<PAGE> 1
As filed with the Securities and Exchange Commission on December 10, 1996.
Subject to amendment.
Registration No. __________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------
QUINTEL ENTERTAINMENT, INC.
(Exact name of issuer as specified in its charter)
Delaware 22-3322277
(State or other jurisdic- (I.R.S. Employer
tion of incorporation Identification No.)
or organization)
---------------------
One Blue Hill Plaza
Pearl River, New York 10965
(Address of principal executive offices)
---------------------
QUINTEL ENTERTAINMENT, INC.
1996 STOCK OPTION PLAN
(Full title of the plan)
---------------------
JEFFREY L. SCHWARTZ
Chairman and Chief Executive Officer
Quintel Entertainment, Inc.
One Blue Hill Plaza
Pearl River, New York 10965
(914) 620-1212
(Name, address and telephone number,
including area code, of agent for service)
---------------------
Copy to:
MURRAY L. SKALA, ESQ.
Feder, Kaszovitz, Isaacson, Weber, Skala & Bass LLP
750 Lexington Avenue
New York, New York 10022
---------------------
Approximate date of commencement of proposed sale to the public:
From time to time after the
Registration Statement becomes effective.
---------------------
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per share* price* fee
---------- ---------- ---------- ------ ---
<S> <C> <C> <C> <C>
Common Stock 500,000 $7.25 $3,625,000 $1,098.48
($.001 par shares
value)
</TABLE>
* Estimated solely for purposes of calculating the registration fee on the basis
of the product resulting from multiplying 500,000 shares of Common Stock by
$7.25, the average of the bid and ask prices of the shares of Common Stock on
the Nasdaq National Market on December 6, 1996, as reported by the National
Association of Securities Dealers Automated Quotation System.
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange
Commission (the "Commission") by Quintel Entertainment, Inc., a Delaware
corporation (referred to herein as either the "Company" or the "Registrant"),
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and the Securities Act of 1933, as amended (the "Securities Act"), are
incorporated by reference in this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the year ended
November 30, 1995.
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ending February 29, May 31 and August 31, 1996, as well as a Current Report on
Form 8-K, filed with the Commission on May 21, 1996.
(c) The description of the Common Stock set forth in the Company's
Registration Statement on Form 8-A filed October 23, 1995 and any amendment or
report filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicate that all shares of Common Stock offered
hereby have been sold or which deregisters all then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents. 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 Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
The Company's Common Stock is registered under Section 12 of the
Securities Exchange Act of 1934. See Item 3(c) above.
Item 5. Interests of Named Experts and Counsel.
Mark Gutterman, a director of the Company and a partner in the firm of
Feldman, Gutterman, Meinberg & Co., one of the Company's accountants, has been
granted by the Company options to purchase up to 20,000 shares of the Company's
Common Stock at varying exercise prices.
<PAGE> 4
Murray L. Skala, a director of the Company and a member of the firm of
Feder, Kaszovitz, Isaacson, Weber, Skala & Bass LLP, the Company's legal
counsel, has been granted by the Company options to purchase up to 30,000 shares
of the Company's Common Stock at varying exercise prices.
Item 6. Indemnification of Officers and Directors.
The Company's Certificate of Incorporation provides that the personal
liability of the directors of the Company shall be limited to the fullest extent
permitted by the provisions of Section 102(b)(7) of the General Corporation Law
of the State of Delaware (the "DGCL"). Section 102(b)(7) of the DGCL generally
provides that no director shall be liable personally to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
provided that the Certificate of Incorporation does not eliminate the liability
of a director for (i) any breach of the director's duty of loyalty to the
Company or its stockholders; (ii) acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law; (iii) acts or
omissions in respect of certain unlawful dividend payments or stock redemptions
or repurchases; or (iv) any transaction from which such director derives
improper personal benefit. The effect of this provision is to eliminate the
rights of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of her or his fiduciary duty of care as a director (including
breaches resulting from negligent or grossly negligent behavior) except in the
situations described in clauses (i) through (iv) above. The limitations
summarized above, however, do not affect the ability of the Company or its
stockholders to seek nonmonetary remedies, such as an injunction or rescission,
against a director for breach of her or his fiduciary duty. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers, or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Securities and Exchange Commission (the "Commission"), such indemnification
is against public policy as expressed in the Securities Act and is therefore
unenforceable.
