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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 14a-11(c) or 14a-12
Nextel Communications, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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LOGO NEXTEL COMMUNICATIONS, INC.
201 Route 17 North, Rutherford, NJ 07070
201 438-1400 FAX 201 438-5540
May 20, 1996
To Our Stockholders:
On behalf of the Board of Directors of Nextel Communications, Inc. (the
"Company"), I cordially invite you to attend the Annual Meeting of Stockholders
of the Company (the "Annual Meeting") to be held at Hyatt Regency O'Hare, 9300
West Bryn Mawr, Rosemont, Illinois 60018 on Tuesday, June 18, 1996 at 10:00
a.m., local time. A Notice of Annual Meeting, form of proxy and a proxy
statement containing information about the matters to be acted upon at the
Annual Meeting are enclosed.
We urge you to attend the Annual Meeting. Your participation in the affairs
of the Company is important. The Annual Meeting is an excellent opportunity for
the Company's management to discuss the Company's progress with you in person.
Whether in person or by proxy, it is important that your shares be
represented at the Annual Meeting. To ensure your participation in the Annual
Meeting, regardless of whether you intend to attend in person, please complete,
sign, date and return the enclosed proxy promptly. If you attend the Annual
Meeting, you may revoke your proxy at that time and vote in person, if you wish,
even if you have previously returned your form of proxy, by following the
procedures set forth in the proxy statement.
We look forward to seeing you on June 18.
Sincerely,
/s/ Daniel F. Akerson
------------------------
Daniel F. Akerson
Chairman of the Board and
Chief Executive Officer
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LOGO
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 18, 1996
Notice is hereby given that the Annual Meeting of Stockholders of Nextel
Communications, Inc. (the "Company") will be held on June 18, 1996 at 10:00 a.m.
local time at:
Hyatt Regency O'Hare
9300 West Bryn Mawr
Rosemont, Illinois 60018
The purpose of the meeting is:
(1) To elect three directors of the Company to hold office for a
three-year term ending on the date of the third succeeding Annual
Meeting of Stockholders of the Company and until their respective
successors shall have been duly elected and qualified;
(2) To consider and vote upon a proposal to approve the adoption of the
Company's Associate Stock Purchase Plan;
(3) To consider and vote upon a proposal to approve an amendment to the
Company's Amended and Restated Incentive Equity Plan to increase the
aggregate number of shares of the Company's Class A Common Stock
that may be issued or transferred upon exercise, payment or vesting
of stock options and other equity incentive awards granted under
such plan from 14,000,000 to 24,000,000;
(4) To ratify the appointment of Deloitte & Touche LLP as the firm of
independent auditors to audit the consolidated financial statements
of the Company and its subsidiaries for fiscal year 1996; and
(5) To consider and take action upon any other business that may
properly come before the meeting or any adjournment thereof.
The Board of Directors of the Company has fixed the close of business on
May 10, 1996 as the record date for the determination of stockholders entitled
to notice of, and to vote at, the Annual Meeting or any adjournment thereof.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN AND
DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE VOTE AT THE ANNUAL
MEETING BY FOLLOWING THE PROCEDURES SET FORTH IN THE ACCOMPANYING PROXY
STATEMENT.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Daniel F. Akerson
---------------------
DANIEL F. AKERSON
Chairman of the Board
Rutherford, New Jersey
May 20, 1996
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NEXTEL COMMUNICATIONS, INC.
201 ROUTE 17 NORTH
RUTHERFORD, NEW JERSEY 07070
(201) 438-1400
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 18, 1996
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GENERAL INFORMATION
This Proxy Statement is being furnished to stockholders of Nextel
Communications, Inc., a Delaware corporation (the "Company"), in connection with
the Annual Meeting of Stockholders of the Company to be held at Hyatt Regency
O'Hare, 9300 West Bryn Mawr, Rosemont, Illinois 60018 on Tuesday, June 18, 1996
at 10:00 a.m. local time, and any adjournments or postponements thereof (the
"Annual Meeting"). At the Annual Meeting, stockholders will be asked to consider
and vote upon the election of directors, a proposal to approve the adoption of
the Company's Associate Stock Purchase Plan (the "Stock Purchase Plan") and a
proposal to approve an amendment to the Company's Amended and Restated Incentive
Equity Plan (the "Incentive Equity Plan"). Stockholders will also be asked to
consider and ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for fiscal year 1996.
SOLICITATION, USE AND REVOCATION OF PROXIES
The accompanying proxy is solicited by the Company's Board of Directors
(the "Board of Directors") for use at the Annual Meeting. A proxy may be revoked
at any time prior to its use by: (1) delivering to the General Counsel of the
Company a signed notice of revocation or a later dated proxy, (2) attending the
Annual Meeting and voting in person or (3) giving notice of revocation of the
proxy at the Annual Meeting. Attendance at the Annual Meeting will not in itself
constitute the revocation of a proxy. Prior to the Annual Meeting, any written
notice of revocation should be sent to Nextel Communications, Inc., 201 Route 17
North, Rutherford, New Jersey 07070, Attention: General Counsel, or hand
delivered to the General Counsel of the Company, at such address, at or before
the taking of the vote or at the Annual Meeting. A stockholder may be requested
to present such documents as shall be reasonably requested for the purpose of
establishing such stockholder's identity. This Proxy Statement, the accompanying
proxy card and the 1995 Annual Report to Stockholders are being mailed or
otherwise distributed to stockholders on or about May 20, 1996.
The shares represented by properly executed proxies will be voted in
accordance with the instructions indicated on such proxies. It is intended that
the shares represented by proxies on which no instructions have been indicated
will be voted "FOR" the election of the nominees for director named herein or
such substitute nominees as the Board of Directors may designate, "FOR" the
proposal to approve the adoption of the Stock Purchase Plan, "FOR" the proposal
to approve the amendment to the Incentive Equity Plan and "FOR" ratification of
Deloitte & Touche LLP as the firm of independent auditors to audit the
consolidated financial statements of the Company and its subsidiaries for fiscal
year 1996, and at the discretion of the persons named as proxies on all other
matters that may properly come before the Annual Meeting.
RECORD DATE, VOTING RIGHTS AND OUTSTANDING SHARES
The Board of Directors has fixed the close of business on May 10, 1996 as
the record date for the determination of stockholders entitled to receive notice
of and to vote at the Annual Meeting and any adjournment or postponement
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thereof (the "Record Date"). Only holders of record of the Company's Class A
Common Stock, par value $0.001 per share (the "Class A Common Stock"), and the
Company's Class A Convertible Redeemable Preferred Stock, par value $0.01 per
share (the "Class A Preferred Stock"), on the Record Date are entitled to vote
at the Annual Meeting. Each holder of record of Class A Common Stock at the
close of business on the Record Date is entitled to one vote per share on each
matter to be voted upon by the stockholders at the Annual Meeting other than the
election of the director nominated by the holder of the Class A Preferred Stock
(the "Class A Preferred Director"). The holder of record of the Class A
Preferred Stock at the close of business on the Record Date is entitled to one
vote per share of Class A Common Stock into which its shares of Class A
Preferred Stock are convertible on the Record Date. The holder of Class A
Preferred Stock, in its capacity as such, is entitled to vote together with the
holders of Class A Common Stock on each matter to be voted upon at the Annual
Meeting other than the election of directors. The holder of the Class A
Preferred Stock is entitled, in its capacity as such, to vote as a separate
class on the election of the Class A Preferred Director. As of the Record Date,
there were 206,920,514 shares of Class A Common Stock (excluding treasury
shares) issued and outstanding and 8,163,265 shares of Class A Preferred Stock
(convertible into 24,489,795 shares of Class A Common Stock) issued and
outstanding.
QUORUM, VOTING REQUIREMENTS AND EFFECT OF ABSTENTIONS AND NON-VOTES
At the Annual Meeting, inspectors of election will determine the presence
of a quorum and tabulate the results of the voting by stockholders. The holders
of a majority of the total number of outstanding shares of stock that are
entitled to vote at the meeting must be present in person or by proxy in order
to have the quorum that is necessary for the transaction of business at the
Annual Meeting. The inspectors will treat properly executed proxies marked
"ABSTAIN" or required to be treated as "non-votes" as present for purposes of
determining whether there is a quorum at the Annual Meeting. A "non-vote" occurs
when a broker or nominee holding shares for a beneficial owner votes on one
proposal, but does not vote on another proposal because the broker or nominee
does not have discretionary voting power and has not received instructions from
the beneficial owner.
The three nominees for director who receive a plurality of the votes cast
by the Class A Common Stock, voting as a separate class, and the nominee for
Class A Preferred Director who receives a plurality of the votes cast by the
Class A Preferred Stock, voting as a separate class, in each case in person or
by proxy at the Annual Meeting, will be elected. The approval of the adoption of
the Stock Purchase Plan and the approval of the amendment to the Incentive
Equity Plan will require for their approval the favorable vote of a majority of
the votes of the Class A Common Stock and the Class A Preferred Stock, voting as
a single class, present in person or by proxy and entitled to vote at the Annual
Meeting. All other matters will require the approval of a majority of the votes
casts by the Class A Common Stock and the Class A Preferred Stock, voting as a
single class, in person or by proxy at the Annual Meeting. Abstentions and
non-votes will have the same effect as a vote against the proposal to adopt the
Stock Purchase Plan and the proposal to amend the Incentive Equity Plan, but
will have no effect on the election of directors or the proposal to ratify the
appointment of the independent auditors.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
Pursuant to the Company's By-Laws, the Board of Directors is divided into
three classes of directors, with each class having a number of directors as
nearly equal as possible and with the terms of each class expiring in a
different year. Pursuant to the terms of the Class A Preferred Stock, the holder
of the Class A Preferred Stock is entitled to elect three Class A Preferred
Directors or such greater number as is necessary to cause the total number of
Class A Preferred Directors to equal 25% of the total number of members of the
Board of Directors. In electing such directors, the holders of the Class A
Preferred Stock vote separately as a class. The Class A Preferred Directors are
to be allocated as equally as possible among the Company's three classes of
directors. Accordingly, one Class A Preferred Director has been allocated to
each of the Company's classes of directors. The holders of the Class A Common
Stock are not entitled to vote for the Class A
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Preferred Directors and the holder of Class A Preferred Stock, in its capacity
as such, is not entitled to vote in the election of members of the Board of
Directors other than the Class A Preferred Directors.
Digital Radio L.L.C., ("Digital Radio" or the "McCaw Investor"), in its
capacity as the sole holder of the Class A Preferred Stock, has informed the
Company that it intends to vote all of its Class A Preferred Stock to elect the
Class A Preferred Director-nominee named in the following table. It is intended
that valid proxies received will be voted, unless contrary instructions are
given, to elect the other three nominees named in the following table. Should
any nominee decline or be unable to accept such nomination to serve as a
director, an event that the Company does not currently anticipate, the persons
named in the enclosed proxy reserve the right, in their discretion, to vote for
a lesser number or for substitute nominees designated by the Board of Directors,
to the extent consistent with the Company's Amended and Restated Certificate of
Incorporation and its By-Laws.
The McCaw Investor is also a holder of shares of Class A Common Stock as of
the Record Date. Pursuant to the McCaw Securities Purchase Agreement (as defined
below), the McCaw Investor agreed not to vote its shares of Class A Common Stock
for the election of any nominees for director other than those endorsed by at
least 80% of the members of the then-current Board of Directors (excluding any
such members who are representatives of the McCaw Investor). The McCaw Investor
agreed to cast its votes for such nominees in the same proportions as the votes
cast by the Company's other stockholders. The McCaw Investor has informed the
Company that it intends to cast its votes, in its capacity as a holder of Class
A Common Stock, for the election of the nominees named for director named herein
or such substitute nominees as the Board of Directors may designate (subject to
the endorsement requirement described above) in the same proportions as the
votes cast by the Company's other stockholders.
Of the three nominees for director to be elected by the holders of Class A
Common Stock, two are currently members of the Board of Directors and one is
currently an executive officer of the Company and, if elected, each will hold
office until the 1999 Annual Meeting of Stockholders and until his respective
successor is duly elected and qualified. The nominee for Class A Preferred
Director is currently a member of the Board of Directors and, if elected, will
hold office until the 1999 Annual Meeting of Stockholders and until his
successor is duly elected and qualified. The incumbent directors who are not
standing for election at the Annual Meeting are to serve until the end of their
respective terms as specified in the following table and until their respective
successors are elected and qualified.
DIRECTOR POSITIONS WITH THE
NAME AGE SINCE COMPANY COMMITTEES
-------------------------- --- -------- ---------------------- -----------------------
NOMINEES FOR DIRECTORS TO
HOLD OFFICE UNTIL 1999
--------------------------
Daniel F. Akerson 47 1996 Chairman of the Board Operations
of Directors and Chief
Executive Officer
Robert Cooper 53 1988 Director Compensation
Timothy M. Donahue 47 -- President and Chief
Operating Officer
Dennis M. Weibling* 45 1995 Director Audit, Compensation,
Nominating, Operations
and Interested Party
DIRECTORS HOLDING OFFICE
UNTIL 1998
--------------------------
Keith Bane 54 1995 Director Interested Party
Craig O. McCaw* 45 1995 Director Operations
Masaaki Torimoto 53 1995 Director Compensation
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DIRECTOR POSITIONS WITH THE
NAME AGE SINCE COMPANY COMMITTEES
-------------------------- --- -------- ---------------------- -----------------------
DIRECTORS HOLDING OFFICE
UNTIL 1997
--------------------------
Scot B. Jarvis* 35 1995 Director Nominating, Operations
and Transaction
Brian D. McAuley 55 1987 Vice Chairman of the Audit and Transaction
Board of Directors
Keisuke Nakasaki 54 1995 Director Audit
Morgan E. O'Brien 51 1987 Vice Chairman of the Nominating, Operations,
Board of Directors Transaction and
Interested Party
---------------
* Class A Preferred Directors.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" INCUMBENT DIRECTORS ROBERT
COOPER AND DANIEL F. AKERSON AND DIRECTOR-NOMINEE TIMOTHY M. DONAHUE.
INFORMATION CONCERNING NOMINEES FOR ELECTION AND INCUMBENT DIRECTORS
Based upon information received from the respective directors and the
director-nominee, set forth below is information with respect to the individuals
who are nominees for election to the Board of Directors and the incumbent
directors of the Company who are not standing for election at the Annual
Meeting.
NOMINEES FOR ELECTION AS DIRECTORS TO HOLD OFFICE UNTIL THE 1999 ANNUAL MEETING
OF STOCKHOLDERS
DANIEL F. AKERSON. Mr. Akerson has served as Chairman of the Board of
Directors and Chief Executive Officer since joining the Company on March 6,
1996. From 1993 until March 5, 1996, Mr. Akerson served as a general partner of
Forstmann Little & Co., a private investment firm ("Forstmann Little"). While
serving as a general partner of Forstmann Little, Mr. Akerson also held the
positions of Chairman of the Board and Chief Executive Officer of General
Instrument Corporation, a technology company acquired by Forstmann Little
("General Instrument"). From 1983 to 1993, Mr. Akerson held various senior
management positions with MCI Communications Corporation, including president
and chief operating officer. Mr. Akerson currently serves as a director of
General Instrument and American Express Company.
ROBERT COOPER. Mr. Cooper has served as a director of the Company since
November 1988. Mr. Cooper has been President of Touch Tel Corp., a
communications company, for more than five years.
TIMOTHY M. DONAHUE. Mr. Donahue has served as President of the Company
since joining the Company on February 1, 1996. On February 29, 1996, Mr. Donahue
was elected by the Board of Directors to the additional position of Chief
Operating Officer of the Company. From 1986 to January 1996, Mr. Donahue held
various senior management positions with AT&T Wireless Services (formerly known
as McCaw Cellular Communications, Inc., "McCaw Cellular"), most recently
regional president for the Northeast.
DENNIS M. WEIBLING. Mr. Weibling has served as a director of the Company
since July 31, 1995. From October 1995 to March 1996, Mr. Weibling served as the
Company's acting Chief Executive Officer. Since 1993, Mr. Weibling has been
President of Eagle River, Inc., a company formed to make strategic investments
in telecommunications ventures ("Eagle River"). From 1981 to 1993, Mr. Weibling
was a shareholder of Clark, Nuber and Co., P.S., a public accounting firm in
Bellevue, Washington.
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DIRECTORS HOLDING OFFICE UNTIL THE 1998 ANNUAL MEETING OF STOCKHOLDERS
KEITH BANE. Mr. Bane has served as a director of the Company since July 31,
1995. Since August 1994, Mr. Bane has been Executive Vice President and Chief
Corporate Staff Officer of Motorola, Inc. ("Motorola"). From 1973 to August
1984, Mr. Bane held various senior management positions with Motorola. Prior to
joining Motorola, Mr. Bane was a partner at the law firm of Kirkland & Ellis.
CRAIG O. MCCAW. Mr. McCaw has served as a director of the Company since
July 31, 1995. Since 1994, Mr. McCaw has been Chairman of the Board and Chief
Executive Officer of Eagle River, and since 1995, Chairman of the Board of
Digital Radio, a company formed for the purpose of making an equity investment
in the Company. From March 1990 to November 1994, Mr. McCaw served as Chairman
of the Board and Chief Executive Officer of LIN Broadcasting Company. From 1974
to September 1994, Mr. McCaw served as Chairman of the Board and Chief Executive
Officer of McCaw Cellular, which was sold to AT&T in August 1994. Mr. McCaw
currently serves as Chairman of the Board of LIN Television Company, an owner
and operator of television stations, and is an appointee to the President's
National Security Telecommunications Advisory Committee.
MASAAKI TORIMOTO. Mr. Torimoto has served as a director of the Company
since February 28, 1995. Mr. Torimoto is employed by Matsushita Electric Corp.
of America ("Matsushita Electric") and has served as the Chief Liaison between
Matsushita Communication Industrial Co. Ltd. ("Matsushita") and the Company
since January 1995. From June 1994 to December 1994, Mr. Torimoto served as
Director of Marketing and Product Planning for the Company. From June 1992 to
May 1994, Mr. Torimoto was a Corporate Vice President and General Manager,
Marketing at Matsushita Communication Industrial Corp. of America ("Matsushita
America"), a subsidiary of Matsushita. From January 1990 to May 1992, Mr.
Torimoto was General Manager, Marketing at Matsushita America. Prior thereto,
Mr. Torimoto was a General Manager, Auto Products Division at Panasonic Company,
a division of Matsushita Electric.
DIRECTORS HOLDING OFFICE UNTIL THE 1997 ANNUAL MEETING OF STOCKHOLDERS
SCOT B. JARVIS. Mr. Jarvis has served as a director of the Company since
April 4, 1995. Since October 1994, Mr. Jarvis has been Vice President of Eagle
River. From October 1994 to April 1995, Mr. Jarvis was also Vice President of
NextLink, Inc., a company formed to make strategic investments in companies
operating in the fiber optics market. From September 1993 to October 1994, Mr.
