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As filed with the Securities and Exchange Commission on December 24, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
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
Los Angeles, California 91436
(Address of principal executive offices)
Daniel M. Yukelson
Executive Vice President/Finance and Chief Financial Officer, and Secretary
15821 Ventura Boulevard
Suite 570
Los Angeles, California 91436
(Name and address of agent for service)
(818) 461-6400
(Telephone number, including area code, of agent for service)
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, check the following box: |_|
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
investment plans. Check the following box. |X|
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.|_|
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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
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share 17,508,373(1) $8.97/share (2) $157,050,100 (2) $43,660.00 (2)
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(1) Includes 13,333,373 shares of Registrant's Common Stock issuable upon
conversion of Series E Convertible Preferred Stock, 200,000 shares of
Registrant's Common Stock which may be issued by the Registrant in
satisfaction of a premium payable upon Registrant's Series E Convertible
Preferred Stock, 212,500 shares of Registrant's Common Stock issuable
upon exercise of options and 3,762,500 shares of Registrant's Common
Stock issuable upon exercise of warrants.
(2) Based on the average of the high and low trading price of the
Registrant's Common Stock as reported by the New York Stock Exchange on
December 21, 1998, as estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457(c) under the Securities Act
of 1933.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act or until the registration statement shall become effective on
such date as the Securities and Exchange Commission, acting pursuant to said
section 8(a), may determine.
<PAGE>
"The Information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
SUBJECT TO COMPLETION
PROSPECTUS
NATIONAL MEDIA CORPORATION
15821 Ventura Boulevard
Suite 570
Los Angeles, California 91436
(818) 461-6400
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17,508,373 Shares of Common Stock
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The stockholders of National Media Corporation listed in this
Prospectus under "Selling Stockholders" are offering and selling up to
17,508,373 shares of common stock. The selling stockholders may acquire the
shares of common stock offered pursuant to this Prospectus upon conversion of
shares of Series E Preferred Stock and upon exercise of options and warrants.
The selling stockholders may offer the shares of common stock through
public or private transactions, on the New York Stock Exchange or the
Philadelphia Stock Exchange, at prevailing market prices, or at privately
negotiated prices.
National Media's common stock is listed on the New York Stock Exchange
and the Philadelphia Stock Exchange under the symbol "NM." On December 21, 1998,
the closing sale price for the common stock, as quoted on the New York Stock
Exchange, was $9.3125 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR
CERTAIN INFORMATION THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SHARES OF COMMON
STOCK OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is December __,
1998.
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TABLE OF CONTENTS
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS.................................................................3
RISK FACTORS......................................................................................................3
THE COMPANY.......................................................................................................8
RECENT DEVELOPMENTS...............................................................................................8
USE OF PROCEEDS...................................................................................................9
SELLING STOCKHOLDERS.............................................................................................10
PLAN OF DISTRIBUTION.............................................................................................13
LEGAL MATTERS....................................................................................................13
EXPERTS ........................................................................................................13
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..................................................................14
WHERE YOU CAN GET MORE INFORMATION...............................................................................14
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this Prospectus discuss future
expectations, contain projections of results of operations or financial
condition or state other "forward-looking" information. Those statements are
subject to known and unknown risks, uncertainties and other factors that could
cause the actual results to differ materially from those contemplated by the
statements. The forward-looking information is based on various factors and has
been derived using numerous assumptions.
Important factors that may cause actual results to differ from
projections include, for example,
- the success or failure of National Media's efforts to
implement its business strategies;
- competition for National Media's products and media
time;
- National Media's ability to raise sufficient capital
to expand our business;
- National Media's ability to develop or obtain rights
to successful new products and ability to exploit
alternative distribution channels such as electronic
commerce;
- National Media's ability to attract and retain
quality employees and talented performers for
National Media's infomercials; and
- other risks which may be described in National
Media's future filings with the SEC.
National Media does not promise, nor is it obligated, to update
forward-looking information to reflect actual results or changes in assumptions
or other factors that could affect those statements.
RISK FACTORS
You should carefully consider each of the following factors and other
information in this prospectus before deciding to invest in shares of National
Media's Common Stock.
Recent Losses; Cash Flow; Going Concern.
National Media incurred significant losses in four of its last five
fiscal years. National Media also reported a net loss of approximately $12.2
million for the first six months of fiscal 1999. Because of National Media's
financial condition as well as other unfavorable conditions, including cash flow
problems, National Media's independent auditors stated, in their report dated
June 29, 1998, that substantial doubt exists as to National Media's ability to
continue as a going concern. In response to these issues, National Media
developed a business plan and has begun implementing new initiatives designed to
increase revenues, reduce costs and return it to profitability; however, if the
business plan does not adequately address the circumstances and situations which
resulted in National Media's past poor performance, National Media would be
required to seek alternative forms of financing, the availability of which is
uncertain, or be forced to go out of business. On December 3, 1998, National
Media consummated a $20.0 million secured credit agreement with Foothill Capital
Corporation. Borrowings under the credit agreement are subject to certain levels
of collateral and related advance rates.
Risks of Doing Business in the Transactional Television (Infomercial) and
Electronic Commerce Industries
National Media experiences extreme competition for products, customers
and media access in the transactional television and electronic commerce
industries. Accordingly, to be successful, National Media must:
- Accurately predict consumer needs, market conditions
and competition;
- Introduce successful products;
- Produce compelling infomercials;
- Acquire appropriate amounts of media time;
- Manage its media time effectively;
- Fulfill customer orders timely and efficiently;
- Provide courteous and informative customer service;
- Maintain adequate vendor relationship and terms;
- Enhance successful products to generate additional
sales;
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- Expand the methods used to sell products;
- Expand in existing geographic markets; and
- Integrate acquired companies and businesses
efficiently.
