<PAGE>
As filed with the Securities and Exchange Commission on July 12, 2000
Registration No. 333-_____
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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SBA COMMUNICATIONS CORPORATION
(Exact name of Registrant as specified in its charter)
Florida 65-0716501
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
One Town Center Road
Third Floor
Boca Raton, Florida 33486
(561) 995-7670
(Address, including zip code, and telephone number,
including area code, of Registrant's principal
executive offices)
--------------
Jeffrey A. Stoops
President
SBA Communications Corporation
One Town Center Road
Third Floor
Boca Raton, Florida 33486
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Robert C. Boehm, Esquire
Akerman, Senterfitt & Eidson, P.A.
One S.E. 3rd Ave, 28th Floor
Miami, Florida 33131
Phone: (305) 374-5600
Fax: (305) 374-5095
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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 to be 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, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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Calculation of Registration Fee
<TABLE>
<CAPTION>
Proposed Maximum Amount of
Title of Each Class Amount to be Proposed Maximum Aggregate Offering Price Registration
of Securities to be Registered Registered Offering Price per Unit (1)(2) Fee (3)
------------------------------ ---------- ----------------------- --------------------- -------
<S> <C> <C> <C> <C>
Debt Securities(4)..............
Preferred Stock, par value $0.01
per share(5)....................
Class A Common Stock, par value
$0.01 per share(6)..............
Depositary Shares(7)............
Warrants(8).....................
--------
Total........................... $500,000,000(1) (2) $500,000,000 $132,000
(Footnotes appear on following page)
</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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
(1) In no event will the aggregate maximum initial offering price of all
securities issued and sold by the Registrant pursuant to this Registration
Statement exceed $500,000,000, or the equivalent thereof in foreign
currencies or currency units. Any securities registered hereunder may be
sold separately, together or as units with other securities registered
hereunder.
(2) The proposed maximum offering price per unit (a) has been omitted pursuant
to Instruction II.D of Form S-3 and (b) will be determined, from time to
time, by the Registrant in connection with the issuance by the Registrant
of the securities registered hereunder.
(3) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
(4) Subject to footnote 1, there is being registered hereunder an indeterminate
principal amount of debt securities as may be sold, from time to time, by
the Company. Such amount shall be increased, if any debt securities are
issued at an original issue discount, by an amount such that the net
proceeds to be received by the Company shall be equal to the above amount
to be registered. Also, in addition to any debt securities that may be
issued directly under this Registration Statement, there is being
registered hereunder such indeterminate amount of debt securities as may be
issued upon conversion or exchange of other debt securities, preferred
stock or depositary shares of the Company, for which no consideration will
be received by the Company, or upon exercise of warrants registered hereby.
(5) Subject to footnote 1, there is being registered hereunder an indeterminate
number of shares of preferred stock as may be sold, from time to time, by
the Company. There also is being registered hereunder an indeterminate
number of shares of preferred stock as shall be issuable upon exercise of
warrants registered hereby. In addition, there is being registered
hereunder such indeterminate number of shares of preferred stock, for which
no consideration will be received by the Company, as may be issued upon
conversion or exchange of debt securities of the Company.
(6) Subject to footnote 1, there is being registered hereunder an indeterminate
number of shares of Class A common stock as may be sold, from time to time,
by the Company. There also is being registered hereunder an indeterminate
number of shares of Class A common stock as may be issuable upon conversion
of the debt securities or the preferred stock or upon exercise of warrants
registered hereby. The aggregate amount of Class A common stock registered
hereunder is limited, solely for purposes of any market offerings, to that
which is permissible under Rule 415(a)(4) under the Securities Act of 1933,
as amended.
(7) Such indeterminate number of depositary shares to be evidenced by
depositary receipts, representing a fractional interest of a share of
preferred stock.
(8) Subject to footnote 1, there is being registered hereunder an indeterminate
number of warrants representing rights to purchase debt securities, shares
of Class A common stock or preferred stock or depositary shares of the
Company registered hereby.
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
PROSPECTUS
$500,000,000
SBA COMMUNICATIONS CORPORATION
CLASS A COMMON STOCK, PREFERRED STOCK, DEBT SECURITIES,
DEPOSITARY SHARES AND WARRANTS
--------------
This prospectus relates to the public offering by SBA Communications
Corporation of up to $500,000,000 of shares of Class A common stock, shares of
preferred stock, debt securities, depositary shares and warrants.
--------------
When we offer securities, we will provide you with a prospectus supplement
describing the terms of the specific issue of securities, including the offering
price of the securities. The prospectus supplements may also add, update or
change information contained in this prospectus. You should read this prospectus
and any supplements carefully before you invest.
--------------
Our Class A common stock is traded on the Nasdaq National Market under the
symbol "SBAC." We will make application to list any shares of Class A common
stock sold pursuant to a supplement to this prospectus on the Nasdaq National
Market. We have not determined whether we will list any of the other securities
we may offer on any exchange or over-the-counter market. If we decide to seek
the listing of any securities, the supplement will disclose the exchange or
market.
--------------
Investing in these securities involves risks. See "Risk Factors" beginning
on page 3 of this prospectus.
--------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
____________, 2000.
<PAGE>
Table of Contents
Page
Where You Can Find More Information...........................................i
Information Incorporated by Reference.........................................i
Disclosure Regarding Forward-Looking Statements.............................iii
About this Prospectus.........................................................1
SBA Communications Corporation................................................1
Risk Factors..................................................................3
Ratio of Earnings to Fixed Charges...........................................13
Use of Proceeds..............................................................13
The Securities...............................................................14
Description of Capital Stock.................................................14
Description of Debt Securities...............................................18
Description of Depositary Shares.............................................26
Description of Warrants......................................................30
Plan of Distribution.........................................................31
Legal Matters................................................................32
Experts......................................................................32
Where You Can Find More Information
We file annual, quarterly and special reports and other information with
the Securities and Exchange Commission. You may read our SEC filings over the
Internet at the Commission's website at http://www.sec.gov. You may also read
and copy documents at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at its regional offices located at 7 World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms.
We have filed with the Commission a registration statement on Form S-3
under the Securities Act to register with the Commission the securities
described herein. This prospectus, which is a part of the registration
statement, does not contain all of the information set forth in the registration
statement. For further information about us and our securities, you should refer
to the registration statement.
Information Incorporated by Reference
The Commission allows us to provide information about our business and
other important information to you by "incorporating by reference" the
information we file with the Commission, which means that we can disclose the
information to you by referring in this prospectus to the documents we file with
the Commission. Under the Commission's regulations, any statement contained in a
document incorporated by reference in this prospectus is automatically updated
and superseded by any information contained in this prospectus, or in any
subsequently filed document of the types described below.
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We incorporate into this prospectus by reference the following documents filed
by us with the Commission, each of which should be considered an important part
of this prospectus:
SEC Filing (File No. 000-30110) Period Covered or Date of Filing
------------------------------- --------------------------------
Annual Report on Form 10-K.................... Year ended December 31, 1999
Quarterly Report on Form 10-Q................. Quarter ended March 31, 2000
Current Reports on Form 8-K................... January 11, 2000, January 11,
2000, February 4, 2000, February
4, 2000, February 23, 2000,
April 19, 2000, May 2, 2000, May
9, 2000 and May 12, 2000
Prospectus filed pursuant to Rule 424 under
the Securities Act............................ January 28, 2000
Description of our Class A common stock
contained in Registration Statement on Form
8-A and any amendment or report filed for the
purpose of updating such description ......... June 9, 1999
All subsequent documents filed by us under
Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act of 1934.......................... After the date of this
prospectus
You may request a copy of each of our filings at no cost, by writing or
telephoning us at the following address, telephone or facsimile number:
SBA Communications Corporation
One Town Center Road, Third Floor
Boca Raton, FL 33486
Phone: (561) 995-7670
Fax: (561) 998-3448
Exhibits to a document will not be provided unless they are specifically
incorporated by reference in that document.
You should rely only on the information contained in this prospectus or any
supplement. We have not authorized any other person to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should not assume that the information in this prospectus or any supplement is
accurate as of any date other than the date on the front of those documents. Our
business, financial condition, results of operations and prospects may have
changed since that date.
The information in this prospectus or any supplement may not contain all of
the information that may be important to you. You should read the entire
prospectus or any supplement, as well as the documents incorporated by reference
in the prospectus or any supplement, before making an investment decision.
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Disclosure Regarding Forward-Looking Statements
This prospectus contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Discussions containing forward-looking statements may be
found in the material set forth in this section and under "SBA Communications
Corporation" as well as in the prospectus generally. These statements concern
expectations, beliefs, projections, future plans and strategies, anticipated
events or trends and similar expressions concerning matters that are not
historical facts. Specifically, this prospectus and the documents incorporated
into this prospectus by reference contain forward-looking statements regarding:
. our strategy to transition the primary focus of our business from site
development services toward the site leasing business, including our
intent to make strategic acquisitions of towers and tower companies;
. anticipated trends in the site development industry and its effect on
our revenues and profits;
. our estimates regarding the future development of the site leasing
industry and its effect on our site leasing revenues;
. our plan to continue to construct and acquire tower assets and the
resulting effect on our revenues, capital expenditures, expenses and
net income;
. our ability to successfully conclude letters of intent or definitive
agreements for newly built towers or acquisitions of existing towers
and the resulting effect on our financial operations;
. our estimate of the amount of capital expenditures for fiscal year
2000 that will be required for the construction or acquisition of
communications sites and the contingent share issuance related to the
acquisition of Com-Net Construction Services, Inc.; and
. our intention to fund capital expenditures for fiscal year 2000 from
cash from the follow-on offering, operations and borrowings under our
Senior Credit Facility.
These forward-looking statements reflect our current views about future
events and are subject to risks, uncertainties and assumptions. We wish to
caution readers that certain important factors may have affected and could in
the future affect our actual results and could cause actual results to differ
significantly from those expressed in any forward-looking statement. The most
important factors that could prevent us from achieving our goals, and cause the
assumptions underlying forward-looking statements and the actual results to
differ materially from those expressed in or implied by those forward-looking
statements include, but are not limited to, the following:
. our ability to secure as many site leasing tenants as planned;
. our ability to expand our site leasing business and maintain or expand
our site development business;
. our ability to complete construction of new towers on a timely and
cost-efficient basis, including our ability to successfully address
zoning issues, carrier design changes, changing local market
conditions and the impact of adverse weather conditions;
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. our ability to identify and acquire new towers, including our
capability to timely complete due diligence and obtain third party
consents;
. our ability to retain current lessees on newly acquired towers;
. our ability to realize economies of scale for newly acquired towers;
. the continued dependence on towers and outsourced site development
services by the wireless communications industry;
. our ability to compete effectively for new tower opportunities and
site development services in light of increased competition; and
. our ability to raise substantial additional financing to expand our
tower holdings.
You should read carefully the section of this prospectus under the heading
"Risk Factors" beginning on page 3. We assume no responsibility for updating
forward-looking statements contained in this prospectus, any supplements to this
prospectus, and in any documents that we incorporate by reference into this
prospectus.
