Document:

Exhibit

Exhibit 10.3

WINDSTREAM EXECUTIVE SEVERANCE PLAN

ARTICLE I
PURPOSE

The Windstream Executive Severance Plan (the “Plan”) was established effective as of September 1, 2017 (the “Effective Date”).  The purpose of the Plan is to provide severance benefits to certain eligible employees of Windstream Services, LLC, a Delaware limited liability company (the “Company”), who are terminated from employment in certain limited circumstances.  The Plan is intended to replace each existing offer letter, employment agreement and severance agreement between the Company and Participants (as defined below) regarding severance or Change in Control (as defined below) benefits. 

ARTICLE II
DEFINITIONS

For the purposes of the Plan the following definitions shall apply:

2.1    “Accrued Obligations” means the sum of (a) Participant’s Base Salary through the Date of Termination to the extent not already paid, (b) Participant’s business expenses that are reimbursable in accordance with the Company’s policies and for which Participant submits for reimbursement within thirty (30) calendar days following the Date of Termination, but have not been reimbursed by the Company as of the Date of Termination, and (c) Participant’s accrued, unused vacation time. 

2.2    “Affiliate” means any entity controlled by, controlling, or under common control with, the Company.   

2.3    “Annual Incentive Target” means Participant’s target annual incentive opportunity expressed as a percentage of Participant’s base salary.  Any “special” or other bonus arrangements are specifically excluded from this definition.  

2.4    “Base Salary” means Participant’s annual rate of base salary in effect immediately prior to the occurrence of the facts, circumstances or reasons giving rise to Participant’s termination of employment.

2.5    “Board” means the Board of Directors of the Corporation, as constituted from time to time.

2.6    “Business Combination” means the consummation of a reorganization, merger or consolidation or sale or other disposition of more than fifty percent (50%) of the assets of the Corporation.

2.7    “Cause” for termination by the Company of Participant’s employment shall mean the occurrence of any one of the following: (a) Participant’s substantial, willful failure or refusal to perform the duties or render the services reasonably assigned to Participant by the Company or any Affiliate other than resulting from Participant’s incapacity due to physical or mental illness,

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 (b) a conviction, guilty plea or plea of nolo contendere of Participant for any felony, (c) the willful engaging by Participant in misconduct that is demonstrably and materially injurious to the Company or any Affiliate, monetarily or otherwise, (d) a material violation by Participant of the corporate governance board guidelines or code of ethics of the Company or any Affiliate, (e) a material violation by Participant of the requirements of the Sarbanes-Oxley Act of 2002 or other federal or state securities law, rule or regulation, or (f) the repeated use of alcohol by Participant that materially interferes with his/her duties, the use of illegal drugs by Participant, or a violation by Participant of the drug and/or alcohol policies of the Company or any Affiliate.  No act or omission on Participant’s part shall be considered “willful” unless it is done or omitted in bad faith or without Participant’s reasonable belief that the action or omission was in the best interests of the Company.  Any purported termination for Cause that does not follow the notice provisions set forth in Section 2.22 shall be deemed a termination without Cause.

2.8    “Change in Control” means if at any time any of the following events shall have occurred: 

a.The acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of Voting Securities of the Corporation where such acquisition causes any such Person to own fifty percent (50%) or more of the combined voting power of the then outstanding Voting Securities; provided, however, that for purposes of this definition, any acquisition by any Person pursuant to a transaction that complies with clauses (i), (ii) and (iii) of subparagraph c. below shall not be deemed to result in a Change in Control;
 
b.Individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose appointment or election, or nomination for election by the Corporation’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;  

c.A Business Combination unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners of the outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, at least fifty percent (50%) of the outstanding shares of common stock and the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries), in substantially the same proportions as their ownership, immediately prior to such Business Combination of the outstanding Voting Securities, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, fifty percent (50%) or more of the outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the 

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outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were Incumbent Board members at the time of the execution of the initial agreement, or the action of the Board, providing for such Business Combination; or
 
d.    Approval by the stockholders of the Corporation of a complete liquidation or dissolution of the Corporation. 

2.9    “Change in Control Protection Period” means the period commencing on a Change in Control and ending on the second anniversary thereof.  

2.10    “CIC Restrictive Covenant Period” means the number of months specified in Participant’s Participation Notice.

2.11    “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended from time to time.

2.12    “Code” means the Internal Revenue Code of 1986, as amended from time to time.

2.13    “Company” means Windstream Services, LLC, and any successor to its business or assets, by operation of law or otherwise.

2.14    “Corporation” means Windstream Holdings, Inc.

2.15    “Date of Termination” means the effective date of Participant’s termination of employment with the Company or its Affiliates.  

2.16    “Disability” shall be deemed the reason for the termination by the Company of Participant’s employment if, as a result of Participant’s incapacity due to physical or mental illness, Participant has been absent from the full-time performance of Participant’s duties with the Company or an Affiliate for a period of six (6) consecutive months, the Company has given Participant a Notice of Termination for Disability, and within twenty (20) business days after the Notice of Termination is given, Participant has not returned to the full-time performance of Participant’s duties. Any purported termination for Disability that does not follow the notice provisions set forth in Section 2.22 shall be deemed not to be a termination for Disability.

2.17    “Eligible Employee” means an individual who is qualified and designated as such pursuant to Section 3.1 hereof.  

2.18    “Exchange Act” means the Securities Exchange Act of 1934, as amended.

2.19    “Good Reason” for termination by Participant of Participant’s employment means the occurrence on or after a Change in Control, without Participant’s express written consent, of any one of the following:

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a.a material adverse alteration in the nature or status of Participant’s authority, duties, or responsibilities from those in effect immediately prior to the Change in Control;

b.any reduction in Participant’s Base Salary;

c.a transfer of Participant’s principal place of employment to a location more than thirty-five (35) miles away from his/her principal place of employment immediately prior to the Change in Control; 

d.the failure by the Company to maintain Participant’s total compensation opportunity (i.e., base salary, short-term incentive, and long-term incentive) in the aggregate, as of the Effective Date or, if later, the date on which the Participant becomes eligible to participate in the Plan, or such higher compensation opportunity as determined by the Company from time to time, unless such compensation is changed by the Company as part of a change in the Company’s executive compensation program in a manner applied equally to similarly situated executives; 

e.the failure by the Company to continue to provide Participant with health, welfare and retirement benefits substantially similar, in the aggregate, to those enjoyed by Participant under the Company’s employee benefit plans in which Participant was participating, or the failure by the Company to provide Participant with the number of paid vacation days to which Participant is entitled in accordance with the Company’s normal vacation policy, unless such benefits are changed by the Benefits Committee of the Company as part of a change in the Company’s executive benefit program in a manner applied equally to similarly situated executives;

f.the failure by the Company to pay to Participant any portion of Participant’s current compensation, or to pay to Participant any deferred compensation under any deferred compensation program of the Company, within five (5) calendar days after the date the compensation is due (taking into account applicable restrictions under Section 409A or other applicable law) or to pay or reimburse Participant for any expenses incurred by him/her for required business travel; or

g.any failure by the Company to comply with and satisfy Section 9.4 of the Plan, other than an unintentional failure not occurring in bad faith which is remedied by the Company promptly after receipt of notice thereof given by Participant. 

An event described in Section 2.19(d) or (e) (including, but not limited to, a Company decision regarding a Participant’s total compensation opportunity or health, welfare and retirement benefits, but excluding a decision made as part of a change in the Company’s executive compensation or executive benefit program that is made in a manner applied equally to similarly situated executives) shall not constitute Good Reason if Participant consents to the event in writing. 

2.20    “Incumbent Board” means the individuals who, as of the Effective Date, constitute the Board.

2.21    “Notice of Occurrence of Good Reason” means the written notice of the occurrence of an event, which has become effective, that Participant believes to constitute Good Reason for 

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Participant to terminate his/her employment that is communicated in accordance with Section 9.2 of the Plan.

2.22    “Notice of Termination” means the written notice of termination of Participant’s employment that is communicated in accordance with Section 9.2 of the Plan.  If the Company terminates Participant for Cause or Disability, the Notice of Termination shall specify in reasonable detail the grounds for the termination for Cause or Disability.

2.23    “Outplacement Services” means outplacement services from a recognized outplacement service provider.

2.24    “Participant” means an Eligible Employee who meets the eligibility requirements and other conditions of Sections 3.1 and 3.2 hereof (including the timely execution and delivery of a Participation Notice), until such time as the Eligible Employee’s participation ceases in accordance with Section 3.3 hereof.    

2.25    “Participation Notice” means the notice provided to an employee of the Company that designates such individual as a Participant in the Plan and the terms and conditions of such individual’s participation in the Plan, which notice shall be substantially in the form set forth on Exhibit A. 

2.26    “Person” means any individual, entity or “group” within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act.

2.27    “Protection Period” has the meaning specified in Section 8.11(e).

2.28    “Section 409A” shall mean Section 409A of the Code and any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section 409A by the U.S. Department of Treasury or the Internal Revenue Service.

2.29    “Severance Multiplier” means the multiplier applicable to a Participant as stated in such Participant’s Participation Notice.

2.30    “Voting Securities” means the securities of the Corporation which entitle the owner or holder thereof to vote generally for the election of Corporation directors.

ARTICLE III
ELIGIBILITY FOR SEVERANCE PAYMENTS AND BENEFITS

3.1    Eligible Employees.  Eligibility to participate in the Plan shall be limited to those officers and key employees of the Company and its Affiliates who (a) are full-time employees, and (b) are designated as Eligible Employees by the Chief Executive Officer and the Chief Human Resources & Legal Officer of the Company, in their sole discretion, provided that in no event may an executive officer subject to the reporting requirements of Section 16 of the Exchange Act be 

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considered an Eligible Employee unless approved by the Compensation Committee of the Board of Directors of the Company.    

3.2    Participation.  As a condition to becoming a Participant and being entitled to the benefits and protections provided under the Plan, each Eligible Employee must execute and deliver a Participation Notice to the Company within thirty (30) calendar days after the Eligible Employee first receives the Participation Notice to be executed.

3.3    Duration of Participation.  An Eligible Employee participating in the Plan shall cease to be a Participant in the Plan if the Eligible Employee ceases to be employed by the Company or an Affiliate for any reason, unless such Eligible Employee is then entitled to a severance benefit as provided in Section 3.4 or 3.6 of the Plan.  Notwithstanding anything herein to the contrary, a Participant who is entitled to a severance benefit as provided in Section 3.4 or 3.6 of the Plan shall remain a Participant in the Plan until the amounts and benefits payable under the Plan have been paid or provided to Participant in full.  

3.4    Change in Control Protection Period.  If, during a Change in Control Protection Period, (a) the Company shall terminate a Participant’s employment other than for Cause, Disability or death, or (b) Participant shall terminate employment for Good Reason (after having complied with Section 3.5), then the Company shall provide the following benefits to Participant, in addition to the Accrued Obligations:

	
		
	Payment
	How Payment is Calculated

	Prorated Annual Incentive Target
	Product of:
(x) Participant’s Annual Incentive Target in effect immediately prior to the Change in Control or, if higher, on the Date of Termination, and 
(y) a fraction the numerator of which is the number of calendar days in the current fiscal year through the Date of Termination and the denominator of which is 365.  

The prorated Annual Incentive Target shall be paid in a single lump sum as soon as administratively practicable following the effective date of the release of claims agreement detailed in Section 3.7.  

	Incentive Compensation for Completed Fiscal Year
	Amount of any incentive compensation that has been allocated or awarded to  Participant for a completed fiscal year or other completed measuring period preceding the occurrence of the Date of Termination under any incentive compensation plan but has not yet been paid to Participant.

The incentive compensation under this provision shall be based on actual results and paid in a single lump sum at the time all other incentive compensation payments for the applicable measuring period are paid.

	Severance Pay
	Product of:
(x) Participant's Severance Multiplier, and
(y) the sum of (i) Participant's Base Salary in effect immediately prior to the Change in Control or, if higher, on the Date of Termination, plus

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	(ii) Participant’s Annual Incentive Target in effect immediately prior to the Change in Control or, if higher, on the Date of Termination.

The Severance Pay shall be paid in a single lump sum as soon as administratively practicable following the effective date of the release of claims agreement detailed in Section 3.7.  

	COBRA Premium
Subsidy
	The product of:
(x) Participant’s monthly premium for health and dental insurance continuation coverage for Participant and Participant’s family, if applicable, under COBRA, based on the monthly premium rate for such coverage in effect on the Date of Termination, and
(y) Participant’s CIC Restrictive Covenant Period

The COBRA Premium Subsidy shall be paid in a single lump sum as soon as administratively practicable following the effective date of the release of claims agreement detailed in Section 3.7.  

	Outplacement
	The Company shall, at its sole expense as incurred, make available to Participant Outplacement Services, provided that (i) the cost to the Company shall not exceed $25,000, and (ii) in no event shall the period during which the outplacement service expenses are incurred or the period during which the expenses are paid extend beyond twelve (12) months after Participant’s Date of Termination.

