<PAGE>
As filed with the Securities and Exchange Commission on September 25, 1998
Registration No. 333-
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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)
15821 Ventura Boulevard
Suite 570
Encino, California 91416
(Address of principal executive offices)
Employment Agreement between National Media Corporation and Frederick S. Hammer
Employment Agreement between National Media Corporation and Robert N. Verratti
Employment Agreement between National Media Corporation and Robert Berman
Employment Agreement between National Media Corporation and Paul R. Brazina
(Full Title of Plan)
Brian J. Sisko, Senior Vice President/General Counsel
Eleven Penn Center, Suite 1100
1835 Market Street
Philadelphia, Pennsylvania 19103
(Name and address of agent for service)
(215) 988-4600
(Telephone number, including area code, of agent for service)
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Copies to:
Stephen T. Burdumy, Esquire
Klehr, Harrison, Harvey, Branzburg & Ellers LLP
1401 Walnut Street
Philadelphia, Pennsylvania 19102
(215) 568-6060
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per share 915,000 (1) $3.375/share(2) $3,088,125(2) $911.00(2)
</TABLE>
(1) Represents the number of shares of the Registrant's Common Stock reserved
for issuance pursuant to (i) the employment agreement, dated as of February
27, 1997, by and between Registrant and Frederick S. Hammer and a related
option agreement; (ii) the employment agreement, dated as of January 28,
1998 by and between Registrant and Robert N. Verratti and a related option
agreement; (iii) the employment agreement, dated as of January 7, 1996, by
and between Registrant and Robert Berman and a related option agreement;
and (iv) the employment agreement, dated as of May 12, 1997, by and between
Registrant and Paul R. Brazina and a related option agreement.
(2) Based on the average of the high and low sales price of the Registrant's
Common Stock as reported by the New York Stock Exchange on September 21,
1998, estimated solely for the purpose of calculating the registration fee
in accordance with Rule 457(c) under the Securities Act of 1933, as
amended.
<PAGE>
PART I
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, as amended, and the Note to Part I of Form S-8.
<PAGE>
PROSPECTUS
NATIONAL MEDIA CORPORATION
Eleven Penn Center, Suite 1100
1835 Market Street
Philadelphia, Pennsylvania 19103
(215) 988-4600
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915,000 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 persons upon the exercise of options (the "Options") to purchase Shares
granted by the Company pursuant to (i) the terms of an employment agreement,
dated as of February 27, 1997, by and between the Company and Frederick S.
Hammer and a related option agreement (the "Hammer Agreement"), (ii) an amended
and restated employment agreement, dated as of January 28, 1998, by and between
the Company and Robert N. Verratti and a related option agreement (the "Verratti
Agreement"); (iii) an employment agreement, dated as of January 7, 1996, by and
between the Company and Robert Berman and a related option agreement (the
"Berman Agreement"); and (iv) an employment agreement, dated as of May 12, 1997,
by and between the Company and Paul R. Brazina and a related option agreement
(the "Brazina Agreement"). See "Selling Stockholders."
It is anticipated that the Shares may be offered for sale by one or
more of the Selling Stockholders, in each selling stockholder's 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 (the
"NYSE") or Philadelphia Stock Exchange ("PHLX") 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. Upon the exercise of the Options by the holders thereof, the
Company will receive the exercise price of the Options. To the extent the
Options are exercised, the Company will apply the proceeds thereof to its
general corporate purposes.
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.
------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION (THE "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 September 25, 1998.
<PAGE>
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 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. Such reports and other information filed with the
Commission can be reviewed through the Commission's Electronic Data Gathering
Analysis and Retrieval System, which is publicly available through the
Commission's website (http:www.sec.gov). The Common Stock of the Company is
listed on the NYSE and the PHLX and reports, proxy and information material and
other information concerning the Company may be inspected at the offices of the
NYSE, 20 Broad Street, New York, New York 10005 and the PHLX, 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, 1998 (the "Form 10-K");
(b) Amendment No. 1 on Form 10-K/A;
(c) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998;
(d) The Company's Current Reports on Form 8-K, dated April 8, 1998,
June 1, 1998, July 15, 1998 and August 13, 1998;
(e) The Company's proxy statement on Schedule 14A, dated September
23, 1998; and
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<PAGE>
(f) 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.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written 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 requests for copies should be directed to National Media Corporation,
c/o Quantum Television, 15821 Ventura Boulevard, Suite 570, Encino, California
91416; Attention: Director of Investor Relations, phone number 818-461-6400.
