<PAGE> 1
As filed with the Securities and Exchange Commission on June 15, 1999
Registration No.
------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------------
THE RECOVERY NETWORK, INC.
(Exact Name of Registrant as Specified in Its Charter)
COLORADO
(State or Other Jurisdiction of Incorporation or Organization)
39-1731029
(I.R.S. Employer Identification No.)
1411 FIFTH STREET, SUITE 200
SANTA MONICA, CALIFORNIA 90401
(310) 393-3979
(Address and Telephone Number of Principal Executive Offices)
THE RECOVERY NETWORK 1999 EMPLOYEE STOCK COMPENSATION PLAN
(Full Title of the Plan)
WILLIAM D. MOSES
PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS
THE RECOVERY NETWORK, INC.
1411 FIFTH STREET, SUITE 200
SANTA MONICA, CALIFORNIA 90401
(310) 393-3979
(Name, Address and Telephone Number of Agent For Service)
--------------------
CALCULATION OF REGISTRATION FEE
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================================================================================================
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE AGGREGATE OFFERING REGISTRATION
PER SHARE PRICE SHARE FEE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock of the
Company par value $.01 1,300,000(2) $.44 $572,000 $166.00 (1)
================================================================================================
</TABLE>
(1) The fee with respect to these shares has been calculated pursuant to Rule
457 of Regulation C under the Securities Act of 1933, as amended, and based upon
the average of the bid and asked price per share of the Registrant's Common
Stock on a date within five (5) days prior to the date of filing of this
Registration Statement, as reported on the National Association of Securities
Dealers, Inc.'s Electronic Bulletin Board.
(2) To be issued, at the sole discretion of the Registrant, as an outright grant
of Shares, or Shares underlying options granted to and to be granted, under the
Recovery Network, Inc. 1999 Employee Stock Compensation Plan.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE PROSPECTUS
The document(s) containing the information concerning the The Recovery
Network, Inc. 1999 Stock Plan, effective as of June 4, 1999 (the "Plan"),
required by Item 1 of Form S-8, and the statement of availability of registrant
information, employee benefit plan annual reports and other information required
by Item 2 of Form S-8 will be sent or given to participants as specified by Rule
428. In accordance with Rule 428 and the requirements of Part I of Form S-8,
such documents are not being filed with the Securities and Exchange Commission
(the "Commission") either as part of this registration statement on Form S-8
(the "Registration Statement") or as prospectuses or prospectus supplements
pursuant to Rule 424. The Recovery Network, Inc., a Colorado corporation (the
"Company"), shall maintain a file of such documents in accordance with the
provisions of Rule 428. Upon request, the Company shall furnish to the
Commission or its staff a copy or copies of all of the documents included in
such file.
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Incorporated by reference into this Registration Statement are the
content of the Company's Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1998, and all other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Securities Act of 1934 (the "Exchange Act"); and Form 8-A
which was declared effective by the Commission on July 31, 1997 (File No.
0-22913) registering the Company's Common Stock under Section 12 of the Exchange
Act. All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the termination of the offering shall be
deemed to be incorporated by reference into this Registration Statement and to
be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement. The Company will provide
without charge to each person to whom a copy of this Registration Statement is
delivered, on the written or oral request of such person, a copy of any or all
of the documents referred to above which have been or may be incorporated by
reference into this Registration Statement, other than certain exhibits to such
documents. Requests for such copies shall be directed to Shareholder Relations,
The Recovery Network, Inc., 1411 Fifth Street, Suite 200, Santa Monica,
California 90401, telephone (310) 393-3979.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Colorado Business Corporation Act, and the Company's Articles of
Incorporation, as amended, generally permit the Company to indemnify any officer
or director of the Company for claims and liabilities, including legal expenses,
which he may incur in his capacity as such, provided that he acted in good faith
and in a manner that he reasonably believed to be in the best interests of the
Company. However, he may not be indemnified in connection with a proceeding in
which he is found to be liable to the Company or where he is found to have
received an improper personal benefit from the Company. To the extent that an
officer or director is successful in defending himself in any proceeding to
which he was a party, he is to be indemnified against his reasonable expenses
incurred by him in connection with the proceeding.
In addition, the Company's Articles of Incorporation limits the
liability of directors for monetary damages for certain breaches of fiduciary
duties, as permitted under the Colorado Business Corporation Act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
<PAGE> 4
ITEM 8. EXHIBITS.
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Exhibit Number Description
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4.15 The Company's Articles of Incorporation (incorporated by
reference to exhibit 3.1 to the Company's Registration Statement
on Form SB-2, File No. 333-27787)
4.16 The Company's Bylaws (incorporated by reference to exhibit 3.2 to
the Company's Registration Statement on Form SB-2, File No.
333-27787)
4.17 The Recovery Network, Inc. 1999 Employee Stock Compensation Plan
4.18 Registration Statement of the Company on Form 8-A (declared
effective on July 31, 1997, File No. 0- 22913, and incorporated
herein by reference)
4.19 Resolution of the Board of Directors dated June 4, 1999
5.2 Opinion of Counsel of Beckman, Millman & Sanders, LLP
23.4 Consent of Arthur Andersen LLP
23.5 Consent of Beckman, Millman & Sanders, LLP, LLC (included in
Exhibit 5.2)
</TABLE>
ITEM 9. UNDERTAKINGS.
The undersigned Company 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 the registration statement (or the most recent post-effective
amendment thereof) which individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(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
tide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) 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 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, the Company has
been
<PAGE> 5
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 that the payment by the Company of expenses incurred or
paid by a director, officer, or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person of the Company in the successful
defense of that action suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the Company 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 of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement or amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Santa Monica, State of California, on the 14th
day of June, 1999.
THE RECOVERY NETWORK, INC.