	Vested Benefits
	The Company shall pay to Participant all vested benefits or other amounts that Participant is otherwise entitled to receive under any plan, policy, practice, program, contract or agreement with the Company or any of its Affiliates in accordance with such plan, policy, practice, program, contract or agreement except as explicitly modified herein.

If (a) Participant is terminated by the Company without Cause, or an event constituting Good Reason occurs, following the public announcement of a definitive agreement that, when consummated, would constitute a Change in Control, and (b) such Change in Control is consummated, then the termination or event constituting Good Reason shall be deemed to occur within the Change in Control Protection Period, and Participant shall be entitled to the benefits described in this Section 3.4.

3.5    Any Participant claiming Good Reason to terminate his/her employment must provide the Company a Notice of Occurrence of Good Reason within ninety (90) calendar days after the occurrence of the event.  Unless the Company waives in writing its rights under this Section 3.5, failure for any reason to give Notice of Occurrence of Good Reason shall be deemed a waiver of the right to terminate employment for such Good Reason.  Following receipt of the Notice of Occurrence of Good Reason, the Company shall have a period of thirty (30) calendar days in which to cease and/or cure the event, circumstance, or conduct constituting Good Reason (the “Cure Period”).  If the event, circumstance, or conduct constituting Good Reason is ceased and/or cured within the Cure Period, Participant will not be entitled to severance payments and benefits with respect to such occurrence.  If the Company waives in writing its right to cure or does not cure the

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event, circumstance, or conduct constituting Good Reason within the Cure Period, Participant shall have thirty (30) days after the earlier of the receipt of the written waiver or end of the Cure Period to provide Notice of Termination to the Company in order to exercise the right to terminate employment for Good Reason with respect to such event, circumstance, or conduct. If Participant fails to deliver Notice of Termination within such time period, such failure shall be deemed a waiver of the right to terminate employment for Good Reason as a result of such event, circumstance, or conduct.  Following the Notice of Termination, the Company will have no opportunity to cure, and Participant will be entitled to severance payments and benefits under the Plan.  Participant’s actual termination date shall be determined in the sole discretion of the Company but no later than thirty (30) calendar days from the date of the Notice of Termination. Notwithstanding anything in this Plan to the contrary, in the event of any reduction in a Participant’s total compensation opportunity or employee benefits that would constitute Good Reason under Section 2.19, such reduction shall be disregarded for purposes of calculating amounts due to the Participant under Section 3.4 or 3.6.

3.6    Outside of Change in Control Protection Period.  If, other than during a Change in Control Protection Period, Participant’s employment is terminated by the Company for any reason other than Cause, Disability or death (but specifically excluding a resignation by Participant for any reason or no reason), then the Company shall provide the following benefits to Participant, in addition to the Accrued Obligations:

	
		
	Payment
	How Payment is Calculated

	Incentive Compensation for Completed Fiscal Year
	Amount of any incentive compensation that has been allocated or awarded to Participant for a completed fiscal year or other completed measuring period preceding the occurrence of the Date of Termination under any incentive compensation plan but has not yet been paid to Participant.

The incentive compensation under this provision shall be based on actual results and paid in a single lump sum at the time all other incentive compensation payments for the applicable measuring period are paid.

	Severance Pay
	Sum of:
(x)  Twelve (12) months of Participant’s Base Salary on the Date of Termination, and 
(y)  Annual Incentive Target in effect on the Date of Termination. 

The Severance Pay shall be paid in equal biweekly installments, with one installment being paid each regular pay day starting in the month following the effective date of the release of claims agreement detailed in Section 3.7.  

	COBRA Premium
Subsidy
	The product of:
(x) Participant’s monthly premium for health and dental insurance continuation coverage for Participant and Participant’s family, if applicable, under COBRA, based on the monthly premium rate for such coverage in effect on the Date of Termination, and
(y) Twelve (12).

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	The COBRA Premium Subsidy shall be paid in a single lump sum as soon as administratively practicable following the effective date of the release of claims agreement detailed in Section 3.7.  

	Outplacement
	The Company shall, at its sole expense as incurred, make available to Participant Outplacement Services, provided that (i) the cost to the Company shall not exceed $25,000, and (ii) in no event shall the period during which the outplacement service expenses are incurred or the period during which the expenses are paid, extend beyond twelve (12) months after Participant’s Date of Termination.

	Vested Benefits
	The Company shall pay to Participant all vested benefits or other amounts that Participant is otherwise entitled to receive under any plan, policy, practice, program, contract or agreement with the Company or any of its Affiliates in accordance with such plan, policy, practice, program, contract or agreement except as explicitly modified herein.

3.7    Release.  Notwithstanding anything contained herein to the contrary, the Company shall not be obligated to provide any benefits to a Participant under Section 3.4 or 3.6 hereof unless:  (a) Participant first executes no later than forty-five (45) calendar days after the Date of Termination a release of claims agreement in the form attached hereto as Exhibit B, with such changes as the Company may determine to be required or reasonably advisable in order to make the release enforceable and otherwise compliant with applicable law, (b) Participant does not revoke the release within seven (7) days after signature, and (c) the release becomes effective and irrevocable in accordance with its terms. If the combined release execution period and revocation period span two (2) calendar years, payments subject to the release will commence in the second calendar year.

3.8    Exclusive Severance Benefit.  Notwithstanding the foregoing provisions of this Article III, and except as specifically provided below, any severance payments or benefits received by a Participant pursuant to the Plan shall be in lieu of any benefits under the Windstream Severance Pay Plan or any other severance or reduction-in-force plan, program, policy, agreement or arrangement maintained by the Company or an Affiliate (not including an equity award agreement, retirement or deferred compensation plan or similar plan or agreement which may contain provisions operative on a termination of Participant’s employment or which may incidentally refer to accelerated vesting or accelerated payment upon a termination of employment) and in lieu of any severance or separation pay benefit that may be required under applicable law.  In no event shall a Participant be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Participant under any of the provisions of the Plan.

3.9    Tax Withholding.  The Company may withhold from all payments due to Participant (or his/her estate) hereunder all taxes which, by applicable federal, state, local or other law, are required to be withheld.

3.10    Coordination with WARN Act.  To the extent that the Company determines that Participant’s termination may be subject to the Worker Adjustment and Retraining Notification Act or any other similar federal, state or local law regarding mass employment separations (collectively, “WARN Act”), notwithstanding any other provision of the Plan, the Company shall 

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endeavor to comply with the WARN Act, to the extent applicable, by giving notice of the termination (“WARN Act Notice”) at least sixty (60) days in advance of the termination date.  The period between the WARN Act Notice date and the termination date is hereinafter referred to as “WARN Act Notice Period.”  The Company’s determination that a Participant may be subject to the WARN Act and/or any corresponding actions taken or statements made are not an admission or indication that any WARN Act or WARN Act obligations are applicable, triggered, invoked or owed and do not waive or otherwise hinder the Company’s ability to argue the WARN Act does not apply or to take other similar positions.

The Company may excuse Participant from work during all or part of the WARN Act Notice Period and provide Participant with a payment or payments intended to satisfy all or part of any potential WARN Act obligations, including those during the WARN Act Notice Period.  If this occurs, any benefit shall be reduced and offset by and may be coordinated with any payment(s) Participant receives during the WARN Act Notice Period After any offset/deduction, the Company will provide the remaining benefits (subject to the release requirement described in Section 3.7) to Participant.  

If Participant is not excused from work following the WARN Act Notice date, the regular salary or wages paid to Participant during the WARN Act Notice Period will constitute Participant’s usual compensation and not a benefit under the Plan. 

3.11    Payment After Participant’s Death.  If Participant dies after all conditions to receive benefits under Section 3.4 or 3.6 have been satisfied, any amount not yet paid to Participant under the Plan (other than amounts which, by their terms, terminate upon the death of Participant) shall be paid in accordance with the terms of the Plan to the executors, personal representatives, or administrators of Participant’s estate.

3.12    No Duplication. In no event shall payments in accordance with this Plan be made in respect of more than one of Section 3.4 or 3.6.
    
ARTICLE IV
TAX INFORMATION

4.1    IRS Code Section 280G.

a.For the purposes of this Section 4.1, the following definitions apply:

i.“Accounting Firm” means an independent, certified public accounting firm with recognized specialization and expertise in the valuation of change-in-control severance benefits and the tax calculations required by this Section, designated by the Company prior to a Change in Control; however, if the Accounting Firm is not willing or able to value the restrictive covenants in Article VIII (or in the release of claims agreement in the form attached hereto as Exhibit B), then the restrictive covenants shall be valued by an independent third-party valuation specialist selected by the Company prior to a Change in Control.

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ii.“Excise Tax” means the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.

iii.“Net After-Tax Benefit” means the aggregate Value of all Payments to Participant, net of all taxes imposed on Participant with respect thereto under Sections 1 and 4999 of the Code and under applicable state and local laws, as determined by the Accounting Firm after considering any value attributable to the restrictive covenants in Article VIII (or in the release of claims agreement in the form attached hereto as Exhibit B) that is treated as reasonable compensation described in Section 280G(b)(4) of the Code.

iv.“Payment” shall mean any payment or distribution by the Company in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of Participant that is contingent on a Change in Control, whether paid or payable or distributed or distributable pursuant to the terms of the Plan or otherwise.

v.“Reduced Amount” means the greatest amount of Payments that can be paid to Participant that would not result in the imposition of the Excise Tax upon Participant if the Accounting Firm determines to reduce Payments to Participant pursuant to this Section 4.1, after considering any value attributable to the restrictive covenants in Article VIII (or in the release of claims agreement in the form attached hereto as Exhibit B) that is treated as reasonable compensation described in Section 280G(b)(4) of the Code.

vi.“Value” of a Payment means the economic present value of a Payment as of the date of the Change in Control (or such other date as required pursuant to Section 280G), as determined by the Accounting Firm pursuant to Section 280G of the Code using the discount rate required by Section 280G(d)(4) of the Code.

b.If the Accounting Firm determines that any Payment to Participant would be subject to the Excise Tax, the Accounting Firm shall determine whether to reduce the aggregate amount of the Payments payable to Participant to the Reduced Amount.  The Payments shall be reduced to the Reduced Amount only if the Accounting Firm determines that Participant would have a greater Net After-Tax Benefit if Participant’s Payments were reduced to the Reduced Amount.  If, instead, the Accounting Firm determines that Participant would have a greater Net After-Tax Benefit if Participant’s Payments were not reduced to the Reduced Amount, Participant shall receive all Payments to which Participant is entitled under the Plan.  

c.If the Accounting Firm determines that the aggregate Payments otherwise payable to Participant should be reduced to the Reduced Amount pursuant to this Section 4.1, the Company shall promptly give Participant notice to that effect and a copy of the detailed calculation thereof.  All determinations made by the Accounting Firm under this Section 4.1 shall be binding upon the Company and Participant and shall be made within thirty (30) business days after a termination of Participant’s employment or such earlier date as requested by the Company.  The reduction of Participant’s Payments to the Reduced Amount, if applicable, shall be made by reducing the

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Payments detailed in Section 3.4 (and no other Payments) in the following order: (i) Severance Pay, (ii) Prorated Annual Incentive Target, (iii) COBRA Premium Subsidy, and (iv) Outplacement Services.  All fees and expenses of the Accounting Firm pursuant to this Section 4.1 shall be borne solely by the Company.  

4.2    IRS Code Section 409A.

a.Section 409A imposes payment restrictions on “nonqualified deferred compensation” (potentially including payments owed to a Participant upon termination of employment).  Failure to comply with these restrictions could result in negative tax consequences to a Participant, including immediate taxation, interest and a 20% additional income tax.  It is the Company’s intent that the Plan be exempt from the application of, or otherwise comply with, the requirements of Section 409A.  Specifically, any taxable benefits or payments provided under the Plan are intended to be separate payments that qualify for the “short-term deferral” exception to Section 409A to the maximum extent possible and, to the extent they do not so qualify, are intended to qualify for the separation pay exceptions to Section 409A to the maximum extent possible.  To the extent that none of these exceptions applies, and to the extent that the Company determines it is necessary to comply with Section 409A (e.g., if Participant is a “specified employee” within the meaning of Section 409A), then notwithstanding any provision in the Plan to the contrary, all amounts that would otherwise be paid or provided to such Participant during the first six (6) months following the Date of Termination shall instead be accumulated through and paid or provided (without interest) on the first business day that is more than six (6) months after Participant’s separation from service.  

b.A termination of employment shall not be deemed to have occurred for purposes of any provision of the Plan providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and Participant is no longer providing services (at a level that would preclude the occurrence of a “separation from service” within the meaning of Section 409A) to the Company or its Affiliates as an employee or consultant, and for purposes of any such provision of the Plan, references to the “Date of Termination,” a “termination,” “termination of employment” or like terms shall mean “separation from service” within the meaning of Section 409A. 

c.Whenever a payment under the Plan specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company.  In the event the payment period under the Plan for any nonqualified deferred compensation commences in one calendar year and ends in a second calendar year, the payments shall not be paid (or installments commenced) until the later of the first payroll date of the second calendar year, or the date that the release described in Section 3.7 becomes effective and irrevocable, to the extent necessary to comply with Section 409A.  For purposes of Section 409A, a Participant’s right to receive installment payments pursuant to the Plan shall be treated as a right to receive a series of separate and distinct payments.

d.Although the Company will use its best efforts to avoid the imposition of taxation, interest and penalties under Section 409A, the tax treatment of the benefits provided under the 

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Plan is not warranted or guaranteed.  Neither the Company, its Affiliates nor their respective directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by a Participant (or any other individual claiming a benefit through Participant) as a result of the Plan.

