down over the3-year period based on Laureate’s performance relative to the S&P Super1500 Index, the Compensation Committee later concluded that the difficulty andexpense to administer this component outweighed its benefits.  Therefore, the Compensation Committee removedtotal shareholder return as a component of the Cash LTIP, thereby making thoseawards ineligible for deductibility under Section 162(m) of the InternalRevenue Code.  See “Tax and AccountingImplications” beginning on page 12 for a discussion of deductibility ofcompensation, generally.  Despite thisresult, the Compensation Committee believes the amendments to the Cash LTIPwere advisable to reduce expense variability and simplify administration of theCash LTIP.

***OtherCompensation****.*

*Deferred Compensation*.  The Company offers an annual non-qualifieddeferred compensation plan, intended to promote executive retention byproviding a long-term savings opportunity on a tax-efficient basis toapproximately 64 eligible Company employees plus the members of the Board ofDirectors who are subject to U.S. federal income taxes.  The Named Executive Officers are eligible toparticipate in the plan, but only the Chief Executive Officer and the ChiefFinancial Officer elected to participate during 2006.  The plan allows executives to defer up to100% of their salaries and annual bonuses, with interest earned at market rateson deferred amounts and payout following employment termination.  The Chief Executive Officer deferred $422,000of his 2006 salary and annual bonus, and the Chief Financial Officer deferred$210,900 of her 2006 annual bonus. Because interest on contributions is earned at market rates, it is notdisclosed as compensation in the Summary Compensation Table on page 14.  All amounts deferred under the plan areunfunded and unsecured obligations of the Company, receive no preferentialstanding and are subject to the same risks as any of the Company’s othergeneral obligations.  On October 22,2004, the American Jobs Creation Act of 2004 was signed into law, changing thetax rules applicable to nonqualified deferred compensation arrangements.  While the final regulations have not becomeeffective yet, the Company believes it is operating in good faith compliancewith the statutory provisions which were effective January 1, 2005.

*Benefits and Perquisites*. The Company provides various employee benefit programs to our executiveofficers, including medical, dental and life insurance benefits and our 401(k)Retirement Savings Plan. These benefit programs are generally available to allof our employees.  Executives, includingthe Named Executive Officers, also receive a car allowance and access to thePinnacle Care Health Consulting Service, benefits not available to theemployees, generally.  Pinnacle Care is amedical concierge service which provides advice and other assistance withhealth care decisions.  Additionally, theCompany pays the premium on a $2.5 million life insurance policy for the ChiefExecutive Officer and allows him personal use of a plane in which the companyowns a 20% time-share interest.  A morecomplete description,  and the value tothe Chief Executive Officer, of these items is included below under the heading“Chairman and Chief Executive Officer Compensation” and in the SummaryCompensation Table under the “All Other Compensation” column on page 14.

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*Severanceand Change in Control Benefits*.  In connection with the proposed mergerbetween the Company and L Curve Sub, Inc., an entity owned by an investmentgroup of which the Company’s Chief Executive Officer is a part, the Companyentered into executive retention agreements with the Executive Team, includingthe Named Executive Officers (“Executive Retention Agreements”).  The Executive Retention Agreements providecertain severance payments and benefits, including payments and benefits inconnection with the executive’s termination and/or a change of control, andsupersede any prior agreements any member of the Executive Team may haveentered into with the Company.  Theproposed merger qualifies as a “change of control” for purposes of theExecutive Retention Agreements.  Adetailed explanation of the severance and change of control benefits includedin the Executive Retention Agreements follows on page 18 under the heading“Change of Control and Severance Agreements.” As of April 27, 2007, the ChiefExecutive Officer had not executed an Executive Retention Agreement.

**Chairman and Chief Executive Officer Compensation**

The terms of Mr. Becker’s employment are set forth inan employment agreement dated June 30, 2004, which expires on June 30,2007.  Pursuant to the terms of thisagreement, Mr. Becker (i) receives an annual base salary of at least $500,000,(ii) is eligible for annual incentive bonuses targeted at 100% of his basesalary, (iii) received a grant of 166,000 performance share units which vestedbetween December 31, 2004 and January 1, 2007 upon achievement of specifiedperformance goals, (iv) is reimbursed for up to $50,000 of travel expensesincurred by his family each year when they accompany him on business trips and(v) is the beneficiary of a $2.5 million life insurance policy for which theCompany pays the premiums. In reviewing and approving 2006 compensation actionsfor the Company’s Chairman and Chief Executive Officer, the CompensationCommittee evaluated Laureate’s performance in 2006 versus goals identified forboth financial and non-financial factors. Notable Company financialaccomplishments in 2006 included revenue growth of 31%, earnings per sharegrowth of 18%, and new enrollment growth of 24% from 2005. This level ofachievement in 2006 is consistent with sustained performance improvements overthe last three years; with 3-year revenue growth of 33%, earnings per sharegrowth of 11%, and new enrollment growth of 24%.

Inaddition to strong financial and shareholder results, the CompensationCommittee assessed the performance of the Chairman and Chief Executive Officeragainst non-financial factors. Notable non-financial accomplishments in 2006included continued success in recruiting top talent to Laureate in criticalexecutive roles, the integration of several strategic acquisitions in keygeographies around the world, expansion into China and Brazil and the launch ofkey network initiatives.  In its reviewof the Chief Executive Officer’s 2006 performance, the Compensation Committeetook note of the fact that the Company’s management concluded that as of bothDecember 31, 2006 and December 31, 2005, the Company had not maintainedeffective internal control over financial reporting related to the Company’saccounting for income taxes and that this control deficiency resulted in amaterial weakness disclosed in the Company’s 2006 audited financialstatements.  This was a factor indetermining the Chief Executive Officer’s 2006 annual incentive compensation.

Overall,the Compensation Committee believes that the financial and non-financialperformance of the Chairman and Chief Executive Officer has been and continuesto be exceptional and that with his continued leadership the Company is wellpositioned for continued growth and shareholder value creation. Based on thisassessment, and competitive market data from the High-Performing Peer Group,the Compensation Committee took the following actions with respect toMr. Becker’s compensation in 2006 and 2007:

·                  Anannual incentive award in the amount of $900,000 was approved forMr. Becker under the Company’s annual incentive plan for 2006 performance.

·                  Mr. Becker’sannual incentive target for 2007 was set at 120% of base salary, with a maximumopportunity of 240% of base salary if maximum performance results are achieved.

·                  Mr.Becker’s base salary was increased to $645,840 in 2007, only a 3.5% increasefrom his 2006 base salary.

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The CompensationCommittee believes that the Chief Executive Officer compensation package, asdescribed above and throughout this report, is market-based andperformance-aligned and that it facilitates the retention and motivation of theChief Executive Officer, which is critical to the Company’s continuedsuccess.  In determining the mix of cashand equity incentive compensation for Mr. Becker, the Compensation Committeedetermined that it was appropriate for Mr. Becker’s incentive compensation tobe more heavily weighted toward cash rather than equity when compared to theother Named Executive Officers due to Mr. Becker’s longstanding and significantshareholdings in the Company.

**Stock Ownership Guidelines**

InFebruary 2006, the Compensation Committee adopted stock ownership guidelinesfor the Executive Team as well as for other less senior officers of theCompany. The stock ownership guidelines are share-denominated and set forth aminimum stock ownership level that must be achieved and maintained by eachexecutive. The specific ownership requirements are based on the executive’slevel of responsibility, accountability and role within the Company. TheCompensation Committee believes that the share retention policy lengthens therelevant performance horizon of long-term incentive awards and further alignsexecutive and shareholder interests. The Compensation Committee will annuallyreview compliance with the policy and will consider this information whenreviewing and approving any changes to executive compensation arrangements,including any subsequent long-term incentive awards.

Underthis policy, the Chief Executive Officer and each of the other Named ExecutiveOfficers were required to own 60,000 shares and 40,000 shares of LaureateCommon Stock, respectively, by March 31, 2006. Other officers of the Company are required to own up to 10,000 shares ofCommon Stock by the end of 2008, with the number dependent on the officer’s responsibilitylevel.  Under this policy, shares ownedoutright by the executive or his or her immediate family members residing inthe same household, shares held by the executive in the Company’s 401(k)Retirement Savings Plan, shares of restricted stock (vested and non-vested)held by the executive, shares acquired and held upon stock option exercises andshares held in trust for the benefit of the executive or their families all arecounted in determining whether the executive has met the Compensation Committee’sstock ownership policy.  Compliance withall company policies is the expected behavior for all employees. An executive’s failure to abide by theseguidelines may result in adverse consequence to the employee, including but notlimited to the reduction of subsequent equity incentive awards or removal fromparticipation in the Company’s equity incentive program(s).  As of December 31, 2006, each of the NamedExecutive Officers was in compliance with the stock ownership guidelines.

**Tax andAccounting Implications**

Aspart of its role, the Compensation Committee considers the tax and accountingimpact reflected in the Company’s financial statements when establishing theCompany’s compensation plans.  The formsof compensation selected are intended to be cost-efficient.  Under accounting standards, the cash AIP andLTIP awards result in “accrual” accounting, which means that the estimatedpayout of the award, along with any changes in that estimate, are recognizedover the performance period.  The Company’sultimate expense will equal the value earned by/paid to the executives.Therefore, the ultimate expense is not determinable until the end of the one orthree-year performance period, as applicable.

