<PAGE> 1
As filed with the Securities and Exchange Commission on February 14, 1997
Registration No. 333-21171
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO.1
TO
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 Identification Number)
Organization)
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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:
<TABLE>
<S> <C> <C>
Lisa A. Stater, Esq. William J. Phillips, Esq. Norman D. Slonaker, Esq.
Jones, Day, Reavis & Pogue Dewey Ballantine Brown & Wood LLP
3500 One Peachtree Center 1301 Avenue of the Americas One World Trade Center
303 Peachtree Street New York, New York 10019 New York, New York 10048
Atlanta, Georgia 30308 (212)259-8000 (212) 839-5300
(404) 521-3939
</TABLE>
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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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<PAGE> 2
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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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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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 OFFER 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 14, 1997
7,168,587 SHARES
NEXTEL COMMUNICATIONS, INC.
CLASS A COMMON STOCK
------------------------
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") 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 dissolution 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, 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 dissolution 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 "Beneficial Stockholders") who received
such shares in connection with the consummation of a transaction involving the
merger of a corporation, in which the Beneficial Stockholders were
securityholders, with a wholly-owned subsidiary of Nextel. The shares of Common
Stock covered hereby are owned of record by entities (the "Contracting
Stockholders") that are beneficially owned by the Beneficial Stockholders. The
Beneficial Stockholders and the Contracting Stockholders are hereinafter
referred to collectively as the "Stockholders." The Company has been advised
that the Contracting Stockholders may deliver such Common Stock to the Trust
pursuant to a forward purchase contract (the "Contract") among the Contracting
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. This Prospectus does not reflect any changes in the STRYPES
or the offering thereof after the date of this Prospectus.
SEE "RISK FACTORS," BEGINNING ON PAGE 10 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 13, 1997, the last reported sale price of the
Common Stock on NASDAQ was $15 1/8 per share. See "Price Range of Common Stock
and Dividend Policy."
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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 February 14, 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
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.
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<PAGE> 5
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;
(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, (x)
dated and filed with the Commission on January 21, 1997, and (xi) dated and
filed with the Commission on February 7, 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 December 31,
1996, Nextel provided service to approximately 1,114,500 units, consisting of
300,300 units utilizing Nextel's Digital Mobile networks (as defined below) and
approximately 814,200 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
4
<PAGE> 7
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 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,
-----------------------------
1994 1995 1996
------- ------- ---------
<S> <C> <C> <C>
Analog SMR Service....................................... 310,000 758,000 814,200
Digital Mobile Network................................... 13,500 85,000 300,300
------- ------- ---------
Total.......................................... 323,500 843,000 1,114,500
======= ======= =========
</TABLE>
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
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<PAGE> 8
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 in 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.
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 Beneficial Stockholders and certain other
persons.
6
<PAGE> 9
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 dissolution 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 dissolution of the Trust in certain
circumstances.
All of the shares of Common Stock covered hereby are owned of record by the
Contracting 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 and risks from a direct investment in the Common
Stock.
7
<PAGE> 10
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
========== ========== ========== =========== =========== ========== ===========
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------
1995 1996
----------- -----------
(UNAUDITED)
<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>
8
<PAGE> 11
<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>
- ---------------
(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.
9
<PAGE> 12
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
10
<PAGE> 13
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 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.
11
<PAGE> 14
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 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
12
<PAGE> 15
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 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
13
<PAGE> 16
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 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
14
<PAGE> 17
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 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
15
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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 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.
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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
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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 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
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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.
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
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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
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.
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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 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
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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) 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
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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 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
23
<PAGE> 26
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 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 Commission 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."
24
<PAGE> 27
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,
25
<PAGE> 28
or provide equipment/vendor financing to, certain iDEN customers with respect to
purchases of iDEN equipment.
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.
26
<PAGE> 29
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.
YEAR ENDED DECEMBER 31, 1995:
<TABLE>
<CAPTION>
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
</TABLE>
YEAR ENDED DECEMBER 31, 1996:
<TABLE>
<CAPTION>
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
</TABLE>
YEAR ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
QUARTER HIGH LOW
------- ------- -------
<S> <C> <C>
First (through February 13)................................. $15.750 $13.375
</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.
27
<PAGE> 30
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.
<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
</TABLE>
28
<PAGE> 31
<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>
Comcast Corporation................... Class A Common 15,278,469(15) 5.8%
1500 Market Street Stock
Philadelphia, Pennsylvania 19102
</TABLE>
- ---------------
* Less than one percent (1%).
(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
29
<PAGE> 32
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.
