-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QrutOHQAedZH6EE+NjMmcTTVTkXM0Xaeyz8WEg7+s5R/RRrTKnGr+pf/ux9YzMT6 GfREUoHg6Mk8YQqAMxEMCQ== 0000928385-97-000302.txt : 19970222 0000928385-97-000302.hdr.sgml : 19970222 ACCESSION NUMBER: 0000928385-97-000302 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970218 EFFECTIVENESS DATE: 19970218 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYLVAN LEARNING SYSTEMS INC CENTRAL INDEX KEY: 0000912766 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 521492296 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-21963 FILM NUMBER: 97537558 BUSINESS ADDRESS: STREET 1: 1000 LANCASTER ST CITY: BALTIMORE STATE: MD ZIP: 21202 BUSINESS PHONE: 4108438000 MAIL ADDRESS: STREET 1: 1000 LANCASTER ST CITY: BALTIMORE STATE: MD ZIP: 21202 S-8 1 FORM S-8 As filed with the Securities and Exchange Commission on February 18, 1997 Registration No. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________________ FORM S-8 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.) 1000 Lancaster Street Baltimore, Maryland 21202 (410) 843-8000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) SYLVAN LEARNING SYSTEMS, INC. EMPLOYEE STOCK PURCHASE PLAN Donald Scheeler Sylvan Learning Systems, Inc. 1000 Lancaster Street Baltimore, Maryland 21231 (410) 843-8000 (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., Esquire Jill Cantor Nord, Esq. Piper & Marbury 36 South Charles Street Baltimore, Maryland 21201 (410) 539-2530 CALCULATION OF REGISTRATION FEE
================================================================================ Proposed Proposed Title of Securities Amount to be Maximum Maximum Amount of to be Registered Registered Offering Aggregate Registration Price Per Offering Fee Share(1) Price(1) ================================================================================ Common Stock, $.01 par value 50,000 shares $35,875 $1,793,750 $544.00 ================================================================================
(1) Calculated in accordance with Rule 457(a) of the Securities Act of 1933, as amended, based on the average of the high and low sales price for the Common Stock on February 10, 1997. 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. INFORMATION NOT REQUIRED IN THE PROSPECTUS Item 3. 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 and 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. 3. The Company's Current Report on Forms 8-K and 8-K/A dated November 8, 1996 relating to the purchase by the Company of 20,000 shares of Series A Preferred Stock of JLC Learning Corporation. 4. The Company's Current Report on Form 8-K dated November 20, 1996 relating to litigation brought by ACT, Inc. against the Company. 5. The Company's Current Report on Form 8-K dated January 28, 1997 relating to the Company's acquisition of Wall Street Institute. 6. 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 7. 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., 1000 Lancaster Street, Baltimore, Maryland 21231, Attention: Chief Financial Officer, telephone: (410) 843-8000. 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. II-1 Item 6. 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. Item 8. Exhibits. --------- Exhibit No. Description ----------- ----------- 4.1 Sylvan Learning Systems, Inc. Employee Stock Purchase Plan 5.1 Opinion of Piper & Marbury L.L.P. regarding the legality of the securities being registered. 23.1 Consent of Ernst & Young LLP. 23.2 Consent of Piper & Marbury L.L.P. (included in Exhibit 5.1). 24.1 Power of Attorney (included on signature page). Item 9. Undertakings. ------------- (a) 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-2 (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. (b) 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. (c) 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 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. II-3 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 Baltimore, Maryland, on this 17th day of February, 1997. SYLVAN LEARNING SYSTEMS, INC. By /s/ R. Christopher Hoehn-Saric ------------------------------------------- R. Christopher Hoehn-Saric, Chairman of the Board and Co-Chief Executive Officer Know all men by these presents, that each person whose signature appears below constitutes and appoints R. Christopher Hoehn-Saric and Douglas L. Becker (with full power to each of them to act alone) as his true and lawful attorney- in-fact and agent, with full power of substitution, for him and in his name, place and stead in any and all capacities to sign any or all amendments or post- effective amendments to this Registration Statement, including post-effective amendments filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, to sign any and all applications, registration statements, notices or other document necessary or advisable to comply with the applicable state securities laws, and to file the same, together with all other documents in connection therewith, with the appropriate state securities authorities, granting unto said attorneys- in-fact and agents or any of them, or their or his substitute or substitutes, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, thereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- Co-Chief Executive Officer and /s/ R. Christopher Chairman of the Board of February 17, 1997 Hoehn-Saric Directors (Principal Executive - --------------------------- Officer) R. Christopher Hoehn-Saric Co-Chief Executive Officer /s/ Douglas L. Becker President, Secretary and February 17, 1997 - --------------------------- Director Douglas L. Becker Chief Financial Officer /s/ B. Lee McGee (Principal Financial and February 17, 1997 - --------------------------- Accounting Officer) B. Lee McGee Director February 17, 1997 - -------------------------- Donald V. Berlanti /s/ William Pollock Director February 17, 1997 - -------------------------- R. William Pollock /s/ Patrick A. Hopf Director February 17, 1997 - -------------------------- Patrick A. Hopf /s/ J. Phillip Samper Director February 17, 1997 - -------------------------- J. Phillip Samper /s/ Nancy A. Cole Director February 17, 1997 - -------------------------- Nancy A. Cole /s/ James H. McGuire Director February 17, 1997 - -------------------------- James H. McGuire