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About this Prospectus
This prospectus is part of a registration statement on Form S-3 that we
filed with the Securities and Exchange Commission utilizing a "shelf"
registration process. Under this shelf process, we may, from time to time, sell
any combination of securities described in this prospectus in one or more
offerings. This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any applicable prospectus supplement together with additional information
described above under the heading "Where You Can Find More Information."
When used in this prospectus and any prospectus supplement, the terms
"SBA", "we", "our", and "us" refer to SBA Communications Corporation and its
subsidiaries. The following summary contains basic information about us. It
likely does not contain all the information that is important to you. We
encourage you to read this entire prospectus and the documents we have referred
you to.
SBA Communications Corporation
We are a leading independent owner and operator of wireless communications
infrastructure in the United States. We generate revenues from our two primary
businesses-site leasing and site development services. Since our founding in
1989, we have participated in the development of more than 14,000 antenna sites
in 49 of the 51 major wireless markets in the United States. In 1997, we began
aggressively expanding our site leasing business by capitalizing on our
nationally recognized site development experience and strong relationships with
wireless service providers to take advantage of the trend toward colocation and
independent tower ownership. As of June 30, 2000, we owned or controlled 1,660
towers and had letters of intent or definitive agreements to acquire 147 towers.
We also had non-binding mandates to build over 600 additional towers for anchor
tenants and had over 900 strategic sites in various phases of development. In
1998 and 1999 we built, for our own account, 310 and 438 towers. For the six
months ended June 30, 2000, we built, for our own account, 329 towers. We
believe our history and experience in providing site development services gives
us a competitive advantage in choosing the most attractive locations in which to
build new towers or buy existing towers, as measured by our success in
increasing tower revenues and cash flows. Our same tower revenue growth for the
six months ended June 30, 2000 on the 770 towers we owned as of June 30, 1999
was 35% based on tenant leases executed as of June 30, 2000. We executed 216 new
tenant leases in the quarter ended June 30, 2000 on the 1,351 towers we owned at
the beginning of the quarter, at an average initial monthly rent of $1,528.
Our primary focus is the leasing of antenna space on our multi-tenant
towers to a variety of wireless service providers under long-term lease
contracts. We lease antenna space on: (1) the towers we construct through
build-to-suit programs; (2) existing sites we acquire; (3) the towers we develop
strategically; and (4) sites we lease, sublease and/or manage for third parties.
Under a build-to-suit program, we build a tower for a wireless service provider.
We retain ownership of the tower and the exclusive right to co-locate additional
tenants on the tower. Many wireless service providers are choosing the
build-to-suit option as an alternative to tower ownership, and we believe that
this outsourcing trend is likely to continue. Our non-binding mandates come from
a variety of wireless carriers, including Alamosa PCS, AT&T Wireless, BellSouth
Mobility DCS, Georgia PCS, Horizon PCS, Southwestern Bell, Sprint PCS, Telecorp
PCS and VoiceStream. We have also grown through selective acquisitions of towers
primarily from smaller independent owners. We also develop towers strategically,
for our own account, by identifying an attractive location and completing all
pre-construction
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procedures, such as zoning, necessary to secure the site. We then market the
tower site to potential customers.
Our site development business consists of site development consulting and
site development construction. In our site development business, we provide a
full range of end-to-end services which typically occur in five phases: (1)
network pre-design; (2) communication site selection; (3) communication site
acquisition; (4) local zoning and permitting; and (5) site construction, switch
construction and antenna installation. We will continue to use our site
development expertise to complement our site leasing business and secure
additional new tower build-to-suit opportunities. We have capitalized on our
leadership position in the site development business, our existing national
field organization and our strong relationships with wireless service providers
to develop our build-to-suit and strategic siting programs.
We have a diverse range of customers, including cellular, PCS, wireless
data and Internet services, paging, SMR, and ESMR providers as well as other
users of wireless transmission and reception equipment. Our customers currently
comprise many of the major wireless communications companies, including AT&T
Wireless, BellSouth, Georgia PCS, Horizon PCS, LEAP Wireless, Metricom, Nextel,
Omnipoint, Southwestern Bell, Sprint PCS, Telecorp PCS, Teligent, Verizon and
VoiceStream.
While we believe that our site development business will grow with the
expected overall growth of wireless and other telecommunications networks, we
believe our revenues and gross profit from the consulting segment of that
business may continue to decline as carriers find new ways to obtain network
development through outsourced tower ownership. We also believe that, over the
longer term, our site leasing revenues will continue to increase due to the same
outsourcing trend and as the number of towers we own or control grows.
Principal Executive Offices
Our principal executive offices are located at One Town Center Road, Third
Floor, Boca Raton, Florida 33486, and our telephone number is (561) 995-7670. We
were founded in 1989 and incorporated in Florida in 1997.
Recent Developments
Telecorp PCS "Build-To-Suit" Agreement
On April 26, 2000, we entered into a build-to-suit agreement with Telecorp
PCS, Inc., AT&T Wireless' largest affiliate. Under the build-to-suit agreement,
we will construct up to 200 tower facilities covering a number of strategic
markets over the next two years. Telecorp PCS will enter into long term leases
to place its wireless equipment at each site.
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Risk Factors
This prospectus includes "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Although we believe that our plans, intentions and
expectations reflected in or suggested by these forward-looking statements are
reasonable, we cannot assure you that these plans, intentions or expectations
will be achieved. Important factors that could cause actual results to differ
materially from the forward looking statements we make in this prospectus are
set forth below and elsewhere in this prospectus. All forward-looking statements
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by the following cautionary statements.
Tenant demand may not be as strong as planned.
We may not be successful in growing our site leasing business. Our success
depends to a large extent on our management's expectations and assumptions
concerning future tenant demand for independently-owned communication sites and
numerous other factors, many of which are beyond our control. Tenant demand
includes both the number of tenants and the lease rates they are willing to pay.
Any material error in any of these expectations or assumptions could have a
material adverse effect on our growth rate. Because most of our towers are newly
constructed, and because these towers have little or no positive cash flow at
the time of their construction, the risks of lower tenant demand for tower space
are much greater for us than for a tower company which has grown its portfolio
by acquiring towers with existing cash flow.
We compete for site leasing tenants with: (1) wireless service providers
that own and operate their own tower infrastructure and lease, or may in the
future decide to lease, antenna space to other providers; (2) site development
companies that acquire antenna space on existing towers for wireless service
providers, manage new tower construction and provide site development services;
(3) other large independent tower companies; and (4) smaller local independent
tower operators. Wireless service providers that own and operate their own tower
infrastructure generally are substantially larger and have greater financial
resources than we do. Several of the independent tower companies also have
larger tower infrastructure and greater financial resources than we do. We
believe that tower location and capacity, price, quality of service and density
within a geographic market historically have been and will continue to be the
most significant competitive factors affecting the site leasing business.
The number of towers we build, the number of tenants we add to our towers and
our site development business revenues fluctuate from quarter to quarter.
The number of towers we build, the number of tenants we add to our towers
and the demand for our site development services fluctuate from period to period
and within periods. Numerous factors cause these fluctuations, including:
. the timing of our customers' capital expenditures;
. the number and significance of active customer engagements during a
quarter;
. delays incurred in connection with a project or a tenant installation
of equipment;
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. employee hiring;
. the use of consultants; and
. the rate and volume of wireless service providers' tower build-outs.
While the demand for our site development services fluctuates, we incur
significant fixed costs, such as maintaining a staff and office space in
anticipation of future contracts, even when there is no current business. The
timing of revenues is difficult to forecast as our sales cycle can be relatively
long and may depend on factors such as the size and scope of assignments,
budgetary cycles and pressures and general economic conditions. With respect to
new tenant leases, in some cases revenue commencement trails execution of the
lease due to contractual terms, which are typical in the industry, and which
provide for revenue to commence upon installation of the tenant's equipment on
the tower, which can be 90 days or more after the execution of the lease.
Seasonal factors, such as weather, vacation days and total business days in a
quarter, and the business practices of customers, such as deferring commitments
on new projects until after the end of the calendar year or the customers'
fiscal year, may add to the variability of new tower builds and revenues and
could have a material adverse effect on our growth rate, prospects, financial
condition or results of operations. Consequently, the number of towers we build
and the operating results of our site leasing and development businesses for any
particular period may vary significantly, and should not be considered as
indicative of long-term results.
We face zoning and other restrictions on our ability to construct new towers.
Our growth strategy depends on our ability to construct and operate towers
in a timely and cost-effective manner. A number of factors beyond our control
can affect our ability to construct new towers, including:
. zoning and local permitting requirements;
. Federal Aviation Administration considerations;
. availability of tower components and construction equipment;
. skilled construction personnel;
. bad weather conditions; and
. finding suitable anchor tenants in those cases where we are not
willing to build a tower without an anchor tenant.
In addition, as the concern over tower proliferation has grown in recent years,
certain communities have placed restrictions on new tower construction or have
delayed granting permits required for construction. We cannot assure you (1)
that there will be a significant need for the construction of new towers once
existing wireless service providers complete their tower infrastructure
build-out, (2) of the number of mandates that we will be awarded or the number
of mandates that will result in constructed towers, (3) that we will be able to
overcome regulatory or other barriers to new construction or (4) that the number
of towers planned for construction will be completed in accordance with the
requirements of our
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customers. Certain of our anchor tenant leases contain penalty or forfeiture
provisions in the event we do not complete the towers within specified time
periods.
We face increasing competition for new tower opportunities and acquisitions of
existing towers.
We compete for new tower opportunities primarily with site developers,
wireless carriers and other independent tower companies. We believe that
competition for new tower opportunities will increase and that additional
competitors will enter the tower market. Some of these additional competitors
have or are expected to have greater financial resources than we do.
Our growth strategy depends on our ability to acquire and operate existing
towers not built by us to augment our existing tower network. Increased
competition for acquisitions may result in fewer acquisition opportunities for
us and higher acquisition prices. We regularly explore acquisition
opportunities, and we are currently actively negotiating to acquire additional
towers. As of June 30, 2000, we had letters of intent or definitive agreements
to acquire 147 towers in 38 separate transactions for an aggregate purchase
price of approximately $56.4 million.
We may not be able to identify, finance and complete future acquisitions of
towers or tower companies on acceptable terms or may not be able to profitably
manage and market available space on any towers that we acquire. We may also
face challenges in integrating newly acquired towers or tower companies and may
face difficulties in retaining current lessees on newly acquired towers. The
extent to which we are unable to construct or acquire additional towers, or
profitably manage these tower operations, may have a material adverse effect on
our results of operations.
We are not profitable and expect to continue to incur losses.
We incurred net losses of $19.9 million for the year ended December 31,
1998, $34.6 million for the year ended December 31, 1999 and $9.7 million for
the quarter ended March 31, 2000. Our losses are principally due to significant
depreciation, amortization and interest expense. We have not achieved
profitability and expect to continue to incur losses for the foreseeable future.
Our mandates may not yield binding agreements.
As of June 30, 2000, we had non-binding mandates to build over 600 towers
under build-to-suit programs for wireless service providers. Although we believe
that the majority of these non-binding mandates will result in long-term anchor
leases for specific communication towers, there are a number of steps that need
to occur before any leases are executed. These steps include, in some cases,
finalizing build-out plans by the customers who have awarded the mandates,
completing due diligence by us and our customers and finalizing other definitive
documents between the parties. As a result, we cannot assure you as to the
percentage of current and future non-binding mandates that will ultimately
result in binding anchor tenant leases and constructed towers.
