As filed with the Securities and Exchange Commission on January 29, 1999
Registration No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
Network Event Theater, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3864111
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
529 Fifth Avenue
New York, New York 10017
(Address of principal executive offices)
(Zip Code)
Network Event Theater, Inc. 1997 Stock Option Plan
Network Event Theater, Inc. 1996 Stock Option Plan
(Full title of the Plans)
Harlan D. Peltz
Network Event Theater, Inc.
529 Fifth Avenue
New York, New York 10017
(212) 622-7300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------------
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================
Title Of Securities Amount Proposed Proposed Amount Of
To Be Registered To Be Maximum Maximum Registration
Registered(1) Offering Aggregate Fee (2)
Price Per Offering
Share(2) Price(2)
===============================================================================
<S> <C> <C> <C> <C>
Common Stock, 850,000 shares $15.50 $13,175,000 $3,663
par value
$.01 per share
===============================================================================
<FN>
<F1>
(1) The maximum number of shares which may be issued pursuant to the Network
Event Theater, Inc. 1997 Stock Option Plan (the "1997 Plan") and the Network
Event Theater, Inc. 1996 Stock Option Plan (the "1996 Plan" and, together with
the 1997 Plan, the "Plans") covered by this Registration Statement. Pursuant to
Rule 416 under the Securities Act of 1933, as amended (the "Securities Act"),
there are also being registered such additional indeterminate number of shares
as may be required to cover possible adjustments under the Plans as a result of
the adjustment provisions therein.
<F2>
(2) Estimated solely for the purpose of calculating the fee pursuant to
Rule 457(h) and 457(c) under the Securities Act, based on the average of the
high and low prices of the Registrant's common stock, par value $.01 per share
(the "Common Stock"), reported on the Nasdaq SmallCap Market on January 26,
1999.
</FN>
</TABLE>
<PAGE>
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 Network Event Theater, Inc., a Delaware corporation (the
"Company" or the "Registrant"), are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1998.
(2) ______ The Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended September 30, 1998.
(3) ______ The description of the Common Stock contained in the Company's
registration statement on Form 8-A, as filed with the Commission on January 17,
1996, including 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 or 15(d) of the Securities Exchange Act of 1934, as amended, prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be part hereof from the date of filing such documents. Any
statement in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for the purposes of this
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any 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.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Company is incorporated in Delaware. Section 145 of the General
Corporation Law of the State of Delaware permits a corporation to indemnify its
directors and officers against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlements actually and reasonably incurred by them
in connection with any action, suit or proceeding brought by third parties, if
such directors or officers acted in good faith and in a manner they 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 reason to believe
their conduct was unlawful. In a derivative action, i.e., one by or in the right
of the corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors and officers in connection with the defense or
settlement of an action or suit, and only with
<PAGE>
respect to a matter as to which they shall have acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests of
the corporation, except that no indemnification shall be made if such person
shall have been adjudged liable to the corporation, unless and only to the
extent that the court in which the action or suit was brought shall determine
upon application that the defendant officers or directors are reasonably
entitled to indemnity for such expenses despite such adjudication of liability.
The Certificate of Incorporation of the Company provides for indemnification of
directors and officers to the fullest extent permitted by the General
Corporation Law of the State of Delaware.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a corporation may eliminate or limit the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 (relating to liability for
unauthorized acquisitions or redemptions of, or dividends on, capital stock) of
the General Corporation Law of the State of Delaware or (iv) for any transaction
from which the director derived an improper personal benefit. No such provision
shall eliminate or limit the liability of a director for any act or omission
occurring prior to the date when such provision becomes effective. The Company's
Certificate of Incorporation contains such a provision.
The Company's Bylaws authorize the Company to indemnify its directors,
officers, incorporators, employees and agents with respect to certain costs,
expenses and amounts incurred in connection with an action, suit or proceeding
by reason of the fact that any such person was serving as a director, officer,
incorporator, employee or agent of the Company. In addition, the Company's
Bylaws permit the Company to provide additional indemnification rights to its
officers and directors and to indemnify them to the fullest extent possible
under the General Corporation Law of the State of Delaware.
