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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 24, 1997
REGISTRATION NO. 33-80021
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE
AMENDMENT NO. 3
ON FORM S-3 TO
REGISTRATION STATEMENT
ON
FORM S-4
UNDER
THE SECURITIES ACT OF 1933
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NEXTEL COMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 36-3939651
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
1505 FARM CREDIT DRIVE
MCLEAN, VIRGINIA 22102
(703) 394-3000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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THOMAS J. SIDMAN, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
NEXTEL COMMUNICATIONS, INC.
1505 FARM CREDIT DRIVE
MCLEAN, VIRGINIA 22102
(703) 394-3000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
LISA A. STATER, ESQ.
JONES, DAY, REAVIS & POGUE
3500 ONE PEACHTREE CENTER
303 PEACHTREE STREET
ATLANTA, GEORGIA 30308
(404) 521-3939
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable following the effective date of this Registration Statement.
If the securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, check the following box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ] __________
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
check the following box: [ ]
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EXPLANATORY NOTE
This Post-Effective Amendment No. 3 relates to an aggregate of 2,160,072
shares of Class A Common Stock, par value $.001 per share ("Common Stock"), of
Nextel Communications, Inc. ("Nextel" or the "Company") that are issuable upon
exercise of certain warrants (the "Warrants") to purchase Common Stock. The
Warrants were issued or assumed in connection with the merger of Dial Page, Inc.
with and into Nextel on January 30, 1996. A Registration Statement on Form S-4
(No. 33-80021) relating to the issuance of the Warrants and the shares of Common
Stock issuable upon exercise of the Warrants was declared effective by the
Securities and Exchange Commission on December 13, 1995. The purpose of this
Post-Effective Amendment No. 3 is to update the information set forth in the
prospectus in such Registration Statement.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED OCTOBER 24, 1997
PROSPECTUS
NEXTEL COMMUNICATIONS, INC.
2,160,072 SHARES
CLASS A COMMON STOCK,
PAR VALUE $.001 PER SHARE
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This Prospectus relates to the offering (the "Offering") of up to 2,160,072
shares of Class A Common Stock, par value $.001 per share ("Common Stock"), of
Nextel Communications, Inc. ("Nextel" or the "Company") issuable upon exercise
of certain Warrants (as defined below) issued or assumed in connection with the
merger of Dial Page, Inc. ("Dial Page") with and into Nextel on January 30, 1996
(the "Dial Page Merger").
The proceeds of the aggregate exercise price of the Warrants will be used
for general corporate purposes. See "Use of Proceeds."
The Common Stock is currently traded on the Nasdaq National Market (the
"Nasdaq NM") under the symbol "NXTL," and the closing sale price of the Common
Stock on October 23, 1997, as reported by the Nasdaq NM, was $28.8125. See
"Certain Market Information."
SEE "RISK FACTORS," BEGINNING ON PAGE 14 OF THIS PROSPECTUS, FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE COMMON STOCK ISSUABLE UPON EXERCISE OF THE WARRANTS.
This Prospectus relates to: (i) 179,502 shares of Common Stock issuable
upon exercise of certain warrants (the "Assumed 1998 Warrants") issued under a
warrant agreement dated as of December 22, 1993 (the "1998 Warrant Agreement");
(ii) 10,736 shares of Common Stock issuable upon exercise of certain warrants
exchanged for warrants originally issued under the 1998 Warrant Agreement (the
"1998 Exchange Warrants"); (iii) 779,211 shares of Common Stock issuable upon
exercise of certain warrants (the "1999 Assumed Warrants") issued under a
warrant agreement dated as of April 25, 1994 (the "1999 Warrant Agreement");
(iv) 14,839 shares of Common Stock issuable upon exercise of certain warrants
exchanged for warrants originally issued under the 1999 Warrant Agreement (the
"1999 Exchange Warrants"); (v) 485,376 shares of Common Stock issuable upon
exercise of certain warrants exchanged for warrants originally issued under the
1999 Warrant Agreement as an alternative to the 1999 Exchange Warrants (the
"1999 Exchange Alternative Warrants"); (vi) an aggregate of 149,856 shares of
Common Stock issuable upon the exercise of certain warrants issued prior to the
Dial Page Merger which were assumed by Nextel; and (vii) an aggregate of 540,552
shares of Common Stock issuable upon the exercise of certain warrants issued by
Nextel in exchange for certain other warrants issued by Dial Page prior to the
Dial Page Merger, or an aggregate of 2,160,072 shares of Common Stock issuable
pursuant to such warrants (collectively, the "Warrants").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is October , 1997.
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CONTENTS
PAGE
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AVAILABLE INFORMATION....................................... 3
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE........... 3
SUMMARY..................................................... 5
RISK FACTORS................................................ 14
USE OF PROCEEDS............................................. 28
DILUTION.................................................... 28
CERTAIN MARKET INFORMATION.................................. 29
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT OF NEXTEL...................................... 29
PLAN OF DISTRIBUTION........................................ 31
LEGAL MATTERS............................................... 32
EXPERTS..................................................... 32
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AVAILABLE INFORMATION
Nextel is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (collectively, the "Exchange Act") and, in accordance therewith,
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). The reports, proxy statements and other
information filed by Nextel with the Commission can be inspected and copied at
the public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the
Commission's Regional Offices at 7 World Trade Center, 13th Floor, New York, New
York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material also may be obtained by mail from the
Public Reference Section of the Commission, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Additionally, the Commission
maintains a Web site on the Internet, that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission and that is located at http://www.sec.gov.
Nextel has filed with the Commission a Post-Effective Amendment No. 3 on
Form S-3 to its Registration Statement on Form S-4 (including the exhibits and
amendments thereto, the "Registration Statement") pursuant to the requirements
of the Securities Act of 1933, as amended (the "Securities Act"), with respect
to the securities offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain portions of which
are omitted in accordance with the rules and regulations of the Commission and
to which reference is hereby made. Statements made in this Prospectus as to the
contents of any contract, agreement or other document referred to herein are not
necessarily complete. With respect to each such contract, agreement or other
document filed or incorporated by reference as an exhibit to the Registration
Statement or as an exhibit to documents incorporated by reference in this
Prospectus (see "Incorporation of Certain Information By Reference"), reference
is made to the respective exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference. Copies of the Registration Statement together with exhibits may
be inspected at the office of the Commission in Washington, D.C. without charge
and copies thereof may be obtained therefrom upon payment of a prescribed fee.
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY NEXTEL. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES IN ANY JURISDICTION TO OR FROM
ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION IN
SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION
OF SECURITIES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR THE
AFFAIRS OF NEXTEL SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
THIS PROSPECTUS INCORPORATES CERTAIN DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN EXHIBITS TO
SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE)
ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON TO WHOM THIS PROSPECTUS IS DELIVERED
UPON WRITTEN OR ORAL REQUEST. REQUESTS FOR SUCH DOCUMENTS SHOULD BE DIRECTED TO
NEXTEL COMMUNICATIONS, INC., 1505 FARM CREDIT DRIVE, MCLEAN, VIRGINIA 22102,
ATTENTION: INVESTOR RELATIONS, TELEPHONE: (703) 394-3500.
The information in the following documents filed by Nextel with the
Commission (File No. 0-19656) pursuant to the Exchange Act is incorporated by
reference in this Prospectus:
(a) Annual Report on Form 10-K for the year ended December 31, 1996
filed with the Commission on March 31, 1997;
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(b) Quarterly Reports on Form 10-Q for the quarters ended (i) March
31, 1997 dated and filed with the Commission on May 15, 1997, and (ii) June
30, 1997 dated and filed with the Commission on August 12, 1997;
(c) Current Reports on Form 8-K: (i) dated and filed with the
Commission on January 21, 1997, (ii) dated and filed with the Commission on
February 7, 1997, (iii) dated and filed with the Commission on March 18,
1997, (iv) dated and filed with the Commission on April 15, 1997, (v) dated
June 2, 1997, and filed with the Commission on June 3, 1997, (vi) dated and
filed with the Commission on June 17, 1997, (vii) dated and filed with the
Commission on July 9, 1997, (viii) dated and filed with the Commission on
July 16, 1997, (ix) dated July 21, 1997 and filed with the Commission on
July 22, 1997, (x) dated and filed with the Commission on September 5,
1997, (xi) dated and filed with the Commission on September 9, 1997, (xii)
dated and filed with the Commission on September 22, 1997 and (xiii) dated
and filed with the Commission on October 23, 1997;
(d) Proxy Statement, dated as of April 18, 1997, filed in definitive
form on April 21, 1997 with the Commission with respect to the information
required to be included herein by Items 401 (management), 402 (executive
compensation) and 404 (certain relationships and related transactions) of
Regulation S-K promulgated under the Securities Act and the Exchange Act;
and
(e) Registration Statement on Form S-1, as amended, dated as of
January 27, 1992 (No. 33-43415), with respect to the information contained
under the heading "Description of Capital Stock" which was incorporated by
reference into the Registration Statement on Form 8-A, dated January 16,
1992.
All documents filed by Nextel pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the Offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part thereof from the date of filing of such
documents.
Any statements made herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which is also incorporated or deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The information relating to Nextel contained in this Prospectus should be
read together with the information in the documents incorporated by reference.
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SUMMARY
The following summary should be read in conjunction with, and is qualified
in its entirety by, the more detailed information and financial statements,
including the notes thereto, included or incorporated by reference into this
Prospectus.
On July 28, 1995, NEXTEL Communications, Inc., a corporation organized
under the laws of the State of Delaware in 1987 ("Old Nextel"), was merged with
ESMR, Inc. ("ESMR"), until then a wholly owned subsidiary of Motorola, Inc.
("Motorola"). ESMR was the surviving corporation in the merger (the "Motorola
Transaction") and succeeded to Old Nextel's assets and liabilities. ESMR changed
its name to Nextel Communications, Inc., effective upon consummation of the
Motorola Transaction. References herein to Nextel for periods prior to July 28,
1995 refer to Old Nextel as the predecessor to the business and operations of
Nextel. Unless the context requires otherwise, references to Nextel are intended
to include Nextel Communications, Inc. and its consolidated subsidiaries.
Information contained herein gives effect to the acquisition of
approximately 1,220,000 shares of Common Stock by Digital Radio L.L.C. (the
"McCaw Investor") on April 5, 1995, an additional acquisition of 8,163,265
shares of Nextel's Class A Convertible Redeemable Preferred Stock, par value
$.01 per share (the "Class A Preferred Stock"), and 82 shares of Nextel's Class
B Convertible Preferred Stock, par value $.01 per share (the "Class B Preferred
Stock"), by the McCaw Investor and the consummation of related transactions on
July 28, 1995 (the "McCaw Transaction"), the merger of OneComm Corporation
("OneComm") with and into Nextel on July 28, 1995 (the "OneComm Transaction"),
the consummation of the Motorola Transaction on July 28, 1995, the merger of a
subsidiary of Nextel with American Mobile Systems Incorporated ("AMS") on July
31, 1995 (the "AMS Transaction") and the merger of Dial Page with and into
Nextel on January 30, 1996 (the "Dial Page Transaction").
THE COMPANY
OVERVIEW
Nextel's business consists principally of providing a wide array of digital
and analog wireless communications services to its customers in the United
States, in each case utilizing frequencies licensed to its subsidiaries by the
Federal Communications Commission ("FCC"). Nextel provides a differentiated
package of integrated digital wireless communications services under the Nextel
brand name to customers of the various networks constructed and operated by
Nextel's subsidiaries in and around major metropolitan population centers
throughout the country. Collectively, Nextel's operations constitute one of the
largest integrated wireless communications networks utilizing a single digital
transmission technology currently offering commercial service in the United
States. Through its digital and analog wireless communications networks, Nextel
is the leading provider of specialized mobile radio ("SMR") wireless
communications services in nearly all 48 states in the continental United States
and in Hawaii. Nextel has significant SMR spectrum holdings in and around every
major business and population center in the country, including all of the top 50
metropolitan market areas in the United States.
Nextel's operating revenues primarily arise from its digital and analog
wireless communications businesses in the United States, particularly the mobile
telephone service and two-way radio service and, to a lesser extent, from sales
and maintenance of related equipment. Nextel's business plans and efforts are to
a large extent directed toward replacing the traditional analog SMR systems that
it currently operates with advanced mobile communications systems employing
digital technology with a multi-site configuration permitting frequency reuse
("Digital Mobile networks"). A customer using Nextel's Digital Mobile network is
able to access mobile telephone services, two-way dispatch (marketed as Nextel's
Direct Connect(SM) service), paging and alphanumeric short-messaging service,
and in the future is expected to be able to access data transmission. Nextel is
implementing its Digital Mobile networks utilizing digital technology developed
by Motorola (such technology is referred to as the "integrated Digital Enhanced
Network" or "iDEN"). As of September 30, 1997, Nextel's Digital Mobile networks
were operating in major metropolitan market areas throughout the United States
in which approximately 60% of the total United States population lives or works.
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Prior to the second quarter of 1996, Nextel implemented its Digital Mobile
networks in its market areas using Motorola's first generation iDEN technology.
During that time frame, Nextel encountered certain technology and system
performance issues relating primarily to the voice transmission quality of the
mobile telephone service. In response to these issues, Nextel and Motorola took
action on several fronts to address system performance issues in general, and
voice transmission quality concerns in particular. See "Risk
Factors -- Implementation of Digital Mobile Networks Subject to Risks of
Developing Technology." Additionally, Nextel, together with Motorola, in 1995
began pursuing a program directed toward the development and deployment of
modifications to the first generation iDEN technology platform, which
modifications were targeted specifically at improving the voice transmission
quality of the mobile telephone service. Nextel commenced the full-scale
commercial launch of its first Digital Mobile networks incorporating the
modified iDEN technology (referred to herein as "Reconfigured iDEN") in the
Chicago metropolitan market late in the third quarter of 1996 and has since
deployed the Reconfigured iDEN technology throughout its Digital Mobile
networks. To date, the Company's Digital Mobile network is operational in
markets in which approximately 60% of the United States population lives or
works, providing coverage in and around major metropolitan areas, including New
York, Los Angeles, Chicago, Washington, D.C., Atlanta, Boston, Denver, Detroit,
Dallas/Fort Worth, Houston, San Francisco, Miami/Fort Lauderdale, Tampa/St.
Petersburg, Orlando, Jacksonville, Pittsburgh, Cleveland, Columbus, Salt Lake
City, Phoenix, Tucson and Spokane. Later in 1997, the Company plans to expand
network coverage to other major metropolitan areas, including San Antonio,
Cincinnati and Austin. Based on its current plans and construction schedules,
the Company expects that its Digital Mobile network will be operational in
markets in which approximately 85% of the United States population lives or
works by the end of 1998.
Since December 31, 1994, the number of subscriber units in service on
Nextel's Digital Mobile network has increased significantly, reflecting the
commencement of Digital Mobile network service in certain markets, increased
sales in markets in which Digital Mobile network services are provided and, to a
limited extent, acquisitions. As a result, the number of subscriber units in
service on Nextel's Digital Mobile network increased from 13,500 at December 31,
1994, to 85,000 at December 31, 1995, to 300,300 at December 31, 1996 and to
946,600 at September 30, 1997. Nextel's business and marketing strategy for its
Digital Mobile networks continues to be based on, and reflect, a principal focus
on multi-service business users in its markets with Digital Mobile networks.
During 1996 and 1997, Nextel also significantly expanded its business
activities to include operations and investments involving wireless
communications service providers outside the United States, which are conducted
under or are coordinated by or through Nextel International, Inc. (formerly
known as McCaw International, Ltd.; "Nextel International"), an indirect, wholly
owned subsidiary of Nextel. With the exception of the equity interests held by
Nextel and by Nextel International in Clearnet Communications, Inc.
("Clearnet"), a major provider of analog and digital SMR wireless communications
services throughout Canada, and the holder of one of the two nationwide 30 MHz
personal communications services ("PCS") licenses awarded in Canada, Nextel
International's subsidiaries or other entities in which Nextel International
holds equity or equivalent interests own and operate wireless communications
systems in Latin America and Asia. Nextel International's operating companies
currently provide a variety of analog or digital wireless communications
services in certain major metropolitan areas in Argentina, Brazil, Mexico, the
Philippines and Shanghai, China.
Nextel's principal executive and administrative facility is located at 1505
Farm Credit Drive, McLean, Virginia 22102, and its telephone number is (703)
394-3000.
BUSINESS PLAN
Nextel is implementing its revised business plan, which contemplates an
accelerated deployment during 1997 and 1998 of the Reconfigured iDEN technology
platform throughout markets in the United States in which the Company intends to
establish Digital Mobile networks (including primary connecting routes between
certain markets). Nextel has estimated that system infrastructure and other
system capital costs to be incurred during the period from March 31, 1997
through the end of 1998 to implement the business plan would be approximately
$1,450,000,000. See "Risk Factors -- Nextel to Require Additional Financing."
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Nextel believes that the implementation of the accelerated build-out
contemplated by its business plan will better position Nextel both to achieve
its strategic objectives relating to its U.S. operations and to prepare for
emerging competition in the wireless communications industry, especially from
certain current operators that, on their existing cellular frequencies or on PCS
frequencies, are in the process of converting their wireless communications
systems to digital technology formats and are moving to provide "nationwide
coverage" on the resulting systems. Nextel believes that a significant strategic
advantage may exist in being "first to market," particularly in comparison to
the new "entrepreneur block" PCS licensees and other existing or potential
regional wireless communications service providers, which may encounter
significant financial and other challenges in replicating or overtaking Nextel's
industry position assuming Nextel successfully concludes its nationwide Digital
Mobile network build-out plan and develops a sufficient customer base in its
markets. Nextel already has taken a number of significant steps to implement
this business plan (including obtaining modifications to certain terms contained
in the Old Indentures (as herein defined) to provide the flexibility required to
assemble and utilize the necessary financing for such business plan), and
further actions currently are underway to reach that objective. Nextel's ability
to fully implement its business plan will depend, among other things, on certain
actions by third parties, which cannot be assured. See "Risk Factors -- Nextel
to Require Additional Financing" and "-- Forward Looking Statements."
RECENT DEVELOPMENTS
October Notes Issuance. On October 22, 1997, Nextel completed the sale of
$1,129,100,000 principal amount at maturity of Senior Serial Redeemable Discount
Notes due 2007 (the "October Notes"). The issue price of the October Notes,
which mature on October 31, 2007, was $619.96 per $1,000 principal amount at
maturity (generating approximately $700,000,000 in aggregate gross proceeds),
representing a yield to maturity of 9.75% computed on a semi-annual bond
equivalent basis from the date of issuance. Nextel received approximately
$682,000,000 in net cash proceeds from the sale of the October Notes (the
"October Notes Proceeds").