II-4 EXHIBIT INDEX
Sequentially Exhibit No. Description Numbered Page - ----------- ----------- ------------- 4.1 Sylvan Learning Systems, Inc. Employee Stock Purchase Plan 5.1 Opinion of Piper & Marbury L.L.P. regarding the legality of the securities being registered. 23.1 Consent of Ernst & Young LLP. 23.2 Consent of Piper & Marbury L.L.P. (included in Exhibit 5.1) 24.1 Power of Attorney (included on signature page)
II-5 EX-4.1 2 EMPLOYEE STOCK PURCHASE PLAN EXHIBIT 4.1 ----------- SYLVAN LEARNING SYSTEMS, INC. EMPLOYEE STOCK PURCHASE PLAN Effective March 1, 1997 The purpose of this Plan is to provide eligible employees of Sylvan Learning Systems, Inc. (the "Company") and certain of its subsidiaries with opportunities to purchase shares of the Company's Common Stock, $0.01 par value (the "Common Stock"). Fifty thousand (50,000) shares of Common Stock in the aggregate have been approved for this purpose. 1. Administration. The Plan will be administered by the Company's Board of -------------- Directors (the "Board") or by a Committee appointed by the Board (the "Committee"). The Board or the Committee has authority to make rules and regulations for the administration of the Plan and its interpretation and decisions with regard thereto will be final and conclusive. 2. Eligibility. Participation in the Plan will neither be permitted nor ----------- denied contrary to the requirements of Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations promulgated thereunder. All employees of the Company, including directors who are employees, and all employees of any subsidiary of the Company (as defined in Section 424(f) of the Code) designated by the Board or the Committee from time to time (a "Designated Subsidiary"), are eligible to participate in any offering of Options (as defined below) to purchase Common Stock under the Plan, provided that: (a) they have been employed by the Company or a Designated Subsidiary for six months; and (b) they are employees of the Company or a Designated Subsidiary on the first day of the applicable Offering Period (as defined below). No employee may be granted an Option hereunder if such employee, immediately after the option is granted, owns 5% or more of the total combined voting power or value of the stock of the Company or any subsidiary. For purposes of the preceding sentence, the attribution rules of Code section 424(d) will apply in determining the stock ownership of an employee, and all stock which the employee has a contractual right to purchase will be treated as stock owned by the employee. 3. Offerings. --------- (a) Offering Period. Options granted pursuant to the Plan ("Offerings") may --------------- be exercised during an offering period which will begin on the first day on which national stock exchanges or -1- the National Association of Securities Dealers Automated Quotation ("Nasdaq") system are open for trading ("Trading Day") on or after March 1 of each year (the "Offering Commencement Date") and will terminate on the last Trading Day of February in the following year (each such period referred to herein as an "Offering Period"). (b) Special Offering Period. Notwithstanding the provisions of paragraph ----------------------- (a), with respect to employees who first become eligible to participate in the Plan after the Offering Commencement Date but prior to the first Trading Day on or after September 1 of each year (the "Special Offering Commencement Date"), there shall be an offering period which will begin on the first Trading Day on or after September 1 of that year and will terminate on the last Trading Day of August of the following year (a "Special Offering Period"). With respect to any Special Offering Period, the term "Offering Commencement Date" shall mean the Special Offering Commencement Date and the term "Offering Period" shall mean the Special Offering Period. (c) The Board will have the power to change the duration of the Offering Period (including the commencement and termination date thereof) with respect to future Offerings without shareholder approval if such change is announced at least 15 days prior to the scheduled beginning of the first Offering Period to be affected thereafter. 4. Participation. An employee eligible on the Offering Commencement Date of ------------- any Offering may participate in such Offering by completing and forwarding a payroll deduction authorization form to the Benefits Specialist of the Company at least 14 days prior to the applicable Offering Period Commencement Date. The form will authorize a regular payroll deduction from the Compensation received by the employee during the Offering Period. Unless an employee files a new form or withdraws from the Plan, the employee's deductions and purchases will continue at the same rate for future Offering Periods under the Plan as long as the Plan remains in effect. The term "Compensation" means an employee's total salary, pay or earned income from the Company, as reflected on Form W-2, which is subject to withholding under Code section 3401(a) when earned, plus salary reduction contributions under Code sections 125 and 401(k). Only amounts earned while the employee is eligible to participate will be considered "Compensation." 