Jarvis served as Vice President of McCaw Development Co. From December 1990 to
September 1993, Mr. Jarvis was Vice President General Manager in California of
McCaw Cellular. Prior to December 1990, Mr. Jarvis served as Vice President
Acquisitions and Development of McCaw Cellular.
BRIAN D. MCAULEY. Mr. McAuley has served as a director of the Company since
co-founding the Company in 1987. Since October 2, 1995, Mr. McAuley has served
as Vice Chairman of the Board of Directors. From 1987 to October 1, 1995, Mr.
McAuley served as President of the Company, and from 1987 to September 1, 1994,
Mr. McAuley also served as the Company's Chief Executive Officer. Mr. McAuley is
also a Certified Public Accountant with extensive experience in accounting,
strategic planning, investment banking, acquisitions and divestitures. From
September 1986 to April 1987, Mr. McAuley served as a financial consultant,
including a senior consultant to Reinheimer Nordberg, Inc., an investment
banking firm. Previously, Mr. McAuley held a variety of positions at various
firms, including Senior Vice President, Chief Financial Officer and director of
Millicom Incorporated, an international telecommunications firm. Mr. McAuley
currently serves as a director of Clearnet Communications, Inc., a Canadian
wireless communications company in which the Company holds a minority equity
interest, and Corporacion Mobilcom S.A. de C.V., a Mexican SMR provider in which
the Company holds a minority equity interest.
KEISUKE NAKASAKI. Mr. Nakasaki has served as a director of the Company
since July 31, 1995. Since July 1995, Mr. Nakasaki has been President and Chief
Executive Officer of NTT America, Inc. ("NTT America"), a subsidiary of Nippon
Telegraph and Telephone Corporation ("NTT") of Japan. From December 1992 to July
1995, Mr. Nakasaki served as a director of Thai Telephone and Telecommunications
Public Co., Ltd. From July 1991 to
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December 1992, Mr. Nakasaki served as Vice President, Integrated Communications
Systems of NTT. Prior to July 1991, Mr. Nakasaki held various management
positions with NTT.
MORGAN E. O'BRIEN. Mr. O'Brien has served as a director of the Company
since co-founding the Company in 1987. Since March 6, 1996, Mr. O'Brien has
served as Vice Chairman of the Board of Directors. From 1987 to March 5, 1996,
Mr. O'Brien served as Chairman of the Board of Directors and from 1987 to
October 16, 1994, Mr. O'Brien also served as General Counsel of the Company. Mr.
O'Brien was with the firm of Jones, Day, Reavis & Pogue, an international law
firm, from January 1986 to January 1990, during which time he served as the
partner-in-charge of the firm's telecommunications section until co-founding the
Company in 1987. Mr. O'Brien also served as a consultant to Jones, Day, Reavis &
Pogue from January 1990 to October 1991. From June 1979 until April 1987, Mr.
O'Brien was in private legal practice and represented major specialized mobile
radio ("SMR") operators in proceedings before the Federal Communications
Commission ("FCC"). From October 1970 to June 1979, Mr. O'Brien served in a
variety of legal and managerial positions with the FCC in the areas of private
radio and radio common carrier administration. Mr. O'Brien currently serves as a
director of Cellular Telecommunications Industry Association, a leading wireless
communications trade association, and American Mobile Telecommunications
Association, a leading SMR trade association.
INFORMATION REGARDING CERTAIN DIRECTORSHIPS
In connection with a number of the Company's transactions, the Company
granted parties to certain of such transactions the right to nominate persons
for election to the Company's Board of Directors. Additionally, the Company has
agreed to limit the size of the Board of Directors to a maximum of sixteen
members.
Mr. Torimoto's directorship is connected with Matsushita's $45,000,000
investment in 3,000,000 shares of Class A Common Stock made pursuant to the
Stock Purchase Agreement dated as of December 9, 1991 between the Company and
Matsushita and certain related agreements (collectively, the "Matsushita Stock
Purchase Agreement"). The Matsushita Stock Purchase Agreement provides, among
other matters, that Matsushita is entitled, subject to certain conditions, to
nominate one person for election to the Board of Directors for as long as
Matsushita or its affiliates continue to own at least 1,500,000 shares of Class
A Common Stock.
Mr. Nakasaki's directorship is connected with NTT's investment in the
Company. On January 20, 1994, the Company and NTT entered into a Stock Purchase
Agreement (the "NTT Stock Purchase Agreement"), and NTT America and the Company
entered into a Technical Services Agreement (the "Technical Services
Agreement"). Under the terms of the NTT Stock Purchase Agreement, NTT purchased
1,532,959 shares of Class A Common Stock for $48.925 per share or $75 million on
April 4, 1994. Pursuant to the NTT Stock Purchase Agreement, NTT is entitled to
nominate one person to serve on the Board of Directors. NTT nominated Mr.
Nakasaki as its designee to the Company's Board of Directors following the
resignation of NTT's previous representative, Dr. Koichiro Hayashi, from the
Company's Board of Directors on July 31, 1995.
The directorships of Messrs. Jarvis, McCaw and Weibling (collectively, the
"Class A Preferred Directors") are connected with the McCaw Investor's
investment in the Company. Pursuant to the terms of the Class A Preferred Stock,
the McCaw Investor, as the sole holder of the Class A Preferred Stock, is
entitled to elect three Class A Preferred Directors or such greater number as is
necessary to cause the total number of Class A Preferred Directors to equal 25%
of the total number of members of the Board of Directors. In electing such
directors, the holders of the Class A Preferred Stock vote separately as a
class. The Class A Preferred Directors are to be allocated as equally as
possible among the Company's three classes of directors. Accordingly, one Class
A Preferred Director has been allocated to each of the Company's classes of
directors. The McCaw Investor is entitled to elect the Class A Preferred
Directors unless, as a result of a sale, transfer or other disposition, it holds
equity securities of the Company having less than 5% of the aggregate voting
power required to elect the Board of Directors. The McCaw Investor has also
agreed not to vote its shares of Class A Common Stock for the election of any
nominees for director other than those endorsed by at least 80% of the members
of the then-current
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Board of Directors (excluding any such members who are representatives of the
McCaw Investor). The McCaw Investor agreed to cast its votes for such nominees
in the same proportions as the votes cast by the Company's other stockholders.
Mr. Bane's directorship is connected with Motorola's investment in the
Company. Pursuant to the terms of the Contribution and Merger Agreement, dated
as August 4, 1994, as amended, by and among the Company, Motorola, ESMR, Inc.
and ESMR Sub, Inc. (the "Motorola Agreement"), and subject to certain
conditions, as long as Motorola owns 5% or more of the outstanding shares of
Class A Common Stock, Motorola is entitled to nominate two persons for election
as members of the Board of Directors. Motorola has elected currently to exercise
such right only with respect to one nominee.
Pursuant to the terms of the Stock Purchase Agreement dated as of September
14, 1992 among Comcast Corporation ("Comcast"), Comcast FCI, Inc. and the
Company, as amended, and subject to certain conditions, Comcast is entitled to
nominate one person for election to the Board of Directors in connection with
its initial investment in the Company. Comcast is entitled to nominate
additional nominees such that the number of director-nominees designated by
Comcast represents a percentage of the entire Board of Directors at least equal
to its percentage ownership in the Company. Although Comcast's nominees to the
Board of Directors resigned in May 1995 and Comcast has not nominated any
replacements to serve on the Board of Directors, Comcast's contractual rights to
representation on the Board of Directors remain in effect.
In connection with Mr. Akerson's employment by the Company, Mr. Akerson is
entitled to be nominated for election as a member of the Board of Directors and
to hold the position of Chairman of the Board of Directors.
COMPENSATION OF DIRECTORS
Directors are reimbursed for direct expenses relating to their activities
as members of the Board of Directors, but are not otherwise compensated for the
performance of their duties as directors.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 BY COMPANY
OFFICERS, DIRECTORS AND 10% STOCKHOLDERS
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, and persons who own
more than ten percent (10%) of a registered class of the Company's equity
securities, to file with the Securities and Exchange Commission (the
"Commission") initial reports of beneficial ownership and reports of changes in
beneficial ownership of Class A Common Stock and other equity securities of the
Company. The rules promulgated by the Commission under Section 16(a) of the
Exchange Act require those persons to furnish the Company with copies of all
reports filed with the Commission pursuant to Section 16(a).
Reports received by the Company indicate that on one occasion Wayland R.
Hicks, who served as a director and executive officer of the Company until
October 2, 1995, failed to file a Form 4 on a timely basis. The six transactions
reported on the Form 4 were in connection with an amendment to employee stock
options granted previously to Mr. Hicks. The employee stock options were amended
in connection with the termination of Mr. Hicks employment with the Company.
Additionally, reports received by the Company indicate that on one occasion
Justin Jaschke, a former executive officer of the Company, failed to file a Form
4, reporting one transaction, on a timely basis and Thomas D. Hickey failed to
file a Form 4, reporting two transactions, on a timely basis.
Based solely upon a review of Forms 3, Forms 4 and Forms 5 and amendments
thereto furnished to the Company pursuant to Rule 16a-3(e) during the fiscal
year ended December 31, 1995, and written representations of certain of its
directors and executive officers that no Forms 5 were required to be filed, all
other directors and executive officers have filed with the Commission on a
timely basis all reports required to be filed under Section 16(a) of the
Exchange Act.
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BOARD OF DIRECTORS AND BOARD COMMITTEES
During fiscal year 1995, the Board of Directors held twelve regularly
scheduled and special meetings. During fiscal year 1995, all directors, except
for Mr. McCaw, attended at least seventy-five percent (75%) of the meetings of
the Company's Board of Directors and committees thereof of which they were a
member. In addition to attending meetings, directors discharge their
responsibilities by review of Company reports to directors, visits to Company
facilities, correspondence and telephone conferences with the Company's
executive officers and others regarding matters of interest and concern to the
Company.
The Board of Directors has standing Audit, Compensation, Transaction,
Nominating, Operations and Interested Party committees. The McCaw Securities
Purchase Agreement (as defined below) provides that each committee of the Board
of Directors shall include at least one Class A Preferred Director as a member.
All committees report their activities, actions and recommendations to the Board
of Directors as appropriate.
AUDIT COMMITTEE
Messrs. McAuley (Chairman), Nakasaki and Weibling currently are members of
the Audit Committee. The Audit Committee reviews with the Company's management,
the internal auditors and the independent auditors, the Company's policies and
procedures with respect to internal control; reviews significant accounting
matters; approves the audited financial statements prior to public distribution;
approves any significant changes in the Company's accounting principles or
financial reporting practices; reviews independent auditor services; and
recommends to the Board of Directors the firm of independent auditors to audit
the Company's consolidated financial statements. The Audit Committee held one
meeting during fiscal year 1995. The Audit Committee did not meet during the
period that Mr. Weibling served as acting Chief Executive Officer of the
Company.
COMPENSATION COMMITTEE
Messrs. Cooper (Chairman), Torimoto and Weibling currently are members of
the Compensation Committee. During the period that Mr. Weibling served as acting
Chief Executive Officer of the Company, Mr. Jarvis replaced Mr. Weibling on the
Compensation Committee. The Compensation Committee is (and is expected to
continue to be) composed entirely of directors who are not employees of the
Company or its subsidiaries. The Compensation Committee recommends to the Board
of Directors the compensation of the Chairman of the Board of Directors, the
Vice Chairmen of the Board of Directors, the Chief Executive Officer and the
President; administers the Company's compensation plans for the same executives;
and reviews various matters relating to organization and compensation. The
Compensation Committee administers, and makes all ongoing determinations
concerning matters relevant to, the Incentive Equity Plan and, if approved by
the stockholders, also will administer the Stock Purchase Plan. The Compensation
Committee held eight meetings during fiscal year 1995.
TRANSACTION COMMITTEE
Messrs. McAuley (Chairman), Jarvis and O'Brien currently are members of the
Transaction Committee. The Transaction Committee has the authority (when the
Company's full Board of Directors has not acted on such matters) to set various
procedural details regarding annual and special meetings and the selection of
the record date for determining stockholders entitled to vote at annual or
special meetings. The Transaction Committee held one meeting during fiscal year
1995.
NOMINATING COMMITTEE
The Nominating Committee was formed to recommend new members for nomination
to the Board of Directors. Messrs. O'Brien (Chairman), Jarvis and Weibling
currently are members of the Nominating Committee. On July 27, 1995, the
Company's By-Laws were amended to provide that as long as there is an Operations
Committee, there shall be a Nominating Committee composed of least three
members. All nominees proposed by the Nominating Committee to
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serve on the committees of the Board of Directors or to stand for election to
the Board of Directors (other than nominees of the McCaw Investor), shall be
presented by the Nominating Committee to the Operations Committee for its
endorsement prior to the submission of the nominations to the Board of
Directors, except that any nomination or appointment made to meet or satisfy
contractual obligations of the Company that were in existence on April 4, 1995
need not be presented to the Operations Committee and need only be approved by a
vote of a majority of a quorum of the Board of Directors. Nominees who receive
the endorsement of the Operations Committee will be appointed to the designated
committee or stand for election if approved by a majority of a quorum of the
Board of Directors. Nominees who do not receive the endorsement of the
Operations Committee will be appointed to the designated committee or stand for
election only if approved by the lesser of a defined required vote or a majority
of all of the members of the Board of Directors. The Nominating Committee did
not meet during fiscal year 1995 because, other than nominees of the McCaw
Investor, all nominees proposed for election to the Board of Directors during
fiscal year 1995 (subsequent to April 4, 1995) were elected by action of the
full Board of Directors. The full Board of Directors also acted to fill all
vacancies on the committees of the Board of Directors during such period. The
Nominating Committee has not yet instituted a formal procedure for considering
director candidates recommended by stockholders for election to the Board of
Directors.
OPERATIONS COMMITTEE
The Operations Committee was formed on July 31, 1995 in connection with the
McCaw Investor's investment in the Company. Messrs. McCaw (Chairman), Akerson,
Jarvis, O'Brien and Weibling currently are members of the Operations Committee.
The Company's By-Laws provide that the Operations Committee shall be comprised
of five members, three of whom shall be Class A Preferred Directors. Also, in
connection with Mr. Akerson's employment by the Company, Mr. Akerson is entitled
to serve as a member of the Operations Committee. The Operations Committee has
the authority to formulate key aspects of the Company's business strategy,
including decisions relating to the technology used by the Company to provide
wireless communications services (subject to existing equipment purchase
agreements); actions with respect to acquisitions relating to wireless
communications services; creation and approval of operating and capital
expenditure budgets, marketing and strategic plans and financing plans;
nomination, supervision and oversight of certain executive officers of the
Company; and endorsement of nominees proposed by the Nominating Committee to
serve on the committees of the Board of Directors or to stand for election to
the Board of Directors. The Operations Committee held two meetings during fiscal
year 1995.
The Board of Directors retains the power and authority to override actions
taken or proposed by the Operations Committee, and in certain circumstances, to
terminate the Operations Committee. The Board of Directors may override actions
taken or proposed to be taken by the Operations Committee by majority vote,
which would give rise to a $25,000,000 liquidated damages payment to the McCaw
Investor, the commencement of accrual of a 12% dividend payable on all
outstanding shares of Class A Preferred Stock, and the immediate vesting of an
option entitling Eagle River to purchase up to 1,000,000 shares of Class A
Common Stock at an exercise price of $12.25 per share. See "Certain
Relationships and Related Transactions." The Board of Directors, by a defined
super-majority vote, may override actions taken or proposed by the Operations
Committee, and in certain circumstances, terminate the Operations Committee
without triggering the obligations described above.
INTERESTED PARTY COMMITTEE
The Interested Party Committee was formed on July 31, 1995. Messrs. Bane
(Chairman), O'Brien and Weibling currently are members of the Interested Party
Committee. Pursuant to the Motorola Agreement as long as Motorola has the right
to nominate persons for election to the Board of Directors, the Motorola
nominees shall serve as members of the Interested Party Committee. The
Interested Party Committee has the authority to review certain significant
proposed transactions between the Company and affiliated persons or entities
(other than subsidiaries or other affiliated entities controlled by the
Company). The Interested Party Committee did not meet during fiscal year 1995.
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for (i) recommending to the Board
of Directors the cash and equity compensation of the Chairman of the Board of
Directors, the Vice Chairmen of the Board of Directors, the Chief Executive
Officer and the President, (ii) reviewing and approving the cash and equity
compensation recommended by the Chairman of the Board of Directors, the Vice
Chairmen of the Board of Directors and the Chief Executive Officer for the other
executive officers of the Company and (iii) determining equity compensation for
all employees. During fiscal year 1995, the Compensation Committee recommended
the cash and equity compensation for Mr. Hicks, the Company's Chief Executive
Officer and Vice Chairman of the Board of Directors until October 1995, Mr.
O'Brien, the Chairman of the Board of Directors during fiscal year 1995, and Mr.
McAuley, the Company's President until October 1995. Mr. Weibling, the Company's
acting Chief Executive Officer from October 1995 to March 1996, did not receive
any cash or equity compensation from the Company.
The Compensation Committee believes that the compensation levels of the
Company's executive officers, who provide leadership and strategic direction for
the Company, should consist of (i) base salaries that are commensurate with
executives of other comparable telecommunications companies and (ii) cash bonus
opportunities based on achievement of objectives set by the Compensation
Committee. The Compensation Committee also believes that it is important to
provide the Company's executive officers with significant stock-based incentive
compensation, which increases in value in direct correlation with improvement in
the performance of the Company's Class A Common Stock, thereby aligning
management's interest with those of the Company's stockholders.
The Compensation Committee considers the following factors (ranked in order
of importance) when determining compensation of executive officers: (i) the
Company's performance measured by attainment of specific strategic objectives,
stock price performance, and operating cash flow results, (ii) the individual
performance of each executive officer, (iii) comparative industry compensation
levels, (iv) historical cash and equity compensation levels, and (v)
recommendations of professional compensation consultants. The comparative
industry compensation data was based on public telecommunications companies,
two-thirds of which are included in the Nasdaq Telecommunications Index, which
was chosen as the peer group for the Stockholder Return Performance Graph
included herein, and the remainder of which are listed on either the New York
Stock Exchange or the American Stock Exchange.
For fiscal years beginning after January 1, 1994, Section 162(m) of the
Internal Revenue Code generally disallows a tax deduction to a publicly-held
company for compensation in excess of $1,000,000 paid to the Company's chief
executive officer and its four other most highly compensated executive officers,
unless the plan and awards pursuant to which any portion of the compensation is
paid meet certain requirements. The Incentive Equity Plan does not meet those
requirements, and the Compensation Committee has determined that meeting such
requirements may not necessarily be in the best interest of the Company.
Accordingly, the Compensation Committee has decided not to recommend any
amendment to the Incentive Equity Plan to satisfy those requirements at this
time. In any event, the Company does not anticipate having taxable income
against which a deduction could be taken in the near future.
CASH COMPENSATION
The salaries of certain executive officers were set initially by their
respective employment agreements. Each of the employment agreements provide that
the Company may increase the executive officer's base salary throughout the term
or any renewal term of such employment agreement and each agreement is
consistent with the Company's compensation policy as set forth herein.