ARTICLE V
PLAN ADMINISTRATION

5.1    The Plan shall be administered by the Benefits Committee (the “Committee”) of the Company.  The Committee shall be the plan administrator for purposes of ERISA.

5.2    The Committee shall be a fiduciary under ERISA, having all powers expressly conferred upon it under the Plan and such other powers as are reasonably necessary to carry out expressed powers, authority and duties.  The Committee shall have the discretionary power and authority to interpret and construe the provisions of the Plan and to make factual determinations in deciding whether a claimant (defined below) is entitled to benefits under the Plan.  Benefits under the Plan shall be paid only if the Committee decides in its discretion that the claimant is entitled to benefits under the Plan.  The Committee shall have the maximum discretion permitted under law to interpret the Plan, and all decisions of the Committee shall be final and binding on all interested parties. 

5.3    Committee action shall be taken only with majority approval, which may be expressed by a vote at a meeting of the Committee or in writing without a meeting.

5.4    The Company shall indemnify any officer, director or employee of the Company to whom any power, authority or responsibility is allocated or delegated under the Plan for any liability actually and reasonably incurred with respect to the exercise or failure to exercise such power, authority or responsibility, unless such liability results from such person’s own gross negligence or willful misconduct.

5.5    Any person who thinks that he/she is entitled to receive a benefit under the Plan (the “claimant”) shall make application in writing on the form and in the manner prescribed by the Committee.  If any claim for benefits filed by a claimant is denied in whole or in part, the Committee shall issue a written notice of such adverse benefit determination to the claimant.  The notice shall be issued to the claimant within a reasonable period of time but in no event later than ninety (90) calendar days from the date the claim for benefits was filed.  The notice issued by the Committee shall be written in a manner calculated to be understood by the claimant and shall include the following:

a.the specific reason or reasons for any adverse benefit determination;

b.the specific Plan provisions on which any adverse benefit determination is based;

c.a description of any further material or information that is necessary for the claimant to perfect his/her claim and an explanation of why the material or information is needed; and

13

d.an explanation of the Plan’s claim review procedure and time limits applicable to the Plan’s claim review procedures, including a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review.

The Committee, as Plan administrator, shall comply with the additional requirements prescribed by DOL Reg. 2560.503‐1 for claims, including a determination of disability.

5.6    If the Committee denies a claim for benefits in whole or in part, or the claim is otherwise deemed to have been denied, the claimant or his/her duly authorized representative may submit to the Committee a written request for review of the claim denial within sixty (60) calendar days after the receipt of the notice of adverse benefit determination, which request shall contain the following information:

a.the date on which the claimant’s request was filed with the Committee; provided, however, that the date on which the claimant’s request for review was in fact filed with the Committee shall control in the event that the date of the actual filing is later than the date stated by the claimant pursuant to this paragraph (a);

b.the specific portions of the adverse benefit determination which the claimant requests the Committee to review;

c.a statement by the claimant setting forth the basis upon which he/she believes the Committee should reverse the previous adverse benefit determination and accept his/her claim as made; and

d.any written material (offered as exhibits) which the claimant desires the Committee to examine in its consideration of his/her position as stated pursuant to paragraph (c).

The claimant or his/her duly authorized representative may:

i.submit written comments, documents, records and other information relating to the claim for benefits; and

ii.review pertinent documents, including, upon request in the manner and form prescribed by the Committee and free of charge, being provided reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits.

The review by the Committee shall consider all comments, documents, records and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.  The Committee shall furnish a written decision on review not later than sixty (60) calendar days after receipt of the written request for review of the adverse benefit determination, unless special circumstances require an extension of the time for processing the appeal.  If an extension of time for review is 

14

required because of special circumstances, written notice of the extension shall be furnished to the claimant prior to the commencement of the extension, and the Committee shall furnish a written decision on review not later than one hundred and twenty (120) calendar days after receipt of the written request for review of the adverse benefit determination.  The decision on review shall be in writing, shall be written in a manner calculated to be understood by the claimant, and, in the case of an adverse benefit determination on review, shall include (a) specific reasons for the adverse benefit determination, (b) references to the specific Plan provisions on which the decision is based, (c) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits, (d) a statement that there is no voluntary appeal procedure offered by the Plan, and (e) a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review.

The Committee shall comply with the additional requirements prescribed by DOL Reg. 2560.503‐1 for review of claims, including a determination of disability.

5.7    Notwithstanding anything to the contrary in the Plan, completion of the claims review procedures described in this Article shall be a condition precedent to the commencement of any external proceeding in connection with a claim for Plan benefits by a claimant or by any other person or entity claiming rights individually or through a claimant.  Any suit or legal action initiated by a claimant must be brought by the claimant no later than one (1) year following a final decision on the claim under these claims procedures.  The one (1) year statute of limitations on suits for benefits shall apply in any forum where a claimant initiates such suit or legal action.  If a civil action is not filed within this period, the claimant’s claim will be deemed permanently waived and abandoned, and the claimant will be precluded from reasserting it.

ARTICLE VI
PLAN FUNDING

6.1    Benefits shall be paid solely out of the general assets of the Company.  No Participant contributions are required or accepted.

6.2    All costs and expenses of Plan administration shall be paid by the Company.

ARTICLE VII
PLAN AMENDMENT AND TERMINATION

7.1    Prior to the consummation of a Change in Control, the Company shall have the power to amend or terminate the Plan from time to time in its discretion and for any reason (or no reason) (including the removal of an individual as a Participant by the Chief Executive Officer and the Chief Human Resources & Legal Officer of the Company), provided that no such amendment or termination shall be effective with respect to a termination of employment that occurred prior to the amendment or termination of the Plan.  Notwithstanding the foregoing, during a Change in Control Protection Period, no amendment or termination of the Plan shall impair any rights or obligations to any Participant under the Plan (including the removal of an individual as a Participant) unless such Participant expressly consents to such amendment or termination.

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ARTICLE VIII
RESTRICTIVE COVENANTS

8.1    Confidentiality.  By signing the Participation Notice, during Participant’s employment and after the Date of Termination, Participant agrees to keep secret and confidential, and not to use or disclose to any third parties, except as directly required for Participant to perform Participant’s responsibilities for the Company, any of the Company’s Confidential Information (as defined in Section 8.11 below) acquired by Participant in connection with, Participant’s employment with the Company.  Participant acknowledges that the Confidential Information is the exclusive property of the Company.  Upon termination of Participant’s employment with the Company, for any reason, or at the request of the Company at any time, Participant shall promptly return to the Company all property then in Participant’s possession, custody or control belonging to the Company, including all Confidential Information.  Participant shall not retain any copies of correspondence, memoranda, reports, notebooks, drawings, photographs or other documents in any form whatsoever (including information contained in computer or other electronic memory or on any computer or electronic storage device) relating in any way to the affairs of the Company and which were entrusted to Participant or obtained by Participant at any time during employment with the Company.   
8.2    Customer Nonsolicitation.  By signing the Participation Notice, Participant agrees that, during employment with the Company and thereafter during the Protection Period (as defined in Section 8.11 below), Participant will not, directly or indirectly (in a capacity where Participant could use specialized knowledge, training, skill or expertise, Confidential Information, or customer contacts or information obtained from the Company to the detriment of the Company): (i) solicit, attempt to solicit, call on, or accept business from any Customer (as defined in Section 8.11 below) or (ii) in any manner cause or attempt to cause any Customer to divert, terminate, limit, modify or fail to enter into any existing or potential business relationship with the Company.  
8.3    Employee Nonsolicitation.  By signing the Participation Notice, Participant agrees that, during employment with the Company and thereafter during the Protection Period, Participant will not directly or indirectly engage, solicit, hire, attempt to hire, or encourage any current employee or former employee (limited to former employees whose employment has been terminated or concluded for less than six (6) months) of the Company to leave or terminate his/her employment relationship with the Company.
8.4    Noncompetition.  By signing the Participation Notice, Participant agrees that, if he/she receives benefits under the Plan pursuant to Section 3.4 or 3.6, he/she will comply with the noncompetition covenant outlined in Addendum 1 to the Plan.  
8.5    Divisible Provisions.  The individual terms and provisions of this Article VIII are intended to be separate and divisible provisions and if, for any reason, any one or more of them is held to be invalid or unenforceable, neither the validity nor the enforceability of any other provision of this Article VIII shall thereby be affected.  It is the intention of Participant and the Company that the potential restrictions on Participant’s solicitation and future employment imposed by this Article VIII be reasonable in both duration and geographic scope and in all other respects.  If for any reason any court of competent jurisdiction shall find any provisions of this Article VIII 

16

unreasonable in duration or geographic scope or otherwise, Participant and the Company agree that the restrictions and prohibitions contained herein may be modified by a court of competent jurisdiction and shall be effective to the fullest extent allowed under applicable law in such jurisdiction.
8.6    Injunctive Relief and Remedies.  In the event of a breach or threatened breach of any of Participant’s duties and obligations under this Article VIII, the Company shall be entitled, in addition to any other legal or equitable remedies it may have in connection therewith (including any right to damages it may suffer), to (a) temporary, preliminary and permanent injunctive relief restraining such breach or threatened breach, (b) cease making payments or providing benefits under Section 3.4 or 3.6 of the Plan (other than the Accrued Obligations and Vested Benefits), and (c) any other relief obtainable through statutory or common‐law means (including, but not limited to, applicable trade secrets law).  By signing the Participation Notice, Participant expressly acknowledges that the harm that might result to the Company’s business as a result of any noncompliance by Participant with the provisions of this Article VIII would be irreparable.  By signing the Participation Notice, Participant specifically agrees that if there is a question as to the enforceability of any of the provisions of this Article VIII, Participant will not engage in any conduct inconsistent with or contrary to this Article VIII until after the question has been resolved by a final judgment of a court of competent jurisdiction.  The restrictions stated in this Article VIII are in addition to and not in lieu of protections afforded to trade secrets and confidential information under applicable law.  Nothing in this Article VIII is intended to or shall be interpreted as diminishing or otherwise limiting the Company’s right under applicable law to protect its trade secrets and confidential information.
8.7    Protected Activity.  Nothing contained in the Plan, or any other agreement, policy, practice, procedure, directive or instruction maintained by the Company shall prohibit Participant from reporting possible violations of federal, state or local laws or regulations to any federal, state or local governmental agency or commission (a “Government Agency”) or from making other disclosures that are protected under the whistleblower provisions of federal, state or local laws or regulations.  Participant does not need prior authorization of any kind to make any such reports or disclosures to any Government Agency and Participant is not required to notify the Company that Participant has made such reports or disclosures.  Nothing in the Plan limits any right Participant may have to receive a whistleblower award or bounty for information provided to any Government Agency.  By signing the Participation Notice, Participant acknowledges that the Company has informed Participant, in accordance with 18 U.S.C. § 1833(b), that Participant may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret where the disclosure: (a) is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law, or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
8.8    Notification.  To enable the Company to monitor Participant’s compliance with the obligations imposed by this Article VIII, by signing the Participation Notice, Participant agrees to inform the Company, during the Protection Period, of the identity of any subsequent employer and Participant’s new job title, prior to commencing employment or serving in a potential Prohibited Capacity (as defined in Section 8.11 below) with another entity.  Participant also agrees that he will disclose the existence of this Article VIII to any subsequent employer.  

