<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 4, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
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)
<TABLE>
<S> <C>
DELAWARE 36-3939651
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
</TABLE>
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)
---------------------
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)
---------------------
COPIES TO:
LISA A. STATER, ESQ.
JONES, DAY, REAVIS & POGUE
3500 ONE PEACHTREE CENTER
303 PEACHTREE STREET
ATLANTA, GEORGIA 30308
(404) 521-3939
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable following the effective date of this Registration Statement.
If the securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, check the following box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [ ]
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: [ ]
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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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) FEE(2)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, Par Value $.001 Per
Share...................................... 4,909,090 shares $13.75 $67,500,000 $20,455
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</TABLE>
(1) Estimated solely for purposes of computing the registration fee pursuant to
Rule 457(c) of the Securities Act of 1933, as amended (the "Securities
Act"), based upon the average of the reported high and low sales prices of
Class A Common Stock of the registrant on the Nasdaq Stock Market (the
"Nasdaq NM") on May 29, 1997 and the maximum proceeds to be received by the
registrant.
(2) The registration fee for the securities offered hereby, $20,455, is
calculated pursuant to Rule 457(c) under the Securities Act as follows: one
thirty-third of one percent of the product of $13.75, the average of the
high and low sales prices of Class A Common Stock on the Nasdaq NM on May
29, 1997, multiplied by 4,909,090, the number of shares to be registered.
---------------------
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 SAID SECTION 8(A), MAY DETERMINE.
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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.
SUBJECT TO COMPLETION DATED JUNE 4, 1997
PROSPECTUS
NEXTEL COMMUNICATIONS, INC.
CLASS A COMMON STOCK,
PAR VALUE $.001 PER SHARE
---------------------
This Prospectus relates to the offering (the "Offering") of up to 4,909,090
shares (the "Shares") of Class A Common Stock, par value $.001 per share (the
"Common Stock"), of Nextel Communications, Inc. ("Nextel" or the "Company"). The
Shares will be offered exclusively to holders of Nextel's five outstanding
issues of Senior Redeemable Discount Notes (the "Nextel Notes") who validly
consent ("Consenting Holders") to certain amendments to the public indentures
(the "Nextel Indentures") relating to the Nextel Notes pursuant to the consent
solicitation materials dated April 14, 1997 (as supplemented and amended to and
including the date of this Prospectus, the "Consent Solicitation Statement"). A
copy of the Supplemental Consent Solicitation Statement dated June 4, 1997 (the
"Supplemental Statement") is being or has been delivered to each of the
Consenting Holders of the Nextel Notes to whom this Offering is being made. This
Prospectus does not constitute a solicitation of consents. Consents are being
solicited only by means of the Consent Solicitation Statement.
The offering price of the Shares was determined in part based upon
indications of interest by parties representing certain holders of Nextel Notes
to certain representatives of Nextel in conjunction with the Consent
Solicitation (as defined below). The Shares will be offered exclusively to
Consenting Holders subject to the terms and conditions set forth herein and in
the accompanying form of subscription (the "Subscription Form"). In order to
subscribe for Shares, a Consenting Holder must properly complete and execute the
Subscription Form and tender the purchase price to the Bank of New York, as
trustee (the "Trustee") on behalf of the Company on or before ,
1997 (the "Expiration Date"). A Consenting Holder may subscribe only for the
maximum number of whole Shares (rounded down to the nearest whole share)
purchasable for the aggregate consent payment (the "Consent Payment") received
by such Consenting Holder in connection with such Consenting Holder's delivery
of valid consents in the Consent Solicitation. Consenting Holders who subscribe
for Shares will be required to agree that such Shares may not be transferred,
subject to certain limited exceptions, prior to January 1, 1998. See "Plan of
Distribution." The Company will not accept any subscriptions for Shares unless
and until supplemental indentures that will set forth the proposed amendments
and waivers for each respective Nextel Indenture contemplated by the Consent
Solicitation Statement (the "Supplemental Indentures") are executed and have
become operative and the registration statement of which this Prospectus is a
part is declared effective by the Securities and Exchange Commission (the
"Commission").
The proceeds of the sale of the Shares will be used by Nextel for general
corporate purposes. See "Use of Proceeds."
The Common Stock is traded on the Nasdaq National Market (the "Nasdaq NM")
under the symbol "NXTL," and the closing sale price of the Common Stock on
, 1997, as reported by the Nasdaq NM, was $ . See
"Certain Market Information."
SEE "RISK FACTORS," BEGINNING ON PAGE 7 OF THIS PROSPECTUS, FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE SHARES OFFERED HEREBY.
The Offering is not contingent upon receipt of subscriptions for any
minimum number of Shares. The following table assumes that all holders of the
Nextel Notes are Consenting Holders and that all such Consenting Holders elect
to subscribe for Shares.
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OFFERING PRICE PROCEEDS TO COMPANY(1)
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<S> <C> <C>
Per Share.......................................... (2)
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Total.............................................. (3)
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</TABLE>
(1) Before deducting estimated expenses of $ of the Offering.
(2) The offering price per share was calculated at an amount equal to 10/11 of
the arithmetic average of the closing bid and ask prices (but in neither
case being more than $0.25 greater or less than the actual last sale price)
for a share of Common Stock as reported on the Nasdaq NM for the consecutive
trading day period beginning on June 1997, the fifth trading day prior
to the expiration date of the Consent Solicitation, and ending with the
fifth trading day after such expiration date.
(3) The total offering price represents the aggregate Consent Payments.
---------------------
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.
The Shares will be delivered to Consenting Holders who validly subscribe
therefor promptly following the Expiration Date.
The date of this Prospectus is , 1997.
<PAGE> 3
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 Commission. The
reports, proxy statements and other information filed by Nextel 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., Washington, D.C. 20549, at
prescribed rates. Additionally, the Commission maintains a Web site on the
Internet, that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission
and that is located at http://www.sec.gov.
Nextel 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 Common Stock offered 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.
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY NEXTEL. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES IN ANY JURISDICTION TO OR FROM
ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION IN
SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION
OF SECURITIES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR THE
AFFAIRS OF NEXTEL SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
THIS PROSPECTUS INCORPORATES CERTAIN DOCUMENTS REGARDING NEXTEL 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. REQUESTS FOR SUCH
DOCUMENTS SHOULD BE 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, 1996
filed with the Commission on March 31, 1997;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1997
dated and filed with the Commission on May 15, 1997;
(ii)
<PAGE> 4
(c) Current Reports on Form 8-K: (i) dated and filed with the
Commission on January 21, 1997, (ii) dated and filed with the Commission on
February 7, 1997, (iii) dated and filed with the Commission on March 18,
1997, (iv) dated and filed with the Commission on April 15, 1997 and (v)
dated June 2, 1997, and filed with the Commission on June 3, 1997;
(d) Proxy Statement, dated as of April 18, 1997, filed in definitive
form on April 21, 1997 with the Commission with respect to the information
required to be included herein by Items 401 (management), 402 (executive
compensation) and 404 (certain relationships and related transactions) of
Regulation S-K promulgated under the Securities Act and the Exchange Act;
and
(e) 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 Nextel 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 the 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.
(iii)
<PAGE> 5
SUMMARY
The following summary should be read in conjunction with, and is qualified
in its entirety by, the more detailed information and financial statements,
including the notes thereto, included or incorporated by reference into this
Prospectus.
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 for periods prior to July 28,
1995 refer to Old Nextel as the predecessor to the business and operations of
Nextel. Unless the context requires otherwise, references 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 Nextel's Class A Convertible Redeemable Preferred Stock, par value
$.01 per share (the "Class A Preferred Stock"), and 82 shares of Nextel's Class
B Convertible Preferred Stock, par value $.01 per share (the "Class B Preferred
Stock"), 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") and the merger of Dial Page, Inc. ("Dial Page")
with and into Nextel on January 30, 1996 (the "Dial Page Transaction").
A. THE COMPANY
OVERVIEW
Nextel's business consists principally of providing a wide array of digital
and analog wireless communications services to its customers in the United
States, in each case utilizing frequencies licensed to its subsidiaries by the
Federal Communications Commission ("FCC"). Nextel provides a differentiated
package of integrated digital wireless communications services under the Nextel
brand name to customers of the various networks constructed and operated by
Nextel's subsidiaries in and around major metropolitan population centers
throughout the country. Collectively, Nextel's operations constitute one of the
largest integrated wireless communications networks utilizing a single digital
transmission technology currently offering commercial service in the United
States. Through its digital and analog wireless communications networks, Nextel
is the leading provider of specialized mobile radio ("SMR") wireless
communications services in nearly all 48 states in the continental United States
and in Hawaii. Nextel has significant SMR spectrum holdings in and around
virtually every major business and population center in the country, including
all of the top 50 metropolitan market areas in the United States.
Nextel's operating revenues primarily arise from its digital and analog
wireless communications businesses in the United States, particularly the mobile
telephone service and two-way radio service 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 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, two-way dispatch, paging and
alphanumeric short-messaging service, and in the future is expected to be able
to access data transmission. Nextel 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"). As of March 31,
1997, Nextel's Digital Mobile networks were operating in major metropolitan
market areas throughout the United States in which approximately 50% of the
total United States population lives or works.
1
<PAGE> 6
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 primarily to the voice transmission quality of the
mobile telephone service. In response to these issues, Nextel and Motorola took
action on several fronts to address system performance issues in general, and
voice transmission quality concerns in particular. See "Risk
Factors -- Implementation of Digital Mobile Networks Subject to Risks of
Developing Technology." Additionally, Nextel, together with Motorola, in 1995
began pursuing a program directed toward the development and deployment of
modifications to the first generation iDEN technology platform, which
modifications were targeted specifically at improving the voice transmission
quality of the mobile telephone service. Nextel commenced the full-scale
commercial launch of its first Digital Mobile networks incorporating the
modified iDEN technology (referred to herein as "Reconfigured iDEN") in the
Chicago metropolitan market late in the third quarter of 1996. Subsequently in
1996, Nextel commenced full-scale commercial launches of the Reconfigured iDEN
Digital Mobile networks in the Atlanta, Boston, Denver, Detroit and Las Vegas
metropolitan market areas, in each case accompanied by an aggressive regionally
focused marketing campaign. During the first four months of 1997, Nextel
commenced commercial launches of its Reconfigured iDEN technology on the Nextel
national digital network throughout the Pacific Northwest, metropolitan
Washington, D.C. and in cities throughout North Carolina, New York, Maryland,
Missouri and California, including Seattle, Portland, Charlotte, Raleigh/Durham,
Greensboro, Winston-Salem, New York, Baltimore, St. Louis, Los Angeles, San
Francisco and San Diego.
Recently, Nextel announced the introduction of its national digital network
and indicated that it will not charge roaming fees for its customers traveling
anywhere on the national digital network. Nextel's national digital network,
which covers major metropolitan areas in which approximately 50% of the United
States population lives or works, will enable Nextel's mobile telephone
customers to "roam" throughout the markets covered by the network at the same
airtime rate charged in their home markets. The Nextel national digital network
provides the same mobile telephone functionality and related features offered to
customers in their home markets and eliminates the complex dialing procedures,
access fees and higher per-minute airtime rates often encountered by "roaming"
customers of cellular providers. Additionally, Nextel recently announced a new
billing policy pursuant to which Nextel will bill its mobile telephone service
customers based on the actual number of seconds of airtime used after the first
minute, in contrast to the cellular industry practice of rounding all calls up
to the next minute.
