<PAGE>   1
                                                                   EXHIBIT 10.7



















                         NEXTEL COMMUNICATIONS, INC.
                    CHANGE OF CONTROL RETENTION BONUS AND
                              SEVERANCE PAY PLAN




























<PAGE>   2




                              Table of Contents
                              -----------------
<TABLE>
<CAPTION>
                                                                      Page
                                                                      ----
<S>                                                                   <C>
1.  General Statement of Purpose.........................................1
2.  Effective and Termination Dates......................................1
3.  Definitions..........................................................1
4.  Eligibility; Termination Following a Change of Control...............4
5.  Severance Compensation...............................................6
6.  No Mitigation Obligation.............................................7
7.  Certain Payments Not Considered for Other Benefits, etc..............7
8.  Arbitration..........................................................7
9.  Employment Rights....................................................7
10. Withholding of Taxes.................................................8
11. Successors and Binding Effect........................................8
12. Governing Law........................................................8
13. Validity.............................................................8
14. Captions.............................................................9
15. Construction.........................................................9
16. Administration of the Plan...........................................9
17. Amendment and Termination...........................................10
18. Other Plans, etc....................................................10

EXHIBIT A..............................................................A-1
EXHIBIT B..............................................................B-1
EXHIBIT C..............................................................C-1
</TABLE>



<PAGE>   3

                         NEXTEL COMMUNICATIONS, INC.
           CHANGE OF CONTROL RETENTION BONUS AND SEVERANCE PAY PLAN


    1. General Statement of Purpose. The Board of Directors (the "Board") of
Nextel Communications, Inc. (the "Company") has considered the effect a change
of control of the Company may have on key employees of the Company and its
subsidiaries. Given the level of acquisition and change of control activity in
today's business environment, the Board recognizes and understands the
concerns such employees have for their careers. The possible occurrence of a
change-of-control transaction may cause key employees to consider major career
changes in an effort to assure financial security for themselves and their
families. The Company desires to assure fair treatment of its key employees in
the event of a change of control and to allow them to make critical career
decisions without undue time pressure and financial uncertainty, increasing
their willingness to remain with the Company notwithstanding the outcome of a
possible change-of-control transaction.

    The Company recognizes that the possibility of a change of control exists
and desires to assure itself of both the present and future continuity of
management, desires to establish certain retention and severance benefits for
certain of its Covered Employees (as defined below) applicable in a change of
control, and wishes to insure that its Covered Employees are not practically
disabled from discharging their duties in respect of a proposed or actual
transaction involving a change of control.

    2. Effective and Termination Dates.  The Plan shall be effective as of
July 14, 1999 (the "Effective Date").  The Plan will automatically terminate
when all benefits payable hereunder have been paid.

    3. Definitions.  Where the following words and phrases appear in the Plan,
they shall have the respective meanings set forth below:

    (a) "Base Salary" means, with respect to each Covered Employee, the annual
base salary, exclusive of any bonus, special pay (including any retention pay)
or other benefits he or she may receive, but without giving effect to any
salary reductions authorized by the Covered Employee under any qualified or
non-qualified deferred compensation plan of an Employer, in effect (i) on the
date immediately preceding the date of the relevant Change of Control or (ii)
on the date of the Covered Employee's termination of employment with his or
her Employer, whichever is the highest.

    (b)  "Cause" shall mean with respect to any Covered Employee:

        (i)    conviction of a felony involving an intentional act of fraud,
    embezzlement or theft in connection with his employment with an Employer;

        (ii)   intentional wrongful damage to property, contractual interests
    or business relationships of an Employer;



<PAGE>   4


        (iii)  intentional wrongful disclosure of secret processes or
    confidential information of an Employer in violation of any agreement with
    or policy of the Employer; or

        (iv)   conduct contrary to an Employer's announced policies or
    practices (including those contained in the Corporation's Employee
    Handbook) where either:

               (A) the nature and/or severity of the conduct or its
               consequences typically would have resulted in immediate
               termination based on the Corporation's established employee
               termination or disciplinary practices in place before the
               Reference Date (as defined in Section 3(h)(i) below); or

               (B) the Covered Employee has been provided with written notice
               detailing the relevant policy or practice and the nature of the
               objectionable conduct or other violation and within 20 business
               days of the receipt of such notice the Covered Employee has not
               remedied the violation or ceased to engage in the objectionable
               conduct.