National Media's recent operating results were primarily caused by
delays in product introductions, lack of successful products, failure to
integrate strategic business acquisitions, failure to adequately leverage its
global spending and deteriorating economic conditions in the Asian and South
Pacific markets. National Media actively seeks out new products, new sources of
products and alternative distribution channels, including retail and the
Internet. National Media cannot be sure that inventors and product manufacturers
will select National Media to market their products. Significant delays in
product introductions or a lack of successful products could prevent National
Media from selling adequate amounts of its products and otherwise have a
negative effect on National Media's business.
Dependence on Foreign Sales
National Media markets products to consumers in over 70 countries. In
recent years National Media has derived approximately half of its net revenues
from sales to customers outside the United States and Canada. National Media's
largest international markets are Western Europe and Asia (primarily Japan and
the South Pacific). The economic downturn in the Asian and South Pacific regions
has had and, for the foreseeable future, is expected to have, an adverse effect
on National Media. National Media's international expansion has increased its
working capital requirements due to the additional time required to deliver
products abroad and receive payment from foreign countries.
While National Media's foreign operations have the advantage of airing
infomercials that have already proven successful in the United States, as well
as successful infomercials produced by other infomercial companies with limited
media access and distribution capabilities, there can be no assurance that
National Media's foreign operations will continue to generate similar revenues
or operate profitably. Competition in the international marketplace is
increasing rapidly. In addition, National Media 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.
- Lack of available long-form media.
The occurrence of any of these risks could have a negative effect on
National Media's business.
Entering into New Markets
As National Media enters new markets, it is faced with the uncertainty
of never having done business in that market's particular commercial, political
and social environment. Accordingly, despite National Media's best efforts,
likelihood of success is unpredictable for reasons particular to each new
market. It is also possible that, despite National Media's apparently successful
entrance into a new market, some unforeseen circumstance could arise which would
limit National Media's ability to continue to do business, operate profitably or
to expand in that new market.
Dependence on Successful Products; Unpredictable Market Life; Inventory
Management and Product Returns
National Media is dependent on its continuing ability to introduce
successful new products to supplement or replace existing products as they
mature within their product life cycles. National Media's five most successful
products each year typically account for a substantial amount of National
Media's annual net revenues. Generally, National Media's successful products
change from year to year. Accordingly, National Media's future results of
operations depend on its ability to introduce successful new products
consistently and to capture the full revenue potential of each product at all
stages of consumer marketing and distribution channels during the product's life
cycle.
In addition to a supply of successful new products, National Media's
revenues and results of operations depend on a positive consumer response to its
infomercials, the effective management of product inventory and other factors.
Customer response to infomercials depends on many variables, including the
appeal of the products being marketed, the effectiveness of the infomercial, the
availability of competing products and the timing and frequency of airings.
There can be no assurance that National Media's infomercials will receive market
acceptance.
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National Media must have an adequate supply of inventory to meet
consumer demand. Most of National Media's products have a limited market life,
so it is extremely important that National Media generate maximum sales during
this time period. If production delays or shortages, poor inventory management
or inadequate cash flow prevent National Media from maintaining sufficient
inventory during peak periods of demand, National Media could lose potential
product sales, which may never be recouped. In addition, unanticipated
obsolescence of a product may occur or problems may arise regarding regulatory,
intellectual property, product liability or other issues which adversely affect
future sales of a product even though National Media may still hold a large
quantity of the product in inventory. Accordingly, National Media's ability to
maintain systems and procedures to effectively manage its inventory is of
critical importance to National Media's cash flow and results of operations.
The average domestic and international market life of a product is less
than two years. Generally, products generate their most significant revenues in
their first year of sales. In addition, National Media must adapt to market
conditions and competition as well as other factors which may cut short a
product's life cycle and adversely affect National Media's results of
operations.
National Media offers a limited money-back guarantee on all of its
products if the customer is not fully satisfied. Accordingly, National Media's
results of operations may be adversely affected by product returns under
National Media's guarantee, its product warranty or otherwise. Although National
Media establishes reserves against product returns which it believes are
adequate based on product mix and returns history, there can be no assurance
that National Media will not experience unexpectedly high levels of product
returns which exceed the reserves for a particular product. If product returns
do exceed reserves, National Media's results of operations may be adversely
affected.
Dependence on Third Party Manufacturers and Service Providers
Substantially all of National Media's products are manufactured by
other domestic and foreign companies. In addition, National Media sometimes uses
other companies to fulfill orders placed for National Media's products and to
provide telemarketing services. If National Media's suppliers are unable, either
temporarily or permanently, to deliver products to National Media in time to
fulfill sales orders, it could have a material adverse effect on National
Media's results of operations. Moreover, because the time from the initial
approval of a product by National Media's product development department until
the first sale of a product must be short, National Media must be able to cause
its product manufacturers to quickly produce high-quality, reasonably priced
products for it to sell. However, because National Media's primary product
manufacturers are foreign companies which require longer lead times for
products, any delay in production or delivery would adversely affect sales of
the product and National Media's results of operations. In addition, utilization
of foreign manufacturers further exposes National Media to the general risks of
doing business abroad.
Dependence on Media Access; Effective Management of Media Time
National Media must have access to media time to promote its products
on cable and broadcast networks, network affiliates and local stations, and via
the Internet and radio. National Media purchases a significant amount of media
time from cable television and satellite networks, which assemble programming
for transmission to cable system operators. If demand for air time increases,
cable system operators and broadcasters may limit the amount of time available
for these broadcasts. Larger multiple cable system operators have begun selling
"dark" time, (i.e., the hours during which a network does not broadcast its own
programming) to third parties which may cause prices for such media to rise.
Significant increases in the cost of' media time or significant decreases in
National Media's access to domestic or international media time could negatively
affect National Media. In addition, periodic world events may limit National
Media's access to air time and reduce the number of persons viewing National
Media's infomercials in one or more markets, which would negatively affect
National Media for these periods.
