AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON September 9, 1998
REGISTRATION NO. 333-_________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ADELPHIA COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 4841 23-2417713
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
MAIN AT WATER STREET
COUDERSPORT, PENNSYLVANIA 16915
(814) 274-9830
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
COLIN HIGGIN, ESQUIRE
DEPUTY GENERAL COUNSEL
ADELPHIA COMMUNICATIONS CORPORATION
MAIN AT WATER STREET
COUDERSPORT, PENNSYLVANIA 16915
(814) 274-9830
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
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) 562-8826
<PAGE>
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. [ ]
<TABLE>
<CAPTION>
Calculation of Registration Fee
Proposed maximum
Title of each class of offering price per Proposed maximum Amount of
Securities to be registered Amount to be unit(1) offering price (1) registration fee
registered
================================ ==================== ===================== ====================== ==================
<S> <C> <C> <C> <C>
Class A Common Stock (par 333,929 $34.1250 $11,395,327.13 $3,361.62
value $.01 per share)
================================ ==================== ===================== ====================== ==================
<FN>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c). Such number represents the average of the
high and low prices for the Class A Common Stock as reported by the
Nasdaq National Market System on September 1, 1998 of $34.1250.
</FN>
</TABLE>
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
PROSPECTUS
333,929 Shares
ADELPHIA COMMUNICATIONS CORPORATION
Class A Common Stock
($.01 par value)
This Prospectus relates to 333,929 shares (the "Shares") of Class A Common
Stock, $.01 par value (the "Class A Common Stock") of Adelphia Communications
Corporation ("Adelphia" or the "Company"), which may be sold by or for the
account of the Selling Stockholders named herein. The Shares were originally
acquired by the Selling Stockholders from Adelphia in a privately negotiated
acquisition transaction. See "Selling Stockholders."
The Shares may be sold from time to time by the Selling Stockholders in open
market or over-the-counter transactions, in private or negotiated transactions
or in a combination of such methods of sale, at fixed prices, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at varying or negotiated prices. See "Plan of Distribution." Adelphia
will not receive any of the proceeds from the sale of the Shares.
The Class A Common Stock is listed for trading on the NASDAQ National Market
System. On September 8 1998, the closing sale price of the Class A Common Stock
was $40.0625 per share.
The rights of holders of Class A Common Stock and Class B Common Stock, $.01 par
value (the "Class B Common Stock" and together with the Class A Common Stock,
the "Common Stock") differ with respect to certain aspects of dividend,
liquidation and voting rights. The Class A Common Stock has certain preferential
rights with respect to cash dividends and distributions upon the liquidation of
Adelphia. Holders of Class B Common Stock are entitled to greater voting rights
than the holders of Class A Common Stock; however, the holders of Class A Common
Stock, voting as a separate class, are entitled to elect one of Adelphia's
directors.
PROSPECTIVE PURCHASERS OF CLASS A COMMON STOCK SHOULD CAREFULLY CONSIDER THE
MATTERS SET FORTH UNDER THE CAPTION "RISK FACTORS."
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.
The date of this Prospectus is September 9, 1998.
<PAGE>
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
STOCKHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION TO
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREBY SHALL UNDER ANY
CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
DATE SUBSEQUENT TO THE DATE HEREOF.
AVAILABLE INFORMATION
Adelphia is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act" or the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "SEC" or the "Commission"). Such
reports, proxy statements and other information can be inspected and copied at
the public reference facilities of the SEC at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the Regional Offices
of the SEC located at Citicorp Center, Suite 1400, 500 West Madison Street,
Chicago, Illinois 60661 and Seven World Trade Center, Suite 1300, New York, New
York 10048. Copies of such information can be obtained from the Public Reference
Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Adelphia's Class A Common Stock is listed on the NASDAQ
National Market System under the symbol "ADLAC".
Adelphia has filed with the SEC a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"1933 Act"), with respect to the Shares. This Prospectus, which is part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the SEC. Reference is hereby made to the
Registration Statement and related exhibits for further information with respect
to the Company and the Shares offered hereby. Statements contained herein
concerning the provisions of documents are necessarily summaries of such
documents, and each statement is qualified in its entirety by reference to the
copy of the applicable document filed with the SEC. The Registration Statement
and the exhibits thereto may be inspected without charge at the office of the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies thereof may be
obtained from the SEC at prescribed rates. The Commission maintains a web site
that contains reports, proxy and information statements and other information
regarding the Company that is electronically filed through the Commission's
Electronic Data Gathering, Analysis and Retrieval system. Such information is
publicly available through the Commission's web site (http://www.sec.gov).
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Adelphia hereby incorporates by reference into this Prospectus the
following documents or information previously filed with the Commission under
the Exchange Act (file number 000-16014): (a) Adelphia's Annual Report on Form
10-K for the fiscal year ended March 31, 1998, which incorporates, in Items 7
and 8 to such Form 10-K, portions of the Form 10-K for the fiscal year ended
December 31, 1997 of Olympus Communications. L.P. and Olympus Capital
Corporation, as amended by Form 10-K/A (the "Form 10-K/A") dated July 27, 1998
(collectively, the "Form 10-K"); (b) Adelphia's Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 1998 (the "Form 10-Q"); (c) Adelphia's
Current Report on Form 8-K for the events dated June 29, 1998, July 2, 1998,
August 3, 1998 and August 18, 1998; and (d) the descriptions of common stock
contained in Adelphia's Registration Statement filed under Section 12(g) of the
1934 Act, including any amendments or reports filed for the purpose of updating
such description.
