U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ___________ to _____________
COMMISSION FILE NUMBER 1-13272
SPECIALTY TELECONSTRUCTORS, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 85-0421409
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12001 STATE HWY 14 NORTH 87008
CEDAR CREST, NEW MEXICO (Zip Code)
(Address of principal executive offices)
(505) 281-2197
(Issuer's telephone number,
including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes /x/ No / /
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 14,969,559 on May 12, 1998
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1.
SPECIALTY TELECONSTRUCTORS, INC.
Consolidated Balance Sheets
March 31, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
Assets
1998 1997
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents ............................... $ 1,405,400 $ 5,442,623
Available for sale securities ........................... 50,000 283,374
Contracts receivable, net of allowance for doubtful
accounts .............................................. 14,431,737 14,285,134
Costs and estimated earnings in excess of billings on
uncompleted contracts ................................. 3,220,249 2,825,762
Finished goods inventory ................................ 3,523,546 1,270,314
Prepaid income taxes .................................... 261,775 56,465
Other ................................................... 402,318 607,896
------------ ------------
Total current assets ................................ $ 23,295,025 $ 24,771,568
Property and equipment, net ............................... $ 9,405,468 $ 8,007,925
Other assets, net ......................................... $ 3,831,889 $ 422,650
------------ ------------
Total assets ........................................ $ 38,532,382 $ 33,202,143
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable .................................. $ 4,589,709 $ 4,079,574
Lines of credit ......................................... 3,031,171 4,544,481
Notes payable to stockholder ............................ 999,000 2,000,000
Billings in excess of costs and estimated earnings
on uncompleted contracts .............................. 469,497 401,508
Accrued expenses ........................................ 616,535 658,589
Current installments of notes payable ................... 570,998 408,651
Current income taxes payable ............................ 1,142,848 310,879
Deferred income taxes ................................... 372,469 231,645
------------ ------------
Total current liabilities ........................... $ 11,792,227 $ 12,635,327
Deferred income taxes ..................................... $ 90,000 $ 199,292
Notes payable to banks, excluding current installments .... $ 2,404,760 $ 1,974,940
------------ ------------
Total liabilities ................................... $ 14,286,987 $ 14,809,559
------------ ------------
Stockholders' Equity:
Common stock ............................................ $ 81,555 $ 76,607
Additional paid-in capital .............................. 14,528,644 8,963,341
Treasury stock, 100,000 in 1998 and none in 1997,
respectively, at cost ................................. (1,387,500) --
Retained earnings ....................................... 9,022,696 9,352,636
------------ ------------
Total stockholders' equity .......................... 22,245,395 18,392,584
------------ ------------
Total liabilities and stockholders' equity .......... $ 36,532,382 $ 33,202,143
============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
2
<PAGE>
SPECIALTY TELECONSTRUCTORS, INC.
Consolidated Statements of Earnings
For the three and nine months ended March 31, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
Nine months Three months
ended ended
March 31, March 31,
----------------------- ------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues earned:
Installation services...................... $39,835,298 $44,484,161 $13,783,853 $16,069,274
Component sales............................ 5,191,456 6,700,530 1,667,821 1,952,500
----------- ----------- ----------- -----------
Total revenues earned.................. $45,026,754 $51,184,691 $15,451,474 $18,021,774
----------- ----------- ----------- -----------
Cost of revenues earned:
Installation services...................... 34,422,763 36,355,200 12,942,938 13,237,901
Component sales............................ 3,222,544 4,676,400 1,175,036 1,142,790
----------- ----------- ----------- -----------
Total cost of revenues earned........... $37,645,307 $41,031,600 $14,117,974 $14,380,691
----------- ----------- ----------- -----------
Gross profit on revenues earned......... $ 7,381,447 $10,153,091 $ 1,333,500 $ 3,641,083
----------- ----------- ----------- -----------
Selling, general and administrative expenses. $ 2,978,303 $ 3,680,383 $ 819,404 $ 938,048
----------- ----------- ----------- -----------
Earnings from operations................... $ 4,403,144 $ 6,472,708 $ 514,096 $ 2,703,035
----------- ----------- ----------- -----------
Other income (deductions):
Interest income............................ $ 87,068 $ 73,773 $ 25,112 $ 10,506
Interest expense........................... (375,688) (227,195) (225,125) (98,312)
Other, net................................. 122,337 (2,119) 60,625 (13,942)
----------- ----------- ----------- -----------
$ (166,283)$ (155,541) $ (139,388) $ (101,748)
----------- ----------- ----------- -----------
Earnings before income taxes............... $ 4,236,861 $ 6,317,167 $ 374,708 $ 2,601,287
Income taxes................................. $ 1,624,000 $ 797,675 $ 130,651 $ 188,393
----------- ----------- ----------- -----------
Net earnings............................... $ 2,612,861 $ 5,519,492 $ 244,057 $ 2,412,894
=========== =========== =========== ===========
Basic earnings per common share:
Net earnings............................... $ 0.33 $ 0.80 $ 0.03 $ 0.35
----------- ----------- ----------- -----------
Weighted average common shares outstanding. 7,939,998 6,927,149 8,008,454 6,975,959
=========== =========== =========== ===========
Diluted earnings per share:
Net earnings............................... $ 0.32 $ 0.77 $ 0.03 $ 0.33
Weighted average common shares outstanding
plus dilutive potential common shares.... 8,061,835 7,155,560 8,163,360 7,317,587
=========== =========== =========== ===========
Pro forma information:
Net earnings............................... $ 2,612,861 $ 5,519,492 $ 244,057 $ 2,412,894
Pro forma adjustment for income taxes of
acquired entity previously filing as
an S Corporation......................... $ -- $(1,712,000) $ -- $ (841,000)
=========== ============ =========== ===========
Pro forma net earnings after adjustment for
income taxes of acquired entity.......... $ 2,612,861 $ 3,807,492 $ 244,057 $ 1,571,894
=========== ============ =========== ===========
Pro forma basic earnings per common
share outstanding........................ $ 0.33 $ 0.55 $ 0.03 $ 0.23
Pro forma diluted earnings per common
share outstanding........................ $ 0.32 $ 0.53 $ 0.03 $ 0.21
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
3
<PAGE>
SPECIALTY TELECONSTRUCTORS, INC.
Consolidated Statements of Cash Flows
For the nine months ended March 31, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
-------------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings ....................................... $ 2,612,861 $ 5,519,492
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation ....................................... 1,417,516 971,282
Amortization of goodwill ........................... 233,933 98,594
Changes in certain assets and liabilities:
Available for sale securities .................... 719,850 12,661
Contracts receivable ............................. (557,177) (5,241,855)
Costs and estimated earnings in excess of billings
on uncompleted contracts ....................... (986,960) (1,368,758)
Finished goods inventory ......................... (773,095) (580,557)
Prepaid income taxes ............................. 145,702 6,286
Other assets ..................................... (610,507) (374,523)
Trade accounts payable ........................... 951,341 1,342,105
Billings in excess of costs and estimated earnings
on uncompleted contracts ....................... 368,289 158,928
Accrued expenses ................................. (182,311) (570,047)
Current income taxes ............................. 1,142,848 (333,476)
Deferred income taxes ............................ $ (12,131) $ (187,808)
----------- -----------
Net cash provided (used) by operating
activities ................................... $ 4,470,159 $ (547,676)
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment ................ $(1,013,818) $(2,747,656)
Cash expended in acquisition of Data
Cell Systems, Inc. ............................... -- (160,000)
Cash expended in acquisition of Ellis Tower
Company, Inc., net of cash of $151,701
acquired in acquisition .......................... (297,704) --
----------- -----------
Net cash used in investing activities ............ $(1,311,522) $(2,907,656)
----------- -----------
Cash flows from financing activities:
Line of credit with bank, net ...................... $ (356,739) $ 2,412,481
Principal repayment on note payable to
stockholder, net ................................. (1,001,000) 1,500,000
Acquisition of treasury stock ...................... (1,387,500) --
Distributions of prior S Corporation earnings ...... -- (1,199,673)
Proceeds from sale of common stock, net ............ 718,148 2,961,417
Principal payments on notes payable to banks ....... (715,866) (188,888)
----------- -----------
Net cash provided (used) by financing activities ... $(2,742,957) $ 5,485,337
----------- -----------
Net increase in cash and cash equivalents .......... $ 415,680 $ 2,030,005
Cash and cash equivalents:
Beginning of period ................................ $ 989,720 $ 3,412,618
----------- -----------
End of period ...................................... $ 1,405,400 $ 5,442,623
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
4
<PAGE>
SPECIALTY TELECONSTRUCTORS, INC.
Consolidated Statements of Cash Flows
For the nine months ended March 31, 1998 and 1997
(Unaudited)
Supplemental disclosure of cash flow information:
<TABLE>
<CAPTION>
1998 1997
---------- -----------
<S> <C> <C>
Interest paid ......................................... $ 375,688 $ 154,179
========== ==========
Taxes paid ............................................ 311,689 1,132,919
========== ==========
Noncash transactions - acquisition of vehicles
in exchange for debt ................................ 1,108,545 1,533,003
========== ==========
Ellis Tower Company, Inc. acquisition in fiscal
year 1998 and Data Cell Systems, Inc. in
fiscal year 1997:
Cash .............................................. 151,701 --
Contracts receivable .............................. 865,919 200,000
Finished goods inventory .......................... 86,212 --
Other current assets .............................. 33,924 100,000
Property and equipment ............................ 267,915 267,000
Goodwill .......................................... 1,729,280 258,510
Trade accounts payable ............................ (383,326) --
Billings in excess of costs and estimated earnings
on uncompleted contracts ...................... (496,731) --
Accrued expenses .................................. (7,871) --
---------- ---------
$ 2,247,023 $ 825,510
=========== =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
5
<PAGE>
SPECIALTY TELECONSTRUCTORS, INC.