Beginningon January 1, 2006, Laureate began accounting for equity compensation underStatement of Financial Accounting Standards 123, as revised in 2004,Share-Based Payment (“SFAS 123R”).  Underthis accounting standard, stock options result in “equity” accounting, whichmeans that the grant date fair value is a fixed charge measured at the date ofgrant and is generally expensed over the service/vesting period based on thenumber of options that vest.  Restrictedstock and performance share units also result in SFAS 123R equity accounting,under which the fair value of the award is recognized over the service/vestingperiod based on the number of shares or units that vest.  The expense recognized in 2006 in accordancewith SFAS 123R, which is based on the grant date fair value, is presented inthe Grants of Plan-Based Awards in Fiscal 2006 table on page 15.  The ultimate value of the stock options thatwill be realized by the grantee, if any, is not determinable until the optionsare exercised.

12

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Section162(m) of the Internal Revenue Code generally limits the deductibility ofcompensation paid by a public company to its Chief Executive Officer andcertain other highly compensated executive officers to $1,000,000 in the yearthe compensation becomes taxable to the executive. There is an exception to thelimit on deductibility for performance-based compensation that meets certainrequirements. The Compensation Committee considers the impact of this rule whendeveloping and implementing our executive compensation programs.  The AIP and Cash LTIP awards, stock optiongrants and performance-based restricted stock grants are designed to bedeductible by the Company for federal income tax purposes under Section 162(m)of the Internal Revenue Code, except as noted in the following paragraph.  Accordingly, when executives earn and receivecash incentive awards, exercise stock options or have restriction lapses onrestricted stock, they are taxed at ordinary income rates (subject towithholding) and the Company is subject to potential tax deduction limitations underSection 162(m).

TheCompensation Committee believes it is important to preserve flexibility inadministering compensation programs in a manner designed to promote varyingcorporate goals.  Accordingly, theCompensation Committee has not adopted a policy that all compensation mustqualify as deductible under Section 162(m), and we retain the right toauthorize payments that are not tax-deductible when viewed as appropriate andnecessary to ensure competitive levels of total compensation for its executiveofficers.  On December 29, 2006, theCompensation Committee amended the terms of the Cash LTIP, thereby making thecompensation earned under the Cash LTIP subject to potential tax deductionlimitations under Section 162(m). Despite this result, the Compensation Committee believes the amendmentsto the Cash LTIP were advisable to protect the interests of the Company and itsshareholders.

 

13

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**Executive Compensation Tables**

The following table setsforth for each of the Named Executive Officers: (i) the dollar value of basesalary and bonus earned during fiscal 2006; (ii) the portion of the aggregategrant date fair value of stock and option awards which was recognized forfiscal 2006 financial statement purposes, computed in accordance with SFAS 123R;(iii) the dollar value of earnings for services pursuant to awards granted undernon-equity compensation plans; (iv) the change in non-qualified deferredcompensation earnings during fiscal 2006; (v) all other compensation for fiscal2006; and, finally (vi) the dollar value of total compensation for fiscal 2006.

InJanuary 2004, the Company entered into an employment agreement with Mr. Beckerwhich expires on June 30, 2007.  InSeptember 2005, the Company entered into an employment agreement with Ms.Mecca, which can be terminated by either party without cause upon thirty days’notice.  The employment agreementsprovide a minimum annual base salary, annual incentive targets, and long-termincentive targets.  The terms of theExecutive Retention Agreement Ms. Mecca executed in connection with theproposed merger supersede, with respect to termination and change of controlpayments, the terms of her employment agreement.  These terms are discussed below under theheading “Change of Control and SeveranceArrangements,” beginning on page 18.  Theprocess followed by the Compensation Committee in setting total compensationfor each Named Executive Officer is described in the Compensation andDiscussion Analysis section beginning on page 4.

**SummaryCompensation Table**
| Name and Principal Position           | ** ** | ** ** | ** ** | **Year**   | ** ** | **Salary ($)** | ** ** | **Bonus ($)** | ** ** | **Stock  Awards ($)(2)** | ** ** | **Option  Awards ($)(3)** | ** ** | **Non-Equity  Incentive Plan  Compensation  ($)(4)** | ** ** | **Change in  Pension  Value and  Nonqualified  Deferred  Compensation  Earnings** | ** ** | **All Other  Compensation  ($)(6)** | ** ** | **Total ($)** | ** ** |
|------------------------------------------------------|------------|------------|------------|------------|------------|---------------------|------------|--------------------|------------|-------------------------------|------------|--------------------------------|------------|-----------------------------------------------------------|------------|---------------------------------------------------------------------------------------------|------------|------------------------------------------|------------|--------------------|------------|
| ** **                                           | ** ** | ** ** | ** ** | ** ** | ** ** | ** **          | ** ** | ** **         | ** ** | ** **                    | ** ** | ** **                     | ** ** | ** **                                                | ** ** | ** **                                                                                  | ** ** | ** **                               | ** ** |
| Douglas  Becker                                      |       | 2006       |       | $          | 620,000    | (1)                 | $          | —             |       | $                             | 2,036,818  |                           | $          | 565,872                                                   |       | $                                                                                           | 1,900,000  | (1)                                      | $          | —             |       | $ | 61,537 | (7) | $ | 5,184,227 |   |
| Chairman  of the Board and Chief Executive Officer   |       |       |       |       |       |                |       |               |       |                          |       |                           |       |                                                      |       |                                                                                        |       |                                     |       |
| Rosemarie  Mecca                                     |       | 2006       |       | $          | 466,392    |                | $          | —             |       | $                             | 1,538,621  |                           | $          | 353,808                                                   |       | $                                                                                           | 738,667    | (5)                                      | $          | —             |       | $ | 118,324 | (8) | $ | 3,215,811 |   |
| Executive Vice President and Chief Financial Officer |       |       |       |       |       |                |       |               |       |                          |       |                           |       |                                                      |       |                                                                                        |       |                                     |       |
| William  Dennis                                      |       | 2006       |       | $          | 516,667    |                | $          | —             |       | $                             | 730,095    |                           | $          | 847,752                                                   |       | $                                                                                           | 1,097,000  |                                     | $          | —             |       | $ | 21,672 |   | $ | 3,213,186 |   |
| President,  Latin America Operations                 |       |       |       |       |       |                |       |               |       |                          |       |                           |       |                                                      |       |                                                                                        |       |                                     |       |
| Raph  Appadoo                                        |       | 2006       |       | $          | 516,667    |                | $          | —             |       | $                             | 691,726    |                           | $          | 717,192                                                   |       | $                                                                                           | 807,000    |                                     | $          | —             |       | $ | 32,789 |   | $ | 2,765,373 |   |
| President                                            |       |       |       |       |       |                |       |               |       |                          |       |                           |       |                                                      |       |                                                                                        |       |                                     |       |
| Paula  Singer                                        |       | 2006       |       | $          | 345,833    |                | $          | —             |       | $                             | 381,490    |                           | $          | 132,036                                                   |       | $                                                                                           | 536,500    |                                     | $          | —             |       | $ | 33,707 |   | $ | 1,429,566 |   |
| President,  Laureate Online Education                |       |       |       |       |       |                |       |               |       |                          |       |                           |       |                                                      |       |                                                                                        |       |                                     |       |

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(1)             Doug Becker hasdeferred $62,000 in salary and $360,000 in non-equity incentive payments during2006, as part of the Company’s deferred compensation plan.

(2)             This columnrepresents the dollar amounts recognized for financial statement reportingpurposes for fiscal 2006, in accordance with SFAS 123R, for the fair value ofrestricted stock and stock unit awards granted in 2006 as well as prior fiscalyears.  Pursuant to the SEC rules, theamounts shown exclude the impact of estimated forfeitures.  For restricted stock and stock unit awardsthe fair value is calculated using the closing price of the Company’s stock onthe grant date. For additional information refer to Note 3 of the Company’saudited consolidated financial statements for fiscal 2006, included in theCompany’s Annual Report on Form 10-K, as filed with the SEC.

(3)             This columnrepresents the dollar amounts recognized for financial statement reportingpurposes for fiscal 2006, in accordance with SFAS 123R, for the fair value ofstock options granted to each of the named executives, in 2006 as well as priorfiscal years.  Pursuant to SEC rules, theamounts shown exclude the impact of estimated forfeitures related toservice-based vesting conditions. Assumptions used in the valuation calculation of this amount for fiscalyears ended December 31, 2004, 2005 and 2006 are included in Note 3 to theCompany’s audited consolidated financial statements for fiscal 2006, includedin the Company’s Annual Report on Form 10-K as filed with the SEC.  Assumptions used in the valuation calculationfor the fiscal years ended December 31, 2003 and 2002 are included under theheading of “Stock Based Compensation” in Note 2 to the Company’s auditedconsolidated financial statements for the fiscal years ended December 31, 2003and 2002, included in the Company’s Annual Report on Form 10-K, as filed withthe SEC.

(4)             The amounts in thiscolumn represent the amount earned under the Company’s annual bonus and Cash LTIPprograms, which are discussed in further detail beginning on page 7, under theheading “Incentive Opportunity.”

(5)             Ms.Mecca has deferred $210,900 in non-equity incentive payments during 2006, pursuantto the Company’s deferred compensation plan.

14

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(6)             The amounts in thiscolumn reflect the following for each Named Executive Officer:

- Company contributions to the employee’s 401(k) account ($6,150 to eachof Messrs. Becker and Appadoo and Ms. Singer)

- Company sponsoredenrollment into an executive medical advisory board program ($12,625 per personplus the amount necessary to reimburse each of these executives for the taxespayable as a result of the healthcare benefits received.)