Pursuant to Section 145 of the General Corporation Law of the State of
Delaware, the Company maintains a standard form of directors' and officers'
liability insurance policy which provides coverage to the directors and officers
of the Company for certain liabilities, including certain liabilities which may
arise out of this Registration Statement.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Certificate of Incorporation of the Company (incorporated
herein by reference to Exhibit 3.1 to the Company's
Registration Statement on Form SB-2, Registration No.
33-80935, filed on March 6, 1996 (the "Form SB-2")).
4.2 Certificate of Amendment of Certificate of Incorporation
(incorporated herein by reference to Exhibit 3.2 to the Form
SB-2).
<PAGE>
4.3 Certificate of Amendment of Certificate of Incorporation, as
filed May 27, 1998 (incorporated herein by reference to
Exhibit 3.3 to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1998).
4.4 Bylaws of the Company (incorporated herein by reference
to Exhibit 3.3 to the Form SB-2).
4.5 Network Event Theater, Inc. 1996 Stock Option Plan
(incorporated herein by reference to Exhibit 10.1 to the
Form SB-2).
4.6* Network Event Theater, Inc. 1997 Stock Option Plan.
5.1* Opinion of Proskauer Rose LLP re: legality of securities.
23.1* Consent of Ernst & Young LLP.
23.2* Consent of Proskauer Rose LLP (included in Exhibit 5.1).
24.1* Powers of Attorney (included on signature page).
- ---------------------------
* Filed herewith.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes that it will:
(1) ______ File, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the 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 than a 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) Include any additional or changed material information on
the plan of distribution.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 New York, State of New York, on January 29, 1999.
Network Event Theater, Inc.
By:/s/ Harlan D. Peltz
Harlan D. Peltz
Chairman of the Board and
Chief Executive Officer
SIGNATURES AND POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each director and officer whose
signature appears below hereby constitutes and appoints Harlan D. Peltz, Don
Leeds, Bruce L. Resnik or any of them, as his true and lawful attorney-in-fact
and agent, with full power of substitution, to sign on his behalf individually
and in any and all capacities (until revoked in writing), any and all amendments
(including post-effective amendments) to this Registration Statement on Form
S-8, and to file the same with all exhibits thereto and all other documents in
connection therewith with the Securities and Exchange Commission, granting to
such attorneys-in-fact and agents, and each of them, full power and authority to
do all such other acts and things requisite or necessary to be done, and to
execute all such other documents as they, or any of them, may deem necessary or
desirable in connection with the foregoing, as fully as the undersigned might or
could do in person, hereby ratifying and confirming all that such
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signatures Title Date
- ---------- ----- ----
/s/Harlan D. Peltz Chairman of the Board and January 29, 1999
- -------------------- Chief Executive Officer
Harlan D. Peltz (principal executive officer)
/s/ Don Leeds President and Director January 29, 1999
- --------------------
Don Leeds
/s/ Bruce L. Resnik Executive Vice President, January 29, 1999
Bruce L. Resnik Chief Financial Officer
and Secretary (principal
financial and accounting
officer)
<PAGE>
/s/ Freddie Fields Director January 29, 1999
- --------------------
Freddie Fields
/s/ Howard Klein Director January 29, 1999
- --------------------
Howard Klein
/s/ Metin Negrin Director January 29, 1999
- --------------------
Metin Negrin
/s/ George Lindemann Director January 29, 1999
- --------------------
George Lindemann
<PAGE>
EXHIBIT INDEX
4.1 Certificate of Incorporation of the Company (incorporated
herein by reference to Exhibit 3.1 to the Company's
Registration Statement on Form SB-2, Registration No.
33-80935, filed on March 6, 1996 (the "Form SB-2")).
4.2 Certificate of Amendment of Certificate of Incorporation
(incorporated herein by reference to Exhibit 3.2 to the Form
SB-2).
