<PAGE> 1
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Sec. 240.14a-1(c) OR Sec. 240.14a-12
NATIONAL EDUCATION CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
NATIONAL EDUCATION CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
Set forth the amount on which the filing fee is calculated and state how it was
determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date of
its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
[LOGO] NATIONAL EDUCATION CORPORATION
18400 VON KARMAN AVENUE
IRVINE, CALIFORNIA 92715
March 28, 1994
Dear Stockholder:
You are cordially invited to attend the May 13, 1994 Annual Meeting of
Stockholders of National Education Corporation. The meeting will be held at the
Irvine Marriott, 18000 Von Karman Avenue, Irvine, California 92715, beginning at
10:00 a.m., local time.
The business to be conducted at the meeting includes the election of three
directors, ratification of the selection of independent public accountants, and
consideration of any other matters which may properly come before the meeting
and any adjournment thereof.
It is important that your shares be represented, so, even if you presently
plan to attend the meeting, please complete, sign, date and promptly return the
enclosed proxy card. If you do attend the meeting and wish to vote in person,
you may withdraw your proxy at that time.
Sincerely,
[SIG]
David C. Jones
Chairman of the Board
<PAGE> 3
[LOGO] NATIONAL EDUCATION CORPORATION
18400 VON KARMAN AVENUE
IRVINE, CALIFORNIA 92715
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1994
To the Stockholders of National Education Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of National Education Corporation, a Delaware corporation (the
"Company"), will be held at the Irvine Marriott, 18000 Von Karman Avenue,
Irvine, California on Friday, May 13, 1994, at 10:00 a.m., local time, for the
following purposes:
(1) To elect three directors of the Company to hold office for a three-year
term or until their respective successors are elected and qualified;
(2) To consider and act upon the ratification of the selection of Price
Waterhouse as the independent public accountants for the Company; and
(3) To transact any such business as may properly come before the meeting
and any adjournment or adjournments thereof.
Stockholders of record as of the close of business on March 11, 1994, are
entitled to notice of and to vote at the Annual Meeting and any adjournment
thereof. A list of such stockholders will be available for examination by any
stockholder, for any purpose germane to the Annual Meeting, at the office of the
Secretary of the Company, 18400 Von Karman Avenue, Irvine, California for a
period of ten days prior to the Annual Meeting.
By Order of the Board of Directors
[sig]
PHILIP C. MAYNARD
Secretary
Irvine, California
March 28, 1994
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ACCOMPANYING PROXY CARD,
DATE AND SIGN IT, AND RETURN IT IN THE PREADDRESSED ENVELOPE PROVIDED. NO
POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE> 4
[LOGO] NATIONAL EDUCATION CORPORATION
18400 VON KARMAN AVENUE
IRVINE, CALIFORNIA 92715
PROXY STATEMENT
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of National Education Corporation (the
"Company") for use at the Annual Meeting of Stockholders of the Company to be
held on Friday, May 13, 1994, at 10:00 a.m., local time. The Annual Meeting will
be held at the Irvine Marriott, 18000 Von Karman Avenue, Irvine, California
92715. This proxy statement and the accompanying proxy are first being mailed on
or about March 28, 1994.
REVOCABILITY OF PROXIES
An executed proxy may be revoked at any time before its exercise by filing
with the Secretary of the Company, at 18400 Von Karman Avenue, Irvine,
California 92715, the principal executive office of the Company, a written
notice of revocation or a duly executed proxy bearing a later date. The
execution of the enclosed proxy will not affect a stockholder's right to vote in
person should such stockholder find it convenient to attend the Annual Meeting
and desire to vote in person.
VOTING AND SOLICITATION
On March 11, 1994, the record date with respect to this solicitation,
29,485,004 shares of the Company's Common Stock were outstanding. No shares of
any other class of stock were outstanding. Only stockholders of record on such
date are entitled to notice of and to vote at the Annual Meeting and at any
adjournment thereof. Each stockholder of record is entitled to one vote for each
share held on all matters to come before the Annual Meeting and at any
adjournment thereof.
The three director nominees receiving the highest number of affirmative
votes of the shares present or represented and entitled to be voted for them
shall be elected as directors. Votes withheld from any director are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business, but have no legal effect under Delaware law. While there is no
definitive statutory or case law authority in Delaware as to the proper
treatment of abstentions, the Company believes that abstentions should be
counted for purposes of determining whether a quorum is present at the Annual
Meeting for the transaction of business, and, except for the election of
directors, should also be counted in tabulating votes cast on proposals
presented to the stockholders. In the absence of controlling precedent to the
contrary, the Company intends to treat abstentions with respect to the
transaction of business in this manner. In a 1988 Delaware case, Berlin v.
Emerald Partners, the Delaware Supreme Court held that broker non-votes may be
counted as present or represented for purposes of determining the presence or
absence of a quorum for the transaction of business. Accordingly, the Company
intends to treat broker non-votes in this manner. Broker non-votes will not be
counted for purposes of determining whether a proposal has been approved.
The shares represented by all valid proxies received will be voted in
accordance with the specifications therein. Unless otherwise directed in the
proxy, the persons named therein will vote FOR the election of the three
nominees listed below and FOR the ratification of the Company's selection of
independent public accountants. As to any other business which may properly come
before the meeting, they will vote in accordance with their best judgment. The
Company does not presently know of any other such business.
1
<PAGE> 5
Proxies will be solicited principally by mail and the costs will be borne
by the Company. These costs include reimbursements to banks, brokerage houses
and other custodians, nominees and fiduciaries for their reasonable expenses in
forwarding proxy materials to beneficial owners of the Company's stock. Officers
and regular employees of the Company may conduct solicitation of proxies
personally, by telephone, or by special letter without any additional
compensation. The Company has engaged D.F. King & Co., Inc. ("King") to solicit
proxies and distribute materials to banks, brokerage houses and other custodians
and nominees. The Company will pay King $8,000 for these services.
