Document:

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                                                                   EXHIBIT 10.12

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

         (iii) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
      successor schedule, form or report), each as promulgated pursuant to the
      Securities Exchange Act of 1934, as amended ( the "Exchange Act"),
      disclosing that any "person" (as that term is used in Section 13(d)(3) or
      Section 14(d)(2) of the Exchange Act) has become the "beneficial owner"
      (as that term is used in Rule 13d-3 promulgated under the Exchange Act) of
      securities representing 50% or more of the voting securities of the
      Company (or any successor thereto by operation of law or by reason of the
      acquisition of all or substantially all of the assets of the Company),
      including voting securities issuable upon the exercise of options,
      warrants or other securities or rights;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

   4. Eligibility; Termination Following a Change of Control.

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

   (b) Subject to the last sentence of this Section 4(b), in the event of a
Change of Control, a Covered Employee shall be entitled to receive a Retention
Bonus in the amount described on Exhibit A for such Covered Employee. The
Retention Bonus shall be payable in two installments. The first installment
shall be paid on the effective date of any Change of Control. The second
installment shall be paid on the first anniversary of the relevant Change of
Control. Notwithstanding the foregoing, if a Covered Employee's employment is
terminated by an Employer after the occurrence of a Trigger Date, and a Change
of Control occurs prior to the first anniversary of such Trigger Date, then if
such termination is without Cause and before the full amount of the Retention
Bonus is paid to the Covered Employee, the Covered Employee shall be paid the
entire remaining portion of the

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Retention Bonus in full on the later of (x) the effective date of the Change of
Control or (y) the date of such termination of employment. If a majority of the
members of the Board in office on the date immediately preceding the relevant
Trigger Date (or a majority of the members of the Compensation Committee thereof
on such date) should determine (after consultation with the Company's
independent auditors) that the grant of any right to receive a Retention Bonus
pursuant to this Section 4(b) would prevent the relevant proposed merger or
other business combination transaction contemplated to constitute a Change of
Control (and intended by the Company and the other party or parties thereto to
be accounted for as a pooling of interests) from meeting all criteria required
for pooling of interests accounting treatment, then such Board members (or
members of the Compensation Committee thereof) shall be authorized to modify the
amount or any of the other terms otherwise applicable to any Covered Employee's
Retention Bonus, or the group of Covered Employees entitled to receive any such
Retention Bonus, but in each case only to the extent determined to be necessary
to permit such relevant transaction to be accounted for as a pooling of
interests.

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

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

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

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

      (ii) of the Covered Employee's death;

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

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

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

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    5.  Severance Compensation.

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

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

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

   (d) Anything in this Plan to the contrary notwithstanding, but subject to the
last sentence of this Section 5(d), in the event that it shall be determined
that any payment or distribution of cash or other compensation or benefit by the
Company or any of its affiliates to or for the benefit of any Covered Employee,
whether paid or payable or distributed or distributable pursuant to the terms of
this Plan or otherwise pursuant to or by reason of any other agreement, policy,
plan, program or arrangement (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision thereto), by
reason of being considered "contingent on a change in ownership or control" of
the Company, within the meaning of Section 280G of the Code (or any successor
provision thereto) or to any similar tax imposed by state or local law, or any
interest or penalties with respect to such tax (such tax or taxes, together with
any such interest and penalties, being hereafter collectively referred to as the
"Excise Tax"), then the Covered Employee will be entitled to receive from the
Company an additional payment or payments (collectively, a "Gross-Up Payment").
The Gross-Up Payment will be in an amount such that, after payment by the
Covered Employee of all taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax imposed upon the Gross-Up
Payment, the Covered Employee retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed on the Payment. The Gross-Up Payment shall be paid to the
Covered Employee prior to the date on which any Payment part or all of which is
subject to the Excise Tax is made to the Covered Employee. The Covered Employee
shall cooperate in all reasonable respects with the Company (but at the
Company's sole cost and expense) to attempt to minimize any such tax liability
(such cooperation not to include foregoing or deferring any payments or benefits
to which he or she is otherwise entitled), and if the Covered Employee later
receives a refund of any part of the Excise Tax, such Covered Employee shall
promptly after receipt of such refund pay back to the Company so much of the
Gross-Up Payment as is required to avoid a windfall. If a majority of the
members of the Board in office on the day immediately preceding the relevant
Trigger Date (or a majority of the members of the Compensation Committee thereof
on such date) should determine (after consultation with the Company's
independent auditors) that the grant of any right to receive a Gross-Up Payment
pursuant to this Section 5(d) would prevent the relevant proposed merger or
other business combination transaction contemplated to constitute a Change of
Control (and intended by the Company and the other party or parties thereto to
be accounted for as

