UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrantx

Filed by a Party other than the Registrant¨

Check the appropriate box:¨

CITIZENS COMMUNICATIONS COMPANY

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

		Three High Ridge Park, Stamford, CT 06905 (203) 614-5600

April 10, 20079, 2008

Dear Fellow Stockholder:

On behalf of the board of directors of Citizens Communications Company, I am pleased to invite you to attend our 20072008 Annual Meeting of Stockholders. The meeting will be held at our offices located at Three High Ridge Park, Stamford, Connecticut 06905, on Friday,Thursday, May 18, 200715, 2008 at 10:00 a.m., Eastern Daylight Savings Time.

At this meeting, you will be asked:

It is important that your shares be represented, whether or not you attend the meeting. In order to ensure that you will be represented, we ask that you sign, date, and return the enclosed proxy card. You may also vote your shares via the Internet or by telephone. Information regarding voting by mail, the Internet, or telephone is included on the proxy card instructions. If present, you may revoke your proxy and vote in person.

Attendance at the meeting will be limited to stockholders as of the record date, or their authorized representatives, and our guests. If you are planning to attend the meeting please mark the appropriate box on the proxy card.

We look forward to seeing you at the meeting.

Cordially,

Mary Agnes Wilderotter

Chairman of the Board of Directors,

President and Chief Executive Officer

		Three High Ridge Park, Stamford, CT 06905 (203) 614-5600

April 10, 20079, 2008

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held May 18, 200715, 2008

To the Stockholders of

CITIZENS COMMUNICATIONS COMPANY:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Citizens Communications Company will be held at the company’s offices, Three High Ridge Park, Stamford, Connecticut 06905, on Friday,Thursday, May 18, 2007,15, 2008, at 10:00 a.m., Eastern Daylight Savings Time, for the following purposes:

The board of directors fixed the close of business on March 28, 200719, 2008 as the record date for determining stockholders entitled to notice of and to vote at the meeting or any adjournment or postponement of the meeting. At the close of business on March 28, 2007,19, 2008, there were 343,544,184327,591,265 shares of our common stock entitled to vote at the meeting.

A complete list of stockholders entitled to vote at the meeting will be open to the examination of stockholders on the meeting date and for a period of ten days prior to the meeting at our offices at Three High Ridge Park, Stamford, Connecticut 06905, during ordinary business hours.

Important Notice Regarding the Availability of

Proxy Materials for the Annual Meeting of Stockholders to be held on May 15, 2008

Our proxy statement is attached. Financial and other information concerning our company is contained in our Annual Report for the fiscal year ended December 31, 2007. Pursuant to new rules promulgated by the Securities and Exchange Commission (“SEC”), we have elected to provide access to our proxy materials both by sending you this full set of proxy materials, including a proxy card, and by notifying you of the availability of our proxy materials on the Internet. This proxy statement and our 2007 Annual Report are available on our website atwww.czn.com.Additionally, and in accordance with new SEC rules, you may access our proxy statement atwww.proxyvote.com, which does not have “cookies” that identify visitors to the site.

TABLE OF CONTENTS

CITIZENS COMMUNICATIONS COMPANY

Three High Ridge Park

Stamford, Connecticut 06905

PROXY STATEMENT

20072008 Annual Meeting of Stockholders

THE MEETING

Introduction

This proxy statement is being furnished to the stockholders of Citizens Communications Company, a Delaware corporation, in connection with the solicitation of proxies by our board of directors for use at our 20072008 annual meeting of stockholders and at any adjournments thereof.

This proxy statement and the accompanying form of proxy are first being sent to holders of our common stock on or about April 10, 2007.9, 2008.

Date, Time and Place

The meeting will be held on May 18, 2007,15, 2008, at 10:00 a.m., Eastern Daylight Savings Time, at our offices located at Three High Ridge Park, Stamford, Connecticut 06905.

Matters to be Considered

At the meeting, stockholders will be asked to elect 12 directors, to adopt the 2008 Citizens Incentive Plan,Name Change Amendment, to adopt an amendmentthe Purposes Clause Amendment, to the Amendedconsider and Restated 2000 Equity Incentive Planvote upon a stockholder proposal, if presented, and to ratify the selection of our independent registered public accounting firm. See “ELECTION OF DIRECTORS,” “PROPOSED 2008 CITIZENS INCENTIVE PLAN,AMENDMENTS TO THE RESTATED CERTIFICATE OF INCORPORATION,” “PROPOSED AMENDMENT TO AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLAN”“STOCKHOLDER PROPOSAL” and “RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.” The board of directors does not know of any matters to be brought before the meeting other than as set forth in the notice of meeting. If any other matters properly come before the meeting, the persons named in the enclosed form of proxy or their substitutes will vote in accordance with their best judgment on such matters.

Record Date; Shares Outstanding and Entitled to Vote; Quorum

Stockholders as of the record date,i.e., the close of business on March 28, 2007,19, 2008, are entitled to notice of and to vote at the meeting. As of the record date, there were 343,544,184327,591,265 shares of common stock outstanding and entitled to vote, with each share entitled to one vote. Holders of a majority of the outstanding shares entitled to vote must be present in person or represented by proxy in order for action to be taken at the meeting.

Required Votes

Election of Directors. Under our by-laws, the affirmative vote of the holders of a majority of the shares of common stock present or represented by proxy and entitled to vote at the meeting is required to elect each director. Consequently, only shares that are voted in favor of a particular nominee will be counted toward the nominee’s achievement of a majority. Shares present at the meeting that are not voted for a particular nominee or shares present by proxy where the stockholder properly withholds authority to vote for the nominee will have the same effect as a vote against the nominee.

Under Delaware law, an incumbent director who fails to receive the required vote “holds over,” or continues to serve as a director until his or her successor is elected and qualified. To address this “hold-over” issue, we have adopted a policy under which, in non-contested elections, if a director fails to win a majority of affirmative

votes for his or her election, the director must immediately tender his or her resignation from the board, and the board will decide, through a process managed by the Nominating and Corporate Governance Committee and excluding the nominee in question, whether to accept the resignation at its next regularly scheduled meeting.

Approval of the 2008 Citizens Incentive PlanAmendments to the Restated Certificate of Incorporation. Approval of the Amendments requires the affirmative vote of the holders of a majority of the common stock outstanding and entitled to vote at the meeting. Abstentions will have the same effect as a vote against approving the Amendments.

