Windstream 2006 Annual Report Download - page 38

died or became “disabled” during the year, then his 2006 annual bonus under the Performance Incentive
Compensation Plan would have been pro-rated on the basis of the ratio of the number of days of participation
during the plan year to the number of days during the plan year and paid in a lump sum following the end of the
year. For this purpose, the term “disability” means incapacity resulting in the executive being unable to engage in
gainful employment at his usual occupation by reason of any medically demonstrable physical or mental
condition, excluding, however, incapacity resulting from a felonious enterprise; chronic alcoholism or addiction
to drugs or abuse; and self-inflicted injury or illness.
Executive Incentive Compensation Plan. Messrs. Whittington, Paglusch, Fletcher and Raney
participated in the Executive Incentive Compensation Plan, which is a quarterly bonus plan. Each of these
executives would have forfeited his right to his 2006 fourth quarter bonus if he had died or become disabled.
Change-in-Control
In general, Windstream does not maintain any plans or arrangements that would provide benefits to the
named executive officers solely as a result of a change-in-control (as defined under the heading “Qualifying
Termination Following Change-in-Control” below). However, each of Messrs. Gardner and Frantz would receive
a lump sum payment of his account balances maintained under the Windstream Executive Deferred
Compensation Plan and the Windstream Management Deferred Compensation Plan (which balances are now part
of the Windstream 2007 Deferred Compensation Plan) upon a change-in-control. Please refer to the section
above entitled “Nonqualified Deferred Compensation” for more information. Moreover, all of Mr. Frantz’s
outstanding restricted shares would vest upon a change-in-control. These shares had a value of $6,392,075 as of
December 31, 2006.
Qualifying Termination Following Change-in-Control
Each executive officer listed below would have been entitled to the following estimated payments and
benefits from Windstream or its successor if a change-in-control (as defined below) occurred on December 31,
2006 and Windstream terminated the executive’s employment without “cause” (as defined below) or the
executive terminated his employment with Windstream for “good reason” (as defined below) immediately
following such change-in- control.
Name
Cash
Severance
($)
Cash
Equivalent
for Three
Years of
Health
Care
Premiums
($)
Outplacement
Services
($)
Excise Tax
Gross-Up (1)
($)
Accelerated
Vesting of
Restricted
Shares (2)
($)
Total on a
Qualifying
Termination
Following a
Change-in-
Control
($)
Jeffery R.
Gardner 4,900,000 33,096 50,000 3,315,284 8,536,366 16,834,746
Brent
Whittington 1,885,000 28,909 50,000 1,142,097 1,251,957 4,357,963
Keith D.
Paglusch 2,175,000 33,096 50,000 1,109,278 1,128,556 4,495,930
John P.
Fletcher 1,885,000 33,096 50,000 999,142 1,072,131 4,039,369
William G.
Raney 462,600 6,252 25,000 - 1,045,966 1,539,818
(1) Because the excise tax gross-up is calculated based on the average compensation of an executive officer over
the five years prior to a change-in-control, and because all of the foregoing individuals (other than
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