(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 beneficially own an aggregate
of 1,141,954 shares or less than 1% 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> <C>
Cherrywood Holdings, Inc.(3)(4)................... 5,941,909 2.2% 5,108,907
Vernon Investors, L.L.C.(3)....................... 2,368,632 * 2,059,680
Rajendra Singh(3)(4).............................. 8,310,541 3.1% 7,168,587
Neera Singh(3)(4)(5).............................. 8,310,541 3.1% 7,168,587
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) Each of Cherrywood Holdings, Inc. and Vernon Investors, L.L.C. is owned by
the Beneficial Stockholders. Mr. and Mrs. Singh hold a majority of the
voting stock of and control Cherrywood Holdings, Inc. and control Vernon
Investors, L.L.C., a limited liability company, and may be deemed to be the
beneficial
30
<PAGE> 33
owners of all shares held by such entities. Accordingly, the reported
beneficial ownership for Mr. and Mrs. Singh includes the shares held by
Cherrywood Holdings, Inc. and Vernon Investors, L.L.C.
(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 Telcom Ventures, L.L.C., an entity in
which Mr. and Mrs. Singh through 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 reported as held by the trusts are also included in the shares
reported as held by Vernon Investors, L.L.C.
The Shares were issued to the Beneficial 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 ("Telcom"), in which Mr. and Mrs. Singh, two of the
Beneficial Stockholders, have a controlling interest.
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.
31
<PAGE> 34
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 NonVoting
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.
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."
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<PAGE> 35
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.
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 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 ByLaws.
33
<PAGE> 36
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 662/3% 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 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 summarizes information provided to the Company by
the Stockholders on February 13, 1997. The Company has not independently
verified the accuracy or currency of any of such information, and strongly urges
recipients 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.
34
<PAGE> 37
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 Contracting 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
Contracting 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 90 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.
35
<PAGE> 38
======================================================
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 Information
by Reference........................ 3
Prospectus Summary.................... 4
Risk Factors.......................... 10
Price Range of Common Stock and
Dividend Policy..................... 27
Securities Ownership of Management and
Certain Beneficial Owners........... 28
Concerning the Stockholders........... 30
Description of Capital Stock.......... 32
Plan of Distribution.................. 34
Validity of Shares.................... 35
Experts............................... 35
</TABLE>
======================================================
======================================================
7,168,587 SHARES
[NEXTEL LOGO]
Nextel Communications, Inc.
Class A Common Stock
---------------------------
PROSPECTUS
---------------------------
FEBRUARY 14, 1997
======================================================
<PAGE> 39
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........................................................................................ 175,000
Accounting Fees and Expenses................................................................................... 50,000
Printing Expenses.............................................................................................. 10,000
Miscellaneous.................................................................................................. 27,528
--------
Total.................................................................................................... $300,000
========
</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 upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if it shall
ultimately be
II-1
<PAGE> 40
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 to secure an extension of its Directors and Officers' insurance coverage
and related policies of insurance at the
II-2
<PAGE> 41
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> 42
<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 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 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).
</TABLE>
II-4
<PAGE> 43
<TABLE>
<CAPTION>
EXHIBIT
NUMBER Description of Exhibits
- ------ -----------------------
<S> <C>
4.15 - Form of Note issued pursuant to the February Indenture (included in Exhibit No. 4.14).
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 February 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).
</TABLE>
II-5
<PAGE> 44
<TABLE>
<CAPTION>
EXHIBIT
NUMBER Description of Exhibits
- ------ -----------------------
<S> <C>
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).
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 Comunicaciones,
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
Comunicaciones, 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 Comunicaciones, 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.
** Previously filed.
II-6
<PAGE> 45
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.
The undesigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933:
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
II-7
<PAGE> 46
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 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 13, 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
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 13, 1997
- --------------------
*Thomas J. Sidman
</TABLE>
II-8
<PAGE> 47
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 - Not applicable
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 Not applicable
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 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 Not applicable
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 Not applicable
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 Not applicable
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 Not applicable
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 Not applicable
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 Not applicable
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).
</TABLE>
-i-
<PAGE> 48
<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 Not applicable
as of 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 Not applicable
(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 Not applicable
(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 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 Not applicable
Exhibit 4.20).
</TABLE>
-ii-
<PAGE> 49
<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 Not applicable
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 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, Not applicable
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).
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> 50
<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 Comunicaciones, 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 Not applicable
and among Nextel, Grupo Comunicaciones, 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 Not applicable
and among Nextel, Grupo Comunicaciones, 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.
</TABLE>
- -------------------------
* Filed herewith.
** Previously filed.
-iv-
<PAGE> 1
EXHIBIT 1.1
------------------------------------------------------------------------------
------------------------------------------------------------------------------
NEXTEL COMMUNICATIONS, INC.