Recently, international media suppliers have begun to negotiate for
fixed media rates, similar to the United States, and minimum revenue guarantees,
each of which increase National Media's cost of media and risk.
In addition to acquiring adequate amounts of media time, National
Media's business depends on its ability to manage efficiently its acquisitions
of media time, by analyzing the need for, and making purchases of, long term
media and spot media. National Media must also properly allocate its available
air time among its current library of infomercials and inventory or availability
of its products. Whenever National Media makes advance purchases and commitments
to purchase media time, it must manage the media time effectively, because the
failure to do so could negatively affect National Media's business. If National
Media cannot use all of the media time it has acquired, it attempts to sell its
excess media time to others. However, there can be no assurance that National
Media will be able to use or sell all of its purchased media time.
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In April 1998, National Media began leasing a twenty-four hour
transponder on a newly-launched Eutelstat satellite, the "Hotbird IV," which
broadcasts across Europe. National Media has incurred significant start-up costs
in connection with the transponder lease. If National Media is unable to use
effectively or sell the transponder media time, National Media's business could
be negatively affected.
Litigation and Regulatory Actions
There have been many lawsuits against companies in the direct marketing
industry. Also, in recent years, National Media has been involved in significant
legal proceedings and regulatory actions by the Federal Trade Commission and
Consumer Product Safety Commission, which have resulted in significant costs and
charges to National Media in defending and settling these matters. In addition,
National Media, its wholly-owned subsidiary, Positive Response Television, Inc.
and its chief executive officer are subject to FTC consent orders which require
them to submit periodic compliance reports to the FTC. Any additional FTC or
CPSC violations or significant new litigation could have an adverse impact on
National Media's business.
In August 1998, National Media received notice from the New York Stock
Exchange ("NYSE") that it did not meet the NYSE's standards for continued
listing. Representatives from National Media met with the NYSE staff and
proposed actions to the NYSE designed to restore its compliance with the listing
standards. The NYSE reviewed National Media's compliance plan and informed
National Media that, while it would continue to monitor National Media's
compliance and performance, no action by the NYSE was presently contemplated. If
National Media's common stock is delisted from trading on the NYSE, it would
have severe negative effects on National Media and its stockholders.
Product Liability Claims
Products sold by National Media may expose it to potential liability
from damages claims by users of the products. In certain instances, National
Media is able to obtain contractual indemnification rights against these
liabilities from the manufacturers of the products. In addition, National Media
generally requires its manufacturers to carry product liability insurance.
However, National Media cannot be certain that manufacturers will maintain this
insurance or that their coverage will be adequate to cover all claims. In
addition, National Media cannot be certain that it will be able to maintain its
insurance coverage or obtain additional coverage on acceptable terms, or that
its insurance will provide adequate coverage against all claims.
Competition
National Media competes directly with companies which generate sales
from infomercials and with other direct marketing and electronic commerce
companies. National Media also competes with a large number of consumer product
retailers, many of which have substantially greater financial, marketing and
other resources than National Media. Some of these retailers have recently
begun, or indicated that they intend to begin, selling products through direct
response marketing methods, including sales within various electronic commerce
channels, such as the Internet. National Media also competes with companies that
make imitations of National Media's products at substantially lower prices,
which may be sold in department stores, pharmacies, general merchandise stores
and through magazines, newspapers, direct mail advertising, catalogs and the
Internet.
Dependence on Key Personnel
National Media's executive officers have substantial experience and
expertise in direct response sales and marketing, electronic commerce and media.
In particular, National Media is highly dependent on certain of its employees
responsible for product development, production of infomercials and purchases of
media. If any of these individuals leave National Media, National Media's
business could be negatively affected. Steven Lehman, National Media's Chairman
of the Board and Chief Executive Officer, Eric Weiss, National Media's Vice
Chairman of the Board and Chief Operating Officer and Daniel Yukelson, National
Media's Executive Vice President/Finance and Chief Financial Officer, and
Secretary are currently compensated pursuant to the terms of a consulting
agreement. While National Media expects to enter into employment agreements with
each of Messrs. Lehman, Weiss and Yukelson, the loss of any of them would
negatively affect National Media's business.
Year 2000 Issues
The operation of National Media's business is dependent on its computer
hardware, software programs and operating systems. Computer technology is used
in several key areas of National Media's business, including merchandise
purchasing, inventory management, pricing, sales, fulfillment and financial
reporting, as well as in various
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administrative functions. National Media has been evaluating its computer
technology to identify potential Year 2000 compliance issues and has begun an
implementation process with respect thereto. It is anticipated that modification
or replacement of some of National Media's computer technology will be necessary
to enable National Media's computers to recognize the Year 2000. National Media
does not expect that the costs associated with achieving Year 2000 compliance
will have a significant effect on its business. In addition, National Media is
also dependent on third-party suppliers and vendors and will be vulnerable to
such parties' failures to address and resolve their Year 2000 issues. While
National Media is not aware of any known third party problems that will not be
corrected, National Media has limited information concerning the Year 2000
readiness of third parties. If management is incorrect, Year 2000 problems could
have a negative effect on National Media and its business.
Seasonality
National Media's revenues vary throughout the year. National Media's
revenues have historically been highest in its third and fourth fiscal quarters
and lower in its first and second fiscal quarters due to fluctuations in the
number of television viewers. These seasonal trends have been and may continue
to be affected by the timing and success of new product offerings and the
potential growth in National Media's electronic commerce and retail businesses.
