<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 20, 1996
REGISTRATION NO. 333-16111
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
PRE-EFFECTIVE AMENDMENT
NO.1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________
SYLVAN LEARNING SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 52-1492296
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
9135 GUILFORD ROAD
COLUMBIA, MARYLAND 21046
(410) 880-0889
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DOUGLAS L. BECKER
PRESIDENT, CO-CHIEF EXECUTIVE OFFICER AND SECRETARY
SYLVAN LEARNING SYSTEMS, INC.
9135 GUILFORD ROAD
COLUMBIA, MARYLAND 21046
(410) 880-0889
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS, INCLUDING ALL COMMUNICATIONS SENT TO
THE AGENT FOR SERVICE, SHOULD BE SENT TO:
RICHARD C. TILGHMAN, JR.
JILL CANTOR NORD, ESQ.
PIPER & MARBURY
36 SOUTH CHARLES STREET
BALTIMORE, MARYLAND 21201
(410) 539-2530
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED PURSUANT
TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE
CHECK THE FOLLOWING BOX: [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON A
DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933,OTHER THAN SECURITIES OFFERED IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX: [X] _________________________
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING: [ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C) UNDER
THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING: [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX: [ ]
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
TITLE OF PROPOSED MAXIMUM
SHARES AGGREGATE AMOUNT OF
TO BE REGISTERED OFFERING PRICE REGISTRATION FEE
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK, $.01 PAR VALUE $17,196,501 $5,930
===============================================================================
</TABLE>
(1) PAID WITH FILING OF THIS REGISTRATION STATEMENT ON FORM S-3 ON NOVEMBER 14,
1996.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
SUBJECT TO COMPLETION
NOVEMBER 20, 1996
PROSPECTUS
544,486 SHARES
SYLVAN LEARNING SYSTEMS, INC.
COMMON STOCK
___________
The shares of Common Stock of Sylvan Learning Systems, Inc. (the "Company")
covered by this Prospectus are outstanding shares which may be offered and sold
from time to time by the stockholder named herein. See "Selling Stockholder."
The Company will not receive any proceeds from the sale of the shares by the
Selling Stockholder.
The Common Stock is quoted on the Nasdaq National Market under the symbol
"SLVN." On November 19, 1996 the last sale price for the Common Stock as
reported on the Nasdaq National Market was $29.00 per share.
The Selling Stockholder named herein or any transferees or other successors
in interest, directly or through dealers or underwriters to be designated, may
sell the Common Stock from time to time in a single block to a broker-dealer
acting as principal, in one or more transactions on the Nasdaq National Market
or in the over-the-counter market and in negotiated transactions, on terms to be
determined at the time of sale. To the extent required, the specific Common
Stock to be sold, the respective purchase prices and public offering prices, the
names of any such agent, dealer or underwriter, and any applicable commissions
or discounts with respect to a particular offer will be set forth in any
accompanying Prospectus Supplement or, if appropriate, a post-effective
amendment to the Registration Statement of which this Prospectus is a part. See
"Plan of Distribution." By agreement, the Company will pay all the expenses of
the registration of the Common Stock by the Selling Stockholders other than
underwriting discounts and commissions and transfer taxes, if any. Such expenses
to be borne by the Company are estimated at $26,000.
The Selling Stockholders and any broker-dealers, agents or underwriters that
participate with the Selling Stockholders in the distribution of the Common
Stock may be deemed to be "underwriters" within the meaning of the Securities
Act of 1933, as amended (the "1933 Act"), and any commissions received by them
and any profit on the resale of the Common Stock purchased by them may be deemed
underwriting commissions or discounts under the 1933 Act.
___________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
___________
The date of this Prospectus is November , 1996.
