|ARCH WIRELESS
HOLDINGS, INC.RETENTION PLAN


I.     Introduction


     A.    
          Purpose.


The
purpose of this Retention Plan (the Plan) adopted by the Board of Directors
(the Board) of Arch Wireless Holdings, Inc. (the Company) is to
attract and retain management and professional employees essential to continuing the
business of the Company through its restructuring. This Plan will be effective only if it
is approved by the United States Bankruptcy Court for the District of Massachusetts.


B.     Administration.


The
Plan will be administered by the Board which will have the discretion to determine all
issues of fact as well as to interpret the Plans provisions. The Board may delegate
to the Companys Chief Executive Officer certain of its Plan responsibilities with
respect to particular Plan issues or certain classes of Plan participants (other than
himself), and any reference to the Board in the Plan shall in the case of such delegation
be deemed a reference to the Companys Chief Executive Officer.


     C.    
          Participants.


All
persons employed by the Company on the date on which the Company files a voluntary
petition in the United States Bankruptcy Court for the District of Massachusetts pursuant
to Chapter 11 of the Bankruptcy Code (the Start Date), and who are designated
as Participants on Exhibit A and such other individuals employed on the Start Date as are
thereafter selected by the Chief Executive Officer as participants shall be deemed
Participants under the terms of the Plan. Any person designated as a
Participant who ceases to be an employee of the Company shall also cease to be a
Participant provided that in certain cases benefits may be paid on cessation of employment
as provided herein. However, any Participant who only ceases to be an employee of the
Company as a result of becoming an employee of another entity which is a member of the
same controlled group of corporations or the same group of commonly controlled trades or
businesses within the meaning of Sections 414(b) and (c) of the Internal Revenue Code of
1986, as amended, shall not be treated as having ceased to be a Participant.


II.     Retention Bonus


     A.    
          Retention Bonus Amount.


The
maximum amount payable to a Participant as a bonus under this Article II (the
Retention Bonus) is the dollar amount set opposite the Participants name
on Exhibit A, attached hereto and incorporated by reference.*


B.    
Retention Bonus Payment.


The
Retention Bonus will be paid in the following Installments:


     (i)    
          The first Installment of 25% of each Participants Retention Bonus will be
          paid on the earlier of (the First Installment Date) (a) the six
          month anniversary of the Start Date, or (b) the effective date of the
          Companys plan of reorganization (the Reorganization Plan Effective
          Date);


     (ii)    
          The second Installment of 25% of each Participants Retention Bonus will be
          paid on the Reorganization Plan Effective Date (the Second Installment
          Date); and


     (iii)    
          The third Installment of 50% of each Participants Retention Bonus will be
          paid on June 30, 2003 (the Final Installment Date).


     C.    
          Conditions for Receipt of Retention Bonus.


     (i)    
          Employment. Except as provided in Article II, Paragraph D, a Participant
          will be entitled to receive each Installment of the Retention Bonus only if he
          or she is employed by the Company on the relevant Installment Date.


     (ii)    
          Liquidation. If the Company is liquidated or commences a plan of
          liquidation prior to a Change in Control as defined in Paragraph D, below, all
          Installments payable after such liquidation will be forfeited.


     D.    
          Accelerated Retention Payment.


Subject to Paragraph C (ii):


     (i)    
          If a Participants employment is terminated by the Company, other than for
          Cause, Death or Disability, all unpaid Installments will be immediately due and
          payable to such Participant as of his or her termination of employment.
          Cause for purposes of this accelerated payment will mean the
          Participants willful and continued failure to substantially perform his or
          her reasonable assigned duties (other than as a result of incapacity due to
          physical or mental condition), or the Participants willful engagement in
          illegal conduct or gross misconduct (which in the case of a Senior Officer is
          materially and demonstrably injurious to the Company or Arch Wireless, Inc.
          (AWI)), or conviction of a felony. A Senior Officer is the CEO, the
          President and Chief Operating Officer (the COO), the Executive Vice
          President and Chief Financial Officer (CFO), an Executive Vice
          President, a Senior Vice President, a Division President and an Executive Level
          Vice President. If a Participant dies or is terminated in connection with
          becoming disabled within the meaning of the Companys long term disability
          benefit program, the Participant (or his estate) will receive a fraction of the
          next Installment to be paid which is determined by multiplying the dollar amount
          of that Installment by a fraction the numerator of which is the number of weeks
          the Participant worked since the Installment payment prior to his death or
          disability (or, if none, the Start Date) and denominator of which is the total
          number of weeks from such last Installment (or, if none, the Start Date) to the
          next Installment; and


