<PAGE> 1
As filed with the Securities and Exchange Commission on February 5, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NEXTEL COMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 36-3939651
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
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1505 Farm Credit Drive
McLean, Virginia 22102
(703) 394-3000
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
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Thomas J. Sidman, Esq.
Vice President
and General Counsel
Nextel Communications, Inc.
1505 Farm Credit Drive
McLean, Virginia 22102
(703) 394-3000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
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Copies to:
Lisa A. Stater, Esq. Norman D. Slonaker, Esq.
Jones, Day, Reavis & Pogue Brown & Wood LLP
3500 One Peachtree Center One World Trade Center
303 Peachtree Street New York, New York 10048
Atlanta, Georgia 30308 (212) 839-5300
(404) 521-3939
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Approximate date of commencement of proposed sale to the public: As
soon as practicable following the effective date of this Registration
Statement.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check following box: [ ]
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<PAGE> 2
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: [ ]
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If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act of 1933, please check
the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering:
[ ] ----------------------
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If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
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If delivery of the Prospectus is expected to be made pursuant to Rule
434, check the following box: [ ]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum
Title of Each Class of Amount Offering Price Per Aggregate Offering Amount of
Securities to be Registered to be Registered(1) Share(2) Price(2) Registration Fee(3)
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<S> <C> <C> <C> <C>
Class A Common Stock,
Par Value $.001 Per Share 8,243,875 shares(4) $15.00 $123,658,125 $37,472.13
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</TABLE>
(1) Includes 1,075,288 shares that may be delivered in connection with the
exercise of an over-allotment option and subscribed for and purchased by
an affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated in
connection with the formation of the Nextel STRYPES Trust. See Note (4)
below.
(2) Estimated solely for purposes of computing the registration fee pursuant
to Rule 457(c) of the Securities Act of 1933, as amended (the "Securities
Act"), based upon the average of the reported high and low sales prices of
the Class A Common Stock of the Registrant as reported on the Nasdaq
National Market ("NASDAQ) on January 30, 1997.
(3) The registration fee for the securities offered hereby, $37,472.13, is
calculated pursuant to Rule 457(c) under the Securities Act as follows: one
thirty-third of one percent of the product of $15.00, the average of the
reported high and low sales prices of Class A Common Stock on all caps on
January 30, 1997, multiplied by 8,243,875 the number of shares to be
registered.
(4) Such shares are the number of shares which may be deliverable upon exchange
of the STRYPES (the "STRYPES") of Nextel STRYPES Trust (plus such
indeterminate number of shares as may be deliverable as a result of certain
antidilution provisions applicable to the STRYPES), which are being
registered pursuant to a separate registration statement of the Nextel
STRYPES Trust. The Nextel STRYPES Trust, the issuer of the STRYPES, is not
affiliated with the Registrant.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(A), MAY DETERMINE.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN EFFORT TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED FEBRUARY 5, 1997
7,168,587 Shares
NEXTEL COMMUNICATIONS, INC.
CLASS A COMMON STOCK
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This Prospectus relates to 7,168,587 shares of Class A Common Stock,
par value $.001 per share (the "Common Stock"), of Nextel Communications, Inc.,
a Delaware corporation ("Nextel" or the "Company"), which may be distributed to
holders of the Structured Yield Product Exchangeable for Stock(SM) (each, a
"STRYPES") of and issued by Nextel STRYPES Trust, a Delaware business trust
(the "Trust"), upon conclusion of the term of the Trust on or about the third
anniversary of the issuance date of the STRYPES (the "Exchange Date") or upon
earlier termination of the Trust in certain circumstances. The Trust has
granted the Underwriters of the STRYPES a 30-day option to purchase additional
STRYPES, solely to cover over-allotments, if any. This Prospectus relates to
up to an additional 1,075,288 shares of Common Stock which may be distributed
by the Trust in connection with (i) STRYPES issued upon the exercise of the
over-allotment option granted to the Underwriters of the STRYPES and (ii)
STRYPES subscribed for and purchased by an affiliate of Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch") in connection with the formation
of the Trust to the holders of such additional STRYPES on the Exchange Date or
upon earlier termination of the Trust in certain circumstances.
All of the shares of Common Stock covered hereby are beneficially owned
by certain stockholders of the Company (the "Stockholders") who received such
shares in connection with the consummation of a transaction involving the
merger of a corporation, in which the Stockholders were securityholders, with a
wholly-owned subsidiary of Nextel. The Company has been advised that the
Stockholders may deliver such Common Stock to the Trust pursuant to a forward
purchase contract (the "Contract") among the Stockholders and the Trust. The
Company is not affiliated with the Trust or with any of the Stockholders
presently, and will not receive any of the proceeds from the sale of the STRYPES
or as a result of the distribution of the Common Stock in connection therewith.
The STRYPES are offered by a separate prospectus of the Trust (the
"STRYPES Prospectus"). This Prospectus relates only to the Common Stock
covered hereby and does not relate to the STRYPES. THE COMPANY TAKES NO
RESPONSIBILITY FOR ANY INFORMATION INCLUDED IN OR OMITTED FROM THE STRYPES
PROSPECTUS. THE STRYPES PROSPECTUS DOES NOT CONSTITUTE A PART OF THIS
PROSPECTUS, NOR IS IT INCORPORATED BY REFERENCE HEREIN. Because the STRYPES
are a separate security issued by the Trust, for which the Company has no
responsibility, an investment in the STRYPES may have materially
different characteristics and risks from a direct investment in the Common
Stock.
SEE "RISK FACTORS," BEGINNING ON PAGE 9 OF THIS PROSPECTUS, FOR A
DISCUSSION OF CERTAIN FACTORS RELEVANT TO AN INVESTMENT IN THE COMMON STOCK.
The Common Stock is quoted on the NASDAQ National Market ("NASDAQ")
under the symbol "NXTL." On February 4, 1997, the last reported sale price
of the Common Stock on Nasdaq was $14 5/8 per share. See "Price Range of
Common Stock and Dividend Policy."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
(SM)Service mark of Merrill Lynch & Co., Inc.
The date of this Prospectus is _______________, 1997.
<PAGE> 4
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS OF THE STRYPES MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET,
IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
Nextel is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (collectively, the "Exchange Act") and, in accordance therewith,
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information filed with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the
Commission's Regional Offices at 7 World Trade Center, 13th Floor, New York,
New York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material also may be obtained by mail
from the Public Reference Section of the Commission, Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed rates.
Additionally, the Commission maintains a Web site on the Internet at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants, such as Nextel, that file
electronically with the Commission.
The Company has filed with the Commission a Registration Statement on
Form S-3 (including the exhibits and amendments thereto, the "Registration
Statement") pursuant to the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the shares of Common Stock
covered hereby. This Prospectus does not contain all the information set forth
in the Registration Statement, certain portions of which are omitted in
accordance with the rules and regulations of the Commission and to which
reference is hereby made. Statements made in this Prospectus as to the
contents of any contract, agreement or other document referred to herein are
not necessarily complete. With respect to each such contract, agreement or
other document filed or incorporated by reference as an exhibit to the
Registration Statement or as an exhibit to documents incorporated by reference
in this Prospectus (see "Incorporation of Certain Information by Reference"),
reference is made to the respective exhibit for a more complete description of
the matter involved, and each such statement shall be deemed qualified in its
entirety by such reference. Copies of the Registration Statement together with
exhibits may be inspected at the office of the Commission in Washington, D.C.
without charge and copies thereof may be obtained therefrom upon payment of a
prescribed fee.
All information contained in this Prospectus relating to the
Stockholders or to the proposed or potential methods of distribution of Common
Stock covered hereby and all information contained herein regarding the
STRYPES, the Trust, the Contract and the proposed STRYPES offering has been
supplied by the Stockholders. Nextel has not been involved in the formation
of the Trust (including, without limitation, establishing the terms of the
STRYPES) and the securities issued or held by the Trust may be subject to
factors unrelated to Nextel and the Common Stock.
It is contemplated that this Prospectus will be provided only to
persons who are prospective purchasers of STRYPES, which persons shall
simultaneously receive from the Trust or Underwriters of the STRYPES a STRYPES
Prospectus representing the Trust a relating to the offer and sale of the
STRYPES. This Prospectus is not intended, and has not been authorized to be
used, for any purpose other than to provide legally required information to
prospective purchasers of STRYPES who also have received the STRYPES
Prospectus.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
THIS PROSPECTUS INCORPORATES CERTAIN DOCUMENTS BY REFERENCE WHICH ARE
NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE) ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED UPON WRITTEN OR ORAL REQUEST DIRECTED TO NEXTEL
COMMUNICATIONS, INC., 1505 FARM CREDIT DRIVE, MCLEAN, VIRGINIA 22102,
ATTENTION: INVESTOR RELATIONS, TELEPHONE: (703) 394-3500.
The information in the following documents filed by Nextel with the
Commission (File No. 0-19656) pursuant to the Exchange Act is incorporated by
reference in this Prospectus:
(a) Annual Report on Form 10-K for the year ended December 31,
1995 filed with the Commission on April 1, 1996, as amended by
Form 10-K/A filed with the Commission on April 26, 1996 and as
further amended by Form 10-K/A2 filed with the Commission on
May 17, 1996;
(b) Quarterly Reports on Form 10-Q for the quarter ended March 31,
1996 filed with the Commission on May 12, 1996, for the
quarter ended June 30, 1996 filed with the Commission on
August 13, 1996 and for the quarter ended September 30, 1996
filed with the Commission on November 14, 1996;
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(c) Current Reports on Form 8-K: (i) dated February 6, 1996 and
filed with the Commission on February 7, 1996, as amended by
Form 8-K/A, filed on April 26, 1996, (ii) dated February 9,
1996 and filed with the Commission on February 12, 1996, (iii)
dated March 13, 1996 and filed with the Commission on March
15, 1996, (iv) dated and filed with the Commission on July 5,
1996, (v) dated and filed with the Commission on August 30,
1996, (vi) dated September 30, 1996 and filed with the
Commission on October 1, 1996, (vii) dated and filed with the
Commission on October 3, 1996, (viii) dated and filed with the
Commission on November 4, 1996, (ix) dated November 22, 1996
and filed with the Commission on November 26, 1996, and (x)
dated and filed with the Commission on January 21, 1997; and
(d) Registration Statement on Form S-1, as amended, dated as of
January 27, 1992 (No. 33-43415), with respect to the
information contained under the heading "Description of
Capital Stock" which was incorporated by reference into the
Registration Statement on Form 8-A, dated January 16, 1992.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of this offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents.
Any statements made herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which is also
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The information relating to Nextel contained in this Prospectus should
be read together with the information in the documents incorporated by
reference.
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<PAGE> 6
PROSPECTUS SUMMARY
On July 28, 1995, NEXTEL Communications, Inc., a corporation organized
under the laws of the State of Delaware in 1987 ("Old Nextel"), was merged with
ESMR, Inc. ("ESMR"), until then a wholly owned subsidiary of Motorola, Inc.
("Motorola"). ESMR was the surviving corporation in the merger (the "Motorola
Transaction") and succeeded to Old Nextel's assets and liabilities. ESMR
changed its name to Nextel Communications, Inc., effective upon consummation of
the Motorola Transaction. References herein to Nextel or the Company for
periods prior to July 28, 1995 refer to Old Nextel as the predecessor to the
business and operations of Nextel. Unless the context otherwise requires,
references to the Company or to Nextel are intended to include Nextel
Communications, Inc. and its consolidated subsidiaries.
Information contained herein gives effect to the acquisition of
approximately 1,220,000 shares of Common Stock by Digital Radio L.L.C. (the
"McCaw Investor") on April 5, 1995, an additional acquisition of 8,163,265
shares of Class A Convertible Redeemable Preferred Stock of Nextel and 82
shares of Class B Convertible Preferred Stock of Nextel by the McCaw Investor
and the consummation of related transactions on July 28, 1995 (the "McCaw
Transaction"), the merger of OneComm Corporation ("OneComm") with and into
Nextel on July 28, 1995 (the "OneComm Transaction"), the consummation of the
Motorola Transaction on July 28, 1995, the merger of a subsidiary of Nextel
with American Mobile Systems Incorporated ("AMS") on July 31, 1995 (the "AMS
Transaction"), the merger of Dial Page, Inc. ("Dial Page") with and into Nextel
on January 30, 1996 (the "Dial Page Transaction"), and the purchase of
8,155,506 shares of Common Stock by Comcast FCI, Inc. ("Comcast FCI"), a wholly
owned subsidiary of Comcast Corporation ("Comcast") on February 9, 1996,
pursuant to the exercise of certain anti-dilutive purchase rights (the "Comcast
Purchase Right") of Comcast and Comcast FCI in connection with the Dial Page
Transaction.
THE COMPANY
Nextel's business consists principally of providing wireless
communications services to its customers utilizing specialized mobile radio
("SMR") frequencies licensed to its subsidiaries by the Federal Communications
Commission ("FCC"). Nextel is the leading provider of SMR wireless
communications services in Hawaii and in nearly all 48 states in the
continental United States, including all of the top 50 metropolitan market
areas in the United States. As of September 30, 1996, Nextel provided service
to approximately 1,044,000 units, consisting of 228,000 units utilizing
Nextel's Digital Mobile networks (as defined below) and approximately 816,000
analog SMR units. Nextel's operating revenues primarily arise from mobile
telephone service and two-way radio dispatch and, to a lesser extent, from
sales and maintenance of related equipment. Nextel's business plans and
efforts are to a large extent directed toward replacing the remaining
traditional analog SMR systems that it currently operates with advanced mobile
communications systems employing digital technology with a multi-site
configuration permitting frequency reuse ("Digital Mobile networks"). A
customer using Nextel's Digital Mobile network is able to access mobile
telephone services and two-way radio dispatch, paging and in the future is
expected to be able to access data transmission. The Company is implementing
its Digital Mobile networks utilizing digital technology developed by Motorola
(such technology is referred to as the "Integrated Digital Enhanced Network" or
"iDEN" and prior to various system enhancements was known as "Motorola
Integrated Radio System" or "MIRS"). As of December 31, 1996, Nextel's Digital
Mobile networks were operating throughout most of California, the greater
metropolitan areas of Baltimore, Boston, Charlotte, North Carolina, Chicago,
Colorado Springs, Denver, Detroit, Greensboro, North Carolina, Hartford, Kansas
City, Las Vegas, Milwaukee, New York, Newark, Oklahoma City, Philadelphia,
Portland, Oregon, Raleigh/Durham, Seattle, St. Louis, Toledo, Topeka, Tulsa,
Washington D.C., Wichita and Winston-Salem, North Carolina, south along the
I-85 corridor through Greenville/Spartanburg, South Carolina and including
Atlanta, Georgia and west along the I-20 corridor to and including Birmingham,
Alabama.
Prior to the second quarter of 1996, the Company implemented its
Digital Mobile networks in its market areas using Motorola's "first generation"
iDEN technology. During that time frame, the Company encountered certain
technology and system performance issues relating primarily to the voice
transmission quality of the mobile telephone service. In response to these
issues, the Company and Motorola have undertaken significant, and continue to
undertake less significant, system enhancement efforts to address various
circumstances believed to adversely affect system performance and customer
satisfaction with the "first generation" iDEN technology, particularly those
associated with voice transmission quality. Additionally, independent of such
system enhancement efforts, the Company, together with Motorola, is pursuing a
significant program directed toward the development and deployment of
modifications to the "first generation" iDEN technology platform (such modified
technology being referred to as Reconfigured iDEN) which offers improved voice
transmission quality. Based on its
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<PAGE> 7
experiences with the Reconfigured iDEN technology, including the feedback
received in customer trials and various other inputs and considerations, the
Company announced the first full-scale commercial launch of the Reconfigured
iDEN Digital Mobile network in the Chicago market late in the third quarter of
1996 and subsequently announced full-scale commercial launches in the Atlanta,
Boston, Denver, Detroit and Las Vegas markets, in each case accompanied by a
more broadly-focused marketing campaign in such market areas. Nextel recently
announced the launching of its national network, which interconnects each of
the Company's current Digital Mobile networks and allows mobile telephone
users to "roam" throughout the network at the same airtime rate charged in
their home markets. The national network provides the same functionality and
features offered to mobile telephone customers in their home markets and
eliminates the complex dialing procedures often encountered by "roaming"
customers of cellular providers.
Over the three years ended December 31, 1996, the number of subscriber
units in service has increased dramatically reflecting acquisitions, the
commencement of Digital Mobile network service in certain markets and increased
sales in markets in which Digital Mobile network services are provided.
Nextel's strategy is to focus principally on multi-service business users in
its markets with Digital Mobile networks. The following table summarizes the
subscriber units in service for the years indicated:
<TABLE>
<CAPTION>
As of December 31,
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1994 1995 1996
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<S> <C> <C> <C>
Analog SMR Service 310,000 758,000 *
Digital Mobile Network 13,500 85,000 300,300
------- -------- -------
Total 323,500 843,000 *
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</TABLE>
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*Data not yet available.
Through its subsidiary McCaw International, Ltd. ("MIL"), and other
subsidiaries that are involved in international wireless investments and
business activities managed and/or coordinated through MIL, Nextel has interests
in wireless operations in Canada, Mexico, Brazil, Argentina, the Philippines
and Shanghai, China.
Nextel's principal executive and administrative facility is located at
1505 Farm Credit Drive, McLean, Virginia 22102, and its telephone number at
that location is (703) 394-3000.
RECENT DEVELOPMENTS
THE FOLLOWING PROVIDES BRIEF SUMMARIES OF CERTAIN TRANSACTIONS OR
DEVELOPMENTS THAT ARE DESCRIBED IN MORE DETAIL IN PUBLIC DISCLOSURES PREVIOUSLY
MADE BY THE COMPANY INCLUDING, IN MANY CASES, IN REPORTS FILED BY THE COMPANY
WITH THE COMMISSION UNDER THE EXCHANGE ACT.
On January 30, 1996, Nextel consummated the Dial Page Transaction
pursuant to an Agreement of Merger and Plan of Reorganization dated February
17, 1995. As a result of such transaction, Dial Page was merged with Nextel
and the former stockholders of Dial Page received an aggregate of approximately
26.8 million shares of Common Stock. Prior to the merger, Dial Page was a
leading provider of integrated wireless communications services in the
southeastern United States.
Nextel, Comcast and Comcast FCI entered into an Amendment to the Stock
Purchase Agreement, dated as of February 9, 1996, which amended the original
Stock Purchase Agreement dated as of September 14, 1992, as previously amended.
Such amendment set forth certain terms and conditions applicable to the
exercise by Comcast of its anti-dilutive rights with respect to the issuance of
shares of Common Stock in the Dial Page Transaction and also to potential
exercises of Comcast's anti-dilutive rights with respect to issuances of Nextel
equity securities occurring in connection with any subsequent acquisition
transaction. Also on February 9, 1996, Comcast completed the purchase of
8,155,506 shares of Common Stock for an aggregate purchase price of
$99,904,948, pursuant to Comcast's exercise of its anti-dilutive right with
respect to the Dial Page Transaction.
In early 1996, Nextel announced changes to its senior management team.
On January 29, 1996, the Company announced that Timothy M. Donahue had been
named President and Chief Operating Officer of the Company. Mr. Donahue had
previously been regional president of AT&T Wireless Services operations in the
Northeast. On March 6, 1996, the Company announced that Daniel F. Akerson had
agreed to join the Company as Chairman and Chief Executive Officer. Mr.
Akerson was previously the chairman and chief executive officer of General
Instrument Corporation and the president of MCI Communications Corporation.
Additionally, on April 22, 1996, Nextel named Steven M. Shindler as its Senior
Vice President and Chief Financial Officer. Mr. Shindler previously served as
managing director of communications finance at the Toronto-Dominion Bank in New
York.
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<PAGE> 8
Nextel and Motorola entered into an amendment, dated as of April 28,
1996, to the Enhanced Specialized Mobile Radio Systems Purchase Agreement,
which amended the equipment purchase agreements between Nextel and Motorola
that were first entered into in 1991 (as amended, the "Equipment Purchase
Agreements"). Such amendment established payment terms for all purchases made
by Nextel under the Equipment Purchase Agreements and confirmed certain
warranty coverages and commencement dates for system infrastructure equipment
and software.
Nextel, Nextel Finance Company, a wholly owned subsidiary of Nextel
("NFC"), and certain subsidiaries of Nextel entered into definitive agreements,
which became effective on September 30, 1996, with respect to a secured credit
facility arranged by Chase Securities, Inc., J.P. Morgan Securities Inc. and
Toronto-Dominion Securities (USA), Inc. (the "Bank Credit Facility").
Concurrently therewith, Nextel, NFC and certain subsidiaries of Nextel entered
into definitive agreements, which also became effective on September 30, 1996,
with respect to the amendment, restatement and consolidation of the previously
existing financing arrangements with Motorola and NTFC Capital Corporation
("NTFC") (the "Vendor Credit Facility").
The Credit Agreement relating to the Bank Credit Facility (the "Bank
Credit Agreement") provides for up to $1,655,000,000 of secured financing,
consisting of a $1,085,000,000 revolving loan and $570,000,000 in term loans.
The Amended, Restated and Consolidated Credit Agreement relating to the Vendor
Credit Facility (the "Vendor Credit Agreement") provides for up to $345,000,000
of secured financing, consisting of a $195,000,000 revolving loan and
$150,000,000 in term loans. Borrowings under the Bank Credit Facility and the
Vendor Credit Facility are ratably secured by liens on assets of Nextel's
subsidiaries that are "restricted" subsidiaries under the terms of Nextel's
public indentures. Additionally, Nextel's public indentures contain provisions
that operate to limit the amount of borrowings available under the Bank Credit
Facility and the Vendor Credit Facility in certain circumstances. See "Risk
Factors - Nextel to Require Financing."