Since December 31, 1994, the number of subscriber units in service on
Nextel's Digital Mobile network has increased substantially, 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. As a result, the number of subscriber units in service on Nextel's
Digital Mobile network increased from 13,500 at December 31, 1994, to 85,000 at
December 31, 1995, to 300,300 at December 31, 1996 and to 422,900 at March 31,
1997. Nextel's business and marketing strategy for its Digital Mobile networks
continues to be based on, and reflect, a principal focus on multi-service
business users in its markets with Digital Mobile networks.
During 1996 and into early 1997, Nextel also significantly expanded its
operations and investments involving wireless communications service providers
outside the United States, which are conducted under or are coordinated by or
through McCaw International, Ltd. ("McCaw International"), an indirect, wholly
owned subsidiary of Nextel. With the exception of the equity interests held by
Nextel and by McCaw International in Clearnet Communications, Inc. ("Clearnet"),
a major provider of analog and digital SMR wireless communications services
throughout Canada, and the holder of one of the two nationwide personal
communications services ("PCS") licenses awarded in Canada, McCaw
International's subsidiaries or other entities in which McCaw International
holds equity or equivalent interests own and operate wireless communications
systems in Latin America and Asia. McCaw International's operating companies
currently provide a variety of analog or digital wireless communications
services (including analog SMR dispatch and interconnect, paging and
alphanumeric short-messaging and digital mobile telephone services) in certain
major metropolitan areas in Argentina, Brazil, Mexico, the Philippines and
Shanghai, China. In March 1997, McCaw International completed a private
placement of 951,463 units yielding approximately $500,000,000 in
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<PAGE> 7
gross proceeds. Each unit is comprised of a 10-year senior discount note and a
warrant to purchase 0.10616 shares of McCaw International common stock. The
notes (the "McCaw Notes") have a 13% yield to maturity, are noncallable for five
years, and require no interest payments for the first five years. The warrants
are exercisable at a price of $36.45 per share and entitle holders to purchase,
in the aggregate, approximately 1% of McCaw International's common stock on a
fully diluted basis.
Nextel's principal executive and administrative facility is located at 1505
Farm Credit Drive, McLean, Virginia 22102, and its telephone number is (703)
394-3000.
BUSINESS PLAN
Nextel currently is making necessary preparations to adopt and implement a
newly developed revised business plan (the "Revised Business Plan"), which would
involve a more accelerated and extensive deployment during 1997 and 1998 of the
Reconfigured iDEN technology platform throughout Nextel's existing and
contemplated Digital Mobile networks (including primary connecting routes
between affected markets) in the United States. Nextel anticipates that
deployment of Digital Mobile networks utilizing the Reconfigured iDEN technology
platform will enable it to provide potential customers in its markets with an
integrated package of wireless communications services competitive with the
service packages being offered currently or expected to be offered by other
providers of wireless communications services in those markets. The Revised
Business Plan does not contemplate a significant increase in the population
coverage to be achieved by the Digital Mobile networks in operation at the end
of 1998, as compared to the population coverage targets reflected in its current
business plan (the "Existing Business Plan"). However, there are significant
areas of difference between the Existing Business Plan and the Revised Business
Plan in terms of the geographical coverage objectives, the perceived customer
demands for and utilization of the relevant wireless services and the
positioning of Nextel's products and services relative to those of competing
wireless communications service providers. Nextel estimates that system
infrastructure and other system capital costs to be incurred through 1998 to
implement the Existing Business Plan will be approximately $1.0 billion and that
implementation of the Revised Business Plan would increase such costs by at
least $450 million. See "Risk Factors -- Nextel to Require Additional
Financing." Nextel believes that the implementation of its Revised Business Plan
will better position Nextel both to achieve its strategic objectives and to
prepare for emerging competition in the wireless communications industry,
especially from certain current operators that, on their existing cellular
frequencies or on other frequencies acquired by such operators or their
affiliates in the recently concluded PCS spectrum auctions, are in the process
of converting their wireless communications systems to digital technology
formats and are moving to provide "nationwide coverage" on the resulting
systems. Nextel believes that a significant strategic advantage may exist in
being "first to market," particularly in comparison to the new "entrepreneur
block" PCS licensees and other existing or potential regional wireless
communications service providers, which may encounter significant financial and
other challenges in replicating or overtaking Nextel's industry position once
Nextel successfully concludes its nationwide Digital Mobile network build-out
plan and develops a sufficient customer base in its markets. Although Nextel
already has taken a number of significant steps in anticipation of implementing
the Revised Business Plan, and further actions currently are underway to reach
that objective (including obtaining modifications to certain terms contained in
the Nextel Indentures to provide the flexibility required to assemble and
utilize the necessary financing for such Revised Business Plan), several of the
actions that must be taken to enable Nextel to implement the Revised Business
Plan are dependent on certain actions by or responses from third parties, which
as yet have not been secured. See "Risk Factors -- Nextel to Require Additional
Financing" and "-- Forward Looking Statements."
RECENT DEVELOPMENTS
Consent Solicitation. Under the terms of the Nextel Indentures as in
effect on June 4, 1997, Nextel and its subsidiaries that are "restricted
subsidiaries" for purposes of the Nextel Indentures (the "restricted
subsidiaries") may only incur debt (other than certain categories of "Permitted
Debt" (as defined in the Nextel Indentures)) if the aggregate amount of its debt
does not exceed certain levels. Because such terms of the Nextel Indentures may
have the effect of limiting Nextel's ability to borrow the funds necessary to
3
<PAGE> 8
complete its planned deployment of the Reconfigured iDEN technology in its
Digital Mobile networks (under both the Existing Business Plan and the Revised
Business Plan), Nextel decided to seek the consent of the holders of the Nextel
Notes to certain amendments to the Nextel Indentures pursuant to the Consent
Solicitation Statement (the "Consent Solicitation"). On May 31, 1997, Nextel
announced that it had reached a preliminary understanding with a group of
significant holders of the Nextel Notes concerning the terms and conditions on
which Nextel would seek amendments and waivers to specific provisions of the
Nextel Indentures. The proposed amendments contemplated by such preliminary
understanding would include, among other things, certain modifications to the
debt incurrence limitations of the Nextel Indentures to allow Nextel to incur
additional indebtedness to fund such deployment, by (i) increasing the amount of
permitted debt by $350 million and providing additional flexibility to allocate
the total amount of permitted debt among the existing categories of permitted
debt, (ii) allowing Nextel to incur indebtedness in excess of such permitted
debt, in the period prior to January 1, 2000, based on the amount and timing of
any net cash proceeds received by Nextel from new equity issuances (such new
equity issuances would exclude equity funds from several currently identified
sources, including most significantly equity investment proceeds scheduled to be
received from affiliates of Craig O. McCaw in 1997 in connection with the Option
Commitment (as defined below)), and (iii) making Nextel's ability to incur
additional indebtedness on and after January 1, 2000 a function of satisfaction
of a new interest coverage ratio test. See "Risk Factors -- Nextel to Require
Additional Financing." The proposed amendments and waivers to the Nextel
Indentures contemplated by such preliminary understanding also would authorize
Nextel to transfer to its unrestricted subsidiary group the approximate 17%
equity interest in Clearnet currently held directly by Nextel and also would
implement certain technical amendments to particular Nextel Indenture
provisions. No assurances can be given that any such consents will be obtained.
Receipt of consents necessary for the execution and effectiveness of the
Supplemental Indentures implementing the proposed amendments and waivers must
occur before the Offering contemplated hereby will be consummated. See "Risk
Factors -- Forward Looking Statements."
The foregoing statements relating to the Nextel Indentures are summaries of
the relevant provisions and do not purport to be complete. Where reference is
made to particular provisions of the Nextel Indentures, such provisions,
including the definitions of certain terms, are incorporated by reference as
part of such summaries, and are qualified in their entirety by such reference.
Each of the Nextel Indentures has previously been filed with the Commission, and
each of the Nextel Indentures is incorporated by reference herein. Additionally,
Nextel would intend to file with the Commission copies of any Supplemental
Indentures that are executed and become effective to implement amendments or
waivers actually obtained, if any, that would modify the terms of any of the
Nextel Indentures to the extent such matters are consented to by the requisite
percentages of the holders of the various issues of the Nextel Notes. Any such
filing made by Nextel during the offering period hereunder would be incorporated
by reference herein.
This Prospectus does not constitute a solicitation of consents. The Consent
Solicitation is being made only by means of the Consent Solicitation Statement.
McCaw Investor Exercise Commitment. On April 11, 1997, Nextel reached an
agreement with the McCaw Investor pursuant to which the McCaw Investor committed
to exercise in full its currently outstanding option (the "First Option") to
purchase 15,000,000 shares of Nextel's Common Stock for an aggregate purchase
price of $232,500,000 (the "Option Commitment"), with the consummation thereof
scheduled to occur on or before July 28, 1997 (the "Option Closing"). In
consideration for the McCaw Investor's making the Option Commitment and a
payment of a nominal purchase price, Nextel agreed to issue to the McCaw
Investor a contingent equity instrument (the "CEI"), which, at any time between
the Option Closing and July 28, 1999, may be converted, without any additional
consideration, into a number of shares of Common Stock to be determined using a
formula based upon the average closing price for a share of Common Stock during
the 20 trading days immediately preceding the Option Closing (the "Average
Trading Price"). The number of shares of Common Stock into which the CEI may be
converted ranges from no shares, if the Average Trading Price is equal to $15.50
or more, to a maximum of 1,607,143 shares, if the Average Trading Price is
$14.00 or less. The Option Closing is subject to certain conditions, including,
without limitation, the negotiation and execution of definitive agreements and
receipt of the consents of the holders of the Nextel
4
<PAGE> 9
Notes to the proposed amendments to the Nextel Indentures. Nextel has been
advised by representatives of the McCaw Investor that Supplemental Indentures,
in the forms distributed as attachments to the Supplemental Statement, will (if
they are executed and become operative) be viewed as satisfying such condition
regarding receipt of consents.
In connection with the foregoing, the McCaw Investor also agreed to provide
up to $50,000,000 in debt financing to Nextel (the "McCaw Investor Borrowings")
(see "Risk Factors -- Nextel to Require Additional Financing") and another
affiliate of Craig O. McCaw (an equity owner and controlling person of the McCaw
Investor) agreed to acquire an option to purchase up to 25,000,000 shares of
Common Stock as described below.
On March 20, 1997, Nextel completed the purchase from an affiliate of
Comcast Corporation ("Comcast") of an option to acquire 25,000,000 shares of
Common Stock, at an exercise price of $16.00 per share (the "Comcast Option"),
for an aggregate purchase price of $25,000,000. In connection with the
agreements relating to the Option Commitment, on April 11, 1997, Nextel reached
an agreement with an affiliate of Craig O. McCaw (such affiliate, the
"Purchaser"), pursuant to which the Purchaser will acquire, for an aggregate
purchase price of $25,000,000, an option, in replacement of the Comcast Option,
to purchase 25,000,000 shares of Common Stock (the "New Option"), 15,000,000 of
which would be purchasable at an exercise price of $16.00 per share and the
remaining 10,000,000 of which would be purchasable at an exercise price of
$18.00 per share, at any time through July 28, 1998. The New Option, and any
shares of Common Stock issued upon exercise thereof, would be transferable,
subject to certain limitations. In addition, one direct transferee of the
Purchaser would be entitled to designate one nominee for election to Nextel's
Board of Directors, provided that such party (i) has exercised the transferred
portion of the New Option and continues to own at least 10,000,000 shares of
Common Stock obtained on such exercise, (ii) is not an affiliate of Craig O.
