exv10w1






Exhibit 10.1







On July 22, 2008, the Board of Directors of the Company approved the below 2004 Incentive
Compensation Plan (As Amended 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.

2004 INCENTIVE COMPENSATION PLAN

(As Amended Effective July 22, 2008)




 









 








NII HOLDINGS, INC.

2004 Incentive Compensation Plan

(As Amended Effective July 22, 2008)




Table of Contents




	 	 	 	 	 	 	 	 	 
	ARTICLE I DEFINITIONS	 	 	5	 
	 
	 	1.01	 	Accounting Firm	 	 	5	 
	 
	 	1.02	 	Administrator	 	 	5	 
	 
	 	1.03	 	Agreement	 	 	5	 
	 
	 	1.04	 	Award	 	 	5	 
	 
	 	1.05	 	Board	 	 	5	 
	 
	 	1.06	 	Change in Control	 	 	5	 
	 
	 	1.07	 	Code	 	 	6	 
	 
	 	1.08	 	Committee	 	 	7	 
	 
	 	1.09	 	Common Stock	 	 	7	 
	 
	 	1.10	 	Company	 	 	7	 
	 
	 	1.11	 	Control Change Date	 	 	7	 
	 
	 	1.12	 	Corresponding SAR	 	 	7	 
	 
	 	1.13	 	Dividend Equivalent Right	 	 	7	 
	 
	 	1.14	 	Exchange Act	 	 	7	 
	 
	 	1.15	 	Fair Market Value	 	 	7	 
	 
	 	1.16	 	Incentive Award	 	 	7	 
	 
	 	1.17	 	Initial Value	 	 	8	 
	 
	 	1.18	 	Option	 	 	8	 
	 
	 	1.19	 	Participant	 	 	8	 
	 
	 	1.20	 	Performance Criteria	 	 	8	 
	 
	 	1.21	 	Performance Shares	 	 	9	 
	 
	 	1.22	 	Plan 	 	 	9	 
	 
	 	1.23	 	SAR	 	 	9	 
	 
	 	1.24	 	Stock Award	 	 	9	 
	 
	 	1.25	 	Stock Unit	 	 	9	 
	 
	 	1.26	 	Subsidiary	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II PURPOSES	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III ADMINISTRATION	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV ELIGIBILITY	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE V STOCK SUBJECT TO PLAN	 	 	11	 
	 
	 	5.01	 	Shares Issued	 	 	11	 
	 
	 	5.02	 	Aggregate Limit	 	 	11	 
	 
	 	5.03	 	Reallocation of Shares	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VI OPTIONS	 	 	13	 
	 
	 	6.01	 	Award 	 	 	13	 
	 
	 	6.02	 	Option Price	 	 	13	 
	 
	 	6.03	 	Maximum Option Period	 	 	14	 
	 
	 	6.04	 	Nontransferability	 	 	14	 






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	 	6.05	 	Transferable Options	 	 	14	 
	 
	 	6.06	 	Employee Status	 	 	14	 
	 
	 	6.07	 	Exercise	 	 	14	 
	 
	 	6.08	 	Payment	 	 	15	 
	 
	 	6.09	 	Change in Control	 	 	15	 
	 
	 	6.10	 	Shareholder Rights	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII SARS	 	 	15	 
	 
	 	7.01	 	Award	 	 	15	 
	 
	 	7.02	 	Maximum SAR Period	 	 	16	 
	 
	 	7.03	 	Nontransferability	 	 	16	 
	 
	 	7.04	 	Transferable SARS	 	 	16	 
	 
	 	7.05	 	Exercise	 	 	16	 
	 
	 	7.06	 	Change in Control	 	 	16	 
	 
	 	7.07	 	Employee Status	 	 	17	 
	 
	 	7.08	 	Settlement	 	 	17	 
	 
	 	7.09	 	Shareholder Rights	 	 	17	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VIII STOCK AWARDS	 	 	17	 
	 
	 	8.01	 	Award	 	 	17	 
	 
	 	8.02	 	Vesting	 	 	17	 
	 
	 	8.03	 	Employee Status	 	 	18	 
	 
	 	8.04	 	Change in Control	 	 	18	 
	 
	 	8.05	 	Shareholder Rights	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IX PERFORMANCE SHARE AWARDS	 	 	19	 
	 
	 	9.01	 	Award	 	 	19	 
	 
	 	9.02	 	Earning the Award	 	 	19	 
	 
	 	9.03	 	Payment	 	 	19	 
	 
	 	9.04	 	Shareholder Rights	 	 	19	 
	 
	 	9.05	 	Nontransferability	 	 	20	 
	 
	 	9.06	 	Transferable Performance Shares	 	 	20	 
	 
	 	9.07	 	Employee Status	 	 	20	 
	 
	 	9.08	 	Change in Control	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE X INCENTIVE AWARDS	 	 	21	 
	 
	 	10.01	 	Award	 	 	21	 
	 
	 	10.02	 	Terms and Conditions	 	 	21	 
	 
	 	10.03	 	Payment	 	 	21	 
	 
	 	10.04	 	Nontransferability	 	 	21	 
	 
	 	10.05	 	Transferable Incentive Awards	 	 	22	 
	 
	 	10.06	 	Employee Status	 	 	22	 
	 
	 	10.07	 	Change in Control	 	 	22	 
	 
	 	10.08	 	Shareholder Rights	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XI STOCK UNITS	 	 	22	 
	 
	 	11.01	 	Award	 	 	22	 
	 
	 	11.02	 	Earning the Award	 	 	23	 
	 
	 	11.03	 	Payment	 	 	23	 
	 
	 	11.04	 	Nontransferability	 	 	23	 
	 
	 	11.05	 	Shareholder Rights	 	 	23	 






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	 	11.06	 	Change in Control	 	 	24	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XII DIVIDEND EQUIVALENT RIGHTS	 	 	24	 
	 
	 	12.01	 	Award	 	 	24	 
	 
	 	12.02	 	Payment	 	 	24	 
	 
	 	12.03	 	Nontransferability	 	 	24	 
	 
	 	12.04	 	Shareholder Rights	 	 	24	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XIII ADJUSTMENT UPON CHANGE IN COMMON STOCK	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XIV COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XV GENERAL PROVISIONS	 	 	26	 
	 
	 	15.01	 	Effect on Employment and Service	 	 	26	 
	 
	 	15.02	 	Unfunded Plan	 	 	26	 
	 
	 	15.03	 	Rules of Construction	 	 	26	 
	 
	 	15.04	 	Tax Withholding	 	 	26	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XVI AMENDMENT	 	 	26	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XVII DURATION OF PLAN	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XVIII EFFECTIVE DATE OF PLAN	 	 	27	 







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ARTICLE I




DEFINITIONS




1.01. Accounting Firm




     Accounting Firm means the independent accounting firm engaged to audit the Company’s financial
statements.



1.02. Administrator




     Administrator means the Committee and any delegate of the Committee that is appointed in
accordance with Article III. Notwithstanding the preceding sentence, “Administrator” means the
Board on any date on which there is not a Committee.



