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EXHIBIT (c)(9)
AGREEMENT
AGREEMENT made this 30th day of May, 1997, by and between XXXXX-XXXXXX
PUBLISHING CORPORATION ("Xxxxx-Xxxxxx") 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 Xxxxx-Xxxxxx.
2. Harcourt has requested the Board of Directors of Xxxxx-Xxxxxx
to approve Harcourt's acquisition of such interest in Xxxxx-Xxxxxx for purposes
of Section 203 of the Delaware General Corporation Law ("Section 203").
3. The Board of Directors of Xxxxx-Xxxxxx 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 Xxxxx-Xxxxxx 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 Xxxxx-Xxxxxx.
4. In order to induce the Board of Directors of Xxxxx-Xxxxxx to
xxxxx 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 Xxxxx-Xxxxxx agree as follows:
1. Approval Of Harcourt's Acquisition Of Interest In Xxxxx-Xxxxxx.
The Board of Directors of Xxxxx-Xxxxxx has approved Harcourt's acquisition of
an indirect ownership interest of approximately 83% of Xxxxx-Xxxxxx'x 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rescinded or modified.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
Xxxxx-Xxxxxx 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 Xxxxx-Xxxxxx;
b. The Board of Directors of Xxxxx-Xxxxxx shall appoint a
committee of the Board (the "Committee") comprised solely of Disinterested
Directors;
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c. The Committee may retain such financial and legal
advisors as it deems necessary or desirable, at the sole cost and expense of
Xxxxx-Xxxxxx;
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 Xxxxx-Xxxxxx, other than NEC and Harcourt; and
e. The Business Combination is approved by a majority of
the Xxxxx-Xxxxxx Board, including a majority of the Disinterested Directors.
In order to effectuate the foregoing during such three year
period, Harcourt will cause Xxxxx-Xxxxxx'x 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, Xxxxx and Xxxx)
to serve initially as Disinterested Directors (which directors shall be
compensated consistent with the compensation of outside directors of comparable
public companies) and, if a Committee is formed, so long as such individuals
remain Disinterested Directors, to constitute a majority of the members of such
Committees.
Harcourt acknowledges and agrees that the directors of
Xxxxx-Xxxxxx are acting within the scope of their responsibilities as Directors
of Xxxxx-Xxxxxx in connection with their actions in connection with this
Agreement and adoption of the Resolution and that the Disinterested Directors
of Xxxxx-Xxxxxx 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 Xxxxx-Xxxxxx
is held not to be appropriate, Harcourt shall indemnify and hold harmless each
of the Xxxxx-Xxxxxx 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 Xxxxx-Xxxxxx 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 Xxxxx-Xxxxxx who is
not an officer, director, employee or affiliate of Harcourt, NEC (after the
Merger) or their respective affiliates, who does not have a direct or indirect
material financial interest in Harcourt, NEC, or its affiliates, and who would
be deemed to be an outside director qualified to serve on the audit committee
of the corporation under the rules of the New York Stock Exchange.
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3. Third Party Beneficiaries. This Agreement is for the express
benefit of the shareholders of Xxxxx-Xxxxxx, other than NEC and for the express
benefit of the Disinterested Directors of Xxxxx-Xxxxxx, 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, Xxxxx-Xxxxxx 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 Xxxxx-Xxxxxx 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, Xxxxx-Xxxxxx and the Board of Directors
of Xxxxx-Xxxxxx 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 Xxxxx-Xxxxxx Board of Directors such that the Harcourt
designees will constitute a majority of the entire Board of Directors of
Xxxxx-Xxxxxx. In addition to the foregoing, following consummation of the
Tender Offer, Xxxxx-Xxxxxx and the Board of Directors of Xxxxx-Xxxxxx 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
Xxxxx-Xxxxxx Board of Directors such that the Harcourt designees will
constitute half of the entire Board of Directors of Xxxxx-Xxxxxx.
6. No Inconsistent Actions. Harcourt agrees not to vote for any
amendment to the certificate of incorporation or bylaws of Harcourt or
Xxxxx-Xxxxxx which is inconsistent with the terms of this agreement.
7. Specific Performance and Injunctive Relief. The parties hereto
acknowledge that irreparable harm would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms and that the parties shall be entitled to an injunction to
prevent breaches and to enforce specifically
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the terms and provisions hereof. Nothing in this paragraph shall exclude or
limit any other remedies that the parties may be entitled to pursue at law or
in equity.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
HARCOURT GENERAL, INC.
By: /s/ Xxxx X. Xxxxxx
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Its: Senior Vice President and
General Counsel
XXXXX-XXXXXX PUBLISHING CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Its: Vice President and Secretary
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