Cash interest will not accrue on the October Notes prior to October 31,
2002 and will be payable on April 30 and October 31 of each year, commencing
April 30, 2003, at a rate of 9.75% per annum. The October Notes are redeemable,
at the option of Nextel at any time, in whole or in part, on or after October
31, 2002, at specified redemption prices plus accrued and unpaid interest. In
addition, in the event of one or more sales by Nextel prior to October 31, 2000
of at least $125,000,000 of its capital stock, a portion of the October Notes
not to exceed a maximum of 33 1/3% of the aggregate accreted value of the
outstanding October Notes may be redeemed at Nextel's option within 180 days
after such sale from the net cash proceeds thereof at 109.75% of such accreted
value on the date of redemption. The October Notes are senior unsecured
indebtedness of Nextel and rank pari passu in right of payment with all
unsubordinated, unsecured indebtedness of Nextel, including indebtedness
evidenced by the Old Senior Notes (as defined below) and the September Notes (as
defined below), and will be senior in right of payment to all subordinated
indebtedness of Nextel.
The October Notes were issued in a private placement transaction and have
not been registered with the Commission under the Securities Act, and may not be
sold absent registration or an applicable exemption from the registration
requirements. In connection with the issuance of the October Notes, Nextel has
agreed to use its best efforts to file with the Commission and cause to become
effective a registration statement with respect to a registered offer to
exchange the then outstanding October Notes for notes of equal value that have
been registered pursuant to the Securities Act (the "October Notes Exchange
Offer"). In the event that the October Notes Exchange Offer is not consummated
prior to specified dates, additional incremental interest on the accreted value
of the October Notes will accrue until the October Notes Exchange Offer is
consummated or certain other requirements are met.
The terms of the October Notes are set forth in the related indenture (the
"October Indenture") which has been filed with the Commission and is
incorporated by reference herein.
September Notes Issuance. On September 17, 1997, Nextel completed the sale
of $840,000,000 principal amount at maturity of Senior Redeemable Discount Notes
due 2007 (the "September Notes"). The issue price of the September Notes, which
mature on September 15, 2007, was $595.57 per $1,000 principal
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amount at maturity (generating approximately $500,300,000 in aggregate gross
proceeds), representing a yield to maturity of 10.65% computed on a semi-annual
bond equivalent basis from the date of issuance. Nextel received approximately
$486,000,000 in net cash proceeds from the sale of the September Notes (the
"September Notes Proceeds").
Cash interest will not accrue on the September Notes prior to September 15,
2002 and will be payable on March 15 and September 15 of each year, commencing
March 15, 2003, at a rate of 10.65% per annum. The September Notes are
redeemable, at the option of Nextel at any time, in whole or in part, on or
after September 15, 2002, at specified redemption prices plus accrued and unpaid
interest. In addition, in the event of one or more sales by Nextel prior to
September 15, 2000 of at least $125,000,000 of its capital stock, a portion of
the September Notes not to exceed a maximum of 33 1/3% of the aggregate accreted
value of the outstanding September Notes may be redeemed at Nextel's option
within 180 days after such sale from the net cash proceeds thereof at 110.65% of
such accreted value on the date of redemption. The September Notes are senior
unsecured indebtedness of Nextel and rank pari passu in right of payment with
all unsubordinated, unsecured indebtedness of Nextel, including indebtedness
evidenced by the Old Senior Notes and the October Notes, and will be senior in
right of payment to all subordinated indebtedness of Nextel.
The September Notes were issued in a private placement transaction and have
not been registered with the Commission under the Securities Act, and may not be
sold absent registration or an applicable exemption from the registration
requirements. In connection with the issuance of the September Notes, Nextel has
agreed to use its best efforts to file with the Commission and cause to become
effective a registration statement with respect to a registered offer to
exchange the then outstanding September Notes for notes of equal value that have
been registered pursuant to the Securities Act (the "September Notes Exchange
Offer"). In the event that the September Notes Exchange Offer is not consummated
prior to specified dates, additional incremental interest on the accreted value
of the September Notes will accrue until the September Senior Notes Exchange
Offer is consummated or certain other requirements are met.
The terms of the September Notes are set forth in the related indenture
(the "September Indenture") which has been filed with the Commission and is
incorporated by reference herein.
Additional Credit Facilities. Nextel, Nextel Finance Company, a wholly
owned subsidiary of Nextel ("NFC"), and certain subsidiaries of Nextel have
entered into definitive agreements which became effective on September 4, 1997
with respect to $500,000,000 in additional financing, increasing Nextel's total
secured financing capacity under its financing agreements to $2,500,000,000.
These agreements provided for (i) amendments to the existing secured credit
facility with certain banks (as so amended, the "Bank Credit Facility") pursuant
to which $250,000,000 in additional term loans (the "Additional Bank
Borrowings") were made to the Company, (ii) amendments to the existing secured
credit facility with Motorola, NTFC Capital Corporation and certain other
lenders (as so amended, the "Vendor Credit Facility") pursuant to which
$50,000,000 in additional term loans (the "Additional Vendor Borrowings") will
be made available to the Company, subject to the satisfaction or waiver of
applicable borrowing conditions, and (iii) a new credit facility pursuant to
which up to $200,000,000 in additional secured term loans (that are to be second
in ranking to the borrowings made pursuant to the Bank Credit Facility and the
Vendor Credit Facility) will be made available to the Company by Motorola
through March 31, 1999 (the "Second Secured Borrowings"), subject to the
satisfaction or waiver of applicable borrowing conditions. Borrowings under the
Bank Credit Facility and the Vendor Credit Facility (together, the "Bank and
Vendor Credit Facilities") are ratably secured by liens on assets of Nextel's
domestic operating subsidiaries. The Second Secured Borrowings are secured (on a
second priority basis) by the same collateral package securing amounts
outstanding under the Bank Credit Facility and Vendor Credit Facility.
Giving effect to these amendments and to the agreement related to the
Second Secured Borrowings (the "Second Vendor Financing Agreement"), the
agreement related to the Bank Credit Facility (the "Bank Credit Agreement")
provides for up to $1,905,000,000 of secured financing (consisting of a
$1,085,000,000 revolving loan and $820,000,000 in term loans), the agreement
related to the Vendor Credit Facility (the "Vendor Credit Agreement") provides
for up to $395,000,000 of secured financing (consisting of a $195,000,000
revolving loan and $200,000,000 in term loans), and the Second Vendor Financing
Agreement
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provides for up to $200,000,000 of Second Secured Borrowings, for a total of up
to $2,500,000,000 in secured financing. The indebtedness incurred upon issuance
of the October Notes may, under certain circumstances described elsewhere
herein, limit the Company's ability to incur indebtedness otherwise available
for incurrence pursuant to the Bank Credit Facility, the Vendor Credit Facility
and/or the Second Vendor Financing Agreement. See "Risk Factors -- Nextel to
Require Additional Financing."
Exercise of First Motorola Option by McCaw Investor. On September 3, 1997,
the McCaw Investor acquired 2,000,000 shares of Common Stock from Motorola
pursuant to the exercise of an option granted by Motorola, at a per share price
of $15.50 (the "First Motorola Option"). The First Motorola Option was granted
to the McCaw Investor by Motorola in 1995 in connection with the consummation of
the McCaw Transaction, together with additional options covering 2,000,000 and
5,000,000 shares of Common Stock owned by Motorola, at per share exercise prices
of $18.50 and $21.50, respectively, which will become exercisable by the McCaw
Investor in 1999 and 2001, respectively. There can be no assurance that such
additional options will be exercised in whole or in part by the McCaw Investor.
Preferred Stock Issuance. On July 21, 1997, Nextel completed the sale of
500,000 shares of 13% Series D Exchangeable Preferred Stock (the "Series D
Preferred Stock") with a liquidation preference of $1,000 per share. Nextel
received approximately $482,000,000 in net cash proceeds from the sale of the
Series D Preferred Stock (the "Preferred Stock Proceeds").
Dividends on the Series D Preferred Stock accrue at an annual rate of 13%
of the liquidation preference, are cumulative from the date of issuance and are
payable quarterly in cash or, on or prior to July 15, 2002, at the sole option
of Nextel, in additional shares of Series D Preferred Stock. Nextel elected to
pay the first quarterly dividend on the Series D Preferred Stock in kind,
resulting in the issuance of an additional 15,167 shares of Series D Preferred
Stock on October 15, 1997. The Series D Preferred Stock is mandatorily
redeemable on July 15, 2009 at the liquidation preference plus accrued and
unpaid dividends, and is redeemable in whole or in part, at the option of
Nextel, at any time after December 15, 2005, at a price equal to the liquidation
preference plus accrued and unpaid dividends, and, in certain circumstances,
after July 15, 2002 at specified redemption prices. Up to 35% of the Series D
Preferred Stock may be redeemed on or prior to July 15, 2000, in whole or in
part, at the option of Nextel in certain circumstances, at 113% of the
liquidation preference plus accrued and unpaid dividends from the proceeds of
one or more sales of Common Stock. The Series D Preferred Stock is also
exchangeable, in whole but not in part, at the option of Nextel at any time
after December 15, 2005 and in certain circumstances sooner, into Nextel
subordinated debentures.
The shares of Series D Preferred Stock were issued in a private placement
transaction and have not been registered with the Commission under the
Securities Act, and may not be sold absent registration or an applicable
exemption from the registration requirements. In connection with the issuance of
the Series D Preferred Stock, Nextel has agreed to use its best efforts to file
with the Commission and cause to become effective a registration statement with
respect to a registered offer to exchange the then outstanding Series D
Preferred Stock for an equal number of shares of 13% Series D Exchangeable
Preferred Stock that have been registered pursuant to the Securities Act (the
"Preferred Stock Exchange Offer"). In the event that the Preferred Stock
Exchange Offer is not consummated prior to specified dates, the dividend accrual
rate applicable to the Series D Preferred Stock will increase by specified
amounts until the Preferred Stock Exchange Offer is consummated or certain other
requirements are met.
Terms of the Series D Preferred Stock are set forth in the Certificate of
Designation, which has been filed with the Commission, and is incorporated by
reference herein.
Consent Solicitation. Under the terms of Nextel's five outstanding issues
of Senior Redeemable Discount Notes outstanding prior to 1997 (the "Old Senior
Notes"), issued pursuant to respective public indentures as in effect prior to
June 13, 1997 (the "Former Version Indentures"), Nextel and its subsidiaries
that are "restricted subsidiaries" for purposes of such indentures (the
"restricted subsidiaries") could not have incurred debt (other than certain
categories of "Permitted Debt" (as defined in such indentures)) unless certain
tests were met. Because such terms of the Former Version Indentures could have
had the effect of limiting Nextel's ability to borrow the funds necessary to
implement its business plan, Nextel sought the consent of the holders of the Old
Senior Notes to certain amendments to the Former Version Indentures
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pursuant to a consent solicitation (the "Consent Solicitation"). On June 13,
1997, Nextel obtained the consent of the requisite number of holders of the Old
Senior Notes to certain amendments and waivers to specific provisions of the
Former Version Indentures. Also on that date, Nextel and the Trustee under such
Former Version Indentures executed supplemental indentures (the "Supplemental
Indentures") to each of the Former Version Indentures implementing such
amendments and waivers. The Former Version Indentures, as amended and modified
by their respective Supplemental Indentures, are referred to herein as the "Old
Indentures" and are referred to collectively with the September Indenture and
the October Indenture as the "Nextel Indentures." The Old Senior Notes as
referred to collectively with the September Notes and the October Notes as the
"Existing Notes." The amendments include, among other things, certain
modifications to the debt incurrence limitations of such indentures to allow
Nextel to incur additional indebtedness, by (i) increasing the amount of
permitted debt by $350,000,000 and providing additional flexibility to allocate
the total amount of permitted debt among the existing categories of permitted
debt, (ii) allowing Nextel to incur indebtedness in excess of such permitted
debt, in the period prior to January 1, 2000, based on the amount and timing of
any net cash proceeds received by Nextel from new equity issuances (such
proceeds of new equity issuances include the Preferred Stock Proceeds, but would
exclude equity funds from several identified sources, including most
significantly equity investment proceeds received from affiliates of Craig O.
McCaw in connection with the exercise of the First Option (as defined below) and
also the Subscription Proceeds (as defined below) received by Nextel), and (iii)
making Nextel's ability to incur additional indebtedness on and after January 1,
2000 a function of satisfaction of a new interest coverage ratio test. See "Risk
Factors -- Nextel to Require Additional Financing." The Supplemental Indentures
also authorize Nextel to transfer to its unrestricted subsidiary group the
equity interest in Clearnet currently held directly by Nextel and also
implemented certain technical amendments.
The foregoing statements relating to the Old Indentures are summaries of
the relevant provisions and do not purport to be complete. Where reference is
made to particular provisions of the Old Indentures, such provisions, including
the definitions of certain terms, are incorporated by reference as part of such
summaries, and are qualified in their entirety by such reference. Each of the
Former Version Indentures and the Supplemental Indentures has previously been
filed with the Commission, and each of the Former Version Indentures, as amended
and supplemented by the appropriate Supplemental Indenture, is incorporated by
reference herein.
In connection with the Consent Solicitation, Nextel made consent payments
totalling approximately $67,151,000 to validly consenting holders of the Old
Senior Notes (the "Consenting Holders"). On August 8, 1997, the Commission
declared effective Nextel's registration statement on Form S-3 relating to the
offering of approximately 4,161,000 shares of Common Stock exclusively to
Consenting Holders. Pursuant to such registration statement, Nextel offered such
Common Stock to the Consenting Holders at a per share cash price of $16.14. Such
offering expired on September 9, 1997 and approximately 3,940,000 of the offered
shares of Common Stock were subscribed for by Consenting Holders for an
aggregate purchase price of approximately $63,500,000 (the "Subscription
Proceeds").
McCaw Investor Option Exercise. In April 1997, Nextel and the McCaw
Investor reached a preliminary agreement (which was confirmed in definitive
agreements entered into in June 1997) pursuant to which the McCaw Investor
committed to exercise in full the outstanding option that was scheduled to
expire on July 28, 1997 (the "First Option") to purchase 15,000,000 shares of
Common Stock for an aggregate purchase price of $232,500,000 (the "McCaw Option
Proceeds"). The McCaw Investor exercised the First Option on July 28, 1997. In
connection with the foregoing, the McCaw Investor also agreed to provide up to
$50,000,000 in debt financing (subject to certain conditions) to Nextel (the
"McCaw Investor Borrowings"). See "Risk Factors -- Nextel to Require Additional
Financing." At the present time, however, Nextel is not taking steps to meet the
conditions to access the McCaw Investor Borrowings.
On March 20, 1997, Nextel completed the purchase from an affiliate of
Comcast Corporation ("Comcast") of an option to acquire 25,000,000 shares of
Common Stock, at an exercise price of $16.00 per share (the "Comcast Option"),
for an aggregate purchase price of $25,000,000. In connection with the
agreements relating to the commitment to exercise the First Option, Nextel
reached an agreement with an affiliate of Craig O. McCaw (such affiliate, the
"Purchaser"), pursuant to which the Purchaser acquired, for
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13
an aggregate purchase price of $25,000,000, an option, in replacement of the
Comcast Option, to purchase 25,000,000 shares of Common Stock (the "New
Option"), 15,000,000 of which are purchasable at an exercise price of $16.00 per
share and the remaining 10,000,000 of which are purchasable at an exercise price
of $18.00 per share, at any time through July 28, 1998. The New Option, and any
shares of Common Stock issued upon exercise thereof, are transferable, subject
to certain limitations. In addition, one direct transferee of the Purchaser will
be entitled to designate one nominee for election to Nextel's Board of
Directors, provided that such party (i) has exercised the transferred portion of
the New Option and continues to own at least 10,000,000 shares of Common Stock
obtained on such exercise, (ii) is not an affiliate of Craig O. McCaw and (iii)
does not hold a 5% or greater equity ownership interest in any entity that
provides terrestrial-based wireless communications services in competition with
Nextel in any of its markets. Shares issuable upon exercise of the New Option
will be entitled to certain demand and piggyback registration rights, which
would be assignable to transferees in certain circumstances. There can be no
assurance that the Purchaser or any transferee will elect to exercise the New
Option. See "Risk Factors -- Forward Looking Statements." The arrangements
pertinent to the New Option, the exercise of the First Option and the McCaw
Investor Borrowings are set forth in definitive agreements entered into among
the relevant parties, which definitive agreements have been filed with the
Commission, and are incorporated herein by reference.
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SUMMARY FINANCIAL DATA
The summary financial data set forth below for the periods indicated should
be read in conjunction with the consolidated financial statements, related notes
and other financial information appearing in Nextel's Annual Report on Form 10-K
for the year ended December 31, 1996 and Nextel's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1997, incorporated herein by reference. The
financial information for the fiscal years ended March 31, 1993 and 1994, the
nine months ended December 31, 1994 and the years ended December 31, 1995 and
1996 have been derived from the audited consolidated financial statements of
Nextel. The report of Deloitte & Touche LLP, independent auditors, for the nine
months ended December 31, 1994 and the years ended December 31, 1995 and 1996
has been incorporated by reference. See "Experts." The financial information for
the six months ended June 30, 1996 and 1997 is derived from the unaudited
financial statements of Nextel and, in the opinion of Nextel, includes all
adjustments, consisting only of normal recurring accruals, considered necessary
for the fair presentation of such information. The results of operations for
interim periods are not necessarily indicative of the results to be expected for
the full year. See "Incorporation of Certain Information By Reference."
