Windstream 2013 Annual Report Download - page 60

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Restricted Stock Units. Generally, no income will be recognized upon the award of restricted stock units.
The recipient of a restricted stock unit award generally will be subject to tax at ordinary income rates on the fair
market value of unrestricted shares of Windstream common stock on the date that such shares are transferred to the
participant under the award (reduced by any amount paid by the participant for such restricted stock units), and the
capital gains/loss holding period for such shares also will commence on such date.
Other Share-Based Awards. The recipient of a share-based award other than an award described above
generally will be subject to tax at ordinary income rates on the amount of cash and the fair market value of shares of
Windstream common stock received under the share-based award, and the capital gains/loss holding period for such
shares also will commence on the date of receipt.
Dividend Equivalents. Any dividend equivalents awarded with respect to awards granted under the Equity
Plan and paid in cash or unrestricted shares of Windstream common stock will be taxed to the participant at ordinary
income rates when received by the participant.
Section 409A. The Equity Plan permits the grant of various types of awards that may or may not be exempt
from Section 409A of the Code. If an award is subject to Section 409A, and if the requirements of Section 409A are
not met, the taxable events as described above could apply earlier than described, and could result in the imposition of
additional taxes and penalties. Restricted stock awards, stock options and stock appreciation rights that comply with
the terms of the Equity Plan are designed to be exempt from the application of Section 409A. Restricted stock units,
performance shares, performance units and dividend equivalents granted under the Equity Plan would be subject to
Section 409A unless they are designed to satisfy the short-term deferral exemption (or other applicable exception).
If not exempt, it is intended that those awards will be designed to meet the requirements of Section 409A in order to
avoid early taxation and penalties.
Because the tax consequences to a participant may vary depending on his or her individual circumstances, each
participant should consult his or her personal tax advisor regarding the federal and any state, local, foreign or other
consequences to him or her.
Historical Award Data
The following table includes information regarding outstanding equity awards under the Equity Plan, shares
currently available for future equity awards under the Equity Plan, and the total shares outstanding as of December 31,
2013 (all without giving effect to stockholder approval of this proposal). The closing market price of the Company’s
common stock as reported by NASDAQ on that date was $7.98.
Total shares underlying outstanding options 0
Total shares underlying outstanding performance based restricted stock awards 0
Total shares underlying outstanding unvested PBRSUs 1,356,883
Total shares underlying outstanding unvested restricted stock awards 3,051,822
Total shares underlying outstanding unvested RSUs 0
Total shares currently available for grant 4,819,043
Total shares currently available for grant as full-value awards 3,319,043
Total shares of common stock outstanding 596,152,328
Other Equity Incentive Plans. In addition to the Equity Plan, the Company is authorized to issue shares of
common stock under the PAETEC Holding Corp. 2011 Omnibus Incentive Plan (the “PAETEC Plan”) to eligible
participants who transferred to Windstream from PAETEC at the time of acquisition, which was assumed by the
Company in connection with its acquisition of PAETEC in 2011. As of December 31, 2013, 2,610,174 shares remained
available for future grants under the PAETEC Plan. Other than the Equity Plan and the PAETEC Plan, the Company
does not maintain any equity compensation plans under which it may grant equity compensation.
Potential Dilutive Effect of the Company’s Equity-Based Compensation Program. As of December 31, 2013,
there were 4,819,043 shares remaining available for issuance under the Plan, 2,610,174 shares remaining available for
issuance under the PAETEC Plan, and 6,066,783 shares subject to outstanding awards under these plans, representing
2.3% of outstanding Windstream Common Stock. If stockholders approve this proposal, the number authorized for