Exhibit 10.1
**EMPLOYMENT AGREEMENT**
     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into asof July 1, 2003 (the “Effective Date”), by and between Nextel Communications,Inc., a Delaware corporation (the “Company”), and Timothy M. Donahue (the“Executive”).
WITNESSETH:
     WHEREAS, the Executive is an employee of the Company and serves theCompany as the President and Chief Executive Officer and as a member of theBoard of Directors of the Company;
     WHEREAS, the Executive and the Company are parties to an EmploymentAgreement dated February 1, 1996, as amended by an Addendum to EmploymentAgreement dated March 24, 1997 (the “Prior Employment Agreement”), and theExecutive and the Company desire to enter into this new employment agreementwhich will supersede the Prior Employment 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 Executivewill continue to be employed by the Company upon the terms and conditions setforth herein.
             (b) The employment relationship between the Company and the Executiveshall be governed by the general employment policies and practices of theCompany, including without limitation, those relating to the Company’s Code ofCorporate Conduct, confidential information and avoidance of conflicts, exceptthat when the terms of this Agreement differ from or are in conflict with theCompany’s general employment policies or practices, this Agreement shallcontrol.
     2. Term. Subject to termination under Section 9, the Executive’semployment shall be for an initial term of three (3) years commencing on theEffective Date and shall continue through the third anniversary of theEffective Date (the “Employment Term”); provided, however, thatat the end of the initial Employment Term and on each succeeding anniversary ofthe Effective Date, the Employment Term will be automatically extended by anadditional year, unless twelve (12) months prior to the end of the initialEmployment Term or any such succeeding anniversary date either the Executive orthe Company has given the other written notice of nonrenewal.
 

 

     3. Position and Duties of the Executive.
             (a) The Executive shall serve as the President and Chief Executive Officerof the Company, and agrees to serve as an officer of any Subsidiary as may berequested from time to time by the Board of Directors of the Company (the“Board”). The Executive shall report directly to the Board. In such capacityas President and Chief Executive Officer of the Company, the Executive shallexercise general day-to-day supervisory responsibility and operational andmanagement authority over the affairs of the Company and its Subsidiaries. Forpurposes 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 theCompany directly or indirectly controls 50% or more of the voting interest.
             (b) Subject to the provisions of Section 9, during the Employment Term,the Company agrees to use its reasonable best efforts to cause the Executive tobe renominated as a director of the Company (a “Director”). If so elected, theExecutive shall serve as a Director of the Company; and if elected, theExecutive shall also serve as (i) a member of any committee of the Board,whether now existing or hereafter created, and (ii) a member of the board ofdirectors of any Subsidiary or affiliate of the Company.
             (c) Throughout the Employment Term, the Executive shall, except as mayfrom time 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, the responsibilities provided for thePresident and Chief Executive Officer in the Company’s By-laws, and such otherrelated duties and responsibilities as may from time to time be reasonablyprescribed by the Board or any committee or person delegated by the Board, ineach case, within the framework of the Company’s policies and objectives.
             (d) Throughout the Employment Term and provided that such activities donot contravene the provisions of Sections 3(a) and (b) or Section 10, 11, 13and 14 hereof and provided further the Executive does not engage in any othersubstantial business activity for gain, profit or other pecuniary advantagewhich materially 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 private or public for profit companies, subject in each case tothe prior approval of the Board. The Executive may retain all fees and othercompensation from any such service and the Company shall not reduce hiscompensation by the amount of such fees.
     4. Compensation.
             (a) Base Salary. During the Employment Term the Company shall payto the Executive a base salary of not less than one million dollars($1,000,000) per annum (the “Base Salary”), payable at the times and in themanner consistent with the Company’s general policies regarding compensation ofsenior executive employees. The Base Salary will be reviewed not less thanannually by the Compensation Committee of the Board (the “CompensationCommittee”) and may be increased (but not decreased) in the CompensationCommittee’s sole
 