By: /s/ WILLIAM D. MOSES
-------------------------------------
William D. Moses
President, Chairman of the Board and Director
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
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By: /s/ STACEY ROMM
-------------------------------------- Stacey Romm, Chief Financial Officer
Dated: June 15, 1999
By: /s/ WILLIAM D. MOSES
-------------------------------------- William D. Moses, Chairman of the Board of Directors
Dated: June 15, 1999
By: /s/ GEORGE HENRY
-------------------------------------- George Henry, Member of the Board of Directors
Dated: June 15, 1999
By: /s/ CHARLOTTE SCHIFF JONES
-------------------------------------- Charlotte Schiff Jones, Member of the Board of Directors
Dated: June 15, 1999
By: /s/ JAY HANDLINE
-------------------------------------- Jay Handline, Member of the Board of Directors
Dated: June 14, 1999
By: /s/ BRAD PAROBEK
-------------------------------------- Brad Parobek, Member of the Board of Directors
Dated: June 15, 1999
</TABLE>
<PAGE> 7
EXHIBIT INDEX
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Exhibit Number Description
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<S> <C>
4.15 The Company's Articles of Incorporation (incorporated by
reference to exhibit 3.1 to the Company's Registration Statement
on Form SB-2, File No. 333-27787)
4.16 The Company's Bylaws (incorporated by reference to exhibit 3.2 to
the Company's Registration Statement on Form SB-2, File No.
333-27787)
4.17 The Recovery Network, Inc. 1999 Employee Stock Compensation Plan
4.18 Registration Statement of the Company on Form 8-A (declared
effective on July 31, 1997, File No. 0- 22913, and incorporated
herein by reference)
4.19 Resolution of the Board of Directors dated June 4, 1999
5.2 Opinion of Counsel of Beckman, Millman & Sanders, LLP
23.4 Consent of Arthur Andersen LLP
23.5 Consent of Beckman, Millman & Sanders, LLP, LLC (included in
Exhibit 5)
</TABLE>
<PAGE> 1
EXHIBIT 4.17
THE RECOVERY NETWORK, INC.
1999 EMPLOYEE STOCK COMPENSATION PLAN
ARTICLE I
INTRODUCTION
1.1 ESTABLISHMENT. THE RECOVERY NETWORK, INC., a Colorado corporation, hereby
establishes the 1999 Employee Stock Compensation Plan, which permits the grant
of stock options, restricted stock awards, stock appreciation rights, stock
units, and other stock grants (the "Plan") to certain directors, key employees,
consultants, and certain independent contractors, providing certain services to
RNET.
1.2 PURPOSES. The purposes of the Plan are (a) to provide directors and key
employees selected for participation in the Plan with added incentives to
continue in the service of RNET; (b) to create in such directors and employees a
more direct interest in the success of the operations of RNET by relating
compensation to the achievement of long-term corporate economic objectives; (c)
to attract and retain directors and key employees by providing an opportunity
for investment in RNET; (d) to obtain services for RNET from independent
contractors, for services, including, but not limited to, advertising, public
relations, consulting, at reduced compensation or at rates and/or on terms which
are otherwise negotiated favorably to RNET.
1.3 EFFECTIVE DATE. The effective date of the Plan shall be the Effective Date,
which is the date on which it was approved by the Board of Directors of RNET in
accordance with section 422 of the Code.
ARTICLE II
DEFINITIONS
Throughout the Plan, except when the context indicates otherwise, the masculine
gender shall include the feminine, and the use of any term in the singular shall
include the plural. The following terms shall have the meanings set forth:
"Affiliated Corporation" shall mean any corporation or other entity
(including without limitation a partnership) that is affiliated with RNET
through stock ownership or otherwise and is treated as a common employer under
sections 414(b) and 414(c) of the Code, including without limitation means any
parent or subsidiary of RNET as defined in section 424 of the Code.
"RNET" shall mean The Recovery Network, Inc., a Colorado corporation,
and any Affiliated Corporation.
"Award" shall mean an Option, a Restricted Stock Award, a Stock
Appreciation Right, a Stock Unit, a grant of Shares pursuant to article XI, or
another issuance of Shares hereunder.
"Board" shall mean the board of directors of RNET.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Disabled" or "Disability" shall have the meaning set forth in section
22(e)(3) of the Code.
"Effective Date" shall have the meaning set forth in section 1.3.
"Eligible Parties" shall mean directors, key employees of RNET,
consultants and independent contractors.
"Fair Market Value" of a Share shall mean its fair market value as
determined by the Board of Directors in good faith in accordance with section
422 of the Code.
"Incentive Option" shall mean an Option designated as such and granted
in accordance with section 422 of the Code.
"Non-Qualified Option" shall mean any Option other than an Incentive
Option.
<PAGE> 2
"Option" shall mean a right to purchase Shares at a stated or formula
price for a specified period of time and shall be either an Incentive Option or
a Non-Qualified Option.
"Option Certificate" shall mean a written stock option certificate
issued by RNET in the name of the Option Holder and in such form as may be
approved by the Board of Directors. An Option Certificate shall incorporate and
conform to the conditions set forth in section 7.2 and other terms and
conditions consistent with the Plan as the Board of Directors may deem
appropriate.
"Option Holder" shall mean a Participant who has been granted one or
more Options.
"Option Price" shall mean the price at which Shares subject to an Option
may be purchased, as determined in accordance with section 7.2(b).
"Participant" shall mean an Eligible Party designated by the Board of
Directors from time to time during the term of the Plan to receive one or more
Awards.
"Plan" shall mean this 1999 Employee Stock Compensation Plan.
"Restricted Stock Award" shall mean an Award of Shares granted pursuant
to article VIII that is subject to restrictions imposed in article VIII.
"Share" shall mean a share of the Common Stock, par value $0.01 per
share, of RNET.
"Stock Appreciation Right" shall mean the right, granted by the Board of
Directors pursuant to the Plan, to receive a payment equal to the increase in
the Fair Market Value of a Share subsequent to the grant of such right. A Stock
Appreciation Right may entitle a Participant to receive a number of Shares
(without any payment to RNET, except for applicable withholding taxes), cash, or
Shares and cash, as determined by the Board of Directors in accordance with
section 10.3.
"Stock Unit" shall mean a measurement component equal to the Fair Market
Value of a Share on the date of determination.