PROPOSAL 1:
ELECTION OF DIRECTORS
Three directors are to be elected to the Company's Board of Directors at
the Annual Meeting. The Board is divided into three classes and, upon the
election of three directors, the Board will consist of a total of ten directors.
Three incumbent directors, Messrs. Leonard W. Jaffe, Frederic V. Malek, and
William D. Walsh, have been nominated for three-year terms. Each director
elected shall serve the term for which he was nominated and until the election
and qualification of his successor or until his earlier resignation or removal.
The Board of Directors has currently fixed its size at ten members. The
reduction in the size of the Board reflects the resignation of Mrs. Lynne V.
Cheney, who resigned effective January 1, 1994, and the decision of the Board
not to renominate Mr. Harold Segal. The Nominating Committee intends to seek
additional qualified potential board members who would add to the Board's
expertise, experience and diversity, particularly in the education and new
technologies fields. The Board reserves the right to increase its size during
the year to accommodate qualified candidates.
Each stockholder is entitled to one vote for each office of director to be
elected. The candidates receiving the greatest number of votes cast at the
meeting in person or by proxy will be elected. The shares represented by the
proxies solicited hereunder will be voted in favor of the three nominees named
below unless authorization to do so is withheld in the proxy. If any nominee
should become unavailable to serve as a director, which contingency is not
presently anticipated, the persons named in the proxy, or their substitutes,
will be authorized to vote for such other person or persons as the Board of
Directors may designate.
The following table provides information regarding each nominee and the
other continuing members of the Board of Directors. Titles are as officers of
the Company unless otherwise indicated.
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING LAST DIRECTOR
NAME AND AGE FIVE YEARS AND OTHER DIRECTORSHIPS SINCE
- --------------------------- ----------------------------------------------- ---------
<S> <C> <C>
CURRENT NOMINEES -- TERM EXPIRING IN 1997
Leonard W. Jaffe (75) Vice Chairman of the Board since July 1989. 1976
Private investor and consultant. Director of
Steck-Vaughn Publishing Corporation since May
1993.
Frederic V. Malek (57) Co-Chairman of CB Commercial Real Estate Group, 1984
Inc. since April 1989. Vice Chairman of
Northwest Airlines from June 1990 through
December 1991. President of Northwest Airlines
from September 1989 through June 1990. Prior to
1989, President of Marriott Hotels and Resorts.
Director of Automatic Data Processing, Inc.,
FPL Group, Inc., various PaineWebber Mutual
Funds, American Management Systems, Inc., Manor
Care, Inc., Caterair International, ICF, Inc.,
and Northwest Airlines, Inc.
William D. Walsh (63) General Partner of Sequoia Associates, an 1987
investment partnership. Chairman of the Board
of Champion Road Machinery Limited and Newell
Industrial Corporation. Director of Basic
Vegetable Products Corporation, URS
Corporation, Newcourt Credit Group, Inc., and
Mike Yurosek & Son, L.P.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING LAST DIRECTOR
NAME AND AGE FIVE YEARS AND OTHER DIRECTORSHIPS SINCE
- --------------------------- ----------------------------------------------- ---------
<S> <C> <C>
CURRENT DIRECTORS -- TERM EXPIRING IN 1995
Richard C. Blum (58) Chairman of Richard C. Blum & Associates, Inc., 1987
a merchant banking firm. Vice Chairman of URS
Corporation and Director of Sumitomo Bank of
California, AGP Industrial Corporation, Triad
Systems Corporation, Shaklee Corporation,
Immulogic Pharmaceutical Corporation, Northwest
Airlines Corporation and C.B. Commercial Real
Estate Group, Inc. Special foreign advisor to
Shanghai International Trust and Investment
Company (China).
Jerome W. Cwiertnia (52) President and Chief Executive Officer since 1984
April 1990. President and Chief Operating
Officer from August 1989 to April 1990.
President from February 1988 to March 1989.
Director and Chairman of the Board of
Steck-Vaughn Publishing Corporation since March
1993.
David C. Jones (72) Chairman of the Board since July 1989. Acting 1983
Chief Executive Officer from July 1989 until
April 1990. Chairman of the Joint Chiefs of
Staff from June 1978 through June 1982.
Director of General Electric Company.
Paul B. MacCready (68) Chairman of the Board, AeroVironment, Inc. 1992
Director of MacNeal-Schwendler Corporation.
CURRENT DIRECTORS -- TERM EXPIRING IN 1996
David Bonderman (51) Managing General Partner of TPG Partners, L.P., 1993
an investment partnership, from December 1993
to present. Indirect managing general partner
of various investment partnerships from August
1992 to December 1993. Vice President and Chief
Operating Officer of Keystone, Inc. (formerly
Robert M. Bass Group, Inc.) from July 1983 to
August 1992. Director of National Re
Corporation, Bell & Howell Holdings Company and
Carr Realty Corporation, and Chairman of the
Board of Continental Airlines, Inc.
Michael R. Klein (51) Partner, Wilmer, Cutler & Pickering law firm 1991
since 1974. Chairman of Realty Information
Group, Inc. since 1987. Director of
Steck-Vaughn Publishing Corporation since May
1993.
John J. McNaughton (71) Founder of the Company. President and Chairman 1954
of the Board from 1954 to 1980 and Chairman of
the Board from 1954 until retirement in 1988.
Director of Intervisual Books International.
Owner of McNaughton Farms.
</TABLE>
3
<PAGE> 7
INFORMATION REGARDING THE BOARD AND ITS COMMITTEES
DIRECTORS' FEES AND BENEFITS
The Company pays each of its directors who is not an employee of the
Company an annual fee of $15,000, plus $1,500 for each Board meeting attended,
and $1,000 for each committee meeting attended (unless the committee meeting is
in conjunction with a Board meeting, in which case the director receives $500
per committee meeting). Mr. Jaffe receives an additional $6,000 for serving as
Vice Chairman of the Board and $6,000 as Chairman of the Executive Committee.
Other committee chairmen receive an additional $3,000 each year. Nonemployee
directors serving on the Executive Committee receive an additional $6,000 each
year, but do not receive compensation for attending Executive Committee
meetings. All directors are entitled to a $2,500 annual financial planning
allowance.
