Windstream 2006 Annual Report Download - page 33

Impact of Section 409A. Section 409A was added to the Internal Revenue Code as part of the American
Jobs Creation Act of 2004. Section 409A imposes new restrictions on the BRP described above with respect to
amounts deferred after December 31, 2004 and earnings thereon (and with respect to plans that are “materially
modified” after October 3, 2004). These new restrictions generally define the earliest date that payments may
commence under the plans and limit the ability of participants to receive accelerated payments or to change their
deferral and payment elections. As permitted under existing guidance, Windstream will amend the plans
described above on or before December 31, 2007 to conform to Section 409A. In the interim, the BRP will be
administered in good faith compliance with the new rules, as permitted by current IRS guidance.
The following table shows certain information regarding benefits under the Windstream Pension Plan as
of December 31, 2006 for the individuals named below.
PENSION BENEFITS
Name Plan Name
Number of Years
Credited Service
(#) (1)
Present Value of
Accumulated Benefit
($) (2)
Payments During
Last Fiscal Year
($) (3)
Jeffery R. Gardner Pension Plan
Benefit Restoration Plan
8.00
-
103,741
677,370
-
-
Brent Whittington Pension Plan
Benefit Restoration Plan
3.50
-
21,056
-
-
-
Francis X. Frantz Pension Plan
Benefit Restoration Plan
16.75
-
316,744
1,429,933
-
-
Keith D. Paglusch - - - -
John P. Fletcher - - - -
John J. Mueller - - - -
Jerry E. Vaughn - - - -
William M. Ojile, Jr. - - - -
William G. Raney - - - -
(1) The plans recognize all prior years of service under the Alltel Corporation Pension Plan and the Alltel
Corporation Benefit Restoration Plan.
(2) The present value of accumulated benefits includes the present value of the benefits transferred from the
Alltel Corporation Pension Plan and the Alltel Corporation Benefit Restoration Plan as part of the spin-off. The
present value of accumulated benefits was calculated based on retirement at age 60 with 20 years of credited
service, current compensation as of December 31, 2006, no pre-retirement decrements, the 1994 Group Annuity
Mortality table for males and females, and a 5.92% discount rate, which is the same rate used for preparing
Windstream’s consolidated financial statements.
(3) Alltel maintained a non-qualified supplemental executive retirement plan (the “SERP”) in which Messrs.
Frantz and Gardner participated prior to the spin-off. Each of Messrs. Frantz and Gardner was entitled to a lump
sum payment in the amount of $7,615,028 and $9,256,645, respectively, under the SERP upon the closing of the
spin-off. These payments were to discharge a liability of Alltel for retirement benefits that were earned by
Messrs. Frantz and Gardner in accordance with the SERP during their tenure with Alltel. Alltel made these
payments to Messrs. Frantz and Gardner in July 2006 following the closing of the spin-off.
Non-Qualified Deferred Compensation
The following is a brief summary of the plans that administered the nonqualified deferred compensation
benefits of Windstream as of December 31, 2006. Effective as of January 1, 2007, these plans were merged with
and into the Windstream 2007 Deferred Compensation Plan (“2007 Plan”). As a result of these plan mergers,
Windstream’s obligations and participants’ rights under these plans became obligations and rights under the 2007
Plan.
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