ARTICLE III
ADMINISTRATION
The Plan shall be administered by the Board of Directors. Members of the Board
of Directors shall be appointed from time to time by the Board, shall serve at
the pleasure of the Board, and may resign at any time upon written notice to the
Board. Consistent with the Plan, the Board of Directors in its sole discretion
shall select Participants from among the Eligible Parties, shall determine
Awards, the number of Stock Units, Stock Appreciation Rights, or Shares to be
subject to Awards, and the time at which Awards are to be made, shall fix the
Option Price and the period and manner in which an Option becomes exercisable,
and shall establish the duration and nature of the restrictions in Restricted
Stock Awards, the terms and conditions applicable to Stock Units, and such other
terms and requirements of the compensation incentives under the Plan as the
Board of Directors may deem necessary or desirable. The Board of Directors shall
determine the form or forms of the agreements with Participants that evidence
the particular provisions, terms, conditions, rights, and duties of RNET and the
Participants with respect to Awards, which provisions need not be identical
except as may be provided herein. The Board of Directors may from time to time
adopt such rules and regulations to carry out the purposes of the Plan as it may
deem proper and in the best interests of RNET. The Board of Directors in its
sole discretion may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan or in any agreement entered into hereunder in the
manner and to the extent it deems expedient. No member of the Board of Directors
shall be liable for any action or determination made in good faith. The
determinations, interpretations, and other actions of the Board of Directors
pursuant to the Plan shall be binding and conclusive for all purposes.
<PAGE> 3
ARTICLE IV
SUBJECT SHARES
4.1 NUMBER. The number of Shares that are authorized for issuance under the Plan
shall not exceed 1,300,000. This number may be increased from time to time by
the Board, with the approval of the shareholders of RNET if, in the opinion of
counsel to RNET, shareholder approval is required. Shares that may be issued
upon exercise of Options or Stock Appreciation Rights or that are issued with
respect to Stock Units or as Restricted Stock Awards, incentive compensation, or
other grants under the Plan shall reduce the number of Shares available for
issuance under the Plan. RNET shall at all times during the term of the Plan and
while any Options or Stock Units are outstanding reserve as authorized but
unissued at least the number of Shares from time to time required under the
Plan. Any Shares subject to an Option that expires or is terminated before
exercise shall become available for issuance under the Plan.
4.2 ADJUSTMENTS FOR STOCK SPLIT, STOCK DIVIDEND, ETC. If at any time RNET
increases or decreases the number of Shares outstanding or changes the rights
and privileges of such Shares through the payment of a stock dividend, the
making of any other distribution payable in Shares, a stock split, subdivision,
consolidation, or combination of Shares, or a reclassification or
recapitalization involving the Shares, then the numbers, rights, and privileges
of Shares as to which Awards may be granted and Shares then subject to an Award
shall be increased, decreased, or changed in like manner as if such Shares had
been issued and outstanding.
4.3 OTHER DISTRIBUTIONS AND CHANGES. If at any time (a) RNET distributes with
respect to the Shares assets or securities of persons other than RNET (excluding
cash or distributions described in section 4.3), or (b) RNET grants to the
holders of its Shares generally rights to subscribe pro rata for additional
Shares or other securities of RNET, or (c) any other change (except as described
in section 4.2) occurs in the number or kind of outstanding Shares or other
securities into which the Shares are changed or for which they are exchanged,
and if the Board of Directors in its discretion determines that such event
equitably requires an adjustment in the number or kind of Shares subject to an
Award, an adjustment in an Option Price, or the taking of other action by the
Board of Directors, including without limitation the setting aside of property
for delivery to the Participant upon the exercise of an Option or the full
vesting of an Award, then such adjustments shall be made and such other action
shall be taken by the Board of Directors and shall be effective for all purposes
and on each outstanding Award affected. Notwithstanding the foregoing and
pursuant to section 8.3, a Participant holding Shares received as a Restricted
Stock Award shall have the right to receive all amounts, including cash and
property of any kind, distributed with respect to the Shares upon becoming a
holder of record of the Shares.
4.5 GENERAL ADJUSTMENT RULES. No adjustment or substitution provided for in this
article IV shall require RNET to issue a fractional Share, and the total
substitution or adjustment with respect to each Award shall be limited by
deleting any fractional Share. In such case, the total Option Price for Shares
then subject to an Option shall remain unchanged, but the Option Price per Share
shall be equitably adjusted by the Board of Directors to reflect the greater or
lesser number of Shares or other securities into which the Shares subject to the
Option may have been changed. Appropriate adjustments shall be made to other
Awards to reflect any such substitution or adjustment. All adjustments under
this article IV shall be made by the Board of Directors, whose determination
shall be final and binding upon all parties.
ARTICLE V
CORPORATE REORGANIZATION
5.1 REORGANIZATION. Upon the occurrence of any of the following events, if the
notice provided in section 5.2 has been given, the Plan and all outstanding
Options shall terminate and be of no further force and effect, and all other
outstanding Awards shall be treated in accordance with sections 5.2 and 5.3,
without the necessity for any additional action by the Board or RNET:
(a) the merger or consolidation of RNET with or into another
corporation or other reorganization (other than a reorganization under the
United States Bankruptcy Code) of RNET (other than a consolidation, merger, or
reorganization in which RNET is the surviving corporation and which does not
result in any reclassification or change of outstanding Shares);
<PAGE> 4
(b) the sale or conveyance of the property of RNET as an entirety
or substantially as an entirety (other than a sale or conveyance in which RNET
continues as holding company of an entity or entities that conduct the business
or business formerly conducted by RNET); or
(c) the dissolution or liquidation of RNET.
