Document:

ex_145458.htm

 

Exhibit 10.2

 

INDEMNIFICATION AGREEMENT 

 

This INDEMNIFICATION AGREEMENT (this “Agreement”) is entered into as of [__________], [___], 2019, by and among Isramco, Inc., a Delaware corporation (the “Company”), Naphtha Israel Petroleum Corporation Ltd., an Israeli public company (“Naphtha”), Naphtha Holding Ltd., an Israeli private company and a direct wholly owned Subsidiary of Naphtha (“NHL”), I.O.C. - Israel Oil Company, Ltd., an Israeli private company and a Subsidiary of Naphtha (“Parent”), and Naphtha US Oil, Inc., a Delaware corporation and wholly owned Subsidiary of Parent (“Merger Sub” and, together with Naphtha, NHL and Parent, the “Naphtha Group”) and [__________________] (the “Indemnified Party”).

 

WHEREAS, Naphtha, Parent, NHL, Merger Sub and the Company have, concurrently with the execution of this Agreement, entered into an Agreement and Plan of Merger, dated as of the date hereof (as may be amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Merger Agreement”), which provides, among other things, for the merger of Merger Sub with and into the Company, with the Company continuing as the surviving corporation and a subsidiary of Parent and NHL (the “Merger”), upon the terms and subject to the conditions set forth in the Merger Agreement;

 

WHEREAS, the Indemnified Party, as a member of the Company’s Board of Directors and/or an officer of the Company, performs valuable services for the Company;

 

WHEREAS, the Naphtha Group and the Indemnified Party recognize the substantial increase in corporate litigation in general, subjecting directors, officers, employees, controlling persons, agents and fiduciaries to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited;

 

WHEREAS, the Company’s Bylaws (the “Bylaws”), provide for the indemnification of the directors, officers, employees and agents of the Company to the maximum extent authorized by Section 145 of the Delaware General Corporation Law, as amended (“DGCL”);

 

WHEREAS, the Bylaws and the DGCL, by their non-exclusive nature, permit contracts between the Company and its directors, officers, employees, controlling persons, agents or fiduciaries with respect to indemnification; and

 

WHEREAS, the Company acknowledges that the Indemnified Party is a third party beneficiary to the Merger Agreement and in recognition of and in addition to such indemnification the Company wishes to provide for the indemnification and advancing of expenses to the Indemnified Party to the maximum extent permitted by law.

 

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

Section 1.1     Defined Terms. Terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Merger Agreement.

 

Section 1.2     Directors’ and Officers’ Insurance and Indemnification.

 

(a)     From and after the Effective Time, Naphtha and Parent shall, and shall cause the Surviving Corporation to, and the Surviving Corporation shall, indemnify and hold harmless, and provide advancement of expenses to the Indemnified Party in respect of acts or omissions in their capacity as an officer or director of any of the Acquired Companies or any of their respective predecessors or as an officer, director, employee, fiduciary or agent of another enterprise if the Indemnified Party was serving in such capacity at the request of any of the Acquired Companies or any of their respective predecessors, in any case occurring at or prior to the Effective Time, to the fullest extent permitted by the DGCL or any other applicable Law or provided under the certificate of incorporation, bylaws, any indemnification agreements and any other governing documents of the Acquired Companies in effect on the date hereof. In the event of any threatened or pending claim, action, suit, arbitration, proceeding or investigation, whether civil, criminal, administrative or investigative and whether formal or informal (each, a “Proceeding”) to which an Indemnified Party is, has been or becomes a party or with respect to which an Indemnified Party is, has been or becomes otherwise involved (including as a witness), arising in whole or in part out of, or pertaining in whole or in part to, the fact that the Indemnified Party is or was an officer or director of any of the Acquired Companies or any of

 

