<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
STECK-VAUGHN PUBLISHING CORPORATION
(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
63577110
(CUSIP Number)
ERIC P. GELLER
HARCOURT GENERAL, INC.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
27 BOYLSTON STREET
CHESTNUT HILL, MASSACHUSETTS 02167
TELEPHONE: (617) 232-8200
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
JUNE 5, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ X ] (with
respect to NEC).
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 2
2
CUSIP No. 63577110
- --------------------------------------------------------------------------------
1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person
Harcourt General, Inc. ("Parent" or "Harcourt"); Tax I.D. 04-1619609
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a) N/A
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds
WC
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
NUMBER OF SHARES 7. Sole Voting Power
BENEFICIALLY 11,900,000 shares of Common Stock (held by National
Education Corporation ("NEC"), a wholly-owned
subsidiary of Parent)
OWNED BY EACH
-----------------------------------------------------------
8. Shared Voting Power
REPORTING PERSON -0-
-----------------------------------------------------------
WITH 9. Sole Dispositive Power
11,900,000 shares of Common Stock (held by NEC)
-----------------------------------------------------------
10. Shared Dispositive Power
-0-
-----------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
<PAGE> 3
3
11,900,000 shares of Common Stock
- --------------------------------------------------------------------------------
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
82.1% (based on 14,498,948 shares outstanding at June 13, 1997, not
including treasury shares or shares issuable upon exercise of options)
- --------------------------------------------------------------------------------
14 Type of Reporting Person
CO
- --------------------------------------------------------------------------------
<PAGE> 4
4
CUSIP No. 63577110
- --------------------------------------------------------------------------------
1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person
National Education Corporation ("NEC"); Tax I.D. 95-2774428
- --------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a) N/A
(b)
- --------------------------------------------------------------------------------
3. SEC Use Only
- --------------------------------------------------------------------------------
4. Source of Funds
N/A
- --------------------------------------------------------------------------------
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6. Citizenship or Place of Organization
Delaware
- --------------------------------------------------------------------------------
NUMBER OF SHARES 7. Sole Voting Power
BENEFICIALLY 11,900,000 shares of Common Stock
OWNED BY EACH
-----------------------------------------------------------
8. Shared Voting Power
REPORTING PERSON -0-
-----------------------------------------------------------
WITH 9. Sole Dispositive Power
11,900,000 shares of Common Stock
-----------------------------------------------------------
10. Shared Dispositive Power
-0-
-----------------------------------------------------------
11. Aggregate Amount Beneficially Owned by Each Reporting Person
11,900,000 shares of Common Stock
- --------------------------------------------------------------------------------
<PAGE> 5
5
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
- --------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)
82.1% (based on 14,498,948 shares outstanding at June 13, 1997, not
including treasury shares or shares issuable upon exercise of options)
- --------------------------------------------------------------------------------
14 Type of Reporting Person
CO
- --------------------------------------------------------------------------------
<PAGE> 6
6
Item 1. Security and Issuer.
This statement relates to the Common Stock, $.01 par value (the "Common
Stock"), of Steck-Vaughn Publishing Corporation, a Delaware corporation
("Steck-Vaughn"), which has its principal executive offices at 4515 Seton Center
Parkway, Suite 300, Austin, Texas 78759.
Item 2. Identity and Background.
This statement is being filed by Harcourt General, Inc., a Delaware
corporation ("Parent" or "Harcourt"), and National Education Corporation, a
Delaware corporation ("NEC") and wholly-owned subsidiary of Parent ("NEC").
Parent and NEC have their principal executive offices at 27 Boylston Street,
Chestnut Hill, Massachusetts 02167.
Harcourt is a growth-oriented operating company with core businesses in
publishing and specialty retailing. Harcourt also provides professional
outplacement services to clients worldwide. NEC's operations include ICS
Learning Systems, the largest provider of distance education in vocational,
academic and professional studies; National Education Training Group, the leader
in information technology interactive multimedia-based learning products; and
approximately 82% ownership of Steck-Vaughn Publishing Corporation, one of the
largest publishers of supplemental education materials.
