Proxy Statement - Notice of Shareholders Meeting (preliminary) (pre 14a)

Date : 07/05/2019 @ 9:01PM
Source : Edgar (US Regulatory)
Stock : NII Holdings Inc (NIHD)
Quote : 1.59  0.02 (1.27%) @ 11:00PM

Proxy Statement - Notice of Shareholders Meeting (preliminary) (pre 14a)


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TABLE OF CONTENTS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

ý

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

NII HOLDINGS, INC.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

ý

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
    (4)   Proposed maximum aggregate value of transaction:
        
 
    (5)   Total fee paid:
        
 

o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
    (1)   Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

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LOGO

ANNUAL MEETING OF STOCKHOLDERS

July [     ·     ], 2019

DEAR FELLOW STOCKHOLDERS:

You are invited to attend the 2019 Annual Meeting of Stockholders (the "Annual Meeting") of NII Holdings, Inc. (the "Company"), which is to be held on August 20, 2019 at 2:00 p.m. Eastern Time at the Hyatt Regency Reston, located at 1800 Presidents Street, Reston, Virginia 20190 (703-709-1234). At the Annual Meeting, you will be asked to (1) elect seven directors to serve a one-year term, (2) cast an advisory vote on executive compensation, (3) consider and vote on a proposal to amend our 2015 Incentive Compensation Plan to increase the number of shares available to be issued thereunder, (4) consider and vote on a proposal to amend and restate our Fifth Amended and Restated Bylaws and Amended and Restated Certificate of Incorporation to reduce the minimum number of directors of the Company from three directors to one director, and (5) ratify the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year 2019.

Whether or not you plan to attend, it is important that your shares be represented and voted at the Annual Meeting. You can vote by signing, dating and returning the enclosed proxy card. Also, eligible stockholders may vote by telephone or over the Internet. Instructions for using these convenient services are set forth in the instructions for voting that are attached to the enclosed proxy card or voting instruction form. Beneficial owners of shares of our common stock held in street name should follow the enclosed instructions for voting their shares. I hope you will be able to attend the Annual Meeting, but even if you cannot, please vote your shares as promptly as possible.

The proxy statement and the Company's annual report on Form 10-K for the fiscal year ended December 31, 2018 are available at www.proxyvote.com.

Thank you for your ongoing support of NII Holdings, Inc.

Sincerely,

GRAPHIC


Kevin L. Beebe
Chair of the Board of Directors

   

NII Holdings, Inc.
12110 Sunset Hills Road, Suite 600
Reston, VA 20190
www.nii.com


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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

August 20, 2019 at 2:00 p.m. Eastern Time
Hyatt Regency Reston
1800 Presidents Street
Reston, VA 20190
703-709-1234

We will hold the 2019 Annual Meeting of Stockholders (the "Annual Meeting") of NII Holdings, Inc. (the "Company") on August 20, 2019 at 2:00 p.m. Eastern Time at the Hyatt Regency Reston, located at 1800 Presidents Street, Reston, Virginia 20190 (703-709-1234).

At our Annual Meeting, our stockholders will be asked to:

    1.
    Elect seven directors for a one-year term to expire at the 2020 Annual Meeting of Stockholders;

    2.
    Provide an advisory vote to approve the compensation of our named executive officers;

    3.
    Consider and vote on a proposal to amend the Company's 2015 Incentive Compensation Plan to increase the authorized shares thereunder (the "Plan Amendment");

    4.
    Consider and vote on a proposal to amend and restate our Fifth Amended and Restated Bylaws and the Amended and Restated Certificate of Incorporation to reduce the minimum number of directors of the Company from three directors to one director (the "Bylaws and Charter Amendments");

    5.
    Ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for fiscal year 2019; and

    6.
    Transact any other business that properly comes before the Annual Meeting and any adjournment or postponement thereof.

The Board of Directors of the Company recommends that you vote FOR the nominees for director; FOR the approval, on an advisory basis, of the compensation of our named executive officers; FOR the Plan Amendment; FOR the Bylaws and Charter Amendments; and FOR the ratification of the appointment of KPMG LLP as the Company's independent registered public accounting firm for fiscal year 2019.

Only stockholders of record as of July 15, 2019 can vote at the Annual Meeting.

July [     ·     ], 2019

By Order of the Board of Directors,

GRAPHIC

Kevin L. Beebe
Chair of the Board of Directors

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDERS' MEETING TO BE HELD ON AUGUST 20, 2019.

The proxy statement and annual report on Form 10-K for the fiscal year ended December 31, 2018 are available at www.proxyvote.com.


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GRAPHIC   TABLE OF CONTENTS

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GENERAL INFORMATION

Time and Place of Annual Meeting The 2019 Annual Meeting of Stockholders (the "Annual Meeting") of NII Holdings, Inc. (the "Company") will be held on August 20, 2019 at 2:00 p.m. Eastern Time at the Hyatt Regency Reston, located at 1800 Presidents Street, Reston, Virginia 20190 (703-709-1234).
Enclosed
Materials
Enclosed are the following materials:

the proxy statement for the Annual Meeting;

the Company's annual report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission (the "SEC") on March 18, 2019; and

the proxy card or vote instruction form for the Annual Meeting.


 


We are providing these proxy materials in connection with the solicitation by the Board of Directors (the "Board") of proxies to be voted at the Annual Meeting. We commenced mailing this proxy statement and the enclosed form of proxy to our stockholders entitled to vote at the meeting on or about July [ · ], 2019.
Management
Proposals

At the Annual Meeting, our stockholders will be asked to:

elect Kevin Beebe, James Continenza, Howard Hoffmann, Richard Knoepfelmacher, Christopher Rogers, Robert Schriesheim and Steven Shindler to the Board to serve for a one-year term expiring at the 2020 Annual Meeting of Stockholders (Proposal 1 on the proxy card);

provide an advisory vote on the compensation of the Company's named executive officers (Proposal 2 on the proxy card);

consider and vote on a proposal to amend our 2015 Incentive Compensation Plan ("2015 Plan") to increase the number of shares available to be issued thereunder (Proposal 3 on the proxy card);

consider and vote on a proposal to amend and restate our Fifth Amended and Restated Bylaws and Amended and Restated Certificate of Incorporation to reduce the minimum number of directors of the Company from three directors to one director (Proposal 4 on the proxy card);

ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year 2019 (Proposal 5 on the proxy card); and

take action on any other business that properly comes before the meeting and any adjournment or postponement of the meeting.

Stockholders
Entitled to Vote
The holders of common stock at the close of business on July 15, 2019 (the "Record Date") are entitled to receive notice of, to attend and to vote one vote per share on each matter at the Annual Meeting or any adjournment or postponement of the Annual Meeting.

 


As of the Record Date, there were [ · ] shares of common stock outstanding. A complete list of stockholders entitled to vote at the Annual Meeting will be available for examination at the time and place of the Annual Meeting.
How to Vote Stockholder of Record . If you are a stockholder of record (that is, stockholders who hold their shares in their own name), there are four ways to vote:

 


GRAPHIC



In person. You may vote in person at the Annual Meeting. The Company will give you a ballot when you arrive.

 


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Via the Internet. You may vote by proxy via the Internet by following the instructions provided on the proxy card.

 


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By Telephone. You may vote by proxy by calling the toll-free number found on the proxy card.

 


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By Mail. You may vote by proxy by filling out the proxy card and sending it back in the envelope provided.

 


If you are a stockholder of record and a current employee of the Company, you will receive an e-mail containing instructions on how to access our proxy materials and how to vote your shares on the Internet.

 


Beneficial Owner . If you are a beneficial owner of shares held in street name (that is, shares held in the name of a bank, broker or other holder of record), the materials were forwarded to you by the organization holding your account and there are up to four ways to vote:

 


GRAPHIC



In person. If you wish to vote in person at the Annual Meeting, you must obtain a legal proxy from the organization that holds your shares. Please contact that organization for instructions to obtain a legal proxy.

 


GRAPHIC



Via the Internet. You may be eligible to vote by proxy via the Internet by following the instructions on the vote instruction form.

 


GRAPHIC



By Telephone. You may be eligible to vote by proxy via telephone by following the instructions on the vote instruction form.

 


GRAPHIC



By Mail. You may vote by proxy by filling out the vote instruction form and sending it back in the envelope provided.

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GENERAL INFORMATION

Quorum The presence of, by person or by proxy, the holders of a majority of the total number of issued and outstanding shares of common stock that are entitled to vote at the Annual Meeting constitutes a quorum and is necessary for the transaction of business at the Annual Meeting.

 


An inspector of elections will determine the presence of a quorum and tabulate the results of the voting by stockholders at the Annual Meeting. The inspector will treat valid proxies marked abstain or proxies required to be treated as broker non-votes (which occurs when a broker has not received voting instructions on a matter and either does not vote the shares on that matter or is not entitled to vote on that matter without instruction but has voted on another matter the broker is entitled to vote on) as present for purposes of determining whether there is a quorum at the Annual Meeting.
Voting All shares represented by valid proxies received prior to the Annual Meeting will be voted and, where a stockholder specifies by means of the proxy a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the stockholder's instructions.
Effect of Not
Providing Voting
Instructions
Stockholder of Record . If you are a stockholder of record and you sign, date and return the enclosed proxy card but do not specify how to vote, then your shares will be voted in accordance with the recommendations of the Board on all matters presented in this proxy statement and as the proxy holders may determine in their discretion regarding any other matters properly presented for a vote at the Annual Meeting or any adjournment or postponement thereof.

 


If you are a current employee of the Company, you will receive an e-mail containing instructions on how to access our proxy materials and how to vote your shares on the Internet.

 


Beneficial Owner . If you are a beneficial owner of shares held in street name and hold your shares through a broker, bank or other financial institution, and you do not provide the broker or other nominee that holds your shares with voting instructions, the broker or other nominee will determine if it has the discretionary authority to vote on a particular matter. Brokers and other nominees have the discretion to vote on routine matters such as Proposal 5, but do not have the discretion to vote on non-routine matters such as Proposals 1 through 4. Therefore, if you do not provide voting instructions to your broker or other nominee, your broker or other nominee may only vote your shares on Proposal 5 and any other routine matters properly presented for a vote at the Annual Meeting. The failure to provide voting instructions to your broker or other nominee will have the same effect as a vote "AGAINST" Proposal 4.
Vote Standard In uncontested elections, directors are elected if they receive a majority of the votes cast for each director at the Annual Meeting. A majority of the votes cast means that the number of votes cast "for" a director must exceed the number of votes cast "against" that director. Abstentions and broker non-votes will not be counted as votes against a director.

 


Proposals 2, 3 and 5 require the approval of a majority of the votes cast on the matter, excluding any abstentions or broker non-votes.

 


Proposal 4 must be approved by the affirmative vote of holders of at least a majority of the shares of our common stock outstanding on the Record Date and entitled to vote on Proposal 4.
Broker Non-Votes
and Abstentions
Broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. These matters are referred to as "non-routine" matters. Of the matters scheduled to be voted on at the Annual Meeting, Proposals 1 through 4 are "non-routine" and Proposal 5 is "routine."

 


While broker non-votes will be treated as present for purposes of determining whether there is a quorum, they will not be counted for purposes of determining the number of votes cast with respect to a particular proposal. Accordingly, a broker non-vote will be counted in order to obtain a quorum, but will not be counted or otherwise affect the outcome of the vote with respect to Proposals 1, 2, 3 and 5. A broker non-vote will have the same effect as a vote "AGAINST" Proposal 4.

 


Abstentions with respect to Proposal 1 will not be counted as votes either "for" or "against" the director's election.

 


Abstentions with respect to Proposals 2, 3 and 5 will not be counted as a vote cast or otherwise affect the outcome of the vote with respect to such proposals.

 


Abstentions will have the same effect as a vote "AGAINST" Proposal 4.

