DFAN14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN

PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

Filed by the Registrant  ¨                            

Filed by a Party other than the Registrant  þ

Check the appropriate box:

¨	Preliminary Proxy Statement
¨	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
¨	Definitive Proxy Statement
þ	Definitive Additional Materials
¨	Soliciting Material Pursuant to §240.14a-12
CHINACAST EDUCATION CORPORATION
(Name of Registrant as Specified in its Charter)
NED SHERWOOD ZS EDU L.P. ZS EDU GP LLC ROBERT HORNE DEREK FENG DANIEL TSEUNG
(Name of Person(s) Filing Proxy Statement, if Other Than Registrant)
Payment of Filing Fee (Check the appropriate box):
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On December 27, 2011, Ned Sherwood issued a press release announcing the issuance of a letter to stockholders relating to ChinaCast Education Corporation (“ChinaCast”). Also on December 27, 2011, Mr. Sherwood disseminated an investor presentation relating to ChinaCast. The press release, the letter to stockholders and the investor presentation are attached hereto as Exhibits 1, 2 and 3, respectively.

Important Information

SECURITY HOLDERS ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY NED SHERWOOD, ZS EDU L.P., ZS EDU GP LLC, ROBERT HORNE AND THE NOMINEES FROM THE STOCKHOLDERS OF CHINACAST EDUCATION CORPORATION (THE “ISSUER”) FOR USE AT THE ISSUER’S ANNUAL MEETING BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. INVESTORS CAN GET THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS, AT NO CHARGE AT THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV.

Exhibits:

Exhibit 1: Press Release

Exhibit 2: Letter to Stockholders

Exhibit 3: Investor Presentation

EX-99.1

Exhibit 1

NED SHERWOOD, MAJOR STOCKHOLDER OF CHINACAST EDUCATION

CORPORATION, ISSUES OPEN LETTER TO STOCKHOLDERS

-Urges ChinaCast Stockholders To Vote For His Three Highly Qualified Nominees On The

Green Proxy Card Today

NEW YORK, Dec. 27, 2011 (BUSINESS WIRE)—Ned Sherwood, a major stockholder of ChinaCast Education Corporation (Nasdaq GS: CAST), today issued the following letter to all stockholders of the Company:

Dear Fellow ChinaCast Stockholders:

As you may be aware, the Delaware Court of Chancery¹ has forced ChinaCast to delay the Annual Stockholders Meeting until January 9, 2012, at 8:00 p.m. EST in order for all stockholders to have adequate time to make a fair and reasoned determination of who should be elected to the Board of CAST. You deserve to have independent voices in the boardroom looking out for your best interests. I urge you to vote FOR my highly qualified independent nominees—Ned Sherwood, Derek Feng and Daniel Tseung—on the GREEN proxy card today.

As a significant stockholder and current member of CAST’s Board of Directors, I wish to state that my major goal is to assure that CAST undergoes, under the direction of a truly independent Special Committee, a full and complete, unbiased process to maximize stockholder value.

I continue to be convinced that CAST has an excellent business model operated by superior Mainland Chinese management and employees. Let me be clear, I do not wish to interfere with the Company’s day-to-day operations in any way. I do, however, have serious concerns with the actions and strategic decisions made by certain of the current Board members.

I am not seeking control of the Company’s Board. Rather, I am seeking to elect three (including myself) of the six Board members at the Annual Stockholders Meeting on January 9^th to assure that Board actions are executed in the proper manner at this critical time in CAST’s history. I believe that my three nominees will ensure that the interests of the stockholders, the true owners of ChinaCast, are vigorously represented in the boardroom by truly independent representatives.

Obviously, as a major stockholder, I want the process currently begun by the Special Committee to be run by the most experienced, independent, and professional individuals on our Board (or our Board as constituted after January 9^th). I question the current composition of the Special Committee. While both Paul Weiss and Credit Suisse, the outside advisors to the Special Committee, are excellent firms, it is ultimately the Special Committee, and not its advisors, that will determine the best course of action for CAST. This is not a process that can simply be outsourced to a law firm and investment bank.

¹  The opinion of the Delaware Court of Chancery is located here:

http://www.delawarelitigation.com/files/2011/12/sherwoodOp.pdf.