In addition, the Certificate of Incorporation provides that the Company
shall, to the fullest extent permitted by Section 145 of the DGCL, indemnify all
persons whom it may indemnify pursuant to Section 145 of the DGCL. Section 145
of the DGCL permits a company to indemnify an officer or director who was or is
a party or is threatened to be made a party to any proceeding because of his or
her position, if the officer or director acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the
Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
The Company maintains a directors' and officers' liability insurance
policy covering certain liabilities that may be incurred by directors and
<PAGE> 5
officers in connection with the performance of their duties. The entire
premium for such insurance is paid by the Company.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
<TABLE>
<CAPTION>
Number Description of Exhibit
- ------ ----------------------
<S> <C>
4* Copy of the Plan, as amended
5 Opinion of Feder, Kaszovitz,
Isaacson, Weber, Skala & Bass LLP
23(i) Consent of Coopers & Lybrand L.L.P.
23(ii) Consent of Feder, Kaszovitz,
Isaacson, Weber, Skala & Bass LLP
(contained in Exhibit 5)
</TABLE>
- ----------------
* The Plan document has been revised to provide for 500,000 shares under
the Plan rather than 1,250,000 shares, the number of shares mistakenly
included in the Plan document, originally filed with the Commission on
August 20, 1996. In addition, Section 6 of the Plan document has been
revised to reflect that non-employee directors will only receive an
automatic grant of 25,000 shares upon becoming a director if they had
not already received such grant under other stock option plans of the
Company. Such changes conform the Plan with the proxy materials
related thereto filed with the Commission on August 20, 1996.
Item 9. Undertakings.
The Registrant hereby undertakes:
(1) That for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Act"), 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.
(2) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement, 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.
<PAGE> 6
(3) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions discussed in Item 6 hereof, 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, suit 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.
(4) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.
(5) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Registrant's Certificate of Incorporation,
indemnification agreement, insurance 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 director, officer or controlling person of the Registrant in the
successful defense of any action, suit 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.
<PAGE> 7
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-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pearl River and State of New York on the 10th day of
December, 1996.
QUINTEL ENTERTAINMENT, INC.
By: /s/ Jeffrey L. Schwartz
-------------------------------
Jeffrey L. Schwartz
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Jeffrey L. Schwartz Chairman, Chief Executive
- ---------------------- Officer and Director
Jeffrey L. Schwartz (Principal Executive Officer) December 10, 1996
/s/ Jay Greenwald President, Chief Operating
- ---------------------- Officer and Director December 10, 1996
Jay Greenwald
/s/ Raymond J. Richter Chief Financial Officer
- ---------------------- and Treasurer (Principal
Raymond J. Richter Financial and Accounting
Officer) December 10, 1996
/s/ Claudia Newman Hirsch Executive Vice President
- ---------------------- and Director December 10, 1996
Claudia Newman Hirsch
/s/ Andrew Stollman Senior Vice President,
- ---------------------- Secretary and Director December 10, 1996
Andrew Stollman
/s/ Michael G. Miller Director December 10, 1996
- ----------------------
Michael G. Miller
/s/ Murray L. Skala Director December 10, 1996
- ----------------------
Murray L. Skala
/s/ Mark Gutterman Director December 10, 1996
- ----------------------
Mark Gutterman
/s/ Edwin A. Levy Director December 10, 1996
- ----------------------
Edwin A. Levy
/s/ Vincent Tese Director December 10, 1996
- ----------------------
Vincent Tese
/s/ Steven Feder Director December 10, 1996
- ---------------------
Steven Feder
</TABLE>
<PAGE> 8
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-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Pearl River and State of New York on the 10th
day of December, 1996.