 

discretion. The Base Salary shall be payable in accordance with theCompany’s normal payroll schedule. 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. The Executive will continue to beeligible to participate in any short-term and long-term incentive compensationplans, annual bonus plans and such other management incentive programs orarrangements of the Company approved by the Board that are generally availableto the Company’s senior executives, including, but not limited to, the NextelCommunications, Inc. Cash Compensation Deferral Plan, as may be amended fromtime to time.
             (i) Annual Performance Bonus. During the EmploymentTerm, the Executive shall be entitled to participate in an annualbonus plan (the “Bonus Plan”), with such opportunities as may bedetermined by the Compensation Committee (“Target Bonuses”);provided, however, that effective for the bonus yearending December 31, 2003, and thereafter during the EmploymentTerm, the Executive will participate in the Bonus Plan at a minimumannual Target Bonus opportunity of 150% of his Base Salary andshall be entitled to receive full payment of any award under theBonus Plan determined pursuant to such Bonus Plan (a “BonusAward”).
             (ii) Long-Term Performance Bonus. During theEmployment Term, the Executive shall be entitled to participate inthe Nextel Long-Term Incentive Plan effective January 1, 2002, orany successor plan, program, agreement or arrangement (the “LTIP”),with such opportunities, if any, as may be determined by theCompensation Committee (“Target Award Opportunities”);provided, however, that for the 2004-2005 LTIPperformance period, the Executive will participate in the LTIP at aminimum Target Award Opportunity of two million seven hundredthousand dollars ($2,700,000).
             (iii) Incentive bonuses, if earned, shall be paid whenincentive compensation is customarily paid to the Company’s seniorexecutives in accordance with the terms of the applicable plans,programs or arrangements.
             (iv) Pursuant to the Company’s applicable incentive or bonusplans as in effect from time to time, the Executive’s incentivecompensation during the term of this Agreement may be determinedaccording to criteria intended to qualify under Section 162(m) ofthe Internal Revenue Code of 1986, as amended (the “Code”).
             (c) Equity Compensation. The Executive shall continue to beeligible to participate in the Nextel Communications, Inc. Amended and RestatedIncentive Equity Plan (as amended and restated as of November 16, 2000), as maybe further amended from time to time, (the “Incentive Equity Plan”).
 

 

             (i) Deferred Shares. Effective as of August 11, 2003,the Board will award to the Executive 1,000,000 Deferred Shares (assuch term is defined in the Incentive Equity Plan) of common stockof the Company, par value $.001 per share (“Common Stock”), (the“Deferred Shares Award”). Subject to the terms and conditions ofthe deferred shares award agreement evidencing such grant,one-third (1/3) of the Deferred Shares Award shall vest and becomenonforfeitable on each of the first three (3) anniversaries of theEffective Date.
             (ii) Stock Options. (A) The Board will grant to theExecutive in calendar year 2004 an option to purchase a minimum of250,000 shares of Common Stock (the “2004 Option Award”). Subjectto the terms and conditions of the option agreement evidencing suchgrant, one-half (1/2) of the 2004 Option Award shall vest andbecome exercisable on each of the first two (2) anniversaries ofthe date of grant; provided, however, that if thesecond half of the 2004 Option Award has not vested on or beforeJune 30, 2006, such installment shall vest on June 30, 2006. (B)The Board will grant to the Executive in calendar year 2005 anoption to purchase a minimum of 250,000 shares of Common Stock (the“2005 Option Award”). Subject to the terms and conditions of theoption agreement evidencing such grant, the 2005 Option Award shallvest on the first anniversary of the date of grant;provided, however, that if the 2005 Option Award hasnot vested on or before June 30, 2006, such installment shall veston June 30, 2006.
     5. Benefits.
             (a) During the Employment Term, the Company shall make available to theExecutive, on no less favorable terms and conditions than those available toother senior executives and subject to the terms and conditions of theapplicable plans, participation for the Executive and his eligible dependentsin (i) Company-sponsored group health, major medical, pension and profitsharing, 401(k) and employee welfare benefit plans, programs and arrangements(the “Employee Plans”) and such other usual and customary benefits in whichsenior executives of the Company participate from time to time, and (ii) suchfringe benefits and perquisites as may be made available to senior executivesof the Company 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 benefitprograms from time to time which may result in certain benefit programs beingamended or terminated for its senior executives generally.
     6. Expenses. The Company shall pay or reimburse the Executive forreasonable and necessary business expenses incurred by the Executive inconnection with his duties on behalf of the Company in accordance with theCompany’s Travel and Expense Policy and any other of its expense policiesapplicable to senior executives of the Company, following submission by theExecutive of reimbursement expense forms in a form consistent with such expensepolicies.
 