5.2 REQUIRED NOTICE. At least 30 days' written notice of an event described in
section 5.1 shall be given by RNET to each Option Holder and Participant unless
(a) in the case of events described in sections 5.1(a) and 5.1(b), RNET or the
successor or purchaser shall make adequate provision for the assumption of the
outstanding Options or the substitution of new options on comparable terms,
except that an Option Holder shall have the right thereafter to purchase the
kind and amount of securities or property or cash receivable upon such event by
a holder of the number of Shares that would have been received upon exercise of
the Option immediately prior to the occurrence of such event (assuming that such
holder failed to exercise any rights of election and received per Share the kind
and amount of property received per Share by the holders of a majority of the
non-electing Shares) or (b) RNET or the successor or purchaser shall make
adequate provision for the adjustment of outstanding Awards other than Options
so that such Awards shall entitle the Participant to receive the kind and amount
of securities or property or cash receivable upon such event by a holder of the
number of Shares that would have been received with respect to such Award
immediately prior to the occurrence of such event (assuming that such holder
failed to exercise any rights of election and received per share the kind and
amount of property received per Share by the holders of a majority of the
non-electing Shares). This article V shall similarly apply to successive
mergers, consolidations, reorganizations, sales, or conveyances. Notice shall be
deemed to have been given when delivered personally to a Participant or when
mailed to a Participant by certified mail, postage prepaid, at such
Participant's address last known to RNET.
5.3 ACCELERATION OF EXERCISE. Participants notified in accordance with section
5.2 may exercise their Options at any time before the occurrence of the event
requiring the giving of notice (but subject to occurrence of such event),
regardless of whether all conditions of exercise relating to length of service,
attainment of financial performance goals, or otherwise have been satisfied.
Upon the giving of notice in accordance with section 5.2, all restrictions with
respect to Restricted Stock Awards and other Awards shall lapse immediately, all
Stock Units shall become payable immediately, and all Stock Appreciation Rights
shall become exercisable. Any Options, Stock Appreciation Rights, or Stock Units
that are not assumed or substituted under section 5.2(a) or 5.2(b) and that have
not been exercised prior to the event described in section 5.1 shall
automatically terminate upon the occurrence of such event.
5.4 LIMITATION ON PAYMENTS. If this article V would result in the receipt by any
Participant of a payment within the meaning of section 2806 of the Code and the
regulations promulgated thereunder and if the receipt of such payment by any
Participant would, in the opinion to counsel to RNET, result in the payment by
such Participant of any excise tax provided for in sections 2806 and 4999 of the
Code, then the amount of such payment shall be reduced to the extent required,
in the opinion of independent tax counsel, to prevent the imposition of such
excise tax, except that the Board of Directors, in its sole discretion, may
authorize the payment of all or part of the amount of such reduction to the
Participant.
ARTICLE VI
PARTICIPATION
Participants shall be those Eligible Parties who, in the judgment of the Board
of Directors, are performing, or during the term of their incentive arrangement
will perform, vital services in the management, operation, and development of
RNET or an Affiliated Corporation and contribute significantly, or are expected
to contribute significantly, to the achievement of long-term corporate economic
objectives. Participants may be granted from time to time one or more Awards,
except that the grant of each Award shall be separately approved by the Board of
Directors, and receipt of one Award shall not result in automatic receipt of any
other Award. Upon determination by the Board of Directors that an Award is to be
granted to a Participant, written notice shall be given specifying the terms,
conditions, rights, and duties related thereto. Each Participant shall, if
required by the Board of Directors, enter into an agreement with RNET, in such
form as the Board of Directors shall determine consistent with the Plan
specifying such terms, conditions, rights, and duties. Awards shall be deemed to
be granted as of the date specified in the grant resolution of the Board of
Directors, which date shall be the date of any related agreement with the
Participant. In the event of any inconsistency between the Plan and any such
agreement, the provisions of the Plan shall govern.
<PAGE> 5
ARTICLE VII
OPTIONS
7.1 GRANT OF OPTIONS. Coincident with or following designation for participation
in the Plan, a Participant may be granted one or more Options. The Board of
Directors in its sole discretion shall designate whether an Option is an
Incentive Option or a Non-Qualified Option. The Board of Directors may grant
both an Incentive Option and a Non-Qualified Option to a Participant at the same
time or at different times. Incentive Options and Non-Qualified Options, whether
granted at the same time or at different times, shall be deemed to have been
awarded in separate grants and shall be clearly identified, and in no event
shall the exercise of one Option affect the right to exercise any other Option
or affect the number of Shares for which any other Option may be exercised,
except as provided in section 7.2(b).
7.2 OPTION CERTIFICATE. Each Option granted under the Plan shall be evidenced by
an Option Certificate, incorporating and conforming to the following:
(a) Number of Shares. Each Option Certificate shall state that it
covers a specified number of Shares, as determined by the Board of Directors.
The maximum number of Shares subject to Options granted to any one Participant
during the term of the Plan shall be 500,000 Shares.
(b) Price. The price at which each Share may be purchased shall
be determined in each case by the Board of Directors and set forth in the Option
Certificate, but in no event shall the price be less than 100 percent of the
Fair Market Value of the Shares on the date of grant.
(c) Duration of Options; Restrictions on Exercise. Each Option
Certificate shall state the period, as determined by the Board of Directors,
within which the Option may be exercised. Such period shall end no more than ten
years from the date the Option is granted. The Option Certificate shall also set
forth such restrictions on exercise of the Option during such period, if any, as
may be determined by the Board of Directors. Each Option shall become
exercisable over such period of time, if any, or upon such events, as may be
determined by the Board of Directors.
(d) Termination of Service, Death, Disability, etc. The Board of
Directors may specify the period, if any, after which an Option may be exercised
following termination of the Option Holder's employment or service as a
director. The effect of this section 7.2(d) shall be limited to determining the
consequences of a termination, and nothing in this section 7.2(d) shall restrict
or otherwise interfere with RNET's discretion with respect to the termination of
any individual's employment or the shareholders' discretion with respect to the
election of directors. If the Board of Directors does not otherwise specify, the
following shall apply:
(i) If the employment or service of the Option Holder terminates for any
reason other than death or Disability within six months after the date
the Option is granted or if the employment or service of the Option
Holder is terminated within the Option Period for "cause," as determined
by RNET, the Option shall thereafter be void for all purposes. As used
in this section 7.2(d), "cause" shall mean a gross violation, as
determined by RNET, of RNET's established policies and procedures or
willful misconduct.
