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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
(Rule 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)*
Sylvan Learning Systems, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
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(CUSIP Number)
Christopher C. Cleveland, Esq.
Briggs and Morgan, P.A.
2400 IDS Center
Minneapolis, MN 55402
(612) 334-8400
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 5, 1997
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(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 [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover 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).
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SCHEDULE 13D
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CUSIP NO. PAGE 2 OF 8 PAGES
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Nasser J. Kazeminy
###-##-####
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4
00
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
U.S.A.
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SOLE VOTING POWER
7
NUMBER OF
1,941,881/1/
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY None
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EACH SOLE DISPOSITIVE POWER
9
REPORTING
1,941,881/2/
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
None
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
1,941,881
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
8.2%/3/
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TYPE OF REPORTING PERSON*
14
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
_____________________
1 The power of the Reporting Person to vote 503,529 of these shares
is subject to the Voting Trust Agreement (see Item 5 below).
971,632 of these shares are held by the 1995 Revocable Trust of
Nasser Kazeminy.
2 The power of the Reporting Person to dispose of 975,000 of these
shares is subject to the Escrow Agreement (see Item 4 below) and
the power to dispose of any of the shares beneficially owned by
the Reporting Person is subject to the Stockholders' Agreement
(see Item 8 below). 971,632 of these shares are held by the 1995
Revocable Trust of Nasser Kazeminy.
3 Assumes 23,579,707 shares of Common Stock outstanding, as
represented by Sylvan Learning Systems, Inc., in its Form 10-Q
for the quarter ended March 31, 1997.
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Page 3 of 8
STATEMENT PURSUANT TO RULE 13d-1
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
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Item 1. Security and Issuer
This Schedule 13D relates to Common Stock, par value $.01 per share
(the "Common Stock"), of Sylvan Learning Systems, Inc., a Maryland corporation
("Sylvan"). The principal executive offices of Sylvan are located at 1000
Lancaster Street, Baltimore, Maryland 21202.
Item 2. Identity and Background
(a) None: Nasser J. Kazeminy
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(b) Residence:
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(c) Principal Occupation:
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Business Address: NJK Holding Corporation
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7803 Glenroy Road, Suite 300
Bloomington, MN 55439
(d) Convictions: None
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(e) Civil Proceedings: None
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(f) Citizenship: U.S.A.
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Item 3. Source and Amount of Funds or Other Consideration
On July 28, 1995, the Reporting Person entered into an Agreement and
Plan of Reorganization (the "Agreement and Plan of Reorganization") with ITS
General, Inc., a Delaware corporation ("ITS"), United School Services of
America, Inc., a Delaware corporation ("USSA"), NJK Associates Corp., a
Minnesota corporation ("NJK"), Office Overload, Inc., a Delaware corporation
("OOI"), Drake Prometric, L.P., a Delaware limited partnership (the
"Partnership"), R. William Pollock ("Mr. Pollock"), Drake International B.V., a
company organized under the laws of the Netherlands ("Drake International"),
Drake Personnel (New Zealand) Limited, a company organized under the laws of the
Bahamas, Sylvan, and SLS Testing Subsidiary, Inc., a Delaware corporation and
wholly-owned subsidiary of Sylvan ("Merger Sub"). The closing of the
transactions contemplated by the Agreement and Plan of Reorganization took place
on December 13, 1995 (the "Closing Date").
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Pursuant to the Agreement and Plan of Reorganization, Sylvan acquired
100% of the partnership interests of the Partnership from Mr. Pollock and the
Reporting Person through a series of mergers and a stock exchange with the
corporate partners of the Partnership. The Reporting Person owned NJK, which was
both a limited partner of the Partnership and a 30% stockholder of the
Partnership's sole general partner, ITS. The Reporting Person also owned USSA, a
limited partner of the Partnership. Together, NJK and USSA held 38.7% of the
limited partnership interests in the Partnership. Therefore, including his
interest in ITS, the Reporting Person had a 39% ownership interest in the
Partnership .
Pursuant to the Agreement and Plan of Reorganization, NJK and USSA
were merged into Merger Sub. At the Closing Date, as a result of the merger,
Sylvan, through Merger Sub, acquired the Reporting Person's 39% ownership
interest in the Partnership. At the Closing Date, the Reporting Person
surrendered to Sylvan certificates representing all of the outstanding shares of
capital stock of NJK and USSA, and those shares were cancelled. In consideration
therefor, the Reporting Person received $7,800,000 in cash (or Sylvan Promissory
Notes) and 2,228,571 (i) shares of Sylvan's Common Stock (the "Initial Shares").