QUINTEL ENTERTAINMENT, INC.
By:
------------------------------------
Jeffrey L. Schwartz
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Chairman, Chief Executive
- ----------------------- Officer and Director
Jeffrey L. Schwartz (Principal Executive Officer) December 10, 1996
President, Chief Operating
- ----------------------- Operating Officer and
Jay Greenwald Director December 10, 1996
Chief Financial Officer
- ----------------------- and Treasurer (Principal
Raymond J. Richter Financial and Accounting
Officer) December 10, 1996
Executive Vice President
- ----------------------- and Director December 10, 1996
Claudia Newman Hirsch
Senior Vice President,
- ----------------------- Secretary and Director December 10, 1996
Andrew Stollman
Director December 10, 1996
- -----------------------
Michael G. Miller
Director December 10, 1996
- -----------------------
Murray L. Skala
Director December 10, 1996
- -----------------------
Mark Gutterman
Director December 10, 1996
- -----------------------
Edwin A. Levy
Director December 10, 1996
- -----------------------
Vincent Tese
Director December 10, 1996
- -----------------------
Steven Feder
</TABLE>
<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Number Description of Exhibit
- ------ ----------------------
<S> <C>
4* Copy of the Plan, as amended
5 Opinion of Feder, Kaszovitz,
Isaacson, Weber, Skala & Bass LLP
23(i) Consent of Coopers & Lybrand L.L.P.
23(ii) Consent of Feder, Kaszovitz,
Isaacson, Weber, Skala & Bass LLP
(contained in Exhibit 5)
</TABLE>
- ----------------
* The Plan document has been revised to provide for 500,000
shares under the Plan rather than 1,250,000 shares, the
number of shares mistakenly included in the Plan document,
originally filed with the Commission on August 20, 1996. In
addition, Section 6 of the Plan document has been revised to
reflect that non-employee directors will only receive an
automatic grant of 25,000 shares upon becoming a director if
they had not already received such grant under other stock
option plans of the Company. Such changes conform the Plan
with the proxy materials related thereto filed with the
Commission on August 20, 1996.
<PAGE> 1
QUINTEL ENTERTAINMENT, INC.
1996 STOCK OPTION PLAN
1. Purpose of the Plan. The Quintel Entertainment, Inc. 1996 Stock
Option Plan (the "Plan") is intended to advance the interests of Quintel
Entertainment, Inc. (the "Company") by inducing persons of outstanding ability
and potential to join and remain with the Company, by encouraging and enabling
employees to acquire proprietary interests in the Company, and by providing the
participating employees with an additional incentive to promote the success of
the Company. This is accomplished by providing for the granting of "Options"
(which term as used herein includes both "Incentive Stock Options" and
"Nonstatutory Stock Options," as later defined, to qualified employees. In
addition, the Plan also provides for the granting of "Nonstatutory Stock
Options" to all non-employee Directors of the Company, as consideration for
their services and for attending meetings of the Board of Directors, and also
provides for the granting of "Nonstatutory Stock Options" to consultants and
advisors who provide services to the Company.
2. Administration. The Plan shall be administered by a committee (the
"Committee") consisting of at least two (2) Directors chosen by the Board of
Directors, each of which is a "disinterested person", as such term is defined in
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Except as herein specifically provided, the interpretation
and construction by the Committee of any provision of the Plan or of any Option
granted under it shall be final and conclusive. The receipt of Options by
Directors, or any members of the Committee, shall not preclude their vote on any
matters in connection with the administration or interpretation of the Plan,
except as otherwise provided by law.
3. Shares subject to the Plan. The stock subject to grant under the
Plan shall be shares of the Company's common stock, $.001 par value (the "Common
Stock"), whether authorized but unissued or held in the Company's treasury or
shares purchased from stockholders expressly for use under the Plan. The maximum
number of shares of Common Stock which may be issued pursuant to Options granted
under the Plan shall not exceed five hundred thousand (500,000) shares, subject
to adjustment in accordance with the provisions of Section 13 hereof. The
Company shall at all times while the Plan is in force reserve such number of
shares of Common Stock as will be sufficient to satisfy the requirements of all
outstanding Options granted under the Plan. In the event any Option granted
under the Plan shall expire or terminate for any reason without having been
exercised in full or shall cease for any reason to be exercisable in whole or in
part, the unpurchased shares subject thereto shall again be available for
Options under this Plan.