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We think revenues from the consulting segment of our site development business
may continue to decline.
Our growth strategy is primarily focused on expanding our site leasing
business, as opposed to our site development business. However, you should be
aware that a substantial portion of our revenues has historically come from the
consulting segment of our site development business. We believe that wireless
service providers have begun to move away from the traditional build-out formula
where those providers contract for site development services for a fee and
invest the capital necessary to build and own their own network of
communications towers. We believe that the use of build-to-suit programs is
rapidly becoming the preferred method of wireless network expansion. As wireless
service providers have moved away from the traditional build-out formula, our
site development revenues from the consulting segment declined in each of 1997,
1998, 1999, and we could experience a further decline in 2000. We expect this
trend to continue for the foreseeable future as our customers continue to move
toward build-to-suit programs and other outsourcing alternatives and away from
wireless service provider-funded site development and ownership.
We will need to seek additional financing to fund our business plan.
Our business strategy contemplates substantial capital expenditures in
connection with the expansion of our tower infrastructure by agreeing with
wireless carriers to assume ownership or control of their existing towers, by
pursuing build-to-suit opportunities and by exploring other tower acquisition
opportunities.
Our cash capital expenditures for the quarter ended March 31, 2000 were
$60.6 million. We currently estimate that we will make at least $300.0 million
of cash capital expenditures through the end of the first quarter 2001, which
will be primarily for the construction and acquisition of towers. Based on our
current operations and anticipated revenue growth, we believe that, if our
business strategy is successful, cash flow from operations and available cash,
together with available borrowings under our senior credit facility, will be
sufficient to fund our anticipated cash capital expenditures through the end of
the first quarter 2001. Thereafter, however, or in the event we exceed our
currently anticipated cash capital expenditures by the end of the first quarter
2001, or are unable to fully draw on our senior credit facility, we anticipate
that we will need to seek additional equity or debt financing to fund our
business plan. Additional financing may not be available on commercially
acceptable terms or at all, and additional debt financing may not be permitted
by the terms of our existing indebtedness, including our senior discount notes.
Prior to March 1, 2003, interest expense on our outstanding senior discount
notes will consist solely of non-cash accretion of original issue discount and
these notes will not require cash interest payments. After that time, our
outstanding senior discount notes will have accreted to $269.0 million and will
require annual cash interest payments of approximately $32.3 million. If we are
required to issue additional common equity to finance our capital expenditures,
it could be dilutive to our existing shareholders. To the extent we are unable
to finance future capital expenditures, we will be unable to achieve our
currently contemplated business goals.
The expansion of our business may strain our resources.
Expanding our business may impose significant strains on our management,
operating systems and financial resources. In addition, we anticipate that our
operating expenses may increase during the next few years from their 1999 levels
as we construct and acquire additional tower assets. Our failure to
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manage our growth or unexpected difficulties encountered during expansion could
have a material adverse effect on our results of operations. The pursuit and
integration of new tower build-outs in addition to future acquisitions,
investments, joint ventures and strategic alliances will require substantial
attention from our senior management, which will limit the amount of time
available to devote to our existing operations.
From January 1, 1995 to June 30, 2000, our work force increased from
approximately 80 to 800 employees. This growth has placed, and will likely
continue to place, a substantial strain on our administrative, operational and
financial resources. In addition, as part of our business strategy, we may
acquire complementary businesses or expand into new businesses. We may not be
able to manage our growth successfully and our management, personnel or
operational and financial control systems may not be adequate to support
expanded or complementary operations. Any of these inabilities or inadequacies
could have a material adverse effect on our growth rate, prospects, financial
condition or results of operations.
If demand for wireless communication services decreases, our revenue will be
adversely affected.
Substantially all of our customers to date have been providers of wireless
communications services and, therefore, our success is dependent on their
success. Demand for both our site leasing and site development services is
dependent on demand for communication sites from wireless service providers,
which, in turn, is dependent on the demand for wireless services. A slowdown in
the growth of, or reduction in demand, in a particular wireless communication
segment could adversely affect the demand for communication sites. Most types of
wireless services currently require ground-based network facilities, including
communication sites for transmission and reception. The extent to which wireless
service providers lease these communication sites depends on a number of factors
beyond our control, including:
. the level of demand for wireless services;
. the financial condition and access to capital of wireless service
providers;
. the strategy of wireless service providers with respect to owning or
leasing communication sites;
. government licensing of broadcast rights; and
. changes in telecommunications regulations and general economic
conditions.
In addition, wireless voice service providers frequently enter into roaming
agreements with competitors allowing them to use one another's wireless
communications facilities to accommodate customers who are out of range of their
home provider's services. These roaming agreements may be viewed by wireless
voice service providers as a superior alternative to leasing antenna space on
communications sites owned or controlled by us. The proliferation of these
roaming agreements could have a material adverse effect on our results of
operations.
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We depend on a relatively small number of customers for most of our revenues.
We derive a significant portion of our revenues from a small number of
customers which vary at any given time, particularly in the site development
services side of our business. For example, during 1997, 1998, 1999 and the
quarter ended March 31, 2000, our five largest customers accounted for
approximately 89.9%, 91.4%, 48.3% and 46.7% respectively, of our revenues from
site development services. Sprint PCS, our largest customer for the years ended
December 31, 1997, 1998, 1999 and the quarter ended March 31, 2000, accounted
for 53.6%, 41.3%, 20.8% and 15.6%, respectively, of our revenues from site
development services during those periods. Other large customers include
BellSouth Mobility DCS, which accounted for 23.8% of our revenues from site
development services for the year ended December 31, 1998 and 13.9% for the year
ended December 31, 1999. For the quarter ended March 31, 2000, AT&T Wireless
accounted for 9.8% of our site development services. PageNet represented 33.4%
of our site leasing revenue for 1998, 16.5% for the year ended December 31,
1999, and 11.8% for the quarter ended March 31, 2000. These PageNet revenues
come primarily from our lease/sublease component of our site leasing business.
For the quarter ended March 31, 2000, our other major site leasing customers
were Nextel, Sprint PCS, and BellSouth Mobility DCS which accounted for 10.0%,
9.6%, and 9.2% of our site leasing revenues. Our site development customers
engage us on a project-by-project basis, and a customer can generally terminate
an assignment at any time without penalty. In addition, a customer's need for
site development services can decrease, and we may not be successful in
establishing relationships with new clients. Moreover, our existing customers
may not continue to engage us for additional projects. The substantial majority
of our existing non-binding mandates are from Alamosa PCS, AT&T Wireless,
Horizon PCS, Georgia PCS, Sprint PCS and Telecorp PCS. The loss of any
significant customer could have a material adverse effect on our growth rate,
prospects, financial condition or results of operations.
Due to the long-term expectations of revenue from tenant leases, the tower
industry is very sensitive to the creditworthiness of its tenants. Wireless
service providers often operate with substantial leverage, and financial
problems for our customers could result in uncollected accounts receivable, in
the loss of customers and the associated lease revenues, or in a reduced ability
of these customers to finance expansion activities.
Our substantial indebtedness could adversely affect our financial health and
prevent us from fulfilling our payment obligations.
We have a significant amount of indebtedness. The following chart shows
certain important credit information:
At March 31, 2000
-----------------
(dollars in thousands)
Total indebtedness...... $ 266,730
Stockholders' equity.... $ 274,716
Our substantial indebtedness could have important consequences to you. For
example, it could:
. increase our vulnerability to general adverse economic and industry
conditions;
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. limit our ability to fund future working capital, capital
expenditures, research and development costs and other general
corporate requirements;
. require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow to fund working capital, capital
expenditures, research and development efforts and other general
corporate purposes;
. limit our flexibility in planning for, or reacting to, changes in our
business and the industry in which we operate;
. place us at a competitive disadvantage to our competitors that are
less leveraged; and
. limit, along with the financial and other restrictive covenants in our
indebtedness, among other things, our ability to borrow additional
funds. Failing to comply with those covenants could result in an event
of default which, if not cured or waived, could have a material
adverse effect on our growth rate, prospects, financial condition or
results of operations.
Our ability to service our debt obligations will depend on our future
operating performance, which will be affected by prevailing economic conditions
in the wireless communications industry, and financial, business and other
factors, certain of which are beyond our control. If we are unable to generate
sufficient cash flow from operations to service our indebtedness, we will be
forced to adopt an alternative strategy that may include actions such as
reducing, delaying or eliminating acquisitions of towers or related service
companies, delaying tower construction and other capital expenditures, selling
assets, restructuring or refinancing our indebtedness or seeking additional
equity capital. We may not be able to effect any of these alternative strategies
on satisfactory terms, if at all. The implementation of any of these alternative
strategies could have a material adverse effect on our growth rate.
Our senior credit facility and the indenture governing our senior discount
notes each contains certain restrictive covenants. The senior credit facility
also requires us to maintain specified financial ratios and satisfy certain
financial condition tests. Our ability to meet these financial ratios and tests
can be affected by events beyond our control, and we may not be able to meet
those tests. A breach of any of these covenants could result in a default under
the senior credit facility and the indenture governing our senior discount
notes. Upon the occurrence of certain bankruptcy events, the outstanding
principal, together with all accrued interest, will automatically become
immediately due and payable. If any other event of default should occur under
the senior credit facility, our lenders can elect to declare all amounts of
principal outstanding under the senior credit facility, together with all
accrued interest, to be immediately due and payable. Either of these events
could also result in the triggering of cross-default or cross-acceleration
provisions in other instruments, permitting acceleration of the maturity of
additional indebtedness. If we were unable to repay amounts that become due
under the senior credit facility, our lenders could proceed against the
collateral granted to them to secure that indebtedness. If the indebtedness
under the senior credit facility were to be accelerated, our assets may not be
sufficient to repay in full the indebtedness. Substantially all of our assets
are pledged as security under the senior credit facility.
Our earnings have been insufficient to cover our fixed charges since the
issuance of our senior discount notes, assuming the accretion on the notes as a
fixed charge. We expect our earnings to continue to be insufficient to cover our
fixed charges for the foreseeable future. We may be able to incur
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substantial additional indebtedness in the future. If new debt is added to our
current debt levels, the related risks that we face could intensify.
We must comply with a variety of extensive regulations.
We are subject to a variety of regulations, including those at the federal,
state and local level. Both the Federal Communications Commission ("FCC") and
the Federal Aviation Administration ("FAA") regulate towers and other sites used
for wireless communications transmitters and receivers. Such regulations control
siting, lighting and marking of towers and may, depending on the characteristics
of the tower, require prior approval or registration of tower facilities.
