<PAGE>
As filed with the Securities and Exchange Commission on December 11, 1997
Registration No. 333-
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------------------------------
SFX BROADCASTING, INC.
(Exact Name of Registrant as Specified in Its Charter)
--------------------------------------
DELAWARE 13-3649750
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
150 EAST 58TH STREET, 19TH FLOOR
NEW YORK, NEW YORK 10155
(Address, Including Zip Code, of Principal Executive Offices)
--------------------------------------
Stock Option Agreement, dated December 17, 1996, between
SFX Broadcasting, Inc. and Robert F.X. Sillerman
(Full Title of the Plan)
--------------------------------------
Robert F.X. Sillerman
Executive Chairman
150 East 58th Street, 19th Floor
New York, New York 10155
(212) 407-9191
(Name, Address and Telephone Number,
Including Area Code, of Agent For Service)
with copies to:
Howard Berkower
Baker & McKenzie
805 Third Avenue
New York, New York 10022
(212) 751-5700
--------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED (1) PER SHARE OFFERING PRICE FEE
- ------------------------- -------------- -------------- ---------------- ------------
<S> <C> <C> <C> <C>
Class A Common Stock 75,000 $ 27.25 $ 2,043,750 $ 602.91
</TABLE>
(1) Pursuant to Rule 416 of the Securities Act of 1933, this Registration
Statement also covers such additional shares of Class A Common Stock
as may be issuable by reason of the operation of the anti-dilution
provisions of the options granted under the Stock Option Agreement.
- -------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
The Prospectus filed as a part of this Registration Statement has been
prepared in accordance with the requirements of Form S-3 and may be used for
reofferings and resales of shares of Class A Common Stock of SFX Broadcasting,
Inc. by the selling stockholder named therein.
<PAGE>
PROSPECTUS
UP TO 75,000 SHARES
OF
CLASS A COMMON STOCK,
PAR VALUE $.01 PER SHARE,
OF
SFX BROADCASTING, INC.
This Prospectus relates to an aggregate of up to 75,000 shares of
common stock, par value $.01 per share (the "Class A Common Stock"), of SFX
Broadcasting, Inc., a Delaware corporation (the "Company"), which shares of
Class A Common Stock are held by an individual who may be deemed to be an
"affiliate" of the Company as defined by Rule 405(a) of Regulation C of the
Securities and Exchange Commission (the "Commission"), and which shares of
Class A Common Stock may be offered from time to time by the selling
stockholder named herein (the "Selling Stockholder"), including his
transferees. See "Selling Stockholder." Shares of Class A Common Stock offered
hereby were acquired by the Selling Stockholder pursuant to a Stock Option
Agreement, dated December 17, 1996, between the Company and the Selling
Stockholder. Sales to be made pursuant to this Prospectus are to be made
on the Nasdaq National Market or any national securities exchange on which the
shares of Class A Common Stock trade, at the price then available at the time
of sale, or (i) through privately negotiated transactions directly with
purchasers or (ii) through underwriters, dealers or agents who may receive
compensation in the form of underwriting discounts, commissions or commissions
from the Selling Stockholder and/or purchasers of the Class A Common Stock for
whom they act as agent. It is anticipated that the underlying shares will be
sold to a broker dealer at prices, and for compensation, to be negotiated
between the Selling Stockholder and such broker dealer. The broker dealer may
retain such shares or resell such shares (or any interest therein) in any
legal manner. The prices and compensation for such sale are being negotiated
based in part on trading in the stock and in connection with a contract
proposed to be entered into between the broker dealer and the Selling
Stockholder. The contract will relate to the value of shares of SFX
Entertainment (as herein defined) if and when issued as a dividend in the
Spin-Off (as herein defined). See "Recent Developments" and "Plan of
Distribution." This Prospectus also relates to such additional shares of
Class A Common Stock as may be issued to the Selling Stockholder as a result
of future stock adjustments in respect of the shares of Class A Common Stock
covered hereby.
The Selling Stockholder and any broker or dealer that participates in
the distribution of the shares of Class A Common Stock offered hereby may be
deemed to be "underwriters," as that term is construed within the meaning of
the Securities Act of 1933, as amended (the "Securities Act"), in which event
any profit on the sale of the shares of Class A Common Stock by them and any
discounts and commissions received by such broker or dealer may be deemed to be
underwriting discounts and commissions under the Securities Act.
The Company will not receive any part of the proceeds from sales made
hereunder. All expenses of registration incurred in connection with the
offering being made of this Prospectus are being borne by the Company, but any
brokerage commissions and other expenses incurred by the Selling Stockholder
will be borne by the Selling Stockholder.
The Class A Common Stock trades on the Nasdaq National Market, and on
December 9, 1997, the last practicable date preceding the date of this
Prospectus, the last reported sales price of a shares of Class A Common Stock
was $77.50.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
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 DECEMBER 11, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. Copies of such material may be obtained from the Public
Reference Section of the Commission at its principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, such
reports, proxy statements and other information can be inspected and copied at
the Commission's facilities referred to above and at the public reference
facilities at the Regional Offices of the Commission located at Seven World
Trade Center, 13th Floor, New York, New York 10048 and the Northwest Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The
Company is an electronic filer under the EDGAR (Electronic Data Gathering,
Analysis and Retrieval) system maintained by the Commission. The Commission
maintains a Web site (http://www.sec.gov) on the Internet that contains
reports, proxy and information statements and other information regarding
companies that file electronically with the Commission. In addition, documents
filed by the Company can be inspected at the offices of The Nasdaq Stock
Market, Inc., Reports Section, 1735 K Street, N.W. Washington, D.C. 20006.
The Company has filed a registration statement on Form S-8 (herein,
collectively, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act. This Prospectus 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
Commission. For further information, reference is hereby made to the
Registration Statement including the exhibits filed as a part thereof and
otherwise incorporated therein.
Statements contained in this Prospectus or in any document
incorporated by reference in this Prospectus as to the contents of any contract
or other document referred to herein or therein 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 or such other
document, each such statement being qualified in all respects by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS
The following documents filed with the Commission incorporated in this
Prospectus by reference:
(A) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996;
(B) The Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1997, June 30, 1997 and September
30, 1997;
(C) The Company's Current Reports on Form 8-K dated January 17,
1997, January 21, 1997, January 22, 1997, January 27, 1997,
April 15, 1997, June 16, 1997, July 11, 1997, August 25, 1997
and December 11, 1997 and the Company's Current Report on
Form 8-K/A dated June 16, 1997; and
(D) The description of the Class A Common Stock contained in the
Registration Statement on Form 8-A (File No. 0-22486) filed
with the Commission on September 29, 1993 and any subsequent
amendment thereto filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of shares of Class A Common Stock hereunder
shall be deemed incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed incorporated herein by reference shall be
deemed to be modified or superseded for all purposes to the extent that a
statement contained in this Prospectus or in any other subsequently filed
document which also is, or is deemed to be, incorporated by reference in this
Prospectus modifies or supersedes such statement.