- Company paid carallowance

(7)             In addition to theitems described above in footnote (6) this amount reflects:

- The cost of personaluse of Company paid aircraft and insurance premiums paid for Mr. Becker’sbenefit.  Neither of such amounts exceedsthe greater of $25,000 or 10% of Mr. Becker’s perquisites 

- The cost of personalitems reimbursed by the Company during travel of $17,037.

(8)             In addition to theitems described above in footnote (6) this amount reflects:

- Relocationpayments of $89,172, of which $20,263 was given to Ms. Mecca in order toreimburse her for the taxes payable as a result of the relocation compensationshe received.

**Grants of Plan-Based Awards in Fiscal 2006**

The 2006 annual incentiveawards were approved by the Compensation Committee at its meeting held onDecember 29, 2005, effective for the performance period beginning January 1,2006. Details regarding the financial targets established under the AnnualExecutive Incentive Plan and the individual goals for 2006 as well as thepayouts provided at each level of target/goal attainment, can be found on pages7 through 8 under the heading “Incentive Opportunity — Annual Incentive Opportunity.”Performance-based restricted stock and long-term cash incentive compensationwere awarded under the 2005 Stock Incentive Plan, of which the Cash LTIP is apart.  The size and other terms andconditions of the awards were approved by the Compensation Committee at itsmeeting held on February 23, 2006. Additional information about these awards,including information about how the size of the awards is determined and theperformance criteria applicable to performance based awards can be found onpages 8 through 10, under the heading “Incentive Opportunity — Long-TermIncentive Opportunity.”

The following tableprovides information about equity and non-equity awards granted to the NamedExecutive Officers in fiscal 2006: (1) the grant date; (2) theestimated future payouts under non-equity incentive plan awards, which consistof potential payouts deemed to have been earned under the AIP and the Cash LTIPbased on 2006 financial results, although no determination will be made as towhether a payout has been earned under the Cash LTIP until the end of the2006-2008 performance period; (3) estimated future payouts under equityincentive plan awards, which consist of performance-based restricted stockawards; (4) the number of shares underlying all other stock awards, whichconsist of restricted stock awarded to the Named Executive Officers,(5) all other option awards, which consist of the number of sharesunderlying stock options awarded to the Named Executive Officers and(6) the exercise price of the stock option awards, which reflects theclosing price of Laureate common stock on the date of grant.
|                 | ** ** | ** **        | ** ** | ** **                                                   | ** ** | ** **                                               | ** ** | **All  Other  Stock  Awards:  Number  of** | ** ** | **All Other  Option  Awards:  Number** | ** ** | **Exercise  or**    | ** ** | **Grant Date  Fair Value** | ** ** |
|-----------------|------------|-------------------|------------|--------------------------------------------------------------|------------|----------------------------------------------------------|------------|--------------------------------------------|------------|---------------------------------------------|------------|---------------------|------------|--------------------------------------|------------|
| ** **      | ** ** | ** **        | ** ** | **Estimated Future Payouts Under**            | ** ** | **Estimated Future Payouts Under**        | ** ** | **Shares of **                   | ** ** | **of Securities**                      | ** ** | **Base Price** | ** ** | **of Stock**                    | ** ** |
| ** **      | ** ** | ** **        | ** ** | **Non-Equity Incentive Plan Awards (1)** | ** ** | **Equity Incentive Plan Awards (2)** | ** ** | **Stock**                                  | ** ** | **Underlying**                              | ** ** | **of Option**  | ** ** | **and**                              | ** ** |
| ** **      | ** ** | ** **        | ** ** | **Threshold**                                                | ** ** | **Target**                                               | ** ** | **Maximum**                                | ** ** | **Threshold**                               | ** ** | **Target**          | ** ** | **Maximum**                          | ** ** | **or Units** | ** ** | **Options** | ** ** | **Awards** | ** ** | **Option** | ** ** |
| Name            | ** ** | ** **        | ** ** | **Grant Date**                                          | ** ** | **($)**                                                  | ** ** | **($)**                                    | ** ** | **($)**                                     | ** ** | **(#)**             | ** ** | **(#)**                              | ** ** | **(#)** | ** ** | **(#) ** | ** ** | **(#) ** | ** ** | **($/sh) ** | ** ** | **Awards** | ** ** |
| Douglas Becker  |       | 6/28/2006  - PBRS |       |                                                         |       |                                                     |       |                                       |       |                                        |       | 30,000              |       |                                 |       |   |   |   |   |   |   | 1,312,500 |   |
|                 |       | 1/1/2006  - A     |       | $                                                            | 599,040    |                                                     | $          | 748,800                                    |       | $                                           | 1,497,600  |                |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | 1/1/2006  - LT    |       | $                                                            | 800,000    |                                                     | $          | 1,000,000                                  |       | $                                           | 2,000,000  |                |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |
|            |       |              |       |                                                         |       |                                                     |       |                                       |       |                                        |       |                |       |                                 |       |   |   |   |   |   |   |   |   |
| Rosemarie Mecca |       | 1/1/2006  - A     |       | $                                                            | 280,602    |                                                     | $          | 350,753                                    |       | $                                           | 701,506    |                |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |
|            |       | 1/1/2006  - LT    |       | $                                                            | 133,334    |                                                     | $          | 166,667                                    |       | $                                           | 333,334    |                |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |
|            |       |              |       |                                                         |       |                                                     |       |                                       |       |                                        |       |                |       |                                 |       |   |   |   |   |   |   |   |   |
| William Dennis  |       | 1/1/2006  - A     |       | $                                                            | 499,200    |                                                     | $          | 624,000                                    |       | $                                           | 1,248,000  |                |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | 1/1/2006  - LT    |       | $                                                            | 240,000    |                                                     | $          | 300,000                                    |       | $                                           | 600,000    |                |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |
|            |       |              |       |                                                         |       |                                                     |       |                                       |       |                                        |       |                |       |                                 |       |   |   |   |   |   |   |   |   |
| Raph Appadoo    |       | 1/1/2006  - A     |       | $                                                            | 416,000    |                                                     | $          | 520,000                                    |       | $                                           | 1,040,000  |                |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |
|            |       | 1/1/2006  - LT    |       | $                                                            | 240,000    |                                                     | $          | 300,000                                    |       | $                                           | 600,000    |                |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |
|            |       |              |       |                                                         |       |                                                     |       |                                       |       |                                        |       |                |       |                                 |       |   |   |   |   |   |   |   |   |
| Paula Singer    |       | 1/1/2006  - A     |       | $                                                            | 280,000    |                                                     | $          | 350,000                                    |       | $                                           | 700,000    |                |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | 1/1/2006 - LT     |       | $                                                            | 98,000     |                                                     | $          | 122,500                                    |       | $                                           | 245,000    |                |       |                                 |       |   |   |   |   |   |   |   |   |   |   |   |
|                 |            |                   |            |                                                              |            |                                                          |            |                                            |            |                                             |            |                     |            |                                      |            |  |  |  |  |  |  |  |  |  |  |  |  |  |

----

PBRS — Performance-Based Restricted Stock award

A — 2006 Annual Incentive Plan award

LT — 2006 Long-TermIncentive Plan award

15

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(1) The amounts in these columns represent thepotential value of the payout for each Named Executive Officer under the 2006AIP and Cash LTIP plans.  The Company’sAIP is an annual cash incentive program designed to create a link betweenexecutive compensation and individual and business performance.  The Company’s Cash LTIP uses long-termincentives to create a link between executive compensation and long-termperformance.  For more details refer tothe AIP and Cash LTIP discussions in the Compensation Discussion and Analysisbeginning on page 7 under the heading “Incentive Opportunity.”

(2) The amounts shown inthese columns represent potential future share payouts for restricted stockawards in which the share number is set and the vesting is dependent uponperformance measures.  The performancemeasurement periods include 2006 through 2009.

