exv10w2w1



 





Exhibit 10.2.1




EMPLOYMENT AGREEMENT




     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as
of April 1, 2004 (the “Effective Date”), by and between Nextel Communications,
Inc., a Delaware corporation (the “Company”), and Thomas N. Kelly, Jr. (the
“Executive”).



WITNESSETH:




     WHEREAS, the Executive serves the Company as its Executive Vice President
and Chief Operating Officer;



     WHEREAS, the Executive and the Company are parties to a Nextel
Confidentiality Agreement dated April 8, 1996 (the “Confidentiality
Agreement”);



     WHEREAS, the Executive and the Company desire to enter into this
employment agreement; and



     NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements set forth herein and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the Company and the
Executive agree as follows:



1. Employment.




(a) The Company will continue to employ the Executive and the Executive will
continue to be employed by the Company upon the terms and conditions set forth
herein.



(b) The employment relationship between the Company and the Executive shall be
governed by the general employment policies and practices of the Company,
including without limitation, those relating to the Company’s Code of Corporate
Conduct, confidential information and avoidance of conflicts, except that when
the terms of this Agreement differ from or are in conflict with the Company’s
general employment policies or practices, this Agreement shall control.



2. Term. Subject to termination under Section 9, the Executive’s employment
shall be for an initial term of thirty-six (36) months commencing on the
Effective Date and shall continue through the third anniversary of the
Effective Date (the “Employment Term”); provided, however, that at the end of
the initial Employment Term and on each succeeding anniversary of the Effective
Date, the Employment Term will be automatically extended by an additional
twelve (12) months, unless not less than twelve (12) months prior to the end of
the initial Employment Term or any such succeeding anniversary date either the
Executive or the Company has given the other written notice of nonrenewal.



3. Position and Duties of the Executive.



(a) The Executive shall serve as an Executive Vice President and the Chief
Operating Officer of the Company, and agrees to serve as an officer and/or
agrees to be an employee of any Subsidiary as may be requested from time to
time by the Board of Directors of the Company (the “Board”), any committee or
person delegated by the Board or the Chief


 









 








Executive Officer of the Company (the “Chief Executive Officer”). In such
capacity, the Executive shall report directly to the Chief Executive Officer of
the Company. The Executive shall perform such duties as may be delineated in
the By-laws of the Company, and such other duties commensurate with the
Executive’s title and position, as may be assigned to the Executive from time
to time by the Chief Executive Officer or such other officer of the Company as
may be designated by the Chief Executive Officer. For purposes of this
Agreement, “Subsidiary” shall mean any entity, corporation, partnership
(general or limited), limited liability company, entity, firm, business
organization, enterprise, association or joint venture in which the Company
directly or indirectly controls ten percent (10%) or more of the voting
interest.



(b) Throughout the Employment Term, the Executive shall, except as may from
time to time be otherwise agreed in writing by the Company and during
reasonable vacations as set forth in Section 7 hereof and authorized leave,
devote his best efforts, full attention and energies during his normal working
time to the business of the Company, any duties as may be delineated in the
Company’s By-laws for the Executive’s position and title and such other related
duties and responsibilities as may from time to time be reasonably prescribed
by the Board, any committee or person delegated by the Board, or the Chief
Executive Officer, in each case, within the framework of the Company’s policies
and objectives.



(c) Throughout the Employment Term and provided that such activities do not
contravene the provisions of Section 3(a) or Sections 10, 11, 12 and 13 hereof
and provided further the Executive does not engage in any other substantial
business activity for gain, profit or other pecuniary advantage which
materially interferes with the performance of his duties hereunder, the
Executive may participate in any governmental, educational, charitable or other
community affairs and serve as a member of the governing board of any such
organization or of up to three (3) private or public for profit companies,
subject in each case to the prior approval of the Chief Executive Officer. The
Executive may retain all fees and other compensation from any such service, and
the Company shall not reduce his compensation by the amount of such fees.



4. Compensation.



(a) Base Salary. During the Employment Term the Company shall pay to the
Executive a base salary of not less than his base salary as of the Effective
Date (the “Base Salary”), payable at the times and in the manner consistent
with the Company’s general policies regarding compensation of senior executive
employees. The Base Salary will be reviewed not less than annually by the
Chief Executive Officer and may be increased (but not decreased) in the Chief
Executive Officer’s sole discretion. The Executive’s position shall be
classified as pay grade EX4 or better (as adjusted for any changes to the
Company’s system of classifying employees by salary grade level implemented
subsequent to the Effective Date).



(b) Incentive Compensation.



(i) The Executive will continue to be eligible to participate in any short-term
and long-term incentive compensation plans, annual bonus plans and such other
management incentive programs or arrangements of the Company approved by the
Board that are generally available to the Company’s senior executives,
including, but not limited to, (i) the Nextel Communications, Inc. Long-Term
Performance Plan effective January 1, 2004, or any


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successor plan, program, agreement or arrangement (the “LTPP”) and (ii) the
Nextel Communications, Inc. Cash Compensation Deferral Plan, each as may be
amended from time to time.



(ii) Annual Performance Bonus. During the Employment Term, the Executive shall
be entitled to participate in an annual bonus plan (the “Bonus Plan”), with
such opportunities as may be determined by the Chief Executive Officer (“Target
Bonuses”); provided, however, that effective for the bonus year ending December
31, 2004, the Executive will participate in the Bonus Plan at a Target Bonus
opportunity of 100% of his Base Salary and shall be entitled to receive full
payment of any award under the Bonus Plan determined pursuant to such Bonus
Plan (a “Bonus Award”).



