As filed with the Securities and Exchange Commission on August 31, 1998
Registration No. 333-___________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HYPERION TELECOMMUNICATIONS, INC.
Delaware 25-1669404
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Main at Water Street
Coudersport, Pennsylvania 16915
(Address of principal executive offices)
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HYPERION TELECOMMUNICATIONS, INC.
1996 LONG-TERM INCENTIVE COMPENSATION PLAN
(Full title of the plan)
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James P. Rigas, Chief Executive Officer Copies of communications to:
Hyperion Telecommunications, Inc. Carl E. Rothenberger, Jr., Esquire
Main at Water Street Buchanan Ingersoll
Coudersport, Pennsylvania 16915 Professional Corporation
(Name and address of agent for service) One Oxford Centre
(814) 274-9830 301 Grant Street, 21st Floor
(Telephone number of agent for service) Pittsburgh, PA 15219-1410
(412) 562-8826
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CALCULATION OF REGISTRATION FEE
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- ----------------------------------------- ---------------- -------------------- -------------------- ---------------------
Proposed Maximum Proposed Maximum
Amount to Be Offering Price Per Aggregate Offering Amount of
Title of Securities to Be Registered Registered Share(1) Price Registration Fee(2)
- ----------------------------------------- ---------------- -------------------- -------------------- ---------------------
<S> <C> <C> <C> <C>
Class A Common Stock 8,125,000(3) $8.8125 $71,601,562.50 $21,122.46
(par value $.01 per share)
- ----------------------------------------- ---------------- -------------------- -------------------- ---------------------
Total 8,125,000 $8.8125 $71,601,562.50 $21,122.46
- ----------------------------------------- ---------------- -------------------- -------------------- ---------------------
- ----------------------------------------- ---------------- -------------------- -------------------- ---------------------
<FN>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(h). In accordance with Rule 457(h), such price is the average
of the high and low sale prices for the Common Stock as quoted on the
Nasdaq National Market on August 27, 1998.
(2) Calculated pursuant to Section 6(B).
(3) Includes 455,000 shares of Common Stock previously awarded to an executive
officer pursuant to an employment agreement with Hyperion
Telecommunications, Inc. under its 1996 Long-Term Incentive Compensation
Plan (the "Plan"). Certain of these shares may be issuable upon the
execution of options which may be granted under the Plan with fixed
exercise prices.
</FN>
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</TABLE>
<PAGE>
The documents containing the information specified in Part I of this
Registration Statement will be sent or given to employees as specified by Rule
428(b)(1). Such documents are not required to be and are not filed with the
Securities and Exchange Commission (the "Commission") either as a part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424. These documents and the documents incorporated by reference in this
Registration Statement pursuant to Item 3 of Part II of this Form S-8, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933, as amended.
<PAGE>
REOFFER PROSPECTUS
HYPERION TELECOMMUNICATIONS, INC.
8,125,000 SHARES OF CLASS A COMMON STOCK
This Reoffer Prospectus (this "Prospectus") relates to the reoffer and
resale of an aggregate of 8,125,000 shares (the "Shares") of Class A Common
Stock, par value $.01 per share (the "Class A Common Stock"), of Hyperion
Telecommunications, Inc. (the "Company" or the "Registrant"). The Shares may be
acquired, or have been acquired, by certain officers and directors of the
Company and others who may be deemed to be "affiliates" of the Company (as
defined in Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act") ) all as identified herein (the "Selling Stockholders"), from
time to time upon the grant of Class A Common Stock or the exercise of stock
options granted under the Company's 1996 Long-Term Incentive Compensation Plan
(the "Plan"). The Company may from time to time supplement and/or amend this
Prospectus to cover additional shares that underlie options granted to
"affiliates" of the Company.
The Selling Stockholders may, from time to time, offer all or part of the
Shares on the Nasdaq Stock Market or such national securities exchange upon
which the Class A Common Stock may be traded at the time of such sales, at
prices prevailing at the time of such sales, or in negotiated transactions. The
Company will pay all expenses in preparing and reproducing the Registration
Statement of which this Prospectus is a part, but will not receive any part of
the proceeds of any sales of Shares. In addition, any securities covered by this
Prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule
144 rather than pursuant to this Prospectus. The Selling Stockholders will pay
the brokerage commissions charged to sellers in connection with such sales. See
"Plan of Distribution."
The Company's Class A Common Stock trades on the Nasdaq National Market
tier of the Nasdaq Stock Market under the symbol "HYPT." On August 27, 1998, the
closing price of the Class A Common Stock was $8.875 per share.
The Selling Stockholders and any broker executing selling orders on behalf
of the Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act, in which event commissions received by such
broker may be deemed to be an underwriting commission under the Securities Act.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE CLASS A COMMON
STOCK OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations, other than as contained herein, in
connection with the offer made in this Prospectus, and any information or
representations not contained herein must not be relied upon as having been
authorized by the Company or the Selling Stockholders. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any security
other than the Class A Common Stock offered by this Prospectus, nor does it
constitute an offer to sell or a solicitation of any offer to buy any shares of
Class A Common Stock offered hereby to any person in any jurisdiction where it
is unlawful to make such an offer or solicitation to such person. Neither the
delivery of this Prospectus nor any sale hereunder shall under any circumstances
create any implication that information contained herein is correct as of any
time subsequent to the date hereof.
The date of this Prospectus is August 28, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-8 (the
"Registration Statement") under the Securities Act with the Commission which
includes this Prospectus with respect to the Class A Common Stock of the Company
offered by the Selling Stockholders hereby. As permitted by the rules and
regulations of the Commission, this Prospectus omits certain information
contained in the Registration Statement. For further information with respect to
the Company and the Class A Common Stock offered hereby, the Company files
reports and other information with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), which may be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20459, or at its Regional Offices
located at 500 West Madison, 14th Floor, Chicago, Illinois 60661-2511, and 7
World Trade Center, 13th Floor, New York, New York 10048. In addition, the
Commission maintains a Web site at http://www.sec.gov containing reports, proxy
and information statements and other information regarding registrants that file
electronically with the Commission, including the Company. Statements contained
in this Prospectus as to the contents of any contract or other document referred
to are not necessarily complete, and in each instance reference is made to the
copy of such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus is delivered, upon oral or written request of such
person, a copy of any and all of the information that has been or may be
incorporated by reference in this Prospectus, other than exhibits to such
documents. Requests for such copies should be directed to the attention of
Edward E. Babcock, Vice President, Finance, Hyperion Telecommunications, Inc.,
Main at Water Street, Coudersport, Pennsylvania 16915, (814) 274-9830.