For purposes of the Plan, no act or failure to act on the part of the Covered
Employee shall be deemed "intentional" if it was due primarily to an error in
judgment or negligence, but shall be deemed "intentional" only if done or
omitted to be done by the Covered Employee not in good faith and without
reasonable belief that his action or omission was in the best interest of his
or her Employer. Nothing herein will limit the right of the Covered Employee
or his beneficiaries to contest the validity or propriety of any such
determination.

    (c) "Change of Control" means the occurrence of any of the following events:

            (i) The Company is merged or consolidated or reorganized into or
        with another company or other legal entity, and as a result of such
        merger, consolidation or reorganization less than a majority of the
        combined voting power of the then outstanding securities of such
        resulting company or entity immediately after such transaction is held
        directly or indirectly in the aggregate by the holders of voting
        securities of the Company immediately prior to such transaction,
        including voting securities issuable upon the exercise or conversion
        of options, warrants or other securities or rights;

            (ii) The Company sells or otherwise transfers all or substantially
        all of its assets to another company or other legal entity, and as a
        result of such sale or other transfer of assets, less than a majority
        of the combined voting power of the then outstanding securities of
        such company or other entity immediately after such sale or transfer
        is held directly or indirectly in the aggregate by the holders of
        voting securities of the Company immediately prior to such sale or
        transfer, including voting securities issuable upon exercise or
        conversion of options, warrants or other securities or rights;

            (iii) There is a report filed on Schedule 13D or Schedule 14D-1
        (or any successor schedule, form or report), each as promulgated
        pursuant to the Securities Exchange Act of 1934, as amended ( the
        "Exchange Act"), disclosing that any "person" (as that term is used in
        Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become
        the "beneficial owner" (as that term is used in Rule 13d-3 promulgated
        under the Exchange Act) of


                                      2
<PAGE>   5

        securities representing 50% or more of the voting securities of the
        Company (or any successor thereto by operation of law or by reason of
        the acquisition of all or substantially all of the assets of the
        Company), including voting securities issuable upon the exercise of
        options, warrants or other securities or rights;

            (iv) The Company (or any successor thereto by operation of law or
        by acquisition of all or substantially all of the assets of the
        Company) files a report or proxy statement pursuant to the Exchange
        Act disclosing in response to Form 8-K or Schedule 14A (or any
        successor schedule, form, report or item therein) that a change in
        control of the Company (or such successor) has occurred.

            Notwithstanding the foregoing provisions of subsections (iii) and
        (iv) above, a "Change of Control" shall not be deemed to have occurred
        solely because (x) the Company, (y) an entity in which the Company
        directly or indirectly beneficially owns 50% or more of the voting
        securities or (z) any Company-sponsored employee stock ownership plan
        or other employee benefit plan of the Company, either files or becomes
        obligated to file a report or proxy statement under or in response to
        Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any
        successor form, report, schedule or item therein) under the Exchange
        Act, disclosing beneficial ownership by it of voting securities,
        whether in excess of 50% or otherwise, or because the Company reports
        that a change of control of the Company has or may have occurred or
        will or may occur in the future by reason of such beneficial
        ownership.

    (d)  "Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.

    (e) "Covered Employee" means any individual recognized by an Employer as a
regular full-time employee of an Employer who is subject to U.S. income tax
withholding to whom the Plan applies pursuant to Section 4(a) below.

    (f) "Employee Benefits" means, with respect to any Covered Employee, all
life insurance, medical insurance (including dental and vision care) and
disability plans and programs in which the Covered Employee was entitled to
participate immediately prior to the relevant Change of Control.

    (g)  "Employer" means the Company, each of its wholly owned subsidiaries,
Nextel International, Inc., Nextel International [Services] Ltd. and any other
subsidiary of the Company to which the Plan has been extended by the Board (or
by the Compensation Committee of the Board) and which has adopted the Plan.

    (h)  "Good Reason" means, with respect to any Covered Employee:

        (i) any significant and adverse change in the Covered Employee's
    duties, responsibilities and authority, as compared in each case to the
    corresponding circumstances in place on the date immediately preceding the
    first occurrence of a Change of Control after the Effective Date (the
    "Reference Date"); or

        (ii)a relocation of the principal work location at which the Covered
    Employee is based on the Reference Date to a location more than 30 miles
    away from such location; or



                                      3
<PAGE>   6
        (iii) a reduction in Base Salary or bonus potential not agreed to by
    the Covered Employee, or any other significant adverse financial
    consequences associated with the Covered Employee's employment in
    comparison to the corresponding circumstances in place on the Reference
    Date; or

        (iv) a breach by any Employer of its obligations under any agreement
    to which such Employer and the Covered Employee are parties, that remains
    uncured after 20 business days following such Employer's receipt of a
    written notice from the Covered Employee specifying the particulars in
    reasonable detail.

