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As filed with the Securities and Exchange Commission on July 18, 1996
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NATIONAL MEDIA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
13-2658741
(I.R.S. Employer Identification Number)
1700 Walnut Street
Philadelphia, Pennsylvania 19103
(Address of principal executive offices)
Amended and Restated 1994 Stock Option Plan of
Positive Response Television, Inc., a wholly-owned
subsidiary of National Media Corporation; and
Employment Agreement, dated May 17, 1996, by and between
Positive Response Television, Inc., National Media
Corporation and Michael S. Levey
(Full Title of Plan)
Brian J. Sisko, Vice President/Corporate Development
National Media Corporation
1700 Walnut Street
Philadelphia, Pennsylvania 19103
(Name and address of agent for service)
(215) 772-5000
(Telephone number, including area code, of agent for service)
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Copies to:
Gerald F. Stahlecker, Esquire
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, Pennsylvania 19102
(215) 568-6060
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<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Proposed Amount of
Title of Securities Amount to be Maximum Offering Maximum Aggregate Registration
to be Registered Registered Price Per Share Offering Price Fee
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<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per share 178,750(1) $15.625(3) $2,792,968.75 $963.09(3)
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Common Stock, par
value $.01 per share 300,000(2) $20.00(4) $6,000,000.00 $2,068.97(4)
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</TABLE>
(1) Represents the maximum number of shares of the Registrant's Common Stock
issuable upon the exercise of currently outstanding options granted under
the Amended and Restated 1994 Stock Option Plan of Positive Response
Television, Inc., a wholly-owned subsidiary of the Registrant.
(2) Represents the maximum number of shares of the Registrant's Common Stock
issuable upon the exercise of options granted by the Registrant pursuant to
that certain Employment Agreement, dated as of May 17, 1996, by and between
Positive Response Television, Inc., the Registrant and Michael S. Levey.
(3) Based on the average of the high and low sale prices of the Registrant's
Common Stock as reported on the New York Stock Exchange on July 15, 1996,
estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933.
(4) Based on the exercise price of $20.00 per share of the Registrant's Common
Stock pursuant to that certain Employment Agreement, dated as of May 17,
1996, by and between Positive Response Television, Inc., the Registrant and
Michael S. Levey, in accordance with Rule 457(h) under the Securities Act
of 1933.
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PART I
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INFORMATION REQUIRED IN PROSPECTUS
A reoffer prospectus prepared in accordance with the requirements of
Part I of Form S-3 is being filed with the Commission as part of this
Registration Statement. The Section 10(a) prospectus is omitted from this
Registration Statement in accordance with Rule 428 under the Securities Act of
1933 and the Note to Part I of Form S-8.
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PROSPECTUS
NATIONAL MEDIA CORPORATION
1700 Walnut Street
Philadelphia, Pennsylvania 19103
(215) 772-5000
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318,080 Shares of Common Stock
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The shares (the "Shares") of common stock, par value $.01 per share
(the "Common Stock"), of National Media Corporation (together with its
subsidiaries, the "Company") which are the subject of this Prospectus and which
may be sold from time to time hereunder are shares which may be acquired by
certain officers and directors (the "Selling Stockholders") of Positive Response
Television, Inc., a wholly-owned subsidiary of the Company ("Positive
Response"), upon the exercise of options to purchase such Shares granted to the
Selling Stockholders by the Company pursuant to (i) Positive Response's Amended
and Restated 1994 Stock Option Plan (the "Plan") and (ii) that certain
Employment Agreement, dated as of May 17, 1996, by and between Positive
Response, the Company and Michael S. Levey (the "Employment Agreement").
Effective May 17, 1996, the Company acquired Positive Response through the
merger of Positive Response with and into a wholly-owned subsidiary of the
Company (the "Merger"). Pursuant to the terms of the Merger, all of Positive
Response's obligations under the Plan were assumed by the Company and all
options issued under the Plan prior to the consummation of the Merger were
converted into the right to acquire shares of the Company's Common Stock. Of the
Shares offered hereby, 18,080 Shares are issuable under the Plan and 300,000
Shares are issuable under the Employment Agreement. See "Selling Stockholders."
It is anticipated that the Shares may be offered for sale by one or
more of the Selling Stockholders, in their discretion, on a delayed or
continuous basis from time to time in transactions in the open market at prices
prevailing at the time of sale on the New York Stock Exchange and/or the
Philadelphia Stock Exchange under the symbol "NM" or in private transactions at
negotiated prices or otherwise. Such transactions may be effected directly by
the Selling Stockholders, each acting as principal for his own account.
Alternatively, such transactions may be effected through brokers, dealers or
other agents designated from time to time by the Selling Stockholders, and such
brokers, dealers or other agents may receive compensation in the form of
customary brokerage commissions or concessions from the Selling Stockholders or
the purchasers of the Shares. The Shares held by the Selling Stockholders may
also be sold hereunder by brokers, dealers, banks or other persons or entities
who receive such Shares as a pledgee of the Selling Stockholders. The Selling
Stockholders, brokers who execute orders on their behalf and other persons who
participate in the offering of the Shares on their behalf may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act of
1933, as amended (the "Securities Act") and a portion of the proceeds of sales
and commissions or concessions therefore may be deemed underwriting compensation
for purposes of the Securities Act. The Company will not receive any part of the
proceeds from the sale of Shares by the Selling Stockholders.
The Company will pay all costs and expenses incurred by it in
connection with the registration of the Shares under the Securities Act. The
Selling Stockholders will pay the costs associated with any sales of Shares,
including any discounts, commissions and applicable transfer taxes.
See "Risk Factors" for a discussion of certain factors to be considered
by purchasers of the Shares.
------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is July 18, 1996.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
MADE BY THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE SELLING STOCKHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO BUY
THE SECURITIES TO WHICH THIS PROSPECTUS RELATES IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR SINCE THE DATE AS
OF WHICH INFORMATION IS SET FORTH HEREIN.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy and information
statements and other information can be inspected and copied at prescribed rates
at the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, and at the Commission's regional offices
located at 7 World Trade Center, New York, New York 10048, and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. The Common
Stock of the Company is listed on the New York and the Philadelphia Stock
Exchanges, and reports, proxy and information material and other information
concerning the Company may be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005 and the Philadelphia
Stock Exchange, Inc., 1900 Market Street, Philadelphia, Pennsylvania 19103.
This Prospectus constitutes a part of a registration statement on Form
S-8 (the "Registration Statement") filed by the Company with the Commission
under the Securities Act with respect to the securities offered hereby. This
Prospectus does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and to the exhibits thereto for further information with respect to
the Company and the securities offered hereby. Copies of the Registration
Statement and the exhibits thereto are on file at the offices of the Commission
and may be obtained upon payment of the prescribed fee or may be examined
without charge at the Public Reference Section of the Commission described
above. Statements contained herein concerning the provisions of documents are
necessarily summaries of such documents, and each statement is qualified in its
entirety by reference to the copy of the applicable document filed with the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1996 (the "1996 Annual Report");
(b) The Company's Current Reports on Form 8-K, dated October 25, 1995
(as amended on Form 8-K/A filed on or about January 6, 1996), May
17, 1996 (as amended on Form 8-K/A filed on or about June 14,
1996) and July 1, 1996; and
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, dated August 28,
1990, including all amendments and reports filed for the purpose
of updating such description.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15 (d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
completion or termination of this offering shall be deemed to be incorporated by
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reference in this Prospectus and to be part hereof from the date of filing of
such documents. Any statement contained in a document, all or a portion of which
is incorporated or deemed to be incorporated by reference herein, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request, a copy of any or all of such documents which are incorporated herein by
reference (other than exhibits to such documents unless such exhibits are
specifically incorporated by reference into the documents that this Prospectus
incorporates). Written or oral requests for copies should be directed to
Marshall A. Fleisher, Vice President (Legal) and Corporate Secretary, National
Media Corporation, 1700 Walnut Street, Philadelphia, Pennsylvania 19103, (215)
772-5000.
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THE COMPANY
The Company is a global leader in the use of direct response
transactional television programming, known as infomercials, to market consumer
products. The Company is the world's largest publicly held infomercial company,
making infomercial programming available to more than 260 million households in
60 countries worldwide.
The Company manages all phases of marketing the majority of its
products in both the United States and the international markets, including
product selection and development, manufacturing by third parties, production
and broadcast of the infomercials, order processing and fulfillment and customer
service. The Company's products are primarily concentrated in the automotive,
beauty and personal care, crafts, health and fitness, kitchen and household,
music, outdoor and self-improvement categories. At any given time, the Company
broadcasts infomercials concerning approximately 75 products in one or more
geographic markets worldwide.
Net revenues for fiscal 1996 were $292.6 million, a 66.1% increase over
the prior year. Net income for the fiscal year ended March 31, 1996 was $16.6
million, compared to a net loss of $672,000 for the prior year. In the fall of
1994, the Company commenced a corporate restructuring. Since then, the Company
has achieved strong revenue and net income performance, posting its sixth
consecutive profitable quarter in the fourth quarter of fiscal 1996.