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a pooling of interests) from meeting all criteria required for pooling of
interests accounting treatment, then such Board members (or members of the
Compensation Committee thereof) shall be authorized to modify the amount of or
any of the other terms otherwise applicable to any Covered Employees's right to
receive a Gross-Up Payment, but in each case only to the extent determined to be
necessary to permit such relevant transaction to be accounted for as a pooling
of interests.

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

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

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

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

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

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   11. Successors and Binding Effect.

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

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

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

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

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

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

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

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

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

   16. Administration of the Plan.

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

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

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

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

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

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

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

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

      (iv) an explanation of the claim review procedure.

A claimant whose claim is denied (or his duly authorized representative) may,
within 30 days after receipt of denial of his claim, request a review of such
denial by the Company by filing with the Secretary of the Company a written
request for review of his claim. If the claimant does not file a request for
review with the Company within such 30-day period, the claimant shall be deemed
to have acquiesced in the original decision of the Company on his claim. If a
written request for review is so filed within such 30-day period, the Company
shall conduct a full and fair review of such claim. During such full review, the
claimant shall be given the opportunity to review documents that are pertinent
to his claim and to submit issues and comments in writing. The Company shall
notify the

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claimant of its decision on review within 60 days after receipt of a request for
review. Notice of the decision on review shall be in writing. If the decision on
review is not furnished to the claimant within such 60-day period, the claim
shall be deemed to have been denied on review. The existence of the claims
determination and review procedures set forth in this Section 16(d) shall not
impose on any Covered Employee any obligation or requirement to exhaust his
remedies or to commence proceedings under this Section 16(d) prior to seeking an
arbitration of any controversy or claim pursuant to Section 8 hereof, nor shall
the provision of this Section 16(d) operate to limit any Covered Employee's
rights to seek or obtain specific performance or other remedies pursuant to
Section 11(e) hereof.

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

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

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

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

                                            NEXTEL COMMUNICATIONS, INC.

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

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

                                    EXHIBIT A

<TABLE>
<CAPTION>

                RETENTION BONUS

                   Position                                     Retention Bonus

<S>                                                         <C>
Top Management (Tier 1)(1)                                   150% of Base Salary plus 150%
                                                             of Target Bonus

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

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

-----------------------
(1)     All employees in employee classification EX3.

(2)     All employees in employee classifications EX2 and EX1.

(3)     All employees in employee classification E7.

                                      A-1
<PAGE>   12

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

                                    EXHIBIT B

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

             Employees in employee classifications EX3, EX2 and EX1.

                                      B-1
<PAGE>   13
                           NEXTEL COMMUNICATIONS, INC.
            CHANGE OF CONTROL RETENTION BONUS AND SEVERANCE PAY PLAN

                                    EXHIBIT C

<TABLE>
<CAPTION>

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

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

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

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

(2)     All employees in employee classification E7.

                                      C-1
<PAGE>   14

                                Table of Contents
                                                                  Page

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

EXHIBIT A.........................................................A-1
EXHIBIT B.........................................................B-1
EXHIBIT C.........................................................C-1<PAGE>   1
                                                                   EXHIBIT 10.12

EXECUTION COPY

[USINTERNETWORKING LOGO]                                      CONFIDENTIAL

                             USINTERNETWORKING, INC.
                         EXECUTIVE EMPLOYMENT AGREEMENT

               This Executive Employment Agreement (the "AGREEMENT") dated as of
November 10, 2000 (the "Effective Date"), is made by and between
USinternetworking, Inc., a Delaware corporation (together with any successor
thereto, the "COMPANY") and Christopher R. McCleary (the "EXECUTIVE").

               This Agreement supercedes and replaces the Employment Agreement
dated May 29th, 1998, between the Executive and the Company, and the amendments
thereto, but is exclusive of the existing option agreements between the
Executive and the Company which shall remain in full force and effect.

