Edgar Filing: WINDSTREAM CORP

Definitive Proxy Statement

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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WINDSTREAM CORPORATION

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WINDSTREAM CORPORATION

4001 Rodney Parham Road

Little Rock, Arkansas 72212

Telephone: (501) 748-7000

www.windstream.com

NOTICE OF 2011 ANNUAL MEETING OF STOCKHOLDERS

To be Held May 4, 2011

To the Stockholders of Windstream Corporation:

Notice Is Hereby Given That the 2011 Annual Meeting of Stockholders of Windstream Corporation (“Windstream”) will be held at the Capital Hotel, 111 West Markham, Little Rock, Arkansas 72201, on Wednesday, May 4, 2011 at 11:00 a.m. (local time), for the following purposes:

To elect nine directors to serve until the 2012 Annual Meeting of Stockholders or until their successors are duly elected and qualified or until their earlier removal, resignation or death;

To vote on an advisory (non-binding) resolution on executive compensation;

To vote on an advisory (non-binding) resolution on the frequency of advisory votes on executive compensation;

To ratify the appointment of PricewaterhouseCoopers LLP as Windstream’s independent registered public accountant for 2011;

To vote on two stockholder proposals; and

To transact such other business as may properly come before the meeting or any postponement or adjournment thereof.

Only holders of Common Stock of record at the close of business on March 15, 2011 are entitled to notice of and to vote at the meeting or at any adjournment or postponement thereof.

Beginning on March 24, 2011, we began mailing our stockholders a notice containing instructions on how to access our 2010 Annual Report, Proxy Statement and Annual Report on Form 10-K and to vote online. The notice also included instructions on how to receive those Annual Meeting materials by mail. If you received those Annual Meeting materials by mail, the proxy card from the Board of Directors was enclosed with this notice and those materials.

By Order of the Board of Directors,

John P. Fletcher

Secretary

Little Rock, Arkansas

March 24, 2011

WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE VOTE AS SOON AS POSSIBLE TO RECORD YOUR VOTE PROMPTLY. PRIOR TO THE MEETING YOU MAY VOTE ON THE INTERNET, BY TELEPHONE OR BY MAIL.

Important notice regarding the availability of proxy materials for the 2011 Annual Meeting of Stockholders to be held on May 4, 2011. Windstream’s Proxy Statement and Annual Report to security holders for the fiscal year ended December 31, 2010 is also available at www.windstream.com.

WINDSTREAM CORPORATION

4001 Rodney Parham Road

Little Rock, Arkansas 72212

Telephone: (501) 748-7000

www.windstream.com

PROXY STATEMENT

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of Windstream Corporation (“Windstream”) to be used at its 2011 Annual Meeting of Stockholders. The meeting will be held at the Capital Hotel, 111 West Markham, Little Rock, Arkansas 72201 on Wednesday, May 4, 2011 at 11:00 a.m. (local time).

TABLE OF CONTENTS


	Page No.
Internet Availability of Proxy Materials		2
Voting Information		2
Proposal No. 1 - Election of Directors		4
Board and Board Committee Matters		8
Stock Ownership Guidelines		10
Security Ownership of Directors and Executive Officers		12
Security Ownership of Certain Beneficial Owners		13
Compensation Committee Report on Executive Compensation		14
Audit Committee Report		15
Management Compensation		16

Compensation Discussion and Analysis		16
Compensation of Directors		24
Compensation of Named Executive Officers		25
Information on Plan-Based Awards		27
Pension Benefits		29
Non-Qualified Deferred Compensation		31
Potential Payments Upon Termination or Change-in-Control		32
Clawback Policy		36
Risks Presented by Windstream’s Compensation Programs		37
Compensation Committee Interlocks and Insider Participation		37

Proposal No. 2 - Advisory Vote on Executive Compensation		38

Proposal No. 3 - Advisory Vote on Frequency of Advisory Votes on Executive Compensation		39

Proposal No. 4 - Ratification of Appointment of Independent Auditors		39

Proposal No. 5 - Stockholder Proposal - Cumulative Voting		40

Proposal No. 6 - Stockholder Proposal - Transparency And Accountability In Corporate Spending On Political Activities		41

Stockholder Proposals for 2012 Annual Meeting		43
Certain Relationships and Related Transactions		43
Section 16(a) Beneficial Ownership Reporting Compliance		44
Annual Report		44
Audit and Non-Audit Fees		45
Other Matters		46
Appendices
A. Companies Included in 2010 Competitive Market Analysis		A-1

INTERNET AVAILABILITY OF PROXY MATERIALS

Under U.S. Securities and Exchange Commission (SEC) rules, we are furnishing proxy materials to our stockholders primarily via the Internet, instead of mailing printed copies of those materials to each stockholder. Beginning March 24, 2011, we mailed to our stockholders (other than those who previously requested electronic or paper delivery) a notice containing instructions on how to access our proxy materials, including our proxy statement and our annual report. The notice also instructs you on how to access your proxy card to vote through the Internet or by telephone.

This process is designed to expedite stockholders’ receipt of proxy materials, lower the cost of the annual meeting, and help conserve natural resources. However, if you would prefer to receive printed proxy materials, please follow the instructions included in the notice. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials via e-mail unless you elect otherwise.

VOTING INFORMATION

Shares represented by properly executed proxies will be voted at the annual meeting of stockholders (“the Annual Meeting”). If a choice is specified by a stockholder, the proxy will be voted in accordance with that choice. If no choice is specified by a stockholder, the proxy will be voted in accordance with the recommendations of the Windstream Board of Directors.

Any stockholder executing a proxy retains the right to revoke it at any time prior to exercise at the Annual Meeting. A proxy may be revoked by delivery of written notice of revocation to the Secretary of Windstream, by execution and delivery of a later proxy or by voting the shares in person at the Annual Meeting. If not revoked, all shares represented by properly executed proxies will be voted as specified therein.

The close of business on March 15, 2011 has been fixed as the record date for the determination of stockholders entitled to notice of and to vote at the meeting or any adjournment thereof. On the record date, there were outstanding and entitled to vote 509,982,073 shares of Common Stock. This proxy statement is being made available to stockholders beginning on March 24, 2011.

Required Vote. On all matters to be acted upon at the meeting, each share of Common Stock is entitled to one vote per share. Windstream’s Bylaws require that, in an uncontested election, each director be elected by the affirmative vote of a majority of the votes cast at the meeting, either in person or by proxy (in other words, the number of shares voted “for” a director nominee must exceed the number of votes cast “against” that director nominee). In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), a plurality standard would apply to election of directors, and under a plurality standard the nominees for election of directors who receive the greatest number of votes cast for the election of directors at the meeting by the shares represented in person or by proxy and entitled to vote would be elected directors. The 2011 election has been determined to be an uncontested election, and the majority vote standard will apply.

If a nominee who is serving as a director is not elected at the Annual Meeting, Delaware law provides that the director would continue to serve on the Board as a “holdover director”. However, under our Bylaws, each director annually submits an advance, contingent, irrevocable resignation that the Board may accept if the director fails to be elected through a majority vote. In that situation, the Governance Committee of the Board of Directors would consider the tendered resignation of any nominee who failed to receive a majority vote and make a recommendation to the Board about whether to accept or reject the resignation, or whether to take other action. The Board will act on the Governance Committee’s recommendation to it within 90 days from the date the election results are certified and then publicly disclose its decision and the rationale behind it. If a nominee who was not already serving as a director fails to receive a majority of votes cast at the annual meeting, Delaware law provides that the nominee does not serve on the Board as a “holdover director”. In 2011, all director nominees are currently serving on the Board.

Except for the non-binding advisory vote on the frequency of advisory votes on executive compensation, all matters to be submitted to a vote by the stockholders at the Annual Meeting must be approved by the affirmative vote of the majority of the shares present in person or by proxy and entitled to vote on the matter. However, because the vote on the frequency of advisory votes on executive compensation is advisory and non-binding, and because the presence of three frequency options on the ballot creates the potential that no option will receive majority support, the frequency option that receives the greatest number of votes will be considered the frequency recommended by the Company’s stockholders.

Beneficial Owners of Shares Held in Street Name. If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization that holds your shares will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote”.

The ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accountant for 2011 (Proposal No. 4) is considered routine under applicable rules. A broker or other nominee may generally vote on routine matters, and therefore no broker non-votes are expected to exist in connection with Proposal No. 4.

The election of directors (Proposal No. 1), the advisory votes on executive compensation and the frequency of advisory votes on executive compensation (Proposals No. 2 and 3) and the shareholder proposals (Proposals No. 5 and 6) are matters considered non-routine under applicable rules. A broker or other nominee cannot vote without instructions on non-routine matters, and therefore there may be broker non-votes on Proposals No. 1, No. 2, No. 3, No. 5 and No. 6.

Effect of Broker Non-Votes and Abstentions. Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present. Broker non-votes and abstentions will have no effect on the outcome of the election of directors because they will not be considered votes cast. In the case of each proposal other than election of directors, broker non-votes will have no effect on the outcome of each vote, but abstentions will have the same effect as a vote “AGAINST” each item. In order to minimize the number of broker non-votes, Windstream encourages you to provide voting instructions to the organization that holds your shares by carefully following the instructions provided in the notice of internet availability of proxy materials.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

The number of directors that serve on the Windstream Board of Directors is currently set at nine and may be fixed from time to time in the manner provided in Windstream’s Bylaws. The nine current members of the Board of Directors will stand for election as directors at the 2011 Annual Meeting of Stockholders, and the size of the Board is expected to be fixed at nine at such time. Directors are elected to serve until the 2012 Annual Meeting of Stockholders or until their successors are duly elected and qualified or until their earlier removal, resignation or death. The slate of nine nominees set forth below has been chosen by the Board upon the recommendation of the Governance Committee.

Unless otherwise directed, the persons named in the form of proxy for the Annual Meeting will vote that proxy for the election of the nine persons named below. In case any nominee is unable to serve (which is not anticipated), the persons named in the proxy may vote for another nominee of their choice. For each nominee, there follows a brief listing of principal occupations for at least the past five years, other major affiliations, Windstream Board Committees, age, and the year in which each such person was initially elected as a Windstream director. The following description of each director also outlines the specific experience, qualifications, attributes or skills that support the Board’s conclusion that the nominee should serve as a director.

Carol B. Armitage, age 53, has served as a director of Windstream since September 2007 and serves on the Audit Committee and the Governance Committee. Ms. Armitage has served as a telecommunications consultant since 1998. From 1995 to 1997 she served as Senior Vice President, Technology and Strategy at General Instrument. Prior to 1995 she held various management and engineering positions during sixteen years of service with Bell Laboratories and Network Systems (which later became Lucent). Since March 2010, Ms. Armitage has served as Chairman of the Board of SCALA, Inc., a provider of digital signage and advertising management solutions. From 2000 to February 2010, she served as Vice Chairman of SCALA. From 2003-2004, Ms. Armitage served as Chairman of the Board and was on the Audit Committee of YDI Wireless, a public company engaged in the development and provision of wireless fiber technologies.

Ms. Armitage’s qualifications for election to the Board include her extensive knowledge of technologies impacting the communications industry based on her deep industry experience and her educational training including an M.S. in electrical engineering from Princeton University. Her service on the boards of other companies has given her additional experience in strategic planning, financial reporting, and mergers and acquisitions.

Samuel E. Beall, III, age 60, has served as a director of Windstream since November 2006 and serves on the Compensation Committee and Governance Committee. Mr. Beall has served as Chairman of the Board and Chief Executive Officer of Ruby Tuesday, Inc. since May 1995 and also as President of Ruby Tuesday, Inc. since July 2004. Ruby Tuesday, Inc. is a New York Stock Exchange listed company that owns and operates casual dining restaurants under the Ruby Tuesday brand.

Mr. Beall’s qualifications for election to the Board include his ability to provide the perspective of an active chief executive officer of a public company, which gives him unique insights into Windstream’s challenges and opportunities. As a current chief executive officer of a public company and a director of several private businesses, he has insight on managing complex business operations, overseeing business risk, designing compensation programs that motivate people, and developing national advertising campaigns.

Dennis E. Foster, age 70, has served as Chairman of the Board of Windstream since February 2010. From July 2006 to February 2010, he served as Lead Director, and Mr. Foster continues to perform the role of Lead Director in his role as Chairman. Mr. Foster was a director of Alltel Holding Corp. (a predecessor corporation to Windstream) from June 2006 to July 2006. Mr. Foster serves as Chairman of

the Governance Committee and is a member of the Compensation Committee. Mr. Foster is a principal in Foster Thoroughbred Investments (thoroughbred racing, breeding and training operations) in Lexington, Kentucky, which he joined in June 1995. Mr. Foster served as a director of Alltel Corporation from 1998 through 2006. Prior to his retirement in 2000, Mr. Foster held a number of leadership positions in the telecommunications industry, including President and Chief Executive Officer of 360° Communications and Senior Vice President of the Local Telecommunications Division of Sprint Corporation, and he has over 40 years of experience in the telecommunications industry. Mr. Foster is also a director and serves on the Compensation and Governance Committees of YRCW (Yellow Roadway Corporation Worldwide) and is a director and Chairman of the Audit Committee of NiSource Inc.

Mr. Foster’s qualifications for election to the Board include his ability to provide the insight and perspectives of a successful and long-serving senior executive in the telecommunications industry. Having formerly served as president and chief executive officer of a telecommunications company, he has insight on managing people, overseeing business risk and understanding financial statements. As a result of currently serving as chairman of Windstream and as a director of two other public companies (which directorships include serving as chairman of Windstream’s governance committee and a member of its compensation committee, chairman of YRCW’s compensation committee, and chairman of NiSource Inc.’s audit committee), Mr. Foster also has particular experience with corporate governance issues, as well as the capital markets, the challenges of financing in the current economy and the merger and acquisitions environment.

Francis X. (“Skip”) Frantz, age 57, has served as a director of Windstream since 2006 and served as Chairman of the Board of Alltel Holding Corp. from December 2005 to July 2006 and of Windstream from July 2006 until February 2010 when, to enhance Windstream’s corporate governance profile, Mr. Frantz and the Board determined to select a Chairman who is “independent”, as defined by applicable stock exchange rules (because of compensation arrangements implemented in connection with the 2006 spin-off of Windstream from Alltel Corporation, Mr. Frantz is not “independent” and, as currently defined, would not qualify as “independent” until 2013). Mr. Frantz has served as Chairman of Swyft Technology, LLC (a provider of interaction management technology) in Jacksonville, Florida, since February 2010. Prior to January 2006, Mr. Frantz was Executive Vice President-External Affairs, General Counsel and Secretary of Alltel Corporation. Mr. Frantz joined Alltel in 1990 as Senior Vice President and General Counsel and was appointed Secretary in January 1992 and Executive Vice President in July 1998. While with Alltel, he was responsible for Alltel’s mergers and acquisitions negotiations, wholesale services group, federal and state government and external affairs, corporate communications, administrative services, and corporate governance, in addition to serving as Alltel’s chief legal officer. Mr. Frantz served as the 2006 and 2007 Chairman of the Board and of the Executive Committee of USTelecom, a telecom trade association. Because Mr. Frantz is not “independent”, he is disqualified, under applicable stock exchange rules, from being a member of the Audit, Compensation, or Governance Committees.

Mr. Frantz’s qualifications for election to the Board include his ability to provide insight and perspective on a wide range of issues facing business enterprises based on his long tenure as a senior executive in the telecommunications industry. Mr. Frantz’s over 15-year career as a senior telecom executive in various capacities provides him with a thorough understanding of all aspects of Windstream’s business, and his service as a director and Chairman of USTelecom provides Mr. Frantz with additional experience and insight in telecommunications policy and regulation. Through his current position as Chairman of an emerging technology company and his prior role as Chairman of Windstream and, before that, as a senior executive at Alltel Corporation, Mr. Frantz has extensive experience in corporate governance, mergers and acquisitions, risk management, and capital market transactions, in addition to the specific aspects of the telecom industry.

Jeffery R. Gardner, age 51, President and Chief Executive Officer of Windstream since July 2006. Mr. Gardner has been a director of Windstream since July 2006 and was a director of Alltel Holding

Corp. from December 2005 to July 2006. Alltel Corporation appointed Mr. Gardner in December 2005 to serve as President and Chief Executive Officer of Alltel Holding Corp. Prior to January 2006, Mr. Gardner was the Executive Vice President and Chief Financial Officer of Alltel. Mr. Gardner has been in the communications industry since 1986 and joined Alltel in 1998 when Alltel and 360º Communications merged. While with 360° Communications, he held a variety of other senior management positions such as Senior Vice President of Finance, President of the Mid-Atlantic Region, Vice President and General Manager of Las Vegas and Director of Finance. Since 2008, he has served as a member of the Executive Committee of USTelecom, a telecom trade association. He is a director and a member of the Audit Committee of RF Micro Devices, based in Greensboro, North Carolina.

