As filed with the Securities and Exchange Commission on April 16, 1999
Registration No.333-___________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
NETTER DIGITAL ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3392054
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5125 Lankershim Boulevard
North Hollywood, California 91601
(Address of principal executive offices) (Zip Code)
Netter Digital Entertainment, Inc. 1995 Stock Option Plan
(Full title of the Plan)
Douglas Netter, President and Chief Executive Officer
Netter Digital Entertainment, Inc.
5125 Lankershim Boulevard
North Hollywood, California 91601
(Name and address of agent for service)
(818)753-1990
(Telephone number, including area code, of agent for service)
Copy to:
Kenneth A. Luer
Ervin, Cohen & Jessup
9401 Wilshire Boulevard, 9th Floor
Beverly Hills, CA 90212
(310) 273-6333
CALCULATION OF REGISTRATION FEE
Title of each class Amount Proposed maximum Proposed Amount of
ofsecurity to be to be offering price maximum registration
registered registered per unit aggregate fee
offering price
Common Stock 500,000 $1.50(*) $750,00(*) $208.50
issuable under the shares
1995 Stock Option
Plan
(*) Calculated pursuant to Rule 457(h)(1).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Netter Digital Entertainment, Inc. ("Netter Digital") hereby incorporates
by reference into this Registration Statement the following documents:
(a) Netter Digital's Annual Report on Form 10-KSB for the year ended June
30, 1998;
(b) Netter Digital's Quarterly Reports on Form 10-Q for the quarters ended
September 30 and December 31, 1998;
(c) Netter Digital's Current Report on Form 8-K dated March 29, 1999; and
(d) The description of the Common Stock of Netter Digital contained in
its Registration Statement filed pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
such description may be amended from time to time.
All reports and other documents filed by Netter Digital subsequent to the
date of this Registration Statement 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 indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement and to be
considered a part hereof from the date of filing of such documents.
Item 6. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware (the
"GCL") permits a corporation to, and the registrant's bylaws require that it,
indemnify any person who is or was a director or officer of the corporation,
or is or was serving at the request of the corporation as a director or officer
of another corporation, against any judgment, fine, amount paid in settlement,
and expense (including attorneys' fees) actually and reasonably incurred by
such person in connection with any action, suit, or proceeding brought or
threatened to be brought (other than in an action by or in right of the
corporation) in his capacity as or arising out of his status as a director or
officer of the corporation or, if serving at the request of the corporation,
as a director or officer of another corporation, if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
As permitted under Section 145 of the GCL, the registrant's bylaws also
provide that it shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests
of the corporation. However, in such an action by or on behalf of a
corporation, no indemnification may be made in respect of any claim, issue or
matter as to which the person is adjudged liable for negligence or misconduct
in the performance of his duty to the corporation unless and only to the
extent that the court determines that, despite the adjudication of liability
but in view of all the circumstances, the person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
In addition, the indemnification provided by Section 145 shall not be
deemed exclusive of any other rights to which a person seeking indemnification
may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
The bylaws also provide that the registrant may purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
registrant, or is serving at the request of the registrant as a director or
officer of another corporation, against any liability incurred by such person
in any such capacity, or arising out of his status as such, regardless of
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whether the registrant is empowered to indemnify such person under the
provisions of the bylaws. Netter Digital currently maintains such insurance.
The registrant's Certificate of Incorporation (the "Certificate")
provides that the registrant shall indemnify, to the fullest extent permitted
by law, each of its officers, directors, employees and agents.
Item 8. Exhibits
4.1 Netter Digital Entertainment, Inc. 1995 Stock Option Plan (the "1995
Plan"), with form of incentive option agreement used in connection
with the 1995 Plan attached as Exhibit "C" thereto.
5.1 Opinion of Ervin, Cohen & Jessup LLP.
23.1 Consent of Feldman Sherb Ehrlich & Co., P.C.
23.2 Consent of Ervin, Cohen & Jessup LLP (included in Exhibit 5.1)
24.1 Powers of Attorney (set forth on Pages II-5 and II-6).
Item 9. Undertakings
A. The 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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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 this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more that a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement
or any material change to such information in this 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 is contained in periodic reports filed by the registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
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(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 Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at the 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, 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.
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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 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 North Hollywood, State of California, on April 16,
1999.
NETTER DIGITAL ENTERTAINMENT, INC.
By /s/ Douglas Netter
--------------------------------------
Douglas Netter, Chairman of the Board,
President, and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Thomas Jorgenson and Chad Kalebic, and each of
them, as true and lawful attorneys-in-fact and agents with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all post-effective amendments to this
Registration Statement, and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the foregoing, as fully
to all intents and purposes as he might or could do in person, hereby
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, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
/s/ Douglas Netter Chairman of the Board, President 4/16/99
Douglas Netter and Chief Executive Officer
/s/ John Copeland Executive Vice President 4/16/99
John Copeland and Secretary
/s/ Thomas L. Jorgenson Executive Vice President 4/16/99
Thomas L. Jorgenson and Chief Operating Officer
/s/ Chad Kalebic Chief Financial Officer and 4/16/99
Chad Kalebic Controller (Principal Financial
and Accounting Officer)
/s/ Kate Netter Forte Director 4/16/99
Kate Netter Forte
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/s/ Leonard Silverman Director 4/16/99
Leonard Silverman
/s/ Paul Costa Director 4/16/99
Paul Costa
/s/ Lennart Ringquist Director 4/16/99
Lennart Ringquist
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EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
4.1 Netter Digital Entertainment, Inc. 1995 Stock Option
Plan (the "1995 Plan"), with form of incentive option
agreement used in connection with the 1995 Plan
attached as Exhibit "C" thereto.
