Windstream 2014 Annual Report Download - page 53

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plans and programs described in the sections above titled “Pension Benefits” and “Non-Qualified Deferred
Compensation.” 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 by a named executive officer without “good reason” or an involuntary termination by
Windstream for “cause” (each as defined under the heading “Voluntary 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. Thomas. Under the Employment Agreement, if Windstream or
its affiliates terminated Mr. Thomas’s employment without “cause” (as defined below) or if Mr. Thomas terminated
his employment with Windstream or its affiliates for “good reason” (as defined below) on December 31, 2014,
then Windstream would have been obligated to pay Mr. Thomas, in a lump sum, approximately $3,000,000. This
severance benefit under the Employment Agreement equals (i) his annual base salary through the date of termination
and any other vested benefits, in each case to the extent not previously paid and (ii) three times his annual base salary.
The Employment Agreement provides that upon termination of employment for any reason, Mr. Thomas 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. Thomas substantially to perform his duties to Windstream; (ii) a conviction, guilty plea or plea of nolo contendere
of Mr. Thomas for any felony; (iii) gross negligence or willful misconduct by Mr. Thomas 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. Thomas of the corporate governance board guidelines
and code of ethics of Windstream or any affiliate; (v) a material violation by Mr. Thomas 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. Thomas 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. Thomas of any non-solicitation,
non-disparagement or confidentiality restrictions.
For purposes of the Employment Agreement, the term “good reason” generally means the occurrence, without
Mr. Thomas’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. Thomas’s position (including status, offices, title, and
reporting requirements), authorities, duties, or other responsibilities; (ii) a material reduction by Windstream in
Mr. Thomas’s compensation; (iii) the failure of the Board of Directors to nominate Mr. Thomas for election or
re-election to the Board; or (iv) a material breach by Windstream of any provision of the Employment Agreement.
Before Mr. Thomas may resign for “good reason,” Windstream must have an opportunity within 30 days after receipt
of notice to cure the “good reason” condition(s). Notwithstanding the foregoing, in no event shall “good reason” occur
as a result of the following: (i) a reduction in any component of Mr. Thomas’s compensation if other components
of his compensation are increased or a substitute or alternative is provided so that his overall compensation is not
materially reduced; (ii) Mr. Thomas does not earn cash bonuses or benefit from equity incentives awarded to him
because the performance goals or targets were not achieved; and (iii) the suspension of Mr. Thomas for the period
during which the Board of Directors is making a determination whether to terminate him for cause.
Messrs. Fletcher and Works are eligible to receive severance benefits of three times, Mr. Gunderman two times,
and Mr. Eichler one time salary and target bonus if their employment is terminated by Windstream without cause or
if they resign for good reason. “Cause” and “good reason” are defined in the current form of the change-in-control
Agreements, as noted below.