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EXHIBIT 10.9
NEXTEL COMMUNICATIONS, INC.
SEVERANCE BENEFITS PLAN
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THE NEXTEL SEVERANCE BENEFITS PLAN
AND SUMMARY PLAN DESCRIPTION
INTRODUCTION
Nextel Communications, Inc. ("Nextel") has established The Nextel Severance
Benefits Plan (the "Plan") to provide severance benefits to certain eligible
employees who are involuntarily separated by Nextel or one of its wholly owned
subsidiaries. The severance benefit is paid to eligible employees to assist them
during their time of unemployment. The effective date of the Plan is January 01,
2001. As of the effective date, the Plan replaces all previous severance or
separation pay plans and arrangements maintained by Nextel.
DEFINITIONS
ANNUAL EARNINGS mean the annualized base salary of the employee as of the
Separation Date, without regard to overtime, bonus, incentive payments or
commission payments.
SERVICE means all periods of employment with Nextel. Service also may include
periods of employment with a company that was acquired by Nextel, 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 separation (severance) pay under
the Plan or under any similar plan of Nextel, or any other predecessor company,
or service before retirement from a predecessor company.
SEPARATION DATE means the last date of employment by Nextel.
ELIGIBILITY
Eligible Employees
Eligible employees are those who:
|_| Are employed by Nextel on a full-time (if regularly scheduled to
work 30 hours or more per week) basis; and
|_| Experience, through no fault of their own, an involuntary
separation of employment that is intended to be permanent as a
result of:
(a) A reduction-in-force due to lack of work or
other reasons; or
(b) A determination by management that, due to
business reasons, their performance or
contribution to the business (although
satisfactory) does not meet the needs of the
business; and
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|_| Continue to perform their duties satisfactorily until the Separation
Date.
Limitations on Eligibility
An employee shall not be eligible to receive benefits under the Plan if the
employee:
1. 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
2. Fails or refuses to return all Nextel property in the employee's
possession, and/or fails to clear all expenses and other financial
accounts, as of the Separation Date. (Examples of Nextel property
include, without limitation: Nextel security badges, office keys, and
all Nextel 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 Nextel); or
3. Resigns or otherwise voluntarily terminates his or her employment; or
4. Is terminated by temporary layoff or furlough, except that if Nextel
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 otherwise is eligible for benefits
under the Plan; or
5. Is on a leave of absence, except that if an employee is released to
return to work from an approved leave of absence and Nextel has no
assignment for the employee, he/she will be eligible for severance
benefits; or
6. Is offered a position within Nextel (not involving relocation as defined
by the IRS and providing the same or greater Annual Earnings) in lieu of
termination, but fails or refuses to accept it; or
7. Is terminated because of Nextel's sale or transfer of all or part of its
assets and his/her employment continues with the buyer or transferee
company on the day after the transaction is completed; or
8. Is terminated in connection with the "outsourcing" of operational
functions, and he/she is offered comparable employment by the
outsourcing vendor. For this purpose, comparable employment shall be
defined as a position with substantially the same duties, at the same or
greater base Annual Earnings, which does not require relocation (as
defined by the IRS); or
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9. Is terminated from employment for failure to return to work following a
leave of absence; or
10. Retires; or
11. Dies, at which time eligibility for severance benefits will end and all
such benefit payments will cease; or
12. Is separated from Nextel because he or she is no longer able to perform
the essential functions of his/her job (with or without reasonable
accommodation) because of a disability; or
13. Is a part-time, temporary and casual employee, independent contractor or
consultant; contract personnel assigned to work at Nextel by an outside
employment agency or
14. Is an employee employed by Nextel pursuant to a collective bargaining
agreement or other written contract.
15. Accepts a position, which requires relocation (as defined by the IRS),
but later declines to relocate when such relocation becomes mandatory.
SEVERANCE BENEFITS
SALARY GRADES E6/S6 AND BELOW
Severance pay for employees in grades up to the E6/S6 level will be equal to:
(a) Four (4) weeks of Annual Earnings, plus
(b) one (1) week of Annual Earnings for each full or partial year of
service, plus
(c) additional weeks of Annual Earnings for each $10,000 of Annual
earnings at or above $50,000 in accordance with the following
schedule:
Annual Earnings Additional Weeks Pay
--------------- --------------------
$50,000 to $69,999 2
$70,000 to $79,999 4
$80,000 to $89,999 6
$90,000 to $99,999 8
$100,000 and over Continue schedule at
2 weeks per $10,000
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The maximum benefit payable for salary grades E6/S6and below is 26 weeks of
severance pay. The minimum benefit payable for salary grades E6/S6 and below is
6 weeks of severance pay.