<PAGE>
THE COMPANY
Hyperion is a leading facilities-based provider of local telecommunications
services with state-of-the-art fiber-optic networks located in regionally
clustered markets primarily within the eastern half of the United States. As of
June 30, 1998, Hyperion had 22 networks (the "Existing Networks"), including two
networks under construction. The Existing Networks serve 46 cities and include
approximately 5,455 route miles of fiber-optic cable. In addition, as of June
30, 1998, the Company's 20 networks in operation were connected to 2,034
buildings, and the Company's facilities were collocated in 116 local exchange
carrier ("LEC") central offices. Management believes that the Company's Existing
Networks represent an addressable market opportunity of approximately 13.2
million business access lines, substantially all of which is currently serviced
by incumbent LECs and interexchange carriers ("IXCs").
RISK FACTORS
In addition to the other information in this Prospectus, prospective
investors should consider carefully the following risk factors in evaluating the
Company and its business before purchasing any shares of Class A Common Stock
offered hereby.
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.
When used in or incorporated by reference into this Prospectus, the words
"estimate," "project," "intend," "expect" and similar expressions are intended
to identify forward-looking statements regarding events and financial trends
which may affect the Company's future operating results and financial position.
Such forwarding-looking information involves important risks and uncertainties
that could significantly alter expected results in the future from those
expressed in any forward-looking statements made by, or on behalf of, the
Company. These risks and uncertainties include, but are not limited to,
uncertainties relating to the Company'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 relating to general economic
conditions, acquisitions and divestitures, government and regulatory policies,
the pricing and availability of equipment, materials and inventories,
technological developments and changes in the competitive environment in which
the Company 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.
Negative Cash Flow and Operating Losses; Limited History of Operations
The Company has experienced significant losses since its inception, with
operating losses of approximately $3.6 million, $9.1 million, $20.1 million,
$3.4 million and $11.9 million for the fiscal years ended March 31, 1996, 1997
and 1998 and the three month periods ended June 30, 1997 and 1998, respectively.
The Company expects to continue to incur substantial operating losses in the
foreseeable future as it pursues its plans to expand its networks, service
offerings and customer base. There can be no assurance that such losses will not
continue indefinitely. The Company currently accounts for its ownership
interests in the operating companies or partnerships in which it does not have a
majority ownership (collectively, the "Operating Companies") interest using the
equity method and, therefore, the Company's consolidated financial statements
include only the Company's pro rata share of such Operating Companies' net
losses as equity in net losses of joint ventures.
The Company was formed in October 1991 and, as of June 30, 1998, only 11 of
its 20 operational networks had been in operation for more than 24 months and
two Existing Networks were not yet in operation. Prospective investors therefore
have limited historical financial information about the Company upon which to
base an evaluation of the Company's performance. The development of the
Company's businesses and the installation and expansion of its Existing Networks
and new networks require significant expenditures, a substantial portion of
<PAGE>
which are made before any revenues may be realized. Certain of the expenditures,
including marketing, sales and general and administrative costs, are expensed as
incurred, while certain other expenditures, including network design and
construction, negotiation of rights-of-way and costs to obtain legal and
regulatory approval, are deferred until the applicable network is operational.
The Company will continue to incur significant expenditures in connection with
the construction, acquisition, development and expansion of the Company's and
Operating Companies' networks, services and customer base.
In light of the Company's limited operating history, its history of
significant operating losses and its expectation that it will continue to incur
significant expenses and operating losses for the foreseeable future, there can
be no assurance that the Company will be able to implement its growth strategy
or achieve or sustain profitability.
Significant Future Capital Requirements
The competitive local telecommunication service business is a
capital-intensive business. The Company's operations have required and will
continue to require substantial capital investment for (i) the installation of
electronics for switched services in the Company's networks, (ii) the expansion
and improvement of the Company's Network Operating Control Center ("NOCC") and
Existing Networks, (iii) the design, construction and development of new
networks and (iv) the acquisition of additional ownership interests in Existing
Networks or new networks. The Company estimates that it will require
approximately $420 million to fund anticipated capital expenditures, working
capital requirements and operating losses of the Company and investments in its
existing and its planned new Operating Companies through the end of calendar
1999. Expansion of the Company's networks will include the geographic expansion
of the Company's Existing Networks and the construction of new networks over the
next several years. The Company expects to build these new networks in
additional markets, which in some cases may include additional partnerships with
utility partners. Also, in the future, the Company may increase its ownership
interests in Existing Networks. The expectations of required future capital
expenditures are based on the Company's current estimate. There can be no
assurance that actual expenditures will not significantly exceed current
estimates, that the Company will not accelerate its capital expenditures
program, or that the application of existing cash will not otherwise very
significantly from the Company's plans. In addition to the foregoing, the
Company will use funds for the purchase of LMDS spectrum in the LMDS Auction and
to construct and develop associated facilities. The Company is in the process of
defining its plans for utilization of the LMDS Spectrum, which could involve
substantial additional funds.
The Company currently expects that its existing cash balance and internally
generated funds, will be sufficient to fund the Company's capital expenditures,
working capital requirements, operating losses and pro rata investments in the
Operating Companies through the beginning of calendar 2000. There can be no
assurance, however, as to the availability of funds from internal cash flow,
Local Partner investments or from the private or public equity or debt markets.
Also, the indentures relating to the 13% Senior Discount Notes (the "Senior
Notes") and the 12 1/4% Senior Secured Notes (the "Senior Secured Notes") and
the Certificate of Designation for the 12 7/8% Senior Exchangeable Redeemable
Preferred Stock provide certain restrictions upon the Company's ability to incur
additional indebtedness. The Company's inability to fund pro rata investments
required for the Operating Companies could result in a dilution of the Company's
interest in the individual Operating Companies or could otherwise have a
material adverse effect upon the Company and/or the Operating Companies.
