As filed with the Securities and Exchange Commission on October 13, 1999
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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HYPERION TELECOMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 4813 25-1669404
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
One North Main Street James P. Rigas
Coudersport, Pennsylvania 16915 Chief Executive Officer
(814) 274-9830 Hyperion Telecommunications, Inc.
(Address, including zip code, and One North Main Street
telephone Coudersport, Pennsylvania 16915
number, including area code, of (814) 274-9830
registrant's (Name, address, including zip code, and
principal executive offices) telephone number, including area code,
of agent for service)
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Please address a copy of all communications to:
Carl E. Rothenberger, Jr., Esquire
Buchanan Ingersoll
Professional Corporation
21st Floor, 301 Grant Street
Pittsburgh, Pennsylvania 15219
(412) 562-8800
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are being 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 reinvestment 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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Title of each class of Proposed maximum Amount of
securities to be registered aggregate offering price(1) registration fee(1)
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Debt Securities................ -- --
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Preferred Stock (par value $.01
per share).................... -- --
Debt Securities, Preferred
Stock, Depositary Shares,
Class A Common Stock (par
value $.01 per share) and
Class B Common Stock (par
value $.01 per share) issuable
upon conversion of any
convertible Debt Securities,
Preferred Stock, Depositary
Shares or Class B Common
Stock(2)...................... -- --
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Depositary Shares(3)........... -- --
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Class A Common Stock (par value
$.01 per share)............... -- --
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Class B Common Stock (par value
$.01 per share)............... -- --
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Other Equity Securities(4)..... -- --
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TOTAL......................... $1,500,000,000(5) $417,000
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(continued on next page)
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(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(o) under the Securities Act of 1933,
as amended (the "Securities Act"). There are being registered an
indeterminate number of Debt Securities, Preferred Stock, Depositary
Shares, Class A Common Stock and Class B Common Stock and Other Equity
Securities of Hyperion Telecommunications, Inc. The aggregate public
offering price of the Debt Securities, Preferred Stock, Class A Common
Stock and Class B Common Stock of Hyperion Telecommunications, Inc.
registered hereby will not exceed $1,500,000,000.
(2) Consists of such indeterminate amount of Debt Securities and number of
shares of such Class A Common Stock, Class B Common Stock, Preferred Stock
or Depositary Shares of Hyperion Telecommunications, Inc. issuable
pursuant to any conversion rights which are part of the Debt Securities,
Preferred Stock, Depositary Shares and Class B Common Stock of Hyperion
Telecommunications, Inc. sold pursuant to this Registration Statement.
(3) In the event that the Registrant elects to offer to the public fractional
interests in shares of Preferred Stock registered under this Registration
Statement, Depositary Shares, evidenced by depositary receipts issued
under a deposit agreement, will be distributed to those persons purchasing
such fractional interests, and the shares of Preferred Stock will be
issued to the depositary under the deposit agreement.
(4) Other Equity Securities may consist of stock purchase contracts, rights to
purchase equity securities, hybrid equity securities and any other type of
interest in the Preferred Stock, Class A Common Stock and/or Class B
Common Stock or other equity of the Registrant.
(5) The aggregate initial offering price of all securities registered pursuant
to this Registration Statement and offered from time to time will not
exceed $1,500,000,000. Any securities registered hereunder may be sold
separately or with other securities registered hereunder.
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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 of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in the prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the SEC +
+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 prohibited. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 13, 1999
Prospectus
HYPERION TELECOMMUNICATIONS, INC.
Debt Securities
Preferred Stock
Depositary Shares
Class A Common Stock
Class B Common Stock
Other Equity Securities
This prospectus relates to:
. Hyperion Telecommunications, Inc.'s debentures, notes and other debt
securities in one or more series which may be senior debt securities or
subordinated debt securities,
. shares of our preferred stock issuable in series designated by our board of
directors,
. fractional interests represented by depositary shares in shares of our
preferred stock issuable in series designated by our board of directors,
. shares of our Class A common stock,
. shares of our Class B common stock, which may be offered in combination or
separately from time to time by us, and
. other equity securities such as stock purchase contracts or rights to
purchase our preferred stock, Class A common stock or Class B common stock
or other interests in the equity of Hyperion.
The aggregate initial offering price of all of the securities which may be
sold pursuant to this prospectus will not exceed U.S. $1,500,000,000, or its
equivalent based on the applicable exchange rate at the time of issue in one or
more foreign currencies or currency units as shall be designated by Hyperion.
The Class A common stock is quoted on the Nasdaq National Market. The Class A
common stock's ticker symbol is "HYPT." On October 12, 1999, the closing sale
price on the Nasdaq National Market of a single share of Class A common stock
was $28.25.
Our common stock includes Class A and Class B common stock. The rights of
holders of the Class A common stock and Class B common stock are the same
except that Class B common stock holders have 10 votes per share and have the
right to convert their shares of Class B common stock into Class A common
stock.
You should carefully review "Risk Factors" beginning on page 3 for a
discussion of things you should consider when investing in securities of
Hyperion.
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Neither the SEC nor any state securities commission has approved or
disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
This Prospectus May Not Be Used To Consummate Sales Of Securities Unless
Accompanied By A Prospectus Supplement.
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The date of this Prospectus is , 1999.
TABLE OF CONTENTS
Hyperion............................................................................... 2
Risk Factors........................................................................... 3
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.............. 13
Dilution............................................................................... 13
Use of Proceeds........................................................................ 13
Description of Debt Securities......................................................... 13
Description of Capital Stock........................................................... 24
Book Entry Issuance.................................................................... 28
Plan of Distribution................................................................... 30
Where You Can Find More Information.................................................... 31
Legal Matters.......................................................................... 32
Experts................................................................................ 32
SUMMARY
"We," "our," "ours," "us" or "Hyperion" means Hyperion Telecommunications,
Inc. together with its majority-owned subsidiaries, except where the context
otherwise requires. Unless the context otherwise requires, references to the
networks mean the telecommunications networks in operation or under
construction owned as of June 30, 1999 which are wholly and majority-owned
subsidiaries of Hyperion or joint ventures managed by Hyperion and in which
Hyperion holds less than a majority equity interest with one or more other
partners, and the additional networks under development as of such date. This
summary may not contain all the information that may be important to you. You
should read the entire prospectus and those documents incorporated by reference
into this document, including the risk factors, financial data and related
notes, before making an investment decision.
Hyperion
We are an integrated communications services provider in the eastern United
States. This means that we provide our customers with alternatives to the
incumbent local telephone company for local telephone and other
telecommunications services. Hyperion's telephone operations are referred to as
being facilities based, which means we generally own a large portion of the
local telecommunications networks and facilities we use to deliver these
services, rather than leasing or renting the use of another party's networks to
do so. We offer a full range of communications services to customers that
include businesses, governmental and educational end users and other
telecommunications service providers. Our communications services include local
switch dial tone (also known as local phone service), long distance service,
high speed data services, and Internet connectivity. The customer has a choice
of receiving these services individually or as part of a bundle of services. In
order to take advantage of the improved economic returns from providing
services over our own network system, we are in the process of significantly
expanding the reach of our network system. This network system expansion, which
will allow us to offer our services in over 200 markets throughout the
continental United States, includes the purchase, lease or construction of
fiber optic network facilities in more than 160 new markets and the
interconnection of all of our existing and new markets with our own fiber optic
network facilities. As of June 30, 1999, we managed and operated
telecommunications networks serving 40 metropolitan statistical areas.
Hyperion's Class A common stock is quoted on the Nasdaq National Market under
the symbol "HYPT."
Our executive offices are located at One North Main Street, Coudersport,
Pennsylvania 16915, and our telephone number is (814) 274-9830.
Recent Developments
Please see the applicable prospectus supplement and Hyperion's recent public
filings for recent developments.
2
RISK FACTORS
Before you invest in Hyperion's securities, you should be aware that there
are various risks, including those described below. You should consider
carefully these risk factors together with all of the other information
included in this prospectus before you decide to purchase any securities of
Hyperion.
High Level Of
Indebtedness
As of June 30, 1999, Hyperion has a substantial amount of debt. We
we owed approximately borrowed this money to purchase and to expand our
$1.1 billion. Our high telecommunications systems and other operations
level of indebtedness and, to a lesser extent, for investments and loans
can have important to our affiliates. At June 30, 1999, our
adverse consequences to indebtedness and redeemable preferred stock totaled
us and to you. approximately $1,121,878,000. This included
approximately:
. $236,745,000 of 13% senior discount notes due
2003;
. $250,000,000 of 12 1/4% senior secured notes
due 2004 which are secured by the equity we
own in some of our telephone networks;
. $300,000,000 of 12% senior subordinated notes
due 2007; and
. $244,153,000 of redeemable preferred stock
due October 15, 2007.
Commencing 1999 we We will have to start funding cash payments on
will have to begin these debts as follows:
funding substantial cash
payments.
. commencing May 1, 1999--semi-annual interest
payments of $18,000,000 on the 12% senior
subordinated notes;
. commencing March 1, 2001--semi-annual
interest payments of $15,300,000 on our 12
1/4% senior secured notes due 2004;
. commencing October 15, 2001--semi-annual
interest payments of $19,800,000 on our 13%
senior discount notes due 2003;
. commencing October 15, 2002--quarterly cash
dividends of approximately $12,200,000 on our
redeemable preferred stock.
This could affect our
ability to invest in our Our high level of indebtedness can have important
business in the future adverse consequences to us and to you. In the
as well as our ability future it will require that we spend a substantial
to react to changes in portion of the cash we get from our business to
our industry or economic repay the principal and interest on these debts.
downturns. Otherwise, we could use these funds for general
corporate purposes or for capital improvements. Our
ability to obtain new loans for working capital,
capital expenditures, acquisitions or capital
improvements may be limited by our current level of
debt. In addition, having such a high level of debt
could limit our ability to react to changes in our
industry and to economic conditions generally and
may put us at a competitive disadvantage to
competitors who have lower debt levels.
3
Subordinated Notes Are
Subordinated To Our If we issue subordinated notes, these notes will be
Other Borrowings subordinated in right of payment to all of our
current and future senior debt. Upon any
distribution to our creditors in a liquidation or
dissolution of Hyperion or in a bankruptcy,
reorganization, insolvency, receivership or similar
proceeding relating to us or our property, the
holders of senior debt will be entitled to be paid
in full before any payment may be made with respect
to subordinated notes. In the event of a
bankruptcy, liquidation or reorganization of
Hyperion, holders of subordinated notes will
participate ratably with all holders of existing
subordinated indebtedness of Hyperion that is
deemed to be of the same class as the subordinated
notes, and potentially with all other general
creditors of Hyperion, based upon the respective
amounts owed to each holder or creditor, in the
remaining assets of Hyperion. We cannot guarantee
that there would be sufficient assets to pay
amounts due on the subordinated notes. As a result,
holders of subordinated notes may receive less,
ratably, than the holders of senior debt. Senior
creditors may also have the right upon a default
under their loan agreements to block payments being
made to holders of subordinated notes. The
subordination provisions will be described in the
applicable prospectus supplement for the
subordinated notes. As of June 30, 1999, the
aggregate amount of our senior debt was
approximately $486.7 million.
In the event of a
bankruptcy, subordinated
noteholders may receive
less than other
creditors because senior
creditors are entitled
to be paid in full
before subordinated
noteholders receive any
payment.