<PAGE> 2
4. Stock Option Agreement. Each Option granted under the Plan shall be
authorized by the Committee and shall be evidenced by a Stock Option Agreement
which shall be executed by the Company and by the person to whom such Option is
granted. The Stock Option Agreement shall specify the number of shares of Common
Stock as to which any Option is granted, the period during which the Option is
exercisable and the option price per share thereof.
5. Discretionary Grant Participation. The class of persons which shall
be eligible to receive discretionary grants of Options under the Plan shall be
all key employees (including officers) of either the Company or any subsidiary
corporation of the Company and consultants and advisors who provide services to
the Company or any subsidiary of the Company, other than in connection with the
offer or sale of securities in a capital raising transaction. Employees shall be
entitled to receive (i) Incentive Stock Options, as described in Section 7
hereafter and (ii) Nonstatutory Stock Options, as described in Section 8 here
after. Consultants and advisors shall be entitled only to receive Nonstatutory
Stock Options. The Committee, in its sole discretion, but subject to the
provisions of the Plan, shall determine the employees, consultants or advisors
to whom Options shall be granted and the number of shares to be covered by each
Option taking into account the nature of the employment or services rendered by
the individuals being considered, their annual compensation, their present and
potential contributions to the success of the Company and such other factors as
the Committee may deem relevant.
6. Non-Employee Director Participation.
(a) From September 25, 1996, the date of the adoption of the Plan by
the Company's Board of Directors and stockholders, each non-employee Director
upon first becoming a director will be automatically granted, without further
action by the Committee, an option to purchase 25,000 shares of the Company's
Common Stock.
(b) Commencing each January 1st during the term of the Plan,
non-employee Directors of the Company then serving in such capacity, shall each
be granted Options to purchase 25,000 shares of the Company's Common Stock, to
be granted in equal quarterly installments of 6,250 shares.
(c) The option price of the shares subject to the Options set forth in
Sections 6(a) and 6(b) hereof shall be the fair market value (as defined in
Section 7(f) hereafter) of the Company's Common Stock on the date such Options
are granted. All of such Options shall be Nonstatutory Stock Options, as
described in Section 8 hereafter. The Options granted pursuant to this
<PAGE> 3
Section 6 shall vest entirely on the date they are granted and shall be
exercisable for a period of ten (10) years.
7. Incentive Stock Options. The Committee may grant Options under the
Plan which are intended to meet the requirements of Section 422 of the Internal
Revenue Code of 1986 (the "Code") (such an Option referred to herein as an
"Incentive Stock Option"), and which are subject to the following terms and
conditions and any other terms and conditions as may at any time be required by
Section 422 of the Code:
(a) No Incentive Stock Option shall be granted to individuals other
than key employees of the Company or of a subsidiary corporation of the Company.
(b) Each Incentive Stock Option under the Plan must be granted prior to
September 25, 2006, which is within ten (10) years from the date the Plan was
adopted by the Board of Directors.
(c) The option price of the shares subject to any Incentive Stock
Option shall not be less than the fair market value of the Common Stock at the
time such Incentive Stock Option is granted; provided, however, if an Incentive
Stock Option is granted to an individual who owns, at the time the Incentive
Stock Option is granted, more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of a subsidiary
corporation of the Company, the option price of the shares subject to the
Incentive Stock Option shall be at least one hundred ten percent (110%) of the
fair market value of the Common Stock at the time the Incentive Stock Option is
granted.
(d) No Incentive Stock Option granted under the Plan shall be
exercisable after the expiration of ten (10) years from the date of its grant.