Stockholder Proposal. Approval of the 2008 Citizens Incentive Planstockholder proposal requires the affirmative vote of the holders of a majority of the common stock present or represented by proxy and entitled to vote at the meeting. Abstentions will have the same effect as a vote against approving the plan.

Approval of Amendment tostockholder proposal. Under the Amended and Restated 2000 Equity Incentive Plan. Approvalrules of the amendmentNew York Stock Exchange (“NYSE”), brokers are not permitted to vote shares on this matter if they do not receive voting instructions from the Amendedbeneficial owners of such shares. Such “broker non-votes” will be considered present for purposes of establishing a quorum, but will not be considered in determining the number of votes necessary for approval and Restated 2000 Equity Incentive Plan requireswill have no effect on the affirmative voteoutcome of the holders of a majority ofvote on the common stock present or represented by proxy and entitled to vote at the meeting. Abstentions will have the same effect as a vote against approving the plan.stockholder proposal.

Selection of Auditors. The ratification of the selection of KPMG LLP as our independent registered public accounting firm is being submitted to stockholders because we believe that this action follows sound corporate practice and is in the best interests of the stockholders. If the stockholders do not ratify the selection by the affirmative vote of the holders of a majority of the common stock present or represented by proxy and entitled to vote at the meeting, the Audit Committee of the board of directors will reconsider the selection of the independent registered public accounting firm, but such a vote will not be binding on the Audit Committee. If the stockholders ratify the selection, the Audit Committee, in its discretion, may still direct the appointment of a new independent registered public accounting firm at any time during the year if they believe that this change would be in our and our stockholders’ best interests. Abstentions will have the same effect as a vote against ratification of the auditors.

Voting Recommendations

The board of directors recommends that you voteFOR each nominee for director named,FOR adoption of the 2008 Citizens Incentive Plan,Name Change Amendment,FOR adoption of the amendment toPurposes Clause Amendment,AGAINST the Amended and Restated 2000 Equity Incentive Planstockholder proposal andFOR ratification of the selection of our independent registered public accounting firm for 2007.2008.

Voting and Revocation of Proxies

Stockholders are requested to vote by proxy in one of three ways:

Common stock represented by properly executed proxies, received by us or voted by telephone or via the Internet, which are not revoked will be voted at the meeting in accordance with the instructions contained therein. IfSubject to the broker non-vote rules discussed above under “Required Votes,” if instructions are not given, proxies will be votedFOR election of each nominee for director named,FOR adoption of the 2008 Citizens Incentive Plan,Name Change Amendment,FOR adoption of the amendment toPurposes Clause Amendment,AGAINST the Amended and Restated 2000 Equity Incentive Planstockholder proposal andFOR ratification of the selection of our independent registered public accounting firm.

Voting instructions, including instructions for both telephonic and Internet voting, are provided on the proxy card. The Internet and telephone voting procedures are designed to authenticate stockholder identities, to allow stockholders to give voting instructions and to confirm that stockholders’ instructions have been recorded properly. A control number, located on the proxy card, will identify stockholders and allow them to vote their shares and confirm that their voting instructions have been properly recorded. Stockholders voting via the Internet should understand that there may be costs associated with electronic access, such as usage charges from

Internet access providers and telephone companies, which must be borne by the stockholder. If you do vote by Internet or telephone, it will not be necessary to return your proxy card.

If your shares are held in the name of a bank or broker, follow the voting instructions on the form you receive from your record holder. The availability of Internet and telephone voting will depend on their voting procedures.

If a stockholder neither returns a signed proxy card, votes by the Internet or by telephone, nor attends the meeting and votes in person, his or her shares will not be voted.

Any proxy signed and returned by a stockholder or voted by telephone or via the Internet may be revoked at any time before it is exercised by giving written notice of revocation to our Secretary, at our address set forth herein, by executing and delivering a later-dated proxy, either in writing, by telephone or via the Internet, or by voting in person at the meeting. Attendance at the meeting will not alone constitute revocation of a proxy.

“Householding” of Annual Report and Proxy Materials

We have adopted a procedure approved by the Securities and Exchange Commission, or the “SEC,”SEC called “householding.” Under this procedure, stockholders of record who have the same address and last name will receive only one copy of our Annual Report and proxy statement unless one or more of these stockholders notifies us that they wish to continue receiving individual copies. This procedure will reduce our printing costs and postage fees.

Stockholders who participate in householding will continue to receive separate proxy cards. Also, householding will not in any way affect dividend check mailings.

If you are eligible for householding, but you and other stockholders of record with whom you share an address currently receive multiple copies of the Annual Report and/or the proxy statement, or if you hold in more than one account, and in either case you wish to receive only a single copy of each of these documents for your household, please contact our transfer agent, Illinois Stock Transfer Company (in writing: 209 West Jackson Boulevard, Suite 903, Chicago, Illinois 60606;60606-6905; by telephone: in the U.S., Puerto Rico and Canada, 1-800-757-5755; outside the U.S., Puerto Rico and Canada, 1-312-427-2953).

If we are householding materials to your address and you wish to receive a separate copy of the Annual Report or this proxy statement, or if you do not wish to participate in householding and prefer to receive separate copies of these documents in the future, please contact Illinois Stock Transfer as indicated above.

Beneficial stockholders can request information about householding from their banks, brokers or other holders of record.

Proxy Solicitation

We will bear the costs of solicitation of proxies for the meeting. In addition to solicitation by mail, directors, officers and our regular employees may solicit proxies from stockholders by telephone, personal interview or otherwise. These directors, officers and employees will not receive additional compensation, but may be reimbursed for out-of-pocket expenses in connection with this solicitation. In addition to solicitation by our directors, officers and employees, we have engaged The Proxy Advisory Group, LLC, a proxy solicitation agent, in connection with the solicitation of proxies for the meeting. We will bear the costs of the fees for the solicitation agent, which are not expected to exceed $10,000.$35,000. Brokers, nominees, fiduciaries and other custodians have been requested to forward soliciting material to the beneficial owners of common stock held of record by them, and these custodians will be reimbursed for their reasonable expenses.

Independent Registered Public Accounting Firm

We have been advised that representatives of KPMG LLP, our independent registered public accounting firm for 2006,2007, will attend the meeting, will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions of stockholders.