5.1 Opinion of Ervin, Cohen & Jessup LLP.
23.1 Consent of Feldman Sherb Ehrlich & Co., P.C.
23.2 Consent of Ervin, Cohen & Jessup LLP (included in Exhibit 5.1).
24.1 Powers of Attorney (included on pages II-5 and II-6 hereof).
EXHIBIT 4.1
NETTER DIGITAL ENTERTAINMENT, INC.
1995 STOCK OPTION PLAN
1. PURPOSE. This Stock Option Plan (the "Plan") is intended to serve as
an incentive to, and to encourage stock ownership by certain eligible
participants rendering services to Netter Digital Entertainment, Inc., a
Delaware corporation, and certain affiliates as set forth below (the
"Corporation"), so that they may acquire or increase their proprietary
interest in the Corporation and to encourage them to remain in the service of
the Corporation.
2. ADMINISTRATION.
2.1 Committee. The Plan shall be administered by a committee of two
or more outside directors appointed by the Board of Directors of the
Corporation (the "Committee"). The Committee shall select one of its members
as Chairman and shall appoint a Secretary, who need not be a member of the
Committee. The Committee shall hold meetings at such times and places as it
may determine and minutes of such meetings shall be recorded. Acts by a
majority of the Committee in a meeting at which a quorum is present and acts
approved in writing by a majority of the members of the Committee shall be
valid acts of the Committee. Each member of the Committee shall be also
"disinterested, " as that term is defined in Rule 16b-3 promulgated pursuant
to Section 16(b) of the Securities Exchange Act of 1934 ("Rule 16b-3")
meaning for purposes of this Plan, that no director may be a member of the
Committee if that director has received any discretionary grant or award
under any of the Corporation's stock or securities plans, including this Plan,
during (i) the one year period prior to the director's serving on the
Committee, or (ii) during the period of such director's service on the
Committee.
2.2 Formula Grants, to Non-Employee Directors. Notwithstanding the
other provisions of this Plan regarding the grant of options, options shall be
granted to non-employee Directors of the Corporation (other than Geoffrey
Talbot) as follows:
2.2.1 Options to acquire 30,000 shares of Stock (as defined
below) shall be granted to each such Director of the Corporation within six
months after taking office as a member of the Board of Directors of the
Corporation. Each such Director shall receive additional options to acquire
10,000 shares of Stock (as defined below) on the first anniversary of the
Director taking office and another set of options to acquire 10,000 shares of
Stock (as defined below) on the second anniversary of the Director taking
office, provided the Director still holds office on that anniversary date.
2.2.2 The exercise price for options granted pursuant to this
Section 2.2 shall be the fair market value of the Stock, as determined by the
Committee, on the date of grant, unless a higher price is required by
applicable securities or tax laws; and
2.2.3 This Section 2.2 shall not be modified more often than
once every six months, except as may be necessary or advisable to comport with
the requirements of any applicable law or regulation.
2.3 Term. If the Board of Directors selects a Committee, the
members of the Committee shall serve on the Committee for the period of time
determined by the Board of Directors and shall be subject to removal by the
Board of Directors at any time. The Board of Directors may terminate the
function of the Committee at any time and resume all powers and authority
previously delegated to the Committee.
2.4 Authority. The Committee shall have sole discretion and
authority to grant options under the Plan to eligible participants rendering
services to the Corporation or any " parent " or " subsidiary " of the
Corporation, as defined in Section 424 of the Internal Revenue Code of 1986, as
amended (the "Code") ("Parent or Subsidiary"), at such times, under such terms
and in such amounts as it may decide. For purposes of this Plan and any Stock
Option Agreement (as defined below), the term "Corporation" shall include any
Parent or Subsidiary, if applicable. Subject to the express provisions of the
Plan, the Committee shall have complete authority to interpret the Plan, to
prescribe, amend and rescind the rules and regulations relating to it, to
determine the details and provisions of any Stock Option Agreement, to
accelerate any options and to make all other determinations necessary and
advisable for the administration of the Plan.
2.5 Type of Option. The Committee shall have full authority and
discretion to determine, and shall specify, whether the eligible individual
will be granted options intended to qualify as incentive options under Section
422 of the Code ("Incentive Options") or options which are not intended to
qualify under Section 422 of the Code ("Non-Qualified Options"); provided,
however, that Incentive Options shall only be granted to employees of the
Corporation, or a Parent or Subsidiary thereof, and shall be subject to the
special limitations set forth herein attributable to Incentive Options.
2.6 Interpretation. The interpretation and construction by the
Committee of any provisions of the Plan or of any option granted under the Plan
shall be final and binding on all parties having an interest in this Plan or
any option granted hereunder. No member of the Committee shall be liable for
any action or determination made in good faith with respect to the Plan or any
option granted under the Plan.
3. ELIGIBILITY.
3.1 General. All directors, officers, employees of and certain
persons rendering services to the Corporation relative to the Corporation's
management, operation or development shall be eligible to receive options under
the Plan. The selection of recipients of options shall be within the sole and
absolute discretion of the Committee. No person shall be granted an Incentive
Option under this Plan unless such person is an employee of the Corporation on
the date of grant. No person shall be granted an option under this Plan unless
such person has executed the grant representation letter set forth on Exhibit
"A," as such Exhibit may be amended by the Committee from time to time.
3.2 Termination of Eligibility.
3.2.1 If an optionee ceases to be employed by the
Corporation, is no longer an officer or member of the Board of Directors of the
Corporation, or no longer performs services for the Corporation for any reason
(other than for "cause, " as hereinafter defined, or such optionee's death),
any option granted hereunder to such optionee shall expire on the 90th day
after the occurrence giving rise to such termination of eligibility (or 1
year in the event an optionee is "disabled," as defined in Section 22(e)(3) of
the Code) or upon the date it expires by its terms, whichever is earlier.