The Compensation Committee engaged a compensation consultant in 1993 to
review and make recommendations with respect to the compensation of executive
officers. The Compensation Committee continues to engage and confer with the
consultant from time to time, and the Compensation Committee considers the
consultant's recommendations and advice in structuring the compensation of the
Company's executive officers.
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As stated above, the compensation of executive officers is also based in
part upon individual performance and comparative industry compensation levels.
Early in each fiscal year, a performance plan is established. Each such annual
plan sets forth overall goals to be achieved by the Company, as well as specific
performance goals to be achieved by each of its executive officers according to
his or her duties and responsibilities, for the relevant fiscal year. For fiscal
year 1995, the overall goals were (i) the completion of the Company's previously
announced merger and acquisition transactions, (ii) the meeting of targets
relating to the acquisition and construction of antenna sites for the Company's
advanced mobile communications systems employing digital technology ("Digital
Mobile networks"), (iii) the continuation, with Motorola, the Company's
equipment supplier and the developer of the proprietary technology currently
deployed by the Company in its Digital Mobile networks, of system development
and technology optimization activities with respect to the Digital Mobile
networks, (iv) the facilitation of the development of nationwide compatible
Digital Mobile networks and the achievement of a North American footprint, (v)
the continuation of the integration of acquired companies, (vi) the enhancement
of strategic relationships, (vii) the meeting of targets for development,
implementation, subscribers, budgets and cash flow, (viii) the strengthening of
operations by hiring senior operations executives for key positions and (ix) the
achievement of appreciation in the Company's stock price.
The Compensation Committee determined that most, but not all, of the
overall goals for fiscal year 1995 were met. Accordingly, Messrs. O'Brien and
McAuley each received a bonus in the amount of $262,500. Neither Mr. McAuley nor
Mr. O'Brien, however, received a salary increase in fiscal year 1995. Most of
the other executive officers of the Company received salary increases and
bonuses based on their achievement of overall and specific performance goals
during fiscal year 1995. Pursuant to the terms of his employment agreement with
the Company, Mr. Hicks received a bonus of $350,000 during fiscal year 1995. On
average, the cash compensation for executive officers of the Company is near the
median of comparative industry salary and bonus levels.
EQUITY COMPENSATION
The Compensation Committee administers and authorizes all grants and awards
made under the Incentive Equity Plan. Periodically, the Compensation Committee
authorizes grants of options to purchase Class A Common Stock under the
Incentive Equity Plan to all employees who have been with the Company one year
or longer. The Compensation Committee also authorizes awards for new employees
as incentive to join the Company. In determining whether and in what amount to
grant stock options or other equity compensation in fiscal year 1995, the
Compensation Committee considered the amount and date of vesting of currently
outstanding incentive equity compensation granted previously to each of the
Company's executive officers. The Compensation Committee believes that continued
grants of equity compensation to key executives is an important tool to retain
and motivate exceptionally-talented executives who are necessary to achieve the
Company's long-term goals, especially at a time of significant growth and
competition in the wireless communications industry.
During fiscal year 1995, the Compensation Committee did not grant equity
compensation to Messrs. Hicks, O'Brien or McAuley. The Compensation Committee
approved grants of equity compensation to certain of the other executive
officers of the Company, consistent with the Compensation Committee's
overarching policy of granting equity compensation to key executives and
employees.
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The Compensation Committee is comprised of three members. From May 19, 1994
until May 12, 1995, the members of the Committee were Mr. Cooper, Julian A.
Brodsky and Donald A. Harris. Messrs. Brodsky and Harris, Comcast's nominees to
the Board of Directors, resigned from the Board of Directors and each committee
thereof on May 12, 1995. Messrs. Weibling and Torimoto filled the vacancies on
the Compensation Committee created by such resignations. Mr. Weibling resigned
as a member of the Compensation Committee on October 2, 1995 when he was named
acting Chief Executive Officer of the Company and rejoined the Compensation
Committee in March 1996 when Mr. Akerson was named Chief Executive Officer and
Chairman of the Board of Directors. Mr. Jarvis served on the Compensation
Committee during the period that Mr. Weibling served as acting Chief Executive
Officer.
The Compensation Committee
Robert Cooper, Chairman
Masaaki Torimoto
Dennis M. Weibling
Scot Jarvis (member from October 2, 1995
to March 6, 1996)
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EXECUTIVE COMPENSATION
The following table and discussion summarize the compensation of each
person who served as the Chief Executive Officer of the Company during fiscal
year 1995 and each of the four other most highly compensated executive officers
of the Company (the "Named Executive Officers") for the fiscal years ended March
31, 1993 and 1994, the nine months ended December 31, 1994 ("Transition 1994" or
"T1994") and the fiscal year ended December 31, 1995.
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
-----------------------------------
AWARDS
----------------------- PAYOUTS
ANNUAL COMPENSATION RESTRICTED SECURITIES ---------
NAME AND ---------------------------- OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
PRINCIPAL POSITION AS OF SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
DECEMBER 31, 1995(1) YEAR ($) ($) ($)(2) ($)(3) ($) ($) ($)(4)
------------------------- ------ ------- ------- ------------- ---------- ---------- --------- ------------
Wayland R. Hicks......... 1995 269,240 350,000 -- -- -- -- --
Former Chief Executive T1994 110,388(5) -- -- -- 550,000(6) -- --
Officer and Vice 1994 -- -- -- -- -- --
Chairman of the 1993 -- -- -- -- -- -- --
Board(5)
Dennis M. Weibling....... 1995 -- -- -- -- -- -- --
Chief Executive T1994 -- -- -- -- -- -- --
Officer(7) 1994 -- -- -- -- -- -- --
1993 -- -- -- -- -- -- --
Morgan E. O'Brien........ 1995 350,000 262,500 -- -- -- -- 4,716
Chairman of the Board T1994 272,597(8) 350,000 -- -- -- -- --
1994 336,000 250,000 -- -- 400,000(9) 1,290,000(10) --
1993 320,000 200,000 -- -- -- 435,000(10) --
Brian D. McAuley......... 1995 350,000 262,500 -- -- -- -- 4,716
Vice Chairman of the T1994 272,597(8) 350,000 -- -- -- -- 5,142
Board 1994 336,000 250,000 -- -- 400,000(9) 1,290,000(10) 4,000
1993 320,000 200,000 -- -- -- 435,000(10) 4,000
Robert S. Foosaner....... 1995 325,000 94,500 -- -- -- -- 4,716
Senior Vice President T1994 239,152(8) 110,000 -- -- 20,000 -- 4,410
1994 260,000 90,000 -- -- 40,000 -- 1,000
1993 240,000(11) 150,000 -- 210,000 200,000 -- 1,000
James M. Dixon........... 1995 275,676 75,000 -- -- -- 1,790,172(12) 4,716
Executive Vice T1994 220,697(8) 110,000 -- -- 135,000 -- 3,208
President 1994 185,000 100,000 -- -- 75,000 2,546,875(12) 2,000
1993 181,000 60,000 -- -- -- -- 2,000
---------------
(1) See "Employment Agreements" for more information concerning the terms of
employment of the Named Executive Officers.
(2) The amount of "Other Annual Compensation" for the Named Executive Officers
did not meet the threshold reporting requirements under the rules of the
Commission.
(3) Values of the restricted stock awards shown in the Summary Compensation
Table are based on the closing price of the Class A Common Stock on the
date of grant. Mr. Foosaner's award is based on 15,000 shares times $14.00
per share. During Transition 1994, 5,000 shares of Mr. Foosaner's
restricted stock award vested and during fiscal year 1995, 5,000 additional
shares vested. The value of the remainder of Mr. Foosaner's restricted
stock award as of December 31, 1995 is $73,750 (5,000 shares times $14.750,
the closing price of the Class A Common Stock on such date). The shares
covered by Mr. Foosaner's restricted stock award vest 33 1/3% each year.
Dividends are payable on restricted stock awards, but to date, the Company
has never paid dividends on its Class A Common Stock.
(4) "All Other Compensation" is comprised of the Company's contributions to the
its Section 401(k) Plan on behalf of the Named Executive Officers.
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(5) Mr. Hicks joined the Company on September 1, 1994, and, therefore, the
compensation received by him for Transition 1994 reflects the four-month
period ended December 31, 1994. Mr. Hicks resigned his positions with the
Company effective October 2, 1995.
(6) Mr. Hicks received options for 400,000 shares of Class A Common Stock
vesting 20% per year over a five (5) year period and 150,000 options or
cash settlement election rights ("CSERs") vesting 20% each year over a
five-year period. The CSERs can be exercised in lieu of the stock options
and upon exercise entitle Mr. Hicks to receive a payment from the Company
of $15.00 for each CSER exercised. The options and CSERs vested fully in
October 1995 in connection with the termination of Mr. Hicks's employment
with the Company. See "Employment Agreements."
(7) Mr. Weibling was named acting Chief Executive Officer of the Company on
October 2, 1995. Mr. Weibling, a member of the Board of Directors, was not
paid a salary or any other compensation for his services as acting Chief
Executive Officer.
(8) Reflects nine (9) months of salary paid during Transition 1994.
(9) Messrs. O'Brien and McAuley each received options on December 28, 1993 for
150,000 shares of Class A Common Stock vesting 20% per year over a
five-year period and 250,000 performance options, vesting 100% when the
Class A Common Stock price during any 30 consecutive trading days averages
more than twice the closing price of the Class A Common Stock on December
28, 1993, the date of the grant. The closing price of the Class A Common
Stock on such date was $40.25.
(10) Messrs. O'Brien's and McAuley's award payments were made in connection with
Stock Appreciation Rights ("SARs") that were granted to each in 1991. The
Company was required to make payments under the SARs equal to the
difference between the base price of the SARs ($5.00) and the fair market
value of the Class A Common Stock on the payment dates, the last of which
was in November 1993.
(11) Mr. Foosaner joined the Company on April 20, 1992, and, therefore, the
compensation received by him for fiscal year 1993 reflects the eleven and
one-half month period ended March 31, 1993.
(12) Reflects the cash value of shares received on the date of grant. A portion
of Mr. Dixon's performance award was granted upon the attainment of certain
goals pursuant to Mr. Dixon's Performance Award Plan. Mr. Dixon's original
award was based on a total of 250,000 shares of Class A Common Stock times
$5.00 per share, of which 62,500 shares were granted during fiscal year
1994. The payment for fiscal year 1994 is based on 62,500 shares of Class A
Common Stock times $45.75 per share (the closing market price of the Class
A Common Stock on the date the shares were granted), less the value upon
which the shares were based at the time of the award in 1992 (62,500 times
$5.00 per share). During fiscal year 1995, Mr. Dixon was awarded the
remainder of the 250,000 performance shares as follows: 75,000 performance
shares on February 8, 1995 and 112,500 performance shares on July 3, 1995.
Additionally, Mr. Dixon was awarded 18,875 performance shares on July 3,
1995. The payment for fiscal year 1995 is based on: the aggregate of (i)
the sum of (a) 75,000 shares times $9.875 per share (the closing market
price of the Class A Common Stock on the date the shares were granted) and
(b) 112,500 shares times $15.125 per share (the closing market price of the
Class A Common Stock on the date the shares were granted), less (c) the
value upon which the shares were based at the time of the award in 1992
(187,500 times $5.00 per share); and (ii) 18,875 shares times $15.125 (the
closing market price of the Class A Common Stock on the date the shares
were granted).
OPTION AND SAR GRANTS IN FISCAL YEAR 1995
The Company did not grant options or SARs to any of the Named Executive
Officers in fiscal year 1995.
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OPTION AND SAR EXERCISES IN FISCAL YEAR 1995 AND YEAR-END VALUES
The following table sets forth information concerning the exercise of
options and SARs during fiscal year 1995 and unexercised options and SARs held
as of the end of fiscal year 1995 with respect to each of the Named Executive
Officers.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR 1995 AND FISCAL YEAR-END
OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS/SARS AND SARS AT FISCAL
SHARES ACQUIRED VALUE AT FISCAL YEAR-END(#) YEAR-END($)
ON EXERCISE REALIZED ------------------------------ ------------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------------------- --------------- --------- ----------- ------------- ----------- -------------
Wayland R. Hicks
Options -- -- 400,000 -- -- --
SARs -- -- -- -- -- --
Dennis M. Weibling
Options -- -- -- -- -- --
SARs -- -- -- -- -- --
Morgan E. O'Brien
Options 20,000 240,000 1,003,650 351,429 9,470,587 111,432
SARs -- -- -- -- -- --
Brian D. McAuley
Options 250,000 3,050,000 983,650 351,429 9,470,587 111,432
SARs -- -- -- -- -- --
Robert S. Foosaner
Options -- -- 100,000 120,000 5,000 20,000
SARs -- -- -- -- -- --
James M. Dixon
Options -- -- 43,000 167,000 33,750 135,000
SARs -- -- -- -- -- --
---------------
(1) The value realized equals the aggregate amount of the excess of the fair
market value on the date of exercise (the closing price of Class A Common
Stock as reported by the Nasdaq Stock Market for the exercise date) over the
relevant exercise price(s).
EMPLOYMENT AGREEMENTS
The Company entered into employment agreements with Messrs. O'Brien and
McAuley, which provide for their employment as Chairman of the Board of
Directors and as President of the Company, respectively, for five-year terms.
The Company is negotiating new employment agreements with each of Messrs.
O'Brien and McAuley to reflect their new positions as Vice Chairmen of the Board
of Directors. The Company has entered into an employment agreement with Mr.
Foosaner, which provides for his employment as Senior Vice President of the
Company for a three-year term. The Company has entered into an employment
agreement with Mr. Dixon, which provides for Mr. Dixon's employment as an
Executive Vice President of the Company for a three-year term expiring on
December 31, 1997.
The employment agreements with Messrs. O'Brien, McAuley and Foosaner
provide for automatic extensions of the terms for successive one-year periods
unless, two years prior to the expiration of the then-current term, the Company
or such officer elects not to have the term so extended. The agreement with Mr.
Dixon provides for automatic one-year extensions of the term unless terminated
by either party upon not less than twelve months written notice.
The agreements with Messrs. O'Brien and McAuley provide that each will
receive an annual base salary of $300,000, which may be increased annually by
the Board of Directors. For fiscal year 1994, each of Messrs. O'Brien's and
McAuley's annual salary was increased to $350,000, but because the increase in
salary did not take effect until after the commencement of fiscal year 1994,
each received salary in the amount of $336,000. During Transition 1994, each of
Messrs. O'Brien's and McAuley's annual salary remained at $350,000 and each
received a salary of $272,597 for such period. For fiscal year 1995, each of
Messrs. O'Brien and McAuley's annual salary remained at $350,000.
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The agreement with Mr. Foosaner provides for an annual salary of $250,000.
The agreement provides that the Board of Directors may authorize increases in
Mr. Foosaner's salary. For fiscal year 1994, Mr. Foosaner's annual salary was
increased to $260,000 and during Transition 1994, Mr. Foosaner's annual salary
was increased to $315,000 and Mr. Foosaner received a salary of $239,152 for
such period. For fiscal year 1995, Mr. Foosaner's salary was increased to
$325,000. The agreement with Mr. Dixon provides for an annual salary of $275,000
for fiscal year 1995, $300,000 for fiscal year 1996 and $325,000 for fiscal year
1997.
Under Mr. Foosaner's agreement, any stock options outstanding will
automatically become vested and exercisable in full upon a filing pursuant to
any federal or state law in connection with any tender offer, or the execution
of any agreement relating to a merger, consolidation or reorganization of the
Company, or the sale of substantially all of the assets of the Company to
another entity if, in the opinion of the Board of Directors, such action would
result in the creation of a single majority controlling interest in the Company.
The employment agreements with Messrs. O'Brien and McAuley also provide
that, in the event of the officer's disability during the term of the agreement,
the Company will make monthly payments of such officer's monthly salary for six
months. Thereafter, such monthly payments will decrease to 50% of such officer's
salary during the next ensuing twelve-month period and will decrease by 15%
during each subsequent twelve-month period. The payments continue so long as the
disability continues and will be paid until the retirement or death of the
officer. Each agreement provides further that the officer will be subject to
certain confidentiality and non-competition restrictions, during the employment
term and for a period of two years after the termination thereof.
On October 2, 1995, the Company entered into a Settlement Agreement with
Mr. Hicks (the "Settlement Agreement"), pursuant to which Mr. Hicks resigned
from his positions as Chief Executive Officer of the Company and Vice Chairman
of the Board of Directors and as a member of the Board of Directors effective as
of such date. The agreement provides, among other things, for the vesting of
certain options and CSERs and a lump sum payment of $1,861,500 to Mr. Hicks
within 10 days of written request therefor from Mr. Hicks, but not earlier than
January 1, 1996 nor later than March 31, 1996. The Settlement Agreement also
contains non-competition, non-solicitation and confidentiality covenants by Mr.
Hicks. The Company made the lump sum payment to Mr. Hicks during the first
quarter of fiscal year 1996. Additionally, during the first quarter of fiscal
year 1996, Mr. Hicks exercised his CSERs and the Company, pursuant to the
Settlement Agreement, issued 143,593 shares of Class A Common Stock to Mr. Hicks
in lieu of cash in payment of the amount due to Mr. Hicks upon such exercise.
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STOCKHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Class A Common Stock of the Company during the fiscal years ended March 31,
1992, March 31, 1993, March 31, 1994, the nine-month transition period ended
December 31, 1994 and the fiscal year ended December 31, 1995, with the
cumulative total stockholder return of companies comprising the Nasdaq (U.S.)
Stock Market Index and the total stockholder return of a peer group of companies
comprising the Nasdaq Telecommunications Index, which includes wireless
telecommunications companies of comparable market capitalization traded on the
Nasdaq Stock Market. The Company will provide stockholders a list of the
companies included in the Nasdaq Telecommunications Index upon request. The
graph was prepared by the Company with data provided by Research Data Group. The
graph assumes an initial investment of $100 on January 27, 1992 and reinvestment
of all dividends.
The Company commenced public trading on January 27, 1992, and, therefore,
the above graph and table include data only since such date. Additionally,
effective December 31, 1994, the Company changed its fiscal year-end from March
31 to December 31, which resulted in a nine-month transition period from April
1, 1994 to December 31, 1994.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
NEXTEL COMMUNICATIONS, INC.,
THE NASDAQ STOCK MARKET (US) INDEX
AND THE NASDAQ TELECOMMUNICATIONS INDEX
NASDAQ
NEXTEL NASDAQ STOCK TELECOMMUN
MEASUREMENT PERIOD COMMUNICATIONS, MARKET (US) ICATIONS
(FISCAL YEAR COVERED) INC. INDEX INDEX
27-JAN-92 100 100 100
31-MAR-92 93 97 99
31-MAR-93 176 112 132
31-MAR-94 262 121 158
31-DEC-94 96 123 151
31-DEC-95 98 174 182
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SECURITIES OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of March 15, 1996 (the "Ownership
Date"), the amount and percentage of shares of each class of the Company's
capital stock that are deemed under the rules of the Commission to be
"beneficially owned" by (i) each director or director-nominee of the Company,
(ii) each of the Named Executive Officers employed by the Company as of the
Ownership Date, (iii) all directors and executive officers of the Company
(including the director-nominees) as a group and (iv) each person or "group" (as
such term is used in Section 13(d)(3) of the Exchange Act) known by the Company
to be the beneficial owner of more than 5% of the outstanding shares of each
class of the Company's capital stock.