Risk of Substantial Dilution
Sales of a substantial number of shares of National Media's common
stock in the public market could adversely affect the market price of National
Media's common stock. As of December 21, 1998, there were 29,630,816 shares of
National Media's common stock issued and outstanding, nearly all of which are
freely tradeable. In addition, approximately 50 million shares of National
Media's common stock are currently reserved for issuance upon the exercise of
outstanding options and warrants and the conversion of convertible preferred
stock. For example, approximately 18.5 million shares of common stock will be
issued to holders of National Media's Series D Convertible Preferred Stock
(based on a conversion price of $1.073125 per share) and approximately 13.3
million shares of common stock will be issued to holders of National Media's
Series E Convertible Preferred Stock (based on a conversion price of $1.50 per
share).
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THE COMPANY
National Media is principally engaged in the use of direct response
transactional television programming, known as infomercials, and electronic
commerce, to sell consumer products. National Media 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.
National Media 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 National Media
acquired in 1986, and internationally through its wholly-owned subsidiaries:
Quantum International Limited, which National Media acquired in 1991; Quantum
Far East Ltd., through which National Media operates in all Asian countries
other than Japan; Quantum International (Japan) Company Limited, which National
Media formed in June 1995; and Prestige Marketing Limited and Suzanne Paul
Holdings Pty Limited and its operating subsidiaries which National Media
acquired in July 1996. National Media produces infomercials through Quantum
Television (formerly d/b/a DirectAmerica Corporation), which National Media
acquired in October 1995.
National Media is a Delaware corporation, with its principal executive
offices located at 15821 Ventura Boulevard, Suite 570, Los Angeles, California
91436 and its telephone number is 818-461-6400.
RECENT DEVELOPMENTS
On October 23, 1998, National Media announced the consummation of a
transaction (the "Transaction") pursuant to which, among other things,
operational control of National Media was assumed by an investor group led by
Messrs. Lehman, Weiss and Yukelson. At a special meeting of National Media's
stockholders held earlier on October 23rd, prior to consummation of the
Transaction, National Media's stockholders approved the Transaction, elected
nine directors, approved an amendment to National Media's 1991 Stock Option Plan
and ratified the appointment of Ernst & Young LLP as National Media's auditors
for the fiscal year ending March 31, 1999.
In connection with the Transaction, NM Acquisition Co., LLC, a Delaware
limited liability company ("ACO"), invested an additional $20,000,000 into
National Media in exchange for shares of newly-created Series E Convertible
Preferred Stock ("Series E Stock") which shares are convertible into 13,333,333
shares of Common Stock. ACO is managed by Temporary Media Co., LLC, a Delaware
limited liability company ("TMC") of which Messrs. Lehman, Weiss and Yukelson
are the managing members. As part of the Transaction, TMC was granted a
five-year option to purchase up to 212,500 shares of Common Stock, subject to
certain vesting requirements, at an exercise price of $1.32 and warrants to
purchase up to 3,762,500 shares of Common Stock at an exercise price ranging
from $1.32 to $3.00, (1,000,000 of which may not be exercised by TMC or any
employee of TMC). Financing for the Transaction was obtained through the private
placement of equity interests in ACO. A portion of the $20,000,000 was used to
repay in full National Media's obligations to its secured lender. The remainder
of the funds was used to pay certain expenses of the Transaction and for working
capital purposes.
As of the closing of the Transaction, members of ACO and TMC
beneficially owned an aggregate of 26,619,854 shares of Common Stock (which
included shares of Common Stock underlying the Series E Stock, the Series D
Preferred Stock, the Series D Common Stock Warrants and the Series C Common
Stock Warrants (collectively, the "Securities")), along with the TMC options and
TMC warrants set forth above, which represented approximately 34% of the then
outstanding Common Stock on a fully diluted basis. Immediately following
consummation of the Transaction, ACO was dissolved and the Securities were
distributed to its members pro rata according to their membership interests in
ACO. In connection with the dissolution of ACO, each of its members granted TMC
an irrevocable proxy to vote their respective shares with regard to any election
of Directors.
Pursuant to the terms of the Transaction, (i) the stockholders of
National Media elected Messrs. Lehman and Weiss and Andrew M. Schuon to National
Media's Board of Directors, (ii) each of Albert R. Dowden, William M. Goldstein,
Frederick S. Hammer, Robert N. Verratti and Jon W. Yoskin resigned from the
Board of Directors, effective October 23, 1998, (iii) the size of the Board of
Directors was reduced from nine to seven members and (iv) Stuart D. Buchalter,
David E. Salzman and Robert W. Crawford were appointed to the Board of
Directors. Following consummation of the Transaction, Mr. Lehman was appointed
Chairman of the Board and Chief Executive Officer, Mr. Weiss was appointed Vice
Chairman of the Board and Chief Operating Officer, John W. Kirby was appointed
President and Mr. Yukelson was appointed Executive Vice President/Finance and
Chief Financial Officer and Secretary of National Media.
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USE OF PROCEEDS
National Media will not receive any proceeds from the sale of the
shares of Common Stock offered by the Selling Stockholders pursuant to this
Prospectus. Certain Selling Stockholders will remit the exercise price of the
TMC Options and/or certain warrants in connection with an exercise of such
securities. National Media will use the proceeds from such exercises for working
capital purposes.
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SELLING STOCKHOLDERS
The following table sets forth the name of the Selling Stockholders,
the number of shares of Common Stock beneficially owned by the Selling
Stockholders as of December 21, 1998 and the number of shares of Common Stock
which may be offered for sale pursuant to this Prospectus by such Selling
Stockholder. The Offered Shares may be offered from time to time by the Selling
Stockholder named below. See "Plan of Distribution." However, the Selling
Stockholders are under no obligation to sell all or any portion of the shares of
Common Stock offered hereby, nor are the Selling Stockholders obligated to sell
such shares of Common Stock immediately under this Prospectus. Because the
Selling Stockholders may sell all or part of the shares of Common Stock offered
hereby, no estimate can be given as to the number of shares of Common Stock that
will be held by the Selling Stockholders upon termination of any offering made
hereby.