The Board believes it is important that Windstream’s Chief Executive Officer serve on the Board, as the position of Chief Executive Officer puts Mr. Gardner in a unique position to understand the challenges and issues facing Windstream. Mr. Gardner’s qualifications for election to the Board include the demonstrated leadership skills and experience that qualify him to serve as Chief Executive Officer of Windstream. Mr. Gardner’s service on the board of another public company and several non-profit organizations also provides him with a broad perspective on the challenges and opportunities facing Windstream and the communities it serves.

Jeffrey T. Hinson, age 56, has served as a director of Windstream since July 2006 and served as a director of Alltel Holding Corp. from June 2006 to July 2006. Mr. Hinson also serves as Chairman of the Audit Committee and as a member of the Governance Committee. Mr. Hinson has served as President of YouPlus Media, LLC, since June 2009. From July 2007 to July 2009, Mr. Hinson served as the President and Chief Executive Officer and a member of the board of directors of Border Media Partners, LLC. Mr. Hinson served as a financial consultant from January 1, 2006 to June 30, 2007. Mr. Hinson served as a consultant to Univision Communications Inc., a Spanish language media company in the United States from July 2005 to December 2005. Mr. Hinson served as Executive Vice President and Chief Financial Officer of Univision Communications from March 2004 to June 2005. He served as Senior Vice President and Chief Financial Officer of Univision Radio, the radio division of Univision Communications, from September 2003 to March 2004. From 1997 to 2003, Mr. Hinson served as Senior Vice President and Chief Financial Officer of Hispanic Broadcasting Corporation, which was acquired by Univision Communications in 2003 and became the radio division of Univision Communications. Mr. Hinson is a director and Chairman of the Audit Committee of LiveNation and a director and Chairman of the Audit Committee of TiVo, Inc.

Mr. Hinson’s qualifications for election to the Board include his extensive financial and accounting experience. Through his current service on the audit committees of three public companies and his prior service as a chief financial officer of two public companies, Mr. Hinson has deep experience in overseeing financial reporting processes, internal accounting and financial controls, independent auditor engagements, and the other functions of an audit committee of a public company. The Windstream Board has also determined that Mr. Hinson qualifies as an “audit committee financial expert”, as defined by the rules of the Securities and Exchange Commission (“SEC”). His service on the boards of other public companies in diverse industries also allows him to offer a broad perspective on the challenges and opportunities facing Windstream.

Judy K. Jones, age 67, has served as a director of Windstream since July 2006 and served as a director of Alltel Holding Corp. from June 2006 to July 2006. Ms. Jones also serves as a member of the Audit Committee and the Governance Committee. She is currently a member of the board of directors of Lovelace Respiratory Research Institute and of Lovelace Scientific Resources. She held various senior administrative positions at the University of New Mexico from 1988 to 2006, including Vice President for Advancement, Associate Vice President for Strategic Initiatives (Health Sciences Center) and Chief of Staff to the President of the University. She also held senior administrative positions with New Mexico state government and is a former management consultant serving public sector clients for a major national accounting firm.

Ms. Jones’ qualifications for election to the Board include her expertise in financial and accounting matters. Through her prior experience as a senior executive at a state university and in state government and her experience on the boards of non-profit institutions, Ms. Jones has experience in reviewing and evaluating financial statements, financial budgets and forecasts, investment portfolios of public endowments, and other public finance matters. The Windstream Board has determined that Ms. Jones qualifies as an “audit committee financial expert”, as defined by the rules of the SEC. Her broad state government and higher education experience also allows her to offer insights and perspectives on government policy, structure and operations; public relations and marketing issues; the needs of colleges and universities, which are an important customer segment for Windstream; and information technology and strategic planning.

William A. Montgomery, age 62, has served as a director of Windstream since July 2006 and served as a director of Alltel Holding Corp. from June 2006 to July 2006. Mr. Montgomery also serves as Chairman of the Compensation Committee and is a member of the Governance Committee. Mr. Montgomery has been a private investor since 1999. From 1989 to 1999, Mr. Montgomery was Chief Executive Officer of SA-SO Company, a company engaged in the distribution of municipal and traffic control products based in Dallas, Texas. Prior to 1989, Mr. Montgomery worked as a registered representative in the financial services industry and has over 12 years of experience in the financial services industry, most recently serving with Morgan Stanley in the Private Client Services group from 1985 to 1989.

Mr. Montgomery’s qualifications for election to the Board include his wide range of financial and business experience. In his current role as Chair of the Compensation Committee of Windstream and through his professional career including his prior role as a chief executive officer of a private company, Mr. Montgomery has experience in strategic planning, risk management, compensation plans and policies, and capital market transactions. Mr. Montgomery’s service on the boards of non-profit organizations also provides him with a broad perspective on the challenges and opportunities facing Windstream and the communities it serves.

Alan L. Wells, age 51, has served as a director of Windstream since June 2010, and served as Chief Executive Officer of Iowa Telecommunication Services, Inc. (“Iowa Telecom”) and Chairman of the board of directors from 2004 to 2010. He joined Iowa Telecom in 1999 as President and Chief Operating Officer, and was appointed to the role of President and Chief Executive Officer in 2002. Prior to joining Iowa Telecom, Mr. Wells was Senior Vice President and Chief Financial Officer at MidAmerican Energy Holdings Company (MidAmerican), a Des Moines, Iowa-based electric and gas utility holding company, from 1997 until 1999. During the same period, Mr. Wells also served as President of MidAmerican’s non-regulated businesses. Mr. Wells held various executive and management positions with MidAmerican, its subsidiaries, and Iowa-Illinois Gas and Electric, one of its predecessors, from 1993 through 1999. Prior to that, Mr. Wells was with Deloitte Consulting (previously Deloitte & Touche Consulting) and previously held various positions with the Public Utility Commission of Texas and Illinois Power Company.

Mr. Wells’ qualification for election to the Board include his wide range of operational and financial experiences in regulated industries and associated businesses. Through his prior experience as a senior executive in the telecommunications and other regulated industries, he has insight on managing complex regulated enterprises, developing strategic plans in changing regulatory environments, overseeing financial reporting processes, and executing large capital market transactions.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE FOREGOING NOMINEES. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED FOR EACH OF THE FOREGOING NOMINEES UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.

BOARD AND BOARD COMMITTEE MATTERS

During 2010, there were ten meetings of Windstream’s Board. 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. Each director attended the 2010 Annual Meeting of Stockholders except for Mr. Wells who was not a nominee for election or a member of the Board at the date of the 2010 Annual Meeting of Stockholders.

The Windstream Board of Directors has affirmatively determined that all of the nominees for director, except Messrs. Francis X. Frantz, Jeffery R. Gardner and Alan L. Wells, have no material relationship with Windstream and are independent directors under NASDAQ listing standards. With the exception of Mr. Wells, each of the director nominees was elected at the 2010 Annual Meeting of Stockholders. Mr. Wells was the Chief Executive Officer of Iowa Telecom and was appointed as a non-executive director of Windstream at the time of the closing of Windstream’s acquisition of Iowa Telecom in June 2010.

The Board has adopted categorical standards for use in determining whether any relationship between a director and Windstream is a material relationship that would impair the director’s independence. Specifically, the Board has determined that one or more relationships between a director and Windstream during the past three fiscal years will not constitute a material relationship that would interfere with the director’s exercise of independent judgment if each such relationship falls within one or more of the following categorical standards:

(1)

The director, or one or more members of the director’s immediate family, purchased services or products from Windstream in the ordinary course of business and on terms generally available to employees or customers;

(2)

The director, or one or more members of the director’s immediate family, was either a director of an entity or owned five percent or less of an entity, or both, that has a business relationship with Windstream, as long as the director or immediate family member was not an executive officer or employee of such entity;

(3)

The director or one or more members of the director’s immediate family was a director or trustee of an entity that had a charitable relationship with Windstream and that made payments to, or received from, Windstream in any fiscal year in an amount representing less than $500,000 for the year in question;

(4)

The director or a member of the director’s immediate family was a partner, controlling shareholder, executive officer or employee of an entity that made payments to, or received payments from, Windstream in any year in question that account for less than $200,000 or, if greater, five percent of the entity’s consolidated gross revenues for the year in question.

Since the inception of Windstream, the positions of Chief Executive Officer and Chairman have been held by separate individuals. The Board of Directors believes this board leadership structure improves the ability of the Board of Directors to exercise its oversight role over management by having a director who is not an officer or member of management to serve in the role of Chairman. Mr. Gardner has served as Windstream’s CEO from 2006 to the present, and Mr. Frantz served as Chairman of Windstream from 2006 to 2010. In 2010, in order to enhance Windstream’s corporate governance profile, Mr. Frantz and the Board of Directors chose to select a Chairman who is “independent”, as defined by applicable stock exchange rules. Although Mr. Frantz has not been an officer or employee of Windstream for more than three years, he is not “independent” and, as currently defined, would not qualify as “independent” prior to 2013, because of compensation arrangements implemented in connection with his departure from Alltel and the 2006 spin-off of Windstream from Alltel Corporation. Having an independent Chairman also simplifies Windstream’s corporate governance structure by allowing the Chairman to convene executive sessions with independent directors and dispensing with the need for a separate director to discharge the role of Lead Director.

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 NASDAQ 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 preside at executive sessions of independent directors. The Windstream Board of Directors has designated Mr. Foster, Chairman of the Board, to serve as the Lead Director to preside at the executive sessions until his successor is appointed. During 2010, the executive sessions of the independent directors specified in the Board Guidelines generally occurred at the end of each regular meeting of the Board.

The Audit Committee held five meetings during 2010. 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 overseeing the accounting and financial reporting processes of Windstream and the audits of the consolidated financial statements of Windstream as contemplated by Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The members of the Audit Committee are Mr. Hinson and Mses. Armitage and Jones, and the Windstream Board of Directors has determined that each of Mr. Hinson and Ms. Jones is an “audit committee financial expert”, as defined by the rules of the SEC.

The Compensation Committee held four meetings during 2010. The Compensation Committee assists the Windstream Board of Directors in fulfilling its oversight responsibility related to the compensation programs, plans, and awards for Windstream’s directors and principal officers. For more information regarding the Compensation Committee, see “Management Compensation — Compensation Discussion and Analysis”.

The Governance Committee held two meetings during 2010. In February 2010, the Board of Directors expanded the Governance Committee to include all independent directors of Windstream. The Governance Committee oversees Windstream’s director nomination and screening process, succession planning for the Chief Executive Officer position, the annual self-evaluation of the Board and each Board Committee, and compliance with Windstream’s related party transaction policy and stock ownership guidelines. On an annual basis, the Governance Committee reviews and assesses Windstream’s Corporate Governance Board Guidelines and recommends any proposed changes to the Board of Directors for approval.

The Governance Committee identifies individuals qualified to become members of the Windstream Board of Directors and recommends director nominees to the Board for each annual meeting of stockholders. The Governance Committee identifies candidates through various methods, including recommendation from directors, management, and stockholders. The Governance Committee has the sole authority to retain and terminate search firms to be used to identify director candidates and to approve the search firm’s fees and other retention terms. The Committee recommends director nominees to the Board for approval. The Governance Committee periodically reviews with the Chairman and the Chief Executive Officer the appropriate skills and characteristics required of Board members in the context of the composition of the Board and an assessment of the needs of the Board from time to time. The Governance Committee considers applicable Board and Board committee independence requirements imposed by Windstream’s Corporate Governance Board Guidelines, NASDAQ listing standards, and applicable law. The Governance Committee also considers, on a case-by-case basis, the number of other boards and board committees on which a director candidate serves. The Governance Committee seeks candidates who evidence personal characteristics of high personal and professional integrity; intelligence and independent judgment; broad training and experience at the policy-making level in business;

strong interpersonal and communication skills; demonstrated ability to solve problems and to build consensus among diverse viewpoints; a commitment to serve on the Board over a period of several years to develop knowledge about Windstream, its strategy, and its principal operations; a willingness to evaluate management performance objectively; and the absence of activities or interests that could conflict with the director’s responsibilities to Windstream. The Governance Committee does not have a formal policy on diversity with regard to consideration of director nominees, but the Governance Committee considers diversity in its selection of nominees and seeks to have a board that reflects a diverse range of views, backgrounds and experience.

The Governance Committee will consider director candidates recommended by stockholders. To qualify for such consideration, stockholder recommendations must be submitted to the Governance Committee in accordance with the substantive and procedural requirements set forth in Windstream’s Bylaws, as discussed below under the caption “Other Matters”. The Governance Committee does not have a specific policy regarding the consideration of stockholder recommendations for director candidates because the Committee intends to evaluate stockholder recommendations in the same manner as it evaluates director candidates recommended by other sources.

Management of Windstream has the primary responsibility for managing the risks facing Windstream, subject to the oversight of the Board of Directors. Each Committee of the Board assists the Board of Directors to discharge its risk oversight role by performing the subject matter responsibilities outlined above in the description of each Committee. The Board of Directors retains full oversight responsibility for all subject matters not assigned to Committees including risks presented by business strategy, competition, regulation, general industry trends including the disruptive impact of technological change, capital structure and allocation, and mergers and acquisitions. The Board of Directors supplements its ability to discharge its risk oversight role by receiving a report on the results of an annual risk assessment of Windstream that is prepared by the Internal Audit Department. This survey is used primarily to assist the Internal Audit Department to prepare the scope of its annual audit plan, subject to the review and approval of the Audit Committee. Internal Audit prepares the risk assessment by conducting risk assessment interviews and surveys with management across the Company to identify individual process and Company-wide risks. An annual report on the top risks to Windstream identified by this assessment process is presented to the Audit Committee and the full Board.

Windstream’s Corporate Governance Board Guidelines, its code of ethics policy entitled “Working With Integrity”, and the charters for the Audit, Compensation and Governance Committees are available on the Investor Relations page of the Windstream Corporation website at www.windstream.com/investors. Copies of each of these documents are also available to stockholders who submit a request to Windstream Corporation, ATTN: Investor Relations, 4001 Rodney Parham Road, Little Rock, AR 72212. Stockholders and other interested parties may contact the Chairman of the Board or the non-management directors of the Windstream Board of Directors by writing to Windstream Corporation, ATTN: Chairman of the Board or Non-Management Directors, c/o Corporate Secretary, 4001 Rodney Parham Road, Little Rock, AR 72212.

STOCK OWNERSHIP GUIDELINES

The Windstream Board of Directors has adopted minimum stock ownership guidelines for Windstream’s directors and executive officers. Directors who are not executive officers are expected to maintain beneficial ownership of shares of Windstream Common Stock valued at least five times the annual cash retainer paid to non-management directors. Executive officers are expected to maintain beneficial ownership of shares of Common Stock at the following levels: ten times base salary for the Chief Executive Officer; five times base salary for each of the Chief Financial Officer, Chief Operating Officer and General Counsel; and three times base salary for all other executive officers. Directors have a transition period of five years from their initial election (or, for incumbent directors as of November 2006, until the date of the 2011 Annual Meeting of Stockholders), and executive officers have a transition period of three years from their initial election to meet the applicable ownership guidelines and, thereafter, one year to meet any increased ownership requirements resulting from

changes in stock price, annual base fee, annual base salary, or applicable ownership levels occurring since the initial deadline. 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 stock or the exercise of stock options. For the purposes of the guidelines, unvested shares or units of restricted stock (including the performance based restricted stock units granted in 2011) are considered to be owned.

Based on the foregoing, the table below sets forth the number of shares of Common Stock that each named executive officer is expected to own by the 2011 Annual Meeting of Stockholders, which amounts were determined based on each person’s position with Windstream and base salary as of the date of Windstream’s 2010 Annual Meeting of Stockholders:


Named Executive Officers	Guideline Share Amount
Jeffery R. Gardner		900,909
Anthony W. Thomas		197,142
Brent Whittington		272,727
John P. Fletcher		200,000
Cynthia B. Nash		102,857

Based on current ownership amounts, Windstream expects that each of its executive officers will be in compliance with the stock ownership guidelines at the time of the 2011 Annual Meeting of Stockholders. Following the 2011 Annual Meeting of Stockholders, the executive officers will have until 2012 Annual Meeting of Stockholders to meet increased share guidelines resulting from changes in stock price, annual base salary or ownership levels since the 2011 Annual Meeting of Stockholders. The actual shares held by the executive officers can be found in the Security Ownership of Directors and Executive Officers table.

The table below sets forth the number of shares of Common Stock that each non-management director is expected to own and which Annual Meeting of Stockholders is the deadline for achieving such ownership level. Based on current ownership amounts, Windstream expects that each non-management director will be in compliance with the stock ownership guidelines at the time of the 2011 Annual Meeting of Stockholders.