4.3 Certificate of Amendment of Certificate of Incorporation, as
filed May 27, 1998 (incorporated herein by reference to
Exhibit 3.3 to the Company's Annual Report on Form 10-KSB for
the fiscal year ended June 30, 1998).
4.4 Bylaws of the Company (incorporated herein by reference to
Exhibit 3.3 to the Form SB-2).
4.5 Network Event Theater, Inc. 1996 Stock Option Plan
(incorporated herein by reference to Exhibit 10.1 to the
Form SB-2).
4.6* Network Event Theater, Inc. 1997 Stock Option Plan.
5.1* Opinion of Proskauer Rose LLP.
23.1* Consent of Ernst & Young LLP.
23.2* Consent of Proskauer Rose LLP (included in Exhibit 5.1).
24.1* Powers of Attorney (included on signature page).
- ---------------------------
* Filed herewith.
1997 STOCK OPTION PLAN
OF
NETWORK EVENT THEATER, INC.
1. Purpose. The purpose of this 1997 Stock Option Plan is to advance
the interests of the Company and its stockholders by (i) providing key employees
and consultants of the Company, upon whose judgment, initiative and efforts the
successful conduct of the Company's business largely depends, with an additional
incentive to continue their efforts on behalf of the Company, thereby
attracting, retaining and rewarding people of experience and ability, and (ii)
making equity-based awards to non-employee directors, thereby attracting,
retaining and rewarding non-employee directors and strengthening the mutuality
of interests between non-employee directors and the Company's stockholders.
2. Definitions. When used in this Plan, unless the context otherwise
requires:
(a) "Board of Directors" shall mean the Board of Directors of
the Company, as constituted at any time.
(b) "Committee" shall mean the Stock Option Committee of the
Board of Directors, as described in Section 3.
(c) "Company" shall mean Network Event Theater, Inc., a Delaware
corporation.
(d) "Fair Market Value" on a specified date shall mean the last
sales price reported for the Shares on the last trading day immediately
preceding the applicable date (i) as reported on the principal national
securities exchange on which the Shares are primarily traded, or (ii) if the
Shares are not traded on a national securities exchange, as quoted on an
automated quotation system sponsored by The Nasdaq Stock Market ("Nasdaq"). If
the Shares are not listed on a national securities exchange or quoted
<PAGE>
on a system sponsored by Nasdaq, the Fair Market Value of the Shares shall
be as established by the Committee using any reasonable method of valuation.
(e) "Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended, or the comparable provisions of future Internal Revenue
laws.
(f) "Options" shall mean the stock options issued pursuant to
this Plan.
(g) "Plan" shall mean this 1997 Stock Option Plan of the
Company, as such Plan from time to time may be amended.
(h) "Share" shall mean a share of common stock of the
Company, par value $.01.
(i) "Subsidiary" shall mean any "subsidiary corporation," as
such term is defined in Section 424(f) of the Internal Revenue Code.
3. Administration of the Plan. The Plan shall be administered by a
Committee of at least three members of the Board of Directors, each of whom is a
"non-employee director" within the meaning of Rule 16b-3(b)(3) under the
Securities Exchange Act of 1934. Each member of the Committee shall hold office
until the next regular annual meeting of the Board of Directors following his
designation and until his successor is designated as a member of the Committee.
Any vacancy in the Committee may be filled by a resolution adopted by a majority
of the full Board of Directors. Any member of the Committee may be removed at
any time, with or without cause, by resolution adopted by a majority of the full
Board of Directors. A member of the Committee may resign from the Committee at
any time by giving written notice to the Chairman or Secretary of the Company
and, unless otherwise specified therein, such resignation shall take effect upon
receipt thereof. The acceptance of such resignation shall not be necessary to
make it effective. The Committee shall establish such rules and procedures as it
considers necessary or advisable to administer the Plan and shall make such
determinations and interpretations and take such action in connection with the
Plan and any Options granted pursuant to the Plan as it considers necessary or
advisable.