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their respective predecessors or is or was serving at the request of any of the Acquired Companies or any of their respective predecessors as an officer, director, employee, fiduciary or agent of another enterprise (including any Proceeding arising out of or pertaining to matters occurring or existing or alleged to have occurred or existed, or acts or omissions occurring or alleged to have occurred, at or prior to the Effective Time, or arising out of or pertaining to the Merger Agreement and the transactions and actions contemplated hereby), (i) Naphtha and Parent shall, and shall cause the Surviving Corporation to, and the Surviving Corporation shall, advance fees, costs and expenses (including attorney’s fees and disbursements) incurred by each Indemnified Party in connection with and prior to the final disposition of such Proceedings, such fees, costs and expenses (including attorney’s fees and disbursements) to be advanced within 20 Business Days of receipt by Naphtha and Parent from the Indemnified Party of a request therefor, provided that such Indemnified Party delivers an undertaking to the Surviving Corporation, agreeing to repay such advanced fees, costs and expenses if it is determined by a court of competent jurisdiction in a final nonappealable Order that such Indemnified Party was not entitled to indemnification with respect to such fees, costs and expenses and (ii) none of Naphtha, Parent or the Surviving Corporation shall settle, compromise or consent to the entry of any judgment in any Proceeding in which indemnification could be sought by such Indemnified Party hereunder, unless such settlement, compromise or consent includes an unconditional release of such Indemnified Party from all liability arising out of such Proceeding or such Indemnified Party otherwise consents in writing. For clarity, the indemnification herein shall also pertain to any retentions or deductibles under the D&O Insurance. If any claim for indemnification is asserted or made by any Indemnified Party pursuant to this Section 1.2, any determination required to be made with respect to whether such Indemnified Party’s conduct complies with the standards under the DGCL, the certificate of incorporation of the Surviving Corporation or any Subsidiary, other applicable Law or any applicable indemnification agreement shall be made by independent legal counsel selected by such Indemnified Party that is reasonably acceptable to the Surviving Corporation. If any Proceeding is brought against any Indemnified Party in which indemnification could be sought by such Indemnified Party under this Section 1.2, (A) each Indemnified Party shall be entitled to retain his or her own counsel in connection with such Proceeding and (B) no Indemnified Party shall be liable for any settlement effected without his or her prior express written consent.

 

(b)     From and after the Effective Time, each of Naphtha and Parent shall cause to be maintained in effect all provisions in the Surviving Corporation’s certificate of incorporation and bylaws (or in such documents of any successor to the business of the Surviving Corporation) and in the certificate of incorporation, bylaws and other governing documents of the Company’s Subsidiaries regarding (i) elimination of liability of directors, (ii) indemnification of officers, directors and employees and (iii) advancement of expenses, in each case, that are no less advantageous to the intended beneficiaries than the corresponding provisions in existence on the date of the Merger Agreement.

 

(c)     Prior to the Effective Time, the Company will obtain and fully pay the premium for the non-cancellable extension of the directors’ and officers’ liability coverage of the Company’s existing directors’ and officers’ insurance policies and the Company’s existing fiduciary liability insurance policies, including any policies of Naphtha or Parent (or any Affiliate of Naphtha or Parent) that benefit the Company’s directors and officers (collectively, “D&O Insurance”), in each case for a claims reporting or discovery period ending seven years from and after the Effective Time with respect to any claim related to any period of time at or prior to the Effective Time, from an insurance carrier with the same or better credit rating as the Company’s (or the applicable policy holder’s) current insurance carrier with respect to D&O Insurance, with terms, conditions, retentions and limits of liability that are no less favorable to the Indemnified Parties than the coverage provided under the Company’s (or the applicable policy holder’s) existing policies with respect to any actual or alleged error, misstatement, misleading statement, act, omission, neglect, breach of duty or any matter claimed against a director or officer of any of the Acquired Companies by reason of him or her serving in such capacity that existed or occurred at or prior to the Effective Time (including in connection with the Merger Agreement or the Contemplated Transactions). If the Company does not obtain such “tail” insurance policies as of the Effective Time, the Surviving Corporation shall, and Naphtha and Parent shall cause the Surviving Corporation (or the applicable policy holder) to, continue to maintain in effect, for a period of at least seven years from and after the Effective Time, the D&O Insurance in place as of the date hereof with the Company’s (or the applicable policy holder’s) current insurance carrier or with an insurance carrier with the same or better credit rating as the Company’s (or the applicable policy holder’s) current insurance carrier with respect to D&O Insurance with terms, conditions, retentions and limits of liability that are no less favorable than the coverage provided under the Company’s (or the applicable policy holder’s) existing policies as of the date hereof, or the Surviving Corporation shall purchase from the Company’s (or the applicable policy holder’s) current insurance carrier or from an insurance carrier with the same or better credit rating as the Company’s (or the applicable policy holder’s) current insurance carrier with respect to D&O Insurance comparable D&O Insurance for such seven-year period with terms, conditions, retentions and limits of liability that are no less favorable to the Indemnified Parties than as provided in the Company’s (or the applicable policy holder’s) existing policies as of the date hereof. At all times prior to the Effective Time, the

 

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Company and any Purchaser Party that is the policy holder of D&O Insurance shall maintain (or renew as necessary) such D&O Insurance policies as were in effect as of the date of the Merger Agreement.

 

(d)     If Naphtha, Parent, the Surviving Corporation or any of their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, to the extent necessary, proper provision shall be made so that the successors and assigns of Naphtha, Parent or the Surviving Corporation, as the case may be, shall assume the obligations set forth in this Section 1.2.