Risk of New Service Acceptance of Customers
The Company is currently in the process of introducing a number of
services, primarily local exchange services, that the Company believes are
important to its long-term growth. The success of these services will be
dependent upon, among other things, the willingness of customers to accept the
Company as a new provider of such new telecommunications services. No assurances
can be given that such acceptance will occur, and the lack of such acceptance
could have a material adverse effect on the Company.
Expansion Risk; Additional Personnel
The Company is experiencing a period of rapid expansion which the Company
believes will accelerate in the foreseeable future. The operating complexity of
<PAGE>
the Company, as well as the responsibilities of management personnel, have
increased as a result of this expansion. The Company's ability to manage such
growth effectively will require it to continue to expand and improve its
operational and financial systems and to expand, train and manage its employee
base. In addition, the Company and the Operating Companies intend to
significantly increase the hiring of additional sales and marketing personnel.
There can be no assurance that such new personnel will be successfully
integrated into the Company or the Operating Companies, as the case may be, or
whether a sufficient number of qualified personnel will be available at all. The
Company's inability to effectively manage its hiring of additional personnel and
expansion could have a material adverse effect on its business and results of
operations.
Holding Company Structure; Inability to Access Cash Flow
The Company is a holding company with substantially all of its operations
conducted through the Operating Companies, and the Company expects that it may
develop new networks and operations in the future through joint ventures. In
addition, as of June 30, 1998, 10 of the Company's Existing Networks were owned
by joint ventures in which the Company owned 50% or less of the equity
interests, and future joint ventures may be developed in which the Company will
own less than 50% of the equity interests. Accordingly, the Company's cash flow
and, consequently, its ability to service its debt, if any, any other
indebtedness and its obligations with respect to preferred stock, is dependent
on the Company receiving its pro rata share of the cash flow of the Operating
Companies and the payment of funds by those Operating Companies in the form of
management fees, loans, dividends, distributions or otherwise. The Operating
Companies are separate and distinct legal entities and have no obligation,
contingent or otherwise, to pay any amounts due pursuant to the Company's senior
notes, the senior secured notes or the preferred stock or to make any funds
available therefor, whether in the form of loans, dividends, distributions or
otherwise. Furthermore, the Company may be unable to access its portion of the
cash flow of certain of the Operating Companies because it holds a 50% or less
ownership interest in certain of such entities and, therefore, does not have the
requisite control to cause such entities to make distributions or pay dividends
to the partners or equity holders. In addition, such entities will be permitted
to incur indebtedness that may severely restrict or prohibit the making of
distributions, the payment of dividends or the making of loans.
Substantial Leverage
As of June 30, 1998, the Company's total amount of debt and redeemable
preferred stock outstanding was approximately $714.3 million, and the Company
had a Stockholders' equity of approximately $141.4 million. In addition, in each
year since its inception, despite increasing revenues, the Company's earnings
have been inadequate to cover its combined fixed charges and preferred stock
dividends by a substantial and increasing margin. Moreover, the Company
anticipates that earnings will be insufficient to cover combined fixed charges
and preferred stock dividends for the foreseeable future. Commencing on October
15, 2001, semi-annual cash interest payments of $21.4 million will be due and
payable on the Company's 13% Senior Discount Notes due April 15, 2003 (the
"Senior Notes"), commencing March 1, 1998, semi-annual cash payments of $15.3
million on the Senior Secured Notes are due and payable, and commencing on
October 15, 2002, quarterly cash dividends of $12.2 million on the Preferred
Stock (assuming that all dividends prior to such date are paid in additional
shares of Preferred Stock) will become due and payable.
Because the Company currently has, and anticipates that it will continue to
have, a substantial consolidated operating cash-flow deficit, its ability to (i)
make cash interest payments on the Senior Notes commencing on October 15, 2001
and to repay its obligations on the Senior Notes at maturity, (ii) make cash
interest payments on the Senior Secured Notes commencing on March 1, 1998, and
to repay its obligations on the Senior Secured Notes at maturity, and (iii) make
cash dividend payments on the Preferred Stock commencing on October 15, 2002,
and to redeem the Preferred Stock at maturity, will be dependent on developing
one or more sources of cash flow prior to the date on which such cash payment
obligations arise. To accomplish this, the Company may seek to (i) refinance all
or a portion of the Senior Notes, the Senior Secured Notes and/or the Preferred
Stock (or the debentures exchanged therefor, including any such debentures
issued in lieu of cash interest thereon, as the case may be, the "Exchange
Debentures"), (ii) sell all or a portion of its interests in one or more of the
Operating Companies, (iii) negotiate with its current local partners to permit
any excess cash generated by its Operating Companies to be distributed to the
partners rather than invested in the business of such Operating Companies,
and/or (iv) invest in companies that will make substantial cash distributions.
There can be no assurance that (i) there will be a market for the debt or equity
<PAGE>
securities of the Company in the future, (ii) the Company will be able to sell
assets in a timely manner or on commercially reasonable terms or in an amount
that will be sufficient to make cash interest or dividend payments and to repay
the Senior Notes, the Senior Secured Notes and/or redeem the Preferred Stock (or
repay the Exchange Debentures, as the case may be) when due, (iii) the Company
will be able to persuade its Local Partners that cash generated by the
operations of the Operating Companies should be distributed to partners, members
or shareholders, or (iv) the Company will be able to locate and invest in
companies that will be mature enough to make substantial cash contributions to
the Company prior to the time such payments are due.
