Windstream 2013 Annual Report Download - page 38

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entered into new change-in-control agreements with its NEOs effective January 1, 2013. The terms of the new
change-in-control agreements are generally the same as the prior agreements, except that the new agreements do
not provide for a gross-up payment to any NEOs to offset any excise taxes that may be imposed on excess parachute
payments under Section 4999 of the Internal Revenue Code. Instead, under the change-in-control agreements if
such excise taxes would be imposed, the executive will either receive all of the benefits to which he or she is entitled
under the agreement, subject to the excise tax, or have his or her benefits under the agreement reduced to a level at
which the excise tax will not apply, depending upon which approach would provide the executive with the greater
net after-tax benefit. Upon a qualifying separation from service, the executive officers are eligible to receive a cash,
lump sum payment based upon a multiple of base salary and target bonus of three times for all NEOs. Refer to the
“Potential Payment Upon Termination or Change-in-Control” section for details associated with the Change-in-
Control Agreement.
Perquisites and Other Benefits. Windstream permits limited personal use of Windstream’s corporate aircraft
by Mr. Gardner and the other named executive officers. Under Windstream’s policy, this use cannot interfere
with business use of the aircraft. Due to the extensive travel demands on their schedules, Messrs. Gardner and
Whittington are allowed to utilize the corporate aircraft for personal use more often than the other named executive
officers, pursuant to time-sharing arrangements in which they reimburse 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 named 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 named executive officers is permitted
only as approved in advance by Mr. Gardner. The Compensation Committee monitors the use by Mr. Gardner and
all named 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.
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.