For information required by this Item 2 of Schedule 13D with respect to
the executive officers and directors of Parent and NEC, reference is made to
Attachment A to this Schedule 13D, which is incorporated herein by reference.
None of Parent or NEC, or, to the best of Parent's and NEC's knowledge,
any of the persons named on Attachment A attached hereto, has during the last
five years: (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors); or (ii) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Harcourt's ownership of the Common Stock reported hereby did not arise
as a result of the direct purchase of such Common Stock.
On April 21, 1997, Harcourt, through a wholly-owned subsidiary, Nick
Acquisition Corporation, a Delaware corporation ("Nick"), commenced a tender
offer (the "Offer") to acquire all of the outstanding shares (the "Shares") of
Common Stock of NEC. The initial per Share consideration offered was $19.50. On
May 12, 1997, Harcourt and Nick entered into an Agreement and Plan of Merger
with NEC (the "Merger Agreement") pursuant to which it agreed to increase the
per Share consideration of the Offer to $21.00, and agreed to lend $30 million
to NEC to pay a $30 million fee to Sylvan Learning Systems, Inc.
<PAGE> 7
7
("Sylvan") in connection with the termination of a previously entered into
merger agreement between NEC and Sylvan. On June 4, 1997, the Offer terminated,
and on June 5, 1997, Harcourt acquired approximately 34.4 million Shares
representing approximately 95.6% of the issued and outstanding Shares. Harcourt
promptly paid approximately $723.4 million for those Shares. On June 10, 1997,
pursuant to the Merger Agreement, Nick was merged with and into NEC (the
"Merger"), and the balance of the Shares not previously purchased in the Offer
were converted into the right to receive $21.00 in cash. As a result of the
consummation of the Offer and the Merger, NEC became a wholly-owned subsidiary
of Harcourt, and Harcourt became the indirect beneficial owner of 11,900,000
shares of Common Stock, representing approximately 82% of the outstanding
shares of Common Stock. In addition, pursuant to the Merger Agreement effective
as of June 5, 1997, the Board of Directors of NEC was reconstituted effective as
of June 5, 1997 so that individuals designated by Harcourt now comprise the
entire Board of Directors of NEC.
Harcourt used available cash and equivalents and short-term
investments, as well as borrowings under its existing $400 million revolving
credit facility (the "Credit Agreement"), to fund payments of approximately $850
million (including estimated fees and expenses) in connection with the
transactions referenced in the immediately preceding paragraph. The Credit
Agreement is dated as of December 16, 1994 among Harcourt, Morgan Guaranty Trust
Company of New York, as documentation agent, The First National Bank of Boston,
as administrative agent, The Bank of Nova Scotia and National Westminster Bank
Plc, as co-agents, and a group of 13 lending parties thereto.
Item 4. Purpose of Transaction.
As described under Item 3 above, Harcourt acquired the Common Stock
reported hereby indirectly upon the acquisition of all the outstanding shares of
NEC common stock pursuant to the Offer and the Merger.
4(a), (b), (e): Prior to acquiring control of Steck-Vaughn, Harcourt
entered into an agreement with Steck-Vaughn dated May 30, 1997 (the "Harcourt
Agreement") pursuant to which Harcourt agreed that until June 4, 2000, it would
not consummate any business combination (as defined in Section 203 of the
Delaware General Corporation Law) with Steck-Vaughn unless and until (i) the
proposed business combination has been submitted by Harcourt in writing to the
Board of Directors of Steck-Vaughn, (ii) a committee of the Board of Directors
of Steck-Vaughn comprised solely of disinterested directors (the "Committee")
affirmatively recommends its approval of such business combination, finding that
the terms thereof are fair to the shareholders of Steck-Vaughn other than NEC
and Harcourt and (iii) the business combination is approved by a majority of the
Steck-Vaughn Board of Directors, including a majority of the disinterested
directors.