Control by Principal Stockholders; Effect of Transfer of Class B Common Stock
Adelphia owns (or will own or have the right to acquire after the
consummation of certain stock purchases and warrant issuances) approximately
64.7% on a fully diluted basis, of the Company as of June 30, 1998, with an
additional 3.8%, on a fully diluted basis, owned by senior executives of the
Company (the "Management Stockholders"). Adelphia owns 87.1% of the fully
diluted Class B Common Stock of the Company, which is entitled to ten votes per
share, whereas the holders of Class A Common Stock are entitled to one vote per
share. Except as provided in the Lock-Up Agreements (as herein defined), there
are no contractual restrictions or restrictions in the Company's certificate of
incorporation regarding the ability to transfer the Class B Common Stock. As of
June 30, 1998, Adelphia controlled approximately 83.4% of the combined voting
power of both classes of common stock. Accordingly, Adelphia is able to control
the vote on corporate matters requiring Stockholders' approval, including, but
not limited to, electing directors, amending the Company's Restated Certificate
of Incorporation and approving mergers or sales of substantially all of the
Company's assets. In addition, Adelphia will be able to transfer control of the
Company through the transfer of its Class B Common Stock to an unrelated third
party. In such event, such third-party transferee could use its voting control
in the Company to engage in corporate transactions, such as those set forth
above, that could adversely affect the holders of the Common Stock.
Through its ownership of the outstanding capital stock of the Company,
Adelphia has substantial influence over certain corporate transactions of the
Company, including its ability to enter into joint ventures and other business
relationships. As a result, the Company may be subject to possible conflicts of
interest arising from the relationship with Adelphia in connection with the
pursuit of business opportunities in the telecommunications industry. Although
certain officers and directors of the Company, who are also officers and
directors of Adelphia, have certain fiduciary obligations to the Company under
Delaware law, such officers and directors are in positions that may create
conflicts of interest. There can be no assurance that any such conflict will be
resolved in favor of the Company which is empowered to expand the number of
seats on the Company's Board of Directors to up to 14 and to fill the vacancies
created thereby. Adelphia has also agreed to vote its shares of the common stock
of the Company to elect Messrs. Drenning and Fowlerto the Company's Board of
Directors so long as each is both an employee and shareholder of the Company.
Need to Obtain and Maintain Permits and Rights-of-Way
The Company expects that in connection with its planned construction and
development of certain of its new networks that it will be required to obtain
and maintain permits and rights-of-way to develop and operate such networks.
There can be no assurance that the Company or the Operating Companies, through
local partners, Adelphia or their own efforts, will be able to obtain new
permits and rights-of-way, 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. In addition, the Company and the
Operating Companies may require pole attachment or conduit use agreements with
incumbent LECs, utilities or other LECs to operate Existing Networks and new
networks, and there can be no assurance that such agreements will be obtained or
will be obtainable on reasonable terms. Failure to obtain or maintain such
permits, rights-of-way and agreements could have a material adverse effect on
the Company's ability to operate and expand its networks.
The amount of lease payments could be affected by the costs the Local
Partners incur for attachments to poles, or use of conduit, owned by incumbent
LECs or electric utilities. Various state Public Utilities Commission ("PUCs")
and the FCC are reviewing whether use of local partner facilities for
telecommunications purposes (as occurs when the Operating Companies lease
fiber-optic capacity from local partners) should entitle incumbent LECs 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
<PAGE>
made by the Operating Companies to the local partners and could have a
significant impact on the profitability of the Operating Companies.
Competition
In each of the markets served by the Company's networks, the services
offered by the Company compete principally with the services offered by the
incumbent LEC serving that area. Incumbent LECs have long-standing relationships
with their customers, have the potential to subsidize competitive services from
monopoly service revenues, and benefit from favorable state and federal
regulations. In light of the passage of the Telecommunications Act of 1996 (the
"Telecommunications Act"), federal and state regulatory initiatives will provide
increased business opportunities to CLECs such as the Company, but regulators
are likely to provide incumbent LECs with increased pricing flexibility for
their services as competition increases. If incumbent LECs are allowed by
regulators to lower their rates substantially or selectively engage in excessive
volume and term discount pricing practices for their customers or change CLECs
excessive fees for interconnection to the incumbent LECs' networks, the net
income and cash flow of CLECs, including the Operating Companies, could be
materially and adversely affected.
The Telecommunications Act also establishes procedures under which the
Regional Bell Operating Companies ("RBOCs") can obtain authority to provide
long-distance services if they comply with certain interconnection requirements.
To date, the FCC authority to provide in-region interLATA service has been
sought by Ameritech in Michigan, Southwestern Bell in Oklahoma, and BellSouth in
Louisiana and South Carolina. The Department of Justice has opposed each
request, and each request has been denied by the FCC. An approval could result
in decreased market share for the major IXCs, which are among the Operating
Companies' significant customers. Such a result could have an adverse effect on
the Company.
There has been significant merger activity among the RBOCs in anticipation
of entry into the long-distance market, including the merger of Bell Atlantic
and NYNEX, whose combined territory covers a substantial portion of the
Company's markets. If RBOCs are permitted to provide such services, they will
ultimately be in a position to offer single-source service for local and
long-distance communications and subsidize the price of their long-distance
prices with charges on local service. Other combinations are occurring in the
industry which may have an effect on the Company, such as the pending
combination between Worldcom and MCI or between AT&T Corp. and Teleport
Communications Group Inc. ("TCG"). The effects of these combinations, if
consummated, are unknown at this time. The Company believes that, if
consummated, such combinations will also affect the Company's strategy of
originating and terminating a significant proportion of its customers'
communications traffic over its own networks, rather than relying on the network
of the incumbent LEC.
The Company also faces, and will continue to face, competition from other
current and potential market entrants, including CLECs, incumbent LECs which are
not subject to RBOC restrictions on long distance, AT&T, MCI, Sprint and other
IXCs, cable television companies, electric utilities, microwave carriers,
wireless telecommunications providers and private networks built by large end
users. The Telecommunications Act facilitates such entry by requiring incumbent
LECs to allow new entrants to acquire local services at wholesale prices for
resale, and to purchase unbundled networks at cost-based rates. Substantially
all of the Company's markets are served by one or more CLECs other than the
Company. In addition, all of the major IXCs are expected to enter the market for
local telecommunications services. Both AT&T and MCI 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. Although the Company has good relationships with the IXCs, there are no
assurances that any of these IXCs will not build their own facilities, purchase
other carriers or their facilities, or resell the services of other carriers
rather than use the Company's services when entering the market for local
exchange services.