Consolidated Statements of Changes in Stockholders' Equity
For the nine months ended March 31, 1998 and 1997
<TABLE>
<CAPTION>
Common Stock Additional
----------------- paid-In Retained Treasury
Shares Amount capital earnings stock Total
--------- ------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Balances at June 30, 1996 ........ 6,672,308 $68,723 $ 5,344,298 $ 5,032,817 $ -- $10,445,838
Distributions of prior
S Corporation earnings.......... -- -- -- $(1,199,673) -- $(1,199,673)
Issuance of common stock and warrants
to acquire common stock, net..... 694,987 $ 6,950 $ 2,954,467 -- -- $ 2,961,417
Issuance of common shares to acquire
Data Cell Systems, Inc. ........ 93,405 $ 934 $ 664,576 -- -- $ 665,510
Net earnings ..................... -- -- -- $ 5,519,492 -- $ 5,519,492
--------- ------- ----------- ----------- ----------- -----------
Balances as of March 31, 1997 .... 7,660,700 $76,607 $ 8,963,341 $ 9,352,636 $ -- $18,392,584
========= ======= =========== =========== =========== ===========
Balances at June 30, 1997 ........ 7,876,554 $78,765 $12,015,667 $ 6,409,835 $ -- $18,504,267
Exercise of stock options ........ 158,050 $ 1,581 $ 716,567 -- -- $ 718,148
Issuance of common shares to
acquire Ellis Tower Company,
Inc. ........................... 120,848 $ 1,209 $ 1,796,410 -- -- $ 1,797,619
Acquisition of 100,000 shares of
common stock for treasury
stock .......................... -- -- -- -- $(1,387,500) $(1,387,500)
Net earnings ..................... -- -- -- $ 2,612,861 $ -- $ 2,612,861
--------- ------- ----------- ----------- ----------- -----------
Balances at March 31, 1998 ....... 8,155,452 $81,555 $14,528,644 $ 9,022,696 $(1,387,500) $22,245,395
========= ======= =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
6
<PAGE>
SPECIALTY TELECONSTRUCTORS, INC.
Notes to Consolidated Financial Statements
March 31, 1998 and 1997
(Unaudited)
Note 1: Basis of Presentation
The consolidated financial statements and notes thereto at March 31, 1998 and
for the three and nine-month periods ended March 31, 1998 and 1997 are unaudited
and are presented in accordance with the requirements of Form 10-QSB and
consequently do not include all disclosures normally required by generally
accepted accounting principles or those normally reflected in the Company's
Annual Report on Form 10-KSB. Accordingly, the consolidated financial statements
and notes thereto contained herein should be read in conjunction with the
consolidated financial statements and notes thereto contained in the Form 10-KSB
of Specialty Teleconstructors, Inc. (the "Company") for the fiscal year ended
June 30, 1997.
The consolidated financial statements and notes thereto at March 31, 1998 and
for the three and nine-month periods ended March 31, 1998 and 1997 reflect (i)
the acquisition of Novak & Lackey Construction Co., Inc., an Oklahoma
corporation ("Novak & Lackey"), which was effected as of March 31, 1997 through
a merger of Novak & Lackey and a wholly-owned subsidiary of the Company, with
Novak & Lackey as the surviving corporation, and (ii) the acquisition of
Microwave Tower Service, Inc., an Oregon corporation ("MTS"), which was effected
as of June 30, 1997 through a merger of MTS and a wholly-owned subsidiary of the
Company, with MTS as the surviving corporation. The acquisitions of Novak &
Lackey and MTS were accounted for as poolings of interests. Accordingly, the
consolidated financial statements and notes thereto at March 31, 1998 and for
the three and nine-month periods ended March 31, 1998 and 1997 are presented as
if the acquisitions of Novak & Lackey and MTS had occurred at the beginning of
all periods presented.
For financial reporting purposes, a pro forma provision for income taxes has
been reflected in the consolidated statements of earnings for the three and
nine-month periods ended March 31, 1997 to present taxes on the results of
operations of MTS for the three and nine-month periods ended March 31, 1997 on
the basis that is required upon its change in tax status from an S Corporation
to a C Corporation. The pro forma provision for income taxes is approximately
equal to the required Federal and state income tax provisions that would have
been recorded if MTS had not elected S Corporation status and was subject to and
liable for Federal and state income taxes as a C Corporation prior to its
termination of S Corporation status. MTS terminated its S Corporation status
upon merging with a wholly-owned subsidiary of the Company on June 30, 1997.
The financial information included herein reflects all adjustments (consisting
of normal recurring adjustments) which are, in the opinion of management,
necessary to a fair presentation of the results for interim periods. The results
of operations for the three and nine-month periods ended March 31, 1998 are not
necessarily indicative of the results to be expected for the full fiscal year.
Note 2: Acquisitions
As of October 7, 1997, a wholly-owned subsidiary of the Company purchased
substantially all the assets of Ellis Tower Co., Inc., a Florida corporation, in
exchange for $449,405 in cash and the delivery of 120,848 shares of common stock
of the Company. The transaction was accounted for by the Company as a purchase.
Note 3: Subsequent Events
On April 23, 1998, the Company consummated the transactions contemplated by that
certain Amended and Restated Agreement and Plan of Merger, dated as of February
16, 1998 and amended and restated as of April 22, 1998 (the "Merger
7
<PAGE>
Agreement"), among the Company, OAI Acquisition Corp., a Delaware corporation
and wholly-owned subsidiary of the Company ("Acquisition"), OmniAmerica Holdings
Corporation, a Delaware corporation ("OmniAmerica Holdings"), OmniAmerica, Inc.,
a Delaware corporation and wholly-owned subsidiary of Holdings, Omni/HSW
Acquisition, Inc., which, prior to its merger with and into OmniAmerica Holdings
immediately prior to the Merger (as hereinafter defined) was a Delaware
corporation ("Omni/HSW"), and HMTF/Omni Partners, L.P., a Delaware limited
partnership ("OmniPartners"). On April 23, 1998, (i) Omni/HSW was merged (the
"HSW Merger") with and into OmniAmerica Holdings, with OmniAmerica Holdings
being the surviving corporation of the HSW Merger and (ii) immediately
thereafter, Acquisition was merged (the "Merger") with and into OmniAmerica
Holdings, with OmniAmerica Holdings being the surviving corporation of the
Merger and, as a result of the Merger, a wholly-owned subsidiary of the Company.
At the effective time of the Merger, each share of common stock of OmniAmerica
Holdings outstanding immediately prior to the effective time was converted into
the right to receive 0.09109398 shares of common stock of the Company. At the
consummation of the Merger, the Company issued 6,750,000 shares of common stock
to OmniPartners, the former stockholder of OmniAmerica Holdings.
The aggregate consideration paid to acquire OmniAmerica Holdings and its
subsidiaries pursuant to the Merger Agreement was determined as the result of
arm's length negotiations between the Company and OmniAmerica Holdings. Prior to
the consummation of the Merger, OmniAmerica Holdings and its subsidiaries owned
assets consisting of real estate, equipment and other physical property used in
the operation of the wireless communications and broadcast transmission tower
business and, subject to any dispositions that may be agreed upon in the future,
such assets will continue to be utilized by the Company for such purposes.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward-Looking Statements
Statements contained herein that are not historical facts are forward-looking
statements ("forward-looking statements") within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, which are intended to be covered by the safe
harbors created by those sections. In addition, such forward-looking statements
may be contained in filings made by the Company with the Securities and Exchange
Commission, or press releases or oral statements made from time to time by or
with the approval of an authorized executive officer of the Company. Such
forward-looking statements are necessarily estimates reflecting the best
judgment of the Company's management based upon current information and involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company, or industry results,
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such risks,
uncertainties and other factors include, but are not limited to, those set forth
in the Company's Annual Report on Form 10-KSB for the fiscal year ended June 30,
1997 under the caption "ITEM 6, MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cautionary Statements" and
elsewhere therein and appearing from time to time in filings made by the Company
with the Securities and Exchange Commission. These risks, uncertainties and
other factors should not be construed as exhaustive and the Company does not
undertake, and specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences or unanticipated events or
circumstances after the date of such statements.
Plan of Operations
Management believes that wireless carriers, which have traditionally owned and
operated their own transmission tower assets, have been evaluating the new
opportunities of outsourcing the ownership and operation of their wireless
infrastructure. Many carriers are considering the benefits of entering into
"build-to-suit" arrangements, in which an independent tower company builds a
8
<PAGE>
group of tower sites for a wireless carrier. The third-party provider owns,
leases and operates the wireless infrastructure, often with multiple carriers as
tenants on a given tower. The build-to-suit program offers an end-to-end
solution to wireless carriers and is designed to reduce carriers' capital
expenditures and overhead associated with the traditional methods of acquiring
and owning their wireless networks. Strategically, management has sought to
capitalize on carrier build-to-suit demand, due primarily to the lower cost
advantages anticipated, as the Company can use internal labor and components in
fulfilling build-to-suit agreements. Thus late in the second fiscal quarter,
certain senior management personnel began focusing on opportunities to provide
build-to-suit services to wireless carriers. As of March 31, 1998, approximately
16 sites were under written/oral commitments from five wireless carriers. As of
May 14, 1998, an additional 42 were under written/oral commitment status. The
Company currently intends to continue its businesses of constructing
transmission towers for third parties and the fabrication of tower components.
There can be no assurance that the Company will successfully enter into
significant build-to-suit agreements with any wireless carrier or group of
carriers or that it will be able to reach definitive agreements with the owners
of sites not currently under written contract or develop the sites in a
cost-effective manner. As the Company focuses its resources on tower ownership,
revenues from its construction operations are likely to decline. Management
believes that the decline in revenues from its construction operations will be
mitigated over time by the recurrent revenue stream expected from tower
ownership, including revenues from the transmission towers acquired in the
OmniAmerica Holdings Merger on April 23, 1998, as discussed in "Note 3.
Subsequent Events" to the Company's Consolidated Financial Statements set forth
above.
Results of Operations
For the Three-Month Periods Ended March 31, 1998 and 1997:
Revenues. The Company's revenues for the three-month period ended March 31, 1998
decreased approximately 14% to $15,451,474 from $18,021,774 for the same
three-month period in the prior year. Management believes the decrease in
revenues is principally attributable to a slower rollout of the wireless
infrastructure building and implementation activity in the U.S. compared to the
same period in 1997, as the wireless carrier industry evaluated the new
opportunities for build-to-suit services noted above, and the Company's focus on
obtaining and developing sites for ownership.
Gross Profit. Gross profit as a percentage of revenues decreased from
approximately 20% for the three-month period ended March 31, 1997 to
approximately 9% for the period ended March 31, 1998. Gross profit for the
three-month period ended March 31, 1998 decreased approximately 63% to
$1,333,500 from $3,641,083 for the same three-month period in the prior year.
The decrease resulted from a conscious decision by management to retain the
current workforce in anticipation of the rollout expected for build-to-suit
programs. Field personnel were mobilized throughout the nation to meet regional
workloads, despite the additional costs to be incurred. In addition, management
directed the efforts of certain senior management personnel to focus on the
development of sites for the Company's own account, incurring substantial costs
and change in focus, thus impacting current operations. These actions resulted
in less efficient labor utilization and costs.
Selling, General and Administrative Expenses ("SG&A"). SG&A expenses as a
percentage of revenue was maintained at 5% for both the three-month period ended
March 31, 1998 and 1997. SG&A for the three-month period ended March 31, 1998
decreased approximately 13% to $819,404 compared to $938,048 for the same
three-month period in the prior year, principally due to increased
administrative efficiencies resulting from the continued integration of the
Company's acquisitions effected since the last half of fiscal year 1997.