All documents filed by Adelphia pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act on or after the date of this Prospectus and prior to the
termination of the offering of the Shares made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in any
documents incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for the purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Adelphia will provide without charge to each person to whom this
Prospectus has been delivered, upon written or oral request of such person, a
copy of any or all other documents incorporated by reference into this
Prospectus. Requests for such copies should be directed to Adelphia
Communications Corporation, Main at Water Street, Coudersport, Pennsylvania
16915, Attention: Deputy General Counsel; telephone number (814) 274-9830.
<PAGE>
PROSPECTUS SUMMARY
The following information is qualified in its entirety by the
more detailed information and financial statements appearing in this Prospectus
or incorporated by reference herein. The Private Securities Litigation Reform
Act of 1995 provides a "safe harbor" for forward-looking statements. Certain
information included or incorporated by reference in this Prospectus, including
Management's Discussion and Analysis of Financial Condition and Results of
Operations contained in the Form 10-K and the Form 10-Q, is forward-looking,
such as information relating to the effects of future regulation, future capital
commitments and the effects of competition. 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, the Company. These risks and uncertainties
include, but are not limited to, uncertainties relating to economic conditions,
acquisitions and divestitures, government and regulatory policies, the pricing
and availability of equipment, materials, inventories and programming,
technological developments and changes in the competitive environment in which
the Company operates. Persons reading this Prospectus are cautioned that such
forward-looking 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. Prospective investors should carefully consider the factors set
forth herein under the caption "Risk Factors."
The Company
As of June 30, 1998, Adelphia Communications Corporation was the
seventh-largest cable television operator in the United States with cable
television systems owned or managed by the Company (the "Systems") in the
aggregate passing 2,796,747 homes and serving 1,998,411 basic subscribers. John
J. Rigas, the Chairman, President, Chief Executive Officer and founder of
Adelphia, has owned and operated cable television systems since 1952.
As of June 30, 1998, the Company's owned cable systems (the "Company
Systems") are located in twelve states and are organized into seven regional
clusters: Western New York, Virginia, Western Pennsylvania, New England, Eastern
Pennsylvania, Ohio and Coastal New Jersey. The Company Systems are located
primarily in suburban areas of large and medium-sized cities within the 50
largest television markets. As of June 30, 1998, the Company Systems passed
1,696,294 homes and served 1,244,310 basic subscribers.
The Company also provides, for a fee, management and consulting services
to certain partnerships and certain corporations engaged in the ownership and
operation of cable television systems (the "Managed Partnerships"). John J.
Rigas and certain members of his immediate family, including entities they own
or control (collectively the "Rigas Family") have substantial ownership
interests in the Managed Partnerships. As of June 30, 1998, cable systems (the
"Managed Systems") owned by the Managed Partnerships passed 348,441 homes and
served 260,843 basic subscribers.
<PAGE>
The Company also owns a 50% voting interest and nonvoting Preferred
Limited Partnership interests entitling the Company to a 16.5% preferred return
in Olympus Communications, L.P. ("Olympus"). Olympus is a joint venture limited
partnership between the Company and subsidiaries of FPL Group, Inc. Olympus
operates a large cable system in southern Florida that, as of June 30, 1998,
passed 752,012 homes and served 493,258 basic subscribers. The Company's
investment in Olympus is accounted for under the equity method of accounting.
Among its other significant investments in addition to its cable
operations, the Company owns a 66% interest, based on outstanding common stock
at September 8, 1998, in Hyperion Telecommunications, Inc. ("Hyperion"), a
leading competitive local exchange carrier ("CLEC") that designs, constructs,
operates and manages state-of-the-art, fiber optic networks and facilities.
Hyperion operates one of the largest CLECs in the United States based upon route
miles and buildings connected. As of June 30, 1998, Hyperion managed and
operated 22 networks (including two under construction), which served 46 cities
and had approximately 5,455 route miles, connecting approximately 2,034
buildings. Hyperion offers switched services, including local dial tone, in 19
markets and expects to begin offering local dial tone in the remainder of its
operating networks in 1998. Hyperion is consolidated in Adelphia's financial
results and is currently an unrestricted subsidiary of Adelphia for purposes of
Adelphia's indentures.
Adelphia was incorporated in Delaware on July 1, 1986 for the purpose of
reorganizing five cable television companies, then principally owned by the
Rigas Family, into a holding company structure in connection with the initial
public offering of Adelphia's Class A Common Stock. The Company's executive
offices are located at Main at Water Street, Coudersport, Pennsylvania 16915,
and its telephone number is (814) 274-9830.
Recent Developments
On March 2, 1998, Adelphia entered into a definitive agreement to acquire
cable television systems serving approximately 62,000 subscribers in Connecticut
and Virginia from Marcus Cable, Inc. for approximately $150,000,000 in cash.
This acquisition closed on September 1, 1998.
For other recent developments regarding the Company, reference is made to
the Form 10-Q and future filings by the Company under the Exchange Act.
<PAGE>
The Offering
Shares Offered by the Selling Stockholders.......................333,929 shares,
Class A Common
Shares outstanding as of September 8, 1998....................28,283,843 shares,
Class A Common
10,944,476 shares,
Class B Common
NASDAQ National Market System Symbol...........................ADLAC
<PAGE>
RISK FACTORS
In addition to the other information contained or incorporated by reference in
this Prospectus, the following risk factors should be carefully considered in
evaluating the Company and its business before purchasing the securities offered
hereby.