TITLE OF CLASS OF AMOUNT AND NATURE
THE COMPANY'S OF BENEFICIAL APPROXIMATE %
NAME OF BENEFICIAL OWNER CAPITAL STOCK OWNERSHIP(1) OF CLASS(2)
-------------------------------------- --------------------- ----------------- -------------
Daniel F. Akerson..................... Class A Common Stock 2,000,000(3) *
Brian D. McAuley...................... Class A Common Stock 1,782,883(4) *
Morgan E. O'Brien..................... Class A Common Stock 1,386,211(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 1,000 *
Scot B. Jarvis........................ Class A Common Stock 64,709,877(7) 22.8%
Craig O. McCaw........................ Class A Common Stock 64,709,877(8) 22.8%
Keisuke Nakasaki...................... Class A Common Stock 0(9) *
Masaaki Torimoto...................... Class A Common Stock 0(10) *
Dennis M. Weibling.................... Class A Common Stock 64,709,877(11) 22.8%
Robert S. Foosaner.................... Class A Common Stock 180,000(12) *
James M. Dixon........................ Class A Common Stock 219,875(13) *
All directors and executive........... Class A Common Stock 70,509,024(14) 24.5%
officers as a group (18 persons)
5% Stockholders:
Digital Radio, L.L.C.................. Class A Common Stock 64,709,877(15) 22.8%
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) 24.1%
1303 East Algonquin Road.............. Class B Common Stock 17,830,000 100.0%
Schaumburg, Illinois 60196
Comcast Corporation................... Class A Common Stock 20,848,469(17) 8.0%
1500 Market Street
Philadelphia, Pennsylvania 19102
---------------
* Less than one percent (1%).
(1) Under the rules of the Commission, a person is deemed to be the beneficial
owner of a security if such person, directly or indirectly, has or shares
the power to vote or direct the voting of such security or the power to
dispose or direct the disposition of such security. A person is also deemed
to be a beneficial owner of any securities if that person has the right to
acquire beneficial ownership within 60 days of the Ownership Date.
Accordingly, more than one person may be deemed to be a beneficial owner of
the same securities. Unless otherwise indicated by footnote, the named
individuals have sole voting and investment power with respect to the
shares of the Company's capital stock beneficially owned.
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(2) Represents the voting power of the number of shares of each of class of
capital stock beneficially owned as of the Ownership Date by each named
person or group, expressed as a percentage of (a) all shares of the
Company's capital stock of the indicated class actually outstanding as of
such date (in the case of the Class A Common Stock, giving effect to the
conversion of the Company's preferred stock and the Company's Class B
Non-Voting Common Stock, par value $0.001 per share (the "Class B Common
Stock")), plus (b) all other shares of capital stock deemed outstanding as
of such date pursuant to Rule 13d-3(d)(1) under the Exchange Act.
(3) Comprised of 2,000,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Akerson upon the
exercise of certain stock purchase rights.
(4) Includes 933,650 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.
(5) Includes 866,063 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. O'Brien upon the
exercise of nonqualified stock options.
(6) Mr. Bane, who is Executive Vice President and Chief Corporate Officer of
Motorola, disclaims beneficial ownership of all securities of the Company
held by Motorola. See note 16.
(7) Mr. Jarvis, who is Vice President of Eagle River, an affiliate of the McCaw
Investor, disclaims beneficial ownership of all securities of Company held
by the McCaw Investor, except to the extent of his pecuniary interest
therein. See note 15.
(8) Mr. McCaw, who is an equity owner and controlling person of the McCaw
Investor, disclaims beneficial ownership of all securities of the Company
held by the McCaw Investor, except to the extent of his pecuniary interest
therein. See note 15.
(9) Mr. Nakasaki, who is President and Chief Executive Officer of NTT America,
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.
(10) Mr. Torimoto, who is employed by Matsushita as Chief Liaison between
Matsushita and the Company, disclaims beneficial ownership of all shares of
Class A Common Stock held by Matsushita. As of the Ownership Date,
Matsushita held 3,000,000 shares.
(11) Mr. Weibling, who is President of Eagle River, an affiliate of the McCaw
Investor, disclaims beneficial ownership of all securities of the Company
held by the McCaw Investor, except to the extent of his pecuniary interest
therein. See note 15.
(12) Includes 140,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Foosaner upon the
exercise of nonqualified stock options.
(13) Includes 43,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Dixon upon the exercise
of nonqualified stock options.
(14) Includes an aggregate of 4,161,441 shares of Class A Common Stock
obtainable as of the Ownership Date or within 60 days thereafter by
directors and executive officers as a group upon the exercise of
nonqualified stock options or other stock purchase rights. See also notes
15 and 16.
(15) Comprised of (i) 5,220,000 shares of Class A Common Stock beneficially
owned by the McCaw Investor, (ii) 35,000,000 shares of Class A Common Stock
obtainable as of the Ownership Date or within 60 days thereafter upon the
exercise of certain options and (iii) 24,489,877 shares of Class A Common
Stock, which represents the conversion of the 8,163,265 shares of Class A
Preferred Stock and the 82 shares of the Company's Class B Convertible
Preferred Stock, par value $0.01 per share (the "Class B Preferred Stock")
held by the McCaw Investor.
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(16) Assuming conversion of the Class B Common Stock held by Motorola. Comprised
of (i) 40,170,000 shares of Class A Common Stock beneficially owned by
Motorola, (ii) 17,830,000 shares of Class B Common Stock beneficially owned
by Motorola and (iii) 2,700,000 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 agreed to transfer a portion
relating to 110,000 shares to a third party. Motorola granted the McCaw
Investor an option to acquire 9,000,000 shares included herein, which
option is not currently exercisable.
(17) Comprised of 8,848,469 shares of Class A Common Stock beneficially owned by
Comcast and 12,000,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter upon the exercise of an option.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. O'Brien has received a secured, non-interest bearing loan of $70,000
from the Company, which was repayable on February 20, 1996. The loan has been
repaid by Mr. O'Brien.
On April 4, 1995, the Company, the McCaw Investor and Mr. McCaw entered
into the Securities Purchase Agreement (as amended, the "McCaw Securities
Purchase Agreement") and certain other related agreements (the "McCaw
Transaction"). Pursuant to the McCaw Securities Purchase Agreement, (i) the
McCaw Investor purchased on April 5, 1995 from the Company, 1,220,000 shares of
Class A Common Stock for an aggregate purchase price of $14,945,000; and (ii)
the McCaw Investor purchased on July 28, 1995 from the Company, for an aggregate
purchase price of $300,000,000, an aggregate of 8,163,265 units consisting of a
total of (a) 8,163,265 shares Class A Preferred Stock; (b) 82 shares of Class B
Preferred Stock; and (c) three separate options, 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 Class A Common Stock at exercise prices ranging from
$15.50 to $21.50 per share.
Concurrently with the execution of the McCaw Securities Purchase Agreement,
the Company entered into a Management Support Agreement (the "Support
Agreement") with Eagle River, an affiliate of the McCaw Investor that is also
controlled by Mr. McCaw, pursuant to which Eagle River will provide management
and consulting services to the Company and the Board of Directors and the
Operations Committee from time to time as requested. In consideration of the
services to be provided to the Company under the Support Agreement, the Company
granted an option to purchase an aggregate of 1,000,000 shares of Class A Common
Stock at an exercise price of $12.25 per share to Eagle River. The option
expires on April 4, 2005 and is exercisable for 400,000 shares on April 4, 1997
and an additional 200,000 shares in each of the three years thereafter.
Additionally, the Company agreed to reimburse Eagle River for all out-of-pocket
costs, plus up to $200,000 per year for all allocable overhead costs reasonably
incurred by Eagle River in connection with the performance of its obligations
under the Support Agreement. No payments were made to Eagle River pursuant to
the Support Agreement during fiscal year 1995.
Pursuant to the terms of the Class A Preferred Stock, the McCaw Investor,
as the sole holder of the Company's Class A Preferred Stock, is entitled to
elect three Class A Preferred Directors or such greater number as is necessary
to cause the total number of Class A Preferred Directors to equal 25% of the
total number of members of the Board of Directors. In electing such directors,
the holders of the Class A Preferred Stock vote separately as a class. The McCaw
Investor is entitled to elect the Class A Preferred Directors unless, as a
result of a sale, transfer or other disposition, it holds equity securities of
the Company having less than 5% of the aggregate voting power required to elect
the Board of Directors. Messrs. Jarvis, McCaw and Weibling serve currently as
the Class A Preferred Directors.
On July 28, 1995, the Company and Motorola closed the Motorola Agreement,
pursuant to which the Company acquired all of Motorola's 800 MHz SMR licenses in
the continental United States in exchange for an aggregate of approximately
59,500,000 shares of Class A Common Stock and Class B Common Stock. Also in
connection with the
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closing of the Motorola Agreement, Motorola agreed to provide up to an
additional $260,000,000 in new vendor financing for certain existing
subsidiaries of the Company and $165,000,000 in new vendor financing for an
acquired subsidiary of OneComm Corporation ("OneComm"). Additionally, in
connection with the McCaw Transaction, the Company submitted certain purchase
orders for Motorola-manufactured infrastructure equipment and confirmed its
anticipated infrastructure equipment purchase commitments for calendar year 1995
and the Company and Motorola entered into an amendment to their existing
equipment purchase agreement the ("Second Equipment Agreement Amendment").
During fiscal year 1995, the Company purchased approximately $217,200,000 of
infrastructure and other equipment, warranties and services from Motorola.
Pursuant to existing equipment purchase agreements, as amended, between the
Company and Motorola, and subject to certain conditions, the Company has agreed
to purchase a significant amount of infrastructure equipment from Motorola.
Motorola estimated at the time the Second Equipment Agreement Amendment was
entered into that such commitments to purchase infrastructure equipment could
have an aggregate purchase price in excess of approximately $750,000,000.
Pursuant to the Motorola Agreement, and subject to certain conditions, as
long as Motorola owns 5% or more of the outstanding shares of Class A Common
Stock, Motorola is entitled to nominate two persons for election as members of
the Board of Directors. Mr. Bane serves currently as Motorola's representative
on the Board of Directors. Motorola has elected currently to exercise such right
only with respect to one nominee.
As a result of arrangements that either existed at the time of the
acquisition of certain companies or resulted from such acquisitions, the Company
utilizes antenna sites and office space of certain of its board members and
employees. Net rental expense under such arrangements was approximately $116,000
in fiscal year 1995. The Company believes that such rent expense is at or below
prevailing market rates.
The terms related to Mr. Akerson's employment by the Company reflect a
preliminary understanding between the Company and Mr. Akerson, subject to the
negotiation and execution of definitive documentation, pursuant to which Mr.
Akerson will purchase 2,000,000 shares of Class A Common Stock at a purchase
price of $14.75 per share (the price of a share of Class A Common Stock on the
Nasdaq Stock Market at the time agreement was reached on the basic terms of
employment), and the Company or an affiliate of the Company will lend Mr.
Akerson an amount sufficient to fund the purchase price of such Class A Common
Stock. Such proposed arrangements also contemplate compensatory and other
arrangements for the benefit of Mr. Akerson that would have the effect of
offseting interest payments due on the proposed loan and reducing the principal
amount of the proposed loan. Such proposed arrangements also would involve Mr.
Akerson's agreement to hold all of such shares of Class A Common Stock for a
minimum of one year, with 20% released from such holding commitment each year.
It is also anticipated that the definitive documentation will provide for agreed
upon repayments of the proposed loan upon the sale or other disposition of such
stock and, under certain circumstances, for the repayment of any unpaid amounts
on the proposed loan on the first anniversary of the termination of Mr.
Akerson's employment with the Company. The specific details of the proposed
arrangements described above remain subject to review by the parties and their
respective advisors and the ultimately agreed-upon definitive documentation may
reflect modified or different terms that the parties on balance, may view as
providing equivalent benefits to those summarized above.
APPROVAL OF STOCK PURCHASE PLAN
(PROPOSAL NO. 2)
On May 13, 1996, the Board of Directors adopted, subject to stockholder
approval, the Stock Purchase Plan, which provides for the granting to eligible
employees of the Company and its subsidiaries of options to purchase shares of
Class A Common Stock from the Company at a discount from the market price
thereof. The Stock Purchase Plan is intended to qualify as an "employee stock
purchase plan" under Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"), and is intended to advance the interests of the Company
and its stockholders by strengthening the Company's ability to attract and
retain employees who have the training, experience and ability to enhance the
profitability of the Company and to reward employees of the Company and its
subsidiaries upon whose judgment, initiative and effort the
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successful conduct and development of their businesses largely depend. The
following summary description of the Stock Purchase Plan is qualified in its
entirety by reference to the Stock Purchase Plan, which is attached hereto as
Exhibit A.
DESCRIPTION OF THE STOCK PURCHASE PLAN
Eligible Employees. All employees of the Company and its subsidiaries who
are customarily employed for more than 20 hours per week are eligible to elect
to be granted options under the Stock Purchase Plan. Section 423 of the Code,
however, prohibits the granting of an option to any employee who would own stock
possessing five percent or more of the total combined voting power or value of
all classes of stock of the Company or any of its subsidiaries following the
granting of the option. For purposes of the foregoing, shares of stock that are
subject to outstanding options or other vested or contingent rights to acquire
the same are deemed to be owned by the optionee.
Shares Covered. The aggregate number of shares of Class A Common Stock that
may be issued or transferred upon the exercise of options granted under the
Stock Purchase Plan is 5,000,000, which may be newly issued shares or shares
held in treasury or a combination thereof, subject to adjustment in the event of
stock dividends, stock splits, combinations of shares or other changes in the
capital structure of the Company.
Option Terms. The option price per share payable upon exercise of an option
granted under the Stock Purchase Plan is an amount equal to 85 percent of the
lesser of (i) the fair market value of a share of Class A Common Stock on the
date of grant or (ii) the fair market value of a share of Class A Common Stock
on the date of exercise. For purposes of the Stock Purchase Plan, "fair market
value" means the closing price of the Class A Common Stock on the Nasdaq Stock
Market on the last trading date preceding the date of the grant or the date of
exercise, as the case may be. The closing price of the Class A Common Stock on
the Nasdaq Stock Market on May 10, 1996, was $18.00.
The option price is payable by the optionee on the date of exercise with
funds accumulated through payroll withholding over the term of the option or, at
the discretion of the Compensation Committee, with funds paid to the Company by
the optionee in a lump sum on or before the date of exercise. An optionee may
elect to have not less than 1 percent and not more than 10 percent of his or her
"basic compensation," which includes base salary and any commissions paid
pursuant to an ongoing sales incentive compensation program but does not include
cash bonuses or any form of noncash compensation, withheld from payroll and
applied to the purchase of Class A Common Stock upon the exercise of options
granted under the Stock Purchase Plan.
The maximum number of shares of Class A Common Stock that an optionee may
purchase upon exercise of an option granted under the Stock Purchase Plan is
equal to 10 percent of his or her basic compensation divided by an amount equal
to 85 percent of the lesser of (i) the fair market value of a share of Class A
Common Stock on the date of grant or (ii) the fair market value of a share of
Common Stock on the date of exercise, subject to further limitations imposed by
Section 423 of the Code. Section 423 of the Code provides that, among other
things, the right of an optionee to purchase stock under all "employee stock
purchase plans" (as defined in Section 423 of the Code) of a corporation and its
subsidiaries may not accrue at a rate that exceeds $25,000 of fair market value
(determined at the time of grant) for each calendar year in which the option is
outstanding at any time.
Options granted under the Stock Purchase Plan may have terms of not less
than three months and not more than one year, as determined by the Compensation
Committee in its sole discretion, provided that all options granted pursuant to
any particular offering under the Stock Purchase Plan must have the same term
for all optionees. The first day of the relevant term of an option granted under
the Stock Purchase Plan is the grant date with respect to such option, and the
date of exercise of an option granted under the Stock Purchase Plan is the last
day of its term. No option granted under the Stock Purchase Plan may be
transferred by the optionee.
Administration. The Stock Purchase Plan is administered by the Compensation
Committee, which may establish such policies or procedures and adopt such rules
for the operation and administration of the Stock Purchase Plan as it deems
appropriate. The Company may engage the services of a professional plan
administrator on such terms and conditions as the Compensation Committee deems
appropriate for the purposes of establishing and maintaining custodial
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accounts and holding shares of Class A Common Stock acquired by employees upon
the exercise of options granted under the Stock Purchase Plan and otherwise
operating the Stock Purchase Plan. The Compensation Committee has, among other
things, the authority to (i) determine, within the aforementioned parameters
imposed by the Stock Purchase Plan, the length of the terms of options granted
under the Stock Purchase Plan and (ii) make such adjustments in the aggregate
number of shares of Class A Common Stock that may be issued and sold upon the
exercise of options granted under the Stock Purchase Plan and the number of
shares of Class A Common Stock covered by, and the option price per share
payable upon exercise of, outstanding options granted under the Stock Purchase
Plan as the Compensation Committee may deem appropriate in order to prevent the
dilution or expansion of the rights of optionees in the event of a stock
dividend, stock split, combination of shares or other change in the capital
structure of the Company. The Compensation Committee also has the authority to
fix a maximum number of shares of Class A Common Stock that may be issued or
transferred upon the exercise of options granted pursuant to any particular
offering under the Stock Purchase Plan. The Compensation Committee also has the
authority to promulgate terms and conditions (to the extent not inconsistent
with the terms and conditions prescribed in the Stock Purchase Plan) applicable
to grants made under the Stock Purchase Plan, including, without limitation,
holding periods for shares of Class A Common Stock purchased upon the exercise
of an option granted under the Stock Purchase Plan beyond those required to
obtain favorable tax treatment under Section 423 of the Code and sanctions for
failing to comply with the terms and conditions applicable to particular grants
(in addition to those otherwise imposed by law or the terms of the Stock
Purchase Plan).
Term and Termination; Amendment. The Stock Purchase Plan will terminate on
the tenth anniversary of its adoption by the Board of Directors, unless sooner
terminated by the Board of Directors, and no options will thereafter be granted
thereunder. The Stock Purchase Plan may be amended from time to time by the
Board of Directors, but without further approval by the stockholders of the
Company, no such amendment may (i) increase the aggregate number of shares of
Class A Common Stock covered by the Stock Purchase Plan, except for adjustments
to reflect the effects of stock dividends, stock splits, combinations of shares
or other changes in the capital structure of the Company, (ii) permit the
granting of options under the Stock Purchase Plan to persons other than
employees of the Company and its subsidiaries who are customarily employed for
more than 20 hours per week, (iii) cause options granted under the Stock
Purchase Plan to fail to satisfy any of the conditions of Section 423 of the
Code or (iv) cause Rule 16b-3 under Section 16(b) of the Exchange Act (or any
successor rule to the same effect) to cease to be applicable to the Stock
Purchase Plan.