Net Earnings. Net earnings for the three-month period ended March 31, 1998
decreased to $244,057, compared to pro forma net earnings of $1,571,894 for the
same three-month period in 1997, adjusted to give effect to income taxes on the
earnings of Microwave Tower Service, Inc., which, prior to its acquisition by
the Company, had been an S Corporation tax payer. As a
9
<PAGE>
percentage of revenue, net earnings decreased to 2% from 9% (pro forma) in the
prior year. The decrease is principally the result of management's conscious
decision to retain the current workforce in anticipation of the rollout expected
with the build-to-suit programs implemented by the Company in the third fiscal
quarter and the extra costs incurred to mobilize field personnel to meet
regional workloads and senior management to develop the build-to-suit
opportunities.
For the Nine-Month Periods Ended March 31, 1998 and 1997:
Revenues. The Company's revenues for the nine-month period ended March 31, 1998
decreased approximately 12% to $45,026,754 from $51,184,691 for the same
nine-month period in the prior year. Management believes the decrease in
revenues is principally attributable to a slower rollout of the wireless
infrastructure building and implementation activity in the U.S. compared to the
same period in 1997, as the wireless carrier industry evaluated the new
opportunities for build-to-suit services noted above, and the Company's focus on
obtaining and developing sites for its own account.
Gross Profit. Gross profit as a percentage of revenues decreased to 16% for the
nine-month period ended March 31, 1998 compared to 20% for the same period in
the prior year. Gross profit for the nine-month period ended March 31, 1998
decreased approximately 27% to $7,381,447 from $10,153,091 for the same
nine-month period in the prior year. The decrease resulted from a conscious
effort by management to retain the current workforce in anticipation of the
rollout expected for build-to-suit programs. Field personnel were mobilized
throughout the nation to meet regional workloads, despite the additional costs
to be incurred. In addition, management directed certain senior management
personnel to focus on the development of sites for the Company's own account,
incurring substantial costs and change in focus, thus impacting current
operations. These actions resulted in less efficient labor utilization and
costs.
SG&A Expenses. SG&A expenses as a percentage of revenue were maintained at 7%
for both the nine-month periods ended March 31, 1998 and 1997. SG&A for the
nine-month period ended March 31, 1998 decreased to $2,978,303 compared to
$3,680,383 for the same nine-month period in the prior year. The decrease is
principally due to increased administrative efficiencies resulting from the
continued integration of the Company's acquisitions effected since the last half
of fiscal year 1997, offset by one-time expenses of additional audit and legal
fees incurred for the acquisitions of Novak & Lackey Construction Company, Inc.,
Ellis Tower Company, Inc. and Microwave Tower Service, Inc. Such one time
expenses totaled approximately $140,000 along with the administrative fees to
transition these entities in the Company.
Net Earnings. Net earnings for the nine-month period ended March 31, 1998
decreased to $2,612,861, compared to pro forma net earnings of $3,807,492 for
the nine-month period ended March 31, 1997, adjusted to give effect to income
taxes on the earnings of Microwave Tower Service, Inc., which, prior to its
acquisition by the Company, had been an S Corporation tax payer. As a percentage
of revenue, net earnings decreased to 6% for the nine-month period ended March
31, 1998 from 7% (pro forma) for the same nine-month period in the prior year.
The decrease is principally the result of management's conscious decision to
retain the current workforce in anticipation of the rollout expected with the
build-to-suit programs implemented by the Company in the third quarter and the
extra costs incurred to mobilize field personnel to meet regional workloads and
senior management to develop the build-to-suit opportunities.
Earnings Per Share ("EPS") Disclosures:
The following is the reconciliation of the numerators and denominators of the
basic and diluted EPS computations for net income and other related disclosures
required by Statement of Financial Accounting Standards No. 128, Earnings Per
Share.
10
<PAGE>
<TABLE>
<CAPTION>
For the Nine-Month
Period Ended March 31, 1998
----------------------------------
Per-
Income Shares Share
(Numerator) (Denominator) Amount
----------- ------------- ------
<S> <C> <C> <C>
Basic EPS
Income available to common stockholders... $2,612,861 7,939,998 $0.33
Effect of Dilutive Shares
Options .................................. -- 121,837
Dilutive EPS
Income available to common stockholders
plus assumed conversions ............... $2,612,861 8,061,835 $0.32
========== ========= =====
</TABLE>
<TABLE>
<CAPTION>
For the Three-Month Period
Ended March 31, 1998
----------------------------------
Per-
Income Shares Share
(Numerator) (Denominator) Amount
----------- ------------- ------
<S> <C> <C> <C>
Basic EPS
Income available to common stockholders .. $ 244,057 8,008,454 $0.03
Effect of Dilutive Shares
Options .................................. -- 154,906
Dilutive EPS
Income available to common stockholders
plus assumed conversions ............... $ 244,057 8,163,360 $0.03
========== ========= =====
</TABLE>
<TABLE>
<CAPTION>
For the Nine-Month
Period Ended March 31, 1997
----------------------------------
Per-
Income Shares Share
(Numerator) (Denominator) Amount
----------- ------------- ------
<S> <C> <C> <C>
Basic EPS
Income available to common stockholders .. $5,519,492 6,927,149 $0.80
Effect of Dilutive Shares
Warrants ................................. -- 153,179
Options .................................. -- 75,232
Dilutive EPS
Income available to common stockholders
plus assumed conversions ............... $5,519,492 7,155,560 $0.77
========== ========= =====
Pro forma earnings per share:
Basic .................................... $0.55
Dilutive ................................. $0.53
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
For the Three-Month Period
Ended March 31, 1997
----------------------------------
Per-
Income Shares Share
(Numerator) (Denominator) Amount
----------- ------------- ------
<S> <C> <C> <C>
Basic Earnings Per Share
Income available to common stockholders .. $2,412,894 6,975,969 $0.35
Effect of Dilutive Shares
Warrants ................................. -- 247,475
Options .................................. -- 94,153
Dilutive Earnings Per Share
Income available to common stockholders
plus assumed conversions ............... $2,412,894 7,317,587 $0.33
========== ========= =====
Pro forma earnings per share:
Basic .................................... $0.23
Dilutive ................................. $0.21
</TABLE>
12
<PAGE>
PART II
OTHER INFORMATION
Item 2. Changes in Securities.
The information set forth under "Note 3. Subsequent Events" in Part I of
this Form 10-QSB is hereby incorporated by reference into this Part II. The
common stock of the Company issued to OmniPartners was not registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to the
exemption from registration provided under Section 4(2) of the Securities Act,
and rules and regulations promulgated thereunder, as a transaction by the issuer
not involving any public offering.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1 Amended and Restated Articles of Incorporation of Specialty
Teleconstructors, Inc.*
3.2 Amended and Restated Bylaws of Specialty Teleconstructors, Inc.*
10.1 Executive Employment Agreement, dated February 16, 1998,
effective as of April 23, 1998, between the Company and Michael
R. Budagher (Incorporated by reference to the Company's Form 8-K
filed on May 7, 1998)
10.2 Executive Employment Agreement, dated February 16, 1998,
effective as of April 23, 1998, between the Company and Carl E.
Hirsch (Incorporated by reference to the Company's Form 8-K filed
on May 7, 1998)
10.3 Executive Employment Agreement, dated February 16, 1998,
effective as of April 23, 1998, between the Company and Anthony
S. Ocepek (Incorporated by reference to the Company's Form 8-K
filed on May 7, 1998)
27.1 Financial Data Schedule*
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter
for which this report is filed. The Company filed a Report on Form 8-K
on May 7, 1998 in respect of the OmniAmerica Holdings Merger. No
financial statements were filed with such Report on Form 8-K.
- ----------------
* Filed herewith.
13
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SPECIALTY TELECONSTRUCTORS, INC.
(Registrant)
Date: May 14, 1998 By: /s/ Anthony S. Ocepek
----------------------------------------
Name: Anthony S. Ocepek
Title: Chief Financial Officer
(Principal Financial and Accounting
Officer of the Registrant, thereunto
duly authorized)
14
EXHIBIT 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
SPECIALTY TELECONSTRUCTORS, INC.
(A NEVADA CORPORATION)
We the undersigned Michael R. Budagher, President, and Dennis K. Hartnett,
Secretary, of Specialty Teleconstructors, Inc., do hereby certify, that:
That the Board of Directors of said corporation at a meeting duly convened,
held on the 5th day of September, 1997, adopted a resolution to amend the
original articles.
The number of shares of the corporation outstanding and entitled to vote on
an amendment to the Articles of Incorporation is 7,907,590; that the said
change(s) and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
The entire text of the corporation's articles of incorporation as amended
to the date of this certificate are as follows:
ARTICLE ONE
NAME
The name of the Corporation is Specialty Teleconstructors, Inc.
1
<PAGE>
ARTICLE TWO
RESIDENT AGENT AND REGISTERED OFFICE
Section 2.01 Resident Agent and Registered Office. The name and address of
its resident agent for the service of process is The Corporation Trust Company
of Nevada. The location of the corporation's registered office in the State of
Nevada is One East First Street, Reno, County of Washoe, Nevada 33501.
ARTICLE THREE
SHARES OF STOCK
Section 3.01 Number and Classes. The total number of shares of capital
stock which this Corporation is authorized to issue is TWENTY-TWO MILLION
(22,000,000), consisting of TWENTY MILLION (20,0000,000) shares of Common Stock,
par value one cent ($0.01) per share, and TWO MILLION (2,000,000) shares of
Preferred Stock. The Common Stock may be issued from time to time without action
by the stockholders. The Common Stock is subject to the rights and preferences
of the Preferred Stock as hereinafter set forth. Subject to the rights and
preferences of the Preferred Stock, (i) the Common Stock may be issued for such
consideration as may be fixed from time to time by the Board of Directors, and
(ii) the Board of Directors may issue such shares of Common Stock in one or more
series, with such voting powers, designations, preferences, rights,
qualifications, limitations or restrictions thereof as shall be stated in the
resolution or resolutions providing for the issuance thereof.
Section 3.02 Issuance of Preferred Stock in Series. The Preferred Stock may
be issued from time to time in one or more series in any manner permitted by law
and the provisions of these Restated Articles of Incorporation, as determined
from time to time by the Board of Directors and stated in the resolution or
resolutions providing for the issuance thereof. The Board of Directors shall
have the authority to fix, determine and amend, subject to the provisions
hereof, the voting powers, designations, preferences, rights, qualifications,
limitations or restrictions of the shares of any series that is wholly unissued
or is to be established. Unless otherwise specifically provided in the
resolution establishing any series, the Board of Directors shall further have
the authority, after the issuance of shares of a series whose number it has
designated, to amend the resolution establishing such series to decrease the
number of shares of that series, but not below the number of shares of such
series then outstanding. In the event that there are no issued or outstanding
shares of a series of Preferred Stock which this Corporation has been authorized
to issue, unless otherwise
2
<PAGE>
specifically provided in the resolution establishing such series, the Board of
Directors, without any further action on the part of the holders of the
outstanding shares of any class or series of stock of this corporation, may
amend these Restated Articles of Incorporation to delete all reference to such
series.