1.03. Agreement




     Agreement means a written agreement (including any amendment or supplement thereto) between
the Company and a Participant specifying the terms and conditions of an Award granted to such
Participant.



1.04. Award




     Award means an award of Performance Shares, or a Stock Award, Stock Unit, Incentive Award,
Option or SAR granted to a Participant.



1.05. Board




     Board means the Board of Directors of the Company.



1.06. Change in Control




     Change in Control means the occurrence of any of the events set forth in any one of the
following paragraphs:




     (a) 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; or




     (b) 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



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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; or




     (c) Individuals who, as of the effective date of the Plan, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the Effective Date
whose election, or nomination for election by the Company’s shareholders, was approved by a
vote of at least two thirds of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by or on behalf
of a person or entity other than the Board; or




     (d) Approval by the shareholders of the Company of a complete liquidation or dissolution of
the Company; or




     (e) An acquisition by an 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 (“Exchange Act”)) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 50% or more of either the then outstanding shares (“Outstanding Company Stock”), or the
combined voting power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (“Outstanding Company Voting Securities”),
excluding, however, the following: (i) any acquisition directly from the Company other than
the acquisition by virtue of the exercise of a conversion privilege unless the security
being so converted was itself acquired directly from the Company, (ii) any acquisition by
the Company or any of its subsidiaries, or (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries;
or




     (f) Approval by the Board of Directors of the Company of a resolution that a Change in Control
has occurred.



     Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated transactions immediately
following which the recordholders of the common stock of the Company immediately prior to such
transaction or series of transactions continue to have substantially the same proportionate
ownership in an entity which owns all or substantially all of the assets of the Company immediately
following such transaction or series of transactions.



1.07. Code




     Code means the Internal Revenue Code of 1986, and any amendments thereto.



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1.08. Committee




     Committee means the Compensation Committee of the Board.



1.09. Common Stock




     Common Stock means the common stock of the Company.



1.10. Company




     Company means NII Holdings, Inc.



1.11. Control Change Date




     Control Change Date means the date on which a Change in Control occurs. If a Change in Control
occurs on account of a series of transactions, the Control Change Date is the date of the last of
such transactions.



1.12. Corresponding SAR




     Corresponding SAR means an SAR that is granted in relation to a particular Option and that can
be exercised only upon the surrender to the Company, unexercised, of that portion of the Option to
which the SAR relates.



1.13. Dividend Equivalent Right




     Dividend Equivalent Right means the rights granted under Section 12.01 of the Plan.



1.14. Exchange Act




     Exchange Act means the Securities Exchange Act of 1934, as amended from time to time.



1.15. Fair Market Value




     Fair Market Value means, on any given date, the reported “closing” price of a share of Common
Stock on the NASDAQ National Market System or the Principal Stock Exchange on which the Common
Stock is traded, or if the Common Stock was not so traded on such day, then on the next preceding
day that the Common Stock was so traded; provided, that in no event shall such price be less than
the fair market value for purposes of Section 409A of the Code and any regulations thereunder.



1.16. Incentive Award




     Incentive Award means a cash-denominated Award which, subject to the terms and conditions as
may be prescribed by the Administrator, entitles the Participant to receive a



7









 







payment, in cash or Common Stock, Stock Units or a combination of cash, Common Stock and Stock
Units from the Company or a Subsidiary.



1.17. Initial Value




     Initial Value means, with respect to a Corresponding SAR, the option price per share of the
related Option and, with respect to an SAR granted independently of an Option, the price per share
of Common Stock as determined by the Administrator on the date of the grant; provided, however,
that the price per share of Common Stock encompassed by the grant of an SAR shall not be less than
Fair Market Value on the date of grant. Except for an adjustment authorized under Article XIII, the
Initial Value may not be reduced (by amendment or cancellation of the sale or otherwise) after the
date of grant.



1.18. Option




     Option means a stock option that entitles the holder to purchase from the Company a stated
number of shares of Common Stock at the price set forth in an Agreement, which is not intended to
comply with Code Section 422.



1.19. Participant




     Participant means an employee of the Company or a Subsidiary, a member of the Board or the
board of directors of a Subsidiary or any consultant or advisor to the Company or a Subsidiary who
satisfies the requirements of Article IV and is selected by the Administrator to receive an Award.



1.20. Performance Criteria




     Performance Criteria means one or more of (a) cash flow and/or free cash flow (before or after
dividends), (b) earnings per share as defined by the Company, (c) EBITDA (as defined by the
Company), (d) the price of Common Stock, (e) return on equity, (f) total shareholder return, (g)
return on capital (including return on total capital or return on invested capital), (h) return on
assets or net assets, (i) market capitalization, (j) total enterprise value (market capitalization
plus debt), (k) economic value added (or equivalent metric), (l) debt leverage (debt to capital),
(m) revenue, (n) income (including net income, operating income, pre or after-tax income or income
from continuing operations), (o) operating profit or net operating profit, (p) operating margin or
profit margin, (q) return on operating revenue, (r) cash from operations, (s) operating ratio, (t)
cash flow per share, (u) market share (v) subscriber growth (on a gross or net basis), (w) churn,
(x) capital expenditures, and (y) expense levels. Measurement of Performance Criteria against goals
excludes the impact of charges for restructurings, discontinued operations, extraordinary items,
and other unusual or non-recurring items, and the cumulative effects of accounting changes, each as
defined by Generally Accepted Accounting Principles and as identified in the financial statements
or Management’s Discussion and Analysis in the Annual Report. Performance Criteria may be
established on a Company-wide basis, with respect to one or more business units, divisions or
subsidiaries; and in either absolute terms or relative to the performance of one or more comparable
companies or an index covering multiple companies.



8









 





1.21. Performance Shares




     Performance Shares means an Award, in the amount determined by the Administrator and specified
in an Agreement, stated with reference to a specified number of shares of Common Stock or Stock
Units, that entitles the holder to receive a payment for each specified share equal to the Fair
Market Value of Common Stock on the date of payment.



1.22. Plan




     Plan means the NII Holdings, Inc. 2004 Incentive Compensation Plan.



1.23. SAR




     SAR means a stock appreciation right that entitles the holder to receive, with respect to each
share of Common Stock encompassed by the exercise of such SAR, the excess, if any, of the Fair
Market Value at the time of exercise over the Initial Value. References to “SARs” include both
Corresponding SARs and SARs granted independently of Options, unless the context requires
otherwise.



1.24. Stock Award




     Stock Award means Common Stock or Stock Units awarded to a Participant under Article VIII,
including shares issued in settlement of benefit obligations under the Company’s incentive
compensation or deferral plan or any successor thereto.



1.25. Stock Unit




     Stock Unit means an Award, in the amount determined by the Administrator and specified in an
Agreement, stated with reference to a specified number of shares of Common Stock, that entitles the
holder to receive a payment for each Stock Unit equal to the Fair Market Value of a share of Common
Stock on the date of payment. Each Stock Unit Award shall be adjusted (from the date of grant to
the date of payment), to reflect the payment of dividends on the comparable number of shares of
Common Stock and the adjustment shall be in the form of additional Stock Units as if such dividends
had been invested in Common Stock on the dividend payment date.