(a Delaware corporation)
REGISTRATION AGREEMENT
Dated: __________, 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
i
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
REGISTRATION AGREEMENT.................................................................... 1
SECTION 1. Representations and Warranties....................................... 3
(a) Representations and Warranties by the Company........................ 3
(i) Compliance with Registration Requirements................... 3
(ii) Incorporated Documents...................................... 4
(iii) Independent Accountants..................................... 5
(iv) Financial Statements........................................ 5
(v) No Material Adverse Change in Business...................... 5
(vi) Good Standing of the Company................................ 5
(vii) Good Standing of Subsidiaries............................... 6
(viii) Capitalization.............................................. 6
(ix) Description of Common Stock................................. 6
(x) Authorization of Agreement.................................. 6
(xi) Absence of Defaults and Conflicts........................... 6
(xii) Absence of Labor Dispute.................................... 7
(xiii) Absence of Proceedings...................................... 7
(xiv) Accuracy of Exhibits........................................ 7
(xv) Possession of Intellectual Property......................... 8
(xvi) Absence of Further Requirements............................. 8
(xvii) Possession of Licenses and Permits.......................... 8
(b) Officer's Certificates............................................... 8
SECTION 2. Covenants of the Company............................................. 9
(a) Compliance with Securities Regulations and Commission
Requests............................................................. 9
(b) Filing of Amendments................................................. 9
(c) Delivery of Nextel Registration Statements........................... 9
(d) Delivery of Nextel Prospectuses...................................... 9
(e) Continued Compliance with Securities Laws............................ 10
(f) Blue Sky Qualifications.............................................. 10
(g) Reporting Requirements............................................... 10
SECTION 2A. Covenants of Underwriters............................................ 11
SECTION 3. Payment of Expenses.................................................. 11
(a) Expenses............................................................. 11
(b) Allocation of Expenses............................................... 11
SECTION 4. Indemnification...................................................... 11
(a) Indemnification of Underwriters and the Trust........................ 11
(b) Indemnification of Company, Directors, Officers...................... 13
(c) Actions against Parties; Notification................................ 13
(d) Settlement without Consent if Failure to Reimburse................... 14
SECTION 5. Contribution......................................................... 14
SECTION 6. Representations, Warranties and Agreements to
Survive Delivery..................................................... 15
SECTION 7. Termination.......................................................... 16
SECTION 8. Notices.............................................................. 16
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 9. Parties............................................. 16
SECTION 10. GOVERNING LAW....................................... 16
SECTION 11. Effect of Headings.................................. 16
</TABLE>
SCHEDULE A
Exhibit 1(a)(vii)
Schedule 1(a)(xvii)
Schedule 1(a)(xv)
ii
<PAGE> 4
NEXTEL COMMUNICATIONS, INC.
(a Delaware corporation)
REGISTRATION AGREEMENT
, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281
NEXTEL STRYPES TRUST
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Nextel Communications, Inc., a Delaware corporation (the "Company"),
confirms its agreement with NEXTEL STRYPES Trust, a Delaware business trust (the
"Trust"), and with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Donaldson, Lufkin & Jenrette Securities
Corporation and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as provided in Section 10 of the Underwriting Agreement (as defined
below)), for whom Merrill Lynch and Donaldson, Lufkin & Jenrette Securities
Corporation are acting as representatives (in such capacity, the
"Representatives"), in connection with a transaction
1
<PAGE> 5
characterized by the Representatives as involving the proposed issue and sale by
the Trust to the Underwriters, acting severally and not jointly, pursuant to an
underwriting agreement, dated the date hereof (the "Underwriting Agreement"),
among the Trust, Cherrywood Holdings, Inc. and Vernon Investors, L.L.C. (each, a
"Contracting Stockholder" and, together with Rejendra Singh, Neera Singh, The
HRS Education Trust and The SRS Education Trust, a "Shareholder" and
collectively, the "Shareholders"), and the Underwriters, of an aggregate of of
the Trust's STRYPESSM (each, a "STRYPES"), exchangeable for shares of common
stock, par value $.001 per share (the "Nextel Common Stock"), of the Company
upon conclusion of the term of the Trust on , 2000 (the "Exchange Date"), and,
at the option of the Underwriters, all or any part of ____________ additional
STRYPES to cover over-allotments, if any. The aforesaid ____________ STRYPES
(the "Initial Securities") to be purchased by the Underwriters and all or any
part of the ____________ STRYPES subject to the option described in Section 2(b)
of the Underwriting Agreement (the "Option Securities") are hereinafter called,
collectively, the "Securities." Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Underwriting Agreement.