The Company also competes with equipment vendors and installers and
telecommunications management companies with respect to certain portions of its
business.
<PAGE>
Many of the Company's current and potential competitors, particularly
incumbent LECs, have financial, personnel and other resources substantially
greater than those of the Company, as well as other competitive advantages over
the Company.
Regulation and Risks of the Telecommunications Act
The Company is subject to varying degrees of federal, state and local
regulation. The Company is not currently subject to price cap or rate-of-return
regulation by the FCC, nor is it currently required to obtain FCC authorization
for the installation, acquisition or operation of its network facilities.
However, the Operating Companies that provide intrastate services are generally
subject to certification and tariff filing requirements by state regulators and
may also be subject to state reporting, customer service, service quality,
unbundling, universal service or other requirements. Challenges to these tariffs
and certificates by third parties or independent action by state public utility
commissions ("State PUCs") could cause the Company to incur substantial legal
and administrative expenses.
Although the Telecommunications Act is intended to eliminate many legal
barriers to entry, no assurance can be given that changes in current or future
regulations adopted by the FCC or State PUCs or other legislative or judicial
initiatives relating to the telecommunications industry, including initiatives
that address access charge and universal service requirements, will not have a
material adverse effect on the Company. In particular, the Company's belief that
the entire $97 billion local exchange market may ultimately be open to CLEC
competition depends upon favorable interpretations of the Telecommunications
Act. The ability of the Company and the Operating Companies to compete in these
new market segments may be adversely affected if incumbent LECs are granted
greater pricing flexibility and other regulatory relief that enables them to
impose costs on potential competitors or otherwise restrict the Company's
ability to serve its customers and attract new customers. In addition, the
Telecommunications Act removes entry barriers for all companies and could
increase substantially the number of competitors offering comparable services in
the Company's markets.
While the Telecommunications Act requires incumbent LECs, including RBOCs,
to enter into agreements to interconnect with, and generally to sell unbundled
network elements or to resell services to, CLECs, LEC-CLEC interconnection
agreements may have short terms, requiring the CLEC to renegotiate the
agreements repeatedly. LECs may not provide timely provisioning or adequate
service quality, thereby impairing a CLEC's reputation with customers who can
easily switch back to the LEC. In addition, the prices set in the agreements may
be subject to significant rate increases if State PUCs establish prices designed
to pass on to the CLECs part of the cost of providing universal service.
The Company also depends on timely and high-quality provisioning by LECs
for purposes of interconnecting the Company's and LEC's networks, purchasing
elements of the LEC's network to serve the Company's customers, transferring the
phone numbers of new Company customers from the LEC that formerly served them
and obtaining other facilities and services. While the Telecommunications Act
requires LECs to provide the same quality of service to the Company and other
CLECs as LECs provide to their own end user customers, on some occasions LECs
have provided poor-quality service. The Company cannot attract and maintain
customers for which such facilities and services must be purchased from LECs if
the quality of service is less than the customer has experienced or obtained
from the LEC.
Risks Associated With Joint Ventures
Most of the Operating Companies' local partnership agreements contain
mandatory buy/sell provisions that, after a certain number of years, can be
initiated by either partner and result in one partner purchasing all of the
other partner's interests. Accordingly, there can be no assurance that the
Company and its subsidiaries will continue to be in partnership with their
current local partner, or any other partner, in each of their respective
markets, or that the Company or its subsidiaries will have sufficient funds to
purchase the partnership interest of such other partner. In addition, if a
partner triggers such buy/sell provisions and the Company is unable to purchase
the initiating partner's interests, the Company will be forced to sell its
interests to the partner, thereby terminating the partnership, which could
result in a material adverse effect on the future cash flow of the Company.
<PAGE>
The bankruptcy or insolvency of a local partner or an Operating Company
could result in the termination of the respective local partner agreement and
the related fiber lease agreement. The effect of such terminations could be
materially adverse to the Company and the respective Operating Company.
Similarly, all of the management agreements, two of the local partner agreements
and five of the fiber lease agreements can be terminated by the respective local
partner at various times during the next seven years. While the Company believes
such agreements will be renewed, there can be no assurance that the local
partner will not seek to terminate the agreements. Accordingly, the failure to
renew such agreements could materially adversely affect the Company and the
respective Operating Companies. In addition, the failure of a local partner to
make required capital contributions could have a material adverse effect on the
Company and the respective Operating Company.
Neither the Senior Indenture, the Senior Secured Indenture (as defined),
nor the Preferred Stock Certificate of Designation (as defined) restricts the
amount of indebtedness that can be incurred by Operating Companies in which the
Company owns a less-than-45% interest. The Company expects that certain of the
Operating Companies may begin to incur substantial indebtedness in the
foreseeable future. Accordingly, the Company's ability to access the cash flow
and assets of such Operating Companies may be severely limited.
Risk Related to LMDS Strategy
LMDS is a new service, and major telecommunications equipment manufacturers
have yet to introduce infrastructure products for the LMDS frequency band. As a
result, no wireless local loop systems are currently operating under LMDS, and
implementation of such systems could be subject to unforeseen delays, costs and
possible quality and implementation issues. Material aspects of the Company's
LMDS implementation strategy are still being developed and defined, and there
can be no assurance that the Company will develop and implement a successful and
profitable LMDS strategy, or that implementation of its LMDS strategy will not
involve substantial expense.
Rapid Technological Changes
The telecommunications industry is subject to rapid and significant changes
in technology. While the Company believes that for the foreseeable future these
changes will neither materially affect the continued use of fiber-optic
telecommunications networks nor materially hinder the Company's ability to
acquire necessary technologies, the effect of technological changes on the
businesses of the Company cannot be predicted. Thus, there can be no assurance
that technological developments will not have a material adverse effect on the
Company.
Impact of the Year 2000 Issue
The year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the Company's
computer programs that have data-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices or
engage in similar normal business activities. The Company has received assurance
from its major software vendors that the products used by the Company are year
2000 compliant and will function adequately. If the systems of other companies
on whose services the Company depends or with whom the Company's systems
interface are not year 2000 compliant, it could have a material adverse effect
on the Company. The Company will continue its year 2000 issue assessment and, if
it comes to the attention of the Company's management that any of its systems,
or the systems of those on whom the Company relies, are not year 2000 compliant,
the Company intends to develop an action plan, and assess the resources it would
be required to devote, to address such problem. There can be no assurance that
devoting further resources of the Company will prevent the year 2000 issue from
having a material adverse effect on the Company.