Our Business Requires Our business requires substantial additional
Substantial Additional financing on a continuing basis for capital
Financing And If We Do expenditures and other purposes including:
Not Obtain That
Financing, We May Not Be
Able To Expand Our
Networks, Offer
Services, Make Payments
When Due or Refinance
Existing Debt.
. installing additional electronics and
computers in our telephone networks that
route a telephone caller to the number he or
she dialed,
. expanding our Network Operations and Control
Center and improving our existing telephone
networks,
. designing, constructing and developing, or
acquiring, new telephone networks,
. continued purchasing of our partners'
interests in the telephone networks we do not
wholly own, and
. scheduled principal and interest payments on
our debt.
There can be no guarantee that we will be able to
issue additional debt or sell stock or other
additional equity on satisfactory terms, or at all,
to meet our future financing needs.
We Have Had Large We have incurred substantial net losses for each
Losses, And We Expect year of operations since our inception in 1991. Our
This To Continue recent net losses applicable to our common
stockholders were approximately as follows:
. fiscal year ended March 31, 1996--
$13,620,000;
. fiscal year ended March 31, 1997--
$30,547,000;
. fiscal year ended March 31, 1998--
$81,491,000;
. nine months ended December 31, 1998--
$95,302,000; and
. six months ended June 30, 1999--$82,539,000.
4
Our earnings have
been insufficient to pay Our earnings could not pay for our combined fixed
for our fixed charges charges and preferred stock dividends during these
and preferred stock periods by the amounts set forth in the table
dividends below.
Earnings
Deficiency
------------
.fiscal year ended March 31, 1997 $ 30,288,000
.fiscal year ended March 31, 1998 $ 85,762,000
.nine months ended December 31, 1998 $105,525,000
.six months ended June 30, 1999 $ 90,046,000
If we cannot Historically, we have depended on getting
refinance our debt or additional borrowings and selling equity to meet
obtain new loans, we our cash needs. Although in the past we have been
would likely have to able to obtain additional borrowings and sell
consider various options equity, there can be no guarantee that we will be
such as the sale of able to do so in the future or that the cost to us
additional equity or or the other terms which would affect us would be
some of our assets to as favorable to us as our current indentures. The
meet the principal and covenants in our indentures for our current debt
interest payments we limit our ability to borrow more money.
owe, negotiate with our
lenders to restructure
existing loans or
explore other options
available under
applicable laws
including those under
reorganization or
bankruptcy laws. We
cannot guarantee that
any options available to
us would enable us to
repay our debt in full.
Holding Company Hyperion directly owns no significant assets other
Structure than stock, partnership interests, equity and other
interests in its operating companies. Hyperion does
not receive cash flow from operations except to the
extent that its operating companies pay management
fees or make distributions to it. In the event of
an insolvency of an operating company, creditors of
that operating company would be entitled to be paid
in full before dividends or other distributions
would be made to Hyperion. In addition, Hyperion
does not own a controlling interest in some of
these operating companies. This business structure
creates risks regarding Hyperion's obtaining cash
from its business operations which could adversely
affect its ability to repay the interest and
principal which it owes, to get new loans, to fund
future development of existing networks and new
networks and to pay cash dividends to its common
stockholders in the future.
Hyperion depends on
its subsidiaries' and
joint ventures' cash
payments and
distributions to fund
its cash needs.
New Service Acceptance
By Customers We are in the process of introducing a number of
services, primarily local exchange services, that
we believe are important to our long-term growth.
The success of these services will be dependent
upon, among other things, the willingness of
customers to accept us as a new provider of such
new telecommunications services. There is no
guarantee that this acceptance will occur, and the
lack of this acceptance could have a material
adverse effect on Hyperion.
Risks From Rapid
Expansion
We are in a period of rapid expansion which we
believe will continue and may even accelerate in
the foreseeable future. The operating
5
complexity of Hyperion, as well as the
responsibilities of management personnel, have
increased as a result of this expansion. Our
ability to manage this growth effectively will
require us to continue to expand and improve our
operational and financial systems and to expand,
train and manage our employee base. In addition,
Hyperion and its operating companies have
significantly increased, and intend to continue,
the hiring of additional sales and marketing
personnel. We cannot guarantee that these new
personnel will be successfully integrated into
Hyperion or the operating companies or that we can
hire a sufficient number of qualified personnel.
Our inability to effectively manage the hiring of
additional personnel and expansion could have a
material adverse effect on our business and results
of operations.
The expansion of Hyperion is also dependent upon
the expansion of our fiber optic network through
the continued acquisition of indefeasible rights of
use (IRUs) for local and long-haul fiber optic
plant or Hyperion built fiber optic plant when IRUs
are not available or cost justified. If new IRUs
cannot be obtained or if such fiber optic plant is
not delivered or built by Hyperion on a timely
basis, the development of the new markets and the
interconnection of existing and new networks may be
delayed, which could have a material adverse effect
on Hyperion.
Control By Adelphia As of June 30, 1999, Adelphia Communications
Corporation beneficially owned shares representing
about 66% of the total number of outstanding shares
of both classes of our common stock and about 90%
of the total number of outstanding shares of our
Class B common stock. As a result of Adelphia's
stock ownership, Adelphia has the power to elect
all of our directors. In addition, Adelphia could
control stockholder decisions on other matters such
as amendments to our Certificate of Incorporation
and Bylaws, and mergers or other fundamental
corporate transactions. Adelphia could also
transfer control of Hyperion to an unrelated third
person by transferring our Class B common stock.
Adelphia can control
and can transfer control
of stockholder decisions
on very important
matters.
There Are Potential Adelphia's activities could present a conflict of
Conflicts Of Interest interest with us, such as pursuing business
Between Hyperion And opportunities in the telecommunications industry.
Adelphia In addition, there have been and will continue to
be transactions between us and Adelphia or the
other entities or persons they own or have
affiliations with. Our debt indentures contain
covenants that place some restrictions on
transactions between us and our affiliates.
Need To Obtain Permits We expect that in connection with our planned
And Rights-of-Way construction and development of new networks that
we must obtain and maintain permits and rights-of-
way for the cabling needed to develop and operate
such networks. In addition, we may require pole
attachment or conduit use agreements with incumbent
local exchange carriers, utilities or other local
exchange carriers to operate existing networks and
new networks. There is no guarantee that Hyperion,
its operating companies, its local partners, or
Adelphia will be able to obtain new permits and
rights-of-way, pole attachment and conduit use, to
maintain existing permits and rights-of-way or to
obtain and maintain the other permits and rights-
of-way needed to develop and operate existing
networks and new networks.
6
Failure to obtain or maintain necessary permits,
rights-of-way and agreements could have a material
adverse effect on Hyperion's ability to operate and
expand its networks.
In addition, the amount of lease payments made by
our operating companies could be affected by the
costs our local partners incur for attachments to
poles, or use of conduit, owned by incumbent local
exchange carriers or electric utilities. Various
state public utility commissions and the FCC are
reviewing whether use of local partner facilities
for telecommunications purposes (as occurs when our
operating companies lease fiber optic capacity from
local partners) should entitle incumbent local
exchange carriers and electric utilities to raise
pole attachment or conduit occupancy fees. Such
increased fees could result in an increase in the
amount of the lease payments made by our operating
companies to the local partners and could have a
significant adverse impact on the profitability of
our operating companies and our results of
operations.
Competition
In each of our markets, the competitive local
Hyperion's operations exchange carrier services offered by us compete
are subject to risk principally with the services offered by the
because Hyperion incumbent local telephone exchange carrier company
competes principally serving that area. Local telephone companies have
with established local long-standing relationships with their customers,
telephone companies that have the potential to subsidize competitive
have long-standing services from monopoly service revenues, and
utility relationships benefit from favorable state and federal
with their customers and regulations. The merger of Bell Atlantic and NYNEX
pricing flexibility for created a very large company whose combined
local telephone territory covers a substantial portion of our
services. current markets. Other combinations are occurring
in the industry, which may have a material adverse
effect on us.
We think that local telephone companies will gain
increased pricing flexibility from regulators as
competition increases. Our operating results and
cash flow could be materially and adversely
affected by actions by regulators, including
permitting the incumbent local telephone companies
in our markets to do the following:
. lower their rates substantially;
. engage in aggressive volume and term discount
pricing practices for their customers; or
. charge excessive fees to us for
interconnection to the incumbent local
telephone company's networks.
If the regional Bell
telephone companies The regional Bell operating companies can now
could get regulatory obtain regulatory approval to offer long distance
approval to offer long services if they comply with the interconnection
distance service in requirements of the federal Telecommunications Act
competition with our of 1996. To date, the FCC has denied the requests
significant customers, for approval filed by regional Bell operating
some of our major companies in our operating areas. However, an
customers could lose approval of such a request could result in
market share. decreased market share for the major long distance
carriers which are among our significant customers.
This could have a material adverse effect on us.
7
The regional Bell
telephone companies Some of the regional Bell operating companies have
continue to seek other also recently filed petitions with the FCC
regulatory approvals requesting waivers of other obligations under the
that could significantly federal Telecommunications Act of 1996. These
enhance their involve services we also provide such as high speed
competitive position data, long distance, and services to Internet
against us. Service Providers. If the FCC grants the regional
Bell operating companies' petitions, this could
have a material adverse effect on us.
Potential competitors Our potential competitors include other competitive
to our local exchange carriers, incumbent local telephone
telecommunications companies which are not subject to regional Bell
services include the operating companies' restrictions on offering long
regional Bell telephone distance service, AT&T, MCIWorldCom, Sprint and
companies, AT&T, other long distance carriers, cable television
MCIWorldCom and Sprint, companies, electric utilities, microwave carriers,
electric utilities and wireless telecommunications providers and private
other companies that networks built by large end users. Both AT&T and
have advantages over us. MCIWorldCom have announced that they have begun to
offer local telephone services in some areas of the
country, and AT&T recently announced a new wireless
technology for providing local telephone service.
AT&T and Tele-Communications, Inc. also recently
merged and MCIWorldCom and Sprint announced that
they will merge. Although we have good
relationships with the long distance carriers, they
could build their own facilities, purchase other
carriers or their facilities, or resell the
services of other carriers rather than use our
services when entering the market for local
exchange services.
Many of our current and potential competitors,
particularly incumbent local telephone companies,
have financial, personnel and other resources
substantially greater than our resources, as well
as other competitive advantages over us.
We Are Subject To The federal Telecommunications Act of 1996
Extensive Regulation substantially changed federal, state and local laws
and regulations governing telecommunications
businesses. This law could materially affect the
growth and operation of the telephone industry and
the services we provide. There are numerous
rulemakings that have been and continue to be
undertaken by the FCC which will interpret and
implement the provisions of this law. Furthermore,
portions of this law have been, and likely other
portions will be, challenged in the courts. In
addition, the federal Telecommunications Act of
1996 removes entry barriers for all companies and
could increase substantially the number of
competitors offering comparable services in our
markets or potential markets. We cannot predict the
outcome of such rulemakings or lawsuits or the
short- and long-term effect, financial or
otherwise, of this law and FCC rulemakings on us.
Furthermore, we cannot guarantee that rules adopted
by the FCC or state regulators or other legislative
or judicial initiatives relating to the
telecommunications industry will not have a
material adverse effect on us.
The federal
Telecommunications Act
of 1996 may have a
significant impact on
our businesses.