Of the Initial Shares, 1,253,571 shares were delivered to the Reporting Person
at the Closing Date, while the 975,000 balance of the Initial Shares was placed
into escrow accounts pursuant to an escrow arrangement provided for in the
Agreement and plan of Reorganization and in an Escrow Agreement (see below). The
Reporting Person also was granted the right to receive an additional cash
payment provided for in the Agreement and Plan of Reorganization and in a
Contingent Participation Rights Agreement (see below).
Item 4. Purpose of Transaction
The Reporting Person entered into the Agreement and Plan of
Reorganization and thereby acquired the shares to which this Statement on
Schedule 13D relates as an inducement to enter into and consummate the
transactions contemplated by and described in the Agreement and Plan of
Reorganization.
As described in Item 3, the Reporting Person received 2,228,571
Initial Shares pursuant to the merger of NJK and USSA into Merger Sub. However,
pursuant to the Agreement and Plan of Reorganization, the Reporting Person,
along with Mr. Pollock, who also received shares of Common Stock pursuant to
Sylvan's acquisition of the Partnership, has agreed to refund to Sylvan cash
equal to, or return to Sylvan Initial Shares having a value (based on a $21 per
share price, pre split) equal to, the total dollar amount of the Partnership's
accounts receivable on November 30, 1995 which have not been collected within
180 days thereafter (less any related reserve for uncollectible receivables).
Pursuant to the Agreement and Plan of Reorganization, and as more
specifically described in an Escrow Agreement dated as of December 13, 1995 (the
"Escrow Agreement"), among the Reporting Person, Mr. Pollock, Drake
International, Drake Personnel, Sylvan and State Street Bank & Trust Company, as
Escrow Agent, 696,429 of the Reporting Person's Initial Shares were placed into
an escrow account (the "Revenue Escrow Shares"), with release to the Reporting
Person scheduled to occur at specified times between 1997 and 1999 only if
certain targets related to specified revenues of the combined computer-based
testing business of Sylvan and the Partnership are achieved.
Also pursuant to the Agreement and Plan of Reorganization and the
Escrow Agreement, 278,571 of the Reporting Person's Initial Shares were placed
into an escrow account (the "Indemnity Escrow Shares"), with release to the
Reporting Person scheduled to occur at the time the Contingent Payment (as
defined below) is made, to the extent that Sylvan has not been subjected to
losses as to which the Reporting Person is required to indemnify Sylvan.
The Reporting Person is entitled, pursuant to a Contingent
Participation Rights Agreement dated as of December 13, 1995 (the "Contingent
Participation Rights Agreement"), among the Reporting Person, Mr.
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(i) All share numbers have been adjusted to reflect a three-for-two stock split
declared and paid by Sylvan subsequent to the issuance of the Initial Shares.
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Pollack, Drake International, Drake Personnel and Sylvan, to receive a payment
(the "Contingent Payment") equal to 39% of the amount which is equal to twice
the amount by which specified revenues of the combined computer-based testing
business of the Partnership and Sylvan exceed a 20% annual compound growth rate
between 1996 and 1998 (or 1999, at the Reporting Person and Mr. Pollock's
option). In no event, however, can the Contingent Payment to the Reporting
Person exceed $15.6 million. The Contingent Payment, if earned, is payable
12.5% in cash and the balance in shares of Common Stock (the "Contingent
Shares") or cash, at Sylvan's option. The value of the Contingent Shares will
be determined by using the average per share closing price of the Sylvan Common
Stock for the 15 days prior and subsequent to December 31, 1998 or 1999, as
applicable.
Pursuant to the Agreement and Plan of Reorganization, the Reporting
Person was granted the right to nominate himself or another individual
acceptable to Sylvan for election to Sylvan's Board of Directors. In order to
comply with this provision of the Agreement and Plan of Reorganization, Sylvan's
Board was expanded prior to the Closing Date to include two new members,
bringing the total number of Sylvan Board members to nine. The Reporting Person
has selected James H. McGuire as his nominee to the Sylvan Board. On December 8,
1995, the Sylvan stockholders elected Mr. McGuire as a Class II director, with a
term expiring at Sylvan's 1998 Annual Meeting of Stockholders. Additionally,
pursuant to the Agreement and Plan of Reorganization, the Reporting Person may
nominate himself or another person acceptable to Sylvan as a Class II director
at Sylvan's 1998 Annual Meeting of Stockholders. Sylvan has agreed to use its
best efforts to cause such nominees to be elected to the Sylvan Board at the
1998 Annual Meeting of Stockholders.
Item 5. Interest in Securities of the Issuer
(a) The aggregate number of shares of Common Stock beneficially owned
by the Reporting Person is 1,941,881 shares, or approximately 8.2% of the class
of such securities. 971,362 of these shares are held by the 1995 Revocable Trust
of Nasser J. Kazeminy. Beneficial ownership of such shares was acquired as
described in Item 3 and Item 4.