Section 3.03 Dividends. The holders of shares of Preferred Stock shall be
entitled to receive dividends, out of the funds of this Corporation legally
available therefor, at the rate and at the time or times, whether cumulative or
noncumulative, as may be provided by the Board of Directors in designating a
particular series of Preferred Stock. If such dividends on the Preferred Stock
shall be cumulative, then if dividends shall not have been paid, the deficiency
shall be fully paid or the dividends declared and set apart for payment at such
rate, but without interest on cumulative dividends, before any dividends on the
Common Stock shall be paid or declared and set apart for payment. The holders of
Preferred Stock shall not be entitled to receive any dividends thereon other
than the dividends referred to in this section.
Section 3.04 Redemption. The Preferred Stock may be redeemable at such
price, in such amount, and at such time or times as may be provided by the Board
of Directors in designating a particular series of Preferred Stock. In any
event, such Preferred Stock may be repurchased by this Corporation to the extent
legally permissible.
Section 3.05 Liquidation. In the event of any liquidation, dissolution or
winding up of the affairs of this Corporation, whether voluntary or involuntary,
then, before any distribution shall be made to the holders of Common Stock, the
holders of Preferred Stock at tile time outstanding shall be entitled to be paid
the preferential amount or amounts per share as may be provided by the Board of
Directors in designating a particular series of Preferred Stock and dividends
accrued thereon to the date of such payment. The holders of Preferred Stock
shall not be entitled to receive any distributive amount upon the liquidation,
dissolution or winding up of the affairs of this Corporation other than the
distributive amounts referred to in this section, unless otherwise provided by
the Board of Directors in designating a particular series of Preferred Stock.
Section 3.06 Conversion. Shares of Preferred Stock may be convertible into
Common Stock of this Corporation Upon such terms and conditions, at such rate
and subject to such adjustments as may be provided by the Board of Directors in
designating a particular series of Preferred Stock.
3
<PAGE>
Section 3.07 Voting Rights. Holders of Preferred Stock shall have such
voting rights as may be provided by the Board of Directors in designating a
particular series of Preferred Stock.
ARTICLE FOUR
DIRECTORS
Section 4.01 Governing Board. The members of the governing board of the
corporation shall be styled directors.
Section 4.02 Number. The Corporation shall have at least one director, the
actual number to be determined as set forth in the Bylaws.
Section 4.03. Staggered Terms. The Board of Directors shall be divided into
three classes if the number of directors is four or more, with said classes to
be as equal in number as may be possible. Any director or directors in excess of
the number divisible by three shall be first assigned to Class 1, and any
additional director shall be assigned to Class 2, as the case may be. (For
example, if there are five directors, the fourth director shall be in Class 1
and the fifth director in Class 2). At the first election of directors to such
classified Board of Directors, each Class 1 Director shall be elected to serve
until the next ensuing annual meeting of stockholders, each Class 2 Director
shall be elected to serve until the second annual meeting of stockholders and
each Class 3 Director, shall be elected to serve until the third ensuing annual
meeting of stockholders. At each annual meeting of stockholders following the
meeting at which the Board of Directors is initially classified, the number of
directors equal to the number of directors in a class whose term expires at the
time of such meeting shall be elected to serve until the third ensuing annual
meeting of stockholders. Notwithstanding any of the foregoing provisions of this
Article Four, directors shall serve until their successors are elected and
qualified or until their earlier death, resignation or removal from office, or
until there is a decrease in the number of directors; provided, however, that no
decrease in the number of directors shall have the effect of shortening the term
of any incumbent director.
ARTICLE FIVE
DIRECTORS' AND OFFICERS' LIABILITY
A director or officer of the corporation shall not be personally liable to
this corporation or its stockholders for damages for breach of fiduciary duty as
a director or officer, but this Article shall not eliminate or limit the
liability of a
4
<PAGE>
director or officer for (i) acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law or (ii) the unlawful payment of
distributions. Any repeal or modification of this Article by the stockholders of
the Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability or a director or officer of the corporation
for acts or omissions prior to such repeal or modification.
ARTICLE SIX
INDEMNITY
Every person who was or is a parry to, or is threatened to be made a party
to, or is involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation) by reason of the fact he, or a person of whom he is the legal
representative, is or was a director, or officer of the corporation, or is or
was serving at the request of the corporation as a director or officer of
another corporation, or as its representative in a partnership, joint venture,
trust or other enterprise, shall be held harmless to the fullest extent legally
permissible under the laws of the State of Nevada from time to time against all
expenses, liabilities and loss (including attorneys' fees, judgments, fines and
amount paid or to be paid in settlement) reasonably incurred or suffered by him
in connection therewith. Such right of indemnification shall be a contract right
which may be enforced in any manner desired by such person. The expenses of
officers and directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the corporation as they are incurred and in advance
of the final disposition of the action, suit or proceeding, upon receipt of an
undertaking b or on behalf of the director or officer to repay the amount if it
is ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. Such right of indemnification
shall not be exclusive of any other right which such directors, officer or
representatives may have or hereafter acquire, and, without limiting the
generality of such statement, they shall be entitled to their respective rights
of indemnification under any bylaw, agreement, vote of stockholders, provisions
of law, or otherwise, as well as their rights under this Article.
Without limiting the application of the foregoing, the Board of Directors
may adopt bylaws from time to time with respect to indemnification, to provide
at all times the fullest indemnification permitted by the laws of the State of
Nevada, and may cause the corporation to purchase and maintain insurance on
5
<PAGE>
behalf of any person who is or was a director or officer of the corporation as
director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprises against any liability
asserted against such capacity or arising out of such status, whether or not the
corporation would have the power to indemnify, such person.
The indemnification provided in this Article shall continue as to a person
who has ceased to be a director, officer, employee or agent, and shall inure to
the benefit of the heirs, executors and administrators of such person.
ARTICLE SEVEN
BYLAWS
The Board of Directors shall have the power to adopt, amend or repeal the
Bylaws of this Corporation subject to approval by a majority of the Continuing
Directors (as defined in Article Eight hereof); provided, however, that the
Board of Directors may not repeal or amend any bylaw that the stockholders
expressly have provided may not be amended or repealed by the Board of
Directors. The stockholders shall also have the power to adopt, amend or repeal
the Bylaws of this Corporation by the affirmative vote of the holders of not
less than two-thirds of the outstanding shares entitled to vote thereon and, to
the extent, if any, provided by resolution adopted by the Board of Directors
authorizing the issuance of a class or series of Preferred Stock, by the
affirmative vote of the holders of not less than two-thirds of the outstanding
shares of Common Stock and/or such class or series of Preferred Stock, voting as
separate voting groups.
ARTICLE EIGHT
AMENDMENTS TO AMENDED AND RESTATED ARTICLES OF INCORPORATION
This Corporation reserves, and the rights of the stockholders of this
Corporation are granted subject to, the right to amend or repeal any of the
provisions contained in these Amended and Restated Articles of Incorporation as
follows:
Section 8.01 Supermajority Voting. Except as provided in Section 8.02 of
this Article Eight, the Amended and Restated Articles of Incorporation may be
amended or repealed only upon the affirmative vote of the holders of at least
two-thirds of the outstanding shares entitled to vote thereon and, to the
extent, if any, provided by resolution adopted by the Board of Directors
authorizing the issuance of a class or series of Preferred Stock, by the
affirmative vote of the holders of at least two-thirds of
6
<PAGE>
the outstanding shares of Common Stock and/or of such class or series of
Preferred Stock, voting as separate voting groups.
Section 8.02 Majority Voting. Notwithstanding the provisions of Section
8.01 of this Article Eight, if an amendment or repeal of a Section or Article of
the Amended and Rested Articles of Incorporation is approved by a majority of
the Continuing Directors (as defined below), voting separately and as a subclass
of directors, such amendment or repeal shall require the affirmative vote of the
holders of at least a majority of the outstanding shares entitled to vote
thereon and, to the extent, if any, provided by resolution adopted by the Board
of Directors authorizing the issuance of a class or series of Preferred Stock,
by the affirmative vote of the holders of at least a majority of the Common
Stock and/or of such class or series of Preferred Stock, voting as separate
voting groups. For the purpose of this Article Eight. "Continuing Director"
means any member of the Board of Directors (i) who was a member of the Board of
Directors on November 21, 1997, or (ii) who is elected to the Board of Directors
after November 21, 1997, after being nominated by a majority of the Continuing
Directors voting separately and as a subclass of directors on such nomination.
SPECIALTY TELECONSTRUCTORS, INC.
[SEAL]
By: /s/ Michael R. Budagher
----------------------------------------
Michael R. Budagher, Chief
Executive Officer, President
and Treasurer
ATTEST:
/s/ Dennis K. Hartnett
- -------------------------------
Dennis K. Hartnett, Secretary
7
<PAGE>
STATE OF NEW MEXICO )
) SS:
COUNTY OF BERNALILLO )
Before me, Teresa M. Kelsh, a Notary Public in and for said County and
State, personally appeared Michael R. Budagher, who acknowledged before me that
he is the Chief Executive Officer, President and Treasurer of Specialty
Teleconstructors, Inc., a Nevada corporation, and that he signed the foregoing
Amended and Restated Articles of Incorporation of Specialty Teleconstructors,
Inc. as his free and voluntary act and deed, for the uses and purposes therein
set forth, and that the facts contained therein are true.
In witness whereof I have hereunto set my hand and seal this 19th day of
December, 1997.
/s/ Teresa M. Kelsh
----------------------------------
Notary Public
My Commission Expires: February 23, 1999
8
<PAGE>
STATE OF NEW MEXICO )
) SS:
COUNTY OF BERNALILLO )
Before me, Teresa M. Kelsh, a Notary Public in and for said County and
State, personally appeared Dennis K. Hartnett, who acknowledged before me that
he is the Secretary of Specialty Teleconstructors, Inc., a Nevada corporation,
and that he signed the foregoing Amended and Restated Articles of Incorporation
of Specialty Teleconstructors, Inc. as his free and voluntary act and deed, for
the uses and purposes therein set forth, and that the facts contained therein
are true.
In witness whereof I have hereunto set my hand and seal this 19th day of
December, 1997.