2
<PAGE>
4. Participants. Except as hereinafter provided, the class of persons
who are potential recipients of Options to be granted under this Plan consists
of the employees, consultants and non-employee directors of the Company or a
Subsidiary, as determined by the Committee. The persons to whom Options are
granted under this Plan and the number of Shares subject to each Option shall be
determined by the Committee in its sole discretion, subject, however, to the
terms and conditions of this Plan. Options may be granted to employees and
consultants who are also officers and/or directors of the Company or a
Subsidiary.
5. Shares. The Committee may, but shall not be required to, grant,
in accordance with this Plan, Options to purchase Shares for an aggregate of up
to 450,000 Shares (subject to adjustment as provided in Section 14), which may
be either treasury Shares or authorized but unissued Shares. If an Option shall
expire or terminate for any reason without having been exercised in full, then
the Committee may grant Options with respect to the unpurchased Shares subject
to any such expired or terminated Option.
6. Grant of Options. An Option granted under this Plan to an employee
of the Company shall be an incentive stock option within the meaning of Section
422 of the Internal Revenue Code, unless the Committee, in its sole discretion,
designates otherwise. Options granted to employees that are designated not to be
incentive stock options and Options granted to consultants and non-employee
directors shall not be treated as such for purposes of this Plan and the
Internal Revenue Code.
Notwithstanding any other provision of this Plan to the contrary
(a) the aggregate Fair Market Value (determined as of the date an Option is
granted) of the Shares with respect to which any individual employee may be
granted Options that are incentive stock options and that become exercisable in
any one calendar year (under this Plan and all other stock option plans
maintained by the Company or any Subsidiary), shall not exceed $100,000, and (b)
the maximum number of Shares that may be granted under this
3
<PAGE>
Plan to each non-employee director of the Company shall not exceed 5,000 Shares
in any one calendar year.
The form, terms and conditions to each Option shall be determined from
time to time by the Committee and shall be set forth in writing in an agreement
(the "Option Agreement") signed by the Option holder and on behalf of the
Company by the Chairman, President or a Vice President of the Company. The
Option Agreement shall state whether or not the Option is an incentive stock
option. The Committee may, in its sole discretion, at the time an Option is
granted, establish one or more conditions to the exercise of an Option, provided
that, if the Option is designated as an incentive stock option, then the
condition or conditions shall not be inconsistent with Section 422 of the
Internal Revenue Code.
7. Exercise Price for Options. The exercise price per share of the
Shares to be purchased pursuant to any Option shall be fixed by the Committee at
the time an Option is granted; provided, however, that in no event shall the
exercise price per Share be less than the Fair Market Value of a Share on the
date on which the Option is granted.
8. Duration of Options and Rights. The duration of any Option granted
under this Plan shall be for a period fixed by the Committee but not more than
ten years from the date upon which the Option is granted.
9. Limitations on Options Granted to Ten Percent Stockholders. No
Option that is intended to qualify as an incentive stock option may be granted
under this Plan to any employee who, at the time the Option is granted, owns, or
is considered as owning, within the meaning of Section 422 of the Internal
Revenue Code, Shares possessing more than ten percent of the total combined
voting power or value of all classes of stock of the Company or any Subsidiary,
unless the exercise price under the Option is at least 110% of the Fair Market
Value on the date such Option is granted and the duration of such Option is no
more than five years.
4
<PAGE>
10. Option Holder Not a Stockholder. An Option holder shall not be
deemed to be the holder of, or to have any of the rights of a stockholder with
respect to, any Shares subject to that Option unless and until the Option shall
have been exercised pursuant to the terms thereof, the Company shall have issued
and delivered Shares to the Option holder, and the holder's name shall have been
entered as a stockholder of record on the books of the Company. Thereupon, the
holder shall have full voting, dividend and other ownership rights with respect
to those Shares.
11. Non-transferability of Options. Options may be exercised or
surrendered during the holder's lifetime only by the holder thereof, and all
rights thereunder shall be non-transferable and non-assignable by the holder
thereof, other than by will or the laws of descent and distribution.
