CFO Employment Agreement - John D. Thompson

EMPLOYMENT AGREEMENT



EMPLOYMENT AGREEMENT, dated as of January 29, 1999, between Nextel Partners Operating Corp., a Delaware corporation (the "Company"), and John D. Thompson ("Executive"). Capitalized terms used and not otherwise defined herein shall have the meanings given to such terms in Section 9 or as otherwise set forth below.



WHEREAS, the Company desires to employ Executive and to enter into an agreement embodying the terms of such employment (this "Agreement"), and Executive desires to accept such employment and enter into this Agreement.



NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company and Executive, intending to be legally bound, hereby agree as follows:



1. Employment. (a) Agreement to Employ. Upon the terms and subject to the conditions hereof the Company shall employ Executive as Chief Financial Officer and Treasurer of the Company until the Expiration Date (as defined in Section 1(b)), any date to which this Agreement shall have been extended pursuant to Section 1(b) or any earlier termination of this Agreement pursuant to Section 6. Executive's office shall be located in the Seattle, Washington metropolitan area. The Company agrees and acknowledges that Executive may, consistent with this Agreement and his responsibilities hereunder, devote time to other business activities; provided, that such other business activities do not materially interfere with the performance of Executive's duties hereunder. Executive will disclose such activities to the Board of Directors of the Company (the "Board") from time to time as the Board may request.



(b) Employment Period. Unless earlier terminated pursuant to Section 6, the initial term of Executive's employment with the Company shall be for a period of four years, commencing on the date of this Agreement and continuing until January 29, 2003 (the "Expiration Date"). The term of this Agreement may be extended by the Company for successive one-year terms commencing on the Expiration Date by providing Executive notice of such election not less than 60 days prior to the Expiration Date or the scheduled expiration date of any renewal term.



2. Responsibility. Executive shall be responsible for supervising the establishment, maintenance and operation of all financial and accounting functions at the Company and for such other duties commensurate with his position that may be assigned from time to time by the Board or (to the extent not inconsistent with the duties assigned to him by the Board) by the chief executive officer of the Company. Executive shall report directly to the chief executive officer of the Company and shall be subject to the overall supervision of the Board.





3. Compensation and Benefits.



(a) Salary and Bonus.



(i) The Company shall pay Executive a base salary in the annual amount of $150,000 payable in accordance with the Company's normal payroll practices.



(ii) The Company shall (subject to the Board's review and approval) establish a performance based program pursuant to which Executive shall receive, if performance targets are met, an additional annual cash payment of up to forty percent (40%) of Executive's then current base salary (or such higher amount as the Board may approve), and shall offer to Executive a benefits package equivalent to that provided to the Company's other senior executives.



(iii) In addition to the amounts payable pursuant to paragraphs (i) and (ii) above, in recognition of Executive's services prior to the date hereof, the Company will on the date of the Closing make a lump sum payment to Executive in the amount of $87,500.



(iv) Upon completion of the Required Build on or before the Scheduled Completion Date, the Compensation Committee of the Board shall review Executive's base salary and bonus payment in light of the performance of Executive and the Company, and may, in its discretion, increase (but not decrease) such base salary and bonus payment by an amount it determines to be appropriate.



(v) If this Agreement is renewed by the Company upon expiration of the initial four-year term, Executive's base salary and bonus payment will be recalculated so as to place them at levels that are comparable to prevailing market rates, based on the overall compensation packages of executives holding comparable positions in similarly situated companies (which shall include consideration of Executive's equity compensation arrangements in comparison to those of executives holding comparable positions in similarly situated companies).



(vi) In order to induce Executive to enter into this Agreement, the Company will on the date of the Closing, pursuant to an Option Agreement in the form attached as Exhibit A hereto, issue to Executive options to purchase 35,000 shares of Class A Common Stock at a purchase price of $10 per share. The Option Agreement will provide, among other things, that Executive shall have the right to require that the Company purchase such options on the fourth anniversary of the Closing for an aggregate purchase price of $500,000.



