**Exhibit 10.2.1**
**EMPLOYMENT AGREEMENT**
     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into asof 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 Presidentand Chief Operating Officer;
     WHEREAS, the Executive and the Company are parties to a NextelConfidentiality Agreement dated April 8, 1996 (the “ConfidentialityAgreement”);
     WHEREAS, the Executive and the Company desire to enter into thisemployment agreement; and
     NOW, THEREFORE, in consideration of the premises and of the covenants andagreements set forth herein and for other good and valuable consideration, thesufficiency and receipt of which are hereby acknowledged, the Company and theExecutive agree as follows:
1. Employment.
(a) The Company will continue to employ the Executive and the Executive willcontinue to be employed by the Company upon the terms and conditions set forthherein.
(b) The employment relationship between the Company and the Executive shall begoverned by the general employment policies and practices of the Company,including without limitation, those relating to the Company’s Code of CorporateConduct, confidential information and avoidance of conflicts, except that whenthe terms of this Agreement differ from or are in conflict with the Company’sgeneral employment policies or practices, this Agreement shall control.
2. Term. Subject to termination under Section 9, the Executive’s employmentshall be for an initial term of thirty-six (36) months commencing on theEffective Date and shall continue through the third anniversary of theEffective Date (the “Employment Term”); provided, however, that at the end ofthe initial Employment Term and on each succeeding anniversary of the EffectiveDate, the Employment Term will be automatically extended by an additionaltwelve (12) months, unless not less than twelve (12) months prior to the end ofthe initial Employment Term or any such succeeding anniversary date either theExecutive 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 ChiefOperating Officer of the Company, and agrees to serve as an officer and/oragrees to be an employee of any Subsidiary as may be requested from time totime by the Board of Directors of the Company (the “Board”), any committee orperson delegated by the Board or the Chief
 

 

Executive Officer of the Company (the “Chief Executive Officer”). In suchcapacity, the Executive shall report directly to the Chief Executive Officer ofthe Company. The Executive shall perform such duties as may be delineated inthe By-laws of the Company, and such other duties commensurate with theExecutive’s title and position, as may be assigned to the Executive from timeto time by the Chief Executive Officer or such other officer of the Company asmay be designated by the Chief Executive Officer. For purposes of thisAgreement, “Subsidiary” shall mean any entity, corporation, partnership(general or limited), limited liability company, entity, firm, businessorganization, enterprise, association or joint venture in which the Companydirectly or indirectly controls ten percent (10%) or more of the votinginterest.
(b) Throughout the Employment Term, the Executive shall, except as may fromtime to time be otherwise agreed in writing by the Company and duringreasonable vacations as set forth in Section 7 hereof and authorized leave,devote his best efforts, full attention and energies during his normal workingtime to the business of the Company, any duties as may be delineated in theCompany’s By-laws for the Executive’s position and title and such other relatedduties and responsibilities as may from time to time be reasonably prescribedby the Board, any committee or person delegated by the Board, or the ChiefExecutive Officer, in each case, within the framework of the Company’s policiesand objectives.
(c) Throughout the Employment Term and provided that such activities do notcontravene the provisions of Section 3(a) or Sections 10, 11, 12 and 13 hereofand provided further the Executive does not engage in any other substantialbusiness activity for gain, profit or other pecuniary advantage whichmaterially interferes with the performance of his duties hereunder, theExecutive may participate in any governmental, educational, charitable or othercommunity affairs and serve as a member of the governing board of any suchorganization 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. TheExecutive may retain all fees and other compensation from any such service, andthe 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 theExecutive a base salary of not less than his base salary as of the EffectiveDate (the “Base Salary”), payable at the times and in the manner consistentwith the Company’s general policies regarding compensation of senior executiveemployees. The Base Salary will be reviewed not less than annually by theChief Executive Officer and may be increased (but not decreased) in the ChiefExecutive Officer’s sole discretion. The Executive’s position shall beclassified as pay grade EX4 or better (as adjusted for any changes to theCompany’s system of classifying employees by salary grade level implementedsubsequent to the Effective Date).
(b) Incentive Compensation.
(i) The Executive will continue to be eligible to participate in any short-termand long-term incentive compensation plans, annual bonus plans and such othermanagement incentive programs or arrangements of the Company approved by theBoard that are generally available to the Company’s senior executives,including, but not limited to, (i) the Nextel Communications, Inc. Long-TermPerformance Plan effective January 1, 2004, or any
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successor plan, program, agreement or arrangement (the “LTPP”) and (ii) theNextel Communications, Inc. Cash Compensation Deferral Plan, each as may beamended from time to time.
(ii) Annual Performance Bonus. During the Employment Term, the Executive shallbe entitled to participate in an annual bonus plan (the “Bonus Plan”), withsuch opportunities as may be determined by the Chief Executive Officer (“TargetBonuses”); provided, however, that effective for the bonus year ending December31, 2004, the Executive will participate in the Bonus Plan at a Target Bonusopportunity of 100% of his Base Salary and shall be entitled to receive fullpayment of any award under the Bonus Plan determined pursuant to such BonusPlan (a “Bonus Award”).