The Company has been advised that the Underwriters propose to make a
public offering of the Securities as soon as the Representatives deem advisable
after this Agreement and the Underwriting Agreement have been executed and
delivered and following compliance with certain procedures set forth in a letter
agreement dated February __, 1997, by and between the Company and Merrill Lynch,
as Representative (the "Letter Agreement"). The Company acknowledges that it has
been advised that the execution and delivery of this Agreement is a condition to
the execution and delivery of the Underwriting Agreement by the Underwriters and
the Trust, and the Company acknowledges that it is required to enter into this
Agreement by the terms of Section 5.20 of the Merger Agreement (as defined
herein) and that, in consideration of the Company's obligations under Section
5.20 of the Merger Agreement and the execution and delivery of the Underwriting
Agreement by the Underwriters and the Trust, the Company is willing to make the
representations, warranties and covenants herein contained.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-21171) covering the
resale under the Securities Act of 1933, as amended (the "1933 Act") of the
shares of Nextel Common Stock deliverable upon exchange of the Securities,
including the related preliminary prospectus or prospectuses. Each prospectus
used before such registration statement became effective is herein called a
"Nextel preliminary prospectus." Such registration statement, including the
exhibits thereto, the schedules thereto, if any, and the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the
time it became effective, is herein called the "Nextel Registration Statement."
The final prospectus, including the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished
to the Underwriters for use in connection with the offering of the Securities
- --------------------------
2
<PAGE> 6
(SM)Service mark of Merrill Lynch & Co., Inc.
3
<PAGE> 7
is herein called the "Nextel Prospectus." For purposes of this Agreement, all
references to the Nextel Registration Statement, any Nextel preliminary
prospectus, the Nextel Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the Nextel
Registration Statement, any Nextel preliminary prospectus or the Nextel
Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated by reference in the Nextel Registration Statement, any Nextel
preliminary prospectus or the Nextel Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Nextel
Registration Statement, any Nextel preliminary prospectus or the Nextel
Prospectus shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), which is
incorporated by reference in the Nextel Registration Statement, such Nextel
preliminary prospectus or the Nextel Prospectus, as the case may be.
Prior to the closing under the Underwriting Agreement, the
Representatives have indicated that the Trust will enter into a forward purchase
contract (the "Forward Purchase Contract") with the Contracting Shareholders
pursuant to which the Contracting Shareholders will agree to sell and the Trust
will agree to purchase, immediately prior to the Exchange Date, the Reference
Property required by the Trust to exchange all of the Securities on the Exchange
Date as described in the Trust Prospectus, subject to the Contracting
Shareholders' right to require that the obligations thereunder be satisfied by a
cash payment or net cash settlement based on the value of such Reference
Property.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter and to the Trust as of the date
hereof, as of the Closing Time referred to in Section 2(c) of the Underwriting
Agreement, and as of each Date of Delivery (if any) referred to in Section 2(b)
of the Underwriting Agreement, and agrees with each Underwriter and the Trust as
follows:
(i) Compliance with Registration Requirements. The Company
meets the requirements for the use of Form S-3 under the 1933 Act. The
Nextel Registration Statement has become effective under the 1933 Act
and, to the knowledge of the Company, no stop order suspending the
effectiveness of the Nextel Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
4
<PAGE> 8
At the respective times the Nextel Registration Statement and
any post-effective amendments thereto became effective and at the
Closing Time (and, if any Option Securities are purchased, at the Date
of Delivery), the Nextel Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations") and did
not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. Neither the Nextel
Prospectus nor any amendments or supplements thereto, at the time the
Nextel Prospectus or any such amendment or supplement was issued and at
the Closing Time (and, if any Option Securities are purchased, at the
Date of Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Nextel Registration Statement or
Nextel Prospectus made in reliance upon and in conformity with (x)
information furnished to the Company in writing by the Underwriters
expressly for use in the Nextel Registration Statement or Nextel
Prospectus, (y) information furnished to the Company in writing by the
Trust expressly for use in the Nextel Registration Statement or Nextel
Prospectus and (z) information furnished by the Shareholders for use in
the Nextel Registration Statement or the Nextel Prospectus.
Each Nextel preliminary prospectus and the Nextel Prospectus
filed as part of the Nextel Registration Statement as originally filed
or as part of any amendment thereto complied when so filed in all
material respects with the 1933 Act Regulations and, if applicable,
each Nextel preliminary prospectus and the Nextel Prospectus delivered
to the Underwriters for use in connection with the offering of the
Securities was identical in all material respects to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Nextel Registration
Statement and the Nextel Prospectus, when they became effective or at
the time they were or hereafter are filed with the Commission
(including and giving effect to any filed amendments and/or supplements
to such documents), complied and will comply in all material respects
with the requirements of the 1934 Act and the rules and regulations of
the Commission thereunder (the "1934 Act Regulations").