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GENERAL INFORMATION
Changing Your
Vote

A stockholder has the power to revoke his or her proxy or change his or her vote at any time before the proxy is voted at the Annual Meeting. If your shares are held in street name by a broker, bank or other financial institution, you must contact that institution to change your vote. If you are a stockholder of record, you can revoke your proxy or change your vote in one of five ways:

you can send a signed written notice of revocation to our corporate secretary at the address noted below to revoke your proxy;

you can send a completed proxy card bearing a later date than your original proxy to us indicating the change in your vote;

you can vote again on a later date on the Internet or by telephone (only your latest proxy submitted prior to the Annual Meeting will be counted);

you can attend the Annual Meeting and vote in person, which will automatically cancel any proxy previously given; or

you can revoke your proxy in person at the Annual Meeting, but attendance at the Annual Meeting alone will not revoke any proxy that you have given previously.


 


If you choose either of the first three methods, we must receive the described notice or proxy no later than the beginning of the Annual Meeting. If you choose the fourth or fifth methods, you will be asked to present documents to establish your identity as a stockholder of the Company. Before the Annual Meeting, any written notice of revocation should be sent to: NII Holdings, Inc., 12110 Sunset Hills Road, Suite 600, Reston, Virginia 20190, Attention: General Counsel. Any notice of revocation that is delivered at the Annual Meeting should be hand delivered to our General Counsel before a vote is taken. Once voting on a particular matter is completed at the Annual Meeting, you will not be able to revoke your proxy or change your vote as to that matter.

 


If you are a stockholder of record and a current employee of the Company, you will receive an e-mail containing instructions on how to access our proxy materials and how to vote your shares on the Internet.
Voting Results The preliminary voting results will be announced at the Annual Meeting. The final voting results will be tallied by the inspector of elections and published in the Company's Current Report on Form 8-K, which the Company is required to file with the SEC within four business days following the Annual Meeting and can be accessed on the investor relations area of our website at www.nii.com .
Householding To reduce the Company's printing and mailing costs and minimize the environmental impact of the Company's annual meetings, the Company will deliver a single copy of the proxy materials to multiple stockholders who share the same address unless the Company has received instructions to the contrary from one or more of the stockholders at that address. You may request a separate copy of the proxy materials by writing or calling the Company at the following address and telephone number:

 


Investor Relations
NII Holdings, Inc.
12110 Sunset Hills Road, Suite 600
Reston, VA 20190
703-547-5209

 


Stockholders who hold shares in street name may contact the organization holding their account to request information about householding.
Cost of
Solicitation
The cost of soliciting proxies for the Annual Meeting will be borne by the Company. We have hired Broadridge Financial Solutions, Inc. ("Broadridge") to help us send out the proxy materials and expect Broadridge's fee for this service to be about $25,000. While we do not expect to incur additional solicitation expenses, the Company may incur additional expenses in order to encourage voting on a particular matter. In addition, certain of our officers and regular employees, without additional compensation, may use their personal efforts, by telephone or otherwise, to obtain proxies. We also reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses in forwarding proxy materials to the beneficial owners of shares of common stock.

Every stockholder's vote is important. Accordingly, you should sign, date and return the enclosed proxy card, vote via the Internet or by telephone, or provide instructions to your broker or other nominee whether or not you plan to attend the Annual Meeting in person.

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CORPORATE GOVERNANCE

INTRODUCTION

We are committed to effective corporate governance and high ethical standards because we believe that these values support our long-term performance. Under our current governance framework, the Board, working with senior management and our stockholders, has implemented the following corporate governance practices to support our values:

Corporate Governance

71% Independent Board
Independent Chair
Independent Audit, Compensation, and Corporate Governance and Nominating Committees

Stockholder Rights

Declassified Board in 2017
Majority Voting for Directors
Stockholder Right to Call Special Meeting

CORPORATE GOVERNANCE FRAMEWORK

The Board is responsible for the oversight of management on behalf of our stockholders, and the Board accomplishes this function acting directly and through its committees. Directors discharge their duties at Board and committee meetings and also through telephone contact and other communications with management and others regarding matters of concern and interest to the Company. In accordance with our policies, our corporate governance is managed under the following structure and details of the roles and responsibilities of each of these elements are outlined further below:

GRAPHIC

INDEPENDENT BOARD CHAIR

We have an independent Chair of the Board who presides over meetings of the Board and annual meetings of stockholders and serves as a liaison between the Board and senior management. Our leadership structure ensures a strong role for the independent directors in the oversight of the Company and in establishing priorities and procedures for the work of the

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Board. The Board recognizes that there is no single generally accepted approach to providing Board leadership and that the Board's leadership structure may vary in the future as circumstances warrant.

BOARD COMMITTEES

The specific roles and responsibilities of the Board's committees are delineated in written charters adopted by the Board for each committee and are reviewed annually by the Corporate Governance and Nominating Committee in accordance with our Corporate Governance Guidelines. As provided in their charters, each committee is authorized to engage or consult from time to time, as appropriate, at our expense, with outside independent legal counsel or other experts or advisors it deems necessary, appropriate or advisable to discharge its duties.

Each member of the Audit, Compensation, and Corporate Governance and Nominating Committees is independent in accordance with the NASDAQ Stock Market ("NASDAQ") listing rules and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as applicable.

Below is a summary of the primary responsibilities of each committee.

 
   
Audit:  

Oversight of the quality and integrity of our financial statements and related disclosures, and our accounting, auditing, and reporting practices.

Oversight of internal controls over financial reporting.

Oversight of the establishment and maintenance by management of programs and controls designed to prevent, deter and detect fraud.

Review of our processes to manage financial risk, and for compliance with significant applicable legal, ethical and regulatory requirements.

Appointment, replacement, compensation and oversight of the independent registered public accounting firm engaged to prepare and issue audit reports on our financial statements.

Oversight of our internal audit function.

Compensation:  

Review and approve our annual executive compensation and executive compensation program and philosophy.

Oversee the administration of our equity-based compensation and other benefit plans and the compensation programs and philosophy for non-executive employees.

Approve grants of stock options and stock awards to directors, officers and employees under our stock plan.

Corporate Governance
and Nominating:


 

Promote the effective and efficient governance of the Company, including the development and periodic assessment of ethics and corporate governance policies.

Assist the Board in the oversight of management succession planning.

Oversee the Board and committee annual evaluation process.

Develop qualifications for director candidates and recommend to the Board persons to serve as directors and as members of the Board's committees.

CORPORATE GOVERNANCE POLICIES AND PRACTICES

We manage our business and affairs in accordance with the Delaware General Corporation Law and a number of key governance documents, including our Corporate Governance Guidelines, Amended and Restated Certificate of Incorporation, Fifth Amended and Restated Bylaws, Code of Conduct and Business Ethics, and Board Committee Charters. Our Board reevaluates our policies and practices on an ongoing basis to ensure high standards of business conduct that facilitate the Board's execution of its responsibilities. Additional information is provided below regarding key corporate governance and ethics policies and practices that we believe enable us to manage our business in accordance with the highest standards of business practices and in the best interest of our stockholders.

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CORPORATE GOVERNANCE

DIRECTOR INDEPENDENCE

In accordance with our Corporate Governance Guidelines, a majority of our Board must be independent as defined by the NASDAQ listing rules and the Exchange Act. On March 11, 2019, the Board determined that the following five of its seven current members (71%) are independent: Kevin Beebe (Chair), James Continenza, Howard Hoffmann, Christopher Rogers and Robert Schriesheim. In making that determination, the Board considered Mr. Shindler's former employment as chief executive officer of the Company and the relationship between Mr. Knoepfelmacher and RK Partners described below in "Certain Relationships and Related Transactions." The Audit, Compensation, and Corporate Governance and Nominating Committees are comprised entirely of independent directors. The positions of principal executive officer and Chair of the Board are not held by the same individual. Kevin Beebe serves as Chair of the Board and Roberto Rittes is the principal executive officer of the Company.

RISK OVERSIGHT

Our Board has an active role, as a whole and also at the committee level, in overseeing the management of the risks that the Company faces in its business. Our Corporate Governance Guidelines set forth the responsibilities of our Board, including the Board's oversight of the Company's risk assessment and risk audit functions and provides for specific actions to mitigate certain risks. The Board regularly reviews information regarding the Company's results of operations and any related trends and other factors contributing to or affecting those results, long-term strategy, financial reporting systems and processes, and access to capital and liquidity, as well as the risks associated with these aspects of the Company's business. The Company's Code of Conduct and Business Ethics establishes standards of conduct for employees that are designed to mitigate risks associated with the Company's and its employees' compliance with legal requirements, foster ethical conduct by employees in dealing with the Company and others, and protect the Company's assets. The Company requires that all employees receive annual training relating to the Code of Conduct and Business Ethics and related policies in order to ensure that employees are familiar with those standards of conduct and to mitigate the risks associated with employees' failure to meet those standards.

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In addition, each of the committees of the Board is involved in the assessment of risks relevant to their area of responsibility and the implementation of actions designed to address or mitigate those risks. The types of risks that are considered by the committees and some of the actions taken to address those risks include:

 
   
Audit:  

Risks related to the Company's tax, accounting, financial reporting systems and processes, internal controls, and its legal and regulatory compliance.

The committee holds regular meetings with our independent registered public accounting firm, principal accounting officer, vice president of internal audit, chief financial officer, general counsel and management to discuss the risks faced by the Company and the actions being taken to mitigate those risks.

Compensation:  

Risks relating to the Company's compensation and benefit programs.

Historically, the committee retains an independent compensation consultant to assist with its oversight responsibilities and to ensure that the compensation and benefit programs are designed in a manner that aligns the compensation of executives and other employees with the interests of the Company and its stockholders. In 2016 and 2017, the Compensation Committee did not utilize the services of an independent compensation consultant given the determination that no changes would be made to executive officer compensation for 2016 and 2017 and no equity grants would be provided. In 2018, the Compensation Committee utilized the services of Lyons, Benenson & Company Inc. ("Lyons, Benenson"), an independent compensation consultant, in connection with a review of director compensation. The Compensation Committee did not use an independent compensation consultant for executive compensation given the determination that no material changes would be made to executive officer compensation for 2018.

Corporate Governance
and Nominating:


 

Risks related to the Company's corporate governance and management.

The committee reviews, and implements changes to, the Company's policies relating to corporate governance, ethics and related processes; assists the Board in management succession planning; and selects and recommends individuals nominated to our Board in an effort to ensure that a majority of the members of the Board are independent and have appropriate time, skills and experiences necessary to assist the Board in its oversight role.

In addition, the Company's internal audit group, which reports directly to the chair of the Audit Committee through the vice president and controller, prepares an annual risk assessment that includes a review of risks related to the Company's operations and processes, market and business environment, as well as risks relating to the availability and reliability of information used by management in its decision making. Based on this risk assessment, the internal audit group makes a recommendation to the Audit Committee concerning an annual internal audit plan that identifies the business activities and processes that will be reviewed and analyzed by the internal audit group during the year. The Audit Committee, comprised of Robert Schriesheim (Chair), Kevin Beebe and Howard Hoffmann, approves the risk assessment and annual internal audit plan to be carried out by the internal audit group and receives detailed reports concerning the results of each review, including recommendations made to address risks that are identified and actions taken by management with respect to those recommendations. The Audit Committee also receives quarterly updates concerning the status and outcome of the reviews conducted by the internal audit group pursuant to the annual review plan and the status of actions taken by management to mitigate risks identified in the reviews.

While each of the committees of our Board is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through management and committee reports about risks, our risk assessment and the internal audit group's annual review plan.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As stated in our Corporate Governance Guidelines and the charter of the Audit Committee, the Audit Committee is responsible for reviewing and approving or ratifying transactions involving the Company and related persons (such as the Company's officers, directors, family members of the officers and directors, and other related parties) in accordance with the

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requirements of NASDAQ. In determining whether to approve or ratify a related party transaction, the Audit Committee evaluates whether the transaction is in the best interests of the Company taking into consideration all relevant factors, including, as applicable, the Company's business rationale for entering into the transaction and the fairness of the transaction to the Company. The Audit Committee generally seeks to consider and approve these transactions in advance where practicable, but may also ratify them after the transactions are entered into, particularly in instances where the transactions are entered into in the ordinary course of business or if the transaction is on terms that are consistent with a policy previously approved by the Audit Committee or the Board. In instances where the transaction is subject to renewal or if the Company has the right to terminate the relationship, the Audit Committee expects to periodically monitor the transaction to ensure that there are no changed circumstances that would render it advisable for the Company to amend or terminate the transaction.