Any good faith determination by the Covered Employee that "Good Reason" exists
will be presumptively correct for purposes of this Plan.

    (i)  "Plan" means the Nextel Communications, Inc. Change of Control
Retention Bonus and Severance Pay Plan.

    (j)  "Retention Bonus" means the Retention Bonus described in Section
4(b).

    (k) "Severance Compensation" means Severance Pay and other benefits
provided by Section 5(a) and (b).

    (l)  "Severance Pay" means the amounts payable as set forth in Section
5(a) and (b).

    (m) "Severance Period" means the period of time commencing on the date of
the first occurrence of a Change of Control and continuing until the earlier
of (i) the first anniversary of such date or (ii) the Covered Employee's
death.

    (n) "Target Bonus" means the amount obtained by multiplying the Covered
Employee's target bonus percentage as established and in effect for the
Covered Employee (i) on the Reference Date, or (ii) on the date of the Covered
Employee's termination of employment with his or her Employer, whichever is
the highest, by the Covered Employee's Base Salary.

    4.  Eligibility; Termination Following a Change of Control.

    (a) Subject to the limitations described below, the Plan applies to all
individuals who are recognized by an Employer as regular full-time salaried
employees in any of the following salary grade levels (as determined on July
14, 1999, and adjusting as appropriate for any changes to the Company's system
of classifying employees by salary grade level implemented subsequent to such
date): EX3, EX2, EX1 and E7, who are employed by an Employer on or after the
date that (x) the Company enters into a definitive agreement providing for a
Change of Control, (y) a third party publicly announces a bona fide intention
to commence a tender offer for outstanding voting securities of the Company or
otherwise to take actions that are reasonably designed and expected to result
in a Change of Control or (z) a Change of Control otherwise occurs (the date
described in the foregoing clauses (x), (y) or (z), as appropriate, the
"Trigger Date").

    (b) Subject to the last sentence of this Section 4(b), in the event of a
Change of Control, a Covered Employee shall be entitled to receive a Retention
Bonus in the amount described on Exhibit





                                      4
<PAGE>   7


A for such Covered Employee. The Retention Bonus shall be payable in two
installments. The first installment shall be paid on the effective date of any
Change of Control. The second installment shall be paid on the first
anniversary of the relevant Change of Control. Notwithstanding the foregoing,
if a Covered Employee's employment is terminated by an Employer after the
occurrence of a Trigger Date, and a Change of Control occurs prior to the
first anniversary of such Trigger Date, then if such termination is without
Cause and before the full amount of the Retention Bonus is paid to the Covered
Employee, the Covered Employee shall be paid the entire remaining portion of
the Retention Bonus in full on the later of (x) the effective date of the
Change of Control or (y) the date of such termination of employment. If a
majority of the members of the Board in office on the date immediately
preceding the relevant Trigger Date (or a majority of the members of the
Compensation Committee thereof on such date) should determine (after
consultation with the Company's independent auditors) that the grant of any
right to receive a Retention Bonus pursuant to this Section 4(b) would prevent
the relevant proposed merger or other business combination transaction
contemplated to constitute a Change of Control (and intended by the Company
and the other party or parties thereto to be accounted for as a pooling of
interests) from meeting all criteria required for pooling of interests
accounting treatment, then such Board members (or members of the Compensation
Committee thereof) shall be authorized to modify the amount or any of the
other terms otherwise applicable to any Covered Employee's Retention Bonus, or
the group of Covered Employees entitled to receive any such Retention Bonus,
but in each case only to the extent determined to be necessary to permit such
relevant transaction to be accounted for as a pooling of interests.

    (c) A Covered Employee will be entitled to the Severance Compensation
described in Section 5 if (i) the Covered Employee's employment is terminated
by an Employer during the Severance Period and such termination is without
Cause and is not described in Subsection (e) of this Section, or (ii) in the
case of each Covered Employee as to whom Exhibit B indicates that this Section
4(c)(ii) applies to such Covered Employee, the Covered Employee voluntarily
terminates his employment with his Employer during the Severance Period for
Good Reason.