Substantial Leverage
The Company is highly leveraged and has incurred substantial indebtedness
to finance acquisitions and expansion of its operations and, to a lesser extent,
for investments in and advances to affiliates. At June 30, 1998, the Company's
total indebtedness aggregated approximately $2,996,821,000, which included
approximately $1,013,276,000 of subsidiary bank, institutional and other debt,
approximately $472,949000 of Hyperion public debt and approximately
$1,510,596,000 of indebtedness of the parent company. The Company's total debt
has varying maturities to 2008, including an aggregate of approximately
$1,158,487,000 maturing on or prior to March 31, 2003. The Company has
maintained its public long-term debt at the holding company level and at
Hyperion while borrowing in the private debt markets (e.g., bank and insurance
company debt) through the Company's wholly-owned subsidiaries. The Company's
subsidiary financings are effected through separate borrowing groups, and
substantially all of the indebtedness in these borrowing groups is non-recourse
to Adelphia. The subsidiary credit arrangements have varied revolving credit and
term loan periods and contain separately negotiated covenants relating to, among
other things, cross-defaults and the incurrence of additional debt for each
borrowing group. In addition, Olympus has substantial leverage. The high level
of the Company's indebtedness will have important consequences to investors,
including: (i) a substantial portion of the Company's cash flow from operations
must be dedicated to debt service and will not be available for general
corporate purposes or for capital improvements; (ii) the Company's ability to
obtain additional debt financing in the future for working capital, capital
expenditures, acquisitions or for capital improvements may be limited; and (iii)
the Company's level of indebtedness could limit its flexibility in reacting to
changes in the industry and economic conditions generally. In addition, at June
30, 1998, Adelphia had approximately $148,105,000 and Hyperion had approximately
$214,085,000 of redeemable exchangeable preferred stock. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Form 10-K and the Form 10-Q.
Net Losses and Convertible Preferred Stock, Common Stock and Other Stockholders'
Equity (Deficiency)
The Total Convertible Preferred Stock, Common Stock and Other
Stockholders' Equity (Deficiency) at June 30, 1998 was approximately
($1,217,429,000). The stockholders' deficiency generally has resulted from the
Company's reported net losses which have been caused primarily by high levels of
depreciation and amortization and interest expense. The Company reported net
losses applicable to common stockholders of approximately $119,894,000,
$130,642,000, $192,729,000 and $48,285,000 for the years ended March 31, 1996,
1997, 1998 and the three months ended June 30, 1998, respectively. The Company
expects to continue to incur significant net losses for the next several years.
<PAGE>
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Form 10-K and the Form 10-Q.
For the years ended March 31, 1997 and 1998, and the three months ended
June 30, 1998, the Company's earnings were insufficient to cover its combined
fixed charges and preferred stock dividends by approximately $61,848,000,
$113,941,000 and $38,757,000, respectively. However, such amounts reflect
non-cash charges totaling approximately $165,426,000, $182,471,000 and
$46,454,000, respectively, consisting of depreciation, amortization and non-cash
interest expense on certain indebtedness of the Company and Hyperion preferred
stock dividends. Historically, the Company's cash generated from operating
activities and borrowings has been sufficient to meet its requirements for debt
service, working capital, capital expenditures, and investments in and advances
to affiliates, and the Company has depended on the availability of additional
borrowings to meet its liquidity requirements. The Company believes that it will
continue to generate cash and obtain financing sufficient to meet such
requirements. However, the Company's ability to incur additional indebtedness is
limited by covenants in its indentures and its subsidiary credit agreements.
Although in the past the Company has been able both to refinance its
indebtedness and to obtain new financing, there can be no assurance that the
Company would be able to do so in the future or that, if the Company were able
to do so, the terms available would be favorable to the Company. In the event
that the Company were unable to refinance its indebtedness or obtain new
financing under these circumstances, the Company would likely have to consider
various options such as the sale of certain assets to meet its required debt
service, negotiation with its lenders to restructure applicable indebtedness or
other options available to it under applicable law. There can be no assurance
that any such options would yield net proceeds sufficient to repay its
indebtedness in full. See "Selected Consolidated Financial Data" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Form 10-K and the Form 10-Q.
Voting Control and Disparate Voting Rights
As of August 20, 1998, the Rigas Family beneficially owned 10,846,544
shares, or 99.1%, of Adelphia's outstanding Class B Common Stock and 11,029,119
shares, or 39.0%, of Adelphia's outstanding Class A Common Stock. On a combined
basis, these shares represented 55.8% of the total number of outstanding shares
of both classes of Common Stock and 86.8% of the total voting power of both
classes. Assuming conversion of the 8 1/8% Series C Cumulative Convertible
Preferred Stock ("Convertible Preferred Stock") held by the Rigas Family, family
members would have held on an as adjusted basis as of August 20, 1998 20,463,081
shares, or approximately 54.3%, of Adelphia's Class A Common Stock and would
have held approximately 64.3% of the total number of shares and approximately
87.6% of the total voting power of both classes of Common Stock. As a result of
the stock ownership by the Rigas Family and the Class B Stockholders' Agreement,
John J. Rigas and members of his family have the power to elect all seven
directors subject to election by both classes on a combined basis, which
directors constitute seven of the eight members of the Board of Directors of
Adelphia. (The holders of the Class A Common Stock are entitled, as a separate
class, to elect one of Adelphia's directors.) Moreover, because holders of Class
B Common Stock are entitled to ten votes per share while holders of Class A
<PAGE>
Common Stock are entitled to one vote per share, the Rigas Family may control
stockholder decisions on matters in which holders of Class A Common Stock and
Class B Common Stock vote together as a class. These matters include the
amendment of certain provisions of Adelphia's Certificate of Incorporation and
the approval of certain fundamental corporate transactions, including mergers.