 

(e)     The provisions of this Section 1.2 shall survive consummation of the Merger and are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party referred to in this Section 1.2 and his or her heirs and representatives, and are in addition to, and not in substitution for, any other rights that any such person may have under the certificate of incorporation, bylaws or other governing documents of any of the Acquired Companies, under the DGCL or any other applicable Law or under any agreement of any Indemnified Party with any of the Acquired Companies or otherwise.

 

Section 1.3     Nonexclusivity. The indemnification provided by this Agreement shall be in addition to any rights to which the Indemnified Party may be entitled under the Certificate, the Bylaws, any agreement, any vote of stockholders or disinterested directors, the DGCL, or otherwise. The indemnification provided under this Agreement shall continue as to the Indemnified Party for any action the Indemnified Party took or did not take while serving in an indemnified capacity even though the Indemnified Party may have ceased to serve in such capacity.

 

Section 1.4     Amendment of this Agreement. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by each of the parties hereto. No waiver of any of the provisions of this Agreement shall be binding unless in the form of a writing signed by the party against whom enforcement of the waiver is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.

 

Section 1.5     Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, and personal and legal representatives.      

 

Section 1.6     Severability. Each party hereto agrees that, should any court or other competent authority hold any provision of this Agreement or part of this Agreement to be null, void or unenforceable, or order any party to take any action inconsistent herewith or not to take an action consistent with the terms of, or required by, this Agreement, the validity, legality and enforceability of the remaining provisions and obligations contained or set forth in this Agreement shall not in any way be affected or impaired, unless the foregoing inconsistent action or the failure to take an action constitutes a material breach of this Agreement or makes this Agreement impossible to perform, in which case this Agreement shall terminate.

 

Section 1.7     Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such State without giving effect to its principles of conflicts of laws.

 

Section 1.8     Counterparts. This Agreement may be executed in counterparts, including via facsimile or email in “portable document format” (“.pdf”) form transmission, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

 

[Signature Page Follows]

 

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date first written above.

 

 

 

ISRAMCO, INC.

 

By:                                                           

Name: Edy Francis

Title:    Co-Chief Executive Officer/Chief Financial Officer

 

NAPHTHA ISRAEL PETROLEUM CORPORATION LTD.

 

By:                                                            

Name:

Title:

 

 

NAPHTHA HOLDING LTD.

 

By:                                                            

Name:

Title:

 

 

I.O.C. - ISRAEL OIL COMPANY, LTD.

 

By:                                                            

Name:

Title:

 

 

NAPHTHA US OIL, INC.

 

By:                                                            

Name:

Title:

 

 

 

 

 

[Signature Page to Indemnification Agreement]

 

 

 

 

INDEMNIFIED PARTY: 

 

By:                                                             

Name:

Title: Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Indemnification Agreement]Exhibit

Exhibit 10.1

Windstream Holdings Inc.
2019 KEY EMPLOYEE INCENTIVE PLAN
1.Purpose. This Windstream Holdings Inc. (the “Company”) 2019 Key Employee Incentive Plan (the “Plan”) is designed to align the interests of the Company and eligible key employees of the Company and its subsidiaries.

2.Adoption of the Plan. The Company, intending to be legally bound, hereby adopts the Plan effective as of the date on which the Plan is approved by the bankruptcy court for the Southern District of New York (the “Effective Date”). The Plan shall be in effect from the Effective Date and shall continue until December 31, 2019, unless earlier terminated by the Company in accordance with Section 8(e) (the “Term”). The expiration or termination of the Term shall not in any event reduce or adversely affect (a) any amounts due to any Participant hereunder for any Performance Period ending on or before such date or (b) the Company’s rights under Section 6(e) and Section 8. 

3.General. The compensation provided under the Plan is intended to be in addition to all other compensation payable to Participants under any employment agreement in effect with the Company or its direct or indirect subsidiaries.

4.Definitions. For purposes of the Plan: 

(a)“Board” means the Company’s Board of Directors.

(b)“Bonus” shall mean the bonus payment payable to a Participant under the Plan for the applicable Performance Period. 

(c)“Cause” means “Cause” as defined in any employment, change-in-control or severance agreement between the Participant and the Company or any of its subsidiaries or in any severance plan of the Company or any of its subsidiaries in which the Participant participates, or, if no such agreement or plan exists or such term is not defined therein, “Cause” means the Participant has (i) been convicted of, or pleaded no contest to, a felony, (ii) engaged in conduct which is materially injurious to the Company (including, without limitation, misuse of any funds or other property), (iii) engaged in gross negligence or willful misconduct in the performance of the Participant’s duties for the Company or (iv) willfully refused without proper legal reason to perform the Participant’s duties for the Company after written request for such performance. For purposes of this definition, no act or failure to act will be deemed “willful” unless effected by the Participant not in good faith and without a reasonable belief that his or her action or failure to act was in, or not opposed to, the best interests of the Company or any of its Affiliates.