    (d) A termination of employment described in Subsection (c) of this
Section will not affect any rights that the Covered Employee may have pursuant
to any agreement, policy, plan, program or arrangement of the Company or any
other Employer providing Employee Benefits, which rights shall be governed by
the terms thereof, except that any severance benefits provided thereunder
shall be reduced to the extent of the Severance Compensation actually provided
to such Covered Employee under and pursuant to this Plan.

    (e) Notwithstanding the preceding provisions of this Section, a Covered
Employee will not be entitled to Severance Compensation if his employment with
an Employer is terminated during the Severance Period for Cause or because:

        (i) of the Covered Employee's retirement or voluntary withdrawal from
    employment, other than as described in Subsection (c)(ii) or Subsection
    (c)(iii) of this Section;

        (ii)of the Covered Employee's death;


                                      5
<PAGE>   8

        (iii) the Covered Employee becomes permanently disabled within the
    meaning of, and begins actually to receive disability benefits pursuant
    to, the long-term disability plan in effect for, or applicable to, the
    Covered Employee;

        (iv) of the Covered Employee's failure to return to work after a
    temporary lay-off; or

        (v) of the Covered Employee's withdrawal or loss of employment due to
    personal leave, other than as described in Subsection (c)(ii) or
    Subsection (c)(iii) of this Section.

    5.  Severance Compensation.

    (a) If a Covered Employee's employment is terminated in circumstances that
entitle the Covered Employee to Severance Compensation pursuant to Section
4(c), the Company will pay to the Covered Employee as Severance Pay in a
single lump sum payment the amounts described on Exhibit C on the payroll date
of the next full payroll cycle after the termination date, and will continue
to provide to the Covered Employee the Employee Benefits for the period set
forth on Exhibit C.

    (b) Without limiting the rights of a Covered Employee at law or in equity,
if the Company fails to make any payment or provide any benefit required to be
made or provided hereunder on a timely basis, the Company will pay interest on
the amount or value thereof at an annualized rate of interest equal to the
so-called composite "prime rate" as quoted from time to time during the
relevant period in the Eastern Edition of The Wall Street Journal plus the
lesser of 5% or the maximum rate of interest allowed by law. Such interest
will be payable as it accrues on demand. Any change in such prime rate or
maximum rate will be effective on and as of the date of such change.

    (c) Notwithstanding any provision of the Plan to the contrary, the rights
and obligations under this Section and under Section 8 will survive any
termination or expiration of the Plan.

    (d) Anything in this Plan to the contrary notwithstanding, but subject to
the last sentence of this Section 5(d), in the event that it shall be
determined that any payment or distribution of cash or other compensation or
benefit by the Company or any of its affiliates to or for the benefit of any
Covered Employee, whether paid or payable or distributed or distributable
pursuant to the terms of this Plan or otherwise pursuant to or by reason of
any other agreement, policy, plan, program or arrangement (a "Payment"), would
be subject to the excise tax imposed by Section 4999 of the Code (or any
successor provision thereto), by reason of being considered "contingent on a
change in ownership or control" of the Company, within the meaning of Section
280G of the Code (or any successor provision thereto) or to any similar tax
imposed by state or local law, or any interest or penalties with respect to
such tax (such tax or taxes, together with any such interest and penalties,
being hereafter collectively referred to as the "Excise Tax"), then the
Covered Employee will be entitled to receive from the Company an additional
payment or payments (collectively, a "Gross-Up Payment"). The Gross-Up Payment
will be in an amount such that, after payment by the Covered Employee of all
taxes (including any interest or penalties imposed with respect to such
taxes), including any Excise Tax imposed upon the Gross-Up Payment, the
Covered Employee retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed on the Payment. The Gross-Up Payment shall be paid to the Covered
Employee prior to the date on which any Payment part or all of which is
subject to the Excise Tax is made to the Covered Employee. The Covered
Employee shall cooperate in all





