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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 3
TO
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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NATIONAL EDUCATION CORPORATION
(Name of Subject Company)
NATIONAL EDUCATION CORPORATION
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
63577110
(CUSIP Number of Class of Securities)
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PHILIP C. MAYNARD, ESQ.
NATIONAL EDUCATION CORPORATION
2601 MAIN STREET, SUITE 700
IRVINE, CALIFORNIA 92614
(714) 474-9400
(Name and address and telephone number of person
authorized to receive notice and communications on
behalf of the person(s) filing statement)
with a copy to:
ALVIN G. SEGEL, ESQ.
IRELL & MANELLA LLP
1800 AVENUE OF THE STARS, SUITE 900
LOS ANGELES, CALIFORNIA 90067-4276
(310) 277-1010
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This Statement, which is being filed by National Education Corporation,
a Delaware corporation (the "Company"), constitutes Amendment No. 3 to the
Solicitation/Recommendation Statement on Schedule 14D-9 ("Schedule 14D-9"),
filed with the Securities and Exchange Commission (the " Commission") on May 2,
1997, with respect to the tender offer by Harcourt General, Inc., a Delaware
corporation ("Harcourt"), and Nick Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of Harcourt, to purchase all outstanding
shares of common stock, par value $0.01 per share (the "Shares"), of the
Company, at $21.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated April 21,
1997, as amended and supplemented by the supplement thereto dated May 14, 1997.
The item numbers and responses thereto below are in accordance with the
requirements of Schedule 14D-9.
Unless otherwise indicated herein, each capitalized term used but
not defined herein shall have the meaning assigned to such term in the
Schedule 14D-9.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 of the Schedule 14D-9 is hereby amended and supplemented to
replace the document previously filed as Exhibit (c)(8) to Amendment No. 2 to
the Schedule 14D-9, with the document attached hereto as Exhibit (c)(8).
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SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
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Exhibit (a)(1) Press Release, dated May 1, 1997, issued by National
Education Corporation ........................................ *
Exhibit (a)(2) President's Letter to the Stockholder, dated May 2, 1997 ..... *
Exhibit (a)(3) Fairness Opinion of BZW, dated May 12, 1997 .................. ***
Exhibit (a)(4) Joint Press Release, dated May 13, 1997, issued by National
Education Corporation and Harcourt General, Inc. ............. **
Exhibit (a)(5) President's Letter to the Stockholder, dated May 14, 1997 .... ***
Exhibit (c)(1) 1986 Stock Option and Incentive Plan, as amended ............. *
Exhibit (c)(2) Amended and Restated 1990 Stock Option and Incentive Plan .... *
Exhibit (c)(3) Amended and Restated 1991 Directors' Stock Option
and Award Plan ............................................... *
Exhibit (c)(4) National Education Corporation Supplemental Executive
Retirement Plan, as amended .................................. *
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SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
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Exhibit (c)(5) Supplemental Benefit Plan for Non-Employee Directors ......... *
Exhibit (c)(6) Executive Employment Agreement between National Education
Corporation and Sam Yau ...................................... *
Exhibit (c)(7) Agreement and Plan of Merger, dated as of May 12, 1997, among
National Education Corporation, Harcourt General, Inc.
and Nick Acquisition Corporation ............................. ***
Exhibit (c)(8) Settlement Agreement, dated May 12, 1997, among National
Education Corporation, Sylvan Learning Systems, Inc.
and Harcourt General, Inc. ................................... __
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* Previously filed as an exhibit to, or incorporated by reference to a
previously filed document in, the Schedule 14D-9
** Previously filed as an exhibit to Amendment No. 1 to the Schedule 14D-9
*** Previously filed as an exhibit to Amendment No. 2 to the Schedule 14D-9
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 20, 1997 NATIONAL EDUCATION CORPORATION
By: /s/ Philip C. Maynard
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Name: Philip C. Maynard
Title: Vice President,
Secretary and General Counsel
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EXHIBIT(C).(8)
National Education Corporation
2601 Main Street
Irvine, California 92714
Sylvan Learning Systems, Inc.
1000 Lancaster Street
Baltimore, Maryland 21202
May 12, 1997
Gentlemen:
By this letter, you agree with us to amend the Agreement and Plan of
Reorganization (the "Sylvan Agreement") dated as of March 12, 1997, by and among
Sylvan Learning Systems, Inc. ("Sylvan") and National Education Corporation
("NEC") as follows. In the event that NEC and Harcourt General, Inc.