SALARY GRADES E7/S7 AND E8
For employees in salary grades E7/S7 and E8, severance pay will be equal to 6
months of the employee's Annual Earnings plus one month of Annual Earnings for
each full or partial year of service up to a maximum of 9 months of Annual
Earnings (i.e., an eligible employee with more than 2 years of service would
receive 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 annual
bonus payment for the period ending on the Separation Date. These payments will
be made when, and if, annual bonuses are paid for the applicable plan year and
will be calculated based on the bonus goal achievement level for the employee's
business unit.
SALARY GRADES EX1 AND ABOVE
For employees in salary grades EX1 and above, severance pay will be equal to 9
months of the employee's Annual Earnings plus one month of Annual Earnings for
each full or partial year of service up to a maximum of 12 months of Annual
Earnings (i.e., an eligible employee with more than 2 years of service would
receive a maximum of 12 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 prorated portion of the
annual bonus payment for the period ending on the Separation Date. These
payments will be made when, and if, annual bonuses are paid for the applicable
plan and will be calculated based on the bonus goal achievement level for the
employee's business unit.
RELEASE
To receive any severance pay benefit, an eligible employee must fully complete
and execute a Release of Claims provided by Nextel at or near the time of
termination. This Release includes a release of all known and unknown claims the
employee has or may have against Nextel, as well as an agreement of
confidentiality, non-disparagement, and non-solicitation. To be fully completed,
the Release must be signed by the employee and must become irrevocable in
accordance with applicable law.
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METHOD OF PAYMENT
Generally, payment of severance benefits will be made in a lump sum. However,
Nextel reserves the right to distribute severance benefits through periodic
payments, in accordance with Nextel's regular pay frequency.
WITHHOLDING FOR TAXES
All severance pay benefits shall be reduced by any applicable federal, state or
local tax withholdings.
TERMINATION OF SEVERANCE BENEFITS
If the former employee is receiving severance pay benefits through periodic
payments and Nextel discovers that the employee has failed to return all Nextel
property; has disclosed to or used confidential information about Nextel for the
benefit of a third party; has engaged in unfair competition with Nextel; has
defamed Nextel; or has attempted to entice other employees of Nextel to work for
a competitor; severance pay benefits will cease immediately.
If a former employee dies before all payments have been made under the Plan,
severance pay benefits will cease. No benefits will continue to a beneficiary.
EMPLOYEES WHO RETURN TO WORK
If an employee becomes eligible for benefits under the Plan, and that employee
later returns to work at Nextel before receiving all payments under the Plan,
further severance benefit payments will cease effective with the rehire date.
If Nextel rehires a former employee to whom a lump sum payment has been made,
the amount of the lump sum payment which, when converted into weeks of pay,
exceeds the period of time for which the employee was not employed by Nextel,
must be repaid. Although a lump sum repayment is preferred, other repayment
arrangements, including voluntary payroll deduction against future earnings, may
be initiated with the mutual written consent of the employee and Nextel in
accordance with any applicable laws.
BENEFITS IMPLICATIONS
In the event an eligible employee receiving severance benefits under the Plan
also is entitled to receive benefits under any retirement plan offered by
Nextel, such eligible employee shall also receive all benefits due under such
plans pursuant to the terms of such plans. The receipt of severance benefits
under the Plan shall have no effect on the employee's right, if any, to benefits
under any other employee pension or welfare benefit plan.
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GENERAL
Time Limits
All time limits refer to calendar days. If the expiration of any time limits of
the Plan falls on a weekend or a holiday observed by Nextel, the time limit will
be deemed to end on the next workday.
Source of Benefits
The benefits provided under the Plan shall be unfunded and payable solely from
the general assets of Nextel.
Expenses
The expenses of operating and administering the Plan shall be borne entirely by
Nextel.
Plan Sponsor and Administrator
Nextel shall be the "Plan Sponsor" and the "Administrator" of the Plan, as such
terms are defined in the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). The Administrator shall make any and all determinations
required to be made in connection with the operation and administration of the
Plan, including (without limitation) the determination of whether an employee is
an eligible employee and the amount of any severance benefit payable hereunder.
The Administrator shall have the discretionary power to interpret the provisions
of the Plan as it may determine is necessary or appropriate for the operation
and administration of the Plan.
Named Fiduciary
Nextel is the "named fiduciary" of the Plan within the meaning of ERISA,
including the "named fiduciary" with the power to act with respect to the review
of claims for benefits under the Plan.