Under a supplemental benefit plan, each participating director receives an
annual accrual equal to such director's fees for each year subject to a maximum
annual accrual of $25,000 for 1991 and future years, and a maximum annual
accrual of $15,000 for 1990 and prior years; however, any director failing to
attend 50% or more of the Board and committee meetings in a calendar year does
not receive any annual accrual for such year. Upon retirement from the Board,
each director will be paid monthly installments totalling $25,000 each year
until his retirement benefit is exhausted; however, if his accrued benefit is
less than $125,000, it will be paid over five years. If a director dies prior to
retirement, his beneficiary will receive the greater of $15,000 per year for ten
years or the director's retirement benefit. If a director becomes disabled prior
to retirement, the Company will pay him the retainer through the end of the
elected term and will thereafter pay retirement benefits.
Under the 1991 Directors' Stock Option Plan, each eligible director (a
director who was not an employee of the Company when he was first elected to the
Board) receives an initial stock option at fair market value to purchase 5,000
shares of the Company's stock. The initial option vests and first becomes
exercisable in two equal annual installments of 2,500 shares each, commencing
one year from the date of grant. At the first regular Board meeting each year
through the year 2001, each eligible director receives a stock option at fair
market value, exercisable in full one year from the date of grant, to purchase
2,000 shares of the Company's Common Stock; however, a director does not receive
the annual option for one year if he received the initial option at a meeting
later than the first regular Board meeting of the prior calendar year.
All of the directors of the Company are eligible to participate in the 1991
Directors' Stock Option Plan, except Mr. Cwiertnia. Mr. McNaughton became an
eligible director as of February 1, 1994.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the fiscal year ended December 31, 1993, the Board of Directors of
the Company met five times. No incumbent director attended fewer than 75% of the
aggregate meetings of the Board of Directors and meetings of the committees of
the Board on which he served.
The Board of Directors has six committees: the Executive Committee, the
Compensation and Option Committee, the Audit Committee, the Acquisition
Committee, the Education and Technology Committee, and the Nominating Committee.
The Executive Committee is comprised of Messrs. Jaffe (Chairman), Jones,
Cwiertnia, McNaughton, and Blum. The Executive Committee exercises the power of
the Board of Directors (except for certain powers that by law may only be
exercised by the full Board) in monitoring the management of the business
between meetings of the Board of Directors. The Executive Committee held nine
meetings during 1993.
The Compensation and Option Committee, which held three meetings during
1993, is comprised of Messrs. Walsh (Chairman), Jaffe, Blum, and Malek. The
Compensation and Option Committee reviews and recommends the salaries and
bonuses of officers and certain key employees of the Company, establishes
compensation and incentive plans, authorizes and approves the granting of stock
options and restricted stock in accordance with the Company's stock option and
incentive plans, and determines other fringe benefits.
4
<PAGE> 8
The Audit Committee is comprised of Messrs. Segal (Chairman), Bonderman,
and Klein. The Audit Committee recommends engagement of the Company's
independent accountants and is primarily responsible for approving the services
performed by the Company's independent accountants and for reviewing and
evaluating the Company's accounting principles and its system of internal
controls. The Audit Committee held two meetings during 1993.
The Acquisition Committee, which is comprised of Messrs. Blum (Chairman),
Bonderman, Malek, Klein and Walsh, reviews acquisitions or divestitures of
assets of operating entities. The Acquisition Committee held one meeting during
1993.
The Education and Technology Committee, which held one meeting during 1993,
is comprised of Messrs. MacCready (Chairman), McNaughton, and Segal. The
Education and Technology Committee examines the application of the latest
technologies to the Company's business.
The Nominating Committee makes recommendations to the Board of Directors
regarding the composition of the Board of Directors and the selection of
individual candidates for election to the Board of Directors. The committee is
comprised of Messrs. Malek (Chairman), Jones, and MacCready, and met on an
informal basis during the year. Nominees may be recommended by stockholders and
should be submitted to the Secretary of the Company for consideration by the
Nominating Committee.
COMMON STOCK OWNERSHIP
The following table sets forth information as of February 28, 1994 (unless
otherwise noted) concerning the shares of the Company's Common Stock
beneficially owned by (i) each beneficial owner of more than 5% of the
outstanding shares of Common Stock; (ii) each director of the Company; (iii) the
Chief Executive Officer and the four most highly compensated other executive
officers; and (iv) all directors and executive officers of the Company as a
group. Except as otherwise noted, each beneficial owner listed has sole
investment and voting power (or shares such powers with his or her spouse) of
the shares indicated. Beneficial ownership includes any shares the individual
has the right to acquire within 60 days of February 28, 1994 through the
exercise of any stock option or other right.
<TABLE>
<CAPTION>
AMOUNT
AND NATURE
NAME OF INDIVIDUAL OR NUMBER OF BENEFICIAL PERCENT
OF PERSONS IN GROUP POSITION WITH THE COMPANY OWNERSHIP(1) OF CLASS
- ------------------------------------- ----------------------------- ------------- --------
<S> <C> <C> <C>
Richard C. Blum & Associates, Inc.... 6,063,410(2) 17.6%
First Interstate Bancorp. ........... 1,660,600(3) 5.7%
Westport Asset Management, Inc....... 2,088,950(4) 7.1%
Richard C. Blum...................... Director 6,075,250(5) 17.6%
David Bonderman...................... Director 125,000(6) *
Jerome W. Cwiertnia.................. President, Chief Executive
Officer and Director 231,546(7) *
Leonard W. Jaffe..................... Director 32,000 *
David C. Jones....................... Chairman of the Board 65,375 *
Michael R. Klein..................... Director 17,000 *
Paul B. MacCready.................... Director 2,500 *
Frederic V. Malek.................... Director 35,950(8) *
John J. McNaughton................... Director 21,800 *
Harold Segal......................... Director 9,155 *
William D. Walsh..................... Director 13,914 *
Jeffrey A. Brill..................... Former Vice President,
Secretary and General Counsel 12,320(9) *
</TABLE>
5
<PAGE> 9
<TABLE>
<CAPTION>
AMOUNT
AND NATURE
NAME OF INDIVIDUAL OR NUMBER OF BENEFICIAL PERCENT
OF PERSONS IN GROUP POSITION WITH THE COMPANY OWNERSHIP(1) OF CLASS
- ------------------------------------- ----------------------------- ------------- --------
<S> <C> <C> <C>
Christine A. Gattenio................ Vice President and
Corporate Controller 41,952 *
Keith K. Ogata....................... Vice President, Chief
Financial Officer and
Treasurer 62,575 *
All Directors and Executive Officers
as a Group (15 persons)............ 6,596,337 18.9%
* Less than 1%.