- --------------------------------------------------------------------------------
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
- --------------------------------------------------------------------------------
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company with the Commission, including the reports and
other information incorporated by reference into this Prospectus, can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at its
regional offices located at 7 World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can also be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at rates prescribed by the Commission or from the
Commission's Internet web site at http:\\www.sec.gov. The Common Stock of the
Company is quoted on the Nasdaq National Market. Reports, proxy statements and
other information concerning the Company can be inspected at the offices of the
Nasdaq Stock Market, 1735 K Street, Washington, D.C. 20006. This Prospectus
does not contain all the information set forth in the Registration Statement of
which this Prospectus is a part and exhibits relating thereto which the Company
has filed with the Commission. Copies of the information and exhibits are on
file at the offices of the Commission and may be obtained, upon payment of the
fees prescribed by the Commission, may be examined without charge at the offices
of the Commission or through the Commission's Internet web site.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No. 0-
22844) pursuant to the 1934 Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1995 and Quarterly Reports on Form 10-Q for each of the quarters ended March 31,
1996, June 30, 1996, and September 30, 1996.
2. The Company's Current Report on Form 8-K dated September 27, 1996,
relating to the Company's declaration of a three-for-two stock split in the form
of a stock dividend and the adoption of a Shareholder Rights Plan.
3. The Company's Registration Statement on Form 8-A, filed on October 29,
1996, registering the Preferred Share Purchase Rights to be distributed in
connection with the Company's Shareholder Rights Plan.
4. The Company's Current Report on Form 8-K dated November 8, 1996, relating
to the Company investment in Jostens Learning Corporation.
5. The description of Common Stock contained in Item 4 of the Company's
Registration Statement on Form 8-A, filed with the Commission under the 1934
Act; and
6. All other documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the 1934 Act subsequent to the date of filing of the
Registration Statement of which this Prospectus is a part and prior to the
termination of the offering made hereby.
The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the request of any such person, a copy of any or
all of the documents which have been incorporated herein by reference, other
than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into such documents). Requests for such documents
should be directed to Sylvan Learning Systems, Inc., 9135 Guilford Road,
Columbia, Maryland 21046, Attention: Chief Financial Officer, telephone:
(410)880-0889.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
-2-
<PAGE>
THE COMPANY
Sylvan Learning Systems, Inc. (the "Company" or "Sylvan") is a leading
international private provider of educational and computer-based testing
services. The Company delivers a broad array of supplemental and remedial
educational services and computer-based testing through three principal
divisions. Through its Core Educational Services division, the Company designs
and delivers individualized tutorial services to school-age children through its
608 franchised and Company-owned Sylvan Learning Centers in 50 states, five
Canadian provinces, and Hong Kong. The Company's Testing Services division
administers computer-based tests for major corporations, professional
associations and government agencies through its network of centers ("Technology
Centers"), which are located throughout the world. In addition, the Company's
Contract Educational Services division offers educational services to public and
non-public school districts receiving funding under federal and state programs
and provides contract educational and training services on-site to employees of
large corporations. In 1995, total system-wide revenues were approximately
$194.1 million, composed of $132.1 million from core educational services
($115.3 million from franchised Learning Centers and $16.8 million from Company-
owned Learning Centers, product sales and franchise sales fees), $34.6 million
from testing services and $27.4 million from contract educational services.
Sylvan has developed a proprietary program that enables professionals
throughout the Sylvan Learning Center network to deliver consistent, high
quality, individualized tutoring. During the 15 years of Sylvan Learning Center
operations, more than 600,000 students have completed the Sylvan tutorial
program. From the end of 1991, during which year the current management of the
Company assumed control, through 1995, average monthly royalties from franchised
Learning Centers grew approximately 65%, primarily because of a wider array of
services offered and increased student enrollment.