17

8.9    Exclusion of Certain Stock Ownership.  Nothing in this Article VIII shall prohibit Participant from being (a) a stockholder in a mutual fund or a diversified investment company or (b) a passive owner of not more than 5% of the outstanding equity securities of any class of a corporation or other entity which is publicly traded, so long as Participant has no active participation in the business of such corporation or other entity.
8.10     Sufficient Consideration and Irreparable Damage.  Participant acknowledges that the covenants contained in this Article VIII are a principal inducement for the willingness of the Company to maintain the Plan and make the payments and provide the benefits to Participant under the Plan and that the Company and Participant intend the covenants (a) to be binding upon and enforceable against Participant in accordance with their terms, regardless of whether a Change in Control or a Payment Trigger occurs and notwithstanding any common or statutory law to the contrary and (b) to survive and continue in full force in accordance with their terms notwithstanding the termination of the Plan.  Participant agrees that the obligations of the Company under the Plan (specifically including, but not limited to, the obligation to make any payment or provide any benefit under Sections 3.4 and 3.6) constitute sufficient consideration for the covenants contained in this Article VIII.  The Company and Participant further agree that the restrictions contained in this Article VIII are reasonable in period, scope and geographical area and are necessary to protect the legitimate business interests and Confidential Information of the Company and its Affiliates.  Participant agrees that he/she will notify the Company and its Affiliates in writing if he/she has, or reasonably should have, any questions regarding the applicability of this Article VIII.  Because Participant’s services are unique and because Participant has access to Confidential Information, the parties agree that the Company and its Affiliates would be damaged irreparably in the event any of the provisions of this Article VIII were not performed in accordance with their specific terms or were otherwise breached and that money damages would be an inadequate remedy for any such nonperformance or breach.  In the event that Participant breaches or threatens to breach any such provision of this Article VIII, the parties agree that the Company and its Affiliates shall be entitled to seek any and all equitable and legal relief provided by law, specifically including immediate and permanent injunctive relief to prevent any breach or threatened breach of any of such provisions and to enforce such provisions specifically (without posting a bond or other security).  Participant hereby waives any claim that the Company or its Affiliates have an adequate remedy at law.  The parties agree that the foregoing relief shall not be construed to limit or otherwise restrict the ability of the Company and its Affiliates to pursue any other remedy provided by law, including the recovery of any actual, compensatory or punitive damages.
8.11    Definitions.  As used in this Article VIII, the following definitions shall apply:
a.    “Company” means the Company and its affiliates.
b.    “Confidential Information” means information pertaining to the business of the Company that is generally not known to or readily ascertainable to the industry in which the Company competes, and that gives or tends to give the Company a competitive advantage over persons who do not possess such information or the secrecy of which is otherwise of value to the Company in the conduct of its business regardless of when and by whom such information was  developed  or  acquired,  and  regardless  of  whether any  of these  are described in writing, copyrightable or considered copyrightable, patentable or considered patentable.  Confidential 

18

Information includes, but is not limited to, the Company’s trade secrets, information related to present and potential customers, vendors and suppliers (including, but not limited to, lists, contact information, requirements, contract terms, and pricing), methods of operations, research and development, product information, business technical information, including technical data, techniques, solutions, test methods, quality control systems, processes, design specifications, technical formulas, procedures and information, sales plans and strategies, pricing and profit information, financial information, marketing data, all agreements, schematics, manuals, studies, reports, and statistical information relating to the Company, all formulations, database files, information technology, strategic alliances, products, services, programs and processes used or sold, and all software licensed or developed by the Company, computer programs, systems and/or software, ideas, inventions, business information, know-how, improvements, designs, redesigns, creations, discoveries and developments of the Company.  Confidential Information includes all forms of the information, whether oral, written or contained in electronic or any other format.  Confidential Information excludes information which (i) is in the public domain through no act or omission of Participant in violation of any agreement that Participant is a party to with the Company, or (ii) has become available to Participant on a nonconfidential basis from a source other than the Company without breach of such source’s confidentiality or nondisclosure obligations to the Company.
c.    “Customer” means any actual or former customer or client of the Company that Participant knows to have been engaged as a customer or client of the Company during the one (1) year period prior to the Date of Termination.

d.“Prohibited Capacity” means: 
i.The same or similar capacity or function in which Participant worked for the Company at any time during the last two (2) years of Participant’s employment; or
ii.Any other capacity in which Participant’s knowledge of Confidential Information would render Participant’s assistance to a Competing Business (as defined in Addendum 1) a competitive advantage.

e.    “Protection Period” means: 
i.    The period commencing on the Date of Termination and ending on the date [CIC Restrictive Covenant Period] after the Date of Termination, if Participant is terminated and receives benefits pursuant to Section 3.4 of the Plan; or
ii.    The period commencing on the Date of Termination and ending on the date twelve (12) months after the Date of Termination, if Participant is terminated for any reason outside of Section 3.4 of the Plan, regardless of whether the termination is voluntary or involuntary.
In the event Participant breaches the covenants contained in this Article VIII, the periods defined in this Section shall be extended for an additional period of time equal to the time that elapses from the commencement of the breach to the later of (a) the termination of such breach or (b) the final resolution of any litigation stemming from such breach.   

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ARTICLE IX
MISCELLANEOUS PROVISIONS

9.1    Neither the adoption nor the maintenance of the Plan shall be deemed to constitute a contract, implied or expressed, between the Company and any Participant.  Nothing in the Plan shall affect the Company’s right to discharge or otherwise discipline Participants.  The Plan does not create in Participant a right to employment or continued employment for any certain period.

9.2    For the purpose of the Plan, notices and all other communications provided for in the Plan shall be in writing and shall be deemed to have been duly given when delivered or mailed by (1) United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt; (2) personal delivery to the Chief Executive Officer or Chief Human Resources & Legal Officer; or (3) email:

To the Company, with a copy to the Chief Human Resources & Legal Officer:

Windstream Services, LLC
4001 Rodney Parham Road
Little Rock, Arkansas 72212
Attention: Chief Executive Officer
Tony.thomas@windstream.com
John.fletcher@windstream.com

To Participant:  At Participant’s most recent mailing address in the records of Windstream Services, LLC, or at Participant’s Windstream employee email address (during employment)

9.3    Except as set forth in Section 3.11, nothing in the Plan shall be construed as giving any rights under the Plan to any third party, and no rights or benefits hereunder shall be subject to the debts or liabilities of any Participant or beneficiary.  No Participant or beneficiary may alienate, transfer, assign or pledge any right or benefit under the Plan.

9.4    The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business and/or assets of the Company expressly to assume the Plan.  The Plan shall be binding upon and inure to the benefit of the Company and any successor of or to the Company, including, without limitation, any persons acquiring directly or indirectly all or substantially all of the business and/or assets of the Company whether by sale, merger, consolidation, reorganization or otherwise (and such successor shall thereafter be deemed the “Company” for the purposes of the Plan) and the heirs, beneficiaries, executors and administrators of each Participant.  

9.5    The Article and Section headings contained herein are for convenience of reference only and shall not be construed as defining or limiting the matter contained thereunder.  Unless otherwise indicated, all references to Articles, Sections and subsections shall be to the Plan as set 

20

forth in the Plan.  If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provisions of the Plan, and the Plan shall be construed and enforced as if such provision had not been included in the Plan. 

9.6    The Plan and all rights hereunder shall be construed and enforced in accordance with ERISA and other applicable federal law.  To the extent the Plan is not governed by federal law, the provisions of the Plan shall be construed and applied in accordance with the laws of the State of Arkansas. 

IN WITNESS WHEREOF, Windstream Services, LLC has caused the Plan to be executed this 1st day of September, 2017.

	
		
	WINDSTREAM SERVICES, LLC

	By:
	 

21

Addendum 1
A.    Noncompetition.  Participant agrees that during the Protection Period (as defined below), and within the Restricted Territory (as defined below), he/she will not, in any manner, directly or indirectly, through any person, firm or corporation, alone or as a member of a partnership or as an officer, director, shareholder, investor or employee of or in any other corporation or enterprise or otherwise, perform services for or on behalf of a Competing Business (as defined below) in a Prohibited Capacity (as defined below).
1.    Application.  This provision shall only apply to Participant if Participant receives benefits under the Plan pursuant to Section 3.4 or 3.6 thereof.

2.    Other Terms.  The terms contained in Sections 8.5, 8.6, 8.7, 8.8, 8.9, 8.10 and 8.11 of the Plan apply to this Addendum, as appropriate.
 
3.    Definitions.  

a.“Competing Business” means any person, corporation or enterprise that, in direct competition with the Company, provides voice, data, network and/or cloud solutions, and related services, including related services that the Company is engaged in at the time of Participant’s termination which it entered into after the execution of this Agreement, to consumer, business, enterprise, and wholesale customers of all types, regardless of whether provided via a reseller, agent, dealer, cable operator, ILEC, CLEC, VOIP provider, interexchange carrier, or other provider using forms of communication technology.  Voice, data, network, cloud solutions, and related services include, but are not limited to,

		
	i.
	Consumer products and services including local and long distance, broadband, and digital TV;

		
	ii.
	Business and Enterprise products and services including voice, data network services, managed services, SD-WAN, cloud security products, unified communications, MPLS networking/security, UCaaS, CCaaS, business continuity, and similar cloud-based services; and

		
	iii.
	Wholesale products and services including Ethernet, transport, infrastructure, colocation, IP-VPN, and fiber to the tower.

“Competing Business” excludes wireless communication services but includes fixed wireless broadband services.

22

b.“Prohibited Capacity” means: 

		
	i.
	The same or similar capacity or function in which Participant worked for the Company at any time during the last two (2) years of Participant’s employment; and/or 

		
	ii.
	Any other capacity in which Participant’s knowledge of Confidential Information would render Participant’s assistance to a Competing Business a competitive advantage.

c.“Protection Period” means:

		
	i.
	The period commencing on the Date of Termination and ending on the date [CIC Restrictive Covenant Period] after the Date of Termination, if Participant is terminated pursuant to Section 3.4 of the Plan; or

		
	ii.
	The period commencing on the Date of Termination and ending on the date twelve (12) months after the Date of Termination, if Participant is terminated pursuant to Section 3.6 of the Plan.

In the event Participant breaches the covenants contained in this Addendum 1, the periods defined in this Section shall be extended for an additional period of time equal to the time that elapses from the commencement of the breach to the later of (a) the termination of such breach or (b) the final resolution of any litigation stemming from such breach.   
d.    “Restricted Territory” means any state in which the Company or an Affiliate is licensed as an incumbent or competitive local exchange carrier.

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EXHIBIT A
 
Participation Notice
Personal & Confidential
 
[DATE]
 
[NAME]
[ADDRESS]
 
Dear [FIRST NAME]:
 
I am pleased to inform you that you have been selected to participate in the Windstream Executive Severance Plan (the “Plan”), which has been established to provide severance benefits to certain senior leaders of the Company who are terminated from employment in certain limited circumstances.  The terms and conditions of your participation are set forth in and governed by the terms of the Plan and this participation notice (this “Participation Notice”).
 
For purposes of your participation in the Plan, the “Severance Multiplier” means [NUMBER], and the “CIC Restrictive Covenant Period” means [NUMBER] months.

Plan at a Glance

	
		
	Change-in-Control Severance 
Benefits
	Upon a Change-in-Control (CIC), you will be eligible for benefits if, within two (2) years of the CIC, you are terminated without Cause or voluntarily resign for Good Reason.

Benefits:  Your Base Salary and Annual Incentive Target, multiplied by your Severance Multiplier; pro rata bonus in year of termination; COBRA subsidy; outplacement.

	General Severance Benefits
	If you are terminated without Cause, and no CIC has occurred, you will be eligible for benefits.

Benefits:  Your Base Salary and Annual Incentive Target, multiplied by one; COBRA subsidy; outplacement.

24

	
		
	Noncompetition Provision
	Participants in the Plan are bound by a noncompetition provision only in the following two (2) circumstances:

(a) If Participant is terminated without Cause or resigns for Good Reason within the two (2) years following a CIC and receives benefits under the Plan, the noncompetition provision applies for the CIC Restrictive Covenant Period following termination of employment; or

(b)  If Participant is terminated without Cause outside of a CIC and receives benefits under the Plan, the noncompetition provision applies for twelve (12) months following termination of employment. 

	Confidentiality and 
Nonsolicitation Provisions
	All Participants, regardless of whether they receive benefits under the Plan, will be subject to confidentiality, nonsolicitation of employees, and nonsolicitation of customer provisions.  

The nonsolicitation provisions will be in effect during employment and:

(a) If Participant is terminated without Cause or resigns for Good Reason within the two (2) years following a CIC, the nonsolicitation provisions apply for the CIC Restrictive Covenant Period following termination of employment; or

(b)  If Participant is terminated without Cause outside of a CIC, the nonsolicitation provisions apply for twelve (12) months following termination of employment. 

The foregoing summary is provided for informational purposes only.  If there is any conflict between this summary and the Plan, the Plan document shall govern.  Capitalized terms in this summary have the meanings set forth in the Plan.

Legal Acknowledgments

By signing this Participation Notice you hereby acknowledge and agree that:

		
	•
	As a condition to, and in consideration of, your right to participate in the Plan, any change in control agreement, employment agreement, offer letter provision addressing severance or any other severance arrangement with the Company (including any predecessor companies) entered into on or prior to the date hereof (the “Prior Arrangement”) is hereby 

25

terminated and of no further force or effect, and you hereby waive and release any and all rights and claims under the Prior Arrangements.

		
	•
	You have been provided a copy of the Plan and had an opportunity to review and ask questions about the Plan.  You understand that the Plan contains Restrictive Covenants, which include (1) restrictions on your use or disclosure of confidential information and soliciting our customers or employees upon any termination of employment, and (2) noncompetition provisions that would only apply upon a termination of employment in which you are entitled to severance benefits under the Plan (collectively, the “Restrictive Covenants”).  You further understand that (a) the Restrictive Covenants are intended to encourage conduct that protects the legitimate business assets of the Company and its subsidiaries and affiliates, (b) as a condition to and in consideration of participating in the Plan, you hereby agree to be bound by and to comply with the terms and conditions of the Restrictive Covenants, and (c) you will notify the Company in writing if you have, or reasonably should have, any questions regarding the applicability of the Restrictive Covenants. 