Wireless communications devices operating on towers are separately regulated and
independently licensed based upon the regulation of the particular frequency
used. Proposals to construct new communication sites or to modify existing
communication sites are reviewed by both the FCC and the FAA to ensure that a
site will not present a hazard to aviation. Construction or modification of
these structures is also subject to the National Environmental Policy Act, which
requires additional review of any tower that may have a significant effect upon
the quality of the human environment. Owners of towers may have an obligation to
paint the towers or install lighting to conform to FCC and FAA standards and to
maintain such painting or lighting. Tower owners also bear the responsibility
for notifying the FAA of any tower lighting failures. We generally indemnify our
customers against any failure to comply with applicable standards. Failure to
comply with applicable requirements may lead to civil penalties.
Local regulations include city or other local ordinances, zoning
restrictions and restrictive covenants imposed by community developers. These
regulations vary greatly, but typically require tower owners to obtain approval
from local officials or community standards organizations prior to tower
construction. Local regulations can delay or prevent new tower construction or
site upgrade projects, thereby limiting our ability to respond to customers'
demands. In addition, these regulations may increase the timing and costs
associated with new tower construction. Additional regulations could be adopted
which could increase these delays or result in additional costs to us. These
factors could have a material adverse effect on our growth rate, prospects,
financial condition or results of operations and on our ability to implement
and/or achieve our business objectives in the future. Our customers may also
become subject to new regulations or regulatory policies that adversely affect
the demand for communication sites.
Our operations are also subject to federal, state and local environmental
laws and regulations regarding the use, storage, disposal, emission, release and
remediation of hazardous and nonhazardous substances, materials or wastes. Under
certain of these environmental laws, we could be held strictly liable for the
remediation of hazardous substance contamination at our facilities or at
third-party waste disposal sites, and could also be held liable for any personal
or property damage related to the contamination. Although we believe that we are
in substantial compliance with, and have no material liability under, applicable
environmental laws, the costs of compliance with existing or future
environmental laws and liability related to those laws may have a material
adverse effect on our business.
We and the wireless service providers that use our towers are also subject
to government requirements and other guidelines relating to radio frequency, or
RF, emissions. The potential connection between RF emissions and certain
negative health effects, including some forms of cancer, has been the subject of
substantial studies by the scientific community in recent years. To date, the
results of these studies have been inconclusive. Although we have not been
subject to any claims relating to RF emissions, we may be subject to these
claims in the future.
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Our towers are subject to damage from natural disasters.
Our towers are subject to risks associated with natural disasters such as
tornadoes, hurricanes and earthquakes. We maintain insurance to cover the
estimated cost of replacing damaged towers, but these insurance policies are
subject to caps and deductibles. We also maintain third party liability
insurance to protect us in the event of an accident involving a tower. A tower
accident for which we are uninsured or underinsured, or damage to a tower or
group of towers, could have a material adverse effect on our financial
condition or results of operations.
New technologies may undermine the success of our operations.
The emergence of new technologies could have a negative impact on our
operations. For example, the FCC has granted license applications for several
low-earth orbiting satellite systems that are intended to provide mobile voice
and data services. Although these systems are highly capital intensive and have
only begun to be tested, mobile satellite systems could compete with land-based
wireless communications systems. In addition, products are currently being
developed which may permit multiple wireless carriers to use a single antenna,
or to increase the range and capacity of an antenna. These systems and products
could reduce the demand for our infrastructure services or space on our towers.
These events could have a material adverse effect on our growth rate, prospects,
financial condition or results of operations.
Because of our holding company structure, we depend on our subsidiaries for cash
flow. Our access to this cash flow is restricted.
We are a holding company with no business operations of our own. Our only
significant asset is and is expected to be the outstanding capital stock of our
subsidiaries. We conduct, and expect to conduct, all of our business operations
through our subsidiaries. Accordingly, our only source of cash to pay our
obligations is distributions from our subsidiaries of their net earnings and
cash flow. We currently expect that the earnings and cash flow of our
subsidiaries will be retained and used by them in their operations, including to
service their debt obligations. Even if our subsidiaries determined to make a
distribution to us, applicable state law and contractual restrictions, including
the dividend covenants contained in our senior credit facility, may not permit
these dividends or distributions.
Steven E. Bernstein controls the outcome of shareholder votes.
Steven E. Bernstein, our Chairman and Chief Executive Officer, controls
100% of the outstanding shares of Class B common stock. As of June 30, 2000, Mr.
Bernstein controlled approximately 62% of the total voting power of both classes
of common stock. As a result, Mr. Bernstein has the ability to control the
outcome of all matters determined by a vote of our common shareholders when
voting together as a single class, including the election of all of our
directors.
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We depend on the services of our executive officers.
Our success depends to a significant extent upon the continued services of
Steven E. Bernstein, our Chairman and Chief Executive Officer, Jeffrey A.
Stoops, our President, Ronald G. Bizick, II, our Chief Operating Officer- U.S.
Site Development, Daniel J. Eldridge, President-SBA Network Services, Inc., John
Marino, our Chief Financial Officer, and Michael N. Simkin, our Executive Vice
President-International. Each of Messrs. Bizick, Simkin and Stoops has an
employment agreement. We do not have an employment agreement with Messrs.
Bernstein, Eldridge, or Marino. Mr. Bernstein's compensation and other terms of
employment are determined by the Board of Directors. The loss of the services of
any of Messrs. Bernstein, Stoops, Simkin, Eldridge, Bizick or Marino or other
key managers or employees, could have a material adverse effect upon our
prospects or results of operations.
We need to attract, retain and manage skilled employees.
Our business involves the delivery of professional services and is
labor-intensive. Our success depends in large part upon our ability to attract,
develop, motivate and retain skilled employees. We compete with other wireless
communications firms and other enterprises for employees with the skills
required to perform our services. We cannot assure you that we will be able to
attract and retain a sufficient number of highly-skilled employees in the future
or that we will continue to be successful in training, retaining and motivating
employees. The loss of a significant number of employees and/or our inability to
hire a sufficient number of qualified employees could have a material adverse
effect on our results of operations or growth rate.
Commencing international operations in the future may undermine the success of
our operations.
We do not currently have international operations, but we evaluate
international opportunities from time to time and may commence international
operations at any time. If we commence international operations, we will be
subject to various, political, economic and other uncertainties. The risks
include:
. unexpected changes in regulatory requirements;
. difficulties and costs of staffing and managing international
operations;
. different technology standards;
. political and economic instability;
. fluctuations in currency exchange rates;
. imposition of currency exchange controls; and
. potentially adverse tax consequences
Any of these factors could delay or preclude our ability to generate revenues in
our key markets. Accordingly, no assurance can be given that if we commence
international operations our strategies will prove to be effective or that
management's goals will be achieved.
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Ratio of Earnings to Fixed Charges
For purposes of calculating the ratio of earnings to fixed charges,
earnings represent net loss before income taxes and extraordinary items,
interest expense, the component of rental expense believed by management to be
representative of the interest factor thereon, and amortization of original
issue discount and debt issue costs. Fixed charges consist of interest expense,
the component of rental expense believed by management to be representative of
the interest factor thereon, amortization of original issue discount and debt
issue costs and preferred dividends. The ratio of earnings to fixed charges was
33.8x, 7.7x and 3.6x for 1995, 1996 and 1997, respectively. We had a deficiency
in earnings to fixed charges of $24.0 million and $33.7 million for 1998 and
1999, respectively and $9.5 million for the three months ended March 31, 2000.
Use of Proceeds
Unless otherwise indicated in the prospectus supplement, the net proceeds
from the sale of securities offered by this prospectus will be used to finance
the construction and acquisition of towers and related businesses, repay
outstanding debt and for general working capital purposes.
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The Securities
SBA may from time to time offer under this prospectus, separately or
together:
. shares of Class A common stock;
. shares of preferred stock, which may be represented by depositary
shares as described below;
. unsecured senior or subordinated debt securities; and
. warrants to purchase shares of (i) Class A common stock ; (ii)
preferred stock; (iii) depositary shares and (iv) debt securities.
The aggregate initial offering price of the offered securities will not
exceed $500,000,000.
Description of Capital Stock
----------------------------
Our authorized capital stock consists of 100,000,000 shares of Class A
common stock, par value $.01 per share, 8,100,000 shares of Class B common
stock, par value $.01 per share, and 30,000,000 shares of preferred stock, par
value $.01 per share. These shares of preferred stock have not been designated
as to series and are available for issuance from time to time in one or more
series at the discretion of our Board of Directors. Any issuance of preferred
stock could be used to discourage, delay or make more difficult a change in
control of SBA.
We have two classes of authorized common stock: Class A common stock and
Class B common stock. The Class A common stock has one vote per share. The Class
B common stock has ten votes per share. All outstanding shares of Class A common
stock and Class B common stock are validly issued, fully paid and non-
assessable. As of June 30, 2000, there were 207 record holders of the Class A
common stock and 2 record holders of the Class B common stock.
As of June 30, 2000, our outstanding capital stock consisted of 34,122,639
shares of Class A common stock and 5,535,595 shares of Class B common stock. No
other shares of any class or series were issued and outstanding as of June 30
2000. In addition, we have reserved (1) 2,974,481 shares of Class A common stock
issuable upon exercise of outstanding stock options, (2) 577,467 shares of Class
A common stock issuable under our registration statement on Form S-4 that we
filed with the Commission on January 11, 2000, (3) 2,351,686 shares that may be
issued upon exercise of options that may be granted in the future under our 1999
Equity Participation Plan, (4) 451,505 shares for issuance under our 1999
Employee Stock Purchase Plan, and (5) 400,000 shares that are issuable to the
former shareholders of Com-Net if 2000 EBITDA targets established in connection
with the acquisition of that company are met.
Except as otherwise required by law or in our articles of incorporation,
owners of the Class A common stock and Class B common stock will vote together
as a single class on all matters, including the election of directors. Our
articles of incorporation provide for a separate class vote of each class of
common stock in the event of any amendment that alters the terms of the Class B
common stock. Pursuant to our articles of incorporation and by-laws, our Board
of Directors is classified into three classes of directors, denoted as Class I,
Class II and Class III. Messrs. Picow and Landry are Class I
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directors, Messrs. Miller and Stoops are Class II directors, and Messrs.
Bernstein and Hebb are Class III directors.
Class A Common Stock
--------------------
Voting Rights
Each share of Class A common stock is entitled to one vote. Except as noted
above, and except as provided under the Florida Business Corporation Act, the
holders of shares of Class A common stock and Class B common stock vote together
as a single class on all matters on which shareholders are permitted or entitled
to vote.
Class B Common Stock
--------------------
Voting Rights
Each share of Class B common stock is entitled to ten votes for each share
on all matters presented to the shareholders. Except as provided under the
Florida Business Corporation Act, the holders of the shares of Class B common
stock and Class A common stock vote together as a single class on all matters on
which shareholders are permitted or entitled to vote.
Convertibility
Each outstanding share of Class B common stock may, at the option of the
holder thereof, at any time, be converted into one fully paid and non-assessable
share of Class A common stock. Each share of outstanding Class B common stock
converts into one fully paid and non-assessable share of Class A common stock
immediately upon transfer to any holder other than any one or more of the
following (an "Eligible Class B Shareholder"): (1) Steven E. Bernstein; (2)
other members of his immediate family or their lineal descendants; (3) spouses
of lineal descendants or lineal descendants of spouses, whether alive as of the
date of the articles of incorporation or born subsequently; (4) any trusts or
other estate planning vehicles for the benefit of any of the foregoing, whether
existing as of the date of the articles of incorporation or subsequently
created; or (5) any estate or tax planning vehicles on the part of Mr.