Dependence Upon Network Infrastructure; Risk of System Failure; Security Risks
The Company's success in marketing its services to business and government
users requires that the Company provide superior reliability, capacity and
security via its network infrastructure. The Company's networks are subject to
physical damage, power loss, capacity limitations, software defects, breaches of
<PAGE>
security (by computer virus, break-ins or otherwise) and other factors, certain
of which may cause interruptions in service or reduced capacity for the
Company's customers. Interruptions in service, capacity limitations or security
breaches could have a material adverse effect on the Company's business,
financial condition and results of operations.
Dependence on Key Personnel
The success of the Company and its growth strategy depends in large part on
the Company's ability to attract and retain key management, marketing and
operations personnel. Currently, the Company's businesses are 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 the Company will attract and retain the qualified
personnel needed to manage, operate and further develop its business. In
addition, the loss of the services of any one or more members of the Company's
senior management team could have a material adverse effect on the Company.
Dependence on Business From IXCs
For the fiscal year ended March 31, 1998 and for the three months ended
June 30, 1998, approximately 53% and 47%, respectively, of the Operating
Companies' combined revenues were attributable to access services provided to
MCI, AT&T and other IXCs. The loss of access revenues from IXC's in general or
the loss of MCI or AT&T as a customer could have a material adverse effect on
the Company's current revenue stream.
In addition, the Telecommunications Act establishes procedures under which
RBOCs can obtain authority to compete with the IXCs in the long-distance market,
which could result in a decreased market share for IXCs. Due to the Operating
Companies' dependence on business from IXCs, any significant loss of market
share by the IXCs could have a material adverse effect on the Company.
Restrictions on the Company's Ability to Pay Dividends
To date, the Company has not paid cash dividends on its shares of common
stock. The ability of the Company to pay cash dividends on the Preferred Stock,
the common stock or other capital stock and to redeem the Preferred Stock upon
maturity is substantially restricted under various covenants and conditions
contained in the indentures with respect to the Senior Notes (the "Senior
Indenture"), the Senior Secured Notes (the "Senior Secured Indenture") and the
Certificate of Designation with respect to the Preferred Stock. In addition to
the limitations imposed on the payment of dividends by the Senior Indenture and
the Senior Secured Indenture, under Delaware law the Company is permitted to pay
dividends on its capital stock only out of its surplus, or in the event that it
has no surplus, out of its net profits for the year in which a dividend is
declared or for the immediately preceding fiscal year. At June 30, 1998, the
Company had a Stockholders' equity of approximately $141.4 million. In order to
pay dividends in cash, the Company must have surplus or net profits equal to the
full amount of the cash dividend at the time such dividend is declared. The
Company cannot predict what the value of its assets or the amount of its
liabilities will be in the future and, accordingly, there can be no assurance
that the Company will be able to pay cash dividends on its capital stock.
Lack of Dividend History
The Company has never declared or paid any cash dividends on its Class A
Common Stock or Class B Common Stock (collectively, the "Common Stock") and does
not expect to declare any such dividends on its Common Stock in the foreseeable
future. Payment of any future dividends on its Common Stock will depend upon
earnings and capital requirements of the Company, the Company's debt facilities
and other factors the Board of Directors considers appropriate. The Company
intends to retain its earnings, if any, to finance the development and expansion
of its business, and therefore does not anticipate paying any dividends on its
Common Stock in the foreseeable future. The Company's ability to declare
dividends on its Common Stock is also restricted by certain covenants in the
Senior Indenture, Senior Secured Indenture and the Preferred Stock Certificate
of Designation.
<PAGE>
Anti-Takeover Provisions
The Company's Certificate of Incorporation and Bylaws, the provisions of
the Delaware General Corporation Law and the Indentures with respect to the
Senior Secured Notes and the Senior Notes may make it difficult in some respects
to effect a change of control of the Company and replace incumbent management.
The existence of these provisions may have a negative impact on the price of the
Class A Common Stock, may discourage third-party bidders from making a bid for
the Company, or may reduce any premiums paid to Stockholders for their shares of
Common Stock. In addition, the Board has the authority to fix the rights and
preferences of and issue shares of the Company's Preferred Stock, which may have
the effect of delaying or preventing a change of control of the Company without
action by its Stockholders.
The Company and its Operating Companies are subject to regulation by State
PUCs in the states in which they operate. Certain states have statutes and
certain State PUCs have passed or are considering passing regulations that would
require an investor who acquires a specified percentage of the Company's or the
relevant Operating Company's securities to obtain approval to own such
securities from such state or State PUC.
<PAGE>
SELLING STOCKHOLDERS
As the names and amounts of securities to be sold by Selling Stockholders
become known, the following information will be included in a prospectus
supplement: the name and position(s) over the last three years with the Company
of each Selling Stockholder; the number of shares of Class A Common Stock owned
by each Selling Stockholder; the number of shares of Class A Common Stock
available to be acquired by each Selling Stockholder pursuant to the Plan and
being registered for resale by the Selling Stockholders; and the number of
shares of Class A Common Stock and the percentage, if 1% or more, of the total
class of Class A Common Stock outstanding to be beneficially owned by each
Selling Stockholder following this offering.
As of the date of this Prospectus, Mr. Daniel R. Milliard, the Company's
President, Chief Operating Officer and Secretary, may offer up to an aggregate
of 455,000 shares of Class A Common Stock which have been granted to him under
the Plan pursuant to an employment agreement dated March 4, 1997 by and between
the Mr. Milliard and the Company. There is no assurance that Mr. Milliard will
sell any or all of the Class A Common Stock owned by him hereunder.
