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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 4
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. 4 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 3. IDENTITY AND BACKGROUND
Item 3(b) of the Schedule 14D-9 is hereby amended and supplemented as
follows:
Pursuant to an Agreement dated May 30, 1997, by and between Harcourt and
Steck-Vaughn Publishing Corporation, a Delaware corporation ("Steck-Vaughn"), a
copy of which is filed as Exhibit (c)(9) to this Statement and incorporated
herein by reference (the "Steck-Vaughn Agreement"), Harcourt has agreed that,
until June 4, 2000, Harcourt shall not consummate any Business Combination (as
such term is defined in Section 203 of the Delaware General Corporation Law)
with Steck-Vaughn unless and until each of the following steps have been
complied with: (i) any proposed Business Combination shall be submitted by
Harcourt in writing to the Board of Directors of Steck-Vaughn; (ii) the Board of
Directors of Steck-Vaughn shall appoint a committee of the Board (the
"Committee") comprised solely of Disinterested Directors; (iii) the Committee
may retain such financial and legal advisors as it deems necessary or desirable,
at the sole cost and expense of Steck-Vaughn; (iv) the Business Combination
shall not be consummated unless and until the Committee has affirmatively
recommended its approval by the Board of Directors, finding that the terms of
such Business Combination are fair to the shareholders of Steck-Vaughn, other
than NEC and Harcourt; and (v) the Business Combination is approved by a
majority of Steck-Vaughn's Board of Directors, including a majority of the
Disinterested Directors.
In order to effectuate the foregoing during such three-year period,
Harcourt will cause Steck-Vaughn's Board to at all times have at least three
Disinterested Directors and, subject to their willingness to serve, will invite
the following outside directors (Messrs. Jaffe, Justiz, Klein and Lind) to serve
initially as Disinterested Directors) and, if a Committee is formed, so long as
such individuals remain Disinterested Directors, to constitute a majority of the
members of such Committee.
For purposes of the Steck-Vaughn Agreement, the term "Disinterested
Director" means a member of the Board of Directors of Steck-Vaughn who is not
an officer, director, employee or affiliate of Harcourt, NEC (after the merger
of NEC with the Purchaser) or their respective affiliates, who does not have a
direct or indirect material financial interest in Harcourt, NEC, or its
affiliates, and who would be deemed to be an outside director qualified to
serve on the audit committee of Steck-Vaughn under the rules of the New York
Stock Exchange.
Pursuant to the Steck-Vaughn Agreement, following consummation of the
Offer, if requested by Harcourt, and subject to complying with applicable
requirements of the Commission, Steck-Vaughn and the Board of Directors of
Steck-Vaughn have agreed to promptly take all action necessary, including
increasing the size of the Board of Directors, to cause a number of designees of
Harcourt to be elected to the Steck-Vaughn Board of Directors such that the
Harcourt designees will constitute a majority of the entire Board of Directors
of Steck-Vaughn. In addition, pursuant to the Steck-Vaughn Agreement, following
consummation of the Offer, Steck-Vaughn and the Board of Directors of
Steck-Vaughn have agreed to promptly take all action necessary, including
increasing the size of the Board of Directors, to cause a number of designees
of Harcourt to be elected to the Steck-Vaughn Board of Directors such that the
Harcourt designees will constitute half of the entire Board of Directors of
Steck-Vaughn.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
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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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<TABLE>
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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. ................................... ****
Exhibit (c)(9) Agreement, dated May 30, 1997, between Harcourt General, Inc.
and Steck-Vaughn Publishing Corporation ...................... -
</TABLE>
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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
**** Previously filed as an exhibit to Amendment No. 3 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: June 5, 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)(9)
AGREEMENT
AGREEMENT made this 30th day of May, 1997, by and between STECK-VAUGHN
PUBLISHING CORPORATION ("Steck-Vaughn") and HARCOURT GENERAL, INC. ("Harcourt")
with reference to the following facts:
1. In connection with its merger (the "Merger") with National
Education Corporation ("NEC"), and related tender offer (the "Tender Offer") for
shares of NEC's common stock, Harcourt will become the indirect owner of
approximately 83% of the issued and outstanding common stock of Steck-Vaughn.
2. Harcourt has requested the Board of Directors of Steck-Vaughn
to approve Harcourt's acquisition of such interest in Steck-Vaughn for purposes
of Section 203 of the Delaware General Corporation Law ("Section 203").
3. The Board of Directors of Steck-Vaughn has indicated to
Harcourt that it would not approve such acquisition in the absence of the
agreement by Harcourt not to engage in any Business Combination (as defined in
Section 203) with Steck-Vaughn for a period of three years from the date of the
consummation of the Tender Offer, unless such Business Combination was approved
by the vote of a committee of the Board of Directors comprised exclusively of
Disinterested Directors (as defined) of Steck-Vaughn.
4. In order to induce the Board of Directors of Steck-Vaughn to
grant the aforesaid approval, Harcourt is willing to enter into the agreements
contained herein.
Accordingly, in consideration of the foregoing premises and mutual
agreements contained herein, Harcourt and Steck-Vaughn agree as follows:
1. Approval Of Harcourt's Acquisition Of Interest In Steck-Vaughn.
The Board of Directors of Steck-Vaughn has approved Harcourt's acquisition of
an indirect ownership interest of approximately 83% of Steck-Vaughn's common
stock pursuant to the Tender Offer by reason of the adoption of the resolution
annexed as Exhibit A hereto (the "Resolution"), which Resolution has not been
rescinded or modified.