However, if an Incentive Stock Option is granted to an individual who owns, at
the time the Incentive Stock Option is granted, more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or of a
subsidiary corporation, of the Company, such Incentive Stock Option shall not be
exercisable after the expiration of five (5) years from the date of its grant.
Every Incentive Stock Option granted under the Plan shall be subject to earlier
termination as expressly provided in Section 11 hereof.
(e) For purposes of determining stock ownership under this Section 7,
the attribution rules of Section 425(d) of the Code shall apply.
(f) For purposes of the Plan, fair market value shall be determined by
the Committee and, if the Common Stock is listed on a national securities
exchange or traded on the Over-the-Counter market, the fair market value shall
be the closing price of the
<PAGE> 4
Common Stock on such exchange, or on the Over-the-Counter market as reported by
the National Quotation Bureau, Incorporated, as the case may be, on the day on
which the Option is granted or on the day on which a determination of fair
market value is required under the Plan, or, if there is no trading or closing
price on that day, the closing price on the most recent day preceding the day
for which such prices are available.
8. Nonstatutory Stock Options. The Committee may grant Options under
the Plan which are not intended to meet the requirements of Section 422 of the
Code, as well as Options which are intended to meet the requirements of Section
422 of the Code, but the terms of which provide that they will not be treated as
Incentive Stock Options (referred to herein as a "Nonstatutory Stock Option").
Nonstatutory Stock Options which are not intended to meet these requirements
shall be subject to the following terms and conditions:
(a) A Nonstatutory Stock Option may be granted to any person eligible
to receive an Option under the Plan pursuant to Section 5 hereof.
(b) Persons eligible to receive Nonstatutory Stock Options pursuant to
Section 6 hereof are granted Options automatically under the Plan, without any
determination by the Committee.
(c) Subject to the price provisions of Section 6 hereof, the option
price of the shares subject to a Nonstatutory Stock Option shall be determined
by the Committee, in its absolute discretion, at the time of the grant of the
Nonstatutory Stock Option.
(d) Subject to the provisions of Section 6 hereof, a Nonstatutory Stock
Option granted under the Plan may be of such duration as shall be determined by
the Committee (not to exceed 10 years), and shall be subject to earlier
termination as expressly provided in Section 11 hereof.
9. Rights of Option Holders. The holder of any Option granted under the
Plan shall have none of the rights of a stockholder with respect to the shares
covered by his Option until such shares shall be issued to him upon the exercise
of his Option.
10. Transferability. No Option granted under the Plan shall be
transferable by the individual to whom it was granted otherwise than by Will or
the laws of decent and distribution or pursuant to a domestic relations order as
defined by the Internal Revenue Code of 1986, as amended, or Title I of the
Employee Retirement Income Security Act, or the rules thereunder, and, during
the lifetime of such individual, shall not be exercisable by any other person,
but only by him.
<PAGE> 5
11. Termination of Employment or Death.
(a) If the employment of an employee by the Company or any subsidiary
of the Company shall be terminated voluntarily by the employee or for cause,
then his Options shall expire forthwith. Except as provided in subsections (b)
and (c) of this Section 11, if such employment or services shall, terminate for
any other reason, then such Options may be exercised at any time within three
(3) months after such termination, subject to the provisions of subparagraph (f)
of this Section 11. For purposes of the Plan, the retirement of an individual
either pursuant to a pension or retirement plan adopted by the Company or at the
normal retirement date prescribed from time to time by the Company shall be
deemed to be termination of such individual's employment other than voluntarily
or for cause. For purposes of this subparagraph, an employee who leaves the
employ of the Company to become an employee of a subsidiary corporation of the
Company or a corporation (or subsidiary or parent corporation of the
corporation) which has assumed the Option of the Company as a result of a
corporate reorganization, etc., shall not be considered to have terminated his
employment.
(b) If the holder of any Options under the Plan dies (i) while employed
by the Company or a subsidiary of the Company, or (ii) within three (3) months
after the termination of his employment or services other than voluntarily by
the employee or for cause, then such Options may, subject to the provisions of
subparagraph (f) of this Section 11, be exercised by the estate of the employee
or by a person who acquired the right to exercise such Options by bequest or
inheritance or by reason of the death of such employee at any time within one
(1) year after such death.
