Windstream 2009 Annual Report Download - page 34

Potential Payments Upon Termination or Change-in-Control
Windstream has entered into certain agreements and maintains certain plans and arrangements that require
Windstream or its successors to pay or provide certain compensation and benefits to its named executive officers
in the event of certain terminations of employment or a change-in-control of Windstream. The estimated amount
of compensation and benefits payable or provided to each named executive officer in each situation is
summarized below, assuming that the triggering event occurred on the last day of the 2009 fiscal year. The actual
amounts that would be paid to each named executive officer upon certain terminations of employment or upon a
change-in-control can only be determined at the time the actual triggering event occurs. The estimated amount of
compensation and benefits described below are in addition to the benefits to which the named executive officers
would be entitled to receive upon termination of employment generally under the retirement plans and programs
described in the sections above titled “Pension Benefits” and the “Nonqualified Deferred Compensation”. Please
refer to those sections for a description of Windstream’s retirement plans and programs. This section identifies
and quantifies the extent to which those retirement benefits are enhanced or accelerated upon the triggering
events described below.
Voluntary Termination Without “Good Reason” or Involuntary Termination For “Cause”
Windstream does not maintain any plans or arrangements that would provide benefits to its named executive
officers solely as a result of a voluntary termination without “good reason” or an involuntary termination for
“cause” (each as defined under the heading “Termination for ‘Good Reason’ or Involuntary Termination without
‘Cause’” immediately below).
Voluntary Termination for “Good Reason” or Involuntary Termination without “Cause”
Windstream has entered into an Employment Agreement with Mr. Gardner. Under the Employment
Agreement, if Windstream or its affiliates terminated Mr. Gardner’s employment without “cause” (as defined
below) or if Mr. Gardner terminated his employment with Windstream or its affiliates for “good reason” (as
defined below) on December 31, 2009, then Windstream would have been obligated to pay Mr. Gardner, in a
lump sum, approximately $2,973,000. This severance benefit under the Employment Agreement equals three
times his annual base salary.
The Employment Agreement provides that upon termination of employment, Mr. Gardner is prohibited from
soliciting employees or customers or competing against Windstream for a one-year period and is subject to
confidentiality and non-disparagement restrictions. Moreover, he is required to sign a release of all claims against
Windstream prior to receiving severance benefits under the agreement.
For purposes of the Employment Agreement, the term “cause” generally means (i) the willful failure by
Mr. Gardner substantially to perform his duties to Windstream; (ii) a conviction, guilty plea or plea of nolo
contendere of Mr. Gardner for any felony; (iii) gross negligence or willful misconduct by Mr. Gardner that is
intended to or does result in his substantial personal enrichment or a material detrimental effect on the reputation
or business of Windstream or any affiliate; (iv) a material violation by Mr. Gardner of the corporate governance
board guidelines and code of ethics of Windstream or any affiliate; (v) a material violation by Mr. Gardner of the
requirements of the Sarbanes-Oxley Act of 2002 or other federal or state securities law, rule or regulation;
(vi) the repeated use of alcohol by Mr. Gardner that materially interferes with his duties, the use of illegal drugs,
or a violation of the drug and/or alcohol policies of Windstream or any affiliate; or (vii) a material breach by
Mr. Gardner of any non-solicitation, non-disparagement or confidentiality restrictions.
For purposes of the Employment Agreement, the term “good reason” generally means the occurrence,
without the executive’s express written consent, of any one or more of the following: (i) any action of
Windstream or its affiliates that results in a material adverse change in Mr. Gardner’s position (including status,
offices, title, and reporting requirements), authorities, duties, or other responsibilities; (ii) a material reduction by
Windstream in Mr. Gardner’s compensation; (iii) the failure of the Board of Directors to nominate Mr. Gardner
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