Nextel entered into an Agreement of Merger and Plan of Reorganization
dated as of October 2, 1996, as amended, with Pittencrieff Communications, Inc.
("PCI") providing for the merger of PCI with a wholly owned indirect subsidiary
of Nextel. PCI has approximately 6,000 800 MHz SMR channels covering a total
population of over 27 million people predominantly in the states of Texas,
Oklahoma, New Mexico and Arizona. The stockholders of PCI will receive a
maximum of 8,782,403 shares of Common Stock, subject to certain adjustments, as
a result of the merger. The merger is subject to regulatory and PCI
stockholder approval and customary closing conditions.
On January 30, 1997, Nextel acquired 81% of the outstanding shares of
Wireless Ventures of Brazil, Inc., an operator of specialized mobile radio
systems in Brazil ("WVB") in a merger transaction (the "WVB Merger"). WVB
previously had been owned by the Stockholders and certain other persons.
PLAN OF DISTRIBUTION
This Prospectus relates to 7,168,587 shares of Common Stock which may
be distributed by the Trust to holders of the STRYPES on the Exchange Date or
upon earlier termination of the Trust in certain circumstances. The Trust has
granted the Underwriters of the STRYPES a 30-day option to purchase additional
STRYPES, solely to cover over-allotments, if any. This Prospectus also relates
to up to an additional 1,075,288 shares of Common Stock which may be
distributed by the Trust in connection with (i) STRYPES issued upon the
exercise of the over-allotment option granted to the Underwriters of the STRYPES
and (ii) STRYPES subscribed for and purchased by an affiliate of Merrill Lynch
in connection with the formation of the Trust to the holders of such additional
STRYPES on the Exchange Date or upon earlier termination of the Trust in
certain circumstances.
All of the shares of Common Stock covered hereby are beneficially owned
by the Stockholders, who may deliver such Common Stock to the Trust pursuant to
the Contract. The Company is not affiliated with the Trust or with any of the
Stockholders presently, and will not receive any of the proceeds from the
sale of the STRYPES or as a result of the distribution of the Common Stock in
connection therewith.
The STRYPES are offered only by the STRYPES Prospectus. This
Prospectus relates only to the Common Stock covered hereby and does not relate
to the STRYPES. THE COMPANY TAKES NO RESPONSIBILITY FOR ANY INFORMATION
INCLUDED IN OR OMITTED FROM THE STRYPES PROSPECTUS. THE STRYPES PROSPECTUS
DOES NOT CONSTITUTE A PART OF THIS PROSPECTUS, NOR IS IT INCORPORATED BY
REFERENCE HEREIN. Because the STRYPES are a separate security issued by the
Trust, for which the Company has no responsibility, an investment in the
STRYPES may have materially different characteristics from a direct investment
in the Common Stock.
-6-
<PAGE> 9
NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA
The selected financial data set forth below for the periods indicated
should be read in conjunction with the Consolidated Financial Statements,
related notes and other financial information appearing in Nextel's Annual
Report on Form 10-K for the year ended December 31, 1995, as amended, and
Nextel's Quarterly Report on Form 10-Q for the quarter ended September 30,
1996, incorporated herein by reference. The financial information for the
fiscal years ended March 31, 1992, 1993 and 1994, the nine months ended
December 31, 1994 and the year ended December 31, 1995 have been derived from
consolidated financial statements of the Company. The report of Deloitte &
Touche LLP, independent public accountants, for the year ended December 31,
1995 has been incorporated herein by reference. See "Experts." The financial
information for the nine months ended December 31, 1993, the nine months ended
September 30, 1995 and 1996 and the year ended December 31, 1994 is derived
from the unaudited financial statements of the Company and, in the opinion of
the Company, includes all adjustments, consisting only of normal recurring
accruals, considered necessary for the fair presentation of such information.
The results of operations for interim periods are not necessarily indicative of
the results to be expected for the full year. See "Incorporation of Certain
Information By Reference."
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
FISCAL YEAR ENDED MARCH 31, DECEMBER 31, DECEMBER 31,
----------------------------- ------------------- ------------
1992 1993 1994 1993 1994(5)(6) 1994(6) 1995(6)
---- ---- ---- ---- ---------- ------- -------
(UNAUDITED) (UNAUDITED)
(dollar amounts in thousands except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues . . . . . . . . $ 52,529 $ 53,002 $ 67,928 $ 48,901 $ 74,857 $ 93,884 $ 171,703
Cost of Operations . . . 18,965 20,979 28,666 19,808 45,498 54,356 143,130
Selling, general
and administrative
expenses . . . . . . . . 15,686 18,971 41,107 24,966 90,985 107,126 201,909
Expenses related
to Corporate
Reorganization(1) . . . . -- -- -- -- -- -- 17,372
Depreciation and
amortization . . . . . . 27,273 25,942 58,398 37,129 94,147 115,416 236,178
----------- ----------- ----------- ----------- ------------ ----------- ------------
Operating loss . . . . . (9,395) (12,890) (60,243) (33,002) (155,773) (183,014) (426,886)
Other income
(expense) . . . . . . . . (9,542) 2,248 (18,098) (7,742) (41,421) (51,777) (104,881)
Income tax benefit . . . 3,266 1,027 21,437 7,656 71,345 85,126 200,602
----------- ----------- ----------- ----------- ------------ ----------- ------------
Loss before
extraordinary item . . . (15,671) (9,615) (56,904) (33,088) (125,849) (149,665) (331,165)
Extraordinary item(2) . . (12,765) -- -- -- -- -- --
----------- ----------- ----------- ----------- ------------ ----------- ------------
Net Loss . . . . . . . . $ (28,436) $ (9,615) $ (56,904) $ (33,088) $ (125,849) $ (149,665) $ (331,165)
=========== =========== =========== =========== ============ =========== ============
NET LOSS PER SHARE:
Before extraordinary
item . . . . . . . . . . $ (0.58) $ (0.16) $ (0.73) $ (0.43) $ (1.25) $ (1.51) $ (2.31)
Extraordinary item(2) . (0.47) -- -- -- -- -- --
----------- ----------- ----------- ----------- ------------ ----------- ------------
Net Loss . . . . . . . . $ (1.05) $ (0.16) $ (0.73) $ (0.43) $ (1.25) $ (1.51) $ (2.31)
=========== =========== =========== =========== ============ =========== ============
Number of shares used in
computations(3) . . . . . 26,925,000 58,736,000 78,349,000 76,726,000 100,639,000 98,818,000 143,283,000
=========== =========== =========== =========== ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------
1995 1996
---- ----
(UNAUDITED)
(dollar amounts in thousands
except per share amounts)
<S> <C> <C>
Revenues . . . . . . . . $ 110,752 $ 236,977
Cost of Operations . . . 91,328 177,556
Selling, general
and administrative
expenses . . . . . . . . 127,462 234,725
Expenses related
to Corporate
Reorganization(1) . . . . 17,372 --
Depreciation and
amortization . . . . . . 151,392 291,698
------------ ------------
Operating loss . . . . . (276,802) (467,002)
Other income
(expense) . . . . . . . . (51,916) (147,571)
Income tax benefit . . . 116,403 216,944
------------ ------------
Loss before
extraordinary item . . . (212,315) (397,629)
Extraordinary item(2) . . -- --
------------ ------------
Net Loss . . . . . . . . $ (212,315) $ (397,629)
============ ============
NET LOSS PER SHARE:
Before extraordinary
item . . . . . . . . . . $ (1.68) $ (1.80)
Extraordinary item(2) . -- --
------------ ------------
Net Loss . . . . . . . . $ (1.68) $ (1.80)
============ ============
Number of shares used in
computations(3) . . . . . 126,636,000 221,309,000
============ ============
</TABLE>
<TABLE>
<CAPTION>
AS OF
AS OF MARCH 31, AS OF DECEMBER 31, SEPTEMBER 30,
------------------------------ ----------------------- ------------
1992 1993 1994 1994 1995 1996
---- ---- ---- ---- ---- ----
(dollar amounts in thousands)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash
equivalents . . . . . . . . . $ 13,393 $ 17,083 $ 483,483 $ 301,679 $ 340,826 $ 219,508
Marketable securities . . . . -- 14,768 426,113 172,313 68,443 4,998
Current assets . . . . . . . . 20,161 39,932 921,983 504,248 504,661 386,326
Intangible assets, net . . . . 160,558 144,666 889,912 1,451,780 3,549,622 3,886,286
Total assets . . . . . . . . . 210,797 333,557 2,197,266 2,889,110 5,512,827 5,989,318
Long-term debt(4) . . . . . . 1,028 55,024 1,080,702 1,163,221 1,653,400 2,470,995
Stockholders' equity . . . . . 191,108 255,224 846,304 1,268,575 2,945,141 2,951,519
</TABLE>
- ------------------------
-7-
<PAGE> 10
(1) For a summary of business combination transactions completed, see Note
2 to the Notes to Nextel's consolidated financial statements
incorporated herein by reference.
(2) Represents the effect of the early extinguishment of debt.
(3) Includes the weighted average number of shares of Nextel Common Stock
outstanding during the respective periods.
(4) Excludes the current portions of long-term debt. See Note 5 to the
Notes to Nextel's consolidated financial statements incorporated herein
by reference.
(5) Effective December 31, 1994, Nextel changed its fiscal year end from
March 31 to December 31. Accordingly, the income statement data is
presented for the transition period from April 1, 1994 to December 31,
1994.
(6) Certain amounts presented have been reclassified to conform to the
presentation for the periods ended September 30, 1995 and 1996.
-8-
<PAGE> 11
RISK FACTORS
THE FOLLOWING RISK FACTORS MAY AFFECT THE VALUE OF SHARES OF COMMON
STOCK AND THEREFORE SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, IN
CONJUNCTION WITH THE OTHER INFORMATION INCLUDED AND INCORPORATED BY REFERENCE
IN THIS PROSPECTUS, BEFORE MAKING AN INVESTMENT DECISION. SEE ALSO "--FORWARD
LOOKING STATEMENTS."
HISTORY OF AND FUTURE EXPECTATIONS OF LOSSES AND NEGATIVE CASH FLOW
The activities of Nextel since its inception in 1987 have been
concentrated on the acquisition and operation of SMR businesses and the
development of Digital Mobile networks. Nextel has incurred net losses since
its inception, including net losses of $125,849,000 for the nine months ended
December 31, 1994, and $331,165,000 for the year ended December 31, 1995.
Nextel had an accumulated deficit totalling $579,231,000 at December 31, 1995.
On a pro forma basis for the year ended December 31, 1995, taking into account
certain transactions that were consummated during and after that period but
before the date hereof (including the consummation of the Dial Page
Transaction), Nextel would have generated a net loss of $526,699,000.
System infrastructure purchases under purchase agreements with
Motorola and other vendors of equipment related to the Digital Mobile networks,
and inventory purchases made in anticipation of the commencement of commercial
service in Nextel's markets, have caused and will continue to cause a
significant increase in assets and liabilities during the start-up phase of the
Digital Mobile networks. Such Digital Mobile network costs are charged to
operations as depreciation expense beginning in the quarter during which the
relevant market commences commercial operations.
Nextel anticipates that its net losses will increase significantly
during the ongoing start-up phase of Digital Mobile networks and that it will
continue to generate operating losses over the next several years. Nextel's
ability to arrange sufficient equity and/or debt financing or to generate
sufficient revenue to cover its operating and capital needs is subject to a
number of risks and contingencies. Accordingly, there can be no assurance as
to whether or when Nextel's operations will become profitable. See "--Nextel
to Require Financing" and "--Forward Looking Statements."
The development, implementation and operation of the Digital Mobile
networks will require significant funds. Due to expected operating losses and
capital requirements, Nextel expects that it will be required to raise a
portion of such funds externally. See "--Nextel to Require Financing" and
"--Forward Looking Statements."
RISKS OF IMPLEMENTATION OF DIGITAL MOBILE NETWORKS
Nextel and its subsidiaries are licensed to provide wireless
communications services in Hawaii and in nearly all 48 states in the
continental United States, including all of the top 50 metropolitan market
areas in the United States. Nextel has activated its Digital Mobile networks
in certain of these market areas. As of December 31, 1996, Nextel's Digital
Mobile networks were operating throughout most of California, in the greater
metropolitan areas of Baltimore, Boston, Charlotte, North Carolina, Chicago,
Colorado Springs, Denver, Detroit, Greensboro, North Carolina, Hartford, Kansas
City, Las Vegas, Milwaukee, New York, Newark, Oklahoma City, Philadelphia,
Portland, Oregon, Raleigh/Durham, Seattle, St. Louis, Toledo, Topeka, Tulsa,
Washington D.C., Wichita and Winston-Salem, North Carolina, south along the
I-85 corridor through Greenville/Spartanburg, South Carolina to and including
Atlanta, Georgia and west along the I-20 corridor to and including Birmingham,
Alabama. As of December 31, 1996, Nextel's Digital Mobile networks were
activated in major metropolitan market areas throughout the United States that
collectively accounted for more than half of the total United States
population, and approximately 300,300 subscriber units were operating on
Nextel's Digital Mobile networks. Under its nationwide Digital Mobile network
build-out plan (which, as discussed below in "--Nextel to Require Financing,"
"--Implementation of Digital Mobile Networks Subject to Risks of Developing
Technology" and "--Success of Nextel Is Dependent on its Ability to Compete,"
is premised on several key assumptions, including availability of sufficient
funding, achievement of satisfactory system performance standards and
maintenance of targeted service and subscriber equipment pricing levels),
Nextel currently expects its Digital Mobile networks to be available in areas
covering approximately 85% of the United States population by the end of 1998.
See "--Forward Looking Statements."
In order to activate Digital Mobile network service in a market, the
Company must free a certain number of 800 MHz frequencies from SMR analog
traffic in that market ("channel recovery"). Channel recovery involves
transferring 800 MHz customers to 900 MHz systems or other 800 MHz analog SMR
systems. Upon commencement of commercial service, the Company intends to sell
the Digital Mobile network services to existing customers and to
-9-
<PAGE> 12
add 800 MHz frequencies to the Digital Mobile networks as such customers
migrate ("migration"). The Company has commenced its channel recovery and
migration efforts for existing customers in each of the markets in which its
Digital Mobile networks have been activated. The Company expects that only a
portion of its SMR channels in each market will be needed for the initial phase
of the Digital Mobile network build-out. Accordingly, the Company expects to
have the opportunity to move its customers onto the Digital Mobile network
gradually to avoid any significant disruption of service, although there can be
no assurance that such disruption will not occur.
The implementation of Digital Mobile networks involves systems design,
site procurement, construction, electronics installation, receipt of necessary
FCC and other regulatory approvals, channel recovery and initial systems
optimization prior to commencing commercial service. Each stage can take from
several weeks to several months and involves various risks and contingencies,
the outcome of which cannot be predicted. There can be no assurance that
Nextel will be able to implement Digital Mobile networks in any particular
market in accordance with its current plans and schedules. See "--Forward
Looking Statements."
IMPLEMENTATION OF DIGITAL MOBILE NETWORKS SUBJECT TO RISKS OF DEVELOPING
TECHNOLOGY
Currently, there are two principal digital technology formats that are
being assessed or proposed for deployment by providers of cellular telephone
service or by certain entities that have been awarded personal communications
services ("PCS") licenses to provide wireless communications services in the
United States. One such format is known as the Time Division Multiple Access
("TDMA") digital transmission technology, a version of which, known as
"three-time slot TDMA," has been deployed by AT&T Wireless Services (formerly
McCaw Cellular Communications, Inc.), a subsidiary of AT&T, and by Southwestern
Bell Mobile Systems in certain of their cellular system markets, and is
expected to be deployed by certain other cellular operators pursuant to a
standard adopted by the cellular industry. The other principal format is known
as the Code Division Multiple Access ("CDMA") digital transmission technology.
Although TDMA and CDMA are both digital transmission technologies, and thus
share certain basic characteristics and areas of contrast to analog
transmission technology, TDMA and CDMA are not compatible or interchangeable
with each other.
The Motorola proprietary first generation iDEN technology originally
incorporated in Nextel's Digital Mobile networks is known as "six-time slot
TDMA." Although based on the TDMA technology format, this first generation
iDEN technology differs in a number of significant respects from the TDMA
technology versions being assessed or deployed by cellular operators and PCS
licensees in the United States, which differences may have important
consequences. Additionally, unlike the three-time slot TDMA technology format
being utilized for the mobile telephone function in the newly developed
Reconfigured iDEN technology platform or the three-time slot TDMA technology
format being utilized by certain cellular providers, the first generation iDEN
technology that has been utilized by Nextel in most of its presently operating
Digital Mobile networks, as well as for the dispatch function in the
newly-developed Reconfigured iDEN technology platform, can carry up to six
voice and/or control paths per channel. The use of six-time slot TDMA
technology in combination with Nextel's re-use of its licensed frequencies in a
cellular-type system design permits Nextel to utilize its current holdings of
spectrum more efficiently. Efficient utilization of spectrum is an important
objective generally because less spectrum is available in the SMR band than is
or may be licensed to each cellular and certain PCS operators in each market.
Reconfigured iDEN, which is designed to use three time slots per channel for
the mobile telephone service, will result in a reduction in channel capacity
compared to the capacity achievable using first generation iDEN technology for
mobile telephone service.
Although Nextel believes that TDMA technology, on balance, is superior
to analog technology that is used in traditional SMR systems, the use of
digital technology in general, and the six-time slot TDMA version of first
generation iDEN in particular, as each is currently deployed, involves certain
performance trade-offs, for example, in various characteristics affecting voice
quality and fidelity. In general, as the relevant technologies are currently
deployed, digital voice transmission produces a distinguishably different set
of sound characteristics than analog voice transmission (whether SMR or
cellular). The difference results, in part, from the fact that digital voice
transmission requires the digital encoding and decoding of the voice
communication. Hence, the six-time slot TDMA version of first generation iDEN,
the three-time slot version of Reconfigured iDEN and other digital cellular
voice transmissions, as currently deployed, each sound different from
traditional analog cellular and SMR voice transmissions. These trade-offs may
have an effect on customer acceptance of iDEN technology.
It is possible that in the future a digital transmission technology
other than TDMA may gain acceptance sufficient to adversely affect the
resources devoted by third parties to developing or improving TDMA-based
technology. In addition, existing digital cellular technology formats
including cellular TDMA cannot currently be
-10-
<PAGE> 13
utilized on Nextel's present SMR spectrum holdings. Accordingly, if any
improvements were to be made to such currently existing digital cellular
technology formats, the prospect of achievement of parallel improvements in the
TDMA-based iDEN technology presently utilized by Nextel is not certain. Any
difference that may from time to time exist between the technology deployed in
Nextel's Digital Mobile networks and competitive technologies then deployed by
other wireless communications service providers, such as analog, CDMA, TDMA or
other transmission technology formats that may be developed in the future, may
affect customer acceptance of the services offered by Nextel. See
"--Forward Looking Statements."
Customer acceptance of the services offered by Nextel will be affected
not only by technology-based differences, but also by the operational
performance and reliability of system transmissions on Nextel's Digital Mobile
networks. As is frequently the case both in the development and implementation
of new technologies and the offering of related services, Nextel has
experienced difficulties and delays in the implementation of the first
generation iDEN TDMA technology in its Digital Mobile networks, resulting from
certain technology and performance issues with respect to system reliability
(the percentage of time the system is operating), system access (how often a
user can gain access to the system) and various characteristics affecting voice
quality that have limited its ability to market mobile telephone services
utilizing the Company's Digital Mobile networks. Nextel's objectives in
carrying out the initial phase of system development and technology
optimization activities have been to achieve satisfactory performance levels in
the areas of system reliability and system access. Ongoing optimization,
software loading and planned maintenance activities affecting the Digital
Mobile network systems periodically require the scheduled turn-down of selected
subsystems during periods of very low system traffic, typically at night or on
weekend days. See "--Forward Looking Statements."
During calendar years 1994 and 1995, Nextel and Motorola coordinated
their efforts to identify and implement various system hardware adjustments and
software upgrades to bring about improvements in various Digital Mobile network
operating and performance characteristics. Although further improvements in
the areas of system reliability and access are expected to be pursued, Nextel
believes that its existing Digital Mobile networks, as operated at December
31, 1996, were demonstrating acceptable performance levels in these areas.
Motorola has advised Nextel that (independent of development commitments
contained in the second amendment to the existing equipment purchase agreement
between Nextel and Motorola (the "Second Equipment Agreement Amendment"))
Motorola contemplates continuing to install software upgrades in accordance
with its previous plans. Nextel expects that such software upgrades will be
directed at producing system access and reliability improvements, as well as
voice transmission quality improvements in the mobile telephone mode in the
Digital Mobile networks. Nextel further anticipates that there will be an
on-going focus on system optimization activities directed at achieving
improvements in the overall performance of the Digital Mobile networks.
Throughout late 1994 and continuing during 1995, Nextel and Motorola
conducted intensive objective system testing as well as customer surveys
designed to assess the foregoing operational issues. As discussed above,
during 1994 and 1995, a number of system hardware adjustments and software
upgrades were made to address issues identified through such testing and
surveys. Nextel is continuing such system testing and customer surveys as part
of the normal operating activities relating to its Digital Mobile networks, and
anticipates that it will continue to advise and consult with Motorola
concerning potential measures that could be taken to address
particularly-identified system performance or customer satisfaction issues
revealed in such testing and surveys. Nextel believes that customer acceptance
of the dispatch service on the Digital Mobile networks was generally at an
acceptable overall level during the period since late 1994. Nextel also
believes that the successful development and deployment of the Reconfigured
iDEN technology platform, with its accompanying improvements in the quality of
the mobile telephone service provided on Nextel's Digital Mobile networks,
should enable Nextel to be in a position to market such services aggressively
as part of a competitive wireless communications services alternative to
existing cellular telephone service in the markets where Reconfigured iDEN is
deployed.