(d)“Committee” means the Compensation Committee of the Board.

(e)“Company Group” means the Company and its direct and indirect subsidiaries.

(f)“Disability” means “Disability” as defined in any employment, change-in-control or severance agreement between the Participant and the Company or any of its subsidiaries or in any severance plan of the Company or any of its subsidiaries in which the Participant participates, or, if no such agreement or plan exists or such term is not defined therein, “Disability” means a Participant’s inability to perform his or her services for the Company for (i) ninety (90) consecutive days or (ii) one hundred eighty (180) days in any three hundred sixty-five (365)-day period, in either case, due to the Participant’s mental or physical impairment.

(g)“Good Leaver” means a Participant whose employment or service with the Company Group is terminated (i) by the Company for a reason other than Cause, (ii) by the Participant for Good Reason or (iii) due to the Participant’s death or Disability.

(h)“Good Reason” means “Good Reason” as defined in any employment, change-in-control or severance agreement between the Participant and the Company or any of its subsidiaries or in any severance plan of the Company or any of its subsidiaries in which the Participant participates, or, if no such agreement or plan exists or such term is not defined therein, “Good Reason” means any of following, in each case, without the Participant’s written consent: (i) a material breach by Company of any material provision of any material written agreement between the Participant and the Company, (ii) any material diminution in the Participant’s base salary or Target Bonus under this Plan, (iii) any material diminution in the Participant’s authority, duties or responsibilities, or (iv) the Company requiring the Participant to relocate to a primary place of employment that is located more than fifty (50) miles from the Participant’s previous primary place of employment; provided that, prior to the Participant’s 

termination of employment for Good Reason, the Participant must give written notice to the Company of any Good Reason event within thirty (30) days after the Participant has actual knowledge of the facts or circumstances giving rise thereto and such event must remain uncorrected for thirty (30) days following such written notice.  Any termination for “Good Reason” following such thirty (30)-day cure period must occur within thirty (30) days of the expiration of such cure period. 

(i)“Participant” shall have the meaning ascribed thereto in Section 5 hereof. 

(j)“Participation Agreement” means the agreement or notification provided to a Participant granting the Participant the opportunity to earn a Bonus under the Plan. 

(k)“Performance Goals” means the goals established by the Committee for each Performance Period with respect to each of the Performance Metrics, which will be consist of: (i) Threshold Goals, (ii) Target Goals and (iii) Maximum Goals ((i) through (iii), collectively, the “Base Performance Goals”).  For purposes of the catch-up payments described in Section 6(b), “Performance Goals” will consist of: (i) Cumulative Threshold Goals, (ii) Cumulative Target Goals and (iii) Cumulative Maximum Goals ((i) through (iii), collectively, the “Cumulative Performance Goals”). 

(l)“Performance Metric” means the specific performance criteria with respect to which Performance Goals were established for the Performance Period; provided that each Performance Metric shall be adjusted on a pro forma basis to take into account any acquisitions or dispositions consummated during the Performance Period. To the extent relevant, the Performance Metrics shall be adjusted on a pro forma basis to exclude costs and benefits associated with the Company’s restructuring.

(m)“Performance Period” means each of (i) January 1, 2019 through June 30, 2019 (“1H 2019”); (ii) July 1, 2019 through September 30, 2019 (“3Q 2019”); and (iii) October 1, 2019 through December 31, 2019 (“4Q 2019”). 

(n)“Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended. 

(o)“Target Bonus” means the target bonus specified in the Participant’s Participation Agreement for the applicable Performance Period. 

5.Eligible Participants. Each person designated by the Committee from time to time shall be a Participant under the Plan and eligible to receive a Bonus with respect to each Performance Period.

6.Term of Participation. 

(a)Performance Period Measurement.  Subject to the provisions of the Plan and any Participation Agreement, each Participant shall earn a Bonus as of the end of each Performance Period, depending upon the extent to which the Base Performance Goals have been achieved for such Performance Period.

(b)Cumulative Measurement.  In addition to the measurement of achievement of Base Performance Goals under Section 6(a), achievement of the Cumulative Performance Goals shall be measured at the end of 2019; and a “catch-up” payment will be made to the extent the Company achieves the Cumulative Performance Goals for 2019.  The amount of the catch-up payment will be equal to the excess of (i) the Bonus payable for 2019 based on the achievement of the applicable Cumulative Performance Goals for 2019, over (ii) the sum of the aggregate amount of Bonuses earned and paid or payable to the Participant for 1H 2019, 3Q 2019, and 4Q 2019.