		
	•
	You further acknowledge that by signing this Participation Notice, you have agreed to comply with the Restrictive Covenants. 

Please note that you are not required to participate in the Plan and may decline participation in the Plan by not returning this Participation Notice.  

If you wish to accept participation in the Plan, you must execute this Participation Notice and see that it is returned in person or via email to me so that it is received no later than [Date].  This Participation Notice may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

It is important that the terms and conditions of your participation in the Plan as set forth in this Participation Notice be kept confidential, as they pertain only to you.  

If you have any questions regarding this Participation Notice or the Plan, please direct those questions to Windstream’s Vice President - Compensation & Benefits.
Sincerely,

Mary Michaels
Agreed to and accepted:
____________________________________
[NAME]
        
____________________________________
Date

26

EXHIBIT B
CONFIDENTIAL GENERAL RELEASE
This CONFIDENTIAL GENERAL RELEASE (the “General Release”) is made and entered into by and between Windstream Services, LLC (“Windstream” or the “Company”) and [name] (“Executive,” or sometimes referred to herein as you).

WITNESSETH

In consideration of the mutual promises herein contained, Windstream and Executive agree as follows:

FIRST:  You are hereby informed that you have forty-five (45) calendar days from [date] to consider the terms of this General Release.  You are advised to discuss the terms with an attorney of your choice.  The forty-five (45) calendar days shall expire on [date].  If you choose to execute this General Release before the end of forty-five (45) days, that is solely your choice.  If you choose to execute this General Release, you will have seven (7) days from the date of execution to revoke, i.e., cancel, your consent to the General Release.  If you choose to revoke this General Release, you must notify the Chief Human Resources & Legal Officer in writing of your revocation within the seven (7) day revocation period.  The separation benefits outlined in Paragraph SECOND shall not be due and payable, and this General Release shall not become effective, binding or enforceable, until the seven (7) day revocation period has expired.  Once the seven (7) day revocation period has elapsed, you can no longer revoke your acceptance of the separation benefits outlined in Paragraph SECOND or this General Release.  
 
SECOND:  Executive is a Participant in the Windstream Executive Severance Plan (the “Plan”).  Windstream agrees that when you have signed this General Release, returned the signed original to Windstream on or before [date], and remain in compliance with all conditions and agreements in this General Release, including, without limitation, Paragraph EIGHTH and the restrictive covenants referenced in Paragraph SEVENTEENTH, you will receive the payments and benefits set forth in Section [fill in] of the Plan, pursuant to the terms of the Plan.

You acknowledge and agree that the payments and promises made by Windstream hereunder represent substantial value over and above that to which you would otherwise be entitled.  You acknowledge and agree that the payments described herein are in lieu of and replace any other severance benefits to which you may be entitled.  Windstream shall have the right to deduct from all payments made under this General Release any federal, state, local, foreign or other taxes which are required to be withheld with respect to such payments.  

THIRD:  The parties acknowledge that this General Release is entered into solely for the purpose of ending their employment relationship on an amicable basis and shall not be construed as an admission of liability or wrongdoing by either party and that both the Windstream Group (defined below) and Executive have expressly denied any such liability or wrongdoing.  Executive agrees that he/she is eligible for reemployment by Windstream Group only by mutual agreement and consent of the parties.

27

FOURTH:  You state and agree that your last day worked at Windstream was on [date], with an effective termination date of [date] (the “Date of Termination”).  You state and agree that, if applicable, you are no longer an officer of the Company, any companies controlled by, controlling or under common control with the Company, and any predecessors, successors or assigns to the foregoing.

FIFTH:  You understand, acknowledge and agree that your participation, if eligible and enrolled, under Windstream’s Health, Dental, Term Life Insurance, Vision Insurance and Voluntary Life Insurance ends as of [date], and Long Term Disability Insurance ends as of the Date of Termination.  You will remain eligible to continue health and dental coverage in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), if you enroll and meet all the requirements for participation.  Amounts that are vested benefits or which you are otherwise entitled to receive under any plan or arrangement with Windstream as of the Date of Termination shall be payable in accordance with such plan or arrangement except as modified by this General Release.  Unless otherwise provided in this paragraph FIFTH, as of the Date of Termination you shall cease to be eligible to participate in Windstream’s compensation, benefit, incentive (including, but not limited to, individual incentive, project incentive, annual incentive, long-term incentive and annual bonus), pension, welfare and other plans and arrangements, and any predecessor or successor to any such plans and arrangements.  

SIXTH:  As a material inducement to Windstream to enter into this General Release, you, on your own behalf and on behalf of your heirs, representatives, agents and assigns by dower or otherwise hereby irrevocably and unconditionally COVENANT NOT TO SUE OR OTHERWISE VOLUNTARILY PARTICIPATE IN ANY LAWSUIT AGAINST, FULLY RELEASE, ACQUIT, INDEMNIFY, HOLD HARMLESS and OTHERWISE FOREVER DISCHARGE (i) Windstream Services, LLC, (ii) any companies controlled by, controlling or under common control with Windstream Services, LLC, and any predecessors, successors or assigns to the foregoing (together with Windstream Services, LLC, the “Windstream Group”), (iii) the Windstream Group’s compensation, benefit, incentive (including, but not limited to, individual incentive, project incentive, annual incentive, long-term incentive and annual bonus), pension, welfare and other plans and arrangements, and any predecessor or successor to any such plans and arrangements (including the sponsors, administrators and fiduciaries of any such plan and/or arrangements), and (iv) any of the Windstream Group’s current or former officers, directors, agents, executives, employees, attorneys, insurers, shareholders, predecessors, successors or assigns (hereinafter, collectively, “Releases”) from any and all actions, charges, claims, debts, complaints, demands, damages or liabilities of any kind or character whatsoever, known or unknown, in law or in equity (“Claims”), which you now have or may have had whether or not based on or arising out of your employment relationship with the Windstream Group or the termination of that employment relationship through the date of execution of this General Release.  You understand and agree that you are waiving and releasing any and all Claims, including, but not limited to, the following:

a.    Those arising under any federal, state or local statute, ordinance or common law governing or relating to your employment relationship, including, but not limited to, (i) any claims on account of, arising out of or in any way connected with your hiring by the Windstream Group, employment with the Windstream Group or the termination of that 

28

employment, (ii) any claims alleged or which could have been alleged in any charge or complaint against the Windstream Group, including, but not limited to, those with the Equal Employment Opportunity Commission, or other similar state agency, the Occupational Safety and Health Administration, and the Secretary of Labor, (iii) any claims relating to the conduct, including action or inaction, of any executive, employee, officer, director, agent or other representative of the Windstream Group, (iv) any claims of discrimination, harassment or retaliation on any basis, (v) any claims arising from any legal restrictions on an employer’s right to separate its employees, (vi) any claims for personal injury, compensatory or punitive damages, front pay, back pay, liquidated damages, treble damages, legal and/or attorneys’ fees, expenses and litigation costs or other forms of relief, (vii) any claims for compensation and benefits, (viii) any cause of action or claim that could have been asserted in any litigation or other dispute resolution process, regardless of forum (judicial, arbitral or other), against any employee, officer, director, agent or other representative of the Windstream Group, (ix) any claim for, or right to, arbitration, and any claim alleged or which could have been alleged in any charge, complaint or request for arbitration against the Windstream Group, (x) any claim on account of, arising out of or in any way connected with any employment agreement between you and the Windstream Group, (xi) any claim on account of, arising out of or in any way connected with the alleged termination of your employment without “cause” or for “good reason,” (xii) any claim on account of, arising out of or in any way connected with medical, dental, life insurance or other welfare benefit plan coverage, and (xiii) all other causes of action sounding in contract, tort or other common‐law basis, including, but not limited to: (a) the breach of any alleged oral or written contract, (b) negligent or intentional misrepresentations, (c) wrongful discharge, (d) just cause dismissal, (e) defamation, (f) interference with contract or business relationship, (g) negligent or intentional infliction of emotional distress, (h) promissory estoppel, (i) claims in equity or public policy, (j) assault, (k) battery, (l) breach of employee handbooks, manuals or other policies, (m) breach of fiduciary duty, (n) false imprisonment, (o) fraud, (p) invasion of privacy, (q) whistleblower claims, (r) negligence, negligent hiring, retention or supervision and (s) constructive discharge; and 

b.    Those arising under any law relating to sex, age, race, color, religion, handicap or disability, harassment, veteran status, sexual orientation, retaliation, or national origin discrimination, including, without limitation, any rights or claims arising under Title VII of the Civil Rights Acts of 1866 and 1964, as amended, 42 U.S.C. §§ 1981 and 2000(e) et seq.; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §§ 621 et seq., as amended by the Older Workers Benefit Protection Act; the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §§ 12,101 et seq.; Sections 806 and 1107 of the Sarbanes-Oxley Act of 2002; the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201 et seq.; the National Labor Relations Act, 29 U.S.C. §§ 151 et seq.; the Occupational Safety and Health Act, 29 U.S.C. §§ 651 et seq.;  the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101, et seq.; any state’s Worker Adjustment and Retraining Notification Act; any state’s Human Rights Act; any state’s Wage Payment and Collection Law; and any other similar state statutes, as such statutes may be amended from time to time; and

29

		
	c.
	Those arising out of Employee Retirement Income Security Act of 1974, as amended; and

		
	d.
	Those arising out of the Family and Medical Leave Act, 29 U.S.C. §§ 2601 et seq.; and 

e.    Those arising under the civil rights, labor and employment laws of any state, municipality or local ordinance; and

f.    Any claim for reinstatement, compensatory damages, back pay, front pay, interest, punitive damages, special damages, legal and/or attorneys’ fees, expenses and litigation costs, including expert fees; and

g.    Those arising out of any other federal, state or local law that affords employees or individuals protection of any kind whatsoever; and

h.    Subject to Paragraph TWELFTH, those arising under the following agreements or plans (and any predecessor or successor to any such agreements or plans):

Windstream Corporation 2006 Equity Incentive Plan, including, without limitation, all Restricted Share Agreements between Windstream and you;
Windstream Corporation Performance Incentive Compensation Plan; and
Windstream Severance Pay Plan.

SEVENTH:  You represent and agree that you have not filed any Claim against the Releases.  Nothing contained in this General Release, or any other agreement, policy, practice, procedure, directive or instruction maintained by the Company, shall prohibit Executive from reporting possible violations of federal, state or local laws or regulations to any federal, state or local governmental agency or commission (a “Government Agency”) or from making other disclosures that are protected under the whistleblower provisions of federal, state or local laws or regulations.  Executive does not need prior authorization of any kind to make any such reports or disclosures to any Government Agency and Executive is not required to notify the Company that Executive has made such reports or disclosures.  Nothing in this General Release limits any right Executive may have to receive a whistleblower award or bounty for information provided to any Government Agency.  By executing this General Release, Executive acknowledges that the Company has informed Executive, in accordance with 18 U.S.C. § 1833(b), that Executive may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret where the disclosure: (a) is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

EIGHTH:  As further consideration and material inducement for Windstream to enter into this General Release, you agree not to disclose, orally or in writing, to any person, corporation, 

30

firm, business, entity, court or governmental authority, without the prior written consent of Windstream:

a.    the terms and provisions of this General Release, including, but not limited to, the amounts paid pursuant to this General Release; or

		
	b.
	any documents, files, records or any other information related to this General Release.       

Notwithstanding the foregoing, Executive may disclose information about this General Release to (1) his/her spouse, (2) his/her attorney, and (3) his/her tax advisor solely for the purpose of obtaining tax advice, so long as each person agrees to the confidentiality provisions in this Paragraph EIGHTH.  Further, you agree to refrain from disparaging any member of the Windstream Group, its officers, Board of Directors, or other Releases in statements or releases to the media or in verbal or written communications with Windstream customers, employees or individuals or representatives of entities with whom Windstream has a current contractual relationship.  

The Company agrees that Executive may respond to legitimate inquiries regarding his/her employment with the Company by stating that the parties terminated their relationship on an amicable basis and that the parties have entered into a confidential General Release that prohibits him/her from further discussing the specifics of his/her separation.  Nothing contained herein shall be construed to prevent Executive from discussing or otherwise advising subsequent employers of the existence of any obligations as set forth in the General Release.  Further, nothing contained herein shall be construed to limit or otherwise restrict the Windstream Group’s ability to disclose the terms and conditions of the General Release as may be required by law or business necessity.

NINTH:  Any and all Windstream Group papers, records, files (complete or in process), keys, documents, credit cards, confidential or proprietary information, trade secrets, databases and compilations, computer software programs, computer hardware, customer information, blueprints, personal communication devices, equipment, or any other property owned by the Windstream Group in your possession or under your control on your last day of employment shall be immediately returned to Windstream Group (without your retaining any copies thereof).

TENTH:  You acknowledge that you are no longer authorized to incur any expenses on behalf of the Windstream Group or bind the Windstream Group in any way after your last day of employment.  If you should bind or attempt to bind the Windstream Group in any way after your last day of employment, you agree to indemnify, defend and hold the Windstream Group harmless against any loss, damage, claim or expense (including reasonable attorneys’ fees) arising from such unauthorized actions.
    