4(d): Pursuant to the Merger Agreement, and from time to time
thereafter, NEC agreed to use its best efforts to cause persons designated by
Harcourt to constitute the same percentage of the Board of Directors of
Steck-Vaughn and each committee thereof as is on the Board of Directors of NEC.
Harcourt designees currently comprise the entire Board of Directors of NEC.
<PAGE> 8
8
Pursuant to the Harcourt Agreement, Harcourt has the right, subject to
complying with applicable requirements of the Securities and Exchange
Commission, to cause Steck-Vaughn to cause a number of designees of Harcourt to
be elected to the Board of Directors of Steck-Vaughn such that the Harcourt
designees will constitute a majority of the entire Board of Directors of
Steck-Vaughn; and prior to such time, to cause a number of designees of Harcourt
to be elected such that they will constitute half of the entire Board of
Directors of Steck-Vaughn. As of the date hereof, Harcourt has not exercised
such rights.
In order to effectuate the provisions of the Harcourt Agreement, until
June 4, 2000, Harcourt will cause Steck-Vaughn's Board to at all times have at
least three Disinterested Directors and, subject to their willingness to serve,
has invited the following outside directors (Messrs. Jaffe, Justiz, Klein and
Lind) to serve initially as Disinterested Directors and, if a Committee is
formed, as long as such individuals remain Disinterested Directors, to
constitute a majority of the members of such Committee.
For purposes of the Harcourt 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) 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 New York Stock Exchange.
Harcourt currently intends, subject to the requirements of the Harcourt
Agreement, to seek to have NEC or a wholly-owned subsidiary of NEC consummate a
merger or similar business combination with Steck-Vaughn. There can be no
assurance that such business combination will be completed. If for any reason
such business combination is not consummated, Harcourt and NEC reserve the
right, subject to the provisions of the Harcourt Agreement, to acquire
additional shares of Common Stock through private purchases, market
transactions, tender or exchange offers or otherwise.
Except as set forth above or in any other item hereof, Parent does not
have any present plans or proposals that would relate to or result in any of the
actions required to be described in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) As of June 4, 1997, Parent became the indirect beneficial owner of
11,900,000 shares of Common Stock owned by NEC and, as a result, Parent is the
beneficial owner of approximately 82% of the outstanding Common Stock (based
on the number of shares outstanding on June 13, 1997, not including treasury
shares or shares issuable upon exercise of options). Except as set forth herein,
none of Parent or NEC or, to the best of their knowledge, any of the persons
named on Attachment A attached hereto, beneficially owns any Common Stock.
(b) Parent has the sole power to vote all of the Common Stock it
beneficially owns indirectly through NEC.
(c) Except as set forth herein, no transactions were effected in the
Common Stock during the past sixty (60) days by Parent or NEC nor, to the best
of their knowledge, any person listed in Attachment A attached hereto that would
require disclosure pursuant to Item 5(c).
<PAGE> 9
9
(d) None of Parent or NEC or, to the best of their knowledge, any
of the persons named on Attachment A attached hereto, knows of any other person
who has the right to receive or the power to direct the receipt of dividends
from, or the proceeds from the sale of, any Common Stock beneficially owned by
Parent or other than wholly-owned subsidiaries of Parent.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
The information provided under Items 3 and 4 is incorporated
herein by reference.
There are no other contracts, arrangements, understandings or
relationships (legal or otherwise) among the persons named in Item 2 or between
such persons or any person with respect to any securities of Steck-Vaughn except
as referred to or described in this Schedule 13D.
Item 7. Material to be Filed as Exhibits.
Exhibit 2.1 Agreement and Plan of Merger among Harcourt General, Inc., Nick
Acquisition Corporation and National Education Corporation, dated
as of May 12, 1997, incorporated herein by reference to Exhibit
11(c)(1) to Amendment No. 3 to Schedule 14D-1 of Harcourt
General, Inc., dated May 14, 1997.