(c)Performance Metrics; Performance Goals; and Calculation of Bonus Payouts. 
 
(i)Exhibit A sets forth: (A) the Performance Metrics applicable to the Performance Periods and (B) the percentage of a Participant’s Target Bonus payable upon achievement of the applicable Performance Goals for a given Performance Metric.  The Performance Goals for each Performance Metric for each Performance Period will be set forth in each Participant’s Participation Agreement. 
  
(ii)The amount of a Participant’s Bonus shall be based on: (A) the Participant’s Target Bonus that has been approved by the Committee and included in the Participant’s Participation Agreement and (B) the level of achievement of the applicable Performance Goals for the Performance Metrics for a particular Performance Period.
  
(d)Continued Employment.  Except as set forth below, to earn a Bonus for any Performance Period, a Participant must remain employed by the Company Group through the date on which the Bonus for the applicable Performance 

Period is paid (the “Vesting Date”).  Except as set forth in this Section 6(d), a Participant whose employment with the Company Group terminates for any reason before the Vesting Date shall forfeit the right to any Bonus for that Performance Period.  Notwithstanding the foregoing, a Participant who becomes a Good Leaver during a Performance Period shall be entitled to: (i) payment of 100% of his or her Deferred Bonus(es) (as defined in Section 7 hereof) within fifteen (15) days of his or her termination date and (ii) a pro-rata portion (based on the percentage of the Performance Period the Participant was engaged by the Company Group) of the Participant’s Bonus that would otherwise have been earned for such Performance Period, paid in full (without deferral of any portion) at the applicable time specified in Section 7. 

(e)Clawback.  If a Participant’s employment with the Company Group terminates before December 31, 2019 (other than in a Good Leaver termination), the Participant will be required to repay, within ten (10) days of such termination, the After-Tax Value of the Excess Bonuses, if any, to the Company.  For this purpose, (i) “Excess Bonuses” means the sum of the Bonus paid to the Participant for each Performance Period in excess of the Participant’s Target Bonus for that Performance Period; and (ii) “After-Tax Value” of the Excess Bonuses means (A) the Excess Bonuses reduced by (B) the amount of payroll or income taxes actually withheld from such Excess Bonuses.  By way of example, if a Participant’s Target Bonus for each Performance Period was $100 and the Participant was paid $150 for Period 1, $90 for Period 2 and $125 for Period 3, the Participant’s Excess Bonuses would be $75 ($50 for Period 1, $0 for Period 2 and $25 for Period 3).
    
7.Performance Certification.  Promptly after the end of each Performance Period, the Committee shall certify the degree to which the applicable Performance Goals have been achieved and the amount of Bonus payable to each Participant hereunder.  In determining achievement of the Performance Goals, the Committee shall consider the Special Items (as defined and in the manner described in Item 3 of the Committee’s resolutions dated April 12, 2019).  Any Bonus required to be made under the Plan shall be paid on a fully-vested basis by the Company as soon as possible after the end of the applicable Performance Period, but in any event by (a) August 31, 2019 for 1H 2019; (b) November 30, 2019 for 3Q 2019; and (c) February 29, 2020 for 4Q 2019 and, if applicable, for 2019 pursuant to Section 6(b); provided that one-half of a Participant’s Bonus for the applicable Performance Period shall be payable on the earlier of (i) the date of the Company’s emergence from Chapter 11 bankruptcy proceedings and (ii) March 1, 2020 (the “Deferred Bonus”).

8.Plan Administration. The Plan shall be administered by the Committee. The Committee is given full authority and discretion within the limits of the Plan to establish such administrative measures as may be necessary to administer and attain the objectives of the Plan and may delegate the authority to administer the Plan to an officer of the Company. The Committee (or its delegate, as applicable) shall have full power and authority to construe and interpret the Plan and any interpretation by the Committee shall be binding on all Participants and shall be accorded the maximum deference permitted by law.

(a)All rights and interests of Participants under the Plan shall be non-assignable and nontransferable, and otherwise not subject to pledge or encumbrance, whether voluntary or involuntary, other than by will or by the laws of descent and distribution. In the event of any sale, transfer or other disposition of all or substantially all of the Company’s assets or business, whether by merger, stock sale, consolidation or otherwise, the Company may assign the Plan.

(b)Any payment to a Participant in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the Company Group related to the Plan, and the Company may require Participant, as a condition precedent to such payment, to execute a receipt and release to such effect.