The Company undertakes to provide without charge to each person to
whom a Prospectus is delivered, upon written or oral request of such person, a
copy of any and all of the information that has been incorporated by reference
in the Registration Statement filed with the Commission (of which this
Prospectus is a part) from a document or part thereof not delivered with the
Prospectus, but not including exhibits to the document unless such exhibits are
specifically incorporated
2
<PAGE>
by reference. Requests for such information should be directed to SFX
Broadcasting, Inc. at the Company's executive offices located at 150 East 58th
Street, New York, New York 10155 (telephone number (212) 407-919), Attention:
Secretary.
NO PERSON HAS BEEN AUTHORIZED BY THE COMPANY TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS. ANY INFORMATION OR
REPRESENTATION GIVEN WHICH IS NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION HEREIN CONTAINED IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
3
<PAGE>
RECENT DEVELOPMENTS
On August 24, 1997, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with SBI Holdings Corporation ("Buyer") and SBI
Radio Acquisition corporation pursuant to which the Company will become a
wholly owned subsidiary of Buyer (the "Merger"). In the Merger, holders of the
Company's Class A Common Stock will receive $75.00 per share and the holders of
the Company's Class B Common Stock will receive $97.50 per share, subject to
adjustment under certain circumstances. Pursuant to the Merger Agreement, the
Company intends to spin-off (the "Spin-Off") its concert promotion and venue
operation business ("SFX Entertainment") pro-rata to its stockholders and the
holders of certain warrants prior to the effective time of the Merger. In
general, the receipt of cash by the Company's stockholders pursuant to the
Merger and the receipt of stock in the Spin-Off, will be taxable events for
stockholders.
The Company is presently in advanced negotiations for the acquisitions
of several substantial businesses in the live entertainment and related
businesses with an aggregate purchase price of approximately $500,000,000 (the
"Pending Acquisitions"). The Company intends to finance a portion of the
Pending Acquisitions by issuing rights to receive the common stock of SFX
Entertainment upon the consummation of the Spin-Off. The values ascribed to the
SFX Entertainment common stock in the agreements relating to the Pending
Acquisitions will be based upon certain financial projections developed jointly
by the Company and the respective sellers and it is expected that such values
will be greater than the book value of the SFX Entertainment common stock at
the time the Pending Acquisitions are consummated. There is presently no
trading market for the SFX Entertainment common stock and there can be no
assurance that the assumptions upon which such valuations are based will, in
fact, be correct and that such valuations will approximate the actual trading
price of the SFX Entertainment common stock.
SFX Entertainment intends to finance the cash portion of the Pending
Acquisitions through a combination of privately-placed debt and borrowings
under a bank credit facility. There can be no assurance that definitive
agreements for these acquisitions will be entered into, financing to consummate
the acquisitions will be available on terms satisfactory or at all or that the
acquisitions will be consummated. While there can be no assurance, management
believes that financing on satisfactory terms will be available.
The consummation of the Merger and/or the Spin-Off is subject to
certain conditions and the receipt of certain consents including, among other
things, the approval of the Company's common stock voting together as a single
class, the approval of each of the Class A Common Stock and Series D preferred
stock, voting separately as a class, and the consents of the holders of the
Series E preferred stock and certain of the Company's outstanding notes. In
addition, the Merger is subject to the receipt of certain regulatory approvals.
The Company anticipates that the Merger will be consummated in the
second quarter of 1998 and that the Spin-Off will occur prior thereto. There
can be no assurance that the various approvals or consents will be given or
that the conditions to consummating the Merger will be met or that the Spin-Off
will occur as presently contemplated or at all.
RISK FACTORS
An investment in the shares of Class A Common Stock offered hereby
involves a high degree of risk. Prospective investors should consider
carefully, in addition to the other information contained in and incorporated
in this Prospectus (including the financial statements and notes thereto), the
following factors in connection with an investment in the shares of Class A
Common Stock offered hereby. This Prospectus contains forward-looking
statements that involve risks and uncertainties. These risks and uncertainties
include limitations on the consummation of the Merger and the Spin-Off,
leverage, limitations on the payment of dividends, regulation of radio
broadcasting and other factors, and the Company's actual results may differ
materially from the results discussed in the forward-looking statements.
Factors that could cause such a difference include, but are not limited to,
those discussed below, as well as those contained in the information
incorporated by reference herein.
PENDING MERGER AND SPIN-OFF
The Company has entered into the Merger Agreement pursuant to which,
among other things, each share of Class A Common Stock is to receive $75.00
cash (subject to adjustment under certain circumstances) and one share of Class
A common stock in SFX Entertainment, in the event that the Spin-Off is
consummated. Consummation of the Merger is subject to a number of conditions,
some of which are beyond the Company's control. No assurance can be given
that the Merger will be consummated. The trading price of the shares of Common
Stock may be significantly impacted in the event
4
<PAGE>
that the Merger is not consummated and the Merger Agreement is terminated. See
"Recent Developments". See the Company's Current Report on Form 8-K dated
August 25, 1997 for a description of the Merger Agreement.
The consummation of the Spin- Off is subject to a number of
conditions, including shareholder approval of certain amendments to the
Company's charter. No assurance can be given that the Spin-Off will be
consummated. If the Spin-Off is not consummated Buyer will have the right, but
not the obligation, to acquire SFX Entertainment at a price the management
believes to be below its fair value.
Extensive Regulation of Radio Broadcasting
Adoption of the Telecommunications Act of 1996 (the "Telecom Act")
eliminated the national limits and liberalized the local limits on radio
station ownership by a single company. However, the United States antitrust
authorities are increasingly scrutinizing acquisitions of radio stations and
the entering into of joint sales agreements ("JSAs") and local market
agreements ("LMAs"). There can be no assurance that policy and rule-making
activities of the United States antitrust authorities will not impact the
Company's operations (including existing stations or markets) or its ability to
realize the benefits that management had anticipated obtaining following the
adoption of the Telecom Act.