 

     7. Vacation. In addition to such holidays, sick leave, personalleave and other paid leave as is allowed under the Company’s policiesapplicable to senior executives generally, the Executive shall be entitled totwenty (20) days of vacation per 12-month period and subject to the terms andconditions of the Company’s vacation policy applicable to senior executives.The duration of such vacations and the time or times when they shall be takenwill be determined by the Executive in consultation with the Company.
     8. Place of Performance. In connection with his employment by theCompany, the Executive shall be based at the principal executive offices of theCompany in the vicinity of Fairfax County, Virginia, except for travelreasonably required for Company business.
     9. Termination.
             (a) Termination by the Company for Cause or Resignation by theExecutive Without Good Reason. If, prior to the expiration of theEmployment Term, the Executive’s employment is terminated by the Company forCause, as defined in Section 9(d), or if the Executive resigns from hisemployment hereunder without Good Reason, as defined in Section 9(f), theExecutive shall not be eligible to receive Base Salary or to participate in anyEmployee Plans with respect to future periods after the date of suchtermination or resignation except for the right to receive vested benefitsunder any Employee Plan in accordance with the terms of such Employee Plan.Conditioned upon the Executive delivering to the Company a release in a formreasonably satisfactory to the Company with all periods for revocation expired,the Executive shall be entitled to receive a pro rata portion of any earned butunpaid Bonus Award and LTIP Target Award Opportunity, if any, to which he wouldotherwise be entitled for the Company’s fiscal year during which histermination of employment occurs (but not for any later years) in accordancewith the then existing terms of such cash incentive compensation, which shallnot be payable until the Compensation Committee has determined that anyincentive targets have been achieved and the subsequent designated payout datehas arrived.
             (b) Termination by the Company Without Cause or Resignation by theExecutive for Good Reason. If, prior to the expiration of the EmploymentTerm, the Executive’s employment is terminated by the Company without Cause orthe Executive terminates his employment hereunder for Good Reason, conditionedupon the 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, the Executive shall be entitled to:
             (i) receive from the Company his Base Salary then in effectfor two (2) years (the “Severance Period”), payable throughperiodic payments with the same frequency as the Company’s payrollschedule following the termination of the Executive’s employment;
             (ii) for the Severance Period, continue participation in theCompany’s health care, life and long-term disability plans,substantially on the same basis that the Executive participated insuch health care, life and long-term disability plans prior to thetermination of his employment; provided, however,that benefits
 

 

otherwise receivable by the Executive pursuant to this Section9(b)(ii) shall be applied against the maximum period ofcontinuation coverage provided under Section 4980B of the Code(“COBRA Coverage”);
             (iii) (A) receive full payment of the Bonus Award for theCompany’s fiscal year during which his termination of employmentoccurs, (B) receive full payment of the Bonus Award for the nextfiscal year following the fiscal year during which his terminationof employment occurs and (C) receive payment of a pro rata portionof the Bonus Award for the second year following the fiscal year inwhich the Executive’s employment terminates (such pro rata formulashall be determined based on the number of months of serviceprovided by the Executive during the fiscal year in which histermination of employment occurs), in each case at the greater ofthe annual Target Bonus or actual performance for such fiscal yearin accordance with the then existing terms of such cash incentivecompensation, which shall not be payable until the CompensationCommittee has determined that any incentive targets have beenachieved and the subsequent designated payout date has arrived;
             (iv) receive full payment of any Target Award Opportunity towhich he would otherwise be entitled for the LTIP performanceperiod during which his termination of employment occurs (but notfor any later years) at the greater of target or actual performancefor such LTIP performance period in accordance with the thenexisting terms of the LTIP, which shall not be payable until theCompensation Committee has determined that any incentive targetshave been achieved and the subsequent designated payout date hasarrived; and
             (v) accelerated vesting of any unvested Deferred Shares Award,restricted shares and stock options, including the 2004 StockOption Award and the 2005 Stock Option Award, granted to theExecutive which have not otherwise vested and any vested stockoptions shall remain outstanding and exercisable for the EmploymentTerm (including any prior extensions thereof).
          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 set forth underSection 9(b)(i), (ii), (iii), (iv) and (v), the Executive shall be entitled toreceive the compensation and benefits provided under Sections 9(b)(i), (ii) and(iii) for a maximum period of twelve (12) months.
             (c) Termination by Death or Disability. If the Executive dies orbecomes Disabled, as defined in Section 9(e), prior to the expiration of theEmployment Term, the Executive’s employment will terminate and the Executive,or in the case of death, notwithstanding any provisions in the terms of anyincentive compensation plan or agreement to the contrary, the Executive’sbeneficiary, or if none, the Executive’s estate, shall be entitled to:
             (i) receive an amount equal to 12 months Base Salary payablethrough periodic payments with the same frequency as the Company’spayroll schedule;
 

 