The following table sets forth: (i) the number of shares of Class A Common
Stock beneficially owned by Mr. Milliard as of August 1, 1998, (ii) the number
of shares of Class A Common Stock that may be offered and sold by him pursuant
to this Prospectus, and (iii) the amount and percentage of the Class A Common
Stock to be owned by him after completion of this offering. The inclusion in the
table of Mr. Milliard shall not be deemed to be an admission that such
individual is an "affiliate" of the Company.
<TABLE>
Shares Covered by Shares Owned After
Shares Owned by This Offering(2)
Name and Position Prior to Offering Prospectus(1) Number Percentage
----------------- ----------------- ------------- ------ ----------
<S> <C> <C> <C> <C>
Daniel R. Milliard, 465,000 455,000 10,000 *
President, Chief Operating
Officer and Secretary
*Less than 1%
<FN>
(1) Includes (a) all Class A Common Stock owned as of the date of this
Prospectus and vested for the benefit of the named person(s) under the
Plan.
(2) Assumes all Class A Common Stock presently owned by such person covered by
this Prospectus have been sold. The Selling Stockholder has not indicated
any present intent to sell any Class A Common Stock of the Company.
</FN>
</TABLE>
<PAGE>
PLAN OF DISTRIBUTION
The Class A Common Stock offered hereby may be sold from time to time in
one or more transactions through any of several methods, including in
transactions on Nasdaq, in ordinary brokerage transactions or block
transactions, in distributions pursuant to and in accordance with the
over-the-counter market on which the shares may be traded, in negotiated
transactions, through underwriters or a combination of such methods of sale, at
market prices prevailing at the time of sale, at prices relating to such
prevailing market prices or at negotiated prices. The Selling Stockholders may
effect such transactions by selling shares through a broker or brokers or
underwriters, who may act as principal or agent or both agent and principal, and
such brokers or underwriters may receive compensation from the Selling
Stockholders not to exceed that which is customary for the particular
transactions.
Any shares of Class A Common Stock covered by this Prospectus that qualify
for sale pursuant to Rule 144 of the Securities Act may be sold under that rule
rather than pursuant to this Prospectus. There can be no assurance that any of
the Selling Stockholders will sell any or all of the shares of Class A Common
Stock offered by them under this Prospectus. The Company will not receive any
proceeds from any sale of the shares of Class A Common Stock covered in this
Prospectus.
The Company and the Selling Stockholders may enter into customary
agreements concerning indemnification and the provision of information in
connection with the sale of the Shares.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company are
incorporated herein by reference:
(a) The latest annual report of the Company filed on Form 10-K for the
fiscal year ended March 31, 1998;
(b) All other reports, if any, filed pursuant to Section 13(a) or 15(d) of
the Exchange Act of 1934, as amended (the "Exchange Act") since the end of the
fiscal year covered by the Company's report referred to in (a) above; and
(c) The description of the Company's Class A Common Stock, par value $.01
per share, as set forth in the Company's Form 8-A filed with the Commission on
April 21, 1998.
All documents subsequently filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment to this Registration Statement, which
indicate that all securities offered have been sold or which deregister all
securities then remaining unsold shall be deemed to be incorporated by reference
in this Registration Statement and to be a part hereof from the date of filing
of such documents.
Upon written or oral request, any of the documents incorporated herein by
reference in Item 3 of Part II of this Registration Statement (which documents
are incorporated by reference in this Section 10(a) Prospectus), other documents
required to be delivered to eligible employees pursuant to Rule 428(b) and
additional information about the Plan and its administrators are available
without charge by contacting:
Hyperion Telecommunications, Inc.
Main at Water Street
Coudersport, Pennsylvania 16915
(814) 274-9830
Edward E. Babcock
Attn: Vice President, Finance
INDEMNIFICATION
The Company's Articles of Incorporation provide that the Company shall, to
the full extent permitted by the Delaware General Corporation Law, indemnify all
persons whom it has the power to indemnify pursuant thereto, including officers
<PAGE>
and directors of the Company. The Articles of Incorporation also authorize the
Company to maintain insurance to cover such liabilities.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to Directors, officers and persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Commission, such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
LEGAL MATTERS
The validity of the shares of Class A Common Stock offered hereby will be
passed upon for the Company by Buchanan Ingersoll Professional Corporation, One
Oxford Centre, 20th Floor, 301 Grant Street, Pittsburgh, Pennsylvania
15219-1410.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference from the Company's Annual Report on Form 10-K for the year ended March
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.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This Registration Statement relates to the Hyperion Telecommunications,
Inc. 1996 Long-Term Incentive Compensation Plan. Hyperion Telecommunications,
Inc. is incorporated in the State of Delaware.
Item 3. Incorporation of Documents by Reference
The following documents filed with the Commission by the Company are
incorporated herein by reference:
(a) The latest annual report of the Company filed on Form 10-K for the
fiscal year ended March 31, 1998;
(b) All other reports, if any, filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by the Company's
report referred to in (a) above; and
(c) The description of the Company's Class A Common Stock, par value $.01
per share, as set forth in the Company's Form 8-A filed with the Commission on
April 21, 1998.
All documents subsequently filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment to this Registration Statement, which
indicate that all securities offered have been sold or which deregister all
securities then remaining unsold shall be deemed to be incorporated by reference
in this Registration Statement and to be a part hereof from the date of filing
of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "DGCL") empowers a
Delaware corporation to indemnify any persons who are, or are threatened to be
made, parties to any threatened, pending or completed legal action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation), by reason of the fact that
such person was an officer or director of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided that such officer or director acted in good faith in a
manner he or she reasonably believed to be in or not opposed to the
corporation's best interests, and, for criminal proceedings, had no reasonable
cause to believe his or her conduct was illegal. A Delaware corporation may
indemnify officers and directors in an action by or in the right of the
corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation in the performance of his or her duty. Where an
officer or director is successful on the merits or otherwise in the defense of
any action referred to above, the corporation must indemnify him or her against
the expenses which such officer or director actually and reasonably incurred.
Article XI of the Company's Restated Certificate of Incorporation provides for
the indemnification of directors, officers and employees of the Company within
the limitations of Section 145.