/s/ Teresa M. Kelsh
-------------------------------------
Notary Public
My Commission Expires: February 23, 1999
9
<PAGE>
FORM FOR
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
SPECIALTY TELECONSTRUCTORS, INC.
1. The name of the corporation is Specialty Teleconstructors, Inc.
2. The Amended and Restated Articles were adopted on November 21, 1997.
3. The changes made by amendment to the Articles of Incorporation are as
follows:
(a) An amendment provides for staggered terms for the directors, effective
immediately and affecting the Board of Directors elected at the Annual
Meeting. The Board of Directors shall be divided into three classes if
the number of directors is four or more, with the classes to be as
equal in number as may be possible. Any director or directors in
excess of the number divisible by three shall be first assigned to
Class 1, and any additional director shall be assigned to Class 2, as
the case may be. (For example, if there are five directors, the fourth
director shall be in Class 1 and the fifth director in Class 2.) If
the proposed amendment is approved by the stockholders, the Board of
Directors shall be divided into three classes with each Class 1
director elected to serve until the next ensuing annual meeting of
stockholders, each Class 2 director elected to serve until the second
ensuing annual meeting of stockholders, and each Class 3 director
elected to serve until the third ensuing annual meeting of
stockholders. At each annual meeting of stockholders following the
Annual Meeting, the number of directors equal to the number of
directors in a class whose term expires at the time of such meeting
shall be elected to serve until the third ensuing annual meeting of
stockholders. Notwithstanding the foregoing, directors shall serve
until their successors are elected and qualified or until their
earlier death, resignation or removal from office, or until there is a
decrease in the number of directors; provided, however, that no
decrease in the number of directors shall have the effect of
shortening the term of any incumbent director.
<PAGE>
(b) An amendment gives the Board of Directors the authority, without
further action by the stockholders, to issue up to TWO MILLION
(2,000,000) shares of Preferred Stock in one or more series and to fix
the number of shares constituting any such series and the preferences,
limitations and relative rights, including dividend rights, dividend
rate, voting rights, terms of redemption, redemption price or prices,
conversion rights and liquidation preferences of the shares
constituting any series.
(c) An amendment increases the number of shares of Common Stock, par value
one cent ($.01) per share, which the corporation is authorized to
issue to TWENTY MILLION (20,000,000). The additional shares, if and
when used, would have the same rights and privileges as the shares of
Common Stock presently issued and outstanding.
(d) An amendment requires the vote of a majority of "Continuing Directors"
(defined as a director who was a member of the Company's Board on
November 21, 1997 or a director who is elected to the Board after
November 21, 1997, after a nomination from a majority of the existing
Continuing Directors) to amend or repeal a Bylaw, unless the
stockholders expressly have provided that a Bylaw may not be amended
or repealed by the Board. Alternatively, a supermajority of two-thirds
of the stockholders may vote to amend or repeal the Bylaws. The
amendment also requires a supermajority vote of two-thirds of each
voting group of the stockholders to either amend or repeal provisions
contained in the Articles of Incorporation unless the desired
amendment or repealed provision was previously approved by a majority
of Continuing Directors, in which case only a majority vote of each
voting group of stockholders is necessary.
/s/ Michael R. Budagher 12/19/97
- ------------------------------------ ---------------------
Michael R. Budagher, Chief Executive Date
Officer President and Treasurer
<PAGE>
STATE OF NEW MEXICO )
) SS:
COUNTY OF BERNALILLO )
Before me, Teresa M. Kelsh, a Notary Public in and for said County and
State, personally appeared Michael R. Budagher, who acknowledged before me that
he is the Chief Executive Officer, President and Treasurer of Specialty
Teleconstructors, Inc., a Nevada corporation, and that he signed the foregoing
Form for Amended and Restated Articles of Incorporation of Specialty
Teleconstructors, Inc. as his free and voluntary act and deed, for the uses and
purposes therein set forth, and that the facts contained therein are true.
In witness whereof I have hereunto set my hand and seal this 19th day of
December, 1997.
/s/ Teresa M. Kelsh
-------------------------------------
Notary Public
My Commission Expires: February 23, 1999
EXHIBIT 3.2
AMENDED AND RESTATED BY-LAWS OF
SPECIALTY TELECONSTRUCTORS, INC.
(A NEVADA CORPORATION)
ARTICLE I
OFFICES
SECTION 1.1. Principal Office. The principal offices of the corporation
shall be in Cedar Crest, New Mexico, or other location as the Board of Directors
may determine.
SECTION 1.2. Other Offices. The corporation may also have offices at such
other places both within and without the State of Nevada as the Board of
Directors may from time to time determine or the business of the corporation may
require.
ARTICLE 2
MEETINGS OF STOCKHOLDERS
SECTION 2.1. Place of Meeting. All meetings of stockholders shall be held
at such place, either within or without the State of Nevada, as shall be
designated from time to time by the Board of Directors and stated in the notice
of the meeting.
SECTION 2.2. Annual Meetings. The annual meeting of stockholders shall be
held at such date and time as shall be designated from time to time by the Board
of Directors and stated in the notice of the meeting.
SECTION 2.3. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
Restated Articles of Incorporation of the corporation, as amended (the "Restated
Articles of Incorporation"), may be called by the Chairman of the Board, the
President or by the Board of Directors or by written order of a majority of the
directors and shall be called by the Chairman of the Board, the President or the
Secretary at the request in writing of stockholders owning a majority in amount
of the entire capital stock of the corporation issued and outstanding and
entitled vote. Such request shall state the purposes of the proposed meeting.
The officers or directors shall fix the time and any place, either within or
without the State of Nevada, as the place for holding such meeting.
SECTION 2.4. Notice of Meeting. Written notice of the annual and each
special meeting of stockholders, stating the time, place and purpose or purposes
thereof, shall be given to each stockholder entitled to vote thereat, not less
than 10 nor more than 60 days before the meeting and shall be signed by the
Chairman of the Board, the President or the Secretary of the Corporation.
SECTION 2.5. Business Conducted at Meetings. At a meeting of the
stockholders, only such business shall be conducted as shall have been properly
brought before the meeting. To be properly brought before a meeting, business
must be (a) specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Chairman of the Board, the President or the Board
of Directors, or (b) otherwise properly brought before the meeting by a
stockholders. For business to be properly brought before a meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the Secretary of the corporation. To be timely, a stockholder's notice must be
delivered to or mailed and
<PAGE>
received at the principal executive offices of the corporation not less than 60
days prior to the meeting. A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before the meeting (a)
the reasons for conducting such business at the meeting, (b) the name and
address, as they appear on the corporation's books, of the stockholder proposing
such business, (c) the class and number of shares of the corporation which are
beneficially owned by the stockholder, and (d) any material interest of the
stockholder in such business. Notwithstanding anything in these by-laws to the
contrary, no business shall be conducted at a meeting except in accordance with
the procedures set forth in this Section 2.5. The Chairman of the meeting shall,
if the facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting and in accordance with the provisions of
this Section 2.5, and, if he should so determine, he shall so declare to the
meeting, and any such business not properly brought before the meeting shall not
be transacted.
SECTION 2.6. Nomination of Directors. Nomination of candidates for election
as directors of the corporation at any meeting of stockholders called for
election of directors, in whole or in part (an "Election Meeting"), may be made
by the Board of Directors or by any stockholder entitled to vote at such
Election Meeting, in accordance with the following procedures:
2.6.1. Nominations made by the Board of Directors shall be made at a
meeting of the Board or by written consent of the directors in lieu of a meeting
prior to the date of the Election Meeting. At the request of the Secretary of
the corporation, each proposed nominee shall provide the corporation with such
information concerning himself as is required, under the rules of the Securities
and Exchange Commission ("SEC"), to be included in the corporation's proxy
statement soliciting proxies for his election as a director.
2.6.2. Not less than 60 days prior to the date of the Election Meeting, any
stockholder who intends to make a nomination at the Election Meeting shall
deliver a notice to the Secretary of the corporation setting forth (a) the name,
age, business address and the residence address of each nominee proposed in such
notice, (b) the principal occupation or employment of such nominee, (c) the
number of shares of capital stock of the corporation which are beneficially
owned by each such nominee, (d) such other information concerning each such
nominee as would be required, under the rules of the SEC, in a proxy statement
soliciting proxies for the election of such nominees. Such notice shall include
a signed consent to serve as a director of the corporation, if elected, of each
such nominee.
2.6.3. In the event that a person is validly designated as a nominee in
accordance with this Section 2.6 and shall thereafter become unable or willing
to stand for election to the Board of Directors, the Board of Directors or the
stockholder who proposed such nominee, as the case may be, may designate a
substitute nominee.
2.6.4. If the Chairman of the Election Meeting determines that a nomination
was not made in accordance with the foregoing procedures, such nomination shall
be void.
SECTION 2.7. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at any meeting of stockholders for the
transaction of business except when stockholders are required to vote by class,
in which event a majority of the issued and outstanding shares of the
appropriate class shall be present in person or by proxy, and except as
otherwise provided by statute or by the Restated Articles of Incorporation.
Notwithstanding any other provision of the Restated Articles of Incorporation or
by these by-laws, the holders of a majority of the shares of capital stock
entitled to vote thereat, present in person or represented by proxy, whether or
not a quorum is present, shall have power to adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present or represented. If the adjournment is for more than 30 days, or
if after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled
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to vote at the meeting. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted which might have been
transacted at the meeting as originally notified.
SECTION 2.8. Voting. When a quorum is present at any meeting of the
stockholders, the vote of the holders of a majority of the stock having voting
power present in person or represented by proxy shall decide any question
brought before such meeting, unless the question is one upon which, by express
provision of the statutes, of the Restated Articles of Incorporation or of these
by-laws, a different vote is required, in which case such express provision
shall govern and control the decision of such question. Every stockholder having
the right to vote shall be entitled to vote in person, or by proxy appointed by
an instrument in writing subscribed by such stockholder or by his duly
authorized attorney; provided, however, that no such proxy shall be valid after
the expiration of six months from the date of its execution, unless coupled with
an interest, or unless the person executing it specifies therein the length of
time for which it is to continue in force, which in no case shall exceed seven
years from the date of its execution. If such instrument shall designate two or
more persons to act as proxies, unless such instrument shall provide the
contrary, a majority of such persons present at any meeting at which their
powers thereunder are to be exercised shall have and may exercise all the powers
of voting or giving consents thereby conferred, or if only one be present, then
such powers may be exercised by that one; or, if an even number attend and a
majority do not agree on any particular issue, each proxy so attending shall be
entitled to exercise such powers, in representing such shares. Unless required
by statute or determined by the Chairman of the meeting to be advisable, the
vote on any question need not be by written ballot. No shareholder shall have
cumulative voting rights.