McCaw and (iii) does not hold a 5% or greater equity ownership interest in any
entity that provides terrestrial-based wireless communications services in
competition with Nextel in any of its markets. Shares issuable upon exercise of
the New Option will be entitled to certain demand and piggyback registration
rights, which would be assignable to transferees in certain circumstances. The
Purchaser's right and obligation to acquire the New Option is subject to the
negotiation and execution of definitive agreements and receipt of the consents
of the holders of the Nextel Notes to the proposed amendments to the Nextel
Indentures. Nextel has been advised by representatives of the Purchaser that
Supplemental Indentures, in the forms distributed as attachments to the
Supplemental Statement, will (if they are executed and become operative) be
viewed as satisfying such condition regarding receipt of consents.
As indicated, the above potential transactions are subject to certain
conditions, including particularly the receipt of certain consents from holders
of the Nextel Notes to the proposed amendments to the Nextel Indentures. As
there can be no assurance that any or all of such consents will be obtained,
there can be no assurance that these potential transactions will be consummated.
See "Risk Factors -- Forward Looking Statements."
5
<PAGE> 10
B. SUMMARY FINANCIAL DATA
NEXTEL COMMUNICATIONS, INC.
SELECTED CONSOLIDATED 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, 1996, and Nextel's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997, incorporated herein by
reference. The financial information for the fiscal years ended March 31, 1993
and 1994, the nine months ended December 31, 1994 and the years ended December
31, 1995 and 1996 have been derived from the audited consolidated financial
statements of Nextel. The report of Deloitte & Touche, LLP, independent
auditors, for the year ended December 31, 1996 has been incorporated herein by
reference. See "Experts." The financial information for the three months ended
March 31, 1996 and 1997 is derived from the unaudited financial statements of
Nextel and, in the opinion of Nextel, 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>
FISCAL YEAR NINE MONTHS THREE MONTHS
ENDED ENDED YEAR ENDED ENDED
MARCH 31, DECEMBER 31, DECEMBER 31, MARCH 31,
------------------------- ------------ --------------------------- ---------------------------
1993 1994 1994(8) 1995 1996 1996 1997
----------- ----------- ------------ ------------ ------------ ------------ ------------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data(1):
Revenues................. $ 53,002 $ 67,928 $ 74,857 $ 171,703 $ 332,938 $ 68,318 $ 110,676
Cost of operations....... 20,979 28,666 51,406 151,718 247,717 57,299 58,161
Selling, general and
administrative
expenses............... 18,971 41,107 85,077 193,321 330,256 65,289 132,376
Expenses related to
corporate
reorganization(2)...... -- -- -- 17,372 -- -- --
Depreciation and
amortization........... 25,942 58,398 94,147 236,178 400,831 92,674 110,203
----------- ----------- ------------ ------------ ------------ ------------ ------------
Operating loss........... (12,890) (60,243) (155,773) (426,886) (645,866) (146,944) (190,064)
Interest income
(expense), net......... 1,324 (18,101) (41,454) (89,509) (206,480) (42,796) (71,285)
Other income (expense),
net(3)(4).............. 924 3 33 (15,372) (10,866) -- 1,063
Income tax benefit....... 1,027 21,437 71,345 200,602 307,192 71,022 39,436
----------- ----------- ------------ ------------ ------------ ------------ ------------
Net loss................. $ (9,615) $ (56,904) $ (125,849) $ (331,165) $ (556,020) $ (118,718) $ (220,850)
=========== =========== ============ ============ ============ ============ ============
Net loss per share....... $ (0.16) $ (0.73) $ (1.25) $ (2.31) $ (2.50) $ (.56) $ (.93)
=========== =========== ============ ============ ============ ============ ============
Number of shares used in
computations(5)........ 58,736,000 78,439,000 100,639,000 143,283,000 222,779,000 213,653,000 237,496,000
=========== =========== ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31, AS OF DECEMBER 31, AS OF MARCH 31,
--------------------- ------------------------------------ -----------------------
1993 1994 1994 1995 1996 1996 1997
-------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents.............. $ 17,083 $ 483,483 $ 301,679 $ 340,826 $ 139,681 $ 470,432 $ 638,215
Marketable securities.................. 14,768 426,113 172,313 68,443 5,012 26,276 5,102
Current assets......................... 39,932 921,983 504,248 504,661 309,097 600,587 856,686
Intangible assets, net................. 144,666 889,912 1,451,780 3,549,622 4,076,300 3,996,333 4,280,604
Total assets........................... 333,557 2,229,832 2,918,985 5,547,256 6,472,439 6,265,755 7,435,652
Long-term debt(6)...................... 55,024 1,113,268 1,193,096 1,687,829 2,783,041 2,128,243 3,720,427
Stockholders' equity(7)................ 255,224 846,304 1,268,575 2,945,141 2,808,138 3,208,049 2,779,177
</TABLE>
- ---------------
(1) See Note 2 to the Notes to Nextel's consolidated financial statements for a
description of acquisitions.
(2) See Note 2 to the Notes to Nextel's consolidated financial statements.
(3) Other expenses in 1995 include a $15.0 million write-down of the investment
in Corporacion Mobilcom S.A. de C.V. as a result of the devaluation of the
Mexican peso.
(4) Other expenses in 1996 primarily reflect equity in the losses of certain
foreign investments accounted for under the equity method. (See Note 2 to
the Notes to Nextel's consolidated financial statements.)
(5) Includes the weighted average number of shares of Common Stock outstanding
during the respective periods.
(6) Excludes the current portions of long-term debt. See Note 6 to the Notes to
Nextel's consolidated financial statements.
(7) See Notes 10 and 11 to the Notes to Nextel's consolidated financial
statements.
(8) 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
<PAGE> 11
RISK FACTORS
The following risk factors may affect the value of the 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 $556,020,000 and $331,165,000 for the years ended
December 31, 1996 and December 31, 1995, respectively, and $220,850,000 for the
quarter ended March 31, 1997. Nextel had an accumulated deficit totalling
$1,356,101,000 at March 31, 1997. Nextel 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. 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 Additional
Financing" and "-- Forward Looking Statements."
RISKS OF IMPLEMENTATION OF DIGITAL MOBILE NETWORKS
The implementation of Digital Mobile networks involves systems design, site
procurement, construction, electronics installation, receipt of necessary FCC
and other regulatory approvals, channel recovery (freeing a certain number of
800 MHz frequencies from SMR analog traffic) 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 (where such networks are not already in
commercial operation) 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 three principal digital technology formats that are
being assessed or proposed for deployment or deployed currently by providers of
cellular telephone service or by certain entities that have been awarded 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, Inc. ("AT&T Wireless," formerly McCaw
Cellular Communications, Inc. ("McCaw Cellular")), 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. The second
principal format is known as the Code Division Multiple Access ("CDMA") digital
transmission technology which has been deployed by PrimeCo Personal
Communications, Bell Atlantic/Nynex Mobile Services and Sprint PCS in certain of
their PCS markets and is expected to be deployed by certain other cellular and
PCS operators. The third principal format, known as GSM-PCS, is an updated,
upbanded, PCS version of the TDMA-based digital technology format known as
Global System for Mobile Communications that has become the standard for digital
cellular technology in Europe. GSM-PCS has been deployed by American Personal
Communications, a subsidiary of Sprint Spectrum, L.P., in its Washington,
D.C./Baltimore metropolitan market and Bell South in certain of its PCS markets,
and is expected to be deployed by certain other PCS operators. Although TDMA,
CDMA and GSM-PCS are digital transmission technologies, and thus share certain
basic characteristics and areas of contrast to analog transmission technology,
TDMA, CDMA and GSM-PCS 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
7
<PAGE> 12
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 Reconfigured iDEN technology platform
or the three-time slot TDMA technology format being utilized by certain cellular
providers, the first generation iDEN technology, as well as the "six-time slot
TDMA" technology utilized for the two-way dispatch function in the Reconfigured
iDEN technology platform, can carry up to six (rather than three) voice and/or
control paths per channel.
The use of six-time and three-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 will be licensed to each
cellular and certain PCS operators in each market. Reconfigured iDEN, which is
designed to use three time slots per channel for the mobile telephone service,
will result in a reduction in channel capacity compared to the capacity
achievable using first generation iDEN technology for mobile telephone service.
Although Nextel believes that TDMA technology, on balance, is superior to
analog technology that is used in traditional SMR systems, the use of digital
technology in general, and the six-time slot TDMA version of first generation
iDEN in particular, as each is currently deployed, involves certain performance
trade-offs, for example, in various characteristics affecting voice quality and
fidelity. These trade-offs may have an effect on customer acceptance of iDEN
technology.
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 technologies. 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,
GSM-PCS 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.
Nextel implemented Digital Mobile networks in its market areas using Motorola's
first generation iDEN technology prior to the second quarter of 1996. During
that time frame, Nextel encountered certain technology and system 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 transmission quality of mobile telephone
services utilizing Nextel's Digital Mobile networks. Nextel provided discounts
and gave credits to customers in an effort to foster satisfactory customer
relations and delayed both its planned deployment of its Digital Mobile networks
and commencement of aggressive product and service marketing efforts pending
resolution of such system performance and voice quality issues. During this
period Nextel and Motorola also took actions to address system performance
issues in general, and voice transmission quality concerns in particular. These
actions consisted of efforts to enhance the performance of the first generation
iDEN networks in a number of areas that were believed to adversely affect system
performance, perceived voice transmission quality and customer satisfaction, and
included measures as diverse as improvements in system infrastructure and
subscriber equipment design and interaction, adjustments in cell site locations
and in radio frequency planning, development of enhanced network load and
traffic management and control systems, and development and deployment of more
sophisticated diagnostic and error correction software. These and other
measures, most of which can be categorized as systems optimization, are expected
to be ongoing activities connected with Nextel's operation of its Digital Mobile
networks. Moreover, Nextel expects that systems optimization, software loading
and planned maintenance activities will be ongoing components of its operation
of the Digital Mobile networks that will periodically require the scheduled
turndown of selected subsystems in Nextel's Digital Mobile
8
<PAGE> 13
networks during periods of very low system traffic, typically at night or on
weekend days. See "-- Forward Looking Statements."
Nextel's objectives in carrying out the initial phase of system development
and technology enhancements were to achieve satisfactory performance levels in
the areas of system reliability and system access. Nextel believes that its
existing Digital Mobile networks (including both those utilizing the
Reconfigured iDEN technology and those continuing to use the first generation
iDEN technology), as operated at March 31, 1997, were demonstrating acceptable
performance levels in these areas. Nextel also believes that the successful
development and national deployment throughout Nextel's Digital Mobile networks
of the Reconfigured iDEN technology, with its accompanying improvements in the
voice quality of the mobile telephone service provided on Nextel's Digital
Mobile networks, should enable Nextel to aggressively market such services as
part of a competitive wireless communications services alternative to existing
cellular telephone services in its markets. See "-- Forward Looking Statements."