Holding Company Structure; Restrictive Covenants
As a holding company, Adelphia holds no significant assets other than its
investments in and advances to its subsidiaries and other investments.
Adelphia's ability to make interest and principal payments when due to holders
of debt of Adelphia is dependent upon the receipt of sufficient funds from its
subsidiaries or other investments. Under the terms of various debt agreements
between the Adelphia subsidiaries and other investments and their respective
lending institutions, upon the occurrence of an event of default (including
certain cross-defaults resulting from defaults under Adelphia's debt agreements)
or unless certain financial performance tests are met, the Adelphia subsidiaries
and other investments are restricted from distributing funds to Adelphia. The
Indentures governing the 8 1/8% Senior Notes due 2003 (the "8 1/8% Notes"), the
8 3/8% Senior Notes due 2008 (the "8 3/8% Notes"), the 9 1/4% Senior Notes due
2002 (the "9 1/4% Notes"), the 9 7/8% Senior Notes due 2007 (the "9 7/8%
Notes"), the 10 1/2% Senior Notes due 2004 (the "10 1/2% Notes"), the 12 1/2%
Senior Notes due 2002 (the "12 1/2% Notes"), the 10 1/4% Senior Notes due 2000
(the "10 1/4% Notes"), the 9 1/2% Senior Pay-In-Kind Notes due 2004 (the "9 1/2%
Notes"), the 11 7/8% Senior Debentures due 2004 (the "11 7/8% Debentures") and
the 9 7/8% Senior Debentures due 2005 (the "9 7/8% Debentures") (collectively,
"Adelphia's Public Debt") will not restrict the Company's subsidiaries or other
investments from contractually restricting their ability to pay dividends to
Adelphia in the future. In addition, because Adelphia's subsidiaries and other
investments do not guarantee the payment of principal of and interest on debt of
Adelphia, the claims of holders of such debt effectively will be subordinated to
the claim of creditors of such entities. At June 30, 1998, the total amount of
long-term debt of such subsidiaries was approximately $1,486,225,000. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Form 10-K and the Form 10-Q.
The agreements governing the bank debt of the Company's subsidiaries (the
"Subsidiary Bank Agreements") contain, among other covenants, requirements that
Adelphia's subsidiaries maintain specified financial ratios, including maximum
leverage and minimum interest coverage. The ability of a subsidiary to comply
with such provisions may be affected by events that are beyond Adelphia's
control. The breach of any of these covenants could result in a default by a
subsidiary under its Subsidiary Bank Agreement. In the event of any such
default, lenders party to that Subsidiary Bank Agreement could elect to declare
all amounts borrowed under that Subsidiary Bank Agreement, together with accrued
interest and other fees, to be due and payable. If the indebtedness under a
Subsidiary Bank Agreement were to be accelerated, all indebtedness outstanding
under such Subsidiary Bank Agreement would be required to be paid in full before
such subsidiary would be permitted to distribute any assets or cash to Adelphia.
There can be no assurance that the assets of Adelphia and its subsidiaries would
be sufficient to repay all borrowings under the Subsidiary Bank Agreements and
indebtedness owed to the other creditors of such subsidiaries in full. In
addition, as a result of these covenants, the ability of Adelphia's subsidiaries
to respond to changing business and economic conditions and to secure additional
financing, if needed, may be significantly restricted, and Adelphia may be
prevented from engaging in transactions that might otherwise be considered
beneficial to Adelphia. There are similar restrictions under other institutional
debt of the Company's subsidiaries.
Potential Conflicts of Interest
The Rigas Family holds substantially all of Adelphia's Class B Common
Stock and 86.8% of the combined voting power of both classes of Adelphia's
outstanding Common Stock (87.6% assuming the conversion of the Convertible
Preferred Stock owned by the Rigas Family) and has the power to elect seven of
eight members of Adelphia's Board of Directors. John J. Rigas and the other
executive officers of Adelphia (including other members of the Rigas Family)
hold direct and indirect ownership interests in the Managed Partnerships, which
are managed by the Company for a fee. Subject to the restrictions contained in a
business opportunity agreement regarding future acquisitions, Rigas Family
members and the executive officers are free to continue to own these interests
and acquire additional interests in cable television systems. Such activities
could present a conflict of interest with the Company in the allocation of
management time and resources of the executive officers. In addition, there have
been and will continue to be transactions between the Company and the executive
officers or other entities in which the executive officers have ownership
interests or with which they are affiliated. The indentures under which
Adelphia's Public Debt was issued contain covenants that place certain
restrictions on transactions between the Company and its affiliates. See
"Certain Relationships and Related Transactions" in the Form 10-K/A.