The Special Committee currently consists of Justin Tang, Stephen Markscheid, and Hope Ni, and it excludes the Board’s two most experienced directors in investment and mergers and acquisition matters—Tseung and me. Mr. Tang, who has been a Director of CAST since 2007 and, to my knowledge, has never voted against any Board resolution, is, in my opinion, a proxy for Ron Chan. The other two committee members, Markscheid and Ni, were never elected to the Company’s Board by stockholders. Ask yourself whether these are the committee members you would select to explore and evaluate strategic alternatives?

I believe that the nominees on the GREEN proxy card are more qualified and will represent your interests better than any of the current members of the Special Committee.

I am sure you will agree once you compare the backgrounds of the three members of the Special Committee with those of Tseung and me, the Board members who were not chosen for the Special Committee.

Tseung has been affiliated with CAST since its founding in 1999. He has over 16 years of experience as a professional investor. From 2000 until 2010, Tseung served as Managing Director of Sun Hung Kai Properties Direct Investments Ltd., the private equity division Sun Hung Kai Properties, one of the largest market-capitalization, publicly-traded companies in Hong Kong. He is an experienced investment professional who knows ChinaCast well.

I have more than 26 years of mergers and acquisitions and private equity experience as the founder of ZS FUND L.P. (“ZS”). Prior to the founding of ZS, I had 11 years of experience in divestitures for W.R. Grace and as a partner of AEA Investors, Inc., an early private equity firm.

If our slate of three directors is elected to the Board, and if certain members of our slate are selected to be on the Special Committee, we plan to do the following:

1) Review the Company’s official projections that have been submitted to the Special Committee. As a director, I have been requesting two to three-year rolling projections at our regularly scheduled Board meetings, to no avail. Since future projections are a key determinant of value, I would like the Special Committee to review the Company’s projections carefully, and with the assistance of its financial advisor, come up with an independent “unbiased projections” for CAST’s future prospects.

2) I want to confirm that the advisors to the Special Committee have been instructed to conduct the broadest and widest process possible (encompassing both strategic and financial buyers). I have been very concerned about references in the Company’s recent open letters to “the deal” as opposed to “the process.”

3) I have also been troubled by Chan’s statement that threatened an exodus of management if our slate were elected. As you know, this threat, which I believe constitutes a breach of fiduciary duty, resulted in our decision to reduce our slate of director nominees from six candidates to three candidates. As such, it is certain that three nominees from the Company’s slate will be re-elected whether you vote for us or not.

2

As a further precaution, and as an encouragement to strategic buyers to bid for CAST, I plan to suggest, as Chairman of the Compensation Committee, that CAST immediately adopt a generous “Retention Bonus Plan” for the excellent Mainland Chinese management team, including, but not limited to, Li Wei, Xy Jiang, Jim Ma, Donald Gardner, and others. My proposal will include a significant one-time extra bonus payment to each key Mainland Chinese employee who, if a change of control transaction occurs, agrees to remain in the employ of the acquiring company for at least two years post-closing.

Additionally, by including Feng on our slate, I believe that we are further protecting value for all stockholders. Feng was born and educated in Mainland China, advanced his career in the United States at blue-chip companies such as GE, and spent five years as a senior executive at Knowledge Universe, one of the largest education holding companies with more than 40,000 employees globally. In my opinion, his leadership experience and education industry expertise will prove to be a very valuable resource to both management and the CAST Board.

Now is the time for ChinaCast stockholders to protect their best interests by electing three highly-qualified, independent nominees who are committed to maximizing the value of your investment. Please vote your GREEN proxy card today.

If you have any questions or need assistance in voting your GREEN proxy card, please call the firm assisting in the solicitation of proxies, Innisfree M&A Incorporated, toll-free at (888) 750-5834 (banks and brokers call collect at (212) 750-5833)).

Thank you for your support,

Ned Sherwood

Important Information

SECURITY HOLDERS ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY NED SHERWOOD, ZS EDU L.P., ZS EDU GP LLC, ROBERT HORNE AND THE NOMINEES FROM THE STOCKHOLDERS OF CHINACAST EDUCATION CORPORATION (THE “ISSUER”) FOR USE AT THE ISSUER’S ANNUAL MEETING BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. INVESTORS CAN GET THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS AT NO CHARGE AT THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV.

