Windstream 2015 Annual Report Download - page 27

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SECURITY OWNERSHIP
Stock Ownership Guidelines. In November 2015, the Windstream Board of Directors adopted new minimum
stock ownership guidelines for Windstream’s directors and executive officers. The spin-off of Communications Sales
& Leasing, Inc., and the reverse stock split in April 2015 resulted in a recapitalization of the Company, and upon the
recommendation of the Compensation Committee, the Board revised the guidelines to include new ownership levels
consistent with the changes in capital structure. The new guidelines require directors and executive officers to meet
minimum stock ownership levels equal to the lesser of (i) a value-based multiple of salary or retainer, as applicable,
or (ii) a fixed number of shares of common stock.
Directors who are not executive officers are expected to maintain minimum beneficial ownership of shares of
Windstream common stock at levels equaling the lesser of either (i) 40,000 shares of common stock or (ii) a number
of shares valued at least three times the annual retainer paid to non-management directors. Executive officers are
expected to maintain minimum beneficial ownership of shares of Windstream common stock at levels equaling the
lesser of either (i) a number of shares equal to the value-based multiple or (ii) the specified fixed number of shares,
each as provided in the following table.
Officer Value-Based Multiple (1) Fixed Number of Shares (2)
Directors 3x Annual Board Retainer 40,000 Shares
President and Chief Executive Officer 5x Salary 750,000 Shares
Chief Financial Officer 3x Salary 200,000 Shares
Executive Vice President, General Counsel 3x Salary 225,000 Shares
President – Enterprise 3x Salary 200,000 Shares
Vice President – Controller 1x Salary 50,000 Shares
(1) For purposes of the value-based multiple component of the ownership measurement, ownership levels are
calculated as of December 31 of each year by dividing (i) the total value of shares required to be beneficially
owned by (ii) the 30-day average stock price of a share of common stock for the period ending on December 31.
(2) Pursuant to the stock ownership guidelines, the fixed numbers of shares of common stock are adjusted to
reflect stock splits or similar changes to the capital structure of Windstream.
Directors and executive officers in their positions at the time of adoption of the new guidelines have until
December 31, 2020, to attain the ownership levels described above, and each new director and executive officer will
have a transition period of five years from the date of his or her appointment to attain the applicable ownership level.
During the transition period and until the director or officer satisfies the specified ownership levels, the guidelines
imposearetentionratiothatprovidesthateachofficeranddirectorisexpectedtoretainatleast50%oftheshares
received, net of tax payment obligations, upon the vesting of restricted stock or the exercise of stock options. Directors
and officers are also required to hold for at least six months all shares received, net of tax payment obligations, upon
vesting of restricted equity awards or the exercise of stock options. For the purposes of the guidelines, unvested time-
based shares or units of restricted stock are considered beneficially owned, while unvested performance-based shares
or units of restricted stock do not count toward satisfaction of the stock ownership guidelines for executive officers.
The table below sets forth the applicable guideline share amount for each named executive officer and the
number of shares of Windstream common stock that each such officer is deemed to own under the guidelines as of
March 1, 2016.
Named Executive Officers Guideline Share Amount (1) Shares Owned
Tony Thomas 750,000 388,957
Robert E. Gunderman 200,000 136,177
John P. Fletcher 225,000 276,656
J. David Works, Jr. 200,000 136,187
John C. Eichler 45,768 58,331
(1) These executive officers have until December 31, 2020 to attain the ownership levels. The ownership level for
each of the named executive officers is equal to the fixed number of shares applicable to his position, except for
Mr. Eichler for which the value-based multiple resulted in a lower mandatory ownership level.