On
July 22, 2008, the Board of Directors of the Company approved
the below Severance Plan, as Amended and Restated Effective
July 22, 2008, in order to make amendments relating to
compliance with Section 409A of the Internal Revenue Code, a
change in the Company’s employee classification system and
other non-material changes.
NII HOLDINGS, INC. SEVERANCE
PLAN
Plan Document and Summary Plan
Description
As Amended and Restated Effective
July 22, 2008
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ARTICLE
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PAGE
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ADOPTION
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1
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ELIGIBILITY
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2
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INVOLUNTARY
TERMINATION
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3
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CONDITIONS OF
AWARD
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5
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CALCULATION OF
SEVERANCE PAY
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6
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PAYMENT OF
SEVERANCE BENEFITS
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8
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OTHER
BENEFITS
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9
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DECISION FINAL
AND BINDING
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10
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ADMINISTRATION
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11
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CLAIMS
PROCEDURE
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12
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FUNDING
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14
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AMENDMENT AND
TERMINATION
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15
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GENERAL PLAN
INFORMATION AND ERISA RIGHTS
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16
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MISCELLANEOUS
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19
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PARTICIPATING
AFFILIATED COMPANIES
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S-I
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i
NII HOLDINGS, INC. SEVERANCE
PLAN
NII Holdings, Inc.
originally established the NII Holdings, Inc. Severance Plan (the
“Plan”), effective February 11, 2003 in order to
provide severance pay to certain eligible employees of NII
Holdings, Inc. and certain subsidiaries in the event of an
involuntary termination of employment. This Plan and summary plan
description reflects the terms and conditions of the Plan, as
amended and restated, effective July 22, 2008. The Plan is
intended to constitute an employee welfare benefit plan and not a
pension plan under the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), and shall be interpreted
and administered accordingly.
This Plan shall
provide severance pay benefits to eligible employees of NII
Holdings, Inc. and certain affiliated companies of NII Holdings,
Inc. which shall adopt this Plan with the consent of NII Holdings,
Inc. NII Holdings, Inc. and each participating affiliated company
shall be referred to collectively as the “Company”;
provided, however, that each participating affiliated company shall
be considered the “Company” with respect to its own
employees only. The establishment of this Plan is not to be
considered an express or implied contract of employment for any
term or a restriction of the right of the Company to terminate the
employment relationship of any employee.
1
2.01
Eligibility Employees : An employee of the Company is
eligible for severance pay under the Plan only if the employee is a
full-time employee of the Company, meaning the employee is
regularly scheduled to work at least 30 hours per week;
and
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(i)
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the
employee is employed by the Company in the United States;
or
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(ii)
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the
employee receives U.S. source earned income (within the meaning of
Internal Revenue Code Sections 911(d)(2) and 861(a)(3));
or
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(iii)
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the
employee is a foreign division president of the Company;
or
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(iv)
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the
employee reports directly to a foreign division president of the
Company and is classified as a Vice President Level I.
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2.02 Ineligible
Individuals: Notwithstanding the provisions of
Section 2.01, the following individuals shall not be eligible
for severance pay under the Plan:
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(i)
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part time employees (employees who
are regularly scheduled to work less than 30 hours per
week)
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(ii)
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temporary employees
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(iii)
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casual employees
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(iv)
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independent contractors
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(v)
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consultants
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(vi)
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contract personnel assigned to work
at the Company by an outside employment agency
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(vii)
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employees employed by the Company
pursuant to a collective bargaining agreement
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(viii)
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employees covered by an employment
or separation agreement with the Company, unless such agreement
expressly provides that such employee may be considered for an
award of severance pay under the Plan.