Exhibit 2.2 Credit Agreement dated as of December 16, 1994 among Harcourt,
the banks listed therein, Morgan Guaranty Trust Company of New
York, as documentation agent, The First National Bank of Boston,
as administrative agent, The Bank of Nova Scotia and National
Westminster Bank Plc., as co-agents, incorporated herein by
reference to Exhibit 11(b) to Schedule 14D-1 of Harcourt General,
Inc., dated April 21, 1997.
Exhibit 99.1 Agreement dated May 30, 1997 between Harcourt General, Inc. and
Steck-Vaughn Publishing Corporation, incorporated herein by
reference to Exhibit 11(a)(21) to Amendment No. 5 to Schedule
14D-1 of Harcourt General, Inc., dated June 5, 1997.
Exhibit 99.2 Joint Filing Agreement dated June 16, 1997 between Harcourt
General, Inc. and National Education Corporation.
<PAGE> 10
10
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 16, 1997
HARCOURT GENERAL, INC.
By: /s/ PAUL F. GIBBONS
------------------------------------
Paul F. Gibbons
Vice President and Treasurer
NATIONAL EDUCATION CORPORATION
By: /s/ PAUL F. GIBBONS
------------------------------------
Paul F. Gibbons
Vice President and Treasurer
<PAGE> 11
Attachment A
Executive Officers and Directors of Harcourt General, Inc.
The names and titles of the executive officers and the names
of the directors of Harcourt and their business addresses and principal
occupations are set forth below. If no address is given, the director's or
executive officer's business address is that of Harcourt. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
Harcourt and each individual is a United States citizen.