Nextel, for a limited period after first making its Digital Mobile
network services available on a commercial basis, provided, and in certain
markets has continued to provide, discounts to customers, principally with
regard to such customers' usage of mobile telephone services, because of
concerns with the first generation iDEN system performance and network
service-related issues, and gave, and in certain markets continues to give,
credits to subscribers in an attempt to foster satisfactory customer relations
in response to certain performance and network service-related issues. Such
extended system development and technology optimization activities, customer
loading delays and customer discounts and credits have adversely affected and
may continue to adversely affect Nextel's ability to generate revenue. To
date, Nextel's experience is based largely on customers in its markets
employing the first generation iDEN technology, who are primarily oriented to
dispatch service, and such experience should not necessarily be regarded as an
accurate predictor of Nextel's experience in the future, particularly as Nextel
embarks on its planned aggressive
-11-
<PAGE> 14
nationwide roll-out of the Reconfigured iDEN technology and as Nextel's
customer base expands beyond such group of initial customers. Any inability to
address and resolve satisfactorily performance issues that affect customer
acceptance of Digital Mobile network service could delay or adversely affect
the successful commercialization of the Digital Mobile networks and could
adversely affect the business and financial prospects of Nextel. If Nextel for
any reason is unable to implement Digital Mobile networks and provide service
to its target customers that is competitive with the services of other wireless
communications providers, Nextel would be unable, utilizing its existing analog
SMR systems, to provide mobile telephone services comparable to those provided
by other wireless communications systems operators or to achieve significant
further subscriber growth. See "--Success of Nextel Is Dependent on Its
Ability to Compete" and "--Forward Looking Statements."
Nextel and Motorola expect that system optimization activities will be
a continuing component of normal Digital Mobile network operation, and the
satisfactory resolution of certain system performance issues in a particular
market or at a particular stage of operation will not necessarily preclude the
need to address those issues again, for example, as a result of a significant
increase in the number of subscribers using the Digital Mobile networks.
Moreover, future upgrades or modifications may have unexpected adverse effects
on performance issues previously addressed and resolved. Each of Motorola and
Nextel believes, however, that a large portion of the hardware and software
adjustments developed in the course of system development and technology
optimization activities to address particular issues, and the resulting system
performance improvements realized, should be applicable to similar issues in
different markets. Nevertheless, as is often the case in the deployment of
wireless communications networks, it should be expected that there will be
market-specific characteristics, such as local terrain, topography, the number
of licensed frequencies, the utilization of adjacent radio frequencies and
other factors, that will require customized optimization activities to address
related system performance issues successfully. See "--Forward Looking
Statements."
Pursuant to the Second Equipment Agreement Amendment, Motorola has
agreed to use its best efforts to develop, and Nextel has agreed to implement
when developed, Reconfigured iDEN. The principal objective of the Reconfigured
iDEN development and deployment efforts is to achieve significant improvements
in voice transmission quality for the mobile telephone service provided on
Nextel's Digital Mobile networks. No assurance can be given that any
modifications or enhancements, including Reconfigured iDEN, designed to produce
improvements in the voice transmission quality of the mobile telephone services
offered by the Company will be developed successfully, or on the currently
anticipated time schedule, or that any such modifications or enhancements, if
developed, would be deployed in Nextel's Digital Mobile networks or, if
deployed, would perform successfully or would satisfy customer requirements, or
that Nextel's mobile telephone services would be regarded as competitive in the
wireless communications services markets as such markets currently exist and as
they are expected to develop in the future. See "--Forward Looking
Statements."
Nextel continuously reviews alternate technologies as they are
developed. To date, however, it has not been regarded as necessary or as a
commercially feasible strategy to adapt currently available alternative
technologies to operate on Nextel's present spectrum position. Nextel
continues to pursue certain regulatory initiatives that would provide SMR
operators, including Nextel, with the right to use contiguous blocks of
spectrum. The FCC issued an order in December 1995 that would provide SMR
operators, including Nextel, with the opportunity to obtain contiguous
spectrum. See "--Nextel's Prospects Are Dependent on Governmental Regulation."
Were Nextel to obtain a sufficient contiguous spectrum position in its market
areas, pursuant to the FCC's 1995 order or otherwise, it would become feasible
to consider deployment of currently existing cellular digital technology
transmission formats, including CDMA and TDMA, on such contiguous spectrum
blocks. Independent of such technological feasibility, however, additional
factors, including Nextel's contractual obligations to Motorola regarding the
deployment and utilization of first generation iDEN and Reconfigured iDEN
technology, and additional capital requirements associated with any switch in
technology, would likely materially affect Nextel's consideration of such
alternative technologies.
Should Nextel choose to deploy a technology other than iDEN for any of
its wireless communications services, Nextel believes that its systems planning
and its contractual relationships with Motorola would permit it to utilize a
different technology. In light of the development period for Reconfigured
iDEN, however, Nextel has agreed, in the Second Equipment Agreement Amendment,
not to effect a "Switch in Technology" prior to October 1, 1997 without
Motorola's consent. A Switch in Technology is defined in the Second Equipment
Purchase Agreement Amendment as a decision by Nextel before August 4, 1999 to
install and use digital radio frequency technology as an alternative to first
generation iDEN or Reconfigured iDEN on more than 25% of its SMR channels in
the 806-824 MHz band in one or more of its top 20 markets, or the utilization
by Nextel of any of its SMR channels for voice interconnect on certain U.S.
cellular and/or PCS radio telephony standards. Due to the considerable present
uncertainty surrounding the factors that might affect such a decision,
including the performance characteristics and customer perceptions of first
-12-
<PAGE> 15
generation iDEN, Reconfigured iDEN, or of competing digital technologies and
possible future improvements in first generation iDEN or Reconfigured iDEN
technology, it is impossible to predict if or when such a decision could be
made.
NEXTEL TO REQUIRE FINANCING
Nextel anticipates that, for the foreseeable future, it will be
utilizing significant amounts of its available cash for capital expenditures
for the construction of Digital Mobile networks (including the anticipated
conversion of its existing Digital Mobile networks to utilize the Reconfigured
iDEN technology platform as described below under " - Success of Nextel is
Dependent on its Ability to Compete"), operating expenses relating both to the
Digital Mobile networks and to Nextel's traditional analog SMR systems,
potential acquisitions (including the acquisition of rights to spectrum through
the contemplated 800 MHz spectrum auction process, and investment in various
potential international wireless communications business opportunities) and
corporate expenditures. During fiscal year 1995, Nextel's average monthly cash
utilization rate for investing activities (principally attributable to capital
expenditures for the build- out of the Digital Mobile networks and acquisitions
made during 1995) was approximately $33,300,000, and its average monthly
operating losses (exclusive of non-cash items) was approximately $15,900,000.
Such average amounts do not reflect the investing activities and operating
losses of Dial Page during such fiscal year or such activities and losses of
OneComm, AMS or Motorola's operation of its 800 MHz SMR licenses in the
continental U.S. (the "Motorola SMR Business") for the portion of such fiscal
year prior to completion of the OneComm Transaction, the AMS Transaction and
the Motorola Transaction, respectively, and are not presented as representative
of Nextel's anticipated experience in such areas. Nextel anticipates that its
cash utilization for investment activities and operating losses will continue
to exceed its cash flows from operating activities over the next several years
during the start-up phase of its Digital Mobile networks and that it will be
necessary for Nextel to utilize its existing cash and funding from outside
sources to meet its cash needs resulting from such activities and losses.
Nextel's aggregate cash, cash equivalents and marketable securities at
September 30, 1996 totaled approximately $224,506,000.
At September 30, 1996, Nextel had drawn approximately $368,000,000 of
its available financing under the Bank Credit Facility, leaving an aggregate of
approximately $1,287,000,000 available for borrowing under such facility, and
had drawn $150,000,000 of its available financing under the Vendor Credit
Facility, leaving an aggregate of approximately $195,000,000 available for
borrowing under such facility, subject in each case to the satisfaction or
waiver of applicable borrowing conditions.
Nextel believes that it has sufficient funds currently available or
reasonably expected to be accessible to it under its existing financing
facilities to meet its cash needs through the planned completion of its first
stage nationwide Digital Mobile networks build-out in 1998, in light of its
current (and currently committed) business and investment activities and
assuming a conservative ramp-up in Digital Mobile system subscriber growth.
Nextel currently anticipates that the funds available pursuant to the Bank
Credit Facility and the Vendor Credit Facility, together with the proceeds that
would be received by Nextel assuming the exercise of the currently outstanding
warrants and options to acquire shares of Common Stock described below (which
warrants and options are scheduled to expire unless exercised during such time
period), would be sufficient to permit both the full-scale implementation of
its nationwide Digital Mobile networks and the pursuit of its other strategic
objectives, including additional spectrum acquisition activities and currently
committed international investment opportunities. There can be no assurance,
however, that all such outstanding warrants and options will be exercised.
Moreover, Nextel's public indentures contain provisions that operate to limit
the amount of borrowings available under the Bank Credit Facility and the
Vendor Credit Facility in certain circumstances. In addition, Nextel's capital
needs, and its ability to adequately address those needs through debt or equity
funding sources, are subject to a variety of factors that cannot presently be
predicted with certainty, such as the commercial success of Nextel's Digital
Mobile networks incorporating the Reconfigured iDEN technology, the amount and
timing of Nextel's capital expenditures and operating losses, and the market
price of the Common Stock. See "--Forward Looking Statements."
Nextel currently is aware of numerous factors and considerations, any
one or more of which could have a material effect on the timing and/or amount
of the future funding to be required by Nextel, but Nextel cannot currently
quantify with precision either the magnitude or the certainty of the effects
associated with any such factors. These factors include: (i) the timing of
the anticipated 800 MHz spectrum auction process, and the amounts required to
be bid to acquire any or all of the available spectrum blocks in the major
metropolitan market areas where Nextel currently operates, or currently plans
to operate, its Digital Mobile network and the amounts that may be required to
accomplish retuning or acquisition of 800 MHz incumbent channels in spectrum
blocks that may be acquired by Nextel in the 800 MHz spectrum auction process;
(ii) the uncertainty with respect to the success and/or timing of the
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remaining development activities relating to the Reconfigured iDEN technology
format and, assuming successful and timely completion of such efforts, the
uncertainty with respect to the success of commercial introduction and customer
acceptance of Nextel's Digital Mobile services that utilize such Reconfigured
iDEN technology; (iii) the potential commercial opportunities and risks
associated with implementation of Nextel's revised business plan premised on an
anticipated aggressive campaign to convert existing Digital Mobile networks to,
and/or to construct new Digital Mobile networks utilizing, the Reconfigured
iDEN technology format; and (iv) the net impact on Nextel's capital budget of
certain developments currently expected to increase capital needs (e.g., the
additional capital needed if Nextel acquires for cash additional spectrum in
certain markets to increase the capacity and/or efficiency of Nextel's
operating Digital Mobile networks in such markets, the additional capital
needed for more extensive construction of Digital Mobile networks in additional
market areas acquired in the Dial Page Transaction, the OneComm Transaction and
the AMS Transaction and in connection with the conversion of existing Digital
Mobile networks to the Reconfigured iDEN technology format, the short-term
expenditures associated with analog SMR station construction requirements under
the currently effective FCC 800 MHz channel licensing approach) that may be
offset (whether wholly or partially) by other developments anticipated to (or
to have the potential to) reduce capital needs (e.g., co-location of antenna
and/or transmitter sites with other providers of wireless services in the
relevant markets, reductions in infrastructure and subscriber unit prices
obtained from Motorola pursuant to the Second Equipment Agreement Amendment,
alternative and more economical means for increasing system capacity, other
than constructing additional cell sites and/or installing additional base
radios, such as use of so-called "smart antennas," mini-cells and
software-driven and/or system design performance enhancements). Many of the
foregoing involve elements wholly or partly beyond Nextel's control or
influence. See "--Forward Looking Statements."
Other considerations in addition to the factors identified above may
significantly affect Nextel's decisions to seek additional financing, including
general economic conditions, conditions in the telecommunications and/or
wireless communications industry and the feasibility and attractiveness of
structuring particular financings for specific purposes (e.g., separate
capital-raising activities with respect to international activities and
opportunities). Finally, Nextel could obtain significant additional funds in
connection with the exercise of outstanding warrants and options, and the
amount and timing of receipt of such funds also would play a role in Nextel's
determinations concerning the need for or attractiveness of other potentially
available sources of financing. As Nextel has disclosed previously, full
exercise of the options granted to the McCaw Investor at the July 1995 closing
of the McCaw Transaction would result in the receipt by Nextel of approximately
$232,000,000, $277,500,000 and $107,500,000 of additional funds prior to July
29 in the years 1997, 1999 and 2001, respectively, full exercise of the
warrants issued to Comcast for 25,000,000 shares of Common Stock would result
in the receipt by Nextel of approximately $400,000,000 prior to September 16,
1997 and full exercise of the warrants initially issued to Motorola for
3,000,000 shares of Common Stock would result in the receipt by Nextel of
approximately $45,000,000. Finally, proceeds from the exercise by the McCaw
Investor and/or by Comcast of such parties' anti-dilutive rights to acquire
additional Nextel equity in connection with certain issuances by Nextel of its
capital stock and proceeds from the exercise of other warrants and options
currently outstanding and held by third parties, including options granted
pursuant to the Nextel Amended and Restated Incentive Equity Plan (including
its predecessor plans) and the Nextel Associate Stock Purchase Plan, may
provide other available sources of funding.
The foregoing discussion concerning potential exercise of various
third party rights to acquire shares of Common Stock is subject to the
qualification that no assurance can be given that any of such rights will be
exercised or, if exercised, that the contemplated investment will in fact be
consummated. In the case of the Bank Credit Facility and the Vendor Credit
Facility, there can be no assurance that the conditions to access such
facilities will be met. To the extent any of the aforementioned proceeds from
option and warrant exercises or financing arrangements are not available when
required, it will be necessary for Nextel to obtain alternate sources of
financing to meet its anticipated funding needs.
Nextel has had and may in the future have discussions with other
parties regarding potential equity investments and debt financing arrangements
to satisfy actual or anticipated financing needs. Pursuant to the Motorola
Transaction, Nextel has agreed, under certain circumstances, not to grant
superior governance rights to any third-party investor without Motorola's
consent, which may make securing equity investments more difficult. Motorola
consented with respect to the grant of superior governance rights by Nextel in
connection with the McCaw Transaction. The ability of Nextel to incur
additional indebtedness (including, in certain circumstances, indebtedness
incurred under the Bank Credit Agreement and/or under the Vendor Credit
Facility) is and will be limited by the terms of (1) the indentures for
Nextel's senior redeemable discount notes due 2003 and 2004, respectively
(collectively, the "Nextel Indentures"), OneComm's Indenture for its Senior
Redeemable Discount Notes due 2004 (the "OneComm Indenture") and Dial Page's
Indentures for its Senior Redeemable Discount Notes due 2004 and its Senior
Redeemable Discount Notes due 2005 (collectively, the "Dial Call Indentures"),
which notes were initially issued by Dial Call
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Communications, Inc., a wholly owned subsidiary of Dial Page that was merged
with and into Dial Page in connection with the Dial Page Transaction and (2)
the Bank Credit Agreement and the Vendor Credit Agreement. The Bank Credit
Agreement and the Vendor Credit Agreement also require Nextel and its relevant
subsidiaries to satisfy certain financial covenants or ratios including certain
covenants and ratios specifically related to leverage.
At present, other than the existing equity or debt financing
arrangements that have been consummated and/or disclosed, Nextel has no
commitments or understandings with any third parties to obtain any material
amount of additional equity or debt financing. Moreover, no assurances can be
made that Nextel will be able to obtain any such additional financing in the
amounts or at the times such financing may be required, or that, if obtained,
any such financing would be on acceptable terms. Nextel also anticipates that
it will continue to experience significant net losses during the ongoing start
up phase of the Digital Mobile networks over the next several years.
Accordingly, there can be no assurances as to whether or when the operations of
Nextel will become profitable. As a result of Nextel's anticipated continuing
losses, the uncertainty regarding the exercise of options and warrants, the
availability of financing under the Bank Credit Facility and the Vendor Credit
Facility and the impact of Reconfigured iDEN and other matters discussed above,
there can be no assurance that Nextel will have adequate capital to implement
the nationwide build-out of its Digital Mobile networks without obtaining
additional financing and/or alternative financing sources. See "--Forward
Looking Statements."
SUCCESS OF NEXTEL IS DEPENDENT ON ITS ABILITY TO COMPETE
Nextel's success depends on its Digital Mobile networks' ability to
compete with other wireless communications systems in each relevant market and
its ability to successfully market integrated wireless communication services.
Nextel is continuing to focus its marketing efforts on attracting
customers from its previously-identified targeted groups of potential
subscribers, chiefly its existing analog SMR dispatch system subscribers and
other business users including current users of multiple wireless
communications services and those new users who may be attracted to the
combination of services made possible by its Digital Mobile networks. Nextel's
strategy is to focus principally on multi-service business users in its markets
with Digital Mobile networks. As of December 31, 1996 approximately 300,300
Digital Mobile units were in service.
Prior to the second quarter of 1996, Nextel implemented its Digital
Mobile networks in its market areas using Motorola's "first generation" iDEN
technology. During that time frame, Nextel encountered certain technology and
system performance issues relating to the "first generation" iDEN technology
that resulted in delays in the implementation of its plans to deploy its
Digital Mobile networks and in the commencement of aggressive marketing efforts
with respect to its communications products and services, particularly its
mobile telephone services. These technology and system performance issues
related primarily to the voice transmission quality of the mobile telephone
service. See "-- Implementation of Digital Mobile Networks Subject to Risks of
Developing Technology."
In response to these issues, Nextel and Motorola have undertaken, and
continue to undertake, system enhancement efforts to address various
circumstances believed to adversely affect system performance and customer
satisfaction, particularly those associated with voice transmission quality.
Nextel anticipates that such system enhancement efforts will be a continuing
component of the normal ongoing technology optimization process. Additionally,
independent of such system enhancement efforts, Nextel, together with Motorola,
is pursuing a significant program directed toward the development and
deployment of modifications to the "first generation" iDEN technology platform,
known as Reconfigured iDEN, designed principally to produce improvements in
voice transmission quality. Nextel and Motorola have been encouraged by their
experience to date in the Reconfigured iDEN development and deployment process.
All significant technology performance benchmarks, development progress targets
and key event schedules relating to the development and deployment of
Reconfigured iDEN have been achieved or satisfied as of December 31, 1996
substantially as contemplated and originally agreed to by Nextel and Motorola.
Based on its experiences with the Reconfigured iDEN technology,
including the feedback received in customer trials and various other inputs and
considerations, the Company announced the first full-scale commercial launch of
the Reconfigured iDEN Digital Mobile network in the Chicago market late in the
third quarter of 1996, accompanied by the commencement of a more
broadly-focused marketing campaign in that market area. In October and
November 1996, Nextel announced full-scale commercial launches, accompanied by
more broadly-focused marketing campaigns, in the Atlanta, Boston, Denver,
Detroit and Las Vegas markets. Nextel's commercial launch activities in these
markets represent the first phase of a planned rapid nationwide deployment
of the Reconfigured iDEN technology in
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Nextel's significant Digital Mobile markets. Nextel currently is developing
and refining a nationwide build-out plan for Digital Mobile networks
incorporating the Reconfigured iDEN technology based on an anticipated
implementation schedule during 1996 to 1998, which it currently expects will
involve budgeted capital expenditures totaling approximately $1.2 billion. In
this connection, Nextel anticipates that purchases of Motorola-manufactured
infrastructure equipment will represent the largest category of capital
spending. In the final six months of 1996, Nextel placed orders with Motorola
totaling more than $300 million of products incorporating the Reconfigured iDEN
technology, including system infrastructure equipment and related software and
the new, compact Reconfigured iDEN handsets that Nextel plans to market
nationally, principally under the "PowerFone"(R)(TM) brand name. Assuming the
successful and timely completion of such build-out plan, Nextel expects that
its Digital Mobile networks would provide coverage to areas representing
approximately 85% of the United States population by the end of 1998.
Implementation of such a rapid nationwide deployment strategy for Reconfigured
iDEN would likely significantly accelerate Nextel's use of and needs for
capital resources and would therefore be dependent on, among other things,
availability of necessary capital. See also "-- Nextel to Require Financing"
and "-- Forward-Looking Statements."
The Company believes that its ability to provide a full line of mobile
communications services in an integrated package on its Digital Mobile networks
will distinguish it from other providers of wireless communications services.
The focus and the progress of Nextel's Digital Mobile network services
marketing efforts is and will continue to be dependent on a number of factors,
including system performance, subscriber equipment performance and the ability
to provide services that satisfy customer needs and expectations. Nextel
reviews its business and marketing plans in light of a variety of factors,
including perceived opportunities, actual experiences in the marketplace,
availability of financial and other resources and overall economic and/or
competitive considerations, and may from time to time determine to change,
refine or redirect such plans. See "--Forward Looking Statements."