FISCAL YEAR SIX MONTHS
ENDED NINE MONTHS YEAR ENDED ENDED
MARCH 31, ENDED DECEMBER 31, JUNE 30,
----------------------- DECEMBER 31, ------------------------- -------------------------
1993 1994 1994(1) 1995 1996 1996 1997
---------- ---------- ------------ ----------- ----------- ----------- -----------
(IN THOUSANDS)
INCOME STATEMENT DATA(2):
Revenues....................... $ 53,002 $ 67,928 $ 74,857 $ 171,703 $ 332,938 $ 145,937 $ 256,614
Cost of operations............. 20,979 28,666 51,406 151,718 247,717 122,427 122,654
Selling, general and
administrative expenses...... 18,971 41,107 85,077 193,321 330,256 144,045 314,355
Expenses related to corporate
reorganization(3)............ -- -- -- 17,372 -- -- --
Depreciation and
amortization................. 25,942 58,398 94,147 236,178 400,831 186,829 224,704
---------- ---------- ----------- ----------- ----------- ----------- -----------
Operating loss................. (12,890) (60,243) (155,773) (426,886) (645,866) (307,364) (405,099)
Interest income (expense),
net.......................... 1,324 (18,101) (41,454) (89,509) (206,480) (93,532) (160,170)
Other income (expense),
net(4)(5).................... 924 3 33 (15,372) (10,866) -- (3,134)
Income tax benefit............. 1,027 21,437 71,345 200,602 307,192 152,150 85,930
---------- ---------- ----------- ----------- ----------- ----------- -----------
Net loss....................... $ (9,615) $ (56,904) $ (125,849) $ (331,165) $ (556,020) $ (248,746) $ (482,473)
========== ========== =========== =========== =========== =========== ===========
Net loss per share............. $ (0.16) $ (0.73) $ (1.25) $ (2.31) $ (2.50) $ (1.13) $ (2.01)
========== ========== =========== =========== =========== =========== ===========
Number of shares used in
computation(6)............... 58,736,000 78,439,000 100,639,000 143,283,000 222,779,000 219,279,000 239,591,000
========== ========== =========== =========== =========== =========== ===========
AS OF MARCH 31, AS OF DECEMBER 31, AS OF
--------------------- -------------------------------------- JUNE 30,
1993 1994 1994 1995 1996 1997
-------- ---------- ---------- ------------ ---------- ----------
(IN THOUSANDS)
BALANCE SHEET DATA:
Cash and cash equivalents(7)................... $ 17,083 $ 483,483 $ 301,679 $ 340,826 $ 139,681 $ 538,783
Marketable securities(8)....................... 14,768 426,113 172,313 68,443 5,012 72,712
Current assets................................. 39,932 921,983 504,248 504,661 309,097 894,393
Intangible assets, net......................... 144,666 889,912 1,451,780 3,549,622 4,076,300 4,238,168
Total assets................................... 333,557 2,229,832 2,918,985 5,547,256 6,472,439 7,828,824
Long-term debt(9).............................. 55,024 1,113,268 1,193,096 1,687,829 2,783,041 4,336,264
Stockholders' equity(10)....................... 255,224 846,304 1,268,575 2,945,141 2,808,138 2,572,584
- ---------------
(1) Effective December 31, 1994, Nextel changed its fiscal year end from March
31 to December 31. Accordingly, the income statement data is presented for
the transition period from April 1, 1994 to December 31, 1994.
(2) See Note 2 to the Notes to Nextel's consolidated financial statements for
the year ended December 31, 1996 for a description of acquisitions.
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15
(3) See Note 2 to the Notes to Nextel's consolidated financial statements for
the year ended December 31, 1996.
(4) Other expenses in 1995 include a $15,000,000 write-down of the investment
in Corporacion Mobilcom S.A. de C.V. ("Mobilcom") as a result of the
devaluation of the Mexican peso.
(5) Other expenses in 1996 and 1997 primarily reflect equity in the losses of
certain foreign investments accounted for under the equity method. (See
Note 2 to the Notes to Nextel's consolidated financial statements for the
year ended December 31, 1996.)
(6) Includes the weighted average number of shares of Common Stock outstanding
during the respective periods.
(7) Includes approximately $379,076,000 of cash and cash equivalents held by
Nextel International and its subsidiaries as of June 30, 1997 from the
offering by Nextel International of the 10-year discount notes (the "NI
Notes") completed in March 1997, which are not available to fund any of the
cash needs of Nextel's domestic Digital Mobile and analog SMR businesses
due to the restrictions contained in the indenture related thereto (the "NI
Indenture").
(8) Includes approximately $69,962,000 of marketable securities held by Nextel
International and its subsidiaries as of June 30, 1997 from the offering of
the NI Notes, which are not available to fund any of the cash needs of
Nextel's domestic Digital Mobile and analog SMR businesses due to the
restrictions contained in the NI Indenture.
(9) Excludes the current portions of long-term debt. See Note 6 to the Notes to
Nextel's consolidated financial statements for the year ended December 31,
1996.
(10) See Notes 10 and 11 to the Notes to Nextel's consolidated financial
statements for the year ended December 31, 1996.
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RISK FACTORS
The following risk factors may affect the value of the Common Stock and
therefore should be considered by prospective investors, in conjunction with the
other information included and incorporated by reference in this Prospectus,
before making an investment decision. See also "-- Forward Looking Statements."
HISTORY OF AND FUTURE EXPECTATIONS OF LOSSES AND NEGATIVE CASH FLOW
The activities of Nextel since its inception in 1987 have been concentrated
on the acquisition and operation of SMR businesses and the development of
Digital Mobile networks. Nextel has incurred net losses since its inception,
including net losses of approximately $556,020,000 for the year ended December
31, 1996 and approximately $482,473,000 for the six months ended June 30, 1997.
Nextel had an accumulated deficit totalling approximately $1,617,724,000 at June
30, 1997. Nextel anticipates that it will continue to experience significant net
losses and significant negative net cash flow during the ongoing start up phase
of the Digital Mobile networks over the next several years. Nextel's ability to
arrange sufficient equity and/or debt financing or to generate sufficient
revenue to cover its operating and capital needs is subject to a number of risks
and contingencies. Accordingly, there can be no assurance as to whether or when
Nextel's operations will become profitable. See "-- Nextel to Require Additional
Financing" and "-- Forward Looking Statements."
RISKS OF IMPLEMENTATION OF DIGITAL MOBILE NETWORKS
The implementation of Digital Mobile networks involves systems design, site
procurement, construction, electronics installation, receipt of necessary FCC
and other regulatory approvals, channel recovery (freeing a certain number of
800 MHz frequencies from SMR analog traffic) and initial systems optimization
prior to commencing commercial service. Each stage can take from several weeks
to several months and involves various risks and contingencies, the outcome of
which cannot be predicted. There can be no assurance that Nextel will be able to
implement Digital Mobile networks (where such networks are not already in
commercial operation) in any particular market in accordance with its current
plans and schedules. See "-- Forward Looking Statements."
IMPLEMENTATION OF DIGITAL MOBILE NETWORKS SUBJECT TO RISKS OF DEVELOPING
TECHNOLOGY
Currently, there are three principal digital technology formats that are
being assessed or proposed for deployment or deployed currently by providers of
cellular telephone service or by certain entities that have been awarded PCS
licenses to provide wireless communications services in the United States. Such
formats are known as Time Division Multiple Access ("TDMA") digital transmission
technology, Code Division Multiple Access ("CDMA") digital transmission
technology and GSM-PCS, which is an updated, upbanded PCS version of the
TDMA-based digital technology format known as Global System for Mobile
Communications ("GSM"). Although TDMA, CDMA and GSM-PCS are digital transmission
technologies, and thus share certain basic characteristics and areas of contrast
to analog transmission technology, TDMA, CDMA and GSM-PCS are not compatible or
interchangeable with each other.
The Motorola proprietary first generation iDEN technology originally
incorporated in Nextel's Digital Mobile networks is known as "six-time slot
TDMA." Although based on the TDMA technology format, this first generation iDEN
technology differs in a number of significant respects from the TDMA technology
versions being assessed or deployed by cellular operators and PCS licensees in
the United States, which differences may have important consequences.
Additionally, unlike the three-time slot TDMA technology format being utilized
for the mobile telephone function in the Reconfigured iDEN technology platform
or the three-time slot TDMA technology format being utilized by certain cellular
providers, the first generation iDEN technology, as well as the "six-time slot
TDMA" technology utilized for the two-way dispatch function in the Reconfigured
iDEN technology platform, can carry up to six (rather than three) voice and/or
control paths per channel.
Although Nextel believes that TDMA technology, on balance, is superior to
analog technology that is used in traditional SMR systems, the use of digital
technology in general involves certain performance trade-offs, for example, in
various characteristics affecting voice quality and fidelity. These trade-offs
have had and
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may in the future have an effect on customer acceptance of iDEN technology. The
use of six-time and three-time slot TDMA technology in combination with Nextel's
re-use of its licensed frequencies in a cellular-type system design permits
Nextel to utilize its current holdings of spectrum more efficiently. Efficient
utilization of spectrum is an important objective generally because less
spectrum is available in the SMR band than is or will be licensed to each
cellular and certain PCS operators in each market. Reconfigured iDEN, which is
designed to use three time slots per channel for the mobile telephone service,
results in a reduction in channel capacity compared to the capacity achievable
using first generation iDEN technology for mobile telephone service.
Any difference that may from time to time exist between the technology
deployed in Nextel's Digital Mobile networks and competitive technologies then
deployed by other wireless communications service providers, such as analog,
CDMA, TDMA, GSM-PCS or other transmission technology formats that may be
developed in the future, may affect customer acceptance of the services offered
by Nextel. In the future, a digital transmission technology other than TDMA may
gain acceptance sufficient to adversely affect the resources devoted by third
parties to developing or improving TDMA-based technologies and the market
acceptance of TDMA-based technologies, such as iDEN. In addition, existing
digital cellular technology formats including cellular TDMA cannot currently be
utilized on Nextel's present SMR spectrum holdings. Accordingly, if any
improvements were to be made to such currently existing digital cellular
technology formats, the prospect of achievement of parallel improvements in the
TDMA-based iDEN technology presently utilized by Nextel is not certain. See
"-- Forward Looking Statements."
Customer acceptance of the services offered by Nextel will be affected not
only by technology-based differences, but also by the operational performance
and reliability of system transmissions on Nextel's Digital Mobile networks.
Nextel implemented Digital Mobile networks in its market areas using Motorola's
first generation iDEN technology prior to the second quarter of 1996. During
that time frame, Nextel encountered certain technology and system performance
issues with respect to system reliability (the percentage of time the system is
operating), system access (how often a user can gain access to the system) and
various characteristics affecting voice transmission quality of mobile telephone
services utilizing Nextel's Digital Mobile networks. Nextel provided discounts
and gave credits to customers in an effort to foster satisfactory customer
relations and delayed both its planned deployment of its Digital Mobile networks
and commencement of aggressive product and service marketing efforts pending
resolution of such system performance and voice quality issues. During this
period Nextel and Motorola also took actions to address system performance
issues in general, and voice transmission quality concerns in particular. These
actions consisted of efforts to enhance the performance of the first generation
iDEN networks in a number of areas that were believed to adversely affect system
performance, perceived voice transmission quality and customer satisfaction, and
included measures as diverse as improvements in system infrastructure and
subscriber equipment design and interaction, adjustments in cell site locations
and in radio frequency planning, development of enhanced network load and
traffic management and control systems, and development and deployment of more
sophisticated diagnostic and error correction software. These and other
measures, most of which can be categorized as systems optimization, are expected
to be ongoing activities connected with Nextel's operation of its Digital Mobile
networks. Moreover, Nextel expects that systems optimization, software loading
and planned maintenance activities will be ongoing components of its operation
of the Digital Mobile networks that will periodically require the scheduled
turndown of selected subsystems in Nextel's Digital Mobile networks during
periods of very low system traffic, typically at night or on weekend days. See
"-- Forward Looking Statements."
Nextel's objectives in carrying out the initial phase of system development
and technology enhancements were to achieve satisfactory performance levels in
the areas of system reliability and system access. Nextel believes that its
existing Digital Mobile networks, as operated at September 30, 1997, were
demonstrating acceptable performance levels in these areas. Nextel also believes
that the successful national deployment throughout Nextel's Digital Mobile
networks of the Reconfigured iDEN technology, with its accompanying improvements
in the voice quality of the mobile telephone service provided on Nextel's
Digital Mobile networks, should enable Nextel to aggressively market such
services as part of a competitive wireless
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18
communications services alternative to existing cellular telephone and PCS
wireless communications services in its markets. See "-- Forward Looking
Statements."
Motorola has advised Nextel that it contemplates continuing to install
software upgrades and Nextel anticipates it will continue to advise and consult
with Motorola concerning potential measures that could be taken to address any
issues concerning system performance and/or expressed customer satisfaction
levels as revealed by Nextel's continuing system testing and customer surveys.
To the extent Nextel's experience has been derived based on customers in its
markets employing the first generation iDEN technology, who are primarily
oriented to the two-way dispatch service, such experience should not necessarily
be regarded as an accurate predictor of Nextel's experience in the future,
particularly as Nextel continues to implement its planned nationwide roll-out of
the Reconfigured iDEN technology and as Nextel's customer base expands beyond
such group of initial customers. Any inability to address and resolve
satisfactorily performance issues that affect customer acceptance of Digital
Mobile network service could delay or adversely affect the successful
commercialization of the Digital Mobile networks and could adversely affect the
business and financial prospects of Nextel. If Nextel for any reason is unable
to implement Digital Mobile networks and provide service to its target customers
that is competitive with the services of other wireless communications
providers, Nextel would be unable, utilizing its existing analog SMR systems, to
provide mobile telephone services comparable to those provided by other wireless
communications services providers or to achieve significant further subscriber
growth. See "-- Forward Looking Statements."
Nextel anticipates that there will be an ongoing focus on systems and
technology optimization activities directed at achieving improvements in the
overall performance of the Digital Mobile networks and such technology
optimization activities will be a continuing component of normal Digital Mobile
network operation. Moreover, the satisfactory resolution of certain system
performance issues in a particular market or at a particular stage of operation
will not necessarily preclude the need to address those issues again, for
example, as a result of a significant increase in the number of subscribers
using the Digital Mobile networks, and future upgrades or modifications to the
Digital Mobile networks may have unexpected adverse effects on performance
issues previously addressed and resolved. Each of Motorola and Nextel believes,
however, that a large portion of the hardware and software adjustments developed
in the course of system development and technology optimization activities to
address particular issues, and the resulting system performance improvements
realized, should be applicable to similar issues in different markets.
Nevertheless, as is often the case in the deployment of wireless communications
networks, it should be expected that there will be market-specific
characteristics, such as local terrain, topography, the number of licensed
frequencies, the utilization of adjacent radio frequencies and other factors,
that will require customized optimization activities to address related system
performance issues successfully. See "-- Forward Looking Statements."
Pursuant to the second amendment to the existing equipment purchase
agreements between Nextel and Motorola entered into in connection with the McCaw
Transaction (the "Second Equipment Agreement Amendment"), Motorola agreed to use
its best efforts to develop, and Nextel agreed to implement, Reconfigured iDEN.
The Reconfigured iDEN development and deployment activities to date have
proceeded in a timely and satisfactory manner, and Nextel believes that the
Reconfigured iDEN development program contemplated by the Second Equipment
Agreement Amendment is substantially complete. However, no assurance can be
given that any further modifications or enhancements to the Reconfigured iDEN
technology will be developed successfully, or that any such modifications or
enhancements, if developed, would be deployed in Nextel's Digital Mobile
networks or, if deployed, would perform successfully. Moreover, no assurance can
be given that the Reconfigured iDEN technology, as it currently exists or as it
may be further modified or enhanced in the future, will satisfy customer
requirements, or that Nextel's mobile telephone services utilizing such
Reconfigured iDEN technology will be regarded as competitive in the wireless
communications services markets as such markets currently exist and as they are
expected to develop in the future. See "-- Forward Looking Statements."
NEXTEL TO REQUIRE ADDITIONAL FINANCING
Nextel anticipates that, for the foreseeable future, it will be utilizing
significant amounts of its available cash for capital expenditures for the
construction of Digital Mobile networks, operating expenses relating both
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to the Digital Mobile networks and to the analog SMR networks, potential
acquisitions (including the acquisition of rights to spectrum through the
contemplated 800 MHz spectrum auction process), debt service requirements and
other general corporate expenditures. Nextel anticipates that its cash
utilization for capital expenditures and other investing activities and
operating losses will continue to exceed its cash flows from operating
activities over the next several years. During fiscal year 1996, Nextel's
average monthly cash utilization rate for investing activities (principally
attributable to capital expenditures for the build-out of the Digital Mobile
networks) was approximately $33,390,000, and its average monthly operating
losses (exclusive of non-cash items) was approximately $20,400,000. Such average
monthly amounts are not necessarily representative of Nextel's anticipated
experience in such areas and are expected to increase during 1997 and 1998 in
connection with the implementation of Nextel's business plan and the related
accelerated construction of its Digital Mobile networks. During the ongoing
start up phase of its Digital Mobile networks, Nextel expects that it will need
to utilize its existing cash and funding from outside sources to meet its cash
needs resulting from such activities and losses. Nextel's aggregate cash, cash
equivalents and marketable securities at June 30, 1997 totalled approximately
$611,495,000 (however, approximately $449,038,000 of such amount represents
cash, cash equivalents and marketable securities held by Nextel International
and its subsidiaries, which items are not available, due to restrictions
contained in the provisions of the NI Indenture, to fund any of the cash needs
of Nextel's domestic Digital Mobile and analog SMR businesses).
To fully implement an accelerated deployment of its Digital Mobile networks
in the period between March 31, 1997 and December 31, 1998 as described under
"Summary -- The Company -- Business Plan," Nextel would need to obtain
additional amounts of debt or equity financing beyond that available under the
Bank and Vendor Credit Facilities and the Second Vendor Financing Agreement
currently in place. The Bank Credit Agreement currently provides for up to
$1,905,000,000 of secured financing, the Vendor Credit Agreement currently
provides for up to $395,000,000 of secured financing and the Second Vendor
Financing Agreement currently provides for up to $200,000,000 in Second Secured
Borrowings, for an aggregate availability of $2,500,000,000, subject in each
case to the satisfaction or waiver of applicable borrowing conditions. At June
30, 1997, Nextel had drawn $1,441,000,000 of its available financing under the
Bank Credit Facility, and had drawn $227,000,000 of its available financing
under the Vendor Credit Facility. Subsequent to June 30, 1997, Nextel has
applied the aggregate of approximately $2,196,000,000 in Preferred Stock
Proceeds, the September Notes Proceeds, the October Notes Proceeds, the McCaw
Option Proceeds, proceeds of the Additional Bank Borrowings and the Subscription
Proceeds to repay a portion of the borrowings outstanding under the Bank and
Vendor Credit Facilities (to the extent the amounts so repaid would be available
for future borrowings thereunder) with the balance of such aggregate net
proceeds remaining available for general corporate purposes. Disregarding any
limitations imposed pursuant to the Old Indentures on the Company's ability to
incur debt under the Bank and Vendor Credit Facilities and/or the Second Vendor
Financing Agreement by reason of the indebtedness incurred upon issuance of the
October Notes, as of September 30, 1997 a total of $1,530,000,000 (giving effect
to the repayment of all revolving, but no term, loan amounts outstanding under
the Bank and Vendor Credit Facilities) of such $2,500,000,000 in aggregate
availability would be available for future borrowings by the Company. The
remaining funds available for borrowings under the Bank and Vendor Credit
Facilities may be drawn upon prior to the final maturity date of such facilities
in 2003, although the amount available under such facilities will be reduced to
reflect scheduled amortization commencing in 2001. The $200,000,000 in
additional funds available under the Second Vendor Financing Agreement may be
drawn as term loans prior to March 31, 1999 and will mature in 2003.