Bernstein. If the shares of Class B common stock held by Eligible Class B
Shareholders in the aggregate constitute 10% or less of the outstanding shares
of our common stock, or upon the death or mental incapacity of Steven E.
Bernstein, each share of Class B common stock shall immediately convert into one
fully paid and non-assessable share of Class A common stock. Each share of
outstanding Class B common stock which is held by any Eligible Class B
Shareholder will immediately convert into one share of Class A common stock at
the time that the holder is no longer an Eligible Class B Shareholder.
Provisions Applicable to both the Class A and Class B Common Stock
------------------------------------------------------------------
Dividends
Each share of Class A and Class B common stock is entitled to receive
dividends if, as and when declared by the Board of Directors out of funds
legally available for that purpose, subject to preferences that may apply to any
preferred stock that we may issue in the future. No dividends may be declared
and paid to holders of shares of one class of shares of common stock unless the
Board of Directors at the same time also declares and pays to the holders of the
other class of shares of common stock a per share
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dividend equal to the dividend declared and paid to the holders of the first
class of shares of common stock.
Liquidation Rights
In the event of our dissolution or liquidation, after satisfaction of all
our debts and liabilities and distributions to the holders of any preferred
stock that we may issue in the future, if any, of amounts to which they are
preferentially entitled, holders of one class of shares of common stock will be
entitled to share ratably with holders of the other class of shares of common
stock in the distribution of assets to the shareholders.
Other Provisions
There are no cumulative, subscription or preemptive rights to subscribe for
any additional securities which we may issue, and there are no redemption
provisions, conversion provisions or sinking fund provisions applicable to the
Class A and Class B common stock.
The rights and preferences of holders of both classes of common stock are
subject to the rights of any series of preferred stock which we may issue in the
future.
Registration Rights
-------------------
If at any time, the holders of not less than 25% of the Class A common
stock which was issued upon conversion of our previously outstanding preferred
stock request that we file a registration statement covering their shares of
Class A common stock (with an anticipated aggregate offering price of $3.0
million), we will use our best efforts to cause these shares to be registered,
subject to reduction if, in the case of a firm underwritten offering, the
underwriter stipulates that it is not advisable for us to register the full
amount of Class A common stock that holders have requested that we register;
provided, however, that we may delay any demand registration for a period of up
to three months for a valid business reason. Except as otherwise agreed, in the
event of an application of these cut-back provisions, the former holders of the
preferred stock have a priority right to participate in the registration over
Messrs. Bernstein, Bizick, and Stoops. We will not be required to file
more than three registration statements, other than on Form S-3. In addition,
these holders have the right to require us to file up to two registration
statements per year on Form S-3, provided the anticipated aggregate offering
price in each registration on Form S-3 equals $1.0 million or more. However,
these holders may only request that we file a registration statement to the
extent that their shares exceed the amount that can be sold pursuant to Rule 144
of the Securities Act. We believe that a significant portion of these shares may
currently be sold pursuant to Rule 144.
Each of Messrs. Bernstein, Bizick and Stoops also has certain
rights to have his shares of common stock registered under the Securities Act.
Mr. Bernstein has the right to have his shares of Class B common stock
registered under the Securities Act. Mr. Bizick has the right to have 773,528
shares of Class A common stock registered under the Securities Act. Mr. Stoops
has the right to have 1,369,863 shares of Class A common stock registered under
the Securities Act.
If at any time, Mr. Bernstein, Mr. Bizick, or Mr. Stoops, individually or
as a group, request that we file a registration statement on Form S-3 for these
shares, we will use our best efforts to cause these shares to be registered
subject to certain cut-back provisions; provided, however,
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that we may delay any registration for a period of up to three months for a
valid business reason. We will not be required to file the registration
statement on Form S-3 more frequently than twice a year.
Preferred Stock
---------------
Our board of directors is authorized by our articles of incorporation to
provide for the issuance of shares of preferred stock, in one or more series, to
establish the number of shares to be included in each series, to fix the
designation, rights, preferences, privileges and restrictions of the shares of
each series and to increase or decrease the number of shares of any series of
preferred stock, all without any further vote or action by our shareholders.
The prospectus supplement will specify as to each issuance of preferred
stock:
. the maximum number of shares;
. the designation of the shares;
. annual dividend rate, if any, whether the dividend rate is fixed or
variable, the date dividends will accrue, the dividend payment dates
and whether dividends will be cumulative;
. the price and the terms and conditions for redemption, if any,
including redemption at our option or at the option of the holders,
including the time period for redemption, and any accumulated
dividends or premiums;
. the liquidation preference, if any, and any accumulated dividends upon
the liquidation, dissolution or winding up of SBA's affairs;
. any sinking fund or similar provision, and, if so, the terms and
provisions relating to the purpose and operation of the fund;
. the terms and conditions, if any, for conversion or exchange of shares
into or for any other class or classes of our capital stock or any
series of any other class or classes, or into or for any other series
of the same class, or any other securities or assets, including the
price or the rate of conversion or exchange and the method, if any, of
adjustment;
. the voting rights; and
. any or all other preferences and relative, participating, optional or
other special rights, privileges or qualifications, limitations or
restrictions.
Preferred stock will be fully paid and nonassessable upon issuance. The
preferred stock or any series of preferred stock may be represented, in whole or
in part, by one or more global certificates, which will represent an aggregate
number of shares equal to that of the preferred stock represented by the global
certificate.
Each global certificate will:
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. be registered in the name of a depositary or a nominee of the
depositary identified in the prospectus supplement;
. be deposited with such depositary or nominee or a custodian for the
depositary; and
. bear a legend regarding any restrictions on exchanges and registration
of transfer and any other matters as may be provided for under the
certificate of designation.
Description of Debt Securities
------------------------------
The debt securities will primarily be our unsecured direct obligations.
Subject to the terms of our current indebtedness, we may also offer debt
securities that will be our secured direct obligations. The secured debt
securities, if offered, may be secured with all or a portion of our assets. The
debt securities may be senior or subordinated indebtedness. The debt securities
will be issued under one or more indentures between us and a trustee. Any
indenture will be subject to, and governed by, the Trust Indenture Act of 1939,
as amended. The statements made in this prospectus relating to any indenture and
the debt securities to be issued under any indenture are summaries of certain
anticipated provisions of the indentures, do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all provisions
of the indentures and the debt securities.
General
-------
We have filed with the registration statement relating to the offered
securities a form of indenture relating to our senior securities and a form of
indenture relating to our senior subordinated securities and subordinated
securities. Our senior debt securities will rank equally and ratably in right of
payment with other indebtedness of ours that is not subordinated, including but
not limited to our 12% Senior Discount Notes due 2008, Series B. If we issue
subordinated debt securities, they will be subordinated in right of payment to
the prior payment in full of senior indebtedness, as defined in the applicable
prospectus supplement, and may rank equally and ratably with any other
subordinated indebtedness. They may, however, also be subordinated in right of
payment to senior subordinated securities. See "--Subordination." We may issue
the debt securities without limit as to aggregate principal amount, in one or
more series, in each case as established from time to time in or pursuant to
authority granted by a resolution of our board of directors or as established in
one or more supplemental indentures. We need not issue all debt securities of
one series at the same time. Unless we otherwise provide, we may reopen a
series, without the consent of the holders of such series, for issuances of
additional securities of that series.
We anticipate that any indenture will provide that we may, but need not,
designate more than one trustee under an indenture, each with respect to one or
more series of debt securities. Any trustee under any indenture may resign or be
removed with respect to one or more series of debt securities, and a successor
trustee may be appointed to act with respect to that series. The applicable
prospectus supplement will describe the specific terms relating to the series of
debt securities we will offer, including, where applicable, the following:
. the title and series designation and whether they are senior
securities, senior subordinated securities or subordinated securities;
. the aggregate principal amount of the securities;
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. the percentage of the principal amount at which we will issue the debt
securities and, if other than the principal amount of the debt
securities;
. the portion of the principal amount of the debt securities payable
upon declaration of acceleration of the maturity of the debt
securities, or if convertible, the initial conversion price, the
conversion period and any other terms governing such conversion;
. the stated maturity date;
. any fixed or variable interest rate or rates per annum;
. the date from which interest may accrue and any interest payment
dates;
. any sinking fund requirements;
. any provisions for redemption, including the redemption price and any
remarketing arrangements;
. whether the securities are denominated or payable in United States
dollars or a foreign currency or units of two or more foreign
currencies;
. the events of default and covenants of such securities, to the extent;
different from or in addition to those described in this prospectus;
. whether we will issue the debt securities in certificated and/or
book-entry form;
. whether the debt securities will be in registered or bearer form and,
if in registered form, the denominations if other than in even
multiples of $1,000 and, if in bearer form, the denominations and
terms and conditions relating thereto;
. whether we will issue any of the debt securities in permanent global
form and, if so, the terms and conditions, if any, upon which
interests in the global security may be exchanged, in whole or in
part, for the individual debt securities represented by the global
security;
. the applicability, if any, of the defeasance and covenant defeasance
provisions described in this prospectus or any prospectus supplement;
. whether we will pay additional amounts on the securities in respect of
any tax, assessment or governmental charge and, if so, whether we will
have the option to redeem the debt securities instead of making this
payment; and
. the subordination provisions, if any, relating to the debt securities.
We may issue debt securities at less than the principal amount payable
upon maturity (we refer to these securities as "original issue
discount securities"). If material or applicable, we will describe in
the applicable prospectus supplement special U.S. federal income tax,
accounting and other considerations applicable to original issue
discount securities.
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Except as described under "--Merger, Consolidation or Sale of Assets" or as
may be set forth in any prospectus supplement, an indenture will not contain any
other provisions that would limit our ability to incur indebtedness or that
would afford holders of the debt securities protection in the event of a highly
leveraged or similar transaction involving us or in the event of a change of
control. You should review carefully the applicable prospectus supplement for
information with respect to events of default and covenants applicable to the
securities being offered.
Denominations, Interest, Registration and Transfer
Unless otherwise described in the applicable prospectus supplement, we will
issue the debt securities of any series that are registered securities in
denominations that are even multiples of $1,000, other than global securities,
which may be of any denomination.
Unless otherwise specified in the applicable prospectus supplement, we will
pay the interest on and principal of and premium, if any, on any debt securities
at the corporate trust office of the trustee. At our option, however, we may
make payment of interest by check mailed to the address of the person entitled
to the payment as it appears in the applicable register or by wire transfer of
funds to that person at an account maintained within the United States.
If we do not punctually pay or duly provide for interest on any interest
payment date, the defaulted interest will be paid either:
. to the person in whose name the debt security is registered at the
close of business on a special record date to be fixed by the
applicable trustee; or
. in any other lawful manner, all as more completely described in the
applicable indenture.
You may have your debt securities broken into more debt securities of
smaller denominations or combined into fewer debt securities of larger
denominations, as long as the total principal amount is not changed. This is
called an "exchange."
You may exchange or transfer debt securities at the office of the trustee.