Transfer Agent

Our transfer agent is Illinois Stock Transfer Company. You should contact the transfer agent, at the phone number or address listed below, if you have questions concerning stock certificates, dividend checks, transfer of ownership or other matters pertaining to your stock account.

Illinois Stock Transfer Company

209 West Jackson Boulevard, Suite 903

Chicago, IL 6060660606-6905

Telephone: (800) 757-5755 (in the U.S., Puerto Rico and Canada)

or (312) 427-2953 (outside the U.S., Puerto Rico and Canada)

Fax: (312) 427-2879

OWNERSHIP OF COMMON STOCK

Set forth below is certain information as of March 28, 200719, 2008 with respect to the beneficial ownership of our common stock (as determined under the rules of the SEC) by (1) each person who, to our knowledge, is the beneficial owner of more than 5% of our outstanding shares of common stock, which is our only class of voting securities (to our knowledge, there are no such beneficial owners of more than 5% of our outstanding shares of common stock), (2) each director and nominee for director, (3) each of the executive officers named in the Summary Compensation Table under “Executive Compensation,” and (4) all of our directors and executive officers as a group. Except as otherwise stated, the business address of each person listed is c/o Citizens Communications Company, 3Three High Ridge Park, Stamford, Connecticut 06905. Except as otherwise described below, each of the persons named in the table has sole voting and investment power with respect to the common stock beneficially owned and has not pledged such common stock as security for any obligations.

(c)	Includes 81,667 restricted10,000 shares over which Mr. Casey has sole voting power but no dispositive power.that may be acquired upon the exercise of currently exercisable stock options and 6,408 shares that may be acquired upon the redemption of stock units.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and officers, and persons who beneficially own more than 10% of our common stock to file reports of ownership and changes in ownership with the SEC and the New York Stock Exchange (the “NYSE”).NYSE. Such directors, officers and greater than 10% stockholders are also required to furnish us with copies of all such filed reports.

Based solely upon a review of the copies of such reports furnished to us, or representations that no reports were required, we believe that during the year ended December 31, 2006,2007, all persons subject to the reporting requirements of Section 16(a) filed the required reports on a timely basis.

ELECTION OF DIRECTORS

(Item 1 on the Proxy Card)

At the meeting, 12 directors are to be elected to serve until the next annual meeting or until their successors have been elected and qualified. All of the following nominees are currently serving as directors. Directors will be elected by a majority of the votes of the holders of shares of common stock present in person or represented by proxy at the meeting and entitled to vote at the meeting. Stanley Harfenist and Edwin Tornberg, each of whomBradley E. Singer, who has served as a director since 1992, will retire on May 17, 2007 and are2005, has determined not standingto stand for re-election. Accordingly, the board has fixed the number of directors constituting the full board at 12, effective uponimmediately prior to the resignations of Messrs. Harfenist and Tornberg.annual meeting. Since last year’s annual meeting, the board of directors elected Michael T. DuganPeter C.B. Bynoe as a director, to fill a vacancy on the board, effective October 30, 2006.1, 2007.

The persons named in the enclosed form of proxy have advised that, unless contrary instructions are received, they intend to voteFOR the 12 nominees named by the board of directors and listed on the following table. In case any of these nominees should become unavailable for any reason, the persons named in the enclosed form of proxy have advised that they will vote for such substitute nominees as the board of directors may propose.

Name and present position, if any, with the company		Age, period served as director, other business experience during the last five years and family relationships, if any
		Inc. from October 2004 to April 2006,2005, Executive Vice President of Kraft Foods North America from 2000 to 2004 and General Manager of Kraft’s Coffee Division in 2004 and of Kraft Food’s Desserts Division from 2000 to 2003.
Lawton Wehle Fitt		Ms. Fitt, 53,54, has served as a Director since January 2005. Ms. Fitt has been a Senior Advisor to GSC Group, an alternative investment manager, since October 2006, and a Founding Partner of Circle Financial Group, LLC, an investment group, since February 2006. Prior to that time, she was Secretary (Chief Executive Officer) of the Royal Academy of Arts from October 2002 to March 2005 and a Partner and Managing Director of Goldman Sachs from 1994 to 2002. Ms. Fitt is a Director of Ciena Corporation, and Reuters Group PLC.

NamePLC and present position, if any, with the company		Age, period served as director, other business experience during the last five years and family relationships, if any Overture Acquisition Corp.
William M. Kraus		Mr. Kraus, 81,82, has served as a Director since 2002. Prior to his retirement, Mr. Kraus was a Director of Century Communications Corp. and Centennial Cellular Corp. from 1985 to 1999.
Howard L. Schrott		Mr. Schrott, 52,53, has served as a Director since July 2005. Since February 2006, Mr. Schrott has been a Principal in Schrott Consulting, since February 2006.a division of AMMC, Inc., a management consulting firm, for which he also serves as Chief Financial Officer. Prior to that time, he was Chief Financial Officer of Liberty Corporation, a television broadcaster, from 2001 to February 2006.
Larraine D. Segil		Ms. Segil, 58,59, has served as a Director since March 2005. Ms. Segil has been Chief Executive Officer of Larraine Segil Inc. (formerly Larraine Segil Productions, Inc.), since 1987 and Co-Founder of The Lared Group, a business strategy consulting group, since 1987. She has also been a senior research fellow at the IC2 Institute at the University of Texas, Austin on strategy and alliances, since 1991, a member of the Entrepreneurs Board of Advisors for the UCLA Anderson School of Management since 1991 and a member of the board of LARTA, the Los Angeles Technology Alliance since 2003.1994. From 2003 until December 2006, Ms. Segil was a Partner of Vantage Partners.
Bradley E. Singer		Mr. Singer, 40, has served asPartners, a Director since June 2005. Mr. Singer has been Chief Financial Officer and Treasurer of American Tower Corporation since 2001 and has held various executive positions with American Tower since 2000. He is also a Director and Chairman of the Audit Committee of Martha Stewart Omnimedia.business strategy consulting group.
David H. Ward		Mr. Ward, 69,70, has served as a Director since 2003. Mr. Ward has been Chief Financial OfficerTreasurer of Voltarc Technologies, Inc., a specialty lamp manufacturer, since 2007 and was Chief Financial Officer of Voltarc from 2001 andto 2007. He has also been a Principal of Lighting Technologies Holdings, Inc. (successor to Innovative Technologies Group LLC), a holding company owning several lighting manufacturing companies, since 1999.
Myron A. Wick, III		Mr. Wick, 63,64, has served as a Director since March 2005. Mr. Wick has been Managing Director of McGettigan & Wick, Co., an investment banking firm, since 1988 and a Principal of Proactive Partners, L.P., a merchant banking fund, since 1989. He is also a Director of Tanknology, Inc,Inc. and Modtech, Inc MicroIslet, The Tanager Foundation and Chairman of Horizon Fuel Cell Technology Chairman ofand The Hoffman Institute and a Trustee of St. Mark’s School.
Mary Agnes Wilderotter, Chairman of the Board, President and Chief Executive Officer		Mrs. Wilderotter, 52,53, has served as a Director since 2004. She has served as our President and Chief Executive Officer since November 2004 and as our Chairman of the Board since December 2005, President since May 2006 and Chief Executive Officer since November 2004. She also served as our President from November 2004 to December 2005. Prior to joining our company, she was Senior Vice President – World Wide Public Sector of Microsoft Corp. from February 2004 to November 2004 and Senior Vice President – Worldwide Business Strategy of Microsoft Corp. from 2002 to 2004. From 1997 to 2002, she was President and Chief Executive Officer of Wink Communications, an interactive telecommunications and media company. Mrs. Wilderotter is a Director of The McClatchy CompanyXerox Corporation and Xerox Corporation.Yahoo!, Inc.

