Windstream 2009 Annual Report Download - page 41

OUR BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE AMENDED PLAN.
The Amended Plan allows Windstream, by action of the Compensation Committee, to make grants of stock
options, SARs, restricted shares, restricted stock units, performance units, performance shares and other share-
based awards to employees and non-employee directors through February 9, 2016. The purpose of these equity
awards is to attract and retain talented employees and directors, further align employees’ interests with the long-
term interests of our stockholders and continue to closely link employee compensation with Windstream’s
performance.
The Amended Plan provides an essential component of the total compensation package offered to
employees, reflecting the importance we place on motivating and rewarding superior results with long-term,
performance-based incentives. The Amended Plan will allow us to continue to provide performance-based
incentives to our eligible employees and non-employee directors.
Our Board of Directors believes that this proposal is in the best interests of our stockholders and supports
this proposal. If the Amended Plan is approved, Windstream can continue to grant equity-based awards in lieu of
cash as a significant and integral part of an employee’s total compensation and as a mechanism to deliver long-
term incentives. If the Amended Plan is not approved, we may be compelled to significantly increase the cash
component of employee compensation, and we will lose a critical tool for recruiting, retaining and motivating
employees.
Your approval of the Amended Plan not only will allow us to continue to grant equity awards, it will also
permit us to structure incentive compensation that preserves our tax deductions under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”). We refer to these awards as qualified performance-
based awards. Section 162(m) denies a corporation’s federal income tax deduction for compensation it pays to
certain executive officers in excess of $1 million per year for each such officer. Section 162(m) provides an
exception to this limitation for performance-based compensation, the material terms of which have been
approved by a corporation’s shareholders at least every five years. To that end, stockholder approval of the
Amended Plan also will constitute approval of the performance objectives upon which qualified performance-
based awards may be based (as further described below under the heading “Management Objectives”), the annual
maximum limits per individual (as further described below under the heading “Individual Limits”), and the
eligible employees (as further described below under the heading “Eligibility”).
SUMMARY OF THE AMENDED PLAN
The following is a summary of the Amended Plan and is qualified in its entirety by reference to the full text
of the Amended Plan, a copy of which is attached to this proxy statement as Appendix A and incorporated herein
by reference. Stockholders are encouraged to read the text of the Amended Plan in its entirety.
Amended Plan Limits
The maximum number of shares of Windstream common stock that may be issued or delivered with respect
to awards under the Amended Plan is 20,000,000 plus any shares relating to awards that expire or are forfeited or
cancelled as described below, which may include authorized but unissued shares, treasury shares or a
combination thereof.
Shares covered by an award granted under the Amended Plan shall not be counted as used unless and until
they are actually issued or delivered to a participant. Shares covering awards that expire, are forfeited or are
cancelled will again be available for issuance or delivery under the Amended Plan, and upon payment in cash of
the benefit provided by any award granted under the Amended Plan, any shares that were covered by that award
will be available for issuance or delivery under the Amended Plan.
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