Windstream 2012 Annual Report Download - page 30

Stock Ownership/Insider Trading Policies. Windstream’s minimum share ownership guidelines apply to
Mr. Gardner and all other executive officers. The guidelines are described in this proxy statement under the heading “Stock
Ownership Guidelines.” The minimum share ownership guidelines are intended in part to ensure that executive officers retain
a sufficient number of shares of Windstream Common Stock such that they continue to have a material financial interest in
Windstream which is aligned with the stockholders. In addition, under Windstream’s insider trading compliance policy,
directors and executive officers are prohibited from engaging in any transaction involving derivative securities intended to
hedge the market risk in equity securities of Windstream other than purchases of long call options or the sale of short put
options that are not closed prior to their exercise or expiration date. The policy also prohibits the purchase of shares on loan
or margin and short sales.
2013 Compensation Actions. In February 2013, the Compensation Committee met and made the following
decisions regarding executive compensation for 2013 (a detailed analysis of these compensation decisions will be included in
Windstream’s proxy statement for its 2014 annual meeting of stockholders):
xSalary. The Committee elected not to increase base salaries for 2013.
xShort Term Incentives. The Committee elected not to change short term incentive opportunities for 2013 but
adjusted the relevant performance measures. For 2013, awards under Windstream’s short-term incentive plan
will be based 60% on Adjusted OIBDA, 20% on Total Revenue (instead of Adjusted Revenue) and 20% on
Dividend Payout Ratio.
xLong Term Incentives. The Committee elected not to change the overall grant mix for long-term equity
compensation for the CEO (which will remain at 100% PBRSUs). The Committee did, however, change the
grant mix for all other executive officers from 70%/30% to 50% PBRSUs and 50% time-based awards. The
Committee also raised the target level for awards to be paid out from 95.7% of plan to 97% of plan in 2013.
Compensation of Directors
During 2012, Windstream non-employee directors received the following compensation: (1) an annual cash retainer
of $60,000, (2) a cash fee of $2,000 for each Board and committee meeting attended, except that no fees were paid for
periodic informational update meetings, and (3) an annual grant of $80,000 in restricted stock under the Equity Plan. The
restricted shares granted to non-employee directors vest if the grantee continues to serve on the Board for the period
beginning on the date of grant and ending on February 15 of the following year or earlier, if the grantee dies or becomes
permanently disabled while serving on the Board or a change of control of Windstream occurs. In addition, in 2012, the
chairs of the Audit, Governance and Compensation Committees received additional annual cash retainers of $20,000,
$15,000 and $15,000, respectively. The Board Chairman received an additional annual cash retainer of $100,000. All non-
employee directors have the option to elect to receive any cash retainer in the form of Windstream Common Stock.
Board members receive pro-rated amounts of the annual cash retainer and the annual restricted stock grant for the
portion of the first year in which they are appointed or elected to serve as a Board member or Committee Chair.
24