             (ii) in the case of Disability, continue participation in anyhealth care and life plans for a period of 12 months or in theevent of the Executive’s death, receive any health care benefitsunder the terms of the Employee Plans;
             (iii) receive a pro rata portion of the Executive’s BonusAward and LTIP Target Award Opportunity, if any, for the Company’sfiscal year in which the Executive’s death or Disability occurs(but not for any later years) payable in accordance with the thenexisting terms of such cash incentive compensation, which shall notbe payable until the Compensation Committee has determined that anyincentive targets have been achieved and the subsequent designatedpayout date has arrived; and
             (iv) accelerated vesting of any unvested Deferred SharesAward, restricted shares and stock options, including the 2004Stock Option Award and the 2005 Stock Option Award, and exercise ofany unexercised vested stock options for a period of one (1) yearfollowing termination due to the Executive’s death or Disability;
provided, however, if the Executive also becomes entitled toreceive benefits under a long-term disability plan (“LTD Plan”) now orhereafter paid for by the Company, then the Executive’s death or disabilitybenefits under Section 9(c)(i) (calculated on a monthly basis) shall be reducedby the amount of the benefits paid under such LTD Plan.
(d) Cause. For purposes of this Agreement, “Cause” shallmean:
             (i) any act or omission constituting a material breach by theExecutive of any provisions of this Agreement or the willfulfailure by the Executive to perform his duties hereunder (otherthan any such failure resulting from the Executive’s Disability),after demand for performance is delivered by the Company thatidentifies the manner in which the Company believes the Executivehas not performed his duties, if, within thirty (30) days of suchdemand, the Executive fails to cure any such failure capable ofbeing cured;
             (ii) any intentional act or misconduct materially injurious tothe Company or any Subsidiary, financial or otherwise, or themisappropriation, fraud, embezzlement or conversion by theExecutive of the Company’s or any of its Subsidiary’s property inconnection with Executive’s duties or in the course of Executive’semployment with the Company;
             (iii) the conviction or plea of no contest of the Executivefor any felony or the indictment of the Executive for any felonyinvolving fraud, moral turpitude, embezzlement or theft inconnection with the Executive’s duties or in the course of theExecutive’s employment with the Company;
             (iv) the commission of any intentional or knowing violation ofany antifraud provision of the federal or state securities laws orthe Board reasonably believes that the Executive has committed anyof the acts referred to in this Section 9(d)(iv);
 

 

             (v) there is a final, non-appealable order in a proceedingbefore a court of competent jurisdiction or a final order in anadministrative proceeding finding that the Executive committed anywillful misconduct or criminal activity (excluding trafficviolations or other minor offenses) which commission is materiallyinimical to the interests of the Company or any Subsidiary, whetherfor his personal benefit or in connection with his duties for theCompany or any Subsidiary;
             (vi) current alcohol or prescription drug abuse affecting workperformance;
             (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. Notwithstanding the foregoing, the Executive shall not be deemed tohave been terminated for “Cause” hereunder unless and until there shall havebeen delivered to the Executive written notice of termination by the Companyalong with a copy of a resolution duly adopted by the affirmative vote of notless than a majority of the Board then in office (excluding the Executive ifthe Executive is then a member of the Board) at a meeting of the Board calledand held for such purpose, after reasonable notice to the Executive and anopportunity for the Executive, together with the Executive’s counsel (if theExecutive chooses to have counsel present at such meeting), to be heard beforethe Board, finding that, in the good faith opinion of the Board, the Executivehad committed an act constituting “Cause” as herein defined and specifying theparticulars thereof in detail.
(e) Disability. For purposes of this Agreement, “Disability” or“Disabled” shall mean:
             (i) the Executive’s incapacity due to physical or mentalillness to substantially perform his duties and the essentialfunctions of his position on a full-time basis for at least six (6)months in any 12-month period as determined by the Board in itsreasonable discretion, and within thirty (30) days after a noticeof termination is thereafter given by the Company, the Executiveshall not have returned to the full-time performance of theExecutive’s duties; or
             (ii) the Executive becomes eligible to receive benefits underthe Company’s LTD Plan, as defined in Section 9(c);
provided, however, if the Executive shall not agree with adetermination to terminate his employment because of Disability, the questionof the Executive’s disability shall be subject to the certification of aqualified medical doctor agreed to by the Company and the Executive. The costsof such qualified medical doctor shall be paid for by the Company.
 