Non-Management Director	Guideline Share Amount		Deadline for Achieving Guideline Amount
Carol Armitage		21,216		2012 Annual Meeting
Samuel Beall		21,929		2011 Annual Meeting
Dennis Foster		21,929		2011 Annual Meeting
Francis Frantz		21,929		2011 Annual Meeting
Jeffrey Hinson		21,929		2011 Annual Meeting
Judy Jones		21,929		2011 Annual Meeting
Bill Montgomery		21,929		2011 Annual Meeting
Alan Wells		28,116		2015 Annual Meeting

SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

Set forth below is certain information, as of March 1, 2011, as to shares of Windstream Common Stock beneficially owned by each director, named executive officer who was serving as an executive officer at the end of 2010, and by all directors and executive officers of Windstream as a group. Except as otherwise indicated by footnote, the nature of the beneficial ownership is sole voting and investment power, and no shares are pledged as security:


	Amount and Nature of Beneficial Ownership
Name of Beneficial Owners	Shares Beneficially Owned(1)		Unvested Restricted Shares(2)		Total Shares Beneficially Owned(3)		Percent of Class (if 1% or more)
Non-Management Directors
Carol B. Armitage		26,266		6,074		32,340	*
Samuel E. Beall, III		38,901		6,074		44,975	*
Dennis E. Foster		148,005		6,074		154,079	*
Francis X. Frantz		635,120		6,074		641,194	*
Jeffrey T. Hinson		31,714		6,074		37,788	*
Judy K. Jones		29,470		6,074		35,544	*
William A. Montgomery		46,124		6,074		52,198	*
Alan L. Wells		209,719		16,070		225,789	*

Named Executive Officers
Jeffery R. Gardner		929,043		522,958		1,452,001	*
Anthony W. Thomas		88,660		137,537		226,197	*
Brent Whittington		186,550		195,956		382,506	*
John P. Fletcher		166,409		160,673		327,082	*
Cynthia B. Nash		170,329		89,922		260,251	*


All Directors and Executive Officers as a Group		2,706,310		1,165,634		3,871,944	*

* indicates less than 1 percent

(1) Excludes unvested restricted shares and includes shares of Common Stock owned directly and shares held in the person’s account under the Windstream 401(k) Plan, which are as follows: Gardner 678, Thomas 301, Whittington 2,077, Fletcher 11,137, and Nash -0-.

(2) Unvested shares of restricted stock are deemed beneficially owned because grantees of unvested restricted stock under Windstream’s equity compensation plans hold the sole right to vote such shares. To date, Windstream has not granted stock options or other similar instruments that would provide the right to acquire beneficial ownership of Common Stock.

(3) In February 2011, Windstream granted performance-based restricted stock units (PBRSUs) to its executive officers. Because unvested PBRSUs do not provide the recipients the right to vote or other elements of beneficial ownership as defined under SEC rules, all unvested outstanding PBRSUs are omitted from this table. For informational purposes, the following table shows the outstanding unvested PBRSUs granted to each named executive officer:


Named Executive Officers	Total Shares Beneficially Owned	Unvested Performance Based Restricted Stock Units (PBRSUs)	Total Shares Beneficially Owned Including PBRSUs
Jeffery R. Gardner	1,452,001	273,348	1,725,349
Anthony W. Thomas	226,197	30,372	256,569
Brent Whittington	382,506	37,965	420,471
John P. Fletcher	327,082	30,372	357,454
Cynthia B. Nash	260,251	15,186	275,437

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

Set forth below is information, as of March 1, 2011, with respect to any person known to Windstream to be the beneficial owner of more than 5% of any class of Windstream’s voting securities, all of which are shares of Common Stock:

Title of Class

Name and Address

of Beneficial Owner

Amount and Nature of
Beneficial Ownership(1)

Percent of

Class

Common Stock

BlackRock, Inc.

40 East 52^nd Street

New York, NY 10022

28,417,786

5.57%

(1) Based upon information contained in the Schedule 13G filed on February 9, 2011, BlackRock, Inc. has sole voting and investment control over these shares.

COMPENSATION COMMITTEE REPORT

ON EXECUTIVE COMPENSATION

This report provides information concerning the Compensation Committee of Windstream Corporation’s Board of Directors. The Compensation Committee’s Charter is available on the Investor Relations page of Windstream Corporation’s website at www.windstream.com/investors. The Compensation Committee is comprised entirely of independent directors, as defined and required by NASDAQ listing standards.

The Compensation Committee has reviewed the disclosures under the caption “Compensation Discussion and Analysis” contained in Windstream Corporation’s Proxy Statement on Schedule 14A for the 2011 Annual Meeting of Stockholders and has discussed such disclosures with the management of Windstream Corporation. Based on such review and discussion, the Compensation Committee recommended to the Windstream Board of Directors that the “Compensation Discussion and Analysis” be included in Windstream Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and Windstream Corporation’s Proxy Statement on Schedule 14A for the 2011 Annual Meeting of Stockholders for filing with the Securities and Exchange Commission.

The Compensation Committee

William A. Montgomery, Chairman

Samuel E. Beall, III

Dennis E. Foster

AUDIT COMMITTEE REPORT

This report provides information concerning the Audit Committee of Windstream Corporation’s Board of Directors. The Audit Committee’s Charter is available on the Investor Relations page of Windstream Corporation’s website at www.windstream.com/investors. The Audit Committee is comprised entirely of independent directors, as defined and required by NASDAQ listing standards and comprised entirely of directors who are financially literate. Additionally, Mr. Hinson and Ms. Jones qualify as audit committee financial experts.

In connection with its function to oversee and monitor Windstream Corporation’s financial reporting process, the Audit Committee has reviewed and discussed with Windstream Corporation’s management the audited consolidated financial statements for the year ended December 31, 2010; discussed with PricewaterhouseCoopers LLP, Windstream Corporation’s independent registered public accountant, the matters required to be discussed by Statement on Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T; received the written disclosures and the letter from PricewaterhouseCoopers LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with PricewaterhouseCoopers LLP its independence.

Based on the reviews and discussions referred to above, the Audit Committee recommended to Windstream Corporation’s Board of Directors that the audited consolidated financial statements for the year ended December 31, 2010 be included in Windstream Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 for filing with the Securities and Exchange Commission.

The Audit Committee

Jeffrey T. Hinson, Chairman

Carol B. Armitage

Judy K. Jones

MANAGEMENT COMPENSATION

Compensation Discussion and Analysis

Executive Summary

Compensation Philosophy. Windstream’s executive compensation program is designed to achieve the following objectives:

•

Provide a high correlation between pay and performance;

•

Align management’s interests with the long-term interests of Windstream’s stockholders; and

•

Provide competitive compensation and incentives to attract and retain key executives.

Our core program consists of base salary, annual cash incentives and long-term equity incentives.

The following is a summary of key considerations that stockholders should take into account when assessing our executive compensation program:

•

During 2010, we delivered industry-leading financial and operational performance while successfully executing on a wide range of key strategic initiatives. Those initiatives were designed to grow and transform the Company into a next-generation communications company. As a result of these efforts, 58% of 2010 revenues (pro forma to reflect all acquisitions as if they closed prior to January 1, 2010) come from broadband and business, the growth segments of the Company. Our annual (short-term) incentive plan recognized these results with a payout of 181% of target levels and our performance-based equity awards were earned at target level. These payouts demonstrate our desired correlation between pay and performance.

•

Our dividend is a key component of our total shareholder return and we believe Adjusted Operating Income Before Depreciation and Amortization (Adjusted OIBDA) is the right performance metric to motivate management to maintain and increase the cash flows of the business to support the dividend. For 2011, the short-term incentive program will be based 100% on Adjusted OIBDA.

•

We seek to align management with the long-term interests of our shareholders and in 2011, the performance-based restricted stock units were modified to raise the performance bar five hundred basis points over 2010 goals, and a three-year revenue goal has been added to the program. These changes, along with our robust stock ownership guidelines, including ten times base salary for the CEO, and clawback policy that allows Windstream to recover both incentive and non-incentive based compensation in certain situations, strengthen our executive compensation program without creating incentives for excessive risk taking.

Compensation Committee. Windstream’s Compensation Committee is presently comprised of William A. Montgomery, Chair, Dennis E. Foster and Samuel E. Beall, III. The Windstream Board has determined that each member of the Compensation Committee is an independent director under NASDAQ listing standards, a “non-employee director” for purposes of Section 16 of the Securities Exchange Act of 1934, and an “outside director” as defined in Section 162(m) of the Internal Revenue Code.

The Compensation Committee assists the Board in fulfilling its oversight responsibility related to the compensation programs, plans, and awards for Windstream’s directors and principal officers. The Compensation Committee annually reviews and approves goals relevant to Mr. Gardner’s compensation and, based on an annual evaluation of these performance goals, determines and approves Mr. Gardner’s compensation. The Committee conducts this review using a survey of compensation data of comparable employers that is prepared by the Committee’s outside compensation consultant based on criteria specified by the Committee.

Independent Consultant

The Compensation Committee has the sole authority to retain and terminate any executive compensation consultant to be used in the evaluation of director, CEO or executive officer compensation and to approve the

consultant’s fees and other retention terms. It is the policy of the Compensation Committee that the compensation consultant should perform no services for Windstream other than services as consultant to the Compensation Committee. During 2009 and into 2010, the Compensation Committee engaged Watson Wyatt & Company (“Watson Wyatt”) to assist the Committee in the review and design of Windstream’s executive compensation program for 2009 and 2010, and to provide information on competitive market practices and survey data for both plan design and compensation levels. This information was used by the Committee, along with all other relevant information, to assist in the Committee’s decisions regarding the 2010 executive compensation program. During 2009 and into 2010, Watson Wyatt performed no other services for the Company outside of these services.

Following the merger of Watson Wyatt and Towers Perrin in January 2010, we determined that Watson Wyatt would no longer comply with the Compensation Committee’s policy limiting services to the Compensation Committee due to other services performed for Windstream by Towers Perrin. Accordingly, the Compensation Committee conducted a search for a new independent consultant and selected Pearl Meyer & Partners (PM&P). PM&P reports directly to the Compensation Committee and provides no other services to the Company. During 2010 and into 2011, PM&P conducted a competitive review of the Company’s executive pay levels and executive pay program designs, with such data and information being used by the Committee, along with all other relevant information, to inform the Committee’s decisions regarding the 2011 executive compensation program.

Windstream Management

Windstream’s management assists the consultant in its survey of executive compensation by providing historical compensation information and by reviewing and commenting on preliminary drafts of the survey reports. At the first Compensation Committee meeting of each year (which is expected to be held in early February of each year), the Compensation Committee reviews and approves executive compensation for such year. Based on the compensation surveys and compensation principles previously specified by the Compensation Committee, Mr. Gardner and members of Windstream’s Human Resources department prepare recommendations for compensation levels for executive officers in consultation with the Compensation Committee’s consultant, except that no recommendation is made for Mr. Gardner’s compensation. The Compensation Committee then meets to review and determine Mr. Gardner’s compensation and reviews and recommends the compensation for all other executive officers. The Compensation Committee determines Mr. Gardner’s compensation, and recommends the compensation of all other executive officers, based on an evaluation of a number of factors, including historical compensation, individual performance, retention considerations, discussions with Windstream management including Mr. Gardner, compensation survey data, the strategic importance of each position, general economic conditions, and discussions with the compensation consultant. The Windstream Board approves or, in the case of Mr. Gardner’s compensation, ratifies the actions of the Compensation Committee.

Competitive Market Analysis

As part of the process of approving executive compensation levels and plan designs for 2010, the Compensation Committee used market data compiled by Watson Wyatt from published compensation surveys, and attached to this proxy statement as Appendix A is the list of companies who participated in those surveys. Regression analysis was used to normalize for differences in revenue between companies. In addition, at the request of the Compensation Committee, data was summarized from the proxy statement filings of the following companies: CenturyTel, Embarq, Frontier, Qwest, AT&T, Verizon, Sprint/Nextel, Comcast, DirecTV, Time Warner Cable, Dish Network Corp., Cablevision, Charter and Scripps. The summary of compensation from proxy statement filings is prepared at the Compensation Committee’s request, and it serves as an additional reference to assist the Compensation Committee in its assessment and use of the primary market data.

While consideration was given to the comparative market survey data, the Compensation Committee used it primarily as a reference point for determining competitive market levels of compensation and did not

specifically target compensation to any market percentile based on the market data. The Compensation Committee utilizes the survey data in this manner due to a variety of factors, including the limited number of direct industry competitors of comparable size pursuing a similar business strategy, the variability of the data over the past few years, and the Committee’s focus on aligning pay and performance as opposed to simply paying competitively.

Elements of Compensation. The compensation of Windstream’s executive officers consists of three principal components:

•

Base salary;

•

Short-term (annual) cash incentive payments; and

•

Long-term incentives in the form of equity-based compensation.

The compensation program for all executive officers also includes the Windstream 2007 Deferred Compensation Plan, the Windstream 401(k) Plan, a change-in-control agreement, and limited perquisites. Windstream has also entered into an employment agreement with Mr. Gardner, and certain executive officers were eligible to participate, on a grandfathered-basis, in the Windstream Pension Plan and the related Windstream Benefit Restoration Plan.

2010 Compensation Philosophy. The Compensation Committee considers the total compensation of each executive officer as well as the allocation of compensation among base salary, short-term incentive compensation, and equity-based compensation for determining compensation levels. For 2010, the Compensation Committee approved increases in elements of total direct compensation for named executive officers after considering individual performance, Company performance, strategic importance of the role, retention risk, and current compensation compared to competitive market data.

Retention remains a key driver of the equity compensation program. Significant demands are imposed on the senior leadership team by the Company’s difficult financial and operational targets and high volume of strategic initiatives. The relatively young team has achieved tremendous success in a consolidating industry with intense competition. After reviewing the unvested equity values, the Compensation Committee approved additional grants of time-based restricted stock in August 2010 for executive officers (excluding Mr. Gardner) and other key members of the Company’s leadership team. These equity awards have a three year cliff-vesting provision. The following table shows for each named executive officer the amount awarded as part of this special equity grant along with the amount awarded for the 2010 annual equity grant for comparison purposes.


Named Executive Officer	Special Equity Grant $	2010 Annual Equity Grant $
Jeffery R. Gardner	-0-	3,599,994
Anthony W. Thomas	749,996	499,983
Brent Whittington	749,996	899,993
John P. Fletcher	749,996	649,992
Cynthia B. Nash	499,997	319,080

The Compensation Committee believes that a substantial portion of executive compensation should be at risk through allocation of compensation to short-term cash incentives and long-term equity-based incentives. The following table illustrates the allocation for each named executive officer for 2010:


Named Executive Officer	Percentage of Annual Total Direct Compensation Allocated to Short-term Incentive and Performance- Based Equity Compensation (%)	Percentage of Annual Total Direct Compensation Allocated to Equity-Based Compensation (%)
Jeffery R. Gardner	83%	62%
Anthony W. Thomas	45%	42%
Brent Whittington	47%	45%
John P. Fletcher	47%	45%
Cynthia B. Nash	41%	39%

Total direct compensation for these purposes equals base salary, short-term cash incentive payment at target levels and the full up-front fair value of the annual equity-based awards determined in accordance with authoritative guidance on share-based compensation. The August 2010 grants are excluded from the calculations because they were special equity grants designed for long-term retention and are not part of the Company’s ongoing annual compensation program.

2011 Compensation. The Compensation Committee has approved an executive compensation program for 2011 that is consistent with past practice subject to the following principal changes in program design. For 2011, the Compensation Committee has established the performance objective for its annual cash incentive plan based on achievement of Windstream’s adjusted operating income before depreciation and amortization (“Adjusted OIBDA”). As in prior years, the performance measure for Adjusted OIBDA is set at levels that are difficult but achievable and designed to drive industry leading results. The Compensation Committee also replaced the grants of performance-based restricted stock with performance-based restricted stock units (“PBRSUs”), which will accrue dividend equivalents to be paid if performance-based conditions have been satisfied. The performance threshold for vesting of all outstanding performance-based equity awards has been increased five hundred basis points over previous years. The PBRSUs will provide for additional shares (which will not accrue dividends) for achievement of revenue performance over a three-year period, as well as reduced amounts if adjusted OIBDA performance falls between threshold and target criteria. In addition to his annual PBRSU grant as part of our long-term incentive program, Mr. Gardner received a grant of time-based restricted stock subject to three-year cliff vesting in 2014. This special award was intended to recognize Mr. Gardner’s continued leadership in transforming our company, reward him for our strong financial results relative to industry peers, and provide additional retention incentives for him to remain at Windstream during this period of industry consolidation. In determining the size and structure of the grant, the Committee also reviewed and considered peer company practices, broader market pay data, and the fact that Mr. Gardner did not participate in our latest retention grant program in August 2010; at which time other key executives, including the other NEOs, received grants of time-based restricted stock.

Base Salary. Base salary is designed primarily to provide competitive compensation that reflects the contributions and skill levels of each executive.

Short-Term Cash Incentive Payments. Windstream maintains short-term cash incentive plans which are designed primarily to motivate executives to achieve Company-wide performance goals over annual or quarterly periods. Under these plans, the Compensation Committee sets different target payout amounts (as a percentage of base salary) for all executive officers in order to reflect such individual’s contributions to Windstream and the market level of compensation for such position. The Compensation Committee has adopted short-term incentive plans as part of its goal to make a substantial portion of total direct compensation at risk.