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<PAGE>
FORWARD-LOOKING STATEMENTS
This Prospectus contains "forward-looking" statements regarding
potential future events and developments affecting the business of the Company.
Such statements relate to, among other things, (i) the transactions described
under "Recent Developments" below; (ii) competition for customers for its
products and services; (iii) the uncertainty of developing or obtaining rights
to new products that will be accepted by the market and the timing of the
introduction of new products into the market; (iv) the limited market life of
the Company's products; and (v) other statements about the Company or the direct
response consumer marketing industry.
The Company's ability to predict the results or the effect of any
pending events on the Company's operating results is inherently subject to
various risks and uncertainties, including competition for products, customers
and media access; the risks of doing business abroad; the uncertainty of
developing or obtaining rights to new products that will be accepted by the
market; the limited market life of the Company's products; and the effects of
government regulations. Reference is made in particular to the discussion under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Company's 1998 Annual Report and Quarterly Report on Form
10-Q incorporated in this Prospectus by reference. Such forward-looking
statements include those preceded by, followed by or that include the words
"believes," "expects," "anticipates," "intends,""plans," "estimates" or similar
expressions.
THE COMPANY
The Company is principally engaged in the use of direct response
transactional television programming, known as infomercials, to sell consumer
products. The Company manages all phases of direct marketing for the majority of
its products in both the United States and international markets, including
product selection and development, manufacturing by third parties, production
and broadcast of infomercials, order processing and fulfillment and customer
service.
The Company is engaged in direct marketing of consumer products in the
United States and Canada through its wholly-owned subsidiary, Quantum North
America, Inc. (formerly Media Arts International, Ltd.), which the Company
acquired in 1986, and internationally through its wholly-owned subsidiaries:
Quantum International Limited, which the Company acquired in 1991; Quantum Far
East Ltd., through which the Company operates in all Asian countries other than
Japan; Quantum International Japan Company Limited, which the Company formed in
June 1995; and Prestige Marketing Limited ("Prestige") and Suzanne Paul Holdings
Pty Limited and its operating subsidiaries (collectively, "Suzanne Paul"), which
the Company acquired in July 1996. The Company produces infomercials through
Quantum Television (formerly d/b/a DirectAmerica Corporation), which the Company
acquired in October 1995.
The Company is a Delaware corporation, with its principal executive
offices located at 15821 Ventura Boulevard, Suite 570, Encino, California 91416
and its telephone number is 818-461-6400.
RECENT DEVELOPMENTS
On August 11, 1998, the Company executed definitive agreements with NM
Acquisition Co., LLC ("ACO"), a new Delaware limited liability company formed
for the purpose of the Transactions described herein, relating to a transaction
pursuant to which an investor group (the "Investor Group") has agreed to acquire
a substantial equity interest in and operational control of the Company through
the purchase from the holders thereof (the "Series D Holders") of $10,000,000 of
the Company's Series D Convertible Preferred Stock, par value of $.01 per share
(the "Series D Preferred Stock"), and the purchase from the Company of
$20,000,000 to $22,000,000 of the Company's newly-created Series E Convertible
Preferred Stock, par value $.01 per share (the "Series E Preferred Stock")
(together with the other transactions contemplated thereby, the "Transactions").
At the time of the execution of the definitive agreements regarding the
Transactions, the Investor Group consummated the acquisition of 10,000 shares of
the Company's outstanding Series D Preferred Stock, along with warrants to
purchase 992,942 shares of Common Stock which had previously been issued to the
original holders of
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<PAGE>
the Series D Preferred Stock (collectively, the "Series D Securities") from the
Series D Holders for an aggregate of $10,000,000. Upon consummation of such
acquisition, the Investor Group, the Series D Holders and the Company eliminated
the floating conversion price feature of the Series D Preferred Stock, fixing
the conversion price at $1.073125 per share of common stock, par value $.01 per
share ("Common Stock") and agreed to certain limitations regarding sales of the
Series D Securities and the Common Stock issuable upon conversion and/or
exercise of the Series D Securities. In the event the Transactions are not
consummated, or upon the occurrence of certain events, including a subsequent
"change in control" of the Company, the agreements related to the elimination of
the floating conversion price feature of the Series D Preferred Stock, the sales
limitations with respect to the Series D Securities and the Common Stock
issuable upon conversion and/or exercise of the Series D Securities and certain
other covenants with respect to sales of the Series D Securities and the Common
Stock issuable upon conversion and/or exercise of the Series D Securities will
terminate.