ELEVENTH:  You agree to be reasonably available and cooperate with Windstream Group officials and designated agents with respect to any possible, potential or actual court or administrative agency proceedings brought by or against the Windstream Group about which you may have knowledge or information.  Windstream Group shall reimburse you for any reasonable expenses you incur in complying with this provision
    

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TWELFTH:  Notwithstanding anything herein to the contrary, the sole matters to which this General Release does not apply are: (a) your rights of indemnification and directors and officers liability insurance coverage to which you were entitled immediately prior to your termination of employment with regard to your service as an officer or director of any member of the Windstream Group, if applicable, (b) your rights under any tax-qualified pension or claims for accrued vested benefits under any other employee benefit plan, policy or arrangement (whether tax-qualified or not) maintained by the Windstream Group or under COBRA, (c) your rights under any equity awards, agreements or plans for which you received grants prior to termination and which by their terms or the terms of the Agreement do not lapse, or (d) your rights to receive the payments and other consideration specified in Paragraph SECOND of this General Release. 

THIRTEENTH:  In the event that you breach or threaten to breach any provision of this General Release, you agree that the Windstream Group shall be entitled to seek any and all equitable and legal relief provided by law, specifically including immediate and permanent injunctive relief.  You hereby waive any claim that the Windstream Group has an adequate remedy at law.  In addition, and to the extent not prohibited by law, you agree that the prevailing party shall be entitled to an award of all costs and attorneys’ fees in any successful effort to enforce the terms of this General Release.  You agree that the foregoing relief shall not be construed to limit or otherwise restrict the Windstream Group’s ability to pursue any other remedy provided by law, including the recovery of any actual, compensatory or punitive damages.  Moreover, if you pursue any claims against any Releasee subject to this General Release, you agree to immediately reimburse Windstream the amount of the payments and the value of the other consideration received by you in accordance with Paragraph SECOND of this General Release to the fullest extent permitted by law.

FOURTEENTH:  You state and agree that in executing this General Release you do not rely and have not relied upon any representation or statement made by Windstream or by any of Windstream’s agents, representatives or attorneys with regard to the subject matter, bases or effect of this General Release.  

FIFTEENTH:  Each of the promises and obligations contained in this General Release shall be binding upon and shall inure to the benefit of the heirs, executors, administrators, assigns and successors in interest of each of the parties.

SIXTEENTH:  This General Release shall in all respects be governed under the Laws of the State of Arkansas.  

SEVENTEENTH:  This General Release sets forth the entire agreement between you and Windstream and fully supersedes or replaces any and all prior agreements or understandings between the parties relating to the subject matter contained in the General Release.  Notwithstanding the preceding sentence, this General Release shall not supersede or have any effect on any prior confidentiality, noncompetition, nonsolicitation or nondisclosure covenant(s) executed by you for the benefit of the Windstream Group, specifically including, but not limited to, Article VIII of and Addendum 1 to the Plan and the Participation Notice you signed as acceptance of the Plan and agreement to these post-termination covenants.

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EIGHTEENTH:  It is the desire of the parties that if any of the provisions of this General Release be judged to be invalid or unenforceable, or if compliance with any provision is restrained until a final determination as to its legality, then the changes or restraint will apply only to the operation of that part or parts judged invalid, unenforceable or restrained.  To the extent any part of this General Release is deemed invalid, unenforceable or restrained, the remaining agreement parts will be valid and enforceable to the fullest extent possible.  

NINETEENTH:  This General Release may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

NOTICE TO EXECUTIVE - PLEASE READ CAREFULLY BEFORE SIGNING:

THIS GENERAL RELEASE IS A LEGALLY BINDING DOCUMENT WITH IMPORTANT LEGAL CONSEQUENCES.  YOU ARE ENTITLED TO A PERIOD OF NOT LESS THAN FORTY-FIVE (45) CALENDAR DAYS IN WHICH TO REVIEW AND CONSIDER THIS DOCUMENT BEFORE SIGNING IT.  PLEASE RETURN THE SIGNED GENERAL RELEASE TO:

Windstream Services, LLC
4001 Rodney Parham Drive
Mailstop B1F02-93
Little Rock, AR  72212
Attn: Chief Human Resources & Legal Officer

IT IS RECOMMENDED THAT YOU CONSULT YOUR OWN ATTORNEY BEFORE SIGNING THIS DOCUMENT.  BY SIGNING BELOW YOU ACKNOWLEDGE THAT YOU HAVE READ, FULLY UNDERSTAND, AND VOLUNTARILY AGREE TO ALL OF THE PROVISIONS CONTAINED IN THIS GENERAL RELEASE.

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IN WITNESS WHEREOF, the parties have themselves signed, or caused a duly authorized agent thereof to sign, this General Release on their behalf and thereby acknowledge their intent to be bound by its terms and conditions. 

	
			
	EXECUTIVE
[DO NOT SIGN UINTIL AFTER SEPARATION DATE]
	 
	WINDSTREAM SERVICES, LLC

	Signed:

	 
	Signed:

	Print Name:

	 
	Title:

	Date:

	 
	Date:

34EX-10.23

Exhibit
10.23 

EMPLOYMENT
AGREEMENT 

THIS
EMPLOYMENT AGREEMENT ("Agreement"), effective this 17th day of July, 2017
(the "Effective Date"), is entered into by and between John D. Vegas
("Executive") and Unifi, Inc. (the "Employer" and,
collectively with its successors, subsidiaries and affiliated companies, the
"Company"). 

WHEREAS,
the Employer desires to retain the services of Executive on the terms and
subject to the conditions set forth in this Agreement; 

NOW,
THEREFORE, in consideration of the mutual representations, warranties, covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows: 

1.    Employment.
Subject to the terms and conditions of this Agreement, the Employer agrees to
 employ Executive, and Executive agrees to be employed by the Employer, as of
August 21, 2017 (the "Start Date"), pursuant to the terms of
this Agreement. 

2.    Position.
During the period of his employment hereunder, Executive agrees to serve the
 Company, and the Employer shall employ Executive, as Executive Vice
President & Chief Human Resources Officer. If appointed or elected,
Executive also shall serve as an officer, director and/or manager of one or more
of the Employer's subsidiaries and affiliated companies in such capacity or
capacities as may be determined from time to time. 

3.    At-Will
Employment and Duties. 

       (a)
At-Will Employment. Executive and the Employer agree that Executive's
employment by the Employer hereunder will be at-will (as defined under
applicable law), and may be terminated at any time, for any reason, at the
option of either party, subject to the provisions of this Agreement. 

       (b)
Duties. During the period of his employment hereunder and except for
 illness, reasonable vacation periods, and reasonable leaves of absence,
Executive shall in good faith devote all of his business time, attention, skill
and efforts to the business and affairs of the Company. Executive's duties shall
be performed under the supervision of the Employer's Chief Executive Officer.
The foregoing shall not be construed as prohibiting Executive from serving on
corporate, civic or charitable boards or committees or making personal
investments, so long as such activities do not materially interfere with the
performance of Executive's obligations to the Company as set forth herein. 

4.    Salary;
Bonus; Reimbursement of Expenses; Other Benefits. 

       (a)
Salary. In consideration of the services to be rendered by Executive
 pursuant to this Agreement, the Employer shall pay, or cause to be paid, to
Executive a base salary (the "Base Salary") as established by or pursuant
to authority granted by the Employer's board of directors (the
"Board"). Executive's initial Base Salary shall be $400,000 per
annum. The Base Salary shall be reviewed annually by or pursuant to authority
granted by the Board in connection with its annual review of executive
 compensation to determine if such Base Salary should be increased for the
following year in recognition of services to the Company. The Base Salary
shall be payable at such intervals in conformity with the Employer's prevailing
practice as such practice shall be established or modified from time to time.

       (b)
Bonuses; Additional Compensation. Executive will be eligible to receive
bonuses and to participate in compensation plans of the Employer in accordance
with any plan or decision that the Board, or any committee or other person
authorized by the Board, may in its sole discretion determine from time to time.
For the Employer's 2018 fiscal year, Executive's bonus will be equal to 30%, 50%
and 100% of Base Salary for threshold, target and maximum levels of performance,
respectively, and will be pro-rated for the period of Executive's employment
with the Employer during the fiscal year. 

       (c)
Initial Equity Grants. Executive will receive on the Start Date an award
 of (i) options to purchase 15,000 shares of the Employer's common stock
and (ii) restricted stock units representing 20,000 share of the Employer's
common stock. The options will have an exercise price equal to the mean between
 the lowest and highest reported sale prices of the Employer's common stock on
the Start Date, will vest and become fully exercisable in three substantially
equal installments beginning on the first anniversary of the Start Date, subject
to your continued employment through each vesting date, and will have a ten year
term. The restricted stock units will become vested and settled in shares of the
Employer's common stock as follows, subject to your continued employment through
each vesting date: 25% on the first anniversary of the Start Date, 25% on the
second anniversary of the Start Date and 50% on the third anniversary of the
Start Date. 

       (d)
Reimbursement of Expenses. Executive shall be paid or reimbursed by the
 Employer, in accordance with and subject to the Employer's general expense
reimbursement policies and practices, for all reasonable travel and other
business expenses incurred by Executive in performing his obligations under this
Agreement. 

       (e)
Other Benefits. During the period of employment hereunder, Executive
 shall be entitled to participate in all other benefits of employment generally
available to other executives of the Employer and those benefits for which such
persons are or shall become eligible, when and as he becomes eligible therefore.
All outstanding unvested equity awards issued to Executive by the Employer shall
vest in full upon a "Change of Control" (as such term is defined in the
Unifi, Inc. 2013 Incentive Compensation Plan). 

5.    Termination
of Employment. 

       (a)
Termination as a Result of Executive's Death or Disability. Executive's
employment hereunder shall terminate automatically upon Executive's death and
may be terminated by the Employer upon Executive's "Disability" (as hereinafter
defined). If Executive's employment hereunder is terminated by reason of
Executive's death or Disability, Executive's (or Executive's estate's) right to
benefits under this Agreement will terminate as of the date of such termination
and all of the Employer's obligations hereunder shall immediately cease and
terminate, except that (i) Executive or Executive's estate, as the case may
be, will be entitled to receive accrued Base Salary and benefits through the
date of termination and (ii) all outstanding unvested equity awards issued
to Executive by the Employer shall vest in full upon such termination of
employment. As used herein, Executive's "Disability" shall have the
meaning set forth in any long-term disability plan in which Executive
participates, and in the absence thereof shall mean the determination in good
faith by the Board that, due to physical or mental illness, Executive shall have
failed to perform his duties on a full-time basis hereunder for one hundred
eighty (180) consecutive days and shall not have returned to the
performance of his duties hereunder on a full-time basis before the end of such
period. If Disability has occurred, termination of Executive's employment
hereunder shall occur within thirty (30) days after written notice of such
termination is given (which notice may be given before the end of the one
hundred eighty (180) day period described above so as to cause termination
of employment to occur as early as the last day of such period). 

 

2

       (b)
Termination by Executive for Good Reason or by the Employer other than as a
Result of Executive's Death or Disability or for Cause. 

(i)
Executive may terminate Executive's employment hereunder for "Good Reason" (as
hereinafter defined), if Good Reason exists, upon at least five (5) days
prior written notice to the Employer, and the Employer may terminate Executive's
employment hereunder for any reason or for no reason, other than as a result of
Executive's death or Disability or for Cause (as hereinafter defined), in each
case with the consequences set forth in this Section 5(b). 

(ii)
If Executive's employment hereunder is terminated by Executive for Good Reason
or by the Employer other than by reason of Executive's death or Disability and
other than for Cause, then, subject to Executive entering into and not revoking
a release of claims in favor of the Employer and the Company pursuant to
Section 5(e) below, and Executive fully complying with the covenants set
forth in Section 6, Executive shall be entitled to the following benefits:

(1)
Cash severance payments equal in the aggregate to twelve (12) months of
Executive's annual Base Salary at the time of termination, payable in twelve
(12) equal monthly installments beginning at the end of the first full
month following termination of employment. 

(2)
In the event Executive elects COBRA continuation coverage for the level of
medical coverage he had in force at the time of his termination, the Employer
shall reimburse Executive for the monthly cost of such continuation coverage
until the earlier of (A) the date Executive ceases to maintain such
continuation coverage in effect or (B) twelve (12) months from the
termination of Executive's employment. 

(iii)
For purposes of this Agreement, "Good Reason" shall mean: (1) a
material reduction (without Executive's express written consent) in Executive's
title or responsibilities; (2) the requirement that Executive relocate to
an employment location that is more than fifty (50) miles from his
employment location on the Start Date; (3) the Employer's material breach
(without Executive's express written consent) of Sections 2 or 4 of this
Agreement; or (4) following a Change of Control, Executive not being an
officer of the ultimate surviving parent business entity resulting from such
Change of Control transaction, in a substantially similar role to that performed
by Executive for the Employer prior to such Change of Control, for a period of
at least twelve (12) months thereafter; provided, that with respect to the
foregoing clauses (1), (2) and (3), Executive has provided the Employer
written notice of the event or circumstance purporting to constitute Good Reason
within thirty (30) days of the event or circumstance occurring and the
Employer has not cured such event or circumstance within fifteen (15) days
following the date Executive provides such notice. If the Employer thereafter
intentionally repeats the breach it previously cured, such breach shall no
longer be deemed curable. 