SECTION 2.9. Consent of Stockholders. Whenever the vote of the stockholders
at a meeting thereof is required or permitted to be taken for or in connection
with any corporate action, the meeting and vote of stockholders may be dispensed
with if all the stockholders who would have been entitled to vote upon the
action if such meeting were held shall consent in writing to such corporate
action being taken; or if the Restated Articles of Incorporation authorize the
action to be taken with the written consent of the holders of less than all the
stock who would have been entitled to vote upon the action if a meeting were
held, then on the written consent of the stockholders having not less than such
percentage of the number of votes as may be authorized in the Restated Articles
of Incorporation; provided, that in no case shall the written consent be by the
holders of stock having less than the minimum percentage of the vote required by
statute, and provided that prompt notice must be given to all stockholders of
the taking of corporate action without a meeting and less than unanimous written
consent.
SECTION 2.10. Voting of Stock of Certain Holders. Shares standing in the
name of another corporation, domestic or foreign, may be voted by such officer,
agent or proxy as the by-laws of such corporation may prescribe, or in the
absence of such provision, as the Board of Directors of such corporation may
determine. Shares standing in the name of a deceased person may be voted by the
executor or administrator of such deceased person, either in person or by proxy.
Shares standing in the name of a guardian, conservator or trustee may be voted
by such fiduciary, either in person or by proxy, but no such fiduciary shall be
entitled to vote shares held in such fiduciary capacity without a transfer of
such shares into the name of such fiduciary. Shares outstanding in the name of a
receiver may be voted by such receiver. A stockholder whose shares are pledged
shall be entitled to vote such shares, unless in the transfer by the pledgor on
the books of the corporation, he has expressly empowered the pledgee to vote
thereon, in which case only the pledgee, or his proxy, may represent the stock
and vote thereon.
SECTION 2.11. Treasury Stock. The corporation shall not vote, directly or
indirectly, shares of its own stock owned by it; and such shares shall not be
counted in determining the total number outstanding shares.
SECTION 2.12. Fixing Record Date. The Board of Directors may fix in advance
a date, not exceeding 60 nor less than 10 days preceding the date of any meeting
of stockholders, or the date for
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payment of any dividend or distribution, or the date for the allotment of
rights, or the date when any change or conversion or exchange of capital stock
shall go into effect, or a date in connection with obtaining a consent, as a
record date for the determination of the stockholders entitled to notice of, and
to vote at any such meeting and any adjournment thereof, or entitled to receive
payment of any such dividend or distribution, or to receive any such allotment
of rights, or to exercise the rights in respect of any such change, conversion
or exchange of capital stock, or to give such consent, and in such case such
stockholders and only such stockholders as shall be stockholders of record on
the date so fixed shall be entitled to such notice of and to vote at any such
meeting and any adjournment thereof, or to receive payment of such dividend or
distribution, or to receive such allotment of rights, or to exercise such
rights, or to give such consent, as the case may be, notwithstanding any
transfer of any stock on the books of the corporation after any such record date
fixed as aforesaid.
ARTICLE 3
BOARD OF DIRECTORS
SECTION 3.1. Powers. The business and affairs of the corporation shall be
managed by its Board of Directors, which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the Restated Articles of Incorporation or by these by-laws directed or required
to be exercised or done by the stockholders.
SECTION 3.2. Number, Election and Term. The number of directors which shall
constitute the whole board shall be not less than three and not more than nine.
Within the limits above specified, the number of the directors of the
corporation shall be determined by resolution of the Board of Directors. Except
as provided in Section 3.3, the directors shall be elected at the annual meeting
of stockholders and shall hold office until his successor is elected and
qualified. A minimum of two of the directors must be "outside" directors. The
term "outside" director shall mean a director who is not an employee, officer or
former officer of the corporation or a subsidiary or division thereof, or a
relative of a principal executive officer, or who is not an individual member of
an organization acting as an advisor, consultant, legal counsel, etc., receiving
compensation on a continuing basis from the corporation in addition to
director's fees. Directors need not be residents of the State of Nevada or
stockholders of the corporation.
SECTION 3.3. Vacancies, Additional Directors and Removal From Office. If
any vacancy occurs in the Board of Directors caused by death, resignation,
retirement, disqualification or removal from office of any director, or
otherwise, or if any new directorship is created by an increase in the
authorized number of directors, a majority of the directors then in office,
though less than a quorum, or a sole remaining director, may choose a successor
or fill the newly created directorship; any director so chosen shall hold office
until the next election of the class for which such director shall have been
chosen and until his successor shall be elected and qualified, unless sooner
displaced. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director. Notwithstanding any
other provisions of these by-laws or the fact that some lesser percentage may be
specified by law, any director or the entire Board of Directors may be removed
at any time, but only for cause or only by the affirmative vote of the holders
of 66-2/3% or more of the outstanding shares of the capital stock of this
Corporation entitled to vote generally in the election of directors (considered
for this purpose as one class) cast at a meeting of the stockholders called for
that purpose.
SECTION 3.4. Regular Meetings. A regular meeting of the Board of Directors
shall be held each year, without other notice than this by-law, at the place of,
and immediately following, the annual meeting of stockholders; and other regular
meetings of the Board of Directors shall be held during each year, at such time
and place as the Board of Directors may from time to time provide by resolution,
either within or without the State of Nevada, without other notice than such
resolution.
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SECTION 3.5. Special Meeting. A special meeting of the Board of Directors
may be called by the Chairman of the Board or by the President and shall be
called by the Secretary on the written request of any two directors. The
Chairman of the Board or President so calling, or the directors so requesting,
any such meeting shall fix the time and any place, either within or without the
State of Nevada, as the place for holding such meeting.
SECTION 3.6. Notice of Special Meeting. Written notice of special meetings
of the Board of Directors shall be given to each director at least 48 hours
prior to the time of such meeting. Any director may waive notice of any meeting.
The attendance of a director at any meeting shall constitute a waiver of notice
of such meeting, except where a director attends a meeting solely for the
purpose of objecting to the transaction of any business because the meeting is
not lawful called or convened. Neither the business to be transacted at, nor the
purpose of, any special meeting of the Board of Directors need be specified in
the notice or waiver of notice of such meeting, except that notice shall be
given with respect to any matter where notice is required by statute.
SECTION 3.7. Quorum. A majority of the Board of Directors shall constitute
a quorum for the transaction of business at any meeting of the Board of
Directors, and the act of a majority of the directors present at any meeting at
which there is quorum shall be the act of the Board of Directors, except as may
be otherwise specifically provided by statute, by the Restated Articles of
Incorporation or by these by-laws. If a quorum shall not be present at any
meeting of the Board of Directors, the directors present thereat may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
SECTION 3.8. Action Without Meeting. Unless otherwise restricted by the
Restated Articles of Incorporation or these by-laws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof as provided in Article IV of these by-laws, may be taken
without a meeting, if a written consent thereto is signed by all members of the
Board or of such committee, as the case may be.
SECTION 3.9. Meeting by Telephone. Any action required or permitted to be
taken by the Board of Directors or any committee thereof may be taken by means
of a meeting by conference telephone network or similar communications method so
long as all persons participating in the meeting can hear each other. Any person
participating in such meeting shall be deemed to be present in person at such
meeting.
ARTICLE 4
COMMITTEES OF DIRECTORS
SECTION 4.1. Executive Committee. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate an Executive Committee of the
Board of Directors (the "Executive Committee"). If such a committee is
designated by the Board of Directors, it shall be composed of members who are
directors, and the members of the Executive Committee shall be designated by the
Board of Directors in the resolution appointing the Executive Committee.
Thereafter, the Board of Directors shall designate the members of the Executive
Committee on an annual basis at its first regular meeting held pursuant to
Section 3.4 of these by-laws after the annual meeting of stockholders or as soon
thereafter as conveniently possible. The Executive Committee shall have and may
exercise all of the powers of the Board of Directors during the period between
meetings of the Board of Directors except as reserved to the Board of Directors
or as delegated by these by-laws or by the Board of Directors to another
standing or special committee or as may be prohibited by law.
SECTION 4.2. Audit Committee. The Audit Committee of the Board of Directors
(the "Audit Committee") shall be designated annually by the Board of Directors
at its first regular meeting held pursuant
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to Section 3.4 of these by-laws after the annual meeting of stockholders or as
soon thereafter as conveniently possible. The Audit Committee shall consist
solely of directors who are independent of management and who are free from any
relationship that, in the opinion of the Board of Directors, would interfere
with the designated director's exercise of independent judgment as a member of
the Audit Committee.
SECTION 4.3. Compensation and Stock Option Committee. The Compensation and
Stock Option Committee of the Board of Directors (the "Compensation and Stock
Option Committee") shall consist of two or more directors to be designated
annually by the Board of Directors at its first regular meeting held pursuant to
Section 3.4 of these by-laws after the annual meeting of stockholders or as soon
thereafter as conveniently possible. The Compensation and Stock Option Committee
shall consist of at least two "outside" directors.
SECTION 4.4. Other Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more additional
special or standing committees, each such additional committee to consist of one
or more of the directors of the corporation. Each such committee shall have and
may exercise such of the powers of the Board of Directors in the management of
the business and affairs of the corporation as may be provided in such
resolution, except as delegated by these by-laws or by the Board of Directors to
another standing or special committee or as may be prohibited by law.
SECTION 4.5. Committee Operations. A majority of a committee shall
constitute a quorum for the transaction of any committee business. Such
committee or committees shall have such name or names and such limitations of
authority as provided in these by-laws or as may be determined from time to time
by resolution adopted by the Board of Directors. The corporation shall pay all
expenses of committee operations. The Board of Directors may designate one or
more appropriate directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of such committee. In
the absence or disqualification of any members of such committee or committees,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another appropriate member of the Board of Directors to act at the meeting in
the place of any absent or disqualified member.
SECTION 4.6. Minutes. Each committee of directors shall keep regular
minutes of its proceedings and report the same to the Board of Directors when
required. The Secretary or any Assistant Secretary of the corporation shall (a)
serve as the Secretary of the special or standing committees of the Board of
Directors of the corporation, (b) keep regular minutes of standing or special
committee proceedings, (c) make available to the Board of Directors, as
required, copies of all resolutions adopted or minutes or reports of other
actions recommended or taken by any such standing or special committee and (d)
otherwise as requested keep the members of the Board of Directors apprised of
the actions taken by such standing or special committees.