The Audit Committee has reviewed and approved an agreement dated October 27, 2016 between the Company's subsidiary, Nextel Telecomunicações Ltda ("Nextel Brazil") and RK Partners, a financial and operational restructuring advisory firm for which Ricardo Knoepfelmacher, a director of the Company, serves as the Managing Partner, for advice relating to the restructuring of the Company's outstanding debt. The agreement, as amended, provides for fixed monthly payments of R$330,000, or $103,474 based on the average exchange rate of 3.1892 Brazilian Reais to 1.00 U.S. Dollar for the year ended December 31, 2017 (the "Average Exchange Rate") and a success fee of R$12,000,000, or $3,762,699 based on the Average Exchange Rate, less 50% of the monthly payments made through March 2017 and 100% of the monthly payments made starting in April 2017. For services provided in 2017, Nextel Brazil paid RK Partners fixed monthly payments totaling R$3,914,122, or $1,227,305 based on the Average Exchange Rate, including taxes. The project was successfully completed in January 2018 with amendments to Nextel Brazil's credit facilities that included the deferral of substantially all principal payments for the first 48 months from effectiveness, an extension of the loan maturity dates to 98 months from the date of effectiveness and a holiday for certain financial covenant compliance until June 30, 2020. In connection with the effectiveness of the amendments, RK Partners was paid a success fee in January 2018 of R$9,354,741, or $2,933,256 based on the Average Exchange Rate. Due to Nextel Brazil's agreement with RK Partners, the Board has determined that Mr. Knoepfelmacher does not meet the independence standards of the NASDAQ listing rules and the Exchange Act.

CODE OF CONDUCT AND BUSINESS ETHICS

The Company's Code of Conduct and Business Ethics covers our directors, officers and employees, including the directors, officers and employees of our operating subsidiaries in Brazil. The Code of Conduct and Business Ethics addresses such topics as protection and proper use of our assets, compliance with applicable laws and regulations, accuracy and preservation of records, accounting and financial reporting, conflicts of interest and insider trading. The Company requires that all employees receive annual training relating to the Code of Conduct and Business Ethics and related policies in order to ensure that employees are familiar with those standards of conduct.

Only the Board or the Audit Committee may consider a waiver of the Code of Conduct and Business Ethics for an executive officer or director. If a provision of the Code of Conduct and Business Ethics is materially modified, or if a waiver of the Code of Conduct and Business Ethics is granted to a director or executive officer, we will post a notice of such action on the Investor Relations link of our website at www.nii.com . No such waivers were granted during 2016, 2017 or 2018.

HEDGING, SHORT SALE AND PLEDGING POLICIES

The Board has adopted a policy prohibiting all employees (including executive officers and directors) from engaging in any transaction involving our common stock that may be viewed as speculative, including buying or selling puts, calls or options, short sales, hedging transactions or purchases of our common stock on margin.

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CORPORATE GOVERNANCE

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee are Christopher Rogers (Chair), James Continenza and Howard Hoffmann. No member of the Compensation Committee is a current or former officer or employee of the Company or any of its subsidiaries. In addition, there are no compensation committee interlocks with other entities with respect to any such member.

AVAILABILITY OF GOVERNANCE INFORMATION

Our governance documents, including the charters of the Audit, Compensation, and Corporate Governance and Nominating Committees, and our Code of Conduct and Business Ethics, may be viewed free of charge on the Investor Relations link of our website at www.nii.com . The charters and our Code of Conduct and Business Ethics may also be obtained by writing to us at NII Holdings, Inc., 12110 Sunset Hills Road, Suite 600, Reston, Virginia 20190, Attention: Investor Relations.

STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS

As provided for in our Corporate Governance Guidelines, stockholders may communicate directly with the Board by electronic mail sent to boardinquiries@nii.com or by regular mail sent to the address below. The Board has instructed the Board Communications Designee to examine incoming communications to determine whether the communications are relevant to the Board's roles and responsibilities. The Board has authorized the Board Communications Designee to disregard or discard inappropriate communications such as spam, business solicitations or advertisements, resumes or similar communications. The Board Communications Designee will forward any service inquiries or complaints to the appropriate groups within the Company for processing and response.

The Board Communications Designee will review all appropriate communications and report such communications to the chair of the Corporate Governance and Nominating Committee, the Board, or the independent directors, as appropriate. The Board Communications Designee will take additional action or respond to letters in accordance with instructions from the relevant Board source. Communications relating to the Company's accounting, internal accounting controls or auditing matters will be referred promptly to members of the Audit Committee. Stockholder communications to the Board should be sent to:

Shana C. Smith
Board Communications Designee
NII Holdings, Inc.
12110 Sunset Hills Road, Suite 600
Reston, VA 20190

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BOARD OF DIRECTORS

GENERAL

Our Board consists of seven directors. Each of the directors of the Board was appointed in connection with our plan of reorganization, which became effective on our emergence from our Chapter 11 bankruptcy proceedings on June 26, 2015, and determined to be qualified to serve on the Board by The Capital Group Companies, Inc. ("Capital Group"), Aurelius Capital Management, LP ("Aurelius") and the informal group of holders of notes issued by NII International Telecom (the "LuxCo Group"), the creditors who had the right to make the appointments. Pursuant to the plan of reorganization, our former chief executive officer, who was a member of our Board and our chief executive officer when we filed a voluntary petition seeking relief under Chapter 11 of the U.S. Bankruptcy Code in September 2014, was appointed to our Board. In addition, Capital Group designated three of our directors, Aurelius designated one director and the LuxCo Group designated two of our directors who comprise our current seven-member Board. All directors are elected annually and the current term for all of our directors expires at the Annual Meeting.

Each of our directors brings a strong and unique background and set of skills to the Board, giving the Board, as a whole, competence and experience in a wide variety of areas, including:

experience in senior executive positions in the telecommunications and other industries and service on the board of directors of other companies, including telecommunications companies;
experience in key management and operating roles for large, complex organizations, including technology and manufacturing companies, operators of wireless networks, retailers and companies with international operations and, specifically, operations in Latin America;
experience serving on other public company boards, including serving on audit, compensation and other committees responsible for oversight of corporate governance and related issues; and
experience in financing, capital markets and strategic transactions, including as executives of public companies with responsibility for capital planning and fundraising; as executives of investment banks and other financial institutions, including investment funds and private equity investment firms; and as investment fund managers.

The Corporate Governance and Nominating Committee and the Board believe that these and the other skills and experiences brought to the Board by its members position the Board to be able to fulfill its oversight role and to evaluate and advise management with respect to a wide variety of matters faced by the Company in its business. We have included a brief description of the experience, qualifications, attributes and skills that led to the conclusion that each director should serve on our Board as part of the directors' biographies below.

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BOARD OF DIRECTORS

DIRECTOR NOMINATION PROCEDURES

In evaluating a director candidate, each of the Corporate Governance and Nominating Committee and the Board considers factors that it believes are in the best interests of the Company and its stockholders. In addition, the Corporate Governance and Nominating Committee has adopted guidelines for the evaluation of potential director nominees, which are set forth in its charter. These guidelines set forth standards by which potential nominees for election to our Board will be evaluated and include:

the prospective nominee's professional skills and experience;
the ability of the prospective nominee to represent the interests of our stockholders;
the prospective nominee's reputation, standards of integrity, commitment and independence of thought and judgment;
the prospective nominee's independence from the Company under the NASDAQ listing rules, and, as applicable, the standards for independence established by the SEC;
the prospective nominee's ability to dedicate sufficient time, energy and attention to the diligent performance of his or her duties as a director, taking into account, among other things, the prospective nominee's service on other public company boards; and
the extent to which the prospective nominee contributes to the range of talent, skill and expertise appropriate for the Board.

The Corporate Governance and Nominating Committee considers gender diversity a critically important component of the Board's composition and intends to work to improve gender diversity as Board seats become available. The Corporate Governance and Nominating Committee also considers diversity of talents, skills and expertise in evaluating potential nominees. In addition, from time to time, the Corporate Governance and Nominating Committee retains third-party search firms to identify qualified director candidates and to assist the committee in evaluating candidates that have been identified by others.

It is the policy of the Corporate Governance and Nominating Committee to consider candidates recommended by stockholders. Any stockholder who would like to suggest or recommend a person for the Board's consideration as a director candidate may do so at any time by writing to the corporate secretary at the address below. A stockholder wishing to formally nominate a person for election as a director must comply with the advance notice provisions in the Company's Fifth Amended and Restated Bylaws. Generally, these provisions require that the corporate secretary receive notice of the nomination not less than 75 calendar days prior to the anniversary of the date for the preceding year's annual meeting. The notice must set forth, as to each nominee, the name, age, business and residential address, principal occupation or employment, class, series and number of securities of the Company owned by such person, the date or dates the securities were acquired, any other information relating to such person that is required to be disclosed in solicitation for proxies or election of directors pursuant to Regulation 14A under the Exchange Act, and a representation that such person meets the qualifications to serve as a director of the Company. The notice must include a completed director questionnaire, which is available from the corporate secretary of the Company, and the nominee's signed consent to serve as a director if elected. The notice must also set forth, among other things, the name and address of, and the number of our common shares owned by, the stockholder giving the notice and the beneficial owner on whose behalf the nomination is made and any other stockholders believed to be supporting such nominee, and a description of any material relationships between the stockholder giving the notice and any other stockholders and the proposed nominee. Additional details regarding the process to be followed by stockholders wishing to nominate a person for election as a director are included in the Company's Fifth Amended and Restated Bylaws, which are available on the Investor Relations page of our website at www.nii.com . Stockholder recommendations and formal nominations should be sent to:

Shana C. Smith
General Counsel and Corporate Secretary
NII Holdings, Inc.
12110 Sunset Hills Road, Suite 600
Reston, Virginia 20190

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BOARD OF DIRECTORS

SUMMARY OF QUALIFICATIONS

Each of the directors of the Board was appointed in connection with our plan of reorganization, which became effective on our emergence from our Chapter 11 bankruptcy proceedings on June 26, 2015, and determined to be qualified to serve on the Board by the creditors who had the right to make the appointments. Pursuant to the plan of reorganization, our former chief executive officer was appointed to our Board. In addition, Capital Group designated three of our directors, Aurelius designated one director and the LuxCo Group designated two of our directors who comprise our current seven-member Board.

Below is a summary of certain of the qualifications of the members of our Board that, among other things, led the Corporate Governance and Nominating Committee to conclude that each incumbent director is qualified to serve on the Board and should be nominated for reelection to the Board upon expiration of such director's term. Please review the biographies of our Board below.

    Beebe   Continenza   Hoffmann   Knoepfelmacher   Rogers   Schriesheim   Shindler
Senior executive experience in
large, complex organizations

 
x   x     x   x   x   x
Telecommunications experience   x   x   x   x   x   x   x
Diverse experience in
multiple industries

 
x   x   x   x   x   x  
Experience in Brazil or
similar Latin American or
emerging markets
  x   x   x   x   x   x   x
Service on the board of other
public companies

 
x   x     x   x   x  
Managerial experience
evaluating risks
  x   x   x   x   x   x   x
Experience in financial and capital
markets and strategic transactions

 
x   x   x   x   x   x   x

DIRECTOR BIOGRAPHIES

DIRECTORS STANDING FOR REELECTION — TO HOLD OFFICE UNTIL 2020

        Kevin L. Beebe



 

  Chair of the Board, NII Holdings, Inc.

 

  President and Chief Executive Officer, 2BPartners, LLC

 

  Independent

 

  Age  60

 

  Director Since  2010

 

 
Committees

Audit

       
 
  Mr. Beebe has served as a director since 2010 and has served as Chair of the Board since 2013. Mr. Beebe has been President and Chief Executive Officer of 2BPartners, LLC, a partnership that provides strategic, financial and operational advice to private equity clients, investors and management, since November 2007. He is also a founder, and has been a senior operating partner since 2014, of Astra Capital, a private equity firm focused on providing capital to technology and telecom companies. Previously, he was the Group President of Operations at ALLTEL Corporation, a telecommunications services company, from 1998 to 2007. Mr. Beebe also serves as a director for Skyworks Solutions, Inc., a semiconductor and wireless handset chip supplier; SBA Communications Corporation, a provider of wireless and broadcast communications infrastructure; and Frontier Communications Corporation, an internet, television and phone service provider.