               In consideration of the mutual promises made below, the Company
and Executive agree as follows:

               1.     POSITION AND DUTIES

                      The Executive shall, for a period of three (3) years from
July 21, 2000 ("TERM"), serve as Chairman of the Board of Directors of the
Company and Chairman of the Executive Committee of the Board of Directors,
reporting to the Board of Directors of the Company. The Executive shall have the
duties which are commensurate and consistent with those of a chairman and board
member, including, but not limited to, creating the vision and strategic
direction of the Company. The Executive hereby confirms that by accepting this
new position and these duties, the Executive is not violating, and will not
violate, any agreements the Executive may have with any third parties, including
former employers.

               2.     COMPENSATION AND OTHER RELATED BENEFITS

                      (a)    Annual Base Salary.  During the Term the Executive
shall receive a base salary at a rate of three hundred seventy-five thousand
dollars ($ 375,000) per annum, subject to increase as determined by the
Compensation Committee ("ANNUAL BASE SALARY"). The Executive's salary shall be
payable in accordance with the Company's normal payroll procedures.

                      (b)    Stock Options. The Executive shall be granted, as
of the Effective Date:

        (i)    a non-qualified stock option (the "First Option") to purchase two
               hundred fifty thousand (250,000) shares of the Company's common
               stock (subject to adjustment for stock splits and stock
               dividends), with an exercise price equal to the closing price of
               the Company's common stock, as reported on the Nasdaq National
               Market, on July 21, 2000 ($19.3125/share). The term of the First
               Option

                                 Page 1 of 11

--------------

[CONFIDENTIAL TREATMENT] means that certain information has been deleted from
this document and filed separately with the Securities and Exchange Commission.

<PAGE>   2
EXECUTION COPY

[USINTERNETWORKING LOGO]                                      CONFIDENTIAL

               shall be ten (10) years. The First Option shall vest as to 1/12th
               (rounded to four decimal places) of the underlying shares on
               September 30, 2000, and shall vest as to 1/12th (rounded to four
               decimal places) of the underlying shares on the last day of each
               calendar quarter thereafter during the Term until fully vested;
               and

        (ii)   a non-qualified stock option (the "Performance Option") to
               purchase two hundred fifty thousand (250,000) shares of the
               Company's common stock (subject to adjustment for stock splits
               and stock dividends), with an exercise price equal to the closing
               price of the Company's common stock, as reported on the Nasdaq
               National Market, on July 21, 2000 ($19.3125/share). The term of
               the Performance Option shall be ten (10) years. The Performance
               Option shall vest in full on July 20, 2003; provided, however,
               that, in addition to the vesting described above, vesting shall
               accelerate as follows: 1) upon the Executive's death or
               "Disability" (as defined below), the Performance Option shall
               vest as to 1/12th (rounded to four decimal places) of the
               underlying shares for each of the calendar quarters the Executive
               was employed during the Term of the Agreement until his death or
               Disability; or 2) the achievement by the Company of the following
               milestones during the Term while Executive is employed with the
               Company:

               (A)    The Performance Option shall vest as to 1/6th of the
                      underlying shares on September 30, 2000, if the Company
                      achieves EBITDA of [CONFIDENTIAL TREATMENT] or better, and
                      has revenues of [CONFIDENTIAL TREATMENT] or better, in
                      each case determined as of the Company's fiscal quarter
                      ending September 30, 2000 and determined in accordance
                      with generally accepted accounting principles ("GAAP");

               (B)    The Performance Option shall vest as to 1/6th of the
                      underlying shares on December 31, 2000, if the Company
                      achieves EBITDA of [CONFIDENTIAL TREATMENT] or better, and
                      has revenues of [CONFIDENTIAL TREATMENT] or better, in
                      each case determined as of the Company's fiscal quarter
                      ending December 31, 2000 and determined in accordance with
                      GAAP;

               (C)    The Performance Option shall vest as to 1/6th of the
                      underlying shares on March 31, 2001, if the Company
                      achieves EBITDA of [CONFIDENTIAL TREATMENT] or better, and
                      has revenues of [CONFIDENTIAL TREATMENT] or better, in
                      each case determined as of the Company's fiscal quarter
                      ending March 31, 2001 and determined in accordance with
                      GAAP;

               (D)    The Performance Option shall vest as to 1/6th of the
                      underlying shares on June 30, 2001, if the Company
                      achieves EBITDA of [CONFIDENTIAL TREATMENT] or better, and
                      has revenues of [CONFIDENTIAL TREATMENT] or better, in
                      each case determined as of the Company's fiscal quarter
                      ending June 30, 2001 and determined in accordance with
                      GAAP;