Contact:

Innisfree M&A Incorporated

Scott Winter, 212-750-5833

3

EX-99.2

Exhibit 2

December 27, 2011

Dear Fellow ChinaCast Stockholders,

As you may be aware, the Delaware Court of Chancery¹ has forced ChinaCast to delay the Annual Stockholders Meeting until January 9, 2012, at 8:00 p.m. EST in order for all stockholders to have adequate time to make a fair and reasoned determination of who should be elected to the Board of CAST. You deserve to have independent voices in the boardroom looking out for your best interests. I urge you to vote FOR my highly qualified independent nominees—Ned Sherwood, Derek Feng and Daniel Tseung—on the GREEN proxy card today.

As a significant stockholder and current member of CAST’s Board of Directors, I wish to state that my major goal is to assure that CAST undergoes, under the direction of a truly independent Special Committee, a full and complete, unbiased process to maximize stockholder value.

I continue to be convinced that CAST has an excellent business model operated by superior Mainland Chinese management and employees. Let me be clear, I do not wish to interfere with the Company’s day-to-day operations in any way. I do, however, have serious concerns with the actions and strategic decisions made by certain of the current Board members.

I am not seeking control of the Company’s Board. Rather, I am seeking to elect three (including myself) of the six Board members at the Annual Stockholders Meeting on January 9^th to assure that Board actions are executed in the proper manner at this critical time in CAST’s history. I believe that my three nominees will ensure that the interests of the stockholders, the true owners of ChinaCast, are vigorously represented in the boardroom by truly independent representatives.

Obviously, as a major stockholder, I want the process currently begun by the Special Committee to be run by the most experienced, independent, and professional individuals on our Board (or our Board as constituted after January 9^th). I question the current composition of the Special Committee. While both Paul Weiss and Credit Suisse, the outside advisors to the Special Committee, are excellent firms, it is ultimately the Special Committee, and not its advisors, that will determine the best course of action for CAST. This is not a process that can simply be outsourced to a law firm and investment bank.

¹  The opinion of the Delaware Court of Chancery is located here:

http://www.delawarelitigation.com/files/2011/12/sherwoodOp.pdf.

The Special Committee currently consists of Justin Tang, Stephen Markscheid, and Hope Ni, and it excludes the Board’s two most experienced directors in investment and mergers and acquisition matters—Tseung and me. Mr. Tang, who has been a Director of CAST since 2007 and, to my knowledge, has never voted against any Board resolution, is, in my opinion, a proxy for Ron Chan. The other two committee members, Markscheid and Ni, were never elected to the Company’s Board by stockholders. Ask yourself whether these are the committee members you would select to explore and evaluate strategic alternatives?

I believe that the nominees on the GREEN proxy card are more qualified and will represent your interests better than any of the current members of the Special Committee.

I am sure you will agree once you compare the backgrounds of the three members of the Special Committee with those of Tseung and me, the Board members who were not chosen for the Special Committee.

Tseung has been affiliated with CAST since its founding in 1999. He has over 16 years of experience as a professional investor. From 2000 until 2010, Tseung served as Managing Director of Sun Hung Kai Properties Direct Investments Ltd., the private equity division Sun Hung Kai Properties, one of the largest market-capitalization, publicly-traded companies in Hong Kong. He is an experienced investment professional who knows ChinaCast well.

I have more than 26 years of mergers and acquisitions and private equity experience as the founder of ZS FUND L.P. (“ZS”). Prior to the founding of ZS, I had 11 years of experience in divestitures for W.R. Grace and as a partner of AEA Investors, Inc., an early private equity firm.

If our slate of three directors is elected to the Board, and if certain members of our slate are selected to be on the Special Committee, we plan to do the following:

1) Review the Company’s official projections that have been submitted to the Special Committee. As a director, I have been requesting two to three-year rolling projections at our regularly scheduled Board meetings, to no avail. Since future projections are a key determinant of value, I would like the Special Committee to review the Company’s projections carefully, and with the assistance of its financial advisor, come up with an independent “unbiased projections” for CAST’s future prospects.

2) I want to confirm that the advisors to the Special Committee have been instructed to conduct the broadest and widest process possible (encompassing both strategic and financial buyers). I have been very concerned about references in the Company’s recent open letters to “the deal” as opposed to “the process.”

3) I have also been troubled by Chan’s statement that threatened an exodus of management if our slate were elected. As you know, this threat, which I believe constitutes a breach of fiduciary duty, resulted in our decision to reduce our slate of director nominees from six candidates to three candidates. As such, it is certain that three nominees from the Company’s slate will be re-elected whether you vote for us or not.