(b) Expenses. Executive shall maintain his own automobile and shall carry liability insurance in the minimum amount of $300,000. The Company shall reimburse Executive monthly for business use of his automobile at the prevailing IRS rate per mile. Executive shall also be reimbursed monthly for all other reasonable out-of-pocket expenses incurred or paid by Executive while representing the Company or conducting Company business. Executive shall be responsible for maintaining records reasonably satisfactory to support all claimed business usage of his automobile and to substantiate all









out-of-pocket expenses incurred for which reimbursement is sought and shall furnish such records to the Company in accordance with its policies.



(c) Vacation. Executive shall be entitled to 15 vacation days each calendar year, any or all of which may be carried over into a new calendar year, for a maximum accrual of 30 days. Upon termination of Executive's services under this Agreement, Executive will be paid for unused vacation time earned through the last completed month of service, computed at the rate of ten hours per month.



(d) Indemnification. The Company shall indemnify and hold Executive harmless in accordance with the terms of the Company's certificate of incorporation and bylaws, in each case as in effect on the date hereof.



(e) D&O Insurance. The Company shall maintain directors and officers liability insurance coverage covering Executive in amounts customary for similarly situated companies in the telecommunications industry and with reputable insurers. All such policies shall provide for coverage to Executive on the same terms and conditions applicable to the coverage provided under such policies to the Company's other directors and officers.



4. Nondisclosure of Proprietary and Confidential Information.



(a) Confidential Information. Executive agrees to refrain (whether during or after his employment with the Company) from disclosing or using, except as permitted by this Agreement, any secrets or confidential information with respect to any Covered Entity, including without limitation its trade secrets, patents, affairs, business plans, strategic, commercial or financial information other than information that is or becomes publicly available through no fault of Executive (the "Confidential Information"). Executive may disclose or communicate only such information as is reasonably required or specifically approved by the Board or authorized management personnel of the Company designated by the Board in connection with Executive's services. Confidential Information may be used solely for the benefit of the Company, and Executive shall not make any other use of such information. Executive agrees that all materials relating to the business of any Covered Entity that are provided or made available to Executive, or created by Executive, during the course of Executive's services to the Company shall be and remain the property of the Company and/or the applicable Covered Entity (subject to the terms of any separate agreement between the Company and/or its Parent Companies and the affected Covered Entity), whether or not such materials constitute or contain Confidential Information, and all copies of such materials shall be returned to the Company immediately upon the termination of Executive's services to the Company. In the event that the Company notifies the Executive that it has entered into a confidentiality agreement with a Covered Entity or with any Affiliate of the Company with respect to confidential information to be provided to the Company, the Executive shall comply with such reasonable obligations thereunder as are applicable to the Executive.



(b) Innovations; Inventions. Executive hereby sells, transfers and assigns to the Company all right, title and interest of Executive in and to any and all inventions, ideas, disclosures and improvements of





any kind or nature whatsoever, whether patented or unpatented, and any and all copyrightable materials, in either case whether made or conceived in whole or in part by Executive alone or together with others, from January 1, 1998 to the date of this Agreement or during the initial term of this Agreement or any renewal term, that (i) relate to any methods, designs, products, processes, apparatus, service or devices sold, leased used or under construction or development by the Company or any of its subsidiaries or affiliates, (ii) relate to the business, functions or operations of the Company or any of its subsidiaries or affiliates or (iii) arise from, in whole or in part, the efforts of Executive on behalf of the Company. Executive will communicate and disclose to the Company promptly all information, data and details pertaining to any inventions, ideas, disclosures and improvements described above, in such form or format as the Company may reasonably request. During the term of this Agreement or any renewal term and thereafter, Executive will execute, acknowledge or deliver to the Company (at the Company's expense) such formal transfers and assignments and such other papers and documents as may be required of Executive to permit the Company to file and prosecute any patent applications to the Company desires to file and prosecute relating to any of the foregoing, and, as to copyrightable material, to obtain copyright thereon.



5. Non-Competition; Non-Solicitation.



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