1.26. Subsidiary




     Subsidiary means a corporation, partnership, joint venture, unincorporated association or
other entity in which the Corporation has a direct or indirect ownership or other equity interest
that represents, directly or indirectly, more than 50 percent of the total combined voting power
represented by all classes of stock or other ownership or equity interest units issued by such
corporation, partnership, joint venture, unincorporated association or other entity.



9









 





ARTICLE II




PURPOSES




     The Plan is intended to assist the Company and its Subsidiaries in recruiting and retaining
individuals with ability and initiative by enabling such persons to participate in the future
success of the Company and its Subsidiaries and to associate their interests with those of the
Company and its shareholders. The Plan is intended to permit the grant of Options, SARs, Stock
Awards, Stock Units, Incentive Awards and Performance Shares. The proceeds received by the Company
from the sale of Common Stock pursuant to this Plan shall be used for general corporate purposes.



ARTICLE III




ADMINISTRATION




     The Plan shall be administered by the Administrator. The Administrator shall have authority to
grant Awards, upon such terms (not inconsistent with the provisions of this Plan), as the
Administrator may consider appropriate; provided, however, that for 2004 no Awards may be made
covering an aggregate number of shares of Common Stock in excess of 4,000,000. Such terms may
include conditions (in addition to those contained in this Plan) on the exercisability of all or
any part of an Option or SAR or on the transferability or forfeitability of a Stock Award, Stock
Unit, Incentive Award or an award of Performance Shares, including by way of example and not of
limitation, requirements that the Participant complete a specified period of employment or service
with the Company or a Subsidiary, requirements that the Company achieve a specified level of
financial performance or that the Company achieve a specified level of financial return.
Notwithstanding any such conditions, the Administrator may, in its discretion, accelerate the time
at which any Option or SAR may be exercised, or the time at which a Stock Award may become
transferable or nonforfeitable or both, or the time at which an award of Performance Shares, Stock
Unit or Incentive Award may be settled. Notwithstanding the foregoing, any Award to which Section
409A of the Code applies shall comply with Section 409A of the Code (and any regulations
thereunder) and no changes shall be made to an Award that would cause the Award to be subject to
taxation and penalties under Section 409A (and any regulations thereunder).


     In addition, the Administrator shall have complete authority to interpret all provisions of this
Plan; to prescribe the form of Agreements; to adopt, amend, and rescind rules and regulations
pertaining to the administration of the Plan; and to make all other determinations necessary or
advisable for the administration of this Plan. The express grant in the Plan of any specific power
to the Administrator shall not be construed as limiting any power or authority of the
Administrator. Any decision made, or action taken, by the Administrator in connection with the
administration of this Plan shall be final and conclusive. Neither the Administrator nor any member
of the Committee shall be liable for any act done in good faith with respect to this Plan


10









 






or any Agreement or Award. All expenses of administering this Plan shall be borne by the Company, a
Subsidiary or a combination thereof.




     The Committee, in its discretion, may delegate to one or more officers of the Company all or
part of the Committee’s authority and duties with respect to grants and awards to individuals who
are not subject to the reporting and other provisions of Section 16 of the Exchange Act. The
Committee may revoke or amend the terms of a delegation at any time but such action shall not
invalidate any prior actions of the Committee’s delegate or delegates that were consistent with the
terms of the Plan.



     Any other provision of this Plan to the contrary notwithstanding, the Committee may, in its
discretion, specify that grants and Awards to any United States national who is employed by the
Company or provides services to the Company or a Subsidiary outside of the United States, or to any
foreign national who is employed by the Company or provides services to the Company or a
Subsidiary, can be made on such terms and conditions that are different from those specified in the
Plan and which, in the judgment of the Committee, are necessary and desirable to further the
purposes of the Plan consistent with Section 409A of the Code (and any regulations thereunder);
other than with respect to (i) the applicable individual limitation on grants and awards set forth
in Plan sections 6.01, 7.01, 8.01, 9.01, 10.01 and 11.01; and (ii) the criteria for establishing
the Option price described in Plan section 6.02 or SAR Initial Value.



ARTICLE IV




ELIGIBILITY




     Any employee of the Company, any member of the Board, any employee or director of a Subsidiary
(including a corporation that becomes a Subsidiary after the adoption of this Plan) or any
consultant or advisor to the Company or a Subsidiary is eligible to participate in this Plan if the
Administrator, in its sole discretion, determines that such person has contributed or can be
expected to contribute to the profits or growth of the Company or a Subsidiary.



ARTICLE V




STOCK SUBJECT TO PLAN




5.01. Shares Issued




     Upon the Award of shares of Common Stock pursuant to a Stock Award or in settlement of an
Award of Performance Shares, Stock Units or Incentive Award, the Company may issue shares of Common
Stock from its authorized but unissued Common Stock. Upon the exercise of any Option or SAR the
Company may deliver to the Participant (or the Participant’s broker if the Participant so directs),
shares of Common Stock from its authorized but unissued Common Stock.



11









 





5.02. Aggregate Limit





     (a) The maximum aggregate number of shares of Common Stock that may be issued under
this Plan, pursuant to the exercise of SARs and Options, the grant of Stock Awards and the
settlement of Performance Shares, Stock Units and Incentive Awards is 19,800,000 shares plus
any shares of Common Stock remaining available for grant under the NII Holdings, Inc. 2002
Management Incentive Plan (the Prior Plan) on the effective date of the Plan. The maximum
aggregate number of shares that may be issued under this Plan shall be subject to adjustment
as provided in Article XIII.




     (b) With respect to grants of SARs and Options, the maximum aggregate number of shares
shall be reduced by one share of Common Stock for each share of Common Stock issued pursuant
to such grants. With respect to all other Awards made under the Plan, the maximum aggregate
number of shares shall be reduced by one and one-half shares of Common Stock for each share
of Common Stock issued under such Awards.




     (c) Any Awards that are substituted pursuant to Article XIII shall not reduce the shares of Common Stock authorized for issuance under the Plan or authorized for grant to a
Participant in any calendar year. In the event that a company acquired by the Company or any
Subsidiary or with which the Company or any Subsidiary combines has shares available under a
pre-existing plan approved by shareholders and not adopted in contemplation of such
acquisition or combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other
adjustment or valuation ratio or formula used in such acquisition or combination to
determine the consideration payable to the holders of common stock of the entities party to
such acquisition or combination) may be used for Awards under the Plan and shall not reduce
the maximum aggregate number of shares of Common Stock authorized for issuance under the
Plan; provided that Awards using such available shares shall not be made after the date
awards or grants could have been made under the terms of the pre-existing plan absent the
acquisition or combination, and shall only be made to individuals who were not employees or
directors of the Company or any Subsidiary prior to such acquisition or combination.




