Windstream 2006 Annual Report Download - page 47

PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee has selected PricewaterhouseCoopers LLP (“PwC”) to audit Windstream’s
consolidated financial statements for the fiscal year ending December 31, 2007. Windstream is submitting to the
stockholders for ratification at the Annual Meeting the selection of PwC as Windstream’s independent auditors
for 2007, although neither the Board of Directors nor its Audit Committee maintains a policy requiring
Windstream to seek stockholder ratification of the independent auditor selection. PwC also served as
Windstream’s independent auditor during 2006 in connection with the audit of the 2006 fiscal year and as
Spinco’s auditor during 2006 in connection with the audit of the carve-out financial statements that were
prepared for Spinco in connection with the Alltel spin-off and Valor merger. Information regarding PwC’s fees
for 2006 is provided below under the caption “Audit and Non-Audit Fees.” Representatives of PwC are expected
to be present at the 2007 Annual Meeting and will have an opportunity to make a statement, if they desire to do
so, and to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE FOR PROPOSAL NO. 3. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE
VOTED FOR PROPOSAL NO. 3 UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.
PROPOSAL NO. 4
STOCKHOLDER PROPOSAL – REQUIRED EQUITY AWARDS TO BE HELD
The stockholder proposal, which follows, is a verbatim submission by the International Brotherhood of
Electrical Workers’ Pension Benefit Fund (IBEW PBF) (“Fund”) of 900 Seventh Street, N.W., Washington, D.C.
20001 (who has notified Windstream that it is the beneficial owner of 11,015 shares of Windstream common stock),
for consideration by Windstream stockholders. All statements therein are the sole responsibility of the Fund.
RESOLVED:The shareholders of Windstream Corporation (“Company”) urge the Executive
Compensation committee of the Board of Directors (the “Committee”) to adopt a policy requiring that senior
executives and directors retain at least 75 percent of net after tax shares acquired through equity compensation
programs during the course of their employment. The committee should report to stockholders regarding the
adoption of such a policy and other information relevant to the proposal, before Windstream’s 2008 annual
meeting. The board shall implement this policy in a manner that does not violate any existing employment
agreement or equity compensation plan.
SUPPORTING STATEMENT
Equity-based compensation makes up a substantial portion of senior executive compensation at
Windstream. Under our Company’s equity incentive plan, over 800,000 shares have been issued to Windstream’s
CEO, President and Director, Jeffery Gardner. In early February of 2007, our Company issued him 168,800
shares with a grant-date estimated value of $2.5 million. All of those shares will be fully vested in three years.
We are concerned that the Company’s executive compensation policy does not require senior executives and
directors to retain a sufficient percentage of their equity-based compensation.
Citigroup’s 2006 Senior Executive Compensation Guidelines provide a good example of an approach
towards equity awards that this resolution recommends as part of an essential effort to better align executive and
shareholder long-term interests at Windstream.
Requiring senior executives to hold a significant portion of shares obtained through compensation plans,
throughout their tenure, would help them focus on the Company’s long-term success. The recent backdating
scandal has, we think, reminded investors of the dangers of a short-term mentality in which executives extract
value through equity-based compensation, and then cash out before the effects of their mismanagement becomes
apparent to other shareholders.
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