Notwithstanding the foregoing, the Committee may determine, at the time of grant
or thereafter, that a non-qualified option that is otherwise transferable
pursuant to this Section is transferable in whole or in part and in such
circumstances, and under such conditions, as specified by the Committee.
12. Exercise of Options. Except as otherwise provided herein, an
Option, after the grant thereof, shall be exercisable by the holder at such
times as may be fixed by the Committee at the time the Option is granted;
provided, however, that no Option may be exercised in part or in full prior to
the approval of the Plan by the stockholders of the Company as provided in
Section 19 of this Plan. All or any part of any remaining unexercised Options
granted to any person shall, after approval of the Plan by the stockholders of
the Company as provided in Section 19 of this Plan, be exercisable in full,
whether or not then exercisable, upon the occurrence of such special
circumstance or event as in the sole discretion of the Committee merits special
consideration. An Option shall be exercised by the delivery to any officer of
the Company, designated for the purpose of receiving the same, of a written
notice of exercise duly signed by the Option holder (or the representative of
the estate or the heirs of a deceased
5
<PAGE>
Option holder), together with the Option certificate and either cash, a
certified check payable to the order of the Company or Shares duly endorsed over
to the Company (which Shares shall be valued at their Fair Market Value as of
the day of that exercise), or any combination of these methods of payment, that
together amount to the full exercise price of the Shares purchased pursuant to
the terms of the Option; provided, however, that a holder may not use any Shares
he has acquired pursuant to the exercise of an Option granted under this Plan or
any other stock option plan maintained by the Company or any Subsidiary unless
he has beneficially owned such Shares for at least six months (and for which the
holder has good title, free and clear of any liens, claims and encumbrances, and
has represented to the Company that he has owned such Shares for at least six
months). No Option may be granted pursuant to this Plan or exercised at any time
when that Option, or the granting or exercise thereof, may result in the
violation of any law or governmental order or regulation.
Within a reasonable time after exercise of an Option the Company shall
cause to be delivered to the person entitled thereto a certificate for the
Shares purchased pursuant to the exercise of the Option. If the Option shall
have been exercised with respect to fewer than all of the Shares subject to the
Option, the Company shall also cause to be delivered to the persons entitled
thereto a new Option certificate, in replacement of the Option certificate
surrendered at the time of the exercise of the Option, indicating the number of
Shares with respect to which the Option remains available for exercise, or the
original Option certificate shall be endorsed to give effect to the partial
exercise thereof.
13. Termination of Option upon Termination of Service. At the time an
Option is granted, the Committee shall determine the period of time during which
the Option holder may exercise the Option following his termination of service
with the Company and its Subsidiaries; provided, however, that an Option shall
be exercisable only to the extent the Option, by its terms, is exercisable as of
the date the Option holder's service is terminated, unless the Option is made
fully exercisable by the Committee pursuant to the provisions of Section 12 of
this Plan, and such exercise must be
6
<PAGE>
accomplished prior to the expiration of the term of such Option. The
Committee may fix different periods of time during which such Option may be
exercised following the Option holder's termination of service, depending on the
cause for the Option holder's termination of service. Notwithstanding the
foregoing, unless otherwise determined by the Committee, if an Option holder's
service is terminated for cause for any reason, any Option held by such holder
shall thereupon terminate and expire as of the date of termination, regardless
of whether any such Option shall have become exercisable.
14. Adjustment of Shares. If, prior to the complete exercise of any
Option, there shall be declared and paid a stock dividend upon the Shares or if
the Shares shall be split up, converted, exchanged, reclassified, or in any way
substituted for, then the Option, to the extent that it has not been exercised,
shall entitle the holder thereof upon the future exercise of the Option to such
number and kind of securities subject to the terms of the Option to which he
would have been entitled had he actually owned the Shares subject to the
unexercised portion of the Option at the time of the occurrence of such stock
dividend, split-up, conversion, exchange, reclassification or substitution, and
the aggregate purchase price upon the future exercise of the Option shall be the
same as if the originally optioned Shares were being purchased thereunder.