(c)Payment of amounts due under the Plan shall be provided to Participant in the same manner as Participant receives his or her regular paycheck or by mail at the last known address of Participant in the possession of the Company, at the discretion of Committee. The Company may deduct all applicable taxes and any other withholdings required to be withheld with respect to the payment of any award pursuant to the Plan.

(d)The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to ensure the payment of any award provided for hereunder. Bonus payments shall not be considered as extraordinary, special incentive compensation, and it will not be included as “earnings,” “wages,” “salary,” or “compensation” in any pension, welfare, life insurance, or other employee benefit plan or arrangement of the Company Group.

(e)The Company, in its sole discretion, shall have the right to modify, supplement, suspend or terminate the Plan at any time; provided that, except as required by law, in no event shall any amendment or termination adversely affect the rights of Participants regarding any Bonus for a Performance Period that has commenced as of the date of such action without the prior written consent of the affected Participants; and provided, further, that in the event of a termination of the Plan partway through a Performance Period, each Participant shall be entitled to a pro-rata portion (based on the percentage of the Performance Period completed prior to the Plan termination date) of the Bonus that would otherwise have been earned for such Performance 

Period.  Subject to the foregoing, the Plan shall terminate upon the satisfaction of all obligations of the Company or its successor entities hereunder.

(f)Nothing contained in the Plan shall in any way affect the right and power of the Company to discharge any Participant or otherwise terminate his or her employment at any time or for any reason or to change the terms of his or her employment in any manner.

(g)Except as otherwise provided under the Plan, any expense incurred in administering the Plan shall be borne by the Company.

(h)Captions preceding the sections hereof are inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provision hereof.

(i)The administration of the Plan shall be governed by the laws of Arkansas, without regard to the conflict of law principles of any state. Any persons or corporations who now are or shall subsequently become parties to the Plan shall be deemed to consent to this provision.

(j)The Plan is intended to either comply with, or be exempt from, the requirements of Section 409A. To the extent that the Plan is not exempt from the requirements of Section 409A, the Plan is intended to comply with the requirements of Section 409A and shall be limited, construed and interpreted in accordance with such intent. Notwithstanding the foregoing, in no event whatsoever shall the Company be liable for any additional tax, interest, income inclusion or other penalty that may be imposed on a Participant by Section 409A or for damages for failing to comply with Section 409A.

* * * * * * * *

Exhibit A
Performance Metrics and Determination of Bonus Payouts
	
		
	1.  Payable if the Threshold Goal for a Performance
    Metric is Achieved:
	50% of the Applicable Portion of the Participant’s Target Bonus 

	2.  Payable if the Target Goal for a Performance
    Metric is Achieved:
	100% of the Applicable Portion of the Participant’s Target Bonus

	3.  Payable if the Maximum Goal for a Performance
    Metric is Achieved:
	200% of the Applicable Portion of the Participant’s Target Bonus, provided that the payable amount shall be 175% of the Applicable Portion of the Participant’s Target Bonus if the applicable Performance Metric is Adjusted OIBDAR

	4.  Payable if the Cumulative Threshold Goal for a
    Performance Metric is Achieved:
	50% of the Applicable Portion of the Participant’s aggregate Target Bonus for 2019 

	5.  Payable if the Cumulative Target Goal for a
    Performance Metric is Achieved:
	100% of the Applicable Portion of the Participant’s aggregate Target Bonus for 2019

	6.  Payable if the Cumulative Maximum Goal for a
    Performance Metric is Achieved:
	200% of the Applicable Portion of the Participant’s aggregate Target Bonus through for 2019, provided that the payable amount shall be 175% of the Applicable Portion of the Participant’s Target Bonus if the applicable Performance Metric is Adjusted OIBDAR

	7.  Portion of Applicable Portion Payable if
    Achievement is in Between Period or Cumulative
    Goals for a Performance Metric:
	The percentage of the Applicable Portion of the Participant’s Target Bonus will be calculated on the basis of straight-line interpolation for performance in between threshold, target and maximum performance goals

	
					
	 
	(i)
	Performance Metric:
	 
	Broad Company Performance

	 
	Applicable Portion of Target Bonus:
	60%

	 
	 
	 
	 
	 

	 
	(ii)
	Performance Metric:
	 
	Strategic Goals

	 
	Applicable Portion of Target Bonus:
	40%

WINDSTREAM HOLDINGS INC.
2019 KEY EMPLOYEE INCENTIVE PLAN
PARTICIPATION AGREEMENT

TO:    [NAME]
FROM:    [NAME]
DATE:    [DATE], 2019
		
	RE:
	Participation in the Windstream Holdings Inc. 2019 Key Employee Incentive Plan