     (ii)    
          if a Change in Control occurs prior to the Final Installment other than a Change
          of Control involving a significant investment as described in the next sentence,
          then all unpaid Installments will be immediately due and payable to all
          Participants as of the Change in Control. A Change in Control for purposes of
          this Retention Plan, will be the sale of substantially all of the assets of the
          Company (or its direct or indirect parent entity) as an operating business, a
          merger of the Company, (or its direct or indirect parent entity with an entity
          other than the Company), or a significant investment, with a value of at least
          twenty-five million dollars ($25,000,000), in the Company, its subsidiaries or
          its direct or indirect parent entity on terms satisfactory to the Administrative
          Agent for the Secured Lenders if such investment occurs prior to the
          Reorganization Plan Effective Date (a Change in Control).


     E.    
          Special Sale Bonus. In the event of a Change in Control on or prior to
          the Reorganization Plan Effective Date, a cash bonus will be payable to the
          executives named in this Paragraph E, as provided below, of a percentage of the
          Net Transaction Value. The Net Transaction Value will equal the total value of
          the transaction less the transaction costs directly associated with such
          transaction.


Net Transaction Value
CEO E. Baker        .2%
President & COO Daniels     .15%
EVP & CFO Pottle        .15%





III.     Administration


     A.    
          Arbitration.


All
claims arising out of or relating to the Plan shall be settled by arbitration in Boston,
Massachusetts by three arbitrators, one of whom shall be appointed by the Company, one by
the Participant and the third of whom shall be appointed by the first two arbitrators (or
by the Chief Judge of the U.S. District Court for Massachusetts, if the two arbitrators
cannot agree). Each party shall pay the fees and expenses of the arbitrator appointed by
the party and one-half of the fees and expenses of the third arbitrator. 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 by this
Article III, Paragraph A. The arbitrators may award reasonable attorneys fees, costs
and expenses in connection with the arbitration.


     B.    
          Amendment and Termination.


Only
amendments intended solely to clarify or interpret any provisions of the Plan may be
adopted at any time. The Plan shall automatically terminate on the date all payments due
under the Plan have been made.


     C.    
          Withholding.


The
Company shall withhold from all payments hereunder such amounts as it determines are
appropriate for applicable federal, state and local tax purposes or for such other amounts
(other than contributions to the Companys 401(k) Plan) as appropriately may be
withheld under the Companys payroll policies and procedures for contributions or in
accordance with applicable law.


     D.    
          No Employment Rights.


Nothing
in the Plan shall confer upon or be construed as giving any Participant any right to
remain in the employ of the Company subject to the Participants right to receive
payments as provided above. No person shall have any right to be designated a Participant
under the Plan and there is no obligation for uniformity of treatment of employees of the
Company.


     E.    
          Governing Law.


The
validity, construction and effect of the Plan and any rules and regulations relating to
the Plan shall be determined in accordance with the laws of the Commonwealth of
Massachusetts, without giving effect to any conflict or choice of laws provisions or rules
thereof that would cause the application of laws of any jurisdiction other than those of
the Commonwealth of Massachusetts.


     F.    
          No Limitation Upon Rights of Company.


The
Plan shall not affect in any way the right or power of the Company to make adjustments,
reclassifications or changes of its capital or business structure; to merge or
consolidate; to dissolve or liquidate; or to sell or transfer all or any part of its
business or assets.


     G.    
          Entire Agreement.


The
Plan sets forth the terms of any retention program related to the Companys
restructuring and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any officer,
employee or representative of the Board regarding such subject matter.


     H.    
          Successor and Assigns.


The
Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of
the Company to expressly assume and agree to perform the Companys obligations under
the Plan in the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.


     * * * * * * *


This
Plan document reflects Bankruptcy Court changes January, 2002.


* Any part or all of the
$300,000 amount allocated to Participants not yet named on the Exhibit A, may be allocated
to any Employee of the Company on the Start Date other than those named on Exhibit A.
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