(b) The number of shares of Common Stock as to which there is sole
power to vote or to direct the vote, shared power to vote or to direct the vote,
sole power to dispose or direct the disposition, or shared power to dispose or
direct the disposition for the Reporting Person is set forth in the cover page
and such information is incorporated herein by reference.
Pursuant to a Voting Trust Agreement dated as of December 13, 1995
(the "Voting Trust Agreement"), among the Reporting Person, Sylvan, Drake
International, Drake Personnel, Mr. Pollock, Douglas L. Becker, as Voting
Trustee and R. Christopher Hoehn-Saric, as Voting Trustee, the Reporting Person
has agreed that if at any time during the ten years from the Closing Date, the
Reporting person and Mr. Pollock (and their affiliates) (the "Drake
Stockholders") together own more than 20% of the total issued and outstanding
shares of the voting securities of Sylvan, the Reporting Person must transfer or
cause his affiliates to transfer that number of shares of Common Stock owned by
the Reporting Person together with his affiliates in excess of 7.8% of the total
issued and outstanding shares of Sylvan voting securities to the Voting
Trustees. As of the date hereof, in order to comply with the provisions of the
Voting Trust Agreement, the Reporting Person has placed 503,529 of his Initial
Shares into a voting trust pursuant to the Voting Trust Agreement. If an event
occurs (such as the issuance of additional Common Stock) which reduces the
percentage of Sylvan voting securities owned by the Drake Stockholders, the
Voting Trustee will release the appropriate number of shares to the Reporting
Person in accordance with the terms of the Voting Trust Agreement.
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(c) On June 5, 1997, the Reporting Person disposed of 281,895 shares
of Common Stock. There have been no other reportable transactions with respect
to the Common Stock within the last 60 days by the Reporting Person.
(d) Pursuant to the Escrow Agreement, any stock dividends or stock
issued as a result of a stock split received by the Escrow Agent will be added
to and become part of the total shares subject to the Escrow Agreement. All cash
dividends in respect of the shares being pursuant to the Escrow Agreement are to
be distributed to the Escrow Agent. The Escrow Agent will then distribute to the
Reporting Person such amount as is determined in accordance with the terms of
the Escrow Agreement. The balance of any cash dividends not distributed by the
Escrow Agent to the Reporting Person or to any other person entitled to receive
such payments will be held by the Escrow Agent in an interest-bearing deposit
account and such portion as to which the Reporting Person is entitled will be
paid to the Reporting Person in accordance with the terms of the Escrow
Agreement.
Other than pursuant to the terms of the Escrow Agreement, no person
other than the Reporting Person and the trust identified in Item 5(a) has the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the shares of Common Stock being reported on this
Schedule 13D.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to the Securities of the Issuer
The responses to Item 2, Item 3 and Item 4 and the Agreement and Plan
of Reorganization, the Escrow Agreement, the Contingent Participation Rights
Agreement and the Voting Trust Agreement, attached to the Reporting Person's
initial filing of this Schedule 13D dated December 27, 1995 as Exhibits A, B, C
and D, respectively, are incorporated herein by reference.
In addition, pursuant to a Stockholders' Agreement dated as of July
28, 1995 (the "Stockholders' Agreement"), attached to the Reporting Person's
initial filing of this Schedule 13D dated December 27, 1995 as Exhibit E and
incorporation herein by reference, among the Reporting Person, Sylvan, Mr.
Pollock, Drake International and Drake Personnel, the Reporting Person has
agreed that until July 28, 2005, neither be nor anyone affiliated with him will:
(i) acquire directly or indirectly any voting securities of Sylvan (other than
shares to which this Statement on Schedule 13D relates or any Contingent Shares
(collectively, the "Acquisition Shares")); (ii) solicit votes or proxies with
respect to or direct the voting of any Sylvan voting securities (other than the
Acquisition Shares) or participate in any manner in any contest for the election
of a Sylvan director; (iii) deposit any Sylvan voting securities in any voting
trust other than pursuant to the Voting Trust Agreement; or (iv) take any action
alone or in conjunction with others to effect a change of control of Sylvan.
Other than as restricted by the Stockholders' Agreement and the Voting Trust
Agreement, the Reporting Person has the same rights as the other Sylvan
stockholders. Additionally, the Stockholders' Agreement specifically permits (x)
the Reporting Person to vote his shares of Sylvan Common Stock for the election
of Mr. Pollack and himself (or nominees acceptable to Sylvan) to the Sylvan
Board and (y) Mr. Pollock and the Reporting Person (or their nominees, as the
case may be) to exercise their rights and perform their duties as members of the
Sylvan Board.