During 2010, the executive officers participated in a short-term cash incentive plan based on (1) Windstream’s achievement of Adjusted OIBDA, which is a non-GAAP financial measure and is one of the principal measures used by Windstream to communicate its financial performance in its quarterly earnings releases and (2) achievement of certain strategic initiatives during 2010, which were the migration of data center services for most IT systems to new locations and providers, the integration of the acquisitions of D&E Communications, Inc., Lexcom, Inc., NuVox, Inc. and Iowa Telecommunication Services, Inc., and revenues from business sales. Windstream provides the methodology for calculating non-GAAP measures in the Current Report on Form 8-K that accompanies its quarterly earnings releases. The Adjusted OIBDA measure excluded non-cash pension expense, equity compensation expense and restructuring expense and excluded the results of operations of Q-Comm Corporation and Hosted Solutions which were acquired in December 2010 and were not included in the calculation of the performance goals for the year. Windstream utilized Adjusted OIBDA as a performance metric for 2010 because it is a critical indicator of Windstream’s ability to generate sustainable cash flows over a long period of time. The Adjusted OIBDA component was weighted at 80% of the plan. The strategic initiatives component, weighted at 20% of the plan, recognized the importance of several strategic goals necessary for the success of an aggressive, transformational business plan. The Compensation Committee did not use pre-established targets, weightings or formulas to determine the payout for the strategic component.

Under the Windstream short-term incentive plan, executive officers were eligible to receive payments in proportion to Windstream’s achievement of the performance goal that was set at minimum (or threshold), target and maximum levels. The executive officers were eligible to receive 50% to 200% of these target payout amounts if threshold or maximum levels, respectively, were achieved. No payout would be made if performance was below the threshold level and performance between threshold, target and maximum levels results in prorated payouts. During 2010, the target performance goal was the achievement of Adjusted OIBDA of $1,899 million. Windstream’s actual performance for Adjusted OIBDA for 2010 was $1,944 million, which reflected an approximate 176% achievement against the target performance goal for Adjusted OIBDA. The Compensation Committee considered the achievement of the strategic goals to be well above target levels and approved payment of 200% for that component. The following table shows the target and actual payouts under the short-term incentive plan for 2010:


Named Executive Officer	Target Payout Percentage	Actual Payout Percentage
Jeffery R. Gardner	125%	226%
Anthony W. Thomas	70%	127%
Brent Whittington	80%	145%
John P. Fletcher	80%	145%
Cynthia B. Nash	55%	100%

The Compensation Committee believes the payouts reflect the outstanding financial performance driven by Windstream’s management while delivering industry-leading financial and operating results and successfully completing four acquisitions and a highly complex migration of Windstream’s entire data center platform to new third party providers.

Equity-Incentive Awards. Windstream maintains an equity-based compensation program for executive officers to provide long-term incentives, to better align the interests of executives with stockholders and to provide a retention incentive. The Compensation Committee has implemented its equity-compensation program as part of its goal to make a substantial portion of total direct compensation at risk. The Compensation Committee also prefers equity incentives over cash and has used it exclusively in lieu of cash as the method of providing long-term compensation incentives. Each officer receives a portion of his or her total direct annual compensation for a given year in the form of long-term equity-based incentive compensation.

All Windstream equity compensation awards have been issued as either time-based restricted stock, performance-based restricted stock or performance-based restricted stock units under the Windstream Amended

and Restated 2006 Equity Incentive Plan (“Equity Plan”). Windstream has not issued any stock options or other forms of equity compensation to its directors, executive officers or other employees. The Compensation Committee believes that restricted stock or performance-based restricted stock or unit awards are a preferred mechanism of equity compensation compared to stock options or other devices that derive value from future stock price appreciation due to the high-dividend, low-growth profile of Windstream.

For grants of restricted stock made in 2009 and prior years, executive officers have received the rights of a stockholder to vote the restricted stock and to receive any cash dividends paid with respect to the restricted shares during the vesting period. Beginning with equity compensation granted in 2010, the dividends on performance-based restricted stock are accrued and paid out only when and if the performance conditions are satisfied. Windstream places performance targets on 100% of the grants of restricted stock to Mr. Gardner and 50% for all other executive officers.

The Windstream Board of Directors has delegated responsibility for administration of the Equity Plan, including the authority to approve awards, to the Compensation Committee. It is the Compensation Committee’s policy to review and approve all equity compensation awards to directors, executive officers and all other eligible employees at its first regularly scheduled meeting of each year, which is expected to occur each February. In determining the number of shares of restricted stock or performance-based restricted stock to award to any individual under the Equity Plan, the Compensation Committee divides the approved grant value for such individual by the closing stock price of Windstream Common Stock on the date that the Compensation Committee approves the award (rounded down to the nearest whole share). As a matter of policy, the Compensation Committee does not approve awards of equity compensation through the adoption of a unanimous written consent in lieu of a meeting. The following discussion addresses our annual equity compensation program during 2010 and does not address the special equity grants made in August 2010 that have been previously discussed above.

During 2010, the Compensation Committee approved the following categories of annual equity compensation awards to executive officers:

•

Time-Based Vesting Awards — For each executive officer other than Mr. Gardner, fifty percent (50%) of each 2010 stock award vests ratably over three years.

•

Performance-Based Vesting Awards — Mr. Gardner received one hundred percent (100%), and each other executive officer received fifty percent (50%), of his or her stock grants in the form of performance-based restricted stock. The stock vests ratably over a three-year period with each year set as a separate performance period. The stock vests only if the performance threshold is met and the executive is still employed on the date of vesting. For 2010, the performance criteria was set at 90% of the Adjusted OIBDA goal of $1,899 million, and this goal was achieved.

For the performance period from January 1 to December 31, 2011, the Compensation Committee has set the performance measure at 95% of the Adjusted OIBDA goal established by the Company for the internal forecast.

Retention is a key driver of the decision to grant time-based vesting restricted stock. In addition, performance-based vesting restricted stock is also granted to align executives with key long-term Company objectives and to preserve the deductibility of compensation related to awards under Section 162(m) of the Internal Revenue Code.

As discussed above, Windstream has adopted minimum share ownership guidelines that apply to Mr. Gardner and all other executive officers. The minimum share ownership guidelines are intended in part to ensure that executive officers retain a sufficient number of shares of Windstream Common Stock such that they continue to have a material financial interest in Windstream which is aligned with the shareholders. In addition, under Windstream’s insider trading compliance policy, directors and executive officers are prohibited from engaging in any transaction involving derivative securities intended to hedge the market risk in equity securities of Windstream other than purchases of long call options or the sale of short put options that are not closed prior to their exercise or expiration date. The policy also prohibits the purchase of shares on loan or margin and short sales.

Severance Benefits. Except for Mr. Gardner, Windstream has no agreement or plan to provide severance benefits to executive officers other than benefits that are generally available to all employees under Windstream’s severance plan and benefits available under the change-in-control agreements discussed below. During 2009, the Compensation Committee approved an extension of the employment agreement with Mr. Gardner that includes a severance benefit of three times base salary (at the time of severance), or $2.973 million based on Mr. Gardner’s base salary during 2010. The employment agreement provides for no gross up of taxes for severance outside of a change-in-control situation. The employment agreement provides that Mr. Gardner’s base salary will be no less than $700,000 per year. If Mr. Gardner experiences a separation from service following a change of control, the severance benefits provided under the terms of the change-in-control agreements discussed below will govern, and no severance is available under the employment agreement in such circumstance. The Compensation Committee approved the foregoing severance benefit to Mr. Gardner to recognize the importance of his service and contributions to Windstream, to recognize that it would be difficult for him to find comparable employment during a short period of time following a separation, and to reflect market practice of providing similar severance benefits to the CEO position.

Retirement Plans. Windstream maintains a defined benefit pension plan and a qualified 401(k) defined contribution plan for its executive officers and employees. Participation in the pension plan is frozen except for a 5 year transition period for participants who were above the age of 40 with at least two years of service at the end of 2005 and bargaining unit employees. Mr. Gardner was eligible to accrue benefits under the pension plan until December 31, 2010, which time accruals were frozen for non-bargaining participants.

Windstream maintains a 401(k) plan which provides for potential matching employer contributions of up to 4% of a participant’s compensation. The Compensation Committee maintains the 401(k) plan in order to provide employees with an opportunity to save for retirement with pre-tax dollars. The 401(k) plan also allows Windstream to fund its contributions to this plan in a predictable, consistent manner.

Deferred Compensation Plans. Windstream maintains the 2007 Deferred Compensation Plan to provide a non-qualified deferred compensation plan for its executive officers and other key employees. The Compensation Committee adopted this plan as part of its effort to provide a total compensation package that was competitive with the compensation arrangements of other companies. The plan also offers participants the ability to defer compensation above the IRS qualified plan limits.

Change-In-Control Agreements. During 2006, the Compensation Committee approved change-in-control agreements for Mr. Gardner and each executive officer in order to provide some protection to those individuals from the risk and uncertainty associated with a potential change-in-control. The Compensation Committee also adopted the change-in-control agreements as part of its efforts to provide a total compensation package that was competitive with the compensation arrangements of other market participants. Prior to approving the change-in-control agreements in 2006, the Compensation Committee specifically engaged its compensation consultant at the time to review the payment multiples and other terms of the change-in-control agreements, to compare such provisions against prevailing market practices, and to provide recommendations on the final terms of the agreements. When it approved the change-in-control agreements, the Compensation Committee considered the total amount of compensation that Mr. Gardner and each other executive officer would receive in a hypothetical termination under all of the change-in-control benefits described below.

Based on the foregoing, the Compensation Committee approved the payment of change-in-control benefits to Mr. Gardner and the other executive officers on a “double-trigger” basis, which means that a change-in-control of Windstream must occur and the officer must terminate employment with Windstream through either a resignation for “good reason” or a termination without “cause” (as those terms are defined in the change-in-control agreement). Upon a qualifying separation from service, the executive officers are eligible for a cash, lump sum payment based upon a multiple of base salary and target bonus of three times for Messrs. Gardner, Whittington, and Fletcher and two times for all other named executive officers.

In the event of a change-in-control, Windstream has also agreed to provide lump sum cash payments equal to the value of medical and dental benefits for a period of 36 months for Messrs. Gardner, Whittington, and Fletcher and 24 months for all other named executive officers. Windstream has also agreed to provide, at its expense, outplacement services from a recognized outplacement provider, except that Windstream’s cost for such services will not exceed $50,000 in the case of Messrs. Gardner, Whittington, and Fletcher and $25,000 in the case of any other named executive officer. Also, under the terms of Windstream’s agreements for its equity compensation awards of restricted stock or performance-based restricted stock or units, the unvested equity awards held by the executive officers will vest on a “double-trigger” basis that is substantially similar to the events that trigger the cash payments under the change-in-control agreements. For change-in-control agreements adopted prior to 2009, Windstream is obligated to reimburse each executive officer for excise taxes imposed on such individual pursuant to Section 4999 of the Internal Revenue Code as a result of the foregoing payments if the payments exceed 110% of the greatest amount payable to the executive without triggering excise taxes. The change-in-control agreements were amended in 2008 to comply with the final regulations issued under Section 409A of the Internal Revenue Code and to clarify the scope of the non-compete provisions. In consideration of these changes, the term of the agreements was extended by one year to expire January 1, 2013. No changes have been made to the change-in-control agreements since 2008, except that change-in-control agreements entered into with executive officers since 2008 have not included a gross-up provision for excise taxes imposed by Section 4999. Ms. Nash’s change-in-control agreement does not include a gross-up provision.

Perquisites and Other Benefits. Beginning in 2009, the reimbursement of country club and financial planning expenses was discontinued for all participants with no adjustment to compensation and no new perquisite programs.

Windstream permits limited personal use of Windstream’s corporate aircraft by Mr. Gardner and other named executive officers. Under Windstream’s policy, this use cannot interfere with other required business use of the aircraft. Mr. Gardner is allowed to utilize Windstream’s corporate aircraft for personal use pursuant to a time-sharing arrangement in which Mr. Gardner reimburses Windstream for the incremental cost of such use, which primarily includes costs for fuel, maintenance charges allocable to such use and contract-pilot charges and excludes depreciation of the aircraft, general maintenance, compensation of Windstream’s employee pilots, and other general charges related to ownership of the aircraft. Other executive officers are allowed to have family members accompany them on a business trip on the aircraft, subject to seat availability and prior approval of Mr. Gardner. Any other personal use of the aircraft by the other executive officers is permitted only as approved in advance by Mr. Gardner. The Compensation Committee monitors the use by Mr. Gardner and all executive officers to ensure the amount of usage is reasonable. Windstream believes that personal use of aircraft for Mr. Gardner and other senior executives is a reasonable benefit in light of the significant demands that are imposed on their schedules as a result of their responsibilities to Windstream.

Clawback Policy. The Board of Directors, upon the recommendation of the Compensation Committee, has adopted a clawback policy that requires executive officers to repay or forfeit covered compensation under the conditions set forth in the policy. See “Compensation of Named Executive Officers — Clawback Policy” for a description of the terms of the policy. The Board of Directors of Windstream, acting solely through its independent directors, is the administrator of the policy. The policy applies to covered compensation granted or awarded on or after January 1, 2010, including severance payments that may be issued after January 1, 2010 under Windstream’s existing change-in-control agreements. The Compensation Committee intends to modify the clawback policy to comply with the final regulations to be issued by the SEC pursuant to the requirements of in the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Other Services Performed By Compensation Consultant. The Compensation Committee has adopted a policy that the compensation consultant to the Compensation Committee should not perform any other services to Windstream, and PM&P performed no services to Windstream during 2010 other than in its role as compensation consultant to the Compensation Committee.

Compensation of Directors

During 2010, Windstream non-employee directors received the following compensation: (1) an annual cash retainer of $60,000, (2) a cash fee of $2,000 for each Board and committee meeting attended, except that no fees are paid for periodic informational update meetings and Governance Committee meetings, and (3) an annual grant of $80,000 in restricted stock under the Equity Plan. The restricted shares granted to non-employee directors vest if the grantee continues to serve on the Board for the period beginning on the date of grant and ending on February 15 of the following year or earlier, if the grantee dies or becomes permanently disabled while serving on the Board or a change of control of Windstream occurs. In addition, in 2010, the chairs of the Audit and Compensation Committees received additional annual cash retainers of $20,000 and $15,000, respectively. The Board chairman received an annual cash retainer of $100,000. Beginning in 2011, all non-employee directors have the option to elect to receive any cash retainer in the form of Windstream Common Stock.

Board members receive pro-rated amounts of the annual cash retainer, committee chair fees and the annual restricted stock grant for the portion of the first year in which they are appointed or elected to serve as a Board member or Committee Chair.

The following table shows the compensation paid to the non-employee directors of the Windstream Board during 2010:

DIRECTOR COMPENSATION


Name	Fees Earned or Paid in Cash ($)	Stock Awards ($) (1)	Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)	All Other Compensation ($) (2)	Total ($)
Carol B. Armitage	86,000	79,990	-0-	170	166,160
Samuel E. Beall, III	88,000	79,990	-0-	170	168,160
Dennis E. Foster	188,000	79,990	-0-	672	268,662
Francis X. Frantz	78,000	79,990	203,306(3)	639	361,935
Jeffrey T. Hinson	106,000	79,990	-0-	406	186,396
Judy K. Jones	88,000	79,990	-0-	170	168,160
William A. Montgomery	101,000	79,990	-0-	170	181,160
Frank E. Reed(4)	88,000	79,990	-0-	170	168,160
Alan L. Wells(5)	49,000	106,657	-0-	170	155,827

(1) All stock award amounts in the table above reflect the aggregate fair value on the grant date based on the closing price per share of Windstream Common Stock on the date of grant of the restricted stock, computed in accordance with FASB ASC topic 718.

(2) Includes payments of $170 for travel insurance available for all directors and imputed income for personal use of the corporate aircraft for Messrs. Foster, Frantz, and Hinson in the amounts of $502, $469 and $236, respectively.

(3) Amount reflects change in pension value of $203,306 for the Windstream Pension Plan and Benefit Restoration Plan. During 2010, there were no above-market earnings as defined by SEC rules on a deferred compensation balance of $18.0 million. Mr. Frantz received these benefits under arrangements that were approved by Alltel prior to the spin-off and that were assumed by Windstream as part of the spin-off in exchange for cash payments from Alltel totaling the amount of the benefit obligation at the time of the spin-off. On February 1, 2010, Windstream distributed the total balance, net of applicable withholding taxes, to Mr. Frantz as a lump sum distribution of his deferred compensation arrangement.

(4) On May 5, 2010, Mr. Reed retired from the Board and did not stand for re-election to the Board due to reaching the mandatory retirement age pursuant to the Company’s Corporate Governance Board Guidelines.

(5) Mr. Wells joined the Windstream Board in June 2010 and received an initial grant in the amount of $80,000 in restricted stock, and a prorated amount of the 2010 annual cash and stock retainers.

Compensation of Named Executive Officers

The following table shows the compensation paid during all of 2010 by Windstream to Windstream’s President and Chief Executive Officer, Windstream’s Chief Financial Officer, and Windstream’s other three most highly compensated executive officers who were serving as executive officers on December 31, 2010.