Following implementation of its Digital Mobile networks and completion
of related system optimization activities, the Company's Digital Mobile
networks will compete with established and future wireless operators in its
efforts to attract mobile telephone customers, dealers and possibly resellers
to its service in each of the markets in which it operates a Digital Mobile
network. The Company believes that, following software upgrades and additional
system optimization efforts and equipment and technology enhancements, which
occurred during 1996, and the development and commercial deployment of
Reconfigured iDEN, Nextel's Digital Mobile networks will have the capacity,
functionality and quality of service necessary to be competitive with current
wireless communications services in the markets in which the Company operates
Reconfigured iDEN Digital Mobile networks. Nextel's ability to compete
effectively with other wireless communications service providers, however, will
depend on a number of factors, including the successful deployment of the
Reconfigured iDEN technology platform in its market areas, the continued
satisfactory performance of such Reconfigured iDEN systems, the establishment
of roaming service among such market areas and the development of cost
effective direct and indirect channels of distribution for its products and
services. Although the Company has made significant progress in these areas to
date, no assurance can be given that such objectives will be achieved.
See "--Forward Looking Statements."
While Nextel believes that the mobile telephone service to be provided
on its Digital Mobile networks utilizing the Reconfigured iDEN technology will
be similar to other current wireless communications services in certain
respects, as discussed under "--Implementation of Digital Mobile Networks
Subject to Risks of Developing Technology," there are (and will in certain
cases continue to be) differences between the services provided by Nextel and
by cellular and/or PCS system operators and the performance of their
respective systems. As a result of these differences, there can be no
assurance that Digital Mobile network mobile telephone services will be
competitive with other providers of mobile telephone services. As part of its
marketing strategy, Nextel will attempt to emphasize the benefits to its
subscribers of obtaining an integrated package of services consisting of
dispatch radio, paging services and mobile telephone, and in the future, data
transmission. Neither PCS system operators nor cellular operators currently
provide such integrated services, but recent FCC rulings permit cellular
operators to offer two-way dispatch services. If either PCS system or cellular
operators do provide dispatch services in the future, Nextel's competitive
advantage from using such a marketing strategy may be impaired.
Although Nextel currently offers its mobile telephone customers the
ability to "roam" among Nextel's existing Digital Mobile network market areas,
Nextel will not be able to provide roaming service comparable to that currently
available from cellular operators, which have roaming agreements covering
each other's markets throughout the U.S., unless and until nationwide system
build-out is substantially completed. Moreover, the cellular systems in each
of Nextel's markets, as well as in the markets in which Nextel expects to
provide services in the future, have been operational for a number of years and
such operators currently service a significant subscriber base and typically
have significantly greater financial and other resources than those available
to Nextel. As is true for cellular operators, the interconnection of
subscriber units with the public switched telephone network requires Nextel to
purchase certain exchange and inter-exchange services from telephone companies
and certain other common carriers.
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<PAGE> 19
Subscriber units on the Digital Mobile networks will not be compatible
with cellular or PCS systems, and vice versa. This lack of interoperability may
impede the Company's ability to attract cellular subscribers or those new
mobile telephone subscribers that desire the ability to access different
service providers in the same market. Nextel currently markets a
multi-function subscriber unit that is significantly more expensive than analog
handsets, and is likely to remain more expensive than digital cellular
handsets, that do not incorporate multi-function capability. The prices
expected to be charged to Nextel for the subscriber handsets to be used by
Nextel's customers will be higher than those charged to operators for analog
cellular handsets and may be higher than those charged to operators for digital
cellular handsets. During the transition to digital technology, certain
participants in the United States cellular industry are offering subscriber
units with dual mode (analog and digital) compatibility. There can be no
assurances that existing analog SMR customers will be willing to invest in new
subscriber equipment necessary to migrate to the Digital Mobile networks.
Moreover, because many of the cellular operators and certain of the PCS system
operators in Nextel's markets have substantially greater financial resources
than Nextel, such operators may be able to offer prospective customers
equipment subsidies or discounts that are substantially greater than those, if
any, that could be offered by Nextel. Thus, Nextel's ability to compete based
on the price of subscriber equipment will be limited. Nextel cannot predict
the competitive effect that any of these factors, or any combination thereof,
will have on Nextel. See "--Forward Looking Statements."
Cellular operators and certain entities that have been awarded PCS
licenses each control more spectrum than is allocated for SMR service in each
of the relevant market areas. Each cellular operator is licensed to operate 25
MHz of spectrum and certain PCS licensees have been licensed for 30 MHz of
spectrum in the markets in which they are licensed, while no more than 21.5 MHz
is available in the 800 MHz band to all SMR systems, including Nextel's
systems, in those markets. The control of more spectrum gives cellular
operators and such PCS licensees the potential for more system capacity, and,
therefore, more subscribers, than SMR operators, including the Company. The
Company believes that it generally has adequate spectrum to provide the
capacity needed on its Digital Mobile networks for the foreseeable future. See
"--Forward Looking Statements."
Nextel expects to face competition from other technologies and
services currently commencing operations or expected to be introduced in the
future, including PCS. The FCC has described PCS as a digital, wireless
communications system consisting of a variety of new mobile and portable
services and technologies, using small, lightweight units. PCS services may
include portable, two-way voice and data services. The FCC has allocated 120
MHz of spectrum in the 1.8-2.2 GHz band for the provision of PCS, which may
include mobile wireless communications services similar to those provided over
Nextel's Digital Mobile networks. Three 30 MHz and three 10 MHz FCC licenses
for this spectrum have been awarded on either a Major Trading Area ("MTA") or a
Basic Trading Area ("BTA") basis (each as defined in the Rand McNally
Commercial Atlas) through a competitive bidding process. The auction of the
final three licenses in each market was completed on January 15, 1997. A
substantial number of the entities that have been awarded PCS licenses in this
auction are current cellular communications service providers and joint
ventures of current and potential wireless communications service providers,
many of which have financial resources greater than those of Nextel. Although
certain limited PCS offerings have commenced, it is not clear how PCS will
develop or when such services will be available in all of Nextel's markets. PCS
will likely compete with some or all of the services provided over Nextel's
Digital Mobile networks. See "--Forward Looking Statements."
Pursuant to the Omnibus Appropriations Act of 1997, the FCC must
reallocate 30 MHz of 2.3 GHz spectrum to wireless services and assign that
spectrum via an auction that must commence no later than April 15, 1997. The
FCC is proposing to allow these licensees to offer a broad range of fixed and
mobile services, but no final rules have been adopted.
In addition, the FCC has reallocated 220 MHz of radio spectrum for use
by "emerging telecommunications technologies," such as PCS, low-earth orbit
satellites and mobile satellite systems. The FCC has authorized a consortium
of communications companies to provide nationwide mobile satellite services.
Nextel cannot predict how these technologies will develop or what impact, if
any, they will have on Nextel's ability to compete for wireless communications
customers.
RELIANCE ON ONE PRINCIPAL SUPPLIER IN IMPLEMENTATION OF DIGITAL MOBILE NETWORKS
Pursuant to the Equipment Purchase Agreements between Nextel and
Motorola, first entered into in 1991, as subsequently amended by the amendment
entered into in connection with the Motorola Transaction (the "Prior Equipment
Agreement Amendment") and by the Second Equipment Agreement Amendment entered
into in connection with the McCaw Transaction, Motorola provides the iDEN
infrastructure and subscriber handset equipment to Nextel throughout its
markets. The Company expects that it will need to rely on Motorola for the
manufacture of a
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substantial portion of the equipment necessary to construct its Digital Mobile
networks for the foreseeable future. The Equipment Purchase Agreements, as
amended, include a commitment from Nextel to purchase from Motorola a
significant amount of system infrastructure equipment, which will be subject to
financing arrangements with Motorola. Nextel has, among other things, agreed
(subject to certain conditions) to purchase and install iDEN equipment during
the four-year and six-year periods beginning on August 4, 1994 sufficient to
cover 70% and 85%, respectively, of the United States population. In addition,
subject to the applicable terms and conditions under the Second Equipment
Agreement Amendment, Nextel has agreed to deploy Reconfigured iDEN and, until
August 4, 1999 and subject to certain conditions, to purchase from Motorola at
least 50% of the base radios Nextel purchases in any calendar year. Motorola
estimated at the time the Second Equipment Agreement Amendment was entered into
that such commitments to purchase base radios and associated infrastructure
equipment could have an aggregate purchase price in excess of approximately
$750,000,000, although the amount may be higher or lower depending on
circumstances such as systems design, changes in the producer price index, the
timing of purchases or other cost adjustments or the success of Nextel's
marketing plan. See "-- Success of Nextel is Dependent on its Ability to
Compete" and "--Forward Looking Statements." Such commitments are in addition
to amounts purchased from Motorola or for which Nextel, OneComm or Dial Page
had placed orders with Motorola prior to August 4, 1994, which orders, in the
case of OneComm and Dial Page, have become obligations of Nextel. See "--
Nextel to Require Financing."
The Second Equipment Agreement Amendment places certain limits on
Nextel's ability to use other technologies as an alternative to first
generation iDEN or Reconfigured iDEN. See "--Implementation of Digital Mobile
Networks Subject to Risks of Developing Technology."
It is expected that for the first few years of Digital Mobile network
operations by Nextel, Motorola and competing manufacturers who are licensed by
Motorola will be the only manufacturers of subscriber equipment that is
compatible with Nextel's Digital Mobile networks. The Prior Equipment Agreement
Amendment provides for the licensing by Motorola of interfaces relating to
infrastructure and subscriber equipment and of additional manufacturers for
subscriber equipment. In connection with the Second Equipment Agreement
Amendment, Motorola further agreed to negotiate to enter into licenses with at
least one alternative manufacturer of iDEN infrastructure equipment.
NEXTEL'S PROSPECTS ARE DEPENDENT ON GOVERNMENTAL REGULATION
The licensing, operation, acquisition and sale of Nextel's SMR
businesses are regulated by the FCC. Nextel's subsidiaries currently hold FCC
licenses to use SMR radio channels in each of their markets. Traditionally,
these licenses have been granted by the FCC on a site-by-site basis. Under
current regulations, SMR base stations generally must be a minimum of 70 miles
away from all other SMR base stations operating on the same frequencies. The
licenses typically must be constructed and operational within one year of grant
or the licenses will cancel automatically.
To use its SMR channels to provide Digital Mobile network service,
Nextel currently is required to obtain additional site authorizations from the
FCC for transmitter sites in each of its markets. Assuming such site
authorizations are obtained initially, they will be subject to renewal, but may
be cancelled if the respective sites for Digital Mobile networks are not
constructed in the relevant markets within a prescribed time after issuance,
typically one year or five years. There can be no assurance that any such SMR
license will be renewed upon the expiration of its ten-year term. Each SMR
license also may be revoked for cause at any time such a determination is made
by the FCC.
Since August 1994, the FCC has suspended the SMR licensing process (1)
due to an extraordinarily large backlog of license applications, and (2) to
stabilize the licensing landscape in preparation for new SMR licensing rules
and regulations. Although the FCC established a waiver process whereby parties
could obtain SMR licenses if they could show that their application (a) affects
only channels on which the applicant is already permanently licensed and (b)
affects coverage only within the applicant's geographic area, the FCC has
failed to act on a single waiver application of Nextel or, to Nextel's
knowledge, any other SMR licensee. However, on October 23, 1996, the Chief of
the Wireless Telecommunications Bureau issued an order directing the FCC's
Licensing Division to process the applications. At this time, to Nextel's
knowledge, the applications are still being processed.
During the suspension of the licensing process, the FCC was able, with
the assistance of industry trade groups, to process the backlogged
applications. Although many of the license grants and denials are subject to
petitions for reconsideration, it appears that a number of Nextel's
applications have been granted, all of which further the
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implementation of Nextel's Digital Mobile networks. The FCC has also suspended
acceptance of applications proposing new or modified stations on any of the 150
general category (prospectively SMR-only) channels, pending implementation of
the new SMR licensing rules described below.
On December 15, 1995, the FCC released new 800 MHz SMR licensing rules
that provide geographic-area based licenses for SMR operators. According to
these rules, the prospective licensing of Nextel's systems may no longer be
made on the site-by-site basis described above. The new rules require the use
of auctions to license the top 200 SMR channels on an Economic Area ("EA")
basis in three blocks: a 120-channel block, a 60-channel block, and a
20-channel block. Successful bidding in such auctions will be required to
obtain an EA-based block license. Once an EA license is obtained, the EA
licensee will have the ability to construct, operate and modify its systems
within the licensed geographic area without first obtaining FCC approval. All
EA licensees will be required to construct and operate their systems to provide
service to one-third of the population within two years, and two-thirds of the
population within five years using more than 50% of the EA licensee's channels.
Failure to meet these EA license requirements will likely result in the loss of
the EA license.
An EA licensee will have the authority to relocate incumbents in the
EA licensed area to the lower 80 SMR channels and the 150 general category
channels (which the FCC will prospectively license only to SMR operators). Any
incumbent that is not relocated out of the top 200 channels will be provided
co-channel protection by the EA licensee. Those incumbents will not be allowed
to expand their systems within the EA licensed area, but they will be permitted
to make modifications that do not expand their current interference contour.
These incumbents will also be offered an opportunity to convert their current
site-by-site licenses to a single license encompassing their existing
authorized service area contours. Consequently, Nextel may be subject to
relocation on any of the top 200 SMR channels for which it currently holds
licenses if it is unsuccessful in obtaining the EA license for those channels.
In addition, Nextel's ability to expand its systems may be limited on those
channels for which it does not obtain an EA license.
The FCC adopted the new 800 MHz SMR licensing rules to fulfill its
mandate under the Omnibus Budget Reconciliation Act of 1993, which reclassified
interconnected SMR services as "Commercial Mobile Radio Services" ("CMRS"), a
common carrier service, and required that such services be regulated similarly
to cellular and PCS. Petitions for reconsideration of the new 800 MHz SMR
licensing rules were filed with the FCC on March 18, 1996. Oppositions to
those petitions, including one filed by Nextel, were filed with the FCC on
April 16, 1996, and replies to such oppositions were filed on May 1, 1996.
These petitions are pending at the FCC, and their resolution could adversely
affect the impact of those rules on Nextel. The ultimate outcome of the FCC's
800 MHz SMR rule makings, including actions by third parties taken in
accordance therewith, could be adverse to Nextel.
In conjunction with the release of the new 800 MHz SMR licensing
rules, the FCC issued a Second Further Notice of Proposed Rule Making (the
"Notice") to establish operational rules and auction procedures for the lower
80 SMR channels and the 150 general category (now SMR-only) channels. The
Notice proposes EA licensing for these channels through auctions and proposes
no relocation of incumbents to alternate channels. The proposed auction rules
would set aside these channels for "entrepreneur blocks" for small businesses.
The bidding for such blocks of channels would be restricted to entities of a
certain economic size. As proposed, those auction rules would likely exclude
Nextel from eligibility to bid on the "entrepreneur block" EA licenses.
Nextel has filed comments and reply comments, including a joint
pleading with SMR WON (a trade association of small but traditional SMR
operators) and the American Mobile Telecommunications Association ("AMTA"),
each of which initially opposed the FCC's new licensing rules for the upper 200
SMR channels. The joint pleading is a consensus proposal that, among other
things, opposes a set aside for small businesses of all the lower channels.
The consensus proposal also includes a pre-auction settlement process for the
lower channels whereby incumbents, including licensees who have been relocated
out of the upper 200 channels, could enter into, among other things,
partnerships, consortia or buyouts to determine who would be licensed on each
individual channel on the lower channels on an EA basis. Any channel that is
not settled, i.e., continues to have more than one unaffiliated party licensed
on it in a particular EA, would be subject to an auction. The Personal
Communications Industry Association has joined Nextel, SMR WON and AMTA in the
consensus proposal. The FCC is still considering its proposed rules for the
lower channels, and has indicated that it may issue final rules in early 1997.
Among the other regulatory changes the FCC has made in the last two
years to ensure that SMR operators are provided regulatory parity with cellular
and PCS operators are: (1) a 45 MHz CMRS spectrum cap for all CMRS providers
(with a 10 MHz limit on the amount of SMR spectrum that can be attributed to a
single entity); (2)
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elimination of the prohibition on wireline participation in SMR services; (3)
elimination of the restriction on cellular licensees providing dispatch
services; (4) a duty not to restrict unreasonably resale of services; (5) a
duty to provide telephone number portability; and (6) a duty to provide
enhanced 911 services and roaming capabilities. As a CMRS provider, Nextel is
subject to limitations in the Communications Act of 1934, as amended (the
"Communications Act"), concerning foreign investment in and ownership of FCC
licenses. Certain of these regulatory changes could require operational or
technological changes in Nextel's Digital Mobile networks.
Future changes in regulation or legislation affecting Digital Mobile
network service or the allocation by the FCC or the United States Congress of
additional spectrum for services that compete with such service could
materially adversely affect Nextel's business.
NEXTEL'S ASSETS PRIMARILY CONSIST OF INTANGIBLE FCC LICENSES
Nextel's assets consist primarily of intangible assets, principally
FCC licenses, the value of which will depend significantly upon the success of
Nextel's business and the growth of the SMR and wireless communications
industries in general. In the event of default on indebtedness or liquidation
of Nextel, there can be no assurance that the value of these assets will be
sufficient to satisfy its obligations. Nextel had a negative net tangible book
value of $934,767,000 as of September 30, 1996.
NEXTEL SUSCEPTIBLE TO CONTROL BY SIGNIFICANT STOCKHOLDERS
Based on securities ownership information relating to Nextel as of
November 30, 1996, and giving effect to the conversion of the outstanding
shares of Nextel's preferred stock and the exercise in full of (i) three
separate options held by the McCaw Investor exercisable for periods of two,
four and six years, respectively, from July 28, 1995, to acquire an aggregate
of up to 35,000,000 shares of Common Stock at exercise prices ranging from
$15.50 to $21.50 per share (the "McCaw Options"), (ii) the option held by Eagle
River, Inc., an affiliate of the McCaw Investor ("Eagle River"), to purchase an
aggregate of 1,000,000 shares of Common Stock at an exercise price of $12.25,
which option vests over a five-year period from April 4, 1995 (the "Incentive
Option"), (iii) the options granted on July 28, 1995 to the McCaw Investor by
Motorola to purchase up to 9,000,000 shares of Common Stock over a six-year
period (the "McCaw Investor/Motorola Options"), (iv) a warrant held by Motorola
to purchase 2,890,000 shares of Common Stock, and (v) the option held by
Comcast and its affiliates to purchase up to 25,000,000 shares of Common Stock
at a per share exercise price of $16.00, a portion of which is currently
exercisable (the "Comcast Option"), the McCaw Investor would hold approximately
23.8%, Motorola would hold approximately 16.3%, and Comcast (together with
Comcast FCI) would hold approximately 8.9% (4.8% without giving effect to the
exercise of options which by their terms are not presently exercisable but, in
each case, after giving effect to sales of shares of Common Stock by Comcast as
described in "--Potential Dilution From Pending and Future Transactions") of
the Common Stock outstanding as of such date.
In connection with the consummation of the McCaw Transaction and
pursuant to the Securities Purchase Agreement dated as of April 4, 1995, as
amended, among Nextel, the McCaw Investor and Mr. Craig O. McCaw (the "McCaw
Securities Purchase Agreement"), the McCaw Investor has the right to designate
not less than 25% of the Board of Directors of Nextel (the "Nextel Board").
Additionally, the McCaw Investor is entitled to have a majority of the members
of the Operations Committee of the Nextel Board selected from the McCaw
Investor's representatives on the Nextel Board. The Operations Committee has
the authority to formulate key aspects of Nextel's business strategy, including
decisions relating to the technology used by Nextel (subject to existing
equipment purchase agreements), acquisitions, the creation and approval of
operating and capital budgets and marketing and strategic plans, approval of
financing plans, endorsement of nominees to the Nextel Board and committees
thereof and nomination and oversight of certain executive officers. As a
result, based upon the McCaw Investor's stock ownership position, as well as
its ability to designate at least 25% of the members of the Nextel Board and
control the Operations Committee, the McCaw Investor is in a position to exert
significant influence over Nextel's affairs. The Nextel Board retains the
authority to override actions taken or proposed to be taken by the Operations
Committee, subject, in certain circumstances, to certain financial
consequences. The creation and existence of the Operations Committee does not
change the normal fiduciary duties of the Nextel Board, including fiduciary
duties in connection with any proposal to override any action of or to
terminate the Operations Committee, whether or not such action would give rise
to such financial consequences. In addition, Comcast as a Nextel stockholder
has certain contractual rights to designate one or more members (depending on
its ownership percentage) to the Nextel Board, although at present no Comcast
designee is a member of the Nextel Board. Although Motorola is entitled to
nominate two directors to the Nextel Board, presently only one person
designated by Motorola is a Nextel director. Pursuant to an amendment to the
Agreement and Plan of Contribution and Merger dated as of April 4, 1995, by and
among Nextel, Motorola and certain
-20-
<PAGE> 23
subsidiaries of Motorola (the "Motorola Amendment"), Motorola has agreed to
support the decisions and recommendations of the Operations Committee and to
vote the shares of Common Stock held by it accordingly, subject to (1) the
right of any Motorola-designated Nextel directors to vote in a manner
consistent with their fiduciary duties and (2) the right of Motorola to vote
its shares as it determines necessary with respect to issues that conflict with
Motorola's corporate ethics or that present conflicts of interest, or in order
to protect the value or marketability of the shares of Common Stock held by it.