**OutstandingEquity Awards at 2006 Fiscal Year-End**

Thefollowing table provides information on the current holdings of stock optionand stock awards by the Named Executive Officers. This table includesunexercised and unvested options and restricted stock awards with and withoutperformance conditions that have not yet been satisfied. Each equity grant isshown separately for each of the Named Executive Officers. The vesting schedulefor each grant is shown following this table, based on the option or stockaward grant date. The market value of the stock awards is based on the closingmarket price of Laureate common stock as of December 31, 2006, which was$48.63. The performance-based restricted stock awards are subject to specifiedperformance objectives over the performance period, all of which must be meteach period in order for vesting to occur for that period. The time-basedrestricted stock awards vest ratably over the vesting period.  The market value as of December 31, 2006,shown below assumes the satisfaction of these objectives. For additionalinformation about the option awards and restricted stock awards, see thedescription of equity incentive compensation on page 9.
|                 | ** ** | ** **         | ** ** | **Option Awards** | ** ** | **Stock Awards**                                                                  | ** ** |
|-----------------|------------|--------------------|------------|------------------------|------------|----------------------------------------------------------------------------------------|------------|
| **Name**        | ** ** | ** **         | ** ** | **Grant Date**    | ** ** | **Number of  Securities  Underlying  Unexercised  Options (#)  Exercisable** | ** ** | **Number of  Securities  Underlying  Unexercised  Options (#)  Unexercisable** | ** ** | **Equity  Incentive Plan  Awards:  Number of  Securities  Underlying  Unexercised  Unearned  Options (#)** | ** ** | **Option  Exercise  Price ($)** | ** ** | **Option  Expiration  Date** | ** ** | **Number of  Shares or  Units of  Stock That  Have Not  Vested (#)** | ** ** | **Market Value  of Shares or  Units of Stock  That Have Not  Vested ($)** | ** ** | **Equity Incentive  Plan Awards:  Number of  Unearned  Shares,  Units or  Other Rights  That Have Not  Vested (#)** | ** ** | **Equity Incentive  Plan Awards:  Market or  Payout Value  of Unearned  Shares,  Units or  Other Rights  That Have Not  Vested ($)** | ** ** |
| Douglas Becker  |       | January 27, 1998   |       |                   | 630,000    |                                                                                   |       |   |   |   |   |   |   |   | $ | 24.33 |   |   | January 27, 2008 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | February 23, 1998  |       |                   | 52,327     |                                                                                   |       |   |   |   |   |   |   |   | $ | 28.67 |   |   | February 23, 2008 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | May 22, 1998       |       |                   | 100,000    |                                                                                   |       |   |   |   |   |   |   |   | $ | 31.25 |   |   | May 22, 2008 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | December 1, 1999   |       |                   | 605,683    |                                                                                   |       |   |   |   |   |   |   |   | $ | 3.59 |   |   | December 1, 2009 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | December 14, 2001  |       |                   | 100,000    |                                                                                   |       |   |   |   |   |   |   |   | $ | 19.43 |   |   | December 14, 2011 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | January 4, 2004    |       |                   |       |                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   | 27,655 |   |   |   | $1,344,863 |   |   |   |   |   |   |   |   |   |   |
|                 |       | September 20, 2005 |       |                   | 46,875     |                                                                                   |       |   | 103,125 |   |   |   |   |   | $ | 46.37 |   |   | September 20, 2012 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | June 28, 2006      |       |                   |       |                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 30,000 |   |   |   | $ | 1,458,900 |   |   |
| Rosemarie Mecca |       | September 20, 2005 |       |                   | 21,250     |                                                                                   |       |   | 63,750 |   |   |   |   |   | $ | 46.37 |   |   | September 20, 2012 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            |       | September 20, 2005 |       |                   |       |                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   | 33,000 |   |   |   | $ | 1,604,790 |   |   |   |   |   |   |   |   |   |   |
|            |       | December 13, 2005  |       |                   |       |                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 30,000 |   |   |   | $ | 1,458,900 |   |   |
| William Dennis  |       | October 1, 2001    |       |                   | 1          |                                                                                   |       |   |   |   |   |   |   |   | $ | 5.95 |   |   | October 1, 2011 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | April 30, 2003     |       |                   | 45,000     |                                                                                   |       |   | 30,000 |   |   |   |   |   | $ | 17.54 |   |   | April 30, 2013 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | April 30, 2003     |       |                   |       |                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   | 18,000 |   |   |   | $ | 875,340 |   |   |   |   |   |   |   |   |   |   |
|                 |       | September 20, 2005 |       |                   | 43,750     |                                                                                   |       |   | 81,250 |   |   |   |   |   | $ | 46.37 |   |   | September 20, 2012 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | December 13, 2005  |       |                   |       |                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 30,000 |   |   |   | $ | 1,458,900 |   |   |
| Raph Appadoo    |       | February 1, 2000   |       |                   | 349,741    |                                                                                   |       |   |   |   |   |   |   |   | $ | 3.33 |   |   | February 1, 2010 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            |       | April 30, 2003     |       |                   |       |                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   | 15,813 |   |   |   | $ | 768,986 |   |   |   |   |   |   |   |   |   |   |
|            |       | April 30, 2003     |       |                   | 104,062    |                                                                                   |       |   | 34,688 |   |   |   |   |   | $ | 17.54 |   |   | April 30, 2013 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            |       | September 20, 2005 |       |                   | 31,250     |                                                                                   |       |   | 68,750 |   |   |   |   |   | $ | 46.37 |   |   | September 20, 2012 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            |       | December 13, 2005  |       |                   |       |                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 30,000 |   |   |   | $ | 1,458,900 |   |   |
| Paula Singer    |       | December 13, 1999  |       |                   | 11,500     |                                                                                   |       |   |   |   |   |   |   |   | $ | 12.31 |   |   | December 13, 2009 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | December 13, 1999  |       |                   | 36,500     |                                                                                   |       |   |   |   |   |   |   |   | $ | 13.11 |   |   | December 13, 2009 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | April 30, 2003     |       |                   |       |                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   | 12,000 |   |   |   | $ | 583,560 |   |   |   |   |   |   |   |   |   |   |
|                 |       | September 20, 2005 |       |                   | 10,937     |                                                                                   |       |   | 24,063 |   |   |   |   |   | $ | 46.37 |   |   | September 20, 2012 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                 |       | December 13, 2005  |       |                   |       |                                                                                   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 20,000 |   |   |   | $ | 972,600 |   |   |
|                 |            |                    |            |                        |            |                                                                                        |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

16

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**Option Awards Vesting Schedule**
| **Grant Date**     | ** ** | ** **                                                                                              | ** ** | **Vesting Schedule** |
|--------------------|------------|---------------------------------------------------------------------------------------------------------|------------|----------------------|
| January 27, 1998   |       | 33.33% vests per year,  for 3 years, on the anniversary of the grant date                               |
| February 23, 1998  |       | 100% vest immediately  on the grant date                                                                |
| May 22, 1998       |       | 100% vest immediately  on the grant date                                                                |
| December 1, 1999   |       | 100% vest immediately  on the grant date                                                                |
| December 13, 1999  |       | 20% vests per year, for  5 years, on the anniversary of the grant date                                  |
| February 1, 2000   |       | 20% vests per year, for  5 years, on the anniversary of the grant date                                  |
| October 1, 2001    |       | 33.33% vests per year,  for 3 years, on the anniversary of the grant date                               |
| December 14, 2001  |       | 20% vests immediately  on the grant date; 20% vests over 4 years, on the anniversary of the grant  date |
| April 30, 2003     |       | 25% vests, per year,  for 4 years on the anniversary of the grant date                                  |
| September 20, 2005 |       | 25% vests in one year,  on the grant date anniversary; 6.25% quarterly from years 2 through 4           |
| September 20, 2005 |       | 25% vests, per year, for 4 years on the anniversary  of the grant date (Mecca only)                     |

 

**Stock Awards Vesting Schedule**
| **Grant Date**     | ** ** | ** **                                                                                                | ** ** | **Vesting Schedule** |
|--------------------|------------|-----------------------------------------------------------------------------------------------------------|------------|----------------------|
| April 30, 2003     |       | 25% vests, per year,  for 4 years on the anniversary of the grant date                                    |
| April 30, 2003     |       | 20% vests per year, for  5 years, on the anniversary of the grant date (Singer only)                      |
| September 20, 2005 |       | 11,000 shares vest in  12 months and 33,000 shares vest in 27 months from the grant date                  |
| December 13, 2005  |       | Vests 25% on March 31,  2007, 2008, 2009 and 2010 upon the satisfaction of periodic performance  measures |
| June 28, 2006      |       | Vests 25% on March 31, 2007, 2008, 2009 and 2010  upon the satisfaction of periodic performance measures  |

 

**OptionExercises and Stock Vested in Fiscal 2006**

Thefollowing table provides information, for the Named Executive Officers, on(1) stock option exercises during 2006, including the number of sharesacquired upon exercise and the value realized and (2) the number of sharesacquired upon the vesting of stock awards in the form of restricted shares andthe value realized, each before payment of any applicable withholding tax andbroker commissions.

|                    | ** ** | **Option Awards** | ** ** | **Stock Awards**                                           | ** ** |
|--------------------|------------|------------------------|------------|-----------------------------------------------------------------|------------|
| **Name**           | ** ** | ** **             | ** ** | **Number of  Shares  Acquired on  Exercise (#)** | ** ** | **Value Realized  on Exercise ($)** | ** ** | **Number of Shares  Acquired on  Vesting (#)** | ** ** | **Value Realized  on Vesting ($)** | ** ** |
| Douglas Becker (1) |       | 666,250                |       | $                                                               | 25,963,896 |   | 55,333 |   | $ | 1,708,693 |   |
| Rosemarie Mecca    |       | —                 |       | $                                                               | —     |   | 11,000 |   | $ | 526,460 |   |
| William Dennis     |       | 109,414                |       | $                                                               | 3,983,380  |   | 18,000 |   | $ | 901,620 |   |
| Raph Appadoo       |       | 100,000                |       | $                                                               | 5,034,050  |   | 15,812 |   | $ | 792,023 |   |
| Paula Singer       |       | 22,250                 |       | $                                                               | 622,526    |   | 6,000 |   | $ | 300,540 |   |
|                    |            |                        |            |                                                                 |            |  |  |  |  |  |  |  |  |

----

(1)             Mr.Becker’s receipt of the vested shares under this stock award is deferred untilthe later of (a) six months after separation from the Company or (b) 30 daysafter termination or resignation from the Board.

**Pension Benefits in Fiscal 2006**

The Company does not have any pension plans for its Named ExecutiveOfficers.