Motorola has advised Nextel that it contemplates continuing to install
software upgrades and Nextel anticipates it will continue to advise and consult
with Motorola concerning potential measures that could be taken to address any
issues concerning system performance and/or expressed customer satisfaction
levels as revealed by Nextel's continuing system testing and customer surveys.
To date, Nextel's experience has been derived mainly based on customers in its
markets employing the first generation iDEN technology, who are primarily
oriented to the two-way dispatch service, and such experience should not
necessarily be regarded as an accurate predictor of Nextel's experience in the
future, particularly as Nextel continues to implement its planned 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 services providers or to achieve significant further subscriber
growth. See "-- Forward Looking Statements."
Nextel anticipates that there will be an ongoing focus on systems and
technology optimization activities directed at achieving improvements in the
overall performance of the Digital Mobile networks and such technology
optimization activities will be a continuing component of normal Digital Mobile
network operation. Moreover, 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, and future upgrades or modifications to the
Digital Mobile networks 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 amendment to the existing equipment purchase
agreements between Nextel and Motorola entered into in connection with the McCaw
Transaction (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. Although the Reconfigured iDEN development and
deployment activities to date have proceeded in a timely and satisfactory
manner, no assurance can be given that any further modifications or enhancements
to the Reconfigured iDEN technology 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
9
<PAGE> 14
satisfy customer requirements, or that Nextel's mobile telephone services
utilizing the Reconfigured iDEN technology 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 TO REQUIRE ADDITIONAL 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), payment of consent fees and expenses in the
Consent Solicitation process and corporate expenditures. Nextel anticipates that
its cash utilization for investment activities and operating losses will
continue to exceed its cash flows from operating activities over the next
several years. During fiscal year 1996, Nextel's average monthly cash
utilization rate for investing activities (principally attributable to capital
expenditures for the build-out of the Digital Mobile networks) was approximately
$33,390,000, and its average monthly operating losses (exclusive of non-cash
items) was approximately $20,400,000. Such average monthly amounts are not
necessarily representative of Nextel's anticipated experience in such areas and
would be expected to increase during 1997 and 1998 in connection with the
deployment of the Reconfigured iDEN technology platform, particularly if Nextel
is able to implement the Revised Business Plan. During the ongoing start up
phase of its Digital Mobile networks, Nextel expects that it will need 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 March 31, 1997 totaled approximately
$643,317,000 (however, approximately $479,995,000 of such amount represents
cash, cash equivalents and marketable securities held by McCaw International and
its subsidiaries, which items are not available, due to restrictions contained
in the provisions of the indenture relating to the McCaw Notes, to fund any of
the cash needs of Nextel's domestic Digital Mobile and analog SMR businesses).
Nextel, Nextel Finance Company ("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"; and
collectively with the Bank Credit Facility, the "Bank and Vendor Credit
Facilities"). 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 the restricted
subsidiaries under the terms of the Nextel Indentures. At March 31, 1997, Nextel
had drawn approximately $979,000,000 of its available financing under the Bank
Credit Facility, leaving an aggregate of approximately $676,000,000 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.
The Bank Credit Agreement contemplates that Nextel, with the consent of the
lenders under the Bank Credit Agreement and the Vendor Credit Agreement, may
borrow up to an additional $250,000,000 (subject to certain limitations) under
the Bank Credit Facility (the "Additional Bank Borrowings"). The Bank Credit
Agreement also contemplates that borrowings under the Vendor Credit Facility may
be increased by up to $50,000,000 (subject to certain limitations).
10
<PAGE> 15
On March 27, 1997, Nextel and Motorola reached an understanding regarding
the terms and conditions pursuant to which Nextel could access up to an
additional $450,000,000 of equipment financing through Motorola (the "Additional
Motorola Financing") consisting of (i) $50,000,000 in additional senior secured
borrowings pursuant to the Vendor Credit Agreement (the "Additional Vendor
Borrowings"), (ii) up to $200,000,000 in secured borrowings that are to be
second in ranking to the borrowings made pursuant to both the Vendor Credit
Agreement and Nextel's existing Bank Credit Agreement (the "Second Secured
Borrowings") and (iii) up to an additional $200,000,000 in borrowings that would
be required to be ratably secured on an equal ranking with borrowings pursuant
to the Vendor Credit Agreement and such existing Bank Credit Agreement (the
"Senior Secured Borrowings"). Availability of the Additional Motorola Financing
is subject to a number of conditions including, among others, with respect to
the Second Secured Borrowings and the Senior Secured Borrowings, the prior
borrowing of all amounts available under the Vendor Credit Agreement (including
the $50,000,000 in Additional Vendor Borrowings pursuant thereto described
above) and pursuant to Nextel's existing Bank Credit Agreement (including, with
respect to the second $100,000,000 of the Second Secured Borrowings and all of
the Senior Secured Borrowings, the borrowing of $250,000,000 in Additional Bank
Borrowings contemplated by such Bank Credit Agreement), Nextel's receipt of
$232,500,000 in equity contributions from the exercise of the First Option by
the McCaw Investor (see "Summary -- A. The Company -- Recent
Developments -- McCaw Investor Exercise Commitment"), and the receipt of the
approval of a majority of the lenders and secured parties under the Vendor
Credit Agreement and the Bank Credit Agreement (in the case of the Second
Secured Borrowings) and all of such lenders and secured parties (in the case of
the Senior Secured Borrowings). The availability of the Senior Secured
Borrowings is also conditioned upon Nextel raising $250,000,000 in additional
unsubordinated debt financing and Nextel's receipt of the McCaw Investor's
lending commitment for $50,000,000 of debt financing on terms equivalent to such
Senior Secured Borrowings (which lending commitment was included in the
understanding reached between Nextel and the McCaw Investor relating to the
Option Commitment). The availability of all of such additional financing is also
subject to Nextel's satisfying certain requirements under the Nextel Indentures
or obtaining waivers or amendments of such requirements. Nextel believes that
the proposed amendments and waivers described above (see "Summary -- A. The
Company -- Recent Developments -- Consent Solicitation"), which would be
effected upon the Supplemental Indentures being executed and becoming operative,
would satisfy such requirements although the terms of such proposed amendments
would require Nextel to issue additional new equity for cash as a condition to
incurring indebtedness pursuant to such additional financing commitments. The
parties contemplate negotiating and entering into a definitive agreement
implementing the terms of the financing agreements described above. Except for
the understanding regarding the Additional Motorola Financing with Motorola and
the McCaw Investor Borrowings with the McCaw Investor, Nextel does not yet have
any legally binding agreement or commitment from third parties relating to, or
that may be required to satisfy conditions to implement all or any portion of,
the proposed financing pursuant to such Additional Motorola Financing and/or the
McCaw Investor Borrowings.
Nextel believes that it has sufficient funds available pursuant to the Bank
and Vendor Credit Facilities currently in place (but excluding any amounts that
would be available to it through the Additional Bank Borrowings, the Additional
Vendor Borrowings, the Second Secured Borrowings, the Senior Secured Borrowings
and the McCaw Investor Borrowings, the availability of each of which is subject
to certain conditions, including those described herein) and pursuant to the
assumed exercise of the currently outstanding warrants and options to acquire
shares of Common Stock described below, to meet its cash needs for the remainder
of 1997 and into early 1998, based on continuation of its first stage nationwide
Digital Mobile networks build out approach consistent with its Existing Business
Plan, in light of its current (and currently committed) business and investment
activities and assuming a conservative ramp up in Digital Mobile systems
subscriber growth. To fully complete its first stage nationwide Digital Mobile
networks build out in 1998 as envisioned in the Existing Business Plan, and to
adopt and implement the Revised Business Plan, Nextel would need to obtain
additional amounts of debt or equity financing beyond that available under the
Bank and Vendor Facilities currently in place (again excluding amounts
constituting Additional Bank Borrowings, Additional Vendor Borrowings, Second
Secured Borrowings, Senior Secured Borrowings and McCaw Investor Borrowings) and
equity proceeds of $232,500,000 associated with an assumed exercise in full of
the First Option by the McCaw Investor. The additional financing that would be
required to carry out the
11
<PAGE> 16
Existing Business Plan activities through 1998 would primarily consist of equity
or debt funding to substitute for the $400,000,000 in proceeds that would have
been received upon an exercise in full of the Comcast Option, which was
repurchased by Nextel in a transaction consummated on March 20, 1997. If Nextel
consummates the issuance of the New Option, and such New Option is exercised in
full (each of which occurrences are subject to numerous significant conditions
and cannot be assured), Nextel would receive gross proceeds from such exercise
aggregating $420,000,000 prior to the expiration of the New Option on July 28,
1998. However, to the extent such additional financing were in the form of debt
rather than equity, changes to the terms of the Nextel Indentures of the type
contemplated by the proposed amendments described above (see "Summary -- A. The
Company -- Recent Developments -- Consent Solicitation"), and Nextel's receipt
of net proceeds from new equity investments sufficient to permit the incurrence
of a portion of such debt, would be required to provide Nextel the needed
flexibility and ability to incur such debt. See "Summary -- A. The
Company -- Recent Developments -- Consent Solicitation" and "-- Forward Looking
Statements." Significant additional financing, at least a portion of which would
likely be in the form of new equity investment, would be required to adopt and
implement the Revised Business Plan. As indicated above, Nextel is currently
investigating and taking a variety of actions directed to obtain access to
significant additional amounts of debt financing. However, assuming (i) that
Nextel obtains the relief it is seeking from the holders of the Nextel Notes in
the Consent Solicitation process, especially the amendments in the provisions of
the Nextel Indentures that relate to Nextel's ability to incur additional
indebtedness, and that Nextel is able to meet all requirements of the Nextel
Indentures (as so amended) relating thereto (including, with respect to certain
incurrences of indebtedness, the receipt by Nextel of proceeds of additional
qualifying new equity issuances), and (ii) that Nextel secures access to all of
the available funds under the existing Bank and Vendor Credit Facilities, and is
able to structure satisfactory arrangements to obtain access to the $250,000,000
in Additional Bank Borrowings and to the $50,000,000 in Additional Vendor
Borrowings (which would require the receipt by Nextel of net cash proceeds from
qualifying new equity issuances), Nextel estimates that it would have sufficient
financing available to meet its cash needs through 1998 assuming implementation
and completion of the Existing Business Plan. Nextel estimates that
approximately an additional $500,000,000 in financing (which Nextel anticipates
would be primarily in the form of additional debt financing, with the remainder
required to be in the form of new equity issuance proceeds) would be required to
meet Nextel's anticipated cash needs through 1998, assuming implementation and
completion of the Revised Business Plan. In all of such financing scenarios,
Nextel has assumed that it will be able to obtain a sufficient amount of new
equity investment to support additional incurrences of indebtedness, as
contemplated by the proposed amendments to the Nextel Indentures described above
(see "Summary -- A. The Company -- Recent Developments -- Consent Solicitation")
and that all of the funds currently available pursuant to the Bank and Vendor
Credit Facilities may be borrowed thereunder and that certain currently
outstanding warrants and options to acquire shares of Common Stock (but not
including the New Option) described below will be exercised in full before their
respective currently scheduled expiration dates. See "-- Forward Looking
Statements."
