Windstream 2010 Annual Report Download - page 29

In the event of a change-in-control, Windstream has also agreed to provide lump sum cash payments
equal to the value of medical and dental benefits for a period of 36 months for Messrs. Gardner, Whittington, and
Fletcher and 24 months for all other named executive officers. Windstream has also agreed to provide, at its
expense, outplacement services from a recognized outplacement provider, except that Windstream’s cost for such
services will not exceed $50,000 in the case of Messrs. Gardner, Whittington, and Fletcher and $25,000 in the
case of any other named executive officer. Also, under the terms of Windstream’s agreements for its equity
compensation awards of restricted stock or performance-based restricted stock or units, the unvested equity
awards held by the executive officers will vest on a “double-trigger” basis that is substantially similar to the
events that trigger the cash payments under the change-in-control agreements. For change-in-control agreements
adopted prior to 2009, Windstream is obligated to reimburse each executive officer for excise taxes imposed on
such individual pursuant to Section 4999 of the Internal Revenue Code as a result of the foregoing payments if
the payments exceed 110% of the greatest amount payable to the executive without triggering excise taxes. The
change-in-control agreements were amended in 2008 to comply with the final regulations issued under
Section 409A of the Internal Revenue Code and to clarify the scope of the non-compete provisions. In
consideration of these changes, the term of the agreements was extended by one year to expire January 1, 2013.
No changes have been made to the change-in-control agreements since 2008, except that change-in-control
agreements entered into with executive officers since 2008 have not included a gross-up provision for excise
taxes imposed by Section 4999. Ms. Nash’s change-in-control agreement does not include a gross-up provision.
Perquisites and Other Benefits. Beginning in 2009, the reimbursement of country club and financial
planning expenses was discontinued for all participants with no adjustment to compensation and no new
perquisite programs.
Windstream permits limited personal use of Windstream’s corporate aircraft by Mr. Gardner and other
named executive officers. Under Windstream’s policy, this use cannot interfere with other required business use
of the aircraft. Mr. Gardner is allowed to utilize Windstream’s corporate aircraft for personal use pursuant to a
time-sharing arrangement in which Mr. Gardner reimburses Windstream for the incremental cost of such use,
which primarily includes costs for fuel, maintenance charges allocable to such use and contract-pilot charges and
excludes depreciation of the aircraft, general maintenance, compensation of Windstream’s employee pilots, and
other general charges related to ownership of the aircraft. Other executive officers are allowed to have family
members accompany them on a business trip on the aircraft, subject to seat availability and prior approval of
Mr. Gardner. Any other personal use of the aircraft by the other executive officers is permitted only as approved
in advance by Mr. Gardner. The Compensation Committee monitors the use by Mr. Gardner and all executive
officers to ensure the amount of usage is reasonable. Windstream believes that personal use of aircraft for
Mr. Gardner and other senior executives is a reasonable benefit in light of the significant demands that are
imposed on their schedules as a result of their responsibilities to Windstream.
Clawback Policy. The Board of Directors, upon the recommendation of the Compensation Committee,
has adopted a clawback policy that requires executive officers to repay or forfeit covered compensation under the
conditions set forth in the policy. See “Compensation of Named Executive Officers — Clawback Policy” for a
description of the terms of the policy. The Board of Directors of Windstream, acting solely through its
independent directors, is the administrator of the policy. The policy applies to covered compensation granted or
awarded on or after January 1, 2010, including severance payments that may be issued after January 1, 2010
under Windstream’s existing change-in-control agreements. The Compensation Committee intends to modify the
clawback policy to comply with the final regulations to be issued by the SEC pursuant to the requirements of in
the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Other Services Performed By Compensation Consultant. The Compensation Committee has adopted a
policy that the compensation consultant to the Compensation Committee should not perform any other services
to Windstream, and PM&P performed no services to Windstream during 2010 other than in its role as
compensation consultant to the Compensation Committee.
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