Windstream 2009 Annual Report Download - page 44

Performance Shares and Performance Units
The Compensation Committee may, in its discretion, award performance shares and/or performance units to
officers and other key employees of Windstream and its subsidiaries. A performance share is the equivalent of
one share of Windstream common stock and a performance unit is the equivalent of $1.00.
The participant will be given one or more management objectives (as described below) to meet within a
specified period (the “performance period”). A minimum level of acceptable achievement will also be
established by the Compensation Committee. If by the end of the performance period, the participant has
achieved the specified management objectives, the participant will be deemed to have fully earned the
performance shares or performance units. If the participant has not achieved the management objectives, but has
attained or exceeded a predetermined minimum level of acceptable achievement, the participant will be deemed
to have partly earned the performance shares or performance units in accordance with a predetermined formula.
To the extent earned, the performance shares or performance units will be paid to the participant at the time and
in the manner determined by the Compensation Committee in cash, shares of Windstream common stock or any
combination thereof. The grant may provide for the payment of dividend equivalents thereon in cash or in shares
of Windstream common stock on a current, deferred or contingent basis. The grant may also provide for the
earlier termination of the performance period in the event of a change in control of Windstream, retirement, death
or disability of the participant, or other similar transaction or event approved by the Compensation Committee.
Restricted Shares
The Compensation Committee may, in its discretion, award restricted shares to officers and other key
employees of Windstream and its subsidiaries. Restricted shares constitute an immediate transfer of ownership of
a specified number of shares of Windstream common stock to the recipient in consideration of the performance
of services. The participant is entitled immediately to voting, dividend and other ownership rights in shares of
Windstream common stock (unless otherwise determined by the Compensation Committee). The transfer may be
made without additional consideration or in consideration of a payment by such participant that is less than the
fair market value per share of Windstream common stock on the date of grant.
Restricted shares must be subject to a “substantial risk of forfeiture,” within the meaning of Section 83 of
the Code, for a period to be determined by the Compensation Committee on the date of the grant, and may
provide for the earlier termination of the forfeiture provisions in the event of a change in control of Windstream,
retirement, death or disability of the participant, or other similar transaction or event approved by the
Compensation Committee. In order to enforce these forfeiture provisions, the transferability of restricted shares
will be prohibited or restricted in the manner prescribed by the Compensation Committee on the date of grant for
the period during which such forfeiture provisions are to continue.
Any grant of restricted shares may specify management objectives which, if achieved, will result in
termination or early termination of the restrictions applicable to such shares. Any such grant may also specify in
respect of such specified management objectives, a minimum acceptable level of achievement and must set forth
a formula for determining the number of restricted shares on which restrictions will terminate if performance is at
or above the minimum level, but below full achievement of the specified management objectives.
Restricted Stock Units
The Compensation Committee may, in its discretion, award restricted stock units to officers and other key
employees of Windstream and its subsidiaries. Restricted stock units constitute an agreement to issue or deliver
shares of Windstream common stock to the recipient in the future in consideration of the performance of services
over a specified period, but subject to the fulfillment of such conditions as the Compensation Committee may
specify.
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