The radio broadcasting industry is subject to extensive regulation by
the Federal Communications Commission (the "FCC"). In particular, the Company's
business depends on its continuing to hold, and, in connection with
acquisitions of radio stations, on its obtaining prior FCC consent to
assignments or transfers of control of, broadcasting station operating licenses
issued by the FCC. There can be no assurance that the Company's licenses will
be renewed or that the FCC will approve future acquisitions or dispositions. In
addition, the number and locations of radio stations the Company may acquire is
limited by FCC rules and will vary depending upon whether the interests in
other radio stations or certain other media properties of certain individuals
affiliated with the Company are attributable to those individuals. The issuance
of shares of Class A Common Stock, including those issuable pursuant to the
conversion of other securities of the Company and pursuant to all other rights,
options or warrants to purchase Class A Common Stock, that would cause Robert
F.X. Sillerman, a Director of the Company and the Executive Chairman of the
Company, to hold directly voting stock of the Company representing less than
50% of the total voting power of the Company would require the Company to seek
and obtain the consent of the FCC.
The Congress and/or the FCC have under consideration, and in the
future may consider and adopt, new laws, regulations and policies regarding a
wide variety of matters that could affect, directly or indirectly, the
operation, ownership and profitability of the Company's radio broadcast
stations, result in the loss of audience share and advertising revenues for the
Company's radio broadcast stations, and affect the ability of the Company to
acquire additional radio broadcast stations or finance such acquisitions. In
particular, the FCC has outstanding a notice of proposed rulemaking that, among
other things, seeks comment on whether the FCC should modify its attribution
rules by (i) restricting the availability of the single majority stockholder
exemption, (ii) increasing the amount of stock an investment company can own
without attribution, (iii) attributing, under certain circumstances, certain
interests such as non-voting stock or debt and (iv) attributing, under certain
circumstances, JSAs.
SUBSTANTIAL LEVERAGE
In connection with its acquisitions of radio stations, the Company has
incurred significant amounts of indebtedness. The degree to which the Company
is and may become leveraged could have material consequences to the Company and
the holders of the Company's securities, including, but not limited to, the
following: (i) the Company's ability to obtain additional financing in the
future for acquisitions, working capital, capital expenditures, general
corporate or other purposes may be impaired, (ii) a substantial portion of the
Company's cash flow from operations will be dedicated to the payment of the
principal and interest on its debt and dividends on capital stock and will not
be available for other purposes, (iii) the agreements governing the Company's
debt contain or are expected to contain restrictive financial and operating
covenants, and the failure by the Company to comply with such covenants could
result in an event of default under the applicable instruments, which could
permit acceleration of the debt under such instrument and in some cases
acceleration of debt under other instruments that contain cross-default or
cross-acceleration provisions and (iv) the Company's level of indebtedness
could make it more vulnerable to economic downturns, limit its ability to
withstand competitive pressures and limit its flexibility in reacting to
changes in its industry and general economic conditions. Certain of the
Company's competitors operate on a less leveraged basis, and have significantly
greater operating and financial flexibility, than the Company.
5
<PAGE>
The Company's ability to make scheduled payments of principal of, to
pay interest on or to refinance, its debt and to make dividend and redemption
payments on its capital stock depends on its future financial performance,
which, to a certain extent, is subject to general economic, financial,
competitive, legislative, regulatory and other factors beyond its control, as
well as the success of the radio stations to be acquired and the integration of
these stations into the Company's operations. The Company's borrowings under
the senior credit facility may be at variable rates of interest, which will
result in higher interest expense in the event of increases in interest rates.
There can be no assurance that the Company's business will generate sufficient
cash flow from operations or that future working capital borrowings will be
available in an amount that enables the Company to service its debt, to make
dividend, conversion and redemption payments and to make necessary capital or
other expenditures. The Company may be required to refinance a portion of the
principal amount of its debt or the aggregate liquidation preference of the
outstanding preferred stock prior to their maturities. There can be no
assurance that the Company will be able to raise additional capital through the
sale of securities, the disposition of radio stations or otherwise for any such
refinancing.
HISTORICAL LOSSES
Although the Company had net income of $1.8 million for the year ended
December 31, 1994, the Company had net losses of $15.4 million (unaudited),
$50.9 million, $4.4 million and $17.8 million for the nine months ended
September 30, 1997, and the years ended December 31, 1996, 1995 and 1993,
respectively. Depreciation and amortization relating to past acquisitions and
future acquisitions, interest expenses under the Company's debt and dividend
payments will continue to affect the Company's net income (loss) in the future.
There is no assurance that losses will not continue or that the Company will
become profitable in the future.
CHANGE OF CONTROL
Upon the occurrence of a change of control (as defined in the
applicable document) of the Company, the holders of certain preferred stock or
certain debt instruments will have the right, subject to certain conditions and
restrictions, to require the Company to repurchase their securities at a price
equal to 101% of the aggregate liquidation preference or the aggregate
principal amount thereof, as applicable, plus accrued and unpaid dividends or
interest, as applicable, to the date of repurchase. The repurchase price is
payable in cash. In addition, a change of control may constitute a default
under the Company's senior credit facility. If a change of control were to
occur, due to the highly leveraged nature of the Company, the Company might not
have the financial resources to repay all of its obligations under any
indebtedness that would become payable upon the occurrence of such change of
control. In addition, the Communications Act of 1934, as amended (the
"Communications Act"), and FCC rules require the prior consent of the FCC to
any change of control of the Company. See "--Extensive Regulation of Radio
Broadcasting" and "--Substantial Leverage; Inability to Service Obligations."
COMPETITION
The radio broadcasting industry is highly competitive, and the
Company's stations are located in highly competitive markets. Each of the
Company's stations competes for audience share and advertising revenue directly
with other FM and AM radio stations, as well as with other media, within its
respective market. The financial results of each of the Company's stations are
dependent to a significant degree upon its audience ratings and its share of
the overall advertising revenue within the station's geographic market. The
Company's audience ratings and market share are subject to change, and any
adverse change in audience rating or market share in any particular market
could have a material and adverse effect on the Company's net revenues.