In addition to the $10,000,000 acquisition of the Series D Securities,
ACO entered into a stock purchase agreement with the Company pursuant to which
the Investor Group agreed to invest a minimum of $20,000,000 and a maximum of
$22,000,000 directly into the Company in exchange for shares of the Company's
newly-created Series E Preferred Stock. The Series E Preferred Stock will be
convertible into shares of Common Stock at a fixed conversion price of $1.50 per
share (subject to adjustment for certain anti-dilution events).
Upon execution of the definitive agreements regarding the Transactions,
Stephen C. Lehman was named Acting Chief Executive Officer of the Company. Mr.
Lehman, Eric R. Weiss and Andrew M. Schuon were also named to the Company's
Board of Directors as designees of ACO. The Company also entered into a
consulting agreement (the "Consulting Agreement") with Temporary Media Co., LLC
("TMC"), a newly-formed limited liability company controlled by Mr. Lehman, Mr.
Weiss and Daniel M. Yukelson, pursuant to which TMC is presently providing
executive management consulting services to the Company pending consummation of
the Transactions. In connection with the Consulting Agreement, the Company
granted to TMC (i) a five-year option (the "TMC Options") to purchase up to
212,500 shares of Common Stock, subject to certain vesting requirements, at an
exercise price of $1.32 per share and (ii) contingent warrants (the "TMC
Warrants"), which will only become effective following consummation of the
Transactions, to purchase up to 3,762,500 shares of Common Stock, at exercise
prices ranging from $1.32 per share to $3.00 per share. In the event that the
Company's stockholders do not approve the Transactions, all TMC Warrants and all
non-vested TMC Options will be cancelled. Additionally, if TMC materially
breaches its duties and obligations under the Consulting Agreement and such
breach remains uncured for 30 days, all TMC Warrants and all non-vested TMC
Options will be cancelled. 1,000,000 of the TMC Warrants shall not be exercised
by TMC or any employee of TMC and may only be transferred to any officer,
Director, employee or consultant of the Company other than Messrs. Lehman,
Weiss, Yukelson or any employee of TMC. TMC expects to use the TMC Warrants to
retain and attract highly qualified executive personnel and other persons
associated with the Company's programming to the Company and that the TMC
Warrants will have additional terms which provide for the vesting of the TMC
Warrants over a three to five year period.
As a result of negotiations initiated by the Company and ACO, the
Company also executed agreements with First Union National Bank ("First Union")
and ValueVision International, Inc. ("ValueVision") providing for modifications
to the Company's two primary credit facilities. First Union waived all
outstanding financial covenant violations and modified certain financial
covenants pending consummation of the Transactions upon receipt of a $190,000
fee. First Union also agreed to accept payment of 75% of all outstanding
principal obligations in full satisfaction of the Company's indebtedness,
provided such payment is made to First Union by November 15, 1998 and all other
outstanding fees and accrued interest are paid in full.
ValueVision has agreed to waive its right to accelerate repayment of
its $10,000,000 demand note (the "ValueVision Note") pending Closing of the
Transactions, other than in the event of an acceleration of the First Union
facility. ValueVision also agreed to certain standstill provisions and certain
limitations regarding the Company's payment of the ValueVision Note prior to
January 1, 1999. In consideration thereof, the Company agreed to re-price
certain warrants held by ValueVision to $2.74 per share. The Company retained
its right to repay the ValueVision Note upon maturity in cash or shares of
Common Stock (at $1.073125 per share) at the Company's option.
The Company has filed with the Securities and Exchange Commission, the
New York Stock Exchange and the Philadelphia Stock Exchange a definitive proxy
statement describing the Transactions.
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RISK FACTORS
The purchase of the shares of Common Stock 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 of
Common Stock offered hereby. The Company's fiscal year ends on March 31.
References to fiscal 1998, fiscal 1997 etc. refer to the fiscal period ending in
the indicated calendar year.
Recent Losses; Cash Flow
The Company has suffered net losses in four of its last five fiscal
years, including net losses of approximately $56.8 million in fiscal 1998,
approximately $45.7 million in fiscal 1997, approximately $670,000 in fiscal
1995 and approximately $8.7 million in fiscal 1994. The Company also reported a
net loss of approximately $3.2 million for the first quarter of fiscal 1999.
Based upon the deterioration which occurred in the Company's financial condition
during fiscal 1997 and 1998 and the presence of certain other conditions, as of
June 29, 1998, the Company's independent auditors opined that substantial doubt
existed as to the Company's ability to continue as a going concern. During
calendar year 1998, the Company has also experienced, as result of such losses
and other circumstances, significant cash flow difficulties. While the Company
has developed a business plan and implemented a number of programs designed to
reduce costs and return the Company to profitability, there can be no assurance
that the Company's business plan adequately addresses the circumstances and
situations which resulted in the Company's performance in the periods referred
to above. Unless the Company has adequately addressed the reasons for its recent
results of operations, there can be no assurance as to the Company's future
results of operations.