("Harcourt") come to an agreement on or before May 16, 1997 for a business
combination between NEC and Harcourt at a price of $21.00 per NEC share (the
"Harcourt Transaction"), NEC and Sylvan agree that the Sylvan Agreement shall
automatically and without any further action required by NEC or Sylvan be
terminated effective immediately prior to such time as Harcourt and NEC enter
into an agreement with respect to the Harcourt Transaction (the "Harcourt
Agreement"). No later than noon Pacific Daylight Time (the "Drop-Dead Time") on
the business day immediately following the execution of the Harcourt Agreement
(the "Drop-Dead Date"), NEC and Harcourt jointly and severally agree that a fee
of $30.0 million (the "Sylvan Fee") will be paid by NEC to Sylvan by wire
transfer in immediately available funds to the account of Sylvan at NationsBank,
N.A. (Account Number: 3933614751); provided, however, that if the Sylvan Fee is
not paid by the Drop-Dead Time, the Sylvan Agreement shall be deemed not to have
been terminated in accordance with the preceding sentence and shall remain in
full force and effect and no breach or right of termination shall have occurred
thereunder as a result of actions taken in compliance with the preceding
sentence. Notwithstanding the foregoing, in the event the Sylvan Fee is paid to
Sylvan following the Drop-Dead Time but on the Drop-Dead Date and by noon
Eastern Daylight Time on the business day immediately following the Drop-Dead
Date Sylvan has not (i) rejected the Sylvan fee in a written notice to NEC and
(ii) irrevocably instructed NationsBank, N.A. to refund the Sylvan fee to NEC,
the Sylvan Agreement shall be deemed to have been terminated in accordance with
the second sentence of this letter agreement. Sylvan shall be entitled to no
further payments from NEC or Harcourt pursuant to the Sylvan Agreement or
otherwise. Upon effectiveness of the termination of the Sylvan Agreement
pursuant to the second sentence hereof, the mutual release set forth as Annex A
hereto shall become effective.
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Please indicate your agreement to the foregoing by executing this
letter in the space below.
Very truly yours,
NATIONAL EDUCATION CORPORATION
By: /s/ KEITH K. OGATA
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Name: Keith K. Ogata
Title: Vice President, Chief
Financial Officer and
Treasurer
Accepted and agreed: Accepted and agreed:
SYLVAN LEARNING SYSTEMS, INC. HARCOURT GENERAL, INC.
By: /s/ DOUGLAS L. BECKER By: /s/ ERIC P. GELLER
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Name: Douglas L. Becker Name: Eric P. Geller
Title: President and Title: Senior Vice President
Co-Chief Executive Officer and General Counsel
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Annex A
MUTUAL RELEASE
WHEREAS, Sylvan Learning Systems, Inc., a Maryland corporation
("Sylvan"), and National Education Corporation, a Delaware corporation ("NEC"),
are parties to an Agreement and Plan of Reorganization by and among Sylvan and
NEC dated as of March 12, 1997 (the "Reorganization Agreement"); and
WHEREAS, Harcourt General, Inc., a Delaware corporation
("Harcourt"), through a wholly-owned subsidiary has commenced a tender offer to
purchase all the outstanding capital stock of NEC (the "Tender Offer"); and
WHEREAS, Sylvan, NEC and Harcourt have entered into a letter
agreement (the "Letter Agreement") dated May 9, 1997; and
WHEREAS, Sylvan and NEC wish to resolve any actual or potential
controversies or disputes between them arising out of or relating to the
Reorganization Agreement if the Reorganization Agreement is terminated in
accordance with the terms of the Letter Agreement:
NOW, THEREFORE,
1. In consideration of the release of Sylvan by NEC and Harcourt
contained herein, (i) Sylvan for itself, its predecessors, successors and
assigns (ii) does hereby remise, release and forever discharge and covenant not
to sue (iii) NEC and Harcourt and the corporate predecessors, successors,
assigns, subsidiaries, affiliates, parents and divisions, as well as the present
and former officers, partners, directors, advisory directors, employees, agents,
stockholders, advisers (including without limitation, financial advisors) and
attorneys of each of NEC and Harcourt and their heirs, executors,
administrators, and representatives (collectively, the "NEC/Harcourt
Releasees"), (iv) of and from all manner of actions, causes of action, suits,
debts, dues, sums of money, accounts, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, damages, judgments, executions,
rights, claims, and demands whatsoever, in law or in equity, whether known or
unknown, suspected or unsuspected, (v) which against the NEC/Harcourt Releasees,
or any of them, Sylvan or Sylvan's predecessors, successors, or assigns or any
of the present or former officers, directors, employees, agents, stockholders,
advisers (including without limitation, financial advisors) or attorneys of the
foregoing, or any of their heirs, executors, administrators, representatives,
successors or assigns, acting in any capacity, ever had or now has or hereafter
can, shall, or may have, (vi) arising out of or relating to the Reorganization
Agreement (including without limitation the negotiation, execution, amendment or
termination of the Reorganization Agreement) or the Tender Offer or the
transactions contemplated thereby (including, without limitation, any claim for
tortious interference with the Reorganization Agreement or the transactions
contemplated
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thereby), (vii) subject to the exception provided in Paragraph 3 of this Mutual
Release.