                                      6
<PAGE>   9



reasonable respects with the Company (but at the Company's sole cost and
expense) to attempt to minimize any such tax liability (such cooperation not
to include foregoing or deferring any payments or benefits to which he or she
is otherwise entitled), and if the Covered Employee later receives a refund of
any part of the Excise Tax, such Covered Employee shall promptly after receipt
of such refund pay back to the Company so much of the Gross-Up Payment as is
required to avoid a windfall. If a majority of the members of the Board in
office on the day immediately preceding the relevant Trigger Date (or a
majority of the members of the Compensation Committee thereof on such date)
should determine (after consultation with the Company's independent auditors)
that the grant of any right to receive a Gross-Up Payment pursuant to this
Section 5(d) would prevent the relevant proposed merger or other business
combination transaction contemplated to constitute a Change of Control (and
intended by the Company and the other party or parties thereto to be accounted
for as a pooling of interests) from meeting all criteria required for pooling
of interests accounting treatment, then such Board members (or members of the
Compensation Committee thereof) shall be authorized to modify the amount of or
any of the other terms otherwise applicable to any Covered Employees's right
to receive a Gross-Up Payment, but in each case only to the extent determined
to be necessary to permit such relevant transaction to be accounted for as a
pooling of interests.

    6. No Mitigation Obligation. The Company hereby acknowledges that it will
be difficult for a Covered Employee to find reasonably comparable employment
following his termination of employment with his Employer. Accordingly, the
provision of Severance Compensation by the Company to a Covered Employee in
accordance with the terms of the Plan is hereby acknowledged by the Company to
be reasonable, and a Covered Employee will not be required to mitigate the
amount of any payment provided for in the Plan by seeking other employment or
otherwise, nor will any profits, income, earnings or other benefits from any
source whatsoever create any mitigation, offset, reduction or any other
obligation on the part of a Covered Employee hereunder or otherwise, except as
expressly provided in Exhibit B.

    7. Certain Payments Not Considered for Other Benefits, etc. Payments of
Severance Pay will not be included as earnings for the purpose of calculating
contributions or benefits under any Employee Benefit plan of the Company or of
any other Employer. Such payments and payments of Severance Pay will not be
made from any benefit plan funds, and shall constitute an unfunded, unsecured
obligation of the Company.

    8. Arbitration. Any controversy or claim arising out of or relating to
this Plan or the breach thereof, shall be settled by arbitration in the
Washington, D.C. area in accordance with the laws of the State of Delaware by
three arbitrators, one of whom shall be appointed by the Company, one by the
Covered Employee and the third of whom shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the appointment of a
third arbitrator, then the third arbitrator shall be appointed by the Chief
Judge of the United States District Court for the Eastern District of
Virginia. The arbitration shall be conducted in accordance with the rules of
the American Arbitration Association, except with respect to the selection of
arbitrators, which shall be as provided in this Section 8. Judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.

    9. Employment Rights.  Nothing expressed or implied in the Plan shall
create any right or duty on the part of an Employer or a Covered Employee to
have the Covered Employee remain in the employment of an Employer at any time
prior to or following a Change of Control.



                                      7
<PAGE>   10


    10. Withholding of Taxes.  The Company may withhold from any amounts
payable under the Plan all federal, state, city or other taxes as shall be
required pursuant to any law or government regulation or ruling.

    11.  Successors and Binding Effect.

    (a) The Company shall require any successor (including without limitation
any persons acquiring directly or indirectly all or substantially all of the
business and/or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise, and such successor shall be deemed
the Company for the purposes of the Plan) to assume and agree to perform the
obligations under the Plan in the same manner and to the same extent the
Company would be required to perform if no such succession had taken place.
The Plan shall be binding upon and inure to the benefit of the Company and any
successor to the Company, but shall not otherwise be assignable, transferable
or delegable by the Company.

    (b) The rights under the Plan shall inure to the benefit of and be
enforceable by each Covered Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees and/or legatees.

    (c) The rights under the Plan are personal in nature and neither the
Company nor any Covered Employee shall, without the consent of the other,
assign, transfer or delegate the Plan or any rights or obligations hereunder
except as expressly provided in this Section 11. Without limiting the
generality of the foregoing, a Covered Employee's right to receive payments
hereunder shall not be assignable, transferable or delegable, whether by
pledge, creation of a security interest or otherwise, other than by a transfer
by his or her will or by the laws of descent and distribution and, in the
event of any attempted assignment or transfer contrary to this Section, the
Company shall have no liability to pay any amount so attempted to be assigned,
transferred or delegated.

    (d) The obligation of the Company to make payments and/or provide benefits
hereunder shall represent an unsecured obligation of the Company.