17

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**Nonqualified Deferred Compensation inFiscal 2006**

The table below provides information on thenon-qualified deferred compensation of the Named Executive Officers in 2006:

| Name            | ** ** | ** ** | ** ** | **Executive  Contributions  in Last  FY ($)** | ** ** | **Registrant  Contributions  in Last  FY ($)** | ** ** | **Aggregate  Earnings  in Last  FY ($)** | ** ** | **Aggregate  Withdrawals/  Distributions  ($)** | ** ** | **Aggregate  Balance  at Last  FYE ($)** | ** ** |
|-----------------|------------|------------|------------|---------------------------------------------------------|------------|----------------------------------------------------------|------------|----------------------------------------------------|------------|-------------------------------------------------|------------|----------------------------------------------------|------------|
| Douglas Becker  |       | 2,130,693  | (1)        | —                                                  |       | 242,746                                                  |       | —                                             |       | 2,373,439                                       |       |
| Rosemarie Mecca |       | 210,900    |       | —                                                  |       | —                                                   |       | —                                             |       | 210,900                                         |       |
| William Dennis  |       | —     |       | —                                                  |       | —                                                   |       | —                                             |       | —                                          |       |
| Raph Appadoo    |       | —     |       | —                                                  |       | —                                                   |       | —                                             |       | —                                          |       |
| Paula Singer    |       | —     |       | —                                                  |       | —                                                   |       | —                                             |       | —                                          |       |

----

(1)                Represents the December 31, 2006 value of performanceshare units vested in fiscal 2006, which were deferred until the later of (a) 6months after separation from the Company or (b) 30 days after termination orresignation from the Board of Directors, and $422,000 of Mr. Becker’s 2006salary and annual incentive compensation.

TheNamed Executive Officers cannot withdraw any amounts from their deferredcompensation balances until they either leave or retire from the company. Nowithdrawals or distributions were made in 2006.

**Changeof Control and Severance Arrangements**

In connection with the proposed merger between theCompany and L Curve Sub, Inc., an entity owned by an investment group of whichthe Company’s Chief Executive Officer is a part, as of April 27, 2007, theCompany had entered into Executive Retention Agreements with each of the NamedExecutive Officers (other than Mr. Becker) and the other members of theExecutive Team. The Executive Retention Agreements provide certain severancepayments and benefits, including payments and benefits in connection with theexecutive’s termination and/or a change of control, and supersede any prioragreements any member of the Executive Team may have entered into with theCompany.  The proposed merger qualifiesas a “change of control” for purposes of the Executive Retention Agreements.

The terms of each Executive Retention Agreementprovide that if the executive’s employment is terminated by Laureate during theterm of the Executive Retention Agreement other than due to “Disability” or for“Cause” (each as defined in the agreement), then the executive is entitled toreceive, in addition to certain accrued amounts and subject to the execution ofa release and restrictive covenants agreement, (i) a lump sum severancepayment in an amount equal to one and one-half times the sum of the executive’sannual salary and annual target bonus under Laureate’s annual incentivecompensation plan, (ii) continued health care coverage for 18 months,(iii) outplacement assistance and (iv) a lump sum payment under eachof Laureate’s annual incentive plan and long-term incentive plan assuming theapplicable target had been attained, which payments shall be pro-rated for thenumber of months of the performance period that have elapsed.

Inaddition, the terms of each Executive Retention Agreement provide that if,during the period commencing six months prior to the execution of an agreement,the Company enters into a transaction the consummation of which would result ina “change of control” and ending upon the earlier of (i) the expiration ofthe 18-month period which commenced on the date of the “change of control” or(ii) the abandonment of the “change of control” by the parties, theexecutive voluntarily terminates his or her employment with Laureate due to a “materialalteration” of his or her employment, then the Executive is also entitled toreceive the aforementioned severance payments and benefits.

Inaddition to the payments and benefits described above, each Executive RetentionAgreement provides that the executive will be provided with an additionalpayment in the event that the aggregate present value of payments made to theExecutive in connection with a change of control exceed, by more than 10%, theexecutive’s safe harbor amount under Section 280G of the Internal RevenueCode regarding golden parachute payments; otherwise payments made to theExecutive would be capped at the safe harbor amount to prevent any excise taxfrom being assessed against the executive. The terms of each Executive Retention Agreement also provide that eachExecutive’s outstanding stock option and restricted share awards vestimmediately and fully upon the consummation of the change of control.

18

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The table below reflects the amount of compensationand benefits that would be paid to each of the Named Executive Officers in theevent of termination of such Named Executive Officer’s employment.  The amounts shown assume that suchtermination was effective as of December 31, 2006 pursuant to the terms of theExecutive Retention Agreements. In the case of Mr. Becker, the amounts shownare what would be paid to Mr. Becker pursuant to his June 30, 2004 employmentagreement, as Mr. Becker had not yet executed an Executive Retention Agreementas of April 27, 2007. The amounts shown below are the amounts whichwould be paid to the executives upon their termination under the circumstancesidentified.  The actual amounts to bepaid out can only be determined at the time of the executive’s separation fromthe Company.  The amounts quantifiedbelow do not include benefits that each executive would receive following atermination of employment under the Company’s deferred compensation plan.  Except as noted below, the amounts the NamedExecutive Officers would receive in fiscal 2006 under that plan are the amountsreported in the “Aggregate Balance at Year End” column of the NonqualifiedDeferred Compensation in Fiscal 2006 table on page 18.  For payments made in the form of shares, theDecember 31, 2006 closing price of $48.63 was used.

| Name                      | ** ** | ** ** | ** ** | **Total Payment/  Benefits provided  upon Death** | ** ** | **Total Payments/  Benefits provided  upon Termination  without Cause (2)** | ** ** | **Total Payments/  Benefits provided  upon Retirement (3)** | ** ** | **Total Payments/  Benefits provided  following Change  of Control (2)** | ** ** |
|---------------------------|------------|------------|------------|------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------|------------|
| Douglas L. Becker  (4)(5) |       | $          | 12,910,062 |                                                             | $          | 11,288,359                                                                                           |       | $                                                                               | 10,859,537 |                                                                                              | $          | 62,377,668 |   |
| Rosemarie Mecca           |       | $          | 697,643    |                                                             | $          | 1,534,620                                                                                            |       | $                                                                               | 1,336,890  |                                                                                              | $          | 4,957,077 |   |
| William Dennis            |       | $          | 500,000    |                                                             | $          | 1,795,144                                                                                            |       | $                                                                               | 2,243,390  |                                                                                              | $          | 7,043,677 |   |
| Raph Appadoo              |       | $          | 500,000    |                                                             | $          | 1,628,320                                                                                            |       | $                                                                               | 2,268,621  |                                                                                              | $          | 24,539,211 |   |
| Paula Singer              |       | $          | 336,340    |                                                             | $          | 1,137,017                                                                                            |       | $                                                                               | 554,705    |                                                                                              | $          | 4,608,937 |   |

----

(1)          In the event of accidental death, total payments to each of the NamedExecutive Officers (other than Mr. Becker, for whom the payment would remainthe same) would increase by the amount of his or her 2006 base salary.

(2)          Includes for Mr. Becker and Ms. Mecca, payment of compensationpreviously deferred, plus interest earned through December 31, 2006, in theamounts of $2,337,482 and $210,900, respectively.  None of the other Named Executive Officershas deferred compensation.

(3)          Other than Mr. Becker, none of the Named Executive Officers wereeligible for retirement benefits as of December 31, 2006; however, the amountsdisclosed assume each of the Named Executive Officers was eligible to receiveretirement benefits as of that date.

(4)          Includes $8,072,580, the December 31, 2006 value of the performanceshare units which would have been eligible to vest had Mr. Becker’s employmentbeen terminated as of that date.

(5)           In Mr. Becker’s case, “termination without cause” includes Mr. Becker’sresignation for “good reason,” as that term is defined in his June 30, 2004employment agreement and the non-renewal of his employment agreement by itstermination date of June 30, 2007.

The Named Executive Officers, as all other Companyemployees do, will receive insurance benefits equal to 60% of their base salaries, up to a maximum of $6,250 per monthuntil the age of 65, in the event of termination due to long-term disability.  In addition, the Company will pay the NamedExecutive Officers the difference between the insurance benefits received andthe executive’s salary while the executive is not working due to disability butprior to the time his or her employment is terminated due to disability.

19

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**Non-employeeDirectors’ Compensation for Fiscal 2006**

The current compensationprogram for non-employee directors has been in effect since January 1,2006 and is designed to achieve the following goals: compensation should fairlypay directors for work required for a company of Laureate’s size and scope;compensation should align directors’ interests with the long-term interests ofshareholders; and the structure of the compensation should be simple,transparent and easy for shareholders to understand. The table below onnon-management directors’ compensation includes the following compensationelements:

Cash Compensation. In 2006, annualcompensation of $30,000 was paid to each non-employee director other than Mr.Pollock who does not receive any compensation for his service on the Board orany of its Committees, payable in one lump sum in the first quarter of2006.  Compensation of $2,000 and $1,500is paid to non-employee directors for each Board and Committee meeting attendedin person, respectively; and compensation of $1,000 and $750 is paid tonon-employee directors for each Board and Committee meeting attended bytelephone, respectively. Committee attendance fees are paid quarterly.  Non-employee directors have the option ofdeferring some or all of their cash compensation under the Company’s deferred compensationplan.  Messrs. Hengst and Riley deferredthe compensation they earned as directors in 2006.