Sylvan began providing computer-based testing services in 1992. The
Company's testing services revenues grew from $3.6 million in 1993 to $34.6
million in 1995. With its acquisition of Drake Prometric, L.P. in December
1995, Sylvan has established a worldwide network of computer-based testing
centers and has the current capacity to deliver more than 1.6 million computer-
based tests annually through 1,218 Technology Centers. The Company serves as
the exclusive commercial provider of computer-based standardized tests currently
administered by Educational Testing Service ("ETS"), the leading educational
testing organization in the United States. ETS develops and administers more
than 9.5 million tests annually. The Company currently offers the Graduate
Record Exam ("GRE"), the registered and practical nurses licensing exam
("NCLEX") and the National Teachers Exam (the "PRAXIS" series). Sylvan expects
to begin offering the computer-based version of the Graduate Management
Admissions Test ("GMAT"), the graduate business school entrance examination, in
October 1997. In addition, the Company entered into a ten-year contract with
ETS to develop test sites and provide computer-based testing internationally,
and initial testing under this contract began in early 1995. ETS has stated its
intention to make computer-based testing available through Sylvan in 170
countries by 1997. The Company also offers computer-based tests for
organizations licensing or certifying pilots, airplane mechanics, life insurance
agents and pathology laboratory technicians and recently began offering
computer-based tests for Novell certification.
Sylvan offers its educational services under contract to public and non-
public school districts receiving funds under federal and state educational
programs. The Company's revenues from contract educational services grew from
$13.6 million to $27.4, or 102%, from 1994 to 1995. The Title I program,
administered by the U.S. Department of Education, allocated approximately $6.6
billion during the 1995-96 school year to local school districts through state
governments to provide supplemental and remedial educational services to
academically and economically disadvantaged students attending public and non-
public schools. As of December 31, 1995, the Company had contracts to provide
remedial educational services to an aggregate of 52 public schools located in
Baltimore and other Maryland school districts, the District of Columbia, Ohio,
Pennsylvania, Texas, Florida, Minnesota, Delaware, New Jersey and, pursuant to a
contract executed in July 1995, Chicago, Illinois. In addition, Sylvan offers
its contract educational services to adults in the corporate workplace through
its PACE subsidiary and its Sylvan-At-Work program.
-3-
<PAGE>
The Company's principal executive offices are located at 9135 Guilford Road,
Columbia, Maryland 21046, telephone (410) 880-0889; and, as of November 22,
1996, will be located at 1000 Lancaster Street, Baltimore, Maryland 21231, (410)
843-8000.
USE OF PROCEEDS
All of the proceeds from the sale of the shares of the Company's Common Stock
offered hereby will be received by the Selling Stockholder. The Company will
receive none of the proceeds from the sale of the shares of Common Stock.
SELLING STOCKHOLDER
The following table sets forth information regarding the beneficial ownership
of the Company's Common Stock by the Selling Stockholder prior to this offering,
the maximum number of shares of Common Stock to be sold by JLC Learning
Corporation (the "Selling Stockholder") hereby, and the beneficial ownership of
the Company's Common Stock by the Selling Stockholder after this offering,
assuming that all shares of Common Stock offered hereby are sold.
<TABLE>
<CAPTION>
Shares Beneficially
Owned Prior to Share to Shares Beneficially
Offering Be Sole In Owned After Offering
---------------------- This ---------------------
Name and Address of Selling Stockholder Number Percent Offering Number Percent
- --------------------------------------- -------- ------- ----------- ------ -------
<S> <C> <C> <C> <C> <C>
JLC Learning Corporation 544,486 2.3% 544,486 -- --
9920 Pacific Heights Boulevard,
San Diego, California 92121
</TABLE>
The Selling Stockholder acquired its shares of Common Stock pursuant to a
Securities Purchase Agreement (the "JLC Agreement"), dated as of November 1,
1996 by and among the Company, the Selling Stockholder, JLC Holdings, Inc.