     (d) Awards made as a material inducement to a person becoming an employee of the
Company or any Subsidiary, including new employees in connection with a merger or
acquisition, or a former employee being rehired as an employee following a bona fide period
of interruption of employment, shall not reduce the maximum aggregate number of shares of
Common Stock authorized for issuance under the Plan if the Committee determines to not grant
such Awards under the Plan.




     (e) Shares of Common Stock issued pursuant to elective deferred compensation accounts
that are credited as deferred Stock Units shall not reduce the maximum aggregate number of shares of Common Stock authorized for issuance under the Plan.



12









 





5.03. Reallocation of Shares





     (a) If any shares of Common Stock subject to an Award or to an award under the Prior
Plan are forfeited, expire or otherwise terminate without the issuance of shares of Common
Stock or any Award under the Prior Plan is settled for cash or otherwise does not result in
the issuance of all or a portion of the shares of Common Stock subject to such Award or
award under the Prior Plan, the shares of Common Stock shall, to the extent of such
forfeiture, expiration, termination, cash settlement or non-issuance, again be available for
Awards under the Plan, subject to paragraph (d) below.




     (b) If shares of Common Stock are surrendered either actually or by attestation or
withheld (i) pursuant to the exercise of an Option or other Award under the Plan or award
under the Prior Plan or (ii) in satisfaction of tax withholding requirements with respect to
Awards under the Plan or awards under the Prior Plan, the number of shares surrendered or
withheld may be reallocated to other Awards to be granted under this Plan.




     (c) Shares of Common Stock reacquired by the Company on the open market using cash
acquired pursuant to the exercise of an Option shall be available for Awards under the Plan.
Cash proceeds include payment of the Option price and the value of the Company’s tax
deduction on the Option gain. The increase in shares of Common Stock available pursuant to
the repurchase of shares of Common Stock with such proceeds shall not be greater than the
amount of such proceeds divided by the Fair Market Value of a share of Common Stock on the
date of exercise of the Option giving rise to such Option proceeds.




     (d) Any shares of Common Stock that are reallocated pursuant to this Section 5.03 shall
increase the maximum aggregate number of shares available for issuance under the Plan by one
share of Common Stock if such shares were subject to Options or SARs granted under the Plan
and as one and on-half shares of Common Stock if such shares were subject to Awards other
than Options or SARs granted under the Plan.



ARTICLE VI




OPTIONS




6.01. Award




     In accordance with the provisions of Article IV, the Administrator will designate each
individual to whom an Option is to be granted and will specify the number of shares of Common Stock
covered by each such Award; provided, however that no Participant may be granted Options in any
calendar year covering more than 1,000,000 shares of Common Stock.



13









 





6.02. Option Price




     The price per share for Common Stock purchased on the exercise of an Option shall be
determined by the Administrator on the date of grant, but shall not be less than the Fair Market
Value on the date the Option is granted. Except for an adjustment authorized under Article XIII,
the Option price may not be reduced (by amendment or cancellation of the Option or otherwise) after
the date of grant.



6.03. Maximum Option Period




     The maximum period in which an Option may be exercised shall be ten years from the date such
Option was granted. The terms of any Option may provide that it has a term that is less than such
maximum period.



6.04. Nontransferability




     Except as provided in Section 6.05, each Option granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. In the event of any
transfer of an Option (by the Participant or his transferee), the Option and any Corresponding SAR
that relates to such Option must be transferred to the same person or persons or entity or
entities. Except as provided in Section 6.05, during the lifetime of the Participant to whom the
Option is granted, the Option may be exercised only by the Participant. No right or interest of a
Participant in any Option shall be liable for, or subject to, any lien, obligation, or liability of
such Participant.



6.05. Transferable Options




     Section 6.04 to the contrary notwithstanding, if the Agreement provides, an Option may be
transferred by a Participant to the Participant’s children, grandchildren, spouse, one or more
trusts for the benefit of such family members or a partnership in which such family members are the
only partners, on such terms and conditions as may be permitted under Securities Exchange
Commission Rule 16b-3 as in effect from time to time. The holder of an Option transferred pursuant
to this Section shall be bound by the same terms and conditions that governed the Option during the
period that it was held by the Participant; provided, however, that such transferee may not
transfer the Option except by will or the laws of descent and distribution. In the event of any
transfer of an Option (by the Participant or his transferee), the Option and any Corresponding SAR
that relates to such Option must be transferred to the same person or persons or entity or
entities.



6.06. Employee Status




     In the event that the terms of any Option provide that it may be exercised only during
employment or continued service or within a specified period of time after termination of
employment or service, the Administrator may decide to what extent leaves of absence for
governmental or military service, illness, temporary disability, or other reasons shall not be
deemed interruptions of continuous employment or service.



14









 





6.07. Exercise




     Subject to the provisions of this Plan and the applicable Agreement, an Option may be
exercised in whole at any time or in part from time to time at such times and in compliance with
such requirements as the Administrator shall determine. An Option granted under this Plan may be
exercised with respect to any number of whole shares less than the full number for which the Option
could be exercised. A partial exercise of an Option shall not affect the right to exercise the
Option from time to time in accordance with this Plan and the applicable Agreement with respect to
the remaining shares subject to the Option. The exercise of an Option shall result in the
termination of any Corresponding SAR to the extent of the number of shares with respect to which
the Option is exercised.



6.08. Payment




     Unless otherwise provided by the Agreement, payment of the Option price shall be made in cash
or a cash equivalent acceptable to the Administrator or to the extent permitted under the
Agreement, by a cashless exercise through a securities broker. Subject to rules established by the
Administrator, payment of all or part of the Option price may be made with shares of Common Stock
which have been owned by the Participant for at least six months and which have not been used for
another Option exercise during the prior six months. If Common Stock is used to pay all or part of
the Option price, the sum of the cash and cash equivalent and the Fair Market Value (determined, to
the extent consistent with Section 409A of the Code and any regulations thereunder, as of the day
preceding the date of exercise) of the shares surrendered must not be less than the Option price of
the shares for which the Option is being exercised.



6.09. Change in Control




     Section 6.07 to the contrary notwithstanding, unless an outstanding Option is assumed,
replaced or converted to an equivalent award by the continuing entity, each outstanding Option
shall be fully exercisable (in whole or in part at the discretion of the holder) upon a Change in
Control. Any such replacement Awards shall be fully exercisable, vested or earned if the
Participant is terminated within twenty-four months of a Change in Control in a circumstance that
requires the payment of severance under the NII Holdings, Inc. Change of Control Protection Plan or
the NII Holdings, Inc. Severance Policy or any successors or substitutes for such plans. An Option
that becomes exercisable pursuant to this Section 6.09 shall remain exercisable thereafter in
accordance with the terms of the Agreement.



6.10. Shareholder Rights




     No Participant shall have any rights as a shareholder with respect to shares subject to his
Option until the date of exercise of such Option.



