ROCKAWAY - A demonstration planned by students protesting the regional district's firing of 12 teachers failed to materialize as students were entertained by author Jean Shephard instead. Student organizers said a walk-out would take place during the Shepherd assembly when about 800 students were released from classes. John Kwitowski, Morris Hills principal, denied any administrator under his authority threatened students with retaliatory action as student sources alleged. "No one here threatened the students. We talked to who we believed were the organizers and they agreed to stop plans for the demonstration. Tile principal was critical of press coverage relating to the possibility of a demonstration charging it could spark future action. He added the reporting ''was a disservice to Morris Hills and the communities sending students here."