Other than the arrangements summarized above, which are subject to a number
of conditions, there are currently no commitments or understandings with third
parties to obtain funding required to meet such funding shortfall. Moreover,
there can be no assurance that the Additional Bank Borrowings, Additional Vendor
Borrowings, Second Secured Borrowings, Senior Secured Borrowings or McCaw
Investor Borrowings will be available, or that any portion of the proceeds of
new equity issuances that Nextel must receive to support debt incurrences will
be received or that the outstanding warrants and options, including the First
Option, will be exercised, nor that the issuance of the New Option will be
consummated or, if consummated, that such New Option will be exercised in whole
or in part. Both the Bank and Vendor Credit Facilities and the Nextel Indentures
contain and will continue to contain provisions that operate to limit the amount
of borrowings that may be incurred by Nextel. 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."
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<PAGE> 17
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 cash
amounts required to be paid to Consenting Holders of the Nextel Notes in the
Consent Solicitation process and the subsequent amounts received by Nextel from
such Consenting Holders, if any, assuming consummation of the Offering; (iii)
the uncertainty with respect to the success and/or timing of the continuing
development and deployment 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 in new market areas
using such technology; (iv) the potential commercial opportunities and risks
associated with implementation of Nextel's Revised Business Plan; and (v) 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 or that may be
acquired in the future and in connection with the conversion of existing Digital
Mobile networks to the Reconfigured iDEN technology format, the expenditures
associated with analog SMR station construction requirements under the currently
effective FCC 800 MHz channel licensing approach) that may be offset (whether
wholly or partially) by other developments anticipated to (or to have the
potential to) reduce capital needs (e.g., co-location of antenna and/or
transmitter sites with other providers of wireless services in the relevant
markets, reductions in infrastructure and subscriber unit prices obtained from
Motorola pursuant to the Second Equipment Agreement Amendment and a new
agreement entered into on March 27, 1997 (the "1997-1998 Agreement"),
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 partially 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 (including the First Option) would result in the
receipt by Nextel of approximately $232,500,000, $277,500,000 and $107,500,000
of additional funds prior to July 29 in the years 1997, 1999 and 2001,
respectively. As described above, the McCaw Investor has agreed, subject to
certain conditions, to exercise the First Option, which would result in receipt
by Nextel of aggregate proceeds of $232,500,000 on or before July 28, 1997. Full
exercise of the New Option (assuming the currently contemplated issuance thereof
to an affiliate of Craig O. McCaw) would result in the receipt by Nextel of
approximately $420,000,000 prior to July 29, 1998. 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 in additional funds
($32,100,000 of which would be received in 1999 and substantially all of the
remainder of which would be received prior to 2001). Finally, proceeds from the
exercise by the McCaw Investor of its 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
13
<PAGE> 18
(including its predecessor plans) and the Nextel Associate Stock Purchase Plan,
may provide other available sources of funding.
The foregoing discussion concerning potential issuance and/or 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 such potential issuance
will occur or 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 and
Vendor Credit Facilities (or the Additional Bank Borrowings and/or any of the
additional borrowings contemplated by the Additional Motorola Financing and the
McCaw Investor Borrowings, if structured successfully), 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 and has waived assertion of any
application of such provisions to the currently contemplated arrangements
regarding the Option Commitment and/or the New Option. 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 the Nextel Indentures, 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 at
specified times to satisfy certain financial covenants or ratios including
certain covenants and ratios specifically related to leverage.
At present, other than the existing equity or debt financing arrangements
that have been consummated and/or disclosed, Nextel has no commitments or
understandings with any third parties to obtain any material amount of
additional equity or debt financing. Moreover, no assurances can be made that
Nextel will be able to obtain any such additional financing in the amounts or at
the times such financing may be required, or that, if obtained, any such
financing would be on acceptable terms. Nextel also anticipates that it will
continue to experience significant net losses during the ongoing start up phase
of the Digital Mobile networks over the next several years. Accordingly, there
can be no assurances as to whether or when the operations of Nextel will become
profitable. As a result of Nextel's anticipated continuing losses, the
uncertainty regarding the exercise of options and warrants, the availability of
financing under the Bank and Vendor Credit Facilities 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 in accordance with either the Existing Business Plan
or the Revised Business Plan. 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 communications 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 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.
Following implementation of its Digital Mobile networks and completion of
related system optimization activities, Nextel's Digital Mobile networks will
compete with established and future wireless communications operators in its
efforts to attract customers, dealers and possibly resellers to its service in
each of the markets in which it operates a Digital Mobile network. Nextel
believes that following software upgrades and additional system optimization
efforts and equipment and technology enhancements that occurred during 1996 and
the commercial deployment of the Reconfigured iDEN technology, Nextel's Digital
Mobile networks will have the capacity, functionality and quality of service
necessary to be competitive with current wireless communica-
14
<PAGE> 19
tions services in the markets in which Nextel operates 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 technology, 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 Nextel 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 provided on its
Digital Mobile networks utilizing the Reconfigured iDEN technology is similar in
function to and achieves performance levels competitive with those being offered
by other current wireless communications services providers in Nextel's market
areas, 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 services provided on Nextel's Digital Mobile
networks will be competitive with those available from other providers of mobile
telephone services. As part of its marketing strategy, Nextel will continue to
emphasize the benefits to its customers of obtaining an integrated package of
services consisting of mobile telephone service, two-way dispatch, paging and
alphanumeric short-messaging service, and in the future, data transmission.
Neither PCS system operators nor cellular operators currently provide such
integrated services, but recent FCC rulings permit cellular operators to offer
two-way dispatch services. If either PCS system or cellular operators do provide
two-way dispatch services in the future, Nextel's competitive advantage from
using such a marketing strategy may be impaired.
Nextel currently offers its mobile telephone customers the ability to
"roam" among Nextel's existing Digital Mobile network market areas, which as of
March 31, 1997 represented coverage of areas in which approximately 50% of the
United States population lives or works. Accordingly, 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 United States, unless and until nationwide Digital Mobile
networks 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,
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 Nextel'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 (and is likely to remain) significantly more expensive
than analog handsets and is (and is likely to remain) somewhat more expensive
than digital cellular handsets that do not incorporate a comparable
multi-function capability. Accordingly, 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. Nextel's
multi-function subscriber units, however, are competitively priced compared to
multi-function (mobile telephone service and alphanumeric short-text messaging)
digital cellular and PCS 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
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 units 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."
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<PAGE> 20
Cellular operators and certain PCS operators and 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 Nextel. Nextel 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."
Each of the markets in which Nextel's Digital Mobile networks operate or
will operate is serviced by multiple other wireless communications service
providers. In each of the markets where Nextel's Digital Mobile networks
operate, Nextel may compete with the two established cellular licensees in such
market and as many as six PCS licensees. 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. A substantial number of
the entities that have been awarded PCS licenses 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. PCS operators will likely compete with
Nextel in providing some or all of the services available through Nextel's
Digital Mobile networks. Additionally, Nextel expects that existing cellular
service providers, some of which have been operational for a number of years and
have significantly greater financial and technical resources than those
available to Nextel, will continue to upgrade their systems to provide digital
wireless communications services competitive with Nextel's Digital Mobile
networks. Nextel also expects to face competition from other technologies and
services developed and introduced in the future. 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 services customers. See
"-- Forward Looking Statements."
RELIANCE ON ONE PRINCIPAL SUPPLIER IN IMPLEMENTATION OF DIGITAL MOBILE NETWORKS
Pursuant to existing equipment purchase agreements first entered into in
1991, as subsequently amended (such equipment purchase agreements, as amended,
being referred to herein as the "Equipment Purchase Agreements"), between Nextel
and Motorola, Motorola provides the iDEN infrastructure and subscriber handset
equipment to Nextel throughout its markets. Nextel 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 include a commitment from Nextel to purchase
from Motorola a significant amount of system infrastructure equipment. 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 technology 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. 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 or companies
acquired by Nextel had placed orders with Motorola prior to August 4, 1994,
which orders have become obligations of Nextel.
The Second Equipment Agreement Amendment limits Nextel's ability, prior to
October 1, 1997 without Motorola's consent, to deploy a "Switch in Technology"
which, under the Second Equipment Agreement Amendment, is defined to mean a
decision by Nextel before August 4, 1999 to install and use digital radio
frequency technology as an alternative to iDEN on more than 25% of its SMR
channels in the 806-824 MHz band in one or more of its top 20 domestic markets,
or the utilization by Nextel of any of its SMR channels for voice interconnect
on certain United States cellular and/or PCS radio telephony standards. After
October 1, 1997, Nextel may not implement such a Switch in Technology unless (1)
Nextel determines that the iDEN or Reconfigured iDEN equipment fails to meet
certain performance specifications established in the Second
16
<PAGE> 21
Equipment Agreement Amendment, which failure materially adversely affects the
commercial viability of the technology to provide reliable services as intended
by Motorola and Nextel, and Motorola does not cure such failure within six
months after receiving notice thereof, or (2) Nextel or the McCaw Investor
offers to acquire the remainder of Motorola's shares of Common Stock at a per
share price of at least 110% of the average of the closing prices of the Common
Stock over the 30 trading days preceding the public announcement by Nextel of
the decision to implement such a Switch in Technology. In either case, if
Motorola manufactures (or elects to manufacture) the alternate technology Nextel
elects to deploy, Nextel must purchase 50% of its infrastructure requirements
and 25% of its subscriber equipment requirements from Motorola for three years,
provided such equipment is competitive in price and performance to the equipment
utilizing or incorporating such alternate technology then offered by other
manufacturers.
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 Equipment Purchase
Agreements between Nextel and Motorola first entered into in 1991, as
subsequently amended by, among others, the amendment entered into in connection
with the Motorola Transaction (the "Prior Equipment Agreement Amendment")
provide 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. Currently, however, there are no
arrangements in effect with any additional manufacturers to supply Nextel with
alternative sources for either iDEN system infrastructure or subscriber
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. FCC regulations have undergone significant changes
during the last three years and continue to evolve as new FCC rules and
regulations are adopted pursuant to the Omnibus Budget Reconciliation Act of
1993 and the Telecommunications Act of 1996. Nextel's ability to conduct its
business is dependent, in part, on its compliance with FCC rules and
regulations. Future changes in regulation or legislation affecting Digital
Mobile network service and Congress' and the FCC's recent allocation of
additional Commercial Mobile Radio Services spectrum could materially adversely
affect Nextel's business. See "-- Forward Looking Statements."
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 $1,268,000,000 as of December 31, 1996.
