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EXHIBIT 11(a)(21)
AGREEMENT
AGREEMENT made this 30th day of May, 1997, by and between ▇▇▇▇▇-▇▇▇▇▇▇
PUBLISHING CORPORATION ("▇▇▇▇▇-▇▇▇▇▇▇") 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 ▇▇▇▇▇-▇▇▇▇▇▇.
2. Harcourt has requested the Board of Directors of ▇▇▇▇▇-▇▇▇▇▇▇ to
approve Harcourt's acquisition of such interest in ▇▇▇▇▇-▇▇▇▇▇▇ for purposes of
Section 203 of the Delaware General Corporation Law ("Section 203").
3. The Board of Directors of ▇▇▇▇▇-▇▇▇▇▇▇ 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 ▇▇▇▇▇-▇▇▇▇▇▇ 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 ▇▇▇▇▇-▇▇▇▇▇▇.
4. In order to induce the Board of Directors of ▇▇▇▇▇-▇▇▇▇▇▇ to ▇▇▇▇▇ 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 ▇▇▇▇▇-▇▇▇▇▇▇ agree as follows:
1. Approval Of Harcourt's Acquisition Of Interest In ▇▇▇▇▇-▇▇▇▇▇▇. The
Board of Directors of ▇▇▇▇▇-▇▇▇▇▇▇ has approved Harcourt's acquisition of an
indirect ownership interest of approximately 83% of ▇▇▇▇▇-▇▇▇▇▇▇'▇ 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as Exhibit A hereto (the "Resolution"), which Resolution has not been rescinded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
▇▇▇▇▇-▇▇▇▇▇▇ 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 ▇▇▇▇▇-▇▇▇▇▇▇;
b. The Board of Directors of ▇▇▇▇▇-▇▇▇▇▇▇ shall appoint a committee of
the Board (the "Committee") comprised solely of Disinterested Directors;
c. The Committee may retain such financial and legal advisors as it
deems necessary or desirable, at the sole cost and expense of ▇▇▇▇▇-▇▇▇▇▇▇;
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 ▇▇▇▇▇-▇▇▇▇▇▇, other than NEC and Harcourt; and
e. The Business Combination is approved by a majority of the
▇▇▇▇▇-▇▇▇▇▇▇ Board, including a majority of the Disinterested Directors.
In order to effectuate the foregoing during such three year period,
Harcourt will cause ▇▇▇▇▇-▇▇▇▇▇▇'▇ 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, ▇▇▇▇▇ and ▇▇▇▇) 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
Committee.
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Harcourt acknowledges and agrees that the directors of ▇▇▇▇▇-▇▇▇▇▇▇ are
acting within the scope of their responsibilities as Directors of ▇▇▇▇▇-▇▇▇▇▇▇
in connection with their actions in connection with this Agreement and adoption
of the Resolution and that the Disinterested Directors of ▇▇▇▇▇-▇▇▇▇▇▇ 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 ▇▇▇▇▇-▇▇▇▇▇▇ is
held not to be appropriate, Harcourt shall indemnify and hold harmless each of
the ▇▇▇▇▇-▇▇▇▇▇▇ 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 ▇▇▇▇▇-▇▇▇▇▇▇ 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 ▇▇▇▇▇-▇▇▇▇▇▇ 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.
3. Third Party Beneficiaries. This Agreement is for the express benefit
of the shareholders of ▇▇▇▇▇-▇▇▇▇▇▇, other than NEC, and for the express benefit
of the Disinterested Directors of ▇▇▇▇▇-▇▇▇▇▇▇, 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, ▇▇▇▇▇-▇▇▇▇▇▇ 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 ▇▇▇▇▇-▇▇▇▇▇▇ 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, ▇▇▇▇▇-▇▇▇▇▇▇ and the Board of Directors
of ▇▇▇▇▇-▇▇▇▇▇▇ 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 ▇▇▇▇▇-▇▇▇▇▇▇ Board of Directors such that the Harcourt
designees will constitute a majority of the entire Board of Directors of
▇▇▇▇▇-▇▇▇▇▇▇. In addition to the foregoing, following consummation of the Tender
Offer, ▇▇▇▇▇-▇▇▇▇▇▇ and the Board of Directors of ▇▇▇▇▇-▇▇▇▇▇▇ 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
▇▇▇▇▇-▇▇▇▇▇▇ Board of Directors such that the Harcourt designees will constitute
half of the entire Board of Directors of ▇▇▇▇▇-▇▇▇▇▇▇.
6. No Inconsistent Actions. Harcourt agrees not to vote for any amendment
to the certificate of incorporation or bylaws of Harcourt or ▇▇▇▇▇-▇▇▇▇▇▇ 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 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.
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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/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: Senior Vice President,
General Counsel and Secretary
▇▇▇▇▇-▇▇▇▇▇▇ PUBLISHING
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its: Vice President and Secretary
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