2. Acquisition Only With Approval Of Disinterested Directors. For a
three-year period ending on the third anniversary date of the consummation of
the Tender Offer, Harcourt shall not consummate any Business Combination with
Steck-Vaughn unless and until each of the following steps have been complied
with:
a. Any proposed Business Combination shall be submitted by
Harcourt in writing to the Board of Directors of Steck-Vaughn;
b. The Board of Directors of Steck-Vaughn shall appoint a
committee of the Board (the "Committee") comprised solely of Disinterested
Directors;
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c. The Committee may retain such financial and legal
advisors as it deems necessary or desirable, at the sole cost and expense of
Steck-Vaughn;
d. The Business Combination shall not be consummated
unless and until the Committee has affirmatively recommended its approval by
the Board of Directors, finding that the terms of such Business Combination are
fair to the shareholders of Steck-Vaughn, other than NEC and Harcourt; and
e. The Business Combination is approved by a majority of
the Steck-Vaughn Board, including a majority of the Disinterested Directors.
In order to effectuate the foregoing during such three year
period, Harcourt will cause Steck-Vaughn's Board to at all times have at least
three Disinterested Directors and, subject to their willingness to serve, will
invite the following outside directors (Messrs. Jaffe, Justiz, Klein and Lind)
to serve initially as Disinterested Directors (which directors shall be
compensated consistent with the compensation of outside directors of comparable
public companies) and, if a Committee is formed, so long as such individuals
remain Disinterested Directors, to constitute a majority of the members of such
Committees.
Harcourt acknowledges and agrees that the directors of
Steck-Vaughn are acting within the scope of their responsibilities as Directors
of Steck-Vaughn in connection with their actions in connection with this
Agreement and adoption of the Resolution and that the Disinterested Directors
of Steck-Vaughn shall be so acting in connection with any service on the
Committee or consideration of any Business Combination and all such directors
shall be entitled to indemnification and advance of expenses to the maximum
extent permitted by applicable Delaware law and, absent a final non-appealable
judicial determination that indemnification is not proper, such Directors shall
be conclusively deemed to have met the applicable standard for such
indemnification. If for any reason whatsoever indemnification by Steck-Vaughn
is held not to be appropriate, Harcourt shall indemnify and hold harmless each
of the Steck-Vaughn directors from and against all cost, loss, liability or
expense (including attorneys' fees) arising out of or relating to their actions
as directors in connection with this Agreement, adoption of the Resolution or
the matters contemplated hereby if such director acted in good faith and in a
manner the director reasonably believed to be in or not opposed to the best
interests of Steck-Vaughn and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such director's conduct was
unlawful.
For purposes of this Agreement, the term "Disinterested
Director" shall mean a member of the Board of Directors of Steck-Vaughn who is
not an officer, director, employee or affiliate of Harcourt, NEC (after the
Merger) or their respective affiliates, who does not have a direct or indirect
material financial interest in Harcourt, NEC, or its affiliates, and who would
be deemed to be an outside director qualified to serve on the audit committee
of the corporation under the rules of the New York Stock Exchange.
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3. Third Party Beneficiaries. This Agreement is for the express
benefit of the shareholders of Steck-Vaughn, other than NEC and for the express
benefit of the Disinterested Directors of Steck-Vaughn, whether or not
currently in office or elected or appointed to office during such three-year
period and may be enforced by any of them.
4. Miscellaneous. The Delaware Chancery Court shall have exclusive
jurisdiction to determine the validity, rights and obligations of the parties
hereto and the beneficiaries hereof. In connection with any such proceeding,
the prevailing party will be entitled to recover attorneys' fees and costs. In
connection with any action to enforce this Agreement by a Disinterested
Director, Steck-Vaughn shall pay all costs incurred by such director, including
attorneys' fees, for prosecuting or defending any such action. Such costs and
fees shall not be recoverable by Steck-Vaughn absent a non-appealable judicial
determination that such director did not act in good faith and in a manner he
or she deemed to be in the best interests of the corporation. In addition, in
connection with any litigation or proceeding, the Disinterested Director shall
be entitled to be paid for their time as a witness or for depositions or trial
preparation on a reasonable per diem basis.
5. Harcourt Directors. Following consummation of the Tender Offer, if
requested by Harcourt, and subject to complying with applicable requirements of
the Securities and Exchange Commission, Steck-Vaughn and the Board of Directors
of Steck-Vaughn shall promptly take all action necessary, including increasing
the size of the Board of Directors, to cause a number of designees of Harcourt
to be elected to the Steck-Vaughn Board of Directors such that the Harcourt
designees will constitute a majority of the entire Board of Directors of
Steck-Vaughn. In addition to the foregoing, following consummation of the
Tender Offer, Steck-Vaughn and the Board of Directors of Steck-Vaughn shall
promptly take all action necessary, including increasing the size of the Board
of Directors, to cause a number of designees of Harcourt to be elected to the
Steck-Vaughn Board of Directors such that the Harcourt designees will
constitute half of the entire Board of Directors of Steck-Vaughn.
6. No Inconsistent Actions. Harcourt agrees not to vote for any
amendment to the certificate of incorporation or bylaws of Harcourt or
Steck-Vaughn which is inconsistent with the terms of this agreement.
7. Specific Performance and Injunctive Relief. The parties hereto
acknowledge that irreparable harm would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms and that the parties shall be entitled to an injunction to
prevent breaches and to enforce specifically
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the terms and provisions hereof. Nothing in this paragraph shall exclude or
limit any other remedies that the parties may be entitled to pursue at law or
in equity.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
HARCOURT GENERAL, INC.
By: /s/ Eric P. Geller
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Its: Senior Vice President and
General Counsel
STECK-VAUGHN PUBLISHING CORPORATION
By: /s/ Philip C. Maynard
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Its: Vice President and Secretary
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