Nextel has also reached an understanding with Motorola regarding the terms
and conditions pursuant to which Nextel could access up to an additional
$200,000,000 in borrowings that would be required to be ratably secured on an
equal ranking with borrowings pursuant to the Bank Credit Agreement and the
Vendor Credit Agreement (the "Senior Secured Borrowings"). The availability of
the Senior Secured Borrowings is subject to a number of conditions, including
the unanimous approval of the secured parties under the Bank Credit Agreement
and the Vendor Credit Agreement. Nextel is not currently taking steps to meet
such additional conditions and, accordingly, Nextel has assumed for planning
purposes that none of the funds constituting the Senior Secured Borrowings will
be available during 1997 and 1998.
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The availability of all of the above described existing and additional
financing is subject to Nextel's satisfying certain requirements under the Old
Indentures, which require Nextel to issue new equity for cash as a condition to
obtaining access to all amounts not constituting "permitted debt" (as such term
is defined in the Old Indentures) under the Bank Credit Facility, the Vendor
Credit Facility and the Second Vendor Financing Agreement referred to above.
Nextel's receipt of the $482,000,000 in Preferred Stock Proceeds and option and
warrant exercise proceeds in the period from June 1, 1997 (the "Exercise
Proceeds") enabled Nextel to issue the September Notes and still have access to
the full $2,500,000,000 in funding available under the Bank Credit Facility, the
Vendor Credit Facility and the Second Vendor Financing Agreement under the
limitations on indebtedness contained in the Old Indentures. However, under such
limitations the issuance of the October Notes will restrict the Company's
ability to access, on approximately a dollar for dollar basis, the amount of
additional funding that would be available under the Bank and Vendor Credit
Facilities and the Second Vendor Financing Agreement unless either (i) the
proceeds from the issuance of the October Notes are applied to refinance a
portion of the Old Senior Notes in accordance with the Old Indentures (in which
case the indebtedness under the October Notes, to the extent the proceeds
thereof are applied to effect such refinancing, would constitute "permitted
debt" under the Old Indentures that would not reduce the amounts available under
the Bank and Vendor Credit Facilities or the Second Vendor Financing Agreement)
or (ii) the Company issues additional equity for cash that would support the
incurrence of additional debt under the Old Indentures. In the event the
proceeds from the issuance of the October Notes are not applied to refinance a
portion of the Old Senior Notes, such proceeds may be utilized to meet the
Company's funding requirements for the implementation of its business plan to
replace a portion of the borrowings available under the Bank and Vendor Credit
Facilities and/or the Second Vendor Financing Agreement, to the extent such
borrowings would be limited by the Old Indentures.
To the extent any of the aforementioned proceeds from equity issuances or
financing arrangements are not available or are not sufficient to meet Nextel's
funding needs, it will be necessary for Nextel to obtain alternate sources of
financing. See "-- Forward Looking Statements." Assuming (i) that Nextel secures
access to all of the available funds under the Bank Credit Facility, the Vendor
Credit Facility and the Second Vendor Financing Agreement (or such funds are
replaced with October Notes Proceeds, as described above) and (ii) that the New
Option is exercised and Nextel receives the $420,000,000 in proceeds therefrom
(the "New Option Proceeds"), the Company believes that such amounts, coupled
with the Company's available cash and cash equivalents (including the Preferred
Stock Proceeds, the McCaw Option Proceeds, the September Notes Proceeds and the
Subscription Proceeds), will provide funds that in the aggregate are expected to
be sufficient to implement the Company's business plan and meet the other
currently anticipated cash needs of its domestic business activities through the
end of 1998. Thereafter, Nextel may require substantial additional financing.
See "-- Forward Looking Statements."
The availability of borrowings pursuant to the Bank Credit Facility, the
Vendor Credit Facility and the Second Vendor Financing Agreement is subject to
certain conditions, and there can be no assurance that such conditions will be
met. Moreover, there can be no assurance that the New Option will be exercised
and that Nextel will receive the proceeds therefrom, or that any of the other
outstanding options will be exercised. The Bank Credit Facility, the Vendor
Credit Facility, the Second Vendor Financing Agreement, the Nextel Indentures
and the terms of the Certificate of Designation relating to the Series D
Preferred Stock contain and will continue to contain provisions that operate to
limit the amount of borrowings that may be incurred by Nextel. In addition,
Nextel's capital needs, and its ability to adequately address those needs
through debt or equity funding sources, are subject to a variety of factors that
cannot presently be predicted with certainty, such as the commercial success of
Nextel's Digital Mobile networks incorporating the Reconfigured iDEN technology,
the amount and timing of Nextel's capital expenditures and operating losses and
the market price of the Common Stock. See "-- Forward Looking Statements."
Nextel currently is aware of numerous factors and considerations, any one
or more of which could have a material effect on the timing and/or amount of the
future funding to be required by Nextel, but Nextel cannot currently quantify
with precision either the magnitude or the certainty of the effects associated
with any such factors. These factors include: (i) the timing of the contemplated
800 MHz spectrum auction process (which is currently scheduled to commence the
bidding phase in late October 1997), and the amounts required to be
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bid to acquire any or all of the available spectrum blocks in the major
metropolitan market areas where Nextel currently operates, or currently plans to
operate, its Digital Mobile network and the amounts that may be required to
accomplish retuning or acquisition of 800 MHz incumbent channels in spectrum
blocks that may be acquired by Nextel in the 800 MHz spectrum auction process;
(ii) the uncertainty with respect to the success and/or timing of the continuing
development and deployment activities relating to the Reconfigured iDEN
technology format and, assuming successful and timely completion of such
efforts, the uncertainty with respect to the success of commercial introduction
and customer acceptance of Nextel's Digital Mobile network services in new
market areas using such technology; (iii) the potential commercial opportunities
and risks associated with implementation of Nextel's accelerated business plan;
and (iv) the net impact on Nextel's capital budget of certain developments
currently expected to increase capital needs (e.g., the additional capital
needed if Nextel acquires for cash additional spectrum in certain markets to
increase the capacity and/or efficiency of Nextel's operating Digital Mobile
networks in such markets, the additional capital needed for more extensive
construction of Digital Mobile networks in additional market areas acquired or
that may be acquired in the future and the expenditures associated with analog
SMR station construction requirements under the currently effective FCC 800 MHz
channel licensing approach) that may be offset (whether wholly or partially) by
other developments anticipated to (or to have the potential to) reduce capital
needs (e.g., co-location of antenna and/or transmitter sites with other
providers of wireless services in the relevant markets, reductions in
infrastructure and subscriber unit prices obtained from Motorola pursuant to the
Second Equipment Agreement Amendment and an agreement entered into on March 27,
1997, alternative and more economical means for increasing system capacity,
other than constructing additional cell sites and/or installing additional base
radios, such as use of so-called "smart antennas," mini-cells and software-
driven and/or system design performance enhancements). Many of the foregoing
involve elements wholly or partially beyond Nextel's control or influence. Other
considerations in addition to the factors identified above may significantly
affect Nextel's decisions to seek additional financing, including general
economic conditions, conditions in the telecommunications and/or wireless
communications industry and the feasibility and attractiveness of structuring
particular financings for specific purposes (e.g., separate capital-raising
activities with respect to international activities and opportunities). See
"-- Forward Looking Statements."
Nextel has had and may in the future have discussions with third parties
regarding potential equity investments and debt financing arrangements to
satisfy actual or anticipated financing needs. Pursuant to the Motorola
Transaction, Nextel has agreed, under certain circumstances, not to grant
superior governance rights to any third-party investor without Motorola's
consent, which may make securing equity investments more difficult. The ability
of Nextel to incur additional indebtedness (including, in certain circumstances,
indebtedness incurred under the Bank Credit Agreement, the Vendor Credit
Agreement and/or the Second Vendor Financing Agreement) is and will be limited
by the terms of the Nextel Indentures, the Certificate of Designation relating
to the Series D Preferred Stock, the Bank Credit Agreement, the Vendor Credit
Agreement and the Second Vendor Financing Agreement. The Bank Credit Agreement,
the Vendor Credit Agreement and the Second Vendor Financing Agreement also
require Nextel and its relevant subsidiaries at specified times to maintain
compliance with certain financial covenants or ratios including certain
covenants and ratios specifically related to leverage.
At present, other than the existing equity or debt financing arrangements
that have been consummated and/or disclosed, Nextel has no commitments or
understandings with any third parties to obtain any material amount of
additional equity or debt financing. Moreover, no assurances can be made that
Nextel will be able to obtain any such additional financing in the amounts or at
the times such financing may be required, or that, if obtained, any such
financing would be on acceptable terms. Nextel also anticipates that it will
continue to experience significant operating losses and negative net cash flows
during the ongoing start up phase of the Digital Mobile networks over the next
several years. Accordingly, there can be no assurances as to whether or when the
operations of Nextel will become profitable. As a result of Nextel's anticipated
continuing losses, the uncertainty regarding the exercise of options and
warrants, the availability of financing under the Bank and Vendor Credit
Facilities and the Second Vendor Financing Agreement and the impact of
Reconfigured iDEN and other matters discussed above, there can be no assurance
that Nextel will have adequate capital to implement the nationwide build-out of
its Digital Mobile networks in accordance with its business plan. Failure to
obtain such financing could result in the delay or abandonment of some or all of
the Company's
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acquisition, development and expansion plans and expenditures, which could have
a material adverse effect on its business prospects and limit the Company's
ability to make principal and interest payments on its indebtedness, including
the amounts from time to time outstanding under the Bank and Vendor Credit
Facilities and the Second Vendor Financing Agreement and amounts due on or in
respect of any or all of the Existing Notes. See "-- Forward Looking
Statements."
SUCCESS OF NEXTEL IS DEPENDENT ON ITS ABILITY TO COMPETE
Nextel's success depends on its Digital Mobile networks' ability to compete
with other wireless communications systems in each relevant market and its
ability to successfully market integrated wireless communications services.
Nextel is continuing to focus its marketing efforts on attracting customers from
its previously identified targeted groups of potential subscribers, chiefly its
existing analog SMR subscribers and other business users, including current
users of multiple wireless communications services and those new users who may
be attracted to the combination of services made possible by its Digital Mobile
networks.
Following implementation of its Digital Mobile networks and completion of
related system optimization activities, Nextel's Digital Mobile networks will
compete with established and future wireless communications operators in its
efforts to attract customers, dealers and possibly resellers to its service in
each of the markets in which it operates a Digital Mobile network. Nextel
believes that following software upgrades and additional system optimization
efforts and equipment and technology enhancements that occurred during 1996 and
the commercial deployment of the Reconfigured iDEN technology, Nextel's Digital
Mobile networks will have the capacity, functionality and quality of service
necessary to be competitive with current wireless communications services in the
markets in which Nextel operates Digital Mobile networks. Nextel's ability to
compete effectively with other wireless communications service providers,
however, will depend on a number of factors, including the successful deployment
of the Reconfigured iDEN technology platform in its market areas, the continued
satisfactory performance of such technology, the establishment of roaming
service among such market areas and the development of cost effective direct and
indirect channels of distribution for its products and services. Although Nextel
has made significant progress in these areas to date, no assurance can be given
that such objectives will be achieved. See "-- Ability to Manage Growth" and
"-- Forward Looking Statements."
While Nextel believes that the mobile telephone service provided on its
Digital Mobile networks utilizing the Reconfigured iDEN technology is similar in
function to and achieves performance levels competitive with those being offered
by other current wireless communications services providers in Nextel's market
areas, there are (and will in certain cases continue to be) differences between
the services provided by Nextel and by cellular and/or PCS system operators and
the performance of their respective systems. As a result of these differences,
there can be no assurance that services provided on Nextel's Digital Mobile
networks will be competitive with those available from other providers of mobile
telephone services. As part of its marketing strategy, Nextel will continue to
emphasize the benefits to its customers of obtaining an integrated package of
services consisting of mobile telephone service, two-way dispatch, paging and
alphanumeric short-messaging service, and in the future, data transmission.
Neither PCS system operators nor cellular operators currently provide such
integrated services, but recent FCC rulings permit cellular operators to offer
two-way dispatch services. If either PCS system or cellular operators do provide
two-way dispatch services in the future, Nextel's competitive advantage from
using such a marketing strategy may be impaired.
Nextel currently offers its mobile telephone customers the ability to
"roam" among Nextel's existing Digital Mobile network market areas, which as of
September 30, 1997 represented coverage of areas in which approximately 60% of
the United States population lives or works. Accordingly, Nextel will not be
able to provide roaming service comparable to that currently available from
cellular operators, which have roaming agreements covering each other's markets
throughout the United States, unless and until nationwide Digital Mobile
networks build-out is substantially completed. Additionally, certain PCS
operators throughout the United States have announced their intention to
implement agreements to permit roaming among their markets. Moreover, the
cellular systems in each of Nextel's markets, as well as in the markets in which
Nextel expects to provide services in the future, have been operational for a
number of years, currently service a significant subscriber base and typically
have significantly greater financial and other resources than those
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available to Nextel. As is true for cellular operators, the interconnection of
subscriber units with the public switched telephone network requires Nextel to
purchase certain exchange and inter-exchange services from telephone companies
and certain other common carriers.
Subscriber units on the Digital Mobile networks are not compatible with
cellular or PCS systems, and vice versa. This lack of interoperability may
impede Nextel's ability to attract cellular or PCS subscribers or those new
mobile telephone subscribers that desire the ability to access different service
providers in the same market. Nextel currently markets a multi-function
subscriber unit that is (and is likely to remain) significantly more expensive
than analog handsets and is (and is likely to remain) somewhat more expensive
than digital cellular or PCS handsets that do not incorporate a comparable
multi-function capability. Accordingly, the prices expected to be charged to
Nextel for the subscriber handsets to be used by Nextel's customers will be
higher than those charged to operators for analog cellular handsets and may be
higher than those charged to operators for digital cellular handsets. Nextel's
multi-function subscriber units, however, are competitively priced compared to
multi-function (mobile telephone service and alphanumeric short-text messaging)
digital cellular and PCS handsets. During the transition to digital technology,
certain participants in the United States cellular industry are offering
subscriber units with dual mode (analog and digital) compatibility.
Additionally, certain analog cellular system operators that directly or through
their affiliates also are constructing and operating digital PCS systems, have
announced their intention to make available to their customers dual mode/dual
band (800 MHz cellular/1900 MHz PCS) subscriber units, to combine the enhanced
feature set available on digital PCS systems within their digital service
coverage areas with the broader wireless coverage area available on the analog
cellular network. Nextel does not currently have comparable hybrid subscriber
units available to its customers.
There can be no assurances that existing analog SMR customers will be
willing to invest in new subscriber equipment necessary to migrate to the
Digital Mobile networks, nor can there be any assurance that a sufficient number
of customers or potential customers of Nextel's Digital Mobile systems will be
willing to accept system coverage limitations as a trade-off for the enhanced
multi-function wireless communications package provided by the Company on its
nationwide network. Over the past several years as the number of wireless
communications providers in Nextel's market areas has increased, the prices of
such providers' wireless service offerings to customers in those markets have
generally been decreasing. The Company may encounter further market pressures to
reduce its service offering prices to respond to particular short term, market
specific situations (such as special introductory pricing packages that may be
offered by new providers launching their service in a market) or to remain
competitive in the event that wireless service providers generally continue to
reduce the prices charged to their customers. Moreover, because many of the
cellular operators and certain of the PCS operators in Nextel's markets have
substantially greater financial resources than Nextel, such operators may be
able to offer prospective customers equipment subsidies or discounts that are
substantially greater than those, if any, that could be offered by Nextel and
may be able to offer services to customers at prices that are below prices that
Nextel is able to offer for comparable services. Thus, Nextel's ability to
compete based on the price of subscriber units and service offerings will be
limited. Nextel cannot predict the competitive effect that any of these factors,
or any combination thereof, will have on Nextel. See "-- Forward Looking
Statements."
Cellular operators and certain PCS operators and entities that have been
awarded PCS licenses each control more spectrum than is allocated for SMR
service in each of the relevant market areas. Each cellular operator is licensed
to operate 25 MHz of spectrum and certain PCS licensees have been licensed for
30 MHz of spectrum in the markets in which they are licensed, while no more than
21.5 MHz is available in the 800 MHz band to all SMR systems, including Nextel's
systems, in those markets. The control of more spectrum gives cellular operators
and such PCS licensees the potential for more system capacity, and, therefore,
more subscribers, than SMR operators, including Nextel. Nextel believes that it
generally has adequate spectrum to provide the capacity needed on its Digital
Mobile networks currently and for the reasonably foreseeable future. See
"-- Forward Looking Statements."
Each of the markets in which Nextel's Digital Mobile networks operate or
will operate is serviced by multiple other wireless communications service
providers. In each of the markets where Nextel's Digital Mobile networks
operate, Nextel may compete with the two established cellular licensees in such
market and
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as many as six PCS licensees. The FCC has described PCS as a digital, wireless
communications system consisting of a variety of new mobile and portable
services and technologies, using small, lightweight units. PCS services may
include portable, two-way voice and data services. A substantial number of the
entities that have been awarded PCS licenses are current cellular communications
service providers and joint ventures of current and potential wireless
communications service providers, many of which have financial resources,
subscriber bases and name recognition greater than Nextel. PCS operators will
likely compete with Nextel in providing some or all of the services available
through Nextel's Digital Mobile networks. Additionally, Nextel expects that
existing cellular service providers, some of which have been operational for a
number of years and have significantly greater financial and technical
resources, subscriber bases and name recognition than Nextel, will continue to
upgrade their systems to provide digital wireless communications services
competitive with Nextel's Digital Mobile networks. Nextel also expects to face
competition from other technologies and services developed and introduced in the
future. Nextel cannot predict how these technologies will develop or what
impact, if any, they will have on Nextel's ability to compete for wireless
communications services customers. See "-- Forward Looking Statements."