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        James V. Continenza

 

  Executive Chairman, Eastman Kodak Company

 

  Independent

 

  Age  56
    Director Since  2015
    Committees

Compensation

Corporate Governance and Nominating

   
 
  Mr. Continenza has been Executive Chair of Eastman Kodak Company, a provider of imaging products and services, since February 2019. From September 2012 to February 2019, Mr. Continenza served as the Chair and Chief Executive Officer of Vivial Holdings LLC, the parent company of Vivial Inc., a privately held marketing technology and communications company. Prior to joining Vivial Holdings LLC, Mr. Continenza served as President of STi Prepaid, LLC, a telecommunications company, from 2010 to 2011. Prior to that, Mr. Continenza served as Interim Chief Executive Officer of Anchor Glass Container Corp., a leading manufacturer of glass containers; President and Chief Executive Officer of Teligent, Inc., a provider of communications services including voice, data, and internet access; Director of Arch Wireless, Inc., a wireless services provider; and as President and Chief Executive Officer of Lucent Technologies Product Finance, a global leader in telecom equipment. Mr. Continenza has served as a director of Eastman Kodak Company since 2013, and he previously served on the board of Tembec, Inc., a manufacturer of lumber-derived products, from February 2008 to November 2017.
        Howard S. Hoffmann

 

  Managing Partner, De Novo Perspectives

 

  Independent

 

  Age  64
    Director Since  2015
    Committees

Audit

Compensation

   
 
  Mr. Hoffmann has served as a Managing Partner at De Novo Perspectives, a professional services firm specializing in financial and operational performance improvement, crisis and litigation management, investor and creditor advisory services, and corporate turnaround and restructuring advisory services, since 2008. From 2001 to 2012, Mr. Hoffmann served as a Managing Partner at Nightingale & Associates, LLC, a consulting firm providing financial, business advisory and management services. Mr. Hoffmann also currently serves as Chief Executive Officer of Extend Resources LLC, a business and legal solutions company, Executive Director at Hickey Smith LLP, a multi-state law firm, Executive Director of American Discovery Limited, a business process outsourcing company, and as Vice President of Evolution Pharmacy Services, Inc., a pharmacy services company.

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BOARD OF DIRECTORS

        Ricardo Knoepfelmacher

 

  Managing Partner, RK Partners

 

  Non-Independent

 

  Age  53
    Director Since  2013
    Committees

None

   
 
  Mr. Knoepfelmacher has served on our Board since 2013. Mr. Knoepfelmacher co-founded RK Partners, formerly known as Angra Partners Turnaround, a financial and operational restructuring and turnaround advisory firm, in 2003 and is currently a Managing Partner of the firm. Prior to his service as Managing Partner at RK Partners, Mr. Knoepfelmacher served as Chief Executive Officer of Brasil Telecom from 2005 to 2009 and Chief Executive Officer of Pegasus Telecom from 2000 to 2002. He also worked for Citibank and McKinsey & Company before starting his first company, MGDK & Associados, a restructuring and consulting firm. Mr. Knoepfelmacher also serves as a director for Netshoes (Cayman) Limited., a sports and lifestyle online retailer in Latin America.
        Christopher T. Rogers

 

  General Partner, Lumia Capital

 

  Independent

 

  Age  60
    Director Since  2015
    Committees

Compensation

Corporate Governance and Nominating

   
 
  Mr. Rogers has been a General Partner at Lumia Capital since 2013. From 1991 until 2012, Mr. Rogers held various executive positions with Sprint Corporation and Nextel Communications, Inc. Most recently, Mr. Rogers served as Senior Vice President, Corporate Development and Spectrum, at Sprint, where he oversaw mergers, acquisitions, divestitures, equity investments and joint ventures and was responsible for management and oversight of wireless spectrum licenses and Sprint's portfolio of emerging technology investments. Mr. Rogers serves as a director of Digital Turbine, Inc., a provider of mobile products that enable the monetization of mobile content.

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        Robert A. Schriesheim

 

  Director

 

  Independent

 

  Age  58
    Director Since  2015
    Committees

Audit

Corporate Governance and Nominating

   
 
  Mr. Schriesheim is Chair of Truax Partners LLC through which he partners with and advises institutional investors and boards while also serving as a director of public and private companies typically undergoing strategic and financial transformations. Previously, he served as the Executive Vice President and Chief Financial Officer of Sears Holdings Corporation from August 2011 to October 2016. Prior to that, Mr. Schriesheim served as Chief Financial Officer of Hewitt Associates, Inc., a global human resources consulting and outsourcing company, from January 2010 to October 2010. From October 2006 to January 2010, he served as Executive Vice President and Chief Financial Officer of Lawson Software, Inc., an ERP software provider. Prior to joining Lawson Software, Mr. Schriesheim held executive positions at ARCH Development Partners, Global TeleSystems, SBC Equity Partners, Ameritech, AC Nielsen and Brooke Group Ltd. Mr. Schriesheim currently serves as a director of the following companies: Houlihan Lokey, Inc., a global investment bank, where he serves as the chair of the audit committee and as a member of the compensation committee; Skyworks Solutions, Inc., a semiconductor and wireless handset chip supplier, where he is the chair of the audit committee; and Frontier Communications Corporation, an internet, television and phone service provider, where he is the chair of the finance committee.
        Steven M. Shindler

 

  Director

 

  Non-Independent

 

  Age  56
    Director Since  1997
    Committees

None

   
 
  Mr. Shindler has served as the Chief Financial Officer of VectolQ Acquisition Corp., a company formed to effect a business transaction in the industrial technology, transportation and smart mobility industries, since 2018. Prior to joining VectolQ, Mr. Shindler served as Chief Executive Officer of the Company from December 2012 until August 2017 and has served as a director since 1997 (including as Chair of the Board from 2002 to 2013). Prior to his most recent appointment as Chief Executive Officer, Mr. Shindler served as Executive Chair of the Company from February 2008 to July 2012 and as Chief Executive Officer from 2000 until February 2008. Mr. Shindler also served as Executive Vice President and Chief Financial Officer of Nextel Communications from 1996 until 2000. From 1987 to 1996, Mr. Shindler was an officer with Toronto Dominion Bank, where he was a managing director in its communications finance group. Mr. Shindler is also a founding partner of RIME Communications Capital, a firm that invests in early stage media, tech and telecommunications companies.

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BOARD OF DIRECTORS

BOARD AND COMMITTEE MEMBERSHIP
AND ATTENDANCE

MEETING ATTENDANCE

The Board held 13 meetings in 2018, with each member of the Board attending over 75% of the meetings of the Board and the committees on which he serves, except for Ricardo Knoepfelmacher, who attended more than two-thirds of the meetings of the Board. In addition to attending formal meetings, directors also fulfilled their responsibilities in 2018 by meeting informally on a regular basis, through informal and regular meetings with management and legal and financial advisors. The Company encourages members of the Board to attend the Annual Meeting, and all of our directors attended the 2018 Annual Meeting of Stockholders.

COMMITTEE MEMBERSHIP

The standing committees of the Board are the Audit, Compensation, and Corporate Governance and Nominating Committees. Current membership of the Board and each standing committee and the number of formal meetings of the Board and each standing committee in 2018 was as follows:

Name

      Board   Audit   Compensation   Corporate
Governance
and Nominating

Steven Shindler

         

Kevin Beebe

  I, A   C          

James Continenza

  I         C

Howard Hoffmann

  I, A          

Ricardo Knoepfelmacher

         

Christopher Rogers

  I         C  

Robert Schriesheim

  I, A     C    

TOTAL NUMBER OF MEETINGS IN 2018

      13   6 (1)   6   3

I: Independent            A: Audit Committee Financial Expert            C: Chair

(1)
During 2018, the Audit Committee also held meetings with KPMG LLP, our independent registered public accounting firm, without employees present, and meetings with our vice president of internal audit.

EXECUTIVE SESSIONS OF THE BOARD

As required by our Corporate Governance Guidelines, it is the practice of our Board to have executive sessions where independent directors meet to discuss matters of interest and concern. Executive sessions are held in conjunction with regularly scheduled meetings of the Board and at such other times as the Chair or independent members of the Board determine necessary. During executive sessions, the independent directors occasionally meet with and question our employees outside the presence of employee directors and other members of management and with their outside legal counsel.

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DIRECTOR COMPENSATION

FEES PAYABLE TO NON-EMPLOYEE DIRECTORS

Each of our non-employee directors other than Mr. Shindler receives an annual retainer for serving on the Board. In addition, our non-employee directors other than Mr. Shindler receive additional fees for their service on committees. Our director compensation for 2018 consisted of the following components:

Board:

       

Annual Retainer

  $ 70,000  

Annual Non-Executive Chair

  $ 45,000  

Committees:

       

Committee Chairs

  $ 5,000  

Audit Committee

  $ 25,000  

Compensation Committee

  $ 20,000  

Corporate Governance and Nominating Committee

  $ 15,000  

We pay all retainers in arrears in quarterly installments. We also reimburse directors for travel expenses incurred in connection with attending Board, committee and stockholder meetings and for other related expenses. We do not provide any additional compensation to employees who serve as a director or a committee member during periods in which they are also employees.

On August 1, 2017, Mr. Shindler stepped down as Chief Executive Officer of the Company. During his tenure as Chief Executive Officer and member of the Board, Mr. Shindler did not receive any additional compensation for his service as a director. Mr. Shindler continues to serve as a member of the Board and serves as the direct line of reporting for the executive team on behalf of the Board. Mr. Shindler receives $200,000 per year paid bi-weekly and health benefits in connection with this role. In addition, a grant of restricted stock previously provided to Mr. Shindler on June 26, 2015 and that vested 33 1 / 3 % on each of June 26, 2016, June 26, 2017 and June 26, 2018 remained in place and continued to vest after Mr. Shindler stepped down from his position. Under Mr. Shindler's Separation and Release Agreement, as amended, Mr. Shindler has a change of control benefit of $2,576,784, representing 200% of his annual target bonus as of August 1, 2017 and 18 months of COBRA benefits, should the Company enter into a transaction agreement for a transaction meeting the definition of change of control as defined in the Company's Change of Control Severance Plan on or before July 31, 2019, payable within twenty business days of the closing of such transaction.

In August 2018, directors received grants of restricted stock units pursuant to the 2015 Plan that are scheduled to vest in three equal annual installments beginning on August 17, 2019. In connection with these awards, the Compensation Committee of the Board engaged Lyons, Benenson as its independent compensation consultant, to assist it in evaluating its director compensation program and to select an appropriate peer group of comparable companies for purposes of setting director compensation. Based on the analysis of the peer group's director compensation levels, the Company's director compensation levels had been below the peer group since the Company emerged from bankruptcy in 2015, primarily because the Compensation Committee had not made equity grants to directors in 2016 and 2017 in order to preserve the limited number of shares available under the 2015 Plan. In addition, the Compensation Committee and Lyons, Benenson considered the Company's business and strategy, the evolution and growth of the Company since emergence from bankruptcy, the amount and type of work required of directors since emergence from bankruptcy, the Company's unique situation and level of risk associated with the Company's foreign operations and strategic process, and recent requests by stockholders seeking better alignment of interests between stockholders and directors. In consideration of these and other factors and after consultation and discussion with Lyons, Benenson, the Compensation Committee determined that total director compensation should be above the peer group and awarded 236,996 restricted stock units to each of the directors other than Mr. Shindler, and 33,699 restricted stock units to Mr. Shindler, due to Mr. Shindler's director compensation package and Mr. Shindler's Separation and Release Agreement and the potential change of control payment available under that agreement. Although awarded in 2018, these grants were intended to cover equity awards for 2018, 2019 and 2020.

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DIRECTOR COMPENSATION

As previously disclosed by the Company, on June 27, 2019, our stockholders approved of the sale of substantially all of the assets of the Company through a sale of the Company's operations in Brazil to América Móvil, S.A.B. de C.V. (the "Sale") and the future liquidation and dissolution of the Company following the consummation of the Sale (the "Dissolution").