 

(f) Good Reason. For purposes of thisAgreement, “Good Reason” shall mean:
             (i) the Company’s material breach of this Agreement (afterfailure to cure in thirty (30) days);
             (ii) the assignment of the Executive without his consent to aposition, responsibilities or duties of a materially lesser statusor degree of responsibility than his position, responsibilities orduties at the Effective Date; or
             (iii) relocation of the Executive’s principal place of workmore than thirty (30) miles without the Executive’s consent.
          (g) No Mitigation Obligation. The Executive will not be requiredto mitigate the amount of any payment made pursuant to Section 9 of thisAgreement by seeking other employment or otherwise. Except as otherwiseprovided by applicable law, the Executive’s coverage under the Company’swelfare benefit plans will terminate when the Executive becomes eligible forcoverage under any employee benefit plan made available by another employer andcovering the same type of benefits. The Executive shall notify the Companywithin thirty (30) days after becoming eligible for coverage of any suchbenefits.
          (h) Forfeiture. Notwithstanding the foregoing, any right of theExecutive to receive termination payments and benefits hereunder shall beforfeited to the extent of any amounts payable after any breach of Section 10,11, 12, 13, 14 or 16 by 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 formfrom which information can be obtained, translated, or derivedinto reasonably usable form) or maintained in the mind or memoryof the Executive and whether compiled or created by the Company,which derives independent economic value from not being readilyknown to or ascertainable by proper means by others who can obtaineconomic value from the disclosure or use of such information, ofa proprietary, private, secret or confidential nature concerningthe Company’s business, business relationships or financialaffairs (collectively, “Proprietary Information”) shall be theexclusive property of the Company, and by way of illustration, butnot limitation, shall include inventions, products, processes,methods, techniques, formulas, compositions, compounds, projects,developments, sales strategies, plans, research data, clinicaldata, financial data, personnel data, computer programs, customerand supplier lists, trade marks, service marks, copyrights(whether registered or unregistered), artwork, and contacts at orknowledge of customers or prospective customers of the Company;and
 

 

             (ii) the Proprietary Information of the Company gained by theExecutive during the Executive’s association with the Company wasor will be developed by and/or for the Company through substantialexpenditure of time, effort and money and constitutes valuable andunique property of the Company and that reasonable efforts havebeen put forth by the Company to maintain the secrecy of itsProprietary Information, that such Proprietary Information is andwill remain the sole property of the Company, and that anyretention or use by the Executive of Proprietary Information afterthe termination of the Executive’s services for the Company willconstitute a misappropriation of the Company’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.
          (c) The Executive further agrees that all files, letters, memoranda,reports, records, data, sketches, drawings, laboratory notebooks, programlistings, or other written, photographic, electronic, or other tangiblematerial containing or constituting Proprietary Information, whether createdby 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 tobe used by him only in the performance of his duties for the Company. All suchmaterials or copies thereof and all tangible things and other property of theCompany in the Executive’s custody or possession shall be delivered to theCompany (to the extent the Executive has not already returned) in goodcondition, 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 employmentfor any reason or Cause, including for nonrenewal of this Agreement,disability, termination by the Company or termination by the Executive. Aftersuch delivery, the Executive shall not retain any such materials or portions orcopies thereof or any such tangible things and other property and shall executeany statements or affirmations of compliance under oath that the Company mayrequire.
          (d) The Executive further agrees that his obligation not to disclose or touse 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, consultants forthe Company, suppliers to the Company, or other third parties who may havedisclosed or entrusted the same to the Company or to the Executive.
          (e) The Executive further acknowledges and agrees that he will continue tokeep in 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 without limitation as to whenor how the Executive may have acquired such Proprietary Information and that hewill not disclose any Proprietary Information to any person or entity otherthan 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 employmentwith the Company.
 

 

          (f) Further the Executive acknowledges that his obligation ofconfidentiality will survive, regardless of any other breach of this Agreementor any other agreement, by any party hereto, until and unless such ProprietaryInformation of the Company has become, through no fault of the Executive,generally known to the public. In the event that the Executive is required bylaw, regulation, or court order to disclose any of the Company’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.
          (g) The Executive’s obligations under this Section 10 are in addition to,and not in limitation or preemption of, all other obligations ofconfidentiality which the Executive may have to the Company under the Company’spolicies, general legal or equitable principles or statutes and which willremain in full force and effect following the termination of the Executive’semployment.
          (h) During the Employment Term and following his termination ofemployment:
             (i) the Executive shall not, directly or indirectly, make orcause to be made any statements to any third parties criticizing ordisparaging the Company, any of its Subsidiaries or any affiliatesof the Company or its Subsidiaries (collectively, the “CompanyGroup”) or commenting on the character or business reputation ofthe Company Group. The Executive further hereby agrees that,without the prior written consent of the Board, unless otherwiserequired by law, the Executive shall not (A) publicly comment in amanner adverse to the Company Group concerning the status, plans orprospects of the business of the Company Group or (B) publiclycomment in a manner adverse to the Company Group concerning thestatus, plans or prospects of any existing, threatened or potentialclaims or litigation involving the Company Group; and
             (ii) the Company shall comply with its policies regardingpublic statements with respect to the Executive;
provided, however, that nothing herein shall be interpreted topreclude honest and good faith reporting by the Executive to appropriateCompany or legal enforcement authorities.
(i) The Executive acknowledges and agrees that a violation of theforegoing provisions of this Section 10 that results in material detriment tothe Company would cause irreparable harm to the Company, 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 of
 