The board of directors recommends that you voteFOR the election of all nominees for director.

DIRECTOR COMPENSATION

The following table sets forth compensation information for 20062007 for each person who served as a non-employee member of our board of directors.directors during 2007. Mary Agnes Wilderotter, our Chairman, President and Chief Executive Officer, is not included in this table as she is an employee of the company and thus receives no compensation for her services as a director. The compensation received by Mrs. Wilderotter as an employee of the company is shown in the Summary Compensation Table elsewhere in this proxy statement.

20062007 Director Compensation

For directors who have elected to receive cash in settlement of their stock unit accounts upon termination of service, we revalue their stock units in accordance with FAS 123R on a quarterly basis to reflect the then current value of the units. Accordingly, the amounts shown in this column will differ from the grant date fair value shown below in footnote (2), which is fixed on the date of grant. Further, the grant date fair values shown below in footnote (2) include only grants made in 2006,2007, whereas the amounts shown in the table above reflect amounts from grants made in other years as well. The amount shown for Mr. Harfenist reflects the revaluation of his stock units for financial statement reporting purposes as a result of Mr. Harfenist’s election in 2006 to receive cash in settlement of his stock unit account upon retirement.

The grant date fair value, pursuant to FAS 123R, of the stock units granted to directors in 2006 is as follows.

•      Howard L. Schrott		$	118,859
•      Larraine D. Segil		$	85,401
•      Bradley E. Singer		$	118,859
•      Edwin Tornberg		$	42,525
•      David H. Ward		$	42,525
•      Myron A. Wick, III		$	118,859

Non-Employee Director Compensation Program

Directors who are also our employees receive no remuneration for service as a member of our board of directors or any committee of the board. Each director who is not our employee is entitled to receive a retainer, which they havehe or she has the option of receiving in the form of 5,760 stock units, as described below, or a cash payment of $40,000, in each case payable in advance in quarterly installments on the first business day of each quarter. Each director is required to irrevocably elect by December 31 of the prior year whether to receive his or her retainer in cash or in stock units. Each non-employee director receives a fee of $2,000, plus reasonable expenses, for each in-person meeting of the board of directors or committee of the board attended and $1,000 for each telephonic meeting of the board of directors or committee of the board attended, in each case payable in arrears on the last business day of each quarter. The Lead Director receives an additional annual stipend of $15,000, the chair of the Audit Committee receives an additional annual stipend of $25,000, the chair of the Compensation Committee receives an additional annual stipend of $15,000, the chair of the Nominating and Corporate Governance Committee receives an additional annual stipend of $7,500 and the chair of the Retirement Plan Committee receives an additional annual stipend of $5,000. The annual stipends paid to the Lead Director and each of the committee chairs are payable in arrears in equal quarterly installments on the last business day of each quarter.

Upon commencement of services as a director, each non-employee director is granted options to purchase 10,000 shares of common stock at an exercise price equal to the closing price of our common stock on the date the director is elected to the board. The option grants are made under the Non-Employee Directors’ Equity Incentive Plan (the “Directors Plan”). Prior to adoption of the Directors Plan on May 25, 2006, these option grants were made under our Amended and Restated 2000 Equity Incentive Plan. These options become exercisable six months after the grant date and expire on the tenth anniversary of the grant date or, if earlier, on the first anniversary of a director’s termination of service with respect to options granted after May 25, 2006. Directors also receive an annual stock unit award, which is currently fixed at 3,500 stock units.units, on the first business day of each year. These stock awards were made under the Non-Employee Directors’ Deferred Fee Equity Plan (the “Predecessor Plan”) for 2006years prior to 2007 and will be made under the Directors Plan starting in future years.2007.

In addition, each member of the board of directors and his or her spouse is eligible to participate in our medical, dental and vision plans at the same contribution rates as our management employees. Retired directors and their spouses who were participating in these plans at the time of their retirement from our board may continue to participate in the plans, but generally are required to pay 100% of the cost.

In addition to electing the form of his or her annual retainer, a director may elect to have either 50% or 100% of his or her meeting fees, and in the case of the Lead Director and committee chairs their annual stipends, paid in cash or stock units. If a director elects payment of his or her fees in stock units, units are credited in an amount that is equal to the cash payment the director otherwise would have received, based upon a formula where the cash payment amount is the numerator and the “Initial Market Value” of our common stock is the denominator. Under the Predecessor Plan, the Initial Market Value was equal to 85% of the average of the high and low prices of the common stock on the first trading day of the year in which the units are earned. Under the

Directors Plan, the Initial Market Value is equal to 85% of the closing price of the common stock on the grant date of the units. Stock units wereare earned quarterly and credited to the director’s account on the first business day of the succeeding quarter under the Predecessor Plan and are earned quarterly and credited to the director’s account on the last day of the quarter in which the fees were earned under the Directors Plan.earned. We hold all stock units until a director’s termination of service, at which time the units are redeemable, at the director’s election, in either cash or in shares of our common stock. Under limited circumstances, the board of directors may also authorize hardship redemption of some or all of a director’s stock units prior to the director’s termination of service.