("Holdings") and Software Systems Corp. Pursuant to the JLC Agreement, the
Company purchased 20,600 shares of Series A Preferred Stock of the Selling
Stockholder and a warrant exercisable for shares of Common Stock of Holdings and
was assigned by the Selling Stockholder all of the shares of Preferred Stock of
Academic Systems Corporation owned by the Selling Stockholder (collectively, the
"JLC Securities") at an aggregate purchase price of $20,600,000. The purchase
price was paid $5,000,000 in cash and 544,486 shares of Common Stock. The
number of shares of Common Stock issued to the Selling Stockholder pursuant to
the JLC Agreement (the "Shares") represents that number of shares of Common
Stock needed to generate net proceeds of $15,600,000 to the Selling Stockholder,
after payment by the Selling Stockholder of sales commissions. The Company
agreed to file a Registration Statement covering all of the Shares as soon as
practicable after consummation of its purchase of the JLC Securities. No
officer, director, employee or affiliate of the Selling Stockholder is employed
by or an affiliate of the Company.
PLAN OF DISTRIBUTION
The Company's Common Stock is quoted on the Nasdaq National Market under the
symbol "SLVN." The Common Stock offered hereby will be sold by the Selling
Stockholder acting as principal for its own account and the Company will not
receive any of the proceeds from the sale by the Selling Stockholder of the
Common Stock offered hereby. Any or all of the shares of Common Stock may be
sold from time to time (i) to or through underwriters or dealers, (ii) directly
to one or more other purchasers, (iii) through agents on a best-efforts basis,
or (iv) through a combination of any such methods of sale.
The shares of the Common Stock offered hereby may be sold from time to time
by the Selling Stockholder, or by transferees or other successors in interest.
Such sales may be made in the over-the-counter market, or otherwise at prices
and at terms then prevailing or at prices related to the then current market
price, or in negotiated transactions. Any or all of the shares of Common Stock
offered hereby may be sold by one or more of the following:P (a) a block trade
in which the broker or dealer so engaged will attempt to sell the Shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal and
resale by such broker or dealer for its account pursuant to this Prospectus;
(c) an exchange distribution in accordance with the rules of such exchange; and
(d) ordinary brokerage transactions and transactions in which the broker
solicits purchasers. In effecting sales, brokers or dealers engaged by the
Selling Stockholder may arrange for other brokers or dealers to participate.
Brokers or dealers will receive commissions or discounts from Selling
Stockholder in amounts to be negotiated prior to the sale. In addition, any
securities covered by this Prospectus which qualify for sale pursuant to Rule
144 may be sold under Rule 144 rather than pursuant to this Prospectus.
The Selling Stockholder and any such underwriters, dealers or agents that
participate in the distribution of the Common Stock may be deemed to be
underwriters within the meaning of the 1933 Act, and any profit on the sale of
the Common Stock by them and any discounts, commissions or concessions received
by them may be deemed to be underwriting discounts and commissions under the
1933 Act. The Commons Stock may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. Such prices will
be determined by the Selling Stockholder and underwriters or dealers. Brokers or
dealers acting in connection with the sale of Common Stock contemplated by this
Prospectus may receive fees or commissions in connection therewith.
At the time a particular offer of Common Stock is made, to the extent
required, a supplement to this Prospectus will be distributed which will
identify and set forth the aggregate number of shares of Common Stock being
offered and the terms of the offering, including the name or names of any
underwriters, dealers or agents, the purchase price paid by any underwriter for
Common Stock purchased from the Selling Stockholder, any discounts, commissions
and other items constituting compensation from the Selling Stockholder and/or
the Company and any discounts, commissions or concessions allowed or reallowed
or paid to dealers, including the proposed selling price to the public. Such
supplement to this Prospectus and, if necessary, a post-effective amendment to
the Registration Statement of which this Prospectus is a part, will be filed
with the Commission to reflect the disclosure of additional information with
respect to the distribution of the Common Stock.
-4-
<PAGE>
The Selling Stockholder will pay all applicable stock transfer taxes,
transfer fees and commissions or discounts. The Company has agreed to bear the
cost of preparing the Registration Statement of which this Prospectus is a part
and all filing fees and legal and accounting expenses in connection with
registration of the shares of Common Stock offered hereby under federal and
state securities laws. The Company has agreed to indemnify the Selling
Stockholder and certain other persons against certain liabilities, inclding
liabilities arising under the 1933 Act.