Although the federal Telecommunications Act of 1996
requires local telephone companies to interconnect
with and sell services to us, these interconnection
agreements may have short terms, requiring us
renegotiate them repeatedly. Local telephone
companies may not provide timely or adequate
service to us which would impair our reputation
with customers who could easily change back to
using the local telephone
8
company. In addition, the prices we pay in these
agreements may be subject to significant increases
if state public utility commissions establish
prices to pass on to competitive local exchange
carriers part of the cost of providing universal
service.
Our operating companies that provide intrastate
services are also generally subject among other
matters to certification and tariff filing
requirements by state regulators. Challenges to our
tariffs and certificates by third parties or by the
states could cause us to incur substantial legal
and administrative expense.
Risks Related To Local Local multipoint distribution service is a new
Multipoint Distribution service. Major telecommunications equipment
Service Strategy manufacturers are currently introducing products
for the local multipoint distribution service
frequency band. As a result, no wireless local loop
systems are currently operating under local
multipoint distribution service, and implementation
of such systems could be subject to unforeseen
delays, costs and possible quality and
implementation issues. Material aspects of our
local multipoint distribution service
implementation strategy are still being developed
and defined, and there can be no guarantee that we
will develop and implement a successful and
profitable local multipoint distribution service
strategy, or that implementation of our local
multipoint distribution service strategy will not
involve substantial cost.
Rapid Technological The telecommunications industry is subject to rapid
Change and significant changes in technology. While we
believe that for the foreseeable future these
changes will neither materially affect the
continued use of fiber optic telecommunications
networks nor materially hinder our ability to
acquire necessary technologies, the effect of
technological changes on our business cannot be
predicted. Thus, there can be no guarantee that
technological developments will not have a material
adverse effect on us.
Year 2000 Issues Present The year 2000 issue refers to the inability of
Risks To Our Business computerized systems and technologies to recognize
Operations In Several and process dates beyond December 31, 1999. This
Ways could present risks to the operation of our
business in several ways. Our computerized business
applications that could be adversely affected by
the year 2000 issue include:
. information processing and financial
reporting systems,
. customer billing systems,
. customer service systems,
. telecommunication transmission and reception
systems, and
. facility systems.
System failure or miscalculation could result in an
inability to process transactions, send invoices,
accept customer orders or provide customers with
products and services. Although we are evaluating
the impact of the year 2000 issue on our business
and are seeking to implement necessary solutions,
this process has not been completed.
9
There can be no assurance that the systems of other
companies on which our systems rely will be year
2000 ready or timely converted into systems
compatible with our systems. Our failure or a
third-party's failure to become year 2000 ready, or
our inability to become compatible with third
parties with which we have a material relationship,
may have a material adverse effect on us, including
significant service interruption or outages;
however, we cannot currently estimate the extent of
any such adverse effects.
Dependence Upon Network Our success in marketing our services to business
Infrastructure, Risk Of and government users requires that we provide
System Failure Or superior reliability, capacity and security through
Security Breach our network infrastructure. Our networks are
subject to physical damage, power loss, capacity
limitations, software defects, breaches of security
(by computer virus, break-ins or otherwise) and
other factors, any of which may cause interruptions
in service or reduced capacity for our customers.
Interruptions in service, capacity limitations or
security breaches could have a material adverse
effect on us.
Dependence On Key Our growth strategy depends in large part on our
Personnel ability to attract and retain key management,
marketing and operations personnel. Currently, our
business is managed by a small number of management
and operating personnel with certain other
services, including financial and certain
accounting services, provided by Adelphia. There
can be no assurance that we will attract and retain
the qualified personnel needed to manage, operate
and further develop our business. In addition, the
loss of the services of any one or more members of
our senior management team could have a material
adverse effect on Hyperion.
Dependence On Business For the nine months ended December 31, 1998 and the
From Interexchange six months ended June 30, 1999, approximately 18%
Carriers and 13%, respectively, of the operating companies'
combined revenues were attributable to access
services provided to MCIWorldCom and AT&T. The loss
of access revenues from interexchange carriers in
general or the loss of MCIWorldCom or AT&T as a
customer could have a material adverse effect on
our current revenue stream.
In addition, the federal Telecommunications Act of
1996 establishes procedures under which the
regional Bell operating companies can obtain
authority to compete with the interexchange
carriers in the long distance market, which could
result in a decreased market share for
interexchange carriers. Due to our operating
companies' dependence on business from
interexchange carriers, any significant loss of
market share by the interexchange carriers could
have a material adverse effect on us.
We May Not Have The Our current public debt indentures contain
Resources To Make provisions requiring Hyperion, upon a change of
Required Repurchases of control, to offer to redeem the notes issued under
Our Debt If A Change of those indentures. In the event a change of control
Control Occurs occurs, there is no assurance that Hyperion will
have the ability to make an offer to redeem these
notes, that it will have sufficient funds to
repurchase all of these notes or that it would be
able to obtain any additional debt or equity
financing in an amount sufficient to repurchase
these notes or notes which may be offered by this
prospectus and a related prospectus supplement.
10
Unequal Voting Rights Of
Stockholders Hyperion has two classes of common stock--Class A
which carries one vote per share and Class B which
carries ten votes per share. The holders of Class B
common stock can control the outcome of matters
being voted upon by the stockholders such as the
election of directors.
It Is Unlikely You Will Hyperion has never declared or paid cash dividends
Receive A Return On Your on any of its common stock and has no intention of
Shares Through The doing so in the forseeable future. As a result, it
Payment Of Cash is unlikely that you will receive a return on your
Dividends shares through the payment of cash dividends.
Purchasers Of Our Common Persons purchasing common stock will incur
Stock Will Incur immediate and substantial net tangible book value
Immediate Dilution dilution.
Future Sales Of Sales of a substantial number of shares of Class A
Outstanding Common Stock common stock or Class B common stock could
Could Adversely Affect adversely affect the market price of our Class A
The Market Price Of Our common stock and could impair our ability in the
Common Stock future to raise capital through stock offerings. If
all of our existing holders of our warrants and our
Class B common stock exercised their existing
rights as of June 30, 1999 to receive Class A
common stock, we would issue approximately an
additional 33.1 million shares of Class A common
stock.
Forward-Looking The statements contained or incorporated by
Statements In This reference in this prospectus that are not
Prospectus Are Subject historical facts are "forward-looking statements"
To Risks and and can be identified by the use of forward-looking
Uncertainties terminology such as "believes," "expects," "may,"
"will," "should," "intends" or "anticipates" or the
negative thereof or other variations thereon or
comparable terminology, or by discussions of
strategy that involve risks and uncertainties.
Certain information included or incorporated by
reference in this prospectus, is forward-looking,
such as information relating to the effects of
future regulation, future capital commitments and
the effects of competition. These statements appear
in a number of places in this prospectus and our
most recent Form 10-K and Form 10-Q, including
"Summary," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and
"Business," and include statements regarding the
intent, belief and current expectations of Hyperion
and its directors and officers. Such forward-
looking information involves important risks and
uncertainties that could significantly affect
expected results in the future from those expressed
in any forward-looking statements made by, or on
behalf of, Hyperion. These risks and uncertainties
include, but are not limited to, uncertainties
relating to Hyperion's ability to successfully
market its services to current and new customers,
access markets on a nondiscriminatory basis,
identify, design and construct fiber optic
networks, install cable and facilities (including
switching electronics), and obtain rights-of-way,
building access rights and any required
governmental authorizations, franchises and
permits, all in a timely manner, at reasonable
costs and on satisfactory terms and conditions, as
well as risks and uncertainties
11
relating to general economic conditions, the cost
and availability of capital, acquisitions and
divestitures, government and regulatory policies,
the pricing and availability of equipment,
materials, and inventories, technological
developments, year 2000 issues and changes in the
competitive environment in which Hyperion operates.
Persons reading this prospectus are cautioned that
such statements are only predictions and that
actual events or results may differ materially. In
evaluating such statements, readers should
specifically consider the various factors which
could cause actual events or results to differ
materially from those indicated by such forward-
looking statements.
12
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratio of earnings to combined fixed
charges and preferred stock dividends of Hyperion for the periods indicated.
For purposes of calculating the ratio of earnings available to cover combined
fixed charges and preferred stock dividends:
. earnings consist of loss before income taxes and extraordinary items
plus fixed charges, excluding capitalized interest, and
. fixed charges consist of interest, whether expensed or capitalized, plus
amortization of debt issuance costs plus the assumed interest component
of rent expense.
Fiscal Year Ended
--------------------------------------------------------------Nine Months Ended Six Months Ended
March 31, 1995 March 31, 1996 March 31, 1997 March 31, 1998 December 31, 1998 June 30, 1999
-------------- -------------- -------------- -------------- ----------------- ----------------
-- -- -- -- -- --
For the years ended March 31, 1995, 1996, 1997, and 1998, the nine months
ended December 31, 1998, and the six months ended June 30, 1999, Hyperion's
earnings were insufficient to cover its combined fixed charges and preferred
stock dividends by approximately $7,700,000, $13,800,000 $30,300,000
$85,800,000, $105,500,000 and $90,000,000, respectively. Pro forma for the
issuance of the 12% senior subordinated notes due 2007, Hyperion's earnings
were insufficient to cover its combined fixed charges and preferred stock
dividends by approximately $132,500,000 and approximately $96,000,000 for the
nine months ended December 31, 1998 and the six months ended June 30, 1999,
respectively.
DILUTION
The net tangible book value of Hyperion's common stock as of June 30, 1999
was a deficit of approximately $30,300,000 or a negative $0.55 a share. Net
tangible book value per share represents the amount of Hyperion's common stock
and other stockholders' equity deficiency, less intangible assets, divided by
shares of Hyperion's common stock outstanding. Purchasers of common stock will
have an immediate dilution of net tangible book value. Net tangible book value
dilution per share represents the difference between the amount per share paid
by purchasers of shares of Class A or Class B common stock in an offering by
Hyperion and the pro forma net tangible book value per share of the common
stock immediately after completion of such offering.
USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus supplement, we
intend to apply the net proceeds from the sale of the securities to which this
prospectus relates to general funds to be used for general corporate purposes
including capital expenditures, acquisitions, the reduction of indebtedness,
investments and other purposes. We may invest funds not required immediately
for such purposes in short-term obligations or we may use them to reduce the
future level of our indebtedness.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth general terms and provisions of the
debt securities to which any prospectus supplement may relate. We will describe
the particular terms and provisions of the series of debt securities offered by
a prospectus supplement, and the extent to which such general terms and
provisions described below may apply thereto, in the prospectus supplement
relating to such series of debt securities.
The debt securities are to be issued in one or more series under an
indenture, as supplemented or amended from time to time between Hyperion and an
institution that we will name in the related prospectus supplement, as trustee.
For ease of reference, we will refer to the indenture relating to senior debt
securities as the senior
13
indenture and we will refer to the trustee under that indenture as the senior
trustee. The subordinated debt securities are to be issued in one or more
series under an indenture, as supplemented or amended from time to time,
between Hyperion and an institution that we will name in the related prospectus
supplement, as trustee. For ease of reference, we will refer to the indenture
relating to subordinate debt securities as the subordinate indenture and we
will refer to the trustee under that indenture as the subordinate trustee. This
summary of certain terms and provisions of the debt securities and the
indentures is not necessarily complete, and we refer you to the copy of the
form of the indentures which are filed as an exhibit to the registration
statement of which this prospectus forms a part, and to the Trust Indenture
Act. Whenever we refer to particular defined terms of the indentures in this
Section or in a prospectus supplement, we are incorporating these definitions
into this prospectus or the prospectus supplement.