SUMMARY COMPENSATION TABLE


Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($) (2)(3)		Non-Equity Incentive Plan Compensation ($)		Change in Pension Value and Non- Qualified Deferred Compensation Earnings ($) (4)		All Other Compensation ($) (5)		Total ($)
Jeffery R. Gardner President and CEO		2010		991,000		-0-		3,517,827		2,242,347		472,454		78,786		7,302,414
		2009		991,000		-0-		3,407,571		920,002		395,899		112,918		5,827,390
		2008		984,000		-0-		2,931,930		1,787,554		228,408		106,027		6,037,919
Anthony W. Thomas CFO (1)		2010		404,712		-0-		1,158,753		524,587		13,991		24,520		2,126,563
Anthony W. Thomas CFO (1)		2009		308,077		-0-		212,124		155,152		7,614		22,107		705,074
Brent Whittington COO		2010		593,269		-0-		1,640,334		868,881		7,344		40,670		3,150,498
		2009		519,231		-0-		770,406		357,418		7,180		54,265		1,708,500
		2008		492,308		-0-		652,200		631,326		2,471		43,977		1,822,282
John P. Fletcher EVP, General Counsel & Secretary		2010		436,298		-0-		1,376,457		637,180		-0-		30,501		2,480,436
		2009		412,500		-0-		520,357		268,063		-0-		38,280		1,239,200
		2008		409,615		-0-		442,031		520,844		-0-		47,324		1,419,814
Cynthia B. Nash Chief Information Officer (1)		2010		317,308		-0-		788,297		318,590		-0-		16,310		1,440,505

(1) Mr. Thomas was not a named executive officer for 2008 and Ms. Nash was not a named executive officer in 2008 or 2009.

(2) All stock award amounts for restricted stock granted by Windstream reflect the fair value calculated in accordance with FASB ASC topic 718. The fair value reflects the expected future cash flows of dividends and therefore dividends on unvested shares are not separately disclosed. The information provided in the Stock Awards column does not reflect the manner in which the Compensation Committee viewed or determined the equity compensation values for the named executive officers. Specifically, under applicable SEC rules, the grant date fair values for the performance-based restricted stock is calculated based on the stock price when the target for each performance period is set. As a result, from the standpoint of allocating compensation to a particular fiscal period, there is a disparity between the value approved by the Compensation Committee and the amounts reported above. No options have been granted by Windstream.

(3) The following table shows the breakdown of the stock awards across the special equity grant in August 2010 (subject to “cliff” vesting of 100% in August 2013) and annual equity awards in February 2010 and 2009 (subject to “ratable” annual vesting in one-third increments over a three year vesting period), as approved by the Compensation Committee:


Named Executive Officer	Special Equity Grant $	2010 Annual Equity Grant $	2009 Annual Equity Grant $
Jeffery R. Gardner	-0-	3,599,994	3,599,998
Anthony W. Thomas	749,996	499,983	249,994
Brent Whittington	749,996	899,993	899,989
John P. Fletcher	749,996	649,992	599,992
Cynthia B. Nash	499,997	319,080	274,986

(4) Amounts for 2010 for Messrs. Gardner, Thomas and Whittington reflect increase in pension value only. Mr. Gardner did not receive above-market earnings on non-qualified deferred compensation in 2010.

(5) “All Other Compensation” in 2010 includes (i) Company matching contributions under the Windstream 401(k) Plan for Messrs. Gardner, Thomas, Whittington, Fletcher and Ms. Nash in the amount of $9,800, (ii) Company matching contributions under the Windstream 2007 Deferred Compensation Plan for Messrs. Gardner, Thomas, Whittington, Fletcher and Ms. Nash in the amounts of $66,640, $12,510, $24,592, $18,341, and $4,951, respectively, (iii) the valuation of the individual’s personal use of Company plane based on the incremental cost to the Company of such usage, which primarily includes costs for fuel, maintenance charges allocable to such use, and contract-pilot charges and excludes depreciation of the aircraft, general maintenance, compensation of Windstream’s employee pilots and other general charges related to ownership of the aircraft, and (iv) imputed income for value over $50,000 of life insurance coverage provided by the Company. For 2008, “All Other Compensation” included payment of initial or annual country club dues and reimbursement of financial planning and related expenses, which were eliminated in 2009.

Information On Plan-Based Awards

The following table shows information regarding grants of plan-based awards, including equity and non-equity incentive plans, made by Windstream during 2010 to the individuals named below. All equity grants made in 2010 were made pursuant to the Amended and Restated 2006 Equity Incentive Plan. All non-equity grants made in 2010 were made pursuant to the Company’s short-term cash incentive plans described above.

GRANTS OF PLAN-BASED AWARDS


			Estimated Future Payouts Under Non-Equity Incentive Plan Award						Estimated Future Payouts Under Equity Incentive Plan Awards (1)		All Other Stock Awards: Number of Shares of Stock or Units (#)			Grant Date Fair Value of Stock and Option Awards ($) (5)
Name	Grant Date		Threshold ($)		Target ($)		Maximum ($)		Target (#) (2)					Grant Date Fair Value of Stock and Option Awards ($) (5)
Jeffery R. Gardner		2/16/10		619,375		1,238,750		2,477,500		363,685		-0-			3,517,827
Anthony W. Thomas		2/16/10 2/16/10 8/3/10		144,900		289,800		579,600		16,673		-0- 24,271 65,217	(3) (4)		158,765 249,991 749,996
Brent Whittington		2/16/10 2/16/10 8/3/10		240,000		480,000		960,000		45,460		-0- 43,689 65,217	(3) (4)		440,341 449,997 749,996
John P. Fletcher		2/16/10 2/16/10 8/3/10		176,000		352,000		704,000		31,115		-0- 31,553 65,217	(3) (4)		301,465 324,996 749,996
Cynthia B. Nash		2/16/10 2/16/10 8/3/10		88,000		176,000		352,000		14,618		-0- 15,533 43,478	(3) (4)		128,760 159,990 499,997

(1) There is currently no threshold or maximum for the equity incentive plan awards granted prior to 2011.

(2) Equity awards vest based on the achievement of specified levels of Adjusted OIBDA for 2010, and subject to continuous employment through the first anniversary of the grant date.

(3) Equity awards vest ratably in one-third (1/3) annual increments subject to continuous employment through February 15, 2013.

(4) Equity awards vest in full subject to continuous employment through August 15, 2013.

(5) Represents the grant date fair value calculated in accordance with applicable standards for financial statement reporting purposes in accordance with FASB ASC topic 718.

For 2011, the Compensation Committee granted one-hundred percent (100%) performance-based restricted stock units for Mr. Gardner with a grant date value of $3.6 million and fifty percent (50%) each of time-based restricted stock and performance-based restricted stock units for Messrs. Thomas, Whittington, Fletcher and Ms. Nash in the amounts of $800,000, $1,000,000, $800,000 and $400,000, respectively. They also approved a time-based restricted stock grant of $2 million to Mr. Gardner, which is subject to a three-year cliff vest in 2014.

The following table shows information regarding outstanding awards under the Windstream equity incentive plans held by the individuals named below as of December 31, 2010. All awards represent grants of restricted stock under the Equity Plan.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END


	Stock Awards (1)
	Time-Based Vesting Restricted Stock		Performance-Based Vesting Restricted Stock
Name	Number of Shares or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested ($) (2)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (2)
Jeffery R. Gardner	0	0	363,685(3)	5,069,769
	0	0	254,594(4)	3,549,040
	0	0	116,504(5)	1,624,066

	0	0	734,783	10,242,875
Anthony W. Thomas	16,673(6)	232,422	16,673(3)	232,422
	12,884(7)	179,603	12,884(4)	179,603
	8,090(8)	112,775	8,090(5)	112,775
	65,217(9)	909,125	0	0

	102,864	1,433,925	37,647	524,800
Brent Whittington	45,460(6)	633,712	45,460(3)	633,712
	31,824(7)	443,627	31,824(4)	443,627
	14,563(8)	203,008	14,563(5)	203,008
	65,217(9)	909,125	0	0

	157,064	2,189,472	91,847	1,280,347
John P. Fletcher	31,115(6)	433,743	31,115(3)	433,743
	22,025(7)	307,029	22,025(4)	307,029
	10,517(8)	146,607	10,517(5)	146,607
	65,217(9)	909,125	0	0

	128,874	1,796,504	63,657	887,379
Cynthia B. Nash	14,618(6)	203,775	14,618(3)	203,775
	10,452(7)	145,701	10,452(4)	145,701
	5,177(8)	72,167	5,177(5)	72,167
	43,478(9)	606,083	0	0

	73,725	1,027,726	30,247	421,643

(1) Windstream named executive officers have no outstanding awards of stock options.

(2) Market value calculated using the closing price of Windstream Common Stock on December 31, 2010, which was $13.94.

(3) Performance-based shares vested ratably in annual one-third (1/3) increments over the three-year period ending February 15, 2011 if Windstream also achieves the performance objectives for such annual period, and those objectives were achieved.

(4) Performance-based shares vest ratably in annual one-third (1/3) increments over the three-year period ending February 15, 2012 if Windstream also achieves the performance objectives for such annual period.

(5) Performance-based shares vest ratably in annual one-third (1/3) increments over the three-year period ending February 15, 2013 if Windstream also achieves the performance objectives for such annual period.

(6) Shares vested ratably in annual one-third (1/3) increments over the three-year period ending February 15, 2011.

(7) Shares vest ratably in annual one-third (1/3) increments over the three-year period ending February 15, 2012.

(8) Shares vest ratably in annual one-third (1/3) increments over the three-year period ending February 15, 2013.

(9) Shares vest in full on August 15, 2013.

The following table shows information regarding the exercise or vesting of equity-based awards of Windstream during 2010 by the individuals named below.

OPTION EXERCISES AND STOCK VESTED


	Stock Awards (1)
Name	Number of Shares Acquired on Vesting (#)			Value Realized on Vesting ($)
Jeffery R. Gardner		303,449	(2)		3,089,111
Anthony W. Thomas		22,792	(2)		232,023
Anthony W. Thomas		18,867	(3)		246,214
Brent Whittington		76,422	(2)		777,976
John P. Fletcher		52,450	(2)		533,941
Cynthia B. Nash		24,508	(2)		249,491
Cynthia B. Nash		16,981	(3)		221,602

(1) Windstream does not grant stock options and had no exercises for executive officers in 2010.

(2) Shares vested on February 15, 2010 with a closing price of $10.18.

(3) Shares vested on November 15, 2010 with a closing price of $13.05.

Pension Benefits

The following is a brief summary of the material terms of the retirement plans maintained by Windstream.

Windstream Pension Plan. Windstream maintains the Windstream Pension Plan (“Pension Plan”), which is a tax-qualified defined benefit plan. The Pension Plan generally covers salaried and non-salaried employees of Windstream and those subsidiary companies that have adopted the Pension Plan. Accruals are frozen for non-bargaining employees except for those employees who attained age 40 with two years of vesting service as of December 31, 2005, which ended on December 31, 2010. Of our named executive officers, only Mr. Gardner was eligible for continuing accruals under the Pension Plan as of the end of 2010.

The Pension Plan’s accrued benefit is payable in the form of a monthly life annuity following normal retirement at age 65 (or, if later, at five years of service or at the fifth anniversary of participation). The accrued benefit is also payable in a monthly life annuity following early retirement at or after age 55 with at least 20 years of service (with reduction in the life annuity of 0.25% for each month that commencement precedes age 60) or at or after age 60 with 15 years of service (with reduction in the life annuity of 0.25% for each month that commencement precedes age 65 for a participant whose benefit commences before age 62). As of the end of 2010, no named executive officers satisfied the foregoing age and service requirements to commence receipt of an early retirement benefit under the Pension Plan.

For deferred vested participants (i.e. those who terminate employment before early retirement), the accrued benefit is payable in a monthly life annuity beginning at normal retirement age. If a deferred vested participant has 15 years of service, the accrued benefit is also payable in a monthly life annuity beginning as early as age 60 (with reduction in the life annuity of 0.50% for each month commencement precedes age 65), and, if the deferred vested participant has at least 20 years of service, the accrued benefit is also payable in a monthly life annuity beginning as early as age 55 (with reduction in the life annuity of 0.50% for each month commencement precedes age 65).

For a participant eligible for normal retirement or early retirement, payment is also available in actuarial equivalent joint and surviving spouse annuities, which provide a reduced monthly amount for the participant’s life with the surviving spouse receiving 50%, 75% or 100%, as elected, of the reduced monthly amount, or in an actuarial equivalent 10-year certain-and life annuity, which provides a reduced monthly amount for the participant’s life and, if the participant dies within 10 years of benefit commencement, with payments to a designated beneficiary for the remainder of the 10-year certain period. For a married deferred vested participant, payment is also available in the form of an actuarial equivalent joint and 50% or 75% surviving spouse annuity, as elected. If a vested participant dies before benefit commencement, an annuity generally is payable to the participant’s surviving spouse in an amount based on the joint and 50% surviving spouse annuity that would have been payable to the participant beginning on the later of when the participant died or would have been eligible to commence a benefit.

Under the Pension Plan, post-January 1, 1988 through December 31, 2005 service (December 31, 2010 service for employees who had attained age 40 with two years of vesting service as of December 31, 2005) is credited at 1% of compensation, including salary, bonus and other non-equity incentive compensation, plus 0.4% of that part of the participant’s compensation in excess of the Social Security taxable wage base for such year. Service prior to 1988, if any, is credited on the basis of a percentage of the participant’s highest consecutive five-year average annual salary, equal to 1% for each year of service prior to 1982 and thereafter increasing by 0.05% each year until 1988, but only prospectively, i.e., with respect to service earned in such succeeding year. In addition, participants receive an additional credit of 0.25% for each pre-1988 year of service after age 55, subject to a maximum of 10 years of credit, plus an amount equal to 0.4% of the amount by which the participant’s pre-1988 career average annual base salary (three highest years) exceeds his or her Social Security covered compensation, multiplied by his years of pre-1988 credited service.

Windstream Benefit Restoration Plan. The Windstream Benefit Restoration Plan (“BRP”) contains an unfunded, unsecured pension benefit for a group of highly compensated employees whose benefits are reduced due to the IRS compensation limits for qualified plans. This plan was established by Alltel and assumed by Windstream at the spin-off. As with the Pension Plan, accruals are frozen for employees, except for those employees who attained age 40 with two years of vesting service as of December 31, 2005, which ended on December 31, 2010. Of Windstream’s named executive officers, only Mr. Gardner continued to be eligible for accruals in the pension benefit of the BRP as of the end of 2010. The pension benefit under the BRP is calculated as the excess, if any, of (x) the participant’s Pension Plan benefit (on a single life-annuity basis payable commencing on the later of the participant’s retirement date or age 65) without regard to the IRS compensation limit ($245,000 for 2010) over (y) the participant’s regular Pension Plan benefit (on a single life-annuity basis payable commencing on the later of the participant’s retirement date or age 65 regardless of the actual form or timing of payment). If the participant has not attained age 65 on the date his benefit is scheduled to commence, the BRP benefit is reduced to the extent, as the Pension Plan benefit would have been reduced as in effect on December 31, 2010. For purposes of the preceding calculations, compensation has the same meaning provided in the foregoing description of the Pension Plan. The payment of a participant’s retirement benefit under the BRP shall commence as of the first day of the first month following the later of (i) his 60^th birthday or (ii) the six-month anniversary of the participant’s separation from service. Benefits are paid over the life of the participant if the participant is alive when benefits commence or over the life of the spouse if the benefit is paid as a pre-retirement death benefit. The benefit will be paid in one lump sum payment if the actuarial present value is less than $30,000. To the extent permitted by the IRC Section 409A, the Benefits Committee comprised of the Chief Financial Officer, Chief Operating Officer, Senior Vice President-Human Resources and Vice President-Benefits, authorized by the Board of Directors to manage the operation and administration of all employee benefit plans, including non-qualified plans, may direct that the benefit be paid in an alternative form provided that it is the actuarial equivalent of the normal form of benefit so that the BRP benefit is paid in the same form as the Pension Plan benefit. None of the named executive officers were yet eligible to commence their benefit under the BRP as of the end of 2010.

The following table shows certain information regarding benefits under the Windstream Pension Plan and Benefit Restoration Plan as of December 31, 2010 for the individuals named below.

PENSION BENEFITS


Name	Plan Name	Number of Years Credited Service (#) (1)		Present Value of Accumulated Benefit ($) (2)		Payments During Last Fiscal Year ($)
Jeffery R. Gardner	Pension Plan Benefit Restoration Plan		12.0 -		242,165 1,734,968		-0- -0-
Anthony W. Thomas	Pension Plan Benefit Restoration Plan		7.0 -		64,939 5,544		-0- -0-
Brent Whittington	Pension Plan Benefit Restoration Plan		3.5 -		32,412 4,589		-0- -0-
John P. Fletcher	Pension Plan Benefit Restoration Plan		- -		- -		- -
Cynthia B. Nash	Pension Plan Benefit Restoration Plan		- -		- -		- -

(1) The plans recognize all prior years of service under the Alltel Corporation Pension Plan and the Alltel Corporation Benefit Restoration Plan.