(iii) Long-Term Performance Bonus. During the Employment Term, the Executiveshall be entitled to participate in the LTPP with such opportunities, if any,as may be determined by the Chief Executive Officer (“LTPP Target AwardOpportunities”).
(iv) Incentive bonuses, if earned, shall be paid when incentive compensation iscustomarily paid to the Company’s senior executives in accordance with theterms of the applicable plans, programs or arrangements.
(v) Pursuant to the Company’s applicable incentive or bonus plans as in effectfrom time to time, the Executive’s incentive compensation during the term ofthis Agreement may be determined according to criteria intended to qualifyunder Section 162(m) of the Internal Revenue Code of 1986, as amended (the“Code”).
(c) Equity Compensation. The Executive shall continue to be eligible toparticipate in such equity incentive compensation plans and programs as theCompany generally provides to its senior executives, including, but not limitedto, the Nextel Communications, Inc. Amended and Restated Incentive Equity Plan(as amended and restated as of November 16, 2000), as may be further amendedfrom time to time, (the “Incentive Equity Plan”).
(i) Options. During the Employment Term, the Compensation Committee of theBoard (the “Compensation Committee”) may, in its sole discretion, grant stockoptions to the Executive, which would be subject to the terms of the respectiveoption agreements evidencing such grants.
(ii) Deferred Shares. The Compensation Committee will award to the Executive200,000 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 DeferredShares as of the Effective Date (the “Tranche 1 Shares”), 65,000 DeferredShares 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 CompensationCommittee meeting in February 2006 (the “Tranche 3 Shares”). Subject to theterms and conditions of the Deferred Shares Award agreement evidencing eachsuch Tranche, the Deferred Shares Award shall vest and become nonforfeitablepursuant to the following schedule: one-third (1/3) of the Tranche 1 Sharesshall 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 thirdanniversaries of the Effective Date, and all of the Tranche 3 Shares shall vestand become nonforfeitable on the third anniversary of the Effective Date;provided, however, that in the event of a Change of Control (as defined in theIncentive Equity Plan) of the Company, to the extent not awarded, the remainingtranches of the Deferred Shares Award shall be awarded effective immediatelyprior to the Change of Control and any unvested portions of each tranche of theDeferred Shares Award shall immediately vest and become nonforfeitable upon theChange of Control.
5. Benefits.
(a) During the Employment Term, the Company shall make available to theExecutive, 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 seniorexecutives of the Company participate from time to time, and (ii) such fringebenefits and perquisites as may be made available to senior executives of theCompany as a group, including, but not limited to, long-term disabilityinsurance, life insurance coverage and the Nextel Communications, Inc. Changeof 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 programsfrom time to time which may result in certain benefit programs being amended orterminated for its senior executives generally.
6. Expenses. The Company shall pay or reimburse the Executive for reasonableand necessary business expenses incurred by the Executive in connection withhis duties on behalf of the Company in accordance with the Company’s Travel andExpense Policy and any other of its expense policies applicable to seniorexecutives of the Company, following submission by the Executive ofreimbursement expense forms in a form consistent with such expense policies.
7. Vacation. In addition to such holidays, sick leave, personal leave andother paid leave as is allowed under the Company’s policies applicable tosenior executives generally, the Executive shall be entitled to twenty (20)days of vacation per 12-month period and subject to the terms and conditions ofthe Company’s vacation policy applicable to senior executives. The duration ofsuch vacations and the time or times when they shall be taken will bedetermined by the Executive in consultation with the Company.
8. Place of Performance. In connection with his employment by the Company, theExecutive shall be based at the principal executive offices of the Company inthe greater Washington, D.C. area, except for travel reasonably required forCompany business. If the Company relocates his place of work more than 30miles, the Executive shall relocate to a residence within 30 miles of suchrelocated executive offices, subject, however, to reimbursement of theExecutive’s relocation expenses in accordance with the Company’s relocationpolicy applicable to senior executives.
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9. Termination.
(a) Termination by the Company for Cause or Resignation by the ExecutiveWithout Good Reason. If, prior to the expiration of the Employment Term, theExecutive’s employment is terminated by the Company for Cause, as defined inSection 9(d), or if the Executive resigns from his employment hereunder withoutGood Reason, as defined in Section 9(f), the Executive shall not be eligible toreceive Base Salary or to participate in any Employee Plans with respect tofuture periods after the date of such termination or resignation except for theright to receive vested benefits under any Employee Plan in accordance with theterms of such Employee Plan.