5. Deductions. ---------- (a) The Company will maintain payroll deduction accounts for all participating employees. With respect to any Offering Period under this Plan, an eligible employee may authorize a payroll deduction in any whole number percentage up to a maximum of 10% of the Compensation he or she receives during the Offering Period or such shorter period during which deductions from payroll are made. (b) No employee may be granted an Option which permits his or her rights to purchase Common Stock under this Plan and any other stock purchase plan of the Company and its subsidiaries, to accrue at a rate which exceeds $25,000 of the fair market value of such Common -2- Stock (determined at the Offering Commencement Date of the Offering Period) for each calendar year in which the Option is outstanding at any time, as required by Code section 423. 6. Deduction Changes. An employee may decrease or discontinue his or her ----------------- payroll deduction once during any Offering Period by filing a new payroll deduction authorization form. However, an employee may not increase his or her payroll deduction during an Offering Period. If an employee elects to discontinue payroll deductions during an Offering Period, but does not elect to withdraw funds pursuant to Section 8 hereof, funds deducted prior to the election to discontinue will be applied to the purchase of Common Stock on the Exercise Date (as defined below). 7. Interest. Interest will not be paid on any employee payroll deduction -------- accounts, except to the extent that the Board or the Committee, in its sole discretion, elects to credit such accounts with interest at such per annum rate as it may from time to time determine. 8. Withdrawal of Funds. An employee may, on any one occasion during an ------------------- Offering Period and for any reason, withdraw all or part of the balance accumulated in the employee's payroll deduction account. Any such withdrawal must be effected prior to the close of business on the last day of the Offering Period. If the employee withdraws all of such balance, the employee will thereby withdraw from participation in the Offering and may not begin participation again during the remainder of the Offering Period. Any employee withdrawing all or part of such balance may participate in any subsequent Offering Period in accordance with terms and conditions established by the Board or the Committee. 9. Purchase of Shares. ------------------- (a) On the Offering Commencement Date of each Offering Period, the Company will grant to each eligible employee who is then eligible to participate in the Plan an option (an "Option") to purchase during the Offering Period such number of shares of Common Stock of the Company reserved for the purposes of the Plan as does not exceed the number of shares determined by dividing (i) $25,000 by (ii) the closing price (as defined in the next paragraph) of Common Stock on the Offering Commencement Date of such Offering Period. The Option may be exercised, at the election of the Participant, for any or all of the shares subject to the unexercised portion of the Option on the last Trading Day of any Offering Period (each an "Exercise Date"), subject to the limitations set forth in this Plan. (b) The Option Price for each share purchased pursuant to an Option during an Offering Period will be 85% of the closing price of the Common Stock on (i) the Offering Commencement Date of such Offering Period or (ii) the applicable Exercise Date, whichever closing price will be less. Such closing price will be (A) the closing price of the Common Stock on any national securities exchange on which the Common Stock is listed, or (B) the closing price of the Common Stock on the Nasdaq National Market ("Nasdaq") or (C) the average of the closing bid and asked prices in the over-the-counter market, whichever is applicable, as published in The Wall Street Journal. If no sales ----------------------- of Common Stock were made on such a day, the price of the -3- Common Stock for purposes of clauses (A) and (B) above will be the reported price for the next preceding day on which sales were made. (c) Each employee who continues to be a participant in the Plan on an Exercise Date will be deemed to have exercised his or her Option at the Option Price on such date and will be deemed to have purchased from the Company the number of shares of Common Stock reserved for the purpose of the Plan that his of her accumulated payroll deductions on such date will pay for pursuant to the formula set forth above (but not in excess of the maximum number of shares for which the Option was granted and has not previously been exercised, determined in the manner set forth above). 10. Issuance of Certificates. As soon as practicable following the end of ------------------------ each Offering Period, certificates representing shares of Common Stock purchased under the Plan on the Exercise Date for such Offering Period shall be issued only in the name of the employee, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or (in the Company's sole discretion) in the street name of a brokerage firm, bank or other nominee holder designated by the employee. 