MessrsMessrs. Harfenist and Tornberg will retireretired from the board on May 17, 2007.2007 and each elected to receive cash in settlement of his stock unit account. Accordingly, each received cash equal to the fair market value of the stock units in his stock unit account. Fair market value of a stock unit is equal to the fair market value of a share of our common stock (a) on the date of retirement, with respect to stock units awarded under the Directors Plan and (b) on the tenth day following the date of retirement, with respect to stock units awarded under the Predecessor Plan. The settlement of their stock unit accounts took place on May 29, 2007 in accordance with the plans.

Mr. Singer has determined not to stand for re-election at the annual meeting. As of the date of this proxy statement, Mr. Harfenist has elected to receive stock in settlement of his stock unit account upon retirement. Accordingly, he will receive a number of shares of common stock equal to the number of stock units in his stock unit account on the date of his retirement. The settlement of his stock unit account will take place ten days after his retirement. Mr. TornbergSinger has elected to receive cash in settlement of his stock unit account upon retirement. Each stock unit issued underleaving the Predecessor Plan will beboard, valued usingas set forth in the average of the high and low sales prices of the common stock on the date of distribution, which is ten days after his retirement date. Each stock unit issued under the Directors Plan will be valued at the closing price of the common stock on his retirement date. Messrs. Harfenist and Tornberg may change their elections prior to retirement.immediately preceding paragraph.

CORPORATE GOVERNANCE

We maintain corporate governance policies and practices that reflect what the board of directors believes are “best practices,” as well as those that we are required to comply with pursuant to the Sarbanes-Oxley Act of 2002 and the rules of the SEC and the NYSE. A copy of our Corporate Governance Guidelines is available upon request to our Secretary, or may be viewed or downloaded from our website atwww.czn.com.

Director Independence

The board of directors is required to affirmatively determine that a majority of our directors is independent under the listing standards of the NYSE. The board of directors undertakes an annual review of director independence. As a result of this review, the board of directors affirmatively determined that Messrs. Barnes, Bynoe, Dugan, Harfenist, Kraus, Schrott, Tornberg,Singer, Ward and Wick and Ms.Mses. Abernathy, Ms. Finard, Ms. Fitt and Ms. Segil are independent under the rules of the NYSE. In determining director independence, the board of directors reviewed not only relationships between the director and our company, but also relationships between our company and the organizations with which the director is affiliated. After considering the relevant facts and circumstances, the board of directors determined that none of these individuals has a material relationship with our company (either directly or as a partner, shareholder, or officer of an organization that has a relationship with our company), other than as a director of our company, and that each of these directors is free from any relationship with our company that would impair the director’s ability to exercise independent judgment. The board determined that the following relationships are not material relationships and therefore does not affect the independence determinations: Mr. Dugan is a Senior Technical Advisor and a member of the Board of Directors of DISH Network Corporation (formerly EchoStar Communications Corporation.Corporation). We made payments to EchoStarDISH under our agreement with EchoStarDISH which accounted for less than 1% of EchoStar’s gross consolidated revenues in each of the last three years. Ms. Finard is Executive Vice President, Global Category Development of Kraft Foods, Inc. We provide telephone and broadband services to affiliates of Kraft Foods for which we received an amount equal to less than 1% of Kraft’sDISH’s gross consolidated revenues in each of the last three years. Ms. Fitt is a member of the Board of Directors of Ciena Corporation. Over the past three years, we purchased an immaterial amount of communications equipment from an affiliate of Ciena.

Meetings of the Board of Directors

The board of directors held elevenseven meetings in 2006.2007. Each incumbent director attended at least 75% of the aggregate of these meetings (during the period that he or she served as a director) and the total number of meetings held by all committees of the board on which he or she served. It is our policy that the directors attend the annual meeting of stockholders. TwelveEleven of the 1312 directors who were members of the board of directors at the time of last year’s annual meeting of stockholders attended that meeting.

Committees of the Board

The board of directors has four standing committees: Audit, Compensation, Nominating and Corporate Governance, and Retirement Plan.

Audit Committee. The Audit Committee is composed of fourfive independent directors and operates under a written charter adopted by the board of directors. A copy of the charter was attached as Appendix A to our 2006 proxy statement. In addition, a copy of the Audit Committee Charter is available upon request to our Secretary, or may be viewed or downloaded from our website.website,www.czn.com. The Audit Committee currently consists of Mr. Ward,Schrott, as Chair, Messrs. Barnes, Singer and SchrottWard, and Ms. Segil. Each member of the Audit Committee is financially literate, as required by the listing standards of the NYSE. In addition, the board of directors has determined that each of Messrs. Schrott and Ward meets the standard of an “audit committee financial expert” under the rules of the SEC. Mr. Barnes is a member of four public company audit committees, including our Audit Committee. WeAlthough we do not specifically limit the number of audit committees on which our Audit Committee members may serve, we do limit at three the number of public boards, in addition to our own, on which our non-employee directors may serve. As the rules of the NYSE require, our board of directors considered Mr. Barnes’ ability to serve on the Audit Committee and determined that his service on the other audit committees would not impair his ability to effectively serve on our Audit Committee. The Audit Committee met eight times in 2006.2007.

The Audit Committee selects our independent registered public accounting firm. Management is responsible for our internal controls and financial reporting process. The Audit Committee assists the board of directors in undertaking and fulfilling its responsibilities in monitoring (i) our financial reporting process, (ii) the integrity of our consolidated financial statements, (iii)(ii) our compliance with legal and regulatory requirements, (iv)(iii) the qualifications of our internal auditors and the independence and qualifications of our independent registered public accounting firm, and (v)(iv) the performance of our internal audit function and independent registered public accounting firm.

In accordance with the Sarbanes-Oxley Act of 2002 and the rules of the SEC and the NYSE, the Audit Committee pre-approves all auditing and permissible non-auditing services that will be provided by KPMG LLP, our independent registered public accounting firm.