Strengthened by these recent financial results, National Media is pursuing a
business strategy focusing on: (i) expanding its global presence, (ii)
developing and marketing innovative consumer products to enhance its library of
infomercial programs and (iii) lowering costs by becoming a fully-integrated
provider of consumer product marketing services.
Expand Global Presence. The Company is continuing its efforts to expand
its position as the worldwide leader in infomercial programming. Through its
existing media time and order fulfillment operations, the Company has the
ability to deliver infomercial programming and products to over 260 million
households worldwide. The Company intends to aggressively increase its number of
media outlets in new and existing markets through strategic acquisitions and
long-term and other agreements with various network affiliates and cable
networks. At present, the Company has ongoing relationships, some of which are
long-term, with networks in North America such as America's Talking, BET, CNBC,
Discovery, E!, ESPN2, The Family Channel, FX, Home Team Sports, The Learning
Channel, Lifetime Television, The Nashville Network and USA Network, and
internationally with satellite channels such as Eurosport, Flextech (Starstream)
and The NBC Superchannel. The Company has also acquired the rights to use a
twenty-four hour digital satellite transponder to broadcast its infomercials in
Europe.
In addition to increasing its media time in existing markets, the
Company plans to enter additional geographic markets, including South Africa,
mainland China, India and Indonesia. Initial entry into these markets is
currently expected by the end of calendar year 1997.
Develop and Market Innovative Products to Enhance Library of
Infomercial Programs. The Company continually seeks out the most innovative
consumer products which it can market and distribute profitably. The Company has
built an in-house product development/marketing department responsible for
researching, developing and analyzing products and product ideas. The Company
augments its product development activities through strategic relationships with
Mitsui & Co., Ltd., one of the world's largest diversified service companies,
certain media companies and various third-party manufacturers.
The Company believes that its large library of infomercial programs,
together with its extensive international operations and expertise in product
sourcing, in-bound telemarketing, order fulfillment and customer service, gives
it a significant competitive advantage over others desiring to enter its
existing or new markets. While the Company incurs certain initial and ongoing
costs in connection with adapting a product and infomercial for specific
markets, the primary expenses of product and infomercial development and
infomercial production are incurred when the product/infomercial is first
developed for its initial target market. Thus, as the Company obtains sufficient
media time in additional markets, it can quickly, efficiently and relatively
inexpensively begin selling products in such new markets.
The Company believes that by further expanding its coverage into other
parts of the world it will be able to further leverage its library of
infomercial programs and products by extending the time period during which each
product generates revenues and, therefore, the total worldwide revenues for a
particular product. At present, the Company's total product/infomercial library
available for introduction into each new market consists of over 100 products.
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Lower Costs by Becoming a Fully-Integrated Provider. The Company seeks
to be the low-cost provider in the infomercial industry. To this end, the
Company has created a state of the art order fulfillment system to service its
North American operations and is working to more fully integrate its entire
worldwide operations. The Company also continues to explore methods to better
control each step in the development and life cycle of a product/infomercial and
develop its expertise in, and refine its systems with regards to, product
sourcing, in-bound telemarketing, order fulfillment and customer service. The
Company believes that its current competitive advantages of purchased block
media time, multi-country coverage and fully-integrated program production,
product sourcing and order fulfillment, as well as the development of new
long-term media and marketing partners, provide it with a strong base from which
to continue to lower its costs.
RECENT DEVELOPMENTS
On October 25, 1995, the Company acquired DirectAmerica Corporation and
California Production Group, Inc. (collectively "DirectAmerica"). DirectAmerica
is a leading infomercial production company which produces infomercials for the
Company as well as third parties.
On May 17, 1996, the Company acquired Positive Response pursuant to the
Merger. Positive Response was a publicly traded direct marketing company and
producer of infomercials. Its net revenues for the year ended December 31, 1995
were approximately $63.4 million. The Company's acquisition of Positive Response
will enhance its internal capability to produce a substantial number of its
infomercials in the future and provide it with an internal telemarketing
capability.
On July 1, 1996, the Company acquired Prestige Marketing Limited and
Prestige Marketing International Limited (collectively, "Prestige") and, on July
2, 1996, the Company acquired Suzanne Paul Holdings Pty Limited and its
operating subsidiaries (collectively, "Suzanne Paul"), two direct response
television marketing companies.
Prestige operates out of Auckland, New Zealand. It produces its own
short-form and long-form direct response television spots and broadcasts these
and third-party shows in New Zealand. Prestige also licenses its shows for
broadcast throughout Asia and the Pacific Rim and in Russia. Prestige conducts
its own in-bound telemarketing, order fulfillment and customer service
functions. In fiscal 1996, Prestige had net revenues of $18.7 million and net
income of $3.3 million.
Suzanne Paul operates out of Sydney, Australia and broadcasts its
programming in Australia. Suzanne Paul conducts its own in-bound telemarketing,
order fulfillment and customer service functions. In the nine months ended March
31, 1996, Suzanne Paul had net revenues of $16.2 million and net income of $2.3
million.
The acquisitions of Prestige and Suzanne Paul extend the reach of the
Company's programming firmly into the New Zealand, Australia and Southeast Asian
marketplaces. The acquisitions expand the Company's presence in nine countries
in which it has a presence and add three countries to the Company's geographic
reach.
The aggregate consideration paid by the Company for Prestige and
Suzanne Paul was approximately $4.2 million in cash, a $2.8 million note payable
maturing on December 5, 1996 and 787,879 shares of Common Stock. Upon
consummation of these acquisitions, the Company also funded approximately $4.6
million in dividends payable to shareholders of Suzanne Paul. In addition, the
Company may be required to pay up to an additional $5 million in Common Stock,
valued at then present market prices, in 1997 and 1998, contingent upon the
levels of net income achieved in those years by Prestige and Suzanne Paul.
On July 9, 1996, the Company entered into a letter of intent to acquire
Hawthorne Communications, Inc. of Fairfield, Iowa, a full-service infomercial
advertising agency. The acquisition, which is subject to the completion of
satisfactory due diligence and definitive documentation, will be funded by a
combination of cash and Common Stock and is expected to be completed in either
July or August, 1996.
On June 14, 1996, the Company filed a registration statement on Form
S-3 with the Commission concerning the offer and sale by the Company of up to
2,000,000 shares of Common Stock (not including up to an additional
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300,000 shares of Common Stock which may be issued pursuant to an underwriters'
overallotment option) (the "Offering"). The Offering is presently expected to be
consummated prior to September 1, 1996.
RISK FACTORS
The Shares offered hereby involve certain risks. In addition to the other
information set forth and incorporated by reference in this Prospectus, the
following factors should be considered carefully by prospective investors in
evaluating an investment in the Shares offered hereby:
Nature of the Infomercial Industry
The worldwide infomercial industry is relatively new and is characterized by
growth and competition for products, customers and media access. The success of
the Company in this industry will depend in part on its continued access to
media time, introduction of successful products and ability to enhance its
product lines and support product marketing and sales with efficient order
fulfillment and customer services and successfully integrate the entities or
businesses the Company has or may acquire into an efficient global company. The
future revenues of the business will depend substantially on the Company's
continuing ability to create and maintain an effective, integrated organization
to develop, introduce and market products that address changing consumer needs
on a timely basis, establish and maintain effective distribution channels for
its products and develop new geographic markets and expand established
geographic markets. There can be no assurance that the Company will be able to
achieve these goals. While the Company maintains an internal product development
group, there can be no assurance that present and potential third party product
providers will wish to market products through the Company in the future. Any
significant delay or reduction in product introductions could have a material
adverse effect on the Company's results of operations.
Dependence on Foreign Sales
The Company had no sales outside the United States and Canada prior to June
1991. The Company now markets products to consumers in over 60 countries. In
fiscal 1996, 1995 and 1994, approximately 51.6%, 45.7% and 26.7%, respectively,
of the Company's net revenues were derived from sales to customers outside the
United States and Canada. Such sales represented a 87.6% increase in fiscal 1996
from fiscal 1995, a 74.8% increase in fiscal 1995 from fiscal 1994 and a 22.6%
increase in fiscal 1994 from fiscal 1993. In fiscal 1996, 1995 and 1994, sales
in Germany accounted for approximately 7.0%, 13.0% and 12.0%, respectively, of
the Company's net revenues. In early 1994, the Company began airing its
infomercials in Asia. Sales of the Company's products in Asia accounted for
approximately 32.4% of the Company's net revenues for fiscal 1996. After giving
effect to the Company's recent acquisitions of DirectAmerica, Positive Response,
Prestige and Suzanne Paul (collectively, the "Acquisitions") on a pro forma
basis, sales of the Company's products in Asia, a significant portion of which
were made in Japan, would have accounted for approximately 35.1% of the
Company's net revenues for fiscal 1996. International sales activity results in
increased working capital requirements as a result of additional lead time for
delivery and payment of product prior to receipt of sale proceeds. While the
Company's foreign operations have the advantage of airing infomercials that have
been successful in the United States, as well as successful infomercials
produced by companies with limited media access and distribution capabilities,
there can be no assurance that the Company's foreign operations will continue to
generate increases in net revenues. In addition, the Company is subject to the
risks of doing business abroad, including adverse fluctuations in currency
exchange rates, transportation delays and interruptions, political and economic
disruptions, the imposition of tariffs and import and export controls and
increased customs or local regulations. The occurrence of any one or more of the
foregoing could have a material adverse effect the Company's results of
operations.