Competition
The cable television systems owned by the Company compete with other
communications and entertainment media as well as other means of video
distribution including Direct Broadcast Satellite Systems ("DBS") and
Multichannel Multipoint Distribution Systems ("MMDS"). In addition, some of the
Regional Bell Operating Companies (the "RBOCs") and other local telephone
companies are in the process of entering the video-to-home business and several
have expressed their intention to enter the video-to-home business. In addition,
some RBOCs and local telephone companies have in place facilities which are
capable of delivering cable television service.
In addition, the Telecommunications Act of 1996 (the "1996 Act") has
repealed the cable/telephone cross-ownership plan, and telephone companies will
now be permitted to provide cable television service within their service areas.
Certain of such potential service providers have greater financial resources
than the Company, and in the case of local exchange carriers seeking to provide
cable service within their service areas, have an installed plant and switching
capabilities, any of which could give them competitive advantages with respect
to cable television operators such as the Company. The Company cannot predict
either the extent to which competition will materialize or, if such competition
materializes, the extent of its effect on the Company. See
"Business--Competition" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Form 10-K and the Form 10-Q.
<PAGE>
The Company also faces competition from other communications and
entertainment media, including conventional off-air television broadcasting
services, newspapers, movie theaters, live sporting events and home video
products. The Company cannot predict the extent to which competition may affect
the Company.
In each of the markets served by Hyperion's networks, the services offered
by Hyperion compete principally with the services offered by the incumbent local
exchange carrier ("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 1996 Act, federal and state
regulatory initiatives will provide increased business opportunities to CLECs
such as Hyperion, 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 charge CLECs excessive fees for interconnection to the
incumbent LECs' networks, the net income and cash flow of CLECs, including
Hyperion, could be materially and adversely affected.
The 1996 Act also establishes procedures under which the RBOCs can obtain
authority to provide long distance services if they comply with certain
interconnection requirements. To date, the Federal Communications Commission
(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 Inter-Exchange Carriers ("IXCs"), which are among Hyperion's
significant customers. Such a result could have an adverse effect on Hyperion.
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 Hyperion'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 a material adverse effect on Hyperion. Hyperion also faces, and
will continue to face, competition from other current and potential market
entrants, including other 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. 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. AT&T and TCI also recently announced that they will merge. Although
Hyperion 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
Hyperion's services when entering the market for local exchange services.
<PAGE>
Many of Hyperion's current and potential competitors, particularly
incumbent LECs, have financial, personnel and other resources substantially
greater than those of Hyperion, as well as other competitive advantages over
Hyperion.
See "Business--Competition" and "--Legislation and Regulation" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Regulatory and Competitive Matters" in the Form 10-K and the Form
10-Q.
Need for Additional Financing
The Company's business requires substantial investment on a continuing
basis to finance capital expenditures and related expenses for, among other
things, upgrade of the Company's plant (including the need to make cable system
upgrades mandated by franchise authorities), the offering of new services and
the servicing, repayment or refinancing of its indebtedness. The Company will
require significant additional financing, through debt and/or equity issuances,
to meet its capital expenditure plans and to pay its debt obligations. There can
be no assurance that Adelphia will be able to issue additional debt or obtain
additional equity capital on satisfactory terms, or at all, to meet its future
financing needs. See "Business--Technological Developments" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Form 10-K and the Form 10-Q.
Regulation in the Telecommunications Industry
The cable television industry is subject to extensive regulation at the
federal, state and local levels, and many aspects of such regulation are
currently the subject of judicial proceedings and administrative or legislative
proposals. The Cable Television Consumer Protection and Competition Act of 1992
(the "1992 Cable Act") significantly expanded the scope of cable television
regulation. In particular, pursuant to the 1992 Cable Act, the FCC adopted
regulations that limit the Company's ability to set and increase rates for the
Company's basic and cable programming service ("CPS") packages and for the
provision of cable television-related equipment. The 1992 Cable Act permits
certified local franchising authorities to order refunds of rates paid in the
previous twelve-month period determined to be in excess of the permitted
reasonable rates. It is possible that rate reductions or refunds of previously
collected fees may be required in the future.
The 1996 Act, which became law on February 8, 1996, materially alters
federal, state and local laws and regulations pertaining to cable television,
telecommunications and other related services and, in particular, substantially
amends the Communications Act of 1934 (the "Communications Act"). Certain
provisions of the 1996 Act could materially affect the growth and operation of
the cable television industry and the cable services provided by the Company.
Although the new legislation may substantially lessen certain regulatory
burdens, the cable television industry may be subject to additional competition
as a result. See "Business--Competition" in the Form 10-K. There are numerous
rulemakings that have been and continue to be undertaken by the FCC which will
interpret and implement the provisions of the 1996 Act. In addition, certain
provisions of the new legislation (such as the deregulation of rates for CPS
packages) will not immediately be effective. Furthermore, certain provisions of
<PAGE>
the 1996 Act have been, and likely will be, subject to judicial challenge. The
Company is unable at this time to predict the outcome of such rulemakings or
litigation or the short and long-term effect (financial or otherwise) of the
1996 Act and FCC rulemakings on the Company.
The cable television industry is subject to state and local regulations
and the Company must comply with rules of the local franchising authorities to
retain and renew its cable franchises, among other matters. There can be no
assurances that the franchising authorities will not impose new and more
restrictive requirements as a condition to franchise renewal.
Although the 1996 Act eliminates many legal barriers to entry (i.e.,
telephone companies entering the cable industry and cable companies entering the
telephone industry), the Company cannot assure 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 the
Company. In addition, the 1996 Act removes entry barriers for all companies and
could increase substantially the number of competitors offering comparable
services in the Company's potential markets. See "Legislation and Regulation" in
the Form 10-K and "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Regulatory and Competitive Matters" in the Form 10-K
and the Form 10-Q.