The trustee acts as our agent for registering debt securities in the names of
holders and transferring debt securities. We may change this appointment to
another entity or perform it ourselves. The entity performing the role of
maintaining the list of registered holders is called the "security registrar."
It will also perform transfers.
You will not be required to pay a service charge to transfer or exchange
debt securities, but you may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. The security
registrar will make the transfer or exchange only if it is satisfied with your
proof of ownership.
Merger, Consolidation or Sale of Assets
---------------------------------------
Under any indenture, we are generally permitted to consolidate or merge
with another company. We are also permitted to sell substantially all of our
assets to another company, or to buy substantially all of the assets of another
company. However, we may not take any of these actions unless all the following
conditions are met:
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. If we merge out of existence or sell our assets, the other company
must be a corporation, partnership or other entity organized under the
laws of a State or the District of Columbia or under federal law. The
other company must agree to be legally responsible for the debt
securities.
. The merger, sale of assets or other transaction must not cause a
default on the debt securities. In addition, we must not already be in
default, unless the merger or other transaction would cure the
default. A default for this purpose would include any event that would
be an event of default if the requirements for giving us default
notice or our default having to exist for a specific period of time
were disregarded.
Events of Default and Related Matters
-------------------------------------
Events of Default
The term "event of default" means any of the following:
. We do not pay the principal or any premium on a debt security on its
due date.
. We do not pay interest on a debt security within 30 days of its due
date.
. We do not deposit any sinking fund payment on its due date.
. We remain in breach of any other term of the applicable indenture for
60 days after we receive a notice of default stating we are in breach.
Either the trustee or holders of 25% of the principal amount of debt
securities of the affected series may send the notice.
. We file for bankruptcy or certain other events in bankruptcy,
insolvency or reorganization occur.
. Any other event of default described in the applicable prospectus
supplement occurs.
Remedies If an Event of Default Occurs
If an event of default has occurred and has not been cured, the trustee or
the holders of a significant portion in principal amount of the debt securities
of the affected series may declare the entire principal amount of all the debt
securities of that series to be due and immediately payable. This is called a
declaration of acceleration of maturity. If an event of default occurs because
of certain events in bankruptcy, insolvency or reorganization, the principal
amount of all the debt securities of that series will be automatically
accelerated, without any action by the trustee or any holder. At any time after
the trustee or the holders have accelerated any series of debt securities, but
before a judgment or decree for payment of the money due has been obtained, the
holders of at least a majority in principal amount of the debt securities of the
affected series may, under certain circumstances, rescind and annul such
acceleration.
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the applicable indenture at the
request of any holders unless the holders offer the trustee reasonable
protection from expenses and liability. This is known as an indemnity. If
reasonable indemnity is provided, the holders of a majority in principal amount
of the outstanding securities of the
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relevant series may direct the time, method and place of conducting any lawsuit
or other formal legal action seeking any remedy available to the trustee. These
majority holders may also direct the trustee in performing any other action
under the applicable indenture, subject to certain limitations.
Before you bypass the trustee and bring your own lawsuit or other formal
legal action or take other steps to enforce your rights or protect your
interests relating to the debt securities, the following must occur:
. You must give the trustee written notice that an event of default has
occurred and remains uncured.
. The holders of at least 25% in principal amount of all outstanding
securities of the relevant series must make a written request that the
trustee take action because of the default, and must offer reasonable
indemnity to the trustee against the cost and other liabilities of
taking that action.
. The trustee must have not taken action for 60 days after receipt of
the above notice and offer of indemnity.
However, you are entitled at any time to bring a lawsuit for the payment of
money due on your security after its due date.
We will furnish to the trustee every year a written statement of certain of
our officers certifying that to their knowledge we are in compliance with the
applicable indenture and the debt securities, or else specifying any default.
Modification of an Indenture
----------------------------
We will set forth in the applicable prospectus supplement the terms and
conditions upon which we can make changes to an indenture or the debt
securities. There are three types of changes we can make to the indentures and
the debt securities:
Changes Requiring Your Approval
First, there are changes we cannot make to your debt securities without
your specific approval. Following is a list of those types of changes:
. change the stated maturity of the principal or interest on a debt
security, reduce any amounts due on a debt security;
. reduce the amount of principal payable upon acceleration of the
maturity of a debt security following a default;
. change the place or currency of payment on a debt security; and
. impair your right to sue for payment.
Changes Requiring a Majority Vote
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The second type of change to an indenture and the debt securities is the
kind that requires a vote in favor by holders of debt securities owning a
majority of the principal amount of the particular series affected. Most changes
fall into this category, except for clarifying changes and certain other changes
that would not adversely affect holders of the debt securities. We require the
same vote to obtain a waiver of a past default. However, we cannot obtain a
waiver of a payment default or any other aspect of an indenture or the debt
securities listed in the first category described under "--Changes Requiring
Your Approval" unless we obtain your individual consent to the waiver.
Changes Not Requiring Approval
The third type of change does not require any vote by holders of debt
securities. This type is limited to clarifications and certain other changes
that would not adversely affect holders of the debt securities.
Further Details Concerning Voting.
When taking a vote, we will use the following rules to decide how much
principal amount to attribute to a debt security:
. For original issue discount securities, we will use the principal
amount that would be due and payable on the voting date if the
maturity of the debt securities were accelerated to that date because
of a default.
. For debt securities whose principal amount is not known, we will use a
special rule for that security described in the applicable prospectus
supplement. An example is if the principal amount is based on an
index.
. For debt securities denominated in one or more foreign currencies or
currency units, we will use the U.S. dollar equivalent.
Debt securities are not considered outstanding, and therefore not eligible
to vote, if we have deposited or set aside in trust for you money for their
payment or redemption or if we or one of our affiliates own them. Debt
securities are also not eligible to vote if they have been fully defeased as
described immediately below under "--Discharge, Defeasance and Covenant
Defeasance--Full Defeasance."
We are generally entitled to set any day as a record date for the purpose
of determining the holders of outstanding securities entitled to vote or take
other action under an indenture. If we set a record date, only persons who are
holders of outstanding securities of the applicable series on the record date
may vote or take the action. Moreover, the applicable holders must vote or take
the action within 180 days following the record date or another period that we
may specify. We may shorten or lengthen this period from time to time.
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Discharge, Defeasance and Covenant Defeasance
---------------------------------------------
Discharge
We may discharge some obligations to holders of any series of debt
securities that either have become due and payable or will become due and
payable within one year, or scheduled for redemption within one year, by
irrevocably depositing with the trustee, in trust, funds in the applicable
currency in an amount sufficient to pay the debt securities, including any
premium and interest.
Full Defeasance
We can, under particular circumstances, effect a full defeasance of your
series of debt securities. By this we mean we can legally release ourselves from
any payment or other obligations on the debt securities if we put in place the
following arrangements to repay you:
. We must deposit in trust for your benefit and the benefit of all other
direct holders of the debt securities a combination of money and U.S.
government or U.S. government agency notes or bonds that will generate
enough cash to make interest, principal and any other payments on the
debt securities on their various due dates.
. The current federal tax law must be changed or an IRS ruling must be
issued permitting the above deposit without causing you to be taxed on
the debt securities any differently than if we did not make the
deposit and just repaid the debt securities ourselves. Under current
federal tax law, the deposit and our legal release from the debt
securities would be treated as though we took back your debt
securities and gave you your share of the cash and notes or bonds
deposited in trust. In that event, you could recognize gain or loss on
the debt securities you give back to us.
. We must deliver to the trustee a legal opinion confirming the tax law
change described above.
If we did accomplish full defeasance, you would have to rely solely on the
trust deposit for repayment on the debt securities. You could not look to us for
repayment in the unlikely event of any shortfall. Conversely, the trust deposit
would most likely be protected from claims of our lenders and other creditors if
we ever become bankrupt or insolvent. You would also be released from any
subordination provisions.
Covenant Defeasance
Under current federal tax law, we can make the same type of deposit
described above and be released from some of the restrictive covenants in the
debt securities. This is called "covenant defeasance." In that event, you would
lose the protection of those restrictive covenants but would gain the protection
of having money and securities set aside in trust to repay the securities and
you would be released from any subordination provisions. In order to achieve
covenant defeasance, we must do the following:
. We must deposit in trust for your benefit and the benefit of all other
direct holders of the debt securities a combination of money and U.S.
government or U.S. government agency
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notes or bonds that will generate enough cash to make interest,
principal and any other payments on the debt securities on their
various due dates.
. We must deliver to the trustee a legal opinion confirming that under
current federal income tax law we may make the above deposit without
causing you to be taxed on the debt securities any differently than if
we did not make the deposit and just repaid the debt securities
ourselves.
If we accomplish covenant defeasance, the following provisions of an
indenture and the debt securities would no longer apply:
. Any covenants applicable to the series of debt securities and
described in the applicable prospectus supplement.
. Any subordination provisions.
. Certain events of default relating to breach of covenants and
acceleration of the maturity of other debt set forth in any prospectus
supplement.
If we accomplish covenant defeasance, you can still look to us for
repayment of the debt securities if there were a shortfall in the trust deposit.
If one of the remaining events of default occurs, for example, our bankruptcy,
and the debt securities become immediately due and payable, there may be a
shortfall. Depending on the event causing the default, you may not be able to
obtain payment of the shortfall.
Subordination
-------------
We will set forth in the applicable prospectus supplement the terms and
conditions, if any, upon which any series of senior subordinated securities or
subordinated securities is subordinated to debt securities of another series or
to other indebtedness of ours. The terms will include a description of:
. the indebtedness ranking senior to the debt securities being offered;
. the restrictions on payments to the holders of the debt securities
being offered while a default with respect to the senior indebtedness
is continuing;
. the restrictions, if any, on payments to the holders of the debt
securities being offered following an event of default, and
. provisions requiring holders of the debt securities being offered to
remit some payments to holders of senior indebtedness.
Global Securities
-----------------
If so set forth in the applicable prospectus supplement, we may issue the debt
securities of a series in whole or in part in the form of one or more global
securities that will be deposited with a depositary identified in the prospectus
supplement. We may issue global securities in either registered or bearer form
and in either temporary or permanent form. The specific terms of the depositary
arrangement with respect to any series of debt securities will be described in
the prospectus supplement.
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Description of Depositary Shares
--------------------------------
General
-------
The description shown below and in any applicable prospectus supplement of
certain provisions of any deposit agreement and of the depositary shares and
depositary receipts representing depositary shares does not purport to be
complete and is subject to and qualified in its entirety by reference to the
forms of deposit agreement and depositary receipts relating to each applicable
series of preferred stock. The deposit agreement and the depositary receipts
contain the full legal text of the matters described in this section. We will
file a copy of those documents with the SEC at or before the time of the
offering of the applicable series of preferred stock. This summary also is
subject to and qualified by reference to the description of the particular terms
of your series of depositary shares described in the applicable prospectus
supplement.
We may, at our option, elect to offer fractional interests in shares of
preferred stock, rather than shares of preferred stock. If we exercise this
option, we will appoint a depositary to issue depositary receipts representing
those fractional interests. These receipts are known as depositary shares.