Although the Company competes with other radio stations with comparable
programming formats in most of its markets, if another station in the market
were to convert its programming format to a format similar to one of the
Company's radio stations, if a new radio station were to adopt a competitive
format, or if an existing competitor were to strengthen its operations, the
Company's stations could suffer a reduction in ratings or advertising revenue
and could require the Company to incur increased promotional and other
expenses. In addition, certain of the Company's stations compete, and in the
future other stations may compete, with groups of stations in a market operated
by a single operator. As a result of the Telecom Act, the radio broadcasting
industry has become increasingly consolidated, resulting in the existence of
radio broadcasting companies which are significantly larger, with greater
financial resources, than the Company. Furthermore, the Telecom Act will permit
other radio broadcasting companies to enter the markets in which the Company
operates or may operate in the future. Although the Company believes that each
of its stations is able to compete effectively in its market, there can be no
assurance that any of the Company's stations will be able to maintain or
increase its current audience ratings and advertising revenue market share. The
Company's stations also compete with other advertising media such as
newspapers, television, magazines, billboard advertising, transit advertising
and direct mail advertising. Radio
6
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broadcasting is also subject to competition from new media technologies that
are being developed or introduced, such as the delivery of audio programming by
cable television systems or the introduction of digital audio broadcasting. The
Company cannot predict the effect, if any, that any of these new technologies
may have on the radio broadcasting industry.
DEPENDENCE ON ECONOMIC FACTORS
Because the Company derives substantially all of its revenue from the
sale of advertising time, economic conditions that affect advertisers may
adversely affect its revenues. In particular, because approximately 75% of the
Company's revenue has generally been derived from local advertisers, operating
results in individual geographic markets will be adversely affected by local or
regional economic downturns. These economic downturns might adversely impact
the Company's financial condition and results of operations. In addition, other
factors may affect radio stations' revenues, such as: (i) the popularity of
programming, including programming such as sports programming where the Company
makes long-term commitments; (ii) regulatory restrictions on types of
programming or advertising; (iii) competition within national, regional or
local markets from programming on other stations or from other media; (iv) loss
of market share to other technologies; and (v) challenges to license renewals.
CONTROL BY MANAGEMENT
As of November 30, 1997, Robert F.X. Sillerman, a Director of the
Company and the Company's Executive Chairman, may be deemed to be the
beneficial owner of approximately 58.4% of the combined voting power of the
Company, and Mr. Sillerman and other members of the Company's management may be
deemed to be the beneficial owners of approximately 60.0% of the combined
voting power of the Company.
The Class A Common Stock has one vote per share on all matters,
whereas the Class B Common Stock, par value $.01 per share (the "Class B Common
Stock"), has ten votes per share except in certain matters. Accordingly,
management currently is able to control the vote on all matters except (i) in
the election of directors, with respect to which the holders of the Class A
Common Stock are entitled to elect, by a class vote, two sevenths (2/7) of the
Company's directors (or if such number of directors is not a whole number, the
next higher whole number), (ii) in connection with any proposed "going private"
transaction between the Company and Mr. Sillerman or his affiliates, with
respect to which the holders of the Class A Common Stock and the Class B Common
Stock vote as a single class, with each share of Class A Common Stock and of
Class B Common Stock entitled to one vote per share and (iii) as otherwise
provided by law. In addition, if dividends on the 6.5% Series D Cumulative
Convertible Exchangeable Preferred Stock due May 31, 2007 ("Series D Preferred
Stock") or the 12.625% Series E Cumulative Exchangeable Preferred Stock (the
"Series E Preferred Stock") are unpaid in an aggregate amount equal to six full
quarterly dividends and in certain other circumstances, the holders of the
series of preferred stock on which dividends are unpaid will be entitled to
elect two additional members of the Board of Directors of the Company. The
control of the Company by management may have the effect of discouraging
certain types of change-of-control transactions, including transactions in
which the holders of capital stock of the Company might otherwise receive a
premium for their shares over the then-current market price. See "Description
of Common Stock."
POTENTIAL CONFLICTS OF INTEREST; TRANSACTIONS WITH AFFILIATES
Mr. Sillerman and other members of the Company's management have
direct and indirect investments and interests in Triathlon Broadcasting Company
("Triathlon"), a publicly-traded company, which owns and operates radio
stations, including stations that are in the same market as certain of the
Company's radio stations. These investments and interests (and any similar
investments and interests in the future) may give rise to certain conflicts of
interest as well as to potential attribution under FCC rules or invocation of
the FCC's cross-interest policy, which could restrict the Company's ability to
acquire radio stations in certain markets. See "--Extensive Regulation of Radio
Broadcasting." Pursuant to a consulting and marketing agreement with Triathlon,
The Sillerman Companies, Inc. ("TSC"), an affiliate of Mr. Sillerman and Howard
J. Tytel, a Director of the Company and an Executive Vice President of the
Company, is obligated to offer to Triathlon any radio broadcasting
opportunities that come to its attention in medium and small markets located
west of the Mississippi River. The Company does not intend to pursue
acquisitions in the medium and small markets in the Midwest and Western regions
of the United States on which Triathlon primarily focuses, except for radio
stations owned by the Company in the Wichita, Kansas market, a market in which
Triathlon has radio station ownership interests. On April 15, 1996, the Company
was assigned the rights to receive fees for consulting and marketing services
payable by Triathlon, except for fees relating to certain transactions pending
at the date of such agreement, and the Company terminated an arrangement
pursuant to which
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TSC's contractual predecessor, Sillerman Communications Management
Corporation("SCMC"), performed financial consulting services for the Company.
SCMC has acted from time to time as the Company's financial advisor
since the Company's inception. SCMC and TSC are controlled by Mr. Sillerman,
and Messrs. Sillerman and Tytel are officers and directors of SCMC and TSC.
SCMC acts in similar capacities for Triathlon, which may seek to participate in
business opportunities which may be suitable for the Company.
RELIANCE ON KEY PERSONNEL
The Company's business is dependent to a significant extent upon the
performance of certain key individuals, including Mr. Sillerman, Michael G.
Ferrel, a Director of the Company and the Company's Chief Executive Officer,
and D. Geoffrey Armstrong, a Director of the Company and an Executive Vice
President of the Company. The Company has entered into a five-year employment
agreement with Mr. Sillerman, effective as of January 1997, a five-year
employment agreement with Mr. Ferrel, effective as of November 1996, and a
five-year employment agreement with Mr. Armstrong, effective as of April 1995.
There can be no assurance that the services of Messrs. Sillerman, Ferrel or
Armstrong will continue to be provided for the term of such agreements.
