Windstream 2006 Annual Report Download - page 45

depreciation, amortization or extraordinary or special items; return on investment; free cash flow; cash flow
return on investment (discounted or otherwise); net cash provided by operations; cash flow in excess of cost of
capital; operating margin; profit margin; contribution margin; stock price and/or strategic business criteria
consisting of one or more objectives based on meeting specified product development; strategic partnering;
research and development; market penetration; geographic business expansion goals; cost targets; customer
satisfaction; gross or net additional customers; average customer life; employee satisfaction; management of
employment practices and employee benefits; supervision of litigation and information technology; and goals
relating to acquisitions or divestitures of subsidiaries, affiliates and joint ventures. Performance objectives may
be stated as a combination of the listed factors.
Certification. Promptly following the end of each plan year, the Compensation Committee will meet to
certify achievement of the performance objectives for such year, and if such performance objectives have been
achieved, approve actual awards under the Plan pursuant to the payout formulas. Such certification with respect
to “covered employee” (as defined above) shall be documented in writing and satisfy the requirements under
Section 162(m) of the Internal Revenue Code prior to the payout of such award.
Payment. Awards shall be paid as soon as practicable after the close of the Plan year, but in no event
later than 75 days after the end of such year. The Compensation Committee may, in its sole discretion and upon
such terms and conditions as it may establish, direct that payments to the participants (other than “covered
employees”) be made during December of the Plan year in the amount of an estimated award for that year,
subject to adjustment when the exact amount of the award is determined.
If a participant’s employment with Windstream and its subsidiaries is terminated before the last day of a
plan year due to disability, death, or retirement (as defined in the Plan), the participant’s award shall be pro-rated
on the basis of the ratio of the number of days of participation during the Plan year to which the award relates to
the aggregate number of days in such plan year. If, however, a participant’s employment terminates before the
last day of a plan year for any other reason, then, unless otherwise determined by the Compensation Committee,
such participant shall not be entitled to receive payment of the award.
The Compensation Committee may, in its sole discretion, (i) eliminate or reduce the amount of any award
payable to any participant, and (ii) except in the case of a “covered employee”, increase the amount of any award
payable to any participant to recognize his or her individual performance or in other circumstances deemed
appropriate by the Compensation Committee.
Amendments, Etc. The Board reserves the right, at any time, to amend, suspend or terminate the Plan, in
whole or in part, in any manner, and for any reason, and without the consent of any participant, eligible
employee, beneficiary or other person. However, no such action shall adversely affect the payment of any
amount for a plan year ending prior to the action of the Board.
The Plan is intended to qualify for the performance-based compensation exception of Section 162(m) of
the Internal Revenue Code and the short-term deferral exception of Section 409A of the Internal Revenue Code.
The Plan and any awards shall be administrated in a manner consistent with this intent, and any provision that
would cause the Plan or any award to fail to satisfy either such exception shall have no force and effect until
amended to so comply (which amendment may be retroactive and may be made by Windstream without the
consent of any participant, eligible employee, beneficiary or other person).
Federal Income Tax Consequences
The following is a brief summary of certain of the federal income tax consequences of certain
transactions under the Plan. This summary is not intended to be complete and does not describe state, local,
foreign or other tax consequences.
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