Any option that has not vested in the optionee as of the date of such
termination shall immediately expire and shall be null and void. The
Committee shall, in its sole and absolute discretion, decide whether an
authorized leave of absence or absence for military or governmental service,
or absence for any other reason, shall constitute termination of eligibility
for purposes of this Section.
3.2.2 If an optionee ceases to be employed by the
Corporation, is no longer an officer or member of the Board of Directors of the
Corporation, or no longer performs services for the Corporation and such
termination is as a result of "cause, " as hereinafter defined, then all
options granted hereunder to such optionee shall expire on the date of the
occurrence giving rise to such termination of eligibility or upon the date it
expires by its terms, whichever is earlier, and such optionee shall have no
rights with respect to any unexercised options. For purposes of this Plan,
"cause" shall mean an optionee's personal dishonesty, misconduct, breach of
fiduciary duty, incompetence, intentional failure to perform stated
obligations, willful violation of any law, rule, regulation or final cease and
desist order, or any material breach of any provision of this Plan, any Stock
Option Agreement or any employment agreement.
3.3 Death of Optionee and Transfer of Option. In the event an optionee
shall die, an option may be exercised (subject to the condition that no
option shall be exercisable after its expiration and only to the extent
that the optionee's right to exercise such option had accrued at the time
of the optionee's death) at any time within six months after the optionee's
death by the executors or administrators of the optionee or by any person
or persons who shall have acquired the option directly from the optionee
by bequest or inheritance. Any option that has not vested in the optionee
as of the date of death or termination of employment, whichever is earlier,
shall immediately expire and shall be null and void. No option shall be
transferable by the optionee other than by will or the laws of intestate
succession.
3.4 Limitation on Incentive Qptions. No person shall be granted any
Incentive Option to the extent that the aggregate fair market value of the
Stock (as defined below) to which such options are exercisable for the first
time by the optionee during any calendar year (under all plans of the
Corporation as determined under Section 422(d) of the Code) exceeds $100,000.
3.5 Limitation on Number of Options. No person shall be granted in
any calendar year options to acquire more than 50,000 shares of Stock.
4. IDENTIFICATION OF STOCK. The Stock, as defined herein, subject to the
options shall be shares of the Corporation's authorized but unissued or
acquired or reacquired common stock (the "Stock"). The aggregate number of
shares subject to outstanding options shall not exceed 500,000 shares of Stock
(subject to adjustment as provided in Section 6). If any option granted
hereunder shall expire or terminate for any reason without having been
exercised in full, the unpurchased shares subject thereto shall again be
available for purposes of this Plan.
5. TERMS AND CONDITIONS OF OPTIONS. Any option granted pursuant to the
Plan shall be evidenced by an agreement ("Stock Option Agreement") in such form
as the Committee shall from time to time determine, which agreement shall
comply with and be subject to the following terms and conditions:
5.1 Number of Shares. Each option shall state the number of shares
of Stock to which it pertains.
5.2 Option Exercise Price. Each option shall state the option
exercise price, which shall be determined by the Committee; provided, however,
that (i) the exercise price of any Incentive Option shall not be less than the
fair market value of the Stock, as determined by the Committee, on the date of
grant of such option, (ii) the exercise price of any Incentive Option granted to
an employee who owns more than 10% of the total combined voting power of all
classes of the Corporation's stock, as determined for purposes of Section 422
of the Code, shall not be less than 110% of the fair market value of the
Stock, as determined by the Committee, on the date of grant of such option, and
(iii) the exercise price of any Non-Qualified Option shall not be less than the
fair market value of the Stock, as determined by the Committee, on the date of
grant of such option.
5.3 Term of Option. The term of an option granted hereunder shall
be determined by the Committee at the time of grant, but shall not exceed ten
years from the date of the grant. The term of any Incentive Option granted to
an employee who owns more than 10% of the total combined voting power of all
classes of the Corporation's stock, as determined for purposes of Section 422
of the Code, shall in no event exceed five years from the date of grant. All
options shall be subject to early termination as set forth in this Plan. In no
event shall any option be exercisable after the expiration of its term.
5.4 Method of Exercise. An option shall be exercised by written
notice to the Corporation by the optionee (or successor in the event of death)
and execution by the optionee of an exercise representation letter in the form
set forth on Exhibit ''B" as such Exhibit may be amended by the Committee from
time to time. Such written notice shall state the number of shares with respect
to which the option is being exercised and designate a time, during normal
business hours of the Corporation, for the delivery thereof ("Exercise Date"),
which time shall be at least 30 days after the giving of such notice unless an
earlier date shall have been mutually agreed upon. At the time specified in the
written notice, the Corporation shall deliver to the optionee at the principal
office of the Corporation, or such other appropriate place as may be determined
by the Committee, a certificate or certificates for such shares.
Notwithstanding the foregoing, the Corporation may postpone delivery of any
certificate or certificates after notice of exercise for such reasonable
period as may be required to comply with any applicable listing requirements of
any securities exchange. In the event an option shall be exercisable by any
person other than the optionee, the required notice under this Section shall be
accompanied by appropriate proof of the right of such person to exercise the
option.
5.5 Medium qnd Time of Payment. The option exercise price shall be
payable in full on or before the option Exercise Date in any one of the
following alternative forms:
5.5.1 Full payment in cash or certified bank or cashier's check;
5.5.2 A Promissory Note (as defined below);
5.5.3 Full payment in shares of Stock or other securities of the
Corporation having a fair market value on the Exercise Date in the amount
equal to the option exercise price;
5.5.4 A combination of the consideration set forth in Sections
5.4.1, 5.4.2 and 5.4.3 equal to the option exercise price; or
5.5.5 Any other method of payment complying with the provisions
of Section 422 of the Code with respect to Incentive Options, provided the
terms of payment are established by the Committee at the time of grant and
any other method of payment established by the Committee with respect
to Non-Qualified Options.