15









 





ARTICLE VII




SARS




7.01. Award




     In accordance with the provisions of Article IV, the Administrator will designate each
individual to whom SARs are to be granted and will specify the number of shares covered by each
such Award; provided, however, no Participant may be granted SARs in any calendar year covering
more than 1,000,000 shares of Common Stock. For purposes of the foregoing limit, an Option and
Corresponding SAR shall be treated as a single Award. Notwithstanding the foregoing, a
Corresponding SAR or other SAR may not be granted to the extent such grant would cause an Option to
be subject to taxation and penalties under Section 409A of the Code (and any regulations
thereunder).



7.02. Maximum SAR Period




     The maximum period in which an SAR may be exercised shall be ten years from the date such SAR
was granted. The terms of any SAR may provide that it has a term that is less than such maximum
period.



7.03. Nontransferability




     Except as provided in Section 7.04, each SAR granted under this Plan shall be nontransferable
except by will or by the laws of descent and distribution. In the event of any such transfer, a
Corresponding SAR and the related Option must be transferred to the same person or persons or
entity or entities. Except as provided in Section 7.04, during the lifetime of the Participant to
whom the SAR is granted, the SAR may be exercised only by the Participant. No right or interest of
a Participant in any SAR shall be liable for, or subject to, any lien, obligation, or liability of
such Participant.



7.04. Transferable SARs




     Section 7.03 to the contrary notwithstanding, if the Agreement provides, an SAR, may be
transferred by a Participant to the Participant’s children, grandchildren, spouse, one or more
trusts for the benefit of such family members or a partnership in which such family members are the
only partners, on such terms and conditions as may be permitted under Securities Exchange
Commission Rule 16b-3 as in effect from time to time. The holder of an SAR transferred pursuant to
this Section shall be bound by the same terms and conditions that governed the SAR during the
period that it was held by the Participant; provided, however, that such transferee may not
transfer the SAR except by will or the laws of descent and distribution. In the event of any
transfer of a Corresponding SAR (by the Participant or his transferee), the Corresponding SAR and
the related Option must be transferred to the same person or person or entity or entities.



16









 





7.05. Exercise




     Subject to the provisions of this Plan and the applicable Agreement, an SAR may be exercised
in whole at any time or in part from time to time at such times and in compliance with such
requirements as the Administrator shall determine. An SAR granted under this Plan may be exercised
with respect to any number of whole shares less than the full number for which the SAR could be
exercised. A partial exercise of an SAR shall not affect the right to exercise the SAR from time to
time in accordance with this Plan and the applicable Agreement with respect to the remaining shares
subject to the SAR. The exercise of a Corresponding SAR shall result in the termination of the
related Option to the extent of the number of shares with respect to which the SAR is exercised.



7.06. Change in Control




     Section 7.05 to the contrary notwithstanding, unless the outstanding SAR is assumed, converted
or replaced with an equivalent award by the continuing entity, each outstanding SAR shall be fully
exercisable (in whole or in part at the discretion of the holder) upon a Change in Control. Any
such replacement Awards shall be fully exercisable, vested or earned if the Participant is
terminated within twenty-four months of a Change in Control in a circumstance that requires the
payment of severance under the NII Holdings, Inc. Change of Control Protection Plan or the NII
Holdings, Inc. Severance Policy or any successors or substitutes for such plans. An SAR that
becomes exercisable pursuant to this Section 7.06 shall remain exercisable thereafter in accordance
with the terms of the Agreement.



7.07. Employee Status




     If the terms of any SAR provide that it may be exercised only during employment or continued
service or within a specified period of time after termination of employment or service, the
Administrator may decide to what extent leaves of absence for governmental or military service,
illness, temporary disability or other reasons shall not be deemed interruptions of continuous
employment or service.



7.08. Settlement




     At the Administrator’s discretion, the amount payable as a result of the exercise of an SAR
may be settled in cash, Common Stock, or a combination of cash and Common Stock. No fractional
share will be deliverable upon the exercise of an SAR but a cash payment will be made in lieu
thereof.



7.09. Shareholder Rights




     No Participant shall, as a result of receiving an SAR, have any rights as a shareholder of the
Company until the date that the SAR is exercised and then only to the extent that the SAR is
settled by the issuance of Common Stock.



17









 





ARTICLE VIII




STOCK AWARDS




8.01. Award




     In accordance with the provisions of Article IV, the Administrator will designate each
individual to whom a Stock Award is to be made and will specify the number of shares of Common
Stock covered by each such Award; provided, however, that no Participant may receive Stock Awards
in any calendar year for more than 500,000 shares of Common Stock.



8.02. Vesting




     The Administrator, on the date of the Award, may prescribe that a Participant’s rights in a
Stock Award shall be forfeitable or otherwise restricted for a period of time or subject to such
conditions as may be set forth in the Agreement. The restrictions set forth in the Agreement must
include a period of restriction for at least three years; provided, however, that such restrictions
shall not apply in the case of a Stock Award granted in connection with the settlement of
Performance Shares, Stock Awards or an Incentive Award or in the case of a substitute Award
pursuant to Article XIII or in settlement of benefit obligations under the Company’s incentive
compensation or deferral plans. By way of example and not of limitation, the restrictions may
postpone transferability of the shares or may provide that the shares will be forfeited if the
Participant separates from the service of the Company and its Subsidiaries before the expiration of
a stated period. To the extent consistent with Section 409A of the Code and any regulations
thereunder, the Administrator, in its discretion, may waive the requirements for vesting or
transferability for all or part of the shares subject to a Stock Award in connection with a
Participant’s termination of employment or service.



8.03. Employee Status




     In the event that the terms of any Stock Award provide that shares may become transferable and
nonforfeitable thereunder only after completion of a specified period of employment or service, the
Administrator may decide in each case to what extent leaves of absence for governmental or military
service, illness, temporary disability, or other reasons shall not be deemed interruptions of
continuous employment or service.



8.04. Change in Control




     Sections 8.02 and 8.03 to the contrary notwithstanding, unless an outstanding Stock Award is
assumed, replaced or converted to an equivalent award by the continuing entity, each outstanding
Stock Award shall be transferable and nonforfeitable upon a Change in Control. Any such replacement
Awards shall be fully exercisable, vested or earned if the Participant is terminated within
twenty-four months of a Change in Control in a circumstance that requires the payment of severance
under the NII Holdings, Inc. Change of Control Protection Plan or the NII Holdings, Inc. Severance
Policy or any successors or substitutes for such plan.



18









 





8.05. Shareholder Rights




     Prior to their forfeiture (in accordance with the applicable Agreement and while the shares of
Common Stock granted pursuant to the Stock Award may be forfeited or are nontransferable), a
Participant will have all the rights of a shareholder with respect to a Stock Award, including the
right to receive dividends and vote the shares; provided, however, that during such period (i) a
Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of shares
of Common Stock granted pursuant to a Stock Award, (ii) the Company shall retain custody of the
certificates evidencing shares of Common Stock granted pursuant to a Stock Award, and (iii) the
Participant will deliver to the Company a stock power, endorsed in blank, with respect to each
Stock Award. The limitations set forth in the preceding sentence shall not apply after the shares
of Common Stock granted under the Stock Award are transferable and are no longer forfeitable.