</TABLE>
- ---------------
(1) Includes 5,000,000 shares issuable upon conversion of Senior Subordinated
Convertible Debentures due 2006 indirectly owned by Richard C. Blum &
Associates, Inc. ("RCBA"), Mr. Blum, and Mr. Malek. Also includes the
following shares issuable upon conversion of Subordinated Convertible
Debentures due 2011: Mr. Jaffe -- 4,000 shares; Mr. Jones -- 4,000 shares;
Ms. Gattenio -- 1,000 shares; and Mr. Ogata -- 6,000 shares. All directors
and officers as a group hold debentures convertible into 5,015,000 shares.
The shares listed in the table include the following stock options
exercisable on or within 60 days after February 28, 1994: Mr. Cwiertnia --
193,476 shares; Mr. Jaffe -- 24,000 shares; Mr. Jones -- 45,250 shares;
Messrs. Blum, Malek, Segal, and Walsh -- 9,000 shares each; Mr. Klein --
7,000 shares; Mr. Brill -- 5,425 shares; Ms. Gattenio -- 31,260 shares; Mr.
Ogata -- 45,442 shares; and all directors and officers as a group -- 390,353
shares.
(2) Includes 1,063,410 shares held by limited partnerships for which RCBA, 909
Montgomery Street, Suite 400, San Francisco, California 94133, is the sole
general partner, and debentures which are described in footnote (1). RCBA
disclaims beneficial ownership of these securities, except to the extent of
its pro rata profits interest in those limited partnerships.
(3) According to a Schedule 13G filed with the SEC as of December 31, 1993,
First Interstate Bancorp., 633 West Fifth Street, Los Angeles, California
90071, had sole voting power over 904,100 shares, shared voting power over
117,800 shares, sole dispositive power over 1,505,800 shares and shared
dispositive power over 154,800 shares. On March 14, 1994, the Company
received a letter from Denver Investment Advisors, Inc. ("DIA") stating that
as of March 11, 1994, DIA, a wholly owned subsidiary of First Interstate
Bancorp., owned no shares of the Company's Common Stock. DIA sold its entire
security position of 1,505,000 shares after the Schedule 13G filing.
(4) According to a Schedule 13G filed with the SEC as of December 31, 1993,
Westport Asset Management, Inc., 253 Riverside Avenue, Westport, Connecticut
06880 ("Westport") has sole voting and dispositive power over 233,200 shares
and shared voting and dispositive power over 1,855,750 shares. The Schedule
13G states that 6.3% of the Company's shares outstanding are held in
discretionary accounts managed by Westport. The remaining 0.8% of such
shares outstanding are beneficially owned by officers and stockholders of
Westport, but Westport disclaims beneficial ownership of such shares.
(5) Mr. Blum, the Chairman of the Board of RCBA, directly owns 11,840 shares
including 9,000 shares issuable upon the exercise of stock options. Of the
securities listed in the table, 6,063,410 shares are also reported in the
table as indirectly owned by RCBA. Mr. Blum reserves the right to disclaim
beneficial ownership of securities owned by RCBA in excess of his pro rata
ownership in RCBA.
(6) Includes 125,000 shares issuable upon conversion of $500,000 Senior
Subordinated Convertible Debentures due 2006.
(7) Excludes 450 shares owned by Mr. Cwiertnia's wife as custodian for their
son. Mr. Cwiertnia disclaims beneficial ownership of these 450 shares.
(8) Includes 25,000 shares issuable upon conversion of Senior Subordinated
Convertible Debentures due 2006. Excludes Mr. Malek's 1.126% interest in a
limited partnership whose general partner is RCBA which owns 325,110 shares
of Company stock and $1,500,000 Senior Subordinated Debentures convertible
into 375,000 shares of stock. (See footnote (1)).
(9) Mr. Brill resigned as Vice President, Secretary and General Counsel
effective October 21, 1993.
6
<PAGE> 10
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following tables disclose the cash compensation of, and stock options
provided to, the Company's five most highly compensated executive officers,
including the Chief Executive Officer and the Company's former Vice President,
Secretary and General Counsel.
TABLE I
SUMMARY COMPENSATION
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS(2)
------------
NUMBER OF
ANNUAL COMPENSATION SECURITIES
---------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS OPTIONS COMPENSATION
- ----------------------------------- ---- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Jerome W. Cwiertnia................ 1993 $ 318,746 $ 0 25,000 $ 0
Chief Executive Officer 1992 $ 318,653 $117,000 50,000 $ 0
1991 $ 306,210 $243,951 29,758 $ 0
Keith K. Ogata..................... 1993 $ 162,876 $ 0 15,000 $ 0
Vice President, 1992 $ 147,552 $ 42,300 22,000 $ 0
Chief Financial Officer and
Treasurer 1991 $ 130,258 $ 83,859 13,856 $ 0
Christine A. Gattenio.............. 1993 $ 122,293 $ 17,500 7,000 $ 0
Vice President and 1992 $ 117,418 $ 33,390 6,000 $ 0
Corporate Controller 1991 $ 111,167 $ 68,689 7,481 $ 0
David C. Jones..................... 1993 $ 104,000 $ 0 7,000 $ 0
Chairman of the Board 1992 $ 104,000 $ 0 2,000 $ 0
1991 $ 100,000 $ 0 5,000 $ 0
Jeffrey A. Brill................... 1993 $ 152,775 $ 0 5,000 $192,680(3)
Vice President, 1992 $ 157,593 $ 45,525 8,000 $ 0
Secretary and General Counsel 1991 $ 153,425 $ 96,197 12,151 $ 0
until October 1993
</TABLE>
- ---------------
(1) Amounts shown include cash and noncash compensation earned and received by
executive officers as well as amounts earned but deferred at the election of
these officers, including Company contributions on behalf of such officers
to the Company's 401(k) Retirement Plan.