NEW STOCK PURCHASE PLAN BENEFITS
The benefits or amounts that may be granted under the Stock Purchase Plan
are not determinable because the Company does not have any experience by which
to predict the level of participation by the Company's employees in this new
plan. Various factors may affect the level of participation by employees,
including the number of eligible employees, the salaries and sales commissions
paid by the Company and the price of the Class A Common Stock on the dates of
grant and dates of exercise.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain federal income tax consequences
of certain transactions under the Stock Purchase Plan based on federal income
tax laws in effect on January 1, 1996. This summary is not intended to be
exhaustive and does not describe state or local tax consequences.
The federal income tax consequences applicable to employees and the Company
with respect to options granted under the Stock Purchase Plan are determined, in
general, under Sections 421 and 423 of the Code. An option granted under the
Stock Purchase Plan will not result in any taxable income to the optionee when
it is granted or exercised. If the stock acquired upon exercise is held more
than two years from the date of grant of the option and more than one year from
the date of the transfer of the stock to the optionee pursuant to the exercise
of the option, the optionee will be taxed on the sale of such stock at long-term
capital gains rates (currently taxed at the same rate as ordinary income up to
an effective rate of 28% with a marginal rate of 33%), except to the extent that
the optionee realizes ordinary income under Section 423(c) of the Code in an
amount equal to the lesser of (i) the excess of the fair market value of the
stock at the
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time of its disposition over the option price paid by the optionee or (ii) the
excess of the fair market value of the stock at the time the option was granted
over the option price, computed as if the option had been exercised at that
time.
If an employee should die owning stock acquired under the Stock Purchase
Plan, he or she will be deemed to have disposed of his or her shares on the date
of his or her death and will realize ordinary income to the extent of the
ordinary income component described in the preceding paragraph, but no capital
gain will result until the time of a subsequent sale of the stock, when the
amount of gain will typically be equal to the excess of the selling price over
the fair market value of the stock on the date of the employee's death or the
alternative valuation date for federal estate tax purposes.
If stock acquired under the Stock Purchase Plan is sold, exchanged or
otherwise disposed of before the end of the required holding periods described
above, the optionee will usually realize ordinary income at the time of
disposition equal to the excess of the amount received on disposition over the
option price paid by the optionee.
To the extent that an employee of the Company or any subsidiary realizes
ordinary income in the circumstances described in the preceding paragraph, the
Company or its subsidiary would be entitled to a corresponding deduction in the
year in which the disposition occurs, provided that, among other things, such
income meets the test of reasonableness, is an ordinary and necessary business
expense and is not subject to the annual compensation limitation set forth in
Section 162(m) of the Code. Otherwise, no deduction is allowable to the Company
or any subsidiary with respect to options granted under the Stock Purchase Plan.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the votes of the Class A Common Stock
and the Class A Preferred Stock, voting together as a class, present in person
or by proxy at the Annual Meeting is required for approval of the adoption of
the Stock Purchase Plan.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE ADOPTION OF
THE STOCK PURCHASE PLAN.
APPROVAL OF AMENDMENT TO INCENTIVE EQUITY PLAN
(PROPOSAL NO. 3)
PURPOSE AND EFFECT OF PROPOSED AMENDMENT
Proposed Amendment. Subject to stockholder approval, the Board of Directors
has amended the Incentive Equity Plan to increase from 14,000,000 to 24,000,000
the aggregate number of shares of Class A Common Stock that may be issued or
transferred thereunder upon the exercise or payment of Option Rights (excluding
Replacement Option Rights), Appreciation Rights, Restricted Shares, Deferred
Shares, Performance Shares and Performance Units granted thereunder.
Descriptions of Option Rights (including Replacement Option Rights),
Appreciation Rights, Restricted Shares, Deferred Shares, Performance Shares and
Performance Units are set forth below.
Purpose of Proposed Amendment. The Company recognizes the importance of
attracting and retaining outstanding individual as officers, employees and
consultants and stimulating the active interest of those individuals in the
development and financial success of the Company. The Board of Directors
believes that the Incentive Equity Plan is critically important to the
furtherance of these objectives. The Board of Directors also believes that,
through the Incentive Equity Plan, the Company is able to enhance the prospects
for its business activities and objectives and more closely align the interests
of officers, employees and consultants with those of stockholders by providing
those individuals with the opportunity to increase their equity interests in the
Company on advantageous terms.
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As of May 10, 1996, and absent stockholder approval of the proposed
amendment to increase the aggregate number of shares of Class A Common Stock
available for issuance or transfer under the Incentive Equity Plan, there would
be insufficient shares of Class A Common Stock remaining available for issuance
upon exercise, payment or vesting of all stock options and other equity
incentives granted thereunder and outstanding on such date. The absence of an
adequate number of shares of Class A Common Stock available for issuance or
transfer under the Incentive Equity Plan restricts both the ability and the
flexibility of the Company to effectively attract and retain and adequately
compensate outstanding officers, employees and consultants. The Board of
Directors believes that it is both necessary and desirable to increase from
14,000,000 to 24,000,000 the aggregate number of shares of Class A Common Stock
available for issuance or transfer under the Incentive Equity Plan in order to
continue to maintain the effectiveness thereof.
DESCRIPTION OF INCENTIVE EQUITY PLAN
The following description of the Incentive Equity Plan is qualified in its
entirety by reference to the Incentive Equity Plan, as amended, which is
attached hereto as Exhibit B.
Shares and Performance Units Available under the Incentive Equity
Plan. Upon approval of the proposed amendment to the Incentive Equity Plan and
subject to adjustment as provided in the Incentive Equity, the number of shares
of Class A Common Stock that may be covered by outstanding awards, except
Replacement Option Rights, granted under the Incentive Equity and issued or
transferred upon the exercise or payment thereof shall not in the aggregate
exceed 24,000,000 shares, which may be shares authorized but previously unissued
or treasury shares or a combination thereof and which include (i) 19,019,778
shares that have been reserved by the Board of Directors for issuance or
transfer under the Incentive Equity Plan as of May 10, 1996, (ii) the 921,859
shares that remained available for issuance or transfer under the Fleet Call,
Inc. Stock Option Plan (the "Option Plan") and were not covered by stock options
outstanding thereunder as of July 22, 1993, and (iii) any of the 4,058,363
shares that were covered by stock options outstanding under the Option Plan as
of July 22, 1993, and have or may become available for issuance or transfer
under the Incentive Equity Plan as a result of the cancellation or termination
of any such options prior to the exercise thereof. The number of shares of Class
A Common Stock that may be issued or transferred as Restricted Shares under the
Incentive Equity Plan shall not in the aggregate exceed 200,000 shares, and the
number of shares of Class A Common Stock covered by outstanding Option Rights
granted to consultants at an option price per share that is less than the market
price per share on the date of grant and issued or transferred upon the exercise
thereof shall not in the aggregate exceed 1,000,000 shares, subject in each case
to adjustment as provided in the Incentive Equity Plan. The number of
Performance Units granted under the Incentive Equity Plan shall not in the
aggregate exceed 500,000. The number of shares of Class A Common Stock that may
be covered by Replacement Option Rights granted under the Incentive Equity Plan
during any calendar year shall not in the aggregate exceed five percent of the
shares of Class A Common Stock outstanding on January 1 of that year, subject to
adjustment as provided in the Incentive Equity Plan. Replacement Option Rights
granted under the Incentive Equity Plan in 1995 (in connection with the
Company's merger transactions with OneComm and American Mobile Systems
Incorporated) represented approximately 1,382,835 shares of Class A Common
Stock. Replacement Option Rights granted under the Incentive Equity Plan in 1996
(in connection with the Company's merger transaction with Dial Page, Inc.)
represented approximately 2,198,191 shares of Class A Common Stock.
Eligibility. Officers, including officers who are members of the Board of
Directors, and other key employees of and consultants to the Company and its
subsidiaries may be selected by the Compensation Committee to receive benefits
under the Incentive Equity Plan. All officers and other employees of and
consultants to the Company and its subsidiaries (approximately 3,000 persons at
May 10, 1996) are currently eligible to participate in the Incentive Equity
Plan.
Option Rights. The Compensation Committee may grant Option Rights that
entitle the optionee to purchase shares of Class A Common Stock at a price equal
to or greater than market value on the date of grant, except that the option
price of a Replacement Option Right or an Option Right granted to a consultant
may be less than the market value on the date of grant. Replacement Option
Rights and Option Rights granted to consultants are otherwise subject to the
same terms, conditions and discretion as other Option Rights under the Incentive
Equity Plan. A Replacement Option Right is
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an Option Right that is granted in exchange for the surrender and cancellation
of an option to purchase shares of another corporation that has been acquired by
the Company or one of its subsidiaries. The market value of a share of Class A
Common Stock was $18.00 on May 10, 1996, which was the closing price of the
Class A Common Stock on the Nasdaq Stock Market on that date.
The option price is payable at the time of exercise (i) in cash, (ii) by
the transfer to the Company of nonforfeitable, nonrestricted shares of Class A
Common Stock that are already owned by the optionee and have a value at the time
of exercise equal to the option price, (iii) with any other legal consideration
the Compensation Committee may deem appropriate or (iv) by any combination of
the foregoing methods of payment. Any grant of Option Rights may provide for
deferred payment of the option price from the proceeds of sale through a bank or
broker on the date of exercise of some or all of the shares of Class A Common
Stock to which the exercise relates. Option Rights granted under the Incentive
Equity Plan have historically provided that shares of Class A Common Stock will
not be accepted in payment of the option price until they have been owned by the
optionee for a specified period; however, the Incentive Equity Plan does not
require any such holding period and would permit immediate sequential exchanges
of shares of Class A Common Stock at the time of exercise.
Option Rights granted under the Incentive Equity Plan may be Option Rights
that are intended to qualify as "incentive stock options" within the meaning of
Section 422 of the Code or Option Rights that are not intended to so quality. At
or after the date of grant of any nonqualified Option Rights, the Compensation
Committee may provide for the payment of dividend equivalents to the optionee on
a current, deferred or contingent basis or may provide that dividend equivalents
be credited against the option price.
No Option Right may be exercised more than 10 years from the date of grant.
Each grant must specify the period of continuous employment with, or continuous
engagement of consulting services by, the Company or any subsidiary that is
necessary before the Option Rights will become exercisable and may provide for
the earlier exercise of the Option Rights in the event of a change in control of
the Company or other similar transaction or event. Successive grants may be made
to the same optionee regardless of whether Option Rights previously granted to
him or her remain unexercised.
Appreciation Rights. Appreciation Rights granted under the Incentive Equity
Plan may be either free-standing Appreciation Rights or Appreciation Rights that
are granted in tandem with Option Rights. An Appreciation Right represents the
right to receive from the Company the difference (the "Spread"), or a percentage
thereof not in excess of 100 percent, between the base price per share of Class
A Common Stock in the case of a free-standing Appreciation Right, or the option
price of the related Option Right in the case of a tandem Appreciation Right,
and the market value of the Class A Common Stock on the date of exercise of the
Appreciation Right. Tandem Appreciation Rights may only be exercised at a time
when the related Option Right is exercisable and the Spread is positive, and the
exercise of a tandem Appreciation Right requires the surrender of the related
Option Right for cancellation. A free-standing Appreciation Right must have a
base price that is at least equal to the fair market value of a share of Class A
Common Stock on the date of grant, must specify the period of continuous
employment, or continuous engagement of consulting services, that is necessary
before the Appreciation Right becomes exercisable (except that it may provide
for its earlier exercise in the event of a change in control of the Company or
other similar transaction or event) and may not be exercised more than 10 years
from the date of grant. Any grant of Appreciation Rights may specify that the
amount payable by the Company upon exercise may be paid in cash, shares of Class
A Common Stock or a combination thereof and may either grant to the recipient or
retain in the Compensation Committee the right to elect among those
alternatives. The Compensation Committee may provide with respect to any grant
of Appreciation Rights for the payment of dividend equivalents thereon in cash
or Class A Common Stock on a current, deferred or contingent basis.
Restricted Shares. A grant of Restricted Shares involves the immediate
transfer by the Company to the recipient of ownership of a specific number of
shares of Class A Common Stock in consideration of the performance of services.
The recipient is entitled immediately to voting, dividend and other ownership
rights in the shares. The transfer may be made without additional consideration
or for consideration in an amount that is less than the market value of the
shares on the
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date of grant, as the Compensation Committee may determine. The Compensation
Committee may condition a grant of Restricted Shares on the achievement of
specified performance objectives ("Management Objectives").
Restricted Shares must be subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code for a period to be determined by
the Compensation Committee. An example would be a provision that the Restricted
Shares would be forfeited if the recipient ceased to be employed by the Company
or one of its subsidiaries, or ceased to serve the Company or one of its
subsidiaries as a consultant, during a specified period of years. In order to
enforce the forfeiture provisions, the transferability of Restricted Shares is
prohibited or restricted in a manner and to the extent prescribed by the
Compensation Committee for the period during which the forfeiture provisions are
to continue. The Compensation Committee may provide for a shorter period during
which the forfeiture provisions are to apply in the event of a change in control
of the Company or other similar transaction or event.
Deferred Shares. A grant of Deferred Shares constitutes an agreement by the
Company to deliver shares of Class A Common Stock to the recipient in the future
in consideration of the performance of services, subject to the fulfillment of
such conditions during such period of time (the "Deferral Period") as the
Compensation Committee may specify. During the Deferral Period, the recipient
has no right to transfer any rights under his or her grant of Deferred Shares
and no right to vote the shares of Class A Common Stock covered thereby. On or
after the date of any grant of Deferred Shares, the Compensation Committee may
authorize the payment of dividend equivalents thereon on a current, deferred or
contingent basis in either cash or additional shares of Class A Common Stock.
Grants of Deferred Shares may be made without additional consideration or for
consideration in an amount that is less than the market value of the shares on
the date of grant. Deferred Shares must be subject to a Deferral Period, as
determined by the Compensation Committee on the date of grant, except that the
Compensation Committee may provide for a shorter Deferral Period in the event of
a change in control of the Company or other similar transaction or event.
Performance Shares and Performance Units. A Performance Share is the
equivalent of one share of Class A Common Stock, and a Performance Unit is the
equivalent of $1.00. A recipient may be granted any number of Performance Shares
or Performance Units. The recipient will be given one or more Management
Objectives to meet within a specified period (the "Performance Period"). The
specified Performance Period may be subject to earlier termination in the event
of a change in control of the Company or other similar transaction or event. A
minimum level of acceptable achievement will also be established by the
Compensation Committee. If by the end of the Performance Period the recipient
has achieved the specified Management Objectives, he or she will be deemed to
have fully earned the Performance Shares or Performance Units. If the recipient
has not achieved the Management Objectives but has attained or exceeded the
predetermined minimum level of acceptable achievement, he or she will be deemed
to have partly earned the Performance Shares or Performance Units in accordance
with a predetermined formula. To the extent earned, the Performance Shares or
Performance Units will be paid to the recipient at the time and in the manner
determined by the Compensation Committee in cash, shares of Class A Common Stock
or any combination thereof.
Management Objectives may be described in terms of either company-wide
objectives or objectives that are related to the performance of the division,
subsidiary, department or function within the Company or a subsidiary in which
the recipient is employed or with respect to which the recipient provides
consulting services. The Compensation Committee may adjust any Management
Objectives and the related minimum level of acceptable achievement if in its
judgment, transactions or events have occurred after the date of grant that are
unrelated to the recipient's performance and result in distortion of the
Management Objectives or the related minimum level of acceptable achievement.
Transferability. No Option Right, Appreciation Right or other "derivative
security" within the meaning of Rule 16b-3 under the Exchange Act is
transferable by a recipient except by will or the laws of descent and
distribution. Option Rights and Appreciation Rights may not be exercised during
a recipient's lifetime except by the recipient or, in the event of his or her
incapacity, by his or her guardian or legal representative acting in a fiduciary
capacity on behalf of the recipient under state law and court supervision.
The Compensation Committee may specify at the date of grant that all or any
part of the shares of Class A Common Stock that are to be issued or transferred
by the Company upon the exercise of Option Rights or Appreciation Rights,
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upon the termination of the Deferral Period applicable to a grant of Deferred
Shares or upon payment under any grant of Performance Shares or Performance
Units, or are to be no longer subject to the substantial risk of forfeiture and
restrictions on transfer referred to in Section 6 of the Incentive Equity Plan
with respect to Restricted Shares, shall be subject to further restrictions on
transfer.
Adjustments. The maximum number of shares that may be issued or transferred
under the Incentive Equity Plan, the number of shares covered by outstanding
Option Rights or Appreciation Rights and the option prices or base prices per
share applicable thereto, and the number of shares covered by outstanding grants
of Deferred Shares and Performance Shares, are subject to adjustment in the
event of stock dividends, stock splits, combinations of shares,
recapitalizations, mergers, consolidations, spin-offs, reorganizations,
liquidations, issuances of rights or warrants, and similar transactions or
events. In the event of any such transaction or event, the Compensation
Committee may in its discretion provide in substitution for any or all
outstanding awards under the Incentive Equity Plan such alternative
consideration as it may in good faith determine to be equitable in the
circumstances and may require the surrender of all awards so replaced. The
Compensation Committee may also make or provide for such adjustments in the
numbers of shares specified in Section 3(a), and the number of Performance Units
specified in Section 3(b), of the Incentive Equity Plan as the Compensation
Committee may determine to be appropriate in order to reflect any transaction or
event described in Section 10 of the Incentive Equity Plan.
Administration and Amendments. The Incentive Equity Plan is administered by
a committee consisting of not less than three nonemployee directors who are
"disinterested persons" within the meaning of Rule 16b-3 under the Exchange Act.
In connection with its administration of the Incentive Equity Plan, the
Compensation Committee is authorized to interpret the Incentive Equity Plan and
related agreements and other documents. The Compensation Committee may make
grants to participants under any or a combination of all of the various
categories of awards that are authorized under the Incentive Equity Plan and may
provide for special terms for awards to participants who either are foreign
nationals or are employed by or provide consulting services to the Company or
any of its subsidiaries outside of the United States of America, as the
Compensation Committee may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom. The Compensation Committee may
with the concurrence of the affected participant cancel any agreement evidencing
an award granted under the Incentive Equity Plan. In the event of any such
cancellation, the Compensation Committee may authorize the granting of a new
award under the Incentive Equity Plan (which may or may not cover the same
number of shares that had been the subject of the prior award) in such manner,
at such price and subject to such other terms, conditions and discretion as
would have been applicable under the Incentive Equity Plan had the canceled
award not been granted. The Compensation Committee may also grant any award or
combination of awards authorized under the Incentive Equity Plan (including
without limitation Replacement Option Rights) in exchange for the cancellation
of an award that was not granted under the Incentive Equity Plan (including
without limitation an award that was granted by the Company or one of its
subsidiaries, or by another corporation that is acquired by the Company or a one
of its subsidiaries by merger or otherwise, prior to the adoption of the
Incentive Equity Plan), and any such award or combination of awards so granted
under the Incentive Equity Plan may or may not cover the same number of shares
of Class A Common Stock as had been covered by the canceled award and will be
subject to such other terms, conditions and discretion as would have been
permitted under the Incentive Equity Plan had the canceled award not been
granted.