       (c)
Termination by Executive other than for Good Reason. Executive may
 terminate his employment with the Employer other than for Good Reason upon
thirty (30) days prior written notice to the Employer, after which the
Employer shall have no further obligation hereunder to Executive, except for
payment of accrued Base Salary and benefits through the termination date. If
Executive so notifies the Employer of such termination, the Employer shall have
the right to accelerate the effective date of such termination to any date after
the Employer's receipt of such notice, but such acceleration will not be deemed
to constitute a termination of Executive's employment by the Employer without
Cause, and the consequences of such termination will continue to be governed by
this subsection. 

 

3

       (d)
Termination by the Employer for Cause. The Employer may terminate
Executive's employment under this Agreement at any time for "Cause" (as
hereinafter defined) whereupon the Employer shall have no further obligation
hereunder to Executive, except for payment of amounts of Base Salary and
benefits accrued through the termination date. For purposes of this Agreement,
"Cause" shall mean: (i) the continued willful failure by Executive
to substantially perform his duties to the Company, (ii) the willful
engaging by Executive in gross misconduct materially and demonstrably injurious
to the Company or (iii) Executive's material breach of Sections 3, 6 or 7
of this Agreement; provided, that with respect to any breach that is curable by
Executive, as determined by the Board in good faith, the Employer has provided
Executive written notice of the material breach and Executive has not cured such
breach, as determined by the Board in good faith, within fifteen (15) days
following the date the Employer provides such notice. 

       (e)
Waiver and Release. In consideration for and as a condition to the
payments and benefits provided and to be provided under Section 5(b)(ii) of
this Agreement other than those provided under Section 9 (indemnification),
Executive agrees that Executive will, within thirty (30) days after the
termination of Executive's employment hereunder, deliver to the Employer a fully
executed release agreement substantially in a form then used by and agreeable to
the Employer and which shall fully and irrevocably release and discharge the
Company, its directors, officers, and employees from any and all claims,
charges, complaints, liabilities of any kind, known or unknown, owed to
Executive, other than any rights Executive may have under the terms of this
Agreement that survive such termination of employment and other than any vested
rights of Executive under any of the Company's employee benefit plans or
programs that, by their terms, survive or are unaffected by such termination of
employment. 

6.    Certain
Covenants by Executive. 

       (a)
Confidential Information. Executive acknowledges that in his employment
 hereunder he will occupy a position of trust and confidence. Executive shall
not, except in the course of the good faith performance of his duties hereunder
or as required by applicable law, without limitation in time or until such
information shall have become public other than by Executive's unauthorized
disclosure, disclose to others or use, whether directly or indirectly, any
Confidential Information (as hereinafter defined) regarding the Company. For
purposes of this Agreement, "Confidential Information" shall mean
information about the Company or its clients or customers that was learned by
Executive in the course of his employment by the Employer, including (without
limitation) any proprietary knowledge, trade secrets, data, formulae,
information and client and customer lists and all papers, resumes, and records
(including computer records) of the documents containing such Confidential
Information, but excludes information (i) which is in the public domain
through no unauthorized act or omission of Executive; or (ii) which becomes
available to Executive on a non-confidential basis from a source other than the
Company without breach of such source's confidentiality or non-disclosure
obligations to the Company. Executive agrees to deliver or return to the
Employer, at the Employer's request at any time or upon termination or
expiration of his employment or as soon thereafter as possible, (i) all
 documents, computer tapes and disks, records, lists, data, drawings, prints,
notes and written information (and all copies thereof) furnished by the Company
or prepared by Executive during the term of his employment by the Employer and
(ii) all notebooks and other data relating to research or experiments or
other work conducted by Executive in the scope of such employment. Upon the date
of termination of Executive's employment hereunder, Executive shall, as soon as
possible but no later than two (2) days after the date of termination,
surrender to the Employer all Confidential Information in Executive's possession
and return to the Employer all Company property in Executive's possession or
control, including but not limited to, all paper records and documents, computer
disks and access cards and keys to any Company facilities. 

       (b)
Non-Competition. During the period of Executive's employment hereunder
and for a period of twelve (12) months after the date of termination of his
employment, Executive shall not, 

 

4

directly or indirectly, in the "Restricted Territory" (as hereinafter defined),
without the prior written consent of the Employer, provide consultative services
or otherwise provide services to (whether as an employee or a consultant, with
or without pay) or, own, manage, operate, join, control, participate in, or be
connected with (as a shareholder, partner, or otherwise), any business,
individual, partner, firm, corporation, or other entity that is then a
competitor of the Company (each such competitor a "Competitor of the
Company"); provided, however, that the "beneficial ownership"
by Executive, either individually or as a member of a "group," as such terms are
used in Rule 13d of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), of not more than
five percent (5%) of the voting stock of any publicly held corporation
shall not alone constitute a violation of this Agreement. For purposes of this
Agreement, "Restricted Territory" shall mean: (i) the State of North
Carolina, (ii) the other contiguous states of the United States of America,
and (iii) any other jurisdiction in which the Company is doing or does
business during Executive's employment hereunder. Executive and the Employer
acknowledge and agree that the business of the Company extends throughout the
contiguous states of the United States of America and internationally. 

       (c)
Non-Solicitation of Customers and Suppliers. During the period of
 Executive's employment hereunder and for a period of twelve (12) months
after the date of termination of Executive's employment hereunder, Executive
shall not, directly or indirectly, influence or attempt to influence customers
or suppliers of the Company to divert any of their business to any Competitor of
the Company. 

       (d)
Non-Solicitation of Employees. Executive recognizes that he possesses and
 will possess Confidential Information about other employees of the Company
relating to their education, experience, skills, abilities, compensation and
benefits, and inter-personal relationships with customers of the Company.
Executive recognizes that the information he possesses and will possess about
these other employees is not generally known, is of substantial value to the
Company in developing its business and in securing and retaining customers, and
has been and will be acquired by him because of his business position with the
Company. Executive agrees that, during the period of Executive's employment
hereunder and for a period of twelve (12) months thereafter, he will not,
directly or indirectly, solicit, recruit, induce or encourage or attempt to
solicit, recruit, induce, or encourage any employee of the Company (i) for
the purpose of being employed by him or by any Competitor of the Company on
whose behalf he is acting as an agent, representative or employee or
(ii) to terminate his or her employment or any other relationship with the
Company. Executive also agrees that Executive will not convey any Confidential
Information or trade secrets about other employees of the Company to any other
 person. 

       (e)
Post-Termination Covenants by Executive. 

(i)
Upon the termination of Executive's employment hereunder, regardless of
(A) the date, cause, or manner of the Termination of Employment,
(B) whether the Termination of Employment is with or without Cause or is a
result of Executive's resignation, or (C) whether the Employer provides
severance benefits to Executive under this Agreement (the "Termination of
Employment"), Executive shall resign and does resign (1) as a member of
the Board if serving on the Board at that time and (2) from all positions
as an officer, director or manager of the Company and from any other positions
with the Company, with all such resignations to be effective upon the date of
the Termination of Employment. 

(ii)
From and after the Termination of Employment, Executive agrees not to make any
statements to the Company's employees, customers, vendors, or suppliers or to
any public or media source, whether written or oral, regarding Executive's
employment hereunder or termination from the Employer's employment, except as
may be approved in writing by an executive officer of the Employer in
advance. Executive further agrees not to make any statement (including to
any media source, or to the Company's suppliers, customers or employees) or take

 

5

any action that would disrupt, impair, embarrass, harm or affect adversely the
Company or any of the employees, officers, directors, or customers of the
Company or place the Company or such individuals in any negative light. 

(iii)
From and after the Termination of Employment, Executive agrees to cooperate with
and provide assistance to the Company and its legal counsel in connection with
any litigation (including arbitration or administrative hearings) or
investigation affecting the Company, in which, in the reasonable judgment of the
 Company's counsel, Executive's assistance or cooperation is
needed. Executive shall, when requested by the Company, provide testimony
or other assistance and shall travel at the Company's request in order to
fulfill this obligation. In connection with such litigation or
investigation, the Company shall attempt to accommodate Executive's schedule,
shall reimburse Executive (unless prohibited by law) for any actual loss of
wages in connection therewith, shall provide Executive with reasonable notice in
advance of the times in which Executive's cooperation or assistance is needed,
and shall reimburse Executive for any reasonable expenses incurred in connection
with such matters. 

       (f)
Injunctive Relief. It is expressly agreed that the Employer will or would
 suffer irreparable injury, for which a remedy in monetary damages alone would
be inadequate, if Executive were to violate any of the provisions of this
Section 6 and that the Employer would by reason of such violation be
entitled to injunctive relief in a court of appropriate jurisdiction, and
Executive further consents and stipulates to the entry of such injunctive relief
in such a court prohibiting Executive from so violating Section 6 of this
Agreement, in addition to any and all damages or other remedies to which the
Employer would be entitled at law or in equity. Nothing herein shall be
construed as prohibiting the Employer from pursuing any other equitable or legal
remedies for such breach or threatened breach, including the recovery of
monetary damages from Executive. 

       (g)
Executive's Acknowledgement. Executive acknowledges and agrees that
(i) the restrictive covenants in this Section 6 are reasonable in
time, territory and scope, and in all other respects and (ii) should any
part or provision of any covenant herein be held invalid, void or unenforceable
in any court of competent jurisdiction, such invalidity, voidness, or
unenforceability shall not render invalid, void or unenforceable any other part
or provision of this Agreement. The restrictive covenants contained herein
shall be construed as agreements independent of any other provision in this
Agreement and the existence of any claim or cause of action of Executive against
the Employer, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Employer of these covenants. 

       (h)
Protected Disclosures. Pursuant to the Defend Trade Secrets Act of 2016
 (8 U.S.C. § 1833(b)), Executive will not be held criminally or civilly liable
under any federal or state trade secret law for the disclosure of a trade secret
of the Company that (i) is made (A) in confidence to a federal, state,
or local government official, either directly or indirectly, or to an attorney
and (B) solely for the purpose of reporting or investigating a suspected
violation of law; or (ii) is made in a complaint or other document that is
filed under seal in a lawsuit or other proceeding. If Executive files a lawsuit
for retaliation by the Company for reporting a suspected violation of law,
Executive may disclose the trade secret to Executive's attorney and use the
trade secret information in the court proceeding, if Executive (i) files
any document containing the trade secret under seal, and (ii) does not
disclose the trade secret, except pursuant to court order. Nothing in this
Agreement, is intended to conflict with 18 U.S.C. § 1833(b) or create liability
for disclosures of trade secrets that are expressly allowed by such section.
Notwithstanding any provision in any agreement between Executive and the
Company, Executive may disclose any confidential or non-public information
(i) to report possible violations of federal law or regulation to any
governmental agency or entity, including but not limited to the Department of
Justice, the Securities and Exchange Commission, the United States Congress and
any agency Inspector General, or make other disclosures that are protected under
the whistleblower provisions of federal law or regulation or (ii) as
required by law or order by a court; 

 

6

provided,
however, Executive agrees to notify the Company in advance if Executive
is required to provide information or testimony in connection with any action
brought by a non-governmental or non-regulatory person or entity. 

       (i)
Survival of Provisions. The obligations contained in this Section 6
shall survive the termination or expiration of Executive's employment hereunder
and shall be fully enforceable thereafter. 

7.    No
Conflict. Executive represents and warrants that Executive is not subject to
any agreement, instrument, order, judgment or decree of any kind, or any other
restrictive agreement of any character, which would prevent Executive from
entering into this Agreement or would conflict with the performance of
Executive's duties pursuant to this Agreement. Executive represents and warrants
that Executive will not engage in any activity, which would conflict with the
performance of Executive's duties pursuant to this Agreement. 

8.    Notices.
Any notice, requests, demands and other communications to be given to a party in
 connection with this Agreement shall be in writing addressed to such party at
such party's "Notice Address," which shall initially be as set forth below: 

 

			
	
      If to the Company:
	  	
      Unifi,
      Inc.

		  	
      7201
      West Friendly Avenue

		  	
      Greensboro,
      North Carolina 27410

		  	
      Attn:
      Secretary

		
	
      If
      to Executive:
	  	
      John
      D. Vegas

		  	
      Most
      recent address reflected on

		  	
          the
      Company's payroll records

A
party's Notice Address may be changed or supplemented from time to time by such
party by notice thereof to the other party as herein provided. Any such notice
shall be deemed effectively given to and received by a party on the first to
occur of (a) the date on which such notice is actually delivered (whether
by mail, courier, hand delivery, electronic or facsimile transmission or
otherwise) to such party's Notice Address and addressed to such party, if such
delivery occurs on a business day, or if such delivery occurs on a day which is
not a business day, then on the next business day after the date of such
delivery, or (b) the date on which such notice is actually received by such
party (or, in the case of a party that is not an individual, actually received
by the individual designated in the Notice Address of such party). For purposes
of the preceding sentence, a "business day" is any day other than a Saturday,
Sunday or U.S. federal public legal holiday. 