(2) Although certain of the Company's long-term incentive plans permit grants of
restricted stock, no grants of restricted stock were made during 1991, 1992
and 1993.
(3) Amount shown reflects $155,429 compensation paid pursuant to a severance
agreement, $14,256 forgiveness of indebtedness, and the continuation of
fringe benefits, valued at $22,995, to which Mr. Brill had been entitled
during his employment. (See "Severance Benefits" and "Indebtedness of
Management" for additional information.)
7
<PAGE> 11
TABLE II
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
INDIVIDUAL GRANTS ASSUMED ANNUAL
- ------------------------------------------------------------------------------------------- RATES OF STOCK
NUMBER OF % OF TOTAL PRICE APPRECIATION
SECURITIES OPTIONS FOR OPTION TERM (10
UNDERLYING GRANTED TO EXERCISE YEARS) (2)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------
NAME GRANTED (1) FISCAL YEAR (PER SHARE) DATE 5% 10%
- ------------------------------------ ----------- ------------ ----------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Jerome W. Cwiertnia................. 25,000 6.36 $ 5.725 02/20/03 $90,011 $228,104
Keith K. Ogata...................... 15,000 3.81 $ 5.725 02/20/03 $54,006 $136,863
Christine A. Gattenio............... 7,000 1.78 $ 5.725 02/20/03 $25,203 $ 63,869
David C. Jones...................... 7,000 1.78 $ 5.725 02/20/03 $25,203 $ 63,869
Jeffrey A. Brill.................... 5,000 1.27 $ 5.725 10/22/93 $ 0 $ 0
</TABLE>
- ---------------
(1) All options are exercisable in four equal annual increments commencing one
year from the date of grant, except that Mr. Jones has an option to purchase
2,000 shares (included above) which is exercisable in full one year from the
date of grant. All options become exercisable in full after a change of
control.
(2) 5% appreciation represents an increase from the exercise price of $5.725 to
a stock price of $9.325; 10% appreciation represents an increase to a stock
price of $14.849.
TABLE III
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED IN-THE-MONEY
NUMBER OF UNEXERCISED OPTIONS OPTIONS AT DECEMBER 31,
SHARES AT DECEMBER 31, 1993 1993 (1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jerome W. Cwiertnia................ 0 $ 0 161,036 83,630 $ 384,136 $55,545
Keith K. Ogata..................... 0 $ 0 32,103 40,303 $ 61,153 $21,794
Christine A. Gattenio.............. 0 $ 0 24,515 16,866 $ 55,326 $14,503
David C. Jones..................... 0 $ 0 39,500 9,500 $ 106,594 $11,269
Jeffrey A. Brill................... 15,000 $68,188 5,425 0 $ 16,478 $ 0
</TABLE>
- ---------------
(1) Based upon the difference between the closing price on the New York Stock
Exchange on December 31, 1993 of $6.25 and the option exercise price.
SEVERANCE BENEFITS
Pursuant to Company policy, in the event Mr. Cwiertnia's employment is
terminated without cause or after a change of control, Mr. Cwiertnia would be
entitled to continuation of his salary and fringe benefits for two years or, at
his option, a lump sum payment equal to two years' salary (currently $312,000
per year). Other executive officers, except Mr. Jones, would be entitled to
receive severance benefits of one year's salary and fringe benefits or, at the
executive's option, a lump sum payment equal to one year's salary in the event
of termination of employment without cause or after a change of control. As of
January 1, 1994, the lump sum payments would be $172,150 to Mr. Ogata and
$122,715 to Ms. Gattenio.
The Company entered into a severance agreement with Jeffrey A. Brill,
former Vice President, Secretary and General Counsel of the Company, effective
October 21, 1993. Pursuant to the terms of the agreement, the Company paid Mr.
Brill compensation of $155,429 and it agreed to a 12-month continuation of
certain fringe benefits, valued at $22,995, to which he had been entitled during
his employment. Additionally, the Company forgave a debt of $14,256 incurred by
Mr. Brill (see "Indebtedness of Management") in connection with his 1988
exercise of stock options.
8
<PAGE> 12
EMPLOYEE BENEFIT PLANS
Supplemental Executive Retirement Plan
The Company has a Supplemental Executive Retirement Plan (the "SERP") for
its executive officers and subsidiary presidents designated by the Compensation
and Option Committee. The SERP currently has eleven participants including
Messrs. Cwiertnia, Brill, and Ogata, and Ms. Gattenio. A participant in the SERP
will receive lifetime retirement income in the amount of 60% of the average
earnings (as defined in the SERP) of the participant (reduced by the amount of a
participant's primary social security benefits) multiplied by a percentage based
on the participant's number of years of credited service under the SERP. The
credited service percentage for executive officers is 10% after the sixth year
and increases 10% per year thereafter until it reaches 100% at 15 years of
credited service.
The estimated credited years of service and credited service percentage for
the participating executive officers are as follows: Mr. Cwiertnia -- 14 years
(90%), Mr. Brill -- 15 years (100%), Mr. Ogata -- 8 years (30%), and Ms.
Gattenio -- 8 years (30%). Based on historical compensation levels and continued
employment to age 65, approximate annual retirement benefits would be: Mr.
Cwiertnia -- $263,500, Mr. Brill -- $112,900, Mr. Ogata -- $93,300, and Ms.
Gattenio -- $76,600. The retirement benefit described above assumes payment at
age 65. A reduced retirement benefit is provided to a participant who elects to
receive benefits after age 60 and prior to age 65.