(2) The present value of accumulated benefits includes the present value of the benefits transferred from the Alltel Corporation Pension Plan and the Alltel Corporation Benefit Restoration Plan as part of the spin-off. The present value of accumulated benefits was calculated based on retirement at age 60 with 20 years of credited service, current compensation as of December 31, 2010, no pre-retirement decrements, the RP-2000 combined healthy mortality table (projected to 2011), and a 5.31% discount rate, which is the same rate used for preparing Windstream’s consolidated financial statements.

Non-Qualified Deferred Compensation

The Windstream 2007 Deferred Compensation Plan (the “2007 Plan”) is a non-qualified deferred plan offered to the executive officers and other key employees. Participants may defer up to 25% of base salary and 50% of bonus. The 2007 Plan also allows Windstream to make discretionary contributions to the 2007 Plan to replace contributions that Windstream is limited from making to its 401(k) qualified plan as a result of limits imposed by the Internal Revenue Code. These discretionary contributions equal the amount that could have been credited to the executive officers as a matching contribution under Windstream’s 401(k) plan had compensation not been limited under the 401(k) plan by the Internal Revenue Code, plus the amount, if any, by which the executive officer’s matching contribution under the Windstream 401(k) plan is reduced due to the executive officer’s contributions to the 2007 Plan. Participant accounts are credited with earnings based on a portfolio of investment funds. For amounts deferred prior to 2007, accounts are credited with earnings based on the prime rate, plus 200 basis points. The prime rate for 2010 was set at 5.25%, which was determined using the prime rate published in the Wall Street Journal on the first business day of 2011. Of our named executive officers, only Mr. Gardner was eligible for interest based on the prime rate + 2% (“1998 Fund”). Mr. Gardner’s balance in the 1998 Fund was paid in full on February 1, 2010. Mr. Gardner has a remaining balance of deferrals made since 2007.

Payments are made under the 2007 Plan in cash at certain future dates as specified by the participants or upon separation of service.

NON-QUALIFIED DEFERRED COMPENSATION


Name	Executive Contributions in Last FY ($)		Windstream Contributions in Last FY ($)(1)		Aggregate Earnings in Last FY ($)(2)		Aggregate Withdrawals/ Distributions ($)			Aggregate Balance at 12/31/2010 ($)(3)(4)
Jeffery R. Gardner		-		66,640		81,424		2,836,582	(5)		1,447,128
Anthony W. Thomas		-		12,510		16,785		-			97,588
Brent Whittington		-		24,592		107,036		-			984,015
John P. Fletcher		-		18,341		1,735		-			110,272
Cynthia B. Nash		-		4,951		4		-			54,014

(1) These amounts are also included in the “All Other Compensation” column of the Summary Compensation Table.

(2) There were no “above-market earnings” for 2010.

(3) Balances are paid following termination or upon a date chosen by participant, subject to compliance with Section 409A of the Internal Revenue Code.

(4) All amounts contributed by a named executive officer and Windstream in prior years have been reported in the Summary Compensation Tables in our previously filed proxy statements in the year earned to the extent he/she was a named executive officer for purposes of the SEC’s executive compensation disclosure.

(5) On February 1, 2010, Windstream completed the lump sum distribution of Mr. Gardner’s 1998 Fund balance.

Potential Payments Upon Termination or Change-in-Control

Windstream has entered into certain agreements and maintains certain plans and arrangements that require Windstream or its successors to pay or provide certain compensation and benefits to its named executive officers in the event of certain terminations of employment or a change-in-control of Windstream. The estimated amount of compensation and benefits payable or provided to each named executive officer in each situation is summarized below, assuming that the triggering event occurred on the last day of the 2010 fiscal year. The actual amounts that would be paid to each named executive officer upon certain terminations of employment or upon a change-in-control can only be determined at the time the actual triggering event occurs. The estimated amount of compensation and benefits described below are in addition to the benefits to which the named executive officers would be entitled to receive upon termination of employment generally under the retirement plans and programs described in the sections above titled “Pension Benefits” and “Non-Qualified Deferred Compensation”. Please refer to those sections for a description of Windstream’s retirement plans and programs. This section identifies and quantifies the extent to which those retirement benefits are enhanced or accelerated upon the triggering events described below.

Voluntary Termination Without “Good Reason” or Involuntary Termination For “Cause”

Windstream does not maintain any plans or arrangements that would provide benefits to its named executive officers solely as a result of a voluntary termination without “good reason” or an involuntary termination for “cause” (each as defined under the heading “Termination for ‘Good Reason’ or Involuntary Termination without ‘Cause’” immediately below).

Voluntary Termination for “Good Reason” or Involuntary Termination without “Cause”

Windstream has entered into an Employment Agreement with Mr. Gardner. Under the Employment Agreement, if Windstream or its affiliates terminated Mr. Gardner’s employment without “cause” (as defined below) or if Mr. Gardner terminated his employment with Windstream or its affiliates for “good reason” (as

defined below) on December 31, 2010, then Windstream would have been obligated to pay Mr. Gardner, in a lump sum, approximately $2,973,000. This severance benefit under the Employment Agreement equals three times his annual base salary.

The Employment Agreement provides that upon termination of employment, Mr. Gardner is prohibited from soliciting employees or customers or competing against Windstream for a one-year period and is subject to confidentiality and non-disparagement restrictions. Moreover, he is required to sign a release of all claims against Windstream prior to receiving severance benefits under the agreement.

For purposes of the Employment Agreement, the term “cause” generally means (i) the willful failure by Mr. Gardner substantially to perform his duties to Windstream; (ii) a conviction, guilty plea or plea of nolo contendere of Mr. Gardner for any felony; (iii) gross negligence or willful misconduct by Mr. Gardner that is intended to or does result in his substantial personal enrichment or a material detrimental effect on the reputation or business of Windstream or any affiliate; (iv) a material violation by Mr. Gardner of the corporate governance board guidelines and code of ethics of Windstream or any affiliate; (v) a material violation by Mr. Gardner of the requirements of the Sarbanes-Oxley Act of 2002 or other federal or state securities law, rule or regulation; (vi) the repeated use of alcohol by Mr. Gardner that materially interferes with his duties, the use of illegal drugs, or a violation of the drug and/or alcohol policies of Windstream or any affiliate; or (vii) a material breach by Mr. Gardner of any non-solicitation, non-disparagement or confidentiality restrictions.

For purposes of the Employment Agreement, the term “good reason” generally means the occurrence, without the executive’s express written consent, of any one or more of the following: (i) any action of Windstream or its affiliates that results in a material adverse change in Mr. Gardner’s position (including status, offices, title, and reporting requirements), authorities, duties, or other responsibilities; (ii) a material reduction by Windstream in Mr. Gardner’s compensation; (iii) the failure of the Board of Directors to nominate Mr. Gardner for election or re-election to the Board; or (iv) a material breach by Windstream of any provision of the Employment Agreement. Before Mr. Gardner may resign for “good reason”, Windstream must have an opportunity within 30 days after receipt of notice to cure the “good reason” conditions. Notwithstanding the foregoing, in no event shall “good reason” occur as a result of the following: (i) a reduction in any component of Mr. Gardner’s compensation if other components of his compensation are increased or a substitute or alternative is provided so that his overall compensation is not materially reduced; (ii) Mr. Gardner does not earn cash bonuses or benefit from equity incentives awarded to him because the performance goals or targets were not achieved; and (iii) the suspension of Mr. Gardner for the period during which the Board of Directors is making a determination whether to terminate him for cause.

Death or Disability

Windstream would have been obligated to provide each of the executive officers listed below (or his/her beneficiary) with the following estimated payments in the event that he/she had died or become “disabled” (as defined below) while employed with Windstream on December 31, 2010.



Name	Accelerated Vesting of Restricted Shares (1) ($)	Accelerated Vesting of Annual Incentive Compensation ($)	Total for Death or Disability ($)
Jeffery R. Gardner	10,242,875	2,242,347	12,485,222
Anthony W. Thomas	1,958,723	524,587	2,483,310
Brent Whittington	3,469,819	868,881	4,338,700
John P. Fletcher	2,683,882	637,180	3,321,062
Cynthia B. Nash	1,449,370	318,590	1,767,960

(1) The value of the accelerated vesting of restricted shares is based on the closing price of Windstream’s Common Stock on December 31, 2010 of $13.94 per share.

Accelerated Vesting of Restricted Shares. In the event that an executive officer listed above died or became permanently disabled (as determined by the Compensation Committee in its sole discretion) and while employed with Windstream, then his unvested restricted stock or performance based restricted stock would have immediately vested in full.

Performance Incentive Compensation Plan. During 2010, each of the named executive officers participated in the Performance Incentive Compensation Plan, which is an annual bonus plan. If either an executive died or became “disabled” during the year, then his or her 2010 annual bonus under the Performance Incentive Compensation Plan would have been pro-rated on the basis of the ratio of the number of days of participation during the plan year to the number of days during the plan year and paid in a lump sum following the end of the year. For this purpose, the term “disability” means incapacity resulting in the executive being unable to engage in gainful employment at his usual occupation by reason of any medically demonstrable physical or mental condition, excluding, however, incapacity resulting from a felonious enterprise; chronic alcoholism or addiction to drugs or abuse; and self-inflicted injury or illness.

Change-in-Control

In general, Windstream does not maintain any plans or arrangements that would provide benefits to the named executive officers solely as a result of a change-in-control (as defined under the heading “Qualifying Termination Following Change-in-Control” below). All non-qualified balances would only be subject to payment following a qualifying termination following a change in control. Please refer to the section above entitled “Nonqualified Deferred Compensation” for more information.

Qualifying Termination Following Change-in-Control

Each executive officer listed below would have been entitled to the following estimated payments and benefits from Windstream or its successor if a change-in-control (as defined below) occurred on December 31, 2010 and Windstream terminated the executive’s employment without “cause” (as defined below) or the executive terminated his employment with Windstream for “good reason” (as defined below) immediately following such change-in-control.


Name	Cash Severance ($)(1)		Cash Equivalent for Health Care Premiums ($)		Outplacement Services ($)		Excise Tax Gross-Up ($)		Accelerated Vesting of Restricted Shares(2) ($)		Total on a Qualifying Termination Following a Change-in-Control ($)
Jeffery R. Gardner		7,928,000		43,381		50,000		-0-		10,242,875		18,264,256
Anthony W. Thomas		1,697,400		27,055		25,000		986,215		1,958,723		4,694,393
Brent Whittington		3,720,000		42,692		50,000		2,045,509		3,469,819		9,328,020
John P. Fletcher		2,728,000		43,381		50,000		1,376,208		2,683,882		6,881,471
Cynthia B. Nash		1,168,000		16,306		25,000		- 0 -		1,449,370		2,658,676

(1) This amount includes the annual incentive compensation at target for the year of termination. Actual 2010 payouts are reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.

(2) The value of the accelerated vesting of restricted shares equals the product of (i) the number of unvested shares as of December 31, 2010, multiplied by (ii) the closing price of Windstream’s Common Stock on December 31, 2010 of $13.94 per share.

Change-in-Control Agreements. Windstream has a Change-in-Control Agreement with certain of its executive officers, including its executive officers listed in the above table. The agreements provide that a covered executive would be entitled to certain severance benefits if, during the two-year period following a

change-in-control (as defined below), Windstream terminates the executive’s employment without “cause” (as defined below) or the executive terminates his employment with Windstream for “good reason” (as defined below). In general, the executive officers would be entitled to receive, in a lump sum, the following amounts pursuant to the Change-in-Control Agreements:

•

Three times for Messrs. Gardner, Whittington and Fletcher and two times for Mr. Thomas and Ms. Nash the sum of the executive’s base salary and target annual incentive compensation (in each case, as in effect on the date of the change-in-control, or if higher, on the date of termination);

•

Pro-rated amount of target annual incentive compensation for the year of termination;

•

A cash equivalent for three years for Messrs. Gardner, Whittington and Fletcher and two times for Mr. Thomas and Ms. Nash of health care premiums; and

•

Outplacement services with a value of no more than $50,000 for Messrs. Gardner, Whittington and Fletcher or $25,000 for Mr. Thomas and Ms. Nash.

Terminated executives are prohibited from soliciting employees or customers or competing against Windstream or the acquiring or successor entity for a one-year period and are subject to a confidentiality restriction. Moreover, a terminated executive is required to sign a release of all claims against Windstream and the acquiring or successor entity prior to receiving severance benefits under the agreement.

Excise Tax Gross-Up. On or after a change-in-control, the named executive officers listed above may be subject to certain excise taxes pursuant to Section 4999 of the Internal Revenue Code. For Messrs. Gardner, Thomas, Whittington and Fletcher, Windstream or its successor is obligated under the Change-in-Control Agreements to reimburse each such named executive officer for all Section 4999 excise taxes that are imposed on him, whether as a result of payments received under his Change-in-Control Agreement or otherwise, and any income, employment and excise taxes that are payable by the executive as a result of such reimbursements. If, however, the aggregate parachute payments do not exceed 110% of the maximum total payments that could be made without triggering the excise tax under Section 4999, then the parachute payments would be automatically reduced to such maximum amount and no gross-up payment would be made. In general, the reimbursements would be made to the named executive officers by Windstream or its successor at the same time that the payments or benefits subject to the excise tax are paid or provided. The total tax gross-up amount in the above table assumes that (i) the excise tax rate is 20%, the federal income tax rate is 35%, the Medicare tax rate is 1.45%, and the state and local tax rate is 7%, and (ii) no amounts will be discounted as attributable to reasonable compensation and no value will be attributed to the non-solicitation or non-competition covenants contained in the Change-in-Control Agreements. The calculations exclude benefits paid from qualified plans or the BRP. Ms. Nash’s agreement was entered into after 2009 and does not obligate Windstream or its successor to reimburse her for excise tax. Her payment will be reduced to the maximum amount that could be made without triggering the excise tax under Section 4999.

Accelerated Vesting of Restricted Shares. All unvested restricted stock or performance-based restricted stock held by the named executive officers listed above would have become vested if a change-in-control (as defined below) occurred on December 31, 2010 and Windstream terminated the executive’s employment without “cause” (as defined below) or the executive terminated his employment with Windstream for “good reason” (as defined below) immediately following such change-in-control.

Definitions. For purposes of the Change-in-Control Agreements and the restricted shares described above for all executive officers, the following terms have the meanings set forth below:

•

Change-in-control. A change-in-control generally means any of the following: (i) an acquisition of 50% or more of Windstream’s Common Stock; (ii) a change in the membership of Windstream’s board of directors, such that the current incumbents and their approved successors no longer constitute a majority;

(iii) a reorganization, merger, consolidation or sale or other disposition of more than 50% of Windstream’s assets in which any one of the following is true: Windstream’s pre-transaction shareholders do not hold at least 50% of the combined enterprise; there is a 50%-or-more shareholder of the combined enterprise (other than as a result of conversion of the shareholder’s pre-combination interest in Windstream); or the members of Windstream’s board of directors (immediately before the combination) do not make up a majority of the board of the combined enterprise; or (iv) stockholders approve a complete liquidation of Windstream.

•

Cause. In general a termination is for cause if it is for any of the following reasons: (i) the willful failure by the executive substantially to perform his duties with Windstream; (ii) a conviction, guilty plea or plea of nolo contendere of the executive for any felony; (iii) the willful misconduct by the executive that is demonstratively and materially injurious to Windstream or its affiliates, monetarily or otherwise; (iv) a material violation by the executive of the corporate governance board guidelines and code of ethics of Windstream or any affiliate; (v) a material violation by the executive of the requirements of the Sarbanes-Oxley Act of 2002 or other federal or state securities law, rule or regulation; (vi) the repeated use of alcohol by the executive that materially interferes with his duties, the use of illegal drugs, or a violation of the drug and/or alcohol policies of Windstream or any affiliate; or (vii) a material breach by the executive of any non-solicitation or confidentiality restrictions.

•

Good Reason. In general a termination by the executive is for good reason if it is for any of the following reasons: (i) the assignment to the executive of any duties inconsistent with the executive’s status as an executive officer or a substantial adverse change in the nature or status of the executive’s responsibilities; (ii) a reduction by Windstream in the executive’s annual base salary; (iii) the relocation of the principal executive offices of Windstream by more than 35 miles or Windstream’s requiring the executive to be based anywhere other than its principal executive offices; (iv) the failure by Windstream to pay to the executive any portion of the executive’s current compensation, deferred compensation or business expense reimbursements; (v) the failure by Windstream to continue in effect any compensation plan in which the executive participates unless an equitable alternative arrangement has been made, or the failure by Windstream to continue the executive’s participation in those plans; (vi) the failure by Windstream to continue to provide the executive with benefits substantially similar to those enjoyed by the executive under any of Windstream’s retirement, welfare and fringe benefit plans; (vii) any purported termination by Windstream of the executive’s employment that is not effected in accordance with the terms of the Change-in-Control Agreement; or (viii) any failure by Windstream to require the successor to assume the agreement.