Preferred stock of each series represented by depositary shares will be
deposited under a separate deposit agreement between us and the depositary. The
prospectus supplement relating to a series of depositary shares will show the
name and address of the depositary. Subject to the terms of the applicable
deposit agreement, each owner of depositary shares will be entitled to all of
the dividend, voting, conversion, redemption, liquidation and other rights and
preferences of the preferred stock represented by those depositary shares.
Upon surrender of depositary receipts by a holder of depositary shares at
the office of the depositary, and upon payment of the charges provided in and
subject to the terms of the deposit agreement, the holder of depositary shares
is entitled to receive the shares of preferred stock underlying the surrendered
depositary receipts.
Dividends and Other Distributions
---------------------------------
A depositary will be required to distribute all cash dividends or other
cash distributions received in respect of the applicable preferred stock to the
record holders of depositary receipts evidencing the related depositary shares
in proportion to the number of depositary receipts owned by the holders.
Fractions will be rounded down to the nearest whole cent.
If the distribution is other than in cash, a depositary will be required to
distribute property received by it to the record holders of depositary receipts
entitled thereto, unless the depositary determines that it is not feasible to
make the distribution. In that case, the depositary may, with our approval, sell
the property and distribute the net proceeds from the sale to the holders.
No distributions will be made on any depositary shares that represent
preferred stock converted or exchanged. The deposit agreement will also contain
provisions relating to the manner in which any subscription or similar rights
offered by us to holders of the preferred stock will be made available to
holders of depositary shares. All distributions are subject to obligations of
holders to file proofs, certificates and other information and to pay certain
charges and expenses to the depositary.
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Withdrawal Of Preferred Stock
-----------------------------
You may receive the number of whole shares of your series of preferred
stock and any money or other property represented by those depositary receipts
after surrendering the depositary receipts at the corporate trust office of the
depositary. Partial shares of preferred stock will not be issued. If the
depositary shares which you surrender exceed the number of depositary shares
that represent the number of whole shares of preferred stock you wish to
withdraw, then the depositary will deliver to you at the same time a new
depositary receipt evidencing the excess number of depositary shares. Once you
have withdrawn your preferred stock, you will not be entitled to re-deposit that
preferred stock under the deposit agreement in order to receive depositary
shares. We do not expect that there will be any public trading market for
withdrawn shares of preferred stock.
Redemption of Depositary Shares
-------------------------------
If we redeem a series of the preferred stock underlying the depositary
shares, the depositary shares will be redeemed from the proceeds received by the
depositary resulting from the redemption, in whole or in part, of the series
held by the depositary. The depositary will mail notice of redemption not less
than 30 and not more than 60 days before the date fixed for redemption to the
record holders of the depositary receipts evidencing the depositary shares we
are redeeming at their addresses appearing in the depositary's books. The
redemption price per depositary share will be equal to the applicable fraction
of the redemption price per share payable with respect to the series of the
preferred stock. Whenever we redeem shares of preferred stock held by the
depositary, the depositary will redeem as of the same redemption date the number
of depositary shares relating to shares of preferred stock so redeemed. If we
are redeeming less than all of the depositary shares, the depositary will select
the depositary shares we are redeeming by lot or pro rata as the depositary may
determine.
After the date fixed for redemption, the depositary shares called for
redemption will no longer be deemed outstanding. All rights of the holders of
the depositary shares and the related depositary receipts will cease at that
time, except the right to receive the money or other property to which the
holders of depositary shares were entitled upon redemption. Receipt of the money
or other property is subject to surrender to the depositary of the depositary
receipts evidencing the redeemed depositary shares.
Voting of the Preferred Stock
-----------------------------
Upon receipt of notice of any meeting at which the holders of the
applicable preferred stock are entitled to vote, a depositary will be required
to mail the information contained in the notice of meeting to the record holders
of the applicable depositary receipts. Each record holder of depositary receipts
on the record date, which will be the same date as the record date for the
preferred stock, will be entitled to instruct the depositary as to the exercise
of the voting rights pertaining to the amount of preferred stock represented by
the holder's depositary shares. The depositary will try, as practical, to vote
the shares as you instruct. We will agree to take all reasonable action that the
depositary deems necessary in order to enable it to do so. If you do not
instruct the depositary how to vote your shares, the depositary will abstain
from voting those shares.
Liquidation Preference
----------------------
Upon our liquidation, whether voluntary or involuntary, the holders of each
depositary share will be entitled to the fraction of the liquidation preference
accorded each share of preferred stock represented by the depositary share, as
shown in the applicable prospectus supplement.
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Conversion or Exchange of Preferred Stock
-----------------------------------------
The depositary shares will not themselves be convertible into or
exchangeable for Class A common stock, preferred stock or any of our other
securities or property. Nevertheless, if so specified in the applicable
prospectus supplement, the depositary receipts may be surrendered by holders to
the applicable depositary with written instructions to it to instruct us to
cause conversion of the preferred stock represented by the depositary shares.
Similarly, if so specified in the applicable prospectus supplement, we may
require you to surrender all of your depositary receipts to the applicable
depositary upon our requiring the exchange of the preferred stock represented by
the depositary shares into our debt securities. We will agree that, upon receipt
of the instruction and any amounts payable in connection with the conversion or
exchange, we will cause the conversion or exchange using the same procedures as
those provided for delivery of preferred stock to effect the conversion or
exchange. If you are converting only a part of the depositary shares, the
depositary will issue you a new depositary receipt for any unconverted
depositary shares.
Taxation
--------
As owner of depositary shares, you will be treated for U.S. federal income
tax purposes as if you were an owner of the series of preferred stock
represented by the depositary shares. Therefore, you will be required to take
into account for U.S. federal income tax purposes income and deductions to which
you would be entitled if you were a holder of the underlying series of preferred
stock. In addition:
. no gain or loss will be recognized for U.S. federal income tax
purposes upon the withdrawal of preferred stock in exchange for
depositary shares as provided in the deposit agreement;
. the tax basis of each share of preferred stock to you as exchanging
owner of depositary shares will, upon exchange, be the same as the
aggregate tax basis of the depositary shares exchanged for the
preferred stock; and
. if you held the depositary shares as a capital asset at the time of
the exchange for preferred stock, the holding period for shares of the
preferred stock will include the period during which you owned the
depositary shares.
Amendment and Termination of a Deposit Agreement
------------------------------------------------
We and the applicable depositary are permitted to amend the provisions of
the depositary receipts and the deposit agreement. However, the holders of at
least a majority of the applicable depositary shares then outstanding must
approve any amendment that adds or increases fees or charges or prejudices an
important right of holders. Every holder of an outstanding depositary receipt at
the time any amendment becomes effective, by continuing to hold the receipt,
will be bound by the applicable deposit agreement as amended.
Any deposit agreement may be terminated by us upon not less than 30 days'
prior written notice to the applicable depositary if a majority of each series
of preferred stock affected by the termination consents to the termination. When
that occurs, the depositary will be required to deliver or make available to
each holder of depositary receipts, upon surrender of the depositary receipts
held by the holder, the number of whole or fractional shares of preferred stock
as are represented by the depositary
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shares evidenced by the depositary receipts, together with any other property
held by the depositary with respect to the depositary receipts. In addition, a
deposit agreement will automatically terminate if:
. all depositary shares outstanding it shall have been redeemed;
. there shall have been a final distribution in respect of the related
preferred stock in connection with our liquidation and the
distribution shall have been made to the holders of depositary
receipts evidencing the depositary shares underlying the preferred
stock; or
. each of the shares of related preferred stock shall have been
converted or exchanged into securities not represented by depositary
shares.
Charges of a Depositary
-----------------------
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of a deposit agreement. In addition, we will pay the
fees and expenses of a depositary in connection with the initial deposit of the
preferred stock and any redemption of preferred stock. However, holders of
depositary receipts will pay any transfer or other governmental charges and the
fees and expenses of a depositary for any duties the holders request to be
performed that are outside of those expressly provided for in the applicable
deposit agreement.
Resignation and Removal of Depositary
-------------------------------------
A depositary may resign at any time by delivering to us notice of its
election to do so. In addition, we may at any time remove a depositary. Any
resignation or removal will take effect when we appoint a successor depositary
and it accepts the appointment. We must appoint a successor depositary within 60
days after delivery of the notice of resignation or removal. A depositary must
be a bank or trust company having its principal office in the United States that
has a combined capital and surplus of at least $50 million.
Miscellaneous
-------------
A depositary will be required to forward to holders of depositary receipts
any reports and communications from us that are received by it with respect to
the related preferred stock.
Neither a depositary nor we will be liable if it is prevented from or
delayed in performing its obligations under a deposit agreement by law or any
circumstances beyond its control. Our obligations and those of the depositary
under a deposit agreement will be limited to performing their duties in good
faith and without gross negligence or willful misconduct. Neither we nor any
depositary will be obligated to prosecute or defend any legal proceeding in
respect of any depositary receipts, depositary shares or related preferred stock
unless satisfactory indemnity is furnished. We and each depositary will be
permitted to rely on written advice of counsel or accountants, on information
provided by persons presenting preferred stock for deposit, by holders of
depositary receipts, or by other persons believed in good faith to be competent
to give the information, and on documents believed in good faith to be genuine
and signed by a proper party.
If a depositary receives conflicting claims, requests or instructions from
any holders of depositary receipts, on the one hand, and us, on the other hand,
the depositary shall be entitled to act on the claims, requests or instructions
received from us.
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Description of Warrants
-----------------------
SBA has no warrants outstanding (other than options issued under its
employee stock option plans). SBA may issue warrants for the purchase of debt
securities, Class A common stock or preferred stock. Warrants may be issued
independently or together with any other securities offered by any prospectus
supplement and may be attached to or separate from such securities. Each series
of warrants will be issued under a separate warrant agreement to be entered into
between SBA and a warrant agent specified in the applicable prospectus
supplement. The warrant agent will act solely as an agent of SBA in connection
with the warrants of such series and will not assume any obligation or
relationship of agency or trust for or with any holders of the warrants. Further
terms of the warrants and the applicable warrant agreements will be set forth in
the applicable prospectus supplement. Copies of the form of warrant agreement
and warrant will be filed as exhibits to or incorporated by reference in the
registration statement of which this prospectus forms a part, and the following
summary is qualified in its entirety by reference to such exhibits.
The applicable prospectus supplement will describe the terms of the
warrants, including, where applicable, the following:
. the title of the warrants;
. the aggregate number of warrants;
. the price or prices at which warrants will be issued;
. the designation, terms and number of securities purchasable upon
exercise of warrants;
. the designation and terms of the securities, if any, with which
warrants are issued and the number of warrants issued with each
security;
. the date, if any, on and after which warrants and the related
securities will be separately transferable;
. the price at which each security purchasable upon exercise of warrants
may be purchased;
. the date on which the right to exercise the warrants shall commence
and the date on which that right shall expire;
. the minimum or maximum amount of warrants which may be exercised at
any one time;
. information with respect to book-entry procedures, if any; and
. any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants.