As a further precaution, and as an encouragement to strategic buyers to bid for CAST, I plan to suggest, as Chairman of the Compensation Committee, that CAST immediately adopt a generous “Retention Bonus Plan” for the excellent Mainland Chinese management team, including, but not limited to, Li Wei, Xy Jiang, Jim Ma, Donald Gardner, and others. My proposal will include a significant one-time extra bonus payment to each key Mainland Chinese employee who, if a change of control transaction occurs, agrees to remain in the employ of the acquiring company for at least two years post-closing.

Additionally, by including Feng on our slate, I believe that we are further protecting value for all stockholders. Feng was born and educated in Mainland China, advanced his career in the United States at blue-chip companies such as GE, and spent five years as a senior executive at Knowledge Universe, one of the largest education holding companies with more than 40,000 employees globally. In my opinion, his leadership experience and education industry expertise will prove to be a very valuable resource to both management and the CAST Board.

Now is the time for ChinaCast stockholders to protect their best interests by electing three highly-qualified, independent nominees who are committed to maximizing the value of your investment. Please vote your GREEN proxy card today.

If you have any questions or need assistance in voting your GREEN proxy card, please call the firm assisting in the solicitation of proxies, Innisfree M&A Incorporated, toll-free at (888) 750-5834 (banks and brokers call collect at (212) 750-5833)).

Thank you for your support,

Ned Sherwood

Important Information

SECURITY HOLDERS ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY NED SHERWOOD, ZS EDU L.P., ZS EDU GP LLC, ROBERT HORNE AND THE NOMINEES FROM THE STOCKHOLDERS OF CHINACAST EDUCATION CORPORATION (THE “ISSUER”) FOR USE AT THE ISSUER’S ANNUAL MEETING BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. INVESTORS CAN GET THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS AT NO CHARGE AT THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV.

EX-99.3

ChinaCast Stockholders:

Vote FOR an Independent Voice in the Board Room

Elect the Independent Nominees

on the

GREEN Proxy Card

Ned Sherwood

ZS EDU L.P.

ZS EDU GP LLC

Exhibit 3

Important Information

SECURITY HOLDERS ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT FILED

WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) AND OTHER

DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY NED SHERWOOD, ZS EDU

L.P., ZS EDU GP LLC, ROBERT HORNE AND THE NOMINEES FROM THE STOCKHOLDERS OF

CHINACAST EDUCATION CORPORATION (THE “ISSUER”) FOR USE AT THE ISSUER’S

ANNUAL MEETING BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION.

INVESTORS CAN GET THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT

DOCUMENTS AT NO CHARGE AT THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV.

2

CAST Stock Price has Dramatically Underperformed

•

CAST revenues have grown 37% year-over-year, yet CAST’s share price is down 20%

from the 52-week high of $7.76 per share in December 2010 (as of December 22, 2011)

Indexed Simple Return (1 Year)

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Dec-10

Feb-11

Apr-11

Jun-11

Aug-11

Oct-11

CAST

NDX

3

The Board Does Not Appear to be Looking out for the Best

Interests of Stockholders

•

Given CAST excellent operating results and its strong cash position, but with its stock

trading at less than 3x EBITDA, why is the Board so reluctant to

share the cash flow

with the stockholders?

–

CAST

announced

a

$50

million

stock

buy-back

plan

on

March

16,

2011,

when

the

share

price

was $5.57, which was unanimously approved by the then five-member Board.

–

Since that time, CAST has reported three record quarters of earnings and the share price has

dropped below the March

16 prices.

–

With new university acquisitions valued at 7.5x to 9.0x EBITDA and CAST’s stock trading well

below that EBITDA multiple, new acquisitions would be quite dilutive.

–

However, we believe that CAST has repurchased less than 10% of the announced buy-back

shares to date.

•

Actively exploring a strategic transaction involving a sale of the company without

appointing a special committee consisting of Board members with the most investment

and M&A experience.

–

Current Special Committee members consist of two directors that were appointed (never

elected)

to

the

Board

and

a

third

director

who,

we

believe,

is

a

proxy

for

Ron

Chan.

•

Keeping a “poison pill”

in place making it more difficult for potential suitors to purchase

the company.