General
The debt securities will be issuable in one or more series pursuant to an
indenture supplemental to the applicable indenture or a resolution of
Hyperion's board of directors or a committee of the board. Unless otherwise
specified in a prospectus supplement, each series of senior debt securities
will rank pari passu in right of payment with all of Hyperion's other senior
unsecured obligations. Each series of subordinated debt securities will be
subordinated and junior in right of payment to the extent and in the manner set
forth in the subordinated indenture and the supplemental indenture relating to
that debt. Except as otherwise provided in a prospectus supplement, the
indentures do not limit the incurrence or issuance of other secured or
unsecured debt of Hyperion, whether under the indentures, any other indenture
that Hyperion may enter into in the future or otherwise. For more information,
you should read the prospectus supplement relating to a particular offering of
securities.
The applicable prospectus supplement or prospectus supplements will describe
the following terms of each series of debt securities:
. the title of the debt securities and whether such series constitutes
senior debt securities or subordinated debt securities;
. any limit upon the aggregate principal amount of the debt securities;
. the date or dates on which the principal of the debt securities is
payable or the method of that determination or the right, if any, of
Hyperion to defer payment of principal;
. the rate or rates, if any, at which the debt securities will bear
interest (including reset rates, if any, and the method by which any
such rate will be determined), the interest payment dates on which
interest will be payable and the right, if any, of Hyperion to defer any
interest payment;
. the place or places where, subject to the terms of the indenture as
described below under the caption "--Payment and Paying Agents," the
principal of and premium, if any, and interest, if any, on the debt
securities will be payable and where, subject to the terms of the
indenture as described below under the caption "--Denominations,
Registration and Transfer," Hyperion will maintain an office or agency
where debt securities may be presented for registration of transfer or
exchange and the place or places where notices and demands to or upon
Hyperion in respect of the debt securities and the indenture may be
made;
. any period or periods within, or date or dates on which, the price or
prices at which and the terms and conditions upon which debt securities
may be redeemed, in whole or in part, at the option of Hyperion pursuant
to any sinking fund or otherwise;
. the obligation, if any, of Hyperion to redeem or purchase the debt
securities pursuant to any sinking fund or analogous provisions or at
the option of a holder and the period or periods within which, the price
or prices at which, the currency or currencies including currency unit
or units, in which and the other terms and conditions upon which the
debt securities will be redeemed or purchased, in whole or in part,
pursuant to such obligation;
14
. the denominations in which any debt securities will be issuable if other
than denominations of $1,000 and any integral multiple thereof;
. if other than in U.S. Dollars, the currency or currencies, including
currency unit or units, in which the principal of, and premium, if any,
and interest, if any, on the debt securities will be payable, or in
which the debt securities shall be denominated;
. any additions, modifications or deletions in the events of default or
covenants of Hyperion specified in the indenture with respect to the
debt securities;
. if other than the principal amount, the portion of the principal amount
of debt securities that will be payable upon declaration of acceleration
of the maturity thereof;
. any additions or changes to the indenture with respect to a series of
debt securities that will be necessary to permit or facilitate the
issuance of the series in bearer form, registrable or not registrable as
to principal, and with or without interest coupons;
. any index or indices used to determine the amount of payments of
principal of and premium, if any, on the debt securities and the manner
in which such amounts will be determined;
. subject to the terms described under "--Global Debt Securities," whether
the debt securities of the series will be issued in whole or in part in
the form of one or more global securities and, in such case, the
depositary for the global securities;
. the appointment of any trustee, registrar, paying agent or agents;
. the terms and conditions of any obligation or right of Hyperion or a
holder to convert or exchange debt securities into preferred securities
or other securities;
. whether the defeasance and covenant defeasance provisions described
under the caption "--Satisfaction and Discharge; Defeasance" will be
inapplicable or modified;
. any applicable subordination provisions in addition to those set forth
herein with respect to subordinated debt securities; and
. any other terms of the debt securities not inconsistent with the
provisions of the applicable indenture.
We may sell debt securities at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time
of issuance is below market rates. We will describe material U.S. federal
income tax consequences and special considerations applicable to the debt
securities in the applicable prospectus supplement.
If the purchase price of any of the debt securities is payable in one or
more foreign currencies or currency units or if any debt securities are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any debt securities is
payable in one or more foreign currencies or currency units, we will set forth
the restrictions, elections, material U.S. federal income tax considerations,
specific terms and other information with respect to such issue of debt
securities and such foreign currency or currency units in the applicable
prospectus supplement.
If any index is used to determine the amount of payments of principal,
premium, if any, or interest on any series of debt securities, we will describe
the material U.S. federal income tax, accounting and other considerations
applicable thereto in the applicable prospectus supplement.
Denominations, Registration and Transfer
Unless otherwise specified in the applicable prospectus supplement, the debt
securities will be issuable only in registered form, without coupons, in
denominations of $1,000 and any integral multiple thereof. Debt
15
securities of any series will be exchangeable for other debt securities of the
same issue and series, of any authorized denominations of a like aggregate
principal amount, the same original issue date, stated maturity and bearing the
same interest rate.
Holders may present each series of debt securities for exchange as provided
above, and for registration of transfer, with the form of transfer endorsed
thereon, or with a satisfactory written instrument of transfer, duly executed,
at the office of the appropriate securities registrar or at the office of any
transfer agent designated by Hyperion for such purpose and referred to in the
applicable prospectus supplement, without service charge and upon payment of
any taxes and other governmental charges as described in the indenture.
Hyperion will appoint the trustee of each series of debt securities as
securities registrar for such series under the indenture. If the applicable
prospectus supplement refers to any transfer agents, in addition to the
securities registrar initially designated by Hyperion with respect to any
series, Hyperion may at any time rescind the designation of any such transfer
agent or approve a change in the location through which any such transfer agent
acts, provided that Hyperion maintains a transfer agent in each place of
payment for the series. Hyperion may at any time designate additional transfer
agents with respect to any series of debt securities.
In the event of any redemption, neither Hyperion nor the trustee will be
required to:
. issue, register the transfer of or exchange debt securities of any
series during a period beginning at the opening of business 15 days
before the day of mailing of a notice for redemption of debt securities
of that series, and ending at the close of business on the day of
mailing of the relevant notice of redemption, or
. transfer or exchange any debt securities so selected for redemption,
except, in the case of any debt securities being redeemed in part, any
portion not being redeemed.
Global Debt Securities
Unless otherwise specified in the applicable prospectus supplement, the debt
securities of a series may be issued in whole or in part in the form of one or
more global securities that we will deposit with, or on behalf of, a depositary
identified in the prospectus supplement relating to such series. Global debt
securities may be issued only in fully registered form and in either temporary
or permanent form. Unless and until it is exchanged in whole or in part for the
individual debt securities represented by it, a global debt security may not be
transferred except as a whole by the depositary for the global debt security to
a nominee of the depositary or by a nominee of the depositary to the depositary
or another nominee of the depositary or by the depositary or any nominee to a
successor depositary or any nominee of the successor.
The specific terms of the depositary arrangement with respect to a series of
debt securities will be described in the prospectus supplement relating to the
series. Hyperion anticipates that the following provisions will generally apply
to depositary arrangements.
Upon the issuance of a global debt security, and the deposit of the global
debt security with or on behalf of the applicable depositary, the depositary
for the global debt security or its nominee will credit on its book-entry
registration and transfer system, the respective principal amounts of the
individual debt securities represented by the global debt security to the
accounts of persons, more commonly known as participants, that have accounts
with the depositary. These accounts will be designated by the dealers,
underwriters or agents with respect to the debt securities or by Hyperion if
the debt securities are offered and sold directly by Hyperion. Ownership of
beneficial interests in a global debt security will be limited to participants
or persons that may hold interests through participants. Ownership of
beneficial interests in the global debt security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the applicable depositary or its nominee with respect to interests of
participants and the records of participants with respect to interests of
persons who hold through participants. The laws of some states require that
certain purchasers of securities take physical delivery of the securities in
definitive form. These limits and laws may impair the ability to transfer
beneficial interests in a global debt security.
16
So long as the depositary for a global debt security, or its nominee, is the
registered owner of the global debt security, the depositary or its nominee, as
the case may be, will be considered the sole owner or holder of the debt
securities represented by the global debt security for all purposes under the
indenture. Except as provided below, owners of beneficial interests in a global
debt security will not be entitled to have any of the individual debt
securities of the series represented by the global debt security registered in
their names, will not receive or be entitled to receive physical delivery of
any debt securities of the series in definitive form and will not be considered
the owners or holders of them under the indenture.
Payments of principal of, and premium, if any, and interest on individual
debt securities represented by a global debt security registered in the name of
a depositary or its nominee will be made to the depositary or its nominee, as
the case may be, as the registered owner of the global debt security
representing the debt securities. None of Hyperion, or the trustee, any paying
agent, or the securities registrar for the debt securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interest of the global debt
security for the debt securities or for maintaining, supervising or reviewing
any records relating to those beneficial ownership interests.
Hyperion expects that the depositary for a series of debt securities or its
nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent global debt security representing any of the debt
securities, immediately will credit participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the principal
amount of the global debt security for the debt securities as shown on the
records of the depositary or its nominee. Hyperion also expects that payments
by participants to owners of beneficial interests in the global debt security
held through the participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name." These payments will
be the responsibility of these participants.
Unless otherwise specified in the applicable prospectus supplement, if the
depositary for a series of debt securities is at any time unwilling, unable or
ineligible to continue as depositary and a successor depositary is not
appointed by Hyperion within 90 days, Hyperion will issue individual debt
securities of the series in exchange for the global debt security representing
the series of debt securities. In addition, unless otherwise specified in the
applicable prospectus supplement, Hyperion may at any time and in its sole
discretion, subject to any limitations described in the prospectus supplement
relating to the debt securities, determine not to have any debt securities of
the series represented by one or more global debt securities and, in such
event, will issue individual debt securities of the series in exchange for such
global debt securities. Further, if Hyperion so specifies with respect to the
debt securities of a series, an owner of a beneficial interest in a global debt
security representing debt securities of the series may, on terms acceptable to
Hyperion, the trustee and the depositary for the global debt security, receive
individual debt securities of the series in exchange for such beneficial
interests, subject to any limitations described in the prospectus supplement
relating to the debt securities. In any such instance, an owner of a beneficial
interest in a global debt security will be entitled to physical delivery of
individual debt securities of the series represented by the global debt
security equal in principal amount to its beneficial interest and to have the
debt securities registered in its name. Individual debt securities of the
series so issued will be issued in denominations, unless otherwise specified by
Hyperion, of $1,000 and integral multiples thereof. The applicable prospectus
supplement may specify other circumstances under which individual debt
securities may be issued in exchange for the global debt security representing
any debt securities.
Payment and Paying Agents
Unless otherwise indicated in the applicable prospectus supplement, payment
of principal of, and premium, if any, and any interest on debt securities will
be made at the office of the trustee in New York or at the office of such
paying agent or paying agents as Hyperion may designate from time to time in
the applicable prospectus supplement, except that at the option of Hyperion
payment of any interest may be made:
17
. except in the case of global debt securities, by check mailed to the
address of the person or entity entitled thereto as such address shall
appear in the securities register; or
. by transfer to an account maintained by the person or entity entitled
thereto as specified in the securities register, provided that proper
transfer instructions have been received by the regular record date.
