Corporate Governance Guidelines

SureWest Communications Board of Directors Guidelines Relating to Significant Corporate Governance Issues


Separation of the positions of Chairman and CEO
The Board’s general policy is that the positions of Chairman of the Board and Chief Executive Officer should be held by different individuals.

Size of the Board
SureWest’s Bylaws provide that the Board will be not less than 5 nor more than 9 directors. The Board will periodically review the appropriate size of the Board.

Mix of Inside and Independent Directors
The Board confirms that there must be a majority of independent directors on the Board. The Board anticipates that SureWest’s Chief Executive Officer will be nominated annually to serve on the Board. The Board may also appoint other members of management whose experience and role at SureWest are expected to help the Board fulfill its responsibilities.

Board Definition of What Constitutes Independence for non-employee Directors
SureWest defines an “independent” director in accord with the NASDAQ National Market Issuer requirements for independent directors (NASDAQ Stock Market Rule 4200). Because it is not possible to anticipate or explicitly provide for all potential conflicts of interest that may affect independence, the Board is also responsible to affirmatively determine that each independent Director has no other material relationship with the company or its affiliates or any executive officer of the company or his or her affiliates. A relationship will be considered “material” if in the judgment of the Board it would interfere with the director's independent judgment.

Board Membership Criteria
Nominees for the Board should be committed to enhancing long-term shareholder value and must possess a high level of personal and professional ethics, sound business judgment and integrity. The Board's policy is to encourage selection of directors who will contribute to SureWest’s overall corporate goals: responsibility to its shareholders, technology leadership, effective execution, high customer satisfaction and superior employee working environment. The Nominating and Governance Committee may from time to time review the appropriate skills and characteristics required of Board members, including such factors as business experience, diversity, and personal skills in technology, finance, marketing, financial reporting and other areas that are expected to contribute to an effective Board. In evaluating potential candidates for the Board, the Nominating and Governance Committee considers these factors in the light of the specific needs of the Board at that time. Board members are expected to prepare for, attend and participate in meetings of the Board and committees on which they serve, and are strongly encouraged to attend the company's annual meetings of shareholders.

Selection of Board Members
All Board members are elected annually by the company's shareholders, except for Board action to fill vacancies. The Nominating and Governance Committee is responsible for recommending to the Board director candidates for nomination and election. The Nominating and Governance Committee annually reviews with the Board the applicable skills and characteristics required of Board nominees in the context of current Board composition and company circumstances. In making its recommendations to the Board, the Nominating and Governance Committee considers, among other things, the qualifications of individual director candidates in light of the Board Membership Criteria described above. The Nominating and Governance Committee will consider candidates recommended by shareholders. Shareholders wishing to suggest director candidates should submit their suggestions in writing to the attention of the Corporate Secretary of the company, providing the candidate's name and qualifications for service as a Board member, a document signed by the candidate indicating the candidate's willingness to serve, if elected, and evidence of the shareholder's ownership of company stock. The Board nominates director candidates for election by the shareholders and fills any Board vacancies that occur between shareholder elections pursuant to the company's Bylaws.

Directors Who Change Their Present Job Responsibility; Retirement
The Board does not believe that directors who retire or change from the position they held when they came on the Board should necessarily leave the Board. There should, however, be an opportunity for the Board, through the Nominating and Governance Committee, to review the continued appropriateness of Board membership under these circumstances. The Board does not believe a fixed retirement age for directors is appropriate.

Term Limits
The Board does not believe it should establish term limits. Directors who have served on the Board for an extended period of time are able to provide valuable insight into the operation and future of SureWest based on their experience with and understanding of the company’s policy, history and objectives.

Board Compensation
The Board, through the Compensation Committee, will review, with the assistance of management or outside consultants if desired, appropriate compensation policies for the directors serving on the Board and its committees. This review may consider Board compensation practices of other public companies, contributions to Board functions, service as committee chairs, and other appropriate factors.


Board Meetings – Frequency
The Board will generally have at least six regularly scheduled meetings per year and hold additional special meetings as necessary. The Board may also take action from time to time by unanimous consent. Each director is expected to attend both scheduled and special meetings, except if unusual circumstances make attendance impractical.

Board Meetings – Agenda
The Chairman of the Board and the Chief Executive Officer, together with the Corporate Secretary, and in consultation with all Board members, will set the agenda for each Board meeting, and will distribute this agenda in advance to each director.