8.06. Payment




     Any Stock Award which is subject to Section 409A of the Code shall comply with the deferral,
distribution timing and other applicable rules under Section 409A of the Code (and any regulations
thereunder).



ARTICLE IX




PERFORMANCE SHARE AWARDS




9.01. Award




     In accordance with the provisions of Article IV, the Administrator will designate each
individual to whom an Award of Performance Shares is to be made and will specify the number of
shares of Common Stock covered by each such Award; provided, however, that no Participant may
receive an Award of Performance Shares in any calendar year for more than 500,000 shares of Common
Stock.



9.02. Earning the Award




     The Administrator, on the date of the grant of an Award, shall prescribe that the Performance
Shares, or a portion thereof, will be earned, and the Participant will be entitled to receive
payment pursuant to the Award of Performance Shares, only upon the satisfaction of performance
objectives or such other criteria as may be prescribed by the Administrator and set forth in the
Agreement. The restrictions set forth in the Agreement must include the attainment of performance
objectives, including performance objectives stated with reference to Performance Criteria;
provided, however, that such restrictions shall not apply in the case of a Stock Award granted in
connection with the settlement of Performance Shares, Stock Awards or an Incentive Award or in the
case of a substitute Award pursuant to Article XIII. By way of example and not of limitation, the
performance objectives or other criteria may provide that the Performance Shares will be earned
only if the Participant remains in the employ or service of the



19









 







Company or a Subsidiary for a stated period and that the Company, a Subsidiary, the Company and its
Subsidiaries or the Participant achieve stated objectives. Notwithstanding the preceding sentences
of this Section 9.02, the Administrator, in its discretion, may (to the extent consistent with
Section 409A of the Code and any regulations thereunder) reduce the duration of the performance
period and may adjust the performance objectives for outstanding Performance Shares in connection
with a Participant’s termination of employment or service.



9.03. Payment




     In the discretion of the Administrator, the amount payable when an Award of Performance Shares
is earned may, to the extent consistent with Section 409A of the Code (and any regulations
thereunder), be settled in cash, by the issuance of Common Stock, grant of Stock Units or a
combination of cash, Common Stock and/or Stock Units. A fractional share shall not be deliverable
when an Award of Performance Shares is earned, but a cash payment will be made in lieu thereof.
Any Award of Performance Shares which is subject to Section 409A of the Code shall comply with the
deferral, distribution timing and other applicable rules under Section 409A of the Code (and any
regulations thereunder).



9.04. Shareholder Rights




     No Participant shall, as a result of receiving an Award of Performance Shares, have any rights
as a shareholder until and to the extent that the Award of Performance Shares is earned and settled
by the issuance of Common Stock. After an Award of Performance Shares is earned, if settled
completely or partially in Common Stock, a Participant will have all the rights of a shareholder
with respect to such Common Stock.



9.05. Nontransferability




     Except as provided in Section 9.06, Performance Shares granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. No right or interest of
a Participant in any Performance Shares shall be liable for, or subject to, any lien, obligation,
or liability of such Participant.



9.06. Transferable Performance Shares




     Section 9.05 to the contrary notwithstanding, if the Agreement provides, an Award of
Performance Shares may be transferred by a Participant to the Participant’s children,
grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership
in which such family members are the only partners, on such terms and conditions as may be
permitted under Securities Exchange Commission Rule 16b-3 as in effect from time to time. The
holder of Performance Shares transferred pursuant to this Section shall be bound by the same terms
and conditions that governed the Performance Shares during the period that they were held by the
Participant; provided, however, that such transferee may not transfer Performance Shares except by
will or the laws of descent and distribution.



20









 





9.07. Employee Status




     In the event that the terms of any Performance Share Award provide that no payment will be
made unless the Participant completes a stated period of employment or service, the Administrator
may decide to what extent leaves of absence for government or military service, illness, temporary
disability, or other reasons shall not be deemed interruptions of continuous employment or service.



9.08. Change in Control




     Section 9.02 to the contrary notwithstanding, upon a Change in Control, unless an outstanding
Performance Share Award is assumed, replaced or converted to an equivalent award by the continuing
entity, each outstanding Performance Share Award shall be earned pro-rata based on the fraction
(using nearest whole months) of the performance period that has elapsed from the beginning of the
performance period until the Control Change Date. Any such replacement Awards shall be fully
exercisable, vested or earned if the Participant is terminated within twenty-four months of a
Change in Control in a circumstance that requires the payment of severance under the NII Holdings,
Inc. Change of Control Protection Plan or the NII Holdings, Inc. Severance Policy or any successors
or substitutes for such plans.. The amount payable for Performance Shares that are earned pursuant
to this Section 9.08 shall be settled in cash or Common Stock or a combination of cash and Common
Stock as determined by the Administrator in its discretion on the first day following the Control
Change Date; provided, that for any such Award that is subject to Section 409A of the Code, payment
shall be made at such time as may be permitted under Section 409A of the Code and any regulations
thereunder.



ARTICLE X




INCENTIVE AWARDS




10.01. Award




     The Administrator shall designate Participants to whom Incentive Awards are made. All
Incentive Awards shall be finally determined exclusively by the Administrator under the procedures
established by the Administrator. With respect to an Incentive Award based on a performance period
of one year, no Participant may receive an Incentive Award payment in any calendar year that
exceeds $2,000,000. With respect to an Incentive Award based on a performance period of more than
one year, no Participant may receive an Incentive Award payment in any calendar year that exceeds
the product of (i) $200,000 and (ii) the number of months in the performance period.



10.02. Terms and Conditions




     The Administrator, at the time an Incentive Award is made, shall specify the terms and
conditions which govern the Award. Such terms and conditions shall prescribe that the Incentive
Award shall be earned only upon, and to the extent that, performance objectives are satisfied



21









 







during a performance period of at least one year but no more than five years after the grant of the
Incentive Award. The restrictions set forth in the Agreement must include the attainment of
performance objectives, including performance objectives stated with reference to Performance
Criteria. By way of example and not of limitation, the performance objectives may provide that the
Incentive Award will be earned only if the Company, a Subsidiary or the Company and its
Subsidiaries or the Participant achieve stated objectives, including objectives stated with
reference to Performance Criteria. The Administrator, at the time an Incentive Award is made, shall
also specify when amounts shall be payable under the Incentive Award and whether amounts shall be
payable in the event of the Participant’s death, disability, or retirement.



10.03. Payment




     In the discretion of the Administrator, the Award payable when an Incentive Award is earned,
may, to the extent consistent with Section 409A of the Code (and any regulations thereunder), be
settled in cash, by the issuance of Common Stock, grant of Stock Units, or a combination of cash,
Common Stock and/or Stock Units. Any Incentive Award which is subject to Section 409A of the Code
shall comply with the deferral, distribution timing and other applicable rules under Section 409A
of the Code (and any regulations thereunder).