(ii) The Option may be exercised by the Option Holder if he becomes
Disabled, and the Option may by the persons specified in section
7.2(d)(iv) if the Option Holder dies, within one year following his
Disability (except that exercise shall occur during the duration of the
Option) but not thereafter. In any such case, the Option may be
exercised only as to Shares as to which it had become exercisable on or
before the date of the termination of the Option Holder's employment
because of Disability or death.
(iii) If the Option Holder is no longer a director of RNET or employed
by RNET or an Affiliated Corporation during the duration of the Option
for any reason other than "cause," Disability or death, and such
termination occurs more than six months after the Option is granted, the
Option may be exercised by the Option Holder within three months
following the date of such termination (except that such exercise shall
occur during the duration of the Option) but not thereafter. In any such
case, the Option may be exercised only as to the shares as to which the
Option had become exercisable on or before the date of termination of
employment.
<PAGE> 6
(iv) If the Option Holder dies during the duration of the Option while
still employed or within the one-year period referred to in section
7.2(d)(ii) or the three-month period referred to in section 7.2(d)(iii),
the Option may be exercised by those entitled to do so under the Option
Holder's will or by the laws of descent and distribution.
(e) Transferability. No Option shall be transferable by the Option
Holder except by will or the laws of descent and distribution. Each Option is
exercisable during the Option Holder's lifetime only by him, or in the event of
Disability or incapacity, by his guardian or legal representative.
(f) Consideration for Grant of Option. Each Option Holder agrees to
remain in the service of RNET as a director or in the employment of RNET, at the
pleasure of RNET, for a continuous period of at least one year after the date
the Option is granted, and in the case of an employee at the salary rate in
effect on the date of the Option Certificate or at such changed rate as may be
fixed from time to time by RNET. Nothing in this paragraph shall limit or impair
RNET's right to terminate the employment of any employee or the shareholders'
rights with respect to the election of directors.
(g) Manner of Exercise. An Option shall be exercised by delivery to RNET
of written notice specifying the number of Shares with respect to which such
Option is exercised. The purchase of such Shares shall take place at the
principal offices of RNET within 30 days following delivery of such notice, at
which time the Option Price of the Shares with respect to which the Option is
exercised shall be paid in full by any of the methods set forth below or a
combination thereof. Except as set forth in the next sentence, the Option shall
be exercised when the Option Price for the number of Shares as to which the
Option is exercised is paid to RNET in full. If the Option Price is paid by
means of a broker's loan transaction as described in section 7.2(h)(iv), in
whole or in part, the closing of the purchase of the Shares under the Option
shall take place (and the Option shall be treated as exercised) on the date on
which, and only if, the sale of Shares upon which the broker's loan was based
has been closed and settled, unless the Option Holder makes an irrevocable
written election at the time of exercise of the Option to have the exercise
treated as fully effective for all purposes upon receipt of the Option Price by
RNET, regardless of whether the sale of the Shares by the broker is closed and
settled. A properly executed certificate or certificates representing the Shares
shall be delivered to or at the direction of the Option Holder upon payment
therefor. If Options on less than all Shares subject to an Option are exercised,
RNET shall deliver a new Option Certificate evidencing the Option on the
remaining Shares.
(h) Payment. The Option Price for the Shares as to which the Option is
exercised shall be paid by any of the following methods or any combination of
the following methods at the election of the Option Holder, or by any other
method approved by the Board of Directors upon the request of the Option Holder:
(i) in cash;
(ii) by certified, cashier's check, or other check acceptable to RNET,
payable to the order of RNET;
(iii) by delivery of certificates representing a number of Shares then
owned by the Option Holder, the Fair Market Value of which on the date
of delivery of the certificates at least equals the Option Price for the
Shares as to which the Option is exercised, properly endorsed for
transfer to RNET, except that no Option may be exercised by delivery to
RNET of certificates representing Shares held by the Option Holder for
less than six months; or
(iv) by delivery of a properly executed notice of exercise, together
with irrevocable instructions to a broker to deliver to RNET promptly
the amount of the proceeds of the sale of all or part of the Shares or
of a loan from the broker to the Option Holder in an amount sufficient
to pay the Option Price for the Shares as to which the Option is
exercised.
(i) Date of Grant. An Option shall be deemed to be granted on the date
specified in the grant resolution of the Board of Directors.
(j) Issuance of Additional Option. If an Option Holder pays all or part
of the exercise price of an Option with Shares, or pays all or any part of the
applicable withholding taxes with respect to the exercise of an Option with
Shares that has been held by the Option Holder for more than a period (no
shorter than six months) to be determined by the Board of Directors, the Board
of Directors in its sole discretion may grant to such Option Holder a new Option
covering the number of shares of Shares used to pay such exercise price or
withholding tax. The new Option shall have an Option Price per Share equal to
the Fair Market Value of a Share on the date of exercise of the exercised Option
and shall encompass the
<PAGE> 7
same terms and conditions as the exercised option, except as otherwise provided
by the Board of Directors in its sole discretion.
7.3 RESTRICTIONS ON INCENTIVE OPTIONS. The aggregate Fair Market Value of the
Shares with respect to which Incentive Options are exercisable for the first
time by an Option Holder in any calendar year, under the Plan or otherwise,
shall not exceed $100,000. For this purpose, the Fair Market Value of the Shares
shall be determined as of the date of grant of the Option. Incentive Options
granted to an Option Holder who is the holder of record of 10 percent or more of
the outstanding capital stock of RNET shall have an Option Price equal to 110
percent of the Fair Market Value of the Shares on the date of grant of the
Option, and the Option Period for any such Option shall not exceed five years.
7.4 SHAREHOLDER PRIVILEGES. No Option Holder shall have any rights as a
shareholder with respect to any Shares subject to an Option until the Option
Holder becomes the holder of record of such Shares. No adjustments shall be made
for dividends or other distributions or other rights as to which there is a
record date preceding the date such Option Holder becomes the holder of record
of such Shares, except as provided in article IV.