The Company currently anticipates that it will rely more heavily on
indirect distribution channels to achieve greater market penetration for its
digital wireless service offerings. As the Company expands its retail subscriber
base through increased reliance on indirect distribution channels, the average
revenue per subscriber unit may decrease.
ABILITY TO MANAGE GROWTH
As a result of the commencement of Digital Mobile network service in
certain markets and increased sales in markets in which Digital Mobile network
services are provided, and, to a limited extent, acquisitions, the number of
subscriber units in service on Nextel's Digital Mobile network has increased
substantially over the past several years.
The ability of Nextel to continue to add increasing numbers of subscribers
on its Digital Mobile network is dependent on a variety of factors. Among the
more important of such factors is Nextel's ability to successfully plan for
additional system capacity in its market areas at levels adequate to accommodate
anticipated new subscribers and the related increases in system usage. One
important factor influencing system capacity is the amount of spectrum available
to Nextel in a particular market area. Although Nextel intends to continue to
pursue opportunities to acquire additional SMR spectrum in its market areas,
Nextel believes that its present holdings of 800 MHz spectrum are generally
adequate for the current and reasonably foreseeable operation of its Digital
Mobile network.
Additionally, Nextel requires that a sufficient quantity of cell sites,
system infrastructure equipment and subscriber units, of the appropriate models
and types, be available to meet the demands and preferences of potential
subscribers to the Digital Mobile network. To date, Nextel has been able to
secure sufficient cell sites at appropriate locations in its markets to meet
planned system coverage and capacity targets, and also has been able to obtain
adequate quantities of base radios and other system infrastructure equipment
from Motorola and other suppliers, and adequate volumes and mix of subscriber
units and related accessories from Motorola, to meet subscriber and system
loading rates. Although Nextel does not currently foresee (based on, among other
factors, its scheduled system construction and expansion activities and its
anticipated rates of customer and service usage growth) any significant supply
problems in the near term, Motorola is the sole supplier of subscriber units and
certain system infrastructure equipment and most of the related equipment
required by the Company to construct and operate its Digital Mobile network, and
there can be no assurance that such supply problems or related issues will not
occur in the future.
Nextel's ability to successfully add customers on its Digital Mobile
network depends upon the adequacy and efficiency of its information systems,
business processes and related support functions. Nextel relies on its own
fulfillment processes and related information system resources to accomplish
tasks necessary to initiate service for prospective customers, such as
identifying and provisioning from inventory appropriate subscriber units and
desired accessories, programming subscriber units to support desired functions
and features,
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registering subscriber units to appropriate authorized users of the Digital
Mobile network and setting up appropriate customer accounts and other billing
records and data.
Due to the multiple wireless service offering packages and the need to
create customized applications (for instance, programming multiple talk groups
for the Direct Connect service), the length of time from customer order to
commencement of service (the "activation cycle") on the Digital Mobile network
has been longer than the activation cycle typically encountered for "off the
shelf" cellular and PCS wireless service offerings. The Company is continuing to
take steps to refine, improve and scale-up its customer and service information
reporting, subscriber unit fulfillment, service activation and billing systems
and processes to meet the increased demands that have been experienced as a
result of increases in subscriber growth and Digital Mobile network wireless
systems and service utilization that have occurred and are currently anticipated
to continue. The Company also is exploring alternatives to shorten its Digital
Mobile network activation cycle, such as "pre-programming" subscriber units with
standardized talk groups and potential development with Motorola of an "over the
air" programming capability for digital subscriber units. Finally, the Company's
customer service functions must continue to improve the efficiency and speed of
their processes to adequately respond to the needs of a growing customer base on
the Digital Mobile network. Customer reliance on Nextel's customer service
functions may increase as more Digital Mobile network customers are added
through indirect distribution channels.
There can be no assurance that the back-office and support systems and
processes discussed above will achieve levels of capacity, or improvements in
speed and efficiency, sufficient to meet actual or anticipated customer and
network growth and demands, or will be able to do so on a timely basis. Any
inability of the Company to timely meet Digital Mobile network capacity needs,
to have access to suitable cell sites and infrastructure and subscriber
equipment in any one or more of its market areas, or to develop when and as
required improvements or expansions to its systems and processes adequate to
meet desired levels of customer activation and demand for wireless services on
the Digital Mobile network could decrease or postpone subscriber growth, thereby
adversely affecting Nextel's revenues, business and prospects. See "-- Forward
Looking Statements."
RELIANCE ON ONE PRINCIPAL SUPPLIER IN IMPLEMENTATION OF DIGITAL MOBILE NETWORKS
Pursuant to existing equipment purchase agreements first entered into in
1991, as subsequently amended (such equipment purchase agreements, as amended,
being referred to herein as the "Equipment Purchase Agreements"), between Nextel
and Motorola, Motorola provides the iDEN infrastructure and subscriber handset
equipment to Nextel throughout its markets. Nextel expects that it will need to
rely on Motorola for the manufacture of a substantial portion of the equipment
necessary to construct its Digital Mobile networks and handset equipment for the
foreseeable future. The Equipment Purchase Agreements include a commitment from
Nextel to purchase from Motorola a significant amount of system infrastructure
equipment. Nextel has, among other things, agreed (subject to certain
conditions) to purchase and install iDEN equipment during the four-year and
six-year periods beginning on August 4, 1994 sufficient to cover 70% and 85%,
respectively, of the United States population. In addition, subject to the
applicable terms and conditions under the Second Equipment Agreement Amendment,
Nextel has agreed to deploy Reconfigured iDEN technology and, until August 4,
1999 and subject to certain conditions, to purchase from Motorola at least 50%
of the base radios Nextel purchases in any calendar year. See "-- Success of
Nextel is Dependent on its Ability to Compete" and "-- Forward Looking
Statements." Such commitments are in addition to amounts purchased from Motorola
or for which Nextel or companies acquired by Nextel had placed orders with
Motorola prior to August 4, 1994, which orders have become obligations of
Nextel.
The Second Equipment Agreement Amendment limits Nextel's ability to deploy
a "Switch in Technology" which, under the Second Equipment Agreement Amendment,
is defined to mean a decision by Nextel before August 4, 1999 to install and use
digital radio frequency technology as an alternative to iDEN on more than 25% of
its SMR channels in the 806-824 MHz band in one or more of its top 20 domestic
markets, or the utilization by Nextel of any of its SMR channels for voice
interconnect on certain United States cellular and/or PCS radio telephony
standards. Nextel may not implement such a Switch in Technology unless (1)
Nextel determines that the iDEN or Reconfigured iDEN equipment fails to meet
certain performance
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specifications established in the Second Equipment Agreement Amendment, which
failure materially adversely affects the commercial viability of the technology
to provide reliable services as intended by Motorola and Nextel, and Motorola
does not cure such failure within six months after receiving notice thereof, or
(2) Nextel or the McCaw Investor offers to acquire the remainder of Motorola's
shares of Common Stock at a per share price of at least 110% of the average of
the closing prices of the Common Stock over the 30 trading days preceding the
public announcement by Nextel of the decision to implement such a Switch in
Technology. In either case, if Motorola manufactures (or elects to manufacture)
the alternate technology Nextel elects to deploy, Nextel must purchase 50% of
its infrastructure requirements and 25% of its subscriber equipment requirements
from Motorola for three years, provided such equipment is competitive in price
and performance to the equipment utilizing or incorporating such alternate
technology then offered by other manufacturers.
It is expected that for the next few years of Digital Mobile network
operations by Nextel, Motorola and competing manufacturers who are licensed by
Motorola will be the only manufacturers of subscriber equipment that is
compatible with Nextel's Digital Mobile networks. The Equipment Purchase
Agreements between Nextel and Motorola first entered into in 1991, as
subsequently amended by, among others, the amendment entered into in connection
with the Motorola Transaction (the "Prior Equipment Agreement Amendment")
provide for the licensing by Motorola of interfaces relating to infrastructure
and subscriber equipment and of additional manufacturers for subscriber
equipment. In connection with the Second Equipment Agreement Amendment, Motorola
further agreed to negotiate to enter into licenses with at least one alternative
manufacturer of iDEN infrastructure equipment. Currently, however, there are no
arrangements in effect with any additional manufacturers to supply Nextel with
alternative sources for either iDEN system infrastructure or subscriber
equipment.
NEXTEL'S PROSPECTS ARE DEPENDENT ON GOVERNMENTAL REGULATION
The licensing, operation, acquisition and sale of Nextel's SMR businesses
are regulated by the FCC. FCC regulations have undergone significant changes
during the last three years and continue to evolve as new FCC rules and
regulations are adopted pursuant to the Omnibus Budget Reconciliation Act of
1993 and the Telecommunications Act of 1996. Nextel's ability to conduct its
business is dependent, in part, on its compliance with FCC rules and
regulations. Future changes in regulations or legislation affecting Digital
Mobile network service and Congress' and the FCC's recent allocation of
additional Commercial Mobile Radio Services spectrum could materially adversely
affect Nextel's business. See "-- Forward Looking Statements."
NEXTEL'S ASSETS PRIMARILY CONSIST OF INTANGIBLE FCC LICENSES
Nextel's assets consist primarily of intangible assets, principally FCC
licenses, the value of which will depend significantly upon the success of
Nextel's business and the growth of the SMR and wireless communications
industries in general. In the event of default on indebtedness or liquidation of
Nextel, there can be no assurance that the value of these assets will be
sufficient to satisfy its obligations. Nextel had a net tangible book value
deficit of approximately $1,665,584,000 as of June 30, 1997.
NEXTEL SUSCEPTIBLE TO CONTROL BY SIGNIFICANT STOCKHOLDERS
Based on securities ownership information relating to Nextel as of July 31,
1997, and giving effect (on such date) to the conversion of the outstanding
shares of Nextel's preferred stock and Class B Non-Voting Common Stock, par
value $0.001 per share (the "Non-Voting Common Stock"), and the exercise in full
of (i) two separate options held by the McCaw Investor exercisable for periods
of four and six years, respectively, from July 28, 1995, to acquire an aggregate
of up to 20,000,000 shares of Common Stock at exercise prices ranging from
$18.50 to $21.50 per share, (the "McCaw Options"), (ii) the option held by Eagle
River, Inc., an affiliate of the McCaw Investor ("Eagle River"), to purchase an
aggregate of 1,000,000 shares of Common Stock at an exercise price of $12.25,
which option vests over a five-year period from April 4, 1995 (the "Incentive
Option"), (iii) the New Option issued to an affiliate of Mr. McCaw to acquire
15,000,000 shares at $16.00 per share and 10,000,000 shares at $18.00 per share
prior to July 29, 1998, (iv) the options granted on
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July 28, 1995 to the McCaw Investor by Motorola to purchase up to 9,000,000
shares of Common Stock over a six-year period (the "McCaw Investor/Motorola
Options"), including the 2,000,000 shares of Common Stock that the McCaw
Investor acquired by exercise of the First Motorola Option in a transaction that
closed on September 3, 1997, and (v) a warrant held by Motorola to purchase
2,890,000 shares of Common Stock, the McCaw Investor would hold approximately
30.2% and Motorola would hold approximately 15.7% of the Common Stock that would
be outstanding as of such date.
In connection with the consummation of the McCaw Transaction and pursuant
to the Securities Purchase Agreement dated as of April 4, 1995, as amended,
among Nextel, the McCaw Investor and Mr. McCaw (the "McCaw Securities Purchase
Agreement"), the McCaw Investor has the right to designate not less than 25% of
the Board of Directors of Nextel. Additionally, the McCaw Investor is entitled
to have a majority of the members of the Operations Committee of the Board of
Directors selected from the McCaw Investor's representatives on the Board of
Directors. The Operations Committee has the authority to formulate key aspects
of Nextel's business strategy, including decisions relating to the technology
used by Nextel (subject to existing equipment purchase agreements),
acquisitions, the creation and approval of operating and capital budgets and
marketing and strategic plans, approval of financing plans, endorsement of
nominees to the Board of Directors and committees thereof and nomination and
oversight of certain executive officers. As a result, based upon the McCaw
Investor's stock ownership position, as well as its ability to designate at
least 25% of the members of the Board of Directors and control the Operations
Committee, the McCaw Investor is in a position to exert significant influence
over Nextel's affairs. The Board of Directors retains the authority to override
actions taken or proposed to be taken by the Operations Committee, subject, in
certain circumstances, to certain financial consequences. The creation and
existence of the Operations Committee does not change the normal fiduciary
duties of the Board of Directors, including fiduciary duties in connection with
any proposal to override any action of or to terminate the Operations Committee,
whether or not such action would give rise to such financial consequences.
Although Motorola is entitled to nominate two directors to the Board of
Directors, presently only one person designated by Motorola is a Nextel
director. Pursuant to an amendment to the Plan of Contribution and Merger dated
as of April 4, 1995, by and among Nextel, Motorola and certain subsidiaries of
Motorola (the "Motorola Amendment"), Motorola has agreed to support the
decisions and recommendations of the Operations Committee and to vote the shares
of Common Stock held by it accordingly, subject to (1) the right of any Motorola
designated Nextel directors to vote in a manner consistent with their fiduciary
duties and (2) the right of Motorola to vote its shares as it determines
necessary with respect to issues that conflict with Motorola's corporate ethics
or that present conflicts of interest, or in order to protect the value or
marketability of the shares of Common Stock held by it.
Based upon their respective ownership positions, if the McCaw Investor and
Motorola chose to act together, such parties could have a sufficient voting
interest in Nextel, among other things, to (1) exert effective control over the
approval of amendments to Nextel's Restated Certificate of Incorporation, as
amended, mergers, sales of assets or other major corporate transactions as well
as other matters submitted for stockholder vote, (2) defeat a takeover attempt
and (3) otherwise control whether particular matters are submitted for a vote of
the stockholders of Nextel. Although Motorola has made certain commitments as
described in the last sentence of the preceding paragraph, Nextel is not aware
of any current agreements among the McCaw Investor and Motorola with respect to
the ownership or voting of Common Stock and neither Motorola nor the McCaw
Investor has indicated to Nextel that it has any present intention to seek to
exercise such control. Pursuant to the McCaw Securities Purchase Agreement, the
McCaw Investor has agreed that it will not vote for any nominee to the Board of
Directors other than persons it is entitled to designate under the terms of the
securities it owns or of the McCaw Securities Purchase Agreement. Upon request
of Nextel, the McCaw Investor has also agreed to cause shares of Common Stock,
the voting of which is controlled by it or its affiliates, to be voted in a
manner proportionate to the votes of other holders of Common Stock in the
election of directors so designated by the Board of Directors.
Each of the McCaw Investor and Motorola has and (subject to the terms of
applicable agreements between such parties and Nextel) may have an investment or
interest in entities that provide wireless telecommunications services that
could potentially compete with Nextel. Under the McCaw Securities Purchase
Agreement, the McCaw Investor, Mr. McCaw and their Controlled Affiliates (as
defined in the
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McCaw Securities Purchase Agreement) may not, for a period of time after
consummation of the McCaw Transaction, participate in other two-way
terrestrial-based mobile wireless communications systems in the region that
includes any part of North America or South America unless such opportunities
have first been presented to and rejected by Nextel in accordance with the
provisions of the McCaw Securities Purchase Agreement. Such limitation is
subject to certain limited exceptions, including certain existing securities
holdings and relationships (and expressly including Mr. McCaw's investment in
AT&T resulting from AT&T's acquisition of McCaw Cellular Communications, Inc.,
which investment may not exceed 3% of the outstanding stock of AT&T). Such
restrictions terminate on the later to occur of July 28, 2000 or one year after
the termination of the Operations Committee. See "-- Potential Conflict of
Interest Relationship with Motorola."
POTENTIAL DILUTION FROM PENDING AND FUTURE TRANSACTIONS
As indicated elsewhere in this Prospectus, Nextel has commitments, and from
time to time may enter into additional commitments, to issue a substantial
number of new shares of Common Stock. The shares that are subject to such
issuance commitments, to a large degree, either will be issued in registered
transactions and thus will be freely tradeable, or will be subject to grants of
registration rights which, if and when exercised, would result in such shares
becoming freely tradeable. Additionally, to incur debt in excess of permitted
debt levels prior to January 1, 2000, pursuant to the amendments to the Old
Indentures as described above (see "Summary -- The Company -- Recent
Developments -- Consent Solicitation"), Nextel would be required to issue new
equity.
As of July 31, 1997, there were approximately 282,311,634 shares of Common
Stock outstanding (assuming the conversion of the outstanding shares of Nextel's
Non-Voting Common Stock and Nextel's convertible preferred stock), on a primary,
rather than a fully diluted, basis, and approximately 354,900,135 shares of
Common Stock would have been outstanding assuming the exercise of all options
(including employee options, warrants initially issued to Motorola to purchase
3,000,000 shares, the options to purchase an aggregate of 21,000,000 shares
pursuant to the McCaw Options and the Incentive Option and an aggregate of
25,000,000 shares pursuant to the New Option), warrants and other existing
rights to acquire Common Stock outstanding on such date.
On April 29, 1996, the Commission declared effective Nextel's registration
statement on Form S-4, covering 10,000,000 shares of Common Stock, or warrants
to acquire such shares, which contemplates issuances from time to time on a
"shelf" basis in accordance with Rule 415(a)(1)(viii) promulgated under the
Securities Act in connection with acquisitions of other businesses, properties
or securities in business combination transactions. As of the date hereof,
Nextel has issued 186,621 shares of Common Stock pursuant to such registration
statement. In addition, on August 7, 1997, the Commission declared effective
Nextel's registration statement on Form S-4 covering up to 9,221,523 shares of
Common Stock in connection with the pending acquisition of Pittencrieff
Communications, Inc., which is expected to close in the fourth quarter of 1997.
Pursuant to the McCaw Securities Purchase Agreement, the McCaw Investor was
granted anti-dilutive rights with respect to certain Nextel share issuances (the
"McCaw Purchase Right"). An increase in the number of shares of Common Stock
that will become available for sale in the public market may adversely affect
the market price of Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE
Existing holders of Common Stock generally may freely resell their shares
except to the extent that they are deemed to be affiliates of Nextel or certain
predecessor companies for purposes of Rule 144 or Rule 145 promulgated under the
Securities Act. Nextel has also granted registration rights with respect to a
significant number of its shares outstanding on a fully diluted basis, including
shares of Common Stock issuable upon conversion of securities issued in, or upon
exercise of options granted in, the Motorola Transaction and the McCaw
Transaction. The exercise of registration rights by persons entitled thereto
would permit such persons to sell such shares without regard to the limitations
of Rule 144. An increase in the number of shares of
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Common Stock that will become available for sale in the public market may
adversely affect the market price of Common Stock.