Pursuant to Mr. Armstrong's employment agreement, he has the right to terminate
the agreement under certain circumstances, and, in connection with such
termination, to receive substantial payments. Messrs. Sillerman's and
Armstrong's employment agreements require that they devote substantially all of
their business time to the business and affairs of the Company, except that Mr.
Sillerman's agreement permits him to fulfill his obligations as a director and
officer of companies in which he served in such capacities as of the date of
his employment agreement and to devote a portion of his business time to
personal, non-broadcast investments or commitments or to certain broadcast
investments. The loss of the services of Messrs. Sillerman, Armstrong or Ferrel
could have a material adverse effect on the Company.
In addition, the Company has entered into employment agreements with
certain of the high-profile on-air personalities. However, there can be no
assurance that the Company will be able to retain any of these employees or
prevent them from competing with the Company in the event of their departure.
NO TRANSFER OF CAPITAL STOCK TO ALIENS
The Company's Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), restricts the ownership, voting and transfer
of the Company's capital stock in accordance with the Communications Act and
the rules of the FCC to prohibit ownership of more than 25% of the Company's
outstanding capital stock, or more than 25% of the voting rights it represents
(this percentage, however, is 20% in the case of those subsidiaries of the
Company that are direct holders of FCC licenses), by or for the account of
non-U.S. citizens or their representatives or a foreign government or a
representative thereof or a corporation organized under the laws of a foreign
country ("Aliens") or corporations otherwise subject to domination or control
by Aliens. This restriction is in accordance with the Communications Act and
the rules of the FCC, which prohibit ownership of more than 25% of the
Company's outstanding capital stock, or more than 25% (20% in the case of
subsidiaries of the Company that directly hold FCC licenses) of the voting
rights it represents, by Aliens. As of June 18, 1997, based upon reports filed
with the Commission, the Company believes that there are 1,071,429 shares of
Class A Common Stock held by Nomura Holdings America, Inc. ("Nomura"),
representing 12.8% of the outstanding shares of Class A Common Stock and 5.6%
of the combined voting power of the Company. Because a substantial portion of
the common stock of Nomura is owned and voted by Aliens, the Company, in order
to comply with the requirements of the Communications Act and the rules and
regulations of the FCC promulgated thereunder, may decide not to permit or
recognize any issuance or transfer of its common stock to an Alien. Failure to
comply with these rules and regulations could result in the imposition of
penalties on the Company. This restriction on transfers to Aliens may adversely
affect the market for the Company's securities. In addition, the Certificate of
Incorporation provides that shares of capital stock of the Company determined
by the Board of Directors to be owned beneficially by an Alien will always be
subject to redemption by the Company by action of the Board of Directors to the
extent necessary, in the judgment of the Board of Directors, to comply with the
alien ownership restrictions of the Communications Act and the FCC rules and
regulations.
DIVIDEND POLICY; RESTRICTIONS ON PAYMENT OF DIVIDENDS
The Company has not paid any dividends on its Common Stock since its
inception in 1992 and does not anticipate that it will pay any dividends on its
Common Stock in the foreseeable future. Earnings, if any, will be retained by
the
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<PAGE>
Company to fund its growth. Certain of the Company's debt instruments and
certificates of designations with respect to its preferred stock include
covenants restricting the Company's ability to pay dividends or to make certain
other distributions to stockholders. The Company is a holding company,
substantially all of the operations of which are conducted through
subsidiaries. The ability of such subsidiaries to pay dividends is subject to
applicable state law and certain other restrictions.
MARKET RISK WITH RESPECT TO COMMON STOCK; CERTAIN INVESTMENT LIMITATIONS
The shares of Class A Common Stock are quoted on the Nasdaq National
Market. However, the prices at which the shares of Class A Common Stock trade
may depend upon many factors, including markets for similar securities,
industry conditions, and the performance of, and investor expectations for, the
Company. No assurance can be given that a holder of the shares of Class A
Common Stock of the Company will be able to sell such shares at any particular
price. Certain institutional investors may invest only in dividend-paying
equity securities or may operate under other restrictions that may prohibit or
limit their ability to invest in the shares of Class A Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE AND POSSIBLE ADVERSE EFFECT THEREOF
As of December 8, 1997 there were approximately 8,974,762 shares on
Class A Common Stock and approximately 1,047,037 shares of Class B Common Stock
of the Company issued and outstanding. Of these outstanding shares,
approximately 1.6 million shares of Class A Common Stock and approximately .8
million shares of Class B Common Stock are "Restricted Securities," as that
term is defined in Rule 144 promulgated under the Securities Act. Of such
shares, the Company believes that approximately 1.3 million shares of Class A
Common Stock and all of the shares of Class A Common Stock issuable upon
conversion of the Class B Common Stock are currently eligible for sale in the
open market under Rule 144 (subject to the limitations set forth therein). In
addition, the shares of Class A Common Stock held by Nomura have one demand and
certain piggy-back registration rights which expire on October 7, 2000.
Approximately 77,944 shares of Class A Common Stock (including shares of Class
A Common Stock issuable upon the exercise of options and warrants) and
approximately 208,810 shares of Class B Common Stock issued in an acquisition
by the Company which was consummated in November 1996 are subject to
restrictions on resale under Rule 145 ("Rule 145") promulgated under the
Securities Act. In addition, each of the 2,990,000 outstanding shares of Series
D Preferred Stock is convertible at the option of the holder thereof into
1.0987 shares of Class A Common Stock (subject to adjustments in certain
events) at any time prior to the close of business on May 31, 2007, the
maturity date of the Series D Preferred Stock. The Company has filed a
registration statement with the Commission with respect to the resale by the
holders thereof of the shares of Series D Preferred Stock, the shares of Class
A Common Stock issuable upon conversion thereof and the Exchange Notes issuable
upon the exchange thereof. Such registration statement was declared effective
in July 1996. The sale, or availability for sale, of substantial amounts of
shares of stock of the Company in the public market pursuant to Rule 144, Rule
145 or otherwise could adversely affect the prevailing market price of the
shares of Class A Common Stock and could impair the Company's ability to raise
additional capital through the sale of equity securities.
