Windstream 2013 Annual Report Download - page 46

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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 2010. 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
($255,000 for 2013) 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 based on reduction factors as
in effect on December 31, 2007. 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-
Compensation and 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 2013.