    (e) The Company recognizes that each Covered Employee will have no
adequate remedy at law for breach by the Company of any of the agreements
contained herein and, in the event of any such breach, the Company hereby
agrees and consents that each Covered Employee shall be entitled to a decree
of specific performance, mandamus or other appropriate remedy to enforce
performance of obligations of the Company under the Plan.

    12.  Governing Law.  The validity, interpretation, construction and
performance of the Plan shall be governed by the laws of the State of
Delaware, without giving effect to the principles of conflict of laws of such
State.

    13. Validity. If any provisions of the Plan or the application of any
provision hereof to any person or circumstance is held invalid, unenforceable
or otherwise illegal, the remainder of the Plan and the application of such
provision to any other person or circumstances shall not be affected, and the
provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it
enforceable, valid and legal.



                                      8
<PAGE>   11



    14.  Captions.  The captions in the Plan are for convenience of reference
only and do not define, limit or describe the scope or intent of the Plan or
any part hereof and shall not be considered in any construction hereof.

    15.  Construction.  The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender and the singular shall be
deemed to include the plural, unless the context clearly indicates to the
contrary.

    16.  Administration of the Plan.

    (a)  In General:  The Plan shall be administered by the Company, which
shall be the named fiduciary under the Plan.

    (b) Delegation of Duties: The Company may delegate any of its
administrative duties, including, without limitation, duties with respect to
the processing, review, investigation, approval and payment of any Retention
Bonus or Severance Pay to a named administrator or administrators.

    (c) Regulations: The Company shall promulgate any rules and regulations it
deems necessary in order to carry out the purposes of the Plan or to interpret
the terms and conditions of the Plan; provided, however, that no rule,
regulation or interpretation shall be contrary to the provisions of the Plan.

    (d) Claims Procedure: Except as otherwise provided in the Plan (including,
without limitation, in the final sentence of the definition of the term "Good
Reason", in the final sentence of Section 4(b) and in the final sentence of
Section 5(d)), the Company shall determine the rights of any employee of the
Company to any Retention Bonus or Severance Compensation hereunder. Any
employee or former employee of any Employer who believes that he has not
received any benefit under the Plan to which he believes he is entitled, may
file a claim in writing with the Human Resources Department of the Company.
The Company shall, no later than 90 days after the receipt of a claim, either
allow or deny the claim by written notice to the claimant. If a claimant does
not receive written notice of the Company's decision on his claim within such
90-day period, the claim shall be deemed to have been denied in full.

    A denial of a claim by the Company, wholly or partially, shall be written
in a manner calculated to be understood by the claimant and shall include:

        (i) the specific reason or reasons for the denial;

        (ii)specific reference to pertinent Plan provisions on which the
    denial is based;

        (iii) a description of any additional material or information
    necessary for the claimant to perfect the claim and an explanation of why
    such material or information is necessary; and

        (iv)an explanation of the claim review procedure.



                                      9
<PAGE>   12

A claimant whose claim is denied (or his duly authorized representative) may,
within 30 days after receipt of denial of his claim, request a review of such
denial by the Company by filing with the Secretary of the Company a written
request for review of his claim. If the claimant does not file a request for
review with the Company within such 30-day period, the claimant shall be
deemed to have acquiesced in the original decision of the Company on his
claim. If a written request for review is so filed within such 30-day period,
the Company shall conduct a full and fair review of such claim. During such
full review, the claimant shall be given the opportunity to review documents
that are pertinent to his claim and to submit issues and comments in writing.
The Company shall notify the claimant of its decision on review within 60 days
after receipt of a request for review. Notice of the decision on review shall
be in writing. If the decision on review is not furnished to the claimant
within such 60-day period, the claim shall be deemed to have been denied on
review. The existence of the claims determination and review procedures set
forth in this Section 16(d) shall not impose on any Covered Employee any
obligation or requirement to exhaust his remedies or to commence proceedings
under this Section 16(d) prior to seeking an arbitration of any controversy or
claim pursuant to Section 8 hereof, nor shall the provision of this Section
16(d) operate to limit any Covered Employee's rights to seek or obtain
specific performance or other remedies pursuant to Section 11(e) hereof.

    (e) Requirement of Receipt: Upon receipt of a Retention Bonus or any
Severance Compensation hereunder, the Company reserves the right to require
any Covered Employee to execute a receipt evidencing the amount and payment of
such Retention Bonus or Severance Compensation.