<TABLE>
<CAPTION>
Executive Officers Position; Present Principal Occupation
- ------------------ --------------------------------------
<S> <C>
Richard A. Smith Chairman and Chief Executive Officer
Brian J. Knez President and Co-Chief Operating Officer
Robert A. Smith President and Co-Chief Operating Officer
John R. Cook Senior Vice President and Chief Financial
Officer
Eric P. Geller Senior Vice President, General Counsel and
Secretary
Peter Farwell Vice President -- Corporate Relations
Paul F. Gibbons Vice President and Treasurer
Gerald T. Hughes Vice President -- Human Resources
Michael F. Panutich Vice President -- General Auditor
Stephen C. Richards Vice President and Controller
</TABLE>
<TABLE>
<CAPTION>
Directors Position; Present Principal Occupation
- --------- --------------------------------------
<S> <C>
William F. Connell Chairman and Chief Executive Officer of
Connell Limited Partnership Connell Limited Partnership
One International Place
Boston, MA 02110
Gary L. Countryman Chairman and Chief Executive Officer of
Liberty Mutual Insurance Co. Liberty Mutual Insurance Company and
175 Berkeley Street Liberty Mutual Fire Insurance Company
Boston, MA 02117
Jack M. Greenberg Chairman of McDonald's USA
McDonald's USA
Kroc Drive
Oak Brook, IL 60521
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
Directors Position; Present Principal Occupation
- --------- --------------------------------------
<S> <C>
Brian J. Knez Listed above
Jeffrey R. Lurie Owner and Chief Executive Officer,
Philadelphia Eagles Philadelphia Eagles, Inc., a National
3501 South Broad Street Football League Franchise
Philadelphia, PA 19148
Lynn Morley Martin Davee Chair, J.L. Kellogg School of
Deloitte & Touche Management, Northwestern University
2 Prudential Plaza
180 North Stetson
Chicago, IL 60601
Maurice Segall Senior Lecturer, Massachusetts Institute
MIT-Sloan School of of Technology
Management - E52 - 504
50 Memorial Drive
Cambridge, MA 02142
Richard A. Smith Listed above
Robert A. Smith Listed above
Paula Stern President of The Stern Group, Inc., an
The Stern Group, Inc. economic analysis and trade advisory firm
3314 Ross Place, N.W.
Washington, DC 20008
Hugo Uyterhoeven Timken Professor of Business
Harvard Business School Administration, Graduate School of
Morgan Hall 479 Business Administration, Harvard
Soldiers Field Road University
Boston, MA 02163
Clifton R. Wharton, Jr. Retired Chairman and Chief Executive
TIAA/CREF Officer of Teachers Insurance and Annuity
730 Third Avenue Association - College Retirement Equities
New York, NY 10017 Fund
</TABLE>
Executive Officers and Directors of National Education Corporation
The names and titles of the executive officers and the names
of the directors of NEC and their business addresses and principal occupations
are set forth below. If no address is given, the director's or executive
officer's business address is that of Harcourt. Unless otherwise indicated, each
occupation set forth opposite an individual's name refers to NEC and each
individual is a United States citizen.
<TABLE>
Executive Officers Position; Present Principal Occupation
- ------------------ --------------------------------------
<S> <C>
Brian J. Knez President and Chief Executive Officer
Richard A. Smith Vice President
Robert A. Smith Vice President
John R. Cook Vice President
Eric P. Geller Vice President and Secretary
Michael Banks Vice President
Kathleen Bursley Vice President and Assistant Secretary
</TABLE>
A-2
<PAGE> 13
<TABLE>
<CAPTION>
Executive Officers Position; Present Principal Occupation
- ------------------ --------------------------------------
<S> <C>
John R. Dilworth Vice President
Paul F. Gibbons Vice President and Treasurer
James P. Levy Vice President
George W. Nelson Vice President
Stephen C. Richards Vice President and Controller
Robert R. Simons Vice President
Ernest H. Urquhart Vice President
Philip C. Maynard Vice President and Assistant Secretary
</TABLE>
<TABLE>
<CAPTION>
Directors Position; Present Principal Occupation
- --------- --------------------------------------
<S> <C>
Brian J. Knez Listed above
Richard A. Smith Listed Above
Robert A. Smith Listed Above
================================================================================
</TABLE>
A-3
<PAGE> 14
Exhibit Index
Exhibit 2.1 Agreement and Plan of Merger among Harcourt General, Inc.,
Nick Acquisition Corporation and National Education
Corporation, dated as of May 12, 1997, incorporated herein by
reference to Exhibit 11(c)(1) to Amendment No. 3 to Schedule
14D-1 of Harcourt General, Inc., dated May 14, 1997.
Exhibit 2.2 Credit Agreement dated as of December 16, 1994 among Harcourt,
the banks listed therein, Morgan Guaranty Trust Company of New
York, as documentation agent, The First National Bank of
Boston, as administrative agent, The Bank of Nova Scotia and
National Westminster Bank Plc., as co-agents, incorporated
herein by reference to Exhibit 11(b) to Schedule 14D-1 of
Harcourt General, Inc., dated April 21, 1997.
Exhibit 99.1 Agreement dated May 30, 1997 between Harcourt General, Inc.
and Steck-Vaughn Publishing Corporation, incorporated herein
by reference to Exhibit 11(a)(21) to Amendment No. 5 to
Schedule 14D-1 of Harcourt General, Inc., dated June 5, 1997.
Exhibit 99.2 Joint Filing Agreement dated June 16, 1997 between Harcourt
General, Inc. and National Education Corporation.
<PAGE> 1
Exhibit 99.2
Joint Filing Agreement
The undersigned each hereby agree that the Schedule 13D dated
June 16, 1997 of Harcourt General, Inc. and National Education Corporation
relating to the Common Stock of Steck-Vaughn Publishing Corporation, a Delaware
corporation, and each subsequent amendment to each such filing is to be filed
jointly on behalf of each of them pursuant to Rule 13d-1(f)(1) under the
Securities Exchange Act of 1934, as amended.
Dated: June 16, 1997
HARCOURT GENERAL, INC.
By: /s/ PAUL F. GIBBONS
------------------------------------
Paul F. Gibbons
Vice President and Treasurer
NATIONAL EDUCATION CORPORATION
By: /s/ PAUL F. GIBBONS
------------------------------------
Paul F. Gibbons
Vice President and Treasurer