LEGAL MATTERS
The legality of the shares offered hereby has been passed upon for the
Company by Piper & Marbury L.L.P., Baltimore, Maryland.
EXPERTS
The consolidated financial statements and schedule of Sylvan Learning
Systems, Inc. appearing in the Annual Report of Sylvan Learning Systems, Inc.
(Form 10-K) for the year ended December 31, 1995 have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements have been incorporated herein by reference in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.
-5-
<PAGE>
=========================================================================
No person has been authorized by the Company to give any information
or to make any representations other than those contained in this Prospectus
in connection with the offer contained in this Prospectus, and if given or
made, such information or representations may not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any of the securities in any
jurisdiction in which such offer or solicitation is not authorized, or in
which the person making such offer or solicitation is not qualified to do so,
or to any person to whom it is unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall
create an implication that there has been no change in the affairs of the
Company since the date hereof.
_____________________________
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information .................................... 2
Incorporation of Certain Documents by Reference .......... 2
The Company .............................................. 3
Use of Proceeds .......................................... 4
Selling Stockholder ...................................... 4
Plan of Distribution ..................................... 4
Legal Matters ............................................ 5
Experts .................................................. 5
</TABLE>
544,486 SHARES
SYLVAN LEARNING
SYSTEMS, INC.
COMMON STOCK
PROSPECTUS
NOVEMBER , 1996
================================================================================
<PAGE>
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with this
Registration Statement. The Company will pay all expenses of the offering. All
of such expenses are estimates, other than the filing fees payable to the
Securities and Exchange Commission.
<TABLE>
<S> <C>
Filing Fee-Securities and Exchange Commission.. $ 5,930.00
Nasdaq Listing Fees............................ 10,889.72
Fees and Expenses of Counsel................... 5,000.00
Miscellaneous Expenses......................... 4,180.28
----------
TOTAL $26,000.00
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Charter provides that, to the fullest extent that
limitations on the liability of directors and officers are permitted by the
Maryland General Corporation Law, no director or officer of the Company shall
have any liability to the Company or its stockholders for monetary damages. The
Maryland General Corporation Law provides that a corporation's charter may
include a provision which restricts or limits the liability of its directors or
officers to the corporation or its stockholders for money damages except: (1) to
the extent that it is provided that the person actually received an improper
benefit or profit in money, property or services, for the amount of the benefit
or profit in money, property or services actually received, or (2) to the extent
that a judgment or other final adjudication adverse to the person is entered in
a proceeding based on a finding in the proceeding that the person's action, or
failure to act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding. The Company's
Charter and By-laws provide that the Company shall indemnify and advance
expenses to its currently acting and its former directors to the fullest extent
permitted by the Maryland General Corporation Law and that the Company shall
indemnify and advance expenses to its officers to the same extent as its
directors and to such further extent as is consistent with law.
The Charter and By-laws provides that the Company will indemnify its
directors and officers and may indemnify employees or agents of the Company to
the fullest extent permitted by law against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the Company. In addition, the Company's Charter provides that its
directors and officers will not be liable to stockholders for money damages,
except in limited instances. However, nothing in the Charter or By-laws of the
Company protects or indemnifies a director, officer, employee or agent against
any liability to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. To the extent that a director has been
successful in defense of any proceeding, the Maryland General Corporation Law
provides that he shall be indemnified against reasonable expenses incurred in
connection therewith.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<C> <S>
3.1 Articles of Amendment and Restatement*
3.2 Articles Supplementary for Series A Junior Participating Preferred
Stock
3.2 Amended and Restated By-Laws*
4.1 Specimen Stock Certificate*
4.2 Stockholders' Agreement dated as of January 26, 1993 by and among
the Registrant, Certain Stockholders and the Investors named
therein.*
4.3 Securities Purchase Agreement dated as of November 1, 1996 by and
among the Registrant, JLC Learning Corporation, JLC Holdings, Inc.