(iii) Long-Term Performance Bonus. During the Employment Term, the Executive
shall be entitled to participate in the LTPP with such opportunities, if any,
as may be determined by the Chief Executive Officer (“LTPP Target Award
Opportunities”).



(iv) Incentive bonuses, if earned, shall be paid when incentive compensation is
customarily paid to the Company’s senior executives in accordance with the
terms of the applicable plans, programs or arrangements.



(v) Pursuant to the Company’s applicable incentive or bonus plans as in effect
from time to time, the Executive’s incentive compensation during the term of
this Agreement may be determined according to criteria intended to qualify
under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code”).



(c) Equity Compensation. The Executive shall continue to be eligible to
participate in such equity incentive compensation plans and programs as the
Company generally provides to its senior executives, including, but not limited
to, the Nextel Communications, Inc. Amended and Restated Incentive Equity Plan
(as amended and restated as of November 16, 2000), as may be further amended
from time to time, (the “Incentive Equity Plan”).



(i) Options. During the Employment Term, the Compensation Committee of the
Board (the “Compensation Committee”) may, in its sole discretion, grant stock
options to the Executive, which would be subject to the terms of the respective
option agreements evidencing such grants.



(ii) Deferred Shares. The Compensation Committee will award to the Executive
200,000 Deferred Shares (as such term is defined in the Incentive Equity Plan)
of common stock of the Company, par value $.001 per share (“Common Stock”),
(the “Deferred Shares Award”) in three (3) tranches as follows: 70,000 Deferred
Shares as of the Effective Date (the “Tranche 1 Shares”), 65,000 Deferred
Shares as of the date of a Compensation Committee meeting in February 2005 (the
“Tranche 2 Shares”) and 65,000 Deferred Shares as of the date of a Compensation
Committee meeting in February 2006 (the “Tranche 3 Shares”). Subject to the
terms and conditions of the Deferred Shares Award agreement evidencing each
such Tranche, the Deferred Shares Award shall vest and become nonforfeitable
pursuant to the following schedule: one-third (1/3) of the Tranche 1 Shares
shall vest and become nonforfeitable on each of the first three (3)
anniversaries of the Effective Date, one-half (1/2) of the Tranche 2 Shares


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shall vest and become nonforfeitable on each of the second and third
anniversaries of the Effective Date, and all of the Tranche 3 Shares shall vest
and become nonforfeitable on the third anniversary of the Effective Date;
provided, however, that in the event of a Change of Control (as defined in the
Incentive Equity Plan) of the Company, to the extent not awarded, the remaining
tranches of the Deferred Shares Award shall be awarded effective immediately
prior to the Change of Control and any unvested portions of each tranche of the
Deferred Shares Award shall immediately vest and become nonforfeitable upon the
Change of Control.



5. Benefits.



(a) During the Employment Term, the Company shall make available to the
Executive, subject to the terms and conditions of the applicable plans,
participation for the Executive and his eligible dependents in (i)
Company-sponsored group health, major medical, pension and profit sharing,
401(k) and employee welfare benefit plans, programs and arrangements (the
“Employee Plans”) and such other usual and customary benefits in which senior
executives of the Company participate from time to time, and (ii) such fringe
benefits and perquisites as may be made available to senior executives of the
Company as a group, including, but not limited to, long-term disability
insurance, life insurance coverage and the Nextel Communications, Inc. Change
of Control Retention Bonus and Severance Pay Plan, or any successor plan,
program, agreement or arrangement (the “Change of Control Plan”).



(b) The Executive acknowledges that the Company may change its benefit programs
from time to time which may result in certain benefit programs being amended or
terminated for its senior executives generally.



6. Expenses. The Company shall pay or reimburse the Executive for reasonable
and necessary business expenses incurred by the Executive in connection with
his duties on behalf of the Company in accordance with the Company’s Travel and
Expense Policy and any other of its expense policies applicable to senior
executives of the Company, following submission by the Executive of
reimbursement expense forms in a form consistent with such expense policies.



7. Vacation. In addition to such holidays, sick leave, personal leave and
other paid leave as is allowed under the Company’s policies applicable to
senior executives generally, the Executive shall be entitled to twenty (20)
days of vacation per 12-month period and subject to the terms and conditions of
the Company’s vacation policy applicable to senior executives. The duration of
such vacations and the time or times when they shall be taken will be
determined by the Executive in consultation with the Company.



8. Place of Performance. In connection with his employment by the Company, the
Executive shall be based at the principal executive offices of the Company in
the greater Washington, D.C. area, except for travel reasonably required for
Company business. If the Company relocates his place of work more than 30
miles, the Executive shall relocate to a residence within 30 miles of such
relocated executive offices, subject, however, to reimbursement of the
Executive’s relocation expenses in accordance with the Company’s relocation
policy applicable to senior executives.


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9. Termination.



(a) Termination by the Company for Cause or Resignation by the Executive
Without Good Reason. If, prior to the expiration of the Employment Term, the
Executive’s employment is terminated by the Company for Cause, as defined in
Section 9(d), or if the Executive resigns from his employment hereunder without
Good Reason, as defined in Section 9(f), the Executive shall not be eligible to
receive Base Salary or to participate in any Employee Plans with respect to
future periods after the date of such termination or resignation except for the
right to receive vested benefits under any Employee Plan in accordance with the
terms of such Employee Plan.