The SERP provides for a death benefit of between two and three times the
average earnings of a participant, and a surviving spouse and minor children
also receive certain benefits under the SERP. The SERP provides for disability
benefits of up to 60% of a participant's average earnings. In addition to the
severance benefits noted in the preceding section, if a participant's employment
with the Company terminates within two years of a change of control of the
Company, a participant is entitled to a cash sum equal to the present value of
full retirement benefits without regard to years of service completed. As of
December 31, 1993, the executive officers would be entitled to approximately the
following: Mr. Cwiertnia -- $1,926,300, Mr. Ogata -- $414,200, and Ms. Gattenio
- -- $326,400.
The following Table IV presents information regarding estimated annual
benefits payable under the SERP upon retirement at age 65 (normal retirement age
under the SERP) in specified compensation and years of service classifications:
TABLE IV
PENSION PLAN TABLE(1)
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------------
REMUNERATION 3 6 9 12 15
- ------------------------------------------- --- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000................................... $ 0 $ 7,500 $ 30,000 $ 52,500 $ 75,000
$150,000................................... $ 0 $ 9,000 $ 36,000 $ 63,000 $ 90,000
$175,000................................... $ 0 $10,500 $ 42,000 $ 73,500 $105,000
$200,000................................... $ 0 $12,000 $ 48,000 $ 84,000 $120,000
$225,000................................... $ 0 $13,500 $ 54,000 $ 94,500 $135,000
$250,000................................... $ 0 $15,000 $ 60,000 $105,000 $150,000
$300,000................................... $ 0 $18,000 $ 72,000 $126,000 $180,000
$400,000................................... $ 0 $24,000 $ 96,000 $168,000 $240,000
$450,000................................... $ 0 $27,000 $108,000 $189,000 $270,000
$500,000................................... $ 0 $30,000 $120,000 $210,000 $300,000
</TABLE>
- ---------------
(1) Estimated benefits shown before reduction for social security benefits.
9
<PAGE> 13
TRANSACTIONS WITH DIRECTORS
Mr. McNaughton received an annual consulting fee through January 1994 of
$125,000, and he received retirement payments of $58,850 per year minus social
security benefits. Additionally, he received certain other fringe benefits
which, in 1993, totalled approximately $19,000. Effective February 1, 1994, Mr.
McNaughton became eligible to receive fees paid to nonemployee directors of the
Company, and he entered into a one-year consulting and noncompete agreement
pursuant to which he will receive a consulting fee of $33,000 ending January 31,
1995. Mr. McNaughton will continue to receive the retirement payments noted
above for the remainder of his life.
See also "Compensation Committee Interlocks and Insider Participation" for
additional information regarding transactions with directors.
INDEBTEDNESS OF MANAGEMENT
Mr. Brill executed a promissory note (the "Note") in the amount of $67,205
in 1988 at market rate of interest in connection with his exercise of Company
stock options. His largest aggregate indebtedness outstanding under the Note
during 1993, including accrued interest, was $92,326. The Company foreclosed on
the Note in October 1993 and recovered stock valued at $52,949, which had served
as security for the Note. Pursuant to the severance agreement discussed above in
the "Severance Benefits" section, the Company forgave $14,256 of the principal
balance and waived any right it had to seek a deficiency on interest accrued on
the Note.
During 1993, the Company forgave $29,798 of an interest-free loan made by
the Company in 1983 to Mr. McNaughton to pay income taxes. The largest aggregate
indebtedness outstanding under the loan during 1993 was $29,798 and, as of
January 31, 1993, the loan balance was fully forgiven.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation of the Company's executive officers are made by
the Compensation and Option Committee of the Board (the "Committee"). Each of
the four members of the Committee is a nonemployee director. All decisions made
by the Committee relating to the compensation of the Company's executive
officers are reviewed by the full Board, except for decisions regarding awards
under the Company's stock option and incentive plans, which are made solely by
the Committee in order for the grants under such plans to satisfy the Securities
Exchange Act Rule 16b-3.
EXECUTIVE OFFICER COMPENSATION POLICY
The Committee's executive compensation policies are designed to provide
appropriate levels of compensation that integrate executive compensation with
the Company's annual performance and long-term goals, reward attainment of
management objectives, and assist the Company in attracting and retaining
qualified executives. The Committee believes a substantial portion of the
executives' compensation should be contingent upon the Company's financial
performance. Accordingly, executives are eligible for annual bonuses that
correspond to varying levels of Company and management performance.
BASE SALARY. The compensation of each executive officer is reviewed
annually with reference to the executive's performance, level of responsibility
and experience to determine whether the current base salary is appropriate. If
significant changes in an executive's salary are contemplated, the Committee
also refers to the median salary range paid to executives with comparable duties
at companies of equal size in the same geographical area who are in the service
industry, and the executive officer's salary is adjusted, if appropriate,
according to salary surveys provided by nationally recognized research
organizations. The base salary of executive officers, other than the Chief
Executive Officer, is ultimately fixed by the Committee after consultation with
the Chief Executive Officer. The base salary of the Chief Executive Officer is
recommended by the Committee and approved by the Board. In 1991 the Board
established base salaries for the Company's executive officers at approximately
the median base compensation level for officers in similar positions based upon
a salary survey and report prepared for the Board by an independent consultant.
The Board, based upon
10
<PAGE> 14
its subjective evaluation of executive officer performance, increased base
salaries for its officers approximately 5% in 1992 and 3% in 1993. In
particular, Mr. Cwiertnia's base salary increased 4% in 1992, and was not
increased in 1993.
CASH BONUS PLAN AND RELATIONSHIP TO COMPANY PERFORMANCE. Prior to the
commencement of each fiscal year, a business plan for the Company is prepared
and submitted to the Committee and the full Board of Directors for approval.
