Windstream 2007 Annual Report Download - page 37

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The Board believes that this approach facilitates a sharing of stockholder views and is ultimately more
meaningful and useful to the Board than a non-binding advisory vote that is based on incomplete information.
The proponent references the 2006 stock grants of Mr. Gardner in the supporting statement to the
proposal. Approximately $2 million of the grant was to replace the in-the-money value of Alltel stock options
forfeited by Mr. Gardner at the spin-off from Alltel. All employees with forfeited options received similar grants.
An additional $3 million of the 2006 grant was part of a special one-time grant to recognize the extra efforts
required for the business separation and integration activities that occurred as part of the spin-off and to maintain
consistency with comparable market transactions. The remaining $2.5 million comprised the annual grant for
determining Mr. Gardner’s total direct compensation for 2006. The Board believes the proponent’s criticism of
the 2006 grant without explaining the context of the award is an incomplete and unfair characterization of the
grant. In addition, Mr. Gardner’s 2006 compensation included $872,535 related to payments due from Alltel as a
result of the spin-off. This compensation was from programs approved by Alltel’s Compensation Committee.
The $71,650 in above-market earnings on non-qualified deferred compensation was earned on balances deferred
under Alltel’s deferred compensation plan. Finally, the proponent references $3 million in Excise Tax Gross-up
payments. As shown in this year’s proxy, Mr. Gardner would not have been eligible to receive any gross-up
payments in 2007 and we do not anticipate he would be eligible for gross-ups in future years.
The proponent recommends that stockholders be asked to ratify compensation paid to the Company’s
named executive officers and that stockholders be provided narrative disclosures of material factors necessary to
an understanding of the Summary Compensation Table. The Summary Compensation Table and the
Compensation Discussion and Analysis of this proxy statement describe in detail the philosophy and principles
under which compensation is paid to the Company’s named executive officers. The Board believes that these
disclosures provide the information requested by the proponent and that the additional narrative disclosure sought
by the proponent is therefore duplicative and unnecessary.
Windstream does not have a classified or staggered Board so stockholders can voice their approval or
disapproval of the Compensation Committee with each year’s election of the Board of Directors.
The Compensation Committee considers both public and confidential information about the Company’s
strategies and performance when assessing executive performance and setting compensation. Some of this
information could not be made available to stockholders without also providing proprietary competitive data to
the Company’s competitors. As proposed, stockholders would therefore be asked to endorse or reject
compensation decisions without complete information or, alternatively, to have the Company disclose
competitive information in a public document.
The advisory vote contemplated by the proposal would benefit neither Windstream or its stockholders.
The Compensation Committee would receive no clear guidance regarding the message the vote is intended to
convey, nor would it communicate the views of the stockholders as to the merits, perceived inadequacies or
proposed enhancements to refinements of the compensation package provided to the named executive officers.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “AGAINST” THE
STOCKHOLDER PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE
VOTED AGAINST THE STOCKHOLDER PROPOSAL UNLESS STOCKHOLDERS SPECIFY A
CONTRARY VOTE.
STOCKHOLDER PROPOSALS FOR 2009 ANNUAL MEETING
Stockholders who intend to present proposals at the 2009 Annual Meeting, and who wish to have those
proposals included in Windstream’s proxy statement for the 2009 Annual Meeting, must be certain that those
proposals are received by the Corporate Secretary at 4001 Rodney Parham Road, Little Rock, Arkansas 72212,
prior to December 1, 2008. Such proposals must meet the requirements set forth in the rules and regulations of
the SEC in order to be eligible for inclusion in the proxy statement for Windstream’s 2009 Annual Meeting.
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