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2
ARTICLE III
INVOLUNTARY TERMINATION
3.01
Involuntary Termination : Severance pay shall be awarded to
an eligible employee only if employment with the Company is
involuntarily terminated, through no fault of his or her own, due
to a lack of work, job elimination, work force reduction, a
determination by management that, due to business reasons, the
employee’s performance or contribution to the business
(although satisfactory) does not meet the needs of the business, or
for any other reason determined by the Company to form the basis
for an award of severance pay under this Plan, subject to the
restrictions in Section 3.02. The employee’s termination
of employment must be intended to be permanent.
3.02
Exclusions: An employee shall not be eligible for severance
pay under the Plan if his or her termination is for any reason
other than those referred to in Section 3.01. The Company, in
its sole discretion, shall determine in all cases whether a
termination is involuntary for purposes of being considered for a
possible award of severance pay under the Plan. In no event,
however, shall a termination of employment be deemed involuntary
for purposes of the Plan if the employee:
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(i)
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is
terminated for cause, including but not limited to, failure to meet
the performance requirements of the position, policy violation,
theft, gross misconduct, etc.; or
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(ii)
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fails or refuses to return all
Company property in the employee’s possession, and/or fails
to clear all expenses and other financial accounts, as of the
Separation Date, as defined in Section 5.01(iii). (Examples of
Company property include, without limitation: Company security
badge, office keys, and all Company documents, files and computer
disks. Examples of accounts to be cleared include, without
limitation: the completion and reconciliation of expense accounts
and the pay-off of loans and other financial obligations owing by
the employee to the Company); or
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(iii)
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resigns or otherwise voluntarily
terminates his or her employment; or
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(iv)
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is
terminated by temporary layoff or furlough, except that if the
Company elects to convert the temporary layoff or furlough into a
permanent layoff, severance benefits may then be payable as of the
effective date of permanent layoff if the employee is otherwise
eligible for benefits under the Plan; or
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(v)
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is
classified by the Company as a senior manager or below and is
offered a position within the Company (not involving relocation to
an office or location that is more than 50 miles away from the
employee’s current place of employment) and providing the
same or greater Annual Earnings, as defined in
Section 5.01(i)) in lieu of termination, but fails or refuses
to
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accept it; or
is classified as a director or above and is offered a position
within the Company (not involving relocation to an office or
location that is more than 50 miles away from the employee’s
current place of employment and providing the same or greater
Annual Earnings, as defined in Section 5.01(i), and that is
classified at an equivalent or greater position level) in lieu of
termination, but fails or refuses to accept it; or
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(vi)
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is
terminated because of the Company’s sale or transfer of all
or part of its assets and he or she is offered employment with the
buyer or transferee company at the same or greater Annual Earnings,
as defined in Section 5.01(i), which does not require relocation to
an office or location that is more than 50 miles away from the
employee’s current place of employment; or
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(vii)
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is
terminated in connection with the “outsourcing” of
operational functions, and he or she is offered employment by the
outsourcing vendor at the same or greater Annual Earnings, as
defined in Section 5.01(i), which does not require relocation
to an office or location that is more than 50 miles away from the
employee’s current place of employment; or
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(viii)
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is
terminated for failure to return to work following a leave of
absence; or
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(ix)
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retires; or
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(x)
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dies, at which time eligibility for
severance benefits will end and all such benefit payments will
cease; or
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(xi)
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is
separated from the Company because he or she is no longer able to
perform the essential functions of his or her job (with or without
reasonable accommodation) because of a disability; or
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(xii)
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accepts a position which requires
relocation to an office or location that is more than 50 miles away
from the employee’s current place of employment, but later
declines to relocate when such relocation becomes mandatory;
or
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(xiii)
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is
terminated for any reason (including those referred to in
Section 3.01), but thereafter (and prior to receipt of any
severance pay hereunder) receives an offer of reemployment or other
position with the Company or, any such purchaser or affiliate,
whether or not he or she accepts such offer.