30
<PAGE>
Plan of Distribution
We may offer and sell the securities directly to or through underwriting
syndicates represented by managing underwriters, to or through underwriters
without a syndicate or through dealers or agents. The prospectus supplement with
respect to the offered securities will set forth the terms of the offering,
including the following:
. the name or names of any underwriters, dealers or agents;
. the purchase price and the proceeds we will receive from the sale;
. any underwriting discounts, agency fees and other items constituting
underwriters' or agents' compensation; and
. the initial public offering price and any discounts or concessions
allowed, re-allowed or paid to dealers.
If any underwriters are involved in the offer and sale, the securities will
be acquired by the underwriters and may be resold by them, either at a fixed
public offering price established at the time of offering or from time to time
in one or more negotiated transactions or otherwise, at prices related to
prevailing market prices determined at the time of sale. Unless otherwise set
forth in the applicable prospectus supplement, the obligations of the
underwriters to purchase the securities will be subject to conditions precedent
and the underwriters will be obligated to purchase all the securities described
in the prospectus supplement if any are purchased. Any initial public offering
price and any discounts or concessions allowed or re-allowed or paid to dealers
may be changed from time to time.
We may offer and sell the securities directly or through an agent or agents
designated by us from time to time. An agent may sell securities it has
purchased from us as principal to other dealers for resale to investors and
other purchasers, and may reallow all or any portion of the discount received in
connection with the purchase from us to the dealers. After the initial offering
of the securities, the offering price (in the case of securities to be resold at
a fixed offering price), the concession and the discount may be changed. Any
agent participating in the distribution of the securities may be deemed to be an
"underwriter," as that term is defined in the Securities Act of 1933, of the
securities so offered and sold.
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<PAGE>
If any underwriters are involved in the offer and sale, they will be
permitted to engage in transactions that maintain or otherwise affect the price
of the securities. These transactions may include over-allotment transactions,
purchases to cover short positions created by the underwriter in connection with
the offering and the imposition of penalty bids. If an underwriter creates a
short position in the securities in connection with the offering, i.e., if it
sells more securities than set forth on the cover page of the applicable
prospectus supplement, the underwriter may reduce that short position by
purchasing the securities in the open market. In general, purchases of a
security to reduce a short position could cause the price of the security to be
higher than it might be in the absence of such purchases. As noted above,
underwriters may also choose to impose penalty bids on other underwriters and/or
selling group members. This means that if underwriters purchase securities on
the open market to reduce their short position or to stabilize the price of the
securities, they may reclaim the amount of the selling concession from those
underwriters and/or selling group members who sold such securities as part of
the offering.
Neither we nor any underwriter make any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the securities. In addition, neither we nor any
underwriter make any representation that such underwriter will engage in such
transactions or that such transactions, once commenced, will not be discontinued
without notice.
Underwriters, dealers and agents may be entitled, under agreements entered
into with us, to indemnification by us against some liabilities, including
liabilities under the Securities Act of 1933.
The place and time of delivery for the securities in respect of which this
prospectus is delivered will be set forth in the applicable prospectus
supplement if appropriate.
Unless otherwise indicated in the prospectus supplement, each series of
offered securities will be a new issue of securities and, other than the Class A
common stock, which is listed on the Nasdaq National Market, for which there
currently is no market. Any underwriters to whom securities are sold for public
offering and sale may make a market in such series of securities as permitted by
applicable laws and regulations, but such underwriters will not be obligated to
do so, and any such market making may be discontinued at any time without
notice. Accordingly, there can be no assurance as to the development or
liquidity of any market for the securities.
Underwriters, agents and dealers may engage in transactions with or perform
services, including various investment banking and other services, for us and/or
any of our affiliates in the ordinary course of business.
Legal Matters
Certain legal matters relating to the offering will be passed upon for us
by Akerman, Senterfitt & Eidson, P.A., Miami, Florida.
Experts
The consolidated financial statements and schedule of SBA Communications
Corporation incorporated by reference in this prospectus and elsewhere in the
registration statement have been audited by Arthur Andersen LLP, independent
certified public accountants, as indicated in their reports with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.
32
<PAGE>
$500,000,000
SBA COMMUNICATIONS CORPORATION
CLASS A COMMON STOCK, PREFERRED STOCK, DEBT SECURITIES,
DEPOSITARY SHARES AND WARRANTS
--------------------
PROSPECTUS
--------------------
____________, 2000
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an estimate of the fees and expenses in
connection with the issuance and distribution of the securities being registered
hereunder. All such fees and expenses shall be borne by the undersigned company
(the "Company").
Commission Registration Fee......................................... $132,000
Trustee's Fees and Expenses ........................................ --
Rating Agencies' Fees .............................................. 100,000
Transfer Agent and Registrar Fees and Expenses...................... --
Legal Fees and Expenses............................................. 200,000
Accounting Fees and Expenses........................................ 200,000
Printing, Engraving and Mailing Expenses............................ 100,000
Miscellaneous....................................................... 200,000
Total............................................................... $932,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under the Florida Business Corporation Act (the "FBCA"), a director is not
personally liable for monetary damages to the corporation or any other person
for any statement, vote, decision, or failure to act regarding corporate
management or policy unless (1) the director breached or failed to perform his
duties as a director and (2) the director's breach of, or failure to perform,
those duties constitutes: (a) a violation of the criminal law, unless the
director had reasonable cause to believe his conduct was lawful or had no
reasonable cause to believe his conduct was unlawful, (b) a transaction from
which the director derived an improper personal benefit, either directly or
indirectly, (c) a circumstance under which an unlawful distribution is made, (d)
in a proceeding by or in the right of the corporation to procure a judgment in
its favor or by or in the right of a shareholder, conscious disregard for the
best interest of the corporation, or willful misconduct, or (e) in a proceeding
by or in the right of someone other than the corporation or a shareholder,
recklessness or an act or omission which was committed in bad faith or with
malicious purpose or in a manner exhibiting wanton and willful disregard of
human rights, safety, or property. A corporation may purchase and maintain
insurance on behalf of any director or officer against any liability asserted
against him or her and incurred by him or her in his or her capacity or arising
out of his or her status as such, whether or not the corporation would have the
power to indemnify him or her against such liability under the FBCA.
Under the FBCA, a corporation has power to indemnify any person who was or
is a party to any proceeding (other than an action by, or in the right of the
corporation), by reason of the fact that he is or was a director, officer,
employee or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture,
II-1
<PAGE>
trust or other enterprise against liability incurred in connection with the
proceeding, including any appeal thereof, 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 corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
proceeding by judgment, order, settlement or conviction or upon a plea of nolo
contendere or its equivalent does 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 corporation or, with respect
to any criminal action or proceeding, has reasonable cause to believe that his
conduct was unlawful.
However, indemnification or advancement of expenses shall not be made to or
on behalf of any director, officer, employee or agent if a judgment or other
final adjudication establishes that his actions, or omissions to act, were
material to the cause of action so adjudicated and constitute: (a) a violation
of the criminal law, unless the director, officer, employee or agent had
reasonable cause to believe his conduct was lawful or had no reasonable cause to
believe his conduct was unlawful; (b) a transaction from which the director,
officer, employee or agent derived an improper personal benefit; (c) in the case
of a director, a circumstance under which the above liability provisions are
applicable; or (d) willful misconduct or a conscious disregard for the best
interests of the corporation in a proceeding by or in the right of the
corporation to procure a judgment in its favor or in a proceeding by or in the
right of a shareholder.
The articles of incorporation of the Company provide that the Company
shall, to the fullest extent permitted by applicable law and its by-laws, as
amended from time to time, indemnify all officers and directors of the Company.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
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<PAGE>
ITEM 16. EXHIBITS
Exhibit Description
Number
4.2 Form of Senior Indenture.*
4.3 Form of Subordinated Indenture.*
4.4 Form of Senior Debt Security.*
4.5 Form of Convertible Debt Security.*
4.6 Form of Preferred Stock Certificate of Designation.*
4.7 Form of Warrant.*
4.8 Form of Warrant Agreement.*
4.9 Form of Deposit Agreement.*
5.1 Opinion of Akerman, Senterfitt & Eidson, P.A.*
12.1 Computation of Ratios.*
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Akerman, Senterfitt & Eidson, P.A. (included in Exhibit
5.1).*
24.1 Power of Attorney of certain directors and officers of SBA (set forth
on the signature page of this registration statement).
25.1 Form T-1 Statement of Eligibility of Trustee for Senior Indenture
under the Trust Indenture Act of 1939.*
25.1 Form T-1 Statement of Eligibility of Trustee for Subordinated
Indenture under the Trust Indenture Act of 1939.*
* To be filed with a Current Report on Form 8-K or a
Post-Effective Amendment to the registration statement.
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<PAGE>
ITEM 17. UNDERTAKINGS
(a) The 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;
(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. 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
percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective 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 (a)(1)(i) and (a)(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 with or furnished to the Commission by the
registrant pursuant to Section 13 or 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 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.
(b) 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 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.
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<PAGE>
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
of 1933 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 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 whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
(d) The registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall
be deemed to be part of this registration statement as of the time it
was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of
prospectus 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.
(e) The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
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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-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Boca Raton, State of Florida on July 11, 2000.
SBA COMMUNICATIONS CORPORATION
By: /s/ Steven E. Bernstein
------------------------------------------
Name: Steven E. Bernstein
Title: Chairman and Chief Executive Officer
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints each of Jeffrey A. Stoops and John Marino, or either of
them, each acting alone, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for such person and in his
or her name, place and stead, in any and all capacities, in connection with the
Registrant's Registration Statement on Form S-3 under the Securities Act of
1933, including to sign the Registration Statement in the name and on behalf of
the Registrant or on behalf of the undersigned as a director or officer of the
Registrant, and any and all amendments or supplements to the Registration
Statement, including any and all stickers and post-effective amendments or
supplements to the Registration Statement and to sign any and all additional
registration statements relating to the same offerings of securities as those
that are covered by the Registration Statement that are filed pursuant to Rule
462(b) under the Securities Act of 1933, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission and any applicable securities exchange or securities
self-regulatory body, granting unto said attorneys-in-fact and agents, each
acting alone, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes or
substitute, may lawfully do or cause to be done by virtue hereof.
--------------
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated.
<TABLE>
<CAPTION>
Signature Title Date
------ ----
<S> <C> <C>
/s/ Steven E. Bernstein Chairman, Chief Executive Officer and Director July 11, 2000
-----------------------
Steven E. Bernstein
/s/ Jeffrey A. Stoops President and Director July 11, 2000
-----------------------
Jeffrey A. Stoops
/s/ John Marino Chief Financial Officer July 11, 2000
-----------------------
John Marino
/s/ Pamela J. Kline Chief Accounting Officer July 11, 2000
-----------------------
Pamela J. Kline
/s/ Donald B. Hebb, Jr. Director July 11, 2000
-----------------------
Donald B. Hebb, Jr.
/s/ C. Kevin Landry Director July 11, 2000
-----------------------
C. Kevin Landry
/s/ Richard W. Miller Director July 11, 2000
-----------------------
Richard W. Miller
/s/ Robert S. Picow Director July 11, 2000
-----------------------
Robert S. Picow
</TABLE>
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<PAGE>
EXHIBIT INDEX
Exhibit Description
Number
23.1 Consent of Arthur Andersen LLP.
II-8