Entering into New Markets
As the Company enters into new markets, including Asia and South America, it is
faced with the uncertainty of never having done business in that commercial,
political and social setting. Accordingly, despite the Company's best efforts,
its likelihood of success in each new market which it enters is unpredictable
for reasons particular to each such market. It is also possible that, despite
the Company's apparently successful entrance into a new market, some unforeseen
circumstance will arise which will limit the Company's ability to continue to do
business or to expand in that new market.
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Dependence on New Products; Unpredictable Market Life; and Product Returns
The Company is dependent on its continuing ability to develop or obtain rights
to new products to supplement or replace existing products as they mature
through their product life cycles. The Company's five most successful products
in each of fiscal 1996, 1995 and 1994 accounted for approximately 46.0%, 54.0%
and 67.0%, respectively, of the Company's net revenues for such periods. For the
most part, the Company's five most successful products change from year to year.
Product sales for a given period will depend upon, among other things, a
positive customer response to the Company's infomercials, the Company's
effective management of product inventory and the stage in their life cycles of
products sold during such period. Customer response to infomercials depends on
many variables, including the appeal of the products being marketed, the
effectiveness of the infomercials, the availability of competing products and
the timing and frequency of air-time. There can be no assurance that the
Company's new products will receive market acceptance. In addition, in the event
the Company does not have an adequate supply of inventory, as a result of
production delays or shortages or inadequate inventory management, it may lose
potential product sales. The ability of the Company to manage its inventory,
particularly in the international market, is of critical importance due to the
Company's practice of minimizing its inventory of a given product. It is
possible that, during a product's life, problems may arise regarding regulatory,
intellectual property, product liability or other issues which may affect the
continued viability of the product for sale. Most of the Company's products have
a limited market life for sales through infomercials. Historically, the majority
of products generate their most significant domestic revenue in their
introductory year, while foreign revenues have tended to have been generated
more evenly over a longer period. In the event the number of times an
infomercial is broadcast within a market is increased, the market life of such
product in such market may decrease. There can be no assurance that a product
which has produced significant sales will continue to produce significant or any
sales in the future. As a result, the Company is dependent on its ability to
effectively manage the life cycles of products and to continue to identify and
successfully market new products. The failure of newly introduced products or
significant delays in the introduction of, or failure to introduce, new products
would adversely impact the Company's results of operations in terms of both lost
opportunity cost and actual loss of dollars invested.
Even when market acceptance for the Company's new products occurs, the Company's
results of operations may be adversely impacted by returns of such products.
While the Company establishes reserves against such returns which it believes
are adequate based upon historic levels and product mix, there can be no
assurance that the Company will not experience unexpectedly high levels of
returns (in excess of its reserves) for certain products. In the event that
returns exceed reserves, the Company's results of operations would be adversely
affected.
Dependence on Third Party Manufacturers and Service Providers
The Company is dependent on strategic partners and other third party sources,
both foreign and domestic, to manufacture all of its products, although it does
not depend on any one particular supplier for a majority of its products. The
Company is also dependent to an extent upon a number of companies which serve to
fulfill orders placed for the Company's products and/or provide telemarketing
services. The inability of the Company, either temporarily or permanently, to
obtain a timely supply of product to fulfill sales orders for a specific product
or to satisfy orders for such product could have a material adverse effect on
the Company's results of operations. Moreover, because the time from the initial
approval of a product by the Company's product development department to the
first sale of such product is relatively short, the Company's ability to
identify sources that can meet its production and order fulfillment deadlines at
reasonable costs and produce a high-quality product or render quality service is
important to its business, and there can be no assurance that the Company will
successfully locate such sources. Since the Company often relies on foreign
manufacturers, it must allow longer lead times to order products to fulfill
customer orders, and utilizing such foreign manufacturers exposes the Company to
the general risks of doing business abroad.
Dependence on Media Access
The Company is dependent on having access to media time to televise its
infomercials on cable networks, network affiliates and local stations. In the
normal course of business, the Company's media contracts expire pursuant to
their terms from time to time. There can be no assurance that, as existing
contracts expire, the Company will be able to purchase or renew media time on a
long-term basis or at favorable price levels. The Company purchases a
significant amount of its media time from cable television and satellite
networks. These cable television and satellite networks assemble programming for
transmission to multiple and local cable system operators. These cable system
operators may
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not be required to carry all of the network's programming. The Company currently
does not pay and is not paid for the "privilege" of being broadcast by these
operators. It is possible that, if demand for air time grows, these operators
will begin to charge the Company to continue broadcasting the Company's
infomercials or limit the amount of time available for broadcast. Recently,
larger multiple system operators have elected to change their operations by
selling "dark" time (i.e., the hours during which a station does not broadcast
its own programming). Significant increases in the cost of media time or
significant decreases in the Company's access to media time, including, but not
limited to, any failure to renew or extend existing agreements, could have a
material adverse effect on its results of operations. There can also be no
assurances that, even if the Company secures media access, its programming will
attract viewers or that its products will enjoy consumer acceptance.
A significant portion of the Company's media time is purchased under contracts
which are one year or greater in length. Such contracts require the Company to
make advance purchases and commitments to purchase media time. To the extent the
Company does not manage such media time effectively, such failure could have a
material adverse effect on the Company's results of operations. However, in the
past the Company has generally been able to maintain a flow of infomercials to
fill media time where it has advance commitments. In addition, as part of its
media strategy, the Company arranges to sell a portion of its media time to
others. There can be no assurance, however, that the Company will be able to use
all of its media time or sell it to others or that, upon expiration of such
long-term contracts, the Company will be able to successfully negotiate
extensions of such contracts. The inability of the Company to extend on
reasonable terms one or more of such contracts as they expire could have a
material adverse effect on the Company's results of operations.
Recent Losses
While the Company had net income of $16.6 million during fiscal 1996, the
Company has suffered net losses in three of its last five fiscal years,
including net losses of approximately $670,000 in fiscal 1995 and approximately
$8.7 million in fiscal 1994. Based upon this deterioration in the Company's
financial condition and the presence of certain other conditions, as of July 13,
1994, the Company's independent auditors opined that substantial doubt existed
as to the Company's ability to continue as a going concern. However, as a result
of a series of capital raising transactions in fiscal 1995 and the Company's
recent profitability, at March 31, 1996 the Company's working capital had
increased to approximately $38.7 million. The Company's fiscal 1996 and fiscal
1995 audited financial statements contain unqualified opinions of its
independent auditors. No assurance can be given that the Company's operations
will continue to be profitable and/or that its financial position will continue
to improve.
Litigation Involving the Company
The Company in recent years has been involved in significant legal proceedings.
Abbreviated information regarding the current status of material pending
litigation involving the Company is set forth below. However, as it pertains to
previously reported matters, such information does not purport to be complete
and is qualified in its entirety by the detailed description of the legal and
regulatory proceedings set forth in the reports filed by the Company pursuant to
the Exchange Act and incorporated by reference herein. Such descriptions
variously include information relating to the status of the proceedings and the
Company's evaluation of the claims made against it. Certain of such previously
reported matters have been resolved substantially in accordance with the terms
set forth in such prior disclosure. In addition, as set forth above, the Company
consummated the acquisition of DirectAmerica on October 25, 1995. As of such
date, DirectAmerica was a party to several litigation proceedings. As a result
of the acquisition of DirectAmerica, any liability which DirectAmerica may have
in connection with such litigation becomes the responsibility of the
wholly-owned subsidiary of the Company into which DirectAmerica was merged.
Although certain of the former shareholders of DirectAmerica have agreed to
indemnify the Company against certain of such liabilities, it is not possible to
predict with any accuracy what, if any, liability the Company may have in
connection with such matters. Further, as discussed above, the Company
consummated the acquisition of Positive Response on May 17, 1996 and of Prestige
and Suzanne Paul on July 2 and 3, 1996, respectively. As a result of these
acquisitions, all liabilities of Positive Response became liabilities of the
wholly-owned subsidiary of the Company into which Positive Response was merged
and all liabilities of Prestige and Suzanne Paul survive such acquisitions.
Lachance and Efron and Cohen Class Actions. In July and December 1994,
stockholders filed purported class action lawsuits in federal court against the
Company and certain of its former officers and directors in connection with an
aborted merger transaction with ValueVision International, Inc. ("ValueVision").
The parties have reached an
-8-
<PAGE>
agreement in principle to settle these matters, along with certain similar
actions filed in Delaware state court. Such settlements provided for cash
payments by the Company's insurer of approximately $1.1 million and cash
payments by the Company of $375,000, as to which the Company recorded a charge
against earnings in the fourth quarter of fiscal 1995. Consummation of these
federal court settlements is subject, among other things, to the approval of
such court.