In accordance with the rules of the SEC, the Audit Committee has established procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls, or auditing matters and to allow for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

Compensation Committee. The Compensation Committee is composed of fivefour independent directors and operates under a written charter adopted by the board of directors. A copy of the Compensation Committee Charter is available upon request to our Secretary, or may be viewed or downloaded from our website.website,www.czn.com. The Compensation Committee reviews our general compensation strategies; acts as the committee for our incentive compensation plans; and establishes and reviews compensation for the Chief Executive Officer and other executive officers. The Compensation Committee also oversees and approves compensation policy and incentive plan design, costs and administration. The Compensation Committee, which met threesix times and took action on fourthree other occasions in 2006,2007, currently consists of Mr. Harfenist,Ms. Fitt, as Chair, and Ms. Abernathy, Ms. Finard Ms. Fitt and Mr. Wick. Mr. Harfenist will retire from the board of directors on May 17, 2007. The board will appoint a new Chair to the Compensation Committee at the board meeting immediately following the annual meeting.

The Compensation Committee’s responsibilities, which are set forth in its charter, include, among other duties, the responsibility to:

Mrs. Wilderotter makes recommendations with respect to the compensation for the other senior officers to the Compensation Committee for their final review and approval.

The Committee may form, and delegate any of its responsibilities to, a subcommittee so long as such subcommittee is solely comprised of one or more members of the Committee. The Compensation Committee engages compensation consultants from time to time to assist the Committee in evaluating the design and assessing the competitiveness of its executive compensation program. For more detailed information on the role of compensation consultants, see “Compensation Discussion and Analysis—Roles and Responsibilities” and “—Market and Peer Group Reviews” elsewhere in this proxy statement.

Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is composed of fourfive independent directors and operates under a written charter adopted by the board of directors.

A copy of the Nominating and Corporate Governance Committee Charter is available upon request to our Secretary, or may be viewed or downloaded from our website.website,www.czn.com. One of the committee’s functions is

to recommend candidates for election to the board of directors. The Nominating and Corporate Governance Committee intends to use a variety of means of identifying nominees for director, including recommendations from current board members and from stockholders. In determining whether to nominate a candidate, the Nominating and Corporate Governance Committee will consider the current composition and capabilities of serving board members, as well as additional capabilities considered necessary or desirable in light of our existing needs and then assess the need for new or additional members to provide those capabilities. In addition, the Nominating and Corporate Governance Committee takes a leadership role in shaping our corporate governance, including making recommendations on matters relating to the composition of the board of directors and its various committees and our Corporate Governance Guidelines. The Nominating and Corporate Governance Committee, which met fourthree times and took action on onetwo other occasionoccasions in 2006,2007, currently consists of Mr. Kraus, as Chair, and Ms. Abernathy, Mr. Bynoe, Mr. Schrott and Ms. Segil.

Stockholders may propose director candidates for consideration by the Nominating and Corporate Governance Committee. Any such recommendations should include the nominee’s name and qualifications for membership to the board of directors and should be directed to our Secretary at the address of our principal executive offices. To nominate an individual for election at an annual stockholder meeting, the stockholder must give timely notice to our Secretary in accordance with our bylaws, which, in general, require that the notice be received by our Secretary not less than 90 days nor more than 120 days before the anniversary date of the immediately prior annual stockholders meeting, unless the annual meeting is moved by more than 2530 days before or after the anniversary of the prior year’s annual meeting, in which case the deadline willnotice must be received not less than 120 days beforea reasonable time, as determined by our board, prior to the first anniversaryprinting and mailing of our proxy statement in connection withmaterials for the immediately priorapplicable annual meeting. The notice should include a description of the qualifications of the suggested nominee and any information that is required by the regulations of the SEC concerning the suggested nominee and his or her direct or indirect securities holdings or other interests in our company. See “Proposals by Stockholders” for the deadline for nominating persons for election as directors for the 20082009 annual meeting.

Each candidate for nomination as a director, including each person recommended by stockholders, is evaluated in accordance with our Corporate Governance Guidelines. In addition, the board of directors has adopted guidelines to be used by the Nominating and Corporate Governance Committee in selecting candidates for membership to the board of directors. These guidelines set forth general criteria for selection, including that the background and qualifications of the directors, as a group, should be diverse, and a nominee should possess a depth of experience, knowledge and abilities that will enable him or her to assist the other directors in fulfilling the board’s responsibilities to our company and our stockholders.

In addition, a nominee must be willing to commit that he or she will comply with our director stock ownership guidelines, as discussed below. The guidelines also include the following special criteria for the selection of director nominees:

Decisions regarding the renomination of directors for additional terms on the board of directors are governed by the general and specific criteria described above and by the Nominating and Corporate Governance Committee’s evaluation of the directors’ performance and contribution to the board. In addition, as a general rule, a non-employee director will not be renominated if he or she has served 15 years as a member of the board of directors. The Nominating and Corporate Governance Committee reserves the right to renominate any director regardless of the length of his or her service if, in the judgment of the Nominating and Corporate Governance Committee, such renomination is in our company’s and our stockholders’ best interests.

In 2007, the board of directors approved new stock ownership guidelines for non-management directors. Each non-management director is expected to purchase a minimum of $50,000 in shares of our common stock by the later of May 18, 2010 and three years after joining the board and retain ownership of at least the number of shares purchased as long as he or she serves on the board of directors. The investment can be made by purchasing shares in the open market or exercising stock options.

The information contained in this proxy statement with respect to the Audit Committee Charter, the Compensation Committee Charter, the Nominating and Corporate Governance Committee Charter and the independence of the non-management members of the board of directors shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall the information be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate it by reference in a filing.

Retirement Plan Committee. The Retirement Plan Committee is composed of five independent directors and operates under a written charter adopted by the board of directors. The Retirement Plan Committee oversees our company’s retirement plans, including reviewing the investment strategies and asset performance of the plans, compliance with the plans and the overall quality of the asset managers, plan administrators and communications with employees. The Retirement Plan Committee, which met fivethree times and took action on one other occasion in 2006,2007, currently consists of Ms. Fitt,Mr. Ward, as Chair, and Messrs. Barnes, Dugan and Singer and Tornberg.Ms. Fitt.

Executive Sessions of the Board of Directors

The non-management directors have regularly scheduled executive sessions in which they meet outside the presence of management. At least one of the executive sessions each year is attended only by independent directors. Myron A. Wick, III has been elected as the Lead Director by our independent directors. Mr. Wick presides at executive sessions of the board.