Pursuant to Rule 416(a) under the Securities Act, the shares of Common
Stock issuable in respect of the Series E Preferred Stock, and certain warrants
and options granted in connection therewith, are subject to adjustment by reason
of stock splits, stock dividends and other similar transactions in the Common
Stock.
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Common Shares Beneficially
Owned After Offering (1)
Number of Common ---------------------------
Shares Beneficially Common Shares ---------------------------
Name of Selling Stockholder Owned Prior to Offered Hereby Percent of
Offering Number Outstanding
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Jeffrey S. Amling(2)(3) 175,645 94,261 81,384 *
Mark Armbruster(2)(3) 26,714 15,970 10,744 *
D. Geoff Armstrong(2)(3) 133,634 79,915 53,719 *
Frank Bodenchack(2)(3) 197,902 106,237 91,665 *
Brian B. Boorstein(2)(3) 21,949 11,776 10,173 *
Charles Carey(2)(3) 21,949 11,776 10,173 *
Charles William Compton(2)(3) 13,167 7,105 6,062 *
Mark Cuban(2)(3) 219,605 117,877 101,728 *
Kenny Eldridge(2)(3) 131,817 70,780 61,037 *
Essaness/National Media Partners(2)(3)(4) 534,359 319,590 214,769 *
Fifth Third Bank(2)(3) 87,856 47,164 40,692 *
Douglas S. Frankel(2)(3) 43,962 23,616 20,346 *
William Gerlach(2)(3) 439,025 235,683 203,342 *
Bruce Goodman(2)(3)(5) 1,062,462 451,529 710,933 2.4%
Gruber/McBaine International(2)(3)(6) 556,802 283,050 273,752 *
Hamarat/Helen Partners, LP(2)(3) 160,347 95,885 64,462 *
Jan E. Helen(2)(3) 26,714 15,970 10,744 *
R. Steven Hicks(2)(3) 534,359 319,590 214,769 *
Hirsch Living Trust vdt 10/30/90(2)(3) 87,856 47,164 40,692 *
Benjamin Homel (a/k/a Randy Michaels)(2)(3) 87,856 47,164 40,692 *
David Jacobs(2)(3) 43,962 23,616 20,346 *
Jacor Communications, Inc.(2)(3) 8,787,407 4,717,044 4,077,363 10.6%
Casey Kasem Inc. Retirement Trust(2)(3) 53,426 31,939 21,487 *
Timothy Kelly(2)(3) 80,208 47,977 32,231 *
John W. Kirby(2)(3)(7) 1,274,089 459,491 814,598 2.7%
Kraig T. Kitchin(2)(3) 325,711 94,328 231,383 *
Ross and Rebecca Kudwitt(2)(3) 51,714 15,970 35,744 *
Laguintas Partners, L.P.(2)(3)(6) 1,715,486 896,246 819,240 2.6%
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
Common Shares Beneficially
Owned After Offering (1)
Number of Common ---------------------------
Shares Beneficially Common Shares ---------------------------
Name of Selling Stockholder Owned Prior to Offered Hereby Percent of
Offering Number Outstanding
- --------------------------------------------------- ------------------------- -------------------- -------------- --------------
<S> <C> <C> <C> <C>
Jeffrey Craig Lamont(2)(3) 148,634 79,915 68,719 *
Robert L. Lawrence(2)(3) 65,909 35,390 30,519 *
Robert Lee(2)(3) 43,962 23,616 20,346 *
Lehman Family Trust(2)(3) 87,856 47,164 40,692 *
Stephen C. Lehman(2)(3)(8) 5,245,736 3,684,427 1,561,309
Jonathan Lieber(2)(3) 21,949 11,776 10,173 *
Howard Loewenberg(2)(3) 66,013 35,390 30,623 *
Leonard Loventhal Trust U/A/D 9/24/92(2)(3) 65,909 35,390 30,519 *
Drew Marcus(2)(3) 70,333 37,760 32,573 *
Doug Mitchelson(2)(3) 17,524 9,406 8,118 *
Robert Moore(2)(3) 175,711 94,328 81,383 *
Wilhelmina Nuehring Family Trust(2)(3)(9) 162,311 84,245 78,066 *
Thomas P. Owens(2)(3) 70,370 37,691 32,679 *
Linda Park(2)(3) 439,446 235,886 203,560 *
Harry Radutzky(2)(3) 43,962 23,616 20,346 *
Milton Radutzky(2)(3) 26,373 14,144 12,229 *
Richard Radutzky(2)(3) 21,949 11,776 10,173 *
David J. Rosen(2)(3) 65,909 35,390 30,519 *
S/L Trilling Trust(2)(3) 219,671 117,943 101,728 *
David Salzman and Sonia Salzman(2)(3) 706,643 395,647 310,996 1.0%
Andrew M. Schuon(2)(3) 43,962 23,616 20,346 *
Temporary Media Co., LLC(10) 382,100 382,1000 0 0
Talisman Capital Opportunity Fund Ltd.(2)(3) 2,228,336 1,118,598 1,109,738 3.5%
Charles Tharnstrom(2)(3) 197,902 106,237 91,665 *
R. Christopher Weber(2)(3) 43,962 23,616 20,346 *
Eric R. Weiss(2)(3)(8) 1,582,007 1,061,500 520,507 1.7%
Eric R. Weiss Charitable Remainder Trust(2)(3) 270,415 140,341 130,074 *
Jeffrey A. Wellek(2)(3) 21,949 11,776 10,173 *
Scott Wieler(2)(3) 43,962 23,616 20,346 *
Robert Wilson(2)(3) 51,714 15,970 35,744 *
Daniel M. Yukelson(2)(3)(8)(11) 649,621 493,490 156,131 *
BT Alex. Brown(12) 100,000 100,000 0 0
Van Kasper & Company(12) 17,500 17,500 0 0
Mick Hastie(12) 16,100 15,000 1,000 *
Brady Caverly(12) 62,500 50,000 12,500 *
Sue Schwartz(12) 110,333 50,000 60,333 *
Jeff Clifford(12) 60,000 50,000 10,000 *
Gary Quint(12) 51,250 40,000 11,250 *
Andrew Schuon(12) 20,000 20,000 0 0
Tony Vercillo(12) 25,000 25,000 0 0
Shirley Jones(12) 400 400 0 0
</TABLE>
-11-
<PAGE>
- -----------------------------
* Denotes less than 1%.