Positive Response Shareholders' California Class Action. On May 1, 1995, a
purported class action suit was filed in the United States District for the
Central District of California against Positive Response and its principal
executive officers alleging that Positive Response has made false and misleading
statements in its public filings, press releases and other public statements
with respect to its business and financial prospects. The suit was filed on
behalf of all persons who purchased Positive Response common stock during the
period from January 4, 1995 to April 28, 1995. The suit seeks unspecified
compensatory damages and other equitable relief. An amended complaint was filed
on June 9, 1995, which added more plaintiffs and expanded the class period from
November 1994 to April 28, 1995. Positive Response moved to dismiss the amended
complaint and the amended complaint was dismissed in late July 1995. The
plaintiffs were granted 60 days leave to file another amended complaint to allow
them an attempt to state valid claims against Positive Response. On or about
September 25, 1995, the plaintiffs filed a second amended complaint, which added
additional officers as defendants and attempted to set forth new facts to
support plaintiffs' entitlement to legal relief. On October 31, 1995, Positive
Response again moved to dismiss plaintiffs' entire action. The basis of Positive
Response's new motion was its contention that plaintiffs failed to allege any
new facts in support of a claim that has already been dismissed. Oral argument
in connection with Positive Response's motion was held on December 11, 1995.
Positive Response's motion to dismiss was denied. Discovery is continuing.
Ab Roller Plus Patent Litigation. On March 1, 1996, Precise Exercise Equipment
("Precise") filed suit in the United States District Court for the Central
District of California against certain parties, including the Company, alleging
patent infringement, unfair competition and other intellectual property claims.
Such claims relate to an alleged infringement of Precise's patent for an
exercise device. The suit claims that a product marketed by the Company pursuant
to a license granted by a third party violates Precise's patent. Pursuant to the
terms of such license, the third party is contractually obligated to indemnify
the Company in this suit. The suit seeks an injunction and treble damages. The
Company's independent legal counsel has issued an opinion to the Company that
the product marketed by the Company does not infringe upon Precise's patent.
Regulatory Matters
The infomercial industry is regulated by the Federal Trade Commission (the
"FTC"), the United States Post Office, the Consumer Product Safety Commission
(the "CPSC"), the Federal Communications Commission ("FCC"), the Food and Drug
Administration ("FDA"), various States' Attorneys General and other state and
local consumer protection and health agencies. The FTC directly regulates
marketers of products, such as the Company, credit card companies which process
customer orders and others involved in the infomercial and direct marketing
industries.
The Company's marketing activities and/or products have been and will continue
to be subject to the scrutiny of each of the aforementioned regulatory agencies.
An adverse determination or extended investigation by any of these agencies
could have a material adverse effect on the Company. Moreover, the domestic and
international regulatory environments in which the Company operates are subject
to change from time to time. It is possible that changes in the regulations to
which the Company is subject might have a material adverse effect on the
Company's business or results of operations. As a result of prior settlements
with the FTC, the Company has agreed to two consent orders. Prior to the
Company's recent acquisition of Positive Response, Positive Response and its
Chief Executive Officer, Michael S. Levey, also agreed to a consent order with
the FTC. Among other things, such consent orders require the Company, Positive
Response and Mr. Levey to submit compliance reports to the FTC staff. The
Company, Positive Response and Mr. Levey have submitted compliance reports as
well as additional information requested by the FTC staff. In addition, in
connection with the acquisition by the Company of Positive Response, both the
Company and Positive Response were required pursuant to such consent orders to,
and did, notify the FTC of such acquisition and Michael S. Levey was required
to, and did, notify the FTC of his pending affiliation with the Company. In
early June 1996, the Company received a request from the FTC for additional
information regarding two of the Company's infomercials in order to determine
whether the Company is operating in compliance with the consent orders referred
to above. Such request also included a request for additional information
concerning the Company's acquisition of Positive Response. The Company responded
to such request. The FTC recently advised the Company that it felt that the
Company had violated one of the consent orders by allegedly failing to
substantiate certain claims made in one of such infomercials which
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<PAGE>
was aired by the Company between 1993 and 1995 and is not currently being aired.
The FTC is continuing its inquiry with respect to the second infomercial. The
Company is continuing to provide information to the FTC to demonstrate
substantiation. It is possible that the notifications referred to above will
result in additional requests for information from the Company and Mr. Levey
and/or additional scrutiny of the Company's operations. In an effort to maintain
continued compliance with the terms of its consent order, shortly following its
acquisition of Positive Response, the Company caused Positive Response to cease
airing one of its infomercials until the Company could make such changes to such
infomercial or take such other actions as it deemed appropriate to conform such
infomercial to the Company's standards, if possible. After giving effect to the
Acquisitions on a pro forma basis, such infomercial would have contributed less
than 4.0% to the Company's consolidated revenues for the quarter ended March 31,
1996. The Company is also considering changes to other Positive Response
infomercials. The Company does not believe that such infomercials or the
Company's actions regarding them will have a material adverse effect on the
Company's financial condition.
On February 24, 1994, the staff of the CPSC notified the Company that it had
made a preliminary determination that a particular model of the Company's Juice
Tiger(R) product presents a "substantial product hazard" under the Consumer
Product Safety Act. The CPSC staff requested the Company to take voluntary
corrective action to ameliorate such alleged product hazard. While the Company
has disputed that the model in question presents a substantial product hazard,
the Company and the CPSC staff agreed upon the form and nature of voluntary
action proposed by the Company to assuage the CPSC staff's concerns in April
1996. The Company has implemented the agreed upon plan and, in early July 1996,
entered into a final settlement agreement with the CPSC, which includes a civil
penalty. The cost of implementing the corrective plan and the civil penalty, as
well as the other terms of the settlement agreement, will not have a material
adverse effect on the Company's results of operations or financial condition.
The Company's international business is subject to the laws and regulations of
England, the European Union, Japan and other countries in which the Company
sells its products, including, but not limited to, the various consumer and
health protection laws and regulations in the countries in which the programming
is broadcast, where applicable. If any significant actions were brought against
the Company or any of its subsidiaries in connection with a breach of such laws
or regulations, including the imposition of fines or other penalties, or against
one of the entities through which the Company obtains a significant portion of
its media access, the Company could be materially adversely affected. There can
be no assurance that changes in the laws and regulations of any territory which
forms a significant portion of the Company's market will not adversely affect
the Company's financial condition or results of operations.
Product Liability Claims
Products sold by the Company may expose it to potential liability from claims by
users of such products, subject to the Company's rights, in certain instances,
to indemnification against such liability from the manufacturers of such
products. The Company generally requires the manufacturers of its products to
carry product liability insurance, although in certain instances where a limited
quantity of products are purchased from non-U.S. vendors, the vendor may not be
formally required to carry product liability insurance. Certain of such vendors,
however, may in fact maintain such insurance. There can be no assurance that
such parties will maintain this insurance or that this coverage will be adequate
to cover all potential claims, including claims by the Company for
indemnification. The Company currently maintains product liability insurance
coverage in amounts which it believes to be adequate. There can be no assurance
that the Company will be able to maintain such coverage or obtain additional
coverage on acceptable terms, or that such insurance will provide adequate
coverage against all potential claims.
Competition
The Company competes directly with several companies which generate sales from
infomercials. The Company also competes with a large number of consumer product
companies and retailers which have substantially greater financial, marketing
and other resources than the Company, some of which have recently commenced, or
indicated their intent to conduct, direct response marketing. The Company also
competes with companies that make imitations of the Company's products at
substantially lower prices. Products similar to the Company's products may be
sold in department stores, pharmacies, general merchandise stores and through
magazines, newspapers, direct mail advertising and catalogs.
-10-
<PAGE>
Dependence on Key Personnel
The Company's executive officers have substantial experience and expertise in
the Company's business and make significant contributions to its growth and
success. The unexpected loss of the services of one or more of such individuals
could have a material adverse effect on the Company.
Shares Eligible for Sale under Registration Rights
Sales of substantial amounts of the shares of Common Stock currently issued,
issuable upon conversion or exercise of securities convertible into or
exercisable for Common Stock, issuable in connection with the Offering, or of
the Shares offered hereby could adversely affect the market value of the Common
Stock, depending upon the timing of such sales, and, in the case of convertible
and exercisable securities, may effect a dilution of the book value per share of
Common Stock.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
of Common Stock offered hereby. The Selling Stockholders will receive all of the
net proceeds from the sale of the Shares of Common Stock offered hereby.
SELLING STOCKHOLDERS
The following persons are current officers and directors of Positive
Response, each of whom is eligible to sell pursuant to this Prospectus the
number of Shares set forth opposite their name in the table below.
<TABLE>
<CAPTION>
Pre-Offering Post-Offering
------------ -------------
Total
Total Number Number of
of Shares Shares
Beneficially Percentage Shares Beneficially Percentage
Selling Stockholders Owned(1) of Class(2) Offered Owned(3) of Class(2)
- -------------------- -------- ----------- ------- -------- -----------
<S> <C> <C> <C> <C> <C>
Michael S. Levey 900,026 4.52% 300,000 600,026 3.01%
Lisa Levy 18,080 * 18,080 0 0.00%
</TABLE>
- ---------------------------------
* Indicates less than one percent (1%).