NEXTEL SUSCEPTIBLE TO CONTROL BY SIGNIFICANT STOCKHOLDERS
Based on securities ownership information relating to Nextel as of May 31,
1997, and giving effect (on such date) to the conversion of the outstanding
shares of Nextel's preferred stock and Class B Non-Voting Common Stock, par
value $0.001 per share (the "Non-Voting Common Stock") and the exercise in full
of (i) three separate options held by the McCaw Investor exercisable for periods
of two, four and six years, respectively, from July 28, 1995, to acquire an
aggregate of up to 35,000,000 shares of Common Stock at exercise prices ranging
from $15.50 to $21.50 per share (the "McCaw Options"), (ii) the option held by
Eagle River, Inc., an affiliate of the McCaw Investor ("Eagle River"), to
purchase an aggregate of 1,000,000 shares of Common Stock at an exercise price
of $12.25, which option vests over a five-year period from April 4, 1995 (the
"Incentive Option"), (iii) the New Option currently contemplated to be issued to
an affiliate of Craig O. McCaw to acquire 15,000,000 shares at $16.00 per share
and 10,000,000 shares at $18.00 per share prior to July 29, 1998, (iv) the
options granted on July 28, 1995 to the McCaw Investor by Motorola
17
<PAGE> 22
to purchase up to 9,000,000 shares of Common Stock over a six-year period (the
"McCaw Investor/Motorola Options") and (v) a warrant held by Motorola to
purchase 2,700,000 shares of Common Stock, the McCaw Investor would hold
approximately 30.3% and Motorola would hold approximately 16.4% of the Common
Stock that would be 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 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. 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 of Common
Stock and neither 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, Craig O. 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
18
<PAGE> 23
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 Craig O. McCaw's investment
in AT&T resulting from AT&T's acquisition of McCaw Cellular, 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. Additionally, to incur debt in excess of
permitted debt levels prior to January 1, 2000, pursuant to the proposed
amendments to the Nextel Indentures as described above (see "Summary -- A. The
Company -- Recent Developments -- Consent Solicitation"), Nextel would be
required to issue new equity.
As of May 31, 1997, there were approximately 266,362,546 shares of Common
Stock outstanding (assuming the conversion of the outstanding shares of Nextel's
Non-Voting Common Stock and Nextel's preferred stock), on a primary, rather than
a fully diluted, basis, and approximately 356,315,410 shares of Common Stock
would have been outstanding assuming the exercise of all options (including
employee options, warrants initially issued to Motorola to purchase 3,000,000
shares, the options to purchase an aggregate of 36,000,000 shares pursuant to
the McCaw Options and the Incentive Option and giving effect (on such date) to
an assumed issuance of the New Option to purchase an aggregate of 25,000,000
shares to be issued to an affiliate of Craig O. McCaw), warrants and other
existing rights to acquire Common Stock outstanding on such date.
On April 29, 1996, the Commission declared effective Nextel'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,
Nextel has not issued any of such Common Stock or warrants. In addition, Nextel
has filed a registration statement on Form S-4 covering up to 9,221,523 shares
of Common Stock in connection with the potential acquisition of Pittencrieff
Communications, Inc.
Pursuant to the McCaw Securities Purchase Agreement, the McCaw Investor was
granted anti-dilutive rights with respect to certain Nextel share issuances (the
"McCaw Purchase Right"). 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 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. On April 29, 1996, the Commission declared effective Nextel'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, Inc. ("Comcast
FCI") in satisfaction of Nextel'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 March 25, 1997, Comcast and Comcast FCI have
sold an aggregate of 5,570,000 of such shares of Common Stock pursuant to
brokerage transactions. The exercise of registration rights by persons entitled
thereto would permit such persons to sell such shares without regard to the
limitations of Rule 144. An increase in the number of shares of Common Stock
that will become available for sale in the public market
19
<PAGE> 24
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
Nextel has not paid any dividends on Common Stock and does not plan to pay
dividends on Common Stock for the foreseeable future. The Nextel Indentures, the
Bank Credit Agreement and the Vendor Credit Agreement presently prohibit, and
are expected to operate so as to continue to prohibit, Nextel from paying
dividends. In addition, the collateral security mechanisms and related
provisions associated with the Bank and Vendor Credit Facilities limit the
amount of cash available to make dividends, loans and cash distributions to
Nextel from Nextel's subsidiaries that operate Digital Mobile networks in
Nextel's markets. Accordingly, while such restrictions are in place, any profits
generated by such subsidiaries will not be available to Nextel for, among other
purposes, payment of dividends.
POTENTIAL CONFLICT OF INTEREST RELATIONSHIP WITH MOTOROLA
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, prior to July 28, 1998, make use
(with certain limited exceptions) of the customer lists conveyed by Motorola to
ESMR in connection with the Motorola Transaction 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 technology have been achieved,
Motorola LMPS will not solicit other iDEN customers and neither Motorola LMPS
nor Motorola's credit corporation subsidiary will make any equity investment in,
or provide equipment/vendor financing to, certain iDEN customers with respect to
purchases of iDEN equipment.
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, but not proven, that the use of portable mobile
communications devices may pose health risks due to radio frequency emissions
from such devices. Studies performed by wireless telephone equipment
manufacturers have rebutted these allegations, and a major industry trade
association and certain governmental agencies have stated publicly that the use
of such phones poses no undue health risk. 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" STATEMENT 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
20
<PAGE> 25
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 any issues relating to Digital Mobile system performance,
the successful nationwide 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,
1996 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 1997.
USE OF PROCEEDS
The net proceeds of the Offering, at an assumed public offering price of
$ per Share, are estimated to be approximately $ , after
deducting estimated expenses of the Offering, assuming that all holders of the
Nextel Notes are Consenting Holders and that all such Consenting Holders elect
to subscribe for Shares. There can be no assurance that any Shares will be sold
in the Offering. The Company intends to use the net proceeds of the Offering for
general corporate purposes.
CERTAIN MARKET INFORMATION
The Common Stock is traded on the Nasdaq NM under the symbol "NXTL." Prior
to February 3, 1997, the Common Stock traded under the symbol "CALL." The table
below presents the quarterly high and low sale prices for the Common Stock as
furnished by The Nasdaq Stock Market for the periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31: HIGH LOW
- ----------------------- ---- ---
<S> <C> <C>
1995
First Quarter............................................. $15.625 $ 9.375
Second Quarter............................................ 18.000 13.000
Third Quarter............................................. 21.750 14.000
Fourth Quarter............................................ 18.125 13.875
1996
First Quarter............................................. 18.875 13.500
Second Quarter............................................ 23.375 16.750
Third Quarter............................................. 20.250 14.375
Fourth Quarter............................................ 18.500 12.750
1997
First Quarter............................................. 15.750 12.875
Second Quarter (through , 1997)......................
</TABLE>
As of June , 1997, there were approximately holders of record of
shares of Common Stock. As of June , 1997, there was one holder of record of
shares of Nextel Non-Voting Common Stock, for which
21
<PAGE> 26
there is no established public trading market, but which under certain
circumstances may be converted into an identical number of shares of Common
Stock.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 31, 1997 (the "Ownership Date"),
the amount and percentage of shares of each class of Nextel's capital stock that
are deemed under the rules of the Commission to be "beneficially owned" by (i)
each director of Nextel, (ii) the Chief Executive Officer and each of the four
other most highly compensated executive officers of Nextel for the year ended
December 31, 1996, (iii) all directors and executive officers of Nextel 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 Nextel to be the beneficial owner of more than
five percent of the outstanding shares of each class of Nextel's capital stock.
<TABLE>
<CAPTION>
TITLE OF CLASS OF AMOUNT AND NATURE
THE COMPANY'S OF BENEFICIAL APPROXIMATE %
NAME OF BENEFICIAL OWNER CAPITAL STOCK OWNERSHIP(1) OF CLASS(2)
- ------------------------ ----------------- ----------------- -------------
<S> <C> <C> <C>
Daniel F. Akerson................... Class A Common Stock 200,000(3) *
Brian D. McAuley.................... Class A Common Stock 1,429,785(4) *
Morgan E. O'Brien................... Class A Common Stock 1,205,376(5) *
Keith J. Bane....................... Class A Common Stock 0(6) *
Robert Cooper....................... Class A Common Stock 50,000 *
Timothy M. Donahue.................. Class A Common Stock 76,000(7) *
William E. Conway, Jr............... Class A Common Stock 84,660(8) *
Craig O. McCaw...................... Class A Common Stock 65,483,723(9) 21.7%
Keisuke Nakasaki.................... Class A Common Stock 0(10) *
Masaaki Torimoto.................... Class A Common Stock 0(11) *
Dennis M. Weibling.................. Class A Common Stock 65,483,723(12) 21.7
Robert S. Foosaner.................. Class A Common Stock 192,000(13) *
All directors and executive officers
as a group (21 persons)........... Class A Common Stock 69,052,182(14) 22.5
5% Stockholders:
- ------------------------------------
Digital Radio, L.L.C................ Class A Common Stock 65,483,723(15) 21.7
Class A Preferred
2320 Carillon Point Stock 8,163,265 100.0
Class B Preferred
Kirkland, Washington 98033........ Stock 82 100.0
Motorola, Inc....................... Class A Common Stock 60,700,000(16) 22.6
1303 East Algonquin Road Class B Common Stock 17,830,000 100.0
Schaumburg, Illinois 60196
Putnam Investments, Inc............. Class A Common Stock 15,340,145(17) 5.8
1 P.O. Box Square
Boston, Massachusetts 02109
</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 Nextel'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 Nextel'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 Nextel's preferred stock and Nextel's Non-
22
<PAGE> 27
Voting 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) Includes 200,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Akerson upon the
exercise of non-qualified stock options.
(4) Includes 454,000 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 from the Company's Board of Directors and as
an executive officer of the Company as of January 8, 1997.
(5) Includes 548,477 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 Nextel held
by Motorola. See note 16.
(7) Includes 75,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Donahue upon the
exercise of non-qualified stock options.
(8) Includes 1,667 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Conway upon the exercise
of non-qualified stock options.
(9) Mr. McCaw, who is an equity owner and controlling person of the McCaw
Investor, disclaims beneficial ownership of all securities of Nextel held
by the McCaw Investor, except to the extent of his pecuniary interest
therein. See note 15.
(10) Mr. Nakasaki, who is President and Chief Executive Officer of NTT America,
Inc., a subsidiary of Nippon Telegraph and Telephone Corporation ("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.
(11) Mr. Torimoto, who is Vice President of Panasonic Communications and Systems
Company, disclaims beneficial ownership of all shares of Class A Common
Stock held by Matsushita Communication Industrial Co., Ltd. ("Matsushita").
As of the Ownership Date, Matsushita held 3,000,000 shares.
(12) Mr. Weibling, who is President of Eagle River, an affiliate of the McCaw
Investor, disclaims beneficial ownership of all securities of Nextel held
by the McCaw Investor, except to the extent of his pecuniary interest
therein. See note 15.
(13) Includes 192,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Foosaner upon the
exercise of non-qualified stock options.
(14) Includes an aggregate of 2,830,794 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 non-
qualified stock options or other stock purchase rights. See also notes 15
and 16.
(15) 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, (iii) 400,000 shares of Class A Common Stock
obtainable as of the Ownership Date or within 60 days thereafter upon the
exercise of a portion of the Incentive Option granted to Eagle River, and
(iv) 24,489,877 shares of Class A Common Stock, which represents the
conversion of the 8,163,265 shares of Class A Preferred Stock and the 82
shares of Nextel's Class B Preferred Stock held by the McCaw Investor. Does
not give effect to 25,000,000 shares of Class A Common Stock issuable
pursuant to the New Option currently contemplated to be issued to an
affiliate of Craig O. McCaw.