Based upon the approved business plan, the Committee and the Board established a
minimum, a target, and an above target level of net income for the Company. The
Committee established a target bonus for each participating officer at
approximately 60% of each officer's base salary. The bonus is based 70% on
achievement of the net income factors and 30% on achievement of individual
management objectives. For 1993, the entry level bonus was 50% of target bonus
and the maximum bonus was 200% of target bonus. For 1993, no bonuses were paid
to corporate executive officers or to members of senior management of any
subsidiary that did not achieve its planned minimum performance level, except
for small discretionary bonus awards to officers and employees below the
executive officer level, and except for one executive officer who was awarded a
small discretionary bonus.
STOCK OPTION GRANTS. The Committee endorses the position that granting
stock options to the Company's executive officers can be very beneficial to
stockholders because it aligns management's and stockholders' interests in the
enhancement of stockholder values. Accordingly, the Committee has granted stock
options to the executive officers on an annual basis. The number of options
received by the executive officers is fixed by the Committee after consideration
of the recommendations made by Mr. Cwiertnia. The options are exercisable in
four equal annual installments commencing one year from the date of grant and
are granted at an exercise price equal to the average stock market price for the
ten trading days prior to the date of the grant.
OTHER BENEFITS. The executive officers participate in broad-based employee
benefit plans, such as the Company's 401(k) Retirement Plan, in which the
Company provides some matching contributions, and health care insurance plans.
In addition to these plans, the Company provides a supplemental executive
medical plan and other executive benefits. The incremental cost to the Company
of providing these benefits to the executive officers (which is not set forth in
any of the preceding tables) equaled, on average, approximately 5% of their
compensation in 1993. Benefits under these plans are not directly or indirectly
tied to Company performance, other than the Company's 401(k) Retirement Plan,
which may be partially invested at the direction of the participant in the NEC
Stock Fund.
MR. CWIERTNIA'S 1993 COMPENSATION
Mr. Cwiertnia participates in the same executive compensation plans as
those described above for the other executive officers. The methodology for
establishment of Mr. Cwiertnia's salary was discussed above under Base Salary.
As is true of the other executive officers, the Committee's policy is to have a
large portion of Mr. Cwiertnia's potential total compensation based on the
Company's performance. Accordingly, Mr. Cwiertnia's base compensation has been
established below the 50th percentile for chief executive officers of companies
of comparable size. His base salary for 1994 has not been increased at this
time.
Mr. Cwiertnia's target annual bonus for 1993 also did not change from the
prior year. His entire potential annual bonus is based on the objective
performance criteria of net income described above. Since the Company did not
achieve its targeted performance level, he received no cash bonus for 1993.
In February 1993, after considering Mr. Cwiertnia's total compensation
package, the Committee granted him options to purchase 25,000 shares of the
Company's Common Stock, with an exercise price based upon the average stock
market price for the ten days prior to the date of grant. The options granted to
Mr. Cwiertnia become exercisable over the next four years (vesting at the rate
of 25% per year), subject to Mr. Cwiertnia's continued employment with the
Company. This grant demonstrates the Committee's commitment to encouraging
long-term performance and promoting management retention while simultaneously
aligning stockholders' and management's interest in the performance of the
Company's Common Stock.
11
<PAGE> 15
POLICY REGARDING DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code (the "Section") provides that,
for federal income tax purposes, the otherwise allowable deduction for
compensation paid or accrued to a covered employee of a publicly held
corporation is limited to no more than $1 million per year. The Company is not
presently affected by the Section because, for the fiscal year ended December
31, 1993, no executive officer's compensation exceeded $1 million, and the
Company does not believe that any executive officer of the Company will exceed
$1 million for the 1994 fiscal year.
Compensation and Option Committee
William D. Walsh, Chairman
Richard C. Blum
Leonard W. Jaffe
Frederic V. Malek
12
<PAGE> 16
STOCK PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly percentage change in
the Company's cumulative total shareholder return to the Standard & Poor's
("S&P") 500 Composite Index and a Peer Group Index for the five-year period
commencing January 1, 1989 and ending December 31, 1993. There is no published
index for companies involved in education and training, so the Company developed
a peer group comprised of the following education and training companies:
CareerCom Corp., DeVry Inc., Goal Systems, International, and Houghton Mifflin;
however, statistics are no longer available for CareerCom Corp. and Goal
Systems, International, so they have been omitted from the peer group.
The stockholder return assumes $100 invested at the beginning of the period
in Company stock, the S&P 500 Composite Index and the Peer Group Index. The
total return calculation assumes reinvestment of all dividends for the two
indexes. The Company has not paid any dividends on its stock during the time
frame set forth below.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG NATIONAL EDUCATION CORP, S&P 500 INDEX & PEER GROUP INDEX
<TABLE>
<CAPTION>
National S&P 500
Measurement Period Education Composite Peer Group
(Fiscal Year Covered) Corporation Index Index
<S> <C> <C> <C>
Dec. 31, 1988 100.0 100.0 100.0
Dec. 31, 1989 29.6 131.6 91.4
Dec. 31, 1990 18.8 127.5 71.8
Dec. 31, 1991 39.8 166.2 79.6
Dec. 31, 1992 29.0 178.8 102.7
Dec. 31, 1993 26.9 196.7 127.7
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C> <C> <C> <C> <C> <C>
December 31, December 31, December 31, December 31, December 31, December 31,
Symbol Index Description 1988 1989 1990 1991 1992 1993
- ---------- ----------------------------------------------------------------------------------------------------------------
National Education
-/ /- Corporation $100.0 $ 29.6 $ 18.8 $ 39.8 $ 29.0 $ 26.9
-- S&P 500 Composite Index $100.0 $131.6 $127.5 $166.2 $178.8 $196.7
-- Peer Group Index $100.0 $ 91.4 $ 71.8 $ 79.6 $102.7 $127.7
</TABLE>
- --------------------------------------------------------------------------------
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Option Committee is comprised of Messrs. Walsh
(Chairman), Blum, Jaffe and Malek. There are no interlocking relationships
between any executive officers of the Company and any entity whose directors or
executive officers serve on the Company's Board or Compensation and Option
Committee.
