Windstream 2014 Annual Report Download - page 39

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If Mr. Thomas’s employment terminates for any other reason, then the employment agreement will terminate
without further obligation to Mr. Thomas other than the obligation to pay his annual base salary through the date
of termination and any other vested benefits. Upon termination of employment, Mr. Thomas is prohibited under
the agreement from soliciting employees or customers of or competing against Windstream for a one-year period
and is subject to confidentiality and non-disparagement restrictions. Moreover, Mr. Thomas is required to sign a
waiver and release of all claims against Windstream and its affiliates prior to receiving severance benefits under the
Employment Agreement.
Jeffery R. Gardner. Mr. Gardner’s employment contract was terminated in connection with his resignation
on December 11, 2014. The employment agreement provided for a base salary of not less than $700,000 per year
and severance benefits of three times base salary - which were triggered in connection with his departure from the
Company, as described above. The Compensation Committee approved the foregoing severance benefit to Mr. Gardner
when his employment agreement was executed in January of 2008. The Committee approved the severance benefits
based on the importance of Mr. Gardner’s service and contributions to Windstream, to recognize that it would be
difficult for him to find comparable employment during a short period of time following a separation, and to reflect
market practice of providing similar severance benefits to the CEO position.
Severance Arrangements. As part of his offer letter with Windstream, Mr. Works is eligible to receive
severance benefits of one times his salary and target bonus if his employment is terminated by Windstream for any
reason other than cause or for resignation for good reason (as defined in his change in control agreement) prior to
February 1, 2017, which is the five-year anniversary of his employment with Windstream. In addition, as part of
their change-in-control agreements, Messrs. Gunderman and Eichler are entitled to receive severance benefits of one
times their salary and target bonus if their employment is terminated by Windstream for any reason other than cause
or for resignation for good reason (as defined in their change in control agreements).
Change-In-Control Agreements. Windstream has entered into change-in-control agreements with Mr. Thomas
and each executive officer (including the NEOs). The Compensation Committee believes that change-in-control
agreements provide protection to our executive officers from the uncertainty associated with a potential
change-in-control and are a key element in ensuring that our total compensation package is competitive with
the compensation arrangements of other market participants. The change-in-control agreements for our NEOs
provide that upon a qualifying separation from service the executive officers will be eligible to receive a cash,
lump sum payment equal to a multiple times base salary and target bonus. The multiple is three times for Messrs.
Thomas, Fletcher and Works, two times for Mr. Gunderman and one time for Mr. Eichler. Such payments will
become payable on a “double-trigger” basis, which means that a change-in-control of Windstream must occur and
the officer’s employment with Windstream must be terminated through either a resignation for “good reason” or
a termination without “cause” (as those terms are defined in the change-in-control agreement). Pursuant to the
terms of the change-in-control agreements, if excise taxes would be imposed upon payments received under the
agreements the executive will either receive all of the benefits to which he or she is entitled under the agreement,
subject to the excise tax, or have his or her benefits under the agreement reduced to a level at which the excise tax
will not apply, depending upon which approach would provide the executive with the greater net after-tax benefit.
Refer to the “Potential Payments Upon Termination or Change-in-Control” section for details associated with the
Change-in-Control Agreement.
Whittington Separation Agreement. In 2014, Mr. Whittington resigned as Chief Operating Officer of
Windstream. In recognition of Mr. Whittington’s significant service and contributions to Windstream’s success from
its formation in 2006 and throughout its transformation, the Compensation Committee recommended, and the Board
approved, a severance arrangement for Mr. Whittington which provided:
 a lump sum of $1.6 million,
 full vesting of his unvested time-based restricted shares (160,824 restricted shares), and
 pro-rated vesting of his performance-based restricted stock units for the 2014 performance cycle
(57,479 units) along with accrued but unpaid dividend equivalents.