Unless otherwise indicated in the applicable prospectus supplement, we
will make payment of any interest on debt securities to the person or
entity in whose name the debt security is registered at the close of
business on the regular record date for the interest payment, except in
the case of defaulted interest. Hyperion may at any time designate
additional paying agents or rescind the designation of any paying agent;
however, Hyperion will at all times be required to maintain a paying
agent in each place of payment for each series of debt securities.
Any moneys deposited with the trustee or any paying agent, or held by
Hyperion in trust, for the payment of the principal of, and premium, if any, or
interest on any debt security and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable will, at
the request of Hyperion, be repaid to Hyperion or released from such trust, as
applicable, and the holder of the debt security will thereafter look, as a
general unsecured creditor, only to Hyperion for payment.
Option to Defer Interest Payments or to Pay-in-Kind
If provided in the applicable prospectus supplement, Hyperion will have the
right, at any time and from time to time during the term of any series of debt
securities, to defer the payment of interest for such number of consecutive
interest payment periods as may be specified in the applicable prospectus
supplement, subject to the terms, conditions and covenants, if any, specified
in such prospectus supplement, provided that an extension period may not extend
beyond the stated maturity of the final installment of principal of the series
of debt securities. If provided in the applicable prospectus supplement,
Hyperion will have the right, at any time and from time to time during the term
of any series of debt securities, to make payments of interest by delivering
additional debt securities of the same series. Certain material U.S. federal
income tax consequences and special considerations applicable to the debt
securities will be described in the applicable prospectus supplement.
Subordination
Except as set forth in the applicable prospectus supplement, the
subordinated indenture provides that the subordinated debt securities are
subordinated and junior in right of payment to all senior indebtedness of
Hyperion. If:
. Hyperion defaults in the payment of any principal, or premium, if any,
or interest on any senior indebtedness when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or
declaration or otherwise; or
. an event of default occurs with respect to any senior indebtedness
permitting the holders thereof to accelerate the maturity thereof and
written notice of such event of default, requesting that payments on
subordinated debt securities cease, is given to Hyperion by the holders
of senior indebtedness
then unless and until the default in payment or event of default shall have
been cured or waived or shall have ceased to exist, no direct or indirect
payment, in cash, property or securities, by set-off or otherwise, will be made
or agreed to be made on account of the subordinated debt securities or interest
thereon or in respect of any repayment, redemption, retirement, purchase or
other acquisition of subordinated debt securities.
Except as set forth in the applicable prospectus supplement, the
subordinated indenture provides that in the event of:
. any insolvency, bankruptcy, receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding relating to
Hyperion, its creditors or its property;
18
. any proceeding for the liquidation, dissolution or other winding-up of
Hyperion, voluntary or involuntary, whether or not involving insolvency
or bankruptcy proceedings;
. any assignment by Hyperion for the benefit of creditors; or
. any other marshaling of the assets of Hyperion;
all present and future senior indebtedness, including, without limitation,
interest accruing after the commencement of the proceeding, assignment or
marshaling of assets, will first be paid in full before any payment or
distribution, whether in cash, securities or other property, will be made by
Hyperion on account of subordinated debt securities. In that event, any payment
or distribution, whether in cash, securities or other property, other than
securities of Hyperion or any other corporation provided for by a plan of
reorganization or a readjustment, the payment of which is subordinate, at least
to the extent provided in the subordination provisions of the indenture, to the
payment of all senior indebtedness at the time outstanding and to any
securities issued in respect thereof under any such plan of reorganization or
readjustment and other than payments made from any trust described in the
"Satisfaction and Discharge; Defeasance" below, which would otherwise but for
the subordination provisions be payable or deliverable in respect of
subordinated debt securities, including any such payment or distribution which
may be payable or deliverable by reason of the payment of any other
indebtedness of Hyperion being subordinated to the payment of subordinated debt
securities will be paid or delivered directly to the holders of senior
indebtedness, or to their representative or trustee, in accordance with the
priorities then existing among such holders until all senior indebtedness shall
have been paid in full. No present or future holder of any senior indebtedness
will be prejudiced in the right to enforce subordination of the indebtedness
evidenced by subordinated debt securities by any act or failure to act on the
part of Hyperion.
Except as provided in the applicable prospectus supplement, the term "senior
indebtedness" is defined as the principal, premium, if any, and interest on:
. all indebtedness of Hyperion, whether outstanding on the date of the
issuance of subordinated debt securities or thereafter created, incurred
or assumed, which is for money borrowed, or which is evidenced by a note
or similar instrument given in connection with the acquisition of any
business, properties or assets, including securities;
. any indebtedness of others of the kinds described in the first bullet
point above for the payment of which Hyperion is responsible or liable
as guarantor or otherwise; and
. amendments, renewals, extensions and refundings of any such
indebtedness;
unless in any instrument or instruments evidencing or securing such
indebtedness or pursuant to which the same is outstanding, or in any such
amendment, renewal, extension or refunding, it is expressly provided that such
indebtedness is not superior in right of payment to subordinated debt
securities. The senior indebtedness will continue to be senior indebtedness and
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of the senior indebtedness or
extension or renewal of the senior indebtedness.
Except as provided in the applicable prospectus supplement, the subordinated
indenture for a series of subordinated debt does not limit the aggregate amount
of senior indebtedness that may be issued by Hyperion. As of June 30, 1999,
senior indebtedness of Hyperion aggregated approximately $486,700,000. In
addition, because Hyperion is a holding company, the subordinated debt
securities are effectively subordinated to all existing and future liabilities
of Hyperion's subsidiaries.
Modification of Indentures
From time to time, Hyperion and the trustees may modify the indentures
without the consent of any holders of any series of debt securities with
respect to some matters, including:
19
. to cure any ambiguity, defect or inconsistency or to correct or
supplement any provision which may be inconsistent with any other
provision of the indenture;
. to qualify, or maintain the qualification of, the indentures under the
Trust Indenture Act; and
. to make any change that does not materially adversely affect the
interests of any holder of such series of debt securities.
In addition, under the indentures, Hyperion and the trustee may modify some
rights, covenants and obligations of Hyperion and the rights of holders of any
series of debt securities with the written consent of the holders of at least a
majority in aggregate principal amount of the series of outstanding debt
securities; but no extension of the maturity of any series of debt securities,
reduction in the interest rate or extension of the time for payment of
interest, change in the optional redemption or repurchase provisions in a
manner adverse to any holder of the series of debt securities, other
modification in the terms of payment of the principal of, or interest on, the
series of debt securities, or reduction of the percentage required for
modification, will be effective against any holder of the series of outstanding
debt securities without the holder's consent.
In addition, Hyperion and the trustees may execute, without the consent of
any holder of the debt securities, any supplemental indenture for the purpose
of creating any new series of debt securities.
Events of Default
The indentures provide that any one or more of the following described
events with respect to a series of debt securities that has occurred and is
continuing constitutes an "event of default" with respect to that series of
debt securities:
. failure for 60 days to pay any interest or any sinking fund payment on
the series of debt securities when due, (subject to the deferral of any
due date in the case of an extension period);
. failure to pay any principal or premium, if any, on the series of the
debt securities when due whether at maturity, upon redemption, by
declaration or otherwise;
. failure to observe or perform in any material respect certain other
covenants contained in the indenture for 90 days after written notice
has been given to Hyperion from the trustee or the holders of at least
25% in principal amount of the series of outstanding debt securities;
. default resulting in acceleration of other indebtedness of Hyperion for
borrowed money where the aggregate principal amount so accelerated
exceeds $25 million and the acceleration is not rescinded or annulled
within 30 days after the written notice thereof to Hyperion by the
trustee or to Hyperion and the trustee by the holders of 25% in
aggregate principal amount of the debt securities of the series then
outstanding, provided that the event of default will be remedied, cured
or waived if the default that resulted in the acceleration of such other
indebtedness is remedied, cured or waived; or
. certain events in bankruptcy, insolvency or reorganization of Hyperion.
The holders of a majority in outstanding principal amount of the series of
debt securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee of the
series. The trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the series may declare the principal due and
payable immediately upon an event of default. The holders of a majority in
aggregate outstanding principal amount of the series may annul the declaration
and waive the default if the default (other than the non-payment of the
principal of the series which has become due solely by the acceleration) has
been cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the
trustee of the series.
The holders of a majority in outstanding principal amount of a series of
debt securities affected thereby may, on behalf of the holders of all the
holders of the series of debt securities, waive any past default, except a
20
default in the payment of principal or interest, unless the default has been
cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the
trustee of the series, or a default in respect of a covenant or provision which
under the related indenture cannot be modified or amended without the consent
of the holder of each outstanding debt security of the series. Hyperion is
required to file annually with the trustees a certificate as to whether or not
Hyperion is in compliance with all the conditions and covenants applicable to
it under the indentures.
In case an event of default shall occur and be continuing as to a series of
debt securities, the trustee of the series will have the right to declare the
principal of and the interest on the debt securities, and any other amounts
payable under the indenture, to be forthwith due and payable and to enforce its
other rights as a creditor with respect to the debt securities.
No holder of any debt securities will have any right to institute any
proceeding with respect to the indenture or for any remedy thereunder, unless
the holder shall have previously given to the trustee written notice of a
continuing event of default and unless also the holders of at least 25% in
aggregate principal amount of the outstanding debt securities of the series
shall have made written request and offered reasonably indemnity to the trustee
of the series to institute the proceeding as a trustee, and unless the trustee
shall not have received from the holders of a majority in aggregate principal
amount of the outstanding debt securities of the class a direction inconsistent
with the request and shall have failed to institute the proceeding within 60
days. However, these limitations do not apply to a suit instituted by a holder
of a debt security for enforcement of payment of the principal or interest on
the debt security on or after the respective due dates expressed in the debt
security.
Consolidation, Merger, Sale of Assets and Other Transactions
Unless otherwise indicated in the applicable prospectus supplement, the
indentures provide that Hyperion will not consolidate with or merge into any
other person or entity or sell, assign, convey, transfer or lease its
properties and assets substantially as an entirety to any person or entity
unless:
. either Hyperion is the continuing corporation, or any successor or
purchaser is a corporation, partnership, or trust or other entity
organized under the laws of the United States of America, any State
thereof or the District of Columbia, and the successor or purchaser
expressly assumes Hyperion's obligations on the debt securities under a
supplemental indenture; and
. immediately before and after giving effect thereto, no event of default,
and no event which, after notice or lapse of time or both, would become
an event of default, shall have happened and be continuing.
Unless otherwise indicated in the applicable prospectus supplement, the
general provisions of the indentures do not afford holders of the debt
securities protection in the event of a highly leveraged or other transaction
involving Hyperion that may adversely affect holders of the debt securities.
Satisfaction and Discharge; Defeasance
The indentures provide that when, among other things, all debt securities
not previously delivered to the trustee for cancellation:
. have become due and payable, or
. will become due and payable at their stated maturity within one year,
and Hyperion deposits or causes to be deposited with the trustee, as trust
funds in trust for the purpose, an amount in the currency or currencies in
which the debt securities are payable sufficient to pay and discharge the
entire indebtedness on the debt securities not previously delivered to the
trustee for cancellation, for the principal, and premium, if any, and interest
to the date of the deposit or to the stated maturity, as the case may be, then
the indenture will cease to be of further effect (except as to Hyperion's
obligations to pay all other sums due pursuant to the indenture and to provide
the officers' certificates and opinions of counsel described therein), and
Hyperion will be deemed to have satisfied and discharged the indenture.