Committee Chair and Lead Director Compensation.Additional compensation of $10,000 was paid to each non-employee director servingas Lead Director, chairman of the Audit Committee and chairman of theCompensation Committee.  This additionalcompensation is in recognition of the workload and broad-based responsibilitiesof these positions. This additional compensation was paid in one lump sum toeach of Messrs. Miller, Wilson and McGuire, respectively, in the first quarterof 2006.

Equity Compensation.  On January 3, 2006, each non-employeedirector other than Mr. Pollock received options to purchase 6,500 shares ofthe Company’s common stock at an exercise price equal to the closing price ofthe Company’s common stock on the first trading day of 2006.  These options vested equally over the 12months following grant.
| **Name (1)**       | ** ** | ** ** | ** ** | **Fees Earned or  Paid in Cash ($)** | ** ** | **Stock  Awards ($)** | ** ** | **Options  Awards ($)(4)** | ** ** | **Change in  Pension Value  and  Nonqualified  Deferred  Compensation  Earnings** | ** ** | **All Other  Compensation  ($)(5)** | ** ** | **Total ($)** | ** ** |
|-------------------------|------------|------------|------------|---------------------------------------------------------------|------------|----------------------------|------------|---------------------------------|------------|---------------------------------------------------------------------------------------------|------------|------------------------------------------|------------|--------------------|------------|
| Isabel Aguilera         |       | 46,000     |       | —                                                        |       | 88,920                     |       | —                          |       | —                                                                                      |       | 134,920                                  |       |
| Wolf Hengst             |       | 48,000     | (3)        | —                                                        |       | 88,920                     |       | —                          |       | —                                                                                      |       | 136,920                                  |       |
| Christopher Hoehn-Saric |       | 45,000     |       | —                                                        |       | 88,920                     |       | —                          |       | —                                                                                      |       | 133,920                                  |       |
| James McGuire           |       | 68,750     |       | —                                                        |       | 88,920                     |       | —                          |       | 105,000                                                                                     |       | 262,670                                  |       |
| John Miller             |       | 70,750     |       | —                                                        |       | 88,920                     |       | —                          |       | —                                                                                      |       | 159,670                                  |       |
| R. William Pollock (2)  |       | —     |       | —                                                        |       | —                     |       | —                          |       | —                                                                                      |       | —                                   |       |
| Richard Riley           |       | 56,750     | (3)        | —                                                        |       | 88,920                     |       | —                          |       | —                                                                                      |       | 145,670                                  |       |
| David Wilson            |       | 73,750     |       | —                                                        |       | 88,920                     |       | —                          |       | 130,000                                                                                     |       | 292,670                                  |       |

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(1)          Douglas Becker, the Company’s Chief Executive Officer is not included inthis table, as he is an employee of the Company and thus receives no compensationfor his service as a Director.  Thecompensation received by Mr. Becker as an employee of the Company is shown inthe Summary Compensation Table.

(2)          Mr. Pollock serves on the Company’s board without receiving anycompensation.

(3)          All payments made to Mr. Hengst and Mr. Riley were contributed to theCompany’s deferred compensation plan. Interest on contributions is earned at market rates and, therefore, isnot included as compensation for these directors.

(4)          Reflects the dollar amount recognized for financial statement reportingpurposes for fiscal 2006 in accordance with SFAS 123R.  Due to the Company’s vesting schedule and theSFAS 123R rules, these amounts reflect awards granted in 2006.  Directors were granted shares on January 3,2006 with a grant date fair value of $13.68 computed in accordance with optionpricing rules within SFAS 123R.  As ofDecember 31, 2006, each Director had the following number of optionsoutstanding: Isabel Aguilera, 13,000; Wolf Hengst, 24,500; ChristopherHoehn-Saric, 1,029,511; James McGuire, 49,500; John Miller, 13,000; RichardRiley, 24,500; and David Wilson, 29,500.

(5)   Messrs. Wilson, McGuire andPollock were elected to serve on a special committee of the Board of Directorscharged with the responsibility of evaluating the proposed merger.Mr. Wilson serves as the Chairman of this committee. The amounts representthe fees earned for services provided in 2006 by Messrs. Wilson andMcGuire as members of the special committee. Mr. Pollock does not receivecompensation for his service as a member of the special committee.

Laureate also provides liability insurance coveragefor its directors and officers in the aggregate amount of $50 million.  Various carriers, all of which have a BestRating of at least A:XI, underwrite the current coverage, which extends untilMay 15, 2007 and is currently being negotiated for an annual renewal term. Theannual cost of this coverage is approximately $850,000.

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**Item 12.  Security Ownership of Certain BeneficialOwners and Management and Related Stockholder Matters**

**OutstandingOptions and Shares Reserved for Future Issuance**

The following table setsforth information, as of December 31, 2006, regarding outstanding options andshares reserved for future issuance under the equity compensation plansmaintained by the Company. There are no outstanding warrants or rights otherthan options and restricted shares under the shareholder-approved plans andindividual compensation arrangements set forth below.
| ** **                                | ** ** | **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** | ** ** |
|-------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------|------------|
| **Shareholder-Approved Equity  Plans**    | ** ** | ** **                                                                                                                                       | ** ** | ** **                                                                                                   | ** ** | ** **                                                                                                                              | ** ** |
| 1993 Stock Option Plan                    |       | 356,491                                                                                                                                          |       | $                                                                                                            | 3.76       |                                                                                                                                    | 0          |   |
| 1996 Management Stock  Option Plan        |       | 1,650,866                                                                                                                                        |       | $                                                                                                            | 16.26      |                                                                                                                                    | 0          |   |
| 1998 Stock Incentive  Plan                |       | 1,643,502                                                                                                                                        |       | $                                                                                                            | 17.84      |                                                                                                                                    | 0          |   |
| 2003 Stock Incentive  Plan                |       | 165,744                                                                                                                                          |       | $                                                                                                            | 18.36      |                                                                                                                                    | 0          |   |
| 2005 Stock Incentive  Plan                |       | 1,273,000                                                                                                                                        |       | $                                                                                                            | 47.43      |                                                                                                                                    | 3,673,500  | (3) |
| **Individual Compensation  Arrangements** | ** ** | ** **                                                                                                                                       | ** ** | ** **                                                                                                   | ** ** | ** **                                                                                                                              | ** ** |
| Douglas Becker 01-04  PSUs (1)            |       | 166,000                                                                                                                                          |       | NA                                                                                                           |       | 0                                                                                                                                       |       |
| Rosemarie Mecca 10-01  Options (2)        |       | 85,000                                                                                                                                           |       | $                                                                                                            | 46.37      |                                                                                                                                    | 0          |   |
|                                      |       |                                                                                                                                             |       |                                                                                                         |       |                                                                                                                                    |       |
| **TOTAL**                                 | ** ** | **5,340,603**                                                                                                                                    |       |                                                                                                         | ** ** | **3,673,500**                                                                                                                           | **(3)**    |

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(1)             Inconnection with the execution of his employment agreement in January 2004, Mr.Becker was awarded 166,000 performance share units, giving Mr. Becker the rightto have 83,000 shares of Laureate Common Stock issued to him ratably onDecember 31, 2004, 2005 and 2006 and an aggregate of 83,000 shares issued tohim ratably on January 1, 2005, 2006 and 2007 if certain performance goals weremet.  As of December 31, 2006, all but 27,655 of the units had vested, with the remaining units vesting onJanuary 1, 2007.  Mr. Becker opted todefer issuance of these shares until such time as he has left either the employof the Company or its Board of Directors.

(2)             Ms.Mecca was granted the option to purchase 85,000 shares of Laureate common stockat an exercise price of $46.37 per share in connection with the execution of heragreement to become the Company’s Executive Vice President and Chief FinancialOfficer in September 2005.

(3)             Ofthis amount, up to 1,013,000 shares are available for issuance of RestrictedStock Awards or Restricted Stock Unit Awards.

The1993 Stock Option Plan, the 1996 Management Stock Option Plan, the 1998 StockIncentive Plan, the 2003 Stock Incentive Plan and the 2005 Stock IncentivePlan, as amended (together, the “Plans”) are administered by the Board or by acommittee or officer appointed by the Board. The administrator is empowered totake all actions to carry out the purposes and intents of the Plans, toadminister and interpret all documents relevant to the Plans and take allactions and make all decisions and determinations thereunder. There are no moreshares available for issuance under the 1993, 1996 and 1998 Plans, other thanupon exercise of outstanding options. The number of shares of Laureate common stock available for awards underthe 2003 Plan and the 2005 Plan, as amended, cannot exceed an aggregate of500,000 shares and 5,250,000 shares, respectively. Nonstatutory stock options,stock appreciation rights, phantom stock, performance awards, or any otherstock-based award may be granted under the 2003 and 2005 Plans. The Boardreserves the right to terminate the 2003 and 2005 Plans at any time or modifyor amend the 2003 or 2005 Plans.  Mr.Becker was granted 166,000 performance share units in 2004 in connection withthe execution of his employment agreement. The units vested upon achievement of certain specified performancegoals, as more fully described on page 11, under the heading “Chairman andChief Executive Officer Compensation.”  

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Ms. Mecca wasgranted options to purchase 85,000 shares of Laureate Common Stock, effectiveas of October 1, 2005, as inducement to become the Company’s Chief FinancialOfficer.  These options vest ratably overa four year period, beginning on October 1, 2006, and the shares underlyingthese options have not been registered with the SEC.  The treatment of any outstanding options Ms.Mecca holds at the time of a change of control in the Company or at the timeher employment is terminated is discussed more fully on page 18 under theheading “Change of Control and Severance Arrangements.”