(b) Termination by the Company Without Cause or Resignation by the Executive
for Good Reason. If, prior to the expiration of the Employment Term, the
Executive’s employment is terminated by the Company without Cause or the
Executive terminates his employment hereunder for Good Reason, conditioned upon
the Executive delivering to the Company a release in a form reasonably
satisfactory to the Company with all periods for revocation expired,
notwithstanding any provision in the terms of any incentive compensation plan
or agreement to the contrary, in full satisfaction of the Executive’s rights
and any benefits the Executive might be entitled to under The Nextel Severance
Benefits Plan, or any successor plan, program, agreement or arrangement, the
Executive shall be entitled to:



(i) receive from the Company his Base Salary then in effect for the greater of
the remainder of the Employment Term or twenty-four (24) months (the “Severance
Period”), payable through periodic payments with the same frequency as the
Company’s payroll schedule following the termination of the Executive’s
employment;



(ii) continue participation in the Company’s health care, life and long-term
disability plans, substantially on the same basis that the Executive
participated in such health care, life and long-term disability plans prior to
the termination of his employment for the Severance Period; provided, however,
that benefits otherwise receivable by the Executive pursuant to this Section
9(b)(ii) shall be applied against the maximum period of continuation coverage
provided under Section 4980B of the Code;



(iii) (A) receive full payment of the Bonus Award for the Company’s fiscal year
during which his termination of employment occurs, (B) receive full payment of
the Bonus Award for the next fiscal year following the fiscal year during which
his termination of employment occurs and (C) receive payment of a pro rata
portion of the Bonus Award for the second year following the fiscal year during
which the Executive’s employment terminates (such pro rata formula shall be
determined based on the number of months of service provided by the Executive
during the fiscal year during which his termination of employment occurs), in
each case at the greater of the annual Target Bonus or actual performance for
such fiscal year in accordance with the then existing terms of such cash
incentive compensation, which shall not be payable until the Compensation
Committee has determined that any incentive targets have been achieved and the
subsequent designated payout date has arrived;



(iv) receive either (A) a pro rata portion of any LTPP Target Award Opportunity
to which he would otherwise be entitled for the LTPP performance period during


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which his termination of employment occurs (but not for any later years) if
such termination occurs during the first year of the two-year LTPP performance
period or (B) full payment of any LTPP Target Award Opportunity to which he
would otherwise be entitled for the LTPP performance period during which his
termination of employment occurs (but not for any later years) if such
termination occurs during the second year of the two-year LTPP performance
period, in each case, in accordance with the then existing terms of the LTPP,
which shall not be payable until the Compensation Committee has determined that
any incentive targets have been achieved and the subsequent designated payout
date has arrived;



(v) accelerated vesting of any unvested deferred shares, restricted shares and
stock options granted to the Executive which have not otherwise vested and any
vested stock options shall remain outstanding and exercisable for twelve (12)
months following the Executive’s termination of employment, and to the extent
not awarded, the remaining tranches of the Deferred Shares Award shall be
awarded effective immediately prior to the termination of the Executive’s
employment and any unvested portions of each tranche of the Deferred Shares
Award shall immediately vest and become nonforfeitable; and



(vi) receive outplacement services by a firm selected by the Company at its
expense in an amount not to exceed the lesser of $50,000 or 10% of the
Executive’s Base Salary.



     Notwithstanding the foregoing, if the Executive terminates his employment
for Good Reason due to the relocation of the Executive’s principal place of
work, as set forth in Section 9(f)(iii), in lieu of payments and benefits set
forth under Section 9(b)(i), (ii), (iii), (iv), (v) and (vi), the Executive
shall be entitled to receive (A) the compensation and benefits provided under
Sections 9(b)(i), (ii) and (iii) for a maximum period of twelve (12) months and
under Section 9(b)(v), as provided in such provision and (B) a pro rata portion
of the Executive’s LTPP Target Award Opportunity, if any, for the Company’s
fiscal year during which the Executive’s termination occurs (but not for any
later years) payable in accordance with the then existing terms of such cash
incentive compensation, which shall not be payable until the Compensation
Committee has determined that any incentive targets have been achieved and the
subsequent designated payout has arrived.



(c) Termination by Death or Disability. If the Executive dies or becomes
Disabled, as defined in Section 9(e), prior to the expiration of the Employment
Term, the Executive’s employment will terminate and the Executive, or in the
case of death, the Executive’s beneficiary, or if none, the Executive’s estate,
shall be entitled to:



(i) in the case of Disability, receive an amount equal to twelve (12) months
Base Salary payable through periodic payments with the same frequency as the
Company’s payroll schedule or in the event of the Executive’s death, receive an
amount equal to twelve (12) months Base Salary following termination due to the
Executive’s death;



(ii) in the case of Disability, continue participation in any health care and
life plans for a period of twelve (12) months or in the event of the
Executive’s death, receive any health care benefits under the terms of the
Employee Plans; and


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(iii) receive a pro rata portion of the Executive’s Bonus Award and LTPP Target
Award Opportunity, if any, for the Company’s fiscal year during which the
Executive’s death or Disability occurs (but not for any later years) payable in
accordance with the then existing terms of such cash incentive compensation,
which shall not be payable until the Compensation Committee has determined that
any incentive targets have been achieved and the subsequent designated payout
has arrived; and



(iv) accelerated vesting of any unvested deferred shares, restricted shares and
stock options and exercise of any unexercised vested stock options for a period
of twelve (12) months following termination due to the Executive’s death or
Disability, and to the extent not awarded, the remaining tranches of the
Deferred Shares Award shall be awarded effective immediately prior to the
termination of the Executive’s employment and any unvested portions of each
tranche of the Deferred Shares Award shall immediately vest and become
nonforfeitable;



provided, however, if the Executive also becomes entitled to receive benefits
under a long-term disability plan (“LTD Plan”) now or hereafter paid for by the
Company, then the Executive’s disability benefits under Section 9(c)(i)
(calculated on a monthly basis) shall be reduced by the amount of the benefits
paid under such LTD Plan.