The Incentive Equity Plan may be amended from time to time by the
Compensation Committee, but without further approval by the stockholders of the
Company no such amendment may (i) increase the aggregate number of shares of
Class A Common Stock that may be issued or transferred and covered by
outstanding awards, or increase the aggregate number of Performance Units that
maybe granted, thereunder or (ii) otherwise cause Rule 16b-3 under the Exchange
Act to cease to be applicable to the Incentive Equity Plan.
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INCENTIVE EQUITY PLAN BENEFITS
Set forth in the table below are the numbers of nonqualified Option Rights
and Deferred Shares that were granted under the Incentive Equity Plan during
1995 to Mr. Akerson, Mr. Donahue, each of the Named Executive Officers and
certain groups. Option Rights and Deferred Shares were the only types of awards
granted under the Incentive Equity Plan during 1995.
NAME AND POSITION OR GROUP OPTION RIGHTS DEFERRED SHARES
----------------------------------------------------------------- ------------- ---------------
Daniel F. Akerson
Chairman of the Board of Directors and Chief Executive
Officer(1) 0 0
Wayland R. Hicks
Former Vice Chairman of the Board of Directors and Chief
Executive Officer(2) 0 0
Dennis M. Weibling
Former Chief Executive Officer(3) 0 0
Brian D. McAuley
Vice Chairman of the Board of Directors 0 0
Morgan E. O'Brien
Vice Chairman of the Board of Directors 0 0
Timothy M. Donahue
President and Chief Operating Officer(1) 0 0
Robert S. Foosaner
Senior Vice President 0 0
James M. Dixon
Executive Vice President 0 0
All current executive officers, as a group 275,000 0
All current directors who are not executive officers, as a
group(3) 0 0
All current employees (including all current officers who are not
executive officers), as a group 901,550 0
---------------
(1) These persons are also nominees for director and are the only nominees
for director who are eligible to participate in the Incentive Equity
Plan. These persons did not become officers of the Company until 1996.
(2) Mr. Hicks is no longer an employee of the Company and, therefore, he is
no longer eligible to participate in the Incentive Equity Plan.
(3) The persons in this group are not eligible to participate in the
Incentive Equity Plan. Mr. Weibling is now a member of this group.
The types of awards and amounts thereof that may be granted under the
Incentive Equity Plan to the above-named individuals and groups in the future
are not determinable at this time.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain of the federal income tax
consequences of certain transactions under the Incentive Equity Plan based on
federal income tax laws in effect on January 1, 1996. This summary is not
intended to be exhaustive and does not describe state or local tax consequences.
TAX CONSEQUENCES TO PARTICIPANTS
Nonqualified Option Rights. In general: (i) no income will be recognized by
an optionee at the time a nonqualified Option Right is granted; (ii) at the time
of exercise of a nonqualified Option Right, ordinary income will be recognized
by the optionee in an amount equal to the difference between the option price
paid for the shares and the fair market
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value of the shares if they are nonrestricted on the date of exercise; and (iii)
at the time of sale of shares acquired pursuant to the exercise of a
nonqualified Option Right, any appreciation (or depreciation) in the value of
the shares after the date of exercise will be treated as either short-term or
long-term capital gain (or loss) depending on how long the shares have been
held.
Incentive Stock Options. No income generally will be recognized by an
optionee upon the grant or exercise of an incentive stock option. If shares of
Class A Common Stock are issued to an optionee pursuant to the exercise of an
incentive stock option and no disqualifying disposition of the shares is made by
the optionee within two years after the date of grant or within one year after
the transfer of the shares to the optionee, then upon the sale of the shares any
amount realized in excess of the option price will be taxed to the optionee as
long-term capital gain and any loss sustained will be a long-term capital loss.
If shares of Class A Common Stock acquired upon the exercise of an
incentive stock option are disposed of prior to the expiration of either holding
period described above, the optionee generally will recognize ordinary income in
the year of disposition in an amount equal to any excess of the fair market
value of the shares at the time of exercise (or, if less, the amount realized on
the disposition of the shares in a sale or exchange) over the option price paid
for the shares. Any further gain (or loss) realized by the optionee generally
will be taxed as short-term or long-term capital gain (or loss) depending on the
holding period.
Appreciation Rights. No income will be recognized by a participant in
connection with the grant of an Appreciation Right. When the Appreciation Right
is exercised, the participant normally will be required to include as taxable
ordinary income in the year of exercise an amount equal to the amount of any
cash, and the fair market value of any nonrestricted shares of Class A Common
Stock, received pursuant to the exercise.
Restricted Shares. A recipient of Restricted Shares generally will be
subject to tax at ordinary income rates on the fair market value of the
Restricted Shares reduced by any amount paid by the recipient at such time as
the shares are no longer subject to a risk of forfeiture or restrictions on
transfer for purposes of Section 83 of the Code. However, a recipient who so
elects under Section 83(b) of the Code within 30 days of the date of transfer of
the shares will have taxable ordinary income on the date of transfer of the
shares equal to the excess of the fair market value of the shares (determined
without regard to the risk of forfeiture or restrictions on transfer) over any
purchase price paid for the shares. If a Section 83(b) election has not been
made, any nonrestricted dividends received with respect to shares that are
subject to a risk of forfeiture or restrictions on transfer generally will be
treated as compensation that is taxable as ordinary income to the recipient.
Deferred Shares. No income generally will be recognized upon the grant of
Deferred Shares. The recipient of a grant of Deferred Shares generally will be
subject to tax at ordinary income rates on the fair market value of
nonrestricted shares of Class A Common Stock on the date that the shares are
actually transferred to him or her, reduced by any amount paid by him or her,
and the capital gain or loss holding period for the shares will also commence on
that date.
Performance Shares and Performance Units. No income generally will be
recognized upon the grant of Performance Shares or Performance Units. Upon
payment in respect of the earn-out of Performance Shares or Performance Units,
the recipient generally will be required to include as taxable ordinary income
in the year of receipt an amount equal to the amount of cash received and the
fair market value of any nonrestricted shares of Class A Common Stock received.
Special Rules Applicable to Officers and Directors. In limited
circumstances where the sale of stock that is received as the result of a grant
of an award could subject an officer or director to suit under Section 16(b) of
the Exchange Act, the tax consequences to the officer or director may differ
from the tax consequences described above. In these circumstances, unless a
special election has been made, the principal difference usually will be to
postpone valuation and taxation of the stock received so long as the sale of the
stock received could subject the officer or director to suit under Section 16(b)
of the Exchange Act, but not longer than six months.
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TAX CONSEQUENCES TO THE COMPANY OR A SUBSIDIARY
To the extent that a participant recognizes ordinary income in the
circumstances described above, the Company or the subsidiary for which the
participant performs services will be entitled to a corresponding deduction
provided that, among other things, the income (i) meets the test of
reasonableness, is an ordinary and necessary business expense and is not an
"excess parachute payment" within the meaning of Code Section 280G and (ii) is
not disallowed by the $1,000,000 limitation on certain executive compensation
under Section 162(m) of the Code.
The provisions of Section 162(m) of the Code generally disallow a tax
deduction to a publicly-held company for compensation in excess of $1,000,000
paid to its chief executive officer or any of its other four most highly
compensated executive officers in any fiscal year, unless the plan and awards
pursuant to which any portion of the compensation is paid meet certain
requirements. The Compensation Committee has determined that such requirements
may not necessarily be in the best interests of the Company and so has decided
not to amend the Incentive Equity Plan to satisfy those requirements at this
time. In any event, the Company does not anticipate having taxable income
against which a deduction can be taken in the near future.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the votes of the Class A Common Stock
and the Class A Preferred Stock, voting together as a class, present in person
or by proxy at the Annual Meeting is required for approval of the proposed
amendment to the Incentive Equity Plan.
BOARD OF DIRECTORS RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSED
AMENDMENT TO THE INCENTIVE EQUITY PLAN.
APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL NO. 4)
A proposal will be presented at the Annual Meeting to ratify the
appointment of the firm of Deloitte & Touche LLP as independent auditors to
audit the consolidated financial statements of the Company and its subsidiaries
for the fiscal year ending December 31, 1996. Although such ratification is not
required by law, the Board of Directors believes that stockholders should be
given this opportunity to express their views on the subject. While not binding
on the Board of Directors, the failure of the stockholders to ratify the
appointment of Deloitte & Touche LLP as the Company's independent auditors would
be considered by the Board in determining whether to continue the engagement of
Deloitte & Touche LLP. It is expected that representatives of Deloitte & Touche
LLP WILL ATTEND THE ANNUAL MEETING, WITH THE OPPORTUNITY TO MAKE A STATEMENT IF
THEY SO DESIRE, AND WILL BE AVAILABLE TO ANSWER APPROPRIATE QUESTIONS.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL TO RATIFY THE
APPOINTMENT OF DELOITTE & TOUCHE LLP as the Company's independent auditors.
ANNUAL REPORT
The Company's 1995 Annual Report to Stockholders, including financial
statements for the year ended December 31, 1995, is being distributed to all
stockholders of the Company together with this Proxy Statement, in satisfaction
of the requirements of the Commission. Additional copies of such report are
available upon request. To obtain additional copies of such Annual Report,
please contact the Company's Investor Relations Department at (201) 531-5200.
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EXPENSE OF SOLICITATION OF PROXIES
The cost of soliciting proxies will be paid by the Company. In addition to
solicitation by mail, solicitations may also be made by telephone, teletype or
in person. Arrangements will be made with brokerage houses and other custodians,
nominees and fiduciaries to send proxies and proxy material to their principals,
and the Company will reimburse them for their expenses in so doing. Officers and
other employees of the Company, as yet undesignated, may also request the return
of proxies by telephone, telecopy or in person.
OTHER BUSINESS
It is not anticipated that any other matters will be brought before the
Meeting for action. If any such other matters shall properly come before the
Annual Meeting, however, it is intended that the persons authorized under the
proxies may, in the absence of instructions to the contrary, vote or act thereon
in accordance with their best judgment.
STOCKHOLDER PROPOSALS
Pursuant to Rule 14a-8 under the Exchange Act, stockholders of the Company
may present proper proposals for inclusion in the Company's proxy statement and
for consideration at the next annual meeting by submitting their proposals to
the Company in a timely manner. Any stockholder of the Company who wishes to
present a proposal for the inclusion in the proxy statement for action at the
1997 Annual Meeting of Stockholders must comply with the Company's By-Laws and
the rules and regulations of the Commission then in effect. Such proposal must
have been mailed to the Company at its principal executive offices at 201 Route
17 North, Rutherford, New Jersey 07070, Attention: Secretary, and must be
received by the Company before January 20, 1997.
IMPORTANT
TO ASSURE YOUR REPRESENTATION AND A QUORUM FOR THE TRANSACTION OF BUSINESS
AT THE ANNUAL MEETING, THE COMPANY URGES YOU TO PLEASE COMPLETE, SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD PROMPTLY.
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EXHIBIT A
NEXTEL COMMUNICATIONS, INC.
ASSOCIATE STOCK PURCHASE PLAN
37
NEXTEL COMMUNICATIONS, INC.
ASSOCIATE STOCK PURCHASE PLAN
SECTION 1. PURPOSE.
This Associate Stock Purchase Plan (this "Plan") is intended to advance the
interests of Nextel Communications, Inc. (the "Company") and its stockholders by
strengthening the Company's ability to attract and retain employees who have the
training, experience and ability to enhance the profitability of the Company and
to reward employees of the Company and its subsidiaries upon whose judgment,
initiative and effort the successful conduct and development of their business
largely depend. It is further intended that options granted pursuant to this
Plan shall constitute options granted pursuant to an "employee stock purchase
plan" within the meaning of Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code").
SECTION 2. ADMINISTRATION.
This Plan shall be administered by a committee (the "Committee") comprised
of two or more members of the Board of Directors. The members of the Committee
shall be appointed by, and shall serve at the pleasure of, the Board of
Directors, and each of the members of the Committee shall be a "disinterested
person" within the meaning of Rule 16b-3 under Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any successor rule to
the same effect. A majority of the Committee shall constitute a quorum, and the
action of a majority of the members of the Committee present at any meeting at
which a quorum is present, or acts unanimously approved in writing, shall be the
acts of the Committee. The interpretation and construction by the Committee of
any provision of this Plan or any option granted hereunder shall be final. No
member of the Committee shall be liable for any action or determination made in
good faith with respect hereto or any option granted hereunder.
The Committee may establish any policies or procedures that in its
discretion are relevant to the operation and administration of this Plan and may
adopt rules for the administration of this Plan. The Committee may also engage
the services of a professional plan administrator on such terms and conditions
as the Committee deems appropriate for the purposes of establishing custodial
accounts and holding shares of Common Stock acquired by employees upon the
exercise of options granted under this Plan and otherwise operating this Plan.
SECTION 3. ELIGIBILITY.
All full-time employees of the Company or of any subsidiary of the Company
shall be offered options under this Plan to purchase shares of the Company's
Class A Common Stock, par value $.001 per share ("Common Stock"), except that no
employee shall be granted an option under this Plan if, immediately after the
option was granted, the employee would own stock possessing five percent or more
of the total combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company. For the purposes of the foregoing,
stock ownership of an individual shall be determined under the rules of Section
425(d) of the Code, and stock that an employee may purchase under outstanding
options shall be treated as owned by the employee. For the purposes of this
Plan, "full-time employee" shall mean an employee whose customary employment is
more than 20 hours per week, and "subsidiary" shall mean any corporation that
the Company controls directly or indirectly through one or more intermediaries,
by ownership or 50 percent or more of the corporation's outstanding voting
securities.
SECTION 4. STOCK.
The stock covered by options granted under this Plan shall be shares of
authorized but unissued or reacquired Common Stock. The aggregate number of
shares of Common Stock that may be purchased under this Plan shall not exceed
5,000,000. In the event that the number of shares covered by options to be
granted pursuant to any offering under this Plan exceeds the number of shares
available to be purchased hereunder, the shares available to be purchased
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shall be allocated on a pro rata basis among the options to be granted. Shares
of Common Stock covered by options that are granted under this Plan and are
cancelled prior to exercise shall again be available for future grants under
this Plan.
SECTION 5. TERMS AND CONDITIONS OF OPTIONS.
Options granted pursuant to this Plan shall be evidenced by agreements in
such form as the Committee shall from time to time approve, provided that all
employees granted options hereunder shall have the same rights and privileges,
except as otherwise provided in subparagraphs (a) and (e) of this Section 5, and
provided further that such options shall comply with and be subject to the
following terms and conditions:
(a) Number of Shares. An option granted hereunder shall pertain to
such number of shares of Common Stock as shall be determined by dividing
(i) the aggregate amount of payroll deductions on behalf of the optionee
during the term of the option (and, at the discretion of the Compensation
Committee, the amount of any lump sum payment(s) made by or on behalf of
such optionee during such term) by (ii) the "option price" (as defined in
subparagraph (b) of this Section 5). An employee may authorize annual
payroll deductions of not less than one percent and not more than ten
percent of his or her basic compensation (and, at the discretion of the
Compensation Committee, an employee also may make lump sum payment(s) to
satisfy the option price for exercise of options granted under this Plan,
provided that such lump sum payment(s) in any year, when combined with the
relevant employee's authorized payroll deductions for such year, total at
least one percent, but not more than ten percent, of his or her basic
compensation). If the number of shares computed in accordance with the
foregoing includes a fraction, it will be rounded down to the next whole
number. Notwithstanding the foregoing, prior to any offering pursuant to
this Plan, the Committee may set a maximum aggregate number of shares,
subject to the aggregate Plan limitation set forth Section 4 hereof, that
may be purchased upon the exercise of options granted pursuant to the
offering. In the event that employees elect to be granted options to
purchase shares in excess of such maximum offering limitation, the number
of shares purchased by optionees upon the exercise of such options shall be
reduced on a pro rata basis. For the purposes of this Plan, "basic
compensation" shall mean annual base salary and, if applicable, commissions
paid pursuant to any ongoing sales incentive compensation program,
excluding cash bonuses and all forms of noncash compensation.
(b) Option Price. The option price per share payable upon the exercise
of an option granted under this Plan shall be an amount equal to 85 percent
of the lesser of (i) the fair market value of a share of Common Stock on
the date on which the option is granted or (ii) the fair market value of a
share of Common Stock on the date on which the option is exercised. For the
purposes of this Plan, "fair market value" shall mean the closing price of
the Common Stock on the Nasdaq Stock Market on the last trading date
preceding the date of grant or the date of exercise, as the case may be.
(c) Medium and Time of Payment of Option Price. The option price shall
be payable in full on the date of exercise pursuant to uniform policies and
procedures established by the Committee. The funds required for such
payment shall be derived by regular withholding from an optionee's basic
compensation in approximately equal installments over the term of the
option or, at the discretion of the Committee, by a lump-sum payment by the
optionee to the Company on or before the date of exercise. Any funds
withheld from an optionee's compensation in excess of the actual option
price shall be refunded to the optionee. No interest shall accrue on the
optionee funds held by the Company during the term of the option. An
optionee shall have the right at any time to terminate such withholding, or
to increase or decrease the amount thereof (subject to the limitations set
forth in subparagraph (a) of this Section 5), by delivering written notice
thereof to the Company within such period of time prior to the next payroll
withholding date as the Committee may specify in any grant of options under
this Plan. An optionee shall have the right to cancel his or her option in
whole or in part, and to obtain a refund of amounts withheld from his or
her compensation, by delivering written notice thereof to the Company
within such period of time prior to the date of exercise as the Committee
may specify in any grant of options under this Plan. Such amounts shall
thereafter be paid to the optionee within a reasonable period of time. No
interest shall accrue on such amounts. Any written notice provided for in
this subparagraph (c) shall be addressed to such officer, employee,
department or agent of the
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Company as the Committee may specify in any grant of options under this
Plan and shall not be deemed to have been delivered until received by such
officer, employee, department or agent.
(d) Exercise and Term of Options. The date of exercise on which the
shares of Common Stock covered by an option are to be purchased by the
optionee shall be the last day of the term of the option, except as
otherwise provided in this Plan. The Committee shall establish the term of
each option granted hereunder, which shall not be more than one year or
less than three months from the date of grant; provided, however, that all
options granted to employees pursuant to any offering hereunder must be for
the same term. Except to the extent that an option has been cancelled by
the optionee prior to the date of exercise in accordance with subparagraph
(c) of this Section 5, it shall be deemed automatically exercised on the
date of exercise to the extent of payments received from the optionee in
accordance with subparagraph (c) of this Section 5.