5.6 Fair Market Value. The fair market value of a share of Stock on
any relevant date shall be determined in accordance with the following
provisions:
5.6.1 If the Stock or other security of the Corporation at
the time is neither listed nor admitted to trading on any stock exchange nor
traded in the over-the-counter market, then the fair market value shall be
determined by the Committee after taking into account such factors as the
Committee shall deem appropriate.
5.6.2 If the Stock or other security of the Corporation is
not at the time listed or admitted to trading on any stock exchange but is
traded in the over-the market, the fair market value shall be the mean
between the highest bid and lowest asked prices (or, if such information is
available, the closing selling price) of one share of Stock or other security
of the Corporation on the date in question in the over-the-counter market, as
such prices are reported by the National Association of Securities Dealers
through its NASDAQ system or any successor system. If there are no reported
bid and asked prices (or closing selling price) for the Stock or other
security of the Corporation on the date in question, then the mean between
the highest bid price and lowest asked price (or the closing selling price)
on the last preceding date for which such quotations exist shall be
determinative of fair market value.
5.6.3 If the Stock or other security of the Corporation is at
the time listed or admitted to trading on any stock exchange, then the fair
market value shall be the closing selling price of one share of Stock or other
security of the Corporation on the date in question on the stock exchange
determined by the Committee to be the primary market for the Stock or other
security of the Corporation, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no reported sale of
Stock or other security of the Corporation on such exchange on the date in
question, then the fair market value shall be the closing selling price on
the exchange on the last preceding date for which such quotation exists.
5.7 Promissory Note. Subject to the requirements of applicable
state or Federal law or margin requirements, and if provided in the Stock
Option Agreement, payment of all or part of the purchase price of the Stock
may be made by delivery of a full recourse promissory note ("Promissory
Note"). The Promissory Note shall be executed by the optionee, made payable
to the Corporation and bear interest at such rate as the Committee shall
determine, but in no case less than the minimum rate which will not cause under
the Code (i) interest to be imputed, (ii) original issue discount to exist, or
(iii) any other similar results to occur. Unless otherwise determined by the
Committee, interest on the Note shall be payable in quarterly installments on
March 31, June 30, September 30 and December 31 of each year. A Promissory
Note shall contain such other terms and conditions as may be determined by the
Committee; provided, however, that the full principal amount of the Promissory
Note and all unpaid interest accrued thereon shall be due not later than five
years from the date of exercise. The Corporation may obtain from the optionee
a security interest in all shares of Stock issued to the optionee under the
Plan for the purpose of securing payment under the Promissory Note and may
retain possession of the stock certificates representing such shares in order
to perfect its security interest.
5.8 Rights as a Shareholder. An optionee or successor shall have no
rights as a shareholder with respect to any Stock underlying any option until
the date of the issuance to such optionee of a certificate for such Stock. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such Stock certificate is issued, except
as provided in Section 6.
5.9 Modification, Extension and Renewal of Options. Subject to the
terms and conditions of the Plan, the Committee may modify, extend or renew
outstanding options granted under the Plan, or accept the surrender of
outstanding options (to the extent not exercised) and authorize the granting of
new options in substitution therefor.
5.10 Vesting and Restrictions. The Committee shall have complete
authority and discretion to set the terms, conditions, restrictions, vesting
schedules and other provisions of any option in the applicable Stock Option
Agreement. In addition, the Committee shall have complete authority to require
conditions and restrictions on any Stock issued pursuant to this Plan.
5.11 Other Provisions. The Stock Option Agreements shall contain
such other provisions as the Committee shall deem advisable.
6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
6.1 Subdivision or Consolidation. Subject to any required action
by shareholders of the Corporation, the number of shares of Stock covered by
each outstanding option, and the exercise price thereof, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock of the Corporation resulting from a subdivision or
consolidation of shares or the payment of a stock dividend (but only on the
Stock) or any other increase or decrease in the number of such shares effected
without receipt of consideration by the Corporation. Any fraction of a share
subject to option that would otherwise result from an adjustment pursuant to
this Section shall be rounded downward to the next full number of shares
without other compensation or consideration to the holder of such option.
6.2 Capital Transactions. Upon a sale or exchange of all or
substantially all of the assets of the Corporation, a merger or consolidation
in which the Corporation is not the surviving corporation, a merger,
reorganization or consolidation in which the Corporation is the surviving
corporation and shareholders of the Corporation exchange their stock for
securities or property, a liquidation of the Corporation, or similar
transaction ("Capital Transaction"), this Plan and each option issued under
this Plan, whether vested or unvested, shall terminate, unless such options
are assumed by a successor corporation in a merger or consolidation or
otherwise determined by the Committee, 15 days prior to such Capital
Transaction; provided, however, that unless the outstanding options are
assumed by a successor corporation in a merger or consolidation,
subject to terms approved by the Committee, all optionees will have the right,
until 15 days prior to such Capital Transaction, to exercise all vested
options. Notwithstanding the foregoing, in the event there is a merger or
consolidation where the Corporation is not the surviving corporation, all
options granted under this Plan shall vest 30 days prior to such merger or
consolidation unless such options are assumed by the successor corporation
in such merger or consolidation. The Committee may (but shall not be obligated
to) (i) accelerate the vesting of any option or (ii) apply the foregoing
provisions, including but not limited to termination of this Plan and options
granted pursuant to the Plan, in the event there is a sale of 51 % or more of
the stock of the Corporation in any two year period or a transaction similar
to a Capital Transaction.
6.3 Adjustments. To the extent that the foregoing adjustments
relate to stock or securities of the Corporation, such adjustments shall be
made by the Committee, whose determination in that respect shall be final,
binding and conclusive.