We are pleased to advise you that you will be eligible to receive a Bonus payment pursuant to the Windstream Holdings Inc. (along with its subsidiaries, the "Company") 2019 Key Employee Incentive Plan (the “Plan”) for each Performance Period.  Terms used herein (in this “Participation Agreement”) with initial capital letters have the meanings set forth in the Plan, and this Participation Agreement shall be, in all respects, subject to the terms and conditions of the Plan.  A copy of the Plan as in effect of the date hereof has been furnished to you, and you agree to be bound by the terms and conditions of the Plan and this Participation Agreement.  In the event of any conflict between the terms and conditions of this Participation Agreement and the Plan, the terms and conditions of the Plan shall control.  
		
	1.
	Target Bonus.  Your Target Bonus for each Performance Period is $[•].  

		
	2.
	Performance Goals; Bonus Payable.  Your Bonus for each Performance Period, if any, is calculated by reference to your Target Bonus and will be earned (i) depending upon the extent to which the Performance Goals have been achieved for such Performance Period, as specified on Exhibit A, in accordance with the terms and conditions of the Plan, and (ii) only if you are employed by the Company on the date on which the Bonus for the applicable Performance Period is paid.  A "catch-up" payment may be made with respect to overall performance for 2019 to the extent the Company achieves or exceeds the Cumulative Performance Goals for 2019.  Except as described in Section 3 below, you will not earn the Bonus for the applicable Performance Period if your employment terminates for any reason before the payment date for such Performance Period. 

		
	3.
	Good Leaver.  Notwithstanding the foregoing, if you are a Good Leaver during a Performance Period, you will be entitled to a pro rata portion (based on the percentage of the Performance Period you were employed by or providing services to the Company) of the Bonus that you otherwise would have earned for such Performance Period. 

		
	4.
	Condition to Participation.  As a condition of your participation in the Plan, you hereby forfeit any and all short-term and long-term incentive awards previously granted to you in 2019, and you hereby acknowledge and agree that you will not participate in the Performance Incentive Compensation Plan or any other short-term or long-term incentive plan or program until further notice from the Company. 

Nothing contained in the Plan shall in any way affect the right and power of any member of the Company Group to discharge or otherwise terminate your employment at any time and for any or no reason.  Your rights under this Participation Agreement and any interest in or right to the Bonus payment, if any, may not be transferred or assigned by you, other than by will or by the laws of descent and distribution. The Company will deduct all applicable taxes and any other withholdings required to be withheld with respect to the payment of any Bonus pursuant to the Plan.
To the extent applicable, the Company intends for the Bonus payment for each Performance Period to either comply with, or be exempt from, the requirements of Section 409A.  To the extent that the Bonus payment for the applicable Performance Period is not exempt from the requirements of Section 409A, the Bonus payment is intended to comply with the requirements of Section 409A and shall be limited, construed and interpreted in accordance with such intent.  Notwithstanding the foregoing, in no event whatsoever shall any member of the Company Group be liable for any additional, tax, interest, income inclusion or other penalty that may be imposed on you by Section 409A or for damages for failing to comply with Section 409A.  

We greatly appreciate your contributions to the Company and look forward to working together with you towards the Company's future successes.  If you have any questions regarding this Participation Agreement, please contact the VP-Compensation & Benefits.  Please accept the terms and conditions of the Participation Agreement by signing as the Participant below.
	
					
	PARTICIPANT

	 
	 
	WINDSTREAM HOLDINGS, INC.

	 
	 
	 
	 
	 

	 
	 
	 
	By:
	 

	Name:
	 
	 
	Name:
	 

	 
	 
	 
	Its:
	 

	 
	 
	 
	 
	 

Exhibit A (will populate with above numbers)
	
					
	(i)
	Performance Metric:
	 
	Adjusted OIBDAR

	 
	Applicable Portion of Target Bonus:
	60%

	 
	 
	 
	 
	 

 	
				
	Performance Period:
	1H 2019
	3Q 2019
	4Q 2019

	Period Threshold Goal
	 
	 
	 

	Period Target Goal
	 
	 
	 

	Period Maximum Goal
	 
	 
	 

	 
	2019

	Cumulative Threshold Goal 
	 

	Cumulative Target Goal
	 

	Cumulative Maximum Goal
	 

	
					
	(ii)
	Performance Metric:
	 
	Enterprise Strategic Revenue

	 
	Applicable Portion of Target Bonus:
	20%

	 
	 
	 
	 
	 

	
				
