Windstream 2006 Annual Report Download - page 9

BOARD AND BOARD COMMITTEE MATTERS
During 2006, there were seven meetings of Windstream’s Board, which includes two meetings of the
Spinco Board prior to July 17, 2006. All of the directors attended 75% or more of the meetings of the
Windstream Board of Directors and Board Committees on which they served during the periods in which they
served. Directors are expected to attend each annual meeting of stockholders. None of the present directors
attended the 2006 Annual Meeting of Stockholders of Valor, which occurred prior to the closing of the Alltel
spin-off and Valor merger on July 17, 2006.
The Windstream Board of Directors has affirmatively determined that all of the nominees for director,
except Messrs. Francis X. Frantz and Jeffery R. Gardner, have no material relationship with Windstream and are
independent directors under the NYSE listing standards. In making such determinations, the Windstream Board
of Directors evaluated the following relationships involving Mr. Beall and Mr. Foster and found that each such
relationship was not material, as defined by the NYSE listing standards, because it would not interfere with such
individual’s exercise of independent judgment:
• Mr. Beall is Chairman and CEO of Ruby Tuesday, Inc. Ruby Tuesday makes payments to regulated
subsidiaries of Windstream for communications services in various restaurants nationwide pursuant to
ordinary course customer relationships. In 2006, the payments were approximately $89,000 and were
significantly less than 2% of each of Ruby Tuesday’s and Windstream’s consolidated revenues.
• Mr. Beall is a director of SSC Services Solutions, and Mr. Beall and his family members own stock in
the company in an amount that is less than five percent of SSC’s capital stock. SSC Services Solutions
provides janitorial services to Windstream pursuant to an ordinary course relationship that existed prior
to Mr. Beall having any affiliation with Windstream. Neither Mr. Beall nor any of his family members
is an executive officer or employee of SSC Services Solutions. In 2005 and 2006, Windstream incurred
approximately $547,000 and $557,000, respectively, in charges to SSC Services Solutions.
• Mr. Foster is a director of the Humane Society of Lexington, Kentucky. In 2004, Alltel made a pledge to
the Humane Society in the amount of $150,000 over three years. In 2006, Windstream completed this
pledge with a final payment of $100,000. Lexington, Kentucky is the largest metropolitan market in
which a Windstream subsidiary serves as an incumbent local exchange carrier, and the donations to the
Humane Society are consistent with Windstream’s policy of making charitable contributions to local
organizations in its markets.
The standing Committees of the Windstream Board of Directors are the Audit Committee, Compensation
Committee and the Governance Committee. Each of the Audit, Compensation, and Governance Committees has
a written charter and is comprised entirely of independent directors, as defined under the NYSE listing standards.
A brief description of the functions of the Audit, Compensation, and Governance Committees is set forth below.
The Windstream Corporate Governance Board Guidelines specify that the independent directors of the
Board must meet at regularly scheduled executive sessions without management and that an independent director
selected from time to time by the independent directors shall act as the Lead Director to preside at executive
sessions of independent directors. The Windstream Board of Directors has designated Dennis Foster to serve as
Lead Director to preside at the executive sessions until his successor is appointed. The executive sessions of the
independent directors specified in the Board Guidelines occur at the end of each regular meeting of the Board.
The Audit Committee held two meetings during 2006. The Audit Committee assists the Windstream
Board of Directors in overseeing Windstream’s consolidated financial statements and financial reporting process,
disclosure controls and procedures and systems of internal accounting and financial controls, independent
auditors’ engagement, performance, independence and qualifications, internal audit function, and legal and
regulatory compliance and ethics programs as established by Windstream management and the Board of
Directors. The Audit Committee has been established by the Windstream Board of Directors for the purpose of
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