-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VweC301NZZdt6i1PY+7Bjywr3EMiHNOqk2vKMhpp2CCW5nIIdJkR2KkGbZZvBe0p wKk8p8boQ4JuaTxwH3i0Fg== 0001047469-98-045102.txt : 19981228 0001047469-98-045102.hdr.sgml : 19981228 ACCESSION NUMBER: 0001047469-98-045102 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19981224 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL MEDIA CORP CENTRAL INDEX KEY: 0000070412 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CATALOG & MAIL-ORDER HOUSES [5961] IRS NUMBER: 132658741 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-69743 FILM NUMBER: 98775815 BUSINESS ADDRESS: STREET 1: 15821 VENTURA BOULEVARD STREET 2: SUITE 570 CITY: ENCINO STATE: CA ZIP: 91416 BUSINESS PHONE: 8184616400 MAIL ADDRESS: STREET 1: 15821 VENTURA BOULEVARD STREET 2: SUITE 570 CITY: ENCINO STATE: CA ZIP: 91416 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL PARAGON CORP DATE OF NAME CHANGE: 19870827 S-3 1 FORM-S-3 As filed with the Securities and Exchange Commission on December 24, 1998 Registration No. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- 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) ------------------ 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.|_|
CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------------------------------------------ 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 Common Stock, par value $.01 per share 17,508,373(1) $8.97/share (2) $157,050,100 (2) $43,660.00 (2) - -------------------------------------------------------------------------------------------------------------------
(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. "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. SUBJECT TO COMPLETION PROSPECTUS NATIONAL MEDIA CORPORATION 15821 Ventura Boulevard Suite 570 Los Angeles, California 91436 (818) 461-6400 ------------------------------------ 17,508,373 Shares of Common Stock ------------------------------------ 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. ------------------------------------ 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. TABLE OF CONTENTS
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
-2- 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; -3- - 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. -4- 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. -5- 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 -6- 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). -7- 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. -8- 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. -9- 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.
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 - --------------------------------------------------- ------------------------- -------------------- -------------- -------------- 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%
-10-
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 - --------------------------------------------------- ------------------------- -------------------- -------------- -------------- 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
-11- - ----------------------------- * 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- 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- 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- 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 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:
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 ----------- -----------
- ------------------ * 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 Item 16. Exhibits and Financial Statement Schedules. (a) Schedule of Exhibits.
Exhibit Number Exhibit ------- ------- 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.
- ---------------- (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 (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 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 EX-5 2 EX-5 EXHIBIT 5 [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 EX-23 3 EX-23 EXHIBIT 23 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 -----END PRIVACY-ENHANCED MESSAGE-----