If, at any time during the term of this Plan, there shall be declared
and paid a stock dividend upon the Shares or if the Shares shall be split up,
converted, exchanged, reclassified, or in any way substituted for, the number of
Shares referred to in Section 5 for which Options may be granted and the
exercise price of the Shares shall be adjusted to reflect such stock dividend,
split-up, conversion, exchange, reclassification or substitution.
The Committee shall have the power, in the event of any merger or
consolidation of the Company with or into any other corporation, or the merger
or consolidation of any other corporation into the Company, to amend all
outstanding Options to permit the exercise of all such Options prior to the
effectiveness of any such merger or consolidation and to terminate such Options
as of such effectiveness. If the Committee, in its discretion, shall exercise
that power, all Options then outstanding and
7
<PAGE>
subject to such requirement shall be deemed to have been amended to permit
the exercise thereof in whole or in part by the holder at any time prior to the
effectiveness of such merger or consolidation and these Options shall be deemed
to terminate upon such effectiveness.
The Committee also may grant Options having terms and provisions that
vary from the terms specified in this Plan provided that any Option granted
pursuant to this Section is granted only in substitution for or in connection
with the assumption of existing options granted by another corporation and
assumed or otherwise agreed to be provided for by the Company pursuant to or by
reason of a transaction involving a corporate merger, consolidation, acquisition
of property or stock, separation, reorganization, or liquidation to which the
Company is a party.
15. No Right to Continued Service. Nothing contained herein or in any
Option shall be construed to confer on any holder any right to continue in the
service of the Company or any Subsidiary or derogate from any right of the
Company or any Subsidiary to terminate, retire, request the resignation of or
discharge such holder, at any time, with or without cause.
16. Issuance of Shares and Compliance with Securities Laws. Before
issuing and delivering any Shares upon the exercise of an Option, the Company
may: (i) require the holder to give satisfactory assurances that the Shares are
being purchased for investment and not with a view to resale or distribution,
and will not be transferred in violation of applicable securities laws; (ii)
restrict the transferability of the Shares and require a legend to be endorsed
on the certificate representing the Shares; and (iii) condition the issuance and
delivery of Shares upon the listing, registration or qualification of such
Shares upon a securities exchange or under applicable securities laws. At the
time an Option is granted, the Committee shall determine whether an appropriate
registration statement covering the Shares to be issued pursuant to this Plan
shall be filed with the Securities and Exchange Commission under the Securities
Act of 1933, and whether to
8
<PAGE>
cause a registration statement covering the reoffer and resale of Shares by
holders of Options who may be deemed to be affiliates of the Company to be so
filed, and the length of time the Company will cause any such registration
statement to become and remain effective.
This Plan is intended to comply with Rule 16b-3 under the Securities
Exchange Act of 1934 ("Rule 16b-3"). Any provision inconsistent with that Rule
shall be inoperative and shall not affect the validity of this Plan or of any
Option Agreement.
17. Income Tax Withholding. If the Company or a Subsidiary shall be
required to withhold any amounts be reason of any federal, state or local tax
rules or regulations in respect of the issuance of Shares pursuant to the
exercise of an Option, the holder shall make available to the Company or the
Subsidiary sufficient funds to meet the withholding requirements and the Company
or the Subsidiary shall be entitled to take and authorize any steps it deems
advisable in order to have such funds made available to the Company or the
Subsidiary out of any funds or property due or to become due to the holder. If
an employee disposes of Shares acquired pursuant to an Option that is an
incentive stock option in any transaction considered to be a "disqualifying
transaction" under Sections 421 and 422 of the Internal Revenue Code, the
Company shall have the right to deduct any taxes required to be withheld from
any amounts otherwise payable to the employee.