(b) Termination by the Company Without Cause or Resignation by the Executivefor Good Reason. If, prior to the expiration of the Employment Term, theExecutive’s employment is terminated by the Company without Cause or theExecutive terminates his employment hereunder for Good Reason, conditioned uponthe Executive delivering to the Company a release in a form reasonablysatisfactory to the Company with all periods for revocation expired,notwithstanding any provision in the terms of any incentive compensation planor agreement to the contrary, in full satisfaction of the Executive’s rightsand any benefits the Executive might be entitled to under The Nextel SeveranceBenefits Plan, or any successor plan, program, agreement or arrangement, theExecutive shall be entitled to:
(i) receive from the Company his Base Salary then in effect for the greater ofthe remainder of the Employment Term or twenty-four (24) months (the “SeverancePeriod”), payable through periodic payments with the same frequency as theCompany’s payroll schedule following the termination of the Executive’semployment;
(ii) continue participation in the Company’s health care, life and long-termdisability plans, substantially on the same basis that the Executiveparticipated in such health care, life and long-term disability plans prior tothe termination of his employment for the Severance Period; provided, however,that benefits otherwise receivable by the Executive pursuant to this Section9(b)(ii) shall be applied against the maximum period of continuation coverageprovided under Section 4980B of the Code;
(iii) (A) receive full payment of the Bonus Award for the Company’s fiscal yearduring which his termination of employment occurs, (B) receive full payment ofthe Bonus Award for the next fiscal year following the fiscal year during whichhis termination of employment occurs and (C) receive payment of a pro rataportion of the Bonus Award for the second year following the fiscal year duringwhich the Executive’s employment terminates (such pro rata formula shall bedetermined based on the number of months of service provided by the Executiveduring the fiscal year during which his termination of employment occurs), ineach case at the greater of the annual Target Bonus or actual performance forsuch fiscal year in accordance with the then existing terms of such cashincentive compensation, which shall not be payable until the CompensationCommittee has determined that any incentive targets have been achieved and thesubsequent designated payout date has arrived;
(iv) receive either (A) a pro rata portion of any LTPP Target Award Opportunityto 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) ifsuch termination occurs during the first year of the two-year LTPP performanceperiod or (B) full payment of any LTPP Target Award Opportunity to which hewould otherwise be entitled for the LTPP performance period during which histermination of employment occurs (but not for any later years) if suchtermination occurs during the second year of the two-year LTPP performanceperiod, in each case, in accordance with the then existing terms of the LTPP,which shall not be payable until the Compensation Committee has determined thatany incentive targets have been achieved and the subsequent designated payoutdate has arrived;
(v) accelerated vesting of any unvested deferred shares, restricted shares andstock options granted to the Executive which have not otherwise vested and anyvested stock options shall remain outstanding and exercisable for twelve (12)months following the Executive’s termination of employment, and to the extentnot awarded, the remaining tranches of the Deferred Shares Award shall beawarded effective immediately prior to the termination of the Executive’semployment and any unvested portions of each tranche of the Deferred SharesAward shall immediately vest and become nonforfeitable; and
(vi) receive outplacement services by a firm selected by the Company at itsexpense in an amount not to exceed the lesser of $50,000 or 10% of theExecutive’s Base Salary.
     Notwithstanding the foregoing, if the Executive terminates his employmentfor Good Reason due to the relocation of the Executive’s principal place ofwork, as set forth in Section 9(f)(iii), in lieu of payments and benefits setforth under Section 9(b)(i), (ii), (iii), (iv), (v) and (vi), the Executiveshall be entitled to receive (A) the compensation and benefits provided underSections 9(b)(i), (ii) and (iii) for a maximum period of twelve (12) months andunder Section 9(b)(v), as provided in such provision and (B) a pro rata portionof the Executive’s LTPP Target Award Opportunity, if any, for the Company’sfiscal year during which the Executive’s termination occurs (but not for anylater years) payable in accordance with the then existing terms of such cashincentive compensation, which shall not be payable until the CompensationCommittee has determined that any incentive targets have been achieved and thesubsequent designated payout has arrived.
(c) Termination by Death or Disability. If the Executive dies or becomesDisabled, as defined in Section 9(e), prior to the expiration of the EmploymentTerm, the Executive’s employment will terminate and the Executive, or in thecase 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) monthsBase Salary payable through periodic payments with the same frequency as theCompany’s payroll schedule or in the event of the Executive’s death, receive anamount equal to twelve (12) months Base Salary following termination due to theExecutive’s death;
(ii) in the case of Disability, continue participation in any health care andlife plans for a period of twelve (12) months or in the event of theExecutive’s death, receive any health care benefits under the terms of theEmployee Plans; and
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(iii) receive a pro rata portion of the Executive’s Bonus Award and LTPP TargetAward Opportunity, if any, for the Company’s fiscal year during which theExecutive’s death or Disability occurs (but not for any later years) payable inaccordance with the then existing terms of such cash incentive compensation,which shall not be payable until the Compensation Committee has determined thatany incentive targets have been achieved and the subsequent designated payouthas arrived; and
(iv) accelerated vesting of any unvested deferred shares, restricted shares andstock options and exercise of any unexercised vested stock options for a periodof twelve (12) months following termination due to the Executive’s death orDisability, and to the extent not awarded, the remaining tranches of theDeferred Shares Award shall be awarded effective immediately prior to thetermination of the Executive’s employment and any unvested portions of eachtranche of the Deferred Shares Award shall immediately vest and becomenonforfeitable;
provided, however, if the Executive also becomes entitled to receive benefitsunder a long-term disability plan (“LTD Plan”) now or hereafter paid for by theCompany, then the Executive’s disability benefits under Section 9(c)(i)(calculated on a monthly basis) shall be reduced by the amount of the benefitspaid 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 anyprovisions of this Agreement or the willful failure by the Executive to performhis duties hereunder (other than any such failure resulting from theExecutive’s Disability), after demand for performance is delivered by theCompany that identifies the manner in which the Company believes the Executivehas not performed his duties, if, within thirty (30) days of such demand, theExecutive fails to cure any such failure capable of being cured;