(d) Cause. For purposes of this Agreement, “Cause” shall mean:



(i) any act or omission constituting a material breach by the Executive of any
provisions of this Agreement or the willful failure by the Executive to perform
his duties hereunder (other than any such failure resulting from the
Executive’s Disability), after demand for performance is delivered by the
Company that identifies the manner in which the Company believes the Executive
has not performed his duties, if, within thirty (30) days of such demand, the
Executive fails to cure any such failure capable of being cured;



(ii) any intentional act or misconduct materially injurious to the Company or
any Subsidiary, financial or otherwise, or the misappropriation, fraud,
embezzlement or conversion by the Executive of the Company’s or any of its
Subsidiary’s property in connection with the Executive’s duties or in the
course of the Executive’s employment with the Company;



(iii) the conviction or plea of no contest of the Executive for any felony or
the indictment of the Executive for any felony involving fraud, moral
turpitude, embezzlement or theft in connection with the Executive’s duties or
in the course of the Executive’s employment with the Company;



(iv) the commission of any intentional or knowing violation of any antifraud
provision of the federal or state securities laws or the Board reasonably
believes that the Executive has committed any of the acts referred to in this
Section 9(d)(iv);



(v) there is a final, non-appealable order in a proceeding before a court of
competent jurisdiction or a final order in an administrative proceeding finding
that the Executive committed any willful misconduct or criminal activity
(excluding traffic violations or other minor offenses) which commission is
materially inimical to the interests of the Company or


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any Subsidiary, whether for his personal benefit or in connection with his
duties for the Company or any Subsidiary;



(vi) current alcohol or prescription drug abuse affecting work performance;



(vii) current illegal use of drugs; or



(viii) violation of the Company’s Code of Corporate Conduct.



     For purposes of this Agreement, no act or failure to act on the part of
the Executive 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 Executive not in good faith and without reasonable
belief that the Executive’s action or omission was in the best interest of the
Company.



(e) Disability. For purposes of this Agreement, “Disability” or “Disabled”
shall mean:



(i) the Executive’s incapacity due to physical or mental illness to
substantially perform his duties and the essential functions of his position,
with or without reasonable accommodation, on a full-time basis for at least six
(6) months in any 12-month period as determined by the Board in its reasonable
discretion, and within thirty (30) days after a notice of termination is
thereafter given by the Company, the Executive shall not have returned to the
full-time performance of the Executive’s duties; or



(ii) the Executive becomes eligible to receive benefits under the Company’s LTD
Plan;



provided, however, if the Executive shall not agree with a determination to
terminate his employment because of Disability, the question of the Executive’s
disability shall be subject to the certification of a qualified medical doctor
agreed to by the Company and the Executive. The costs of such qualified
medical doctor shall be paid for by the Company.



(f) Good Reason. For purposes of this Agreement, “Good Reason” shall mean:



(i) the Company’s material breach of this Agreement (after failure to cure in
thirty (30) days);



(ii) a reduction in the Executive’s Base Salary or Target Bonus opportunity, as
set forth in Section 4(b)(ii) (that is not in either case agreed to by the
Executive) as compared to the corresponding circumstances in place on the
Effective Date; or



(iii) relocation of the Executive’s principal place of work more than thirty
(30) miles without the Executive’s consent.


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(g) No Mitigation Obligation. The Executive will not be required to mitigate
the amount of any payment made pursuant to Section 9 of this Agreement by
seeking other employment or otherwise. Except as otherwise provided by
applicable law, the Executive’s coverage under the Company’s welfare benefit
plans will terminate when the Executive becomes eligible for coverage under any
employee benefit plan made available by another employer and covering the same
type of benefits. The Executive shall notify the Company within thirty (30)
days after becoming eligible for coverage of any such benefits.



(h) Forfeiture. Notwithstanding the foregoing, any right of the Executive to
receive termination payments and benefits hereunder shall be forfeited to the
extent of any amounts payable after any breach of Section 10, 11, 12, 13 or 15
by the Executive.



10. Confidential Information; Statements to Third Parties.



(a) During the Employment Term and on a permanent basis upon and following
termination of the Executive’s employment, the Executive acknowledges that:



(i) all information, whether reduced to writing (or in a form from which
information can be obtained, translated, or derived into reasonably usable
form) or maintained in the mind or memory of the Executive and whether compiled
or created by the Company, any of its Subsidiaries or any affiliates of the
Company or its Subsidiaries (collectively, the “Company Group”), which derives
independent economic value from not being readily known to or ascertainable by
proper means by others who can obtain economic value from the disclosure or use
of such information, of a proprietary, private, secret or confidential nature
concerning the Company Group’s business, business relationships or financial
affairs (collectively, “Proprietary Information”) shall be the exclusive
property of the Company Group, and by way of illustration, but not limitation,
shall include inventions, products, processes, methods, techniques, formulas,
compositions, compounds, projects, developments, sales strategies, plans,
research data, clinical data, financial data, personnel data, computer
programs, customer and supplier lists, trade marks, service marks, copyrights
(whether registered or unregistered), artwork, and contacts at or knowledge of
customers or prospective customers of the Company Group; and



(ii) the Proprietary Information of the Company Group gained by the Executive
during the Executive’s association with the Company Group was or will be
developed by and/or for the Company Group through substantial expenditure of
time, effort and money and constitutes valuable and unique property of the
Company Group and that reasonable efforts have been put forth by the Company
Group to maintain the secrecy of its Proprietary Information, that such
Proprietary Information is and will remain the sole property of the Company
Group, and that any retention or use by the Executive of Proprietary
Information after the termination of the Executive’s services for the Company
Group will constitute a misappropriation of the Company Group’s Proprietary
Information.