Nature of the Infomercial Industry
The worldwide infomercial industry is now characterized by extreme
competition for products, customers and media access. The Company's future in
this industry will depend in part on its access to, and efficient management of,
media time; the introduction of successful products and the full exploitation of
such products through not only direct marketing but also traditional retail
marketing and other channels of distribution, including the Internet; its
ability to enhance its product lines and support product marketing and sales
with efficient order fulfillment and customer services; and its ability to
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 ability to create and maintain an
effective, integrated organization to develop, introduce and market products
that (i) address changing consumer needs on a timely basis; (ii) establish and
maintain effective distribution channels (infomercial and non-infomercial) for
its products; and (iii) develop new geographic markets while expanding
profitable 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 responsible for seeking out new products from
third parties, there can be no assurance that present and potential third party
product providers will choose to market products through the Company in the
future. Delays in product introductions and short falls in successful product
introductions played a significant part in the Company's fiscal 1997, 1998 and
subsequent results of operations. Any significant delays or reductions in
product introductions in the future periods could have a material adverse effect
on the Company's future 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 70 countries.
In fiscal 1998, 1997 and 1996, approximately 54.9%, 47.4% and 51.6%,
respectively, of the Company's net revenues were derived from sales to customers
outside the United States and Canada. In fiscal 1998, 1997 and 1996, sales in
Germany accounted for approximately 7.5%, 5.7% and 7.0%, 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
15.2% of the Company's net revenues for fiscal 1998, down from 19.8% in fiscal
1997. Sales of the Company's products in Japan, which represented a significant
portion of Asian revenues, accounted for approximately 11.5% of the Company's
net revenues in fiscal 1998, down from 17.7% in fiscal 1997. The economic
downturn in these markets has materially adversely affected the Company. A
turnaround is not yet expected. Geographical expansion of sales activity has
resulted in increased
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working capital requirements as a result of additional lead time for delivery of
and payment for product prior to receipt of sale proceeds. While the Company's
foreign operations have the advantage of airing infomercials that have already
proven successful in the United States market, as well as successful
infomercials produced by domestic and other international companies with limited
media access and distribution capabilities, there can be no assurance that the
Company's foreign operations will continue to generate similar levels of net
revenues. Competition in the Company's international marketplace is increasing
rapidly. In addition, the Company is subject to many risks associated with 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 on the Company's results of operations.
Entering into New Markets
As the Company enters into new markets, including countries in Asia and
South America, it is faced with the uncertainty of never having done business in
those commercial, political and social settings. 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 could arise which would limit the Company's
ability to continue to do business or to expand in that new market.
Dependence on New Products; Unpredictable Market Life; Inventory Management 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 future results of operations
will also be dependent upon its ability to proactively manage its products
through their life cycles. The Company's five most successful products in each
of fiscal 1998, 1997 and 1996 accounted for approximately 40.3%, 41.2% and
46.0%, 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.
Revenues are dependent from year to year on the introduction of new products.
Even if the Company is able to introduce new products, there can be no assurance
that such new products will be successful. The Company's future results of
operations depend on its ability to spread its revenue (sales) stream over a
larger number of products in a given period and to more effectively exploit the
full revenue potential of each product it introduces through all levels of
consumer marketing, whether directly or through third parties.
Product sales and results of operations 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 the event the Company does not have an adequate supply of inventory,
as a result of production delays or shortages or inadequate inventory management
or cash flow difficulties, it may lose potential product sales. The ability of
the Company to maintain systems and procedures to more effectively manage its
inventory (and its infomercial airings), in the domestic as well as
international markets, is of critical importance to the Company's continuing
cash flow and results of operations. It is possible that, during a product's
life, unanticipated obsolescence of such product may occur or problems may arise
regarding regulatory, intellectual property, product liability or other issues
which may affect the continued viability of the product for sale despite the
fact that the Company may still hold a sizable inventory position in such
product. Most of the Company's products have a limited market life. Accordingly,
it is extremely important that the Company fully realize the potential of each
successful product.