The Sale and the Dissolution will meet the definition of a Change of Control under the 2015 Plan, and the then unvested restricted stock units will vest upon the closing of the Sale. Assuming a value of $1.71 (the closing market price of our common stock on July 3, 2019) for each unvested restricted stock unit and assuming that the Sale is completed after August 17, 2019 (the first year vesting date) but before August 17, 2020 (the second year vesting date), the value of the accelerated vesting of restricted stock units is $38,417 for Mr. Shindler and is $270,175 for each of our other directors.

At vesting, restricted stock units may be settled in cash or in shares of common stock at the election of the Compensation Committee of the Board. Restricted stock units settled in shares of common stock count against the total number of shares available for issuance pursuant to the 2015 Plan by 1.5 shares of common stock for every one share of common stock issued to settle the award. Restricted stock units settled in cash do not count against the total number of shares available for issuance pursuant to the 2015 Plan. The Company does not currently have sufficient shares available under the 2015 Plan to settle its outstanding awards of restricted stock units with shares pursuant to the 2015 Plan. As described under the heading "Proposal 3 — Amendment to 2015 Incentive Compensation Plan" below, the Company is requesting stockholder approval for additional shares for the 2015 Plan so that outstanding grants of restricted stock units may be settled with shares of common stock.

DIRECTOR COMPENSATION TABLE

In the table and discussion below, we summarize the compensation paid to our non-employee directors.

DIRECTOR COMPENSATION FISCAL YEAR 2018

Name

Fees Earned or
Paid in Cash
($)
Stock
Awards (1)
($)
Total
($)

Kevin Beebe

140,000 1,293,998 1,433,998

James Continenza

110,000 1,293,998 1,403,998

Howard Hoffmann

115,000 1,293,998 1,408,998

Ricardo Knoepfelmacher

70,000 1,293,998 1,363,998

Christopher Rogers

110,000 1,293,998 1,403,998

Robert Schriesheim

115,000 1,293,998 1,408,998

Steven Shindler (2)

221,159 183,997 405,156
(1)
The amounts in this column reflect the grant date fair value of restricted stock unit awards computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718). On August 17, 2018, we provided each director other than Mr. Shindler with a grant of 236,996 shares of restricted stock units that vest 33 1 / 3 % on each of August 17, 2019, August 17, 2020 and August 17, 2021. The grant date fair value was $5.46 per share. The dollar value of the restricted stock units subject to those grants, based on the $1.71 closing price of a share of our common stock as reported on the NASDAQ on July 3, 2019, was $405,263. Mr. Shindler received a grant of 33,699 shares of restricted stock units. At vesting, restricted stock units may be settled in cash or in shares of common stock at the election of the Compensation Committee of the Board.

(2)
Fees Earned or Paid in Cash include $21,159 of the Company's portion of health benefits.

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SECURITIES OWNERSHIP

SECURITIES OWNERSHIP OF DIRECTORS
AND MANAGEMENT

In the table and the related footnotes below, we list the amount and percentage of shares of our common stock that are deemed under the rules of the SEC to be beneficially owned on July 5, 2019 by:

each person who served as one of our directors as of that date;
each of the named executive officers; and
all directors and executive officers as a group.
  Shares Covered by
Name of Beneficial Owner Shares
Owned and Vested
Options (1)
Restricted
Stock Units
to Vest (2)
Percent of
Class (3)
Kevin Beebe 11,607 78,999 *
Howard Hoffmann 11,607 78,999 *
James Continenza 11,607 78,999 *
Ricardo Knoepfelmacher 11,607 78,999 *
Christopher Rogers 11,607 78,999 *
Robert Schriesheim 11,607 78,999 *
Steven Shindler 88,309 11,233 *
Roberto Rittes 889,840 *
Daniel Freiman 155,211 57,387 *
Shana Smith 153,934 57,387 *
All directors and executive officers as a group (10 persons) 1,356,936 600,001 *
*
Indicates ownership of less than 1%

(1)
Includes common stock currently owned and options exercisable on or within 60 days of July 5, 2019.

(2)
Indicates restricted stock units that will vest and may be settled in shares of the Company's common stock or cash equal to the fair market value thereof on or within 60 days of July 5, 2019.

(3)
Based on the total number of shares reflected in columns one and two and 101,674,499 shares of our common stock outstanding on July 3, 2019.

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SECURITIES OWNERSHIP

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial reports of beneficial ownership and reports of changes in beneficial ownership of our equity securities. Based solely upon a review of Forms 3 and 4 furnished to us under Rule 16a-3(e) during 2018, Forms 5 furnished to us during 2018, and written representations of our directors and executive officers that no additional Form 5 filings were required, we believe that all directors, executive officers and beneficial owners of more than 10% of our common stock have filed with the SEC on a timely basis all reports required to be filed under Section 16(a) of the Exchange Act.

PRINCIPAL STOCKHOLDERS

The table below lists each person or group, as that term is used in Section 13(d)(3) of the Exchange Act, known by us to be the beneficial owner of more than 5% of our outstanding common stock as of July 5, 2019.

Name and Address of Beneficial Owner Amount and Nature of
Beneficial Ownership
Percent
of Class (1)
Principal Stockholders    
683 Capital Management, LLC (2)
3 Columbus Circle, Suite 2205
New York, NY 10019
13,163,432 13.0%
Joseph D. Samberg (3)
1091 Boston Post Road
Rye, NY 10580


12,362,133 12.2%
BlackRock, Inc. (4)
55 East 52 nd  Street
New York, NY 10055
6,412,748 6.3%
New Generation Advisors, LLC (5)
13 Elm Street, Suite 2
Manchester, MA 01944


6,009,190 5.9%
Whitefort Capital Master Fund, LP (6)
780 Third Avenue, 26 th Floor
New York, NY 10017
5,481,174 5.4%
Mangrove Partners Master Fund, Ltd. (7)
c/o Maples Corporate Services, Ltd.
P.O. Box 309
Ugland House,
South Church Street
George Town,
Grand Cayman, Cayman Islands KY1-1104






5,179,868 5.1%
(1)
Based on 101,674,499 shares of common stock issued and outstanding on July 3, 2019.

(2)
According to a Schedule 13G/A filed with the SEC on February 14, 2019, 683 Capital Management, LLC, 683 Capital Partners, LP and Ari Zweiman have shared voting and shared dispositive power with respect to 13,163,432 shares of our common stock.

(3)
According to a Schedule 13G/A filed with the SEC on December 4, 2018, Joseph D. Samberg has sole voting and sole dispositive power with respect to 12,362,133 shares of our common stock, of which 10,096,986 shares are owned by The Joseph D. Samberg Revocable Trust, for which Mr. Samberg serves as trustee, and 2,265,147 shares are directly held by an entity controlled by Mr. Samberg.

(4)
According to a Schedule 13G filed with the SEC on February 8, 2019, BlackRock, Inc. has sole voting power with respect to 6,213,115 shares of our common stock and sole dispositive power with respect to 6,412,748 shares of our common stock.

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SECURITIES OWNERSHIP
(5)
According to a Schedule 13G/A filed with the SEC on February 14, 2019, New Generation Advisors, LLC, George Putnam III, Michael S. Weiner, Darren Beals and F. Baily Dent have shared voting and shared dispositive power with respect to 6,009,190 shares of our common stock. Michael S. Weiner has sole voting power with respect to 14,900 additional shares of our common stock.

(6)
According to a Schedule 13G filed with the SEC on July 1, 2019, Whitefort Capital Master Fund, LP, Whitefort Capital Management, LP, David Salanic and Joseph Kaplan have shared voting and shared dispositive power with respect to 5,481,174 shares of our common stock. The shares are held by Whitefort Capital Master Fund, LP and beneficial ownership is claimed by Whitefort Capital Management, LP, which acts as the investment manager of Whitefort Capital Master Fund, LP, and each of Messrs. Salanic and Kaplan, who serve as a Co-Managing Partner of Whitefort Capital Management.

(7)
According to a Schedule 13G filed with the SEC on May 23, 2019, Mangrove Partners Master Fund, Ltd., Mangrove Partners and Nathaniel August have shared voting and shared dispositive power with respect to 5,179,868 shares of our common stock. The shares are held by Mangrove Partners Master Fund, Ltd. and beneficial ownership is claimed by Mangrove Partners, which serves as the investment manager of Mangrove Partners Master Fund, Ltd., and Nathaniel August, who is the principal of Mangrove Partners.

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COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors is responsible for the development, oversight and implementation of our compensation program for executive officers and is committed to a philosophy that links a significant portion of each executive's compensation to performance.

The Compensation Committee has reviewed the Compensation Discussion and Analysis included in this report and discussed it with our management. Based on this review and discussion, the Compensation Committee recommended that the Compensation Discussion and Analysis be included in our proxy statement for the 2019 Annual Meeting of Stockholders.

Compensation Committee

Christopher T. Rogers, Chair
James V. Continenza
Howard S. Hoffmann

COMPENSATION DISCUSSION AND ANALYSIS

INTRODUCTION

This Compensation Discussion and Analysis provides the principles, objectives, structure, analysis and determinations of the Compensation Committee with respect to the 2018 compensation of the following named executive officers:

Roberto Rittes, Chief Executive Officer of Nextel Brazil and Principal Executive Officer of the Company (1)
Daniel Freiman, Vice President and Chief Financial Officer of the Company
Shana Smith, Vice President, General Counsel and Corporate Secretary of the Company

(1)
Mr. Rittes is employed by Nextel Telecomunicações Ltda. ("Nextel Brazil"), our wholly owned subsidiary. In 2018, Mr. Rittes' salary and annual bonus were paid in Brazilian Reais. The compensation amounts provided in this Compensation Discussion and Analysis and disclosed in the Summary Compensation Table are based on the average exchange rate for the year ended December 31, 2018, which was 3.66 Brazilian Reais to 1.00 U.S. Dollar.

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EXECUTIVE OFFICER BIOGRAPHIES

EXECUTIVE OFFICERS

There is no family relationship between any of our executive officers or between any of these officers and any of our directors.

        Roberto Rittes

 

  Chief Executive Officer, Nextel Telecomunicações Ltda.

 

  Principal Executive Officer, NII Holdings, Inc.

 

  Age  45
 
  Mr. Rittes has served as Chief Executive Officer of Nextel Telecomunicações Ltda. ("Nextel Brazil") since April 2017 and the Principal Executive Officer of NII Holdings since August 2017. Most recently, Mr. Rittes was a principal at H.I.G. Capital, a leading global private equity investment firm, from 2016 to 2017 where he focused on stabilizing operations and turnarounds of portfolio companies. Prior to that, Mr. Rittes served as Chief Financial Officer and Chief Operating Officer of Boa Vista SCPC, a Brazilian credit bureau, from 2013 to 2016. From 2011 to 2012, Mr. Rittes served as Chief Financial Officer of Estre Ambiental, an environmental services group in Latin America. From 2004 to 2011, Mr. Rittes served as a key officer for Brazilian telecom companies Brasil Telecom and Oi Paggo.
   
        Daniel E. Freiman

 

  Vice President and Chief Financial Officer, NII Holdings, Inc.

 

  Age  47
 
  Mr. Freiman has served as Vice President and Chief Financial Officer of NII Holdings since September 2015. From 2009 to September 2015, Mr. Freiman served as Treasurer, Vice President of Corporate Development and Investor Relations of NII Holdings. From 2005 to 2008, Mr. Freiman served as Vice President and Controller of NII Holdings. Prior to joining NII Holdings, Mr. Freiman was with PricewaterhouseCoopers.
   
        Shana C. Smith

 

  Vice President, General Counsel and Corporate Secretary, NII Holdings, Inc.

 

  Age  46
 
  Mrs. Smith has served as Vice President, General Counsel and Corporate Secretary of NII Holdings since September 2015. Mrs. Smith previously served as Vice President, Deputy General Counsel and Corporate Secretary of NII Holdings from 2011 to September 2015, and as Corporate Counsel and Assistant Secretary from 2009 to 2011. Prior to joining NII Holdings, Mrs. Smith served as Corporate Counsel of Sprint Nextel Corporation and was previously a corporate associate with the law firm of Fried, Frank, Harris, Shriver and Jacobson.
   

