Windstream 2009 Annual Report Download - page 42

Importantly, however, the following shares of Windstream common stock will not be added back to the
aggregate plan limit described above: (i) shares tendered in payment of the option price of a stock option granted
under the Amended Plan; (ii) shares withheld by Windstream to satisfy the tax withholding obligation; and
(iii) shares that are repurchased by Windstream in connection with the exercise of a stock option granted under
the Amended Plan. Moreover, all shares of Windstream common stock covered by a SAR, to the extent that it is
exercised and settled in shares, and whether or not shares are actually issued or delivered to the participant upon
exercise of the right, shall be considered issued or delivered pursuant to the Amended Plan.
In addition to the aggregate limit on awards described above, the Amended Plan imposes various sub-limits
on the number of shares of Windstream common stock that may be issued or delivered under the Amended Plan.
In order to comply with the rules applicable to incentive stock options (or “ISOs”), the Amended Plan provides
that the aggregate number of shares of Windstream common stock actually issued or delivered by Windstream
upon the exercise of ISOs may not exceed 10,000,000 shares. The Amended Plan also provides that the number
of shares of Windstream common stock issued or delivered as “full value” awards (all awards other than stock
options and SARs), after taking forfeitures into account, shall not exceed, in the aggregate, 18,500,000 shares
(the current limitation under the Plan is 8,500,000 shares).
Individual Limits
In order to comply with the exemption from Section 162(m) of the Code relating to performance-based
compensation, the Amended Plan imposes the following additional sub-limits: (i) no participant may be granted
option rights and SARs, in the aggregate, for more than 1,000,000 shares of Windstream common stock during
any calendar year, (ii) no participant may be granted performance shares and restricted shares specifying
management objectives (described below), in the aggregate, for more than 1,000,000 shares of Windstream
common stock during any calendar year, and (iii) no participant may be granted performance units having an
aggregate maximum value as of their date of grant in excess of $12,000,000 during any calendar year.
Administration
The Compensation Committee of Windstream, or such other committee or subcommittee of the Board of
Directors of Windstream that qualifies as a “compensation committee” under the NASDAQ listing standards (all
references to the Compensation Committee used in this description of the Amended Plan shall refer to such
committee or subcommittee), is authorized to administer the Amended Plan. The Compensation Committee will
have complete and absolute authority to make any and all decisions regarding the administration of the Amended
Plan, including the authority to construe and interpret the Amended Plan and awards granted thereunder.
Eligibility
All of the officers and other key employees of Windstream and its subsidiaries (or any person who has agreed
to serve in such capacity) are eligible to participate in the Amended Plan as selected by the Compensation
Committee in its discretion. In addition, non-employee directors of Windstream are eligible to participate in the
Amended Plan as selected by the Compensation Committee in its discretion. Accordingly, it is estimated that
approximately 385 employees and 8 non-employee directors may be eligible for awards under the Amended Plan.
Officers and other key employees may be granted each type of award available under the Amended Plan.
Non-employee directors may be granted nonqualified stock options, SARs, restricted shares, restricted stock
units and other share-based awards, but are not eligible for grants of incentive stock options, performance shares
or performance units.
Option Rights
The Compensation Committee may, in its discretion, award option rights to officers and other key
employees of Windstream and its subsidiaries. Option rights granted to employees under the Amended Plan may
be option rights that are intended to qualify as ISOs or option rights that are not intended to so qualify (i.e.,
non-qualified stock options) or combinations thereof.
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