ARTICLE VIII
RESTRICTED STOCK AWARDS
8.1 GRANT. Coincident with or following designation for participation in the
Plan, the Board of Directors may grant a Participant one or more Restricted
Stock Awards as may be determined by the Board of Directors.
8.2 RESTRICTIONS. A Restricted Stock Award shall be subject to such
restrictions, including without limitation a Participant's continuous service as
a director or continuous employment by RNET or an Affiliated Corporation for a
restriction period specified by the Board of Directors or the attainment of
specified performance goals and objectives determined by the Board of Directors
with respect to such Award. The Board of Directors in its sole discretion may
require different periods of employment or different performance goals and
objectives with respect to different Participants, to different Restricted Stock
Awards, or to separate, designated portions of the Shares comprising a
Restricted Stock Award. In the event of the death or Disability of a
Participant, or the retirement of a Participant in accordance with RNET's
established retirement policy, all employment period and other restrictions
applicable to a Restricted Stock Award shall lapse with respect to a pro rata
portion of such Restricted Stock Award based on the ratio between the number of
full months of employment completed at the time of termination of employment
from the grant of the Restricted Stock Award and the total number of months of
employment required for such Restricted Stock Award to be fully nonforfeitable,
and such portion of the Restricted Stock Award shall become fully
nonforfeitable. The remaining portion of such Restricted Stock Award shall be
forfeited and immediately returned to RNET. In the event of a Participant's
termination of employment for any other reason, any Restricted Stock Awards as
to which the employment period or other restrictions have not been satisfied (or
waived or accelerated as provided herein) shall be forfeited, and all Shares
related thereto shall be immediately returned to RNET.
8.3 PRIVILEGES OF A SHAREHOLDER; TRANSFERABILITY. A Participant shall have all
voting, dividend, liquidation, and other rights with respect to Shares received
a Restricted Stock Award under this article VIII upon his becoming the holder of
record of such Shares, except that the Participant's right to sell, encumber, or
otherwise transfer such Shares shall be subject to the limitations of section
13.2.
8.4 ENFORCEMENT OF RESTRICTIONS. The Board of Directors shall cause a legend to
be placed on the certificates evidencing Shares issued pursuant to a Restricted
Stock Award referring to the restrictions provided by sections 8.2 and 8.3 and,
in addition, may in its sole discretion require the Participant to keep the
certificates evidencing such Shares, duly endorsed, in the custody of RNET or a
third party while the restrictions remain in effect.
ARTICLE IX
STOCK UNITS
Coincident with or following designation for participation in the Plan, the
Board of Directors may grant a Participant one or more Stock Units as may be
determined by the Board of Directors. The number of Stock Units, the goals and
objectives to be satisfied with respect to each grant of Stock Units, the time
and manner of payment for each Stock Unit, and the other terms and conditions
applicable to a grant of Stock Units shall be determined by the Board of
Directors.
<PAGE> 8
ARTICLE X
STOCK APPRECIATION RIGHTS
10.1 GRANT. Coincident with or following designation for participation in the
Plan, the Board of Directors may grant a Participant one or more Stock
Appreciation Rights as may be determined by the Board of Directors. The Board of
Directors shall determine at the time of grant the period during which the Stock
Appreciation Right may be exercised, which period may not commence until six
months after the date of grant.
10.2 EXERCISE. If a Stock Appreciation Right is issued in tandem with an Option,
except as may otherwise be provided by the Board of Directors, the Stock
Appreciation Right shall be exercisable during the period that its related
Option is exercisable. A Participant desiring to exercise a Stock Appreciation
Right shall give written notice stating the proportion of Shares and cash that
the Participant desires to receive pursuant to the Stock Appreciation Right
exercised. Within 30 days after receipt of the notice, RNET shall deliver to the
Participant a certificate or certificates for Shares and/or a cash payment in
accordance with section 10.3. The date on which RNET receives the written notice
shall be deemed the exercise date.
10.3 NUMBER OF SHARES OR AMOUNT OF CASH. Subject to the discretion of the Board
of Directors to substitute cash for Shares or Shares for cash, the number of
Shares to be issued pursuant to the exercise of a Stock Appreciation Right shall
be determined by dividing (a) the total number of Shares as to which the Stock
Appreciation Right is exercised, multiplied by the amount by which the Fair
Market Value of a Share on the exercise date exceeds the Fair Market Value of a
Share on the date of grant of the Stock Appreciation Right, by (b) the Fair
Market Value of a Share on the exercise date. Fractional shares shall not be
issued, and in lieu thereof a cash adjustment shall be paid. In lieu of issuing
Shares upon the exercise of a Stock Appreciation Right, the Board of Directors
in its sole discretion may elect to pay the cash equivalent of the Fair Market
Value of the Shares on the exercise date for any or all Shares that would
otherwise be issuable upon exercise of the Stock Appreciation Right.
10.4 EFFECT OF EXERCISE. If a Stock Appreciation Right is issued in tandem with
an Option, the exercise of the Stock Appreciation Right or the related Option
shall result in an equal reduction in the number of corresponding Stock
Appreciation Rights and Shares subject to the related Option.
10.5 TERMINATION OF EMPLOYMENT. Upon a Participant's termination of service as a
director or employment, any Stock Appreciation Rights then held by such
Participant shall be exercisable within the time periods, and upon the same
conditions with respect to the reasons for termination of employment, as are
specified in section 7.2(d) with respect to Options.
ARTICLE XI
OTHER STOCK GRANTS
From time to time during the duration of this Plan, the Board of Directors in
its sole discretion may adopt one or more incentive compensation arrangements
for Participants pursuant to which the Participants may acquire shares of Shares
by purchase, outright grant, or otherwise. Any such arrangements shall be
subject to the general provisions of this Plan, and all Shares issued pursuant
to such arrangements shall be issued under this Plan.