**Beneficial Ownership**

Thefollowing table sets forth information regarding the beneficial ownership ofour common stock as of March 15, 2007 (unless otherwise noted), by eachperson or entity that Laureate knows to beneficially own more than 5% of theCompany’s common stock; each of our current directors and executive officers;and all of our directors and executive officers as a group.  The percentages of shares outstandingprovided in the tables are based on 51,881,859 voting shares of the Company’scommon stock outstanding as of March 15, 2007. Beneficial ownership isdetermined in accordance with the rules of the SEC and generally includesvoting or investment power with respect to securities. Unless otherwiseindicated, each person or entity named in the table has sole voting andinvestment power, or shares voting and investment power with his or her spouse,with respect to all shares of stock listed as owned by that person. The numberof shares shown does not include the interest of certain persons in shares heldby family members in their own right. Shares issuable upon the exercise ofoptions that are exercisable within 60 days of March 15, 2007 areconsidered outstanding for the purpose of calculating the percentage ofoutstanding shares of the Company’s common stock held by the individual, butnot for the purpose of calculating the percentage of outstanding shares held byany other individual. The address of each of our directors and executiveofficers listed below is c/o Laureate Education, Inc., 1001 FleetStreet, Baltimore, Maryland 21202.
| Name of Beneficial Owner                            | ** ** | **Number of Shares  Beneficially  Owned** | ** ** | ** ** | **Percent  of Total Shares  Outstanding** | ** ** |
|--------------------------------------------------------------------|------------|-----------------------------------------------------|------------|------------|-----------------------------------------------------|------------|
| William  Blair & Company, L.L.C.                          |       | 4,949,093                                           | (1)        |       |                                                | 9.54       | % |
| T. Rowe Price  Mutual Funds                                        |       | 4,233,402                                           | (2)        |       |                                                | 8.16       | % |
| Select Equity  Group                                               |       | 3,674,130                                           | (3)        |       |                                                | 7.08       | % |
| R. William  Pollock                                                |       | 2,949,842                                           | (4)        |       |                                                | 5.69       | % |
| Douglas L.  Becker                                                 |       | 1,984,916                                           | (5)        |       |                                                | 3.72       | % |
| R. Christopher  Hoehn-Saric                                        |       | 1,354,763                                           | (6)        |       |                                                | 2.56       | % |
| Raph Appadoo                                                       |       | 610,707                                             | (7)        |       |                                                | 1.17       | % |
| William C.  Dennis, Jr.                                       |       | 192,436                                             | (8)        |       |                                                | *          |   |
| Paula R. Singer                                                    |       | 92,558                                              | (9)        |       |                                                | *          |   |
| Robert W. Zentz                                                    |       | 93,250                                              | (10)       |       |                                                | *          |   |
| Rosemarie Mecca                                                    |       | 91,817                                              | (11)       |       |                                                | *          |   |
| John A. Miller                                                     |       | 87,317                                              | (12)       |       |                                                | *          |   |
| Daniel M. Nickel                                                   |       | 56,500                                              | (13)       |       |                                                | *          |   |
| James H. McGuire                                                   |       | 54,666                                              | (14)       |       |                                                | *          |   |
| David A. Wilson                                                    |       | 36,666                                              | (15)       |       |                                                | *          |   |
| Richard W. Riley                                                   |       | 32,666                                              | (16)       |       |                                                | *          |   |
| Wolf H. Hengst                                                     |       | 26,666                                              | (17)       |       |                                                | *          |   |
| Isabel Aguilera                                                    |       | 15,166                                              | (18)       |       |                                                | *          |   |
| All Directors and  Executive Officers as a Group (15 persons) |       | 7,679,936                                           |       |       |                                                | 13.84      | % |

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*                    Less than onepercent.

(1)             According to itsSchedule 13G/A filing, as of December 31, 2006, WilliamBlair & Company, L.L.C. (“William Blair”) had sole investment and solevoting power to 4,949,093 shares and no shared investment or voting power.

(2)             According to its Schedule 13Dfiling as of March 2, 2007, T. Rowe Price Associates, Inc. (“PriceAssociates”) had sole investment power to 4,233,402 shares and sole votingpower with respect to 844,000 shares. These securities are owned by variousindividual and institutional investors including T. Rowe Price Mutual Funds(which owns 4,233,402 shares, representing 8.16% of the shares outstanding),for which Price Associates serves as investment adviser with power to directinvestments and/or sole

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                           powerto vote the securities. For purposes of the reporting requirements of theExchange Act, Price Associates is deemed to be a beneficial owner of suchsecurities; however, Price Associates expressly disclaims that it is, in fact,the beneficial owner of such securities.

(3)             According to itsSchedule 13D joint filing, as of February 21, 2007, Select EquityGroup, Inc., Select Offshore Advisors, LLC and George S. Loening have soleinvestment and sole voting power with respect to 3,674,130 shares. As thePresident and controlling stockholder of Select and the Manager of SelectOffshore, Mr. Loening has the power to vote and to direct the voting ofand the power to dispose and direct the disposition of the shares of theCompany’s common stock owned by Select and Select Offshore. Accordingly,Mr. Loening may be deemed to be the beneficial owner of 3,674,130 sharesof the Company’s common stock, or 7.08% of the outstanding shares of theCompany’s common stock.

(4)             Represents 2,555,211shares held indirectly through Drake Holdings Limited and 394,631 shares heldindirectly through Drake Personnel (New Zealand).

(5)             Includes options topurchase 1,544,260 shares of the Company’s common stock, 3,065 shares in the401(k) Plan and 200,625 shares held by the Becker Trusts.

(6)             Includes options topurchase 1,031,677 shares of the Company’s common stock and 2,378 shares in the401(k) Plan.

(7)             Includes options topurchase 525,991 shares of the Company’s common stock and 9,239 shares in the401(k) Plan.

(8)             Includes options topurchase 137,501 shares of the Company’s common stock.

(9)             Includes options topurchase 55,125 shares of the Company’s common stock and 1,020 shares in the401(k) Plan.

(10)       Includes options topurchase 83,250 shares of the Company’s common stock.

(11)       Includes options to purchase21,250 shares of the Company’s common stock.

(12)       Includes options topurchase 15,166 shares of the Company’s common stock and 5,000 shares held bythe John A. Miller Family Foundation.

(13)       Includes options topurchase 25,500 shares of the Company’s common stock.

(14)       Includes options topurchase 51,666 shares of the Company’s common stock.

(15)       Includes options topurchase 31,666 shares of the Company’s common stock.

(16)       Includes options topurchase 26,666 shares of the Company’s common stock.

(17)       Includes options topurchase 26,666 shares of the Company’s common stock.

(18)       Includesoptions to purchase 15,166 shares of the Company’s common stock.

OnJanuary 28, 2007, the Company entered into a definitive agreement pursuant towhich, if approved by its shareholders, the Company will be acquired by aninvestor group led by Douglas L. Becker, Chairman and Chief Executive Officerof Laureate, in an all cash transaction for $60.50 per share, or an aggregatevalue of approximately $3.8 billion (the “merger agreement”).  The investor group also consists of aconsortium including Kohlberg Kravis Roberts & Co. (KKR); Citigroup PrivateEquity; S.A.C. Capital Management, LLC; SPG Partners; Bregal Investments;Caisse de dépôt et placement du Québec; Sterling Capital; Makena Capital;Torreal S.A.; and Southern Cross Capital. R. Christopher Hoehn-Saric, a director of the Company, and StevenTaslitz, a stockholder of the Company, are both affiliates of SterlingCapital.  If the terms of the agreementare approved, the Company will cease to be an independent publicly-tradedcompany.

**Item 13.   CertainRelationships and Related Transactions**

The Board of Directors reviews all relationships andtransactions in which the Company and our directors and executive officers ortheir immediate family members are participants to determine whether suchpersons have a direct or indirect material interest in any particulartransaction. The Company’s legal staff is primarily responsible for thedevelopment and implementation of processes and controls to obtain informationfrom the directors and executive officers with respect to related persontransactions and for then determining, based on the facts and circumstances,whether the Company or a related person has a direct or indirect materialinterest in the transaction. As required under SEC rules, transactions that aredetermined to be directly or indirectly material to the Company or a relatedperson are disclosed in the Company’s annual proxy statement. In addition, the AuditCommittee reviews and approves or ratifies any related person transaction thatis required to be disclosed. In the course of the Audit Committee’s review andapproval or ratification of a disclosable related party transaction, thecommittee considers:

·                 the nature of therelated person’s interest in the transaction;

·                 the material termsof the transaction, including, without limitation, the amount and type oftransaction;

·                 the importance ofthe transaction to the related person;

·                 the importance of thetransaction to the Company;

·               whether thetransaction would impair the judgment of a director or executive officer to actin the best interest of the Company; and

·                 any other mattersthe committee deems appropriate.

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Any member of the Audit Committee who is a relatedperson with respect to a transaction under review may not participate in thedeliberations or vote respecting approval or ratification of the transaction,provided, however, that such director may be counted in determining the presenceof a quorum at a meeting of the committee that considers the transaction.  The following are related party transactionsof which the Company was a part during 2006.