11. Rights on Retirement, Death or Termination of Employment. In the event -------------------------------------------------------- of a participating employee's termination of employment prior to the last business day of an Offering Period (whether as a result of the employee's voluntary or involuntary termination, retirement, death or otherwise), no payroll deduction will be taken from any pay due and owing to the employee and the balance in the employee's payroll deduction account will be paid to the employee or, in the event of the employee's death, (a) to a beneficiary previously designated in a revocable notice signed by the employee (with any spousal consent required under state law) or (b) in the absence of such a designated beneficiary, to the executor or administrator of the employee's estate or (c) if no such executor or administrator has been appointed to the knowledge of the Company, to such other person(s) as the Company may, in its discretion, designate. If, prior to the last business day of an Offering Period, the Designated Subsidiary by which an employee is employed will cease to be a subsidiary of the Company, or if the employee is transferred to a subsidiary of the Company that is not a Designated Subsidiary, the employee will be deemed to have terminated employment for the purposes of this Plan. 12. Optionees Not Stockholders. Neither the granting of an Option to an -------------------------- employee nor the deductions from pay will constitute such employee a stockholder of the shares of Common Stock covered by an Option under this Plan until such shares have been purchased by and issued to such employee. 13. Rights Not Transferable. Rights under this Plan are not transferable by ----------------------- a participating employee other than by will or the laws of descent and distribution, and are exercisable during the employee's lifetime only by the employee. 14. Adjustment in Case of Changes Affecting Common Stock. In the event of a ---------------------------------------------------- subdivision of outstanding shares of Common Stock, or the payment of a dividend in Common Stock, the number of shares approved for this Plan, and the share limitation set forth in Section 9, 4 will be increased proportionately, and such other adjustment will be made as may be deemed equitable by the Board or the Committee. In the event of any other change affecting the Common Stock, such adjustment will be made as may be deemed equitable by the Board or the Committee to give proper effect to such event. 15. Merger. ------ (a) If the Company at any time merges or consolidates with another corporation and the holders of the capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 80% by voting power of the capital stock of the surviving corporation ("Continuity of Control"), the holder of each Option then outstanding will thereafter be entitled to receive at the next Exercise Date upon the exercise of such Option for each share as to which such Option will be exercised the securities or property which a holder of one share of the Common Stock was entitled to upon and at the time of such merger, and the Board or the Committee will take such steps in connection with such merger as the Board or the Committee deem necessary to assure that the provisions of this Section 15 will thereafter be applicable, as nearly as reasonably may be, in relation to the said securities or property as to which such holder of such Option might thereafter be entitled to receive thereunder. (b) In the event of a merger or consolidation of the Company with or into another corporation which does not involve Continuity of Control, or a sale of all or substantially all of the assets of the Company while unexercised Options remain outstanding under the Plan, (i) subject to the provisions of clauses (ii) and (iii), after the effective date of such transaction, each holder of an outstanding Option will be entitled, upon exercise of such Option, to receive in lieu of shares of Common Stock, shares of such stock or other securities as the holders of shares of Common Stock received pursuant to the terms of such transaction; or (ii) all outstanding Options may be canceled by the Board or the Committee as of a date prior to the effective date of any such transaction and all payroll deductions will be paid out to the participating employees; or (iii) all outstanding Options may be canceled by the Board or the Committee as of the effective date of any such transaction, provided that notice of such cancellation will be given to each holder of an Option, and each holder of an Option will have the right to exercise such Option in full based on payroll deductions then credited to his account as of a date determined by the Board or the Committee, which date will not be less than 10 days preceding the effective date of such transaction. 16. Amendment of the Plan. The Board may at any time, and from time to --------------------- time, amend this Plan in any respect, except that (a) if the approval of any such amendment by the stockholders of the Company is required by Code section 423, such amendment will not be effected without such approval, and (b) in no event may any amendment be made which would cause the Plan to fail to comply with Code section 423. 17. Insufficient Shares. In the event that the total number of shares of ------------------- Common Stock specified in elections to be purchased under any Offering plus the number of shares purchased under previous Offerings under this Plan exceeds the maximum number of shares issuable under this Plan, the Board or the Committee will allot the shares then available on a pro rata basis. 