Communications with the Board of Directors

Any stockholder or interested party who wishes to communicate with the board of directors or any specific director, including the Lead Director, any non-management director, or the non-management directors as a group, may do so by writing to such director or directors at: Citizens Communications Company, Three High Ridge Park, Stamford, Connecticut 06905. This communication will be forwarded to the director or directors to whom it is addressed. This information regarding contacting the board of directors is also posted on our website atwww.czn.com.

Code of Business Conduct and Ethics

We have a Code of Business Conduct and Ethics (the “Code of Conduct”) to which all employees, executive officers and directors, which for purposes of the Code of Conduct we collectively refer to as “employees,” are required to adhere in addressing the legal and ethical issues encountered in conducting their work. The Code of Conduct requires that all employees avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner, and otherwise act with integrity. Employees are

required to report any conduct that they believe, in good faith, is an actual or apparent violation of the Code of Conduct and may do so anonymously by using our Ethics Hotline. The Code of Conduct includes specific provisions applicable to our principal executive officer and senior financial officers. These officers are required to certify as to any actual or potential conflicts of interest involving them and our company. We post amendments to or waivers from the provisions applicable to our senior executives on our website. A copy of the Code of Conduct is available upon request to our Secretary, or may be viewed or downloaded from our website.

Related Person Transactions Policy

The board of directors adopted a policy addressing our procedures with respect to the review, approval and ratification of “related person transactions” that are required to be disclosed pursuant to SEC regulations. The policy provides that any transaction, arrangement or relationship, or series of similar transactions, with a “related person” (as defined in the SEC regulations) in which we have or will have a direct or indirect material interest and which exceeds $120,000 in the aggregate shall be subject to review, approval or ratification by the Nominating and Corporate Governance Committee. In its review of related person transactions, the Nominating and Corporate Governance Committee shall review the material facts and circumstances of the transaction and shall take into account certain factors, where appropriate, based on the particular facts and circumstances, including (i) the nature of the “related person’s” interest in the transaction, (ii) the significance of the transaction to us and to the “related person” and (iii) whether the transaction is likely to impair the judgment of the “related person” to act in the best interest of our company.

No member of the Nominating and Corporate Governance Committee may participate in the review, approval or ratification of a transaction with respect to which he or she is a “related person” provided that such person can be counted for purposes of a quorum and shall provide such information with respect to the transaction as may be reasonably requested by other members of the committee or the board.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This section provides information regarding the 20062007 compensation program in place for our Chairman, President and Chief Executive Officer and President (our CEO), our Chief Financial Officer (our CFO) and, the three most highly-compensated executive officers other than our CEO and CFO.CFO, and a former executive officer. These are the executive officers named in the Summary Compensation Table presented in this proxy statement (the “named executive officers”). ItThis section includes information regarding our executive compensation philosophy, the overall objectives of our compensation program and each element of compensation that we provide. This section also describes the key factors the Compensation Committee considers in determining compensation for the named executive officers.

Executive Compensation Philosophy

The company’s executive compensation philosophy is designed to achieve a number of objectives:

Establish clear alignment between the interests of our executives and those of our stockholders. The executive compensation program is designed to align the interests of our executives with those of our stockholders by rewarding performance based uponmeasured by certain key financial metrics - metrics—revenue growth, earnings before interest, taxes, depreciation and amortization (EBITDA) and operatingEBITDA less capital expenditures (operating free cash flow. These financialflow)—and by certain other operating goals. In the case of annual awards, these metrics and goals are derived from the company’s annual business plan and are discussed in more detail below. Additionally, the executives’ interests are aligned with stockholder interests through the use of restricted stock awards that can be earnedrather than cash as an important element of annual compensation. This encourages executives to focus on stockholder returns. We have established minimum stock ownership guidelines for our CEO and her direct reports who are members of our Senior Leadership Team (which includes all named executive officers and two other executive officers).

In March 2008, we adopted the Citizens Long-Term Incentive Plan (LTIP) which will further promote the alignment of stockholder and executive interests by executives annually.setting aggressive targets for revenue and free cash flow growth over a three-year time horizon. Achievement of these targets will give our top managers the opportunity to earn further awards, payable in common stock after completion of the three-year period.

Reinforce our performance culture. Our compensation program is designed to reward superior performance. We do this by making a majority of our named executive officers’ compensation contingent upon performance, both individually and at the company level. Our compensation philosophy is built on the principle that a smaller portion of total compensation should be base salary and a larger portion of total compensation should be “at risk” and awarded based on performance.contingent upon achievement of company and individual goals. The components of executive compensation that are at risk areare: the annual cash bonus, restricted stock awards, and the profit sharing contribution. contribution and, commencing in 2008, the LTIP.

Compensation based on the achievement of specified goals reinforces our performance culture, which is one of our corporatecompany priorities. Given the intensely competitive environment in the communications services industry, we believe that it is important that we have a culture that rewards performance with respect to critical goals.

Hire and retain talented executives. In order for us to hire and retain executives with the skills critical to the long-term success of our company, we implemented a compensation program that is competitive with compensation that is paid to executives in comparable companies. We believe that theThe quality of those we hire and retain at all levels of the organization is a key driver of our performance as a company, both in the short-term and in the long-term. Accordingly, it is critical for us to be able to hire and retain the best executive talent in the marketplace and one of the important tools to do so is to pay competitive total compensation.

In order for us to hire and retain high performing executives with the skills critical to the long-term success of our company, we have implemented a compensation program that is competitive with compensation that is paid to executives in comparable companies. We have also established vesting schedules for restricted stock awards and long-term compensation opportunities that are designed to help us retain valuable executives notwithstanding the competition for talented people.

Ensure company goals are fully aligned throughout the organization. Each year, we establish goals in three broad categories that we refer to as the “3 Ps”“3Ps” (People, Product and Profit). These goals are established every year to set performance objectives for the upcoming year for all employees, including the named executive officers. In the fourth quarter of 2005,2006, Mary Agnes Wilderotter, our CEO, along with the top 30 company leaders, created the business plan for 2006.2007. The 3Ps for 20062007 were derived from the 20062007 business plan, and both of which were reviewed and adopted by the Compensation Committee and the non-management directors on our board. Following their approval, the 3Ps3P goals were communicated to all employees in the first quarter of 20062007 to drive company performance. The named executive officers are accountable for leading the company to achieve the 3P goals each year.year and are rewarded based on achieving certain 3P goals that are the key priorities for the business.

