Windstream 2007 Annual Report Download - page 28

life with the surviving spouse receiving 50%, 75% or 100%, as elected, of the reduced monthly amount, or in an
actuarial equivalent 10-year certain annuity, which provides a reduced monthly amount for the participant’s life
and, if the participant dies within 10 years of benefit commencement, with payments to a designated beneficiary
for the remainder of the 10-year certain period. For a married deferred vested participant, payment is also
available in the form of an actuarial equivalent joint and 50% or 75% surviving spouse annuity, as elected. If a
vested participant dies before benefit commencement, an annuity generally is payable to the participant’s
surviving spouse in an amount based on the joint and 50% surviving spouse annuity that would have been
payable to the participant beginning on the later of when the participant died or would have been eligible to
commence a benefit.
Under the Pension Plan, post-January 1, 1988 through December 31, 2005 service (December 31, 2010
service for employees who had attained age 40 with two years of vesting service as of December 31, 2005) is
credited at 1% of compensation, including salary, bonus and other non-equity incentive compensation, plus 0.4%
of that part of the participant’s compensation in excess of the Social Security taxable wage base for such year.
Service prior to 1988, if any, is credited on the basis of a percentage of the participant’s highest consecutive five-
year average annual salary, equal to 1% for each year of service prior to 1982 and thereafter increasing by 0.05%
each year until 1988, but only prospectively, i.e., with respect to service earned in such succeeding year. In
addition, participants receive an additional credit of 0.25% for each pre-1988 year of service after age 55, subject
to a maximum of 10 years of credit, plus an amount equal to 0.4% of the amount by which the participant’s
pre-1988 career average annual base salary (three highest years) exceeds his or her Social Security covered
compensation, multiplied by his years of pre-1988 credited service.
Windstream Benefit Restoration Plan. The Windstream Benefit Restoration Plan (“BRP”) contains an
unfunded, unsecured pension benefit for a group of highly compensated employees. Of Windstream’s named
executive officers, only Messrs. Gardner and Clancy and Ms. Bradley participated in the pension benefit of the
BRP as of the end of 2007. The pension benefit under the BRP is calculated as the excess, if any, of (x) the
participant’s Pension Plan benefit (on a single life-annuity basis payable commencing on the later of the
participant’s retirement date or age 65) without regard to the IRS compensation limit ($225,000 for 2007) over
(y) the participant’s regular Pension Plan benefit (on a single life-annuity basis payable commencing on the later
of the participant’s retirement date or age 65 regardless of the actual form or timing of payment). If the
participant has not attained age 65 on the date his benefit is scheduled to commence, the BRP benefit is reduced
to the extent, as the Pension Plan benefit would have been reduced as in effect on December 31, 2007. For
purposes of the preceding calculations, compensation has the same meaning provided in the foregoing
description of the Pension Plan. Benefits are paid over the life of the participant if the participant is alive when
benefits commence or over the life of the spouse if the benefit is paid as a pre-retirement death benefit. The
benefit will be paid in one lump sum payment if the actuarial present value is less than $30,000. To the extent
permitted by 409A, the Benefits Committee may direct that the benefit be paid in an alternative form provided
that it is the actuarial equivalent of the normal form of benefit so that the BRP benefit is paid in the same form as
the Pension Plan benefit. Of the named executive officers, only Ms. Bradley was eligible for an early retirement
benefit under the BRP as of the end of 2007.
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