POSSIBLE ADVERSE IMPACT OF AUTHORIZED BUT UNISSUED SHARES OF CAPITAL STOCK AND
DELAWARE LAW
The Company has 100,000,000 shares of Class A Common Stock, 10,000,000
shares-of Class B Common Stock, 1,200,000 shares of Class C Common Stock, par
value $.01 per share (the "Class C Common Stock"), and 10,010,000 shares of
preferred stock, par value $.01 per share, authorized, of which approximately
8,974,762 shares of Class A Common Stock, 1,047,037 shares of Class B Common
Stock, no shares of Class C Common Stock and 5,243,000 shares of preferred
stock are outstanding as of December 8, 1997. Pursuant to the Certificate of
Incorporation, the unissued shares of preferred stock shall have such
designations, rights and preferences as may be determined from time to time by
the Board of Directors of the Company. Accordingly, the Board of Directors of
the Company is empowered, without stockholder approval, to issue stock
preferred stock with liquidation, conversion, voting or other rights which
could adversely affect the voting power or other rights of the holders of the
then outstanding shares of stock of the Company. In addition, the Board of
Directors of the Company may authorize the issuance of substantial amounts of
shares of common or preferred stock, as a financing technique or otherwise, the
effect of which would be to dilute the economic and voting rights of existing
stockholders and might adversely affect the prices at which the shares of Class
A Common Stock trade. The Board of Directors of the Company could use the
issuance of additional shares of capital stock of the Company as a method of
discouraging, delaying or preventing a change in control of the Company.
The Company is subject to the "business combination" statute of
Section 203 of the General Corporation Law of the State of Delaware (the
"DGCL"). In general, Section 203 prohibits a publicly-held Delaware corporation
from engaging
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in a "business combination" with an "interested stockholder" for a period of
three years after the date of the transaction in which the person became an
"interested stockholder," with certain specified exceptions. A "business
combination" includes mergers, stock or asset sales and other transactions
resulting in a financial benefit to the "interested stockholder." An
"interested stockholder" is a person who, together with affiliates and
associates, owns (or, within three years, owned) 15% or more of the
corporation's voting stock. The effect of Section 203 of the DGCL may be to
make it more difficult to effect a change in control of the Company.
USE OF PROCEEDS
All of the shares of Class A Common Stock offered hereby are being
offered by the Selling Stockholder and were acquired by the Selling Shareholder
in connection with the exercise of certain non-qualified stock options. The
Company will receive no part of the proceeds of any sales made hereunder.
Pursuant to the terms of the Merger Agreement, the options which the Selling
Stockholder exercised to acquire the shares being sold hereunder would have
been cashed out upon consummation of the Merger. For individual tax planning
purposes, the Selling Stockholder elected to exercise the options and
simultaneously sell the shares.
SELLING STOCKHOLDER
The shares offered hereby are shares of Class A Common Stock which
have been acquired pursuant to a Stock Option Agreement between the Company and
the Selling Stockholder. The following table sets forth certain information
with respect to the Selling Stockholder.
<TABLE>
<CAPTION>
SHARES OWNED
AFTER OFFERING
TOTAL SHARES OWNED --------------
RELATIONSHIP WITH AS OF TOTAL SHARES
NAME AND ADDRESS THE COMPANY DECEMBER 8, 1997 OFFERED NUMBER PERCENT (2)
---------------- ----------- ---------------- ------- ------ -----------
<S> <C> <C> <C> <C> <C>
Robert F.X. Sillerman Executive Chairman and 1,287,535(1) 75,000 1,212,535(1) 13.5%
150 East 58th Street Director
19th Floor
New York, New York 10155
</TABLE>
- ----------------------
(1) Includes (i) 537,285 shares that may be acquired pursuant to the
exercise of options that have been vested or will vest in 60 days and
(ii) 600,000 shares issuable upon the exercise of warrants issued to
Sillerman Communications Management Corporation, a company controlled
by Mr. Sillerman. Does not include 1,024,168 shares of Class B Common
Stock, which generally has 10 votes per share, held by Mr. Sillerman.
(2) Based on 8,974,762 shares of Class A Common Stock issued and
outstanding as of December 8, 1997.
PLAN OF DISTRIBUTION
The shares of Class A Common Stock offered hereby by the Selling
Stockholder or his transferees are to be sold from time to time, in one or more
transactions, in whole or in part, pursuant to any of the methods listed
herein. Sales may be made on the Nasdaq National Market or a national
securities exchange on which shares of Class A Common Stock may trade in the
future, at the price then prevailing at the time of sale, or (i) through
privately negotiated transactions directly with purchasers or (ii) through
underwriters, dealers or agents who may receive compensation in the form of
underwriting discounts, commissions or commissions from the Selling
Stockholder and/or purchasers of the Class A Common Stock form whom they act
as agent ((i) and (ii) above, collectively, the "Alternate Methods"). It is
anticipated that the underlying shares will be sold to a broker dealer at
prices, and for compensation, to be negotiated between the Selling Stockholder
and such broker dealer. The broker dealer may retain such shares or resell
such shares (or any interest therein) in any legal manner. The prices and
compensation for such sale are being negotiated based in part on trading in
the stock and in connection with a contract proposed to be entered into
between the broker dealer and the Selling Stockholder. The contact will relate
to the value of shares of SFX Entertainment if and when
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<PAGE>
issued as a dividend in the Spin-Off. See "Recent Developments." Unless
disclosed otherwise in a Prospectus Supplement or Amendment (see below), any
sale pursuant to the Alternate Method described in clause (i) above will be
negotiated directly between the Selling Stockholder and the purchaser, and no
finders or agents will be employed nor any commissions or fees paid.
Any offer or sale made pursuant to an Alternate Method may be made for
a fixed price, which may be changed, or at varying prices determined at the
time of sale or at negotiated prices. Upon notice from the Selling Stockholder
that he has elected to use an Alternate Method for an offer or sale, and to the
extent required by the Securities Act, a Prospectus Supplement or Amendment
will be distributed which will set forth the aggregate number of shares of
Class A Common Stock being offered and the terms of the offering, including the
name or names of any underwriter, dealers or agents, any discounts,
commissions, concessions and other items constituting compensation from the
Selling Stockholder or the purchasers or the shares, any discounts, commissions
or concessions allowed or reallowed or paid to dealers and any other material
information required by the Securities Act.
The Selling Stockholder and any underwriter, broker, dealer or other
agent that participates in the distribution of the shares of Class A Common
Stock offered hereby may be deemed to be "underwriters", as that term is
construed within the meaning of the Securities Act, in which event any profit
on the sale of the shares of Class A Common Stock by then and any discounts and
commissions received by any such underwriter, broker, dealer or other agent,
may be deemed to be underwriting discounts and commissions under the Securities
Act.