(1) Assumes exercise of all options to purchase Shares granted to the
above-listed Selling Stockholders.
(2) These percentages are calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules promulgated
thereunder based on 19,632,225 shares of Common Stock outstanding as of
June 30, 1996.
(3) Assumes offer and sale of all Shares eligible to be offered and sold hereby
by the Selling Stockholders.
-11-
<PAGE>
PLAN OF DISTRIBUTION
The Common Stock is listed for trading on the New York Stock Exchange
(the "NYSE") and the Philadelphia Stock Exchange (the "PHLX"). The sale of the
Shares offered hereunder is not being underwritten. The Shares covered by this
Prospectus may be offered and sold by the Selling Stockholders from time to time
on the NYSE or PHLX through broker-dealers selected by the Selling Stockholders
at market prices prevailing at the time of sale, in private transactions at
negotiated prices or otherwise. It is anticipated that such transactions will be
effected without payment of any underwriting commissions or discounts, other
than brokers' commissions or fees customarily paid in connection with such
transactions, which commissions and fees will be borne by the Selling
Stockholders.
The Company has agreed to bear the costs of registering the Shares
offered hereby under the Securities Act, but will not receive any of the
proceeds from the sale of such Shares.
There is no assurance that the Selling Stockholders will sell any or
all of the Shares offered hereby.
LEGAL MATTERS
The legality of the Shares offered hereby has been passed upon for the
Company by Klehr, Harrison, Harvey, Branzburg & Ellers, Philadelphia,
Pennsylvania. Members of such firm beneficially own an aggregate of 11,000
shares of the Company's Common Stock.
EXPERTS
The consolidated financial statements and schedule of the Company
appearing in the Company's 1996 Annual Report have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial statements and
schedule have been incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The combined financial statements of DirectAmerica Corporation and
California Production Group, Inc. at September 30, 1995 and for the nine months
ended September 30, 1995, appearing in the Company's Current Report on Form 8-K,
dated October 25, 1995 (as amended on Form 8-K/A filed on or about January 6,
1996), have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such combined financial statements have been incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
The consolidated financial statements of Positive Response at December
31, 1995 and 1994 and for each of three years in the period ended December 31,
1995, appearing in the Company's Current Report on Form 8-K, dated May 17, 1996
(as amended on Form 8-K/A filed on or about June 14, 1996), have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements have been incorporated herein by reference in reliance upon
the report given upon the authority of such firm as experts in accounting and
auditing.
The financial statements of Prestige Marketing Limited at March 31,
1996 and 1995 and for each of the two years in the period ended March 31, 1996,
appearing in the Company's Current Report on Form 8-K, dated July 1, 1996, have
been audited by Ernst & Young, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
financial statements have been incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
The financial statements of Prestige Marketing International Limited at
March 31, 1996 and 1995 and for each of the two years in the period ended March
31, 1996, appearing in the Company's Current Report on Form 8-K, dated July 1,
1996, have been audited by Ernst & Young, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference. Such
financial statements have been incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
-12-
<PAGE>
The combined special purpose financial statements of Suzanne Paul
Holdings Pty Limited Group of companies in Australia (Suzanne Paul Holdings Pty
Limited and its operating subsidiaries) at March 31, 1996 and at June 30, 1995
and for the nine months ended March 31, 1996 and the year ended June 30, 1995,
appearing in the Company's Current Report on Form 8-K, dated July 1, 1996, have
been audited by Ernst & Young, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
combined special purpose financial statements have been incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
-13-
<PAGE>
No dealer, salesman or any other person has been authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offering described herein and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or the Selling Stockholders. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy a security
other than the shares of Common Stock offered hereby, nor does it constitute an
offer to sell or a solicitation of an offer to buy any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation in such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information contained herein is correct as of any date
subsequent to the date hereof.
--------
TABLE OF CONTENTS
--------
Page
----
Available Information...............................................2
Incorporation of Certain
Documents by Reference..............................................2
The Company.........................................................4
Recent Developments.................................................5
Risk Factors........................................................6
Use of Proceeds....................................................11
Selling Stockholders...............................................11
Plan of Distribution...............................................12
Legal Matters......................................................12
Experts............................................................12
318,080 Shares
NATIONAL MEDIA CORPORATION
Common Stock
--------
PROSPECTUS
--------
July 18, 1996
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Company with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934 are incorporated into this Registration Statement by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1996;
2. The Company's Current Reports on Form 8-K, dated October 25,
1995 (as amended on Form 8-K/A filed on or about January 6,
1996), May 17, 1996 (as amended on Form 8-K/A filed on or
about June 14, 1996) and July 1, 1996; and
3. The description of the Company's Common Stock contained in
the Company's Registration Statement on Form 8-A, dated
August 28, 1990, including all amendments and reports filed
for the purpose of updating such description.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15
(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the completion or termination of this offering shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the date
of filing of such documents. Any statement contained in a document, all or a
portion of which is incorporated or deemed to be incorporated by reference
herein, shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document, which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Klehr, Harrison, Harvey, Branzburg & Ellers, Philadelphia,
Pennsylvania, has delivered an opinion in connection herewith with respect to
the legality of the shares of Common Stock being registered hereunder. Members
of such firm beneficially own an aggregate of 11,000 shares of Common Stock.
Item 6. Indemnification of Directors and Officers.
The Company has adopted in its Certificate of Incorporation
and Bylaws the provisions of Section 102(b)(7) of the Delaware General
Corporation Law which eliminate or limit the personal liability of a director to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director, except that this provision shall not eliminate or limit the
liability of a director for any breach of the director's duty of loyalty to the
Company or its stockholders, for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, under Section 174
of the Delaware General Corporation Law, or for any transaction from which the
director derived an improper personal benefit.
Further, the Company's Certificate of Incorporation and Bylaws
provide that the Company shall indemnify all persons whom it may indemnify
pursuant to Section 145 of the Delaware Corporation Law to the full extent
permitted therein. Section 145 provides, subject to various exceptions and
limitations, that the Company may indemnify its directors or officers if such
director or officer is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was a director or officer of the Company, or is or was serving at the request of
the
II-1
<PAGE>
Company as a director or officer of another corporation, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The determination of whether indemnification is proper
under the circumstances, unless made by a court, shall be made by a majority of
a quorum of disinterested members of the Board of Directors, independent legal
counsel or the stockholders of the Company. In addition, the Company shall
indemnify its directors or officers to the extent that they have been successful
on the merits or otherwise in defense of any such action, suit or proceeding, or
in the defense of any claim, issue or matter therein, against expenses
(including attorneys' fees) actually and reasonably incurred by them in
connection therewith.
Item 7. Exemption from Registration Claimed.
Any restricted securities to be offered or resold pursuant to
this Registration Statement are exempt under Section 4(2) of the Securities Act
of 1933, as amended, as a non-public offering of securities.
Item 8. Exhibits.
Exhibit No. Description
- ----------- -----------
4.1 Amended and Restated 1994 Stock Option Plan of Positive Response
Television, Inc.
* 4.2 Employment Agreement, dated May 17, 1996, by and between Positive
Response Television, Inc., National Media Corporation and
Michael S. Levey.
5 Opinion of Klehr, Harrison, Harvey, Branzburg & Ellers with
respect to the legality of the shares of Common Stock being
registered hereunder.
23.1 Consent of Ernst & Young LLP, independent auditors, with
respect to the consolidated financial statements and schedule
of National Media Corporation.
23.2 Consent of Ernst & Young LLP, independent auditors, with
respect to the combined financial statements of DirectAmerica
Corporation and California Production Group, Inc.
23.3 Consent of Deloitte & Touche LLP, independent auditors, with
respect to the consolidated financial statements of Positive
Response Television, Inc.
23.4 Consent of Ernst & Young, independent auditors, with respect
to the financial statements of Prestige Marketing Limited.
23.5 Consent of Ernst & Young, independent auditors, with respect
to the financial statements of Prestige Marketing
International Limited.
23.6 Consent of Ernst & Young, independent auditors, with respect
to the combined special purpose financial statements of
Suzanne Paul Holdings Pty Limited Group.
23.7 Consent of Klehr, Harrison, Harvey, Branzburg & Ellers with
respect to the legality of the shares of Common Stock being
registered hereunder (included in the opinion filed as Exhibit
5 hereto).
24 Powers of Attorney (included in the signature pages hereto).
- -------------
* Incorporated by reference to Exhibit 99.1 to the Company's Current Report
on Form 8-K, dated May 17, 1996.
II-2
<PAGE>
Item 9. Undertakings.
(a) The 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 this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (a) (1)(i) and (a) (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(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) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Company's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(b) 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 its Certificate of Incorporation, its bylaws, or otherwise,
the Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than 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 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Philadelphia, Commonwealth of Pennsylvania, on this
16th day of July, 1996.
