Windstream 2011 Annual Report Download - page 37

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 whose benefits are reduced
due to the IRS compensation limits for qualified plans. This plan was established by Alltel and assumed by
Windstream at the spin-off. As with the Pension Plan, accruals are frozen for employees. No named executive
officers continued to be eligible for accruals in the pension benefit of the BRP as of the end of 2011. 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 ($245,000 for 2011) 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, 2011. For purposes of the preceding calculations, compensation has the
same meaning provided in the foregoing description of the Pension Plan. The payment of a participant’s
retirement benefit under the BRP shall commence as of the first day of the first month following the later of
(i) his 60th birthday or (ii) the six-month anniversary of the participant’s separation from service. Benefits are
paid over the life of the participant if the participant is alive when benefits commence or over the life of the
spouse if the benefit is paid as a pre-retirement death benefit. The benefit will be paid in one lump sum payment
if the actuarial present value is less than $30,000. To the extent permitted by the IRC Section 409A, the Benefits
Committee comprised of the Chief Financial Officer, Chief Operating Officer, Executive Vice President-Chief
Human Resources Officer and Vice President-Benefits, authorized by the Board of Directors to manage the
operation and administration of all employee benefit plans, including non-qualified plans, may direct that the
benefit be paid in an alternative form provided that it is the actuarial equivalent of the normal form of benefit so
that the BRP benefit is paid in the same form as the Pension Plan benefit. None of the named executive officers
were yet eligible to commence their benefit under the BRP as of the end of 2011.
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