               (E)    The Performance Option shall vest as to 1/6th of the
                      underlying shares on September 30, 2001, if the Company
                      achieves EBITDA of [CONFIDENTIAL TREATMENT] or

                                  Page 2 of 11

<PAGE>   3
EXECUTION COPY

[USINTERNETWORKING LOGO]                                      CONFIDENTIAL

                      better, and has revenues of [CONFIDENTIAL TREATMENT] or
                      better, in each case determined as of the Company's fiscal
                      quarter ending September 30, 2001 and determined in
                      accordance with GAAP;

               (F)    The Performance Option shall vest as to 1/6th of the
                      underlying shares on December 31, 2001, if the Company
                      achieves EBITDA of [CONFIDENTIAL TREATMENT] or better, and
                      has revenues of [CONFIDENTIAL TREATMENT] or better, in
                      each case determined as of the Company's fiscal quarter
                      ending December 31, 2001 and determined in accordance with
                      GAAP; and

        (iii)  a non-qualified stock option (the "Share Appreciation Option") to
               purchase 500,000 shares of the Company's common stock (subject to
               adjustment for stock splits and stock dividends), with an
               exercise price equal to the closing price of the Company's common
               stock, as reported on the Nasdaq National Market, on July 21,
               2000 ($19.3125/share). The term of the Share Appreciation Option
               shall be ten (10) years. The Share Appreciation Option shall vest
               in full on July 20, 2005; provided, however, that such vesting
               shall accelerate as follows:

               (A)    The Share Appreciation Option shall vest as to 1/3rd
                      (rounded to four decimal places) of the underlying shares
                      on the first day that the closing price of the Company's
                      common stock, as reported on the Nasdaq National Market,
                      is equal to or greater than an average of [CONFIDENTIAL
                      TREATMENT] per share (split adjusted) for [CONFIDENTIAL
                      TREATMENT] consecutive calendar days;

               (B)    The Share Appreciation Option shall vest as to 1/3rd
                      (rounded to four decimal places) of the underlying shares
                      on the first day that the closing price of the Company's
                      common stock, as reported on the Nasdaq National Market,
                      is equal to or greater than an average of [CONFIDENTIAL
                      TREATMENT] per share (split adjusted) for [CONFIDENTIAL
                      TREATMENT] consecutive calendar days; and

               (C)    The Share Appreciation Option shall vest as to 1/3rd
                      (rounded to four decimal places) of the underlying shares
                      on the first day that the closing price of the Company's
                      common stock, as reported on the Nasdaq National Market,
                      is equal to or greater than an average of [CONFIDENTIAL
                      TREATMENT] per share (split adjusted) for [CONFIDENTIAL
                      TREATMENT] consecutive calendar days.

               The options will be delivered pursuant to mutually agreed to
Non-Qualified Stock Option Agreements, pursuant to the Company's Amended and
Restated 1998 Stock Option Plan (the "SOP"), to be executed by the Executive and
Company within two (2) weeks of the Effective Date. Notwithstanding anything in
the SOP to the contrary, the Company and the Executive agree that the
pooling-of-interest preservation provisions of Section 9.3(e) of the SOP shall
not apply to the stock options granted pursuant to this Paragraph 2(c). Future
option grants may be made to the Executive at the discretion of the Compensation
Committee of the Company's Board of Directors.

               "DISABILITY" is defined as the failure of Executive to perform
the duties set forth in Paragraph 1 for a cumulative total of sixty percent
(60%) or more of the normal working days

                                  Page 3 of 11

<PAGE>   4
EXECUTION COPY

[USINTERNETWORKING LOGO]                                      CONFIDENTIAL

during any two (2) consecutive months of the Term, or failure to perform his
duties for ninety (90) or more consecutive days of the Term. Nothing herein
shall be construed to violate any Federal or State law including the Family and
Medical Leave Act of 1993, 29 U.S.C.S. Sections 2601 et seq., and the Americans
with Disabilities Act of 1990, 42 U.S.C.S. Sections 12101 et seq.