NATIONAL MEDIA CORPORATION
BY: /s/ Mark P. Hershhorn
----------------------------
Mark P. Hershhorn, President
and Chief Executive Officer
POWER OF ATTORNEY
Each of the undersigned officers and directors of National Media
Corporation whose signature appears below hereby appoints Mark P. Hershhorn,
Constantinos I. Costalas, Brian McAdams and James M. Gallagher, jointly and each
individually, as true and lawful attorneys-in-fact for the undersigned with full
power of substitution, to execute in his name and on his behalf in each capacity
stated below, any and all amendments (including post-effective amendments) to
this Registration Statement as the attorney-in-fact shall deem appropriate, and
to cause to be filed any such amendment (including exhibits thereto and other
documents in connection therewith) to this Registration Statement with the
Securities and Exchange Commission, as fully and to all intents and purposes as
such person might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact, 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, this
Registration Statement has been signed by the following persons in the
capacities indicated on this 16th day of July, 1996.
Signature Title(s) Date
--------- -------- ----
/s/ Brian McAdams Chairman of the Board, Chairman of July 16, 1996
- -------------------------- the Executive Committee and
Brian McAdams Director
/s/ Mark P. Hershhorn President, Chief Executive Officer July 16, 1996
- -------------------------- and Director
Mark P. Hershhorn
Executive Vice President July __, 1996
- -------------------------- and Director
David J. Carman
/s/ Charles L. Andes Director July 16, 1996
- --------------------------
Charles L. Andes
<PAGE>
/s/ Constantinos I. Costalas Vice Chairman of the July 16, 1996
- -------------------------------- Board and Director
Constantinos I. Costalas
Director July __, 1996
- --------------------------------
Albert R. Dowden
Director July __, 1996
- --------------------------------
Michael J. Emmi
Director July __, 1996
- --------------------------------
Frederick S. Hammer
/s/ Ira M. Lubert Director July 16, 1996
- --------------------------------
Ira M. Lubert
/s/ Jon W. Yoskin II Director July 16, 1996
- --------------------------------
Jon W. Yoskin II
/s/ William M. Goldstein Director July 16, 1996
- --------------------------------
William M. Goldstein, Esq.
/s/ James M. Gallagher Vice President and July 16, 1996
- -------------------------------- Chief Financial
James M. Gallagher Officer (Principal Accounting
and Financial Officer)
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
4.1 Amended and Restated 1994 Stock Option Plan of Positive Response
Television, Inc.
5 Opinion of Klehr, Harrison, Harvey, Branzburg & Ellers with
respect to the legality of the shares of Common Stock being
registered hereunder.
23.1 Consent of Ernst & Young LLP, independent auditors, with respect
to the consolidated financial statements and schedule of National
Media Corporation.
23.2 Consent of Ernst & Young LLP, independent auditors, with respect
to the combined financial statements of DirectAmerica Corporation
and California Production Group, Inc.
23.3 Consent of Deloitte & Touche LLP, independent auditors, with
respect to the consolidated financial statements of Positive
Response Television, Inc.
23.4 Consent of Ernst & Young, independent auditors, with respect to
the financial statements of Prestige Marketing Limited.
23.5 Consent of Ernst & Young, independent auditors, with respect to
the financial statements of Prestige Marketing International
Limited.
23.6 Consent of Ernst & Young, independent auditors, with respect to
the combined special purpose financial statements of Suzanne Paul
Holdings Pty Limited Group.
<PAGE>
EXHIBIT 4.1
<PAGE>
POSITIVE RESPONSE TELEVISION, INC.
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
(amended and restated effective as of May 17, 1996)(1)
1. Purpose.
The purpose of this Amended and Restated 1994 Stock Option Plan (the
"Plan") of POSITIVE RESPONSE TELEVISION, INC. ("Positive Response"), a Delaware
corporation and wholly-owned subsidiary of National Media Corporation (the
"Company"), is to secure for the Company and its shareholders the benefits
arising from ownership of the Company's common stock by selected key employees,
officers, consultants and directors of Positive Response. The Plan will provide
a means whereby such persons may purchase shares of the common stock of the
Company (or any class of stock into which such common stock is converted or
reclassified as provided in Section 15) (the "Common Stock") pursuant to (i)
options which will qualify as "incentive stock options" under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), and (ii) "non-incentive"
or "nonqualified" stock options ("nonqualified stock options").
2. Administration.
The Plan shall be administered by a committee (the "Committee")
appointed by the Board of Directors of the Company (the "Board") consisting of
two or more directors of the Company, all of whom shall be "disinterested
persons" within the meaning of Rule 16b-3 ("Rule 16b-3") promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). No member of
the Committee, during the one year prior to service as a member of the
Committee, shall have received, or during such service shall receive, any equity
securities of the Company pursuant to this Plan or any other plan of the Company
or any Affiliate, except if such receipt would not disqualify such director as a
"disinterested person" under Rule 16b-3. An "Affiliate" shall mean any parent or
subsidiary of the Company as defined in Section 424(e) and (f) of the Code.
Any action of the Committee with respect to administration of the Plan
shall be taken by a majority vote or unanimous written consent of its members.
Subject to the provisions of the Plan, the Committee shall have the authority
(i) to construe and interpret the Plan, (ii) to define the terms used herein,
(iii) to prescribe, amend and rescind rules and regulations relating to the
Plan, (iv) to approve and determine the duration of leaves of absence which may
be granted to participants without constituting a termination of their
employment for the purposes of the Plan, (v) to amend the terms of any
outstanding option, with consent of the option holder, and (vi) to make all
other determinations necessary or advisable for the administration of the Plan.
All determinations and
- --------
1 The Plan has been amended and restated in connection with the
acquisition of Positive Response Television, Inc., a California corporation
("Old PRT"), by the Company (as defined herein) pursuant to the merger (the
"Merger") of Old PRT with and into Positive Response (as defined herein) on May
17, 1996. In connection with the Merger, the obligations of Old PRT under the
Plan were assumed by the Company and the shares of Old PRT common stock issuable
upon exercise of options granted pursuant to the Plan were converted into shares
of the Company's common stock at a predetermined rate as reflected in Section 3
hereof.
-1-
<PAGE>
interpretations made by the Committee shall be binding and conclusive on all
participants in the Plan and their legal representatives and beneficiaries.
3. Shares Subject to the Plan.
Subject to adjustment as provided in Section 15, the shares to be
offered under the Plan shall consist of the Company's authorized but unissued
common stock, par value $.01 per share (the "Common Stock"). The Company may
issue up to an aggregate of one hundred seventy-eight thousand seven hundred
fifty (178,750) shares of Common Stock upon the exercise of options outstanding
under the Plan as of the date of amendment and restatement hereof. If any option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full, the aggregate number of shares issuable under the Plan
shall be decreased by the number of unpurchased shares subject to such option.
4. Eligibility and Participation.
All key employees, officers, directors, consultants and advisers of
Positive Response shall be eligible to participate in the Plan, except that only
regular employees of Positive Response may receive incentive stock options under
the Plan.
The aggregate fair market value (determined at the time the option is
granted) of the Common Stock with respect to which incentive stock options
(whenever granted) are exercisable for the first time by an option holder during
any calendar year (under all incentive stock option plans of the Company and its
Affiliates) shall not exceed $100,000.
All options granted under the Plan shall be granted within ten years
from January 20, 1994, the date on which this Plan was originally adopted.
5. Duration of Options.
Each option and all rights associated therewith shall expire on such
date as the Committee may determine, and shall be subject to earlier termination
as provided herein; provided, however, that all stock options shall expire
within ten (10) years from the date on which such options are granted and,
provided further, that in the case of incentive stock options granted to a
person who, at the time the incentive stock option is granted, owns shares of
the Company's (or any of its Affiliates') stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
(or its Affiliates) (a "10% Shareholder"), each incentive stock option shall
expire in any event within five (5) years from the date on which such incentive
stock option is granted.
6. Purchase Price.
The purchase price of the Common Stock covered by each option shall be
determined by the Committee, but (a) in the case of incentive stock options,
shall not be less than one hundred percent (100%) of the fair market value of
such stock (as determined under Section 8) on the date the incentive stock
option is granted, and (b) in the case of incentive stock options granted to 10%
Shareholders, shall not be less than one hundred and ten percent (110%) of the
fair market value of
-2-
<PAGE>
such stock (as determined under Section 8) on the date the incentive stock
option is granted. The purchase price of the shares of Common Stock issuable
upon exercise of an option shall be paid in full at the time of exercise (i) in
cash or by check payable to the order of the Company, (ii) by delivery of shares
of Common Stock of the Company already owned by, and in the possession of the
option holder, valued at their fair market value, as determined in accordance
with Section 8, (iii) by delivery to a broker of a copy of the notice of
exercise, specifying the number of options to be exercised and instructing the
broker to sell the shares issuable upon exercise of the option and to deliver to
the Company from the sale proceeds of such shares an amount equal to the
exercise price of the options, or (iv) if authorized by the Committee, or if
specified in the option being exercised, by a promissory note made by the option
holder in favor of the Company, upon the terms and conditions determined by the
Committee, including, to the extent the Committee determines appropriate, a
security interest in the shares issuable upon exercise or other property, or any
combination thereof. Shares of Common Stock used to satisfy the exercise price
of an option shall be valued at their fair market value determined (in
accordance with Section 8) on the date of exercise (or if such date is not a
business day, as of the close of the business day immediately preceding such
date).