6.4 Ability to Adjust. The grant of an option pursuant to the Plan
shall not affect in any way the right or power of the Corporation to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge, consolidate, dissolve, liquidate, sell or
transfer all or any part of its business or assets.
6.5 Notice of Adjustment. Whenever the Corporation shall take any
action resulting in any adjustment provided for in this Section, the
Corporation shall forthwith deliver notice of such action to each optionee,
which notice shall set forth the, number of shares subject to the option and
the exercise price thereof resulting from such adjustment.
6.6 Limitation on Adjustments. Any adjustment, assumption or
substitution of an Incentive Option shall comply with Section 425 of the Code,
if applicable.
7. NONASSIGNABILITY. Options granted under this Plan may not be sold,
pledged, assigned or transferred in any manner other than by will or by the
laws of intestate succession, and may be exercised during the lifetime of the
optionee only by such optionee. Any transfer in violation of this provision
shall void such option, and any Stock Option Agreement entered into by the
optionee and the Corporation regarding such option shall be void and have no
further force or effect. No option shall be pledged or hypothecated in any way,
nor shall any option be subject to execution, attachment or similar process.
8. NO RIGHT OF EMPLOYMENT. Neither the grant nor exercise of any option
nor anything in this Plan shall impose upon the Corporation or any other
corporation any obligation to employ or continue to employ any optionee. The
right of the Corporation and any other corporation to terminate any employee
shall not be diminished or affected because an option has been granted to such
employee.
9. TERM OF PLAN. This Plan is effective on the date the Plan is adopted
by the Board of Directors and options may be granted pursuant to the Plan from
time to time within a period of ten (10) years from such date, or the date of
any required shareholder approval required under the Plan, if earlier.
Termination of the Plan shall not affect any option theretofore granted.
10. AMENDMENT OF THE PLAN. The Board of Directors of the Corporation may,
subject to any required shareholder approval, suspend, discontinue or terminate
the Plan, or revise or amend it in any respect whatsoever with respect to any
shares of stock at that time not subject to options.
11. APPLICATION OF FUNDS. The proceeds received by the Corporation from
the sale of Stock pursuant to options may be used for general corporate
purposes.
12. RESERVATION OF SHARES. The Corporation, during the term of this Plan,
shall at all times reserve and keep available such number of shares of Stock as
shall be sufficient to satisfy the requirements of the Plan.
13. NO OBLIGATION TO EXERCISE OPTION. The granting of an option shall not
impose any obligation upon the optionee to exercise such option.
14. APPROVAL OF BOARD OF DIRECTORS AND SHAREHOLDERS. The Plan shall not
take effect until approved by the Board of Directors of the Corporation. This
Plan shall be approved by a vote of the shareholders within 12 months from the
date of approval by the Board of Directors. In the event such shareholder vote
is not obtained, all options granted hereunder, whether vested or unvested,
shall be null and void.
15. WITHHOLDING TAXES. Notwithstanding anything else to the contrary in
this Plan or any Stock Option Agreement, the exercise of any option shall be
conditioned upon payment by such optionee in cash, or other provisions
satisfactory to the Committee, of all local, state, federal or other
withholding taxes applicable, in the Committee's judgment, to the exercise or to
later disposition of shares acquired upon exercise of an option (including any
repurchase of an option or Stock).
16 PARACHUTE PAYMENTS. Any outstanding option under the Plan may not
be accelerated to the extent any such acceleration of such option would, when
added to the present value of other payments in the nature of compensation
which becomes due and payable to the optionee would result in the payment to
such optionee of an excess parachute payment under Section 28OG of the Code.
The existence of any such xcess parachute payment shall be determined in the
sole and absolute discretion of the Committee.
17. SECURITIES LAWS COMPLIANCE. Notwithstanding anything contained
herein, the Corporation shall not be obligated to grant any option under this
Plan or to sell, issue or effect any transfer of any Stock unless such grant,
sale, issuance or transfer is at such time effectively (i) registered or exempt
from registration under the Securities Act of 1933, as amended (the "Act"), and
(ii) qualified or exempt from qualification under the California Corporate
Securities Law of 1968 and any other applicable state securities laws. As a
condition to exercise of any option, each optionee shall make such
representations as may be deemed appropriate by counsel to the Corporation for
the Corporation to use any available exemption from registration under the Act
or qualification under any applicable state securities law.
18. RESTRICTIVE LEGENDS. The certificates representing the Stock issued
upon exercise of options granted pursuant to this Plan will bear the following
legends giving notice of restrictions on transfer under the Act and this Plan,
as follows:
(a) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED OR
TRANSFERRED IN A TRANSACTION WHICH WAS NOT REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION
AFFORDED BY SUCH ACT. NO SALE OR TRANSFER OF THESE SHARES SHALL BE
MADE, NO ATTEMPTED SALE OR TRANSFER SHALL BE VALID, AND THE ISSUER
SHALL NOT BE REQUIRED TO GIVE ANY EFFECT, TO ANY SUCH TRANSACTION
UNLESS (A) SUCH TRANSACTION SHALL HAVE BEEN DULY REGISTERED UNDER
THE ACT OR (B) THE ISSUER SHALL HAVE FIRST RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO IT THAT SUCH REGISTRATION IS NOT REQUIRED.
(b) Any other legends required by applicable state securities laws as
determined by the Committee.
19. NOTICES. Any notice to be given under the terms of the Plan shall be
addressed to the Corporation in care of its Secretary at its principal office,
and any notice to be given to an optionee shall be addressed to such optionee a
at the address maintained by the Corporation for such person or at such other
address as the optionee may specify in writing to the Corporation.
As adopted by the Board of Directors on September 13, 1995.
NETTER DIGITAL ENTERTAINMENT, INC., a Delaware
corporation
By: /s/ Douglas Netter
------------------------------
Douglas Netter
Chairman of the Board, President and CEO
EXHIBIT A
______________, 1995
Netter Digital Entertainment, Inc.