(b) The Executive further acknowledges and agrees that he will take all
affirmative steps reasonably necessary or required by the Company to protect
the Proprietary Information from inappropriate disclosure during and after his
employment with the Company.


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(c) The Executive further agrees that all files, letters, memoranda, reports,
records, data, sketches, drawings, laboratory notebooks, program listings, or
other written, photographic, electronic, or other tangible material containing
or constituting Proprietary Information, whether created by the Executive or
others, which shall come into his custody or possession, regardless of medium,
shall be and are the exclusive property of the Company to be used by him only
in the performance of his duties for the Company. All such materials or copies
thereof and all tangible things and other property of the Company Group in the
Executive’s custody or possession shall be delivered to the Company (to the
extent the Executive has not already returned) in good condition, on or before
five (5) business days subsequent to the earlier of: (i) a request by the
Company or (ii) the Executive’s termination of employment for any reason or
Cause, including for nonrenewal of this Agreement, Disability, termination by
the Company or termination by the Executive. After such delivery, the
Executive shall not retain any such materials or portions or copies thereof or
any such tangible things and other property and shall execute any statements or
affirmations of compliance under oath that the Company may require.



(d) The Executive further agrees that his obligation not to disclose or to use
information and materials of the types set forth in Sections 10(a), 10(b) and
10(c) above, and his obligation to return materials and tangible property, set
forth in Section 10(c) above, also extends to such types of information,
materials and tangible property of customers of the Company Group, consultants
for the Company Group, suppliers to the Company Group, or other third parties
who may have disclosed or entrusted the same to the Company Group or to the
Executive.



(e) The Executive further acknowledges and agrees that he will continue to keep
in strict confidence, and will not, directly or indirectly, at any time,
disclose, furnish, disseminate, make available, use or suffer to be used in any
manner any Proprietary Information of the Company Group without limitation as
to when or how the Executive may have acquired such Proprietary Information and
that he will not disclose any Proprietary Information to any person or entity
other than appropriate employees of the Company or use the same for any
purposes (other than in the performance of his duties as an employee of the
Company) without written approval of the Board, either during or after his
employment with the Company.



(f) Further the Executive acknowledges that his obligation of confidentiality
will survive, regardless of any other breach of this Agreement or any other
agreement, by any party hereto, until and unless such Proprietary Information
of the Company Group has become, through no fault of the Executive, generally
known to the public. In the event that the Executive is required by law,
regulation, or court order to disclose any of the Company Group’s Proprietary
Information, the Executive will promptly notify the Company prior to making any
such disclosure to facilitate the Company seeking a protective order or other
appropriate remedy from the proper authority. The Executive further agrees to
cooperate with the Company in seeking such order or other remedy and that, if
the Company is not successful in precluding the requesting legal body from
requiring the disclosure of the Proprietary Information, the Executive will
furnish only that portion of the Proprietary Information that is legally
required, and the Executive will exercise all legal efforts to obtain reliable
assurances that confidential treatment will be accorded the Proprietary
Information.


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(g) The Executive’s obligations under this Section 10 are in addition to, and
not in limitation or preemption of, all other obligations of confidentiality
which the Executive may have to the Company under the Company’s policies,
general legal or equitable principles or statutes and which will remain in full
force and effect following the termination of the Executive’s employment.



(h) During the Employment Term and following his termination of employment:



(i) the Executive shall not, directly or indirectly, make or cause to be made
any statements to any third parties criticizing or disparaging the Company
Group or commenting on the character or business reputation of the Company
Group. The Executive further hereby agrees that, without the prior written
consent of the Board, unless otherwise required by law, the Executive shall not
(A) publicly comment in a manner adverse to the Company Group concerning the
status, plans or prospects of the business of the Company Group or (B) publicly
comment in a manner adverse to the Company Group concerning the status, plans
or prospects of any existing, threatened or potential claims or litigation
involving the Company Group; and



(ii) the Company shall comply with its policies regarding public statements
with respect to the Executive;



provided, however, that nothing herein shall be interpreted to preclude honest
and good faith reporting by the Executive to appropriate Company or legal
enforcement authorities.



(i) The Executive acknowledges and agrees that a violation of the foregoing
provisions of this Section 10 that results in material detriment to the Company
Group would cause irreparable harm to the Company Group, and that the Company’s
remedy at law for any such violation would be inadequate. In recognition of
the foregoing, the Executive agrees that, in addition to any other relief
afforded by law or this Agreement, including damages sustained by a breach of
this Agreement and any forfeitures under Section 9(h), and without the
necessity or proof of actual damages, the Company shall have the right to
enforce this Agreement by specific remedies, which shall include, among other
things, temporary and permanent injunctions, it being the understanding of the
undersigned parties hereto that damages, the forfeitures described above and
injunctions shall all be proper modes of relief and are not to be considered as
alternative remedies.



11. Non-Competition. In consideration of the Company entering into this
Agreement, and in particular, the awards of Deferred Shares under Section
4(c)(ii), for a period commencing on the Effective Date and for a period ending
twenty-four (24) months after the Executive’s termination of employment for any
reason or Cause, including for nonrenewal of this Agreement, Disability,
termination by the Company or termination by the Executive:



(a) the Executive hereby covenants and agrees that he shall not, directly or
indirectly, individually or on behalf of any other person or entity do or
suffer any of the following, engage or be interested in (whether as owner,
stockholder, investor, partner, lender, consultant, employee, agent, director
or otherwise) in any business, activity or enterprise which