5 18. Effective Date, Term and Termination of the Plan. This Plan shall be ------------------------------------------------ effective March 1, 1997, subject to approval of the Plan by a majority of the votes present and entitled to vote at a duly held meeting of the shareholders of the Company at which a quorum representing a majority of all outstanding voting stock is present, either in person or by proxy; provided however, that upon approval of the Plan by the shareholders of the Company as set forth above, all rights to purchase shares granted under the Plan on or after the effective date shall be fully effective as if the shareholders of the Company had approved the Plan on the effective date. If the shareholders fail to approve the Plan on or before one year after the effective date, the Plan shall terminate, any rights to purchase shares granted hereunder shall be null and void and of no effect, and all contributed funds shall be refunded to participating employees. The Board may terminate the Plan at any time and for any reason or for no reason, provided that such termination shall not impair any rights of participating employees that have vested at the time of termination. 19. Governmental Regulations. ------------------------ (a) The Company's obligation to sell and deliver Common Stock under this Plan is subject to listing on a national stock exchange or quotation on Nasdaq and the approval of all governmental authorities required in connection with the authorization, issuance or sale of such stock. (b) The Plan will be governed by the laws of the State of Maryland except to the extent that such law is preempted by federal law. (c) The Plan is intended to comply with the provisions of Rule 16b-3(c) promulgated under the Exchange Act as a "tax conditioned stock purchase plan." Any provision inconsistent with such Rule will to that extent be inoperative and will not affect the validity of the Plan. 20. Issuance of Shares. Shares may be issued upon exercise of an Option ------------------ from authorized but unissued Common Stock, from shares held in the treasury of the Company, or from any other proper source. 21. Notification upon Sale of Shares. Each employee agrees, by entering the -------------------------------- Plan, to promptly give the Company notice of any disposition of shares purchased under the Plan where such disposition occurs within two years after the date of grant of the Option pursuant to which such shares were purchased or one year after the transfer of such share to the employee, so that the Company may take appropriate income tax deductions with respect to such transfer and otherwise comply with applicable federal, state and local income tax laws. 22. Costs of Plan. The Company will pay all costs of administering the ------------- Plan, including the costs of brokerage fees, commissions and expenses, if any, for acquiring shares to be purchased under the Plan. All costs related to the employee's sale of shares acquired under the Plan will be borne by the employee. 6 EX-5.1 3 OPINION OF COUNSEL EXHIBIT 5.1 ----------- [LETTERHEAD OF PIPER & MARBURY L.L.P. APPEARS HERE] February 18, 1997 Sylvan Learning Systems, Inc. 1000 Lancaster Street Baltimore, Maryland 21201 Re: Registration Statement on Form S-8 ---------------------------------- Dear Sirs: We have acted as counsel to Sylvan Learning Systems, Inc., a Maryland corporation (the "Company"), in connection with the Company's Registration Statement on Form S-3 (the "Registration Statement") filed on the date hereof with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"). The Registration Statement relates to 50,000 shares of the Company's Common Stock, par value $.01 per share (the "Shares"), issuable in connection with the Sylvan Learning Systems, Inc. Employee Stock Purchase Plan (the "Plan"), duly adopted by the Company's Board of Directors at a meeting at which a quorum was present. In this capacity, we have examined the Company's Charter and By-Laws, the proceedings of the Board of Directors of the Company relating to the issuance of the shares and such other documents, instruments and matters of law as we have deemed necessary to the rendering of this opinion. in such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity with originals of all documents submitted to us as copies. Based upon the foregoing, we are of the opinion and advise you that each of the Shares described in the registration statement has been duly authorized and will, upon approval of the Plan by the Stockholders of the Company at the 1997 Annual Stockholders Meeting and receipt of payment by the Company as contemplated by the terms of the Plan, be validly issued and fully paid and nonassessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving our consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the Rules and Regulations of the Commission thereunder. Very truly yours, PIPER & MARBURY L.L.P. EX-23.1 4 CONSENT OF ACCOUNTANTS EXHIBIT 23.1 ------------ CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS -------------------------------------------------- We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-______) pertaining to the Sylvan Learning Systems, Inc. Employee Stock Purchase Plan 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. ERNST & YOUNG LLP Baltimore, MD February 13, 1997 -----END PRIVACY-ENHANCED MESSAGE-----