7. Exercise of Options.
Each option granted under this Plan shall be exercisable, and the total
number of shares subject thereto shall be purchasable, in such installments and
at such times prior to its expiration date as the Committee shall determine.
Unless otherwise determined by the Committee, if the option holder shall not in
any given installment period purchase all of the shares which the option holder
is entitled to purchase in such installment period, then the option holder's
right to purchase any shares not purchased in such installment period shall
continue until the expiration date or sooner termination of the option holder's
option. No option may be exercised for a fraction of a share and no partial
exercise of any option may be for less than one hundred (100) shares.
8. Fair Market Value of Common Stock.
The fair market value of a share of Common Stock of the Company shall
be determined for purposes of the Plan by reference to the closing price on the
principal stock exchange on which such shares are then listed or, if such shares
are not then listed on a stock exchange, by reference to the closing price (if
approved for quotation on the NASDAQ National Market System) or the mean between
the bid and asked price (if other over-the-counter issue) of a share as supplied
by the National Association of Securities Dealers, Inc. through NASDAQ (or its
successor in function), in each case as reported by The Wall Street Journal, for
the business day immediately preceding the date on which the option is granted
(which, for all purposes, shall be the date on which the Committee makes the
determination granting the option) or exercised (or, if for any reason no such
price is available, in such other manner as the Committee may deem appropriate
to reflect the then fair market value thereof).
9. Withholding Tax.
Upon (i) the disposition by an employee or other person of shares of
Common Stock acquired pursuant to the exercise of an incentive stock option
granted pursuant to the Plan within two years of the granting of the incentive
stock option or within one year after exercise of the incentive stock option or
(ii) the exercise of non-qualified stock options, the Company shall have the
right to require
-3-
<PAGE>
such employee or such other person to pay the Company the amount of any taxes
which the Company may be required to withhold with respect to shares issuable
upon such exercise.
10. Nontransferability.
An incentive stock option granted under the Plan shall, by its terms,
be non-transferable by the option holder, either voluntarily or by operation of
law, otherwise than by will or the laws of descent and distribution, and shall
be exercisable during the option holder's lifetime only by the option holder,
regardless of any community property interest therein of the spouse of the
option holder, or such spouses's successors in interest. If the spouse of the
option holder shall have acquired a community property interest in such option,
the option holder, or the option holder's permitted successors in interest, may
exercise the option on behalf of the spouse of the option holder or such
spouse's successors in interest.
A non-qualified stock option granted under the Plan shall, by its
terms, be non-transferable by the option holder, either voluntarily or by
operation of law, otherwise than by will or the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code or
Title I of ERISA, or the rules thereunder, and shall be exercisable during the
option holder's lifetime only by the option holder or, to the extent permitted
by the Committee or by the terms of the option agreement, the spouse of the
option holder who obtained the option pursuant to such a qualified domestic
relations order described herein or pursuant to Section 13.
11. Shares to be Issued in Compliance with Federal Securities Laws and
Exchange Rules.
No shares of Common Stock shall be issued and delivered upon the
exercise of any option unless and until there shall have been full compliance
with all applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), (whether by registration or satisfaction of exemption
conditions), all applicable listing requirements of any national securities
exchange on which shares of the same class are then listed and any other
requirements of law or of any regulatory bodies having jurisdiction over such
issuance and delivery. At the discretion of the Committee, any option may
provide that the option holder (and any transferee), by accepting such option,
represents and agrees that none of the shares purchased upon exercise of the
option will be acquired with a view to any sale, transfer or distribution of
said shares in violation of the Securities Act, and the rules and regulations
promulgated thereunder, or any applicable state "blue sky" laws, and the person
entitled to exercise the same shall furnish evidence satisfactory to the Company
(including a written and signed representation) to that effect in form and
substance satisfactory to the Company, including an indemnification of the
Company in the event of any violation of the Securities Act or state blue sky
laws by such person.
12. Termination of Employment.
If a holder of an incentive stock option ceases to be employed by
Positive Response or the Company or any of its Affiliates for any reason other
than the option holder's death or permanent disability (within the meaning of
Section 22(e)(3) of the Code), the option holder's incentive stock option shall
be exercisable for a period of three (3) months after the date the option holder
ceases to be an employee of the Company or such Affiliate (unless by its terms
it sooner expires) to the extent exercisable on the date of such cessation of
employment and shall thereafter expire and be
-4-
<PAGE>
void and of no further force or effect. A leave of absence approved in writing
by the Committee shall not be deemed a termination of employment for the
purposes of this Section 12, but no option may be exercised during any such
leave of absence, except during the first three (3) months thereof. Termination
of employment or other relationship with Positive Response or the Company or any
of its Affiliates by the holder of a nonqualified stock option will have the
effect specified in the individual option agreement, as determined by the
Committee. Any option transferred pursuant to a qualified domestic relations
order pursuant to Section 10 shall continue to be subject to the provisions
governing the grant to the original grantee, including without limitation, the
provisions governing exercisability, vesting and termination (which shall be
determined by reference to the employment status of the original grantee),
unless the option agreement or the Committee provides otherwise.
13. Death or Permanent Disability of Option Holder.
If the holder of an incentive stock option dies or becomes permanently
disabled (within the meaning of Section 22(e)(3) of the Code) while the option
holder is employed by Positive Response or the Company or any of its Affiliates,
the option holder's option shall be exercisable for a period of one (1) year
after the date of such death or permanent disability (unless by its terms it
sooner expires) to the extent exercisable on the date of death or permanent
disability and shall thereafter expire and be void and of no further force or
effect. During such period after death, such incentive stock option may, to the
extent that it remained unexercised (but exercisable by the option holder
according to such option's terms) on the date of such death, be exercised by the
person or persons to whom the option holder's rights under the option shall pass
by the option holder's will or by the laws of descent and distribution. The
death or disability of a holder of a nonqualified stock option will have the
effect specified in the individual option agreement, as determined by the
Committee.
14. Privileges of Stock Ownership.
No person entitled to exercise any option granted under the Plan shall
have any of the rights or privileges of a shareholder of the Company in respect
of any shares of stock issuable upon exercise of such option until certificates
representing such shares shall have been issued and delivered.
15. Adjustments for Reorganizations, Stock Splits, etc..
If the outstanding shares of the Common Stock of the Company (or any
other class of shares or securities which shall have become issuable upon the
exercise of options pursuant to this sentence) are increased, decreased, changed
into or exchanged for a different number or kind of shares or securities of the
Company through reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or other similar transaction, an
appropriate and proportionate adjustment shall be made in the maximum number and
kind of shares issuable upon exercise of outstanding options under this Plan.
Any such adjustment in the outstanding options shall be made without change in
the aggregate purchase price applicable to the unexercised portion of the option
but with a corresponding adjustment in the price for each share or other unit of
any security covered by the option. Adjustments under this Section 15 shall be
made by the Committee, whose determination as to what adjustments shall be made,
and the extent thereof, shall be final, binding
-5-
<PAGE>
and conclusive. No fractional shares of stock shall be issued or become issuable
under the Plan upon any such adjustment.
Upon the occurrence of (i) the dissolution or liquidation of the
Company, (ii) a reorganization, merger or consolidation of the Company with one
or more corporations as a result of which the Company is not the surviving
corporation or as a result of which it is the surviving corporation and its
outstanding voting securities are converted to or reclassified as cash,
securities of another corporation or other property (unless the principal
purpose of such transaction is to change the state of the Company's
incorporation), or (iii) a sale of assets of the Company or its subsidiaries
having a fair market value equal to more than eighty percent (80%) of the total
fair market value of the Company's assets to an entity which is not controlling,
controlled by or under common control with the Company, then, subject to the
following sentence, the Plan shall terminate and all options theretofore granted
hereunder shall terminate and be of no further force and effect. Notwithstanding
the foregoing, the Committee shall provide in writing in connection with any
such transaction for any or all of the following alternatives (separately or in
combination) which shall, as nearly as practicable, preserve the benefits of
outstanding options which have accrued to the holders thereof: (a) for the
options to become immediately exercisable; (b) for the assumption by the
successor corporation of the options theretofore granted or the substitution by
such corporation for such options of new options covering the stock of the
successor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; (c) for the
continuance of the Plan by such successor corporation in which event the Plan
and the options theretofore granted shall continue in the manner and under the
terms so provided; or (d) for the payment in cash or stock in lieu of and in
complete satisfaction of such options.