Historically, the majority of products generate their most significant
domestic revenue in their introductory year. Foreign revenues have tended to be
generated more evenly over a somewhat 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 adapt to
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market conditions and competition as well as other factors which affect the life
cycles of its products and its ability 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, either pursuant to the Company's warranties or otherwise. 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 has historically been dependent on third party sources,
both foreign and domestic, to manufacture all of its products. From time to
time, the Company has also been 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 this initial approval of a product by the Company's product
development personnel to the first sale of such product is relatively short, the
Company's ability to cause its manufacturing sources to 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. There can be no
assurance that the Company will successfully manage this process in such a way
to maximize its sales of its products. Since the Company often relies on foreign
manufacturers, it must allow longer lead times for products to fulfill customer
orders. Utilizing such foreign manufacturers exposes the Company to the general
risks of doing business abroad.
Dependence on Media Access; Effective Management of Media Time
The Company has historically been dependent on having access to media
time to televise its infomercials on cable networks, network affiliates and
local stations. The Company's future results of operation will also depend upon
the Company's ability to manage its media time, taking advantage of long-term
purchases where prudent and spot purchases where necessary. This media
management function must also include a meaningful coordination between
available infomercials and available media time. 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 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, domestically or internationally, 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. In
addition, periodically, due to world events, media access and the number of
persons viewing the Company's infomercials in one or more markets may be
substantially diminished. In such circumstances, the Company's results of
operations for such periods may be adversely affected. In recent periods the
Company has experienced an increase in the demand by international media
suppliers for fixed rates and/or for minimum revenue guarantees, both of which
increase the Company's risk.
Whenever the Company makes advance purchases and commitments to
purchase media time, if the Company does not manage such media time effectively,
such failure could have a material adverse effect on the Company's results of
operations. In the event the Company is unable to utilize all of the media time
it has acquired,
-8-
<PAGE>
it attempts to arrange 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
on terms favorable to the Company. For example, the Company's existing agreement
with Mitsui & Co., Ltd. ("Mitsui") regarding its operations in Japan will
terminate on January 1, 1999. The Company and Mitsui are involved in
negotiations to restructure their relationships in Japan and Asia in order to
address changes in that market and other circumstances which have arisen. The
inability of the Company to extend one or more of such contracts on reasonable
terms as they expire could have a material adverse effect on the Company's
results of operations. In April 1998 the Company began leasing a twenty-four
hour transponder on a newly-launched Eutelstat satellite, the "Hotbird IV," the
coverage of which reaches across the European continent. The Company expects to
incur significant start up costs in connection with the transponder lease. There
can be no assurance that the Company will be able to effectively utilize such
media time. Failure to do so could have a material adverse effect on the Company
and its results of operations.
Litigation Involving the Company
The infomercial industry has historically been very litigious and the
Company in recent years has been involved in significant legal proceedings and
has incurred significant charges in prior periods related to such litigation.
Abbreviated information regarding the status of current 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, the Company consummated the
acquisition of DirectAmerica in October 1995 and the acquisition of Positive
Response Television, Inc. ("Positive Response") in May 1996. As a result of
these acquisitions, all liabilities of DirectAmerica and Positive Response
became liabilities of the respective wholly-owned subsidiary of the Company into
which each of DirectAmerica and Positive Response was merged. The Company also
acquired Prestige and Suzanne Paul in July 1996, including all of their
respective liabilities.
WWOR Litigation
In March 1997, WWOR-TV filed a breach of contract action in the United
States District Court for New Jersey against one of the Company's operating
subsidiaries alleging that the subsidiary wrongfully terminated a contract for
the purchase of media time, seeking in excess of $1,000,000 in compensatory
damages. The Company is contesting the action. At this stage, the Company cannot
predict the outcome of this matter; however, even if plaintiffs were to succeed
on all of their claims, the Company does not believe that such result would have
a material adverse impact on the Company's results of operations.
Regulatory Matters
As a result of prior settlements with the FTC, the Company has agreed
to two consent orders. Prior to the Company's 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
Positive Response and Mr. Levey to submit compliance reports to the FTC staff.
The Company and Mr. Levey submitted compliance reports as well as additional
information requested by the FTC staff. In June 1996, the Company received a
request from the FTC for additional information regarding certain of the
Company's infomercials in order to determine whether the Company was operating
in compliance with the consent orders referred to above. The FTC later advised
the Company that it believed the Company had violated one of the consent orders
by allegedly failing to substantiate certain claims made in one of its
infomercials which it no longer airs in the United States. The Company has
provided information to the FTC to demonstrate substantiation. If the Company's
substantiation is deemed to be insufficient by the FTC, the FTC has a variety of
enforcement mechanisms available to it, including, but not limited to, monetary
penalties. While no assurances can be given, the Company does not believe that
any remedies to which it may become subject will have a material adverse effect
on the Company's results of operations or financial condition. The FTC recently
notified the Company that it had concerns about claims being made in one
-9-
<PAGE>
of the Company's current infomercials and also raised questions concerning
certain aspects of the Company's pricing practices in certain of its current
infomercials. The Company is responding to the FTC's inquiries.