(ii) any intentional act or misconduct materially injurious to the Company orany Subsidiary, financial or otherwise, or the misappropriation, fraud,embezzlement or conversion by the Executive of the Company’s or any of itsSubsidiary’s property in connection with the Executive’s duties or in thecourse of the Executive’s employment with the Company;
(iii) the conviction or plea of no contest of the Executive for any felony orthe indictment of the Executive for any felony involving fraud, moralturpitude, embezzlement or theft in connection with the Executive’s duties orin the course of the Executive’s employment with the Company;
(iv) the commission of any intentional or knowing violation of any antifraudprovision of the federal or state securities laws or the Board reasonablybelieves that the Executive has committed any of the acts referred to in thisSection 9(d)(iv);
(v) there is a final, non-appealable order in a proceeding before a court ofcompetent jurisdiction or a final order in an administrative proceeding findingthat the Executive committed any willful misconduct or criminal activity(excluding traffic violations or other minor offenses) which commission ismaterially inimical to the interests of the Company or
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any Subsidiary, whether for his personal benefit or in connection with hisduties 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 ofthe Executive shall be deemed “intentional” if it was due primarily to an errorin judgment or negligence, but shall be deemed “intentional” only if done oromitted to be done by the Executive not in good faith and without reasonablebelief that the Executive’s action or omission was in the best interest of theCompany.
(e) Disability. For purposes of this Agreement, “Disability” or “Disabled”shall mean:
(i) the Executive’s incapacity due to physical or mental illness tosubstantially 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 reasonablediscretion, and within thirty (30) days after a notice of termination isthereafter given by the Company, the Executive shall not have returned to thefull-time performance of the Executive’s duties; or
(ii) the Executive becomes eligible to receive benefits under the Company’s LTDPlan;
provided, however, if the Executive shall not agree with a determination toterminate his employment because of Disability, the question of the Executive’sdisability shall be subject to the certification of a qualified medical doctoragreed to by the Company and the Executive. The costs of such qualifiedmedical 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 inthirty (30) days);
(ii) a reduction in the Executive’s Base Salary or Target Bonus opportunity, asset forth in Section 4(b)(ii) (that is not in either case agreed to by theExecutive) as compared to the corresponding circumstances in place on theEffective 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 mitigatethe amount of any payment made pursuant to Section 9 of this Agreement byseeking other employment or otherwise. Except as otherwise provided byapplicable law, the Executive’s coverage under the Company’s welfare benefitplans will terminate when the Executive becomes eligible for coverage under anyemployee benefit plan made available by another employer and covering the sametype 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 toreceive termination payments and benefits hereunder shall be forfeited to theextent of any amounts payable after any breach of Section 10, 11, 12, 13 or 15by the Executive.
10. Confidential Information; Statements to Third Parties.
(a) During the Employment Term and on a permanent basis upon and followingtermination of the Executive’s employment, the Executive acknowledges that:
(i) all information, whether reduced to writing (or in a form from whichinformation can be obtained, translated, or derived into reasonably usableform) or maintained in the mind or memory of the Executive and whether compiledor created by the Company, any of its Subsidiaries or any affiliates of theCompany or its Subsidiaries (collectively, the “Company Group”), which derivesindependent economic value from not being readily known to or ascertainable byproper means by others who can obtain economic value from the disclosure or useof such information, of a proprietary, private, secret or confidential natureconcerning the Company Group’s business, business relationships or financialaffairs (collectively, “Proprietary Information”) shall be the exclusiveproperty 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, computerprograms, customer and supplier lists, trade marks, service marks, copyrights(whether registered or unregistered), artwork, and contacts at or knowledge ofcustomers or prospective customers of the Company Group; and
(ii) the Proprietary Information of the Company Group gained by the Executiveduring the Executive’s association with the Company Group was or will bedeveloped by and/or for the Company Group through substantial expenditure oftime, effort and money and constitutes valuable and unique property of theCompany Group and that reasonable efforts have been put forth by the CompanyGroup to maintain the secrecy of its Proprietary Information, that suchProprietary Information is and will remain the sole property of the CompanyGroup, and that any retention or use by the Executive of ProprietaryInformation after the termination of the Executive’s services for the CompanyGroup will constitute a misappropriation of the Company Group’s ProprietaryInformation.
(b) The Executive further acknowledges and agrees that he will take allaffirmative steps reasonably necessary or required by the Company to protectthe Proprietary Information from inappropriate disclosure during and after hisemployment 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, orother written, photographic, electronic, or other tangible material containingor constituting Proprietary Information, whether created by the Executive orothers, 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 onlyin the performance of his duties for the Company. All such materials or copiesthereof and all tangible things and other property of the Company Group in theExecutive’s custody or possession shall be delivered to the Company (to theextent the Executive has not already returned) in good condition, on or beforefive (5) business days subsequent to the earlier of: (i) a request by theCompany or (ii) the Executive’s termination of employment for any reason orCause, including for nonrenewal of this Agreement, Disability, termination bythe Company or termination by the Executive. After such delivery, theExecutive shall not retain any such materials or portions or copies thereof orany such tangible things and other property and shall execute any statements oraffirmations of compliance under oath that the Company may require.