The Company has informed the Selling Stockholder that the
anti-manipulative rules contained in Regulation M under the Exchange Act may
apply to his sales in the market and has informed them of the requirement for
delivery of this Prospectus in connection with any sale of Class A Common Stock
offered hereby. All expenses of registration incurred in connection with the
offering being made of this Prospectus are being borne by the Company, but any
brokerage commissions and other expenses incurred by a Selling Stockholder will
be borne by such Selling Stockholder.
Any shares of Class A Common Stock covered by this Prospectus which
qualify for sale pursuant to Rule 144 under the Securities Act may be sold
under that Rule rather than pursuant to this Prospectus.
LEGAL MATTERS
The validity of the issuance of the shares of Class A Common Stock
offered hereby has been passed upon for the Company by Baker & McKenzie, New
York, New York. Baker & McKenzie has also served as counsel to entities
controlled by the Selling Stockholder, Robert F.X. Sillerman, who is the
Executive Chairman and a Director of the Company, who directly and through his
affiliates, including Sillerman Communications Management Corporation ("SCMC")
and Sillerman Communications Partners, L.P. ("SCP") and The Sillerman Companies
("TSC"), controls a majority of the voting power of the Company. Howard J.
Tytel is of Counsel of Baker & McKenzie, and also is Executive Vice President,
General Counsel, Secretary and a Director of the Company, SCMC, SCP and TSC,
and holds an equity interest in SCMC, SCP and TSC (which equity interest does
not include the right to vote or dispose of interests in SCMC, SCP and TSC). A
portion of the proceeds of the shares offered hereby will be paid by the
Selling Stockholder to Mr. Tytel as fees for consulting and other services
provided to Mr. Sillerman. In addition, Mr. Tytel directly owns 18,108 shares
of Class A Common Stock, 6,176 shares of which are purchasable upon the
exercise of options which have vested or will vest within 60 days.
EXPERTS
The consolidated financial statements and schedule of the Company and
its subsidiaries appearing in SFX Broadcasting, Inc.'s Annual Report (Form
10-K) for the year ended December 31, 1996 have been audited by Ernst & Young,
LLP, independent auditors, as set forth in their report included therein and
incorporated herein by reference. Such consolidated financial statements and
schedule are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The combined balance sheet of The Secret Stations: Indianapolis and
Pittsburgh as of June 30, 1996, and the related combined statements of
operations and cash flows fro the year then ended, incorporated herein by
reference in this Registration Statement, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are incorporated herein by reference in reliance upon the
authority of said firm as experts in giving said report.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents of SFX Broadcasting, Inc., a Delaware
corporation (the "Company"), are incorporated by reference into this
Registration Statement:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
2. The Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1997, June 30, 1997 and September 30, 1997;
3. The Company's Current Reports on Form 8-K dated January 17, 1997,
January 21, 1997, January 22, 1997, January 27, 1997; April 15, 1997, June 16,
1997, July 11, 1997, August 25, 1997 and December 11, 1997 and the Company's
Current Report on Form 8-K/A dated June 16, 1997; and
4. The description of the Company's Class A Common Stock, $.01 par
value per share, contained in the Company's Registration Statement on Form 8-A
(File No. 0-22486) filed with the Securities and Exchange Commission on
September 29, 1993, as amended.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all of the 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. Any statement contained in a document incorporated by reference
herein as set forth above shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Inapplicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the shares of Class A Common Stock
offered hereby has been passed upon for the Company by Baker & McKenzie, New
York, New York. Baker & McKenzie has also served as counsel to entities
controlled by the Selling Stockholder, Robert F.X. Sillerman, who is the
Executive Chairman and a Director of the Company, who directly and through his
affiliates, including Sillerman Communications Management Corporation ("SCMC")
and Sillerman Communications Partners, L.P. ("SCP") and The Sillerman Companies
("TSC"), controls a majority of the voting power of the Company. Howard J.
Tytel is of Counsel of Baker & McKenzie, and also is Executive Vice President,
General Counsel, Secretary and a Director of the Company, SCMC, SCP and TSC,
and holds an equity interest in SCMC, SCP and TSC (which equity interest does
not include the right to vote or dispose of interests in SCMC, SCP and TSC). A
portion of the proceeds of the shares offered hereby will be paid by the
Selling Stockholder to Mr. Tytel as fees for consulting and other services
provided to Mr. Sillerman. In addition, Mr. Tytel directly owns 18,108 shares
of Class A Common Stock, 6,176 shares of which are purchasable upon the
exercise of options which have vested or will vest within 60 days.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify any person who is, or is
threatened to be made, a party to any threatened, pending or completed 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 is or 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
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reasonably incurred by such person in connection with such action, suit or
proceeding, provided that he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. A Delaware corporation may indemnify officers
and directors against expenses (including attorneys' fees) in an action by or
in the right of the corporation under similar conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. 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 against the expenses
which he actually and reasonably incurred in connection therewith.
The Restated Certificate of Incorporation of the Company, as amended
(the "Certificate of Incorporation"), provides that no director of the Company
shall be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the General Corporation Law of the State of Delaware or (iv) for any
transaction from which the director derived an improper personal benefit.
The Company's By-Laws, as amended (the "By-Laws") provide that the
Company shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the Company) by reason of the fact that he
is, was or has agreed to become a director or officer of the Company, or is or
was serving or has agreed to serve at the request of the Company as a director
or officer of another company, partnership, joint venture, trust or other
enterprise, against costs, charges, expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf in connection with such action, suit or
proceeding and any appeal therefrom, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
The By-laws also provide that the Company shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Company to
procure a judgment in its favor by reason of the fact that he is, was or has
agreed to become a director or officer of the Company, or is or was serving at
the request of the Company as a director or officer of another company,
partnership, joint venture, trust or other enterprise, or by reason of any
action alleged to have been taken or omitted in such capacity, against costs,
charges and expenses (including attorneys' fees) actually and reasonably
incurred by him or on his behalf in connection with the defense or settlement
of such action or suit and any appeal therefrom, if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Company and except that no such indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Company unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of such
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.
The By-Laws state that, to the extent that a director or officer of
the Company shall be successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
action, suit or proceeding referred to above, or in the defense of any claim,
issue or matter therein, he shall be indemnified against all costs, charges and
expenses (including attorneys' fees) actually and reasonably incurred by him or
on his behalf in connection therewith.
