Windstream 2013 Annual Report Download - page 55

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Ter m. The Equity Plan allows Windstream to make grants of stock options, SARs, restricted shares, restricted
stock units, performance units, performance shares and other share-based awards to employees and non-employee
directors through July 17, 2016. However, if the Amendment is approved by stockholders, Windstream would be
allowed to make grants under the Equity Plan through February 12, 2019.
Eligible Participants. All of the officers and other key employees of Windstream and its subsidiaries (or
any person who has agreed to serve in such capacity) are eligible to participate in the Equity Plan as selected by
the Compensation Committee in its discretion. In addition, non-employee directors of Windstream are eligible to
participate in the Equity Plan as selected by the Compensation Committee in its discretion. During the last fiscal
year, 652 employees and eight non-employee directors were selected by the Compensation Committee to receive
awards under the Equity Plan.
Types of Awards. The Equity Plan permits awards of a variety of equity-based incentives, including options
rights, SARs, performance shares and performance units, restricted stock, restricted stock units (“RSUs”), and other
awards. Officers and other key employees may be granted each type of award available under the Equity Plan. Non-
employee directors may be granted option rights, SARs, restricted shares, restricted stock units and other share-based
awards, but are not eligible for grants of incentive stock options, performance shares or performance units. Since the
Equity Plan was adopted in 2006, only time-based restricted stock or performance-based restricted stock or stock
units have been granted under the Equity Plan to the Company’s directors, executive officers or other employees.
Option Rights. The Compensation Committee may, in its discretion, award option rights to officers and other
key employees of Windstream and its subsidiaries. Option rights granted to employees under the Equity Plan may
be option rights that are intended to qualify as ISOs or option rights that are not intended to so qualify (i.e., non-
qualified stock options) or combinations thereof.
Option rights provide the right to purchase shares of Windstream common stock at a price not less than
fair market value of the common stock on the date of grant (which date may not be earlier than the date that the
Compensation Committee takes action with respect thereto).
No option rights may be exercised more than ten years from the date of grant. Each grant must specify the
period of continuous employment that is necessary before the option rights become exercisable, and may provide
for the earlier exercise of such option rights in the event of a change in control of Windstream, retirement, death or
disability of the optionee, or other similar transaction or event approved by the Compensation Committee.
The option price is payable at the time of exercise (i) in cash, (ii) by the transfer to Windstream of nonforfeitable,
unrestricted shares of Windstream common stock that are already owned by the option holder and have a value at the
time of exercise equal to the option price, (iii) with any other legal consideration that the Compensation Committee
may deem appropriate or (iv) by any combination of the foregoing methods of payment. Any grant of option rights
may provide for deferred payment of the option price from the proceeds of sale through a broker on the date of
exercise of some or all of the shares of Windstream common stock to which the exercise relates, or the payment of
the option price in installments (although, in the case of executive officers and directors, these payment methods may
be affected by the restrictions on personal loans to executive officers provided by the Sarbanes-Oxley Act of 2002).
Any grant of option rights may specify Management Objectives (as described below) that must be achieved
as a condition to exercise such rights. The Compensation Committee may, at the date of grant of any option rights
(other than the grant of an ISO), provide for the payment of dividend equivalents to the optionee on a current,
deferred or contingent basis or may provide that such equivalents be credited against the option price. Successive
grants may be made to the same option holder regardless of whether option rights previously granted to him or her
remain unexercised.
Stock Appreciation Rights. The Compensation Committee may, in its discretion, award SARs to officers and
other key employees of Windstream and its subsidiaries. SARs represent the right to receive from Windstream an
amount, determined by the Compensation Committee and expressed as a percentage not exceeding 100 percent,
of the difference between the base price established for such SARs (not less than the fair market value per share of
Windstream common stock on the date of grant) and the market value of the common stock on the date the SARs
are exercised.