In addition, in Spring 1997, in accordance with applicable regulations,
The Company notified the CPSC of breakages which were occurring in its Fitness
Strider product. The Company also notified the CPSC of its replacement of
certain parts of the product with upgraded components. The CPSC reviewed the
Company's testing results in order to assess the adequacy of the Company's
upgraded components. The CPSC also undertook its own testing of the product and,
in November 1997, informed the Company that the CPSC compliance staff had made a
preliminary determination that the Fitness Strider product and upgraded
component present a substantial product hazard, as defined under applicable law.
The Company and the CPSC staff are discussing voluntary action to address the
CPSC's concerns, including replacement of the affected components. At present,
management of the Company does not anticipate that any action agreed upon, or
action required by the CPSC, will have any material adverse impact on the
Company's financial condition or results of operations. The Company has also
been contacted by Australian consumer protection regulatory authorities
regarding the safety and fitness of the Fitness Strider product and an exercise
rider product marketed only in Australia and New Zealand. At this point, the
Company cannot predict whether the outcome of these matters regarding the
Fitness Strider will have a material adverse impact upon the Company's financial
condition or results of operations.
In August 1998, the Company received notice from the New York Stock
Exchange ("NYSE") that the Company did not meet the NYSE's standards for
continued listing. The NYSE also requested that the Company provide information
regarding any actions taken or proposed by the Company to restore the Company to
compliance with the NYSE standards. The Company is formulating its response to
the NYSE notification and request. The delisting of the Company's Common Stock
from trading on the NYSE would have a material adverse effect on the Company.
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, 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 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 many 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.
Dependence on Key Personnel
The Company's executive officers have substantial experience and
expertise and make significant contributions to the Company's growth and
success. In particular, the Company is highly dependent on certain of its
employees responsible for product development and production of infomercials.
The unexpected loss of the services of one or more of such individuals could
have a material adverse effect on the Company. The employment agreement of John
W. Kirby, the Company's President, expires in September 1998. There is no
assurance that the Company will be able to reach a new agreement with Mr. Kirby.
-10-
<PAGE>
Year 2000 Issues
The efficient operation of the Company's business is dependent in part
on its computer hardware, software programs and operating systems (collectively,
"Programs and Systems"). These Programs and Systems are used in several key
areas of the Company's business, including merchandise purchasing, inventory
management, pricing, sales, shopping and financial reporting, as well as in
various administrative functions. The Company has been evaluating its Programs
and Systems to identify potential Year 2000 compliance issues. These actions are
necessary to ensure that the Programs and Systems will recognize and process the
Year 2000 and beyond. It is anticipated that modification or replacement of some
of the Company's Programs and Systems will be necessary to make such Programs
and Systems Year 2000 compliant. The Company is also communicating with
suppliers, financial institutions and others to coordinate Year 2000 conversion.
Based on present information, the Company believes that it will be able
to achieve such Year 2000 compliance through a combination of modification of
some existing Programs and Systems, and the replacement of other Programs and
Systems with new Programs and Systems that are already Year 2000 compliant.
However, no assurance can be given that these efforts will be successful. The
Company does not expect that the expenses and capital expenditures associated
with achieving Year 2000 compliance will have a material effect on its financial
condition or results of operations.
Convertible Securities; Shares Eligible for Future Sale
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 or of the shares of Common Stock 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.
As of September 25, 1998, there were 25,466,937 shares of Common Stock
outstanding, nearly all of which were freely tradeable without restriction under
the Securities Act unless held by affiliates. In addition, as of September 25,
1998, approximately 44,000,000 shares of Common Stock were reserved for issuance
upon exercise of outstanding warrants (including the TMC Warrants), options
(including the TMC Options), the Company's Series B Convertible Preferred Stock
and the Company's Series D Convertible Preferred Stock. In the event that the
Transactions are consummated, the Company will be required to reserve for
issuance an additional 13,333,333 shares of Common Stock for issuance upon
conversion of the Series E Preferred Stock (assuming the purchase by ACO of
$20,000,000 of Series E Preferred Stock) and the Company will be obligated to
file and have declared effective a registration statement registering for resale
by ACO (or its designee) the shares of Common Stock issuable upon conversion
and/or exercise of the Series E Preferred Stock, the TMC Warrants and the TMC
Options.