(iii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules of the Company
included in the Nextel Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
5
<PAGE> 9
(iv) Financial Statements. The financial statements of the
Company included in the Nextel Registration Statement and the Nextel
Prospectus, together with the related schedules and notes, present
fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified, except as otherwise stated in
the Nextel Registration Statement or the Nextel Prospectus and except
for the pro forma financial information included therein (which comply
as to form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X of the 1933 Act
Regulations); said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Nextel Registration
Statement present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data included in
the Nextel Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited
financial statements included in the Nextel Registration Statement.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Nextel
Registration Statement and the Nextel Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Nextel Prospectus and to enter into and
perform its obligations under this Agreement; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each of the subsidiaries
of the Company listed on Schedule 1(a)(vii) (each, a "Subsidiary" and,
collectively, the "Subsidiaries") has been duly organized and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Nextel
6
<PAGE> 10
Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the Nextel
Registration Statement, all of the issued and outstanding capital stock
of each such Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity (other than the
pledges related to the secured credit facility arranged by Chase
Securities, Inc., J.P. Morgan Securities Inc. and Toronto Dominion
Securities (USA), Inc. (the "Bank Credit Agreement") and the agreements
related to financing arrangements with Motorola, Inc. and NTFC Capital
Corporation (the "Vendor Credit Facility"); none of the outstanding
shares of capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such
Subsidiary. The Subsidiaries directly or indirectly hold all material
assets relating to the conduct of the Company's digital mobile business
in the United States.
(viii) Capitalization. The shares of outstanding capital stock
of the Company have been duly authorized and validly issued and are
fully paid and non-assessable; none of the shares of Nextel Common
Stock issued to the Shareholders pursuant to the Merger Agreement was
issued in violation of the preemptive rights of any securityholder of
the Company.
(ix) Description of Common Stock. The Nextel Common Stock
conforms to all statements relating thereto contained in the Nextel
Prospectus and such description conforms to the rights set forth in the
instruments defining the same.
(x) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company
nor any of its Subsidiaries is in violation of its charter or bylaws;
neither the Company nor any of its subsidiaries is in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge
7
<PAGE> 11
or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or bylaws of
the Company or any subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness of the Company or any subsidiary (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary, except for any
indebtedness as to which the occurrence of a Repayment Event would not
result in a Material Adverse Effect.
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit or
proceeding, or, to the knowledge of the Company, any inquiry or
investigation, before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the Nextel
Registration Statement (other than as disclosed therein), or which
might, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect, or which might, individually or in
the aggregate, reasonably be expected to materially and adversely
affect the properties or assets thereof or the performance by the
Company of its obligations hereunder; the aggregate of all pending
legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Nextel
Registration Statement, including ordinary routine litigation
incidental to the business, are not reasonably expected to result in a
Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents of the Company which are required to be filed as exhibits to
the Nextel Registration Statement by the 1933 Act which have not been
so filed.
(xv) Possession of Intellectual Property. Except as set forth
on Schedule 1(a)(xv), and except for rights associated with equipment
acquired from Motorola, Inc., the Company and its subsidiaries own or
possess, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information,
8
<PAGE> 12
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xvi) Absence of Further Requirements. No filing with,
authorization, approval, consent or registration of any court or
governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder, except such as
has been already obtained or as may be required under the 1933 Act or
the 1933 Act Regulations or state securities laws.
(xvii) Possession of Licenses and Permits. Except as described
in the Nextel Prospectus, the Company and its subsidiaries possess such
waivers, permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and except
as listed on Schedule 1(a)(xvii) hereto neither the Company nor any of
its subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company and delivered to the Representatives or counsel for the Underwriters
or to the Trust or counsel for the Trust in connection with the offering of the
Securities shall be deemed a representation and warranty by the Company to each
Underwriter and to the Trust, as the case may be, as to the matters covered
thereby.
SECTION 2. Covenants of the Company. The Company covenants with each
Underwriter and with the Trust as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 2(b), will notify the Representatives and the Trust
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Nextel Registration Statement
9
<PAGE> 13
shall become effective, or any supplement to the Nextel Prospectus or any
amended Nextel Prospectus shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission for any
amendment to the Nextel Registration Statement or any amendment or supplement to
the Nextel Prospectus or for additional information, and (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the Nextel
Registration Statement or of any order preventing or suspending the use of any
Nextel preliminary prospectus, or of the suspension of the qualification of the
shares of Nextel Common Stock deliverable upon exchange of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes.