Based upon their respective ownership positions, if the McCaw Investor
and Motorola chose to act together, such parties could have a sufficient voting
interest in Nextel, among other things, to (1) exert effective control over the
approval of amendments to Nextel's Restated Certificate of Incorporation, as
amended (the "Nextel Charter"), mergers, sales of assets or other major
corporate transactions as well as other matters submitted for stockholder vote,
(2) defeat a takeover attempt, and (3) otherwise control whether particular
matters are submitted for a vote of the stockholders of Nextel. Although
Motorola has made certain commitments as described in the last sentence of the
preceding paragraph, Nextel is not aware of any current agreements among the
McCaw Investor and Motorola with respect to the ownership or voting of Common
Stock and neither of Motorola nor the McCaw Investor has indicated to Nextel
that it has any present intention to seek to exercise such control. Pursuant
to the McCaw Securities Purchase Agreement, the McCaw Investor has agreed that
it will not vote for any nominee to the Nextel Board other than persons it is
entitled to designate under the terms of the securities it owns or of the McCaw
Securities Purchase Agreement. Upon request of Nextel, the McCaw Investor has
also agreed to cause shares of Common Stock, the voting of which is controlled
by it or its affiliates, to be voted in a manner proportionate to the votes of
other holders of Common Stock in the election of directors so designated by the
Nextel Board.
Each of the McCaw Investor and Motorola has and (subject to the terms
of applicable agreements between such parties and Nextel) may have an
investment or interest in entities that provide wireless telecommunications
services that could potentially compete with Nextel. Under the McCaw
Securities Purchase Agreement, the McCaw Investor, Mr. McCaw and their
Controlled Affiliates (as defined in the McCaw Securities Purchase Agreement)
may not, for a period of time after consummation of the McCaw Transaction,
participate in other two-way terrestrial-based mobile wireless communications
systems in the region that includes any part of North America or South America
unless such opportunities have first been presented to and rejected by Nextel
in accordance with the provisions of the McCaw Securities Purchase Agreement.
Such limitation is subject to certain limited exceptions, including certain
existing securities holdings and relationships (and expressly including Mr.
McCaw's investment in AT&T resulting from AT&T's acquisition of McCaw Cellular
Communications, Inc., which investment may not exceed 3% of the outstanding
stock of AT&T). Such restrictions terminate on the later to occur of July 28,
2000 or one year after the termination of the Operations Committee.
POTENTIAL DILUTION FROM PENDING AND FUTURE TRANSACTIONS
As indicated elsewhere in this Prospectus, Nextel has commitments, and
from time to time may enter into additional commitments, to issue a substantial
number of new shares of Common Stock.
As of November 30, 1996, there were approximately 252,106,000 shares
of Common Stock outstanding (assuming the conversion of the outstanding shares
of Nextel's preferred stock), on a primary, rather than a fully diluted, basis,
and approximately 342,137,000 shares of Common Stock outstanding assuming the
exercise of all options (including employee options, the Comcast Option for
25,000,000 shares, which expires in September 1997, Motorola's warrant to
purchase 2,890,000 shares, and the options to purchase an aggregate of
36,000,000 shares pursuant to the McCaw Options and the Incentive Option),
warrants and other existing rights to acquire Common Stock.
On April 29, 1996, the Commission declared effective the Company's
registration statement on Form S-4, covering 10,000,000 shares of Common Stock,
or warrants to acquire such shares, which contemplates issuances from time to
time on a "shelf" basis in accordance with Rule 415(a)(1)(viii) promulgated
under the Securities Act in connection with acquisitions of other businesses,
properties or securities in business combination transactions. As of the date
hereof, the Company has not issued any of such Common Stock or warrants.
Additionally, on April 29, 1996, the Commission declared effective the
Company's registration statement on Form S-3, covering 8,848,469 shares of
Common Stock, which was filed by Nextel on behalf of Comcast and Comcast FCI in
satisfaction of the Company's obligations pursuant to the registration rights
of Comcast and Comcast FCI. According to the most recent amendment to the
Schedule 13D of Comcast filed on October 1, 1996, Comcast and Comcast FCI have
sold an aggregate of 5,570,000 of such shares of Common Stock pursuant to
brokerage transactions. On January 24, 1997, the Commission declared effective
Nextel's registration statement on Form S-3 covering 1,580,650 shares of Common
Stock, which was
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<PAGE> 24
filed on behalf of certain selling stockholders in connection with the
Company's acquisition of additional shares of the capital stock of Corporacion
Mobilcom S.A. de C.V. ("Mobilcom") from such selling stockholders. On December
23, 1996, the Commision declared effective Nextel's registration statement on
Form S-4 covering 11,963,858 shares of Common Stock, which were issued in
connection with the consummation of the WVB Merger on January 30, 1997. See
"Concerning the Stockholders."
Pursuant to the McCaw Securities Purchase Agreement, the McCaw Investor
was granted anti-dilutive rights with respect to certain Nextel share
issuances, which rights and related terms are largely comparable to the Comcast
Purchase Right (the "McCaw Purchase Right"). In connection with the issuance
of shares in connection with an acquisition, the McCaw Investor exercised its
anti-dilutive rights, which resulted in the sale of 373,846 treasury shares of
Common Stock to the McCaw Investor on November 26, 1996. Each of the McCaw
Investor and Comcast has the right to acquire additional shares of Common Stock
as a result of future issuances of shares of Common Stock. An increase in the
number of shares of Common Stock that will become available for sale in the
public market may adversely affect the market price of Common Stock and could
impair Nextel's ability to raise additional capital through the sale of its
equity securities.
SHARES ELIGIBLE FOR FUTURE SALE
Existing holders of Common Stock generally may freely resell their
shares except to the extent that they are deemed to be affiliates of Nextel or
certain predecessor companies for purposes of Rule 144 ("Rule 144") or Rule 145
promulgated under the Securities Act. Nextel has also granted registration
rights with respect to a significant number of its shares outstanding, on a
fully diluted basis including shares of Common Stock issuable upon conversion
of securities issued in, or upon exercise of options granted in, the Motorola
Transaction and the McCaw Transaction. The exercise of registration rights by
affiliates of Nextel would permit such persons to sell such shares without
regard to the limitations of Rule 144. Registration rights covering a total of
approximately 190,000,000 shares of Common Stock (including the shares of
Common Stock covered hereby) have been granted to, among others, the McCaw
Investor and certain of its affiliates, Comcast FCI, Matsushita Communications
Industrial Co., Ltd. ("Matsushita"), Nippon Telegraph and Telephone Corporation
("NTT") and Motorola. An increase in the number of shares of Common Stock that
will become available for sale in the public market may adversely affect the
market price of Common Stock and could impair Nextel's ability to raise
additional capital through the sale of its equity securities.
DIVIDEND POLICY LIMITS EXPECTATION OF FUTURE DIVIDENDS
Except for certain dividends paid with respect to preferred stock that
was converted into Common Stock in connection with Nextel's initial public
offering in 1992, Nextel has not paid any dividends on Common Stock. Nextel
does not plan to pay dividends on Common Stock for the foreseeable future.
The Nextel Indentures, the Dial Call Indentures, the OneComm
Indenture, the Bank Credit Agreement and the Vendor Credit Agreement place
significant restrictions on Nextel's ability to pay dividends. In addition,
the collateral security mechanisms and related provisions associated with the
Bank Credit Agreement and the Vendor Credit Agreement may be expected to limit
the amount of cash available to pay dividends or make loans and cash
distributions to Nextel from Nextel's subsidiaries that will operate Digital
Mobile networks in Nextel's existing markets, so that, while such limitations
are in place, profits generated by such subsidiaries will not be available to
Nextel for, among other purposes, the payment of dividends on shares of Common
Stock.
POTENTIAL CONFLICT OF INTEREST RELATIONSHIP WITH MOTOROLA MAY AFFECT NEXTEL'S
PROSPECTS
Motorola and its affiliates have and currently are engaged in wireless
communications businesses, and may in the future engage in additional such
businesses, which are or may be competitive with some or all of the services
offered by Nextel's Digital Mobile networks, although the Motorola Land Mobile
Products Sector ("Motorola LMPS") may not, for three years after consummation
of the Motorola Transaction, make use (with certain limited exceptions) of the
customer lists conveyed by Motorola to ESMR in connection therewith to solicit
subscribers for any 800 MHz SMR commercial mobile voice business owned or
managed by Motorola LMPS in the continental United States. Pursuant to the
Second Equipment Agreement Amendment, Motorola has agreed that from the date
thereof until 18 months after certain development targets for Reconfigured iDEN
have been achieved, Motorola LMPS will not solicit other iDEN customers and
neither Motorola LMPS nor Motorola's credit corporation subsidiary will make
any equity investment in, or provide equipment/vendor financing to, certain
iDEN customers with respect to purchases of iDEN equipment.
-22-
<PAGE> 25
In light of the competitive posture of Motorola, Nextel and Motorola
have agreed that any information relating to Nextel's business plans and
projections will be used by Motorola only for purposes of ensuring compliance
with Nextel's obligations under the various equipment purchase agreements and
financing agreements between Nextel and Motorola. Motorola has designated one
director to the Nextel Board and, hence, such director has access to Nextel's
business plans subject to certain confidentiality restrictions.
Although Nextel believes that its equipment purchase and financing
relationship with Motorola has been structured to reflect the realities of
purchasing and borrowing from a competitor, there can be no assurance that the
potential conflict of interest will not adversely affect Nextel in the future.
Moreover, Motorola's role as a significant stockholder of Nextel, in addition
to its role as a major creditor and supplier, also creates potential conflicts
of interest, particularly with regard to significant transactions.
CONCERNS ABOUT MOBILE COMMUNICATIONS HEALTH RISK MAY AFFECT PROSPECTS OF NEXTEL
Allegations have been made by certain individuals that serious health
risks have resulted from the use of portable mobile communications devices.
The Cellular Telecommunications Industry Association has undertaken studies
concerning the health risk from using mobile communications devices and has
publicly announced its belief that no such risk exists. The actual or
perceived risk of mobile communications devices could adversely affect Nextel
through a reduced subscriber growth rate, a reduction in subscribers, reduced
network usage per subscriber or through reduced financing available to the
mobile communications industry.
FORWARD LOOKING STATEMENTS
"SAFE HARBOR" STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: A number of the matters and subject areas discussed in the
foregoing "Risk Factors" section that are not historical or current facts deal
with potential future circumstances and developments. The discussion of such
matters and subject areas is qualified by the inherent risks and uncertainties
surrounding future expectations generally, and also may materially differ from
Nextel's actual future experience involving any one or more of such matters and
subject areas. Nextel has attempted to identify, in context, certain of the
factors that it currently believes may cause actual future experience and
results to differ from Nextel's current expectations regarding the relevant
matter or subject area. The operation and results of Nextel's wireless
communications business also may be subject to the effect of other risks and
uncertainties in addition to the relevant qualifying factors identified
elsewhere in the foregoing "Risk Factors" section, including, but not limited
to, general economic conditions in the geographic areas and occupational market
segments (such as, for example, construction, delivery, and real estate
management services) that Nextel is targeting for its Digital Mobile network
service, the availability of adequate quantities of system infrastructure and
subscriber equipment and components to meet Nextel's service deployment and
marketing plans and customer demand, the success of efforts to improve and
satisfactorily address issues relating to Digital Mobile system performance,
the successful deployment of the Reconfigured iDEN technology, the ability to
achieve market penetration and average subscriber revenue levels sufficient to
provide financial viability to the Digital Mobile network business, access to
sufficient debt or equity capital to meet Nextel's operating and financing
needs, the quality and price of similar or comparable wireless communications
services offered or to be offered by Nextel's competitors, including providers
of cellular and PCS service, future legislative or regulatory actions relating
to SMR services, other wireless communications services or telecommunications
generally and other risks and uncertainties described from time to time in
Nextel's reports filed with the Commission, including the Annual Report on Form
10-K for the fiscal year ended December 31, 1995 and the Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1996, June 30, 1996 and September
30, 1996.
-23-
<PAGE> 26
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The shares of Common Stock are traded on NASDAQ under the symbol
"NXTL." The following table sets forth, for the periods indicated, the
reported high and low sale prices of the shares of Common Stock on NASDAQ.
<TABLE>
<CAPTION>
Year Ended
December 31, 1995:
Quarter High Low
------- ---- ---
<S> <C> <C>
First $15.625 $ 9.375
Second 18.000 13.000
Third 21.750 14.000
Fourth 18.125 13.875
<CAPTION>
Year Ended
December 31, 1996:
Quarter High Low
------- ---- ---
<S> <C> <C>
First $18.875 $13.500
Second 23.375 16.750
Third 20.250 14.375
Fourth 18.500 12.750
<CAPTION>
Year Ended
December 31, 1997:
Quarter High Low
------- ---- ---
<S> <C> <C>
First (through January 31) $15.750 $13.625
</TABLE>
As of January 31, 1997, there were 2,929 holders of
record of the Common Stock, including Cede & Co., a nominee of The Depository
Trust Company, which holds shares of Common Stock on behalf of an indeterminate
number of beneficial holders. Nextel has authority to issue shares of Class B
Non-Voting Common Stock, which are convertible on a share-for-share basis into
shares of Common Stock. As of January 31, 1997 there was a single
stockholder of record holding all of the 17,830,000 outstanding shares of Class
B Non-Voting Common Stock.
The Company has not paid any dividends on the Common Stock. Certain
indentures and other agreements to which Nextel is a party presently prohibit,
and are expected to operate so as to continue to prohibit Nextel from paying
dividends. See "Risk Factors -- Dividend Policy Limits Expectation of Future
Dividends." The Company does not plan to pay dividends on the Common Stock for
the foreseeable future. The Company anticipates that for the foreseeable
future any cash flow generated from its operations will be used to develop and
expand the Company's business. Any future determination as to the payment of
dividends will be at the discretion of the Nextel Board and will depend upon
the Company's operating results, financial condition and capital requirements,
contractual restrictions, general business conditions and such other factors as
the Nextel Board deems relevant. There can be no assurance that the Company
will pay dividends at any time in the future.
SECURITIES OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of November 30, 1996 (the
"Ownership Date") (unless otherwise indicated), the amount and percentage of
shares of each class of the Company's capital stock that are deemed under the
rules of the Commission to be "beneficially owned" by (i) each director of the
Company, (ii) the Chief Executive Officer and each of the four other most
highly compensated executive officers of the Company for the year ended
December 31, 1995 who were employed by the Company as of the Ownership Date,
(iii) all directors and executive officers of the Company as a group and (iv)
each person or "group" (as such term is used in Section 13(d)(3) of the
Exchange Act) known by the Company to be the beneficial owner of more than 5%
of the outstanding shares of each class of the Company's capital stock.
-24-
<PAGE> 27
<TABLE>
<CAPTION>
Title of Class of Amount and Nature Approximate
the Company's of Beneficial %
Name of Beneficial Owner Capital Stock Ownership(1) of Class(2)
------------------------ ----------------- ----------------- -----------
<S> <C> <C> <C>
Daniel F. Akerson . . . . . . . . . . Class A Common 1,000,000(3) *
Stock
Brian D. McAuley . . . . . . . . . . Class A Common 1,757,883(4) *
Stock
Morgan E. O'Brien . . . . . . . . . . Class A Common 1,366,211(5) *
Stock
Keith J. Bane . . . . . . . . . . . . Class A Common 0(6) *
Stock
Robert Cooper . . . . . . . . . . . . Class A Common 50,000 *
Stock
Timothy M. Donahue . . . . . . . . . Class A Common 1,000 *
Stock
Craig O. McCaw . . . . . . . . . . . Class A Common 65,083,723(7) 22.7%
Stock
Keisuke Nakasaki . . . . . . . . . . Class A Common 0(8) *
Stock
Masaaki Torimoto . . . . . . . . . . Class A Common 0(9) *
Stock
Dennis M. Weibling . . . . . . . . . Class A Common 65,083,723(10) 22.7%
Stock
Robert S. Foosaner . . . . . . . . . Class A Common 180,000(11) *
Stock
All directors and executive
officers as a group (20 persons) . Class A Common 69,631,295(12) 23.9%
Stock
5% Stockholders:
---------------
Digital Radio, L.L.C. . . . . . . . . Class A Common 65,083,723(13) 22.7%
2320 Carillon Point Stock
Kirkland, Washington 98033 Class A Preferred 8,163,265 100.0%
Stock
Class B Preferred 82 100.0%
Stock
Motorola, Inc. . . . . . . . . . . . Class A Common 60,590,000(14) 23.8%
1303 East Algonquin Road Stock
Schaumburg, Illinois 60196 Class B Common 17,830,000 100.0%
Stock
Comcast Corporation . . . . . . . . . Class A Common 15,278,469(15) 5.8%
1500 Market Street Stock
Philadelphia, Pennsylvania 19102
- ------------
</TABLE>
* Less than one percent (1%).
-25-
<PAGE> 28
(1) Under the rules of the Commission, a person is deemed to be the
beneficial owner of a security if such person, directly or indirectly,
has or shares the power to vote or direct the voting of such security or
the power to dispose or direct the disposition of such security. A
person is also deemed to be a beneficial owner of any securities if that
person has the right to acquire beneficial ownership within 60 days of
the Ownership Date. Accordingly, more than one person may be deemed to
be a beneficial owner of the same securities. Unless otherwise indicated
by footnote, the named individuals have sole voting and investment power
with respect to the shares of the Company's capital stock beneficially
owned.
(2) Represents the voting power of the number of shares of each of class of
capital stock beneficially owned as of the Ownership Date by each named
person or group, expressed as a percentage of (a) all shares of the
Company's capital stock of the indicated class actually outstanding as of
such date (in the case of the Class A Common Stock, giving effect to the
conversion of the Company's preferred stock and the Company's Class B
Non-Voting Common Stock, par value $0.001 per share (the "Class B Common
Stock")), plus (b) all other shares of capital stock deemed outstanding
as of such date pursuant to Rule 13d-3(d)(1) under the Exchange Act.
(3) Comprised of 1,000,000 shares of Class A Common Stock which are the
subject of a deferred share grant made to Mr. Akerson in connection with
his employment by Nextel.
(4) Includes 764,634 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. McAuley upon the
exercise of nonqualified stock options. Also includes ownership of
18,000 shares of Class A Common Stock that are held by Mr. McAuley's
minor children. Mr. McAuley resigned his position as a director of the
Company in January 1997.
(5) Includes 866,063 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. O'Brien upon the
exercise of nonqualified stock options.
(6) Mr. Bane, who is Executive Vice President and Chief Corporate Officer of
Motorola, disclaims beneficial ownership of all securities of the Company
held by Motorola. See note 14.
(7) Mr. McCaw, who is an equity owner and controlling person of the McCaw
Investor, disclaims beneficial ownership of all securities of the Company
held by the McCaw Investor, except to the extent of his pecuniary
interest therein. See note 13.
(8) Mr. Nakasaki, who is President and Chief Executive Officer of NTT
America, Inc., a subsidiary of NTT, disclaims beneficial ownership of all
shares of Class A Common Stock held by NTT. As of the Ownership Date,
NTT held 1,532,959 shares.
(9) Mr. Torimoto, who is employed by Matsushita as Chief Liaison between
Matsushita and the Company, disclaims beneficial ownership of all shares
of Class A Common Stock held by Matsushita. As of the Ownership Date,
Matsushita held 3,000,000 shares.
(10) Mr. Weibling, who is President of Eagle River, an affiliate of the McCaw
Investor, disclaims beneficial ownership of all securities of the Company
held by the McCaw Investor, except to the extent of his pecuniary
interest therein. See note 13.
(11) Includes 140,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Foosaner upon the
exercise of nonqualified stock options.
(12) Includes an aggregate of 3,958,425 shares of Class A Common Stock
obtainable as of the Ownership Date or within 60 days thereafter by
directors and executive officers as a group upon the exercise of
nonqualified stock options or other stock purchase rights. See note 13.
(13) Comprised of (i) 5,593,846 shares of Class A Common Stock beneficially
owned by the McCaw Investor, (ii) 35,000,000 shares of Class A Common
Stock obtainable as of the Ownership Date or within 60 days thereafter
upon the exercise of certain options, and (iii) 24,489,877 shares of
Class A Common Stock, which represents the conversion of the 8,163,265
shares of Class A Preferred Stock and the 82 shares of the Company's
Class B Convertible Preferred Stock, par value $0.01 per shares (the
"Class B Preferred Stock") held by the McCaw Investor.
-26-
<PAGE> 29
(14) Assuming conversion of the Class B Common Stock held by Motorola.
Comprised of (i) 40,170,000 shares of Class A Common Stock beneficially
owned by Motorola, (ii) 17,830,000 shares of Class B Common Stock
beneficially owned by Motorola and (iii) 2,590,000 shares of Class A
Common Stock obtainable as of the Ownership Date or within 60 days
thereafter upon exercise of a warrant. Excludes 300,000 shares of Class
A Common Stock as to which such warrant is not exercisable during such
period. Motorola granted the McCaw Investor an option to acquire
9,000,000 shares included herein, which option is not currently
exercisable.
(15) Comprised of 3,728,469 shares of Class A Common Stock beneficially owned
by Comcast, as reported in the most recent amendment to the Schedule 13D
of Comcast filed on October 1, 1996, and 12,000,000 shares of Class A
Common Stock obtainable as of the Ownership Date or within 60 days
thereafter upon the exercise of the option held by Comcast covering an
aggregate of 25,000,000 shares of Class A Common Stock.