DIVIDEND POLICY LIMITS EXPECTATION OF FUTURE DIVIDENDS
Nextel has not paid any dividends on Common Stock and does not plan to pay
dividends on Common Stock for the foreseeable future. The Nextel Indentures, the
Bank Credit Agreement, the Vendor Credit Agreement and the Second Vendor
Financing Agreement presently prohibit, and are expected to operate so as to
continue to prohibit, Nextel from paying dividends. In addition, the collateral
security mechanisms and related provisions associated with the Bank and Vendor
Credit Facilities and the Second Vendor Financing Agreement limit the amount of
cash available to make dividends, loans and cash distributions to Nextel from
Nextel's subsidiaries that operate Digital Mobile networks in Nextel's markets.
Accordingly, while such restrictions are in place, any profits generated by such
subsidiaries will not be available to Nextel for, among other purposes, payment
of dividends.
POTENTIAL CONFLICT OF INTEREST RELATIONSHIP WITH MOTOROLA
Motorola and its affiliates have and currently are engaged in wireless
communications businesses, and may in the future engage in additional such
businesses, which are or may be competitive with some or all of the services
offered by Nextel's Digital Mobile networks, although the Motorola Land Mobile
Products Sector ("Motorola LMPS") may not, prior to July 28, 1998, make use
(with certain limited exceptions) of the customer lists conveyed by Motorola to
ESMR in connection with the Motorola Transaction to solicit subscribers for any
800 MHz SMR commercial mobile voice business owned or managed by Motorola LMPS
in the continental United States. Pursuant to the Second Equipment Agreement
Amendment, Motorola has agreed that until July 1998, Motorola LMPS will not
solicit other iDEN customers and neither Motorola LMPS nor Motorola's credit
corporation subsidiary will make any equity investment in, or provide
equipment/vendor financing to, certain iDEN customers with respect to purchases
of iDEN equipment.
In light of the competitive posture of Motorola, Nextel and Motorola have
agreed that any information relating to Nextel's business plans and projections
will be used by Motorola only for purposes of ensuring compliance with Nextel's
obligations under the various equipment purchase agreements and financing
agreements between Nextel and Motorola. Motorola has designated one director to
the Board of Directors and, hence, such director has access to Nextel's business
plans subject to certain confidentiality restrictions.
Although Nextel believes that its equipment purchase and financing
relationship with Motorola has been structured to reflect the realities of
purchasing and borrowing from a competitor, there can be no assurance that the
potential conflict of interest will not adversely affect Nextel in the future.
Moreover, Motorola's role as a significant stockholder of Nextel, in addition to
its role as a major creditor and supplier, also creates potential conflicts of
interest, particularly with regard to significant transactions.
CONCERNS ABOUT MOBILE COMMUNICATIONS HEALTH RISK MAY AFFECT PROSPECTS OF NEXTEL
Allegations have been made, but not proven, that the use of portable mobile
communications devices may pose health risks due to radio frequency emissions
from such devices. Studies performed by wireless telephone equipment
manufacturers have investigated these allegations, and a major industry trade
association and certain governmental agencies have stated publicly that the use
of such phones poses no undue health risk. The actual or perceived risk of
mobile communications devices could adversely affect Nextel through a reduced
subscriber growth rate, a reduction in subscribers, reduced network usage per
subscriber or through reduced financing available to the mobile communications
industry.
FORWARD LOOKING STATEMENTS
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995: A number of the matters and subject areas discussed in the foregoing
"Risk Factors" section of this Prospectus that are not historical or current
facts deal with potential future circumstances and developments. The discussion
of such matters and subject areas is qualified by the inherent risks and
uncertainties surrounding future expectations
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generally, and also may materially differ from Nextel's actual future experience
involving any one or more of such matters and subject areas. Nextel has
attempted to identify, in context, certain of the factors that it currently
believes may cause actual future experience and results to differ from Nextel's
current expectations regarding the relevant matter or subject area. The
operation and results of Nextel's wireless communications business also may be
subject to the effect of other risks and uncertainties in addition to the
relevant qualifying factors identified elsewhere in the foregoing "Risk Factors"
section, including, but not limited to, general economic conditions in the
geographic areas and occupational market segments that Nextel is targeting for
its Digital Mobile network service, the availability of adequate quantities of
system infrastructure and subscriber equipment and components to meet Nextel's
service deployment and marketing plans and customer demand, the success of
efforts to improve and satisfactorily address any issues relating to Digital
Mobile system performance, the successful nationwide deployment of the
Reconfigured iDEN technology, the ability to achieve market penetration and
average subscriber revenue levels sufficient to provide financial viability to
the Digital Mobile network business, Nextel's ability to timely and successfully
accomplish required scale-up of its billing, customer care and similar back-room
operations to keep pace with customer growth and increased system usage rates,
access to sufficient debt or equity capital to meet Nextel's operating and
financing needs, the quality and price of similar or comparable wireless
communications services offered or to be offered by Nextel's competitors,
including providers of cellular and PCS service, future legislative or
regulatory actions relating to SMR services, other wireless communications
services or telecommunications generally and other risks and uncertainties
described from time to time in Nextel's reports filed with the Commission,
including the Annual Report on Form 10-K for the fiscal year ended December 31,
1996 and the Quarterly Reports on Form 10-Q for the quarters ended March 31,
1997 and June 30, 1997.
USE OF PROCEEDS
Assuming all of the Warrants are exercised, the net proceeds of the
Offering are estimated to be approximately $52,738,745 after deducting estimated
expenses of the Offering of $85,000. The Company intends to use the net proceeds
of the Offering for general corporate purposes. The net proceeds to the Company
from the Offering will be realized only if and to the extent any of the Warrants
are exercised. There can be no assurance that any of the Warrants will be
exercised or as to the timing of such exercises.
DILUTION
The following tables set forth certain information concerning net tangible
book value and dilution as of June 30, 1997. The net tangible book value
(deficit) of the Common Stock as of June 30, 1997 was $(1,665,584,000) or
$(6.25) per share. Net tangible book value (deficit) per share represents the
amount of the Company's stockholders' equity, less intangible assets, divided by
266,553,585 shares of Common Stock outstanding on June 30, 1997, after giving
effect to the conversion of the outstanding shares of Nextel's Non-Voting Common
Stock, the Class A Preferred Stock and the Class B Preferred Stock.
For purposes hereof, net tangible book value dilution per share represents
the difference between (i) $24.25, the weighted average exercise price of the
Warrants, and (ii) the net tangible book value (deficit) per share of Common
Stock as of June 30, 1997. After giving effect to the net proceeds to be
received by the Company upon exercise of the Warrants (assuming exercise of all
of the Warrants and taking into account the expenses to the Company), the net
tangible book value (deficit) per share of the Company as of June 30, 1997 would
have been $(6.00). The following table illustrates this pro forma per share
dilution.
Weighted average exercise price of the Warrants..................... $24.25
Net tangible book value (deficit) per share before the
Offering............................................... $(6.25)
Increase per share attributable to exercise of the
Warrants............................................... $ 0.25
------
Pro forma net tangible book value (deficit) per share after exercise
of the Warrants................................................... $(6.00)
------
Dilution of net tangible book value per share to holders of the
Warrants.......................................................... $30.25
======
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CERTAIN MARKET INFORMATION
The Common Stock is traded on the Nasdaq NM under the symbol "NXTL." Prior
to February 3, 1997, the Common Stock traded under the symbol "CALL." The table
below presents the quarterly high and low closing sale prices for Common Stock
as furnished by the Nasdaq NM for the periods indicated. Nextel has not paid any
dividends on the Common Stock.
YEAR ENDED DECEMBER 31: HIGH LOW
- ----------------------- ------- -------
1995
First Quarter...................................... $15.625 $ 9.375
Second Quarter..................................... $18.000 $13.000
Third Quarter...................................... $21.750 $14.000
Fourth Quarter..................................... $18.125 $13.875
1996
First Quarter...................................... $18.875 $13.500
Second Quarter..................................... $23.375 $16.750
Third Quarter...................................... $20.250 $14.375
Fourth Quarter..................................... $18.500 $12.750
1997
First Quarter...................................... $15.750 $12.875
Second Quarter..................................... $19.188 $12.250
Third Quarter...................................... $29.438 $19.688
Fourth Quarter (through October 23, 1997).......... $31.000 $26.750
As of September 30, 1997, there were approximately 3,073 holders of record
of shares of Common Stock. As of September 30, 1997, there was one holder of
record of shares of Nextel Non-Voting Common Stock, for which there is no
established public trading market, but which under certain circumstances may be
converted into shares of Common Stock.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT OF NEXTEL
The following table sets forth, as of July 31, 1997 (the "Ownership Date"),
the amount and percentage of shares of each class of Nextel's capital stock that
are deemed under the rules of the Commission to be "beneficially owned" by (i)
each director of Nextel (except that the table gives effect to the resignation
of Mr. Robert Cooper and the appointment of Mr. Frank M. Drendel in August
1997), (ii) the Chief Executive Officer and each of the four other most highly
compensated executive officers of Nextel for the year ended December 31, 1996,
(iii) all directors and executive officers of Nextel as a group and (iv) each
person or "group" (as such term is used in Section 13(d)(3) of the Exchange Act)
known by Nextel to be the beneficial owner of more than five percent of the
outstanding shares of each class of Nextel's capital stock.
AMOUNT AND
TITLE OF CLASS OF NATURE APPROXIMATE
THE COMPANY'S OF BENEFICIAL %
NAME OF BENEFICIAL OWNER CAPITAL STOCK OWNERSHIP(1) OF CLASS(2)
- ------------------------ ---------------------- ------------- -----------
Daniel F. Akerson...................... Class A Common Stock 200,000(3) *
Brian D. McAuley....................... Class A Common Stock 1,429,785(4) *
Morgan E. O'Brien...................... Class A Common Stock 1,206,476(5) *
Keith J. Bane.......................... Class A Common Stock --(6) *
Frank M. Drendel....................... Class A Common Stock 10,167(7) *
Timothy M. Donahue..................... Class A Common Stock 76,000(8) *
William E. Conway, Jr.................. Class A Common Stock 97,865(9) *
Craig O. McCaw......................... Class A Common Stock 92,483,723(10) 28.2%
Keisuke Nakasaki....................... Class A Common Stock --(11) *
Masaaki Torimoto....................... Class A Common Stock --(12) *
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AMOUNT AND
TITLE OF CLASS OF NATURE APPROXIMATE
THE COMPANY'S OF BENEFICIAL %
NAME OF BENEFICIAL OWNER CAPITAL STOCK OWNERSHIP(1) OF CLASS(2)
- ------------------------ ---------------------- ------------- -----------
Dennis M. Weibling..................... Class A Common Stock 92,483,723(13) 28.2
Robert S. Foosaner..................... Class A Common Stock 242,000(14) *
All directors and executive officers as
a group (21 persons)................. Class A Common Stock 95,965,005(15) 29.1
5% STOCKHOLDERS:
Digital Radio, L.L.C................... Class A Common Stock 92,483,723(16) 28.2
Class A Preferred Stock
2320 Carillon Point 8,163,265 100.0
Class B Preferred Stock
Kirkland, Washington 98033 82 100.0
Motorola, Inc.......................... Class A Common Stock 60,890,000(17) 21.3
1303 East Algonquin Road Class B Common Stock 17,830,000 100.0
Schaumburg, Illinois 60196
Putnam Investments, Inc................ Class A Common Stock 15,340,145(18) 5.4
1 P.O. Box Square
Boston, Massachusetts 02109
- ---------------
* Less than one percent (1%).
(1) Under the rules of the Commission, a person is deemed to be the beneficial
owner of a security if such person, directly or indirectly, has or shares
the power to vote or direct the voting of such security or the power to
dispose or direct the disposition of such security. A person is also deemed
to be a beneficial owner of any securities if that person has the right to
acquire beneficial ownership within 60 days of the Ownership Date.
Accordingly, more than one person may be deemed to be a beneficial owner of
the same securities. Unless otherwise indicated by footnote, the named
individuals have sole voting and investment power with respect to the
shares of Nextel's capital stock beneficially owned.
(2) Represents the voting power of the number of shares of each of class of
capital stock beneficially owned as of the Ownership Date by each named
person or group, expressed as a percentage of (a) all shares of Nextel's
capital stock of the indicated class actually outstanding as of such date
(in the case of the Class A Common Stock, giving effect to the conversion
of Nextel's preferred stock and Nextel's Non-voting Common Stock), plus (b)
all other shares of capital stock deemed outstanding as of such date
pursuant to Rule 13d-3(d)(1) under the Exchange Act.
(3) Includes 200,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Akerson upon the
exercise of non-qualified stock options.
(4) Includes 454,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. McAuley upon the
exercise of non-qualified stock options. Also includes ownership of 18,000
shares of Class A Common Stock that are held by Mr. McAuley's minor
children. Mr. McAuley resigned from the Company's Board of Directors and as
an executive officer of the Company as of January 8, 1997.
(5) Includes 553,477 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. O'Brien upon the
exercise of non-qualified stock options.
(6) Mr. Bane, who is Executive Vice President and President, Americas Region of
Motorola, disclaims beneficial ownership of all securities of Nextel held
by Motorola. See note 17.
(7) Includes 1,667 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Drendel upon the
exercise of non-qualified stock options.
(8) Includes 75,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Donahue upon the
exercise of non-qualified stock options.
(9) Includes 1,667 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Conway upon the exercise
of non-qualified stock options.
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(10) Mr. McCaw, who is an equity owner and controlling person of the McCaw
Investor, disclaims beneficial ownership of all securities of Nextel held
by the McCaw Investor, except to the extent of his pecuniary interest
therein. See note 16.
(11) Mr. Nakasaki, who is President and Chief Executive Officer of NTT America,
Inc., a subsidiary of Nippon Telegraph and Telephone Corporation ("NTT"),
disclaims beneficial ownership of all shares of Class A Common Stock held
by NTT. As of the Ownership Date, NTT held 1,532,959 shares.
(12) Mr. Torimoto, who is Vice President of Panasonic Communications and Systems
Company, disclaims beneficial ownership of all shares of Class A Common
Stock held by Matsushita Communication Industrial Co., Ltd. ("Matsushita").
As of the Ownership Date, Matsushita held 3,000,000 shares.
(13) Mr. Weibling, who is President of Eagle River, an affiliate of the McCaw
Investor, disclaims beneficial ownership of all securities of Nextel held
by the McCaw Investor, except to the extent of his pecuniary interest
therein. See note 16.
(14) Includes 192,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Foosaner upon the
exercise of non-qualified stock options.
(15) Includes an aggregate of 1,651,894 shares of Class A Common Stock
obtainable as of the Ownership Date or within 60 days thereafter by
directors and executive officers as a group upon the exercise of non-
qualified stock options or other stock purchase rights. See also notes 16
and 17.
(16) Comprised of (i) 20,593,846 shares of Class A Common Stock beneficially
owned by the McCaw Investor, (ii) 20,000,000 shares of Class A Common Stock
obtainable as of the Ownership Date or within 60 days thereafter upon the
exercise of certain options, (iii) 400,000 shares of Class A Common Stock
obtainable as of the Ownership Date or within 60 days thereafter upon the
exercise of a portion of the Incentive Option granted to Eagle River, (iv)
24,489,877 shares of Class A Common Stock, which represents the conversion
of the 8,163,265 shares of Class A Preferred Stock and the 82 shares of
Nextel's Class B Preferred Stock held by the McCaw Investor, (v) 25,000,000
shares of Class A Common Stock issuable pursuant to the New Option issued
to an affiliate of Craig O. McCaw as of June 16, 1997 and (vi) 2,000,000
shares of Class A Common Stock issuable pursuant to an option issued to the
McCaw Investor by Motorola. Subsequent to July 31, 1997, the 2,000,000
shares subject to option referenced in (vi) were acquired by the McCaw
Investor. See Note 17.
(17) Assuming conversion of the Non-Voting Common Stock held by Motorola.
Comprised of (i) 40,170,000 shares of Class A Common Stock beneficially
owned by Motorola, (ii) 17,830,000 shares of Non-Voting Common Stock
beneficially owned by Motorola and (iii) 2,890,000 shares of Class A Common
Stock obtainable as of the Ownership Date or within 60 days thereafter upon
exercise of a warrant. Motorola granted the McCaw Investor an option to
acquire 9,000,000 shares included herein, 2,000,000 shares of which were
purchased on September 3, 1997. Does not give effect to the exercise of
such option. See Note 16.
(18) As reported in the most recent Schedule 13G filed by Putnam Investments,
Inc. ("Putnam"), Putnam does not have sole voting power over the shares of
Class A Common Stock beneficially owned by Putnam.
PLAN OF DISTRIBUTION
The shares of Common Stock offered hereby may be issued from time to time
by the Company upon exercise of the Warrants by the holders thereof. Any Warrant
may be exercised by surrendering to BankBoston, N.A., as warrant agent (the
"Warrant Agent"), or Nextel (as appropriate) the warrant certificate signed by
the registered holder indicating such holder's election to exercise all or a
portion of the Warrants evidenced by such certificate and payment of the
exercise price prior to the expiration date of such Warrant. Upon surrender of
the warrant certificate for exercise and payment of the exercise price, the
Warrant Agent or Nextel (as appropriate) will deliver or cause to be delivered,
to or upon the written order of any holder, certificates for the shares of
Common Stock purchased, together with warrant certificates evidencing any
Warrants not exercised.
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LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for Nextel by Jones, Day, Reavis & Pogue, Atlanta, Georgia.
EXPERTS
The consolidated financial statements and related financial statement
schedules of Nextel incorporated in this Prospectus by reference from Nextel's
Annual Report on Form 10-K for the year ended December 31, 1996, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
32
35
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company will pay all of the expenses in connection with the issuance
and distribution of the securities covered hereby, which are estimated to be as
follows:
Registration Fee............................................ N/A*
Legal Fees and Expenses..................................... $35,000
Accounting Fees and Expenses................................ $12,000
Printing Fees and Expenses.................................. $30,000
Miscellaneous............................................... $ 8,000
-------
Total............................................. $85,000
=======
- ---------------
* A registration fee was paid in connection with the filing of the Registration
Statement on Form S-4 (33-80021) to which this Post-Effective Amendment No. 3
relates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Set forth below is a description of certain provisions of the Restated
Certificate of Incorporation, (the "Nextel Charter"), of Nextel Communications,
Inc. ("New Nextel," and, together with "Old Nextel," its predecessor corporation
of the same name, "Nextel"), the Amended and Restated By-laws of Nextel (the
"Nextel By-laws") and the Delaware General Corporation Law (the "DGCL"). This
description is intended as a summary only and is qualified in its entirety by
reference to the Nextel Charter, the Nextel By-laws and the DGCL.