(c) If the holder of any Options under the Plan ceases employment
because of permanent and total disability (within the meaning of Section
22(e)(3) of the Code) while employed by the Company or a subsidiary of the
Company, then such Options may, subject to the provision of subparagraph (f) of
this Section 11, be exercised at any time within one (1) year after his termina-
tion of employment due to this disability.
(d) If the services of a non-employee Director of the Company shall be
terminated by the Company for cause, then his Options shall expire forthwith. If
such services shall terminate for any other reason (including the death or
disability of a non-employee Director), he shall resign as a director of the
Company or his term shall expire, then such Options may be exercised at any time
within one (1) year after such termination, subject to the provisions of
subparagraph (f) of this Section 11. In the event of the death of a non-employee
Director, his Options may be exercised by his estate or by a person who acquired
the right to exercise such Options by bequest or inheritance or by
<PAGE> 6
reason of the death of such non-employee Director at any time within one (1)
year after such death.
(e) Upon the death of any consultant or advisor to the Company or any
of its subsidiaries, who is granted any Options hereunder, such Options may,
subject to the provisions of subparagraph (f) of this Section 11, be exercised
by the estate of such person or by a person who acquired the right to exercise
such Options by bequest or inheritance or by reason of the death of such person
at any time within one (1) year after such death.
(f) An Option may not be exercised pursuant to this Section 11 except
to the extent that the holder was entitled to exercise the Option at the time of
termination of employment, termination of Directorship, or death, and in any
event may not be exercised after the expiration of the Option.
(g) For purposes of this Section 11, the employment relationship of an
employee of the Company or of a subsidiary corporation of the Company will be
treated as continuing intact while he is on military or sick leave or other bona
fide leave of absence (such as temporary employment by the Government) if such
leave does not exceed ninety (90) days, or, if longer, so long as his right to
reemployment is guaranteed either by status or by contract.
12. Exercise of Options.
(a) Unless otherwise provided in the Stock Option Agreement, any
Option granted under the Plan shall be exercisable in whole at any time, or in
part from time to time, prior to expiration. The Committee, in its absolute
discretion, may provide in any Stock Option Agreement that the exercise of any
Option granted under the Plan shall be subject (i) to such condition or
conditions as it may impose, including but not limited to, a condition that the
holder thereof remain in the employ or service of the Company or a subsidiary
corporation of the Company for such period or periods of time from the date of
grant of the Option, as the Committee, in its absolute discretion, shall
determine; and (ii) to such limitations as it may impose, including, but not
limited to, a limitation that the aggregate fair market value of the Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by any employee during any calendar year (under all plans of the
Company and its parent and subsidiary corporations) shall not exceed One Hundred
Thousand Dollars ($100,000). In addition, in the event that under any Stock
Option Agreement the aggregate fair market value of the Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by
any employee during any calendar year (under all plans of the Company and its
parent and subsidiary corporations) exceeds One Hundred Thousand Dollars
($100,000), the Committee may, when shares are
<PAGE> 7
transferred upon exercise of such Options, designate those shares which shall be
treated as transferred upon exercise of an Incentive Stock Option and those
shares which shall be treated as transferred upon exercise of a Nonstatutory
Stock Option.
(b) An Option granted under the Plan shall be exercised by the delivery
by the holder thereof to the Company at its principal office (attention of the
Secretary) of written notice of the number of shares with respect to which the
Option is being exercised. Such notice shall be accompanied by payment of the
full option price of such shares, and payment of such option price shall be made
by the holder's delivery of his check payable to the order of the Company;
provided, however, that notwithstanding the foregoing provisions of this
Section 12 or any other terms, provisions or conditions of the Plan, at the
written request of the optionee and upon approval by the Board of Directors or
the Committee, shares acquired pursuant to the exercise of any Option may be
paid for in full at the time of exercise by the surrender of shares of Common
Stock of the Company held by or for the account of the optionee at the time of
exercise to the extent permitted by subsection (c)(5) of Section 422 of the Code
and, with respect to any person who is subject to the reporting requirements of
Section 16(a) of the Exchange Act, to the extent permitted by Section 16(b) of
the Exchange Act and the Rules of the Securities and Exchange Commission,
without liability to the Company. In such case, the fair market value of the
surrendered shares shall be determined by the Committee as of the date of
exercise in the same manner as such value is determined upon the grant of an
Incentive Stock Option.