5200 Lankershim Blvd., Suite 230
North Hollywood, CA 91601
Re: 1995 Stock Option Plan
To Whom It May Concern:
This letter is delivered to Netter Digital Entertainment, Inc., a Delaware
corporation(the "Corporation"), in connection with the grant to
______________________ (the "Optionee") of an option (the "Option") to
purchase _________ shares of common stock of the Corporation (the "Stock")
pursuant to the Netter Digital Entertainment, Inc. 1995 Stock Option Plan
dated September __, 1995 (the "Plan"). The Optionee understands that the
Corporation's receipt of this letter executed by the Optionee is a condition to
the Corporation's willingness to grant the Option to the Optionee.
The Optionee acknowledges that the grant of the Option by the Corporation is
in lieu of any and all other promises of the Corporation to the Optionee,
whether written or oral, express or implied, regarding the grant of options or
other rights to acquire Stock. Accordingly, in anticipation of the grant of the
Option, the Optionee hereby relinquishes all rights to such other rights, if
any, to acquire stock of the Corporation.
In addition, the Optionee makes the following representations and warranties
with the understanding that the Corporation will rely upon them in the
Corporation's determination of whether the grant of the Option meets the
requirements of the "private offering" exemption provided in Section 25102(f)
of the California Corporations Code and certain exemptions provided under the
Securities Act of 1933, as amended.
1. The Optionee acknowledges receipt of a copy of the Plan and Agreement.
The Optionee has carefully reviewed the Plan and Agreement.
2. The Option and the Stock will be acquired by the Optionee for
investment only, for the Optionee's own account, and not with a view to or for
sale in connection with any distribution of the Option or the Stock. The
Optionee will not take, or cause to be taken, any action which would cause the
Optionee, or any entity or person affiliated with the Optionee, to be deemed an
underwriter with respect to the Option or the Stock.
3. The Optionee either:
a. has a preexisting personal or business relationship with the
Corporation or any of its officers, directors or controlling persons of a
nature and duration as would allow the Optionee to be aware of the character,
business acumen, general business and financial circumstances of the
Corporation or of the person with whom such relationship exists; or
b. by reason of the Optionee's business or financial experience, or
the business or financial experience of the Optionee's professional advisor who
is unaffiliated with and is not compensated by the Corporation or any affiliate
or selling agent of the Corporation, directly or indirectly, the Optionee has
the capacity to protect the Optionee's interests in connection with the grant
of the Option and the purchase of the Stock.
4. The Optionee acknowledges that an investment in the Corporation
represents a speculative investment and a high degree of risk. The Optionee
acknowledges that the Optionee has had the opportunity to obtain and review all
information from the Corporation necessary to make a reasonably informed
investment decision and that the Optionee has had all questions asked of the
Corporation answered to the reasonable satisfaction of the Optionee. The
Optionee is able to bear the economic risk of an investment in the Option and
the Stock.
5. The grant of the Option has not been accompanied by the publication of
any advertisement.
6. The Optionee understands and acknowledges that the Stock has not
been, and will not be registered under the Securities Act of 1933, as amended,
or qualified under the California Corporate Securities Law of 1968. The
Optionee understands and acknowledges that the Stock may not be sold without
compliance with the registration requirements of federal and applicable state
securities laws unless an exemption from such laws is available. The Optionee
understands that the Certificate representing the Stock shall bear the
legends set forth in the Plan.
7. The Optionee understands and acknowledges that the Option and the
Stock are subject to the terms and conditions of the Plan.
8. The Optionee understands and agrees that, at the time
of exercise of any part of the Option for Stock, the Optionee may be required
to provide the Corporation with additional representations, warranties and/or
covenants similar to those contained in this letter.
9. The Optionee is a resident of the State of __________________.
10. The Optionee will notify the Corporation immediately of any change in
the above information which occurs before the Option is exercised in full by
the Optionee.
The foregoing representations and warranties are given on______________,1995 at
_______________.
OPTIONEE:
_______________________________
Exhibit A - Page 3
EXHIBIT B
___________________ , 1995
Netter Digital Entertainment, Inc.
5200 Lankershim Blvd., Suite 230
North Hollywood, CA 91601
Re: 1995 Stock Option Plan
To Whom It May Concern:
I (the "Optionee") hereby exercise my right to purchase ______ shares of
common stock (the "Stock") of Netter Digital Entertainment, Inc., a Delaware
corporation (the "Corporation"), pursuant to, and in accordance with, the
Netter Digital Entertainment, Inc. Stock Option Plan dated September ___,
1995 (the "Plan") and Stock Option Agreement (the "Agreement") dated __, 1995.
As provided in such Plan, I deliver herewith payment as set forth in the Plan
in the amount of the aggregate option exercise price. Please deliver to me at
my address as set forth above stock certificates representing the subject
shares registered in my name (and (spouse) , as (style of vesting))
The Optionee hereby represents as follows:
1. The Optionee acknowledges receipt of a copy of the Plan and Agreement.
The Optionee has carefully reviewed the Plan and Agreement.
2. The Optionee either:
(a) has a preexisting personal or business relationship with the
Corporation or any of its officers, directors or controlling persons of a
nature and duration as would allow the undersigned to be aware of the
character, business acumen, general business and financial circumstances of the
Corporation or of the person with whom such relationship exists; or
(b) by reason of the Optionee's business or financial experience or
the business or financial experience of the Optionee's professional advisor(s)
who is (are) unaffiliated with and is (are) not compensated by the Corporation
or any affiliate or selling agent of the Corporation, directly or indirectly,
has the capacity to protect the Optionee's interests in connection with the
purchase of nonqualified stock options of the Corporation and Stock issuable
upon the exercise thereof.