(d) The Executive further agrees that his obligation not to disclose or to useinformation and materials of the types set forth in Sections 10(a), 10(b) and10(c) above, and his obligation to return materials and tangible property, setforth in Section 10(c) above, also extends to such types of information,materials and tangible property of customers of the Company Group, consultantsfor the Company Group, suppliers to the Company Group, or other third partieswho may have disclosed or entrusted the same to the Company Group or to theExecutive.
(e) The Executive further acknowledges and agrees that he will continue to keepin strict confidence, and will not, directly or indirectly, at any time,disclose, furnish, disseminate, make available, use or suffer to be used in anymanner any Proprietary Information of the Company Group without limitation asto when or how the Executive may have acquired such Proprietary Information andthat he will not disclose any Proprietary Information to any person or entityother than appropriate employees of the Company or use the same for anypurposes (other than in the performance of his duties as an employee of theCompany) without written approval of the Board, either during or after hisemployment with the Company.
(f) Further the Executive acknowledges that his obligation of confidentialitywill survive, regardless of any other breach of this Agreement or any otheragreement, by any party hereto, until and unless such Proprietary Informationof the Company Group has become, through no fault of the Executive, generallyknown 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 ProprietaryInformation, the Executive will promptly notify the Company prior to making anysuch disclosure to facilitate the Company seeking a protective order or otherappropriate remedy from the proper authority. The Executive further agrees tocooperate with the Company in seeking such order or other remedy and that, ifthe Company is not successful in precluding the requesting legal body fromrequiring the disclosure of the Proprietary Information, the Executive willfurnish only that portion of the Proprietary Information that is legallyrequired, and the Executive will exercise all legal efforts to obtain reliableassurances that confidential treatment will be accorded the ProprietaryInformation.
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(g) The Executive’s obligations under this Section 10 are in addition to, andnot in limitation or preemption of, all other obligations of confidentialitywhich the Executive may have to the Company under the Company’s policies,general legal or equitable principles or statutes and which will remain in fullforce 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 madeany statements to any third parties criticizing or disparaging the CompanyGroup or commenting on the character or business reputation of the CompanyGroup. The Executive further hereby agrees that, without the prior writtenconsent of the Board, unless otherwise required by law, the Executive shall not(A) publicly comment in a manner adverse to the Company Group concerning thestatus, plans or prospects of the business of the Company Group or (B) publiclycomment in a manner adverse to the Company Group concerning the status, plansor prospects of any existing, threatened or potential claims or litigationinvolving the Company Group; and
(ii) the Company shall comply with its policies regarding public statementswith respect to the Executive;
provided, however, that nothing herein shall be interpreted to preclude honestand good faith reporting by the Executive to appropriate Company or legalenforcement authorities.
(i) The Executive acknowledges and agrees that a violation of the foregoingprovisions of this Section 10 that results in material detriment to the CompanyGroup would cause irreparable harm to the Company Group, and that the Company’sremedy at law for any such violation would be inadequate. In recognition ofthe foregoing, the Executive agrees that, in addition to any other reliefafforded by law or this Agreement, including damages sustained by a breach ofthis Agreement and any forfeitures under Section 9(h), and without thenecessity or proof of actual damages, the Company shall have the right toenforce this Agreement by specific remedies, which shall include, among otherthings, temporary and permanent injunctions, it being the understanding of theundersigned parties hereto that damages, the forfeitures described above andinjunctions shall all be proper modes of relief and are not to be considered asalternative remedies.
11. Non-Competition. In consideration of the Company entering into thisAgreement, and in particular, the awards of Deferred Shares under Section4(c)(ii), for a period commencing on the Effective Date and for a period endingtwenty-four (24) months after the Executive’s termination of employment for anyreason 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 orindirectly, individually or on behalf of any other person or entity do orsuffer any of the following, engage or be interested in (whether as owner,stockholder, investor, partner, lender, consultant, employee, agent, directoror 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 divisionor operation of the Company Group within any United States territory or statein which the Company Group is conducting the business of providing wirelesslocal area network (e.g., “802.11” or “Wi-Fi” wireless services) or any otherbusiness 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 ownershipof less than one percent (1%) of any class of stock in a publicly tradedcorporation shall not be deemed a breach of this Section 11; and;
(b) the Executive acknowledges that due to his unique and special contributionsto the Company Group in his position as specified in Section 3, he will beprivy to and/or responsible for Proprietary Information generated by theCompany Group, so that his employment in any capacity for a competing businesswill create an unreasonable and real risk of disclosure, inevitable orotherwise, of Proprietary Information. The Executive further acknowledges thatdue to his talents, skills and experience, the restrictions contained hereinare reasonable and will not deprive him of his ability to obtain commensurateemployment or work in a non-competing business activity or enterprise, and willnot impose an undue hardship on him.