(b) Filing of Amendments. The Company will give the Representatives and
the Trust notice of its intention to file or prepare any amendment to the Nextel
Registration Statement including any amendment, supplement or revision to either
the prospectus included in the Nextel Registration Statement at the time it
became effective or to the Nextel Prospectus, whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will furnish the Representatives and the Trust with
copies of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to
which the Representatives or counsel for the Underwriters or the Trust or
counsel for the Trust shall reasonably object.
(c) Delivery of Nextel Registration Statements. The Company has
furnished or will deliver to the Representatives, counsel for the Underwriters,
the Trust and counsel for the Trust, without charge, signed copies of the Nextel
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) and
signed copies of all consents and certificates of experts. If applicable, the
copies of the Nextel Registration Statement and each amendment thereto furnished
to the Underwriters and the Trust will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T. The provisions of this Section 2(c)
in no way affect the agreement of the Shareholders to pay costs as described in
the Merger Agreement.
(d) Delivery of Nextel Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each Nextel preliminary
prospectus as such Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period when
the Nextel Prospectus is required to be delivered under the 1933 Act or the 1934
Act, such number of copies of the Nextel Prospectus (as amended or supplemented)
as such Underwriter may reasonably request. If applicable, the Nextel Prospectus
and any amendments or supplements thereto furnished to the Underwriters and the
Trust will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T. The provisions of this Section 2(d) in no way affect the
agreement of the Shareholders to pay costs as described in the Merger Agreement.
10
<PAGE> 14
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in the Underwriting
Agreement, subject to the applicable provisions of the Letter Agreement. Subject
to the applicable provisions of the Letter Agreement, if at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters, counsel
for the Trust or counsel for the Company, to amend the Nextel Registration
Statement or amend or supplement the Nextel Prospectus in order that the Nextel
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of any
such counsel, at any such time to amend the Nextel Registration Statement or
amend or supplement the Nextel Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 2(b), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Nextel Registration Statement or the Nextel Prospectus
comply with such requirements, and the Company will furnish to the Underwriters
and the Trust such number of copies of such amendment or supplement as the
Underwriters and the Trust may reasonably request (it being the Company's
understanding that the Shareholders are paying the relevant costs).
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the shares of Nextel Common Stock
deliverable upon exchange of the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the United
States as the Representatives may designate and to maintain such qualifications
in effect through the Exchange Date; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to qualify
as a foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject.
Subject to the preceding proviso, in each jurisdiction in which the shares of
Nextel Common Stock deliverable at maturity of the Securities have been so
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect
through the Exchange Date.
(g) Reporting Requirements. The Company, for the period ending March
31, 1998, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and
the rules and regulations of the Commission thereunder.
SECTION 2A. Covenants of Underwriters. The Representatives, on their
own behalf and on behalf of the other Underwriters, acknowledge that they have
received a copy of the Letter Agreement and will conduct their underwriting
activities, including the offering of any Securities, in compliance with the
applicable terms of the Letter Agreement. The Representatives have furnished to
the Company a true, complete and correct copy of the Underwriting Agreement,
11
<PAGE> 15
and will promptly deliver to the Company any amendment or supplement thereto
when entered into.
SECTION 3. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation and filing of the Nextel Registration Statement (including financial
statements and exhibits) as originally filed and of each amendment thereto, (ii)
the preparation and delivery to the Underwriters and the Trust of this
Agreement, and (iii) the fees and disbursements of the Company's counsel,
accountants and other advisors.
(b) Allocation of Expenses. The provisions of this Section 3 shall not
affect any agreement that the Company and the Shareholders may make for the
sharing of such costs and expenses.
SECTION 4. Indemnification.
(a) Indemnification of Underwriters and the Trust. Subject to the
provisions set forth in this Section 4(a), the Company agrees to indemnify and
hold harmless each Underwriter, the Trust and each person, if any, who controls
any Underwriter or the Trust within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Nextel
Registration Statement (or any amendment thereto) or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Nextel preliminary prospectus or the
Nextel Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, referred to
under (i) above; provided that (subject to Section 4(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Underwriters or the Trust, as the case may
12
<PAGE> 16
be), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, referred to under (i) above,
to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with (A) written information furnished to the Company by
any Underwriter through Merrill Lynch expressly for use in the Nextel
Registration Statement (or any amendment thereto), or any Nextel preliminary
prospectus or the Nextel Prospectus (or any amendment or supplement thereto),
(B) written information furnished to the Company by the Trust expressly for use
in the Nextel Registration Statement (or any amendment thereto), or any Nextel
preliminary prospectus or the Nextel Prospectus (or any amendment or supplement
thereto) or, with respect to the Company, (C) written information furnished to
the Company by the Shareholders expressly for use in the Nextel Registration
Statement (or any amendment thereto), or any Nextel preliminary prospectus or
the Nextel Prospectus (or any amendment or supplement thereto).