Clawback Policy

In 2010, the Board of Directors, acting on the recommendation of the Compensation Committee, adopted a clawback policy that requires executive officers to repay or forfeit covered compensation under the conditions set forth in the policy. The compensation covered by the policy is annual or short-term incentive compensation, performance-based restricted stock, other performance-based compensation, time-based restricted stock, severance benefits awarded under a change-in-control agreement, and such other compensation as may be designated by resolution to be subject to the policy. Under the policy, each executive officer is required to forfeit or repay, to the fullest extent permitted by law, covered compensation if all of the following conditions are met:

(1)

Financial statements of Windstream filed with the SEC during the period in which the executive officer is employed as an executive officer become subject to a restatement that is filed with the SEC;

(2)

The Board of Windstream determines that fraud caused or significantly contributed to the need for the restatement;

(3)

The Board determines that the restatement applies to the covered compensation; and

(4)

The Board determines in its sole discretion that it is in the best interests of Windstream and its stockholders for the executive officer to repay the covered compensation.

The Board can determine that a restatement applies to covered compensation if (i) in the case of performance-based compensation, the vesting or payment of such compensation was based on the achievement of financial results that were subsequently the subject of the restatement, and the amount of compensation that would have been received by the executive officer had the financial results been properly reported, after giving effect to the restatement, would have been lower than the amount actually received, (ii) in the case of time-based restricted stock, the vesting of such compensation occurred during the fiscal period whose results were subject to the restatement, and (iii) in the case of severance payments under a change-in-control agreement, the executive officer engaged in the fraud giving rise to the restatement during the 12 months prior to the consummation of the change-in-control that was a condition to the vesting and payment of any cash severance received by the executive officer pursuant to the change-in-control agreement, and the amount of severance under the change-in-control agreement exceeds the cash severance that would have been available under Windstream’s severance policies generally available to employees.

The Board of Directors of Windstream, acting solely through its independent directors, is the administrator of the policy. The policy applies to covered compensation granted or awarded on or after January 1, 2010, including severance payments that may be issued after January 1, 2010 under Windstream’s existing change-in-control agreements.

Risks Presented by Windstream’s Compensation Programs

As required by SEC rules, Windstream has assessed the risks that could arise from its compensation policies for all employees, including employees who are not officers, and has concluded that such policies are not reasonably likely to have a material adverse effect on Windstream. To the extent that Windstream’s compensation programs create a potential misalignment of risk incentives, Windstream believes that it has more than adequate compensating controls to mitigate against the potential impact of any such misalignment. These compensating controls include strong internal controls over financial reporting, robust stock ownership guidelines, a clawback policy for senior executives, and a three year vesting cycle for equity-based compensation. The result is a strong alignment between the interests of management and shareholders. Windstream also engages in an annual risk assessment process that is conducted by Windstream’s Internal Audit Department. The results of this risk assessment are reported annually to Windstream’s Audit Committee and full Board of Directors, and this assessment is designed in part to identify any activities that create improper risks to Windstream.

Compensation Committee Interlocks and Insider Participation

During 2010, the Compensation Committee consisted of Messrs. Montgomery (Chairman), Beall and Foster. All members of the Compensation Committee during 2010 were independent directors, and no member was an officer or employee of the Windstream or a former officer of Windstream. No member of the Compensation Committee serving during 2010 had any relationship requiring disclosure under the section titled “Certain Relationships and Related Transactions” in this Proxy Statement. During 2010, none of our executive officers served on the compensation committee (or its equivalent) or board of directors of another entity whose executive officer served on either our Compensation Committee or our Board of Directors.

PROPOSAL NO. 2

ADVISORY VOTE ON EXECUTIVE COMPENSATION

At the Annual Meeting and pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Securities Exchange Act of 1934, the Board of Directors is providing stockholders of Windstream the opportunity to vote on the following advisory (nonbinding) resolution:

“Resolved, that the compensation paid to Windstream’s named executive officers, as disclosed in this Proxy Statement, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

As described in the Compensation Discussion and Analysis, our executive compensation philosophy, policies, and practices are designed to:

•

Provide a high correlation between pay and performance;

•

Align management’s interests with the long-term interests of Windstream’s stockholders; and

•

Provide competitive compensation and incentives to attract and retain key executives.

Our core program consists of base salary, annual cash incentives and long-term equity incentives.

The following is a summary of key considerations that stockholders should take into account when assessing our executive compensation program:

•

The Board of Directors values and encourages constructive dialogue on compensation and other important governance topics with Windstream’s stockholders, to whom it is ultimately accountable. The Board of Directors requests stockholder approval of the Company’s overall executive compensation philosophy, policies and practices. Although your vote is advisory and will not be binding upon the Company or the Board of Directors, nor will it create or imply any change in the fiduciary duties of the Company or the Board of Directors, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF PROPOSAL NO. 2. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED FOR PROPOSAL NO. 2 UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.

PROPOSAL NO. 3

ADVISORY VOTE ON FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION

In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Securities Exchange Act of 1934, we are providing the Company’s stockholders the opportunity to cast an advisory vote on whether a non-binding stockholder resolution to approve the compensation of the Company’s named executive officers should occur every one, two or three years. The Board recommends that stockholders vote to hold an advisory vote on executive compensation every year, or an annual vote.

Board Recommendation

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT AN ADVISORY VOTE ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS BE INCLUDED IN THE COMPANY’S PROXY STATEMENT EVERY YEAR.

PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF INCLUDING AN ADVISORY VOTE ON EXECUTIVE COMPENSATION IN THE COMPANY’S PROXY STATEMENT EVERY YEAR.

Vote Required

Generally, approval of any matter presented to shareholders requires a majority of the shares present in person or by proxy and entitled to vote on the matter. However, because this vote is advisory and non-binding, if none of the frequency options receive majority support, the option receiving the greatest number of votes will be considered the frequency recommended by the Company’s stockholders. Although your vote is advisory and will not be binding upon the Company or the Board of Directors, nor will it create or imply any change in the fiduciary duties of the Company or the Board of Directors, the Board of Directors will take into account the outcome of this vote in making a determination on the frequency at which advisory votes on executive compensation will be included in the Company’s proxy statement.

PROPOSAL NO. 4

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, 2011. Windstream is submitting to the stockholders for ratification at the Annual Meeting the selection of PwC as Windstream’s independent auditors for 2011, 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 2009 and 2010 in connection with the audits of the 2009 and 2010 fiscal years. Information regarding PwC’s fees for 2009 and 2010 is provided below under the caption “Audit and Non-Audit Fees”. Representatives of PwC are expected to be present at the 2011 Annual Meeting and will have an opportunity to make a statement, if they desire to do so, and to respond to appropriate questions.

If the stockholders fail to ratify the appointment of PricewaterhouseCoopers LLP as Windstream’s independent registered public accountant, the Board will reconsider the appointment. However, even if the selection is ratified, the Audit Committee, in its sole discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of Windstream and its stockholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” PROPOSAL NO. 4. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED FOR PROPOSAL NO. 4 UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.

PROPOSAL NO. 5

STOCKHOLDER PROPOSAL – CUMULATIVE VOTING

The stockholder proposal, which follows, is a verbatim submission by the Trust for the International Brotherhood of Electrical Workers’ Pension Benefit Fund (who has notified Windstream that it is the beneficial owner of 32,910 shares of Windstream Common Stock), whose address is 900 Seventh Street, N.W., Washington, D.C. 20001, for consideration by Windstream stockholders. All statements contained in the proposal are the sole responsibility of the Fund.

RESOLVED: That the stockholders of Windstream Corporation (“the Company”), assembled in Annual Meeting in person or by proxy, hereby request the Board of Directors to take the necessary steps to provide for cumulative voting in the contested election of directors, which means each stockholder shall be entitled to as many votes as shall equal the number of shares he or she owns multiplied by the number of directors to be elected, and he or she may cast all such votes for a single candidate, or any two or more of them as he or she may see fit.

SUPPORTING STATEMENT

Cumulate voting means that each shareholder may cast as many votes as equal the number of shares held, multiplied by the number of directors to be elected. Each shareholder may cast all such cumulated votes for a single candidate or split votes between one or more candidates, as each shareholder sees fit.

We believe that cumulative voting increases the possibility of electing at least one director with a viewpoint independent of management. In our opinion, this will help achieve the objective of the board representing all shareholders.

We urge our fellow shareholders to vote yes for cumulative voting and the opportunity to enhance the Board with a more independent perspective.

BOARD OF DIRECTORS’ STATEMENT IN OPPOSITION TO THE STOCKHOLDER PROPOSAL

Under the Company’s existing majority voting standard, to be elected in uncontested elections of directors, nominees for election must receive a majority of the votes cast. In contested elections, directors will continue to be elected by a plurality of the votes cast. The Board believes that majority voting is the fairest way to elect the Company’s directors in uncontested elections, as well as the method most likely to produce a Board that will effectively represent the interests of Windstream stockholders. One consequence of cumulative voting is to permit the holders of less than a majority of the votes cast to elect a director.

Cumulative voting is incompatible with majority voting. By permitting stockholders to aggregate their votes and cast them for only one or a limited number of directors, cumulative voting could result in the election of directors who receive less than a majority of the votes outstanding. Stockholders who cumulate their vote often do not vote for all of the candidates for directors and accordingly, some directors who receive very few “for” votes may be elected to the Board.

Windstream’s Governance Committee, which is responsible for identifying candidates for the Board, as well as the independence criteria contained in Windstream’s Corporate Governance Board Guidelines, protects the interests of all stockholders by ensuring that Windstream has an independent and effective Board of Directors. Six directors are independent, and the Governance Committee is comprised entirely of independent directors. This degree of independence among Board members ensures that directors will represent the interest of, and remain accountable to, all stockholders.

A director elected by cumulative voting may be more inclined to promote special interests on the Board and may not represent the best interests of the majority of Windstream stockholders.

For these reasons, Windstream believes the present majority voting-based system best assures the elected directors will represent and act in the interests of all stockholders and this proposal is unnecessary and undesirable and could have adverse consequences for stockholders.

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.

PROPOSAL NO. 6

STOCKHOLDER PROPOSAL—TRANSPARENCY AND ACCOUNTABILITY IN CORPORATE SPENDING ON POLITICAL ACTIVITIES

The stockholder proposal, which follows, is a verbatim submission by the CWA General Fund (who has notified Windstream that it is the beneficial owner of Windstream Common Stock valued at more than $2,000), whose address is 501 Third Street, N.W., Washington, D.C. 20001-2767, for consideration by Windstream stockholders. All statements therein are the sole responsibility of the Fund.

Resolved, that the shareholders of Windstream Corporation (“Company”) hereby request that the Company provide a report, updated semi-annually, disclosing the Company’s:

Policies and procedures for political contribution and expenditures (both direct and indirect) made with corporate funds;

Monetary and non-monetary contributions and expenditures (direct and indirect) used to participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, and used in any attempt to influence the general public, or segments thereof, with respect to elections or referenda. The report shall include:

An accounting through an itemized report that includes the identity of the recipient and the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above; and

The title(s) of the person(s) in the Company who participated in making the decisions to make the political contribution or expenditure.

The report shall be presented to the board of directors’ audit committee or other relevant oversight committee and posted on the Company’s website.

Supporting Statement

As long-term shareholders of Windstream, we support transparency and accountability in corporate spending on political activities. These include any activities considered intervention in any political campaign under the IRS Code, such as direct and indirect political contributions to candidates, political parties, or political organizations; independent expenditures; or electioneering communications on behalf of the federal, state or local candidates.

Disclosure is consistent with public policy, in the best interest of the Company and its shareholders, and critical for compliance with federal ethics laws. The Supreme Court’s Citizens United decision recognized the

importance of political spending disclosure for shareholders when it said “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.” Gaps in transparency and accountability may expose the Company to reputational and business risks that could threaten long-term shareholder value.

Windstream contributed at least $161,000 in corporate funds since the 2006 election cycle, according to the Center for Political Accountability. During the same time frame, the Company spent at least $123,000 on state politics.

Publicly available data does not provide a complete picture of the Company’s political expenditures. Windstream’s payments to trade associations used for political activities are undisclosed and unknown. In many cases, even management does not know how trade associations use their company’s money politically. The proposal asks the Company to disclose all political spending, including payments to trade associations and other tax exempt organizations for political purposes. This would bring Windstream in line with a growing number of leading companies, including Aetna, American Electric Power and Microsoft that support political disclosure and accountability and present this information on their websites.

The Company’s Board and its shareholders need complete disclosure to be able to fully evaluate the political use of corporate assets. We urge support for this critical governance reform.

BOARD OF DIRECTORS’ STATEMENT IN OPPOSITION TO THE STOCKHOLDER PROPOSAL

Windstream shares the proponents’ interest in transparency and accountability regarding corporate spending on political activities. The Company already complies with regulatory requirements arising from the laws and rulings of states, localities, courts, the federal executive branch, the federal legislative branch, and the Federal Election Commission (FEC).

As a result of the exhaustive reporting requirements already in place, vast amounts of data on the political activities of Windstream, as well as the separate segregated fund known as the Windstream Corporation Political Action Committee (PAC), are already publicly available. This information, updated continually, offers a comprehensive account of Company and PAC political activity since the Company’s founding. For instance, one can learn what specific bills Windstream has followed, which political candidates it has supported, and how the Company’s efforts compare to unions or other telecom providers. With specific regard to the Federal Communications Commission (FCC), detailed information documenting the dates that Windstream officials met with commissioners, what data or exhibits were used, and what arguments were made is already available.

The Company strongly disagrees with the resolution’s assertion that communications between Company officers and board members regarding political activity are somehow incomplete or misleading. Furthermore, it is inaccurate to assert that trade associations with which the Company is affiliated are engaging in secretive political activities unbeknownst to Windstream officers. In fact, Company officials are directly engaged in the governance, as well as the policy and political decisions, of every trade association in which we are a member. As is the nature of any group activity, trade associations cannot follow each individual member’s preferred approach in every instance, but we are confident that the associations to which we belong are accountable and their actions are transparent to their membership. Finally, the supporting statement incorrectly suggests that Windstream is contributing corporate funds to candidates. In fact, all Windstream-related funding for candidates and campaigns is provided through the Windstream Corporation PAC, which is registered with the FEC and complies with the requirements of the Federal Election Campaign Act, or from individual contributions of Windstream officers or employees. All PAC dollars come from individual contributors – not the Company – and are required to be kept separate from the general corporate treasury.

Windstream competes in a highly regulated industry, and the Company’s operations are significantly affected by government actions at the local, state and national levels. Therefore, it is important that Windstream actively participate in the electoral and legislative processes in order to protect stockholder interests and that these activities remain transparent, as they are today.

Windstream has three objections to the proposal under consideration: (1) This proposal would impose additional administrative burden on Windstream for little additional value for the Company or its stockholders because comprehensive information regarding Windstream’s political activities is already publicly available; (2) Windstream has not used corporate funds to make political contributions to candidates; and (3) It would burden only Windstream, but not other participants in the political process, including our competitors, unions, or other entities whose resources are in many cases far greater than Windstream’s. For these reasons, Windstream believes this proposal is unnecessary and undesirable and could have adverse consequences for stockholders.

STOCKHOLDER PROPOSALS FOR 2012 ANNUAL MEETING

Stockholders who intend to present proposals at the 2012 Annual Meeting, and who wish to have those proposals included in Windstream’s proxy statement for the 2012 Annual Meeting, must be certain that those proposals are received by the Corporate Secretary at 4001 Rodney Parham Road, Little Rock, Arkansas 72212, no later than November 25, 2011. 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 2012 Annual Meeting.

Additionally, stockholders that desire to submit a proposal at the 2012 Annual Meeting outside the process established by SEC Rule 14a-8 (i.e., where the proposal will not be included in the Company’s proxy statement for the 2012 Annual Meeting) must comply with the advance notice provisions in the Company’s bylaws. In order to comply with the advance notice provisions in the Company’s bylaws, the stockholder must deliver written notice of the proposal to the Corporate Secretary at the address provided above no earlier than January 5, 2012 nor later than February 4, 2012.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Windstream has adopted a written policy for the review and approval of related party transactions. The Governance Committee is responsible for the review and approval of transactions covered by the policy, although transactions can also be approved by the disinterested members of the Board of Directors.

Under the policy and subject to the exceptions noted below, the Governance Committee or the Board must approve any transaction in which Windstream is a participant, the amount involved equals or exceeds $120,000, and the transaction is required to be disclosed under SEC rules regarding related party transactions. To be approved, the transaction must be on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party or is otherwise determined to be fair and in the best interests of Windstream. The persons covered by the policy are Windstream’s directors, director nominees, and executive officers, an immediate family member of any of the foregoing, and any entity that is controlled by any of the foregoing persons. During 2010, there were no commercial transactions between related parties and Windstream that required disclosure in this proxy statement.