 

this 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 intothis Agreement, for a period commencing on the Effective Date and for a periodending two (2) years 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, directlyor indirectly, 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 is then competingwith or planning to compete with the business of any division or operation ofthe Company Group within any United States territory or state, in which theCompany Group is conducting the business of providing wireless local areanetwork (e.g., “802.11” or “Wi-Fi” wireless services) or any other businessauthorized 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 theExecutive’s ownership of less than one percent (1%) of any class of stock in apublicly traded corporation shall not be deemed a breach of this Section 11;and
          (b) the Executive acknowledges that due to his unique and specialcontributions to the Company Group in his positions as specified in Section 3,he will be privy to and ultimately responsible for every type of ProprietaryInformation generated by the Company Group, so that his employment in anycapacity for a competing business will create an unreasonable and real risk ofdisclosure, inevitable or otherwise, of Proprietary Information. The Executivefurther acknowledges that due to his talents, skills and experience, therestrictions contained herein are reasonable and will not deprive him of hisability to obtain commensurate employment or work in a non-competing businessactivity or enterprise, and will not impose an undue hardship on him.
     12. Election to Extend Non-Competition and Non-SolicitationCovenants. If the Executive’s employment terminates pursuant to Section9(b), and the Executive has delivered a release to the Company as provided inSection 9(b), the Executive may elect to extend the covenants set forth inSections 11(a) and (b) and Sections 13(a), (b), (c) and (d) (the“Non-Competition and the Non-Solicitation Covenants”) for one additional year(the “Extension Period”) by giving the Company written notice of such electionto extend no later than ninety (90) days prior to the expiration of theSeverance Period. The Executive must elect to extend all of theNon-Competition and the Non-Solicitation Covenants simultaneously and may notselect extension of some, but not all, of such covenants. In consideration ofthe Executive’s election to extend the Non-Competition and Non-SolicitationCovenants, subject to Section 20, the Executive shall be entitled to:
 

 

          (a) receive from the Company an amount equal to his annual Base Salary asof his termination date, for the Extension Period, payable through periodicpayments with the same frequency as the Company’s payroll schedule during theExtension Period;
          (b) for the Extension Period, continue participation in the Company’shealth care, life and long-term disability plans, substantially on the samebasis that the Executive participated in such health care, life and long-termdisability plans prior to the termination of his employment; provided,however, that benefits otherwise receivable by the Executive pursuant tothis Section 12(b) shall be applied against the maximum period of continuationcoverage provided under Section 4980B of the Code (“COBRA Coverage”), if any;
          (c) receive an amount equal to the full payment of the Bonus Award for theExtension Period, which shall be equal to (i) the Bonus Award for any remainderof the second year following the fiscal year in which the Executive’semployment terminates that the Executive would not have otherwise receivedpursuant to Section 9(b)(iii)(C) and (ii) any applicable pro rata portion ofany Bonus Award for the third year following the fiscal year in which theExecutive’s employment terminates (such pro rata formula shall be determinedbased on the number of months of service provided by the Executive during thefiscal year in which his termination of employment occurs), in each case at thegreater of the annual Target Bonus or actual performance for such fiscalyear(s) in accordance with the then existing terms of such cash incentivecompensation, which shall not be payable until the Compensation Committee hasdetermined that any incentive targets have been achieved and the subsequentdesignated payout day has arrived.
     Notwithstanding the foregoing, without limiting the applicability ofSection 9(h) or in any way affecting the right of the Company to seek equitableremedies thereunder, in the event that the Executive breaches any of theprovisions of Sections 10, 11, 12, 13, 14 or 16, or engages in any activitythat would constitute a breach save for the Executive’s action being in a statewhere Section 11 or 13 is not enforceable as a matter of law, then theCompany’s obligation to pay any remaining payments under this Section 12 thathave not already been paid to the Executive shall be terminated and within ten(10) days of notice of such termination of payment, Executive shall return tothe Company the cash equivalent of all payments made and benefits providedunder this Section 12.
     13. Non-Solicitation. In consideration of the Company enteringinto this Agreement, for a period commencing on the Effective Date and for aperiod ending two (2) years after the Executive’s termination of employment forany reason or Cause, including for nonrenewal of this Agreement, disability,termination by the Company or termination by the Executive, the Executivehereby 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 thefollowing:
          (a) hire or employ or assist in hiring or employing any person who hasbeen an employee, representative or agent of any member of the Company Group atany time during the Executive’s employment or solicit, aid, induce or attemptto solicit, aid, induce or persuade, directly or indirectly, such person toleave his or his employment with any member of the Company Group to acceptemployment with any other person or entity;
 