–

Poison Pill not submitted to stockholders for approval despite Directors Sherwood and Tseung

voting against the adoption of a poison pill.

4

The Board Appears to be Manipulating Corporate Governance and

the Election Process to Create an Entrenched Board of “Yes-Men”

We believe the Board is “rigging”

a management-friendly Board by manipulating the

election process to eliminate any dissenting voices from the Board room.

–

The Board attempted to hold a stockholder meeting just days after removing Ned

Sherwood from its slate in an effort to deprive stockholders of an independent voice in

the Board room.

–

We believe the Board removed Ned Sherwood from its slate to remove a dissenting

voice from the Board room.

–

We believe the current Board has removed directors from various committees

(Sherwood –

Audit and Nominating Committees, Tseung –

Nominating Committees) to

retaliate for expressing differing views in the Board room

–

The Delaware Court of Chancery issued a Temporary Restraining Order to force

CAST to adjourn the annual meeting to January 10, 2012 in order to provide

stockholders with sufficient time to evaluate director nominees.

–

The Board previously rejected another stockholder’s director nomination on purported

technicalities in order to keep a unified Board of “yes-men”.

5

It is ALL about Stockholder Value!

If successful, we are committed to the following simple plan:

1.

Follow a simple philosophy of sharing the CAST success and cash flow with the stockholders via

dividends, share buybacks and, of course, constantly evaluating strategic alternatives. Be assured that

we

will

always

be

alert

to

maximizing

value

for

all

stockholders

if

an

appropriate

opportunity

arises,

and

we do not plan to stop the process of exploring strategic alternatives. We recommend that the Special

Committee of the Board for this process consist of highly experienced investment professionals.

2.

Maintain the commitment to improving and enhancing the quality of education and the facilities at CAST’s

three

existing

universities,

with

the

goal

to

provide

a

“world

class”

education

to

all

of

the

matriculating

students.

When possible, we should also search for additional private universities to acquire and improve and

expand. Currently CAST trades at a multiple net of cash of approximately 3x EBITDA, but most university

acquisition candidates sell for multiples between 7.5 and 9 times EBITDA. Therefore, we strongly believe

our first task at hand is to work to convince the financial markets to properly value CAST stock so that

new university acquisitions would make financial sense and not be dilutive.

3.

Subject to the approval of China’s State Administration of Foreign Exchange, restart CAST’s previously

announced $50

million share buyback program in earnest. Unfortunately, after announcing its buyback

program in March 2011, we believe CAST has not purchased any shares since late June and has only

purchased $4.7

million worth of shares in total to date.

4.

Consult with the relevant Chinese authorities with regard to continuing cash remittance to the United

States and, as soon as possible, initiate a twenty-cent per share annual dividend payable quarterly.

5.

Eliminate

the

“poison

pill”

and

stop

Board

action

to

remove

independent

voices

from

the

Board.

6

The Delaware Court of Chancery

Forced CAST to Delay the Annual Meeting

In its December 20

th

opinion, the Delaware Court of Chancery held that:

•

“Plaintiffs make a colorable claim that, to whatever degree Sherwood may have been obstinate,

that obstinance relates to sincere policy disputes between him and [directors Chan, Santos and

Tang], and a desire to avoid those disputes may have motivated [directors Chan, Santos and

Tang] to remove him from their slate.”

•

“[I]t also is important that directors be able to register effective dissent, even if that might offend

the sensibilities of some of their co-directors.”

•

“The [company’s] Proxy Supplement may be materially misleading in its failure to disclose the

board’s “motivations candidly….””

•

“The board should have foreseen that [removing Sherwood from the management slate] would

generate controversy, and that ChinaCast’s shareholders generally, not just Sherwood, would

lose the opportunity to express their fully informed views on that controversy via a fair election.”

•

Defendants have not simply expressed their disagreement with Sherwood’s positions or

dissatisfaction with his personal behavior; they have also excluded him from merely running for

election.

In

this

way,

holding

the

Annual

Meeting

on

December

21

would

not

comport

with

the

“scrupulous

fairness”

required

of

corporate

elections.”

(emphasis

added)

7

Vote

FOR Independent Stockholder

Voices in the Board Room

on the

Green

Proxy Card

If you have questions or need assistance in voting your shares, please

call our proxy solicitor, Innisfree M&A Incorporated, at 212-750-5833.

8

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