21
The indentures provide that Hyperion may elect either:
. to terminate, and be deemed to have satisfied, all its obligations with
respect to any series of debt securities, except for the obligations to
register the transfer or exchange of such debt securities, to replace
mutilated, destroyed, lost or stolen debt securities, to maintain an
office or agency in respect of the debt securities and to compensate and
indemnify the trustee ("defeasance"); or
. to be released from its obligations with respect to certain covenants,
("covenant defeasance") upon the deposit with the trustee, in trust for
such purpose, of money and/or U.S. Government Obligations, as defined in
the indenture, which through the payment of principal and interest in
accordance with the term used will provide money, in an amount
sufficient (in the opinion of a nationally recognized firm of
independent public accountants) to pay the principal of, interest on and
any other amounts payable in respect of the outstanding debt securities
of the series.
Such a trust may be established only if, among other things, Hyperion has
delivered to the trustee an opinion of counsel (as specified in the indenture)
with regard to certain matters, including an opinion to the effect that the
holders of the debt securities will not recognize income, gain or loss for
Federal income tax purposes as a result of the deposit and discharge and will
be subject to Federal income tax on the same amounts and in the same manner and
at the same times as would have been the case if the deposit and defeasance or
covenant defeasance, as the case may be, had not occurred.
Redemption
Unless otherwise indicated in the applicable prospectus supplement, debt
securities will not be subject to any sinking fund requirements.
Unless otherwise indicated in the applicable prospectus supplement, Hyperion
may, at its option, redeem the debt securities of any series in whole at any
time or in part from time to time, at the redemption price set forth in the
applicable prospectus supplement plus accrued and unpaid interest to the date
fixed for redemption, and debt securities in denominations larger than $1,000
may be redeemed in part but only in integral multiples of $1,000. If the debt
securities of any series are so redeemable only on or after a specified date or
upon the satisfaction of additional conditions, the applicable prospectus
supplement will specify the date or describe the conditions.
Hyperion will mail notice of any redemption at least 30 days but not more
than 60 days before the redemption date to each holder of debt securities to be
redeemed at the holder's registered address. Unless Hyperion defaults in the
payment of the redemption price, on and after the redemption date interest
shall cease to accrue on the debt securities or portions thereof called for
redemption.
Conversion or Exchange
If and to the extent indicated in the applicable prospectus supplement, the
debt securities of any series may be convertible or exchangeable into other
securities. The specific terms on which debt securities of any series may be so
converted or exchanged will be set forth in the applicable prospectus
supplement. These terms may include provisions for conversion or exchange,
either mandatory, at the option of the holder, or at the option of Hyperion, in
which case the number of shares of other securities to be received by the
holders of debt securities would be calculated as of a time and in the manner
stated in the applicable prospectus supplement.
Certain Covenants
The indentures contain certain covenants regarding, among other matters,
corporate existence, payment of taxes and reports to holders of debt
securities. To the extent indicated in the applicable prospectus supplement,
these covenants may be removed or additional covenants added with respect to
any series of debt securities.
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Governing Law
The indentures and the debt securities will be governed by and construed in
accordance with the laws of the State of New York.
Information Concerning the Trustees
Each trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to these provisions, each trustee is under no obligation
to exercise any of the powers vested in it by the indenture at the request of
any holder of the debt securities, unless offered reasonable indemnity by the
holder against the costs, expenses and liabilities which might be incurred
thereby. Each trustee is not required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties
if the trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
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DESCRIPTION OF CAPITAL STOCK
The following description of the capital stock and warrants of Hyperion and
certain provisions of Hyperion's Certificate of Incorporation and Bylaws is as
of the date of this prospectus and is a summary and is qualified in its
entirety by Hyperion's Certificate of Incorporation and Bylaws, each as
amended, which documents are filed as exhibits to the registration statement
covering this prospectus.
Hyperion's authorized capital stock consists of 300,000,000 shares of Class
A common stock, par value $.01 per share, 150,000,000 shares of Class B common
stock, par value $.01 per share, and 5,000,000 shares of preferred stock, par
value $0.01 per share.
Common Stock
Shares of Class A common stock and Class B common stock are substantially
identical, except that holders of Class A common stock are entitled to one vote
per share and holders of Class B common stock are entitled to 10 votes per
share on all matters submitted to a vote of stockholders.
Class A common stock
The holders of Class A common stock are entitled to one vote per share on
all matters to be voted on by the stockholders. Subject to preferences that may
be applicable to any outstanding preferred stock, the holders of Class A common
stock and Class B common stock are entitled to receive dividends ratably, if
any such dividends are declared, from time to time by the Board of Directors
out of funds legally available therefor. Stock dividends declared on Class A
common stock shall be in shares of Class A common stock, and stock dividends on
Class B common stock shall be in shares of Class B common stock. In the event
of a liquidation, dissolution or winding up of Hyperion, the holders of Class A
common stock and Class B common stock are entitled to share ratably in all
assets remaining after payment of liabilities, subject to prior rights of the
holders of the preferred stock then outstanding. There are no redemption or
sinking fund provisions available to the Class A common stock. All outstanding
shares of common stock are fully paid and non-assessable, and the shares of
Class A or Class B common stock to be issued upon exercise of the Warrants will
be fully paid and non-assessable.
Class B common stock
The holders of Class B common stock are entitled to ten votes per share on
all matters to be voted on by the stockholders. Each share of Class B common
stock is convertible at the option of the holder into one share of Class A
common stock. In all other respects, the provisions of the Class B common stock
are identical to those of the Class A common stock. There are no contractual
restrictions, or restrictions contained in the Certificate of Incorporation,
regarding the ability to transfer shares of Class B common stock.
Neither the holders of Class A common stock nor the holders of Class B
common stock have cumulative voting rights. For a discussion of the effects of
the voting rights of Adelphia, see "Risk Factors--Control by Adelphia."
Preferred Stock
The board of directors is authorized, subject to any limitations prescribed
by law, without further stockholder approval, to issue from time to time such
shares of preferred stock, in one or more classes or series. Each class or
series of preferred stock shall have such number of shares, designations,
preferences, voting powers, qualifications and special or relative rights or
privileges as shall be determined by the Board of Directors, which may include,
among others
. the distinctive designation of each series and the number of shares that
will constitute the series;
24
. the voting rights, if any, of shares of the series;
. the dividend rate on the shares of the series, any restriction,
limitation or condition upon the payment of dividends, whether dividends
will be cumulative and the dates on which dividends are payable;
. the prices at which, and the terms and conditions on which, the shares
of the series may be redeemed, if the shares are redeemable;
. the purchase or sinking fund provisions, if any, for the purchase or
redemption of shares of the series;
. any preferential amount payable upon shares of the series in the event
of the liquidation, dissolution or winding up of Adelphia or the
distribution of its assets;
. the prices or rates of conversion at which, and the terms and conditions
on which, the shares of such series may be converted into other
securities, if such shares are convertible.
The ownership and control of Hyperion by the holders of common stock would
be diluted if Hyperion were to issue preferred stock that had voting rights or
that was convertible into common stock. In addition, the holders of preferred
stock issued by Hyperion would be entitled by law to vote on certain
transactions such as a merger or consolidation, and thus the issuance of
preferred stock could dilute the voting rights of the holders of common stock
on such issues.
On October 9, 1997, Hyperion issued $200.0 million aggregate liquidation
preference of 12 7/8% Senior Exchangeable Redeemable Preferred Stock due 2007
in a private placement. Hyperion is required to redeem all of the senior
exchangeable preferred stock on October 15, 2007 at 100% of the liquidation
preference of the senior exchangeable preferred stock then outstanding.
Dividends are payable quarterly, commencing January 15, 1998, at 12 7/8% of the
liquidation preference of outstanding senior exchangeable preferred stock.
Through October 15, 2002, dividends are payable in cash or additional shares of
senior exchangeable preferred stock at Hyperion's option. Subsequent to October
15, 2002, dividends are payable in cash. Prior to October 15, 2000, subject to
certain conditions, Hyperion may redeem up to 35% of the aggregate liquidation
preference of the originally issued senior exchangeable preferred stock at
112.875% of the liquidation preference thereof with the net proceeds of one or
more Qualified Equity Offerings (as defined). Commencing October 15, 2002,
Hyperion may redeem the senior exchangeable preferred stock in whole or in part
at 106.438% of the liquidation preference thereof declining annually to par on
October 15, 2005. Holders of the senior exchangeable preferred stock have the
right to require Hyperion to redeem their senior exchangeable preferred stock
at 101% of the liquidation preference thereof upon a Change of Control (as
defined). The Certificate of Designation provides for, among other things,
limitations on (i) additional borrowings, (ii) payment of dividends or
distributions, (iii) transactions with affiliates and (iv) the sale of assets.
Warrants
Hyperion issued Class B warrants pursuant to the Class B Warrant Agreement
between Hyperion and Bank of Montreal Trust Company, as warrant agent on April
15, 1996 as part of a private placement by Hyperion of 329,000 units consisting
of $329.0 million aggregate principle amount at maturity of 13% senior notes
and Class B warrants to purchase an aggregate of 1,993,638 shares of Class B
common stock of Hyperion. The following summary of certain provisions of the
Class B Warrant Agreement and the Class B warrants does not purport to be
complete and is qualified in its entirety by reference to the Class B Warrant
Agreement and the Class B warrants, including the definitions therein of
certain terms.
Each Class B warrants, when exercised, will entitle the holder thereof to
purchase 6.06 shares of Class B common stock at the exercise price of $0.00308
per share. The exercise price and the number of Class B warrant shares issuable
on exercise of a Class B Warrant are both subject to adjustment in certain
cases referred to below. The Class B warrants are exercisable at any time on or
after the earlier to occur of (i) May 1, 1997 and (ii) in the event a Change of
Control occurs, the date Hyperion mails notice thereof to holders of the Senior
Notes and to the holders of the Class B warrants, Class B warrant shares and
any other securities issued
25
or issuable with respect thereto. Unless exercised, the Class B warrants will
automatically expire on April 1, 2001, the Expiration Date. Hyperion will give
notice of expiration not less than 90 and not more than 120 days prior to the
Expiration Date to the registered holders of the then outstanding Class B
warrants. If Hyperion fails to give such notice, the Class B warrants will not
expire until 90 days after Hyperion gives such notice. In no event will holders
be entitled to any damages or other remedy for Hyperion's failure to give such
notice other than any such extension.
In connection with the issuance of the Class B warrants, Hyperion agreed to
file Class B warrant shelf registration statements under the Securities Act (i)
covering the Warrants, on or prior to October 1, 1996, and (ii) covering the
Class B warrant shares, on or prior to January 1, 1997, and to use its best
efforts to cause such Class B Warrant Shelf registration statements to be
declared effective by the Commission on or prior to 90 days after the dates
specified for such filings. Hyperion filed a Class B warrant shelf registration
statement covering the Class B warrants and the Class B warrant shares on
September 25, 1996 and the Class B warrant shelf registration statement was
declared effective by the Commission on December 30, 1996. Hyperion has agreed
to keep the Class B warrant shelf registration statement with respect to the
Class B warrants and the Class B warrant shares as described in the immediately
preceding paragraph effective until October 1, 1999 and January 1, 2000,
respectively. If Hyperion does not comply with its registration obligations
under the Class B warrant registration rights agreement, it will be required to
pay liquidated damages to holders of the Class B warrants or Class B warrant
shares under certain circumstances.