(e) Accrual Limitation. No option shall permit the rights of an
optionee to purchase stock under all "employee stock purchase plans" (as
defined in Section 423 of the Code) of the Company and its subsidiaries to
accrue at a rate that exceeds $25,000 of fair market value of such stock
(determined at the time the option is granted) for each calendar year in
which the option is outstanding at any time. For the purposes of this
subparagraph (e) and subparagraphs (f) - (i) of this Section 5: (i) the
right to purchase stock under an option accrues when the option (or any
portion thereof) first becomes exercisable during the calendar year (ii)
the right to purchase stock under an option accrues at the rate provided in
the option, but in no case may such rate exceed $25,000 of fair market
value of such stock (determined at the time the option is granted) for any
one calendar year; and (iii) a right to purchase stock that has accrued
under an option granted pursuant to this Plan may not be carried over to
any other option.
(f) Termination of Employment. In the event that an optionee shall
cease to be employed by the Company or any subsidiary of the Company for
any reason (including, without limitation, death or disability) before the
date of exercise, his or her option shall terminate immediately upon
cessation of his or her employment, and any amounts withheld from the
optionee's compensation for purposes of this Plan shall be refunded. No
interest shall accrue on such amounts.
(g) Transfer of Options. No option granted under this Plan may be
sold, assigned, hypothecated, pledged or otherwise transferred by operation
of law or otherwise by an optionee, and no option granted under this Plan
shall be subject to attachment or similar process.
(h) Adjustments. The Committee may make or provide for such
adjustments in the option price and in the number or kind of shares of
Common Stock or other securities covered by outstanding options as the
Committee may determine to be equitably required in order to prevent
dilution or expansion of the rights of optionees that would otherwise
result from (i) any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Company,
(ii) any merger, consolidation, separation, reorganization, partial or
complete liquidation, issuance of rights or warrants to purchase stock or
(iii) any other corporate transaction or event having an effect similar to
any of the foregoing. The Committee may also make or provide for such
adjustments in the number or kind of shares of Common Stock or other
securities that may be sold under this Plan as the Committee may determine
is appropriate to reflect any transaction or event described in clause (i)
of the preceding sentence.
(i) Rights as a Stockholder. An optionee shall have no rights as a
stockholder with respect to any Common Stock covered by his or her option
until the date of exercise following payment in full. No adjustment shall
be made for dividends or distributions of any kind or other rights for
which the record date is prior to the date of exercise, except as provided
in subparagraph (h) of this Section 5.
(j) Nondistribution Purpose. Unless the shares of Common Stock covered
by options granted under this Plan are registered under the Securities Act
of 1933, as amended (the "Securities Act"), each option granted hereunder
shall be granted on the condition that the purchases of shares of Common
Stock hereunder shall not be with a view
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to resale or distribution or any participation therein. Resales of such
shares without registration under the Securities Act may not be made
unless, in the opinion of counsel for the Company, such resale is
permissible under the Securities Act and any other applicable laws or
applicable rules or regulations of any governmental agency.
(k) Other Provisions. The option agreements authorized under this Plan
may contain such other provisions as the Committee may deem advisable,
including but not limited to a holding period of such duration as the
Committee may deem appropriate before shares of Common Stock purchased upon
exercise of options granted under this Plan may be resold or otherwise
disposed of by the employee and such penalty as the Committee may deem
appropriate for failure to satisfy any such holding period, provided that
no such provision may in any way be in conflict with the terms of this Plan
or Section 423 of the Code.
SECTION 6. TERM OF PLAN.
Options may be granted under this Plan for a period of 10 years from the
date on which this Plan is adopted by the Board of Directors.
SECTION 7. AMENDMENT OF PLAN.
This Plan may be amended from time to time by the Board of Directors, but
without further approval of the stockholders, no such amendment shall increase
the aggregate number of shares of Common Stock that may be issued and sold
hereunder (except as provided in the last sentence of subparagraph (h) of
Section 5 hereof) or change the designations in Section 3 hereof of the class of
employees eligible to be granted options hereunder. Furthermore, without further
approval of the stockholders, this Plan may not be amended in any manner that
would cause options granted hereunder to fail to meet the requirements
applicable to "employee stock purchase plans" as defined in Section 423 of the
Code or cause Rule 16b-3 under Section 16(b) of the Exchange Act (or any
successor rule to the same effect) to cease to be applicable to this Plan.
SECTION 8. APPLICATION OF FUNDS.
The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under this Plan shall be used for general corporate purposes.
SECTION 9. APPROVAL OF STOCKHOLDERS.
This Plan shall not take effect until approved by the affirmative vote of a
majority of the shares of Common Stock represented in person or by proxy at a
meeting of the holders of Common Stock at which a quorum is present. Such
approval must be obtained within 12 months after the on which this Plan is
adopted by the Board of Directors.
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EXHIBIT B
NEXTEL COMMUNICATIONS, INC.
AMENDED AND RESTATED INCENTIVE EQUITY PLAN
(AS AMENDED MAY 13, 1996)
42
NEXTEL COMMUNICATIONS, INC.
AMENDED AND RESTATED INCENTIVE EQUITY PLAN
(AS AMENDED MAY 13, 1996)
TABLE OF CONTENTS
PAGE
----
1. Purpose........................................................................... 1
2. Definitions....................................................................... 1
3. Shares and Performance Units Available under the Plan............................. 2
4. Option Rights..................................................................... 3
5. Appreciation Rights............................................................... 4
6. Restricted Shares................................................................. 5
7. Deferred Shares................................................................... 6
8. Performance Shares and Performance Units.......................................... 6
9. Transferability................................................................... 7
10. Adjustments....................................................................... 7
11. Fractional Shares................................................................. 7
12. Withholding Taxes................................................................. 8
13. Participation by Employees of or Consultants to a Less-Than-80-Percent
Subsidiary........................................................................ 8
14. Certain Terminations of Employment or Consulting Services, Hardship and Approved
Leaves of Absence................................................................. 8
15. Foreign Participants.............................................................. 8
16. Administration of the Plan........................................................ 8
17. Amendments and Other Matters...................................................... 9
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NEXTEL COMMUNICATIONS, INC.
AMENDED AND RESTATED INCENTIVE EQUITY PLAN
(AS AMENDED MAY 13, 1996)
1. PURPOSE. The purpose of this Plan is to attract and retain officers and
other key employees of and consultants to Nextel Communications, Inc. (the
"Corporation") and its Subsidiaries and to provide such persons with incentives
and rewards for superior performance.
2. DEFINITIONS. As used in this Plan,
"Appreciation Right" means a right granted pursuant to Section 5 of this
Plan, including a Free-Standing Appreciation Right and a Tandem Appreciation
Right.
"Base Price" means the price to be used as the basis for determining the
Spread upon the exercise of a Free-Standing Appreciation Right.
"Board" means the Board of Directors of the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means the committee described in Section 16(a) of this Plan.
"Common Shares" means (i) shares of the Class A Common Stock, par value
$.001 per share, of the Corporation and (ii) any security into which Common
Shares may be converted by reason of any transaction or event of the type
referred to in Section 10 of this Plan.
"Date of Grant" means the date specified by the Committee on which a grant
of Option Rights, Appreciation Rights or Performance Shares or Performance Units
or a grant or sale of Restricted Shares or Deferred Shares shall become
effective, which shall not be earlier than the date on which the Committee takes
action with respect thereto.
"Deferral Period" means the period of time during which Deferred Shares are
subject to deferral limitations under Section 7 of this Plan.
"Deferred Shares" means an award pursuant to Section 7 of this Plan of the
right to receive Common Shares at the end of a specified Deferral Period.
"Free-Standing Appreciation Right" means an Appreciation Right granted
pursuant to Section 5 of this Plan that is not granted in tandem with an option
Right or similar right.
"Incentive Stock Option" means an Option Right that is intended to qualify
as an "incentive stock option" under Section 422 of the Code or any successor
provision thereto.
"Less-Than-80-Percent Subsidiary" means a Subsidiary with respect to which
the Corporation directly or indirectly owns or controls less than 80 percent of
the total combined voting or other decision-making power.
"Management Objectives" means the achievement or performance objectives
established pursuant to this Plan for Participants who have received grants of
Performance Shares or Performance Units or, when so determined by the Committee,
Restricted Shares.
"Market Value per Share" means the fair market value of the Common Shares
as determined by the Committee from time to time.
"Nonqualified Option" means an Option Right that is not intended to qualify
as a Tax-Qualified Option.
"Optionee" means the person so designated in an agreement evidencing an
outstanding Option Right.
"Option Price" means the purchase price payable upon the exercise of an
Option Right.
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"Option Right" means the right to purchase Common Shares from the
Corporation upon the exercise of a Nonqualified Option or a Tax-Qualified option
granted pursuant to Section 4, or a Replacement Option Right granted pursuant to
Section 17(c), of this Plan.
"Participant" means a person who is selected by the Committee to receive
benefits under this Plan and (i) is at that time an officer, including without
limitation an officer who may also be a member of the Board, or other key
employee of or a consultant to the Corporation or any Subsidiary or (ii) has
agreed to commence serving in any such capacity.
"Performance Period" means, in respect of a Performance Share or
Performance Unit, a period of time established pursuant to Section 8 of this
Plan within which the Management objectives relating thereto are to be achieved.
"Performance Share" means a bookkeeping entry that records the equivalent
of one Common Share awarded pursuant to Section 8 of this Plan.
"Performance Unit" means a bookkeeping entry that records a unit equivalent
to $1.00 awarded pursuant to Section 8 of this Plan.
"Replacement Option Right" means an Option Right granted pursuant to
Section 17(c) of this Plan in exchange for the surrender and cancellation of an
option to purchase shares of another corporation that is acquired by the
Corporation or a Subsidiary by merger or otherwise.
"Restricted Shares" means Common Shares granted or sold pursuant to Section
6 of this Plan as to which neither the substantial risk of forfeiture nor the
restrictions on transfer referred to in Section 6 hereof has expired.
"Rule 16b-3" means Rule 16b-3, as promulgated and amended from time to time
by the Securities and Exchange Commission under the Securities Exchange Act of
1934, or any successor rule to the same effect.
"Spread" means, in the case of a Free-Standing Appreciation Right, the
amount by which the Market Value per Share on the date when the Appreciation
Right is exercised exceeds the Base Price specified therein or, in the case of a
Tandem Appreciation Right, the amount by which the Market Value per Share on the
date when the Appreciation Right is exercised exceeds the option Price specified
in the related Option Right.
"Stock Option Plan" means the Fleet Call, Inc. Stock Option Plan (as
amended and restated as of July 15, 1992).
"Subsidiary" means a corporation, partnership, joint venture,
unincorporated association or other entity in which the Corporation has a direct
or indirect ownership or other equity interest; provided, however, for purposes
of determining whether any person may be a Participant for purposes of any grant
of Incentive Stock Options, "Subsidiary" means any corporation in which the
Corporation owns or controls directly or indirectly more than 50 percent of the
total combined voting power represented by all classes of stock issued by such
corporation at the time of the grant.
"Tandem Appreciation Right" means an Appreciation Right granted pursuant to
section 5 of this Plan that is granted in tandem with an Option Right or any
similar right granted under any other plan of the Corporation.
"Tax-Qualified Option" means an Option Right that is intended to qualify
under particular provisions of the Code, including without limitation an
Incentive Stock Option.
3. SHARES AND PERFORMANCE UNITS AVAILABLE UNDER THE PLAN. (a)(i) Subject to
adjustment as provided in Section 10 of this Plan, the number of Common Shares
covered by outstanding awards, except Replacement Option Rights, granted under
this Plan and issued or transferred upon the exercise or payment thereof shall
not in the aggregate exceed 24,000,000 Common Shares, which may be Common Shares
of original issuance or Common Shares held in treasury or a combination thereof
and which include 19,019,778 Common Shares that have been reserved by the Board
for issuance or transfer under this Plan only, the 921,859 Common Shares that
remained available for issuance or transfer under the Stock Option Plan and were
not covered by stock options outstanding thereunder as of July 22, 1993, and any
of the 4,058,363 Common Shares that were covered by stock options outstanding
under the Stock Option Plan as of July 22, 1993, and have or may become
available for issuance or transfer under this Plan as a result of the
cancellation or
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termination of any such options prior to the exercise thereof; provided,
however, that the number of Common Shares issued or transferred as Restricted
Shares shall not in the aggregate exceed 200,000 Common Shares, and that the
number of Common Shares covered by outstanding Option Rights granted to
consultants at an Option Price per Common Share that is less than the Market
Value per Share on the Date of Grant and issued or transferred upon the exercise
thereof shall not in the aggregate exceed 1,000,000 Common Shares, subject in
each case to adjustment as provided in Section 10 of this Plan.
(i) Subject to adjustment as provided in Section 10 of this Plan, the
number of Common Shares covered by Replacement Option Rights granted under
this Plan during any calendar year shall not in the aggregate exceed five
percent of the Common Shares outstanding on January 1 of that year.
(ii) For the purposes of this Section 3(a):
- Upon payment in cash of the benefit provided by any award granted
under this Plan, any Common Shares that were covered by that award shall
again be available for issuance or transfer hereunder.
- Common Shares covered by any award granted under this Plan shall
be deemed to have been issued or transferred, and shall cease to be
available for future issuance or transfer in respect of any other award
granted hereunder, at the earlier of the time when they are actually
issued or transferred or the time when dividends or dividend equivalents
are paid thereon; provided, however, that Restricted Shares shall be
deemed to have been issued or transferred at the earlier of the time
when they cease to be subject to a substantial risk of forfeiture or the
time when dividends are paid thereon.
(b) The number of Performance Units that may be granted under this Plan
shall not in the aggregate exceed 500,000. Performance Units that are granted
under this Plan, but are not earned by the Participant at the end of the
Performance Period, shall be available for future grants of Performance Units
hereunder.
4. OPTION RIGHTS. The Committee may from time to time authorize grants to
Participants of options to purchase Common Shares upon such terms and conditions
as the Committee may determine in accordance with the following provisions:
(a) Each grant shall specify the number of Common Shares to which it
pertains.
(b) Each grant shall specify an Option Price per Common Share, which
shall be equal to or greater than the Market Value per Share on the Date of
Grant; provided, however, that the Option Price per Common Share of a
Replacement Option Right, and that the Option Price per Common Share of an
Option Right granted to a consultant, may be less than the Market Value per
Share on the Date of Grant.
(c) Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price and the manner of payment of such
consideration, which may include (i) cash in the form of currency or check
or other cash equivalent acceptable to the Corporation, (ii)
nonforfeitable, unrestricted Common Shares, which are already owned by the
optionee and have a value at the time of exercise that is equal to the
Option Price, (iii) any other legal consideration that the Committee may
deem appropriate, including without limitation any form of consideration
authorized under Section 4(d) below, on such basis as the Committee may
determine in accordance with this Plan and (iv) any combination of the
foregoing.
(d) On or after the Date of Grant of any Nonqualified Option, the
Committee may determine that payment of the Option Price may also be made
in whole or in part in the form of Restricted Shares or other Common Shares
that are subject to risk of forfeiture or restrictions on transfer. Unless
otherwise determined by the Committee on or after the Date of Grant,
whenever any Option Price is paid in whole or in part by means of any of
the forms of consideration specified in this Section 4(d), the Common
Shares received by the Optionee upon the exercise of the Nonqualified
Option shall be subject to the same risks of forfeiture or restrictions on
transfer as those that applied to the consideration surrendered by the
optionee; provided, however, that such risks of forfeiture and restrictions
on
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transfer shall apply only to the same number of Common Shares received by
the optionee as applied to the forfeitable or restricted Common Shares
surrendered by the Optionee.
(e) Any grant may provide for deferred payment of the Option Price
from the proceeds of sale through a bank or broker on the date of exercise
of some or all of the Common Shares to which the exercise relates.
(f) Successive grants may be made to the same Participant regardless
of whether any Option Rights previously granted to the Participant remain
unexercised.
(g) Each grant shall specify the period or periods of continuous
employment, or continuous engagement of the consulting services, of the
Optionee by the Corporation or any Subsidiary that are necessary before the
Option Rights or installments thereof shall become exercisable, and any
grant may provide for the earlier exercise of the Option Rights in the
event of a change in control of the Corporation or other similar
transaction or event.
(h) Option Rights granted pursuant to this Section 4 may be
Nonqualified Options or Tax-Qualified Options or combinations thereof.
(i) On or after the Date of Grant of any Nonqualified Option, the
Committee may provide for the payment to the Optionee of dividend
equivalents thereon in cash or Common Shares on a current, deferred or
contingent basis, or the Committee may provide that any dividend
equivalents shall be credited against the Option Price.
(j) No Option Right granted pursuant to this Section 4 may be
exercised more than 10 years from the Date of Grant.
(k) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and delivered
to and accepted by the Optionee and shall contain such terms and provisions
as the Committee may determine consistent with this Plan.
5. APPRECIATION RIGHTS. The Committee may also authorize grants to
Participants of Appreciation Rights. An Appreciation Right shall be a right of
the Participant to receive from the Corporation an amount, which shall be
determined by the Committee and shall be expressed as a percentage (not
exceeding 100 percent) of the Spread at the time of the exercise of an
Appreciation Right. Any grant of Appreciation Rights under this Plan shall be
upon such terms and conditions as the Committee may determine in accordance with
the following provisions:
(a) Any grant may specify that the amount payable upon the exercise of
an Appreciation Right may be paid by the Corporation in cash, Common Shares
or any combination thereof and may (i) either grant to the Participant or
reserve to the Committee the right to elect among those alternatives or
(ii) preclude the right of the Participant to receive and the Corporation
to issue Common Shares or other equity securities in lieu of cash;
provided, however, that no form of consideration or manner of payment that
would cause Rule 16b-3 to cease to apply to this Plan shall be permitted.
(b) Any grant may specify that the amount payable upon the exercise of
an Appreciation Right shall not exceed a maximum specified by the Committee
on the Date of Grant.
(c) Any grant may specify (i) a waiting period or periods before
Appreciation Rights shall become exercisable and (ii) permissible dates or
periods on or during which Appreciation Rights shall be exercisable.
(d) Any grant may specify that an Appreciation Right may be exercised
only in the event of a change in control of the corporation or other
similar transaction or event.
(e) On or after the Date of Grant of any Appreciation Rights, the
Committee may provide for the payment to the Participant of dividend
equivalents thereon in cash or Common Shares on a current, deferred or
contingent basis.
(f) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and delivered
to and accepted by the Optionee and shall describe the subject Appreciation
Rights,
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identify any related Option Rights, state that the Appreciation Rights are
subject to all of the terms and conditions of this Plan and contain such
other terms and provisions as the Committee may determine consistent with
this Plan.
(g) Regarding Tandem Appreciation Rights only: Each grant shall
provide that a Tandem Appreciation Right may be exercised only (i) at a
time when the related Option Right (or any similar right granted under any
other plan of the Corporation) is also exercisable and the Spread is
positive and (ii) by surrender of the related Option Right (or such other
right) for cancellation.