    17. Amendment and Termination. The Company reserves the right, except as
hereinafter provided, at any time and from time to time, to amend, modify,
change or terminate the Plan, including any Exhibit hereto; provided, however,
that except as expressly permitted by the final sentences of Sections 4(b) and
5(d) hereof, after the Effective Date, any such amendment, modification,
change or termination that adversely affects the rights of any Covered
Employee under the Plan will not take effect and be applicable to any Covered
Employee if either (A) (1) a Trigger Date (as defined in Section 4(a) of this
Plan) occurs within six months after the date on which such amendment,
modification, change or termination is made and (2) a Change of Control
related to or growing out of the specific event causing the occurrence of the
Trigger Date occurs thereafter or (B) such amendment, modification, change or
termination is made at any time (1) during the period between the occurrence
of a relevant Trigger Date and the occurrence of the related Change of Control
related to or growing out of the specific event causing the occurrence of the
Trigger Date or (2) at or after the occurrence of a Change of Control (and
before all payments and benefits hereunder associated with such Change of
Control are paid or made available as contemplated herein), without (in each
of the circumstances described in the foregoing clauses (A) and (B)) the
written consent of such Covered Employee.

    18. Other Plans, etc. If the terms of this Plan are inconsistent with the
provisions of any other plan, program, contract or arrangement of an Employer
with respect to any of the Covered Employees, to the extent such plan,
program, contract or arrangement may be amended by the Employer, the terms of
the Plan (insofar as they may be applicable to any such Covered Employee) will
be deemed to so amend such plan, program, contract or arrangement, and the
terms of the Plan will govern.





                                      10
<PAGE>   13

        IN WITNESS WHEREOF, Nextel Communications, Inc. has caused the Plan to
be executed as of the 14th day of July, 1999.

                                            NEXTEL COMMUNICATIONS, INC.

                                            /s/ Timothy Donahue
                                            ----------------------------------
                                            Timothy Donahue, President

                                      11
<PAGE>   14



                         NEXTEL COMMUNICATIONS, INC.
           CHANGE OF CONTROL RETENTION BONUS AND SEVERANCE PAY PLAN

                                  EXHIBIT A

<TABLE>
<CAPTION>

                RETENTION BONUS
                ---------------

                   Position                  Retention Bonus
                   --------                  ---------------

<S>                                      <C>

Top Management (Tier 1)(1)                150% of Base Salary plus 150%
                                          of Target Bonus


Top Management (Tier 2)(2)                100% of Base Salary plus 100% of
                                          Target Bonus

Other Senior Management(3)                50% of Base Salary
</TABLE>




--------
(1)       All employees in employee classification EX3.
(2)       All employees in employee classifications EX2 and EX1.
(3)       All employees in employee classification E7.








                                       A-1

<PAGE>   15



                         NEXTEL COMMUNICATIONS, INC.
           CHANGE OF CONTROL RETENTION BONUS AND SEVERANCE PAY PLAN

                                  EXHIBIT B


                Covered Employees Subject to Section 4(c)(ii)
                       (terminations for "Good Reason")



           Employees in employee classifications EX3, EX2 and EX1.


                                     B-1


<PAGE>   16



                          NEXTEL COMMUNICATIONS, INC.
            CHANGE OF CONTROL RETENTION BONUS AND SEVERANCE PAY PLAN

                                   EXHIBIT C



<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------
          POSITION                         SEVERANCE PAY                          BENEFITS
---------------------------------------------------------------------------------------------------------------
<S>                          <C>                                         <C>
Top Management(1)             200% of Base Salary and Target Bonus                 2 Years


Other Senior Management(2)    100% of Base Salary and Target Bonus                 1 Year


                              The above amounts shall be reduced by any    For any Covered Employee who
                              severance pay or allowance mandated by       becomes covered under another
                              statute or other law or other arrangement    group health plan, benefits under
                              of or with the Company; provided, however,   the Company's group health plan
                              that the above amounts are in addition to    will be coordinated as provided
                              any compensation to which a Covered          in the Company's plan.
                              Employee may be entitled under the notice
                              provisions of the Worker Adjustment and
                              Retraining Notification Act of 1988.
---------------------------------------------------------------------------------------------------------------
</TABLE>

------------------
(1)       All employees in employee classifications EX3, EX2 and EX1.
(2)       All employees in employee classification E7.



                                       C-1