Furthermore, the Reporting Person has agreed that, except for
transfers permitted pursuant to the Stockholders' Agreement he will not directly
or indirectly transfer: (i) any of the non-escrowed Initial Shares delivered at
the Closing Date for a period of two years from delivery; (ii) any of the
Revenue Escrow Shares or Indemnity Escrow Shares for a period of two years from
approximately March 1997; and (iii) Contingent Shares for a period of two years
from approximately March 1999 or March 2000, depending on when the Contingent
Payment is made. The Reporting Person is permitted to: (a) sell the Acquisition
Shares in a tender offer approved by the Sylvan Board; (b) transfer Acquisition
Shares to such Reporting Person's affiliates
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and to the other Drake Stockholders and their respective affiliates; (c) pledge
his Acquisition Shares in any bona fide financing transactions; and (d) make
gifts of not more than 1% of the Acquisition Shares then owned by him to persons
approved by Sylvan. All transfers must comply with federal and state securities
laws.
In the event a transfer is made in violation of the Stockholders'
Agreement, Sylvan has the right to seek injunctive relief as well as to purchase
the transferred Acquisition Shares from the purchaser at the lower of the
purchaser's per share purchase price or the then current per share market price
of the Sylvan Common Stock. The Stockholders' Agreement is suspended as to the
Reporting Person for so long as he and his affiliates own less than 5% of the
then issued and outstanding Sylvan voting securities.
Pursuant to the Registration Rights Agreement dated as of December 13,
1995 (the "Registration Rights Agreement"), attached to the initial filing of
this Schedule 13D dated December 27, 1995 as Exhibit F and incorporated herein
by reference, among the Reporting Person, Mr. Pollock, Drake International,
Drake Personnel and Sylvan. Sylvan has agreed to register the Acquisition Shares
under the Securities Act of 1933, as amended, by filing up to nine registration
statements with the Securities and Exchange Commission (each a "Demand
Registration") between 1997 and 2002. However, Sylvan is not required to file
any Demand Registration between November 1 and December 31, 1998 and, if the
Drake Stockholders decide to use specified testing revenues in 1999 to calculate
the Contingent Payment, November 1 and December 31, 1999.
Additionally, pursuant to the Registration Rights Agreement, the Drake
Shareholders will be given the opportunity to participate in any Sylvan public
offerings effected during this time period, and each such offering will be
counted as a Demand Registration whether or not any Drake Stockholders
participate. In the event that any Acquisition Shares requested to be
registered by the Drake Stockholders are subject to underwriters' cutbacks in a
Sylvan offering in favor of securities being offered by Sylvan for its own
account, Sylvan is required to file an additional registration statement
registering the cutback shares.
Item 7. Material Filed as Exhibits
The following were filed as Exhibits to the initial filing of this
Schedule 13D dated December 27, 1995:
(a) Agreement and Plan of Reorganization dated as of July 28, 1995,
among ITS General, Inc., United School Services of America, Inc.,
NJK Associates Corp., Office Overload, Inc., Drake Prometric,
L.P., R. William Pollock ("Mr. Pollock"), Drake International
B.V. ("Drake International"), Drake Personnel (New Zealand)
Limited ("Drake Personnel"), Nasser J. Kazeminy (the "Reporting
Person"), Sylvan Learning Systems, Inc. ("Sylvan"), and SLS
Testing Subsidiary.
(b) Escrow Agreement dated as of December 13, 1995, among the
Reporting Person, Sylvan, Mr. Pollock, Drake Personnel, Drake
International and State Street Bank & Trust Company, as Escrow
Agent.
(c) Contingent Participation Rights Agreement dated as of December
13, 1995, among the Reporting Person, Sylvan, Mr. Pollock, Drake
International and Drake Personnel.
(d) Voting Trust Agreement dated as of December 13, 1995, among
Sylvan, the Reporting Person, Mr. Pollock, Drake Personnel, Drake
International, Douglas L. Becker, as Voting Trustee, and R.
Christopher Hoehn-Saric, as Voting Trustee.
(e) Stockholders' Agreement dated as of July 28, 1995, among Sylvan,
the Reporting Person, Mr. Pollock, Drake Personnel and Drake
International.
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Page 8 of 8
(f) Registration Rights Agreement dated as of December 13, 1995,
among Sylvan, the Reporting Person, Mr. Pollock, Drake Personnel
and Drake International.
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 16, 1997
/s/Nasser J. Kazeminy
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Nasser J. Kazeminy