                      (d)    Other Benefits.  The Executive shall be entitled to
participate in any welfare benefit plans maintained by the Company for similarly
situated executives, which may include medical, dental, vision, disability and
life insurance benefits, and to receive such other fringe benefits and
perquisites as may be granted to senior management of the Company from time to
time. The Company shall provide, at no cost to the Executive, an additional life
insurance policy on the Executive's life with the beneficiary specified by the
Executive and the face amount of which shall be equal to twice the Executive's
Annual Base Salary as of the Effective Date, less any group insurance otherwise
provided pursuant to this Paragraph 2(d). The Executive shall also be entitled
to participate in the Company's 401(k) plan and any other retirement, deferred
compensation or long-term incentive compensation program that the Company may
establish for senior management from time to time. Additionally, the Executive
will be eligible for a reasonable number of days of paid vacation each year of
the Term., at the Executive's discretion.

                      (e)    Other Expenses: In addition to the compensation
provided for above, the Company agrees to pay or to reimburse the Executive
during his employment for all reasonable travel, entertainment and other
expenses which the Executive may incur in regard to the business of the Company
in accordance with and subject to (i) the limitations of the Company's standard
practices and policies and (ii) the Executive's presentation of such documents
and records as the Company shall require from time to time to substantiate such
expenses.

               3.     TERMINATION WITHOUT CAUSE

                      If the Company terminates the Executive's employment
without "Cause" (as defined in Paragraphs 4 (a) - (f) below), the Company will
compensate the Executive as follows:

                             (a)    Continue to pay the Annual Base Salary and
                                    provide the welfare benefits under Paragraph
                                    2(d) for one year or until the end of the
                                    Term, whichever occurs sooner;

                             (b)    Accelerate vesting of all of the Executive's
                                    outstanding options, including options not
                                    granted pursuant to Paragraph 2(c) of this
                                    Agreement, which are unvested as of the date
                                    of termination without Cause.

               4.     TERMINATION FOR CAUSE

               Executive's employment may be terminated for "Cause" by the
Company upon thirty (30) days written notice, provided that the Executive shall
have the opportunity to cure the events constituting Cause during such thirty
(30) day notice period. If the Cause has not been

                                  Page 4 of 11

<PAGE>   5
EXECUTION COPY

[USINTERNETWORKING LOGO]                                      CONFIDENTIAL

cured by the Executive at the end of the thirty (30) day notice period,
Executive's Annual Base Salary, benefits and vesting of all options shall cease
as of the conclusion of the thirty day notice period of termination for Cause.
At the conclusion of the thirty (30) day notice period, a special session of the
full Board of Directors, excluding Executive, will be convened to consider the
alleged conduct or events constituting "Cause." In the event the Board of
Directors, after considering the alleged conduct or events and rebuttal by the
Executive, vote with a 2/3 majority of all the directors of the Board, excluding
Executive, that "Cause" exists under the terms of this Agreement, the
Executive's termination for "Cause" will be confirmed. However, if less than a
2/3 majority votes for "Cause", Executive's Annual Base Salary, benefits and
vesting of all options shall recommence as of the date they ceased. "CAUSE" is
defined as any one of the following:

                      (a) Executive's substantial failure to perform the
                          material duties under the Agreement;

                      (b) Willful or gross neglect of assigned duties so as to
                          cause material harm to the Company;

                      (c) Willful misconduct or gross negligence that materially
                          and adversely impacts the reputation of the Company;
                          or

                      (d) Executive's material breach of any provision of this
                          Agreement.

               In addition, the Executive may, at the Company's option, be
terminated without notice and for "Cause" if any one of the following events
occur:

                      (e) Conviction of a felony or a crime involving moral
                          turpitude; or

                      (f) Material fraud or personal dishonesty involving
                          Company assets.

               If the Executive is terminated for Cause, Executive's Annual Base
Salary, benefits, and vesting of all options shall cease as of the date of the
Executive's termination for Cause, and the Executive shall not receive any
severance pay or other benefits following such termination except as required by
applicable law; provided, however, that the Executive shall receive any portion
of the Annual Base Salary and bonus earned but unpaid as of the date of such
termination for Cause.

                5.    TERMINATION WITHOUT GOOD REASON

               If Executive terminates his employment with the Company without
"Good Reason" (as defined below in Paragraph 6) prior to the expiration of the
Term, Executive's Annual Base Salary, benefits, and vesting of all options shall
cease as of the date of the Executive's termination without Good Reason, the
Executive shall voluntarily resign from the Company's Board of Directors and
Executive Committee, and the Executive shall not receive any severance pay or
other benefits following such termination except as required by applicable law;
provided, however, that the Executive shall receive any portion of the Annual
Base Salary earned but unpaid as of the date of such termination without Good
Reason.