(1) Assumes the sale of all shares of Common Stock offered hereby. Based on
29,630,816 shares of Common Stock issued and outstanding as of December
21, 1998. National Media is not aware of any plans of any of the
Selling Stockholders to dispose of their Common Stock.
(2) Each of the Selling Stockholders is a party to a Stockholders' Voting
Agreement, which among other things, restricts the Selling
Stockholders' right to transfer the Series E Preferred Stock or Common
Stock set forth in the Selling Stockholders' Table until October 23,
1999. Pursuant to the Stockholders' Voting Agreement, each of the
Selling Stockholders has granted an irrevocable proxy with respect to
the election of Directors to Temporary Media Co., LLC ("TMC") relating
to all shares of Series E Preferred Stock, Series D Preferred Stock,
Series D Warrants and Series C Warrants held by the Selling
Stockholder. TMC is controlled by Messrs. Lehman, Weiss and Yukelson.
The proxy expires October 23, 1999.
(3) The Common Shares Offered Hereby include shares of Common Stock
issuable upon conversion of the Series E Preferred Stock. As of the
date of this Prospectus, the actual number of shares of Common Stock
issuable upon conversion of the Series E Preferred Stock is
indeterminate and is subject to change based on the amount and form of
payment of a premium payable in respect of the Series E Preferred
Stock. Pursuant to the terms of the Certificate of Designation,
Preferences and Rights of the Series E Preferred Stock, the actual
number of shares of Common Stock issuable upon conversion of the Series
E Preferred Stock will equal (i) the aggregate stated value of the
shares of Series E Preferred Stock then being converted (i.e., $1,000
per share), plus any conversion default amount (as defined in the
Certificate of Designations, Preferences and Rights of the Series E
Preferred Stock), divided by $1.50 per share. National Media is also
required to pay to the holders of the Series E Preferred Stock a
premium of 4% for one year only, which is payable on October 30, 1999.
The premium is payable, at national Media's option, in cash or shares
of Common Stock (based upon average trading price for the Common Stock
for the 30 days prior to the date of payment.
(4) Essaness Theatres Corporation is the managing general partner of the
Selling Stockholder.
(5) Mr. Goodman is a Senior Vice President of National Media.
(6) Jon D. Gruber, J. Patterson McBaine and Thomas O. Lloyd Butler share
voting and dispositive power with respect to the shares of Common Stock
offered hereby.
(7) Mr. Kirby is President of National Media and a member of its Board of
Directors.
(8) Includes shares of Common Stock issuable upon exercise of options to
purchase Common Stock and upon exercise of warrants to purchase Common
Stock originally granted to TMC. Messrs. Lehman, Weiss and Yukelson are
the managing members of TMC.
(9) Selling Stockholder is a trust of which Robert Crawford serves as
trustee. Mr. Crawford is a member of National Media's Board of
Directors.
(10) Includes shares issuable upon exercise of warrants to purchase Common
Stock. Messrs. Lehman, Weiss and Yukelson are the managing members of
TMC.
(11) Certain of the shares of Common Stock listed are held for the benefit
of three individuals.
(12) Consists of shares of Common Stock issuable upon exercise of warrants.
-12-
<PAGE>
PLAN OF DISTRIBUTION
The shares of Common Stock are being offered on behalf of the Selling
Stockholders and National Media will not receive any proceeds from the Offering.
The shares of Common Stock may be sold or distributed from time to time by the
Selling Stockholders, or by pledgees, donees or transferees of, or other
successors in interest to, the Selling Stockholders, directly to one or more
purchasers (including pledgees) or through brokers, dealers or underwriters who
may act solely as agent or may acquire such shares as principals, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, at negotiated prices, or at fixed prices, which may be subject to
change. The sale of the shares of Common Stock may be effected in one or more of
the following methods: (i) ordinary brokers' transactions, which may include
long or short sales; (ii) transactions involving cross or block trades or
otherwise on the NYSE and PHLX; (iii) purchases by brokers, dealers or
underwriters as principal and resale by such purchasers for their own accounts
pursuant to this Prospectus; (iv) "at the market" to or through market makers or
into established trading markets, including direct sales to purchasers or sales
effected through agents; (vi) any combination of the foregoing, or by any other
legally available means. In addition, the Selling Stockholders or its successor
in interest may enter into hedging transactions with broker-dealers who may
engage in short sales of shares of Common Stock in the course of hedging the
position they assume with the Selling Stockholders. The Selling Stockholders or
their successors in interest may also enter into option or other transactions
with broker-dealers that require the delivery by such broker-dealers of the
shares of Common Stock, which shares of Common Stock may be resold thereafter
pursuant to this Prospectus. There can be no assurance that all or any of the
shares of Common Stock will be issued to, or sold by, the Selling Stockholders.
