Windstream 2008 Annual Report Download - page 30

benefit is also payable in a monthly life annuity following early retirement at or after age 55 with at least 20
years of service (with reduction in the life annuity of 0.25% for each month that commencement precedes age
60) or at or after age 60 with 15 years of service (with reduction in the life annuity of 0.25% for each month that
commencement precedes age 65 for a participant whose benefit commences before age 62). As of the end of
2008, no named executive officers satisfied the foregoing age and service requirements to commence receipt of
an early retirement benefit under the Pension Plan.
For deferred vested participants (i.e. those who terminate employment before early retirement), the accrued
benefit is payable in a monthly life annuity beginning at normal retirement age. If a deferred vested participant
has 15 years of service, the accrued benefit is also payable in a monthly life annuity beginning as early as age 60
(with reduction in the life annuity of 0.50% for each month commencement precedes age 65), and, if the deferred
vested participant has at least 20 years of service, the accrued benefit is also payable in a monthly life annuity
beginning as early as age 55 (with reduction in the life annuity of 0.50% for each month commencement
precedes age 65).
For a participant eligible for normal retirement or early retirement, payment is also available in actuarial
equivalent joint and surviving spouse annuities, which provide a reduced monthly amount for the participant’s
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-and life 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. As with the Pension Plan,
accruals are frozen for employees, except for those employees who attained age 40 with two years of vesting
service as of December 31, 2005, which will end on December 31, 2010. Of Windstream’s named executive
officers, only Messrs. Gardner, Clancy and Crane participated in the pension benefit of the BRP as of the end of
2008. 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 ($230,000 for 2008) 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, 2008. For purposes of the preceding calculations,
compensation has the same meaning provided in the foregoing description of the Pension Plan. The payment of a
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