                                  Page 5 of 11

<PAGE>   6
EXECUTION COPY

[USINTERNETWORKING LOGO]                                      CONFIDENTIAL

               6.     TERMINATION WITH GOOD REASON

                      If Executive terminates his employment with the Company
with "Good Reason" prior to the expiration of the Term, the Company will
compensate the Executive as follows:

                             (a)    Continue to pay the Annual Base Salary and
                                    provide the welfare benefits under Paragraph
                                    2(d) for one year or until the end of the
                                    Term, whichever occurs sooner; and

                             (b)    Accelerate vesting of all of the Executive's
                                    outstanding options, including options not
                                    granted pursuant to Paragraph 2(c) of this
                                    Agreement, which are unvested as of the date
                                    of termination with Good Reason.

"GOOD REASON" is defined as any one of the following:

        (i)    Company's material breach of any provision of this Agreement;

        (ii)   Any material adverse change in Executive's position (including
               status, offices, titles and reporting requirements), authority,
               duties or responsibilities, or any other action by the Company or
               the Board of Directors which results in: (A) a diminution in any
               material respect in the Executive's position, authority, duties,
               responsibilities or compensation; or (B) a material diversion
               from the Executive's performance of the functions of his
               position, excluding for this purpose material adverse changes
               made with the Executive's written consent or due to Executive's
               termination for Cause or termination without Good Reason;

        (iii)  Involuntary relocation of the Executive's regular work address to
               a location which requires Executive to travel more than fifty
               (50) miles from his residence;

provided, however, that it shall not constitute Good Reason unless Executive has
given the Company written notice of its alleged actions constituting Good Reason
and the Company has not cured any such alleged Good Reason within thirty (30)
days of the Company's receipt of such written notice. For purposes of clause
(ii), a material diminution of title, position, duties or responsibilities shall
be deemed to occur if the Company becomes a subsidiary of another corporation
unless, immediately after the Company becomes a subsidiary, persons who hold a
majority of the outstanding voting securities entitled to vote generally in the
election of directors of the parent company are persons who, immediately prior
to the Company becoming a subsidiary, held the Company Voting Stock (as defined
in Paragraph 9 below) and the Executive remains as Chairman of the Board of
Directors (with the same duties as set forth above in Paragraph 1) of the public
entity.

                                  Page 6 of 11

<PAGE>   7
EXECUTION COPY

[USINTERNETWORKING LOGO]                                      CONFIDENTIAL

               7.     POST-TERMINATION ACTIVITIES

                      (a)    The Executive agrees that during his employment
with the Company and for 12 months thereafter, the Executive will not, and will
not cause others to:

                             (i)    solicit or induce or attempt to solicit or
        induce any employee or full time consultant of the Company (whether such
        person is presently employed by the Company or may later be employed),
        to leave the Company's employ or otherwise interfere with the employment
        relationship between any such person and the Company;

                             (ii)   solicit for competitive purposes, or attempt
        to divert, take away, any exclusive suppliers or customers of the
        Company or potential customers of the Company to whom the Company has
        made presentations seeking to establish business relationships during
        the Term, of which the Executive knew or should have known; or

                             (iii)  publicly disparage the Company, its
        operations, business, Board, directors, officers, management or
        employees; or

                             (iv)   compete with the Company or its subsidiaries
        in the ASP market anywhere in the United States; provided, however, that
        this clause (iv) shall not apply upon the Executive's termination by the
        Company without Cause or termination by the Executive for Good Reason.

                      (b)    In the event the terms of this Paragraph 7 shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of its time period or geographic scope, the terms will be interpreted to extend
only over the maximum period of time and geographic scope which the court
determines are enforceable.

               8.     NONDISCLOSURE OF CONFIDENTIAL INFORMATION

                      The Executive shall not improperly disclose any
confidential information or trade secrets of the Company during the course of
his employment and in perpetuity thereafter.