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COMPENSATION OBJECTIVES AND PHILOSOPHY

Our executive compensation program is designed to provide competitive compensation that is substantially linked to our performance and aligned with long-term stockholder interests. The Compensation Committee's primary objective in designing our compensation program is to recruit and retain the high caliber executive officers and employees necessary to deliver strong and consistent performance to our stockholders, customers and communities in which we operate. Within this framework, the Compensation Committee has developed a compensation program that incorporates salary and benefits that allow us to retain and motivate our executive officers, short-term incentives that challenge our executive officers to achieve our financial and operational goals, and long-term incentives that retain and motivate key employees and link our executives' risks and rewards with those of our stakeholders.

2018 EXECUTIVE OFFICER COMPENSATION

During our Chapter 11 bankruptcy proceedings, changes to the compensation of key executives, including our named executive officers, were not permitted without the approval of the bankruptcy court and no changes were made to the compensation of our named executive officers during our bankruptcy proceedings other than the implementation of a key employee incentive plan that provided for a potential incentive bonus payment should the Company and its subsidiaries successfully emerge from bankruptcy within specified time frames and/or if a sale transaction meeting specified enterprise values was completed. In June and August 2015, following our emergence from bankruptcy and in connection with the restructuring of our executive team, the Compensation Committee approved our executive compensation program for executive officers expected to remain with the Company, which included base salary, short-term incentives and long-term emergence grants.

In 2018, the elements of our executive compensation program included:

Base Salary . Base salary provides a fixed source of income and allows the Company to attract and retain experienced executives.
Short-Term Incentives . Short-term incentives provide variable cash compensation that allows the Company to motivate executives to achieve the Company's operating and financial objectives.
Long-Term Incentives . Long-term incentives provide variable equity awards in the form of stock options and restricted stock that build executive stock ownership, encourage retention, drive strategic and operating performance and align our executives' interests with those of our stockholders.

2018 BASE SALARY

Base salary is a fixed element of our named executive officers' direct compensation. For Mr. Freiman and Mrs. Smith, base salary was determined in 2015 and was based primarily on historic base salary levels and internal pay equity and base salaries paid to executives in comparable positions at a peer group of companies. In February 2016, the Compensation Committee decided not to increase the base salaries of the named executive officers for 2016. In March 2017, the Compensation Committee provided a 3.5% cost of living increase in base salary for Mr. Freiman and Mrs. Smith. Mr. Rittes joined Nextel Brazil in April 2017 and his base salary was based on the historic base salary level for the chief executive officer of Nextel Brazil. In March 2018, the Compensation Committee decided not to increase the base salaries of the named executive officers for 2018. Our named executive officers' annual base salaries for 2018 and the percentage change in base salaries from 2017 are as follows:

Name

2018 Base
Salary ($)
Percent Change
from 2017

Roberto Rittes (1)

655,738 0%

Daniel Freiman

465,750 0%

Shana Smith

465,750 0%
(1)
As an employee of Nextel Brazil, base salary, bonus and benefits are paid to Mr. Rittes in Brazilian Reais. Mr. Rittes' base salary is 2,400,000 Brazilian Reais per year. As reflected in U.S. dollars, Mr. Rittes base salary will vary based on the applicable exchange rate of the Brazilian Real relative to the U.S. dollar,

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    and compensation as reported in U.S. dollars can vary significantly with no actual change to the compensation paid in Brazilian currency if the exchange rates are volatile. The amount of base salary for Mr. Rittes reflected in the table above is based on the average exchange rate of 3.66 Brazilian Reais to 1.00 U.S. dollar for the year ended December 31, 2018. While there was no change to Mr. Rittes' base salary in 2018 from the base salary paid in 2017, the amount as reflected in U.S. dollars is lower due to a change in the average foreign currency exchange rate.

2018 SHORT-TERM INCENTIVES

In December 2017, in connection with a decision by a potential strategic investor not to proceed with its investment and a need to retain a small group of U.S.-based employees during a previously approved and announced wind down process, the Board changed the 2018 Bonus Plan for U.S.-based employees to a time-based retention program with a payout of two times target to be paid 50% on or about August 15, 2018 and 50% on or about March 15, 2019. For Brazil-based employees, the 2018 Bonus Plan remained a program designed to reward employees for performance relative to key financial and operating measures that are designed to stabilize and enhance the value of the Company.

The target bonus percentage of base salary for Mr. Freiman and Mrs. Smith was decided in 2015 based on historic target levels and internal equity, and the comparison of annual incentive compensation targets for executives in comparable positions at a peer group of companies. Mr. Rittes joined Nextel Brazil in April 2017 and his target bonus percentage of base salary was based on the historic target for the chief executive officer of Nextel Brazil. In January 2018, in connection with reductions in target bonus for employees of Nextel Brazil, Mr. Rittes volunteered to reduce his target bonus payment by 20% from 4,800,000 Brazilian Reais to 3,840,000 Brazilian Reais.

For 2018, the payout potential for Mr. Freiman and Mrs. Smith was two times target with 50% based on the value of the Company's common stock. In connection with stockholder requests to better align the interest of directors, management and stockholders, 50% of the 2018 short-term bonus for Mr. Freiman and Mrs. Smith was paid in restricted stock units issued on May 21, 2018 and vesting 50% on August 15, 2018 and 50% on March 15, 2019. At vesting, restricted stock units may be settled in cash or in shares of common stock at the election of the Compensation Committee of the Board, and the restricted stock units granted to Mr. Freiman and Mrs. Smith were settled in shares of common stock at vesting.

For Mr. Rittes, the achievement of the 2018 bonus payout was determined after the conclusion of the year by evaluating Nextel Brazil's performance relative to pre-determined performance goals.

2018 Target Bonus

The 2018 annual target bonus percentage of base salary, the percentage change in target bonus from 2017, and the potential cash payout under the 2018 Bonus Plan at 100% of target for each of the named executive officers were as follows:

2018 Target Bonus
Percentage of Base Salary
Percent Change
from 2017
2018 Target Bonus
at 100% Payout ($)

Roberto Rittes (1)

160% (20)% 1,049,180

Daniel Freiman

200% 0% 931,500

Shana Smith

200% 0% 931,500
(1)
As an employee of Nextel Brazil, Mr. Rittes' base salary, bonus and benefits are paid in Brazilian Reais. As a result, the amount of compensation approved for Mr. Rittes as reflected in U.S. dollars in the Target Bonus at 100% Payout column varies based on the applicable exchange rate of the Brazilian Real relative to the U.S. dollar, and compensation as reported in U.S. dollars can vary significantly with no actual change to the compensation paid in Brazilian currency if the exchange rates are volatile. The amount of compensation for Mr. Rittes reflected in the table above is based on the average exchange rate of 3.66 Brazilian Reais to 1.00 U.S. dollar for the year ended December 31, 2018.

2018 Performance Goals and Targets

The 2018 Bonus Plan for Mr. Rittes was based 100% on Nextel Brazil's performance. The Compensation Committee reviews and determines the appropriate performance measures and weightings for the bonus plan on an annual basis. The following performance measures and weights were selected to focus Nextel Brazil's employees on cash utilization and value preservation and to provide balanced incentives as any actions to improve one performance measure would be expected to have a corresponding negative impact on the other performance measure.

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In 2018, Nextel Brazil's performance was measured through revenue; adjusted operating income before depreciation and amortization, or adjusted OIBDA, which eliminates the impact of impairments and restructuring charges from OIBDA; cash flow and Net Promoter Score, or NPS. Each of the metrics had to meet a minimum threshold of target in order for a payout to be awarded for that metric under the 2018 Bonus Plan, and the bonus achievement was calculated by multiplying the achievement of each metric by its respective weight. The Compensation Committee approved the 2018 performance targets and intervals based on the Company's 2018 budget. The 2018 performance targets and intervals were selected to keep employees of Nextel Brazil focused on key 2018 budget goals. The performance targets and corresponding intervals are designed to drive Company performance against challenging performance standards, but are not goals that would cause our executives or employees to take inappropriate business risks.

The targets, results and weights under the 2018 Bonus Plan for Mr. Rittes were as follows:

Minimum Target   Targets (1)

Performance Measures (millions)

(50% payout) Weight 2018 Actual Achievement

Brazil Revenue Target R$

2,280 10% 2,405

Results

    2,265

Cumulative achievement

0%

Brazil Adjusted OIBDA Target R$

10 40% 48

Results

111

Cumulative achievement

    73%

Brazil Cash Flow Target (2) R$

(540) 40% (415)

Results

    (365)

Cumulative achievement

48%

NPS Target

33 10% 35

Results

31

Cumulative achievement

    0%
(1)
As approved by the Compensation Committee. The 2018 Bonus Plan targets for Nextel Brazil were based on a 12-month business plan.

(2)
Cash flow defined as cash earnings before interest, taxes, depreciation and amortization minus cash taxes and cash investments and does not include restructuring fees, performance bonds, debt and interest repayments or intercompany transfers between segments.

2018 Calculation of Bonus Payout

To determine the bonus earned by Mr. Rittes during the 2018 Bonus Plan, the Compensation Committee met following each fiscal quarter-end to review our financial and operating performance as compared to the applicable performance measures for that quarter and to discuss performance factors and other criteria related to the bonus awards. At the end of the fiscal year 2018, the applicable targets set for each performance measure were compared to the results for the year in order to determine the appropriate bonus payout percentage, which for Mr. Rittes would be either no payout or a payout of 100% of target depending on the Company's performance relative to the performance targets.

In some instances, the Compensation Committee, upon the recommendation of management, adjusts the bonus payments or, if appropriate, the methodology used to calculate the bonus target or our performance relative to the target to take into account, among other things, changes in the Company's goals and plans and changes in business conditions in the relevant bonus period if it concludes that such adjustments are appropriate and consistent with our overall goals and strategy. The Compensation Committee made no adjustments to the 2018 bonus targets and payouts for the named executive officers.

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2018 Financial Achievement and Bonus Payouts

Based on the foregoing, the bonuses awarded to the named executive officers in 2018 were as follows:

Name

2018 Bonus
Cash Payout
2018 Bonus
Equity
Compensation (1)

Roberto Rittes (2)

$ 1,049,180

Daniel Freiman

$ 465,750 $ 465,750

Shana Smith

$ 465,750 $ 465,750
(1)
Mr. Freiman and Mrs. Smith received 50% of their 2018 bonus payout in cash and 50% in restricted stock units with the number of restricted stock units determined by dividing the target bonus by the closing price of our common stock on the NASDAQ on the date of grant, May 21, 2018, of $2.19. The restricted stock units were settled in shares of common stock at vesting.

(2)
As an employee of Nextel Brazil, Mr. Rittes' base salary, bonus and benefits are paid in Brazilian Reais. As a result, the amount of compensation approved for Mr. Rittes as reflected in U.S. dollars in the Bonus Cash Payout column varies based on the applicable exchange rate of the Brazilian Real relative to the U.S. dollar, and compensation as reported in U.S. dollars can vary significantly with no actual change to the compensation paid in Brazilian currency if the exchange rates are volatile. The amounts for Mr. Rittes reflected in the table above are based on the average exchange rate of 3.66 Brazilian Reais to 1.00 U.S. dollar for the year ended December 31, 2018.

2018 LONG-TERM INCENTIVES

2018 Equity Incentives

For 2018, in connection with stockholder requests to better align the interest of directors, management and stockholders, 50% of the 2018 short-term bonus for Mr. Freiman and Mrs. Smith was paid in restricted stock units issued on May 21, 2018 and vesting 50% on August 15, 2018 and 50% on March 15, 2019. At vesting, restricted stock units may be settled in cash or in shares of common stock at the election of the Compensation Committee of the Board, and the restricted stock units granted to Mr. Freiman and Mrs. Smith were settled in shares of common stock at vesting.

In connection with the hiring of Mr. Rittes, on May 16, 2017 Mr. Rittes was offered an award of 1,500,000 options to purchase common stock with an exercise price of $0.5547 per share scheduled to vest ratably over three years from the date of grant. This grant exceeded the number of options permitted to be granted to a single participant in a 12-month period under the Company's 2015 Incentive Compensation Plan (the "2015 Plan") and 500,000 options were determined void as of the date of grant. On May 21, 2018, the Compensation Committee provided Mr. Rittes with a replacement equity award of 388,128 restricted stock units, which reflected the fair market value of the 500,000 stock options of Mr. Rittes' new hire grant that were not granted, to provide Mr. Rittes with the negotiated value of his onboarding grant, ensure retention and align the interests of Mr. Rittes and stockholders. Of this grant, 1/3 vested on the date of grant, 1/3 vested on May 16, 2019 and 1/3 is scheduled to vest on May 16, 2020. At vesting, restricted stock units may be settled in cash or in shares of common stock at the election of the Compensation Committee of the Board, and the restricted stock units granted to Mr. Rittes that vested on May 21, 2018 were settled in shares of common stock.