 

          (b) directly or indirectly induce any person who is an employee, officeror agent 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 entitywhose business the Company Group had solicited during the one hundred andeighty (180) day period prior to termination of the Executive’s employment,within the Territory for purposes of business which is competitive to theCompany Group.
          (d) For purposes of this Section 13, the term “solicit or persuade”includes, but is not limited to, (i) initiating communications with an employeeof the Company 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.
     14. Developments.
             (a) The Executive acknowledges and agrees that he will make full andprompt disclosure 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 14(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 14(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 be required to incur or pay any costs or expenses inconnection with the rendering of such cooperation. The Executive will sign allpapers, including, without limitation, copyright applications, patentapplications, declarations, oaths, formal assignments, assignments of priorityrights, and powers of attorney, and do all things that the Company mayreasonably deem necessary or desirable in order to protect its rights andinterests 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.
          15. Remedies. The Executive and the Company agree that thecovenants contained in Sections 10, 11, 12, 13 and 14 are reasonable under thecircumstances, and further agree that if in the opinion of any court ofcompetent jurisdiction any such covenant is not reasonable in any respect, suchcourt will have the right, power and authority to sever or modify any provisionor provisions of such covenants as to the court will appear not reasonable andto enforce the remainder of the covenants as so amended. The Executiveacknowledges and agrees that the remedy at law available to the Company forbreach of any of the Executive’s obligations under Sections 10, 11, 12, 13 and14 would be inadequate and that damages flowing from such a breach may notreadily be susceptible to being measured in monetary terms. Accordingly, theExecutive acknowledges, consents and agrees that, in addition to any otherrights or remedies that the Company may have at law, in equity or under thisAgreement, upon adequate proof of the Executive’s violation of any suchprovision of this Agreement, the Company will be entitled to immediateinjunctive relief and may obtain a temporary order restraining any threatenedor further breach, without the necessity of proof of actual damage. Withoutlimiting the applicability of this Section 15 or in any way affecting the rightof the Company to seek equitable remedies hereunder, in the event that theExecutive breaches any of the provisions of Sections 10, 11, 12, 13 and 14 orengages in any activity that would constitute a breach save for the Executive’saction being in a state where any of the provisions of Sections 10, 11, 12, 13,14 or this Section 15 is not enforceable as a matter of law, then the Company’sobligation to pay any remaining severance compensation and benefits that hasnot already been paid to Executive pursuant to Section 9 shall be terminatedand within ten (10) days of notice of such termination of payment, Executiveshall return all severance compensation and the value of such benefits.
     16. Continued Availability and Cooperation.
             (a) In the event of termination of the Executive’s employment, theExecutive shall cooperate fully with the Company and with the Company’s counselin connection 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 anddiscussions with the Company’s counsel as well as for depositionsand trial testimony;
             (ii) if depositions or trial testimony are to occur, makinghimself reasonably available and cooperating in the preparationtherefor as and to the extent that the Company or the Company’scounsel reasonably requests;
             (iii) refraining from impeding in any way the Company’sprosecution or defense of such litigation or administrativeproceeding; and
             (iv) cooperating fully in the development and presentation ofthe Company’s prosecution or defense of such litigation oradministrative proceeding.
             (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.
     17. 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 24 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 13 or 14. The arbitrator will permit reasonablepre-hearing discovery of facts, to the extent necessary to establish a claim ora defense to a claim, subject to supervision by the arbitrator. Thedetermination of the arbitrator will be conclusive and binding upon the partiesand judgment upon the same may be entered in any court having jurisdictionthereof. The arbitrator will give written notice to the parties stating thearbitrator’s determination, and will furnish to each party a signed copy ofsuch determination. 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 the Executive’s share of such expenses will not exceed the maximumpermitted by law. Any arbitration or action pursuant to this Section 17 willbe governed by and construed in accordance with the substantive laws of theCommonwealth of Virginia and, where applicable, federal law, without givingeffect to the principles of conflict of laws of such Commonwealth.
          (b) Notwithstanding Section 17(a), the Company will not be required toseek or participate in arbitration regarding any actual or threatened breach ofthe Executive’s covenants in Sections 10, 11, 12 13 or 14, 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 the Company, in a court of competent jurisdiction where the Executive hascommitted or is threatening to commit a breach of the Executive’s covenants,and no arbitrator may make any ruling inconsistent with the findings or rulingsof such court.
          18. Other Agreements. The provisions of this Agreement supersedethe provisions of the Prior Employment 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,compensation and benefits payable under this Agreement upon a termination ofthe Executive’s employment will be reduced dollar for dollar (but not belowzero) by any compensation and benefits payable under the Change of ControlPlan, it being the intent that the Executive receive the greatest of thecompensation and benefits provided under the Change of Control Plan or thisAgreement.
          19. Indemnification. The Company shall, to the fullest extent towhich it is empowered to do so by the General Corporation Law of Delaware, orany other applicable laws, as from time to time in effect, and in the mannertherein provided, indemnify and hold harmless the Executive, through theduration of the Employment Term and all statutory periods during which any suchclaim 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 Executive is or isthreatened to be made a party by reason of the fact that he is or was adirector, officer, employee or agent of the Company. The Executive will befurther covered by the indemnification and limitations on liability of officersand directors provided under the Company’s Certificate of Incorporation andBy-laws and any separate agreement between the Company and the Executive and/orany officers and directors indemnification insurance policy now or hereafterpaid for by the Company.
          20. Withholding of Taxes. The Company may withhold from anyamounts payable under this Agreement all federal, state, city or other taxes asthe Company is required to withhold pursuant to any law or governmentregulation or ruling.
          21. 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.
 