SECTION 4.7. Compensation. Directors, as such may receive reasonable
compensation for their services which shall be set by the Board of Directors and
expenses of attendance at each regular or special meeting of the Board;
provided, however, that nothing herein contained shall be construed to preclude
any director from serving the corporation in any other capacity and receiving
additional compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
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ARTICLE 5
NOTICE
SECTION 5.1. Methods of Giving Notice. Whenever under the provisions of the
statutes, the Restated Articles of Incorporation or these by-laws, notice is
required to be given to any director, member of any committee or stockholder,
personal notice is not required but such notice may be given in writing and
mailed to such director, member or stockholder; provided that in the case of a
director or a member of any committee such notice may be given orally or by
telephone or telegram. If mailed, notice to a director, member of a committee or
stockholder shall be deemed to be given when deposited in the United States mail
first class in a sealed envelope, with postage thereon prepaid, addressed, in
the case of a stockholder, to the stockholder at the stockholder's address as it
appears on the records of the corporation or, in the case of a director or a
member of a committee to such person at his business address. If sent by
telegraph, notice to a director or member of a committee shall be deemed to be
given when the telegraph, so addressed, is delivered to the telegraph company.
SECTION 5.2. Written Waiver. Whenever any notice is required to be given by
statute, the Restated Articles of Incorporation or these by-laws, a waiver
thereof in writing, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent
thereto.
SECTION 5.3. Consent. Whenever all parties entitled to vote at any meeting,
whether of directors or stockholders, consent, either by a writing on the
records of the meeting or filed with the secretary, or by presence at such
meeting and oral consent entered on the minutes, or by taking part in the
deliberations at such meeting without objection, the actions taken at such
meeting shall be as valid as if had at a meeting regularly called and noticed,
and at such meeting any business may be transacted which is not excepted from
the written consent or to the consideration of which no objection for lack of
notice is made at the time, and if any meeting be irregular for lack of notice
or such consent, provided a quorum was present at such meeting, the proceedings
of such meeting may be ratified and approved and rendered valid and the
irregularity or defect therein waived by a writing signed by all parties having
the right to vote thereat. Such consent or approval, if given by stockholders,
may be by proxy or attorney, but all such proxies and powers of attorney must be
in writing.
ARTICLE 6
OFFICERS
SECTION 6.1. Officers. The Board of Directors shall elect and appoint all.
the officers of the corporation. The officers of the corporation shall include,
without limitation, the Chairman of the Board, President, Secretary and
Treasurer and such other officers and agents, including, without limitation, one
or more Vice Presidents (any one or more of which may be designated Executive
Vice President or Senior Vice President), Assistant Vice Presidents, Assistant
Secretaries and Assistant Treasurers, as they deem necessary, who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as prescribed by the Board of Directors or Chairman of the Board. Any two
or more offices may be held by the same person. No officer shall execute,
acknowledge, verify or countersign any instrument on behalf of the corporation
in more than one capacity, if such instrument is required by law, by these
by-laws or by any act of the corporation to be executed, acknowledged, verified
or countersigned by two or more officers. The Chairman of the Board shall be
elected from among the directors. With the foregoing exception, none of the
other officers need be a director, and none of the officers need be a
stockholder of the corporation.
SECTION 6.2. Election and Term of Office. The officers of the corporation
shall be elected annually by the Board of Directors at its first regular meeting
held after the annual meeting of stockholders or as soon thereafter as
conveniently possible. Each officer shall hold office until his successor shall
have been chosen and shall have qualified or until his death or the effective
date of this resignation or removal, or until he shall cease to be a director in
the case of the Chairman of the Board.
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SECTION 6.3. Removal and Resignation. Any officer or agent may be removed,
either with or without cause, by the affirmative vote of a majority of the Board
of Directors whenever, in its judgment, the best interests of the corporation
shall be served thereby, but such removal shall be without prejudice to the
contractual rights, if any, of the person so removed. Any executive officer or
other officer or agent may resign at any time by giving written notice to the
corporation. Any such resignation shall take effect at the date of the receipt
of such notice or at any later time specified therein, and unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
SECTION 6.4. Vacancies. Any vacancy occurring in any office of the
corporation by death, resignation, removal or otherwise, shall be filled by the
Board of Directors for the unexpired portion of the term.
SECTION 6.5. Salaries. The salary of the Chief Executive Officer shall be
determined by the Compensation and Stock Option Committee. Salaries of all other
officers of the corporation shall be determined by the Chief Executive Officer
in consultation with the Compensation and Stock Option Committee; and no officer
who is also a director shall be prevented from receiving such salary by reason
of his also being a director.
SECTION 6.6. Chairman of the Board. The Chairman of the Board shall preside
at all meetings of the Board of Directors and of the stockholders of the
corporation. In the Chairman's absence, such duties shall be attended to by the
President. The Chairman of the Board shall hold the position of chief executive
officer of the corporation and shall perform shall duties as usually pertain to
the position of chief executive officer and such duties as may be prescribed by
the Board of Directors or the Executive Committee. The Chairman of the Board
shall formulate and submit to the Board of Directors or the Executive Committee
matters of general policy for the corporation and shall perform such other
duties as usually appertain to the office or as may be prescribed by the Board
of Directors. He may sign with the President or any other officer of the
corporation thereunto authorized by the Board of Directors certificates for
shares of the corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors, and any deeds or bonds, which the Board of
Directors or the Executive Committee has authorized to be executed, except in
cases where the signing and execution thereof has been expressly delegated or
reserved by these by-laws or by the Board of Directors or the Executive
Committee to some other officer or agent of the corporation, or shall be
required by law to be otherwise executed.
SECTION 6.7. President. The President, subject to the control of the Board
of Directors, the Executive Committee, and the Chairman of the Board, shall in
general supervise and control the business and affairs of the corporation. The
President shall keep the Board of Directors, the Executive Committee and the
Chairman of the Board fully informed as they or any of them shall request and
shall consult them concerning the business of the corporation. He may sign with
the Chairman of the Board or any other officer of the corporation thereunto
authorized by the Board of Directors, certificates for shares of capital stock
of the corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors, and any deeds, bonds, mortgages,
contracts, checks, notes, drafts or other instruments which the Board of
Directors or the Executive Committee has authorized to be executed, except in
cases where the signing and execution thereof has been expressly delegated by
these by-laws or by the Board of Directors or the Executive Committee to some
other officer or agent of the corporation, or shall be required by law to be
otherwise executed. In general he shall perform all other duties normally
incident to the office of the President, except any duties expressly delegated
to other persons by these by-laws, the Board of Directors, or the Executive
Committee, and such other duties as may be prescribed by the stockholders,
Chairman of the Board, the Board of Directors or the Executive Committee, from
time to time.
SECTION 6.8. Vice Presidents. In the absence of the President, or in the
event of his inability or refusal to act, the Executive Vice President (or in
the event there shall be or more than one Vice President designated Executive
Vice President, any Executive Vice President designated by the Board) shall
perform
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the duties an exercise the powers of the President. Any Vice President
authorized by resolution of the Board of Directors to do so, may sign with any
other officer of the corporation thereunto authorized by the Board of Directors,
certificates for shares of capital stock of the corporation, the issuance of
which shall have been authorized by resolution of the Board of Directors. The
Vice Presidents shall perform such other duties as from time to time may be
assigned to them by the Chairman of the Board, the Board of Directors or the
Executive Committee.
SECTION 6.9. Secretary. The Secretary shall (a) keep the minutes of the
meetings of the stockholders, the Board of Directors and committees of
directors; (b) see that all notices are duly given in accordance with provisions
of these by-laws and as required by law; (c) be custodian of the corporate
records and of the seal of the corporation, and see that the seal of the
corporation or a facsimile thereof is affixed to all certificates for shares
prior to the issuance thereof and to all documents, the execution of which on
behalf of the corporation under its seal is duly authorized in accordance with
the provisions of these by-laws; (d) keep or cause to be kept a register of the
post office address of each stockholder which shall be furnished by such
stockholder; (e) have general charge of other stock transfer books of the
corporation; and (f) in general, perform all duties normally incident to the
office of the Secretary and such other duties as from time to time may be
assigned to him by the Chairman of the Board, the President, the Board of
Directors or the Executive Committee.
SECTION 6.10. Treasurer. The Treasurer shall (a) have charge and custody of
and be responsible for all funds and securities of the corporation; receive and
give receipts for moneys due and payable to the corporation from any source
whatsoever and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with the provisions of Section 7.3 of these by-laws; (b) prepare, or cause to be
prepared, for submission at each regular meeting of the Board of Directors, at
each annual meeting of stockholders, and at such other times as may be required
by the Board of Directors, the Chairman of the Board, the President or the
Executive Committee, a statement of financial condition of the corporation in
such detail as may be required; and (c) in general, perform all the duties
incident to the office of Treasurer and such other duties as from time to time
may be assigned to him by the Chairman of the Board, the President, the Board of
Directors or the Executive Committee. If required by the Board of Directors or
the Executive Committee, the Treasurer shall give a bond for the faithful
discharge of his duties as such sum and with such surety or sureties as the
Board of Directors or the Executive Committee shall determine.
SECTION 6.11. Assistant Secretary or Treasurer. The Assistant Secretaries
and Assistant Treasurers shall, in general, perform such duties as shall be
assigned to them by the Secretary or the Treasurer, respectively, or by the
Chairman of the Board, the President, the Board of Directors or the Executive
Committee. The Assistant Secretaries or Assistant Treasurers shall, in the
absence of the Secretary or Treasurer, respectively, perform all functions and
duties which such absent officers may delegate, but such delegation shall not
relieve the absent officer from the responsibilities and liabilities of his
office. The Assistant Treasurers shall respectively, if required by the Board of
Directors or the Executive Committee, give bonds for the faithful discharge of
their duties in such sums with such sureties as the Board of Directors or the
Executive Committee shall determine.
ARTICLE 7
CONTRACTS, CHECKS AND DEPOSITS
SECTION 7.1. Contracts. Subject to the provisions of Section 6.1, the Board
of Directors or the Executive Committee may authorize any officer, officers,
agent or agents, to enter into any contract or execute and deliver an instrument
in the name of and on behalf of the corporation, and such authority may be
general or confined to specific instances.
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SECTION 7.2. Checks, etc. All checks, demands, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation, shall be signed by such officer or officers or such
agent or agents of the corporation, and in such manner, as shall be determined
by the Board of Directors or the Executive Committee.
SECTION 7.3. Deposits. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositories as the Chairman of the Board, the
President or the Treasurer may be empowered by the Board of Directors or the
Executive Committee to select or as the Board of Directors or the Executive
Committee may select.