No Dividends Paid or to Be Paid
Adelphia has never declared or paid dividends on any of its Common Stock
and has no intention to pay cash dividends on such stock in the foreseeable
future. In addition, the indentures for Adelphia's Public Debt contain covenants
which limit Adelphia's ability to pay such dividends.
Shares Eligible for Future Sale
As of September 8, 1998, 28,283,843 shares of Class A Common Stock,
10,944,476 shares of Class B Common Stock, each share of which is presently
convertible into a share of Class A Common Stock, and 100,000 shares of
Convertible Preferred Stock, each share of which is presently convertible into
approximately 117.9245 shares of Class A Common Stock, were outstanding. As of
such date, the Rigas Family beneficially owned 10,846,544 shares of Class B
Common Stock, 11,029,119 shares of Class A Common Stock and 80,000 shares of
Convertible Preferred Stock. Pursuant to various registration rights agreements,
the Rigas Family has the right, subject to certain limitations, to require
Adelphia to register substantially all of these shares including Class A Common
Stock issuable upon conversion of the Class B Common Stock and the Convertible
Preferred Stock. Adelphia has filed a registration statement to register up to
11,000,000 shares of Class A Common Stock, and the 80,000 shares of Convertible
Preferred Stock and Class A Common Stock issuable upon conversion thereof, for
the Rigas Family and a registration statement for Booth American Company which
as of March 24, 1998 owned 3,571,428 shares of Class A Common Stock. Although
members of the Rigas Family have agreed in connection with the August 18,1998
public offering of Adelphia Class A Common Stock that they will not, directly or
indirectly, offer, sell, contract to sell or otherwise dispose of any Common
<PAGE>
Stock or securities convertible or exchangeable or exerciseable for Common Stock
or grant any options or warrants to purchase shares of Common Stock without the
permission of Smith Barney Inc. for a period of 90 days from August 12, 1998,
approximately 8,506,000 shares of Class A Common Stock and up to 80,000 shares
of Convertible Preferred Stock (including the underlying Class A Common Stock)
have been pledged in connection with margin loans by the Rigas Family to
pledgees who are not subject to any restriction on their sale of any shares of
Class A Common Stock acquired upon a foreclosure or upon conversion of
Convertible Preferred Stock acquired upon a foreclosure. Sales of a substantial
number of shares of Class A Common Stock or Class B Common Stock including sale
by any pledgees of such shares could adversely affect the market price of the
Class A Common Stock and could impair Adelphia's ability in the future to raise
capital through an offering of its equity securities.
Impact of the Year 2000 Issues
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 date-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 recently completed
the planning stage of a project that addresses the year 2000 data processing
issues relating to modifications of its mainframe computer applications.
Internal and external resources are being used to make the required
modifications and perform the necessary tests, all of which is expected to be
completed by June 1999. In addition, the Company has begun communicating with
others with whom it does significant business to determine their year 2000
compliance readiness and the extent to which the Company is vulnerable to any
third party year 2000 issues. There can be no assurance that the systems of
other companies on which the Company's systems rely will be timely converted
into systems compatible with the Company systems or that the Company will
prevent the year 2000 issues from having a material adverse effect on the
Company. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Year 2000 Issues" in the Form 10-K.
Dilution
Persons purchasing Class A Common Stock will incur immediate and
substantial net tangible book value dilution. See "Dilution."
Potential Volatility of Stock Price
The market price of the shares of Class A Common Stock may be
significantly affected by factors such as actual or anticipated fluctuations in
the Company's operating results, new products or services or new contracts by
the Company or its competitors, legislative and regulatory developments,
conditions and trends in the telecommunications industry, general market
conditions and other factors beyond the Company's control. In addition, the
stock market has, from time to time, experienced significant price and volume
fluctuations that have particularly affected the market prices for the common
stock of telecommunications companies and that have often been unrelated to the
<PAGE>
operating performance of particular companies. These broad market fluctuations
may also adversely affect the market price of the Company's Class A Common
Stock.
Forward Looking Statements
The statements contained or incorporated by reference in this Prospectus
that are not historical facts are "forward looking statements" (as such term is
defined in the Private Securities Litigation Reform Act of 1995) which
statements can be identified by the use of forward looking 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, including "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Form 10-K and the Form 10-Q, is
forward-looking, such as information relating to the effects of future
regulation, future capital commitments and the effects of competition. 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, the Company. These
risks and uncertainties include, but are not limited to, uncertainties relating
to economic conditions, acquisitions and divestitures, government and regulatory
policies, the pricing and availability of equipment, materials, inventories and
programming, 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.
DILUTION
The net tangible book value of the Company's Common Stock as of June 30,
1998 was a deficit of approximately ($1,937,804,000) or ($62.53) per share. Net
tangible book value per share represents the amount of the Company's convertible
preferred stock, common stock and other stockholders' equity (deficiency), less
intangible assets, divided by shares of Common Stock outstanding. Purchasers of
Class A Common Stock will have an immediate dilution of net tangible book value
which, due to the Company having a net tangible book value deficit, will exceed
the purchase price per share. For example, in the August 1998 Adelphia public
offering, with the purchase price of $32.00 per share, the net tangible book
value dilution per share was $76.95. Net tangible book value dilution per share
represents the difference between the amount per share paid by purchasers of
shares of Class A Common Stock in an offering from the Company and the pro forma
net tangible book value per share of the Common Stock immediately after
completion of such offering.