	Performance Period:
	1H 2019
	3Q 2019
	4Q 2019

	Period Threshold Goal
	 
	 
	 

	Period Target Goal
	 
	 
	 

	Period Maximum Goal
	 
	 
	 

	 
	2019

	Cumulative Threshold Goal 
	 

	Cumulative Target Goal
	 

	Cumulative Maximum Goal
	 

	
					
	(iii)
	Performance Metric:
	 
	Net Broadband Adds

	 
	Applicable Portion of Target Bonus:
	20%

	 
	 
	 
	 
	 

	
				
	Performance Period:
	1H 2019
	3Q 2019
	4Q 2019

	Period Threshold Goal
	 
	 
	 

	Period Target Goal
	 
	 
	 

	Period Maximum Goal
	 
	 
	 

	 
	2019

	Cumulative Threshold Goal 
	 

	Cumulative Target Goal
	 

	Cumulative Maximum Goal
	 

Exhibit A1 
	
					
	(i)
	Performance Metric:
	 
	Enterprise & Wholesale Contribution Margin

	 
	Applicable Portion of Target Bonus:
	60%

	 
	 
	 
	 
	 

	
				
	Performance Period:
	1H 2019
	3Q 2019
	4Q 2019

	Period Threshold Goal
	 
	 
	 

	Period Target Goal
	 
	 
	 

	Period Maximum Goal
	 
	 
	 

	 
	2019

	Cumulative Threshold Goal 
	 

	Cumulative Target Goal
	 

	Cumulative Maximum Goal
	 

	
					
	(ii)
	Performance Metric:
	 
	Enterprise Strategic Revenue

	 
	Applicable Portion of Target Bonus:
	20%

	 
	 
	 
	 
	 

	
				
	Performance Period:
	1H 2019
	3Q 2019
	4Q 2019

	Period Threshold Goal
	 
	 
	 

	Period Target Goal
	 
	 
	 

	Period Maximum Goal
	 
	 
	 

	 
	2019

	Cumulative Threshold Goal 
	 

	Cumulative Target Goal
	 

	Cumulative Maximum Goal
	 

	
					
	(iii)
	Performance Metric:
	 
	Enterprise & Wholesale Revenue

	 
	Applicable Portion of Target Bonus:
	20%

	 
	 
	 
	 
	 

	
				
	Performance Period:
	1H 2019
	3Q 2019
	4Q 2019

	Period Threshold Goal
	 
	 
	 

	Period Target Goal
	 
	 
	 

	Period Maximum Goal
	 
	 
	 

	 
	2019

	Cumulative Threshold Goal 
	 

	Cumulative Target Goal
	 

	Cumulative Maximum Goal
	 

	
					
	 
	 
	 
	 
	 

1Note to Draft: For the President-Enterprise & Wholesale. 

Exhibit A2 
	
					
	(i)
	Performance Metric:
	 
	Kinetic Contribution Margin

	 
	Applicable Portion of Target Bonus:
	60%

	 
	 
	 
	 
	 

	
				
	Performance Period:
	1H 2019
	3Q 2019
	4Q 2019

	Period Threshold Goal
	 
	 
	 

	Period Target Goal
	 
	 
	 

	Period Maximum Goal
	 
	 
	 

	 
	2019

	Cumulative Threshold Goal 
	 

	Cumulative Target Goal
	 

	Cumulative Maximum Goal
	 

	
					
	(ii)
	Performance Metric:
	 
	SMB Revenue

	 
	Applicable Portion of Target Bonus:
	20%

	 
	 
	 
	 
	 

	
				
	Performance Period:
	1H 2019
	3Q 2019
	4Q 2019

	Period Threshold Goal
	 
	 
	 

	Period Target Goal
	 
	 
	 

	Period Maximum Goal
	 
	 
	 

	 
	2019

	Cumulative Threshold Goal 
	 

	Cumulative Target Goal
	 

	Cumulative Maximum Goal
	 

	
					
	(iii)
	Performance Metric:
	 
	Net Broadband Adds

	 
	Applicable Portion of Target Bonus:
	20%

	 
	 
	 
	 
	 

	
				
	Performance Period:
	1H 2019
	3Q 2019
	4Q 2019

	Period Threshold Goal
	 
	 
	 

	Period Target Goal
	 
	 
	 

	Period Maximum Goal
	 
	 
	 

	 
	 
	 
	 

	Cumulative Threshold Goal 
	N/A
	N/A
	 

	Cumulative Target Goal
	N/A
	N/A
	 

	Cumulative Maximum Goal
	N/A
	N/A
	 

	
					
	 
	 
	 
	 
	 

2 Note to Draft: For the President-Kinetic.

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