In the event that any claim for indemnification under this Section 4(a)
or contribution under Section 5 hereof is made against the Company, the
indemnified parties acknowledge that in accordance with the agreements contained
in the Agreement and Plan of Merger by and among the Company, Dial Call
Indimich, Inc., wholly-owned subsidiary of the Company, and Wireless Ventures of
Brazil, Inc. ("WVB") dated as of October 28, 1996, as amended by Amendment No. 1
thereto dated December 19, 1996 (the "Merger Agreement"), and the related
agreements between the Shareholders and the Company dated February 5, 1997 (the
"Indemnity Agreement") and the Joinder Agreement dated February __, 1997 (the
"Joinder Agreement"), the Shareholders are required to indemnify the Company,
among other things, for claims made under this Section 4(a) or Section 5 by the
indemnified parties except in the circumstances specified in the Indemnity
Agreement. Accordingly, in the event that the indemnified parties are entitled
to seek indemnity or contribution hereunder against any loss, liability, claim,
damage and expense under this Section 4(a) or Section 5 hereof (each such
circumstance or event, a "Loss") the indemnified parties shall seek to satisfy
the Loss in full from the Shareholders by making a written demand upon the
Shareholders for such satisfaction, and shall copy the Company on each such
written demand. Only if such Loss shall remain unsatisfied in whole or in part
20 days following the date of receipt by the Shareholders of the relevant demand
shall any indemnified party have the right to take action to satisfy such Loss
by making demand directly on the Company (but only if and to the extent that the
Shareholders have not already satisfied (and do not thereafter satisfy) such
Loss, whether by settlement, release or otherwise). In the case of reimbursement
of expenses pursuant to this Section 4(a) or Section 5 hereof, the indemnified
parties shall first seek to obtain such reimbursement in full from the
Shareholders by making a written demand upon the Shareholders for such
reimbursement and shall copy the Company on each such written demand. Only in
the event such expenses shall remain unreimbursed in full or in part 20 days
following the date of receipt by the Shareholders of such demand shall the
indemnified party have
13
<PAGE> 17
the right to receive reimbursement of such expenses from the Company by making
written demand directly on the Company (but only to the extent the Shareholders
have not already satisfied (and do not thereafter satisfy) the demand for
reimbursement, whether by settlement, release or otherwise).
In the event that the Company shall be required to satisfy a Loss under
this Section 4(a) or Section 5 hereof after the indemnified party or parties
involved have served written demand on the Shareholders, the Company shall be
entitled to recover from the Shareholders the entire amount of such Loss (other
than in the case of a Loss in respect to which the Company is not entitled to
indemnification by the Selling Stockholders under the Indemnity Agreement). The
Company has delivered to the Representatives a true, correct and complete copy
of each of the Merger Agreement, the Indemnity Agreement and the Joinder
Agreement.
(b) Indemnification of Company, Directors, Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Nextel Registration Statement, and each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Nextel
Registration Statement (or any amendment thereto), or any Nextel preliminary
prospectus or the Nextel Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Merrill Lynch expressly for use in the Nextel
Registration Statement (or any amendment thereto) or such Nextel preliminary
prospectus or the Nextel Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 4(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch; and, in
the case of parties indemnified pursuant to Section 4(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
14
<PAGE> 18
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4 or Section
5 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 4(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 5. Contribution. If the indemnification provided for in Section
4 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then the parties hereto intend that the Company
and the Shareholders, on the one hand and the Underwriters and the Trust on the
other hand, in accordance with the applicable provisions of Section 4(a) hereof,
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Shareholders on the one hand and the Underwriters and the
Trust on the other hand from the offering of the Securities pursuant to the
Underwriting Agreement or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Shareholders on the one hand and the Underwriters
and the Trust on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the offering of the Securities
pursuant to the Underwriting Agreement shall be deemed to be such that the
Underwriters and the Trust shall be responsible for that portion of the
aggregate amount of such losses, liabilities, claims, damages and expenses
represented by the percentage that the total underwriting discount received by
the Underwriters, as set forth on the cover of the Trust Prospectus, or, if Rule
434 is used, the corresponding location on the Trust Term Sheet, bears to the
aggregate initial public offering price of the Securities as set forth on such
cover and the Company and the Shareholders shall be responsible for the balance.