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is then competing with or planning to compete with the business of any division
or operation of the Company Group within any United States territory or state
in which the Company Group is conducting the business of providing wireless
local area network (e.g., “802.11” or “Wi-Fi” wireless services) or any other
business authorized by the Federal Communications Commission (“FCC”) to provide
“commercial mobile radio service” as that term is defined by the FCC (47 C.F.R.
§ 20.3), (the “Territory”), provided, however, that the Executive’s ownership
of less than one percent (1%) of any class of stock in a publicly traded
corporation shall not be deemed a breach of this Section 11; and;



(b) the Executive acknowledges that due to his unique and special contributions
to the Company Group in his position as specified in Section 3, he will be
privy to and/or responsible for Proprietary Information generated by the
Company Group, so that his employment in any capacity for a competing business
will create an unreasonable and real risk of disclosure, inevitable or
otherwise, of Proprietary Information. The Executive further acknowledges that
due to his talents, skills and experience, the restrictions contained herein
are reasonable and will not deprive him of his ability to obtain commensurate
employment or work in a non-competing business activity or enterprise, and will
not impose an undue hardship on him.



12. Non-Solicitation. In consideration of the Company entering into this
Agreement, for a period commencing on the Effective Date and for a period
ending twenty-four (24) months after the Executive’s termination of employment
for any reason or Cause, including for nonrenewal of this Agreement,
Disability, termination by the Company or termination by the Executive, the
Executive hereby covenants and agrees that he shall not, directly or
indirectly, individually or on behalf of any other person or entity do or
suffer any of the following:



(a) hire or employ or assist in hiring or employing any person who has been an
employee, representative or agent of any member of the Company Group at any
time during the Executive’s employment or solicit, aid, induce or attempt to
solicit, aid, induce or persuade, directly or indirectly, such person to leave
his or his employment with any member of the Company Group to accept employment
with any other person or entity;



(b) directly or indirectly induce any person who is an employee, officer or
agent of the Company Group, or any of its affiliated, related or subsidiary
entities to terminate such relationship; or



(c) solicit any customer of the Company Group, or any person or entity whose
business the Company Group had solicited during the one hundred and eighty
(180) day period prior to termination of the Executive’s employment, within the
Territory for purposes of business which is competitive to the Company Group.



(d) For purposes of this Section 12, the term “solicit or persuade” includes,
but is not limited to, (i) initiating communications with an employee of the
Company Group relating to possible employment, (ii) offering bonuses or
additional compensation to encourage an employee of the Company Group to
terminate his or her employment, and (iii) referring employees of the Company
Group to personnel or agents employed by competitors, suppliers or customers of
the Company Group.


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13. Developments.



(a) The Executive acknowledges and agrees that he will make full and prompt
disclosure to the Company of all inventions, improvements, discoveries,
methods, developments, software, mask works, and works of authorship, whether
patentable or copyrightable or not, (i) which relate to the Company’s business
and have heretofore been created, made, conceived or reduced to practice by the
Executive or under his direction or jointly with others, and not assigned to
prior employers, or (ii) which have utility in or relate to the Company’s
business and are created, made, conceived or reduced to practice by the
Executive or under his direction or jointly with others during his employment
with the Company, whether or not during normal working hours or on the premises
of the Company (all of the foregoing of which are collectively referred to in
this Agreement as “Developments”).



(b) The Executive further agrees to assign and does hereby assign to the
Company (or any person or entity designated by the Company) all of the
Executive’s rights, title and interest worldwide in and to all Developments and
all related patents, patent applications, copyrights and copyright
applications, and any other applications for registration of a proprietary
right. However, this Section 13(b) shall not apply to Developments that the
Executive developed entirely on his own time without using the Company’s
equipment, supplies, facilities, or trade secret information and that does not,
at the time of conception or reduction to practice, have utility in or relate
to the Company’s business, or actual or demonstrably anticipated research or
development. The Executive understands that, to the extent this Agreement
shall be construed in accordance with the laws of any state or country which
precludes a requirement in an employee agreement to assign certain classes of
inventions made by an employee, this Section 13(b) shall be interpreted not to
apply to any invention which a court rules or the Company agrees falls within
such classes.



(c) The Executive further agrees to cooperate fully with the Company, both
during and after his employment with the Company, with respect to the
procurement, maintenance and enforcement of copyrights, patents and other
intellectual property rights (both in the United States and other countries)
relating to Developments; provided, however, that the Executive shall not be
required to incur or pay any costs or expenses in connection with the rendering
of such cooperation. The Executive will sign all papers, including, without
limitation, copyright applications, patent applications, declarations, oaths,
formal assignments, assignments of priority rights, and powers of attorney, and
do all things that the Company may reasonably deem necessary or desirable in
order to protect its rights and interests in any Development.



(d) The Executive further acknowledges and agrees that if the Company is
unable, after reasonable effort, to secure the Executive’s signature on any
such papers, any executive officer of the Company shall be entitled to execute
any such papers as the Executive’s agent and attorney-in-fact, and the
Executive hereby irrevocably designates and appoints each executive officer of
the Company as his agent and attorney-in-fact to execute any such papers on the
Executive’s behalf, and to take any and all actions as the Company may deem
necessary or desirable in order to protect its rights and interests in any
Development, under the conditions described in this sentence.