Allocation and Delegation of Responsibilities
Nextel may allocate any of its responsibilities for the operation and
administration of the Plan to any officer or association of Nextel. It may also
delegate any of its responsibilities under the Plan by designating, in writing,
another person to carry out such responsibilities. Any such written designation
shall become effective when executed by an officer of Nextel, and the designated
person shall then be responsible for carrying out the responsibilities described
in such writing.
No Individual Liability
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It is the express purpose and intention of Nextel that no individual liability
whatsoever shall attach to, or be incurred by, any director, officer, employee,
representative or agent of Nextel and its affiliated and related entities,
parent and subsidiary corporations and partnerships, under, or by reason of the
operation of, the Plan.
Claims and Review Procedures
Any employee who believes that the employee has not received the proper benefit
under the Plan must file a written claim with the Administrator. The
Administrator will review the claim and notify the employee of its decision in
writing within 60 days after the claim is received.
If the Administrator denies a claim, in whole or in part, the Administrator's
notice will set forth:
1. The specific reason(s) for the denial;
2. The Plan provision(s) on which the denial is based;
3. A description of any material or information necessary for the
claimant to perfect the claim, and an explanation of why such
material or information is necessary; and
4. Information concerning the steps to be taken if the claimant wishes
to submit the claim for further review.
If the claimant feels the denial of the claim is improper, the claimant, or the
claimant's duly authorized representative, must file a written request for a
full review of the claim. A request for review must be filed with the
Administrator within 90 days after the claimant receives the notice of denial
and should set forth all of the grounds upon which it is based, all facts in
support of the request and any other matters the claimant (or the claimant's
representative) deems pertinent. The Administrator will furnish the claimant
with a final written decision within 60 days after receipt of the request for
review.
Right to Amend or Discontinue
Nextel reserves the right at any time, and without prior or other approval of
any employee or former employee, and without prior notice, to change, modify,
amend, terminate, or discontinue the Plan for any or no reason.
Questions Regarding the Plan
Any employee having questions regarding the Plan or its application should
direct them to Nextel's Sr. Vice President of Human Resources.
Date: January 2, 2001 By: {Randall C. Harris}
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YOUR RIGHTS UNDER ERISA
As a participant in the Plan, you are entitled to certain rights and protections
under ERISA. Under ERISA, all participants are entitled to:
1. Examine, without charge, at the office of the Administrator of the Plan, the
Plan document and copies of all documents filed by the Plan with the U.S.
Department of Labor, such as detailed annual reports; and
2. Obtain copies of all Plan documents and other Plan information upon written
request to the Administrator. The Administrator may make a reasonable charge
for the copies.
In addition to creating rights for Plan participants, ERISA imposes duties upon
the people who are responsible for the operation of the Plan. The people who
operate the Plan, called "fiduciaries" of the Plan, have a duty to do so
prudently and in the interest of you and the other Plan participants and their
beneficiaries.
No one, including your employer or any other person, may discriminate against
you in any way to prevent you from obtaining a benefit or exercising your rights
under ERISA. If your claim for benefits is denied, in whole or in part, you must
receive a written explanation of the reason for the denial, and you have the
right to have the Administrator review and reconsider your claim. (See "Claims
and Review Procedures" above).
Under ERISA, there are steps you can take to enforce your rights. For instance,
if you request materials from the Administrator and do not receive them within
thirty days, you may file suit in a federal court. In such a case, the court may
require the Administrator to provide the materials and pay you up to $110 a day
until you receive the materials, unless the materials were not sent because of
reasons beyond the Administrator's control. If you have a claim for benefits
which is denied or ignored, in whole or in part, you may file suit in state or
federal court.
If it should happen that you are discriminated against for asserting your rights
under ERISA, you may seek assistance from the U.S. Department of Labor, or you
may file suit in a federal court. The court will decide who should pay court
costs and legal fees. If you are successful, the court may order the person you
have sued to pay these costs and fees. If you lose, the court may order you to
pay these costs and fees, for example, if it finds your claim is frivolous.
If you have questions about this statement or about your rights under ERISA, you
should contact the nearest Area Office of the U.S. Labor Management Services
Administration, U.S. Department of Labor.
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ERISA INFORMATION
PLAN NAME
The Nextel Severance Benefits Plan
PLAN IDENTIFICATION NUMBER
Plan Identification No. 506
PLAN SPONSOR
Nextel Communications, Inc.
2001 Edmund Halley Drive
Reston, VA 20191
ADMINISTRATOR
Same as Plan Sponsor
EMPLOYER IDENTIFICATION NUMBER
Tax ID No. 36-3939651
AGENT FOR SERVICE OF LEGAL PROCESS
Service of legal process may be upon the Plan Administrator at the
address shown above.
PLAN YEAR
Calendar Year
TYPE OF PLAN
Welfare Plan
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