ARTICLE 8
CERTIFICATE OF STOCK
SECTION 8.1. Issuance. Each stockholder of this corporation shall be
entitled to a certificate or certificates showing the number of shares of stock
registered in his name on the books of the corporation. The certificates shall
be in such form as may be determined by the Board of Directors or the Executive
Committee, shall be issued in numerical order and shall be entered in the books
of the corporation as they are issued. They shall exhibit the holder's name and
the number of shares and shall be signed by the Chairman of the Board and the
President or such other officers as may from time to time be authorized by
resolution of the Board of Directors. Any or all the signatures on the
certificate may be a facsimile. The seal of the corporation shall be impressed,
by original or by facsimile, printed or engraved, on all such certificates. In
case any officer who has signed or whose facsimile signature has been placed
upon any such certificate shall have ceased to be such officer before such
certificate is issued, such certificate may nevertheless be issued by the
corporation with the same effect as if such officer had not ceased to be such
officer at the date of its issue. If the corporation shall be authorized to
issue more than one class of stock or more than one series of any class, the
designation, preferences and relative, participating, option or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and rights shall be set forth in
full or summarized on the face or back of the certificate which the corporation
shall issue to represent such class of stock; provided that except as otherwise
provided by statute, in lieu of the foregoing requirements there may be set
forth on the face or back of the certificate which the corporation shall issue
to represent such class or series of stock, a statement that the corporation
will furnish to each stockholder who so requests the designations, preferences
and relative, participating, option or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and rights. All certificates surrendered to the corporation for
transfer shall be canceled and no new certificate shall be issued until the
former certificate for a like number of shares shall have been surrendered and
canceled, except that in the case of a lost, stolen, destroyed or mutilated
certificate a new one may be issued therefor upon such terms and with such
indemnity, if any, to the corporation as the Board of Directors may prescribe.
In addition to the above, all certificates evidencing shares of the
corporation's stock or other securities issued by the corporation shall contain
such legend or legends as may from time to time be required by the Nevada
Revised Statutes then in effect.
SECTION 8.2. Lost Certificates. The Board of Directors may direct that a
new certificate or certificates be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate or certificates alleged to have been lost,
stolen or destroyed, or both.
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SECTION 8.3. Transfers. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate and
to the person entitled thereto, cancel the old certificate and record the
transaction upon its books. Transfers of shares shall be made only on the books
of the corporation by the registered holder thereof, or by his attorney
thereunto authorized by power of attorney and filed with the Secretary of the
corporation or the transfer agent.
SECTION 8.4. Registered Stockholders. The corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder in fact
thereof and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by laws of the State of Nevada.
SECTION 8.5. Uncertificated Shares. The Board of Directors may approve the
issuance of uncertificated shares of some or all of the shares of any or all of
its classes or series of capital stock.
ARTICLE 9
DIVIDENDS
SECTION 9.1. Declaration. Dividends upon the capital stock of the
corporation, subject to the provisions of the Restated Articles of
Incorporation, if any, may be declared by the Board of Directors at any regular
or special meeting, pursuant to law. Dividends may be paid in cash, in property
or in shares of capital stock, subject to the provisions of the Restated
Articles of Incorporation.
SECTION 9.2. Reserve. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the Board of Directors from time to time, in their absolute discretion,
think proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the Board of Directors shall think conducive to the
interests of the corporation, and the Board of Directors may modify or abolish
any such reserve in the manner in which it was created.
ARTICLE 10
INDEMNIFICATION
SECTION 10.1. Third Party Actions. The corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the 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, trust or other enterprise, against
expenses (including amounts paid in settlement and attorneys' fees), judgments
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interest 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
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
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SECTION 10.2. Actions by or in the Right of the Corporation. The
corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the corporation to procure a judgment in its favor 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, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit 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. No indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged by a court of competent
jurisdiction to be liable to the corporation or for amounts paid in settlement
to the corporation, unless and only to the extent that the court in which such
action or suit was brought or other court of competent jurisdiction shall
determine upon application that in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnify for such expenses as
the court shall deem proper.
SECTION 10.3. Successful Defense. To the extent that a director, officer,
employee or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Sections
10.1 and 10.2, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense.
SECTION 10.4. Determination of Conduct. Any indemnification under Section
10. 1 or 10.2 (unless ordered by a court or advanced pursuant to Section 10.5)
shall be made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances. Such determination shall be made (a) by the
stockholders, (b) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or proceeding,
(c) if a majority vote of a quorum consisting of directors who were not parties
to the act, suit or proceedings so orders, by independent legal counsel in a
written opinion, or (d) if a quorum consisting of directors who were not parties
to the act, suit or proceeding cannot be obtained, by independent legal counsel
in a written opinion.
SECTION 10.5. Payment of Expenses in Advance. Expenses incurred in
defending a civil or criminal action, suit or proceeding shall be paid by the
corporation as they are incurred and in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer, to repay such amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this Section 10.5 do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
SECTION 10.6. Indemnity Not Exclusive. The indemnification and advancement
of expenses authorized in or order by a court provided hereunder shall not
exclude any other rights to which a person seeking indemnification or
advancement of expenses may be entitled under the Restated Articles of
Incorporation, agreement, vote of stockholders or disinterested directors or
otherwise, for either an action in his official capacity or an action in another
capacity while holding his office, except that indemnification, unless ordered
by a court pursuant to Section 10.2 or for the advancement of expenses made
pursuant to Section 10.5, may not be made to or on behalf of any director or
officer if a final adjudication establishes that his acts or omissions involved
intentional misconduct, fraud or a knowing violation of the law and was material
to the cause of action, and shall continue for a person who has ceased to be a
director, officer, employee or agent and insures to the benefit of the heirs,
executors and administrators of such a person.
SECTION 10.7. The Corporation. For purposes of this Article 10, references
to "the corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent
12
<PAGE>
of a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under and subject to
the provisions of this Article 10 (including, without limitation, the provisions
of Section 10.4) with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1. Seal. The corporate seal shall have inscribed thereon the
name of the corporation, and the words "Corporate Seal, Nevada." The seal may be
used by causing it or a facsimile thereof to the impressed or affixed or
otherwise reproduced.
SECTION 11.2. Books. The books of the corporation may be kept within or
without the State of Nevada (subject to any provisions contained in the
statutes) at such place or places as may be designated from time to time by the
Board of Directors or the Executive Committee.
SECTION 11.3. Fiscal Year. The fiscal year of the corporation shall begin
the first day of July of each year or upon such other day as may be designated
by the Board of Directors.
SECTION 11.4. Compliance with Nasdaq Rules. For so long as the Corporations
equity or debt securities shall be listed for trading on the Nasdaq National
Market System, the Corporation's officers will cause the Corporation to comply
with applicable rules of the Nasdaq Stock Market.
SECTION 11.5. The provisions of Nevada Revised Statutes Sections 78.378 to
78.3793, inclusive, do not apply to any acquisition of a shares of Common Stock
by Tommie R. Carpenter in connection with that certain Agreement and Plan of
Merger dated as of June 30, 1997 (the "MTS Merger Agreement") by and among
Microwave Tower Service, Inc., an Oregon corporation ("MTS"), each of the
stockholders of MTS whose name, address and the number of Company Shares (as
defined in Section 4.1(a) of the MTS Merger Agreement) owned appears on Exhibit
1 to the MTS Merger Agreement and who, collectively, constitute the owners of
100% of the issued and outstanding shares of capital stock of MTS, Specialty
Teleconstructors, Inc., a Nevada corporation ("STI") and MTS Acquisition, Inc.,
an Oregon corporation and a wholly-owned subsidiary of STI.
Section 11.6 The provisions of Nevada Revised Statutes Sections 78.378 to
78.3793, inclusive, do not apply to the acquisition of 6,750,000 shares of the
Corporation's Common Stock by HMTF/Omni Partners, L.P. ("OmniPartners") in
connection with the consummation of the transactions contemplated by that
certain Amended and Restated Agreement and Plan of Merger, dated as of April 22,
1998, by and among the Corporation, OAI Acquisition Corp., OmniAmerica Holdings
Corporation, OmniAmerica, Inc., Omni/HSW Acquisition, Inc. and OmniPartners.
Notwithstanding the foregoing, the Corporation expressly elects not to be
subject to nor governed by the provisions of Nevada Revised Statutes Sections
78.378 to 78.3793, inclusive, and said provisions do not apply to the
Corporation.
13
<PAGE>
ARTICLE 12
AMENDMENT
Subject to the provisions of the Restated Articles of Incorporation, these
by-laws may be altered, amended, or repealed as follows:
Section 12.01 Supermajority Voting. Notwithstanding any other provisions of
these by-laws or the fact that some lesser percentage may be specified by law,
except as provided in Section 12.02 of this Article 12, these by-laws may be
altered, amended, or repealed only at any regular meeting of the stockholders
(or at any special meeting thereof duly called for that purpose), by the
affirmative vote of the holders of 66-2/3% or more of the outstanding shares of
the capital stock of this Corporation entitled to vote thereon (considered for
this purpose as one class).
Section 12.02 Majority Voting. Notwithstanding the provisions of Section
12.01 of this Article 12, subject to the laws of the State of Nevada, the Board
of Directors may, by majority vote of the Continuing Directors (as defined
below), voting separately and as a subclass of directors, present at any meeting
at which a quorum is present, alter or amend these by-laws, or enact such other
by-laws as in their judgment may be advisable for the regulation of the conduct
of the affairs of the corporation. For the purpose of this Article 12,
"Continuing Director" means any member of the Board of Directors (i) who was a
member of the Board of Directors on November 21, 1997, or (ii) who is elected to
the Board of Directors after November 21, 1997, after being nominated by a
majority of the Continuing Directors voting separately and as a subclass of
directors on such nomination.
* * * * *
14
<PAGE>
The undersigned Secretary of the Corporation hereby certifies that the
foregoing bylaws were adopted by the Board of Directors of the Corporation as of
April 21, 1998.
/s/ D. Keith Hartnett
-------------------------------------
D. Keith Hartnett, Secretary
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-31-1998
<CASH> $1,405,400
<SECURITIES> 50,000
<RECEIVABLES> 14,431,737
<ALLOWANCES> 0
<INVENTORY> 3,523,546
<CURRENT-ASSETS> 23,295,025
<PP&E> 13,853,854
<DEPRECIATION> 4,448,386
<TOTAL-ASSETS> 36,532,382
<CURRENT-LIABILITIES> 11,792,227
<BONDS> 0
0
0
<COMMON> 81,555
<OTHER-SE> 22,163,840<F1>
<TOTAL-LIABILITY-AND-EQUITY> 36,532,382
<SALES> 45,026,754
<TOTAL-REVENUES> 45,236,159
<CGS> 37,645,307
<TOTAL-COSTS> 40,623,610
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 375,688
<INCOME-PRETAX> 4,236,861
<INCOME-TAX> 1,624,000
<INCOME-CONTINUING> 2,612,861
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,612,861
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.32
<FN>
<F1> Other equity of $22,163,840 is comprised of Additional paid-in Capital of
$14,528,644, Treasury Stock of $(1,387,500) and Retained Earnings of
$9,022,696
</FN>
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