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For purposes of
Section 3.02, a company shall be considered an affiliate of
the Company or a purchaser if it is considered to be under common
control with the Company or such purchaser for purposes of Internal
Revenue Code Section 414(b) and 414(c), as modified by Internal
Revenue Code Section 415(h), or Internal Revenue Code
Section 414(m).
4
ARTICLE IV
CONDITIONS OF AWARD
4.01 Conditions
of Award : As a condition of receiving an award of severance
pay, the Company shall require the employee to execute a release
agreement:
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(i)
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acknowledging that the severance pay
he or she is receiving under the Plan represents the full amount
payable to him or her under the Plan;
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(ii)
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releasing all known and unknown
claims the employee has or may have against the Company (not to
include claims for benefits payable under the terms of any other
employee benefit plans of the Company); and
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(iii)
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in
an appropriate case as determined by the Company, agreeing that he
or she will not provide services to a competitor during a specified
period.
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The release
agreement shall also contain an agreement of confidentiality,
non-disparagement and non-solicitation and the Company’s
obligation to make or continue severance payments to the employee
shall cease if the employee violates any such limitations. The
release agreement shall be irrevocable in accordance with
applicable law. Except as otherwise required to comply with Section
409A of the Internal Revenue Code (or associated regulations), no
severance payment shall be due and the Company shall have no
obligation under this Plan to make any payments unless and until
the Employee has executed the release agreement and any revocation
period has lapsed without revocation.
The Company also
retains the right to condition payment of severance pay upon the
employee’s faithful performance of any remaining obligations
he or she may owe to the Company. Any awarded but unpaid severance
pay shall be terminated if, following the employee’s
termination of employment, such employee engages in behavior which
is determined in the sole judgment of the Company to be detrimental
to the reputation or operation of the Company or if the employee
otherwise fails to comply with any terms of the release
agreement.
5
ARTICLE V
CALCULATION OF SEVERANCE PAY
5.01
Calculation of Severance Pay : The amount of severance pay
to be paid to an eligible terminated employee shall be determined
as provided below. For purposes of determining severance pay,
relevant terms are defined as follows:
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(i)
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“Annual Earnings” means
the annualized base salary of the employee at the time of
separation, without regard to overtime, bonus, incentive payments
or commission payments.
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(ii)
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“Service” means all
periods of employment with the Company. It also may include periods
of employment with a company that was acquired by the Company, if
the employee was an active employee or on disability, military, or
other leave of absence at the time of the acquisition. Service does
not include any period of employment for which the employee has
received severance pay under the Plan or under any similar plan of
the Company, or any other predecessor company, or service before
retirement from a predecessor company.
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(iii)
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“Separation Date” means
the last date of employment with the Company.
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5.02 Senior
Managers and Below: Severance pay for eligible employees who
are classified by the Company as a senior manager or below will be
equal to:
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(i)
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four (4) weeks of Annual
Earnings, plus
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(ii)
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one
(1) week of Annual Earnings for each full or partial year of
Service, plus
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(iii)
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additional weeks of Annual Earnings
for each $10,000 of Annual Earnings at or above $50,000 in
accordance with the following schedule:
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Annual Earnings
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Additional Weeks Pay
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2
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4
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6
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8
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Continue schedule at 2 weeks
per $10,000.
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The maximum
benefit payable for employees who are classified by the Company as
senior managers and below is 26 weeks of severance pay. The
minimum benefit payable for employees classified by the Company as
senior managers and below is 6 weeks of severance
pay.
5.03 Directors
and Senior Directors: For eligible employees who are classified
by the Company as either a director or senior director, severance
pay will be equal to six (6) months of
6
the
employee’s Annual Earnings plus one month for each full or
partial year of Service up to a maximum of nine (9) months of
Annual Earnings (i.e., an eligible employee with more than two (2)
years of Service would receive nine (9) months of Annual
Earnings). Employees at this level will also receive a payment
equal to any annual bonus payment that is unpaid for the previous
fiscal year and an additional payment equal to a prorated portion
of the ann
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