18. Administration and Amendment of this Plan. Except as hereinafter
provided, the Committee may at any time withdraw or from time to time amend this
Plan as it relates to the terms and conditions of any Options not theretofore
granted, and the Committee with the consent of each adversely affected holder of
any Option may at any time withdraw or from time to time amend this Plan as it
relates to the terms and conditions of any outstanding Option. Notwithstanding
the foregoing, any amendment by the Committee that would increase the number of
Shares issuable under this Plan, change the class of persons to whom Options may
be granted or otherwise amend this Plan in a
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<PAGE>
manner that would require stockholder approval under Rule 16b-3, the rules
of any exchange on which the Company's securities are listed or traded, or of
Nasdaq, or, with respect to incentive stock options, under Section 422 of the
Internal Revenue Code, shall be subject to the approval of the stockholders of
the Company solely to the extent required under Rule 16b-3, the rules of such
exchange or Nasdaq or, with respect to incentive stock options, under Section
422 of the Internal Revenue Code.
Determinations of the Committee as to any question that may arise with
respect to the interpretation of the provisions of this Plan shall be final and
binding on all participants and their legal representatives and beneficiaries.
The Committee may authorize and establish such rules, regulations and revisions
thereof, not inconsistent with the provisions of this Plan, as it may deem
advisable to make this Plan and any Options effective or provide for their
administration, and may take such other action with regard to this Plan and any
Options as it shall deem desirable to effectuate their purposes.
19. Effective Date of the Plan. This Plan shall become effective upon
the date specified by the Board of Directors in its resolution adopting the
Plan, provided that the Plan is conditioned upon the approval of the common
stockholders of the Company in accordance with Delaware law in order for this
Plan to be in compliance with the requirements of Rule 16b-3, the rules of any
exchange on which the Company's securities are listed or traded, or of Nasdaq,
or, with respect to incentive stock options, Section 422 of the Internal Revenue
Code. In the event that this Plan is not approved by the stockholders of the
Company, this Plan and any Options granted hereunder shall be void and of no
force or effect.
20. Term of Plan. No Option shall be granted pursuant to this Plan on
or after the tenth anniversary of the earlier of the date the Plan is adopted or
the date of shareholder approval, but Options granted prior to such tenth
anniversary may be exercised beyond that date and the terms and conditions of
this Plan shall continue to apply to those Options.
10
January 29, 1999
The Board of Directors
Network Event Theater, Inc.
529 Fifth Avenue
New York, New York 10017
Dear Sirs:
We are acting as counsel to Network Event Theater, Inc., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 with exhibits thereto (the "Registration Statement") filed by the
Company under the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations thereunder, relating to the registration of 850,000
shares (the "Shares") of the Company's common stock, par value $.01 per share,
issuable by the Company pursuant to the Network Event Theater, Inc. 1997 Stock
Option Plan (the "1997 Plan") and the Network Event Theater, Inc. 1996 Stock
Option Plan (the "1996 Plan" and, together with the 1997 Plan, the "Plans").
As such counsel, we have participated in the preparation of the
Registration Statement and have reviewed the corporate minutes relating to the
issuance of the Shares pursuant to the Plans and have also examined and relied
upon originals or copies, certified or otherwise authenticated to our
satisfaction, of all such corporate records, documents, agreements and
instruments relating to the Company and certificates of public officials and of
representatives of the Company.
Based upon, and subject to, the foregoing, we are of the opinion that
the Shares are duly authorized and, upon exercise in accordance with the terms
of the applicable Plan against payment of the exercise price therefor, and upon
compliance with applicable securities laws, will be, assuming no change in the
applicable law or pertinent facts, validly issued, fully paid and
non-assessable.
The foregoing opinion relates only to matters of the General
Corporation Law of the State of Delaware and does not purport to express any
opinion on the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. In giving the foregoing consent, we do not admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
Very truly yours,
/s/ Proskauer Rose LLP
Proskauer Rose LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the 1996 and 1997 Stock Option Plans of Network Event
Theater, Inc. of our report dated August 21, 1998, with respect to the
consolidated financial statements of Network Event Theater, Inc. included in its
Annual Report (Form 10-KSB) for the year ended June 30, 1998 filed with the
Securities and Exchange Commission.
Ernst & Young LLP
New York, New York
January 28, 1999