Brokers, dealers, underwriters or agents participating in the sale of
the shares of Common Stock as agents may receive compensation in the form of
commissions, discounts or concessions from the Selling Stockholders and/or
purchasers of the Common Stock for whom such broker-dealers may act as agent, or
to whom they may sell as principal, or both (which compensation to a particular
broker-dealer may be less than or in excess of customary commissions). The
Selling Stockholders and any broker-dealers or other persons who act in
connection with the sale of the Common Stock hereunder may be deemed to be
"Underwriters" within the meaning of the Securities Act, and any commission they
receive and proceeds of any sale of such shares may be deemed to be underwriting
discounts and commissions under the Securities Act. Neither National Media nor
the Selling Stockholders can presently estimate the amount of such compensation.
National Media knows of no existing arrangements between the Selling
Stockholders and any other stockholders, broker, dealer, underwriter or agent
relating to the sale or distribution of the shares of Common Stock.
The Selling Stockholders and any other persons participating in the
sale or distribution of the Common Stock will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder, which
provisions may limit the timing of purchases and sales of any of the Common
Stock by the Selling Stockholders or any other such persons. The foregoing may
affect the marketability of the Common Stock.
National Media will pay substantially all of the expenses incident to
the registration, offering and sale of the Common Stock to the public other than
commissions or discounts of underwriters, broker-dealers or agents. National
Media has also agreed to indemnify the Selling Stockholders and certain related
persons against certain liabilities, including liabilities under the Securities
Act.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby has been
passed upon for National Media by National Media's outside legal counsel, Klehr,
Harrison, Harvey, Branzburg & Ellers LLP, Philadelphia, Pennsylvania.
EXPERTS
The consolidated financial statements and schedule of National Media
Corporation appearing in National Media'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
National Media'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>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows companies to "incorporate by reference" the information
filed with them, which means that National Media can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this Prospectus and
information National Media files later with the SEC will automatically update
and supersede this information. National Media incorporates by reference the
documents listed below and any future filings it will make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
(a) National Media's Annual Report on Form 10-K for the fiscal
year ended March 31, 1998;
(b) Amendment No. 1 on Form 10-K/A;
(c) National Media's Quarterly Reports on Form 10-Q for the
quarters ended June 30, 1998 and September 30, 1998;
(d) National Media's Current Reports on Form 8-K, dated April 8,
1998, June 1, 1998 , July 15, 1998, August 13, 1998 and
October 23, 1998;
(e) National Media's proxy statement on Schedule 14A, dated
September 23, 1998; and
(f) The description of National Media's Common Stock contained in
National Media's Registration Statement on Form 8-A, dated
August 28, 1990, including all amendments and reports filed
for the purpose of updating such description.
This Prospectus is part of a registration statement National Media
filed with the SEC. You should rely only on the information or representations
provided in this Prospectus. National Media has authorized no one to provide you
with different information. National Media is not offering or selling these
securities in any state where the offer or sale is not permitted. You should not
assume that the information in this Prospectus is accurate as of any date other
than the date stated on the front cover page of this Prospectus.
National Media will provide without charge to each person 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. You should direct
your requests for copies to National Media Corporation, c/o Quantum Television,
15821 Ventura Boulevard, Suite 570, Los Angeles, California 91436; Attention:
Investor Relations, telephone number 818-461-6400, facsimile number 818-
461-6525.
WHERE YOU CAN GET MORE INFORMATION
At your request, we will provide you, without charge, a copy of any
exhibits to National Media's Registration Statement. If you would like more
information, write or call us at:
National Media Corporation
Attention: Investor Relations
15821 Ventura Boulevard, Suite 570
Los Angeles, CA 91436
Telephone: (818) 461-6400
Facsimile: (818) 461-6530
National Media's fiscal year ends on March 31. National Media intends
to provide to its stockholders annual reports containing audited financial
statements and other appropriate reports. In addition, National Media files
annual, quarterly and current reports, proxy statements and other information
with the SEC. You may read and copy any reports, statements or other information
we file at the SEC's public reference room in Washington, D.C. You can request
copies of these documents, upon payment of a duplicating fee, by writing to the
SEC. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference rooms. National Media's SEC filings are also
available to the public on the SEC Internet site at http\\www.sec.gov.
-14-
<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 National Media 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.
17,508,373 Shares of Common Stock
NATIONAL MEDIA CORPORATION
PROSPECTUS
December __, 1998
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 14. Other Expenses of Issuance and Distribution.
The following is an itemized statement of the estimated amounts of all
expenses payable by National Media in connection with the registration of the
shares of Common Stock offered hereby, other than underwriting discounts and
commissions:
<TABLE>
<CAPTION>
<S> <C>
Registration Fee--Securities and Exchange Commission................... $ 43,660.00
*Blue Sky fees and expenses............................................. $ 1,000.00
*Accountants' fees and expenses ........................................ $ 7,500.00
*Legal fees and expenses ............................................... $ 15,000.00
*Printing and EDGAR expenses ........................................... $ 2,000.00
*Miscellaneous ......................................................... $ 2,500.00
-----------
Total ......................................................... $ 71,660.00
-----------
-----------
</TABLE>
- ------------------
* Estimate
Item 15. Indemnification of Directors and Officers.
National Media 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 National
Media 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 National Media
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.
Further, National Media's Certificate of Incorporation and Bylaws
provide that National Media 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 National Media 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 National Media, or is or was serving at the request
of National Media 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 National
Media, 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 National Media. In
addition, National Media 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.
II-1
<PAGE>
Item 16. Exhibits and Financial Statement Schedules.
(a) Schedule of Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------
<S> <C> <C>
4.1(1) Stock Purchase Agreement, dated August 11, 1998, by and
between National Media Corporation and NM Acquisition Co.,
LLC.
4.2(2) Option Agreement, dated August 11, 1998, in favor of Temporary
Media Co., LLC.
4.3(2) Form of Warrant, dated August 11, 1998, in favor of Temporary
Media Co., LLC.
4.4(1) Stockholders' Voting Agreement, dated August 11, 1998, between
NM Acquisition Co., LLC and its stockholders named therein.