Exhibit B - Page 1
3. The Optionee is able to bear the economic risk of his investment in
the stock options of the Corporation and an investment in the Stock issuable
upon exercise thereof.
4. The Optionee acknowledges that an investment in the Corporation
represents a speculative investment and a high degree of risk. The Optionee
acknowledges that the Optionee has had the opportunity to obtain and review all
information from the Corporation necessary to make a reasonably informed
investment decision and that the Optionee has had all questions asked of the
Corporation answered to the reasonable satisfaction of the Optionee.
5. The grant of Options for Stock and the exercise of the Options has not
been accompanied by the publication of any advertisement.
6. The Optionee understands and acknowledges that the Stock has not, and
will not, be registered under the Securities Act of 1933, as amended, or
qualified under the California Securities Law of 1968. The Optionee understands
and acknowledges that the Stock may not be sold without compliance with the
registration and qualification requirements of federal and applicable state
securities laws unless exemptions from such laws are available. The Optionee
understands that the certificates representing the Stock shall bear the legends
set forth in the Plan.
7. The Optionee is a resident of the State of _________________.
8. The Optionee hereby is purchasing for the Optionee's own account and
not with a view to or for sale in connection with any distribution of the
nonqualified stock options of the Corporation or any Stock issuable upon
exercise thereof.
The foregoing representations and warranties are given on__________________,
1995 at _______________.
OPTIONEE:
__________________________________
Exhibit B - Page 2
EXHIBIT "C"
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement") is made by and between
Netter Digital Entertainment, Inc., a Delaware corporation, (the
"Corporation"), and (the " Optionee").
NOW, THEREFORE, in consideration of the mutual benefit to be derived here
the Corporation and Optionee agree as follows:
1. Grant of Option. The Corporation hereby grants to Optionee, subject to
all the terms and provisions of the Netter Digital Entertainment, Inc.
Incentive Stock Option Plan dated September 25, 1996, as such Plan may be
hereinafter amended, a copy of which is attached hereto and incorporated
herein by this reference (the "Plan"), the right, privilege and option
("Option") to purchase hares of its common stock ("Stock") at $ ____ per
share, in the manner and subject to the conditions provided hereinafter and in
the Plan and anyamendments thereto and any rules and regulations thereunder.
2. Time of Exercise of Option. Option shall vest in Optionee and may be
exercised by Optionee as set forth on Exhibit "A" hereto. Any exercise may be
with respect to any part or all of the shares then exercisable pursuant to such
Option. Such Option must be exercised within the earlier of (i) 10 years (5
years for 10% shareholders as defined in the Plan) after the date of the
grant, or (ii) except as set forth in Section 3.2.2 of the Plan, 90 days
after, Optionee's termination of employment with either the Corporation, or a
Parent or Subsidiary thereof; provided, however, such rights shall be
extended as more fully set forth in Section 3.3 of the Plan in the case of
Optionee's death. In no event shall the Corporation be required to transfer
fractional shares to Optionee or those entitled to Optionee's rights herein.
3. Method of Exercise. The Option shall be exercised by Optionee as set
forth in Sections 5.4 and 5.5 of the Plan.
4. Restrictions on Exercise and Delivery. The exercise of each Option
shall be subject to the condition that, if at any time the Committee shall
determine, in its sole and absolute discretion,
(a) the satisfaction of any withholding tax or other withholding liabilities, is
necessary or desirable as a condition of, or in connection with, such
exercise or the delivery or purchase of Stock pursuant thereto,
(b) the listing, registration, Or qualification of any shares deliverable upon
such exercise is desirable or necessary, under any state or federal law, as
a condition of, or in connection with, such exercise or the delivery or
purchase of shares pursuant thereto, or
(c) the consent or approval of any regulatory body is necessary or desirable
as a condition of, or in connection with, such exercise or the delivery or
purchase of shares pursuant thereto,
then in any such event, such exercise shall not be effective unless such
withholding, listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the
Committee. Optionee shall execute such documents and take such other actions
as are required by the Committee to enable it to effect or obtain such
withholding, listing, registration, qualification, consent or approval.
Neither the Corporation nor any officer or director, or member of the
Committee, shall have any liability with respect to the non-issuance or
failure to sell shares as the result of any suspensions of exercisability
imposed pursuant to this Section.
5. Termination of Option. Except as otherwise provided in this Agreement
or the Plan, to the extent not previously exercised, the Option shall
terminate upon the first to occur of any of the following events:
(a) the dissolution or liquidation of the Corporation;
(b) The expiration of 10 years (5 years for 10% shareholders as defined in the
Plan) from the date of the grant of the Option hereunder;
(c) the breach by Optionee of any provision of this Agreement;
(d) as more fully set forth in Section 3.2 of the Plan, 90 days after
termination of employment;
(e) as more fully set forth in Section 3.3 of the Plan, six months after an
Optionee's death;
(f) as more fully set forth in Section 6.2 of the Plan, *in the event of a
Capital Transaction.
6. Nonassignability. Options may not be sold, pledged, assigned or
transferred in any manner other than by will or by the laws of intestate
succession, and may be exercised during the lifetime of Optionee only by
Optionee. Any transfer by Optionee of any Option granted under the Plan or this
Agreement shall void such Option and the Corporation shall have no further
obligation with respect to such Option. No Option shall be pledged or
hypothecated in any way, nor shall any Option be subject to execution,
attachment or similar process.