10.04. Nontransferability




     Except as provided in Section 10.05, Incentive Awards granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. No right or interest of
a Participant in an Incentive Award shall be liable for, or subject to, any lien, obligation, or
liability of such Participant.



10.05. Transferable Incentive Awards




     Section 10.04 to the contrary notwithstanding, if provided in an Agreement, an Incentive Award
may be transferred by a Participant to the Participant’s children, grandchildren, spouse, one or
more trusts for the benefit of such family members or to a partnership in which such family members
are the only partners, on such terms and conditions as may be permitted by Rule 16b-3 under the
Exchange Act as in effect from time to time. The holder of an Incentive Award transferred pursuant
to this Section shall be bound by the same terms and conditions that governed the Incentive Award
during the period that it was held by the Participant; provided, however, that such transferee may
not transfer the Incentive Award except by will or the laws of descent and distribution.



10.06. Employee Status




     If the terms of an Incentive Award provide that a payment will be made thereunder only if the
Participant completes a stated period of employment or service, the Administrator may decide to
what extent leaves of absence for governmental or military service, illness, temporary disability
or other reasons shall not be deemed interruptions of continuous employment or service.



22









 





10.07. Change in Control




     Section 10.02 to the contrary notwithstanding, unless an outstanding Incentive Award is
assumed, replaced or converted to an equivalent award by the continuing entity, upon a Change in
Control, each outstanding Incentive Award shall be earned pro-rata based on the fraction (using
nearest whole months) of the performance period that has elapsed from the beginning of the
performance period until the Control Change Date. Any such replacement Awards shall be fully
exercisable, vested or earned if the Participant is terminated within twenty-four months of a
Change in Control in a circumstance that requires the payment of severance under the NII Holdings,
Inc. Change of Control Protection Plan or the NII Holdings, Inc. Severance Policy or any successors
or substitutes for such plans.



10.08. Shareholder Rights




No Participant shall, as a result of receiving an Incentive Award, have any rights as to
shareholder of the Company or any Subsidiary on account of such Award until, and except to the
extent that, the Incentive Award is earned and settled in shares of Common Stock.



ARTICLE XI




STOCK UNITS




11.01. Award




     In accordance with the provisions of Article IV, the Administrator will designate each
individual to whom an Award of Stock Units is to be made and will specify the number of Stock Units
covered by such Awards; provided, however, that no Participant may be awarded Stock Units for more
than 500,000 shares of Common Stock in any calendar year.



11.02. Earning the Award




     The Administrator, on the date of grant of the Award, may prescribe that the Stock Units or a
portion thereof, will be earned only upon, and the Participant will be entitled to receive a
payment pursuant to the Award of Stock Units, only upon the satisfaction of performance objectives
or such other criteria as may be prescribed by the Administrator and set forth in the Agreement.
The restrictions set forth in the Agreement must include a period of restriction of at least three
years or the attainment of performance objectives, including performance objectives stated with
reference to Performance Criteria; provided, however, that such restrictions shall not apply in the
case of a Stock Unit granted in connection with the Settlement of Performance Shares, Stock Awards
or an Incentive Award or in the case of a substitute Award pursuant to Article XIII. By way of
example and not of limitation, the Performance Criteria or other criteria may provide that the
Stock Units will be earned only if the Participant remains in the employ or service of the Company
or a Subsidiary for a stated period or that the Company, a Subsidiary, the Company and its
Subsidiaries or the Participant achieve stated objectives including performance objectives stated
with reference to Performance Criteria. Notwithstanding the preceding



23









 







sentences of this Section 11.02, the Administrator, in its discretion, may reduce the duration of
the performance period and may adjust the performance objectives for outstanding Stock Units in
connection with a Participant’s termination of employment or service.



11.03. Payment




     In accordance with the Agreement, the amount payable when an Award of Stock Units is earned
may be settled in cash, Common Stock or a combination of cash and Common Stock. A fractional share
shall not be deliverable when an Award of Stock Units is earned, but a cash payment will be made in
lieu thereof. Any Award of Stock Units which is subject to Section 409A of the Code shall comply
with the deferral, distribution timing and other applicable rules under Section 409A of the Code
(and any regulations thereunder).



11.04. Nontransferability




     A Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of a
Stock Unit Award other than by will or the laws of descent and distribution. The limitations set
forth in the preceding sentence shall not apply to Common Stock issued as payment pursuant to a
Stock Unit Award.



11.05. Shareholder Rights




     No Participant shall, as a result of receiving a Stock Unit Award, have any rights as a
shareholder of the Company or Subsidiary until and to the extent that the Stock Units are earned
and settled in shares of Common Stock. After Stock Units are earned and settled in shares of Common
Stock, a Participant will have all the rights of a shareholder with respect to such shares.



11.06. Change in Control




     Section 11.02 to the contrary notwithstanding, unless an outstanding Stock Unit is assumed,
replaced or converted to an equivalent award by the continuing entity, each Stock Unit shall be
earned in its entirety as of a Control Change Date without regard to whether any Performance
Criteria or other condition to which the award is subject have been met. Any such replacement
Awards shall be fully exercisable, vested or earned if the Participant is terminated within
twenty-four months of a Change in Control in a circumstance that requires the payment of severance
under the NII Holdings, Inc. Change of Control Protection Plan or the NII Holdings, Inc. Severance
Policy or any successors or substitutes for such plans.



24









 





ARTICLE XII




DIVIDEND EQUIVALENT RIGHTS




12.01. Award




     If provided in an Agreement, any Option, SAR or Stock Award granted hereunder will accrue
Dividend Equivalent Rights on such dates as dividends are declared and actually paid to
shareholders of the Company following the grant of such Option, SAR or Stock Award. The amount of
the Dividend Equivalent Right shall be based on the number of shares of Common Stock subject to the
Option, SAR or Stock Award granted to the Participant. Notwithstanding the foregoing, any Award
containing Dividend Equivalent Rights to which Section 409A of the Code applies shall comply with
Section 409A of the Code (and any regulations thereunder) and no Award may include Dividend
Equivalent Rights if the inclusion of such rights would cause the Award to be subject to taxation
and penalties under Section 409A of the Code (and any regulations thereunder).



12.02. Payment




     In the discretion of the Administrator, the amount of accrued Dividend Equivalent Rights to
which a Participant is entitled upon exercise of an Option or SAR, or upon the vesting of a Stock
Award, may be settled in cash, Common Stock or a combination of cash and Common Stock. A fractional
share shall not be deliverable when accrued Dividend Equivalent Rights are settled, but a cash
payment will be made in lieu thereof. Any Award containing Dividend Equivalent Rights that is
subject to Section 409A of the Code shall comply with the deferral, distribution timing and other
applicable rules under Section 409A of the Code (and any regulations thereunder).



12.03. Nontransferability




     A Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of
earned Dividend Equivalent Rights other than by will or the laws of descent and distribution. The
limitations set forth in the preceding sentence shall not apply to Common Stock issued as payment
pursuant to a Dividend Equivalent Rights.