Elimination of Liability in Certain Circumstances. The Nextel Charter
provides that, to the full extent provided by law, a director will not be
personally liable to Nextel or its stockholders for or with respect to any acts
or omissions in the performance of his or her duties as a director. The DGCL
provides that a corporation may limit or eliminate a director's personal
liability for monetary damages to the corporation or its stockholders, except
for liability (i) for any breach of the director's duty of loyalty to such
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
paying a dividend or approving a stock repurchase in violation of Section 174 of
the DGCL or (iv) for any transaction from which the director derived an improper
personal benefit.
While Article 7 of the Nextel Charter provides directors with protection
from awards for monetary damages for breaches of the duty of care, it does not
eliminate the directors' duty of care. Accordingly, Article 7 will have no
effect on the availability of equitable remedies such as an injunction or
rescission based on a director's breach of the duty of care. The provisions of
Article 7 as described above apply to officers of Nextel only if they are
directors of Nextel and are acting in their capacity as directors, and does not
apply to officers of Nextel who are not directors.
Indemnification and Insurance. Under the DGCL, directors and officers as
well as other employees and individuals may be indemnified against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with specified actions, suits or proceedings, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation as a derivative action) if they acted in good faith and
in a manner they reasonably believed to be in or not opposed to the best
interest of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.
Article 6 of the Nextel Charter and Article VII of the Nextel By-laws
provide to directors and officers indemnification to the full extent provided by
law, thereby affording the directors and officers of Nextel the protections
available to directors and officers of Delaware corporations. Article VII of the
Nextel By-laws also provides that expenses incurred by a person in defending a
civil or criminal action, suit or proceeding by reason
II-1
36
of the fact that he or she is or was a director or officer shall be paid in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he or she is not entitled to be
indemnified by Nextel as authorized by relevant Delaware law. Nextel has
obtained directors and officers liability insurance providing coverage to its
directors and officers.
On September 12, 1991, the Board of Directors of Nextel unanimously adopted
resolutions authorizing Nextel to enter into an Indemnification Agreement (the
"Indemnification Agreement") with each director of Nextel. Nextel has entered
into an Indemnification Agreement with each of its directors and officers.
One of the purposes of the Indemnification Agreements is to attempt to
specify the extent to which persons entitled to indemnification thereunder (the
"Indemnitees") may receive indemnification under circumstances in which
indemnity would not otherwise be provided by the DGCL. Pursuant to the
Indemnification Agreements, an Indemnitee is entitled to indemnification as
provided by Section 145 of the DGCL and to indemnification for any amount which
the Indemnitee is or becomes legally obligated to pay relating to or arising out
of any claim made against such person because of any act, failure to act or
neglect or breach of duty, including any actual or alleged error, misstatement
or misleading statement, which such person commits, suffers, permits or
acquiesces in while acting in the Indemnitee's position with Nextel. The
Indemnification Agreements are in addition to and are not intended to limit any
rights of indemnification which are available under the Nextel Charter or the
Nextel By-laws, any policy of insurance or otherwise. Nextel is not required
under the Indemnification Agreements to make payments in excess of those
expressly provided for in the DGCL in connection with any claim against the
Indemnitee:
(i) which results in a final, nonappealable order directing the
Indemnitee to pay a fine or similar governmental imposition which Nextel is
prohibited by applicable law from paying; or
(ii) based upon or attributable to the Indemnitee gaining in fact a
personal profit to which he was not legally entitled including, without
limitation, profits made from the purchase and sale by the Indemnitee of
equity securities of Nextel which are recoverable by Nextel pursuant to
Section 16(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and profits arising from transactions in publicly traded
securities of Nextel which were effected by the Indemnitee in violation of
Section 10(b) of the Exchange Act or Rule 10b-5 promulgated thereunder.
In addition to the rights to indemnification specified therein, the
Indemnification Agreements are intended to increase the certainty of receipt by
the Indemnitee of the benefits to which he or she is entitled by providing
specific procedures relating to indemnification.
The Indemnification Agreements are also intended to provide increased
assurance of indemnification by prohibiting Nextel from adopting any amendment
to the Nextel Charter or the Nextel By-laws which would have the effect of
denying, diminishing or encumbering the Indemnitee's rights pursuant thereto or
to the DGCL or any other law as applied to any act or failure to act occurring
in whole or in part prior to the effective date of such amendment.
ITEM 16. EXHIBITS.
Pursuant to Item 601 of Regulation S-K, 17 C.F.R.
sec. 229.601(b)(4)(iii)(A), Nextel has excluded from Exhibit No. 4 instruments
defining the rights of holders of long-term debt with respect to debt that does
not exceed 10% of the total assets of Nextel. Nextel agrees to furnish copies of
such instruments to the Commission upon request.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
4.1 -- Restated Certificate of Incorporation of Nextel (filed on
July 31, 1995 as Exhibits No. 4.1.1 and 4.1.2 to Nextel's
Post-Effective Amendment No. 1 on Form S-8 to Registration
Statement No. 33-91716 on Form S-4 (the "Nextel S-8
Registration Statement") and incorporated herein by
reference).
II-2
37
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
4.2 -- Amended and Restated By-laws of Nextel (filed on July 31,
1995 as Exhibit No. 4.2 to the Nextel S-8 Registration
Statement and incorporated herein by reference).
4.3 -- Indenture between Old Nextel and The Bank of New York, as
Trustee, dated August 15, 1993 (the "August Indenture")
(filed on December 23, 1993 as Exhibit No. 4.13 to the
Registration Statement on Form S-4 of the Company, No.
33-73388 and incorporated herein by reference).
4.4 -- Form of Note issued pursuant to the August Indenture
(included in Exhibit No. 4.3).
4.5 -- Indenture between Old Nextel and The Bank of New York, as
Trustee, dated as of February 15, 1994 (the "February
Indenture") (filed on March 1, 1994 as Exhibit No. 4.1 to
the Form 8-K Current Report of Old Nextel dated February 16,
1994 and incorporated herein by reference).
4.6 -- Form of Note issued pursuant to the February Indenture
(included in Exhibit No. 4.5).
4.7 -- Supplemental Indenture, dated as of June 30, 1995 to the
August Indenture between Old Nextel and The Bank of New York
(filed on November 14, 1995 as Exhibit 4.1 to the Quarterly
Report on Form 10-Q of Nextel for the quarter ended
September 30, 1995 and incorporated herein by reference).
4.8 -- Supplemental Indenture, dated as of June 30, 1995 to the
February Indenture between Old Nextel and The Bank of New
York (filed on November 14, 1995 as Exhibit 4.2 to the
Quarterly Report on Form 10-Q of Nextel for the quarter
ended September 30, 1995 and incorporated herein by
reference).
4.9 -- Second Supplemental Indenture, dated as of July 28, 1995
between ESMR (now known as Nextel), as Successor by Merger
to Old Nextel and The Bank of New York (relating to the
August Indenture) (filed on November 14, 1995 as Exhibit 4.3
to the Quarterly Report on Form 10-Q of Nextel for the
quarter ended September 30, 1995 and incorporated herein by
reference).
4.10 -- Second Supplemental Indenture, dated as of July 28, 1995
between ESMR (now known as Nextel), as Successor by Merger
to Old Nextel and The Bank of New York (relating to the
February Indenture) (filed on November 14, 1995 as Exhibit
4.4 to the Quarterly Report on Form 10-Q of Nextel for the
quarter ended September 30, 1995 and incorporated herein by
reference).
4.11 -- Third Supplemental Indenture, dated as of June 13, 1997
between Nextel and The Bank of New York (relating to the
August Indenture) (filed on June 17, 1997 as Exhibit 4.1 to
Nextel's Current Report on Form 8-K dated June 17, 1997 (the
"June 17 Form 8-K") and incorporated herein by reference).
4.12 -- Third Supplemental Indenture, dated as of June 13, 1997
between Nextel and The Bank of New York (relating to the
February Indenture) (filed on June 17, 1997 as Exhibit 4.2
to the June 17 Form 8-K and incorporated herein by
reference).
4.13 -- Indenture for Senior Redeemable Discount Notes due 2004,
dated as of January 13, 1994, between OneComm (formerly
called CenCall Communications Corp.) and The Bank of New
York (the "OneComm Indenture") (filed on June 7, 1995 as
Exhibit No. 99.2 to Old Nextel's Registration Statement No.
33-93182 on Form S-4 (the "OneComm S-4 Registration
Statement") and incorporated herein by reference).
4.14 -- Form of Note issued pursuant to the OneComm Indenture
(included in Exhibit 4.11).
4.15 -- Supplemental Indenture dated as of June 30, 1995 to the
OneComm Indenture between OneComm (formerly called CenCall
Communications Corp.) and The Bank of New York (filed on
November 14, 1995 as Exhibit 10.12 to the Form 10-Q for the
quarter ended September 30, 1995 and incorporated herein by
reference).
4.16 -- Second Supplemental Indenture dated as of July 28, 1995
between Nextel (formerly known as ESMR, Inc.), as successor
to OneComm, and The Bank of New York (relating to the
OneComm Indenture) (filed on November 14, 1995 as Exhibit
10.13 to the Form 10-Q for the quarter ended September 30,
1995 and incorporated herein by reference).
4.17 -- Third Supplemental Indenture, dated as of June 13, 1997
between Nextel and The Bank of New York (relating to the
OneComm Indenture) (filed on June 17, 1997 as Exhibit 4.5 to
the June 17 Form 8-K and incorporated herein by reference).
II-3
38
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
4.18 -- Indenture for Senior Redeemable Discount Notes due 2004,
dated as of April 25, 1994, between Dial Call and The Bank
of New York (the "2004 Indenture") (filed on June 7, 1995 as
Exhibit 99.4 to the OneComm S-4 Registration Statement and
incorporated herein by reference).
4.19 -- Supplemental Indenture, dated as of August 7, 1995, to the
2004 Indenture between Dial Call and The Bank of New York
(filed on December 5, 1995 as Exhibit 99.3 to Nextel's
Registration Statement No. 33-80021 on Form S-4 (the "Dial
Page S-4 Registration Statement") and incorporated herein by
reference).
4.20 -- Second Supplemental Indenture, dated as of January 30, 1996,
to the 2004 Indenture between Dial Page (as successor to
Dial Call) and The Bank of New York (filed on April 1, 1996
as Exhibit 4.26 to the Annual Report on Form 10-K of Nextel
for the year ended December 31, 1995 (the "1995 Form 10-K")
and incorporated herein by reference).
4.21 -- Third Supplemental Indenture, dated as of January 30, 1996,
to the 2004 Indenture between Nextel (as successor to Dial
Page) and The Bank of New York (filed on April 1, 1996 as
Exhibit 4.27 to the 1995 Form 10-K and incorporated herein
by reference).
4.22 -- Fourth Supplemental Indenture, dated as of June 13, 1997
between Nextel and The Bank of New York (relating to the
2004 Indenture) (filed on June 17, 1997 as Exhibit 4.3 to
the June 17 Form 8-K and incorporated herein by reference).
4.23 -- Indenture for Senior Discount Notes due 2005, dated as of
December 22, 1993, between Dial Call and The Bank of New
York (the "2005 Indenture") (filed as Exhibit 99.3 to be
OneComm S-4 Registration Statement and incorporated herein
by reference).
4.24 -- Supplemental Indenture, dated as of April 15, 1994, to the
2005 Indenture between Dial Call and The Bank of New York
(filed on April 1, 1996 as Exhibit 4.29 to the 1995 Form
10-K and incorporated herein by reference).
4.25 -- Supplemental Indenture, dated as of June 30, 1995 , to the
2005 Indenture between Dial Call and The Bank of New York
(filed on December 5, 1995 as Exhibit 99.4 to the Dial Page
S-4 Registration Statement and incorporated herein by
reference).
4.26 -- Third Supplemental Indenture, dated as of January 30, 1996,
to the 2005 Indenture between Dial Page (as successor to
Dial Call) and The Bank of New York (filed on April 1, 1996
as Exhibit 4.31 to the 1995 Form 10-K and incorporated
herein by reference).
4.27 -- Fourth Supplemental Indenture, dated as of January 30, 1996,
to the 2005 Indenture between Nextel (as successor to Dial
Page) and The Bank of New York (filed on April 1, 1996 as
Exhibit 4.32 to the 1995 Form 10-K and incorporated herein
by reference).
4.28 -- Fifth Supplemental Indenture, dated as of June 13, 1997
between Nextel and The Bank of New York (relating to the
2005 Indenture) (filed on June 17, 1997 as Exhibit 4.4 to
the June 17 Form 8-K and incorporated herein by reference).
4.29 -- Indenture for Senior Discount Notes due 2007, dated as of
March 6, 1997, between McCaw International and The Bank of
New York, as Trustee (the "McCaw Indenture") (filed on March
31, 1997 as Exhibit 4.24 to Nextel's Annual Report on Form
10-K for the year ended December 31, 1996 (the "1996 Form
10-K") and incorporated herein by reference).
4.30 -- Form of Note issued pursuant to the McCaw Indenture
(included in Exhibit 4.24).
4.31 -- Warrant Agreement, dated as of March 6, 1997, between McCaw
International and The Bank of New York (filed on March 31,
1997 as Exhibit 4.26 to the 1996 Form 10-K and incorporated
herein by reference).
4.32 -- Credit Agreement dated as of September 27, 1996 among
Nextel, Nextel Finance Company, the Restricted Companies
party thereto, the Lenders party thereto, Toronto-Dominion
(Texas) Inc., as Administrative Agent, and The Chase
Manhattan Bank, as Collateral Agent (the "Bank Credit
Agreement") (filed on October 1, 1996 as Exhibit 99.1 to
Nextel's Current Report on Form 8-K dated September 27, 1996
(the "September 27 Form 8-K") and incorporated herein by
reference).
4.33 -- Amendment No. 1 dated as of March 24, 1997 to the Bank
Credit Agreement (filed on July 9, 1997 as Exhibit 99.1 to
Nextel's Current Report on Form 8-K dated July 9, 1997 (the
"July 9 Form 8-K") and incorporated herein by reference).
II-4
39
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
4.34 -- Amended, Restated and Consolidated Credit Agreement dated as
of September 27, 1996 among Nextel, NFC, the Restricted
Companies party thereto and the Vendors party thereto (the
"Vendor Credit Agreement") (filed on October 1, 1996 as
Exhibit 99.2 to the September 27 Form 8-K and incorporated
herein by reference).
4.35 -- Amendment No. 1 dated as of March 24, 1997 to Vendor Credit
Agreement (filed on July 9, 1997 as Exhibit 99.2 to the July
9 Form 8-K and incorporated herein by reference).
4.36 -- Option Exercise and Lending Commitment Agreement by and
between Nextel and Digital Radio, L.L.C., dated as of June
16, 1997 (filed on July 9, 1997 as Exhibit 10.1 to the July
9 Form 8-K and incorporated herein by reference).
4.37 -- Option Purchase Agreement by and among Nextel and
Unrestricted Subsidiary Funding Company and Option
Acquisition, L.L.C., dated as of June 16, 1997 (filed on
July 9,1997 as Exhibit 10.3 to the July 9 Form 8-K and
incorporated herein by reference).
4.38 -- Option Agreement (First New Option) by and between Option
Acquisition, L.L.C. and Nextel, dated as of June 18, 1997
(filed on July 9, 1997 as Exhibit 10.4 to the July 9 Form
8-K and incorporated herein by reference).
4.39 -- Option Agreement (Second New Option) by and between Option
Acquisition, L.L.C. and Nextel, dated as of June 18, 1997
(filed on July 9, 1997 as Exhibit 10.5 to the July 9 Form
8-K and incorporated herein by reference).
4.40 -- Certificate of Designation for 13% Series D Exchangeable
Preferred Stock (filed on July 22, 1997 as Exhibit 4.1 to
Nextel's Current Report on Form 8-K dated July 21, 1997 and
incorporated herein by reference).
4.41 -- Amendment No. 2 dated as of June 3, 1997 to the Bank Credit
Agreement (filed on August 5, 1997 as Exhibit 4.41 to
Nextel's Registration Statement No. 333-28461 on Form S-3
(the "August S-3 Registration Statement") and incorporated
herein by reference).
4.42 -- Amendment No. 2 dated as of June 3, 1997 to the Vendor
Credit Agreement (filed on August 5, 1997 as Exhibit 4.42 to
the August S-3 Registration Statement and incorporated
herein by reference).
4.43 -- Amendment No. 3 dated as of August 20, 1997 to the Bank
Credit Agreement (filed on September 5, 1997 as Exhibit 99.1
to Nextel's Current Report on Form 8-K dated September 5,
1997 (the "September 5 Form 8-K") and incorporated herein by
reference).
4.44 -- Amendment No. 3 dated as of August 29, 1997 to the Vendor
Credit Agreement (filed on September 5, 1997 as Exhibit 99.2
to the September 5 Form 8-K and incorporated herein by
reference).
4.45 -- Second Secured Vendor Financing Agreement dated as of August
29, 1997 among Nextel, Nextel Finance Company and the other
Restricted Companies thereto and the Vendor Lenders thereto
(the "Second Vendor Financing Agreement") (filed as Exhibit
99.3 to the September 5 Form 8-K and incorporated herein by
reference).
4.46 -- Amendment No. 4 dated as of September 10, 1997 to the Bank
Credit Agreement (filed on September 22, 1997 as Exhibit 4.2
to Nextel's Current Report on Form 8-K dated September 22,
1997 (the "September 22 Form 8-K") and incorporated herein
by reference).
4.47 -- Amendment No. 4 dated as of September 10, 1997 to the Vendor
Credit Agreement (filed on September 22, 1997 as Exhibit 4.3
to the September 22 Form 8-K and incorporated herein by
reference).
4.48 -- Amendment No. 1 to the Second Vendor Financing Agreement
dated as of September 10, 1997 (filed on September 22, 1997
as Exhibit 4.4 to the September 22 Form 8-K and incorporated
herein by reference).
4.49 -- Indenture between Nextel and Harris Trust and Savings Bank,
as Trustee, dated September 17, 1997 (filed on September 22,
1997 as Exhibit 4.1 to the September 22 Form 8-K and
incorporated herein by reference).