Retention and Severance Arrangements

As previously disclosed by the Company, in 2015 the Board approved an organizational restructuring of the Company to further streamline expenses by shifting the costs and associated responsibilities from the Company's headquarters in Reston, Virginia to Nextel Brazil, its operating subsidiary in Brazil. In connection with this restructuring, the Board approved a form of Separation and Release Agreement (the "Release Agreement") for certain executive officers of the Company, which, as amended, provides for a severance payment of two times base salary and pro-rated bonus (the "Regular Severance"). The Release Agreements were provided to the officers on November 13, 2015 with a target termination date of July 1, 2016 and were amended to update the target termination date. In July 2017, the Release Agreements with Mr. Freiman and Mrs. Smith were updated to provide for a target termination date of April 1, 2018, and Mr. Freiman and Mrs. Smith were provided a

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payment equal to six months of base salary, paid in August 2017, in connection with their agreement to remain with the Company (the "2017 Retention Payment"). In March 2018, Mr. Freiman and Mrs. Smith's Release Agreements were amended to provide for a target termination date of April 1, 2019. In connection with this change in termination date, Mr. Freiman and Mrs. Smith were provided with a retention payment equal to one year of base salary.

In connection with the Company's announcement of the Sale, the Compensation Committee of the Board determined on March 28, 2019 that it would be in the best interest of the Company to retain Mr. Freiman and Mrs. Smith beyond April 1, 2019 and agreed to amend the Release Agreements with Mr. Freiman and Mrs. Smith in exchange for each officer's agreement to extend their employment. Under the amended arrangements, Mr. Freiman and Mrs. Smith will receive two retention payments, each in an amount equal to their base salary, to be paid on August 30, 2019 and December 31, 2019 (the "2019 Retention Payments"), subject to continued employment through these dates. The severance payment received by Mr. Freiman and Mrs. Smith if they are terminated in connection with a Change of Control of the Company, as defined in the Company's 2015 Change of Control Severance Plan, on or before June 30, 2020 will be reduced by the 2017 Retention Payment and the 2019 Retention Payments. If termination in connection with a Change of Control of the Company occurs after June 30, 2020, Mr. Freiman and Mrs. Smith will be eligible for the full benefits set forth in the Change of Control Severance Plan. In addition, the defined Severance Period of 12 months under the Change of Control Severance Plan will be removed should the Sale close. Finally, should Mr. Freiman and Mrs. Smith be terminated in a situation that does not trigger payment under the Change of Control Severance Plan, they will remain eligible for the Regular Severance to be paid when termination without cause occurs.

In connection with the Sale and to ensure a smooth change of control, Nextel Brazil has entered into a retention agreement with Mr. Rittes providing for a retention bonus equal to 12 months of base salary to be paid by Nextel Brazil after the change of control with 50% paid on the three-month anniversary of the closing of the Sale and 50% on the six-month anniversary of the closing of the Sale, in each case subject to Mr. Rittes' continued employment through the applicable payment date. If the Sale does not close, no retention payment will be made, and if Mr. Rittes is terminated without cause after the Sale closes, any unpaid retention bonus will be paid in connection with his departure.

COMPENSATION FRAMEWORK

Roles and Responsibilities

The following tables summarize the roles and responsibilities of the Compensation Committee and management in connection with the development and implementation of our compensation program for our executive officers.

 
   

Compensation Committee
(3 Independent Directors)


 
Quarterly reviews and approves corporate goals and objectives with respect to our executive officers' compensation.

Annually reviews and approves the evaluation process and compensation structures with respect to our executive officers' compensation.

Evaluates performance in light of the Committee's established goals and objectives.

Approves the annual compensation for our executive officers, considering the recommendations made by management and the independent compensation consultant, when needed.

Evaluates the performance of the chief executive officer relative to the performance goals determined by the Board.

Management   Recommends the compensation structure for the Company's executive officers.

Provides recommendations to the Compensation Committee on the level of annual compensation for the Company's executive officers.

Provides input to the Compensation Committee on the strategy, design and funding of our incentive compensation plans.

Makes plan design recommendations for broad-based benefit programs in which our executive officers participate.

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Compensation Committee Consultant and Independence

Historically, the Compensation Committee considers the advice of an independent compensation consultant, together with information and analysis from management and its own judgment and experience, when evaluating the Company's executive compensation program. In 2018, the Compensation Committee utilized the services of Lyons, Benenson, in connection with a review of director compensation. The Compensation Committee did not use an independent compensation consultant, comparative industry data or a peer group in 2018 for executive compensation given the determination that no material changes would be made to executive officer compensation for 2018.

ADDITIONAL COMPENSATION AND COMPENSATION PLANS

Benefits

In the United States, the named executive officers participate in the same benefit plans as the general employee population of the Company. International plans vary, and incremental amounts paid to executives who work outside the United States pursuant to foreign government required programs, including mandatory vacation allowances and retirement benefits, are not taken into consideration in determining base salary and are not used in calculating the annual target bonus amounts or in determining those executives' target total direct compensation. In general, benefits are designed to provide a safety net of protection against the financial catastrophes that can result from illness, disability or death, and to provide a reasonable level of retirement income based on years of service with the Company. Benefits help keep employees focused on serving the Company and not distracted by matters related to paying for health care, saving for retirement or similar issues.

Retirement, Deferred Compensation and Pension Plans

We are implementing a restructuring of our U.S.-based corporate headquarters to further streamline our expenses by shifting the costs and associated responsibilities from our headquarters in Reston, Virginia to Nextel Brazil. In connection with these changes, the Company stopped accepting contributions to its 401(k) plan as of December 31, 2017 and terminated the 401(k) and distributed all assets in March 2018. We do not have any pension plans that entitle our named executive officers to additional benefits. In addition, we have not adopted a supplemental executive retirement plan or other "excess plan" that pays benefits to highly compensated executives whose salaries exceed the Internal Revenue Service's maximum allowable salary for qualified plans, and we do not have any nonqualified deferred compensation plans.

In Brazil, executive officers receive deferred benefits under two programs. The first is a government-sponsored savings program required for all employees called Fundo de Garantia de Tempo de Servico ("FGTS") pursuant to which Nextel Brazil is required to contribute an amount equal to 8% of an employee's annual salary, bonus and severance, if applicable, into an account for the benefit of that employee. The funds contributed to FGTS become available to the employee or estate of the employee when an employee is terminated without cause, becomes disabled or dies. The second program is a private savings program for employees that is designed to complement Brazilian social security in which Nextel Brazil matches employee contributions up to 10% of an employee's annual salary. The employer contribution vests based on length of service, and a minimum of two years of service is required before vesting begins. Once vested, the funds contributed by Nextel Brazil to the private savings plan are available to the employee or estate of the employee if the employee voluntarily leaves the company, is terminated with or without cause, becomes disabled or dies.

Severance Plans

We have two severance plans that provide for the payment of severance benefits to our U.S.-based employees, including our U.S.-based executive officers, if their employment is terminated in specified circumstances. One plan provides for the payment of severance benefits if the executive officer's employment is terminated without cause for certain reasons, and the other plan provides for the payment of severance benefits if, in connection with or following a change of control, the executive officer's employment is terminated without cause or if the executive officer terminates his or her employment with good reason. The two severance plans are mutually exclusive, meaning that an executive officer may be eligible to receive

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payments under one or the other of the plans depending on the circumstances surrounding the termination of the executive officer's employment, but it is not possible for an executive officer to receive payments under both plans. While the Compensation Committee generally does not consider the potential payments to executive officers under our severance plans, including termination and change of control arrangements, in performing its annual evaluation of the target total direct compensation that may be realized by our executive officers, the Compensation Committee believes that the terms of these arrangements are generally consistent with those offered by similarly situated companies. A description of the terms of our severance plans, the specific circumstances that trigger payment of benefits, an estimate of benefits payable upon the occurrence of those triggering events and other information relating to such plans can be found below under the caption "Executive Compensation — Potential Payments Under Severance Plans."

EXECUTIVE COMPENSATION GOVERNANCE PRACTICES

We believe that our compensation programs should ensure that our executives remain accountable for business results and take responsibility for the assets of the business and its employees. Consistent with these objectives, our Board has incorporated the following governance features into our compensation governance programs.

COMPENSATION RISK MITIGATION

The Company's executive compensation program includes features designed to discourage executives and other employees from taking unnecessary risks that could harm the financial health and viability of the Company, including balanced performance measures in the 2018 Bonus Plan. The Compensation Committee believes that the performance criteria used in our 2018 Bonus Plan strike an appropriate balance between preserving liquidity and spending for future growth and profitability and mitigate risk to the Company because actions taken to improve our performance with respect to one of the criteria would normally be expected to have a corresponding negative impact on other criteria. For example, if management were to implement promotional programs designed to aggressively pursue growth in revenue, those actions would be expected to increase expenses, resulting in a potential deterioration in operational free cash flow in the short term.

The Compensation Committee reviewed the risk profile of our compensation policies and practices and determined that our compensation programs are not reasonably likely to have a material adverse effect on the Company.

TRADING AND DERIVATIVES POLICY

The Board has adopted a policy prohibiting our directors, officers and members of their immediate families from entering into any transactions in our securities without first obtaining pre-clearance of the transaction from our general counsel. In addition, we prohibit directors and employees from engaging in any transaction involving our common stock that may be viewed as speculative, including buying or selling puts, calls or options, short sales, hedging transactions or purchases of our common stock on margin.

EMPLOYMENT AGREEMENTS

Generally, we do not enter into employment contracts with our employees. Our foreign subsidiaries enter into employment contracts with their employees where required or customary based on local law or practice. As is customary for executives in Brazil, Nextel Brazil has entered into an employment agreement with Mr. Rittes in connection with his service as chief executive officer of Nextel Brazil.

NO REPRICING OPTIONS

The 2015 Plan approved by our stockholders in connection with the approval of our plan of reorganization prohibits the repricing of stock options governed by the 2015 Plan.

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COMPENSATION RECOUPMENT POLICY

The Compensation Committee believes that the Company's compensation programs should provide for the reduction or recovery of certain incentive payments made to our executives in the event our financial statements were to be restated in the future in a manner that would have negatively impacted the size or payment of the award at the time of payment. Although the Compensation Committee has not adopted a formal policy in addition to remedies available under applicable law, the Compensation Committee intends to adopt a policy to recover payments in compliance with the rules issued by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act when such rules are finalized.

SUMMARY COMPENSATION TABLE

Name and Principal Position

Year Salary (1)
($)
Bonus (2)
($)
Stock Awards (3)
($)
Option Awards (4)
($)
Non-Equity
Incentive Plan
Compensation (5)
($)
All Other
Compensation (6)
($)
Total
($)

Roberto Rittes (7)

2018 682,079 850,000 1,049,180 122,766 2,704,025

Chief Executive
    Officer, Nextel
    Brazil and Principal
    Executive Officer





2017



515,200












210,000



1,032,652


145,408


1,903,260

Daniel Freiman

2018 465,750 465,750 465,750 465,750 1,863,000

Chief Financial Officer


2017

461,813

242,513



923,625


1,627,951

2016 450,000 3,621 900,000 10,600 1,364,221

Shana Smith

2018 465,750 465,750 465,750 465,750 1,863,000

General Counsel and


2017



461,813




242,513











923,625




1,627,951

Corporate Secretary


2016



450,000




3,621











900,000


10,600


1,364,221
(1)
The amount in this column for Mr. Rittes includes 13 months of base salary, which is typical annual base salary in Brazil, plus salary payments for holidays earned in 2018.