Mr. Blum is the Chairman of Richard C. Blum & Associates, Inc. ("RCBA").
Both Mr. Blum and RCBA are the beneficial owners of more than 5% of the
Company's outstanding Common Stock. (See "Common Stock Ownership.") RCBA
provided consulting and investment banking services on behalf of the Company,
including its subsidiaries, on a variety of strategic issues relating to
enhancement of stockholder values. RCBA was actively involved in the public
offering of one of the Company's subsidiaries, Steck-Vaughn Publishing
Corporation, including interviewing underwriters and assisting in drafting
registration statements.
13
<PAGE> 17
During 1993, RCBA received the sum of $393,000 for its consulting and investment
banking services. Under certain circumstances, RCBA may be entitled to receive
an additional $500,000 in 1994 for continuing consulting and investment banking
services.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") and the New York
Stock Exchange. Officers, directors and stockholders owning more than 10% are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the fiscal year
ended December 31, 1993, all filing requirements were complied with applicable
to its officers, directors, and greater than 10% beneficial owners.
PROPOSAL 2:
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Price Waterhouse has been the Company's independent certified public
accountants since 1979 and the Board of Directors has appointed Price Waterhouse
to continue as such for the fiscal year ending December 31, 1994, and to audit
the books and accounts of the Company for that year, subject to ratification of
their appointment by the stockholders at the Annual Meeting. A representative of
Price Waterhouse will be present at the Annual Meeting. The representative will
be able to respond to questions and will have an opportunity to make a statement
if desired.
OTHER MATTERS
The Company's 1993 Annual Report, including audited financial statements,
is being sent with this proxy statement to all stockholders of record as of
March 11, 1994.
STOCKHOLDER PROPOSALS
For stockholder proposals to be considered for inclusion in the proxy
materials for the Company's 1995 Annual Meeting, they must be received by the
Company no later than December 6, 1994. Proposals should be addressed to:
Corporate Secretary, National Education Corporation, 18400 Von Karman Avenue,
Irvine, California 92715.
By Order of the Board of Directors
[Sig]
PHILIP C. MAYNARD
Secretary
Dated: March 28, 1994
14
<PAGE> 18
PROXY
NATIONAL EDUCATION CORPORATION
18400 VON KARMAN AVENUE
IRVINE, CALIFORNIA 92715
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Philip C. Maynard, Christine A. Gattenio and
Keith K. Ogata, and each of them, the undersigned's proxy, with full power of
substitution, to attend the Annual Meeting of Stockholders of National
Education Corporation on Friday, May 13, 1994 at the Irvine Marriott,
18000 Von Karman Avenue, Irvine, California, at 10:00 a.m., local time, and any
and all adjournments or postponements thereof, and to vote all shares of common
stock held by the undersigned as of March 11, 1994 (the record date with
respect to this solicitation) as designated on the reverse side.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
Please mark
/X/ votes as in
this example.
The shares represented by this Proxy will be voted as directed, but when no
direction is given, they will be voted in favor of Items 1 and 2.
1. ELECTION OF DIRECTORS
Nominees: Leonard W. Jaffe, Frederic V. Malek,
William D. Walsh
For Withheld
/ / / /
/ /______________________________________
For all nominees except as noted above
2. AUDITORS
FOR AGAINST ABSTAIN
Approval and ratification of / / / / / /
selection of Price Waterhouse
as the independent auditors
for the fiscal year ending
December 31, 1994.
In their discretion, the proxy holders are authorized
to vote on all such other matters as may properly
come before the meeting or any adjournment thereof.
MARK HERE / /
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
Please sign exactly as your name appears hereon, date, and return
this Proxy promptly in the reply envelope provided. Please correct
your address before returning this Proxy. Persons signing in a
fiduciary capacity should indicate that fact and give their full
title. If a corporation, please sign in full corporate name by the
president or other authorized officer. If a partnership, please sign
in partnership name by authorized person. Joint owners must each
sign personally.
Signature: ________________________________ Date _________________
Signature: ________________________________ Date _________________
PLEASE BE CERTAIN YOU HAVE DATED AND SIGNED THIS PROXY.
<PAGE> 19
PROXY
CONFIDENTIAL VOTING INSTRUCTIONS
NATIONAL EDUCATION CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TO: BANK OF AMERICA NT&SA AS TRUSTEE UNDER THE NATIONAL
EDUCATION CORPORATION RETIREMENT PLAN
I hereby instruct the Trustee to vote in person or by proxy all the
shares of National Education Corporation Common Stock which are credited to my
account at the Annual Meeting of Stockholders of National Education Corporation
to be held at the Irvine Marriott, 18000 Von Karman Avenue, Irvine, California,
at 10:00 a.m., local time, on Friday, May 13, 1994 and at any adjournment
thereof, on the following matters, as provided in the Proxy Statement, and in
its discretion, or the discretion of its proxy, upon any other matter which may
properly come before the meeting or any adjournment thereof.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
Please mark
/X/ votes as in
this example.
The shares represented by this Proxy will be voted as directed, but when no
direction is given, the Trustee will vote the shares in the National Education
Corporation Retirement Plan as directed by the National Education Corporation
Retirement Plan Committee, except as limited by law.
1. ELECTION OF DIRECTORS
Nominees: Leonard W. Jaffe, Frederic V. Malek,
William D. Walsh
For Withheld
/ / / /
/ /______________________________________
For all nominees except as noted above
2. AUDITORS
FOR AGAINST ABSTAIN
Approval and ratification of / / / / / /
selection of Price Waterhouse
as the independent auditors
for the fiscal year ending
December 31, 1994.
MARK HERE / /
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
Please sign exactly as your name appears hereon, date, and return
this Proxy promptly in the reply envelope provided. Please correct
your address before returning this Proxy. Persons signing in a
fiduciary capacity should indicate that fact and give their full
title. Joint owners must each sign personally.
Signature: ________________________________ Date _________________
Signature: ________________________________ Date _________________
PLEASE BE CERTAIN YOU HAVE DATED AND SIGNED THIS PROXY.