CONCERNING THE STOCKHOLDERS
The Stockholders have advised the Company that, at the date of this
Prospectus, they beneficially owned an aggregate of 8,310,541 shares of Common
Stock, which represented approximately 3.1% of the outstanding Common Stock at
November 30, 1996 (after giving effect to the WVB Merger). Assuming (i) the
delivery to the Trust pursuant to the Contract of a number of shares of Common
Stock equal to the maximum number required by the Trust to exchange all of the
STRYPES as contemplated by the Contract and (ii) that the over-allotment option
granted to the Underwriters of the STRYPES is not exercised and excluding
shares of Common Stock which may be distributed by the Trust in connection with
STRYPES subscribed for and purchased by an affiliate of Merrill Lynch in
connection with the formation of the Trust, the Stockholders would own
beneficially 1,141,954 shares or less that 1.0% of the outstanding Common Stock.
The following table sets forth certain information as of the date of this
Prospectus regarding the beneficial ownership of Common Stock by each of the
Stockholders:
<TABLE>
<CAPTION>
Beneficial Ownership
--------------------
Number of Percentage of
Shares of Common Shares
Name Common Stock(1) Stock Covered hereby(2)
- ---- ------------ ----- -----------------
<S> <C> <C>
Cherrywood Holdings, Inc. 5,941,909 2.2% 5,108,907
(3)(4)
Rajendra Singh(3)(4) 658,824 * 514,920
Neera Singh(3)(4)(5) 658,824 * 514,920
The HRS Education Trust(3)(5) 592,158 * 514,920
The SRS Education Trust(3)(5) 592,158 * 514,920
--------- ---- ---------
Total 8,310,541 3.1% 7,168,587
========= =========
</TABLE>
- -------------------
* Less than one percent.
(1) Includes shares of Common Stock obtainable as of the date of this
Prospectus or within 60 days thereafter.
(2) Assumes no exercise of the over-allotment option granted to the
Underwriters of the STRYPES and does not include shares of Common Stock
which may be distributed by the Trust in connection with STRYPES
subscribed for and purchased by an affiliate of Merrill Lynch in
connection with the formation of the Trust.
(3) Cherrywood Holdings, Inc. is beneficially owned by the remaining
Stockholders.
(4) Includes 66,666 shares which may be acquired pursuant to a
presently exercisable option held by NTI, L.L.C., a Delaware limited
liability company, which is wholly owned by Telecom Venture, L.L.C., an
entity in which Mr. and Mrs. Singh and Cherrywood Holdings, Inc. have a
controlling interest.
(5) Mrs. Singh is the trustee of each of The HRS Education Trust and The SRS
Education Trust, the beneficiaries of which are the Singh's minor
children.
The Shares were issued to the Stockholders in connection with the WVB
Merger on January 30, 1997. During the three years preceding the Merger,
various contractual and other relationships have existed between various
Stockholders and their affiliates, on the one hand, and Nextel and its
affiliates, on the other hand, as described below.
During the years ended December 31, 1995, 1994 and 1993, LCC
International, Inc. (including its predecessors Telcom Solutions, Inc. and LCC,
Incorporated, "LCC International") provided various engineering and related
consulting services for Nextel, as well as related engineering hardware and
software products, in the ordinary course of business. It is anticipated that
similar services will be provided to Nextel by LCC International in 1997. The
amount of such sales and services provided to Nextel by LCC International or
its predecessors in 1995, 1994 and 1993 was approximately $14.7 million, $14.0
million and $6.6 million, respectively. LCC International is majority owned by
Telcom Ventures LLC ("Telecom"), in which Mr. and Mrs. Singh, two of the
Stockholders, have a controlling interest.
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<PAGE> 30
In March 1995, another subsidiary of Telcom assumed from Craig O. McCaw
an obligation of $9,845,000 to fund such subsidiary's investment in the McCaw
Investor, which is a significant stockholder of Nextel. Such obligation bears
interest at LIBOR plus 1.5% per annum and is payable in quarterly installments
that commenced in November 1995 and which terminate at maturity in August 1997.
Telcom holds an approximate 2.735% indirect interest in the McCaw Investor.
In December 1995, Telcom borrowed $6,960,000 from a subsidiary of Nextel,
which funds were used in the business of Telcom. This loan bears interest at
8% per annum and was originally due 180 days following demand. In June 1996,
the parties amended the note such that it becomes due and payable on July 5,
1997. In addition, in December 1995, Nextel agreed to place $8,457,000 on
deposit with a commercial bank to serve as cash collateral for a letter of
credit issued by such bank on behalf of a subsidiary of Telcom. Such letter of
credit expired in December 1996 and the deposited funds were returned to
Nextel.
Nextel and a company controlled by a principal indirect owner of Telcom
are both stockholders of Mobilcom, which is the holder of certain SMR licenses
and related assets in Mexico. In June 1996, a subsidiary of Nextel and such
Telcom affiliate (together with other Mobilcom stockholders) entered into a
Put-Call Agreement under which Nextel granted the Telcom affiliate and the
other Mobilcom stockholders the right to require Nextel to purchase their
shares under certain circumstances at a price calculated by a formula taking
into consideration the fair market value of the purchased shares. In addition,
Nextel was granted the right to require these Mobilcom stockholders to sell
their shares to Nextel under certain circumstances at a similarly determined
price.
On October 28, 1996 Telcom and MIL, an indirect wholly owned subsidiary
of Nextel, agreed (subject to certain conditions, including necessary changes
to Argentine SMR regulations) to form a joint venture with respect to their
wireless communications operations in Argentina. Telcom owns a 99% interest in
Wireless Ventures of Argentina ("WVA"), which, through its subsidiaries, holds
SMR licenses in six cities in Argentina and a nationwide paging license in
Argentina. MIL owns McCaw Argentina, S.A., which holds SMR licenses in four
cities in Argentina. The agreement provides for satisfaction of a number of
conditions, including the amendment prior to December 31, 1997 of SMR
regulations in Argentina that limit to 100 the number of SMR channels that any
single entity or affiliated group of entities may control in any particular
Argentine city. Such regulations were amended in December 1996, and the
formation of the joint venture is anticipated to occur during the first quarter
of 1997.
Other than arrangements described above, none of the Stockholders has had
any material relationship with Nextel within the past three years.
DESCRIPTION OF CAPITAL STOCK
The following summary does not purport to be complete and is subject to,
and qualified in its entirety by, the Nextel Charter, and the Amended and
Restated By-Laws of the Company (the "By-Laws").
GENERAL
Pursuant to the Nextel Charter, the Company has the authority to issue
613,883,948 shares of capital stock, divided into six classes as follows: (i)
515,000,000 shares of Common Stock, (ii) 35,000,000 shares of Class B Non-
Voting Common Stock, par value $.001 per share ("Non-Voting Common Stock"),
(iii) 26,941,933 shares of Class A Convertible Redeemable Preferred Stock
("Class A Preferred Stock"), (iv) 82 shares of Class B Convertible Preferred
Stock ("Class B Preferred Stock"), (v) 26,941,933 shares of Class C Convertible
Redeemable Preferred Stock ("Class C Preferred Stock") and (vi) 10,000,000
shares of Preferred Stock (the "Undesignated Preferred Stock").
As of November 30, 1996, the number of shares outstanding of Common Stock
and Class B Non-Voting Common Stock was 209,412,559 and 17,830,000,
respectively. Additionally, there were 24,489,795 shares of Class A Preferred
Stock and 82 shares of Class B Preferred Stock outstanding on such date. No
shares of either the Class C Preferred Stock or the Undesignated Stock were
outstanding on such date. All shares of the capital stock of Nextel currently
outstanding are fully paid and nonassessable and the holders thereof do not
have preemptive rights. See also "Risk Factors -- Potential Dilution from
Pending and Future Transactions."
First Chicago Trust Company of New York acts as transfer agent and
registrar for the Common Stock.
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<PAGE> 31
Voting. Except as required by law with respect to shares of each of
Class A Preferred Stock, Class B Preferred Stock and Class C Preferred Stock,
and except with respect to matters as to which shares of Class A Preferred
Stock and Class B Preferred Stock vote separately as a class, the holders of
Common Stock are entitled to one vote per share on all matters to be voted on
by the stockholders of the Company. Except as otherwise required by law, the
holders of the Non-Voting Common Stock have no right to vote on any matters to
be voted on by the stockholders of the Company; provided, that the holders of
the Non-Voting Common Stock have the right to vote as a separate class (with
each share having one vote) on any merger, consolidation, reorganization or
reclassification of the Company or its shares of capital stock, any amendment
to the Nextel Charter or any liquidation, dissolution or winding up of the
Company (each such event being a "Fundamental Change") in which shares of the
Non-Voting Common Stock would be treated differently than shares of the Common
Stock (other than a Fundamental Change in which the only difference in such
treatment is that the holders of the Common Stock would be entitled to receive
equity securities with full voting rights and the holders of the Non-Voting
Common Stock would be entitled to receive equity securities which have voting
rights substantially identical to the voting rights of the Non-Voting Common
Stock and are convertible in connection with any Voting Conversion Event (as
defined below), on a share for share basis, into the voting securities to which
the holders of the Common Stock are entitled, but which are otherwise identical
to such voting securities). Holders of Class A Preferred Stock, voting
separately as a class, are entitled to elect three members of the Nextel Board
or, if greater than three, that number of directors (rounded up to the nearest
whole number) equal to 25% of the entire Nextel Board, subject to the
termination of such rights if the McCaw Investor's equity interest in Nextel
falls below specified levels. The Nextel Charter does not provide for
cumulative voting in the election of directors.
Dividends. Subject to the declaration and payment of dividends upon the
preferred stock of the Company at the time outstanding, to the extent of any
preference to which such preferred stock is entitled, and after the provision
for any sinking or purchase fund or funds for any series of the preferred stock
shall have been complied with, the Nextel Board may declare and pay dividends
on the Common Stock and the Non-Voting Common Stock payable in cash or other
consideration, out of funds legally available therefor provided that, if
dividends are declared on the Common Stock which are payable in shares of
Common Stock, then dividends payable at the same rate in shares of Non-Voting
Common Stock must be declared on any outstanding shares of Non-Voting Common
Stock. See also "Price Range of Common Stock and Dividend Policy."
The Company has not paid any dividends on its Common Stock, and does not
plan to pay any dividends on its Common Stock for the foreseeable future.
Liquidation, Subdivision or Combination. In the event of any
liquidation, dissolution or winding up of the Company or upon the distribution
of the assets of the Company, all assets and funds of the Company remaining
after payment in full of the debts and liabilities of the Company, and after
the payment to the holders of the then outstanding preferred stock of the full
preferential amounts to which they were entitled, would be divided and
distributed among the holders of the Common Stock and Non-Voting Common Stock
ratably. In no event will either Common Stock or Non-Voting Common Stock be
split, divided or combined unless the other is proportionately split, divided
or combined.
Convertibility of Non-Voting Common Stock Into Common Stock. Upon the
occurrence (or the expected occurrence) of any Voting Conversion Event (as
defined below), each share of Non-Voting Common Stock which is being or has
been distributed, disposed of or sold (or is expected to be distributed,
disposed of or sold) in connection with such Voting Conversion Event will be
convertible at the option of the holder thereof into one fully paid and
nonassessable share of Common Stock, provided that, if any shares of Non-Voting
Common Stock are converted into shares of Common Stock in connection with a
Voting Conversion Event and any such shares of Common Stock are not actually
distributed, disposed of or sold pursuant to such Voting Conversion Event, such
shares of Common Stock which are not so distributed, disposed of or sold will
be promptly converted back into the same number of shares of Non-Voting Common
Stock. See also "Price Range of Common Stock and Dividend Policy."
A "Voting Conversion Event" means: (i) any public offering or public sale
of securities of the Company (including a public offering registered under the
Securities Act and a public sale pursuant to Rule 144 of the Commission or any
similar rule then in force); (ii) any sale of securities of the Company to a
person or group of persons (within the meaning of the Exchange Act) if, after
such sale, such person or group of persons in the aggregate would own or
control securities which possess in the aggregate the ordinary voting power to
elect a majority of the Company's Directors (provided that such sale has been
approved by the Nextel Board or a committee thereof); (iii) any sale of
securities of the Company to a person or group of persons (within the meaning
of the Exchange Act), if, after such sale, such person or group of persons in
the aggregate would own or control securities of the Company (excluding any
Non-Voting Common Stock being converted and disposed of in connection with such
Voting Conversion Event) which possess in the aggregate the ordinary voting
power to elect a majority of the Company's directors; (iv) any sale of
-29-
<PAGE> 32
securities of the Company to a person or group of persons (within the meaning
of the Exchange Act) if, after such sale, such person or group of persons would
not, in the aggregate, own, control or have the right to acquire more than two
percent (2%) of the outstanding securities of any class of voting securities of
the Company; and (v) any distribution, disposition or sale of any securities of
the Company to a person or group of persons (within the meaning of the Exchange
Act) in connection with a merger, consolidation or similar transaction if,
after such transaction, such person or group of persons will own or control
securities which constitute in the aggregate the ordinary voting power to elect
a majority of the surviving corporation's directors (provided that the
transaction has been approved by the Nextel Board or a committee thereof).
CERTAIN PROVISIONS OF THE CHARTER, THE BY-LAWS AND DELAWARE LAW
The Nextel Charter and the By-Laws contain certain provisions that could
make more difficult the acquisition of the Company by means of a tender offer,
a proxy contest or otherwise. These provisions are expected to discourage
certain types of coercive takeover practices and inadequate takeover bids and
to encourage persons seeking to acquire control of the Company first to
negotiate with the Company. Although such provisions may have the effect of
delaying, deferring or preventing a change in control of the Company, the
Company believes that the benefits of increased protection of the Company's
potential ability to negotiate with the proponent of an unfriendly or
unsolicited proposal to acquire or restructure the Company outweigh the
disadvantages of discouraging such proposals because, among other things,
negotiation of such proposals could result in an improvement of their terms.
The description set forth below is intended as a summary only and is qualified
in its entirety by reference to the Nextel Charter and the By-Laws.
Board of Directors. The Nextel Charter provides that the Nextel Board be
divided into three classes of directors, with each class having a number of
directors as nearly equal as possible and with the term of each class expiring
in a different year. The By-Laws provide that the Nextel Board shall consist
of one or more members, and that the number of directors shall be determined by
resolution of the Nextel Board or by the stockholders at their annual meeting
or a special meeting. Nextel is a party to certain agreements with certain of
its stockholders that entitle specified stockholders to name certain nominees
to be elected to the Nextel Board and might require Nextel to increase the size
of the Nextel Board. Additionally, the holders of Class A Preferred Stock,
voting separately as a class, are entitled to elect a certain number of members
of the Nextel Board See "-General-Voting." Pursuant to the terms of the McCaw
Securities Purchase Agreement, Nextel cannot increase the size of the Nextel
Board to be greater than sixteen (16) members. The Nextel Board currently
consists of nine directors. Subject to any rights of holders of preferred
stock, a majority of the Nextel Board then in office has the sole authority to
fill any vacancies on the Nextel Board. Under Delaware law, stockholders may
remove members of a classified board only for cause.
Stockholder Actions and Special Meetings. The Nextel Charter provides
that stockholder action can be taken only at an annual or special meeting of
stockholders and prohibits stockholder action by written consent in lieu of a
meeting. The By-Laws provide that, subject to the rights of holders of any
series of preferred stock, special meetings of stockholders may be called only
by the President of the Company, at the request of a majority of the Nextel
Board or at the request of stockholders owning a majority of the entire capital
stock of the Company issued and outstanding and entitled to vote.
Anti-Takeover Statute. Section 203 of the Delaware General Corporation
Law ("DGCL") is applicable to corporate takeovers in Delaware. Subject to
certain exceptions set forth therein, Section 203 of the DGCL provides that a
corporation shall not engage in any business combination with any "interested
stockholder" for a three-year period following the date that such stockholder
becomes an interested stockholder unless (a) prior to such date, the board of
directors of the corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an interested
stockholder, (b) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced (excluding certain shares) or (c) on or
subsequent to such date, the business combination is approved by the board of
directors of the corporation and by the affirmative vote of at least 66 2/3% of
the outstanding voting stock which is not owned by the interested stockholder.
Except as specified therein, an interested stockholder is defined to include
any person that is (a) the owner of 15% or more of the outstanding voting stock
of the corporation, (b) an affiliate or associate of the corporation and was
the owner of 15% or more of the outstanding voting stock of the corporation, at
any time within three years immediately prior to the relevant date, and (c) the
affiliates and associates of (a) or (b). Under certain circumstances, Section
203 of the DGCL makes it more difficult for an "interested stockholder" to
effect various business combinations with a corporation for a three-year
period, although the stockholders may, by adopting an amendment to the
corporation's certificate of incorporation or by-laws, elect not to be governed
by this section, effective twelve months after adoption. The Nextel Charter
and the By-Laws do not exclude the Company from the restrictions imposed under
Section 203 of
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<PAGE> 33
the DGCL. It is anticipated that the provisions of Section 203 of the DGCL may
encourage companies interested in acquiring the Company to negotiate in advance
with the Nextel Board since the stockholder approval requirement would be
avoided if a majority of the directors then in office approve either the
business combination or the transaction which resulted in the stockholder
becoming an interested stockholder.
PLAN OF DISTRIBUTION
THE FOLLOWING ACCURATELY SUMMARAIZES INFORMATION PROVIDED TO THE
COMPANY BY THE STOCKHOLDERS ON FEBRUARY __, 1997. THE COMPANY HAS NOT
INDEPENDENTLY VERIFIED THE ACCURACY OR CURRENCY OF ANY OF SUCH INFORMATION, AND
STRONGLY URGES RECIPIANTS OF THIS PROSPECTUS TO CONSULT THE STRYPES PROSPECTUS
AND/OR THE RELATED REGISTRATION STATEMENT FILED BY THE TRUST (INCLUDING ANY
EXHIBITS THERETO) CONCERNING ANY AND ALL OF THE MATTERS ADDRESSED HEREUNDER.
The Company is advised that it is the investment objective of the Trust
to distribute to the holders of the STRYPES on the Exchange Date a specified
number of shares of Common Stock (and/or, pursuant to certain anti-dilution
provisions of the Contract, cash, securities and other property). The Company
is advised that, pursuant to the terms of the Contract, assuming the Trust
continues to the Exchange Date, the Stockholders are obligated to deliver to
the Trust immediately prior to the Exchange Date a number of shares of Common
Stock covered by this Prospectus (and/or cash, securities and other property)
equal to the number (or amount) required by the Trust in order to exchange all
of the STRYPES (including STRYPES issued pursuant to the over-allotment option
granted to the Underwriters of the STRYPES and STRYPES subscribed for and
purchased by an affiliate of Merrill Lynch in connection with the formation of
the Trust) on the Exchange Date in accordance with its investment objective,
subject to each Stockholder's option to settle its obligations under the
Contract, in whole or in part, by delivering cash with an equal value. The
Company is not a party to the Contract and has no obligation thereunder or with
respect to the STRYPES, which are securities of the Trust and are not
securities of the Company.
The Company is advised that each of the Stockholders has agreed not to
offer, sell, contract to sell or otherwise dispose of, directly or indirectly,
or cause to be filed a registration statement under the Securities Act with
respect to, any shares of Common Stock, securities convertible into,
exchangeable for or repayable with such shares or rights or warrants to acquire
such shares, for a period of _____ days after the date of this Prospectus
without the prior written consent of Merrill Lynch.
Each of the Company and the Stockholders have agreed to indemnify the
Trust and the Underwriters of the STRYPES against certain liabilities,
including liabilities under the Securities Act, with respect to the information
in this Prospectus (including the documents incorporated by reference herein)
other than information furnished to the Company in writing by the Trust or the
Underwriters of the STRYPES through Merrill Lynch expressly for use herein.
VALIDITY OF SHARES
The validity of the Shares offered hereby will be passed upon for the
Company by Jones, Day, Reavis & Pogue, counsel for the Company.
EXPERTS
The consolidated financial statements and related financial statement
schedules incorporated in this Prospectus by reference from Nextel's Annual
Report on Form 10-K for the year ended December 31, 1995, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which
is incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.
The consolidated financial statements of Dial Page, Inc. and subsidiaries
as of December 31, 1995 and for the year then ended, incorporated in this
Prospectus by reference from Nextel's Form 8-K/A filed on April 26, 1996, have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
The consolidated financial statements of Dial Page, Inc. and subsidiaries
as of December 31, 1993 and 1994 and for each of the years in the three-year
period ended December 31, 1994, which are included as part of the Form 8-K
dated February 6, 1996, as amended, of Nextel Communications, Inc., have been
incorporated by reference herein in reliance upon the report, dated February
17, 1995, of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
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<PAGE> 34
=================================================
No dealer, salesperson or other individual
has been authorized to give any information or to
make any representations other than those
contained or incorporated by reference in this
Prospectus in connection with the offering of Common
Stock described herein, and, if given or made, such
information or representations must not be relied
upon as having been authorized by the Company or
the Underwriters. This Prospectus does not
constitute an offer to sell, or a solicitation of
an offer to buy, any securities other than those
shares of Common Stock specifically offered hereby
or of any of such shares offered hereby in any
jurisdiction to any person to whom it is unlawful to
make an offer or solicitation in such jurisdiction.
Neither the delivery of this Prospectus nor any sale
made to any person to whom this Prospectus is delivered
shall, under any circumstances, create an implication
that there has been no change in the affairs of the
Company since the date hereof or that the information
contained herein is correct as of any time subsequent
to its date.
-------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information . . . . . . . . . . . 2
Incorporation of Certain
Documents by Reference . . . . . . . . . 2
Prospectus Summary . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . 9
Price Range of Common Stock
and Dividend Policy . . . . . . . . . . . 24
Securities Ownership of Management
and Certain Beneficial Owners . . . . . . 24
Concerning the Stockholders . . . . . . . . 27
Description of Capital Stock . . . . . . . 28
Plan of Distribution . . . . . . . . . . . 31
Validity of Shares . . . . . . . . . . . . 31
Experts . . . . . . . . . . . . . . . . . . 31
</TABLE>
=================================================
=================================================
7,168,587 Shares
NEXTEL
COMMUNICATIONS, INC.