ARTICLE XII
RIGHTS OF PARTICIPANTS
12.1 EMPLOYMENT. Nothing contained in the Plan or any Award shall confer upon
any Participant any right with respect to the continuation of his employment by
RNET or an Affiliated Corporation, or interfere in any way with the right of
RNET or an Affiliated Corporation, subject to the terms of any separate
employment agreement to the contrary, at any time to terminate such employment
or to increase or decrease the compensation of the Participant from the rate in
existence at the time of the grant of an Award. Whether an authorized leave of
absence, or absence in military or government service, shall constitute a
termination of employment shall be determined by the Board of Directors at the
time.
12.2 TRANSFERABILITY. No right or interest of any Participant in an Award shall
be assigned or transferred during the lifetime of the Participant, voluntarily
or involuntarily, or subjected to any lien, directly or indirectly, by operation
of law, or otherwise, including execution, levy, garnishment, attachment,
pledge, or bankruptcy. In the event of a Participant's
<PAGE> 9
death, his rights and interests in Awards shall, to the extent provided in the
Plan, be transferable by will or the laws of descent and distribution, and
payment of any amounts due under the Plan shall be made to, and exercise of any
Options may be made by, the Participant's legal representatives, heirs, or
legatees. If in the opinion of the Board of Directors a person entitled to
payments or to exercise rights with respect to the Plan is disabled from caring
for his affairs because of mental condition, physical condition, or age, payment
due such person may be made to, and such rights shall be exercised by, such
person's guardian, conservator, or other legal personal representative upon
furnishing the Board of Directors with evidence satisfactory to the Board of
Directors of such status.
12.3 NO PLAN FUNDING. Obligations to Participants under the Plan shall not be
funded, trusteed, insured, or secured in any manner. Participants shall have no
security interest in any assets of RNET or any Affiliated Corporation and shall
be only general creditors of RNET.
ARTICLE XIII
GENERAL
13.1 INVESTMENT REPRESENTATIONS. RNET may require any Participant, as a
condition of exercising an Option or a Stock Appreciation Right or receiving a
Restricted Stock Award, Stock Unit, or grant of Shares, to give written
assurances in substance and form satisfactory to RNET that he is acquiring the
Shares for his own account for investment purposes and not with a present
intention of selling or otherwise distributing the same and to such other effect
as RNET deems necessary or appropriate in order to comply with applicable
securities laws.
13.2 SECURITIES LAWS. (a) Each Award shall be subject to the requirement that,
if at any time RNET determines that the listing, registration, or qualification
of the Shares subject to such Award upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental or
regulatory body, is necessary as a condition of or in connection with the
issuance or purchase of Shares thereunder, such Award may not be accepted or
exercised in whole or in part unless such listing, registration, qualification,
consent, or approval has been effected or obtained on conditions acceptable to
the Board of Directors. Nothing herein shall be deemed to require RNET to apply
for or to obtain such listing, registration, or qualification.
(b) If a Participant is an officer or director of RNET within the
meaning of section 16 of the Securities Exchange Act of 1934, then to the extent
that section 16 is applicable, Awards shall be subject to all conditions
required under Rule 16b-3 or any successor rule to qualify the Award for an
exception from the provisions of section 16(b). Such conditions shall be set
forth in the agreement with the Participant which describes the Award.
13.3 CHANGES IN ACCOUNTING RULES. Notwithstanding any other provision of the
Plan to the contrary, if, during the term of the Plan, any changes in the
financial or tax accounting rules applicable to Awards occurs which, in the sole
judgment of the Board of Directors, may have a material adverse effect on the
reported earnings, assets, or liabilities of RNET, the Board of Directors shall
have the right and power to modify as necessary any then outstanding Awards as
to which the applicable employment or other restrictions have not been
satisfied.
13.4 OTHER EMPLOYEE BENEFITS. The amount of any compensation deemed to be
received by a Participant as a result of the exercise of an Option or Stock
Appreciation Right, the sale of shares received upon such exercise, the vesting
of any Restricted Stock Award, distributions with respect to Stock Units, or the
grant of Shares shall not constitute "earnings" or "compensation" with respect
to which any other employee benefits of such Participant are determined,
including without limitation benefits under any pension, profit sharing, life
insurance, or salary continuation plan.
13.5 PLAN AMENDMENT, MODIFICATION, AND TERMINATION. The Board of Directors may
at any time terminate, and from time to time may amend or modify the Plan,
except that no amendment or modification may become effective without approval
of the shareholders if shareholder approval is required to enable the Plan to
satisfy any applicable statutory or regulatory requirements, or if RNET on the
advice of counsel determines that shareholder approval is otherwise necessary or
desirable. No amendment, modification, or termination of the Plan shall
adversely affect any Award theretofore granted without the consent of the
Participant holding such Award.
13.6 WITHHOLDING. (a) Requirement. RNET's obligation to deliver Shares upon the
exercise of any Option or Stock Appreciation Right, the vesting of any
Restricted Stock Award, payment with respect to Stock Units, or a grant of
Shares
<PAGE> 10
shall be subject to the Participant's satisfaction of all applicable federal,
state, and local income and other tax withholding requirements.
(b) Withholding with Shares. At the time an Award is granted, the
Board of Directors in its sole discretion may grant the Participant an election
to pay all or part of such tax withholding by electing to transfer to RNET, or
to have RNET withhold from Shares otherwise issuable to the Participant, Shares
having a Fair Market Value on the date of withholding equal to the amount
required to be withheld or such lesser amount as may be elected by the
Participant. All elections shall be subject to the approval or disapproval of
the Board of Directors. Any such election by a Participant (a) shall be made
prior to the date of withholding, (b) shall be irrevocable, and (c) if the
Participant is an officer or director of RNET within the meaning of section 16
of the Securities Exchange Act of 1934, then to the extent that section 16 is
applicable the Participant shall satisfy the requirements of section 16 and any
applicable rules thereunder.
(c) Withholding for Non-Qualified Options. Upon exercise of a
Non-Qualified Option, the Option Holder shall make appropriate arrangements with
RNET to provide for the amount of additional withholding required by sections
3102 and 3402 of the Code and applicable state income tax laws, including
payment of such taxes through delivery of Shares or by withholding Shares to be
issued under the Option.