13. Adjustment Upon Change in Capitalization.
(a) In the event that the outstanding Common Stock is hereafter
changed by reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination of shares, stock dividends or the
like, an appropriate adjustment shall be made by the Committee in the aggregate
number of shares available under the Plan and in the number of shares and option
price per share subject to outstanding Options. If the Company shall be
reorganized, consolidated or merged with another corporation, or if all of
substantially all of the assets of the Company shall be sold or exchanged, the
holder of an Option shall, at the time of issuance of the stock under such a
corporate event, be entitled to receive upon the exercise of his Option the
same number and kind of shares of stock or the same amount of property, cash or
securities as he would have been entitled to receive upon the happening of such
corporate event as if he had been, immediately prior to such event, the holder
of the number of shares covered by his Option; provided, however, that in such
event the Committee shall have the discretionary power to take any action
necessary or appropriate to prevent any Incentive Stock Option granted hereunder
from being disqualified as an
<PAGE> 8
"incentive stock option" under the then existing provisions of the Code or any
law amendatory thereof or supplemental thereto.
(b) Any adjustment in the number of shares shall apply proportionately
to only the unexercised portion of the Option granted hereunder. If fractions of
a share would result from any such adjustment, the adjustment shall be revised
to the next lower whole number of shares.
14. Further Conditions of Exercise.
(a) Unless prior to the exercise of the Option the shares issuable upon
such exercise have been registered with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), the
notice of exercise shall be accompanied by a representation or agreement of the
individual exercising the Option to the Company to the effect that such shares
are being acquired for investment and not with a view to the resale of
distribution thereof or such other documentation as may be required by the
Company unless in the opinion of counsel to the Company such representation,
agreement or documentation is not necessary to comply with the Securities Act.
(b) The Company shall not be obligated to deliver any Common Stock
until it has been listed on each securities exchange on which the Common Stock
may then be listed or until there has been qualification under or compliance
with such state or federal laws, rules or regulations as the Company may deem
applicable. The Company shall use reasonable efforts to obtain such listing,
qualifications and compliance.
15. Effectiveness of the Plan. The Plan was originally adopted by the
Board of Directors as of August 1, 1996. The Plan was approved by the
affirmative vote of a majority of the outstanding shares of capital stock of the
Company present in person or by proxy at a meeting of stockholders of the
Company convened for such purpose on September 25, 1996.
16. Termination, Modification and Amendment.
(a) The Plan (but not Options previously granted under the Plan) shall
terminate on September 24, 2006, which is within ten (10) years from the date of
its adoption by the Board of Directors and stockholders, or sooner as
hereinafter provided, and no Option shall be granted after termination of the
Plan.
(b) The Plan may from time to time be terminated, modified or amended
by the affirmative vote of the holders of a majority of the outstanding shares
of capital stock of the Company present in person or by proxy at a meeting of
stockholders of the Company convened for such purpose; provided, however, that
Section 6 of
<PAGE> 9
the Plan may not be amended more than once every six (6) months, other than to
comply with changes in the Code, the Employee Retirement Income Security Act, or
the rules thereunder.