Common Stock
--------------------
PROSPECTUS
--------------------
_______________, 1997
=================================================
<PAGE> 35
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses in connection with the issuance and distribution of
the securities to be registered, other than underwriting discounts and
commissions, are as follows:
<TABLE>
<S> <C>
Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $37,472
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Printing Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
</TABLE>
The Stockholders will pay all registration fees and printing expenses and
will reimburse Nextel for all other out- of-pocket costs, including legal and
accounting fees and expenses, incurred in connection with the distribution of
the shares of Common Stock covered hereby (the "Shares") up to an aggregate
limit amount of $250,000.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Set forth below is a description of certain provisions of the Restated
Certificate of Incorporation, (the "Nextel Charter"), of Nextel Communications,
Inc. ("New Nextel," and, together with "Old Nextel," its predecessor
corporation of the same name, "Nextel"), the Amended and Restated By-laws of
Nextel (the "Nextel By-laws") and the Delaware General Corporation Law (the
"DGCL"). This description is intended as a summary only and is qualified in
its entirety by reference to the Nextel Charter, the Nextel By-laws and the
DGCL.
Elimination of Liability in Certain Circumstances. The Nextel Charter
provides that, to the full extent provided by law, a director will not be
personally liable to Nextel or its stockholders for or with respect to any acts
or omissions in the performance of his or her duties as a director. The DGCL
provides that a corporation may limit or eliminate a director's personal
liability for monetary damages to the corporation or its stockholders, except
for liability (i) for any breach of the director's duty of loyalty to such
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
for paying a dividend or approving a stock repurchase in violation of Section
174 of the DGCL or (iv) for any transaction from which the director derived an
improper personal benefit.
While Article 7 of the Nextel Charter provides directors with protection
from awards for monetary damages for breaches of the duty of care, it does not
eliminate the directors' duty of care. Accordingly, Article 7 will have no
effect on the availability of equitable remedies such as an injunction or
rescission based on a director's breach of the duty of care. The provisions of
Article 7 as described above apply to officers of Nextel only if they are
directors of Nextel and are acting in their capacity as directors, and does not
apply to officers of Nextel who are not directors.
Indemnification and Insurance. Under the DGCL, directors and officers as
well as other employees and individuals may be indemnified against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with specified actions, suits or proceedings, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation as a derivative action) if they acted in good faith
and in a manner they 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 their conduct was unlawful.
Article 6 of the Nextel Charter and Article VII of the Nextel By-laws
provide to directors and officers indemnification to the full extent provided
by law, thereby affording the directors and officers of Nextel the protections
available to directors and officers of Delaware corporations. Article VII of
the Nextel By-laws also provides that expenses incurred by a person in
defending a civil or criminal action, suit or proceeding by reason of the fact
that he or she is or was a director or officer shall be paid in advance of the
final disposition of such action, suit or proceeding
II-1
<PAGE> 36
upon receipt of an undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that he or she is not
entitled to be indemnified by Nextel as authorized by relevant Delaware law.
Nextel has obtained directors and officers liability insurance providing
coverage to its directors and officers.
On September 12, 1991, the Board of Directors of Nextel unanimously
adopted resolutions authorizing Nextel to enter into an Indemnification
Agreement (the "Indemnification Agreement") with each director of Nextel.
Nextel has entered into an Indemnification Agreement with each of the directors
other than its two most recently elected directors, Daniel F. Akerson and
Timothy M. Donahue.
One of the purposes of the Indemnification Agreements is to attempt to
specify the extent to which persons entitled to indemnification thereunder (the
"Indemnitees") may receive indemnification under circumstances in which
indemnity would not otherwise be provided by the DGCL. Pursuant to the
Indemnification Agreements, an Indemnitee is entitled to indemnification as
provided by Section 145 of the DGCL and to indemnification for any amount which
the Indemnitee is or becomes legally obligated to pay relating to or arising
out of any claim made against such person because of any act, failure to act or
neglect or breach of duty, including any actual or alleged error, misstatement
or misleading statement, which such person commits, suffers, permits or
acquiesces in while acting in the Indemnitee's position with Nextel. The
Indemnification Agreements are in addition to and are not intended to limit any
rights of indemnification which are available under the Nextel Charter or the
Nextel By-laws, any policy of insurance or otherwise. Nextel is not required
under the Indemnification Agreements to make payments in excess of those
expressly provided for in the DGCL in connection with any claim against the
Indemnitee:
(i) which results in a final, nonappealable order directing the
Indemnitee to pay a fine or similar governmental imposition which Nextel
is prohibited by applicable law from paying; or
(ii) based upon or attributable to the Indemnitee gaining in fact a
personal profit to which he was not legally entitled including, without
limitation, profits made from the purchase and sale by the Indemnitee of
equity securities of Nextel which are recoverable by Nextel pursuant to
Section 16(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and profits arising from transactions in publicly traded
securities of Nextel which were effected by the Indemnitee in violation
of Section 10(b) of the Exchange Act or Rule 10b-5 promulgated
thereunder.
In addition to the rights to indemnification specified therein, the
Indemnification Agreements are intended to increase the certainty of receipt by
the Indemnitee of the benefits to which he or she is entitled by providing
specific procedures relating to indemnification.
The Indemnification Agreements are also intended to provide increased
assurance of indemnification by prohibiting Nextel from adopting any amendment
to the Nextel Charter or the Nextel By-laws which would have the effect of
denying, diminishing or encumbering the Indemnitee's rights pursuant thereto or
to the DGCL or any other law as applied to any act or failure to act occurring
in whole or in part prior to the effective date of such amendment.
The Stockholders have agreed, among other things, to: (i) jointly and
severally indemnify Nextel in full against any and all losses, costs and
liabilities incurred by Nextel, its officers, directors, attorneys, agents or
controlled affiliates or any of them (the "Indemnified Group") that arises from
or is connected with any claim, action or proceeding brought against or
involving any member of the Indemnified Group by any purchaser or underwriter
(or any person claiming or asserting a claim by or through any such purchaser
or underwriter) of the offering of the Shares except to the extent the same are
determined by an adjudication to arise from one or more materially false or
misleading statements or omissions contained (or incorporated by reference) in
the prospectus or elsewhere in the registration statement, in the form declared
effective (other than any of such information as was supplied (or was legally
required to be supplied) by any of such Stockholders or the underwriters for
inclusion in such prospectus or registration statement), or included in other
written materials prepared by Nextel or at Nextel's direction and were
specifically authorized in writing by Nextel to be employed as part of the
offering materials related to the offering made hereby (any such claim, action
or proceeding for which such indemnification may be sought, after giving effect
to the exclusions set forth in the foregoing proviso, being referred to as an
"Indemnifiable Action"); (ii) pay to Nextel the amount of any payment Nextel in
turn would be required to make to the carriers providing its Directors and
Officers' insurance coverage to reinstate a dollar amount of insurance
coverage, up to the maximum amount of coverage initially in force under the
applicable policies during the current coverage period, to the extent such
coverage is reduced by any payments made to or claims filed by or for the
benefit of any member of the Indemnified Group in respect of an Indemnifiable
Action; and (iii) pay Nextel for all excess premium amounts that Nextel in turn
would be required to pay
II-2
<PAGE> 37
to secure an extension of its Directors and Officers' insurance coverage and
related policies of insurance at the expiration of the current coverage period
(with such extension coverage being in all material respects, including term,
deductibles, co-pays and allocations, limits and exclusions, substantially
identical to the coverage currently in force) as a result of any payments made
to or claims filed by or for the benefit of any member of the Indemnified Group
in respect of an Indemnifiable Action.
ITEM 16. EXHIBITS.
Pursuant to Item 601 of Regulation S-K, 17 C.F.R. Section
229.601(b)(4)(iii)(A), Nextel has excluded from Exhibit No. 4 instruments
defining the rights of holders of long-term debt with respect to debt that does
not exceed 10% of the total assets of Nextel. Nextel agrees to furnish copies
of such instruments to the Commission upon request.
II-3
<PAGE> 38
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ -----------------------
<S> <C>
**1.1 Form of Registration Agreement among Nextel, Nextel STRYPES Trust and the Underwriters of the STRYPES.
4.1 - Restated Certificate of Incorporation of Nextel (filed on July 31, 1995 as Exhibits No. 4.1.1 and
4.1.2 to Nextel's Post-Effective Amendment No. 1 on Form S-8 to Registration Statement No. 33-91716
on Form S-4 (the "Nextel S-8 Registration Statement") and incorporated herein by reference).
4.2 - Amended and Restated By-laws of Nextel (filed on July 31, 1995 as Exhibit No. 4.2 to the Nextel S-8
Registration Statement and incorporated herein by reference).
4.3 - Financing and Security Agreement between Motorola, Inc., Smart SMR of California, Inc. and Old
Nextel, dated as of November 1, 1991 (filed on November 15, 1991 as Exhibit No. 10.49 to Registration
Statement No. 33-43415 on Form S-1 of Old Nextel filed on October 18, 1991 (the "S-1 Registration
Statement") and incorporated herein by reference).
4.4 - Financing and Security Agreement between Motorola, Inc., Smart SMR of Illinois, Inc. and Old Nextel,
dated as of November 1, 1991 (filed on November 15, 1991 as Exhibit No. 10.50 to the S-1 Registration
Statement and incorporated herein by reference).
4.5 - Financing and Security Agreement between Motorola, Inc., Smart SMR of Texas, Inc. and Old Nextel,
dated as of November 1, 1991 (filed on November 15, 1991 as Exhibit No. 10.51 to the S-1 Registration
Statement and incorporated herein by reference).
4.6 - Financing and Security Agreement between Motorola, Inc., Smart SMR of New York, Inc. and Old Nextel,
dated as of November 1, 1991 (filed on November 15, 1991 as Exhibit No. 10.52 to the S-1 Registration
Statement and incorporated herein by reference).
4.7 - Financing and Security Agreement between Northern Telecom Finance Corporation, Smart SMR of
California, Inc. and Old Nextel, dated as of November 1, 1991 (filed on November 15, 1991 as Exhibit
No. 10.54 to the S-1 Registration Statement and incorporated herein by reference).
4.8 - Financing and Security Agreement between Northern Telecom Finance Corporation, Smart SMR of Illinois,
Inc., and Old Nextel, dated as of November 15, 1991 (filed on November 15, 1991 as Exhibit No. 10.55
to the S-1 Registration Statement and incorporated herein by reference).
4.9 - Financing and Security Agreement between Northern Telecom Finance Corporation, Smart SMR of Texas,
Inc. and Old Nextel, dated as of November 15, 1991 (filed on November 15, 1991 as Exhibit No. 10.56
to the S-1 Registration Statement and incorporated herein by reference).
4.10 - Financing and Security Agreement between Northern Telecom Finance Corporation, Smart SMR of New York,
Inc. and Old Nextel, dated as of November 15, 1991 (filed on November 15, 1991 as Exhibit No. 10.57
to the S-1 Registration Statement and incorporated herein by reference).
4.11 - Amendment No. 2, dated as of August 2, 1994, to Financing and Security Agreements, dated as of
November 1, 1991, by and among Motorola, Smart SMR of California, Inc., Smart SMR of N ew York, Inc.,
Smart SMR of Illinois, Inc., Smart SMR of Texas, Inc. and Old Nextel (filed as Exhibit 10.01 to the
ESMR S-4 Registration Statement and incorporated herein by reference).
4.12 - Indenture between Old Nextel and The Bank of New York, as Trustee, dated August 15, 1993 (the "August
Indenture") (filed on December 23, 1993 as Exhibit No. 4.13 to the Registration Statement on Form S-4
of the Company, No. 33-73388 (the "PowerFone S-4 Registration Statement") and incorporated herein by
reference).
4.13 - Form of Note issued pursuant to the August Indenture (included in Exhibit No. 4.12).
4.14 - Indenture between Old Nextel and The Bank of New York, as Trustee, dated as of February 15, 1994 (the
"February Indenture") (filed on March 1, 1994 as Exhibit No. 4.1 to the Form 8-K Current Report of
Old Nextel dated February 16, 1994 and incorporated herein by reference).
4.15 - Form of Note issued pursuant to the February Indenture (included in Exhibit No. 4.14).
</TABLE>
II-4
<PAGE> 39
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ ------------------------
<S> <C>
4.16 - Supplemental Indenture, dated as of June 30, 1995 to the August Indenture between Old Nextel and The
Bank of New York (filed on November 14, 1995 as Exhibit 4.1 to the Quarterly Report on Form 10-Q of
Nextel for the quarter ended September 30, 1995 and incorporated herein by reference).
4.17 - Supplemental Indenture, dated as of June 30, 1995 to the Februry Indenture between Old Nextel and
The Bank of New York (filed on November 14, 1995 as Exhibit 4. 2 to the Quarterly Report on Form 10-Q
of Nextel for the quarter ended September 30, 1995 and incorporated herein by reference).
4.18 - Second Supplemental Indenture, dated as of July 28, 1995 between ESMR (now known as Nextel), as
Successor by Merger to Old Nextel and The Bank of New York (relating to the August Indenture) (filed
on November 14, 1995 as Exhibit 4.3 to the Quarterly Report on Form 10-Q of Nextel for the quarter
ended September 30, 1995 and incorporated herein by reference).
4.19 - Second Supplemental Indenture, dated as of July 28, 1995 between ESMR (now known as Nextel), as
Successor by Merger to Old Nextel and The Bank of New York (relating to the February Indenture)
(filed on November 14, 1995 as Exhibit 4.4 to the Quarterly Report on Form 10-Q of Nextel for the
quarter ended September 30, 1995 and incorporated herein by reference).
4.20 - Indenture for Senior Redeemable Discount Notes due 2004, dated as of January 13, 1994, between
OneComm (formerly called CenCall Communications Corp.) and The Bank of New York (the "OneComm
Indenture") (filed on June 7, 1995 as Exhibit No. 99.2 to Old Nextel's Registration Statement No. 33-
93182 on Form S-4 (the "OneComm S-4 Registration Statement") and incorporated herein by reference).
4.21 - Form of Note issued pursuant to the OneComm Indenture (included in Exhibit 4.20).
4.22 - Supplemental Indenture dated as of June 30, 1995 to the OneComm Indenture between OneComm (formerly
called CenCall Communications Corp.) and The Bank of New York (filed on November 14, 1995 as Exhibit
10.12 to the Form 10-Q for the quarter ended September 30, 1995 and incorporated herein by
reference).
4.23 - Second Supplemental Indenture dated as of July 28, 1995 between Nextel (formerly known as ESMR,
Inc.), as successor to OneComm, and The Bank of New York (relating to the OneComm Indenture) (filed
on November 14, 1995 as Exhibit 10.13 to the Form 10-Q for the quarter ended September 30, 1995 and
incorporated herein by reference).
4.24 - Indenture for Senior Redeemable Discount Notes due 2004, dated as of April 25, 1994, between Dial
Call and The Bank of New York (the "2004 Indenture") (filed on June 7, 1995 as Exhibit 99.4 to the
OneComm S-4 Registration Statement and incorporated herein by reference).
4.25 - Supplemental Indenture, dated as of August 7, 1995, to the 2004 Indenture between Dial Call and The
Bank of New York (filed on December 5, 1995 as Exhibit 99.3 to Nextel's Registration Statement No.
33-80021 on Form S-4 (the "Dial Page S-4 Registration Statement") and incorporated herein by
reference).
4.26 - Second Supplemental Indenture, dated as of January 30, 1996, to the 2004 Indenture between Dial Page
(as successor to Dial Call) and The Bank of New York (filed on April 1, 1996 as Exhibit 4.26 to the
Annual Report on Form 10-K of Nextel for the year ended December 31, 1995 (the "1995 Form 10-K") and
incorporated herein by reference).
4.27 - Third Supplemental Indenture, dated as of January 30, 1996, to the 2004 Indenture between Nextel (as
successor to Dial Page) and The Bank of New York (filed on April 1, 1996 as Exhibit 4.27 to the 1995
Form 10-K and incorporated herein by reference).
4.28 - Indenture for Senior Discount Notes due 2005, dated as of December 22, 1993, between Dial Call and
The Bank of New York (the "2005 Indenture") (filed as Exhibit 99.3 to the OneComm S-4 Registration
Statement and incorporated herein by reference).
</TABLE>
II-5
<PAGE> 40
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ -----------------------
<S> <C>
4.29 - Supplemental Indenture, dated as of April 15, 1994, to the 2005 Indenture between Dial Call and The
Bank of New York (filed on April 1, 1996 as Exhibit 4.29 to the 1995 Form 10-K and incorporated
herein by reference).
4.30 - Supplemental Indenture, dated as of June 30, 1995, to the 2005 Indenture between Dial Call and The
Bank of New York (filed on December 5, 1995 as Exhibit 99.4 to the Dial Page S-4 Registration
Statement and incorporated herein by reference).
4.31 - Third Supplemental Indenture, dated as of January 30, 1996, to the 2005 Indenture between Dial Page
(as successor to Dial Call) and The Bank of New York (filed on April 1, 1996 as Exhibit 4.31 to the
1995 Form 10-K and incorporated herein by reference).
4.32 - Fourth Supplemental Indenture, dated as of January 30, 1996, to the 2005 Indenture between Nextel
(as successor to Dial Page) and The Bank of New York (filed on April 1, 1996 as Exhibit 4.32 to the
1995 Form 10-K and incorporated herein by reference).
4.33 - Registration Agreement, dated as of August 23, 1996, by and among Nextel, Grupo Communicaciones, San
Luis S.A. de C.V. and each of the persons listed in Schedule 1 thereto (filed on September 11, 1996
as Exhibit 4.33 to Nextel's Registration Statement No. 333-11733 on Form S-4 and incorporated herein
by reference).
4.34 - Amendment to Registration Agreement dated as of November 22, 1996 by and among Nextel, Grupo
Comunicanciones, San Luis S.A. de C.V. and each of the persons listed in Schedule 1 thereto (filed on
November 26, 1996 as Exhibit 99.1 to the Form 8-K dated November 22, 1996 and incorporated by
reference).
4.35 - Further Amendment to Registration Agreement dated December 20, 1996 by and among Nextel, Grupo
Communicanciones, San Luis S.A. de C.V. and each of the persons listed in Schedule 1 thereto (filed
on January 7, 1997 as Exhibit 4.35 to the Registration Statement on Form S-3 of Nextel, No. 333-19333
and incorporated herein by reference).
4.36 - Agreement and Plan of Merger among Nextel, Dial Call Indimich, Inc. and Wireless Ventures of Brazil,
Inc., dated as of October 28, 1996, as amended (filed on December 23, 1996 as Exhibits 2.1 and 2.2 to
the Registration Statement on Form S-4 of Nextel, No. 333-17173 and incorporated herein by
reference).
**5 - Opinion of Jones, Day, Reavis & Pogue re: validity.
23.1 - Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5).
*23.2 - Consents of Deloitte & Touche LLP.
*23.3 - Consent of KPMG Peat Marwick LLP.
*24 - Powers of Attorney.
- -----------------------
</TABLE>
* Filed herewith.
** To be filed by amendment.
II-6
<PAGE> 41
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-7
<PAGE> 42
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
post-effective amendment to its registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of McLean, in
the Commonwealth of Virginia, on February 5, 1997.
Nextel Communications, Inc.
By: /s/ Thomas J. Sidman
-----------------------------------
Thomas J. Sidman, Vice
President and
General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment to its registration statement has been signed below by
the following persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
NAME TITLE DATE
- ---- ----- ----
<S> <C> <C>
* Chairman of the Board, Chief Executive Officer
- -------------------------------- and Director (Principal Executive Officer)
Daniel F. Akerson
* Senior Vice President and Chief Financial
- -------------------------------- Officer (Principal Financial Officer)
Steven M. Shindler
* Vice President and Corporate Controller
- -------------------------------- (Principal Accounting Officer)
Stephen M. Bailor
* Vice Chairman of the Board and Director
- --------------------------------
Morgan E. O'Brien
* President, Chief Operating Officer and Director
- --------------------------------
Timothy M. Donahue
* Director
- --------------------------------
Keith J. Bane
* Director
- --------------------------------
Robert Cooper
Director
- --------------------------------
Craig O. McCaw
* Director
- --------------------------------
Keisuke Nakasaki
* Director
- --------------------------------
Masaaki Torimoto
* Director
- --------------------------------
Dennis M. Weibling
/s/Thomas J. Sidman Attorney-in-fact February 5, 1997
- --------------------------------
*Thomas J. Sidman
</TABLE>
II-8
<PAGE> 43
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------ ----------------------- ----
<S> <C> <C>
**1.1 Form of Registration Agreement among Nextel, Nextel STRYPES Trust and the
Underwriters of the STRYPES.
4.1 - Restated Certificate of Incorporation of Nextel (filed on July 31, 1995 as Not applicable
Exhibits No. 4.1.1 and 4.1.2 to Nextel's Post-Effective Amendment No. 1 on
Form S-8 to Registration Statement No. 33-91716 on Form S-4 (the "Nextel S-8
Registration Statement") and incorporated herein by reference).
4.2 - Amended and Restated By-laws of Nextel (filed on July 31, 1995 as Exhibit 4.2 Not applicable
to the Nextel S-8 Registration Statement and incorporated herein by
reference).
