SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):April 15, 1997(April 10, 1997)
NEXTEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-19656 36-3939651
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
1505 Farm Credit Drive, Suite 100, McLean, Virginia 22102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 394-3000
(Former name or former address, if changed since last report)
Item 5. Other Events.
On April 11, 1997, Nextel Communications, Inc. ("Nextel") reached an
agreement with Digital Radio, L.L.C., an entity controlled by Craig O. McCaw
(the "McCaw Investor"), pursuant to which the McCaw Investor committed to
exercise in full its currently outstanding option (the "First Tranche Option")
to purchase 15,000,000 shares of Nextel's Class A Common Stock, par value $0.001
per share ("Nextel Common Stock"), for an aggregate purchase price of
$232,500,000 (the "Option Commitment"), with the consummation thereof scheduled
to occur on July 28, 1997, (the "Option Closing").In consideration for the McCaw
Investor's making the Option Commitment, Nextel agreed to issue to the McCaw
Investor a contingent equity instrument (the "CEI"), which, at any time between
the Option Closing and July 18, 1999, may be converted, without any additional
consideration, into a number of shares of Nextel Common Stock to be determined
using a formula based upon the average closing price for a share of Nextel
Common Stock during the 20 trading days immediately preceding the Option Closing
(the "Average Trading Price"). The number of shares of Nextel Common Stock into
which the CEI may be converted ranges from a minimum of 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 remaining options
held by the McCaw Investor to purchase up to 20,000,000 additional shares of
Nextel Common Stock remain in effect as originally issued.
Nextel also reached an agreement with Option Acquisition, L.L.C., an
entity controlled by Mr. McCaw (the "Purchaser"), pursuant to which the
Purchaser will acquire, for an aggregate purchase price of $25,000,000, an
option, in replacement of the option previously issued to Comcast Corporation,
to purchase 25,000,000 shares of Nextel 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 amounting to an
aggregate of $420 million in new equity. The New Option, and any shares of
Nextel 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 Nextel Common
Stock obtained on such exercise, (ii) is not an affiliate of Mr. 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.
Finally, Nextel has also reached an understanding with the McCaw
Investor, which contemplates that the McCaw Investor will provide up to
$50,000,000 in debt financing on terms and subject to conditions that parallel
those contemplated in Nextel's senior secured financing commitment with
Motorola, Inc.
Each of the transactions described above is subject to negotiation of
definitive agreements and to receipt of certain approvals, including Nextel's
receipt of consents to certain amendments of its public indentures that would
enhance Nextel's financing flexibility.
The Memorandum of Understanding dated as of April 11, 1997 between
Nextel, Unrestricted Subsidiary Funding Company, a subsidiary of Nextel, and
Purchaser, and the Memorandum of Understanding dated as of April 11, 1997
between Nextel and McCaw Investor relating to the transactions described above
are attached to this Current Report as Exhibits 99.1 and 99.2, respectively, and
are incorporated herein by reference, and the description contained herein is
qualified in its entirety by reference thereto.
On April 14, 1997, Nextel issued a Press Release describing the
agreements reached with the McCaw Investor and the Purchaser, a copy of which is
attached to this Current Report as Exhibit 20.1 and is incorporated herein by
reference.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Exhibit No. Exhibit Description
20.1 Press Release issued April 14, 1997.
99.1 Memorandum of Understanding, dated as of April 11, 1997,
between Nextel Communications, Inc., Unrestricted
Subsidiary Funding Company and Option Acquisition, L.L.C.
99.2 Memorandum of Understanding, dated as of April 11, 1997,
between Digital Radio, L.L.C. and Nextel Communications,
Inc.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEXTEL COMMUNICATIONS, INC.
Date: April 15, 1997 By: /s/ Steven M. Shindler
Steven M. Shindler
Senior Vice President & CFO
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EXHIBIT INDEX
Exhibit No. Exhibit Description Page
20.1 Press Release issued April 14, 1997.
99.1 Memorandum of Understanding, dated as of April 11, 1997,
between Nextel Communications, Inc., Unrestricted
Subsidiary Funding Company and Option Acquisition, L.L.C.
99.2 Memorandum of Understanding, dated as of April 11, 1997,
between Digital Radio, L.L.C. and Nextel Communications,
Inc.
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