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. Upon
the exercise of Options by the holders thereof, the Company will receive the
exercise price of the Options. To the extent the Options are exercised, the
Company will apply the proceeds thereof to its general corporate purposes.
-11-
<PAGE>
SELLING STOCKHOLDERS
Certain "affiliates" (as defined under Rule 405 promulgated under the
Securities Act) of the Company are eligible to sell, pursuant to this
Prospectus, any Shares acquired by such affiliates, subsequent to the date of
this Prospectus, upon the exercise of the Options.
<TABLE>
<CAPTION>
Pre-Offering Post-Offering
------------ -------------
Total Total
Number Number
of Shares of Shares
Name and Relationship Beneficially Shares Beneficially Percentage
to the Company(1) Owned(2) Offered Owned(3) of Class(4)
----------------- -------- ------- -------- -----------
<S> <C> <C> <C> <C>
Frederick Hammer 202,500 100,000(5) 102,500 *
Robert Verratti 700,000 700,000(6) 0 0
Robert Berman 15,000 15,000(7) 0 0
Paul Brazina 100,000 100,000(8) 0 0
</TABLE>
*Less than 1%.
(1) All persons are employees or consultants of the Company.
(2) Assumes the exercise of all Options to purchase Shares by such Selling
Stockholder.
(3) Assumes the offer and sale of all Shares eligible to be offered and sold
hereby by the Selling Stockholders to third parties unaffiliated with such
Selling Stockholders.
(4) These percentages are calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and the rules promulgated
thereunder, without giving effect to the 60 day limitation regarding the
conversion of convertible securities. Based upon 25,466,937 shares of
Common Stock issued and outstanding as of September 25, 1998.
(5) Consists of Shares issuable upon exercise of Options granted to Mr. Hammer
pursuant to the Hammer Agreement.
(6) Consists of Shares issuable upon exercise of Options granted to Mr.
Verratti pursuant to the Verratti Agreement.
(7) Consists of Shares issuable upon exercise of Options granted to Mr. Berman
pursuant to the Berman Agreement.
(8) Consists of Shares issuable upon exercise of Options granted to Mr. Brazina
pursuant to the Brazina Agreement.
-12-
<PAGE>
PLAN OF DISTRIBUTION
The Common Stock is listed for trading on the NYSE and 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 and 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 will 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 validity of the Shares offered hereby has been passed upon for the
Company by Brian J. Sisko, Esq., Senior Vice President and General Counsel of
the Company.
EXPERTS
The consolidated financial statements and schedule of National Media
Corporation appearing in the Company's Annual Report (Form 10-K) for the year
ended March 31, 1998 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon (which contains an explanatory
paragraph indicating that matters exist that raise substantial doubt as to the
Company's ability to continue as a going concern) 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.
-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
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information................................................................2
Incorporation of Certain Documents by Reference......................................2
Forward-Looking Statements...........................................................4
The Company..........................................................................4
Recent Developments..................................................................4
Risk Factors.........................................................................6
Use of Proceeds.....................................................................11
Selling Stockholders................................................................12
Plan of Distribution................................................................13
Legal Matters.......................................................................13
Experts.............................................................................13
</TABLE>
915,000 Shares of Common Stock
NATIONAL MEDIA CORPORATION
PROSPECTUS
September 25, 1998
<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, as amended, 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, 1998;
2. The Company's Annual Report on Form 10-K/A for the
fiscal year ended March 31, 1998;
3. The Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998;
4. The Company's Current Reports on Form 8-K, dated
April 8, 1998, June 1, 1998, July 15, 1998 and August 13,
1998; and
5. The Company's proxy statement on Schedule 14A, dated
September 23, 1998; and
6. 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.
Brian J. Sisko, Esq., Senior Vice President and General
Counsel of the Company, has delivered an opinion in connection herewith with
respect to the legality of the shares of Common Stock being registered
hereunder.
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 the law, under Section
174 of the Delaware General Corporation Law, or for any transaction from which
the director derived an improper personal benefit.
II-1
<PAGE>
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 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.
<TABLE>
<CAPTION>
Exhibit No. Description
<S> <C>
5 Opinion with respect to the legality of the shares of Common
Stock being registered hereunder.
10.1(1) Employment Agreement, dated February 28, 1997, between
National Media Corporation and Frederick S. Hammer
10.2(2) Amended and Restated Employment Agreement between National
Media Corporation and Robert N. Verratti, dated as of January
28, 1998.
