Windstream 2006 Annual Report Download - page 36

included in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the
Summary Compensation Table.
(4) Alltel maintained the 360° Communications Company Deferred Compensation Plan and the 360°
Communications Company Retirement Savings Restoration Plan (the “360° Plans”), in which Mr. Gardner
participated prior to the spin-off. Mr. Gardner received a lump sum payment of his account balance under the
360° Plans following his termination of employment with Alltel in connection with the spin-off in an amount
equal to $54,306. This payment reflects retirement benefits that were earned by Mr. Gardner in accordance with
the 360° Plans during his tenure at Alltel and 360º Communications Company. Windstream was not obligated to
make these payments and did not assume any portion of the 360° Plans in connection with the spin-off.
Potential Payments Upon Termination or Change-in-Control
Windstream has entered into certain agreements and maintains certain plans and arrangements that
require Windstream or its successors to pay or provide certain compensation and benefits to its named executive
officers in the event of certain terminations of employment or a change-in-control of Windstream. The estimated
amount of compensation and benefits payable or provided to each named executive officer in each situation is
summarized below, assuming that the triggering event occurred on the last day of the 2006 fiscal year. The actual
amounts that would be paid to each named executive officer upon certain terminations of employment or upon a
change-in-control can only be determined at the time the actual triggering event occurs. The estimated amount of
compensation and benefits described below are in addition to the benefits to which the named executive officers
would be entitled to receive upon termination of employment generally under the retirement plans and programs
described in the sections above titled “Pension Benefits” and the “Nonqualified Deferred Compensation”. Please
refer to those sections for a description of Windstream’s retirement plans and programs. This section identifies
and quantifies the extent to which those retirement benefits are enhanced or accelerated upon the triggering
events described below.
Voluntary Termination Without “Good Reason” or Involuntary Termination For “Cause”
Windstream does not maintain any plans or arrangements that would provide benefits to its named
executive officers solely as a result of a voluntary termination without “good reason” or an involuntary
termination for “cause” (each as defined under the heading “Termination for ‘Good Reason’ or Involuntary
Termination without ‘Cause’” immediately below).
Voluntary Termination for “Good Reason” or Involuntary Termination without “Cause”
Windstream entered into an Employment Agreement with Mr. Gardner effective November 7, 2006.
Under the Employment Agreement, if Windstream or its affiliates terminated Mr. Gardner’s employment without
“cause” (as defined below) or Mr. Gardner terminated his employment with Windstream or its affiliates for
“good reason” (as defined below) on December 31, 2006, then Windstream would have been obligated to pay
Mr. Gardner, in a lump sum, approximately $2,100,000. This severance benefit under the Employment
Agreement equals the sum of the following amounts: (i) a pro-rated bonus based on the higher of Mr. Gardner’s
target annual bonus for the year of termination or the annual bonus earned for the immediately preceding year;
and (ii) two times his annual base salary.
The Employment Agreement provides that upon termination of employment, Mr. Gardner is prohibited
from soliciting employees or customers of or competing against Windstream for a one-year period and is subject
to confidentiality and non-disparagement restrictions. Moreover, he is required to sign a release of all claims
against Windstream prior to receiving severance benefits under the agreement.
For purposes of the Employment Agreement, the term “cause” generally means (i) the willful failure by
Mr. Gardner substantially to perform his duties to Windstream; (ii) a conviction, guilty plea or plea of nolo
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