II-5
40
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
4.50 -- Indenture between Nextel and Harris Trust and Savings Bank,
as Trustee, dated as of October 22, 1997 (filed on October
23, 1997 as Exhibit 4.1 to Nextel's Current Report on Form
8-K dated October 23, 1997 (the "October 23 Form 8-K") and
incorporated herein by reference).
4.51 -- Amendment No. 5 dated as of October 9, 1997 to the Bank
Credit Agreement (filed on October 23, 1997 as Exhibit 4.2
to the October 23 Form 8-K and incorporated herein by
reference).
4.52 -- Amendment No. 5 dated as of October 9, 1997 to the Vendor
Credit Agreement (filed on October 23, 1997 as Exhibit 4.3
to the October 23 Form 8-K and incorporated herein by
reference).
4.53 -- Amendment No. 2 dated as of October 9, 1997 to the Second
Vendor Financing Agreement (filed on October 23, 1997 as
Exhibit 4.4 to the October 23 Form 8-K and incorporated
herein by reference).
5 -- Opinion of Jones, Day, Reavis & Pogue re validity.
23.1 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5).
23.2 -- Consent of Deloitte & Touche LLP.
*24 -- Powers of Attorney
- ---------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-6
41
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-7
42
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that is has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this post-effective
amendment to its registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of McLean, in the
Commonwealth of Virginia, on the 23rd day of October, 1997.
Nextel Communications, Inc.
By: /s/ THOMAS J. SIDMAN
------------------------------------
Thomas J. Sidman
Vice President and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment has been signed below by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
* Chairman of the Board, Chief
- ----------------------------------------------------- Executive Officer and
Daniel F. Akerson Director (Principal
Executive Officer)
* Vice President and Chief
- ----------------------------------------------------- Financial Officer
Steven M. Shindler (Principal Financial
Officer)
* Controller (Principal
- ----------------------------------------------------- Accounting Officer)
William G. Arendt
* Vice Chairman of the Board
- ----------------------------------------------------- and Director
Morgan E. O'Brien
* President, Chief Operating
- ----------------------------------------------------- Officer and Director
Timothy M. Donahue
* Director
- -----------------------------------------------------
Keith J. Bane
* Director
- -----------------------------------------------------
Craig O. McCaw
* Director
- -----------------------------------------------------
Keisuke Nakasaki
* Director
- -----------------------------------------------------
Masaaki Torimoto
* Director
- -----------------------------------------------------
Dennis M. Weibling
* Director
- -----------------------------------------------------
William E. Conway, Jr.
* Director
- -----------------------------------------------------
Frank M. Drendel
/s/ *THOMAS J. SIDMAN Attorney-in-fact October 23, 1997
- -----------------------------------------------------
Thomas J. Sidman
II-8
43
EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ----------------------- ----------------
4.1 -- Restated Certificate of Incorporation of Nextel (filed on
July 31, 1995 as Exhibits No. 4.1.1 and 4.1.2 to Nextel's
Post-Effective Amendment No. 1 on Form S-8 to Registration
Statement No. 33-91716 on Form S-4 (the "Nextel S-8
Registration Statement") and incorporated herein by
reference).................................................. Not applicable
4.2 -- Amended and Restated By-laws of Nextel (filed on July 31,
1995 as Exhibit 4.2 to the Nextel S-8 Registration Statement
and incorporated herein by reference)....................... Not applicable
4.3 -- Indenture between Old Nextel and The Bank of New York, as
Trustee, dated August 15, 1993 (the "August Indenture")
(filed on December 23, 1993 as Exhibit No. 4.13 to the
Registration Statement on Form S-4 of the Company, No.
33-73388 and incorporated herein by reference).............. Not applicable
4.4 -- Form of Note issued pursuant to the August Indenture
(included in Exhibit No. 4.3)............................... Not applicable
4.5 -- Indenture between Old Nextel and The Bank of New York, as
Trustee, dated as of February 15, 1994 (the "February
Indenture") (filed on March 1, 1994 as Exhibit No. 4.1 to
the Form 8-K of Old Nextel dated February 16, 1994 and
incorporated herein by reference)........................... Not applicable
4.6 -- Form of Note issued pursuant to the February Indenture
(included in Exhibit No. 4.5)............................... Not applicable
4.7 -- Supplemental Indenture, dated as of June 30, 1995 to the
August Indenture between Old Nextel and The Bank of New York
(filed on November 14, 1995 as Exhibit 4.1 to the Quarterly
Report on Form 10-Q of Nextel for the quarter ended
September 30, 1995 and incorporated herein by reference).... Not applicable
4.8 -- Supplemental Indenture, dated as of June 30, 1995 to the
February Indenture between Old Nextel and The Bank of New
York (filed on November 14, 1995 as Exhibit 4.2 to the
Quarterly Report on Form 10-Q of Nextel for the quarter
ended September 30, 1995 and incorporated herein by
reference).................................................. Not applicable
4.9 -- Second Supplemental Indenture, dated as of July 28, 1995
between ESMR (now known as Nextel), as Successor by Merger
to Old Nextel and The Bank of New York (relating to the
August Indenture) (filed on November 14, 1995 as Exhibit 4.3
to the Quarterly Report on Form 10-Q of Nextel for the
quarter ended September 30, 1995 and incorporated herein by
reference).................................................. Not applicable
4.10 -- Second Supplemental Indenture, dated as of July 28, 1995
between ESMR (now known as Nextel), as Successor by Merger
to Old Nextel and The Bank of New York (relating to the
February Indenture) (filed on November 14, 1995 as Exhibit
4.4 to the Quarterly Report on Form 10-Q of Nextel for the
quarter ended September 30, 1995 and incorporated herein by
reference).................................................. Not applicable
4.11 -- Third Supplemental Indenture, dated as of June 13, 1997
between Nextel and The Bank of New York (relating to the
August Indenture) (filed on June 17, 1997 as Exhibit 4.1 to
Nextel's Current Report on Form 8-K dated June 17, 1997 (the
"June 17 Form 8-K") and incorporated herein by reference)... Not applicable
4.12 -- Third Supplemental Indenture, dated as of June 13, 1997
between Nextel and The Bank of New York (relating to the
February Indenture) (filed on June 17, 1997 as Exhibit 4.2
to the June 17 Form 8-K and incorporated herein by
reference).................................................. Not applicable
44
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
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4.13 -- Indenture for Senior Redeemable Discount Notes due 2004,
dated as of January 13, 1994, between OneComm (formerly
called CenCall Communications Corp.) and The Bank of New
York (the "OneComm Indenture") (filed on June 7, 1995 as
Exhibit No. 99.2 to Old Nextel's Registration Statement No.
33-93182 on Form S-4 (the "OneComm S-4 Registration
Statement") and incorporated herein by reference)........... Not applicable
4.14 -- Form of Note issued pursuant to the OneComm Indenture
(included in Exhibit 4.11).................................. Not applicable
4.15 -- Supplemental Indenture dated as of June 30, 1995 to the
OneComm Indenture between OneComm (formerly called CenCall
Communications Corp.) and The Bank of New York (filed on
November 14, 1995 as Exhibit 10.12 to the Form 10-Q for the
quarter ended September 30, 1995 and incorporated herein by
reference).................................................. Not applicable
4.16 -- Second Supplemental Indenture dated as of July 28, 1995
between Nextel (formerly known as ESMR, Inc.), as successor
to OneComm, and The Bank of New York (relating to the
OneComm Indenture) (filed on November 14, 1995 as Exhibit
10.13 to the Form 10-Q for the quarter ended September 30,
1995 and incorporated herein by reference).................. Not applicable
4.17 -- Third Supplemental Indenture, dated as of June 13, 1997
between Nextel and The Bank of New York (relating to the
OneComm Indenture) (filed on June 17, 1997 as Exhibit 4.5 to
the June 17 Form 8-K and incorporated herein by
reference).................................................. Not applicable
4.18 -- Indenture for Senior Redeemable Discount Notes due 2004,
dated as of April 25, 1994, between Dial Call and The Bank
of New York (the "2004 Indenture") (filed on June 7, 1995 as
Exhibit 99.4 to the OneComm S-4 Registration Statement and
incorporated herein by reference)........................... Not applicable
4.19 -- Supplemental Indenture, dated as of August 7, 1995, to the
2004 Indenture between Dial Call and The Bank of New York
(filed on December 5, 1995 as Exhibit 99.3 to Nextel's
Registration Statement No. 33-80021 on Form S-4 (the "Dial
Page S-4 Registration Statement") and incorporated herein by
reference).................................................. Not applicable
4.20 -- Second Supplemental Indenture, dated as of January 30, 1996,
to the 2004 Indenture between Dial Page (as successor to
Dial Call) and The Bank of New York (filed on April 1, 1996
as Exhibit 4.26 to the Annual Report on Form 10-K of Nextel
for the year ended December 31, 1995 (the "1995 Form 10-K")
and incorporated herein by reference)....................... Not applicable
4.21 -- Third Supplemental Indenture, dated as of January 30, 1996,
to the 2004 Indenture between Nextel (as successor to Dial
Page) and The Bank of New York (filed on April 1, 1996 as
Exhibit 4.27 to the 1995 Form 10-K and incorporated herein
by reference)............................................... Not applicable
4.22 -- Fourth Supplemental Indenture, dated as of June 13, 1997
between Nextel and The Bank of New York (relating to the
2004 Indenture) (filed on June 17, 1997 as Exhibit 4.3 to
the June 17 Form 8-K and incorporated herein by
reference).................................................. Not applicable
4.23 -- Indenture for Senior Discount Notes due 2005, dated as of
December 22, 1993, between Dial Call and The Bank of New
York (the "2005 Indenture") (filed as Exhibit 99.3 to the
OneComm S-4 Registration Statement and incorporated herein
by reference)............................................... Not applicable
4.24 -- Supplemental Indenture, dated as of April 15, 1994, to the
2005 Indenture between Dial Call and The Bank of New York
(filed on April 1, 1996 as Exhibit 4.29 to the 1995 Form
10-K and incorporated herein by reference).................. Not applicable
45
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ----------------------- ----------------
4.25 -- Supplemental Indenture, dated as of June 30, 1995, to the
2005 Indenture between Dial Call and The Bank of New York
(filed on December 5, 1995 as Exhibit 99.4 to the Dial Page
S-4 Registration Statement and incorporated herein by
reference).................................................. Not applicable
4.26 -- Third Supplemental Indenture, dated as of January 30, 1996,
to the 2005 Indenture between Dial Page (as successor to
Dial Call) and The Bank of New York (filed on April 1, 1996
as Exhibit 4.31 to the 1995 Form 10-K and incorporated
herein by reference)........................................ Not applicable
4.27 -- Fourth Supplemental Indenture, dated as of January 30, 1996,
to the 2005 Indenture between Nextel (as successor to Dial
Page) and The Bank of New York (filed on April 1, 1996 as
Exhibit 4.32 to the 1995 Form 10-K and incorporated herein
by reference)............................................... Not applicable
4.28 -- Fifth Supplemental Indenture, dated as of June 13, 1997
between Nextel and The Bank of New York (relating to the
2005 Indenture) (filed on June 17, 1997 as Exhibit 4.4 to
the June 17 Form 8-K and incorporated herein by
reference).................................................. Not applicable
4.29 -- Indenture for Senior Discount Notes due 2007, dated as of
March 6, 1997, between McCaw International and The Bank of
New York, as Trustee (the "McCaw Indenture") (filed on March
31, 1997 as Exhibit 4.24 to Nextel's Annual Report on Form
10-K for the year ended December 31, 1996 (the "1996 Form
10-K") and incorporated herein by reference)................ Not applicable
4.30 -- Form of Note issued pursuant to the McCaw Indenture
(included in Exhibit 4.24).................................. Not applicable
4.31 -- Warrant Agreement, dated as of March 6, 1997, between McCaw
International and The Bank of New York (filed on March 31,
1997 as Exhibit 4.26 to the 1996 Form 10-K and incorporated
herein by reference)........................................ Not applicable
4.32 -- Credit Agreement dated as of September 27, 1996 among
Nextel, NFC, the Restricted Companies party thereto, the
Lenders party thereto, Toronto-Dominion (Texas) Inc., as
Administrative Agent, and The Chase Manhattan Bank, as
Collateral Agent (the "Bank Credit Agreement") (filed on
October 1, 1996 as Exhibit 99.1 to Nextel's Current Report
on Form 8-K dated September 27, 1996 (the "September 27 Form
8-K") and incorporated herein by reference)................. Not applicable
4.33 -- Amendment No. 1 dated as of March 24, 1997 to the Bank
Credit Agreement (filed on July 9, 1997 as Exhibit 99.1 to
Nextel's Current Report on Form 8-K dated July 9, 1997 (the
"July 9 Form 8-K") and incorporated herein by reference).... Not applicable
4.34 -- Amended, Restated and Consolidated Credit Agreement dated as
of September 27, 1996 among Nextel, Nextel Finance Company,
the Restricted Companies party thereto and the Vendors party
thereto (the "Vendor Credit Agreement") (filed on October 1,
1996 as Exhibit 99.2 to the September 27 Form 8-K and
incorporated herein by reference)........................... Not applicable
4.35 -- Amendment No. 1 dated as of March 24, 1997 to the Vendor
Credit Agreement (filed on July 9, 1997 as Exhibit 99.2 to
the July 9 Form 8-K and incorporated herein by reference)... Not applicable
4.36 -- Option Exercise and Lending Commitment Agreement by and
between Nextel and Digital Radio, L.L.C., dated as of June
16, 1997 (filed on July 9, 1997 as Exhibit 10.1 to the July
9 Form 8-K and incorporated herein by reference)............ Not applicable
46
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ----------------------- ----------------
4.37 -- Option Purchase Agreement by and among Nextel and
Unrestricted Subsidiary Funding Company and Option
Acquisition, L.L.C., dated as of June 16, 1997 (filed on
July 9, 1997 as Exhibit 10.3 to the July 9 Form 8-K and
incorporated herein by reference)........................... Not applicable
4.38 -- Option Agreement (First New Option) by and between Option
Acquisition, L.L.C. and Nextel, dated as of June 18, 1997
(filed on July 9, 1997 as Exhibit 10.4 to the July 9 Form
8-K and incorporated herein by reference)................... Not applicable
4.39 -- Option Agreement (Second New Option) by and between Option
Acquisition, L.L.C. and Nextel, dated as of June 18, 1997
(filed on July 9, 1997 as Exhibit 10.5 to the July 9 Form
8-K and incorporated herein by reference)................... Not applicable
4.40 -- Certificate of Designation for 13% Series D Exchangeable
Preferred Stock (filed on July 22, 1997 as Exhibit 4.1 to
Nextel's Current Report on Form 8-K dated July 21, 1997 and
incorporated herein by reference)........................... Not applicable
4.41 -- Amendment No. 2 dated as of June 3, 1997 to the Bank Credit
Agreement (filed on August 5, 1997 as Exhibit 4.41 to
Nextel's Registration Statement No. 333-28461 on Form S-3
(the "August S-3 Registration Statement") and incorporated
herein by reference)........................................ Not applicable
4.42 -- Amendment No. 2 dated as of June 3, 1997 to the Vendor
Credit Agreement (filed on August 5, 1997 as Exhibit 4.42 to
the August S-3 Registration Statement and incorporated
herein by reference)........................................ Not applicable
4.43 -- Amendment No. 3 dated as of August 20, 1997 to the Bank
Credit Agreement (filed on September 5, 1997 as Exhibit 99.1
to Nextel's Current Report on Form 8-K dated September 5,
1997 (the "September 5 Form 8-K") and incorporated herein by
reference).................................................. Not applicable
4.44 -- Amendment No. 3 dated as of August 29, 1997 to the Vendor
Credit Agreement (filed on September 5, 1997 as Exhibit 99.2
to the September 5 Form 8-K and incorporated herein by
reference).................................................. Not applicable
4.45 -- Second Secured Vendor Financing Agreement dated as of August
29, 1997 among Nextel, Nextel Finance Company and the other
Restricted Companies thereto and the Vendor Lenders thereto
(the "Second Secured Vendor Financing Agreement") (filed as
Exhibit 99.3 to the September 5 Form 8-K and incorporated
herein by reference)........................................ Not applicable
4.46 -- Amendment No. 4 dated as of September 10, 1997 to the Bank
Credit Agreement (filed on September 22, 1997 as Exhibit 4.2
to Nextel's Current Report on Form 8-K dated September 22,
1997 (the "September 22 Form 8-K") and incorporated herein
by reference)............................................... Not applicable
4.47 -- Amendment No. 4 dated as of September 10, 1997 to the Vendor
Credit Agreement (filed on September 22, 1997 as Exhibit 4.3
to the September 22 Form 8-K and incorporated herein by
reference).................................................. Not applicable
4.48 -- Amendment No. 1 to the Second Vendor Financing Agreement
dated as of September 10, 1997 (filed on September 22, 1997
as Exhibit 4.4 to the September 22 Form 8-K and incorporated
herein by reference)........................................ Not applicable
4.49 -- Indenture between Nextel and Harris Trust and Savings Bank,
as Trustee, dated September 17, 1997 (filed on September 22,
1997 as Exhibit 4.1 to the September 22 Form 8-K and
incorporated herein by reference)........................... Not applicable
4.50 -- Indenture between Nextel and Harris Trust and Savings Bank,
as Trustee, dated as of October 22, 1997 (filed on October
23, 1997 as Exhibit 4.1 to Nextel's Current Report on Form
8-K dated October 23, 1997 (the "October 23 Form 8-K") and
incorporated herein by reference)........................... Not applicable
47
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ----------------------- ----------------
4.51 -- Amendment No. 5 dated as of October 9, 1997 to the Bank
Credit Agreement (filed on October 23, 1997 as Exhibit 4.2
to the October 23 Form 8-K and incorporated herein by
reference).................................................. Not applicable
4.52 -- Amendment No. 5 dated as of October 9, 1997 to the Vendor
Credit Agreement (filed on October 23, 1997 as Exhibit 4.3
to the October 23 Form 8-K and incorporated herein by
reference).................................................. Not applicable
4.53 -- Amendment No. 2 dated as of October 9, 1997 to the Second
Vendor Financing Agreement (filed on October 23, 1997 as
Exhibit 4.4 to the October 23 Form 8-K and incorporated
herein by reference)........................................ Not applicable
5 -- Opinion of Jones, Day, Reavis & Pogue re validity
23.1 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5)
23.2 -- Consent of Deloitte & Touche LLP
*24 -- Powers of Attorney
- ---------------
* Previously filed.