Bezeq Approved Amendment to the Special Collective Agreement

Dec 20, 2010, 01:31 ET from Bezeq

TEL AVIV, Israel, December 20, 2010 /PRNewswire-FirstCall/ -- Bezeq The Israel Telecommunication Corp., Limited (TASE: BEZQ) , Israel's leading telecommunications provider, announced that the Board of Directors of the Company approved an Amendment (No. 3) to the Special Collective Agreement dated December 5, 2006 between the Company, the Labor Union and the New General Federation of Employees - the Histadrut ("the Collective Agreement"). The main points of the Amendment are the following:

1. Extension of the Collective Agreement and its amendments until December 31, 2015 (the Company has an option to extend the agreement until December 31, 2017).

2. Extension of the retirement arrangements in the Collective Agreement and its amendments until December 31, 2016. Under these retirement arrangements the Company may, at its discretion, terminate the employment of up to 245 permanent employees in each of the years 2010-2016.

3. Definition of "New Permanent Employee", whose employment terms differ from those of a Senior Permanent Employee (according to the Collective Agreement): the New Permanent Employee's salary model will be according to the Company's salary policy, commensurate with the market salary, and upon employment termination he/she will be entitled to the increased severance payments track only (according to years of employment).

4. Consent of the Labor Union to a distribution not in compliance with the "earnings test", of up to NIS 3 billion, with the approval of the Court pursuant to Section 303 of the Companies Law, 5759-1999.

5. The Company will grant Company employees, subject to the approval of the General Meeting of its shareholders, without consideration, 70,000,000 stock options exercisable to 70,000,000 ordinary shares of NIS 1 par value each, accounting for 2.61% of the issued capital of the Company (before the allocation), at an exercise price of NIS 7.457, subject to adjustments following changes in the share capital and dividend distributions. The cost of the stock options plan is approximately NIS 267 million.

If stock options are not granted to employees for any reason within 180 days from the date of execution of the Amendment (No. 3) to the Collective Agreement, the Company will grant the employees "phantom options" reflecting the same benefits to the employees as in the aforementioned stock options plan.

6. The Company will pay its employees a special one-time bonus in respect of the performance in the year 2010, totaling approximately NIS 52 million, payable in two equal portions as part of the January 2011 and January 2012 salaries.

About Bezeq The Israel Telecommunication Corp.

Bezeq is Israel's leading telecommunications service provider. Established in 1984, the Company has led Israel into the new era of communications, based on the most advanced technologies and services. Bezeq and its subsidiaries offer the full range of communications services including domestic, international and cellular phone services; broadband Internet and other data communications and transmission services; satellite and fixed-line-based multi-channel TV; and corporate networks.

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