The By-Laws further provide that any indemnification (unless ordered
by a court) shall be paid by the Company as authorized in the specific case
upon a determination that indemnification of the director or officer is proper
in the circumstances because he has met the applicable standard of conduct set
forth in the By-Laws unless a determination is made that indemnification of the
director or officer is not proper in the circumstances because he has not met
the applicable standard of conduct set forth in the By-Laws. Such determination
shall be made (i) by the Board of Directors of the Company by a majority vote
of a quorum consisting of directors who were not parties to such action, suit
or proceeding, or
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(ii) if such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (iii) by the stockholders.
The By-Laws further require that expenses incurred by an officer or
director in defending a civil or criminal action, suit or proceeding shall be
paid by the Company in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Company as authorized in the By-Laws.
The By-Laws require the Board of Directors of the Company to purchase
and maintain insurance on behalf of any person who is or was or has agreed to
become a director or officer of the Company, or is or was serving at the
request of the Company as a director or officer of another company,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him or on his behalf in any such capacity,
or arising out of his status as such, whether or not the Company would have the
power to indemnify him against such liability under the provisions of the
ByLaws, provided that such insurance is available on acceptable terms, which
determination shall be made by a vote of a majority of the Board of Directors.
The By-Laws also provide that the indemnification and advancement of
expenses provided by, or granted pursuant to, the By-Laws shall continue as to
a person who has ceased to be a director or officer and shall inure to the
benefit of the estate, heirs, executors and administrators of such person.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Inapplicable.
ITEM 8. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
5.1 Opinion of Baker & McKenzie.
23.1 Consent of Baker & McKenzie (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Arthur Andersen LLP.
25.1 Power of Attorney (included on the signature page of the
Registration Statement).
ITEM 9. UNDERTAKINGS.
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 of 1933 (the
"Securities Act");
(ii) To reflect in the Prospectus any facts of 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.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change
in
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the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective Registration Statement; and (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) do not apply if the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 (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 of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
FILING INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY
REFERENCE. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (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 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.
FILING OF REGISTRATION STATEMENT ON FORM S-8. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceedings) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
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<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 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 New York, State of New York, on the 11th day of
December, 1997.
SFX BROADCASTING, INC.
By: /s/ Howard J. Tytel
----------------------------------------
Howard J. Tytel
Executive Vice President and Secretary
POWER OF ATTORNEY
In accordance with the requirements of the Securities Act of
1933, this Registration Statement has been signed by the following persons in
the capacities and on the dates stated. Each person whose signature to this
Registration Statement appears below hereby appoints Robert F.X. Sillerman or
Howard J. Tytel as his attorney-in-fact to sign on his behalf, individually and
in the capacities stated below, and to file any and all amendments and
post-effective amendments to this Registration Statement, which amendment or
amendments may make such changes and additions as such attorney-in-fact may
deem necessary or appropriate.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ ------------------------------------------------ -----------------
<S> <C> <C>
/s/ Robert F.X. Sillerman Executive Chairman and Director December 10, 1997
- ------------------------------- (principal executive officer)
Robert F.X. Sillerman
/s/ Michael G. Ferrel Chief Executive Officer and Director December 10, 1997
- -------------------------------
Michael G. Ferrel
Chief Operating Officer, Executive Vice December __, 1997
- ------------------------------- President and Director
D. Geoffrey Armstrong
/s/ Thomas P. Benson Chief Financial Officer, Treasurer and Director December 10, 1997
- ------------------------------- (principal financial and accounting officer)
Thomas P. Benson
/s/ Howard J. Tytel Executive Vice President, Secretary and Director December 10, 1997
- -------------------------------
Howard J. Tytel
/s/ James F. O'Grady, Jr. Director December 10, 1997
- -------------------------------
James F. O'Grady, Jr.
/s/ Paul Kramer Director December 10, 1997
- -------------------------------
Paul Kramer
/s/ Richard A. Liese Director December 10, 1997
- -------------------------------
Richard A. Liese
/s/ Edward F. Dugan Director December 10, 1997
- -------------------------------
Edward F. Dugan
</TABLE>
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
5.1 Opinion of Baker & McKenzie.
23.1 Consent of Baker & McKenzie (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Arthur Andersen LLP.
25.1 Power of Attorney (included on the signature page of the
Registration Statement).
<PAGE>
EXHIBIT 5.1
December 11, 1997
SFX Broadcasting, Inc.
150 East 58th Street, 19th Floor
New York, New York 10155
RE: Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
As counsel to SFX Broadcasting, Inc., a Delaware corporation (the
"Company"), we have assisted in the preparation of the Company's Registration
Statement on Form S-8 (the "Registration Statement") under the Securities Act
of 1933, as amended (the "Act"). The Registration Statement relates to the
registration by the Company of 75,000 shares of Class A Common Stock, par value
$.01 per share, of the Company issuable upon exercise of a stock option granted
to Robert F.X. Sillerman pursuant to the Stock Option Agreement, dated December
16, 1996 (the "Agreement") between the Company and Mr. Sillerman.
In rendering this opinion, we have examined originals or copies
authenticated to our satisfaction of the Company's Restated Certificate of
Incorporation, as amended, the Company's Bylaws, as amended, and the Company's
records of corporate proceedings. In addition, we have made such other
examinations of law and fact as we have considered necessary in order to form a
basis for the opinions hereinafter expressed. In such examination we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as photostatic or certified copies, and the
authenticity of the originals of such copies.
Based upon the foregoing, we are of the opinion that the shares to be
issued upon exercise of the stock option granted by the Agreement have been
duly and validly authorized and, when issued and paid for as described in the
Agreement, will be duly and validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we come
within the category of persons whose consent is required by the Act or the
rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Baker & McKenzie
HMB/GG
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement on Form S-8 dated December 11, 1997 pertaining to
the Stock Option Agreement between Robert F.X. Sillerman and SFX Broadcasting,
Inc. and to the incorporation by reference therein of our report dated February
20, 1997, except for Note 14 as to which the date is March 27, 1997, with
respect to the consolidated financial statements and schedule of SFX
Broadcasting, Inc. included in its Annual Report (Form 10-K) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
New York, New York
December 10, 1997
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-8
Registration Statement of SFX Broadcasting, Inc. dated December 11, 1997 of our
report dated January 17, 1997 (and to all references to our Firm) relating to
the combined financial statements of The Secret Stations: Indianapolis and
Pittsburgh included in SFX Broadcasting, Inc.'s previously filed Form 8-K dated
January 21, 1997.
/s/ Arthur Andersen LLP
Chicago, Illinois
December 11, 1997