12. Non-Solicitation. In consideration of the Company entering into thisAgreement, for a period commencing on the Effective Date and for a periodending twenty-four (24) months after the Executive’s termination of employmentfor any reason or Cause, including for nonrenewal of this Agreement,Disability, termination by the Company or termination by the Executive, theExecutive hereby covenants and agrees that he shall not, directly orindirectly, individually or on behalf of any other person or entity do orsuffer any of the following:
(a) hire or employ or assist in hiring or employing any person who has been anemployee, representative or agent of any member of the Company Group at anytime during the Executive’s employment or solicit, aid, induce or attempt tosolicit, aid, induce or persuade, directly or indirectly, such person to leavehis or his employment with any member of the Company Group to accept employmentwith any other person or entity;
(b) directly or indirectly induce any person who is an employee, officer oragent of the Company Group, or any of its affiliated, related or subsidiaryentities to terminate such relationship; or
(c) solicit any customer of the Company Group, or any person or entity whosebusiness the Company Group had solicited during the one hundred and eighty(180) day period prior to termination of the Executive’s employment, within theTerritory 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 theCompany Group relating to possible employment, (ii) offering bonuses oradditional compensation to encourage an employee of the Company Group toterminate his or her employment, and (iii) referring employees of the CompanyGroup to personnel or agents employed by competitors, suppliers or customers ofthe Company Group.
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13. Developments.
(a) The Executive acknowledges and agrees that he will make full and promptdisclosure to the Company of all inventions, improvements, discoveries,methods, developments, software, mask works, and works of authorship, whetherpatentable or copyrightable or not, (i) which relate to the Company’s businessand have heretofore been created, made, conceived or reduced to practice by theExecutive or under his direction or jointly with others, and not assigned toprior employers, or (ii) which have utility in or relate to the Company’sbusiness and are created, made, conceived or reduced to practice by theExecutive or under his direction or jointly with others during his employmentwith the Company, whether or not during normal working hours or on the premisesof the Company (all of the foregoing of which are collectively referred to inthis Agreement as “Developments”).
(b) The Executive further agrees to assign and does hereby assign to theCompany (or any person or entity designated by the Company) all of theExecutive’s rights, title and interest worldwide in and to all Developments andall related patents, patent applications, copyrights and copyrightapplications, and any other applications for registration of a proprietaryright. However, this Section 13(b) shall not apply to Developments that theExecutive developed entirely on his own time without using the Company’sequipment, supplies, facilities, or trade secret information and that does not,at the time of conception or reduction to practice, have utility in or relateto the Company’s business, or actual or demonstrably anticipated research ordevelopment. The Executive understands that, to the extent this Agreementshall be construed in accordance with the laws of any state or country whichprecludes a requirement in an employee agreement to assign certain classes ofinventions made by an employee, this Section 13(b) shall be interpreted not toapply to any invention which a court rules or the Company agrees falls withinsuch classes.
(c) The Executive further agrees to cooperate fully with the Company, bothduring and after his employment with the Company, with respect to theprocurement, maintenance and enforcement of copyrights, patents and otherintellectual property rights (both in the United States and other countries)relating to Developments; provided, however, that the Executive shall not berequired to incur or pay any costs or expenses in connection with the renderingof such cooperation. The Executive will sign all papers, including, withoutlimitation, copyright applications, patent applications, declarations, oaths,formal assignments, assignments of priority rights, and powers of attorney, anddo all things that the Company may reasonably deem necessary or desirable inorder to protect its rights and interests in any Development.
(d) The Executive further acknowledges and agrees that if the Company isunable, after reasonable effort, to secure the Executive’s signature on anysuch papers, any executive officer of the Company shall be entitled to executeany such papers as the Executive’s agent and attorney-in-fact, and theExecutive hereby irrevocably designates and appoints each executive officer ofthe Company as his agent and attorney-in-fact to execute any such papers on theExecutive’s behalf, and to take any and all actions as the Company may deemnecessary or desirable in order to protect its rights and interests in anyDevelopment, under the conditions described in this sentence.