4.3 - Financing and Security Agreement between Motorola, Inc., Smart SMR of Not applicable
California, Inc. and Old Nextel, dated as of November 1, 1991 (filed on
November 15, 1991 as Exhibit No. 10.49 to Registration Statement No. 33-43415
on Form S-1 of Old Nextel (the "S-1 Registration Statement") and incorporated
herein by reference).
4.4 - Financing and Security Agreement between Motorola, Inc., Smart SMR of Not applicable
Illinois, Inc. and Old Nextel, dated as of November 1, 1991 (filed on
November 15, 1991 as Exhibit No. 10.50 to the S-1 Registration Statement and
incorporated herein by reference).
4.5 - Financing and Security Agreement between Motorola, Inc., Smart SMR of Texas, Not applicable
Inc. and Old Nextel, dated as of November 1, 1991 (filed on November 15, 1991
as Exhibit No. 10.51 to the S-1 Registration Statement and incorporated herein
by reference).
4.6 - Financing and Security Agreement between Motorola, Inc., Smart SMR of New Not applicable
York, Inc. and Old Nextel, dated as of November 1, 1991 (filed on November 15,
1991 as Exhibit No. 10.52 to the S-1 Registration Statement and incorporated
herein by reference).
4.7 - Financing and Security Agreement between Northern Telecom Finance Corporation, Not applicable
Smart SMR of California, Inc. and Old Nextel, dated as of November 1, 1991
(filed on November 15, 1991 as Exhibit No. 10.54 to the S-1 Registration
Statement and incorporated herein by reference).
4.8 - Financing and Security Agreement between Northern Telecom Finance Corporation, Not applicable
Smart SMR of Illinois, Inc., and Old Nextel, dated as of November 15, 1991
(filed on November 15, 1991 as Exhibit No. 10.55 to the S-1 Registration
Statement and incorporated herein by reference).
4.9 - Financing and Security Agreement between Northern Telecom Finance Corporation, Not applicable
Smart SMR of Texas, Inc. and Old Nextel, dated as of November 15, 1991 (filed
on November 15, 1991 as Exhibit No. 10.56 to the S-1 Registration Statement
and incorporated herein by reference).
4.10 - Financing and Security Agreement between Northern Telecom Finance Corporation, Not applicable
Smart SMR of New York, Inc. and Old Nextel, dated as of November 15, 1991
(filed on November 15, 1991 as Exhibit No. 10.57 to the S-1 Registration
Statement and incorporated herein by reference).
</TABLE>
-i-
<PAGE> 44
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------ ----------------------- ----
<S> <C> <C>
4.11 - Amendment No. 2, dated as of August 2, 1994, to Financing and Security Not applicable
Agreements, dated as of November 1, 1991, by and among Motorola, Smart SMR of
California, Inc., Smart SMR of New York, Inc., Smart SMR of Illinois, Inc.,
Smart SMR of Texas, Inc. and Old Nextel (filed as Exhibit 10.01 to the ESMR S-
4 Registration Statement and incorporated herein by reference).
4.12 - Indenture between Old Nextel and The Bank of New York, as Trustee, dated Not applicable
August 15, 1993 (the "August Indenture") (filed on December 23, 1993 as
Exhibit No. 4.13 to the Registration Statement on Form S-4 of the Company, No.
33-73388 (the "PowerFone S-4 Registration Statement") and incorporated herein
by reference).
4.13 - Form of Note issued pursuant to the August Indenture (included in Exhibit Not applicable
No. 4.12).
4.14 - Indenture between Old Nextel and The Bank of New York, as Trustee, dated as of Not applicable
February 15, 1994 (the "February Indenture") (filed on March 1, 1994 as
Exhibit No. 4.1 to the Form 8-K of Old Nextel dated February 16, 1994 and
incorporated herein by reference).
4.15 - Form of Note issued pursuant to the February Indenture (included in Exhibit Not applicable
No. 4.14).
4.16 - Supplemental Indenture, dated as of June 30, 1995 to the August Indenture Not applicable
between Old Nextel and The Bank of New York (filed on November 14, 1995 as
Exhibit 4.1 to the Quarterly Report on Form 10-Q of Nextel for the quarter
ended September 30, 1995 and incorporated herein by reference).
4.17 - Supplemental Indenture, dated as of June 30, 1995 to the February Indenture Not applicable
between Old Nextel and The Bank of New York (filed on November 14, 1995 as
Exhibit 4.2 to the Quarterly Report on Form 10-Q of Nextel for the quarter
ended September 30, 1995 and incorporated herein by reference).
4.18 - Second Supplemental Indenture, dated as of July 28, 1995 between ESMR (now Not applicable
known as Nextel), as Successor by Merger to Old Nextel and The Bank of New
York (relating to the August Indenture) (filed on November 14, 1995 as Exhibit
4.3 to the Quarterly Report on Form 10-Q of Nextel for the quarter ended
September 30, 1995 and incorporated herein by reference).
4.19 - Second Supplemental Indenture, dated as of July 28, 1995 between ESMR (now Not applicable
known as Nextel), as Successor by Merger to Old Nextel and The Bank of New
York (relating to the February Indenture) (filed on November 14, 1995 as
Exhibit 4.4 to the Quarterly Report on Form 10-Q of Nextel for the quarter
ended September 30, 1995 and incorporated herein by reference).
4.20 - Indenture for Senior Redeemable Discount Notes due 2004, dated as of Not applicable
January 13, 1994, between OneComm (formerly called CenCall Communications
Corp.) and The Bank of New York (the "OneComm Indenture") (filed on June 7,
1995 as Exhibit No. 99.2 to Old Nextel's Registration Statement No. 33-93182
on Form S-4 (the "OneComm S-4 Registration Statement") and incorporated herein
by reference).
4.21 - Form of Note issued pursuant to the OneComm Indenture (included in Exhibit Not applicable
4.20).
</TABLE>
-ii-
<PAGE> 45
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------ ----------------------- ----
<S> <C> <C>
4.22 - Supplemental Indenture dated as of June 30, 1995 to the OneComm Indenture Not applicable
between OneComm (formerly called CenCall Communications Corp.) and The Bank of
New York (filed on November 14, 1995 as Exhibit 10.12 to the Form 10-Q for the
quarter ended September 30, 1995 and incorporated herein by reference).
4.23 - Second Supplemental Indenture dated as of July 28, 1995 between Nextel Not applicable
(formerly known as ESMR, Inc.), as successor to OneComm, and The Bank of New
York (relating to the OneComm Indenture) (filed on November 14, 1995 as
Exhibit 10.13 to the Form 10-Q for the quarter ended September 30, 1995 and
incorporated herein by reference).
4.24 - Indenture for Senior Redeemable Discount Notes due 2004, dated as of April 25, Not applicable
1994, between Dial Call and The Bank of New York (the "2004 Indenture") (filed
on June 7, 1995 as Exhibit 99.4 to the OneComm S-4 Registration Statement and
incorporated herein by reference).
4.25 - Supplemental Indenture, dated as of August 7, 1995, to the 2004 Indenture Not applicable
between Dial Call and The Bank of New York (filed on December 5, 1995 as
Exhibit 99.3 to Nextel's Registration Statement No. 33-80021 on Form S-4 (the
"Dial Page S-4 Registration Statement") and incorporated herein by reference).
4.26 - Second Supplemental Indenture, dated as of January 30, 1996, to the 2004 Not applicable
Indenture between Dial Page (as successor to Dial Call) and The Bank of New
York (filed on April 1, 1996 as Exhibit 4.26 to the Annual Report on Form 10-K
of Nextel for the year ended December 31, 1995 (the "1995 Form 10-K") and
incorporated herein by reference).
4.27 - Third Supplemental Indenture, dated as of January 30, 1996, to the 2004 Not applicable
Indenture between Nextel (as successor to Dial Page) and The Bank of New York
(filed on April 1, 1996 as Exhibit 4.27 to the 1995 Form 10-K and incorporated
herein by reference).
4.28 - Indenture for Senior Discount Notes due 2005, dated as of December 22, 1993, Not applicable
between Dial Call and The Bank of New York (the "2005 Indenture") (filed as
Exhibit 99.3 to the OneComm S-4 Registration Statement and incorporated herein
by reference).
4.29 - Supplemental Indenture, dated as of April 15, 1994, to the 2005 Indenture Not applicable
between Dial Call and The Bank of New York (filed on April 1, 1996 as Exhibit
4.29 to the 1995 Form 10-K and incorporated herein by reference).
4.30 - supplemental Indenture, dated as of June 30, 1995, to the 2005 Indenture Not applicable
between Dial Call and The Bank of New York (filed on December 5, 1995 as
Exhibit 99.4 to the Dial Page S-4 Registration Statement and incorporated
herein by reference).
4.31 - Third Supplemental Indenture, dated as of January 30, 1996, to the 2005 Not applicable
Indenture between Dial Page (as successor to Dial Call) and The Bank of New
York (filed on April 1, 1996 as Exhibit 4.31 to the 1995 Form 10-K and
incorporated herein by reference).
4.32 - Fourth Supplemental Indenture, dated as of January 30, 1996, to the 2005 Not applicable
Indenture between Nextel (as successor to Dial Page) and The Bank of New York
(filed on April 1, 1996 as Exhibit 4.32 to the 1995 Form 10-K and incorporated
herein by reference).
</TABLE>
-iii-
<PAGE> 46
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------ ----------------------- ----
<S> <C> <C>
4.33 - Registration Agreement, dated as of August 23, 1996, by and among Nextel, Not applicable
Grupo Communicaciones, San Luis, S.A. de C.V. and each of the persons listed
on Schedule 1 thereto (filed on September 11, 1996 as Exhibit 4.33 to Nextel's
Registration Statement No. 333-11733 on Form S-4 and incorporated herein by
reference).
4.34 - Amendment to Registration Agreement dated as of November 22, 1996 by and among Not applicable
Nextel, Grupo Comunicanciones, San Luis S.A. de C.V. and each of the persons
listed in Schedule 1 thereto (filed on November 26, 1996 as Exhibit 99.1 to
the Form 8-K dated November 22, 1996 and incorporated by reference).
4.35 - Further Amendment to Registration Agreement dated December 20, 1996 by and Not applicable
among Nextel, Grupo Comunicanciones, San Luis S.A. de C.V. and each of the
persons listed in Schedule 1 thereto (filed on January 7, 1997 as Exhibit 4.35
to the Registration Statement on Form S-3 of Nextel, No. 333-19333 and
incorporated herein by reference).
4.36 - Agreement and Plan of Merger among Nextel, Dial Call Indimich, Inc. and Not applicable
Wireless Ventures of Brazil, Inc., dated as of October 28, 1996, as amended
(filed on December 23, 1996 as Exhibits 2.1 and 2.2 to the Registration
Statement on Form S-4 of Nextel, No. 333-17173 and incorporated herein by
reference).
**5 - Opinion of Jones, Day, Reavis & Pogue re validity.
23.1 - Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5). Not applicable
*23.2 - Consents of Deloitte & Touche LLP.
*23.3 - Consent of KPMG Peat Marwick LLP.
*24 - Powers of Attorney.
- ------------------------
* Filed herewith.
** To be filed by amendment.
</TABLE>
-iv-
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Nextel Communications, Inc., on Form S-3, of our report dated March 20, 1996,
relating to the consolidated financial statments of Dial Page, Inc. for the
year ended December 31, 1995, appearing in Form 8-K/A dated April 24, 1996 and
filed with the Securities and Exchange Commission on April 26, 1996 and to the
reference to us under the headings "Nextel Communications, Inc. and
Subsidiaries Selected Financial Data" and "Experts" in such Prospectus, which
is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Mclean, Virginia
February 4, 1997
<PAGE> 2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Nextel Communications, Inc., on Form S-3, of our report dated March 25, 1996,
appearing in the Annual Report on Form 10-K of Nextel Communications, Inc. for
the year ended December 31, 1995, and to the reference to us under the headings
"Nextel Communications, Inc. and Subsidiaries Selected Financial Data" and
"Experts" in such Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Mclean, Virginia
February 4, 1997
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Dial Page, Inc.
We consent to the incorpation by reference in the Form S-3 Registration
Statement (STRYPES Offering) of Nextel Communications, Inc. of our report dated
February 17, 1995, with respect to the consolidated balance sheets of Dial
Page, Inc. and subsidiaries as of December 31, 1993 and 1994, and the related
consolidated statements of operations, stockholders'/partners' equity (deficit)
and cash flows for each of the years in the three-year period ended December
31, 1994, which report appears in the Form 8-K of Nextel Communications, Inc.
dated February 6, 1996 and filed on February 7,1996, as amended by Form 8-K/A
filed on April 26, 1996.
/s/ KPMG Peat Marwick LLP
---------------------------
KPMG Peat Marwick LLP
Greenville, South Carolina
February 3, 1997
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-3
pursuant to which certain stockholders of the Company may, from time to time,
offer and sell shares of the Company's Class A Common Stock, par value $.001
per share, does hereby constitute and appoint Steven M. Shindler, Thomas D.
Hickey, John H. Willmoth and Thomas J. Sidman, and each of them, each with full
power to act without the other and with full power of substitution and
resubstitution, as attorneys or attorney to sign and file in his or her name,
place and stead, in any and all capacities, such Registration Statement, any
and all amendments and exhibits thereto, and any and all other documents to be
filed with the Securities and Exchange Commission pertaining to or relating to
such Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
Executed as of February 3, 1997.
/s/ Daniel F. Akerson
------------------------------
Daniel F. Akerson
Chairman of the Board, Director
and Chief Executive Officer
(Principal Executive Officer)
<PAGE> 2
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-3,
or other suitable form, pursuant to which certain stockholders of the Company
may, from time to time, offer and sell shares of the Company's Class A Common
Stock, par value $.001 per share, does hereby constitute and appoint Steven M.
Shindler, Thomas D. Hickey, John H. Willmoth and Thomas J. Sidman, and each of
them, each with full power to act without the other and with full power of
substitution and resubstitution, as attorneys or attorney to sign and file in
his or her name, place and stead, in any and all capacities, such Registration
Statement, any and all amendments and exhibits thereto, and any and all other
documents to be filed with the Securities and Exchange Commission pertaining to
or relating to such Registration Statement, or any other document with any
state securities commission or other regulatory authority with respect to the
securities covered by such Registration Statement, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done, hereby ratifying and approving the acts of said attorneys
and each of them and any substitute or substitutes.
Executed as of February 3, 1997.
/s/ Steven M. Shindler
-------------------------------
Steven M. Shindler
Senior Vice President and Chief
Financial Officer
(Principal Financial Officer)
<PAGE> 3
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-3
pursuant to which certain stockholders of the Company may, from time to time,
offer and sell shares of the Company's Class A Common Stock, par value $.001
per share, does hereby constitute and appoint Steven M. Shindler, Thomas D.
Hickey, John H. Willmoth and Thomas J. Sidman, and each of them, each with full
power to act without the other and with full power of substitution and
resubstitution, as attorneys or attorney to sign and file in his or her name,
place and stead, in any and all capacities, such Registration Statement, any
and all amendments and exhibits thereto, and any and all other documents to be
filed with the Securities and Exchange Commission pertaining to or relating to
such Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
Executed as of February 3, 1997.
/s/ Stephen M. Bailor
--------------------------------
Stephen M. Bailor
Vice President and Corporate
Controller (Principal Accounting
Officer)
<PAGE> 4
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-3
pursuant to which certain stockholders of the Company may, from time to time,
offer and sell shares of the Company's Class A Common Stock, par value $.001
per share, does hereby constitute and appoint Steven M. Shindler, Thomas D.
Hickey, John H. Willmoth and Thomas J. Sidman, and each of them, each with full
power to act without the other and with full power of substitution and
resubstitution, as attorneys or attorney to sign and file in his or her name,
place and stead, in any and all capacities, such Registration Statement, any
and all amendments and exhibits thereto, and any and all other documents to be
filed with the Securities and Exchange Commission pertaining to or relating to
such Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
Executed as of February 3, 1997.
/s/ Morgan E. O'Brien
-------------------------------
Morgan E. O'Brien
Vice Chairman of the Board
and Director
<PAGE> 5
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-3,
or other suitable form, pursuant to which certain stockholders of the Company
may, from time to time, offer and sell shares of the Company's Class A Common
Stock, par value $.001 per share, does hereby constitute and appoint Steven M.
Shindler, Thomas D. Hickey, John H. Willmoth and Thomas J. Sidman, and each of
them, each with full power to act without the other and with full power of
substitution and resubstitution, as attorneys or attorney to sign and file in
his or her name, place and stead, in any and all capacities, such Registration
Statement, any and all amendments and exhibits thereto, and any and all other
documents to be filed with the Securities and Exchange Commission pertaining to
or relating to such Registration Statement, or any other document with any
state securities commission or other regulatory authority with respect to the
securities covered by such Registration Statement, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done, hereby ratifying and approving the acts of said attorneys
and each of them and any substitute or substitutes.
Executed as of February 3, 1997.
/s/ Timothy M. Donahue
--------------------------------
Timothy M. Donahue
President and Chief Operating
Officer and Director
<PAGE> 6
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-3,
or other suitable form, pursuant to which certain stockholders of the Company
may, from time to time, offer and sell shares of the Company's Class A Common
Stock, par value $.001 per share, does hereby constitute and appoint Steven M.
Shindler, Thomas D. Hickey, John H. Willmoth and Thomas J. Sidman, and each of
them, each with full power to act without the other and with full power of
substitution and resubstitution, as attorneys or attorney to sign and file in
his or her name, place and stead, in any and all capacities, such Registration
Statement, any and all amendments and exhibits thereto, and any and all other
documents to be filed with the Securities and Exchange Commission pertaining to
or relating to such Registration Statement, or any other document with any
state securities commission or other regulatory authority with respect to the
securities covered by such Registration Statement, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done, hereby ratifying and approving the acts of said attorneys
and each of them and any substitute or substitutes.
Executed as of February 3, 1997.
/s/ Keith Bane
------------------------------
Keith Bane
Director
<PAGE> 7
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-3,
or other suitable form, pursuant to which certain stockholders of the Company
may, from time to time, offer and sell shares of the Company's Class A Common
Stock, par value $.001 per share, does hereby constitute and appoint Steven M.
Shindler, Thomas D. Hickey, John H. Willmoth and Thomas J. Sidman, and each of
them, each with full power to act without the other and with full power of
substitution and resubstitution, as attorneys or attorney to sign and file in
his or her name, place and stead, in any and all capacities, such Registration
Statement, any and all amendments and exhibits thereto, and any and all other
documents to be filed with the Securities and Exchange Commission pertaining to
or relating to such Registration Statement, or any other document with any
state securities commission or other regulatory authority with respect to the
securities covered by such Registration Statement, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done, hereby ratifying and approving the acts of said attorneys
and each of them and any substitute or substitutes.
Executed as of January 31, 1997.
/s/ Robert Cooper
-------------------------------
Robert Cooper
Director
<PAGE> 8
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-3,
or other suitable form, pursuant to which certain stockholders of the Company
may, from time to time, offer and sell shares of the Company's Class A Common
Stock, par value $.001 per share, does hereby constitute and appoint Steven M.
Shindler, Thomas D. Hickey, John H. Willmoth and Thomas J. Sidman, and each of
them, each with full power to act without the other and with full power of
substitution and resubstitution, as attorneys or attorney to sign and file in
his or her name, place and stead, in any and all capacities, such Registration
Statement, any and all amendments and exhibits thereto, and any and all other
documents to be filed with the Securities and Exchange Commission pertaining to
or relating to such Registration Statement, or any other document with any
state securities commission or other regulatory authority with respect to the
securities covered by such Registration Statement, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done, hereby ratifying and approving the acts of said attorneys
and each of them and any substitute or substitutes.
Executed as of February 3, 1997.
/s/ Keisuke Nakasaki
--------------------------------
Keisuke Nakasaki
Director
<PAGE> 9
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-3,
or other suitable form, pursuant to which certain stockholders of the Company
may, from time to time, offer and sell shares of the Company's Class A Common
Stock, par value $.001 per share, does hereby constitute and appoint Steven M.
Shindler, Thomas D. Hickey, John H. Willmoth and Thomas J. Sidman, and each of
them, each with full power to act without the other and with full power of
substitution and resubstitution, as attorneys or attorney to sign and file in
his or her name, place and stead, in any and all capacities, such Registration
Statement, any and all amendments and exhibits thereto, and any and all other
documents to be filed with the Securities and Exchange Commission pertaining to
or relating to such Registration Statement, or any other document with any
state securities commission or other regulatory authority with respect to the
securities covered by such Registration Statement, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done, hereby ratifying and approving the acts of said attorneys
and each of them and any substitute or substitutes.
Executed as of January 31, 1997.
/s/ Masaaki Torimoto
--------------------------------
Masaaki Torimoto
Director
<PAGE> 10
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-3,
or other suitable form, pursuant to which certain stockholders of the Company
may, from time to time, offer and sell shares of the Company's Class A Common
Stock, par value $.001 per share, does hereby constitute and appoint Steven M.
Shindler, Thomas D. Hickey, John H. Willmoth and Thomas J. Sidman, and each of
them, each with full power to act without the other and with full power of
substitution and resubstitution, as attorneys or attorney to sign and file in
his or her name, place and stead, in any and all capacities, such Registration
Statement, any and all amendments and exhibits thereto, and any and all other
documents to be filed with the Securities and Exchange Commission pertaining to
or relating to such Registration Statement, or any other document with any
state securities commission or other regulatory authority with respect to the
securities covered by such Registration Statement, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done, hereby ratifying and approving the acts of said attorneys
and each of them and any substitute or substitutes.
Executed as of February 2, 1997.
/s/ Dennis Weibling
--------------------------------
Dennis Weibling
Director