               9.     CHANGE IN CONTROL

               If during the Term, and while the Executive is still employed, a
"Change in Control" (as defined below) occurs, then all of the Executive's
options then outstanding shall vest immediately before the Change in Control. A
"CHANGE IN CONTROL" is defined as:

               (i)    the acquisition by any Person, as defined in this
Paragraph 9, in a single transaction or a series of transactions (other than
through the distribution of shares of the securities of the Company from the
Company's Series A or B venture investors pursuant to partnership or
distribution agreements) of the beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of 50%
or more of (A) the then outstanding shares of the securities of the Company, or
(B) the combined voting power of the then outstanding securities of the Company
entitled to vote generally in the election of directors (the "Company Voting
Stock");

                                  Page 7 of 11

<PAGE>   8
EXECUTION COPY

[USINTERNETWORKING LOGO]                                      CONFIDENTIAL

               (ii)   the closing of a sale or other conveyance of all or
               substantially all of the assets of the Company; or

               (iii)  the effective time of any merger, share exchange,
               consolidation, or other business combination of the Company if
               immediately after such transaction persons who hold a majority of
               the outstanding voting securities entitled to vote generally in
               the election of directors of the surviving entity (or the entity
               owning 100% of such surviving entity) are not persons who,
               immediately prior to such transaction, held the Company Voting
               Stock.

               For purposes of this Paragraph 9, a "Person" means any
individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), other
than: employee benefit plans sponsored or maintained by the Company or entities
controlled by the Company.

               10.    EXCISE TAX ON PARACHUTE PAYMENTS

               The Executive shall bear all expense of, and be solely
responsible for, all federal, state, local or foreign taxes due with respect to
any payment received hereunder, including, without limitation, any excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"); provided, however, that any payment or benefit received or to be
received by the Executive in connection with a Change in Control or the
termination of the Executive's employment (whether payable pursuant to the terms
of this Agreement ("Contract Payments") or any other plan, arrangements or
agreement with the Company or any affiliate (collectively with the Contract
Payments, the "Total Payments") shall be reduced to the extent necessary so that
no portion thereof shall be subject to the excise tax imposed by Section 4999 of
the Code but only if, by reason of such reduction, the net after-tax benefit
received by the Executive shall exceed the net after-tax benefit received by the
Executive if no such reduction was made. For purposes of this Paragraph 10, "net
after-tax benefit" shall mean (i) the total of all payments and the value of all
benefits which the Executive receives or is then entitled to receive from the
Company that would constitute "parachute payments" within the meaning of Section
280G of the Code, less (ii) the amount of all federal, state and local income
taxes payable with respect to the foregoing calculated at the maximum marginal
income tax rate for each year in which the foregoing shall be paid to the
Executive (based on the rate in effect for such year as set forth in the Code as
in effect at the time of the first payment of the foregoing), less (iii) the
amount of excise taxes imposed with respect to the payments and benefits
described in (i) above by Section 4999 of the Code. The foregoing determination
shall be made by a nationally recognized accounting firm (the "Accounting Firm")
selected by the Company and reasonably acceptable to the Executive (which may
be, but will not be required to be, the Company's independent auditors). The
Accounting Firm shall submit its determination and detailed supporting
calculations to both the Executive and the Company within fifteen (15) days
after receipt of a notice from either the Company or the Executive that the
Executive may receive payments which may be "parachute payments." If the
Accounting Firm determines that such reduction is required by this Paragraph 10,
the Executive, in the Executive's sole and absolute discretion, may determine
which Total Payments shall be reduced to the extent necessary so that no portion
thereof shall be subject to the excise tax imposed by Section 4999 of the Code,
and

                                  Page 8 of 11

<PAGE>   9
EXECUTION COPY

[USINTERNETWORKING LOGO]                                      CONFIDENTIAL

the Company shall pay such reduced amount to the Executive. If the Accounting
Firm determines that no reduction is necessary under this Paragraph 10, it will,
at the same time as it makes such determination, furnish the Executive and the
Company an opinion that Executive shall not be liable for any excise tax under
Section 4999 of the Code. The Executive and the Company shall each provide the
Accounting Firm access to and copies of any books, records, and documents in the
possession of the Executive or the Company, as the case may be, reasonably
requested by the Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the determinations and
calculations contemplated by this Paragraph 10. The fees and expenses of the
Accounting Firm for its services in connection with the determinations and
calculations contemplated by this Paragraph 10 shall be borne by the Company.