12.04. Shareholder Rights




     No Participant shall, as a result of receiving Dividend Equivalent Rights, have any rights as
a shareholder of the Company or Subsidiary until and to the extent that the Dividend Equivalent
Rights are earned and settled in shares of Common Stock. After Dividend Equivalent Rights are
earned and settled in shares of Common Stock, a Participant will have all the rights of a
shareholder with respect to such shares.



25









 





ARTICLE XIII




ADJUSTMENT UPON CHANGE IN COMMON STOCK




     The maximum number of shares as to which Awards may be granted under this Plan; and the terms
of outstanding Awards; and the per individual limitations on the number of shares of Common Stock
for which Awards may be granted shall be adjusted as the Committee shall determine to be equitably
required in the event that (a) the Company (i) effects one or more stock dividends, stock
split-ups, subdivisions or consolidations of shares or (ii) engages in a transaction to which
Section 424 of the Code applies, or (b) there occurs any other event which, in the judgment of the
Committee necessitates such action. Such adjustments shall, for Awards subject to Section 409A of
the Code, be made consistent with Section 409A of the Code (and any regulations thereunder) and no
adjustment shall be made to an Award that would cause the Award to be subject to taxation and
penalties under Section 409A of the Code (and any regulations thereunder). Any determination made
under this Article XIII by the Committee shall be final and conclusive.



     The issuance by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, for cash or property, or for labor or services, either upon direct
sale or upon the exercise of rights or warrants to subscribe therefore, or upon conversion of
shares or obligations of the Company convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the maximum number of
shares as to which Awards may be granted, the per individual limitations on the number of shares of
Common Stock for which Awards may be granted or the terms of outstanding Awards.



     The Committee may make Awards in substitution for performance shares, phantom shares, stock
awards, stock options, stock appreciation rights, or similar awards held by an individual who
becomes an employee of the Company or a Subsidiary in connection with a transaction or event
described in the first paragraph of this Article XIII; provided that, for any such award subject to
Section 409A of the Code, such substitution shall be made consistent with Section 409A of the Code
and any regulations thereunder. Notwithstanding any provision of the Plan (other than the
limitation of Section 5.02), the terms of such substituted Awards shall be as the Committee, in its
discretion, determines is appropriate consistent (where applicable) with Section 409A of the Code
and any regulations thereunder.



ARTICLE XIV




COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES




     No Option or SAR shall be exercisable, no Common Stock shall be issued, no certificates for
shares of Common Stock shall be delivered, and no payment shall be made under this Plan except in
compliance with all applicable federal and state laws and regulations (including, without
limitation, withholding tax requirements), any listing agreement to which the Company is a party,
and the rules of all domestic stock exchanges on which the Company’s shares may be listed. The
Company shall have the right to rely on an opinion of its counsel as to such



26









 




compliance. Any share certificate issued to evidence Common Stock when a Stock Award is granted, a
Performance Share, Incentive Award or Stock Unit is settled or for which an Option or SAR is
exercised may bear such legends and statements as the Administrator may deem advisable to assure
compliance with federal and state laws and regulations. No Option or SAR shall be exercisable, no
Stock Award, Stock Unit or Performance Share shall be granted, no Common Stock shall be issued, no
certificate for shares shall be delivered, and no payment shall be made under this Plan until the
Company has obtained such consent or approval as the Administrator may deem advisable from
regulatory bodies having jurisdiction over such matters.




ARTICLE XV




GENERAL PROVISIONS




15.01. Effect on Employment and Service




     Neither the adoption of this Plan, its operation, nor any documents describing or referring to
this Plan (or any part thereof), shall confer upon any individual any right to continue in the
employ or service of the Company or a Subsidiary or in any way affect any right or power of the
Company or a Subsidiary to terminate the employment or service of any individual at any time with
or without assigning a reason therefore.



15.02. Unfunded Plan




     The Plan, insofar as it provides for grants, shall be unfunded, and the Company shall not be
required to segregate any assets that may at any time be represented by grants under this Plan. Any
liability of the Company to any person with respect to any grant under this Plan shall be based
solely upon any contractual obligations that may be created pursuant to this Plan. No such
obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on,
any property of the Company.



15.03. Rules of Construction




     Headings are given to the articles and sections of this Plan solely as a convenience to
facilitate reference. The reference to any statute, regulation, or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.



15.04. Tax Withholding




     Each Participant shall be responsible for satisfying any income and employment tax withholding
obligation attributable to participation in this Plan. In accordance with procedures established by
the Administrator, a Participant may surrender shares of Common Stock, or receive fewer shares of
Common Stock than otherwise would be issuable, in satisfaction of all or part of that obligation.



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15.05. Compliance with Section 409A




     All Awards shall, to extent applicable, comply with and be administered in accordance with the
rules and requirements of Section 409A of the Code and any regulations thereunder. Notwithstanding
any other provision of the Plan, the Committee may take such actions as it deems necessary or
appropriate to ensure that an Award will comply with or be exempt from Section 409A of the Code and
may interpret this Plan (and any Agreement) in any manner necessary to ensure that an Award is
either so exempt or compliant. The Committee may unilaterally reform any Agreement to the extent
necessary to comply with Section 409A of the Code (and any regulations thereunder).



     In the event that a Participant is a “specified employee” within the meaning of Section 409A
of the Code (as determined by the Company or its delegate), any payment to be made under an Award
that is (a) subject to Section 409A of the Code and (b) payable upon termination of employment,
shall not be made or begin until the expiration of the 6-month period following the Participant’s
termination. For this purpose, termination of employment shall have the same meaning as
“separation from service” under Section 409A (and any regulations thereunder).



ARTICLE XVI




AMENDMENT




     The Board may amend or terminate this Plan from time to time; provided, however, that no
amendment may become effective until shareholder approval is obtained if (i) the amendment
increases the aggregate number of shares of Common Stock that may be issued under the Plan (other
than an adjustment pursuant to Article XIII) or (ii) the amendment changes the class of individuals
eligible to become Participants. No amendment shall, without a Participant’s consent, adversely
affect any rights of such Participant under any Award outstanding at the time such amendment is
made.



ARTICLE XVII




DURATION OF PLAN




     No Award may be granted under this Plan more than ten years after the earlier of the date the
Plan is adopted by the Board or the date that the Plan is approved in accordance with Article
XVIII. Awards granted before that date shall remain valid in accordance with their terms.



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ARTICLE XVIII




EFFECTIVE DATE OF PLAN




     Options, SARs, Incentive Awards, Stock Units and Performance Shares may be granted under this
Plan upon its adoption by the Board, provided that no Option, SAR, Incentive Award, Stock Units or
Performance Shares shall be effective or exercisable unless this Plan is approved by a majority of
the votes by the Company’s shareholders entitled to vote and present, either in person or by proxy,
at a duly held shareholders’ meeting at which a quorum is present or by unanimous consent. Stock
Awards may be granted under this Plan, upon the later of its adoption by the Board or its approval
by shareholders in accordance with the preceding sentence.




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