2. In consideration of the release of NEC and Harcourt by Sylvan
contained herein, (i) NEC and Harcourt each for itself, its predecessors,
successors and assigns (ii) does hereby remise, release and forever discharge
and covenant not to sue (iii) Sylvan and its corporate predecessors, successors,
assigns, subsidiaries, affiliates, parents and divisions, as well as the present
and former officers, partners, directors, advisory directors, employees, agents,
stockholders, advisors (including, without limitation, financial advisors) and
attorneys of the foregoing and their heirs, executors, administrators, and
representatives (collectively, the "Sylvan Releasees"), (iv) of and from all
manner of actions, causes of action, suits, debts, dues, sums of money,
accounts, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, damages, judgements, executions, rights, claims, and
demands whatsoever, in law, or in equity, whether known or unknown, suspected or
unsuspected, (v) which against the Sylvan Releasees, or any of them, NEC or
Harcourt or each's predecessors, successors, or assigns or any of the present or
former officers, directors, employees, agents, stockholders, advisers
(including, without limitation, financial advisors) or attorneys of the
foregoing, or any of their heirs, executors, administrators, representatives,
successors or assigns, acting in any capacity, ever had or now has or hereafter
can, shall, or may have, (vi) arising out of or relating to the Reorganization
Agreement (including without limitation the negotiation, execution, amendment or
termination of the Reorganization Agreement) or the Tender Offer or the
transactions contemplated thereby (including, without limitation, any claim for
tortious interference with the Tender Offer or the Transactions contemplated
thereby).
3. Nothing in this Mutual Release shall affect Sylvan's rights or
claims to payments from NEC (or Harcourt on behalf of NEC) pursuant to the third
sentence of the Letter Agreement.
4. This Mutual Release shall inure to the benefit of and shall be
binding upon the heirs, executors, administrators and successors of Sylvan, the
Sylvan Releasees, NEC and Harcourt and the NEC/Harcourt Releasees.
5. This Mutual Release shall be governed and construed in accordance
with the substantive law of the State of New York without regard to principles
of choice or conflict of laws.
6. The person who enters into and executes this Mutual Release on
behalf of Sylvan warrants and represents that he or she has been duly authorized
by Sylvan to do so. The person who enters into and executes this Mutual Release
on behalf of NEC warrants and represents that he or she has been duly authorized
by NEC to do so. The person who enters into and executes this Mutual Release on
behalf of Harcourt warrants and represents that he or she has been duly
authorized by Harcourt to do so.
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7. This Mutual Release may be modified only by a writing signed by
the Releasees.
8. This Mutual Release shall only be effective after the Merger
Agreement has been terminated in accordance with the terms of the Letter
Agreement; provided, that this Mutual Release shall automatically and without
any further action required by Harcourt, NEC or Sylvan be terminated effective
immediately in the event the Sylvan Fee is not paid by the Drop-Dead Time or is
not paid to Sylvan following the Drop-Dead Time but on the Drop-Dead Date and is
not accepted by Sylvan in accordance with the terms of the Letter Agreement.
9. Capitalized terms which are used herein but not defined herein
are used herein as defined in the Letter Agreement.
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IN WITNESS WHEREOF, Sylvan, NEC and Harcourt have executed this
Mutual Release by their duly authorized officers as of the 12th day of May,
1997.
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SYLVAN LEARNING SYSTEMS, INC. NATIONAL EDUCATION CORPORATION
By: /s/ DOUGLAS L. BECKER By: /s/ KEITH K. OGATA
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Name: Douglas L. Becker Name: Keith K. Ogata
Title: President and Title: Vice President,
Co-Chief Executive Chief Financial Officer
Officer and Treasurer
HARCOURT GENERAL, INC.
By: /s/ ERIC P. GELLER
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Name: Eric P. Geller
Title: Senior Vice President
and General Counsel
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