10.4(3) Employment Agreement, dated May 12, 1997, by and between
National Media Corporation and Paul R. Brazina
23.1 Consent of Ernst & Young LLP, independent auditors, with
respect to the consolidated financial statements of National
Media Corporation for the year ended March 31, 1998.
24 Powers of Attorney (included in the signature pages hereto).
</TABLE>
- -----------------------------
(1) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended March 31, 1997, as amended.
(2) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the period ended December 31, 1997.
(3) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 1997, as amended.
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, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Philadelphia, Commonwealth of Pennsylvania, on this
25th day of September, 1998.
NATIONAL MEDIA CORPORATION
BY: /s/ Stephen C. Lehman
-------------------------------------------------
Stephen C. Lehman, Acting Chief Executive Officer
POWER OF ATTORNEY
Each of the undersigned officers and directors of National Media Corporation
whose signature appears below hereby appoints John W. Kirby as true and lawful
attorney-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, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated on this 25th day of September, 1998.
<TABLE>
<CAPTION>
Signature Title(s)
--------- --------
<S> <C>
/s/ Stephen C. Lehman Acting Chief Executive Officer and Director
- -------------------------------
Stephen C. Lehman
/s/ John J. Sullivan Chief Financial Officer
- -------------------------------
John J. Sullivan
/s/ Albert R. Dowden Director
- -------------------------------
Albert R. Dowden
/s/ William M. Goldstein Director
- -------------------------------
William M. Goldstein
- ------------------------------- Chairman of the Board and Director
Frederick S. Hammer
/s/ John W. Kirby President and Director
- -------------------------------
John W. Kirby
/s/ Andrew M. Schuon Director
- -------------------------------
Andrew M. Schuon
/s/ Robert N. Verratti Director
- -------------------------------
Robert N. Verratti
/s/ Eric R. Weiss Director
- -------------------------------
Eric R. Weiss
/s/ Jon W. Yoskin, II Director
- -------------------------------
Jon W. Yoskin, II
</TABLE>
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
5 Opinion 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 consolidated financial statements of National Media
Corporation for the year ended March 31, 1998.
24 Powers of Attorney (included in the signature pages hereto).
</TABLE>
<PAGE>
EXHIBIT 5
<PAGE>
NATIONAL MEDIA CORPORATION
Eleven Penn Center, Ste. 1100
1835 Market Street
Philadelphia, PA 19103
215-988-4600
September 25, 1998
Board of Directors
National Media Corporation
Eleven Penn Center, Suite 1100
1835 Market Street
Philadelphia, Pennsylvania 19103
Re: Registration Statement on Form S-8
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Gentlemen:
I am general counsel to National Media Corporation (the "Company") and
have caused to be prepared a registration statement on Form S-8 in connection
with the proposed registration of shares of the Company's common stock, par
value $.01 per share (the "Common Stock") pursuant to the Securities Act of
1933, as amended (the "Securities 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 915,000 shares of
Common Stock issuable pursuant to the Hammer Agreement, the Verratti Agreement,
the Berman Agreement, and the Brazina Agreement (each as defined in the
Registration Statement; collectively, the "Agreements"). 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."
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Board of Directors
September 25, 1998
Page 2
In this regard, I have examined: (i) the Agreements; (ii) the Company's
Certificate of Incorporation and Bylaws, each as amended and as presently in
effect; (iii) the Registration Statement; and (iv) 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, I have assumed the authenticity of all
documents and records examined, the conformity with the original documents of
all documents submitted to me as copies and the genuineness of all signatures.
The opinions expressed herein are based solely upon my review of the
documents and other materials expressly referred to above. Other than such
documents and related materials, I 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 examinations
of law and fact as I have deemed necessary or appropriate in connection
herewith, I am of the opinion that, upon issuance in accordance with the
provisions of the Agreements, the Shares will 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
and the Federal securities law of the United States. Except as expressly
otherwise noted herein, this opinion is given as of the date hereof.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference made to me under the caption "Legal
Matters" in the Prospectus constituting a part of the Registration Statement. By
giving such consent, I do not hereby admit that I fall within the category of
persons whose consent is required pursuant to Section 7 of the Securities Act.
Very truly yours,
/s/ Brian J. Sisko
Brian J. Sisko, Esq.
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EXHIBIT 23.1
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Consent of Independent Auditors
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We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-8 and related Prospectus of National Media
Corporation for the registration of 915,000 shares of its common stock and to
the incorporation by reference therein of our report dated June 29, 1998 with
respect to the consolidated financial statements and schedule of National Media
Corporation included in its Annual Report (Form 10-K) for the year ended March
31, 1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
September 24, 1998