14. Remedies. The Executive and the Company agree that the covenants containedin
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Sections 10, 11, 12 and 13 are reasonable under the circumstances, and furtheragree that if in the opinion of any court of competent jurisdiction any suchcovenant is not reasonable in any respect, such court will have the right,power and authority to sever or modify any provision or provisions of suchcovenants as to the court will appear not reasonable and to enforce theremainder of the covenants as so amended. The Executive acknowledges andagrees that the remedy at law available to the Company for breach of any of theExecutive’s obligations under Sections 10, 11, 12 and 13 would be inadequateand that damages flowing from such a breach may not readily be susceptible tobeing measured in monetary terms. Accordingly, the Executive acknowledges,consents and agrees that, in addition to any other rights or remedies that theCompany may have at law, in equity or under this Agreement, upon adequate proofof the Executive’s violation of any such provision of this Agreement, theCompany will be entitled to immediate injunctive relief and may obtain atemporary order restraining any threatened or further breach, without thenecessity of proof of actual damage. Without limiting the applicability ofthis Section 14 or in any way affecting the right of the Company to seekequitable remedies hereunder, in the event that the Executive breaches any ofthe provisions of Sections 10, 11, 12 or 13 or engages in any activity thatwould constitute a breach save for the Executive’s action being in a statewhere any of the provisions of Sections 10, 11, 12, 13 or this Section 14 isnot enforceable as a matter of law, then the Company’s obligation to pay anyremaining severance compensation and benefits that has not already been paid toExecutive pursuant to Section 9 shall be terminated and within ten (10) days ofnotice of such termination of payment, the Executive shall return all severancecompensation and the value of such benefits, including the value of theDeferred 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 Executiveshall cooperate fully with the Company and with the Company’s counsel inconnection with any present and future actual or threatened litigation oradministrative proceeding involving the Company that relates to events,occurrences or conduct occurring (or claimed to have occurred) during theperiod of the Executive’s employment by the Company. This cooperation by theExecutive will include, but not be limited to:
(i) making himself reasonably available for interviews and discussions with theCompany’s counsel as well as for depositions and trial testimony;
(ii) if depositions or trial testimony are to occur, making himself reasonablyavailable and cooperating in the preparation therefor as and to the extent thatthe Company or the Company’s counsel reasonably requests;
(iii) refraining from impeding in any way the Company’s prosecution or defenseof such litigation or administrative proceeding; and
(iv) cooperating fully in the development and presentation of the Company’sprosecution 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 anycooperation, consultation and advice rendered under this Agreement after theExecutive’s termination of employment. The Executive shall not unreasonablywithhold the Executive’s availability for such cooperation, consultation andadvice.
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 arbitratorselected under the rules of the American Arbitration Association forarbitration of employment disputes conducted in Fairfax County, Virginia. Eachparty will be entitled to present evidence and argument to the arbitrator. Thearbitrator will have the right only to interpret and apply the provisions ofthis Agreement and may not change any of its provisions, except as expresslyprovided in Section 23 and only in the event the Company has not brought anaction in a court of competent jurisdiction to enforce the covenants inSections 10, 11, 12 or 13. The arbitrator will permit reasonable pre-hearingdiscovery of facts, to the extent necessary to establish a claim or a defenseto a claim, subject to supervision by the arbitrator. The determination of thearbitrator will be conclusive and binding upon the parties and judgment uponthe same may be entered in any court having jurisdiction thereof. Thearbitrator will give written notice to the parties stating the arbitrator’sdetermination, and will furnish to each party a signed copy of suchdetermination. The expenses of arbitration will be borne equally by theCompany and the Executive or as the arbitrator equitably determines consistentwith the application of state or federal law; provided, however, that theExecutive’s share of such expenses will not exceed the maximum permitted bylaw. Any arbitration or action pursuant to this Section 16 will be governed byand construed in accordance with the substantive laws of the Commonwealth ofVirginia and, where applicable, federal law, without giving effect to theprinciples of conflict of laws of such Commonwealth.
(b) Notwithstanding Section 16(a), the Company will not be required to seek orparticipate in arbitration regarding any actual or threatened breach of theExecutive’s covenants in Sections 10, 11, 12 or 13, but may pursue itsremedies, including injunctive relief, for such breach in a court of competentjurisdiction in Fairfax County, Virginia, or in the sole discretion of theCompany, in a court of competent jurisdiction where the Executive has committedor is threatening to commit a breach of the Executive’s covenants, and noarbitrator may make any ruling inconsistent with the findings or rulings ofsuch court.
17. Other Agreements. The provisions of this Agreement supersede theprovisions of the Confidentiality Agreement. No agreements other than theagreements evidencing any grants of stock options, deferred shares andrestricted shares or representations, oral or otherwise, express or implied,with respect to the subject matter hereof have been made by either party whichare not expressly set forth in this Agreement. To the extent there is a Changeof Control (as defined in the Change of Control Plan) of the Company, severancecompensation and benefits payable under this Agreement upon a termination ofthe Executive’s employment will be reduced dollar for dollar (but not belowzero) by any severance compensation and benefits payable under the Change ofControl Plan, it being the intent that the Executive receive the greatest ofthe compensation and benefits provided under the Change of Control Plan or this
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Agreement. Notwithstanding the foregoing, to the extent there is a Change ofControl (as defined in the Change of Control Plan), for the purpose of reducingthe severance compensation and benefits payable under this Agreement, severancecompensation and benefits payable under the Plan shall not include anyRetention Bonus (as defined in the Change of Control Plan) paid or payable tothe Executive pursuant to the terms of the Change of Control Plan.
18. Indemnification. The Company shall, to the fullest extent to which it isempowered to do so by the General Corporation Law of Delaware, or any otherapplicable laws, as from time to time in effect, and in the manner thereinprovided, indemnify and hold harmless the Executive, through the duration ofthe Employment Term and all statutory periods during which any such claim maybe brought or asserted, from and against any actual, threatened, pending orcompleted action, suit or proceeding, whether civil, criminal, administrative,investigative or otherwise, to which the Executive is or is threatened to bemade 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 theindemnification and limitations on liability of officers and directors providedunder the Company’s Certificate of Incorporation and By-laws and any separateagreement between the Company and the Executive and/or any officers anddirectors indemnification insurance policy now or hereafter paid for by theCompany.