<PAGE>
SELLING STOCKHOLDERS
The Selling Stockholders (which term includes their transferees, pledgees,
donees or their successors) may from time to time offer and sell pursuant to
this Prospectus any or all of the Shares. The following table sets forth certain
information regarding the Selling Stockholders' ownership of the Company's Class
A Common Stock. No Selling Stockholder has held any position, office or had any
other material relationship with the Company, its predecessors or affiliates
during the past two years. Although the Selling Stockholders may offer some or
all of their respective Shares pursuant to this Prospectus, the following table
assumes that all such Shares have been sold upon termination of any such sales.
In addition, the Selling Stockholders may have sold, transferred or otherwise
disposed of all or a portion of their respective Shares since the date on which
they provided information thereon in transactions exempt from the registration
requirements of the 1933 Act. To the knowledge of the Company, except as
disclosed in the table below, the Selling Stockholders did not own, nor did they
have any rights to acquire, any other shares of Common Stock as of the date of
this Prospectus.
<TABLE>
<CAPTION>
Percent of
Class A Common Percent of Class A Common Class A Common
Shares Held Class A Common Class A Common Shares Held Shares Held
Before Offering Shares Held Shares After Offering After Offering
Name Before Offering Offered Hereby
<S> <C> <C> <C> <C> <C>
Joseph S. Gans, Sr.
and Irene F. Gans 95,075 0.3% 95,075 0 0
Joseph S. Gans, Sr. 17,061 *% 17,061 0 0
Irene F. Gans 17,061 *% 17,061 0 0
Joseph S. Gans, III 102,366 0.4% 102,366 0 0
Janice Gans Moisey 102,366 0.4% 102,366 0 0
------- ---- ------- - -
TOTAL 333,929 1.2% 333,929 0 0
======= ==== ======= = =
- ------------------------
<FN>
* Less than 0.1%.
</FN>
</TABLE>
The Shares referenced above were issued to the Selling Stockholders in
March 1998 pursuant to an agreement with the Company, in a private placement
transaction, as consideration for the acquisition by Adelphia of equity
interests in cable television systems. In connection with that private placement
transaction, the Company and the Selling Stockholders have agreed that the
Company shall in no event be obligated to cause the Registration Statement
covering this Prospectus to remain effective for more than one hundred twenty
(120) days, excluding any suspension of such effectiveness. In the event that
the above named Selling Stockholders transfer Shares, by gift, assignment or
otherwise, such transferees would also then become Selling Stockholders under
this Prospectus.
Adelphia will not receive any proceeds from the sale of the Shares.
PLAN OF DISTRIBUTION
The Shares may be sold by a Selling Stockholder from time to time, in one
or more transactions at fixed prices, at prevailing market prices or at prices
related thereto at the time of sale, at varying prices determined at the time of
<PAGE>
sale or at negotiated prices. Such prices will be determined by the Selling
Stockholders. The sale of the Shares may be effected (i) in transactions (which
may involve crosses or block transactions) on any national securities exchange
or quotation service on which the Shares may be listed or quoted at the time of
sale, (ii) in the over-the-counter market, (iii) in private or negotiated
transactions otherwise than on such exchanges or in the over-the-counter market,
(iv) through the writing of options or (v) in combinations of such methods. In
effecting such sales, underwriters, brokers or dealers engaged by the Selling
Stockholders may arrange for other underwriters, brokers or dealers to
participate. Underwriters, brokers or dealers may purchase Shares as principals
for their own accounts and resell such Shares pursuant to this Prospectus.
Underwriters, brokers and dealers may receive commissions or discounts from such
Selling Stockholders in amounts to be negotiated immediately prior to the sale.
The Selling Stockholders, any such underwriters, brokers or dealers and any
other participating brokers or dealers may be deemed to be "underwriters" within
the meaning of the 1933 Act in connection with such sales, and any profits
realized or commissions received may be deemed underwriting compensation.
At the time a particular offering of the Shares is made, if required, a
prospectus supplement will be distributed which will set forth the names of the
Selling Stockholders, the aggregate amount and type of Shares being offered, the
number of such securities owned prior to and after the completion of any such
offering, and, to the extent required, the terms of the offering, including the
name or names of any underwriters, broker/dealers or agents, any discounts,
commissions and other terms constituting compensation from the Selling
Stockholders and any discounts, commissions or concessions allowed or reallowed
or paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if
applicable, the Shares will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the Shares may not be offered or sold unless they have been
registered or qualified for sale in such jurisdictions or any exemption from
registration or qualification is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Shares may be limited in its ability to engage
in market activities with respect to such Shares. In addition and without
limiting the foregoing, each Selling Stockholder will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder, which
provisions may limit the timing of purchases and sales of any of the Shares by
the Selling Stockholders. All of the foregoing may affect the marketability of
the Shares.
All expenses of the registration of the Shares will be paid by the
Company, including, without limitation, Commission filing fees and expenses of
compliance with state securities or "blue sky" laws; provided, however, that the
Selling Stockholders will pay all underwriting discounts and selling
commissions, if any. The Selling Stockholders will be indemnified by the Company
against certain civil liabilities, including certain liabilities under the 1933
Act, or will be entitled to contribution in connection therewith. The Company
will be indemnified by the Selling Stockholders against certain civil
<PAGE>
liabilities, including certain liabilities under the 1933 Act, or will be
entitled to contribution in connection therewith.