(d) Withholding for Incentive Options. If an Option Holder makes
a disposition (as defined in section 424(c) of the Code) of any Shares acquired
pursuant to the exercise of an Incentive Option before the expiration of two
years from the date on which the Incentive Option was granted or prior to the
expiration of one year from the date on which the Option was exercised, the
Option Holder shall send written notice to RNET at its principal office of the
date of such disposition, the number of Shares disposed of, the amount of
proceeds received from such disposition, and any other information relating to
such disposition as RNET may reasonably request. The Option Holder shall then
make appropriate arrangements with RNET to provide for the amount of additional
withholding, if any, required by sections 3102 and 3402 of the Code and
applicable state income tax laws.
13.7 GOVERNING LAW. The Plan and all agreements hereunder shall be construed in
accordance with and governed by the laws of the State of Colorado.
13.8 DURATION. Unless sooner terminated by the Board, the Plan shall terminate
on December 31, 2004, and no Award shall be made after such termination. Awards
outstanding at the time of Plan termination may continue to be exercised, or
become free of restrictions, or be paid in accordance with their terms.
As adopted by the Board of Directors on June 4, 1999.
THE RECOVERY NETWORK, INC.
a Colorado corporation
By: /s/ WILLIAM D. MOSES
------------------------------
William D. Moses
President
<PAGE> 1
EXHIBIT 4.19
ACTION BY CONSENT IN WRITING
OF THE BOARD OF DIRECTORS
OF THE RECOVERY NETWORK, INC.
The undersigned being all of the Directors of RECOVERY NETWORK, INC., a
Colorado corporation (the "Company") hereby consent to the following action of
this corporation, to be effective as of June 4, 1999, in lieu of a meeting.
APPROVAL OF 1999 EMPLOYEE STOCK COMPENSATION PLAN
WHEREAS, it is deemed to be in the best interest of this corporation to
compensate the Company's employees for their efforts and diligence, the Board of
Directors hereby approves the 1999 Employee Stock Compensation Plan (the
"Plan").
The Plan shall administered by the Board of Directors, in accordance
with the provisions of the Company's bylaws. The Plan shall be registered under
Form S-8, effective June 15, 1999.
The purpose of the Plan is to provide employees with an incentive to
maintain the long-term performance and profitability of the Company.
NOW THEREFORE BE IT RESOLVED, that the Board of Directors of The
Recovery Network, Inc., hereby approves the 1999 Employee Stock Compensation
Plan and the registration of a maximum of 1,300,000 shares of Common Stock
pursuant to the Plan.
IN WITNESS WHEREOF, each Director of The Recovery Network, Inc. has
executed this unanimous consent in a separate original document, and all
original documents signed individually by the Directors shall together
constitute one original Unanimous Consent.
/s/ TRACY NEAL
--------------------------------
Tracy Neal
Secretary
Dated as of June 4, 1999 /s/ WILLIAM D. MOSES
------------------------------------
William D. Moses
Dated as of June 4, 1999 /s/ GEORGE H. HENRY
------------------------------------
George H. Henry
Dated as of June 4, 1999 /s/ CHARLOTTE SCHIFF JONES
------------------------------------
Charlotte Schiff Jones
Dated as of June 4, 1999 /s/ JAY HANDLINE
------------------------------------
Jay Handline
Dated as of June 4, 1999 /s/ BRAD PAROBEK
------------------------------------
Brad Parobek
<PAGE> 1
EXHIBIT 5.2
BECKMAN, MILLMAN & SANDERS, LLP
116 John Street
New York, New York 10038
Telephone: (212) 406-4700
Facsimile: (212) 406-3750
June 15, 1999
U.S. Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington D.C. 20549
Re: The Recovery Network, Inc.,Form S-8 Registration Statement
OPINION OF COUNSEL NO.
Ladies and Gentlemen:
OPINION OF COUNSEL
We have acted as counsel to The Recovery Network, Inc. (the "Company")
in connection with the preparation and filing of a Registration Statement on
Form S-8 (the "Registration Statement"). The Registration Statement covers the
registration under the Securities Act of 1933, as amended, of 1,300,000 shares
of the Company's common stock, $.01 par value per share (the "Shares"), pursuant
to the Company's employee and consultant benefit plan entitled the "The Recovery
Network, Inc. 1999 Stock Plan," adopted by the Board of Directors of the Company
on June 4, 1999 (the "Plan"). As such, we have examined the Registration
Statement, the Company's Articles of Incorporation and Bylaws, as amended, and
minutes of meetings of its Board of Directors.
Based upon the foregoing, and assuming that the Shares will be issued as
set forth in the Plan and Registration Statement, at a time when effective, and
that the Company will fully comply with all applicable securities laws involved
under the Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated pursuant to said
Acts, and in those states or foreign jurisdictions in which the Shares may be
sold, we are of the opinion that, upon proper and legal issuance of the Shares
according the Registration Statement and receipt of the consideration to be paid
for the Shares, the Shares will be validly issued, fully paid and nonassessable
shares of Common Stock of the Company. This opinion does not cover any matters
related to any re-offer or re-sale of the Shares by any Plan Beneficiaries, once
properly and legally issued pursuant to the Plan as described in the
Registration Statement.
This opinion is not to be used, circulated, quoted or otherwise referred
to for any other purpose without our prior written consent. This opinion is
based on our knowledge of the law and facts as of the date hereof. This opinion
does not address or relate to any specific state securities laws. We assume no
duty to communicate with the Company in respect to any matter which comes to our
attention hereafter.
CONSENT
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to our firm in the Registration Statement.
/s/ BECKMAN, MILLMAN & SANDERS, LLP
BECKMAN, MILLMAN & SANDERS, LLP
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated September 23, 1998
included in Recovery Network, Inc. and Subsidiary's Form 10-KSB for the year
ended June 30, 1998 and to all references to our Firm included in the
registration statement.
/s/ ARTHUR ANDERSEN LLP
-----------------------
ARTHUR ANDERSEN LLP
Los Angeles, California
June 14, 1999