16. Amendment and Termination of Plan.
The Committee may at any time suspend or terminate the Plan. The
Committee may also at any time amend or revise the terms of the Plan, provided
that no such amendment or revision shall, unless appropriate approval of such
amendment or revision is obtained from the stockholders of the Company, increase
the maximum number of shares in the aggregate which may be sold pursuant to
options granted under the Plan, except as permitted under the provisions of
Section 15, or change the minimum purchase price of incentive stock options set
forth in Section 6, or increase the maximum term of incentive stock options
provided for in Section 4, or permit the granting of options to anyone other
than as provided in Section 4, or materially increase the benefits accruing to
participants under the Plan.
Notwithstanding the foregoing, no amendment, suspension or termination
of the Plan shall, without specific action of the Committee and the consent of
the option holder, in any way materially modify, amend, alter or impair any
rights or obligations under any option theretofore granted under the Plan.
17. No Employment Rights.
The selection of any person to receive options under the Plan shall not
give such person any right to be retained in the employment of Positive Response
or the Company or its Affiliates, and the right and the power of Positive
Response and the Company to discharge any such person shall not be affected by
such grant. No person shall have any right or claim whatsoever, directly,
-6-
<PAGE>
indirectly or by implication, to receive a grant, nor any expectancy thereof,
unless and until a grant in fact shall have been made to such person by the
Committee as provided herein. The grant of options hereunder to any person at
any time shall not create any right or implication that any other or further
grant may or shall be made at another time. Each grant of options hereunder
shall be separate and distinct from every other grant and shall not be construed
as a part of any continuing series of grants.
18. Plan Not Exclusive.
The Plan is not exclusive. The Company may have other plans, programs
and arrangements for the grant of options, the issuance of shares or other
compensation. The Plan does not require that any option holder hereunder be
precluded from participation in such other plans, programs and arrangements.
19. Effective Date of Plan.
The Plan became effective as of January 20, 1994 (the "Effective
Date"), and was amended and restated effective as of May 17, 1996.
-7-
<PAGE>
EXHIBIT 5
<PAGE>
[LETTERHEAD OF KLEHR, HARRISON, HARVEY, BRANZBURG & ELLERS]
July 16, 1996
Board of Directors
National Media Corporation
1700 Walnut Street
Philadelphia, PA 19103
Re: Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to National Media Corporation (the "Company")
in connection with the proposed registration of shares of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), on a registration
statement on Form S-8 being filed by the Company with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended (the
"Act"). Such Registration Statement, as it may be amended or supplemented from
time to time, including all exhibits thereto, is referred to hereinafter as the
"Registration Statement."
The shares to be registered (the "Shares") consist of (i) 178,750
shares of Common Stock issuable upon the exercise of options (the "Plan
Options") granted to certain officers and directors (or former officers and
directors) of Positive Response Television, Inc., a wholly-owned subsidiary of
the Company ("Positive Response"), pursuant to Positive Response's Amended and
Restated 1994 Stock Option Plan (the "Plan") and (ii) 300,000 shares of Common
Stock issuable upon the exercise of options (the "Employment Options") granted
pursuant to that certain Employment Agreement, dated May 17, 1996, by and
between Positive Response, the Company and Michael S. Levey (the "Employment
Agreement"). Certain of the Shares may be offered and sold from time to time for
the account of the persons referred to in the Registration Statement as "Selling
Stockholders."
<PAGE>
Board of Directors
July 16, 1996
Page 2
In this regard, we have examined: (i) the Plan; (ii) the award
agreements granting options pursuant to the Plan to certain of the officers and
directors of Positive Response; (iii) the Employment Agreement; (iv) the
Company's Certificate of Incorporation and Bylaws, each as amended and as
presently in effect; (v) the Registration Statement; and (vi) such officers'
certificates, resolutions, minutes, corporate records and other documents as we
have deemed necessary or appropriate for purposes of rendering the opinions
expressed herein.
In rendering such opinions, we have assumed the authenticity of all
documents and records examined, the conformity with the original documents of
all documents submitted to us as copies and the genuineness of all signatures.
The opinions expressed herein are based solely upon our review of the
documents and other materials expressly referred to above. Other than such
documents and other materials, we have not reviewed any other documents in
rendering such opinions. Such opinions are therefore qualified by the scope of
that document examination.
Based upon and subject to the foregoing, and on such other examination
of law and fact as we have deemed necessary or appropriate in connection
herewith, we are of the opinion that, upon exercise of the Plan Options in
accordance with the provisions of the Plan and the award agreements and upon
exercise of the Employment Options in accordance with the provisions of the
Employment Agreement, as applicable, the Shares issued pursuant to the Plan and
the Employment Agreement, as the case may be, are or will be, as the case may
be, duly authorized, validly issued, fully paid and nonassessable shares of
Common Stock.
This opinion is limited to the law of the Commonwealth of Pennsylvania,
the Federal law of the United States and the General Corporation Law of the
State of Delaware. Except as expressly otherwise noted herein, this opinion is
given as of the date hereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference made to this firm under the caption
"Legal Matters" in the Prospectus constituting a part of the Registration
Statement. By giving such consent, we do not hereby admit that we fall within
the category of persons whose consent is required pursuant to Section 7 of the
Act.
Very truly yours,
Klehr, Harrison, Harvey, Branzburg & Ellers
<PAGE>
EXHIBIT 23.1
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) of National Media Corporation pertaining to
the Amended and Restated 1994 Stock Option Plan of Positive Response Television,
Inc., a wholly owned subsidiary of National Media Corporation; and Employment
Agreement, dated May 17, 1996, by and between Positive Response Television,
Inc., National Media Corporation and Michael S. Levey and to the incorporation
by reference therein of our report dated May 13, 1996 (except for Note 19, as to
which the date is May 30, 1996), with respect to the consolidated financial
statements of National Media Corporation included in its Annual Report (Form
10-K) for the year ended March 31, 1996 filed with the Securities and Exchange
Commission.
Ernst & Young LLP
Philadelphia, Pennsylvania
July 12, 1996
<PAGE>
EXHIBIT 23.2
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) of National Media Corporation pertaining to
the Amended and Restated 1994 Stock Option Plan of Positive Response Television,
Inc., a wholly owned subsidiary of National Media Corporation; and Employment
Agreement, dated May 17, 1996, by and between Positive Response Television,
Inc., National Media Corporation and Michael S. Levey and to the incorporation
by reference therein of our report dated December 12, 1995, with respect to the
combined financial statements of DirectAmerica Corporation and California
Production Group, Inc. as of and for the nine months ended September 30, 1995
included in National Media Corporation's Current Report on Form 8-K/A, filed
with the Securities and Exchange Commission on January 6, 1996.
Ernst & Young LLP
Philadelphia, Pennsylvania
July 12, 1996
<PAGE>
EXHIBIT 23.3
<PAGE>
Independent Auditors' Consent
We consent to the incorporation by reference in this Registration Statement of
National Media Corporation on Form S-8 of our report with respect to the
consolidated financial statements of Positive Response Television, Inc. and
Subsidiaries, dated March 25, 1996, appearing in the Current Report on Form 8-K
of National Media Corporation dated May 17, 1996 (as amended on Form 8-K/A filed
on or about June 14, 1996), and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
Deloitte & Touche LLP
Los Angeles, California
July 12, 1996
<PAGE>
EXHIBIT 23.4
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) of National Media Corporation pertaining to
the Amended and Restated 1994 Stock Option Plan of Positive Response Television,
Inc., a wholly owned subsidiary of National Media Corporation; and Employment
Agreement, dated May 17, 1996, by and between Positive Response Television,
Inc., National Media Corporation and Michael S. Levey and to the incorporation
by reference therein of our report dated May 24, 1996, with respect to the
financial statements of Prestige Marketing Limited included in National Media
Corporation's Current Report on Form 8-K dated July 1, 1996 filed with the
Securities and Exchange Commission.
Ernst & Young
Auckland, New Zealand
July 12, 1996
<PAGE>
EXHIBIT 23.5
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) of National Media Corporation pertaining to
the Amended and Restated 1994 Stock Option Plan of Positive Response Television,
Inc., a wholly owned subsidiary of National Media Corporation; and Employment
Agreement, dated May 17, 1996, by and between Positive Response Television,
Inc., National Media Corporation and Michael S. Levey and to the incorporation
by reference therein of our report dated May 24, 1996, with respect to the
financial statements of Prestige Marketing International Limited included in
National Media Corporation's Current Report on Form 8-K dated July 1, 1996 filed
with the Securities and Exchange Commission.
Ernst & Young
Auckland, New Zealand
July 12, 1996
<PAGE>
EXHIBIT 23.6
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) of National Media Corporation pertaining to
the Amended and Restated 1994 Stock Option Plan of Positive Response Television,
Inc., a wholly owned subsidiary of National Media Corporation; and Employment
Agreement, dated May 17, 1996, by and between Positive Response Television,
Inc., National Media Corporation and Michael S. Levey and to the incorporation
by reference therein of our report dated June 7, 1996, with respect to the
special purpose combined financial statements of Suzanne Paul Holdings Pty.
Limited Group included in National Media Corporation's Current Report on Form
8-K dated July 1, 1996 filed with the Securities and Exchange Commission.
Ernst & Young
Sydney, Australia
July 12, 1996