If required, a supplement to this Prospectus ("Prospectus Supplement")
will set forth, with respect to the Selling Stockholders, any necessary further
information regarding them or the distribution of the shares offered hereby.
Such Prospectus Supplement may be appropriately modified or supplemented.
EXPERTS
The consolidated financial statements and the related financial statement
schedules of Adelphia and its subsidiaries as of March 31, 1997 and 1998, and
for each of the three years in the period ended March 31, 1998, and the
consolidated financial statements of Olympus and its subsidiaries as of December
31, 1996 and 1997, and for each of the three years in the period ended December
31, 1997, all 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 reports,
which are incorporated herein by reference, and have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
<PAGE>
No dealer, salesman or any other person has been 333,929 Shares
authorized to give any information or to make any
representations other than those contained in this
Prospectus in connection with the offer made by this
Prospectus and, if given or made, such information or
representations must not be relied upon as having been
authorized. Neither the delivery of this Prospectus nor
any sale made hereunder shall under any circumstances
create any implication that there has been no change in
the affairs of Adelphia since the date hereof. This
Prospectus does not constitute an offer or solicitation
by anyone in any jurisdiction in which such offer or
solicitation is not authorized or in which the person
making such offer or solicitation is not qualified to
do so or to anyone to whom it is unlawful to make such
offer or solicitation.
-----------------------------------
ADELPHIA COMMUNICATIONS CORPORATION
Class A Common Stock
($.01 par value)
Prospectus
Dated September 8, 1998
<PAGE>
II-5
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 the
Company in connection with the issuance and distribution of the securities being
registered.
AMOUNT
SEC filing fee.......................................... $ 3,361
Legal fees and expenses................................. $ 12,000
Accounting fees and expenses..................... ...... $ 5,000
Miscellaneous expenses.................................. $ 3,000
Total................................................... $ 23,361
============
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 Adelphia provide for indemnification of the officers and directors of
Adelphia to the full extent permissible under Delaware law.
Adelphia's Certificate of Incorporation also provides, pursuant to Section
102(b)(7) of the Delaware General Corporation Law, that directors of Adelphia
shall not be personally liable to Adelphia or its stockholders for monetary
damages for breach of fiduciary duty as a director for acts or omissions after
July 1, 1986, 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:
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Reference
<S> <C> <C>
4.01 The Certificate of Incorporation of Adelphia Communications Incorporated herein by
Corporation reference is Exhibit 3.01 to
Registrant's Current Report on
Form 8-K dated July 24, 1997.
(File No. 000-16104.)
23.01 Consent of Deloitte & Touche LLP Filed herewith.
24.01 Power of Attorney (included on the signature page of the Filed herewith.
Registration Statement)
</TABLE>
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.
<PAGE>
(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.
(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, as amended, 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 Securities Act of 1933, as amended, 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 Securities Act of 1933, as amended, and will be governed by the
final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this registration statement on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Coudersport, Commonwealth
of Pennsylvania, on the 8th day of September, 1998.
ADELPHIA COMMUNICATIONS CORPORATION
By /s/ Timothy J. Rigas
Timothy J. Rigas,
Executive Vice President
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.
KNOW ALL MEN BY THE PRESENTS that each person whose signature appears
below constitutes and appoints Michael J. Rigas, James P. Rigas and Timothy J.
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.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
/s/ John J. Rigas Chairman, President and Chief Executive Officer September 8, 1998
--------------------------------
JOHN J. RIGAS
/s/ Michael J. Rigas Executive Vice President and Director September 8, 1998
--------------------------------
MICHAEL J. RIGAS
/s/ Timothy J. Rigas Executive Vice President, Chief Financial September 8, 1998
--------------------------------
TIMOTHY J. RIGAS Officer, Chief Accounting Officer, Treasurer
and Director
/s/ James P. Rigas Executive Vice President and Director September 8, 1998
--------------------------------
JAMES P. RIGAS
/s/ Daniel R. Milliard Senior Vice President, Secretary and Director September 8, 1998
--------------------------------
DANIEL R. MILLIARD
<PAGE>
/s/ Perry S. Patterson Director September 8, 1998
- ----------------------------------
PERRY S. PATTERSON
/s/ Pete J. Metros Director September 8, 1998
- ----------------------------------
PETE J. METROS
/s/ Dennis P. Coyle Director September 8, 1998
- ----------------------------------
DENNIS P. COYLE
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit No. Reference
<S> <C> <C>
4.01 The Certificate of Incorporation of Adelphia Communications Incorporated herein by reference is
Corporation Exhibit 3.01 to Registrant's
Current Report on Form 8-K dated
July 24, 1997. (File No.
000-16014).
23.01 Consent of Deloitte & Touche LLP Filed herewith.
24.01 Power of Attorney (included on the signature page of the Filed herewith.
Registration Statement)
</TABLE>
<PAGE>
Exhibit 23.01
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Adelphia Communications Corporation on Form S-3 of our report dated June 10,
1998 and our report dated March 6, 1998 on our audits of the financial
statements of Adelphia Communications Corporation and subsidiaries and of
Olympus Communications, L.P. and subsidiaries, respectively, appearing in and
incorporated by reference in the Annual Report on Form 10-K of Adelphia
Communications Corporation 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
September 8, 1998