Educate Shared Services Agreement.  As part of the 2003 sale of the K-12 segmentto Educate, Inc. (“Educate”), Laureate entered into a management servicesagreement with Educate for the receipt of accounting, benefits, IT, humanresources, purchasing and payroll services for a period of three years fromJuly 1, 2003 through June 30, 2006 and pursuant to which Laureate providescertain tax and treasury services to Educate. The agreement is now in effect ona month-to-month basis and is expected to be terminated sometime during2007.  The annual net amount payableunder this agreement by Laureate was approximately $3 million for each of threeyears ended December 31, 2004, 2005 and 2006, respectively. Laureate expectsthat the net amount payable under the agreement by Laureate from January 1,2007 through the termination of the agreement will be approximately $140,000per month.  Messrs. Hoehn-Saric andBecker are Directors of Educate, and Mr. Hoehn-Saric is Educate’s ChiefExecutive Officer.

Agreement for Airplane Usage Costs.  In 2006, the Company paid an aggregate of $132,679to Bravo Transportation, Inc. for the costs associated with Mr. Dennis flyingto and from business meetings using an aircraft owned by this company.  Mr. Dennis and his wife each own a 50%interest in Bravo Transportation, Inc. The Compensation Committee reviewed in detail the comparable costs ofthird party charter airlines and concluded that the amounts paid to BravoTransportation, Inc. were no more than what would have been paid to anyunaffiliated third party provider for this service.

Merger Agreement.  Certain members of the board of directors andcertain executive officers have relationships with members of the investorgroup proposing to acquire the Company and its affiliates or personal interestsin the merger that may be different from, or in addition to, those of theCompany’s shareholders generally. These interests include:

·                  Messrs. Beckerand Hoehn-Saric are affiliated with the company which will be the parent of theCompany after the merger is consummated (the “Parent”) and, following consummationof the merger, will have an ownership interest in Parent, as well as in theentities through which several of the members of the investor group will beinvesting in Parent. Messrs. Becker and Hoehn-Saric are also foundingmanagers of the general partner of another member of the investor group;

·                  Themerger will result in the receipt by Messrs. Becker and Hoehn-Saric of $60.50in cash, without interest and less any applicable withholding taxes, for eachshare of the Company’s common stock held by them in their respective 401(k)accounts and the accelerated vesting and cash-out of all of the Company’s stockoptions and restricted shares held by the Company’s directors and executiveofficers (subject to certain exceptions);

·                  Messrs. Wilsonand McGuire will receive monthly compensation of between $15,000 and $40,000for their service on the special committee of the Board of Directors formed bythe Company to evaluate and negotiate the terms of the merger agreement; and Messrs.Wilson, McGuire and Pollock will be reimbursed for expenses they incur inconnection with their service on the special committee of the Board ofDirectors given the authority to negotiate the proposed merger.

·                  TheNamed Executive Officers, as well as certain other Company officers expect tohave continuing employment relationships with the surviving corporation thatare substantially similar to their current employment relationships withLaureate. After consummation of the merger, Mr. Becker expects to continueto serve as Chairman and Chief Executive Officer of the surviving corporation,and Messrs. Becker and Hoehn-Saric expect to serve on the board ofdirectors of the surviving corporation and the general partner of Parent; and

·                  Themerger agreement provides for continued indemnification of current and formerdirectors and officers of the Company and its subsidiaries in respect ofliabilities for acts or omissions occurring at or prior to the consummation ofthe merger. In addition, the merger agreement provides for continued coverage,for six years following consummation of the merger, under directors’ andofficers’ insurance.

 

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**Item 14.Principal Accountant Fees and Services**

On March 12, 2007, the Audit Committee, with theunanimous resolution of the Board of Directors of Laureate Education Inc. (the “Company”),appointed PricewaterhouseCoopers LLP (“PWC”) as the Company’s independentregistered public accounting firm (“auditors”) for the fiscal year endingDecember 31, 2007 and replaced Ernst & Young LLP (“E&Y”) as itsindependent registered public accounting firm. The reports of E&Y on the Company’s consolidated financial statementsfor the fiscal years ended December 31, 2006 and 2005 did not contain anadverse opinion or a disclaimer of opinion and were not qualified as touncertainty, audit scope, or accounting principles or modified as touncertainty or audit scope. The 2005 report was modified to include anexplanatory paragraph relating to the restatement of the Company’s balancesheet as of December 31, 2004 and the related statements of changes instockholders’ equity for the years ended December 31, 2004 and 2003. The2006 report was modified to include explanatory paragraphs regarding theadoption of SFAS 123R and a change in the Company’s method of revenuerecognition.

During the two most recent fiscal years and throughMarch 12, 2007, there have been no disagreements between the Company andE&Y on any matters of accounting principles or practices, financialstatement disclosure or auditing scope or procedure, which disagreements, ifnot resolved to the satisfaction of E&Y, would have caused E&Y to makereference thereto in their reports on the financial statements for suchyears.  The Company’s managementconcluded that as of both December 31, 2006 and December 31, 2005 the Companydid not maintain effective internal control over financial reporting related tothe Company’s accounting for income taxes and that this control deficiencyresulted in a material weakness.  The Audit Committee of the Board ofDirectors of the Company discussed the material weaknesses with E&Y, andthe Company has authorized E&Y to respond fully to the inquiries of asuccessor auditor concerning the subject matter of the material weaknesses.

Except for the material weaknesses described above,during the two most recent fiscal years ended December 31, 2006 and 2005and through March 12, 2007, there were no reportable events (as defined inItem 304(a)(1)(v) of Regulation S-K). During the Company’s two most recent fiscal years and through the datehereof, the Company did not consult with PWC regarding any of the matters orevents set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.

Fees for professional services provided by theindependent auditors in each of the last two fiscal years, in each of thefollowing categories are:

|                    | ** ** | **2006**               | ** ** | **2005** | ** ** |
|--------------------|------------|------------------------|------------|----------|------------|
| ** **         | ** ** | **(in millions)** | ** ** |
| Audit Fees         |       | $                      | 4.3        |     | $          | 3.3 |   |
| Audit-Related Fees |       | 0.8                    |       | 1.2      |       |
| Tax Fees           |       | 0.4                    |       | 0.5      |       |
| All Other Fees     |       | 0.1                    |       | —   |       |
|                    |            |                        |            |          |            |  |  |

 

In the abovetable, fees paid to E&Y in 2005 and 2006 are set forth in accordance withthe rules and regulations of the SEC. Audit fees are fees the Company paid to E&Y for the audit of the itsannual consolidated financial statements, reviews of quarterly consolidatedfinancial statements and internal control over financial reporting, assistancewith and review of documents filed with the SEC, consent procedures, accountingconsultations related to transactions and the adoption of new accountingpronouncements that impact the audited financial statements, statutory auditsrequired internationally, and audits of subsidiaries required by state orregulation.  Audit-Related feesprincipally consist of audit services for other Laureate subsidiaries requiredto be audited and professional services related to financial due diligence forthe Company’s acquisitions of other businesses. Tax fees primarily consist of consulting and regulatory services relatedto the Company’s international operations.

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The auditcommittee has a policy that requires advance approval of all audit,audit-related, tax, and other services performed by independent auditors.  The policy provides for pre-approval by theAudit Committee of specifically defined audit and non-audit services.  Unless the specific service has beenpreviously pre-approved with respect to that year, the Audit Committee mustapprove the permitted service before the independent auditors are engaged toperform it.  The Audit Committee hasdelegated to the Chair of the Audit Committee authority to approve permittedservice provided that the Chair reports any decisions to the Committee at itsnext scheduled meeting.

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**PARTIV.**

**Item 15.  Exhibits, FinancialStatement Schedules**

**3.             Exhibits**

(a)   Asrequired by Rule 12b-15 under the Securities Exchange Act of 1934, as amended(the “Exchange Act”), new certifications of our principal executive officer andprincipal financial officer are being filed as exhibits to this Amendment No. 1on Form 10-K/A.  No other informationcontained in the original filing is amended hereby:
| Exhibit  Number      | ** ** | **Description**                                                                               |
|----------------------|------------|-----------------------------------------------------------------------------------------------|
| 31(i).01   |       | Certification of Douglas L. Becker pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31(i).02   |       | Certification of Rosemarie Mecca pursuant to Section  302 of the Sarbanes-Oxley Act of 2002   |
| 32.01      |       | Certification of Douglas L. Becker pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.02      |       | Certification of Rosemarie Mecca pursuant to Section  906 of the Sarbanes-Oxley Act of 2002   |

 

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**SIGNATURES**

Pursuant to the requirements of Section 13 of theSecurities Exchange Act of 1934, the Registrant has duly caused this report tobe signed on its behalf by the undersigned, thereunto duly authorized on April27, 2007.
|        |   | LAUREATE EDUCATION, INC. |
|--------|--------|--------------------------|
|   |   | (Registrant)             |
|   |   |                     |   |   |
|   |   |                     |   |   |
|   |   | By:                      |   | /s/ Douglas L. Becker |
|   |   |                     |   | Douglas L. Becker |
|   |   |                     |   | Chairman of the Board |

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, this report has been signed below by the followingpersons on behalf of the Registrant and in the capacities indicated and onApril 27, 2007.
| Signature             | ** ** | **Capacity**                    |
|-----------------------|------------|---------------------------------|
|                  |       |                            |
| /s/ Douglas L. Becker |       | Director, Chairman of the Board |
| Douglas L. Becker     |       | and Chief Executive Officer     |
|                  |       |                            |
| /s/ Rosemarie Mecca   |       | Executive Vice President        |
| Rosemarie Mecca       |       | and Chief Financial Officer     |

 

28

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