Hyperion issued warrants to purchase its Class A common stock in connection
with a 1997 preferred provider agreement with MCI that subsequently were
acquired from MCI by Adelphia. These warrants are exerciseable to obtain
1,421,499 shares of Class A common stock at an exercise price of $6.15 per
share.
On February 12, 1998, Hyperion consummated an agreement with Lenfest
Telephony, Inc. ("Lenfest") whereby Lenfest received a warrant to obtain
731,624 shares of Class A common stock of Hyperion (the "Lenfest Warrant") in
exchange for its partnership interest in the Harrisburg, Pennsylvania network.
On May 15, 1998, Lenfest exercised its warrant and received 731,624 shares of
Class A common stock.
Dividend Restrictions
The terms of our various indentures and our Certificate of Designation
contain restrictions on our ability to pay dividends on the common stock. The
payment of dividends on the common stock is also subject to the preferences
that may be applicable to any then outstanding preferred stock.
Anti-Takeover Effects Of Provisions Of The Certificate Of Incorporation And
Delaware Law
Delaware General Corporation Law
As of the date of this prospectus, although Hyperion's Certificate of
Incorporation currently provides that Hyperion is not subject to Section 203 of
the Delaware General Corporation Law ("Section 203"), Hyperion could become
subject to Section 203 through stockholder action in the future. As of the date
of this prospectus, Section 203, subject to certain exceptions, prohibits a
Delaware corporation, the voting stock of which is generally publicly traded
(i.e., listed on a national securities exchange or authorized for quotation on
an inter-dealer quotation system of a registered national securities
association) or held of record by more than 2,000 stockholders, from engaging
in any "business combination" with any "interested stockholder" for a period of
three years following the time that such stockholder became an interested
stockholder, unless (i) prior to such time, the Board of Directors of the
corporation approved either such business combination or the transaction which
resulted in such stockholder becoming an interested stockholder, (ii) upon
consummation of the transaction which resulted in such stockholder becoming an
interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time such transaction
commenced, excluding for purposes of determining the number of shares
outstanding those shares owned (y) by persons who are directors and also
officers and (z) by employee stock plans in which employee participants do not
have
26
the right to determine confidentially whether shares held subject to the plan
will be tendered in a tender or exchange offer; or (iii) at or subsequent to
such time, such business combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 66 2/3% of the outstanding voting
stock which is not owned by the interested stockholder.
Section 203 defines business combination to include: (i) any merger or
consolidation involving the corporation and the interested stockholder; (ii)
any sale, transfer, pledge or other disposition involving the interested
stockholder of 10% or more of the assets of the corporation; (iii) subject to
certain exceptions, any transaction which results in the issuance or transfer
by the corporation of any stock of the corporation to the interested
stockholder; (iv) any transactions involving the corporation which has the
effect of increasing the proportionate share of any class or series of stock of
the corporation which is beneficially owned by the interested stockholder; or
(v) the receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or
through the corporation. In general, Section 203 defines an interested
stockholder as any entity or person beneficially owning (or within the past
three years having owned) 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.
Certificate of Incorporation
In addition to the voting rights of the Class A and Class B common stock
described above, Hyperion's Certificate of Incorporation, as amended as of the
date of this prospectus, by means of a "blank check preferred" provision
authorizes the Board of Directors, at any time, to divide any or all of the
shares of preferred stock into one or more series and to fix and determine the
number of shares and the designation of such series so as to distinguish it
from the shares of all other series. Further, the Board of Directors, when
issuing a series of preferred stock, may fix and determine the voting rights,
designations, preferences, qualifications, privileges, limitations, options,
conversion rights, restrictions and other special or relative rights of the
preferred stock of such series.
This blank check preferred provision gives the Board of Directors
flexibility in dealing with methods of raising capital and responding to
possible hostile takeover attempts. The provision may have the effect of making
it more difficult for a third party to acquire Hyperion, discourage a third
party from attempting to acquire Hyperion or deter a third party from paying a
premium to acquire a majority of the outstanding voting stock of Hyperion.
Additionally, depending on the rights and preferences of any series of
preferred stock issued and outstanding, the issuance of preferred stock may
adversely affect the voting and other rights of the holders of the common
stock, including the possibility of the loss of voting control to others.
Equity Securities Offered
Any offering of our Class A common stock, Class B common stock, preferred
stock, depositary shares or other equity securities will be described in the
prospectus supplement relating to that offering.
If we offer a series of preferred stock, we will describe the particular
terms and conditions of the series of preferred stock offered by a prospectus
supplement in the prospectus supplement relating to that series of preferred
stock. The applicable prospectus supplement or prospectus supplements will
describe the following terms of each series of preferred stock being offered:
. its title;
. the number of shares offered, any liquidation preference per share and
the purchase price;
. any applicable dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation;
. if dividends apply whether they shall be cumulative or non-cumulative
and, if cumulative, the date from which dividends shall accumulate;
27
. any procedures for any auction and remarketing;
. any provisions for a sinking fund;
. any provisions for redemption;
. any listing of such preferred stock on any securities exchange or market;
. the terms and conditions, if applicable, upon which it will be
convertible into common stock or another series of preferred stock of
Hyperion, including the conversion price (or manner of calculation
thereof) and conversion period;
. the terms and conditions, if applicable, upon which it will be
exchangeable into debt securities of Hyperion, including the exchange
price (or manner of calculation thereof) and exchange period;
. any voting rights;
. a discussion of any applicable material and/or special United States
federal income tax considerations;
. whether fractional interests in that series of preferred stock will be
offered by entering into a deposit agreement that will be filed with the
SEC which provides for a depositary to issue to the public receipts for
depositary shares, each of which will represent ownership of and
entitlement to all rights and preferences of a fractional interest in a
share of preferred stock of a specified series;
. its relative ranking and preferences as to any dividend rights and
rights upon liquidation, dissolution or winding up of the affairs of
Hyperion;
. any limitations on the future issuance of any class or series of
preferred stock ranking senior to or on a parity with the series of
preferred stock being offered as to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of Hyperion; and
. any other specific terms, preferences, rights, limitations or
restrictions.
BOOK ENTRY ISSUANCE
Unless otherwise specified in the applicable prospectus supplement, DTC will
act as depositary for securities issued in the form of global securities. Such
securities will be issued only as fully-registered securities registered in the
name of Cede & Co. (DTC's nominee). One or more fully-registered global
securities will be issued for such securities representing in the aggregate the
total number of such securities, and will be deposited with or on behalf of
DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants deposit with DTC. DTC also facilitates
the settlement among its participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. DTC is owned by a number of its direct
participants and by the New York Stock Exchange, the American Stock Exchange
and the National Association of Securities Dealers, Inc. Access to the DTC
system is also available to others, known as indirect participants, such as
securities brokers and dealers, banks and trust companies that clear through or
maintain custodial relationships with direct participants, either directly or
indirectly. The rules applicable to DTC and its participants are on file with
the Commission.
Purchases of securities within the DTC system must be made by or through
direct participants, which will receive a credit for such Securities on DTC's
records. The ownership interest of each actual purchaser of each
28
Security, commonly referred to as the beneficial owner is in turn to be
recorded on the direct and indirect participants' records. Beneficial owners
will not receive written confirmation from DTC of their purchases, but
beneficial owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the direct or indirect participants through which the beneficial owners
purchased securities. Transfers of ownership interests in securities issued in
the form of global securities are to be accomplished by entries made on the
books of participants acting on behalf of beneficial owners. Beneficial owners
will not receive certificates representing their ownership interests in such
securities, except in the event that use of the book-entry system for such
securities is discontinued.
DTC has no knowledge of the actual beneficial owners of the securities
issued in the form of global securities. DTC's records reflect only the
identity of the direct participants to whose accounts such securities are
credited, which may or may not be the beneficial owners. The participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Although voting with respect to securities issued in the form of global
securities is limited to the holders of record of such securities, in those
instances in which a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to such securities. Under its usual procedures,
DTC would mail an omnibus proxy to the issuer of such securities as soon as
possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts such
securities are credited on the record date, identified in a listing attached to
the omnibus proxy.
Payments in respect of securities issued in the form of global securities
will be made by the issuer of such securities to DTC. DTC's practice is to
credit direct participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
participants to beneficial owners will be governed by standing instructions and
customary practices and will be the responsibility of such participant and not
of DTC or Hyperion, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payments to DTC are the responsibility of the
issuer of the applicable securities, disbursement of such payments to direct
participants is the responsibility of DTC, and disbursements of such payments
to the beneficial owners is the responsibility of direct and indirect
participants.
DTC may discontinue providing its services as depositary with respect to any
securities at any time by giving reasonable notice to the issuer of such
securities. In the event that a successor depositary is not obtained,
individual security certificates representing such securities are required to
be printed and delivered. Hyperion, at its option, may decide to discontinue
use of the system of book-entry transfers through DTC or a successor
depositary.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Hyperion believe to be accurate, but
Hyperion assumes no responsibility for the accuracy thereof. Hyperion has no
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
29
PLAN OF DISTRIBUTION
Any of the securities being offered under this prospectus may be sold in any
one or more of the following ways from time to time:
. through agents;
. to or through underwriters;
. through dealers; and
. directly by Hyperion to purchasers.
The distribution of the securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Securities may also be
offered or sold through depository receipts issued by a depository institution.
Offers to purchase securities may be solicited by agents designated by
Hyperion from time to time. Any agent involved in the offer or sale of the
securities under this prospectus will be named, and any commissions payable by
Hyperion to these agents will be set forth, in a related prospectus supplement.
Unless otherwise indicated in a prospectus supplement, any agent will be acting
on a reasonable best efforts basis for the period of its appointment. Any agent
may be deemed to be an underwriter, as that term is defined in the Securities
Act, of the securities so offered and sold.
If securities are sold by means of an underwritten offering, Hyperion will
execute an underwriting agreement with an underwriter or underwriters at the
time an agreement for such sale is reached, and the names of the specific
managing underwriter or underwriters, as well as any other underwriters, the
respective amounts underwritten and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in a related prospectus supplement. That
prospectus supplement and this prospectus will be used by the underwriters to
make resales of the securities. If underwriters are used in the sale of any
securities in connection with this prospectus, those securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at
fixed public offering prices or at varying prices determined by the
underwriters and Hyperion at the time of sale. Securities may be offered to the
public either through underwriting syndicates represented by managing
underwriters or directly by one or more underwriters. If any underwriter or
underwriters are used in the sale of securities, unless otherwise indicated in
a related prospectus supplement, the underwriting agreement will provide that
the obligations of the underwriters are subject to some conditions precedent
and that the underwriters with respect to a sale of these securities will be
obligated to purchase all such Securities if any are purchased.
Hyperion may grant to the underwriters options to purchase additional
securities, to cover over-allotments, if any, at the initial public offering
price, with additional underwriting commissions or discounts, as may be set
forth in a related prospectus supplement. If Hyperion grants any over-allotment
option, the terms of that over-allotment option will be set forth in the
prospectus supplement for these securities.
If a dealer is utilized in the sale of the securities in respect of which
this prospectus is delivered, Hyperion will sell these securities to the dealer
as principal. The dealer may then resell such securities to the public at
varying prices to be determined by such dealer at the time of resale. Any such
dealer may be deemed to be an underwriter, as such term is defined in the
Securities Act, of the securities so offered and sold. The name of the dealer
and the terms of the transaction will be set forth in the prospectus supplement
relating to those offers and sales.