7. Restrictions on Transfer of Shares Acquired. Optionee represents and
warrants to the Corporation that Optionee understands that, as of the date of
this Agreement, (a) the Stock issuable upon exercise of the Option has not been
registered under the Securities Act of 1933, as amended (the "Act") or
qualified under any applicable state securities laws and the Stock must be held
indefinitely unless subsequently registered and qualified thereunder or an
exemption from registration and qualification is available, (b) the Corporation
has made no agreements, covenants or undertakings whatsoever (i) to register
under the Act or any applicable securities laws the Stock issuable upon
exercise of this Option, or (ii) about the availability of any exemption
under the Act (including Rule 144 of the Act) or applicable state securities
laws and (c) there is no public market for the Stock of the Corporation and
that such a market may never develop. Optionee further represents and
warrants to the Corporation that he will not transfer the Stock in violation
of the provisions of any applicable securities statute or regulation.
8. Representation Letter. Upon the grant of the Option and execution of
this Agreement, the Optionee will deliver to the Corporation the grant
representation letter set forth on Exhibit "A" of the Plan, as such Exhibit may
be amended by the Committee from time to time. Upon exercise of the Option, the
Optionee will deliver to the Corporation the exercise representation letter set
forth on Exhibit "B" of the Plan, as such Exhibit may be amended by the
Committee from time to time. Optionee also agrees to make such other
representations as are deemed necessary or appropriate by the Corporation and
its counsel.
9. Restrictive Legends. Each certificate evidencing the shares acquired
hereunder, including any certificate issued to any transferee thereof, shall be
imprinted with legends substantially in the form set forth in the Plan.
10. Rights as Shareholder. Neither Optionee nor his executor,
administrator, heirs or legatees, shall be, or have any rights or privileges
of a shareholder of the Corporation in respect of the Stock unless and until
certificates representing such Stock shall have been issued in Optionee's name.
11. No Right of Employment. Neither the grant nor exercise of any Option
nor anything in the Plan or this Agreement shall impose upon the Corporation or
any other corporation any obligation to employ or continue to employ any
Optionee. The right of the Corporation and any other corporation to terminate
any employee shall not be diminished or affected because an Option has been
granted to such employee.
12. Mandatory Arbitration. In the event of any dispute between the
Corporation and Optionee regarding this Agreement or the Plan, the dispute and
any issue as to the arbitrability of such dispute, shall be settled to the
exclusion of a court of law, by arbitration in San Diego, California, by a
panel of three arbitrators (each party shall choose one arbitrator and the
third shall be chosen by the two arbitrators so selected) in accordance with
the Commercial Arbitration Rules of the American Arbitration Association then
in effect. The decision of a majority of the arbitrators shall be final and
binding upon the parties. All costs of the arbitration and the fees of the
arbitrators shall be allocated between the parties as determined by a
majority of the arbitrators, it being the intention of the parties that the
prevailing party in such a proceeding be made whole with respect to its
expenses.
13. Definitions. Capitalized terms shall have the meaning set forth in
the Plan unless otherwise defined herein.
14. Notices. Any notice to be given under the terms of this Agreement
shall be addressed to the Corporation in care of its Secretary at its principal
office, and any notice to be given to Optionee shall be addressed to such
Optionee at the address maintained by the Corporation for such person or at
such other address as the Optionee may specify in writing to the Corporation.
15. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of Optionee, his heirs and successors, and of the Corporation, its
successors and assigns.
16. Governing Law. This Agreement shall be governed by the laws of the
State of California.
17. Descriptive Headings. Titles to Sections are solely for information
purposes.
18. Application of Plan. The Corporation has delivered and the Optionee
hereby acknowledges receipt of a copy of the Plan. The parties agree and
acknowledge that the Option granted hereunder is granted pursuant to the Plan
and subject to the term and provisions thereof, and the rights of the
Optionee are subject to modifications and termination in certain events as
provided in the Plan.
IN WITNESS WHEREOF, this Agreement is effective as of, and the date of grant
shall be March _, 1996.
Netter Digital Entertainment, Inc., a
Delaware corporation
By:_________________________
Its:_________________________
OPTIONEE
________________________________
EXHIBIT 5.1
April 16, 1999
Netter Digital Entertainment, Inc.
5125 Lankershim Blvd.
North Hollywood, CA 91601
Re: Form S-8 Registration Statement
Gentlemen:
You have advised us that Netter Digital Entertainment, Inc., a Delaware
corporation (the "Company"), is filing with the Securities and Exchange
Commission a Registration Statement on Form S-8 (the "Registration
Statement") with respect to an aggregate of 500,000 shares of the Company's
Common Stock, par value $0.01 per share (the "Shares"), reserved for issuance
from time to time upon the exercise of stock options granted pursuant to the
Company's 1995 Stock Option Plan (the "1995 Plan"). You have asked us to
provide our opinion concerning the legality of the Shares.
In giving this opinion, we have reviewed the Registration Statement, the
Certificate of Incorporation and Bylaws of the Company, the proceedings of the
Board of Directors of the Company and such other documents as we have
considered advisable. In such examination, we have assumed the genuineness
of all signatures, the conformity with originals of all documents submitted
to us as copies, the authenticity of the originals of such copies, the legal
capacity of all natural persons and that the documents submitted to us for
our review have not been and will not be altered, amended or repealed in any
respect material to our opinions as stated herein.
Based upon the foregoing, we are of the opinion that the Shares have been
duly authorized and, when issued in accordance with the terms of and against
payment of the exercise prices provided of in the 1995 Plan, will be validly
issued, fully paid and nonassessable shares of the Company's Common Stock.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement to be filed by the Company with the Securities and
Exchange Commission.
Very truly yours,
/s/ ERVIN, COHEN & JESSUP LLP
ERVIN, COHEN & JESSUP LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use in this Registration Statement on Form S-8 of our
report dated August 22, 1998 relating to the financial statements of Netter
Digital Entertainment, Inc. as of June 30, 1998 and for each of the years in
the two year period then ended.
/s/ Feldman Sherb Ehrlich & Co., P.C.
-------------------------------------
Feldman Sherb Ehrlich & Co., P.C.
Certified Public Accountants
New York, New York
April 16, 1999