14. Remedies. The Executive and the Company agree that the covenants contained
in


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Sections 10, 11, 12 and 13 are reasonable under the circumstances, and further
agree that if in the opinion of any court of competent jurisdiction any such
covenant is not reasonable in any respect, such court will have the right,
power and authority to sever or modify any provision or provisions of such
covenants as to the court will appear not reasonable and to enforce the
remainder of the covenants as so amended. The Executive acknowledges and
agrees that the remedy at law available to the Company for breach of any of the
Executive’s obligations under Sections 10, 11, 12 and 13 would be inadequate
and that damages flowing from such a breach may not readily be susceptible to
being measured in monetary terms. Accordingly, the Executive acknowledges,
consents and agrees that, in addition to any other rights or remedies that the
Company may have at law, in equity or under this Agreement, upon adequate proof
of the Executive’s violation of any such provision of this Agreement, the
Company will be entitled to immediate injunctive relief and may obtain a
temporary order restraining any threatened or further breach, without the
necessity of proof of actual damage. Without limiting the applicability of
this Section 14 or in any way affecting the right of the Company to seek
equitable remedies hereunder, in the event that the Executive breaches any of
the provisions of Sections 10, 11, 12 or 13 or engages in any activity that
would constitute a breach save for the Executive’s action being in a state
where any of the provisions of Sections 10, 11, 12, 13 or this Section 14 is
not enforceable as a matter of law, then the Company’s obligation to pay any
remaining severance compensation and benefits that has not already been paid to
Executive pursuant to Section 9 shall be terminated and within ten (10) days of
notice of such termination of payment, the Executive shall return all severance
compensation and the value of such benefits, including the value of the
Deferred Shares Award, or profits derived or received from such benefits.



15. Continued Availability and Cooperation.



(a) In the event of termination of the Executive’s employment, the Executive
shall cooperate fully with the Company and with the Company’s counsel in
connection with any present and future actual or threatened litigation or
administrative proceeding involving the Company that relates to events,
occurrences or conduct occurring (or claimed to have occurred) during the
period of the Executive’s employment by the Company. This cooperation by the
Executive will include, but not be limited to:



(i) making himself reasonably available for interviews and discussions with the
Company’s counsel as well as for depositions and trial testimony;



(ii) if depositions or trial testimony are to occur, making himself reasonably
available and cooperating in the preparation therefor as and to the extent that
the Company or the Company’s counsel reasonably requests;



(iii) refraining from impeding in any way the Company’s prosecution or defense
of such litigation or administrative proceeding; and



(iv) cooperating fully in the development and presentation of the Company’s
prosecution or defense of such litigation or administrative proceeding.


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(b) The Executive will be reimbursed by the Company for reasonable travel,
lodging, telephone and similar expenses, as well as reasonable attorneys’ fees
(if independent legal counsel is necessary), incurred in connection with any
cooperation, consultation and advice rendered under this Agreement after the
Executive’s termination of employment. The Executive shall not unreasonably
withhold the Executive’s availability for such cooperation, consultation and
advice.



16. Dispute Resolution.



(a) Any dispute between the parties under this Agreement will be resolved
(except as provided below) through informal arbitration by a single arbitrator
selected under the rules of the American Arbitration Association for
arbitration of employment disputes conducted in Fairfax County, Virginia. Each
party will be entitled to present evidence and argument to the arbitrator. The
arbitrator will have the right only to interpret and apply the provisions of
this Agreement and may not change any of its provisions, except as expressly
provided in Section 23 and only in the event the Company has not brought an
action in a court of competent jurisdiction to enforce the covenants in
Sections 10, 11, 12 or 13. The arbitrator will permit reasonable pre-hearing
discovery of facts, to the extent necessary to establish a claim or a defense
to a claim, subject to supervision by the arbitrator. The determination of the
arbitrator will be conclusive and binding upon the parties and judgment upon
the same may be entered in any court having jurisdiction thereof. The
arbitrator will give written notice to the parties stating the arbitrator’s
determination, and will furnish to each party a signed copy of such
determination. The expenses of arbitration will be borne equally by the
Company and the Executive or as the arbitrator equitably determines consistent
with the application of state or federal law; provided, however, that the
Executive’s share of such expenses will not exceed the maximum permitted by
law. Any arbitration or action pursuant to this Section 16 will be governed by
and construed in accordance with the substantive laws of the Commonwealth of
Virginia and, where applicable, federal law, without giving effect to the
principles of conflict of laws of such Commonwealth.



(b) Notwithstanding Section 16(a), the Company will not be required to seek or
participate in arbitration regarding any actual or threatened breach of the
Executive’s covenants in Sections 10, 11, 12 or 13, but may pursue its
remedies, including injunctive relief, for such breach in a court of competent
jurisdiction in Fairfax County, Virginia, or in the sole discretion of the
Company, in a court of competent jurisdiction where the Executive has committed
or is threatening to commit a breach of the Executive’s covenants, and no
arbitrator may make any ruling inconsistent with the findings or rulings of
such court.



17. Other Agreements. The provisions of this Agreement supersede the
provisions of the Confidentiality Agreement. No agreements other than the
agreements evidencing any grants of stock options, deferred shares and
restricted shares or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not expressly set forth in this Agreement. To the extent there is a Change
of Control (as defined in the Change of Control Plan) of the Company, severance
compensation and benefits payable under this Agreement upon a termination of
the Executive’s employment will be reduced dollar for dollar (but not below
zero) by any severance compensation and benefits payable under the Change of
Control Plan, it being the intent that the Executive receive the greatest of
the compensation and benefits provided under the Change of Control Plan or this


15









 








Agreement. Notwithstanding the foregoing, to the extent there is a Change of
Control (as defined in the Change of Control Plan), for the purpose of reducing
the severance compensation and benefits payable under this Agreement, severance
compensation and benefits payable under the Plan shall not include any
Retention Bonus (as defined in the Change of Control Plan) paid or payable to
the Executive pursuant to the terms of the Change of Control Plan.