Advance Distribution of Materials
All information relevant to the Board's understanding of matters to be discussed at an upcoming Board meeting should be distributed in writing or electronically to all members in advance, whenever feasible and appropriate. Each director is expected to review this information in advance of the meeting to facilitate the efficient use of meeting time. In preparing this information, management should ensure that the materials distributed are as concise as possible, yet give directors sufficient information to make informed decisions. The Board acknowledges that certain items to be discussed at Board meetings are of an extremely sensitive nature and that the distribution of materials on these matters prior to Board meetings may not be appropriate.

Access to Employees
The Board should have access to company employees in order to ensure that directors can ask all questions and glean all information necessary to fulfill their duties. The Board may specify a protocol for making such inquiries. Management is encouraged to invite company personnel to any Board meeting at which their presence and expertise would help the Board have a full understanding of matters being considered.

Access to Independent Advisors
The Board and its committees have the right at any time to retain independent outside auditors and financial, legal or other advisors, and the company will provide appropriate funding, as determined by the Board or any committee, to compensate those independent outside auditors or advisors, as well as to cover the ordinary administrative expenses incurred by the Board and its committees in carrying out their duties.

Executive Sessions of Independent Directors
The independent directors of the company will meet regularly in executive session, i.e., with no management directors or management present, at least four times each fiscal year. Executive sessions of the independent directors will be called and chaired by the Chairman of the Nominating and Governance Committee. These executive session discussions may include such topics as the independent directors determine. SureWest’s independent auditors, finance staff and other employees may be invited to attend portions of these meetings.


Shareholder Communications to the Board

Shareholders may contact an individual director, the Board as a group or a specified Board committee or group, including the independent directors as a group, by the following means:

Mail: Board of Directors, SureWest Communications, P.O. Box 969 Roseville, CA 95661

Each communication should specify the applicable addressee or addressees to be contacted as well as the general topic of the communication. The company will initially receive and process communications before forwarding them to the addressee. The company generally will not forward to the directors a shareholder communication that it determines to be primarily commercial in nature or relate to an improper or irrelevant topic, or that request general information about the company.

Concerns about questionable accounting or auditing matters or possible violations of the Code of Ethics and Business Conduct can be directed to the Audit Committee by the following means:

Mail: Audit Committee SureWest Communications, P.O. Box 601 Roseville, CA 95678-0601


Number and Type of Committees

The Board has three committees – an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. The Board may add new committees or remove existing committees as it deems advisable in the fulfillment of its primary responsibilities. Each committee will perform its duties as assigned by the Board in compliance with company Bylaws and the committee's charter.

Composition of Committees; Committee Chairpersons

The Audit, Compensation and Nominating and Governance Committees consist solely of independent directors. The Board is responsible for the appointment of committee members and committee chairpersons according to criteria that it determines to be in the best interests of the company and its shareholders.

Committee Meetings and Agenda

The chairperson of each committee is responsible for developing, together with relevant company managers, the committee's general agenda and objectives and for setting the specific agenda for committee meetings. The chairperson and committee members will determine the frequency and length of committee meetings consistent with the committee's charter.


Evaluation of Chief Executive Officer

The Compensation Committee shall lead the independent directors, in consultation with all other members of the Board, in conducting annual evaluations of the Chief Executive Officer.

Succession Planning

The Chief Executive Officer will review with the Board succession and development plans for senior executive officers. The Board may from time to time ask the Nominating and Governance Committee to undertake specific reviews concerning management succession planning.

Board Evaluation

The Chairman of the Nominating and Governance Committee manages the Board’s process for annual director self-assessment and evaluation of the Board.


Director Orientation and Continuing Education

The Chairman of the Nominating and Governance Committee and management are responsible for new-director orientation programs and for director continuing education programs to assist directors in maintaining skills necessary or appropriate for the performance of their responsibility.

Orientation programs will be designed to familiarize new directors with the company’s businesses, strategies and policies and to assist new directors in developing the skills and knowledge required for their service.

Continuing education programs for Board members may include a combination of internally developed materials and presentations, programs presented by third parties at the company, and financial and administrative support for attendance at qualifying university or other independent programs.

Review of Governance Guidelines

The practices memorialized in these guidelines have developed over a period of years. The Board expects to review these guidelines at least every two years as appropriate.