9.    Indemnification.

       (a)
General. Subject to the limitations set forth in this Section 9, the
 Employer shall indemnify and hold harmless, to the fullest extent permitted by
applicable law as it presently exists or may hereafter be amended, Executive if
Executive was or is made or is threatened to be made a party to or is otherwise
involved in any pending, threatened or completed action, suit, arbitration,
alternative dispute resolution proceeding, investigation, administrative
hearing, or other proceeding, whether by or in the right of the Employer, any
other Company, or any other person or entity, whether civil, criminal,
administrative or investigative (a "Proceeding") by reason of the fact
that Executive is or was a director, officer, employee or agent of the Employer
or is or was serving at the request of the Employer as a director, officer,
member, employee or agent of any other Company or other enterprise, including
service with respect to employee benefit plans, against all cost, expense,
liability and loss (including without limitation, attorneys' fees, 

 

7

judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by Executive or on Executive's
behalf in connection with any Proceeding and any appeal therefrom. Executive's
rights under this Section 9 shall continue after Executive has ceased
acting as a director, officer, member, employee or agent of a Company and shall
inure to the benefit of the heirs, executors and administrators of Executive.
The Employer's obligation to provide the indemnification set forth in this
Section 9(a) shall be subject to Executive having acted in good faith and
in a manner Executive reasonably believed to be in or not opposed to the best
interests of any Company, and, with respect to any criminal action or
proceeding, having had no reasonable cause to believe Executive's conduct was
unlawful. The termination of any Proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that Executive did not act in good faith and in a
manner which Executive reasonably believed to be in or not opposed to the best
 interests of the Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that Executive's conduct was
unlawful. 

       (b)
Advancement of Expenses. Subject to the limitations set forth in this
 Section 9, the Employer shall pay the reasonable expenses (including
reasonable attorneys' fees) incurred by Executive in defending any Proceeding in
advance of its final disposition; provided, however, that such
advancement of expenses shall be made only upon receipt of an undertaking by
Executive, in a form approved by the Employer, to repay all amounts advanced if
it shall ultimately be determined that Executive is not entitled to be
indemnified therefor. Executive agrees to reimburse the Employer for all
expenses advanced under this Section 9 in the event and only to the extent
it shall ultimately be determined by a final adjudication that Executive is not
entitled to be indemnified by the Employer for such expenses. 

       (c)
Claims for Indemnification or Advancement; Determination of Eligibility.

(i)
Any claim by Executive for indemnification or advancement of expenses under this
 Agreement shall be made in a writing delivered to the Employer, setting forth
in reasonable detail the basis for such indemnification or advancement and the
amount requested, and accompanied by appropriate documentation to support the
amount so requested (or, in the case of advancement of expenses to be incurred,
the basis on which such amount is to be determined). A claim for advancement may
include future expenses reasonably expected to be incurred, provided they are
generally described in the claim, and provided that the Employer shall not be
required to advance particular expenses covered by the claim until it has
received appropriate substantiation that those expenses have been incurred and
are appropriately included within the advances approved by the Employer pursuant
to this Section 9(c). 

(ii)
Promptly upon its receipt of a written claim for advancement of expenses to
which Executive is entitled hereunder, and within sixty (60) days after its
receipt of a written claim for indemnity to which Executive is entitled
hereunder, the Employer shall pay such advancement (and any future related
submissions for advancement of expenses as they are incurred) or such claim for
indemnity in full to or as directed by Executive. If and to the extent it is
required by law that the Employer make any particular determination as to
Executive's eligibility to receive such advancements or indemnity, or whether
Executive has met the standards set forth in Section 9(a) hereof, the
Employer shall make such determination as promptly as practicable in good faith
and in accordance with such requirements of law, and in any event within sixty
(60) days after its receipt of the claim from Executive. In the event that
the Employer fails to make such determination as to Executive's eligibility, or
makes a determination that Executive is ineligible for indemnification or
advancement of expenses hereunder, within such sixty (60)-day period, then
Executive may seek such determination from a court of competent jurisdiction. In
any such proceeding, the Employer shall have the burden of proving that
Executive was not entitled to the requested indemnification or advancement of
expenses, and any prior determination by the 

 

8

Employer to the contrary shall be to no effect and shall not be given any weight
by the court, it being the intention of the parties that any determination by
the court as to Executive's eligibility for and entitlement to indemnification
or advancement of expenses hereunder shall be made de novo based upon the terms
of this Agreement and the evidence presented to such court. 

       (d)
Limitations on Claims. In addition to the limitations on indemnification
 set forth in Section 9(a) above, the Employer shall not be obligated
pursuant to this Agreement: 

(i)
 To indemnify or advance expenses to Executive with respect to a Proceeding
initiated by Executive, except (i) for Proceedings authorized or consented
to by the Board; or (ii) in the event a claim for indemnification or
payment of expenses (including attorneys' fees) made under this Agreement is not
paid in full within sixty (60) days after a written claim therefor has been
received by the Employer, Executive may file suit to recover the unpaid amount
of such claim and, if successful in whole or in part, shall be entitled to be
paid the expense of prosecuting such claim, including attorneys' fees. In any
such action, the Employer shall have the burden of proving that Executive was
not entitled to the requested indemnification or payment of expenses under
applicable law or this Agreement. 

(ii)
To indemnify Executive for any expenses incurred by Executive with respect to
any Proceeding instituted by Executive to enforce or interpret this Agreement,
unless Executive is successful in establishing Executive's right to
indemnification in such Proceeding, in whole or in part; provided,
however, that nothing in this Section 9(d)(ii) is intended to limit
the Employer's obligation with respect to the advancement of expenses to
Executive in connection with any Proceeding instituted by Executive to enforce
or interpret this Agreement, as provided in Section 9(c) above. 

(iii)
To indemnify Executive in connection with proceedings or claims involving the
enforcement of the provisions of this Agreement (other than as otherwise
specifically provided for in this Section 9) or any other employment,
severance or compensation plan or agreement that Executive may be a party to, or
beneficiary of, with the Employer or any other Company. 

(iv)
To indemnify Executive on account of any proceeding with respect to which final
 judgment is rendered against Executive for payment or an accounting of profits
arising from the purchase or sale by Executive of securities in violation of
Section 16(b) of the Securities Exchange Act of 1934, as amended, any
similar successor statute, or similar provisions of state statutory law or
common law. 

       (e)
Non-Exclusivity of Rights. The right conferred on Executive by this
Section 9 shall not be exclusive of any other rights which Executive may
have or hereafter acquire under any statute, provision of the Employer's
articles of incorporation or bylaws, agreement, vote of shareholders or
disinterested directors or otherwise, or under any insurance maintained by the
Employer; but such rights in the aggregate shall not entitle Executive to
duplicative multiple recoveries. No amendment or alteration of the Employer's
articles of incorporation or bylaws or any other agreement shall adversely
affect the rights provided to Executive under this Section 9. 

       (f)
Savings Clause. If any provision or provisions of this Agreement shall be
 invalidated on any ground by any court of competent jurisdiction, then the
Employer shall nevertheless indemnify Executive as to costs, charges and
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Employer, to the full extent 

 

9

permitted by any applicable portion of this Agreement that shall not have been
invalidated and to the full extent permitted by applicable law. 

10.    Dispute
Resolution. 

       (a)
Any dispute between Executive and the Employer arising out of this Agreement or
 the performance or nonperformance hereof (except with respect to
Section 9), shall, upon the demand of either Executive or the Employer, be
settled by binding arbitration in accordance with the Employment Arbitration
Rules and Mediation Procedures of the American Arbitration Association as in
effect at the time the arbitration is commenced and the provisions of this
subsection: 

(i)
The arbitration shall be conducted in Greensboro, North Carolina by a panel of
three impartial arbitrators selected in accordance with such rules, unless the
parties shall hereafter mutually agree in writing to have the arbitration
conducted by a single arbitrator. 

(ii)
In conducting the arbitration and rendering their award, the arbitrators shall
give effect to the terms of this Agreement, including the choice of applicable
law, shall give effect to any other agreement of the parties relating to the
conduct of the arbitration, and shall give effect to applicable statutes of
limitations. 

(iii)
The costs of the arbitration, including the fees and expenses of the arbitrators
and of the American Arbitration Association, shall be allocated to such parties
as, and in such proportions as, the arbitrators shall determine to be just and
equitable, which determination shall be set forth in the award. 

(iv)
Judgment upon the award of the arbitrators may be entered by any court of
competent jurisdiction. 

       (b)
Nothing in this Section 10 shall preclude any party from applying to a
 court of competent jurisdiction for, and obtaining if warranted, preliminary or
ancillary relief pending the conduct of such arbitration, or an order to compel
the arbitration provided for herein. 

       (c)
Any claim arising out of Section 9, including a claim by Executive for
 indemnification or advancement of expenses thereunder, shall be brought before
the state courts of the State of North Carolina pursuant to Section 12.

11.    Assignment;
Successors. This Agreement is personal in its nature and neither of the
parties hereto shall, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder; provided that, this Agreement
shall be binding upon and, subject to the provisions hereof, inure to the
benefit of any successor of the Employer and such successor shall be deemed
substituted for the Employer under the terms of this Agreement; but any such
substitution shall not relieve the Employer of any of its obligations under this
Agreement. As used in this Agreement, the term "successor" shall include any
person, firm, corporation, or like business entity which at any time, whether by
merger, purchase or otherwise, acquires all or a controlling interest in the
assets or business of the Employer. 

12.    Governing
Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by, and construed and enforced in accordance with,
the substantive laws of the State of North Carolina, without giving effect to
its principles of conflict of laws. Executive and the Employer each hereby
irrevocably consent that both parties are subject to the jurisdiction of the
state courts of the State of North Carolina for all purposes in connection with
any action or proceeding that arises out 

 

10

of or relates to this Agreement, and further agree that the sole and exclusive
venue for any such dispute shall be the General Court of Justice, Superior Court
Division, in Guilford County, North Carolina. 

13.    Withholding.
The Employer shall make such deductions and withhold such amounts from each
payment made to Executive hereunder as may be required from time to time by law,
governmental regulation or order. 

14.    Headings.
Section headings in this Agreement are included herein for convenience of
 reference only and shall not constitute a part of this Agreement for any other
purpose. 

15.    Waiver;
Modification. Failure to insist upon strict compliance with any of the
terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times. This Agreement shall not be modified in any
respect except by a writing executed by each party hereto. 

16.    Severability.
The parties have entered into this Agreement for the purposes herein expressed,
with the intention that this Agreement be given full effect to carry out such
purposes. Therefore, consistent with the effectuation of the purposes hereof,
the invalidity or unenforceability of any provision hereof or part thereof shall
 not affect the validity or enforceability of any other provision hereof or any
other part of such provision. 

17.    Entire
Agreement. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes any prior
agreements between them with respect to the subject matter hereof. Without
limiting the generality of the foregoing, the obligations under this Agreement
with respect to any termination of employment of Executive, for whatever reason,
supersede any severance or related obligations of the Company in any policy,
plan or practice of the Company or any agreement between Executive and the
Company. 

18.    Counterparts.
This Agreement may be executed by the parties hereto in multiple counterparts
 and shall be effective as of the Effective Date when each party shall have
executed and delivered a counterpart hereof, whether or not the same counterpart
is executed and delivered by each party. When so executed and delivered, each
such counterpart shall be deemed an original and all such counterparts shall be
deemed one and the same document. Transmission of images of signed signature
pages by facsimile, e-mail or other electronic means shall have the same effect
as the delivery in person of manually signed documents. 

19.    Compliance
with Section 409A. This Agreement is intended to comply with
Section 409A of the Internal Revenue Code of 1986, as amended ("Section
409A"), to the extent applicable. Notwithstanding any provision herein
to the contrary, this Agreement shall be interpreted, operated and administered
consistent with this intent. Each separate installment under this Agreement
shall be treated as a separate payment for purposes of determining whether such
payment is subject to or exempt from compliance with the requirements of
Section 409A. In addition, in the event that Executive is a "specified
employee" within the meaning of Section 409A (as determined in accordance
with the methodology established by the Employer as in effect on the date of
termination of Executive's employment hereunder), any payment or benefits
hereunder that are nonqualified deferred compensation subject to the
requirements of Section 409A shall be provided to Executive no earlier than
six (6) months after the date of Executive's "separation from service"
within the meaning of Section 409A. 

[Signatures
follow on next page] 

 

11

IN
WITNESS WHEREOF, the Employer has caused this Agreement to be executed by its
 duly authorized officer, and Executive has hereunto signed this Agreement, as
of the Effective Date. 

 

			
	"Employer":
	
	
      Unifi,
      Inc.

	
	By:        /s/
      KEVIN D.
      HALL                
	Name:  Kevin D. Hall
	Title:    Chief Executive
      Officer
	
	"Executive":
	
	
      /s/
      JOHN D.
       VEGAS                

	
      Name:  John
      D. Vegas

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