18. Indemnification. The Company shall, to the fullest extent to which it is
empowered to do so by the General Corporation Law of Delaware, or any other
applicable laws, as from time to time in effect, and in the manner therein
provided, indemnify and hold harmless the Executive, through the duration of
the Employment Term and all statutory periods during which any such claim may
be brought or asserted, from and against any actual, threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
investigative or otherwise, to which the Executive is or is threatened to be
made a party by reason of the fact that he is or was a director, officer,
employee or agent of the Company. The Executive will be further covered by the
indemnification and limitations on liability of officers and directors provided
under the Company’s Certificate of Incorporation and By-laws and any separate
agreement between the Company and the Executive and/or any officers and
directors indemnification insurance policy now or hereafter paid for by the
Company.



19. Withholding of Taxes. The Company may withhold from any amounts payable
under this Agreement all federal, state, city or other taxes as the Company is
required to withhold pursuant to any law or government regulation or ruling.



20. Successors and Binding Agreement.



(a) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all of the business or assets of the Company, by agreement in
form and substance satisfactory to the Executive, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent the Company
would be required to perform if no such succession had taken place. This
Agreement will be binding upon and inure to the benefit of the Company and any
successor to the Company, including without limitation any persons acquiring
directly or indirectly all or substantially all of the business or assets of
the Company whether by purchase, merger, consolidation, reorganization or
otherwise (and such successor shall thereafter be deemed the “Company” for the
purposes of this Agreement), but will not otherwise be assignable, transferable
or delegable by the Company, except that the Company may assign and transfer
this Agreement and delegate its duties thereunder to a wholly owned Subsidiary.



(b) This Agreement will inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees and legatees.



(c) This Agreement is personal in nature and neither of the parties hereto
shall, without the consent of the other, assign, transfer or delegate this
Agreement or any rights or obligations hereunder except as expressly provided
in Sections 20(a) and 20(b). Without limiting the generality or effect of the
foregoing, the Executive’s right to receive payments hereunder will not be
assignable, transferable or delegable, whether by pledge, creation of a


16









 








security interest, or otherwise, other than by a transfer by the Executive’s
will or by the laws of descent and distribution and, in the event of any
attempted assignment or transfer contrary to this Section 20(c), the Company
shall have no liability to pay any amount so attempted to be assigned,
transferred or delegated.



21. Notices. For all purposes of this Agreement, all communications, including
without limitation notices, consents, requests or approvals, required or
permitted to be given hereunder will be in writing and will be deemed to have
been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof confirmed), or five (5) business days after
having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, or three (3) business days after having
been sent by a nationally recognized overnight courier service such as Federal
Express or UPS, addressed to the Company (to the attention of the Senior Vice
President and General Counsel of the Company) at its principal executive
offices and to the Executive at his principal residence, or to such other
address as any party may have furnished to the other in writing and in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.



22. Governing Law. The validity, interpretation, construction and performance
of this Agreement will be governed by and construed in accordance with the
substantive laws of the Commonwealth of Virginia, without giving effect to the
principles of conflict of laws of such Commonwealth.



23. Validity/Severability. If any provision of this Agreement or the
application of any provision hereof to any person or circumstances is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement
and the application of such provision to any other person or circumstances will
not be affected, and the provision so held to be invalid, unenforceable or
otherwise illegal will be reformed to the extent (and only to the extent)
necessary to make it enforceable, valid or legal. To the extent any provisions
held to be invalid, unenforceable or otherwise illegal cannot be reformed, such
provisions are to be stricken herefrom and the remainder of this Agreement will
be binding on the parties and their successors and assigns as if such invalid
or illegal provisions were never included in this Agreement from the first
instance.



24. Survival of Provisions. Notwithstanding any other provision of this
Agreement, the parties’ respective rights and obligations under Sections 10,
11, 12, 13, 14, 15, 16 and 18 will survive any termination or expiration of
this Agreement or the termination of the Executive’s employment for any reason
whatsoever.



25. Representations.



(a) The Executive hereby represents that he is not subject to any restriction
of any nature whatsoever on his ability to enter into this Agreement or to
perform his duties and responsibilities hereunder, including, but not limited
to, any covenant not to compete with any former employer, any covenant not to
disclose or use any non-public information acquired during the course of any
former employment or any covenant not to solicit any customer of any former
employer.


17









 








(b) The Executive hereby represents that, except as he has disclosed in writing
to the Company, he is not bound by the terms of any agreement with any previous
employer or other party to refrain from using or disclosing any trade secret or
confidential or proprietary information in the course of the Executive’s
employment with the Company or to refrain from competing, directly or
indirectly, with the business of such previous employer or any other party.



(c) The Executive further represents that, to the best of his knowledge, his
performance of all the terms of this Agreement and as an employee of the
Company does not and will not breach any agreement with another party,
including without limitation any agreement to keep in confidence proprietary
information, knowledge or data the Executive acquired in confidence or in trust
prior to his employment with the Company, and that he will not knowingly
disclose to the Company or induce the Company to use any confidential or
proprietary information or material belonging to any previous employer or
others.



26. Amendment; Waiver. This Agreement may not be modified, amended or waived
in any manner except by an instrument in writing signed by both parties hereto.
No waiver by either party hereto at any time of any breach by the other party
hereto or compliance with any condition or provision of this Agreement to be
performed by such other party will be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.



27. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same agreement.



28. Headings. Unless otherwise noted, the headings of sections herein are
included solely for convenience of reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement.



     IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by
an officer pursuant to the authority of its Board, and the Executive has
executed this Agreement, as of the day and year first written above.



	 	 	 	 	 
	 	 	NEXTEL COMMUNICATIONS, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ Timothy M. Donahue
	

	 	 	 	
 
	 	 	Timothy M. Donahue
	 	 	President and Chief Executive Officer
	 
	 	 	 	 
	 	 	/s/ Thomas N. Kelly, Jr.
	 	 	
 
	 	 	Thomas N. Kelly, Jr.








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