(c) The Board of Directors may at any time, on or before the
termination date referred to in Section 16(a) hereof, terminate the Plan, or
from time to time make such modifications or amendments to the Plan as it may
deem advisable; provided, however, that the Board of Directors shall not,
without approval by the affirmative vote of the holders of a majority of the
outstanding shares of capital stock of the Company present in person or by proxy
at a meeting of stockholders of the Company convened for such purpose, increase
(except as provided by Section 13 hereof) the maximum number of shares as to
which Incentive Stock Options may be granted, or change the designation of the
employees or class of employees eligible to receive Options or make any other
change which would prevent any Incentive Stock Option granted hereunder which is
intended to be an "incentive stock option" from disqualifying as such under the
then existing provisions of the Code or any law amendatory thereof or
supplemental thereto.
(d) No termination, modification or amendment of the Plan, may without
the consent of the individual to whom an Option shall have been previously
granted, adversely affect the rights conferred by such Option.
17. Not a Contract of Employment. Nothing contained in the Plan or in
any Stock Option Agreement executed pursuant hereto shall be deemed to confer
upon any individual to whom an Option is or may be granted hereunder any right
to remain in the employ or service of the Company or a subsidiary corporation of
the Company.
18. Use of Proceeds. The proceeds from the sale of shares pursuant to
Options granted under the Plan shall constitute general funds of the Company.
19. Indemnification of Board of Directors or Committee. In addition to
such other rights of indemnification as they may have, the members of the Board
of Directors or the Committee, as the case may be, shall be indemnified by the
Company to the extent permitted under applicable law against all costs and
expenses reasonably incurred by them in connection with any action, suit or
proceeding to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any rights
granted thereunder and against all amounts paid by them in settlement thereof or
paid by them in satisfaction of a judgment of any such action, suit or
proceeding, except a judgment based upon a finding of bad faith. Upon the
institution of any such action, suit or proceeding, the member or members of the
Board of Directors or the Committee, as
<PAGE> 10
the case may be, shall notify the Company in writing, giving the Company an
opportunity at its own cost to defend the same before such member or members
undertake to defend the same on their own behalf.
20. Definitions. For purposes of the Plan, the terms "parent
corporation" and "subsidiary corporation" shall have the same meanings as set
forth in Sections 425(e) and 425(f) of the Code, respectively, and the masculine
shall include the feminine and the neuter as the context requires.
21. Governing Law. The Plan shall be governed by, and all questions
arising hereunder shall be determined in accordance with, the law of the State
of New York.
<PAGE> 1
December 9, 1996
Quintel Entertainment, Inc.
One Blue Hill Plaza
Pearl River, New York 10965
Gentlemen:
We refer to the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by Quintel Entertainment, Inc. (the
"Company") with the Securities and Exchange Commission under the Securities Act
of 1933, as amended (the "Act"), relating to the registration of 500,000 shares
of the common stock of the Company, par value, $.001 per share (the "Shares"),
which may be issued upon the exercise of options granted or to be granted
pursuant to the Quintel Entertainment, Inc. 1996 Stock Option Plan (the "Plan").
As counsel for the Company, we have examined such corporate
records, documents and such questions of law as we have considered necessary or
appropriate for the purposes of this opinion and, upon the basis of such
examination, advise you that in our opinion, all necessary corporate proceedings
by the Company have been duly taken to authorize the issuance of the Shares upon
the exercise of options granted or to be granted pursuant to the Plan, and that
the Shares being registered pursuant to the Registration Statement, when issued
upon the exercise of options granted or to be granted under the Plan in
accordance with the terms of the options and the Plan, will be duly authorized,
legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and all references to this firm in the
Registration Statement. This consent is not to be construed as an admission that
we are a person whose consent is required to be filed with the Registration
Statement under the provisions of the Act.
Very truly yours,
Feder, Kaszovitz, Isaacson,
Weber, Skala & Bass LLP
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the
registration statement of Quintel Entertainment, Inc. and Subsidiaries (the
"Company") on Form S-8 (File No. ) of our report dated February 19, 1996, on our
audits of the consolidated financial statements and financial statement schedule
of the Company as of November 30, 1995 and 1994, and for each of the years in
the three year period ended November 30, 1995, which report is included in the
Company's Annual Report on Form 10-K.
Coopers & Lybrand L.L.P.
Melville, New York
December 9, 1996