               11.    RESTRICTION ON STOCK

                      For a period of one (1) year from the Effective Date, the
Executive agrees not to make any dispositions or sales of any common stock of
the Company that would be reportable as "non-exempt dispositions" under Section
16(b) of the Exchange Act. Notwithstanding the foregoing sentence, the Company
agrees that the Executive may transfer common stock of the Company:

               (i) to one or more charities, charitable remainder trusts or
charitable annuity trusts,

               (ii) to immediate family members, related by blood, marital
relations or adoption, or to one or more family trusts for the benefit of such
immediate family members, without limitation as to number of shares; provided
that the transferee under this clause (ii) agrees not to transfer or sell such
shares within the one (1) year period commencing on the Effective Date,

               (iii) up to an aggregate of 450 shares to immediate family
members without restriction on such family members' right to subsequently sell
or transfer the shares, and

               (iv) up to 5% of Executive's then current unrestricted holdings
of the Company's common stock in any secondary public offering of the Company's
common stock.

The restrictions imposed under this Paragraph 11 shall not apply after the
Executive's employment with the Company is terminated: (A) by the Executive with
Good Reason; (B) by the Company with or without Cause; or (C) on account of the
Executive's death or Disability.

               12.    LEGAL FEES

                      The Company agrees to reimburse the Executive for all
legal and professional fees and costs incurred by the Executive in connection
with the negotiation and preparation of this Agreement and the Non-Qualified
Stock Option Agreements referred to in Paragraph 2 of this Agreement, but in no
event to exceed $10,000.

               13.    BURDEN AND BENEFIT

                                  Page 9 of 11

<PAGE>   10
EXECUTION COPY

[USINTERNETWORKING LOGO]                                      CONFIDENTIAL

                      This Agreement shall be binding upon, and shall inure to
the benefit of, the Company and the Executive, and their respective heirs,
personal and legal representatives, successors and assigns. This Agreement may
not be assigned by the Executive without the prior written consent of the
Company.

               14.    SEVERABILITY

                      The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any one or more of the
provisions hereof shall not affect the validity or enforceability of the other
provisions of this Agreement.

               15.    ENTIRE AGREEMENT

                      This Agreement contains the entire agreement and
understanding by and between the Company and the Executive with respect to the
subject matter hereof, and no representations, promises, agreements or
understandings, written or oral, not contained herein shall be of any force or
effect. No change or modification hereof shall be valid or binding unless the
same is in writing and signed by the party against whom such waiver is sought to
be enforced; moreover, no valid waiver of any provision of this Agreement at any
time shall be deemed a waiver of any other provision of this Agreement at such
time or will be deemed a valid waiver of such provision at any other time.

               16.    GOVERNING LAW

                      This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Maryland.

               17.    ARBITRATION

                      Any dispute or controversy arising under or in connection
with this Agreement which is not settled to the satisfaction of either party
pursuant to the special Board session set forth above in Paragraph 4 or
otherwise shall be settled exclusively by arbitration, conducted before a single
arbitrator in Baltimore, MD in accordance with the rules of the JAMS/ENDISPUTE
then in effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction; provided, however, that the Company shall be entitled to
seek a restraining order or injunction in any court of competent jurisdiction to
prevent any continuation of any violation of the provisions of Sections 7 or 8
of the Agreement and the Executive hereby consents that such restraining order
or injunction may be granted without the necessity of the Company's posting any
bond. The fees and expense of the arbitrator shall be borne by the
non-prevailing party.

               18.    NOTICES

                      Any notice under this Agreement shall be in writing and
delivered by fax, e-mail or registered mail to the signatories at the addresses
below.

                                  Page 10 of 11

<PAGE>   11
EXECUTION COPY

[USINTERNETWORKING LOGO]                                      CONFIDENTIAL

               IN WITNESS WHEREOF, the parties have executed this Agreement as
of the Effective Date, November 10, 2000.

<TABLE>
<CAPTION>
CHRISTOPHER R. MCCLEARY:                    USINTERNETWORKING, INC.
<S>                                         <C>
/s/ CHRISTOPHER R. MCCLEARY                 By: /s/ FRANK A. ADAMS
-----------------------------                  --------------------------------
                                               Frank A. Adams
                                               Title: Chairman, Compensation Committee
Address:                                       ONE USI PLAZA, ANNAPOLIS, MD 21401-7478
                                               ---------------------------------------
</TABLE>

:

                                  Page 11 of 11

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