(16) Assuming conversion of the Non-Voting 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 Non-Voting Common Stock
beneficially owned by Motorola and (iii) 2,700,000 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. Of the total
of 3,000,000 shares subject to such warrant, Motorola has transferred a
portion relating to 110,000 shares to third parties. Motorola granted the
McCaw Investor an option to acquire 9,000,000 shares included herein, which
option is not currently exercisable.
23
<PAGE> 28
(17) As reported in the most recent Schedule 13G filed by Putnam Investments,
Inc. ("Putnam"), Putnam does not have sole voting power over the shares of
Class A Common Stock beneficially owned by Putnam.
DETERMINATION OF OFFERING PRICE
The formula for determining the offering price of the Shares, which was
established in part based upon indications of interest by parties representing
certain holders of the Nextel Notes to certain representatives of Nextel in
conjunction with the Consent Solicitation, contemplates that the offering price
would be set at an amount equal to 10/11 of the arithmetic average of the
closing bid and ask prices (but in neither case being more than $0.25 greater or
less than the actual last sale price) for a share of Common Stock as reported on
the Nasdaq NM for the consecutive trading day period beginning on June , 1997,
the fifth trading day prior to the expiration date of the Consent Solicitation,
and ending with the fifth trading day after such expiration date.
PLAN OF DISTRIBUTION
The Shares will be offered exclusively to Consenting Holders subject to the
terms and conditions set forth herein and in the accompanying Subscription Form.
In order to subscribe for Shares, a Consenting Holder must properly complete and
execute the Subscription Form and tender the purchase price to the Company, all
in the manner contemplated therein and herein on or before the Expiration Date.
A Consenting Holder may subscribe only for the maximum number of Shares (rounded
down to the nearest whole share) purchasable for the aggregate Consent Payment
received by such holder as a result of the Consent Solicitation. Consenting
Holders who subscribe for Shares will be required to agree that such Shares may
not be transferred, subject to certain limited exceptions, prior to January 1,
1998 and to the placement of a legend to such effect on the certificates
representing such Shares.
VALIDITY OF SHARES
The validity of the Shares offered hereby will be passed upon for Nextel by
Jones, Day, Reavis & Pogue, Atlanta, Georgia.
EXPERTS
The consolidated financial statements and related financial statement
schedules of Nextel incorporated in this Prospectus by reference from Nextel's
Annual Report on Form 10-K for the year ended December 31, 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.
24
<PAGE> 29
======================================================
NO DEALER, SALES PERSON, 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 OFFER OF
SECURITIES DESCRIBED HEREIN, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY
OR OF ANY OF SUCH SECURITIES 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 ANY
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................. ii
Incorporation of Certain Information
by Reference........................ ii
Summary............................... 1
Risk Factors.......................... 7
Use of Proceeds....................... 21
Certain Market Information............ 21
Securities Ownership of Certain
Beneficial Owners and Management.... 22
Determination of Offering Price....... 24
Plan of Distribution.................. 24
Validity of Shares.................... 24
Experts............................... 24
</TABLE>
======================================================
======================================================
SHARES
CLASS A COMMON STOCK
NEXTEL COMMUNICATIONS, INC.
-------------------------
PROSPECTUS
-------------------------
, 1997
======================================================
<PAGE> 30
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 are as follows:
<TABLE>
<S> <C>
Registration Fee............................................ $20,455
Legal Fees and Expenses.....................................
Accounting Fees and Expenses................................
Miscellaneous...............................................
-------
Total............................................. $
=======
</TABLE>
All such expenses will be paid by Nextel.
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
II-1
<PAGE> 31
such amount if it shall ultimately be determined that he or she is not entitled
to be indemnified by Nextel as authorized by relevant Delaware law. Nextel has
obtained directors and officers liability insurance providing coverage to its
directors and officers.
On September 12, 1991, the Board of Directors of Nextel unanimously adopted
resolutions authorizing Nextel to enter into an Indemnification Agreement (the
"Indemnification Agreement") with each director of Nextel. Nextel has entered
into an Indemnification Agreement with each of the directors other than its
three most recently elected directors, Daniel F. Akerson, Timothy M. Donahue and
William E. Conway, Jr.
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.
ITEM 16. EXHIBITS.
Pursuant to Item 601 of Regulation S-K, 17 C.F.R.
sec. 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.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
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).
</TABLE>
II-2
<PAGE> 32
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
4.3 -- 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 and incorporated herein by reference).
4.4 -- Form of Note issued pursuant to the August Indenture
(included in Exhibit No. 4.3).
4.5 -- Indenture between Old Nextel and The Bank of New York, as
Trustee, dated as of February 15, 1994 (the "February
Indenture") (filed on March 1, 1994 as Exhibit No. 4.1 to
the Form 8-K Current Report of Old Nextel dated February 16,
1994 and incorporated herein by reference).
4.6 -- Form of Note issued pursuant to the February Indenture
(included in Exhibit No. 4.5).
4.7 -- 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).
4.8 -- 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).
4.9 -- 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).
4.10 -- 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).
4.11 -- 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).
4.12 -- Form of Note issued pursuant to the OneComm Indenture
(included in Exhibit 4.11).
4.13 -- 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).
4.14 -- 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).
4.15 -- 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).
4.16 -- 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).
4.17 -- 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).
</TABLE>
II-3
<PAGE> 33
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
4.18 -- Third Supplemental Indenture, dated as of January 30, 1996,
to the 2004 Indenture between Nextel (as successor to Dial
Page) and The Bank of New York (filed on April 1, 1996 as
Exhibit 4.27 to the 1995 Form 10-K and incorporated herein
by reference).
4.19 -- 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).
4.20 -- 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).
4.21 -- 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).
4.22 -- 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).
4.23 -- 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).
4.24 -- Indenture for Senior Discount Notes due 2007, dated as of
March 6, 1997, between McCaw International and The Bank of
New York, as Trustee (the "McCaw Indenture") (filed on March
31, 1997 as Exhibit 4.24 to Nextel's Annual Report on Form
10-K for the year ended December 31, 1996 (the "1996 Form
10-K") and incorporated herein by reference).
4.25 -- Form of Note issued pursuant to the McCaw Indenture
(included in Exhibit 4.24).
4.26 -- Warrant Agreement, dated as of March 6, 1997, between McCaw
International and The Bank of New York (filed on March 31,
1997 as Exhibit 4.26 to the 1996 Form 10-K and incorporated
herein by reference).
4.27 -- Credit Agreement dated as of September 27, 1996 among
Nextel, Nextel Finance Company, the Restricted Companies
party thereto, the Lenders party thereto, Toronto-Dominion
(Texas) Inc., as Administrative Agent, and The Chase
Manhattan Bank, as Collateral Agent (filed on October 1,
1996 as Exhibit 99.1 to Nextel's Current Report on Form 8-K
dated September 27, 1996 (the "September 27 Form 8-K") and
incorporated herein by reference).
4.28 -- Amended, Restated and Consolidated Credit Agreement dated as
of September 27, 1996 among Nextel, NFC, the Restricted
Companies party thereto and the Vendors party thereto (filed
on October 1, 1996 as Exhibit 99.2 to the September 27 Form
8-K and incorporated herein by reference).
5 -- Form of Opinion of Jones, Day, Reavis & Pogue re validity.
23.1 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5).
23.2 -- Consent of Deloitte & Touche LLP.
24 -- Powers of Attorney
*99 -- Form of Subscription Form
</TABLE>
- ---------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) 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
II-4
<PAGE> 34
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.
(2) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-5
<PAGE> 35
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of McLean, in the Commonwealth of Virginia, on the 3rd
day of June, 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
registration statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
* Chairman of the Board, Chief
- ----------------------------------------------------- Executive Officer and Director
Daniel F. Akerson (Principal Executive Officer)
* Vice President and Chief
- ----------------------------------------------------- Financial Officer (Principal
Steven M. Shindler Financial Officer)
* Vice President and Controller
- ----------------------------------------------------- (Principal Accounting Officer)
William G. Arendt
* 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
* Director
- -----------------------------------------------------
William E. Conway, Jr.
/s/ THOMAS J. SIDMAN Attorney-in-fact June 3, 1997
- -----------------------------------------------------
Thomas J. Sidman
</TABLE>
II-6
<PAGE> 36
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ----------------------- ----
<C> <C> <S> <C>
4.1 -- Restated Certificate of Incorporation of Nextel (filed on Not applicable
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, Not applicable
1995 as Exhibit 4.2 to the Nextel S-8 Registration Statement
and incorporated herein by reference)
4.3 -- Indenture between Old Nextel and The Bank of New York, as Not applicable
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 and incorporated herein by reference)
4.4 -- Form of Note issued pursuant to the August Indenture Not applicable
(included in Exhibit No. 4.3)
4.5 -- Indenture between Old Nextel and The Bank of New York, as Not applicable
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 of Old Nextel dated February 16, 1994 and
incorporated herein by reference)
4.6 -- Form of Note issued pursuant to the February Indenture Not applicable
(included in Exhibit No. 4.5)
4.7 -- Supplemental Indenture, dated as of June 30, 1995 to the Not applicable
August 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)
4.8 -- Supplemental Indenture, dated as of June 30, 1995 to the Not applicable
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)
4.9 -- Second Supplemental Indenture, dated as of July 28, 1995 Not applicable
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)
4.10 -- Second Supplemental Indenture, dated as of July 28, 1995 Not applicable
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)
4.11 -- Indenture for Senior Redeemable Discount Notes due 2004, Not applicable
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)
4.12 -- Form of Note issued pursuant to the OneComm Indenture Not applicable
(included in Exhibit 4.11)
</TABLE>
<PAGE> 37
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ----------------------- ----
<C> <C> <S> <C>
4.13 -- Supplemental Indenture dated as of June 30, 1995 to the Not applicable
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)
4.14 -- Second Supplemental Indenture dated as of July 28, 1995 Not applicable
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)
4.15 -- Indenture for Senior Redeemable Discount Notes due 2004, Not applicable
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)
4.16 -- Supplemental Indenture, dated as of August 7, 1995, to the Not applicable
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)
4.17 -- Second Supplemental Indenture, dated as of January 30, 1996, Not applicable
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)
4.18 -- Third Supplemental Indenture, dated as of January 30, 1996, Not applicable
to the 2004 Indenture between Nextel (as successor to Dial
Page) and The Bank of New York (filed on April 1, 1996 as
Exhibit 4.27 to the 1995 Form 10-K and incorporated herein
by reference)
4.19 -- Indenture for Senior Discount Notes due 2005, dated as of Not applicable
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)
4.20 -- Supplemental Indenture, dated as of April 15, 1994, to the Not applicable
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)
4.21 -- Supplemental Indenture, dated as of June 30, 1995, to the Not applicable
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)
4.22 -- Third Supplemental Indenture, dated as of January 30, 1996, Not applicable
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)
4.23 -- Fourth Supplemental Indenture, dated as of January 30, 1996, Not applicable
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)
</TABLE>
<PAGE> 38
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ----------------------- ----
<C> <C> <S> <C>
4.24 -- Indenture for Senior Discount Notes due 2007, dated as of Not applicable
March 6, 1997, between McCaw International and The Bank of
New York, as Trustee (the "McCaw Indenture") (filed on March
31, 1997 as Exhibit 4.24 to Nextel's Annual Report on Form
10-K for the year ended December 31, 1996 (the "1996 Form
10-K") and incorporated herein by reference)
4.25 -- Form of Note issued pursuant to the McCaw Indenture Not applicable
(included in Exhibit 4.24)
4.26 -- Warrant Agreement, dated as of March 6, 1997, between McCaw Not applicable
International and The Bank of New York (filed on March 31,
1997 as Exhibit 4.26 to the 1996 Form 10-K and incorporated
herein by reference)
4.27 -- Credit Agreement dated as of September 27, 1996 among Not applicable
Nextel, NFC, the Restricted Companies party thereto, the
Lenders party thereto, Toronto-Dominion (Texas) Inc., as
Administrative Agent, and The Chase Manhattan Bank, as
Collateral Agent (filed on October 1, 1996 as Exhibit 99.1
to Nextel's Current Report on Form 8-K dated September 27,
1996 (the "September 27 Form 8-K") and incorporated herein
by reference)
4.28 -- Amended, Restated and Consolidated Credit Agreement dated as Not applicable
of September 27, 1996 among Nextel, Nextel Finance Company,
the Restricted Companies party thereto and the Vendors party
thereto (filed on October 1, 1996 as Exhibit 99.2 to the
September 27 Form 8-K and incorporated herein by reference)
5 -- Form of Opinion of Jones, Day, Reavis & Pogue re validity
23.1 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5)
23.2 -- Consent of Deloitte & Touche LLP
24 -- Powers of Attorney
*99 -- Form of Subscription Form
</TABLE>
- ---------------
* To be filed by amendment.