Software Systems Corp.**
5.1 Opinion of Piper & Marbury L.L.P. regarding the legality of the
securities being registered.
23.1 Consent of Ernst & Young LLP.
</TABLE>
- ---------------
* Incorporated by reference from the Registrant's Registration
Statement on Form S-1 (No. 33-69558), filed on September 28, 1993.
** To be filed by amendment.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suite or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and
II-2
<PAGE>
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(d) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs in contained in periodic reports filed by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") that are incorporated by reference in the
registration statement.
(2) That for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement or Amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in Columbia, Maryland, on this 20th day of November, 1996.
SYLVAN LEARNING SYSTEMS, INC.
By /s/ R. Christopher Hoehn-Saric
-------------------------------
R. Christopher Hoehn-Saric, Chairman
of the Board and Co-Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the registration statement has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- -----
<S> <C> <C>
Co-Chief Executive Officer and
Chairman of the Board of
/s/ R. Christopher Hoehn-Saric Directors November 20, 1996
- ------------------------------ (Principal Executive Officer)
R. Christopher Hoehn-Saric
Co-Chief Executive Officer
/s/ Douglas L. Becker President, Secretary and November 20, 1996
- ------------------------------ Director
Douglas L. Becker
Chief Financial Officer
/s/ B. Lee McGee (Principal Financial and November 20, 1996
- ------------------------------ Accounting Officer)
B. Lee McGee
/s/ Donald V. Berlanti* Director November 20, 1996
- ------------------------------
Donald V. Berlanti
Director November , 1996
- ------------------------------
R. William Pollock
Director November , 1996
- ------------------------------
Patrick A. Hopf
</TABLE>
II-4
<PAGE>
/s/ J. Phillip Samper* Director November 20, 1996
- --------------------------
J. Phillip Samper
/s/ Nancy A. Cole* Director November 20, 1996
- --------------------------
Nancy A. Cole
/s/ James H. McGuire* Director November 20, 1996
- --------------------------
James H. McGuire
*By /s/ R. Christopher Hoehn-Sarie
------------------------------
Attorney-in-Fact
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
<C> <S> <C>
3.1 Articles of Amendment and Restatement*
3.2 Articles Supplementary for Series A
Junior Participating Preferred Stock***
3.3 Amended and Restated By-Laws*
4.1 Specimen Stock Certificate*
4.2 Stockholders' Agreement dated as of
January 26, 1993 by and among the
Registrant, Certain Stockholders and
the Investors named therein.*
4.3 Securities Purchase Agreement dated as
of November 1, 1996 by and among the
Registrant, JLC Learning Corporation,
JLC Holdings, Inc. and Software
Systems Corp.**
5.1 Opinion of Piper & Marbury L.L.P.***
regarding the legality of the
securities being registered.
23.1 Consent of Ernst & Young LLP.
---------------------------------------
</TABLE>
* Incorporated by reference from the Registrant's Registration
Statement on Form S-1 (No. 33-69558), filed on September 28, 1993.
** Filed previously with Registration Statement on November 14, 1996.
***Incorporated by reference from the Registrant's Current Report on Form 8-K,
dated November 1, 1996 and filed on November 20, 1996.
II-6
<PAGE>
EXHIBIT 23.1
------------
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
--------------------------------------------------
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Pre-Effective Amendment No. 1, Form S-3
No. 333-16111) and related Prospectus of Sylvan Learning Systems, Inc. for the
registration of 544,486 shares of its common stock and to the incorporation by
reference therein of our report dated February 16, 1996, with respect to the
consolidated financial statements and schedule of Sylvan Learning Systems, Inc.
and subsidiaries included in its Annual Report (Form 10-K) for the year ended
December 31, 1995, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Baltimore, MD
November 20, 1996