19. Withholding of Taxes. The Company may withhold from any amounts payableunder this Agreement all federal, state, city or other taxes as the Company isrequired 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, bypurchase, merger, consolidation, reorganization or otherwise) to all orsubstantially all of the business or assets of the Company, by agreement inform and substance satisfactory to the Executive, expressly to assume and agreeto perform this Agreement in the same manner and to the same extent the Companywould be required to perform if no such succession had taken place. ThisAgreement will be binding upon and inure to the benefit of the Company and anysuccessor to the Company, including without limitation any persons acquiringdirectly or indirectly all or substantially all of the business or assets ofthe Company whether by purchase, merger, consolidation, reorganization orotherwise (and such successor shall thereafter be deemed the “Company” for thepurposes of this Agreement), but will not otherwise be assignable, transferableor delegable by the Company, except that the Company may assign and transferthis Agreement and delegate its duties thereunder to a wholly owned Subsidiary.
(b) This Agreement will inure to the benefit of and be enforceable by theExecutive’s personal or legal representatives, executors, administrators,successors, heirs, distributees and legatees.
(c) This Agreement is personal in nature and neither of the parties heretoshall, without the consent of the other, assign, transfer or delegate thisAgreement or any rights or obligations hereunder except as expressly providedin Sections 20(a) and 20(b). Without limiting the generality or effect of theforegoing, the Executive’s right to receive payments hereunder will not beassignable, transferable or delegable, whether by pledge, creation of a
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security interest, or otherwise, other than by a transfer by the Executive’swill or by the laws of descent and distribution and, in the event of anyattempted assignment or transfer contrary to this Section 20(c), the Companyshall 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, includingwithout limitation notices, consents, requests or approvals, required orpermitted to be given hereunder will be in writing and will be deemed to havebeen duly given when hand delivered or dispatched by electronic facsimiletransmission (with receipt thereof confirmed), or five (5) business days afterhaving been mailed by United States registered or certified mail, returnreceipt requested, postage prepaid, or three (3) business days after havingbeen sent by a nationally recognized overnight courier service such as FederalExpress or UPS, addressed to the Company (to the attention of the Senior VicePresident and General Counsel of the Company) at its principal executiveoffices and to the Executive at his principal residence, or to such otheraddress as any party may have furnished to the other in writing and inaccordance herewith, except that notices of changes of address shall beeffective only upon receipt.
22. Governing Law. The validity, interpretation, construction and performanceof this Agreement will be governed by and construed in accordance with thesubstantive laws of the Commonwealth of Virginia, without giving effect to theprinciples of conflict of laws of such Commonwealth.
23. Validity/Severability. If any provision of this Agreement or theapplication of any provision hereof to any person or circumstances is heldinvalid, unenforceable or otherwise illegal, the remainder of this Agreementand the application of such provision to any other person or circumstances willnot be affected, and the provision so held to be invalid, unenforceable orotherwise illegal will be reformed to the extent (and only to the extent)necessary to make it enforceable, valid or legal. To the extent any provisionsheld to be invalid, unenforceable or otherwise illegal cannot be reformed, suchprovisions are to be stricken herefrom and the remainder of this Agreement willbe binding on the parties and their successors and assigns as if such invalidor illegal provisions were never included in this Agreement from the firstinstance.
24. Survival of Provisions. Notwithstanding any other provision of thisAgreement, the parties’ respective rights and obligations under Sections 10,11, 12, 13, 14, 15, 16 and 18 will survive any termination or expiration ofthis Agreement or the termination of the Executive’s employment for any reasonwhatsoever.
25. Representations.
(a) The Executive hereby represents that he is not subject to any restrictionof any nature whatsoever on his ability to enter into this Agreement or toperform his duties and responsibilities hereunder, including, but not limitedto, any covenant not to compete with any former employer, any covenant not todisclose or use any non-public information acquired during the course of anyformer employment or any covenant not to solicit any customer of any formeremployer.
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(b) The Executive hereby represents that, except as he has disclosed in writingto the Company, he is not bound by the terms of any agreement with any previousemployer or other party to refrain from using or disclosing any trade secret orconfidential or proprietary information in the course of the Executive’semployment with the Company or to refrain from competing, directly orindirectly, with the business of such previous employer or any other party.
(c) The Executive further represents that, to the best of his knowledge, hisperformance of all the terms of this Agreement and as an employee of theCompany does not and will not breach any agreement with another party,including without limitation any agreement to keep in confidence proprietaryinformation, knowledge or data the Executive acquired in confidence or in trustprior to his employment with the Company, and that he will not knowinglydisclose to the Company or induce the Company to use any confidential orproprietary information or material belonging to any previous employer orothers.
26. Amendment; Waiver. This Agreement may not be modified, amended or waivedin 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 partyhereto or compliance with any condition or provision of this Agreement to beperformed by such other party will be deemed a waiver of similar or dissimilarprovisions 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 willconstitute one and the same agreement.
28. Headings. Unless otherwise noted, the headings of sections herein areincluded solely for convenience of reference and shall not control the meaningor interpretation of any of the provisions of this Agreement.
     IN WITNESS WHEREOF, the Company has caused this Agreement to be signed byan officer pursuant to the authority of its Board, and the Executive hasexecuted 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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