(2)
The amounts in this column for Mr. Freiman and Mrs. Smith for 2018 represent a retention bonus paid in connection with the extension of their separation dates. The amounts in this column for 2017 for Mr. Freiman and Mrs. Smith include a retention bonus of $232,875 paid in connection with the extension of their separation dates. The amounts in this column for 2017 and 2016 for Mr. Freiman and Mrs. Smith include payments made in 2017 and 2016 in connection with the bankruptcy asset sale bonus earned in 2015 in connection with the sale of the Company's operations in Mexico that is paid in connection with the release of funds escrowed for indemnification and subject to reduction based on amounts paid for indemnification claims.

(3)
The amounts in this column represent the value of restricted stock unit awards granted to executives in 2018 computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718), but disregarding estimated forfeitures related to service-based vesting conditions, and based on the closing price of our common stock on the NASDAQ on the date of grant, May 21, 2018, of $2.19.

(4)
No equity compensation was provided to executive officers in 2017 or 2016 other than a new hire grant of options provided to Mr. Rittes on May 16, 2017. The grant date fair value of Mr. Rittes' options is computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718), but disregarding estimated forfeitures related to service-based vesting conditions and based on the closing price of our common stock on the NASDAQ on the date of grant, May 16, 2017, of $0.5547.

(5)
The amounts in this column represent the bonus that we paid under the Bonus Plans in effect in 2018, 2017 and 2016. The bonus is determined based on a target bonus amount, which is a predetermined percentage of base salary. For Mr. Rittes the bonus is adjusted based on achievement of performance goals. For Mr. Freiman and Mrs. Smith, the bonus in 2017 and 2016 is adjusted based on achievement of bonus goals.

(6)
Consists of: (a) amounts contributed by us under our 401(k) plan for 2016; in 2018 and 2017, the Company did not offer a 401(k) plan, (b) in the case of Mr. Rittes, amounts contributed by Nextel Brazil to FGTS and to a private savings plan and (c) in the case of Mr. Rittes, perquisites and other personal

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    benefits consisting of the additional cost paid by Nextel Brazil for medical and insurance benefits for programs different than those offered to the general employee base:

Year Company
Contributions
to 401(k) Plan
($)
Company
Contributions
to Government
Plans
($)
Company
Contributions
to Private
Savings Plan
($)
Perquisites
and
Other
Personal
Benefits
($)

Mr. Rittes

2018 N/A 54,566 60,530 7,670

2017 N/A 93,727 46,310 5,371

Mr. Freiman

2018 N/A N/A N/A

2017 N/A N/A N/A

2016 10,600 N/A N/A

Mrs. Smith

2018 N/A N/A N/A

2017 N/A N/A N/A

2016 10,600 N/A N/A
(7)
Mr. Rittes' salary, bonus and benefits, other than his equity grant, were paid in Brazilian Reais. As a result, the amount of compensation provided to Mr. Rittes as reflected in U.S. dollars in the Salary, Non-Equity Incentive Plan Compensation and All Other Compensation columns varies based on the applicable exchange rate of the Brazilian Real relative to the U.S. dollar. Mr. Rittes' compensation as reported in U.S. dollars can vary significantly with no actual change to the compensation paid to Mr. Rittes in Brazilian currency if the exchange rates are volatile. The amounts for Mr. Rittes reflected in the Salary, Non-Equity Incentive Plan Compensation and All Other Compensation columns in the table above are based on the average exchange rate of 3.66 Brazilian Reais to 1.00 U.S. dollar for the year ended December 31, 2018.

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GRANTS OF PLAN-BASED AWARDS TABLE

The table below summarizes the cash incentive bonus payments under our 2018 Bonus Plan and grants of restricted stock units made to named executive officers in 2018. Our 2018 Bonus Plan does not provide for payouts in fiscal years after 2018. We historically have not issued any performance-based equity incentive awards.

    Estimated Future Payouts Under
Non-Equity Incentive
Plan Awards (1)
All Other
Stock
Awards:
Number
of Shares
of Stock
All Other
Option
Awards:
Number of
Securities
Underlying
Exercise or
Base Price
of Option
Grant
Date Fair
Value of
Stock and
Option

Name

  Grant Date Threshold
($) (2)
Target
($)
Maximum
($)
or Units
(#)
Options
(#)
Awards
($/sh)
Awards
($) (3)

Roberto Rittes (4)

Annual Bonus N/A 0 1,049,180 1,049,180 N/A N/A N/A N/A

Restricted
Stock Units

5/21/2018 N/A N/A N/A 388,128 N/A N/A 850,000

Daniel Freiman

Annual Bonus N/A N/A 465,750 931,500 N/A N/A N/A N/A

Restricted
Stock Units
5/21/2018 N/A N/A N/A 212,671 N/A N/A 465,750

Shana Smith

Annual Bonus N/A N/A 465,750 931,500 N/A N/A N/A N/A

Restricted
Stock Units

5/21/2018 N/A N/A N/A 212,671 N/A N/A 465,750
(1)
The amounts reflect the potential range of payouts pursuant to the 2018 Bonus Plan. The actual amounts of the payment made to Mr. Rittes is subject to Company-based performance targets, and for Mr. Freiman and Mrs. Smith payout under the retention-based 2018 Bonus Plan for U.S.-based employees was set at two times target with 50% paid in cash and 50% paid through an award of restricted stock units made on May 21, 2018. The actual amounts of the cash payments made under this plan to the named executive officers are reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.

(2)
The 2018 Bonus Plan for U.S.-based employees is a retention bonus plan, and there are no threshold performance levels under the Company's 2018 Bonus Plan for U.S.-based employees.

(3)
The amounts in this column reflect the grant date fair value of the restricted stock unit awards on the date of grant computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718), but disregarding estimated forfeitures related to service-based vesting conditions. We value restricted stock unit awards on the date of grant based on the number of units subject to the grant multiplied by the closing price of our common stock on the date of grant.

(4)
Mr. Rittes' annual bonus is paid in Brazilian Reais. As a result, the amount of compensation provided to Mr. Rittes as reflected in U.S. dollars in the Estimated Future Payouts Under Non-Equity Incentive Plan Awards column varies based on the applicable exchange rate of the Brazilian Real relative to the U.S. dollar. The amounts for Mr. Rittes reflected in the Estimated Future Payouts Under Non-Equity Incentive Plan Awards in the table above are based on the average exchange rate of 3.66 Brazilian Reais to 1.00 U.S. dollar for the year ended December 31, 2018.

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2018 TABLE

  Option Awards Stock Awards

Name

Grant Date Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
Option
Exercise
Price
($)
Option
Expiration
Date
Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)
Market Value
of Shares or
Units of Stock
That Have Not
Vested (1)
($)

Roberto Rittes

5/21/2018 258,752 (2) 1,141,096

5/16/2017 333,334 (3) 666,666 (3) 0.5547 5/16/2027

Daniel Freiman

5/21/2018  — (4)  — (4) 106,335 (5) 468,937

Shana Smith

5/21/2018  — (4)  — (4) 106,335 (5) 468,937
(1)
The market value of the restricted stock units is based on the $4.41 closing price of a share of our common stock as reported on the NASDAQ on December 31, 2018.

(2)
Restricted stock unit award vests 33 1 / 3 % on each of May 21, 2018, May 16, 2019 and May 16, 2020.

(3)
Stock option award vests 33 1 / 3 % on each of May 16, 2018, May 16, 2019 and May 16, 2020.

(4)
In 2017, Mr. Freiman and Mrs. Smith returned to the Company all outstanding options previously granted to them, which had an exercise price of $20.68, for no compensation in order to replenish the Company's equity compensation share pool.

(5)
Restricted stock unit award made in lieu of cash in connection with 2018 Bonus Plan vests 50% on each of August 15, 2018 and March 15, 2020.

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OPTION EXERCISES AND STOCK VESTED

In the table below, we list information on the vesting of restricted stock and restricted stock units during the year ended December 31, 2018. None of our executive officers exercised any options in 2018.

Stock Awards

Name

Number of Shares
Acquired on Vesting
(#)
Value Realized
on Vesting (1)
($)

Roberto Rittes

129,376 283,333 (2)

Daniel Freiman

116,008 614,446 (3)

Shana Smith

116,008 614,446 (3)
(1)
The value realized on vesting is calculated as the number of shares vested multiplied by the closing price of the shares on the date of vesting, unless vesting occurs on a Saturday or Sunday, in which case the shares vested are multiplied by the closing price on the Friday preceding the vesting date.

(2)
Value of the vesting of 129,376 restricted stock units that were settled in shares of common stock on May 21, 2018.

(3)
Value of the vesting of 9,672 shares of restricted stock on June 26, 2018 and 106,336 restricted stock units that were settled in shares of common stock on August 15, 2018.

PENSION BENEFITS AND NONQUALIFIED DEFERRED COMPENSATION

The Company does not offer pension benefits or a nonqualified deferred compensation plan.

POTENTIAL PAYMENTS UNDER SEVERANCE PLANS

We have arrangements with each of our U.S.-based named executive officers under our Change of Control Severance Plan that provide for payments and benefits if an executive officer's employment is terminated in connection with the occurrence of certain events involving a change in control. In addition, we have an obligation to make payments and provide certain benefits to our U.S.-based named executive officers under our Severance Plan, the 2015 Plan and the Release Agreements between the Company and Mr. Freiman and Mrs. Smith resulting from termination of employment upon the occurrence of certain events. The following is a summary of the payments that we or our successor may make under each of these arrangements.

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PAYMENTS UPON TERMINATION OF EMPLOYMENT

Our U.S.-based named executive officers are covered by our Change of Control Severance Plan and our Severance Plan. The Change of Control Severance Plan provides for the payment of certain benefits if, in connection with a change of control, an executive officer's employment is terminated by the Company without cause or by the executive officer for good reason. No benefits are required to be paid unless the executive officer's employment is terminated. The U.S.-based named executive officers are also entitled to severance benefits if their employment is terminated by the Company in specified circumstances under the Severance Plan. Although the benefits under the Severance Plan apply without regard to whether any change of control has occurred or is pending, the Change of Control Severance Plan provides that employees entitled to receive amounts paid under the Change of Control Severance Plan will not be entitled to cash severance under any other severance plan, including the Severance Plan. Mr. Freiman and Mrs. Smith have additional severance benefits pursuant to the Release Agreements that provide for the payment of one additional year of base salary in addition to the benefits provided by our Severance Plan.

Mr. Rittes is an employee of Nextel Brazil and is not eligible to receive benefits under the Change of Control Severance Plan or the Severance Plan. Mr. Rittes' termination benefits are as set forth in his employment agreement and as required by Brazilian law. Pursuant to his employment agreement, Mr. Rittes will receive a payment equal to one year of base salary if he is terminated without cause until the legally mandated severance under Brazilian law is greater than this amount, in which case, he will receive the legally mandated severance.

The named executive officers have also received awards of stock options and restricted stock under the 2015 Plan, which contains provisions that may accelerate the vesting of awards made to a named executive officer if we terminate the executive officer's employment with us, or if the executive officer terminates his or her employment with us for good reason, in connection with a change of control.

Except as noted below, we otherwise have not entered into any employment agreements or other arrangements that provide for benefits in connection with a termination of employment of our named executive officers.

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POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT

PAYMENTS UPON TERMINATION OF EMPLOYMENT

The following table shows the estimated amount of the payments to be made to each of the named executive officers employed with the Company at December 31, 2018 upon termination of their employment in connection with a change of control under the Change of Control Severance Plan, their involuntary termination under the Severance Plan or upon their termination in connection with their death, disability or retirement. For purposes of calculating the value of the benefits for the named executive officers employed by the Company at December 31, 2018, we have assumed that the triggering event for payment occurred under each of the arrangements as of December 31, 2018. The footnotes to the table contain an explanation of the assumptions made by us to calculate the payments, and the discussion that follows the table provides additional details on these arrangements.

POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT

Termination Event (1)

    Base
Salary (2)
($)
    Bonus (3)
($)
  Other
Payments (4)
($)
    Equity
Awards (5)
($)
    Total (6)
($)
 

Change of Control Severance Plan — Termination by Executive for Good Reason or by the Company Without Cause

                     

Roberto Rittes (7)

    N/A     1,049,180   726,142     3,711,293     5,486,615  

Daniel Freiman

  698,625   1,397,250   53,406   468,937   2,618,218  

Shana Smith

    698,625     1,397,250   53,406