15
<PAGE> 19
The relative fault of the Company and the Shareholders on the one hand
and the Underwriters and the Trust on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Shareholders on the
one hand or by the Underwriters or the Trust on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
Notwithstanding the provisions of this Section 5, the Underwriters and
the Trust shall not be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by the
Underwriters and distributed to the public were offered to the public exceeds
the amount of any damages which the Underwriters and the Trust have otherwise
been required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
The Company, the Underwriters and the Trust agree that it would not be
just and equitable if contribution pursuant to this Section 5 were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 5. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 5 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 5, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Underwriter; each
person, if any, who controls the Trust within the meaning of Section 15 of the
1933 Act shall have the same rights to contribution as the Trust; and each
director of the Company, each officer of the Company who signed the Nextel
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 5 are several in
proportion to the number of Securities set forth opposite their respective names
on Schedule A hereto and not joint.
SECTION 6. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant to
the Underwriting Agreement, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the
16
<PAGE> 20
Underwriters or controlling persons, or by or on behalf of the Trust or
controlling persons or by or on behalf of the Company, and shall survive
delivery of the Securities to the Underwriters pursuant to the Underwriting
Agreement.
SECTION 7. Termination. In the event that the Underwriters terminate
the Underwriting Agreement as provided in Section 5, Section 9 or Section 10
thereof, the Underwriters shall promptly give the Company notice thereof and
this Agreement shall simultaneously terminate, except that the provisions of
Section 3, the indemnity agreements set forth in Section 4, the contribution
provisions set forth in Section 5, and the provisions of Section 6 shall remain
in effect.
SECTION 8. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Representatives shall be directed to: Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, North Tower, World Financial Center, New
York, New York 10281, attention of Julie Richardson; notices to the Trust shall
be directed to it at [ADDRESS], attention of [ ]; notices to the Company shall
be directed to it at Nextel Communications, Inc., 1505 Farm Credit Drive,
McLean, Virginia 22102, attention of General Counsel.
SECTION 9. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, the Trust and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Trust and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 4 and 5
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Trust and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
the Underwriters shall be deemed to be a successor by reason merely of such
purchase.
SECTION 10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 11. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
17
<PAGE> 21
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters, the Trust and the Company in accordance with its terms.
Very truly yours,
NEXTEL COMMUNICATIONS, INC.
By
------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
------------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
NEXTEL STRYPES TRUST
By
------------------------------------
Name:
Title:
18
<PAGE> 22
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
------------------- ----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..............................................
Donaldson, Lufkin & Jenrette
Securities Corporation....................................
Total........................................................
==========
Sch A - 1
<PAGE> 23
Exhibit 1(a)(vii)
<PAGE> 24
Schedule 1(a)(xvii)
<PAGE> 25
Schedule 1(a)(xv)
<PAGE> 1
EXHIBIT 5
JONES, DAY, REAVIS & POGUE
3500 One Peachtree Center
303 Peachtree Street
Atlanta, Georgia 30308
February 13, 1997
Nextel Communications, Inc.
1505 Farm Credit Drive
McLean, Virginia 22102
Gentlemen:
We have acted as counsel to Nextel Communications, Inc., a
Delaware corporation (the "Company"), in connection with the registration of
8,243,875 shares of Common Stock, $.001 par value per share, of the Company (the
"Shares"), to be registered by the Company pursuant to a Registration Statement
on Form S-3 (File No. 333-21171) (the "Registration Statement"), filed with the
Securities and Exchange Commission to which this opinion appears as Exhibit 5.
We have examined originals or certified or photostatic copies
of such records of the Company, certificates of officers of the Company, and
public officials and such other documents as we have deemed relevant or
necessary as the basis of the opinion set forth below in this letter. In such
examination, we have assumed the genuineness of all signatures, the conformity
to original documents submitted as certified or photostatic copies, and the
authenticity of originals of such latter documents. Based on the foregoing, we
are of the following opinion:
The Shares are duly authorized, validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5
to the Registration Statement and the reference to this Firm under the heading
"Validity of Shares" in the Prospectus constituting part of the Registration
Statement.
Sincerely,
/s/ Jones, Day, Reavis & Pogue
JONES, DAY, REAVIS & POGUE
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-21171 of Nextel Communications, Inc., on Form
S-3, of our report dated March 20, 1996, relating to the consolidated financial
statements 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 11, 1997
<PAGE> 2
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendement No. 1 to
Registration Statement No. 333-21171 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 "Selected Financial Data" and
"Experts" in such Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
McLean, Virginia
February 11, 1997
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Dial Page, Inc.
We consent to the incorporation by reference in Amendment No. 1 to the Form S-3
Registration Statement (No. 333-21171) 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 11, 1997