<PAGE> 1
EXHIBIT 5
, 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
shares of Common Stock, $.001 par value per share, of the Company (the
"Shares"), to be issued by the Company pursuant to a Registration Statement on
Form S-3 (File No. 333- ) (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, and when issued by the Company in the
manner described in the Registration Statement, will be 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,
JONES, DAY, REAVIS & POGUE
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Nextel Communications, Inc. on Form S-3 of our report dated March 20, 1997,
except for Note 13, as to which the date is March 27, 1997, appearing in the
Annual Report on Form 10-K of Nextel Communications, Inc. for the year ended
December 31, 1996, and to the references to us under the headings "Summary
Financial Data" and "Experts" in the Prospectus, which is part of this
Registration Statement.
DELOITTE & TOUCHE LLP
McLean, Virginia
June 2, 1997
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-2,
S-3 or other appropriate form in connection with the issuance of warrants or
other equity securities and shares of the Company's Class A Common Stock, par
value $.001 per share, underlying such warrants or other equity securities does
hereby constitute and appoint Steven M. Shindler, Thomas D. Hickey, John H.
Willmoth and Thomas J. Sidman, and each of them, each with full power to act
without the other and with full power of substitution and resubstitution, as
attorneys or attorney to sign and file in his or her name, place and stead, in
any and all capacities, such Registration Statement, any and all amendments and
exhibits thereto, and any and all other documents to be filed with the
Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
June 3, 1997
/s/ Daniel F. Akerson
--------------------------------
Daniel F. Akerson
Chairman of the Board, Director
and Chief Executive Officer
(Principal Executive Officer)
<PAGE> 2
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-2,
S-3 or other appropriate form in connection with the issuance of warrants or
other equity securities and shares of the Company's Class A Common Stock, par
value $.001 per share, underlying such warrants or other equity securities does
hereby constitute and appoint Steven M. Shindler, Thomas D. Hickey, John H.
Willmoth and Thomas J. Sidman, and each of them, each with full power to act
without the other and with full power of substitution and resubstitution, as
attorneys or attorney to sign and file in his or her name, place and stead, in
any and all capacities, such Registration Statement, any and all amendments and
exhibits thereto, and any and all other documents to be filed with the
Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
June 3, 1997
/s/ Steven M. Shindler
--------------------------------
Steven M. Shindler
Senior Vice President and Chief
Financial Officer
(Principal Financial Officer)
<PAGE> 3
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-2,
S-3 or other appropriate form in connection with the issuance of warrants or
other equity securities and shares of the Company's Class A Common Stock, par
value $.001 per share, underlying such warrants or other equity securities does
hereby constitute and appoint Steven M. Shindler, Thomas D. Hickey, John H.
Willmoth and Thomas J. Sidman, and each of them, each with full power to act
without the other and with full power of substitution and resubstitution, as
attorneys or attorney to sign and file in his or her name, place and stead, in
any and all capacities, such Registration Statement, any and all amendments and
exhibits thereto, and any and all other documents to be filed with the
Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
June 3, 1997
/s/ William Arendt
---------------------------
William Arendt
Vice President and
Controller (Principal
Accounting Officer)
<PAGE> 4
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-2,
S-3 or other appropriate form in connection with the issuance of warrants or
other equity securities and shares of the Company's Class A Common Stock, par
value $.001 per share, underlying such warrants or other equity securities does
hereby constitute and appoint Steven M. Shindler, Thomas D. Hickey, John H.
Willmoth and Thomas J. Sidman, and each of them, each with full power to act
without the other and with full power of substitution and resubstitution, as
attorneys or attorney to sign and file in his or her name, place and stead, in
any and all capacities, such Registration Statement, any and all amendments and
exhibits thereto, and any and all other documents to be filed with the
Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
June 3, 1997
/s/ Morgan E. O'Brien
-------------------------------
Morgan E. O'Brien
Vice Chairman of the Board
and Director
<PAGE> 5
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-2,
S-3 or other appropriate form in connection with the issuance of warrants or
other equity securities and shares of the Company's Class A Common Stock, par
value $.001 per share, underlying such warrants or other equity securities does
hereby constitute and appoint Steven M. Shindler, Thomas D. Hickey, John H.
Willmoth and Thomas J. Sidman, and each of them, each with full power to act
without the other and with full power of substitution and resubstitution, as
attorneys or attorney to sign and file in his or her name, place and stead, in
any and all capacities, such Registration Statement, any and all amendments and
exhibits thereto, and any and all other documents to be filed with the
Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
June 3, 1997
/s/ Timothy M. Donahue
--------------------------------
Timothy M. Donahue
President and Chief Operating
Officer and Director
<PAGE> 6
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-2,
S-3 or other appropriate form in connection with the issuance of warrants or
other equity securities and shares of the Company's Class A Common Stock, par
value $.001 per share, underlying such warrants or other equity securities does
hereby constitute and appoint Steven M. Shindler, Thomas D. Hickey, John H.
Willmoth and Thomas J. Sidman, and each of them, each with full power to act
without the other and with full power of substitution and resubstitution, as
attorneys or attorney to sign and file in his or her name, place and stead, in
any and all capacities, such Registration Statement, any and all amendments and
exhibits thereto, and any and all other documents to be filed with the
Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
June 3, 1997
/s/ Keith Bane
-----------------------------
Keith Bane
Director
<PAGE> 7
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-2,
S-3 or other appropriate form in connection with the issuance of warrants or
other equity securities and shares of the Company's Class A Common Stock, par
value $.001 per share, underlying such warrants or other equity securities does
hereby constitute and appoint Steven M. Shindler, Thomas D. Hickey, John H.
Willmoth and Thomas J. Sidman, and each of them, each with full power to act
without the other and with full power of substitution and resubstitution, as
attorneys or attorney to sign and file in his or her name, place and stead, in
any and all capacities, such Registration Statement, any and all amendments and
exhibits thereto, and any and all other documents to be filed with the
Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
June 3, 1997
/s/ Robert Cooper
-------------------------
Robert Cooper
Director
<PAGE> 8
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-2,
S-3 or other appropriate form in connection with the issuance of warrants or
other equity securities and shares of the Company's Class A Common Stock, par
value $.001 per share, underlying such warrants or other equity securities does
hereby constitute and appoint Steven M. Shindler, Thomas D. Hickey, John H.
Willmoth and Thomas J. Sidman, and each of them, each with full power to act
without the other and with full power of substitution and resubstitution, as
attorneys or attorney to sign and file in his or her name, place and stead, in
any and all capacities, such Registration Statement, any and all amendments and
exhibits thereto, and any and all other documents to be filed with the
Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
June 3, 1997
/s/ Craig O. McCaw
----------------------------
Craig O. McCaw
Director
<PAGE> 9
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-2,
S-3 or other appropriate form in connection with the issuance of warrants or
other equity securities and shares of the Company's Class A Common Stock, par
value $.001 per share, underlying such warrants or other equity securities does
hereby constitute and appoint Steven M. Shindler, Thomas D. Hickey, John H.
Willmoth and Thomas J. Sidman, and each of them, each with full power to act
without the other and with full power of substitution and resubstitution, as
attorneys or attorney to sign and file in his or her name, place and stead, in
any and all capacities, such Registration Statement, any and all amendments and
exhibits thereto, and any and all other documents to be filed with the
Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
June 3, 1997
/s/ Keisuke Nakasaki
---------------------------
Keisuke Nakasaki
Director
<PAGE> 10
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-2,
S-3 or other appropriate form in connection with the issuance of warrants or
other equity securities and shares of the Company's Class A Common Stock, par
value $.001 per share, underlying such warrants or other equity securities does
hereby constitute and appoint Steven M. Shindler, Thomas D. Hickey, John H.
Willmoth and Thomas J. Sidman, and each of them, each with full power to act
without the other and with full power of substitution and resubstitution, as
attorneys or attorney to sign and file in his or her name, place and stead, in
any and all capacities, such Registration Statement, any and all amendments and
exhibits thereto, and any and all other documents to be filed with the
Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
June 3, 1997
/s/ Masaaki Torimoto
------------------------------
Masaaki Torimoto
Director
<PAGE> 11
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-2,
S-3 or other appropriate form in connection with the issuance of warrants or
other equity securities and shares of the Company's Class A Common Stock, par
value $.001 per share, underlying such warrants or other equity securities does
hereby constitute and appoint Steven M. Shindler, Thomas D. Hickey, John H.
Willmoth and Thomas J. Sidman, and each of them, each with full power to act
without the other and with full power of substitution and resubstitution, as
attorneys or attorney to sign and file in his or her name, place and stead, in
any and all capacities, such Registration Statement, any and all amendments and
exhibits thereto, and any and all other documents to be filed with the
Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
June 3, 1997
/s/ Dennis Weibling
---------------------------
Dennis Weibling
Director
<PAGE> 12
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel
Communications, Inc., a Delaware corporation (the "Company"), which Company
intends to file with the Securities and Exchange Commission under the
provisions of the Securities Act of 1933 a Registration Statement on Form S-2,
S-3 or other appropriate form in connection with the issuance of warrants or
other equity securities and shares of the Company's Class A Common Stock, par
value $.001 per share, underlying such warrants or other equity securities does
hereby constitute and appoint Steven M. Shindler, Thomas D. Hickey, John H.
Willmoth and Thomas J. Sidman, and each of them, each with full power to act
without the other and with full power of substitution and resubstitution, as
attorneys or attorney to sign and file in his or her name, place and stead, in
any and all capacities, such Registration Statement, any and all amendments and
exhibits thereto, and any and all other documents to be filed with the
Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done,
hereby ratifying and approving the acts of said attorneys and each of them and
any substitute or substitutes.
June 3, 1997
/s/ William E. Conway, Jr.
-------------------------------
William E. Conway, Jr.
Director