In accordance with Section 102(b)(7) of the DGCL, the Company's Restated
Certificate of Incorporation provides that directors shall not be personally
liable for monetary damages for breaches of their fiduciary duty as directors,
except for (i) breaches of their duty of loyalty to the Company or its
Stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or knowing violations of law, (iii) certain transactions
<PAGE>
under Section 174 of the DGCL (unlawful payment of dividends or unlawful stock
purchases or redemptions), or (iv) transactions from which a director derives an
improper personal benefit. The effect of the provision is to eliminate the
personal liability of directors for monetary damages for actions involving a
breach of their fiduciary duty of care, including any actions involving gross
negligence.
Item 7. Exemption From Registration Claimed
Not applicable.
Item 8. Exhibits
The following is a list of exhibits filed as part of this Registration
Statement, which are incorporated herein:
4.01 Amended and restated certificate of incorporation of registrant,
together with all amendments thereto. (Incorporated herein by
reference is exhibit 3.1 To registrant's amendment no. 1 To
Registration Statement on Form S-1 filed on December 21, 1996
(Registration No. 333-12619)).
4.02 Bylaws of Registrant. (Incorporated herein by reference is Exhibit
3.2 to Registrant's Amendment No. 1 to Registration Statement on
Form S-1 filed on December 21, 1996 (Registration No. 333-12619)).
5.01 Opinion of Buchanan Ingersoll Professional Corporation (filed
herewith).
23.01 Consent of Deloitte & Touche LLP (filed herewith).
23.02 Consent of Buchanan Ingersoll Professional Corporation (contained
in opinion filed as Exhibit 5.01).
24.01 Power of Attorney (contained on signature page).
Item 9. Undertakings
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act; (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 this Registration
Statement or any material change to such information in this
Registration Statement; provided however, that subclauses
(a)(1)(i) and (a)(1)(ii) do not apply if the information required
to be included in a post-effective amendment by the foregoing
clause is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and
(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.
<PAGE>
(b) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in this 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) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions described in Item 6 of this Registration
Statement, or otherwise, the Company has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Coudersport, Commonwealth of Pennsylvania, on the
28th day of August, 1998.
HYPERION TELECOMMUNICATIONS, INC.
By: /s/ Daniel R. Milliard
Daniel R. Milliard
President and Chief Operating Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THE PRESENTS that each person whose signature appears below
constitutes and appoints Michael J. Rigas, Timothy Rigas, James P. Rigas and
Daniel R. Milliard, 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, 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 August 28, 1998
- ---------------------------
John J. Rigas
/s/ Michael J. Rigas Vice Chairman and Director August 28, 1998
- ---------------------------
Michael J. Rigas
/s/ Timothy J. Rigas Vice Chairman, Treasurer, Chief August 28, 1998
- --------------------------- Financial Officer and Director
Timothy J. Rigas
/s/ James P. Rigas Vice Chairman, Chief Executive August 28, 1998
- --------------------------- Officer and Director
James P. Rigas
/s/ Daniel R. Milliard President, Secretary, Chief August 28, 1998
- --------------------------- Operating Officer and Director
Daniel R. Milliard
/s/ Charles R. Drenning Senior Vice President and Director August 28, 1998
- ---------------------------
Charles R. Drenning
/s/ Randolph S. Fowler Senior Vice President and Director August 28, 1998
- ---------------------------
Randolph S. Fowler
/s/ James L. Gray Director August 28, 1998
- ---------------------------
James L. Gray
/s/ Pete Metros Director August 28, 1998
- ---------------------------
Pete Metros
/s/Edward E. Babcock Vice President Finance and Chief August 28, 1998
- --------------------------- Accounting Officer
Edward E. Babcock
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
4.01 Amended and Restated Certificate of Incorporation of Registrant,
together with all amendments thereto. (Incorporated herein by
reference is Exhibit 3.1 to Registrant's Amendment No. 1 to
Registration Statement on Form S-1 filed on December 21, 1996
(Registration No. 333-12619)).
4.02 Bylaws of Registrant. (Incorporated herein by reference is Exhibit
3.2 to Registrant's Amendment No. 1 to Registration Statement on
Form S-1 filed on December 21, 1996 (Registration No. 333-12619)).
5.01 Opinion of Buchanan Ingersoll Professional Corporation (filed
herewith).
23.01 Consent of Deloitte & Touche LLP (filed herewith).
23.02 Consent of Buchanan Ingersoll Professional Corporation (contained
in opinion filed as Exhibit 5.01).
24.01 Power of Attorney (contained on signature page).
<PAGE>
Exhibit 5.01
Board of Directors
Hyperion Telecommunications, Inc.
Main at Water Street
Coudersport, PA 16915
Gentlemen:
We have acted as counsel to Hyperion Telecommunications, Inc., a Delaware
corporation (the "Company"), in connection with the proposed issuance by the
Company of up to 8,125,000 shares of the Company's Class A Common Stock, par
value $0.01 per share (the "Common Stock"), pursuant to the terms of the
Hyperion Telecommunications, Inc. 1996 Long-Term Incentive Compensation Plan
(the "Plan").
In connection with such proposed issuance, we have examined the Plan, the
Certificate of Incorporation of the Company, as amended and restated, the Bylaws
of the Company (as amended and restated), the relevant corporate proceedings of
the Company, the Registration Statement on Form S-8 covering the issuance of the
shares and such other documents, records, certificates of public officials,
statutes and decisions as we consider necessary to express the opinions
contained herein. In the examination of such documents, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity to those original documents of all documents
submitted to us as certified or photostatic copies.
Based on the foregoing, we are of the opinion that when the Registration
Statement shall have been declared effective by order of the Securities and
Exchange Commission and when the Common Stock has been duly issued and delivered
pursuant to the terms of the Plan, such shares of Common Stock will be validly
issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
BUCHANAN INGERSOLL
PROFESSIONAL CORPORATION
By: /s/ Carl E. Rothenberger
<PAGE>
Exhibit No. 23.01
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Hyperion Telecommunications, Inc. on Form S-8 of our report dated June 10, 1998,
appearing in the Annual Report on Form 10-K of Hyperion Telecommunications, Inc.
for the year ended March 31, 1998 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
August 28, 1998