Transactions covered by the policy do not include the provision of services, the sale of products or other transactions conducted by Windstream in the ordinary course of business and on terms generally available to

employees or customers. Covered transactions also do not include an employment or service relationship involving a director or executive officer and any related compensation resulting from that relationship that is approved by Windstream’s Compensation Committee or is disclosed in the proxy statement pursuant to the SEC’s executive compensation rules. Additionally, covered transactions do not include employment relationships of immediate family members of executive officers as long as the immediate family member is not also an executive officer and is not related to the Chief Executive Officer or a director. Any employment relationships with immediate family members of executive officers that are not subject to the policy require the approval of the Chief Executive Officer. The Governance Committee also receives an annual report disclosing the terms of all related party transactions including transactions that do not require pre-approval by the Committee. The following is a summary of certain employment relationships occurring during 2010 involving Windstream, certain of its executive officers and certain members of their immediate family. Windstream believes the terms of the following employment relationships are comparable to terms that would have been reached by unrelated parties in arm’s-length transaction.

David Martin, brother-in-law of Brent Whittington, who is Chief Operating Officer and an executive officer of Windstream. Mr. Martin served as a Director of Business Solutions during 2010. For 2010, Windstream paid Mr. Martin total compensation of $148,576 comprised of salary, commissions, the value of restricted stock granted during 2010, Company contribution to the Windstream 401K plan, and the Company portion of healthcare premiums.

Wendy Raney, wife of William Grant Raney, who is Executive Vice President – Network Operations and an executive officer of Windstream. Ms. Raney served as Vice President of Customer Service during 2010. For 2010, Windstream paid Ms. Raney total compensation of $231,788 comprised of salary, bonus, the value of restricted stock granted during 2010, Company contribution to the Windstream 401K plan and the Company portion of healthcare premiums.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires Windstream’s directors and executive officers, and persons who own more than ten percent of Windstream’s Common Stock, to file with the SEC and NASDAQ initial reports of ownership and reports of changes in ownership of that Common Stock. To Windstream’s knowledge, based solely upon a review of copies of reports provided by those individuals to Windstream and written representations of those individuals that no other reports were required with respect to the year ended December 31, 2010, Windstream believes that all of the foregoing filing requirements applicable to its directors, executive officers, and greater-than-ten percent beneficial owners have been met, except that one Form 4 related to one reportable transaction for each of the following individuals was filed on November 19, 2010, which was two business days after the filing deadline for these reports: Anthony W. Thomas, William G. Raney, Cynthia Nash, and Robert G. Clancy.

ANNUAL REPORT

The 2010 Annual Report accompanies this proxy statement, which incorporates a copy of Windstream’s 2010 Form 10-K report, including the consolidated financial statements and the financial statement schedules thereto.

For stockholders who elect to receive proxy materials by mail and not electronic delivery, only one copy of this proxy statement, and the accompanying Annual Report, is being delivered to such stockholders who share an address, unless Windstream has received contrary instructions from one or more of the stockholders. Windstream will promptly deliver a separate copy of this proxy statement and the accompanying Annual Report to any stockholder at a shared address to which a single copy of those documents has been delivered by mail upon the written or oral request from that stockholder to Windstream at the address provided below or by calling

(501) 748-7000. Any stockholder sharing a single copy of the proxy statement and Annual Report who wishes to receive a separate distribution by mail of Windstream’s proxy statement and Annual Report in the future and stockholders sharing an address and receiving by mail multiple copies of Windstream’s proxy statement and Annual Report who wish to share a single copy of those documents in the future should also notify Windstream at: Investor Relations, Windstream Corporation, 4001 Rodney Parham Road, Little Rock, Arkansas 72212.

AUDIT AND NON-AUDIT FEES

PricewaterhouseCoopers LLP (“PwC”) has been selected as Windstream’s independent auditors for 2011. Aggregate fees for professional services rendered by PwC for the years ended December 31, 2010 and 2009 were:


In thousands	2010		2009
Audit(a)	$	2,915	$	2,827
Audit-related(b)		200		—
Tax(c)		542		220
All other(d)		4		—

Total	$	3,661	$	3,047

(a) Audit fees include fees for the annual audit and quarterly reviews of the consolidated financial statements as well as services related to statutory/subsidiary audits, attestation reports required by statute or regulation, comfort letters and consents in respect to Securities and Exchange Commission filings, and accounting and financial reporting consultations. The increase in 2010 audit fees is primarily due to work performed in connection with the acquisitions of NuVox, Inc.; Iowa Telecom; Q-Comm Corporation; and Hosted Solutions, LLC.

(b) Audit-related fees include fees for audits in connection with acquisitions and audits of employee benefit plans of $160,000 and $40,000, respectively. Excluded from the 2010 amount is $25,000 paid by the Windstream Pension Plan Trust for the audit of the Windstream Pension Plan.

(c) Tax fees are principally comprised of fees for tax consulting services provided by PwC. The increase in 2010 tax fees is primarily due to work performed in connection with the acquisitions NuVox, Inc.; Iowa Telecom; Q-Comm Corporation; and Hosted Solutions, LLC.

(d) All other fees are comprised of fees for subscription to PwC’s on-line accounting research software.

In making its determination regarding the independence of PwC, the Audit Committee considered whether the provision of the services covered herein regarding “Audit-related fees”, “Tax fees” and “All other fees” was compatible with maintaining such independence. All services to be performed for Windstream by PwC must be pre-approved by the Audit Committee or a designated member of the Audit Committee pursuant to the Committee’s Pre-Approval Policies and Procedures. The Audit Committee’s pre-approval policy provides that Windstream may engage PwC for non-audit services (i) only if such services are not prohibited from being performed by PwC under the Sarbanes-Oxley Act of 2002 or any other applicable law or regulation and (ii) if such services are tax-related services, such services are one or more of the following tax-related services: tax return preparation and review; advice on income tax, tax accounting, sales/use tax, excise tax and other miscellaneous tax matters; tax advice and implementation assistance on restructurings, mergers and acquisition matters and other tax strategies. The pre-approval policy provides that the Audit Committee, or any individual member of the Audit Committee who has been designated with authority to pre-approve audit or non-audit services to be performed by PwC, must pre-approve the engagement of PwC to perform such non-audit services, and any request for approval for PwC to perform a permitted non-audit service must be accompanied by a discussion of the reasons why PwC should be engaged to perform the services instead of an alternative provider. None of the services described above were approved pursuant to the de minimis exception provided in Rule 2-01(c)(7)(i)(C) of Regulation S-X promulgated by the SEC.

OTHER MATTERS

The management and the Board of Directors of Windstream do not know of any other matters that may come before the meeting. If any other matters properly come before the meeting, however, it is the intention of the persons named in the accompanying form of proxy to vote the proxy in accordance with their judgment on those matters.

Under Windstream’s Bylaws, nominations for director may be made only by the Board or by a Windstream stockholder who has delivered timely notice of such stockholder’s intent to make such nomination in writing to the Secretary of Windstream. To be timely, a stockholder’s notice shall be delivered to or mailed and received at the principal executive offices of Windstream (i) in the case of an annual meeting, not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is changed by more than 30 days from such anniversary date, notice by the stockholder must be received not later than the close of business on the 10th day following the day on which notice of the date of the meeting was mailed or public disclosure of the meeting was made, whichever occurs first, and (ii) in the case of a special meeting at which directors are to be elected, not later than the close of business on the 10th day following the day on which notice of the date of the meeting was mailed or public disclosure of the meeting was made, whichever occurs first.

The stockholder’s notice of nomination shall set forth: (1) as to each person whom the stockholder proposes to nominate for election as a director at such meeting all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended and such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (2) as to the stockholder and any “stockholder associated person” (as such phrase is defined below) giving the notice (A) the name and address, as they appear on the Windstream’s books, of such stockholder and any stockholder associated person, (B) the class and number of shares of Windstream common stock which are beneficially owned by such stockholder and also which are owned of record by such stockholder, (C) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares) has been made, the effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such stockholder or any such stockholder associated person with respect to any share of Windstream stock; and (3) as to the beneficial owner, if any, on whose behalf the nomination is made, (A) the name and address of such person, (B) the class and number of shares of Windstream common stock which are beneficially owned by such person, (C) a representation that the stockholder is a holder of record of stock of Windstream entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such nomination, and (D) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (i) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of Windstream’s outstanding capital stock required to elect the nominee and/or (ii) otherwise to solicit proxies from stockholders in support of such nomination. A stockholder associated person means, with respect to a stockholder, (1) any person directly or indirectly controlling, controlled by or under common control with, or directly or indirectly acting in concert with, such stockholder and (2) any beneficial owner of shares of Windstream stock owned of record or otherwise by such stockholder

The Bylaws also provide that no other business may be brought before an annual meeting except as specified in the notice of the meeting or as otherwise brought before the meeting by or at the direction of the Board or by a Windstream stockholder entitled to vote who has delivered timely notice to Windstream. These requirements apply to any matter that a Windstream stockholder wishes to raise at an annual meeting other than in accordance with the procedures in SEC Rule 14a-8. For business to be properly brought before an annual meeting, such proposed business must constitute a proper matter for stockholder action. For a stockholder to provide timely notice of a proposed action, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of Windstream not less than 90 days nor more than 120 days prior to the

anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting of stockholders is called for a date that is not within 25 days before or after such anniversary date, notice by the stockholder must be received not later than the close of business on the 10th day following the date on which notice of the date of the annual meeting was mailed or public announcement of such date was made, whichever occurs first.

A stockholder’s notice of proposed business (other than director nominations) must set forth as to each matter the stockholder proposes to bring before the annual meeting (1) a brief description of the business desired to be brought before the annual meeting and the text of the proposal or business, (2) the reason for conducting such business and any material interest of the stockholder and any stockholder associated person, individually or in the aggregate, including any anticipated benefit to the stockholder or stockholder associated person, (3) the name and address, as they appear on Windstream’s books, of the stockholder proposing such business and of any stockholder associated person, (4) the class and number of shares of Windstream Common Stock which are beneficially owned by the stockholder and by any stockholder associated person, (5) a representation that the stockholder is a holder of record of Common Stock of Windstream entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business, (6) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of Windstream’s outstanding capital stock required to approve or adopt the proposal and/or (b) otherwise to solicit proxies from stockholders in support of such proposal, and (7) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares) has been made, the effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such stockholder or any such stockholder associated person with respect to any share of Windstream stock.

All notices of stockholder nominations for director or other proposed business must be delivered in writing to the Corporate Secretary of Windstream at the principal executive offices of Windstream at 4001 Rodney Parham Road, Little Rock, Arkansas 72212.

Windstream will bear the cost of solicitation of proxies. In addition to the use of the mail, proxies may be solicited by officers, directors, and employees of Windstream, personally or by telephone or electronic means. In the event the management of Windstream deems it advisable, Windstream may engage the services of an independent proxy solicitation firm to aid in the solicitation of proxies. The fees paid by Windstream, in the event of such an engagement, likely would not exceed $20,000. Windstream will pay persons holding stock in their names or those of their nominees for their expenses in sending soliciting material to their principals in accordance with applicable regulations.

The material referred to in this proxy statement under the caption “Audit Committee Report” shall not be deemed soliciting material or otherwise deemed filed and shall not be deemed to be incorporated by any general statement of incorporation by reference in any filings made under the Securities Act of 1933 or the Securities Exchange Act of 1934.

IT IS IMPORTANT THAT ALL SHARES BE VOTED PROMPTLY. THEREFORE, STOCKHOLDERS ARE URGED TO VOTE AS SOON AS POSSIBLE ON THE INTERNET, BY TELEPHONE, OR BY MAIL.


Dated: March 24, 2011		By Order of the Board of Directors,
		John P. Fletcher,
		Secretary

APPENDIX A

Companies Included in 2010 Competitive Market Analysis

AGL Resources

American Tower

Asurion

Broadview Networks

Cablevision Systems Corporation

Cablevision Systems Corporation—Madison Square Garden/Radio City Entertainment

Cellular South, Inc.

CenturyTel, Inc.

Comcast Corporation—Comcast Cable Communications

Cox Enterprises, Inc.—Cox Communications, Inc.

CPS Energy

Crown Castle International Corporation

DIRECTV, Inc.

DISH Network Corp.

Duke Energy Corporation

EMBARQ Corporation

FPL FiberNet

FPL Group—Florida Power & Light

FPL Group—FPL FiberNet

FPL Group—NextEra Energy Resources

GCI Communication Corp

Integra Telecom, Inc.

Intelsat Global Service Corporation

iPCS, Inc.

Level 3 Communications

MetroPCS Communications, Inc.

NACR

National Rural Telecommunications Cooperative

Qwest Communications International, Inc.

SBA Network Services, Inc.

Securus Technologies

Southern Company—SouthernLINC

SureWest Communications

Syniverse Technologies

TDS Telecom

Tellabs

Time Warner Cable

T-Mobile USA

United States Cellular Corporation

University of Michigan

Verizon Communications

Verizon Wireless

Vonage Holdings Corporation

A-1




								Electronic Voting Instructions You can vote by Internet or telephone! Available 24 hours a day, 7 days a week!
								Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Central Time, on May 4, 2011.




		Vote by Internet • Log on to the Internet and go to www.envisionreports.com/WIN • Follow the steps outlined on the secured website.

		Vote by telephone • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada any time on a touch tone telephone. There is NO CHARGE to you for the call. • Follow the instructions provided by the recorded message.
Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas.	x

LOGO

q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q


A		Proposals — The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposals 2 and 4 and a vote of 1 YR on Proposal 3.

1. Election of Directors:

For

Against

Abstain

For

Against

Abstain

For

Against

Abstain

01 - Carol B. Armitage

02 - Samuel E. Beall, III

03 - Dennis E. Foster

04 - Francis X. Frantz

05 - Jeffery R. Gardner

06 - Jeffrey T. Hinson

07 - Judy K. Jones

08 - William A. Montgomery

09 - Alan L. Wells

For

Against

Abstain

1 Yr

2 Yrs

3 Yrs

Abstain

2. To vote on an advisory (non-binding) resolution on

executive compensation

3. To vote on an advisory (non-binding)

resolution on the frequency of advisory

votes on executive compensation

4. To ratify the appointment of PricewaterhouseCoopers LLP as

Windstream’s independent registered public accountant for 2011


B		Stockholder Proposals — The Board of Directors recommends a vote AGAINST Proposal 5 and 6.

For

Against

Abstain

For

Against

Abstain

5. Stockholder Proposal – Cumulative Voting

6. Stockholder Proposal – Transparency and accountability in

corporate spending on political activities

Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below

Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.

Date (mm/dd/yyyy) — Please print date below.

Signature 1 — Please keep signature within the box.

Signature 2 — Please keep signature within the box.

/ /

IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - D ON BOTH SIDES OF THIS CARD.


		Ê


		Receive Proxy Materials Electronically

Your email address can now help save the environment. Vote online and register for electronic communications with the eTree ® program and we’ll have a tree planted on your behalf. Electronic delivery saves Windstream a significant portion of the costs associated with printing and mailing annual meeting materials, and Windstream encourages stockholders to take advantage of the 24/7 access, quick delivery and reduced mail volume they will gain by consenting to electronic delivery. If you consent to electronic delivery of meeting materials, you will receive an e-mail with links to all annual meeting materials and to the online proxy voting site for every annual meeting. To sign up for electronic delivery and have a tree planted on your behalf, please provide your email address while voting online, or register at www.eTree.com/windstream.

q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q


Proxy — Windstream Corporation		+
Proxy — Windstream Corporation		+

Notice of 2011 Annual Meeting of Stockholders

Wednesday, May 4, 2011

11:00 a.m. local time

The Capital Hotel

111 West Markham Street

Little Rock, Arkansas 72201

This Proxy is Solicited on Behalf of the Board of Directors for the Annual Meeting of Stockholders on May 4, 2011.

The undersigned hereby appoints Jeffery R. Gardner, Anthony W. Thomas and John P. Fletcher, or either of them, with full power of substitution, as proxies and attorneys-in-fact with the power of substitution to represent the undersigned and to vote all of the undersigned’s shares of voting stock at the Annual Meeting of Stockholders on May 4, 2011, and at any postponements or adjournments thereof, in accordance with and as more fully described in the Notice of 2011 Annual Meeting of Stockholders and the Proxy Statement, receipt of which is acknowledged. You are encouraged to specify your choices by marking the appropriate boxes on the reverse side, but you need not mark any boxes if you wish to vote in accordance with the Board of Directors’ recommendations.

This proxy, when properly executed, will be voted in the manner directed on the reverse side. If no direction is made, this proxy will be voted “FOR” Proposals 1, 2 and 4 and “1 YR” on Proposal 3 and “AGAINST” Proposal 5 and 6.

Non-Voting Items

Change of Address — Please print your new address below.

Comments — Please print your comments below.

Meeting Attendance

Mark the box to the right if you plan to attend the Annual Meeting.


¢	IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - D ON BOTH SIDES OF THIS CARD.	+
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