 

             (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 21(a) and 21(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 asecurity 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 21(c), the Companyshall have no liability to pay any amount so attempted to be assigned,transferred or delegated.
     22. Notices. For all purposes of this Agreement, allcommunications, including without limitation notices, consents, requests orapprovals, required or permitted to be given hereunder will be in writing andwill be deemed to have been duly given when hand delivered or dispatched byelectronic facsimile transmission (with receipt thereof confirmed), or five (5)business days after having been mailed by United States registered or certifiedmail, return receipt requested, postage prepaid, or three (3) business daysafter having been sent by a nationally recognized overnight courier servicesuch as Federal Express or UPS, addressed to the Company (to the attention ofthe Senior Vice President and General Counsel of the Company) at its principalexecutive offices and to the Executive at his principal residence, or to suchother address 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.
     23. Governing Law. The validity, interpretation, construction andperformance of this Agreement will be governed by and construed in accordancewith the substantive laws of the Commonwealth of Virginia, without givingeffect to the principles of conflict of laws of such State.
     24. Validity/Severability. If any provision of this Agreement orthe application 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.
     25. Survival of Provisions. Notwithstanding any other provision ofthis Agreement, the parties’ respective rights and obligations under Sections10, 11, 12 ,13, 14, 15, 16, 17 and 19 will survive any termination orexpiration of this Agreement or the termination of the Executive’s employmentfor any reason whatsoever.
     26. Representations.
 

 

             (a) The Executive hereby represents that he is not subject to anyrestriction of any nature whatsoever on his ability to enter into thisAgreement or to perform his duties and responsibilities hereunder, including,but not limited to any covenant not to compete with any former employer, anycovenant not to disclose or use any non-public information acquired during thecourse of any former employment or any covenant not to solicit any customer ofany former employer.
             (b) The Executive hereby represents that, except as he has disclosed inwriting to the Company, he is not bound by the terms of any agreement with anyprevious employer or other party to refrain from using or disclosing any tradesecret or confidential or proprietary information in the course of theExecutive’s employment with the Company or to refrain from competing, directlyor 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 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.
     27. Amendment; Waiver. This Agreement may not be modified, amendedor waived in any manner except by an instrument in writing signed by bothparties hereto. No waiver by either party hereto at any time of any breach bythe other party hereto or compliance with any condition or provision of thisAgreement to be performed by such other party will be deemed a waiver ofsimilar or dissimilar provisions or conditions at the same or at any prior orsubsequent time.
     28. Counterparts. This Agreement may be executed in one or morecounterparts, each of which shall be deemed to be an original but all of whichtogether will constitute one and the same agreement.
     29. Headings. Unless otherwise noted, the headings of sectionsherein are included solely for convenience of reference and shall not controlthe meaning or 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/ William E. Conway, Jr.