(h) Regarding Free-Standing Appreciation Rights only:
(i) Each grant shall specify in respect of each Free-Standing
Appreciation Right a Base Price per Common Share, which shall be equal
to or greater than the Market Value per Share on the Date of Grant;
(ii) Successive grants may be made to the same Participant
regardless of whether any Free-Standing Appreciation Rights previously
granted to the Participant remain unexercised;
(iii) Each grant shall specify the period or periods of continuous
employment, or continuous engagement of the consulting services, of the
Participant by the Corporation or any Subsidiary that are necessary
before the Free-Standing Appreciation Rights or installments thereof
shall become exercisable, and any grant may provide for the earlier
exercise of the Free-Standing Appreciation Rights in the event of a
change in control of the Corporation or other similar transaction or
event; and
(iv) No Free-Standing Appreciation Right granted under this Plan
may be exercised more than 10 years from the Date of Grant.
6. RESTRICTED SHARES. The Committee may also authorize grants or sales to
Participants of Restricted Shares upon such terms and conditions as the
Committee may determine in accordance with the following provisions:
(a) Each grant or sale shall constitute an immediate transfer of the
ownership of Common Shares to the Participant in consideration of the
performance of services, entitling such Participant to dividend, voting and
other ownership rights, subject to the substantial risk of forfeiture and
restrictions on transfer hereinafter referred to.
(b) Each grant or sale may be made without additional consideration
from the Participant or in consideration of a payment by the Participant
that is less than the Market Value per Share on the Date of Grant.
(c) Each grant or sale shall provide that the Restricted Shares
covered thereby shall be subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code for a period to be determined
by the Committee on the Date of Grant, and any grant or sale may provide
for the earlier termination of such period in the event of a change in
control of the Corporation or other similar transaction or event.
(d) Each grant or sale shall provide that, during the period for which
such substantial risk of forfeiture is to continue, the transferability of
the Restricted Shares shall be prohibited or restricted in the manner and
to the extent prescribed by the Committee on the Date of Grant. Such
restrictions may include without limitation rights of repurchase or first
refusal in the Corporation or provisions subjecting the Restricted Shares
to a continuing substantial risk of forfeiture in the hands of any
transferee.
(e) Any grant or sale may require that any or all dividends or other
distributions paid on the Restricted Shares during the period of such
restrictions be automatically sequestered and reinvested on an immediate or
deferred basis in additional Common Shares, which may be subject to the
same restrictions as the underlying award or such other restrictions as the
Committee may determine.
(f) Each grant or sale shall be evidenced by an agreement, which shall
be executed on behalf of the Corporation by any officer thereof and
delivered to and accepted by the Participant and shall contain such terms
and provisions as the Committee may determine consistent with this Plan.
Unless otherwise directed by the Committee, all certificates representing
Restricted Shares, together with a stock power that shall be endorsed in
blank by the
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Participant with respect to the Restricted Shares, shall be held in custody
by the Corporation until all restrictions thereon lapse.
7. DEFERRED SHARES. The Committee may also authorize grants or sales of
Deferred Shares to Participants upon such terms and conditions as the Committee
may determine in accordance with the following provisions:
(a) Each grant or sale shall constitute the agreement by the
Corporation to issue or transfer Common Shares to the Participant in the
future in consideration of the performance of services, subject to the
fulfillment during the Deferral Period of such conditions as the Committee
may specify.
(b) Each grant or sale may be made without additional consideration
from the Participant or in consideration of a payment by the Participant
that is less than the Market Value per Share on the Date of Grant.
(c) Each grant or sale shall provide that the Deferred Shares covered
thereby shall be subject to a Deferral Period, which shall be fixed by the
Committee on the Date of Grant, and any grant or sale may provide for the
earlier termination of the Deferral Period in the event of a change in
control of the Corporation or other similar transaction or event.
(d) During the Deferral Period, the Participant shall not have any
right to transfer any rights under the subject award, shall not have any
rights of ownership in the Deferred Shares and shall not have any right to
vote the Deferred Shares, but the Committee may on or after the Date of
Grant authorize the payment of dividend equivalents on the Deferred Shares
in cash or additional Common Shares on a current, deferred or contingent
basis.
(e) Each grant or sale shall be evidenced by an agreement, which shall
be executed on behalf of the Corporation by any officer thereof and
delivered to and accepted by the Participant and shall contain such terms
and provisions as the Committee may determine consistent with this Plan.
8. PERFORMANCE SHARES AND PERFORMANCE UNITS. The Committee may also
authorize grants of Performance Shares and Performance Units, which shall become
payable to the Participant upon the achievement of specified Management
Objectives, upon such terms and conditions as the Committee may determine in
accordance with the following provisions:
(a) Each grant shall specify the number of Performance Shares or
Performance Units to which it pertains, which may be subject to adjustment
to reflect changes in compensation or other factors.
(b) The Performance Period with respect to each Performance Share or
Performance Unit shall be determined by the Committee on the Date of Grant
and may be subject to earlier termination in the event of a change in
control of the Corporation or other similar transaction or event.
(c) Each grant shall specify the Management Objectives that are to be
achieved by the Participant, which may be described in terms of
Corporation-wide objectives or objectives that are related to the
performance of the individual Participant or the Subsidiary, division,
department or function within the Corporation or Subsidiary in which the
Participant is employed or with respect to which the Participant provides
consulting services.
(d) Each grant shall specify in respect of the specified Management
Objectives a minimum acceptable level of achievement below which no payment
will be made and shall set forth a formula for determining the amount of
any payment to be made if performance is at or above the minimum acceptable
level but falls short of full achievement of the specified Management
Objectives.
(e) Each grant shall specify the time and manner of payment of
Performance Shares or Performance Units that shall have been earned, and
any grant may specify that any such amount may be paid by the Corporation
in cash, Common Shares or any combination thereof and may either grant to
the Participant or reserve to the Committee the right to elect among those
alternatives; provided, however, that no form of consideration or manner of
payment that would cause Rule 16b-3 to cease to apply to this Plan shall be
permitted.
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49
(f) Any grant of Performance Shares may specify that the amount
payable with respect thereto may not exceed a maximum specified by the
Committee on the Date of Grant. Any grant of Performance Units may specify
that the amount payable, or the number of Common Shares issued, with
respect thereto may not exceed maximums specified by the Committee on the
Date of Grant.
(g) On or after the Date of Grant of Performance Shares, the Committee
may provide for the payment to the Participant of dividend equivalents
thereon in cash or additional Common Shares on a current, deferred or
contingent basis.
(h) The Committee may adjust Management Objectives and the related
minimum acceptable level of achievement if, in the sole judgment of the
Committee, events or transactions have occurred after the Date of Grant
that are unrelated to the performance of the Participant and result in
distortion of the Management Objectives or the related minimum acceptable
level of achievement.
(i) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and delivered
to and accepted by the Participant and shall contain such terms and
provisions as the Committee may determine consistent with this Plan.
9. TRANSFERABILITY. (a) No Option Right or other derivative security (as
that term is used in Rule 16b-3) granted under this Plan may be transferred by a
Participant except by will or the laws of descent and distribution. Option
Rights and Appreciation Rights granted under this Plan may not be exercised
during a Participant's lifetime except by the Participant or, in the event of
the Participant's legal incapacity, by his guardian or legal representative
acting in a fiduciary capacity on behalf of the Participant under state law and
court supervision.
(a) Any grant made under this Plan may provide that all or any part of
the Common Shares that are to be issued or transferred by the Corporation
upon the exercise of Option Rights or Appreciation Rights or upon the
termination of the Deferral Period applicable to Deferred Shares or in
payment of Performance Shares or Performance Units, or are no longer
subject to the substantial risk of forfeiture and restrictions on transfer
referred to in Section 6 of this Plan, shall be subject to further
restrictions upon transfer.
10. ADJUSTMENTS. The Committee may make or provide for such adjustments
in the number of Common Shares covered by outstanding Option Rights,
Appreciation Rights, Deferred Shares and Performance Shares granted hereunder,
the Option Prices per Common Share or Base Prices per Common Share applicable to
any such Option Rights and Appreciation Rights, and the kind of shares
(including shares of another issuer) covered thereby, as the Committee may in
good faith determine to be equitably required in order to prevent dilution or
expansion of the rights of Participants that otherwise would result from (a) any
stock dividend, stock split, combination of shares, recapitalization or other
change in the capital structure of the Corporation or (b) any merger,
consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial
or complete liquidation or other distribution of assets, issuance of warrants or
other rights to purchase securities or any other corporate transaction or event
having an effect similar to any of the foregoing. In the event of any such
transaction or event, the Committee may provide in substitution for any or all
outstanding awards under this Plan such alternative consideration as it may in
good faith determine to be equitable under the circumstances and may require in
connection therewith the surrender of all awards so replaced. Moreover, the
Committee may on or after the Date of Grant provide in the agreement evidencing
any award under this Plan that the holder of the award may elect to receive an
equivalent award in respect of securities of the surviving entity of any merger,
consolidation or other transaction or event having a similar effect, or the
Committee may provide that the holder will automatically be entitled to receive
such an equivalent award. The Committee may also make or provide for such
adjustments in the numbers of Common Shares specified in Sections 3(a)(i) and
3(a)(ii) of this Plan as the Committee may in good faith determine to be
appropriate in order to reflect any transaction or event described in this
Section 10.
11. FRACTIONAL SHARES. The Corporation shall not be required to issue any
fractional Common Shares pursuant to this Plan. The Committee may provide for
the elimination of fractions or for the settlement thereof in cash.
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50
12. WITHHOLDING TAXES. To the extent that the Corporation is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Corporation for the withholding are insufficient,
it shall be a condition to the receipt of any such payment or the realization of
any such benefit that the Participant or such other person make arrangements
satisfactory to the Corporation for payment of the balance of any taxes required
to be withheld. At the discretion of the Committee, any such arrangements may
include relinquishment of a portion of any such payment or benefit. The
Corporation and any Participant or such other person may also make similar
arrangements with respect to the payment of any taxes with respect to which
withholding is not required.
13. PARTICIPATION BY EMPLOYEES OF OR CONSULTANTS TO A LESS-THAN-80-PERCENT
SUBSIDIARY. As a condition to the effectiveness of any grant or award to be
made hereunder to a Participant who is an employee of or a consultant to a
Less-Than-80-Percent Subsidiary, regardless of whether the Participant is also
employed by or engaged as a consultant to the Corporation or another Subsidiary,
the Committee may require the Less-Than-80-Percent Subsidiary to agree to
transfer to the Participant (as, if and when provided for under this Plan and
any applicable agreement entered into between the Participant and the
Less-Than-80-Percent Subsidiary pursuant to this Plan) the Common Shares that
would otherwise be delivered by the Corporation upon receipt by the
Less-Than-80-Percent Subsidiary of any consideration then otherwise payable by
the Participant to the Corporation. Any such award may be evidenced by an
agreement between the Participant and the Less-Than-80-Percent Subsidiary, in
lieu of the Corporation, on terms consistent with this Plan and approved by the
Committee and the Less-Than-80-Percent Subsidiary. All Common Shares so
delivered by or to a Less-Than-80-Percent Subsidiary will be treated as if they
had been delivered by or to the Corporation for purposes of Section 3 of this
Plan, and all references to the Corporation in this Plan shall be deemed to
refer to the Less-Than-80-Percent Subsidiary except with respect to the
definitions of the Board and the Committee and in other cases where the context
otherwise requires.
14. CERTAIN TERMINATIONS OF EMPLOYMENT OR CONSULTING SERVICES, HARDSHIP AND
APPROVED LEAVES OF ABSENCE. Notwithstanding any other provision of this Plan to
the contrary, in the event of termination of employment or consulting services
by reason of death, disability, normal retirement, early retirement with the
consent of the Corporation, termination of employment or consulting services to
enter public service with the consent of the Corporation or leave of absence
approved by the Corporation, or in the event of hardship or other special
circumstances, of a Participant who holds an Option Right or Appreciation Right
that is not immediately and fully exercisable, any Restricted Shares as to which
the substantial risk of forfeiture or the prohibition or restriction on transfer
has not lapsed, any Deferred Shares as to which the Deferral Period is not
complete, any Performance Shares or Performance Units that have not been fully
earned, or any Common Shares that are subject to any transfer restriction
pursuant to Section 9(b) of this Plan, the Committee may take any action that it
deems to be equitable under the circumstances or in the best interests of the
Corporation, including without limitation waiving or modifying any limitation or
requirement with respect to any award under this Plan.
15. FOREIGN PARTICIPANTS. In order to facilitate the making of any award or
combination of awards under this Plan, the Committee may provide for such
special terms for awards to Participants who are foreign nationals, or who are
employed by or engaged as consultants to the Corporation or any Subsidiary
outside of the United States of America, as the Committee may consider necessary
or appropriate to accommodate differences in local law, tax policy or custom.
Moreover, the Committee may approve such supplements to, or amendments,
restatements or alternative versions of, this Plan as it may consider necessary
or appropriate for such purposes without thereby affecting the terms of this
Plan as in effect for any other purpose; provided, however, that no such
supplements, amendments, restatements or alternative versions shall include any
provisions that are inconsistent with the terms of this Plan, as then in effect,
unless this Plan could have been amended to eliminate the inconsistency without
further approval by the stockholders of the Corporation.
16. ADMINISTRATION OF THE PLAN. (a) This Plan shall be administered by the
Compensation Committee of the Board, which shall be composed of not less than
three members of the Board, each of whom shall be a "disinterested person"
within the meaning of Rule 16b-3. A majority of the Committee shall constitute a
quorum, and the acts of the
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51
members of the Committee who are present at any meeting thereof at which a
quorum is present, or acts unanimously approved by the members of the Committee
in writing, shall be the acts of the Committee.
(a) The interpretation and construction by the Committee of any
provision of this Plan or any agreement, notification or document
evidencing the grant of Option Rights, Appreciation Rights, Restricted
Shares, Deferred Shares, Performance Shares or Performance Units, and any
determination by the Committee pursuant to any provision of this Plan or
any such agreement, notification or document, shall be final and
conclusive. No member of the Committee shall be liable for any such action
taken or determination made in good faith.
17. AMENDMENTS AND OTHER MATTERS. (a) This Plan may be amended from time to
time by the Committee; provided, however, except as expressly authorized by this
Plan, no such amendment shall increase the numbers of Common Shares specified in
Sections 3(a)(i) and 3(a)(ii) hereof, increase the number of Performance Units
specified in Section 3(b) hereof, or otherwise cause this Plan to cease to
satisfy any applicable condition of Rule 16b-3, without the further approval of
the stockholders of the Corporation.
(a) With the concurrence of the affected Participant, the Committee
may cancel any agreement evidencing Option Rights or any other award
granted under this Plan. In the event of any such cancellation, the
Committee may authorize the granting of new Option Rights or other awards
hereunder, which may or may not cover the same number of Common Shares as
had been covered by the cancelled Option Rights or other award, at such
Option Price, in such manner and subject to such other terms, conditions
and discretion as would have been permitted under this Plan had the
cancelled Option Rights or other award not been granted.
(b) The Committee may grant under this Plan any award or combination
of awards authorized under this Plan, including without limitation
Replacement Option Rights, in exchange for the surrender and cancellation
of an award that was not granted under this Plan, including without
limitation an award that was granted by the Corporation or a Subsidiary, or
by another corporation that is acquired by the Corporation or a Subsidiary
by merger or otherwise, prior to the adoption of this Plan by the Board,
and any such award or combination of awards so granted under this Plan may
or may not cover the same number of Common Shares as had been covered by
the cancelled award and shall be subject to such other terms, conditions
and discretion as would have been permitted under this Plan had the
cancelled award not been granted.
(c) This Plan shall not confer upon any Participant any right with
respect to continuance of employment or other service with the Corporation
or any Subsidiary and shall not interfere in any way with any right that
the Corporation or any Subsidiary would otherwise have to terminate any
Participant's employment or other service at any time.
(d) (i) To the extent that any provision of this Plan would prevent
any Option Right that was intended to qualify as a Tax-Qualified Option
from so qualifying, any such provision shall be null and void with respect
to any such Option Right; provided, however, that any such provision shall
remain in effect with respect to other Option Rights, and there shall be no
further effect on any provision of this Plan.
(ii) Any award that may be made pursuant to an amendment to this Plan
that shall have been adopted without the approval of the stockholders of
the Corporation shall be null and void if it is subsequently determined
that such approval was required in order for this Plan to continue to
satisfy the applicable conditions of Rule 16b-3.
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NEXTEL COMMUNICATIONS, INC.
ANNUAL MEETING OF STOCKHOLDERS, JUNE 18, 1996
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR USE AT THE
ANNUAL MEETING OF STOCKHOLDERS. The undersigned hereby appoints Thomas J.
Sidman, John Willmoth and Lisa A. Zappala, and each of them, as Proxies, each
with the power to appoint his or her substitutes, and hereby authorizes them to
represent and to vote, as designated below and in accordance with their
judgment upon any other matter properly presented, all the shares of Class A
Common Stock, par value $0.001 per share (the "Class A Common Stock"), of
Nextel Communications, Inc. (the "Company") held of record by the undersigned
at the close of business on May 10, 1996, at the Annual Meeting of Stockholders
to be held on June 18, 1996 or any adjournment or postponement thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED
HEREIN AS DIRECTORS OF THE COMPANY, FOR THE ADOPTION OF THE COMPANY'S ASSOCIATE
STOCK PURCHASE PLAN, FOR THE AMENDMENT OF THE COMPANY'S INCENTIVE EQUITY PLAN
AND FOR RATIFICATION OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR FISCAL YEAR 1996.
Should any nominee decline or be unable to accept such nomination to serve as a
director, an event that the Company does not currently anticipate, the persons
named in the enclosed proxy reserve the right, in their discretion, to vote for
a lesser number or for substitute nominees designated by the Board of Directors.
PLEASE MARK, SIGN, DATE AND RETURN THIS FORM PROMPTLY IN THE ENCLOSED ENVELOPE.
53
_____ PLEASE MARK YOUR
X VOTES AS INDICATED
_____ IN THIS EXAMPLE.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted FOR the election of the nominees named herein and FOR proposals 2, 3
and 4.
FOR WITHHELD
1. Election of Directors to serve until the _____ _____
1999 Annual Meeting of Stockholders.
Nominees: Robert Cooper _____ _____
Daniel F. Akerson
Timothy M. Donahue
FOR, except vote withheld from for the following nominee(s):
____________________________________________________________
FOR AGAINST ABSTAIN
2. The proposal to adopt the _____ _____ _____
Company's Associate Stock
Purchase Plan, as described _____ _____ _____
in the Proxy Statement.
FOR AGAINST ABSTAIN
3. The proposal to approve the _____ _____ _____
amendment to the Company's
Incentive Equity Plan, as _____ _____ _____
described in the Proxy Statement.
FOR AGAINST ABSTAIN
4. The proposal to ratify the _____ _____ _____
appointment of Deloitte &
Touche LLP as the Company's _____ _____ _____
independent auditors for fiscal
year 1996.
_____
Please indicate by a check mark whether you plan to attend the
_____ Annual Meeting of Stockholders.
Please sign your name below. When shares are held by joint tenants, both should
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give the full title or capacity. If a corporation, please sign in
corporate name by an authorized officer and give title. If a partnership,
please sign in partnership name by an authorized person.
_______________________________________________________________________________
PRINT NAME OF STOCKHOLDER
_______________________________________________________________________________
SIGNATURE(S) DATE