Offers to purchase securities may be solicited directly by Hyperion and
those sales may be made by Hyperion directly to institutional investors or
others, who may be deemed to be underwriters within the
30
meaning of the Securities Act with respect to any resale of those securities.
The terms of any sales of this type will be described in the prospectus
supplement.
Securities may also be offered and sold, if so indicated in the related
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment in connection with their terms, or
otherwise, by one or more firms "remarketing firms," acting as principals for
their own accounts or as agents for Hyperion. Any remarketing firm will be
identified and the terms of its agreement, if any, with Hyperion and its
compensation will be described in a related prospectus supplement. Remarketing
firms may be deemed to be underwriters, as that term is defined in the
Securities Act, in connection with the securities remarketed by them.
If so indicated in a related prospectus supplement, Hyperion may authorize
agents and underwriters to solicit offers by certain institutions to purchase
securities from Hyperion at the public offering price set forth in a related
prospectus supplement as part of delayed delivery contracts providing for
payment and delivery on the date or dates stated in a related prospectus
supplement. Such delayed delivery contracts will be subject to only those
conditions set forth in a related prospectus supplement. A commission indicated
in a related prospectus supplement will be paid to underwriters and agents
soliciting purchases of securities pursuant to delayed delivery contracts
accepted by Hyperion.
Agents, underwriters, dealers and remarketing firms may be entitled under
relevant agreements with Hyperion to indemnification by Hyperion against some
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such agents, underwriters, dealers and
remarketing firms may be required to make in respect thereof.
Each series of securities will be a new issue and, other than the Class A
common stock, which is quoted on the Nasdaq National Market, will have no
established trading market. Unless otherwise specified in a related prospectus
supplement, Hyperion will not be obligated to list any series of securities on
an exchange or otherwise. We cannot assure you that there will be any liquidity
in the trading market for any of the securities.
Agents, underwriters, dealers and remarketing firms may be customers of,
engage in transactions with, or perform services for, Hyperion and its
subsidiaries in the ordinary course of business.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, as well as proxy statements
and other information with the SEC. You may read and copy any document we file
with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at its Regional Offices in Chicago, Illinois or New
York, New York. You may obtain further information about the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are
also available to the public over the Internet at the SEC's web site at
http://www.sec.gov, which contains reports, proxy statements and other
information regarding registrants like us that file electronically with the
SEC.
This prospectus is part of a registration statement on Form S-3 filed by us
with the SEC under the Securities Act. As permitted by SEC rules, this
prospectus does not contain all of the information included in the registration
statement and the accompanying exhibits filed with the SEC. You may refer to
the registration statement and its exhibits for more information.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with the SEC. This means that we 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. If we
subsequently file updating or superseding information in a document that is
incorporated by reference into this prospectus, the subsequent information will
also become part of this prospectus and will supersede the earlier information.
31
We are incorporating by reference the following documents that we have filed
with the SEC:
. our Transition Report on Form 10-K for the nine months ended December
31, 1998, as amended by Form 10-K/A. We refer to this Transition Report
on Form 10-K in this prospectus as the Form 10-K;
. our Form 10-Qs for the quarters ended March 31, 1999 and June 30, 1999;
. our definitive proxy statement dated October 4, 1999, with respect to
the Annual Meeting of Stockholders to be held October 25, 1999;
. our Form 8-Ks for the events dated February 16, 1999, February 25, 1999,
March 30, 1999 and September 21, 1999; and
. the description of our Class A common stock contained in our
registration statement filed with the SEC under Section 12 of the
Securities Exchange Act of 1934 and subsequent amendments and reports
filed to update such description.
We are also incorporating by reference into this prospectus all of our
future filings with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until this offering has been completed.
You may obtain a copy of any of our filings that are incorporated by
reference, at no cost, by writing to or telephoning us at the following
address:
Hyperion Telecommunications, Inc.
One North Main Street
Coudersport, Pennsylvania 16915
Attention: Investor Relations
Telephone: (814) 274-9830
You should rely only on the information provided in this prospectus or
incorporated by reference. We have not authorized anyone to provide you with
different information. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the cover of the
prospectus. We are not making this offer of securities in any state or country
in which this offer or the acceptance thereof would not be in compliance with
the Securities or Blue Sky laws of such jurisdiction.
LEGAL MATTERS
Buchanan Ingersoll Professional Corporation, Pittsburgh, Pennsylvania will
pass upon the validity of the securities. Any required information regarding
ownership of Hyperion's securities by lawyers of such firm will be contained in
the applicable prospectus supplement. If the securities are underwritten, the
applicable prospectus supplement will also set forth whether and to what
extent, if any, a law firm for the underwriters will pass upon the validity of
the securities.
EXPERTS
The consolidated financial statements of Hyperion as of March 31, 1998 and
December 31, 1998, and for each of the years ended March 31, 1997 and 1998 and
the nine months ended December 31, 1998, all incorporated in this prospectus by
reference from Hyperion's Transition Report on Form 10-K for the nine months
ended December 31, 1998 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
32
Hyperion Telecommunications, Inc.
Debt Securities
Preferred Stock
Depositary Shares
Class A Common Stock
Class B Common Stock
Other Equity Securities
----------------
PROSPECTUS
----------------
We have not authorized any dealer, salesperson or other person to give any
information or represent anything contained in this prospectus. You must not
rely on any unauthorized information. This prospectus does not offer to sell
nor does it solicit to buy any securities in any jurisdiction where it is
unlawful. The information in this prospectus is current as of October , 1999.
Dated October , 1999
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following is an estimate of the expenses which will be incurred by
Hyperion in connection with the issuance and distribution of the securities
being registered.*
Amount
--------
SEC filing fee.................................................. $417,000
Trustee fees.................................................... 10,000
Blue Sky fees and expenses...................................... 20,000
Legal fees and expenses......................................... 200,000
Accounting fees and expenses.................................... 150,000
Printing and engraving expenses................................. 150,000
Miscellaneous expenses.......................................... 50,000
--------
Total........................................................... $997,000
========
- --------
*All amounts are estimated except for the SEC filing fee.
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law provides in general that
a corporation may indemnify its directors, officers, employees or agents
against expenditures (including judgments, fines, amounts paid in settlement
and attorneys' fees) made by them in connection with certain lawsuits to which
they may be made parties by reason of their being directors, officers,
employees or agents and shall so indemnify such persons against expenses
(including attorneys' fees) if they have been successful on the merits or
otherwise. The bylaws of Hyperion provide for indemnification of the officers
and directors of Hyperion to the full extent permissible under Delaware law.
Hyperion's Certificate of Incorporation also provides, pursuant to Section
102(b)(7) of the Delaware General Corporation Law, that directors of Hyperion
shall not be personally liable to Hyperion or its stockholders for monetary
damages for breach of fiduciary duty as a director for acts or omissions,
provided that directors shall nonetheless be liable for breaches of the duty of
loyalty, bad faith, intentional misconduct, knowing violations of law, unlawful
distributions to stockholders, or transactions from which a director derived an
improper personal benefit.
Item 16. Exhibits and Financial Statement Schedules
(a) The following is a complete list of Exhibits filed as part of this
Registration Statement, which are incorporated herein:
Exhibit No. Description
----------- -----------
1.01 Forms of Underwriting Agreements (To be filed by Form 8-K (File
No. 000-21605))
3.01 Certificate of Incorporation of Registrant, together with all
amendments thereto. (Incorporated herein by reference is Exhibit
3.01 to Registrant's Current Report on Form 8-K for the event
dated October 9, 1997.)
3.02 Bylaws of Registrant. (Incorporated herein by reference is Exhibit
3.2 to Registration Statement No. 333-12619 on Form S-1).
II-1
Exhibit No. Description
----------- -----------
4.01** Form of Senior Debt Indenture.
4.02** Form of Subordinated Debt Indenture.
5.01** Opinion of Buchanan Ingersoll Professional Corporation.
12.01** Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.
23.01** Consent of Buchanan Ingersoll Professional Corporation (contained
in its opinion filed as Exhibit 5.01 hereto).
23.02** Consent of Deloitte & Touche LLP.
24.01** Power of Attorney (Appearing on signature page).
- --------
** Filed herewith
(b) Financial Statement Schedules
The following schedules are included in the Registrant's Transitional Report
on Form 10-K for the nine months ended December 31, 1998 incorporated herein by
reference.
Schedule II--Valuation and Qualifying Accounts.
Item 17. Undertakings
(a) Rule 415 Offering.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) 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;
(iii) 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) above do not apply
if the Registration Statement is on Form S-3 or Form S-8, and 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 Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-2
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement 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.
(c) Request for Acceleration of Effective Date.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the 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 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 of whether such indemnification by it
is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
(d) Trust Indenture Application.
The undersigned Registrants hereby undertake to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Coudersport,
Commonwealth of Pennsylvania, on the 13th day of October, 1999.
HYPERION TELECOMMUNICATIONS, INC.
/s/ James P. Rigas
By: _________________________________
James P. Rigas
Chief Executive Officer
POWER OF ATTORNEY
Know All Men By These Presents that each person whose signature appears
below constitutes and appoints John J. Rigas, Michael J. Rigas, Timothy J.
Rigas, and James P. Rigas, and each of them, such person's true and lawful
attorneys-in-fact and agents, with full power of substitution and revocation,
for such person and in such person's name, place and stead, in any and all
amendments (including post-effective amendments to this Registration Statement)
and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as such person might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title
Date
/s/ John J. Rigas Chairman and Director October 13,
- ------------------------- 1999
John J. Rigas
/s/ Timothy J. Rigas Vice Chairman, Treasurer, Chief
Financial Officer Chief Accounting Officer
and Director
October 13,
- ------------------------- 1999
Timothy J. Rigas
/s/ Michael J. Rigas Vice Chairman and Director October 13,
- ------------------------- 1999
Michael J. Rigas
/s/ James P. Rigas Vice Chairman, Chief Executive October 13,
- ------------------------- Officer and Director 1999
James P. Rigas
Director October ,
- ------------------------- 1999
Daniel R. Milliard
/s/ Pete J. Metros Director October 13,
- ------------------------- 1999
Pete J. Metros
II-4
Signature Title
Date
/s/ James L. Gray Director October 13,
- ------------------------- 1999
James L. Gray
/s/ Randolph S. Fowler Director October 13,
- ------------------------- 1999
Randolph S. Fowler
II-5
Exhibit Index
Exhibit No. Description
----------- -----------
1.01 Forms of Underwriting Agreements (To be filed by Form 8-K (File
No. 000-21605))
3.01 Certificate of Incorporation of Registrant, together with all
amendments thereto. (Incorporated herein by reference is Exhibit
3.01 to Registrant's Current Report on Form 8-K for the event
dated October 9, 1997.)
3.02 Bylaws of Registrant. (Incorporated herein by reference is Exhibit
3.2 to Registration Statement No. 333-12619 on Form S-1.)
4.01** Form of Senior Debt Indenture.
4.02** Form of Subordinated Debt Indenture.
5.01** Opinion of Buchanan Ingersoll Professional Corporation.
12.01** Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends.
23.01** Consent of Buchanan Ingersoll Professional Corporation (contained
in its opinion filed as Exhibit 5.01 hereto).
23.02** Consent of Deloitte & Touche LLP.
24.01** Power of Attorney (Appearing on signature page).
- --------
** Filed herewith