4.5(2) Series D Stock Purchase Agreement, dated as of August 12,
1998, between NM Acquisition Co., LLC, National Media
Corporation, Rose Glen International Investors, LDC and
Capital Ventures International.
4.6(1) Certificate of Designations, Preferences and Rights of Series
E Preferred Stock, dated October 23, 1998.
4.7(1) Registration Rights Agreement, dated October 23, 1998, between
National Media Corporation and NM Acquisition Co., LLC.
5(3) Opinion and Consent of Klehr, Harrison, Harvey, Branzburg &
Ellers, LLP.
10.1(2) Consulting Agreement, dated August 11, 1998, by and between
TMC and National Media.
10.2(2) Agreement, dated August 11, 1998, among National Media, ACO
and ValueVision International, Inc.
10.3(4) Agreement, dated July 15, 1998, among National Media, ACO and
First Union National Bank.
23(3) Consent of Ernst & Young LLP, independent certified public
accountants, with respect to the consolidated financial
statements of National Media Corporation for the year ended
March 31, 1998.
</TABLE>
- ----------------
(1) Incorporated by reference to Registrant's Current Report on Form 8-K
dated October 23, 1998.
(2) Incorporated by reference to Registrant's Current Report on Form 8-K
dated August 13, 1998.
(3) Filed herewith.
(4) Incorporated by reference to Registrant's Current Report on Form 8-K
dated July 15, 1998.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(i) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(A) to include any prospectus required by section
10(a)(3) of the Securities Act;
II-2
<PAGE>
(B) to reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement.
(C) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement; provided,
however, that paragraphs (1)(i) and (1)(ii) do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
(ii) That, for the purpose of determining any liability under the
Securities Act, 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.
(iii) 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.
(iv) For purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to Section 13(a) or 15(d)
of the Exchange Act that is incorporated by reference in the 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
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act 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-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on this 22nd day of
December, 1998.
NATIONAL MEDIA CORPORATION
BY: /s/ Stephen C. Lehman
--------------------------------------
Stephen C. Lehman, Chairman of the
Board of Directors and Chief
Executive Officer
POWER OF ATTORNEY
Each of the undersigned officers and directors of National Media Corporation
whose signature appears below hereby appoints Stephen C. Lehman and Daniel M.
Yukelson 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 22nd day of December, 1998.
Signature Title(s)
--------- --------
/s/ Stephen C. Lehman Chairman of the Board of Directors
- ------------------------------------ and Chief Executive Officer
Stephen C. Lehman
/s/ Daniel M. Yukelson Executive Vice President/Finance and
- ------------------------------------ Chief Financial Officer, and
Daniel M. Yukelson Secretary
/s/ Stuart D. Buchalter Director
- ------------------------------------
Stuart D. Buchalter
/s/ Robert W. Crawford Director
- ------------------------------------
Robert W. Crawford
/s/ John W. Kirby President and Director
- ------------------------------------
John W. Kirby
/s/ David E. Salzman Director
- ------------------------------------
David E. Salzman
/s/ Andrew M. Schuon Director
- ------------------------------------
Andrew M. Schuon
/s/ Eric R. Weiss Vice Chairman of the Board of
- ------------------------------------ Directors and Chief Operating
Eric R. Weiss Officer
<PAGE>
EXHIBIT 5
<PAGE>
[LETTERHEAD OF KLEHR, HARRISON, HARVEY, BRANZBURG & ELLERS LLP]
December 23, 1998
Board of Directors
National Media Corporation
15821 Ventura Boulevard, Suite 570
Los Angeles, CA 91436
RE: Registration Statement on Form S-3
Gentlemen:
We have acted as counsel to National Media Corporation, a Delaware
corporation (the "Company"), in connection with the preparation of the Company's
Registration Statement on Form S-3 (the "Registration Statement") being filed
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"). The Registration Statement
relates to the resale of up to 17,508,373 shares of the Company's common stock,
par value $.01 per share (the "Shares"), consisting of the following: (i)
13,533,373 shares issuable upon conversion of the Company's Series E Convertible
Preferred Stock, par value $.01 per share (the "Series E Preferred Stock"); (ii)
212,500 Shares issuable upon exercise of options (the "Options"); and (iii)
3,762,500 Shares issuable upon exercise of warrants (the "Warrants").
In connection with this opinion, we have examined and relied upon the
original or copies of (i) the Certificate of Incorporation and the By-laws of
the Company, (ii) minutes and records of the corporate proceedings with respect
to the issuance of the Shares, and (iii) such other documents as we have deemed
necessary as a basis for the opinion hereinafter set forth.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to the opinions expressed herein that were not independently established or
verified, we have relied upon oral or written statements and representations of
officers and other representatives of the Company and others.
This opinion is limited to the laws of the State of Delaware and we
express no opinion as to the laws of any other jurisdiction.
Based upon and subject to the foregoing, we are of the opinion that (i)
the Shares issuable upon conversion of the Series E Preferred Stock, when issued
upon conversion of the Series E Preferred Stock in accordance with the
Certificate of Designations, Rights and Preferences of the Series E Preferred
Stock, will be validly issued, fully paid and non-assessable; and (ii) the
Shares issuable upon exercise of the Options and the Warrants, when issued upon
exercise of the Options and the Warrants, respectively, in accordance with their
terms, will be validly issued, fully paid and non-assessable.
This opinion is being furnished to you solely for your benefit in
connection with the Registration Statement and is not to be used, circulated,
quoted or referred to or relied upon for any other purpose without our express
written permission.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Act, or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Klehr, Harrison, Harvey, Branzburg & Ellers LLP
<PAGE>
EXHIBIT 23
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of National Media
Corporation for the registration of 17,508,373 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, PA
December 23, 1998