Compensation Program Design

In order to achieve the objectives discussed above, we offer a straightforward executive compensation program that is designed to reward executives for both short term (one year) and long term performance.

There are For 2007, there were four primary components of compensation foravailable to executives: base salary, annual cash bonus, restricted stock awardawards and profit sharing contribution. In 2008, a fifth component was added, the LTIP. Of these, only base salary is fixed while the others are determined with reference tovariable based on the performance of both the company and, except for profit sharing, the individual executive, measured against specific goals that are determined in advance.

There are many factors whichthat are considered in determining the amount of total compensation and the individual components of that compensation, including the executive’s experience level and scope of responsibility. As the market for talented executives is extremely competitive, we also consider the compensation that is paid over time to executives in comparable companies with whom we compete for talent, which we refer to as our “peer group.” See “Market and Peer Group Review” below. The peer group information provides valuable comparative insights and is one of many factors considered by the Compensation Committee in determining executive compensation. In general, it is our aim to offer total compensation to our executives that would place them in the 50^th to 75^th percentile rank for the peer group, with base salary generally falling at the lower end of this range and incentive compensation at the upper end of the range.group. By targeting the 50^th to 75^th percentile of our peer group for total compensation, we believe we can be successful in hiring and retaining talented executives. In addition to the value executives receive upon an award of restricted stock based on the market value of the stock itself, executives also receives long-term value from the dividends we pay on the stock and from any increases in the market value of the stock over time. If certain profit goals are achieved, executives also receive a profit sharing contribution to their 401(k) accounts in the exact same manner as all participating non-union employees.

The Role of the Compensation CommitteeRoles and Responsibilities

As described in the Compensation Committee’s charter, the Compensation Committee is responsible for overseeing and approving the company’s overall executive compensation philosophy and compensation programs, as well as determining and approving the compensation for our CEO and other key senior executives. At the beginning of each year, the Compensation Committee reviews and approves the performance goals for the CEO and approves the targets for each of the executive compensation plan elements that apply to the named executive officers for the upcoming year. In the Compensation Committee meeting held in February of each year, the Compensation Committee assesses the CEO’s performance for the year just ended to determine the appropriate award for each element of the CEO’s total compensation and any base salary merit increase for the CEO the payout for the CEO’s incentive bonus for the previous year, as well as the CEO’s restricted stock award amount. The non-management directors then review the Compensation Committee’s determinations for approval.

current year. The Compensation Committee then reviews their recommendations with the non-management directors before finalizing their decision.

Our CEO annually reviews the performance of the other key senior executives, including the named executive officers, and presents to the Compensation Committee her conclusions and compensation recommendations, including the award for each element of the executive’s total compensation for the year just ended and any base salary merit increases for the current year. The Compensation Committee then follows a similar review process with respect to these executives similar to that undertaken for the other named executive officers.CEO. After review, the Compensation Committee then approves the compensation for these executives.

The Compensation Committee retains an independent compensation consultant to assist in the other nameddevelopment of compensation programs, evaluation of compensation practices and the determination of compensation awards. The role of the compensation consultant is to provide objective third-party data, advice and expertise in executive officers.compensation matters. In 2007, the Compensation Committee engaged in a search for a new independent compensation consultant and, after interviewing a number of candidates, in October 2007, the Committee selected Compensia, Inc. The decisions made by the Compensation Committee are the responsibility of the Compensation Committee and reflect factors and considerations in addition to the information and recommendations provided by the compensation consultant.

The Compensation Committee reviews on a periodic basis the company’s management compensation programs, including any management incentive compensation plans, to determine whether they are appropriate, properly coordinated and achieve their intended purposes(s), and recommend to the board any modifications or new plans or programs.

Elements of the Executive Compensation Program

The following describes each element of our executive compensation program and post-employment terms, the rationale for each and how awards are determined.

Cash Compensation

Base Salary. Base salary is established at approximatelyaround the median salary level50^th percentile for comparable executives within our peer group. We believe a salary scale set at this level, when considered together with the median levelother components of compensation, is sufficient to attract and retain talented executives. Executives are eligible for increases to their base salary based on individual performance. We conduct an annual merit review process, generally held in February of each year, where the executive’s performance in the prior year is reviewed against his or her individual and company performance goals. The budget for merit increases is set atby using an average of the average for that year usingmerit increase percentages in national compensation survey data.surveys in each year. Executives are eligible for increases to their base salary based on individual performance. Executives may also receive an increase to their base salary if they are promoted, if they are given increased responsibility or if an executive’s base salary is determined to be below the 50^th percentile of our peer group. The Compensation Committee reviews and approvesdetermines all changes to the base salary of Mrs. Wilderotter, which is then subsequently

reviewed and approvedratified by the non-management directors on the board.directors. Mrs. Wilderotter recommends changes in the base salary for the other named executive officers to the Compensation Committee for their final review and approval. Base salary represented between 20 and 30 percent of the named executive officers’ total compensation for 2007 (for this purpose, consisting of base salary, fair market value of restricted stock awards on the grant date and annual cash bonus).

Annual Bonus Plan (Citizens Incentive Plan). The named executive officers participate in the Citizens Incentive Plan, which is the same bonus plan as doin which all of our company’s non-union employees.employees participate. This component of executive compensation is designed to incent and reward executives for achieving predetermined and measurable performance goals. Target performance bonuses are established at the beginning of each year and are set as a percentage of the named executive officer’s base salary. Target bonuses range from 85%75% to 100% of the executive’s base salary. The performance bonus target percentage for Mrs. Wilderotter is 100% in accordance with her employment agreement with us. See “Employment Arrangements; Potential Payments upon Termination or Change-in-Control” below. Annual cash bonuses represented between 20 and 30 percent of the named executive officers’ total compensation for 2007 (again, consisting for this purpose of base salary, fair market value of restricted stock awards on the grant date and annual cash bonus).

The performance goals for the Citizens Incentive Plan are specified in our 3P (People, Product and Profit) goals. Each of the named executives has his or her own specific goals which are consistent with our overall goals. These goals are “stretch” goals

that are designed to incent our executives to drive high performance and achieve the company’s quantitative and qualitative objectives. As a result, we believe the goals will be difficult to reach but are attainable with significant effort. In the last three years, the company has performed at varying levels of the established 3P goals; for certain goals the performance was below the target, others were met and some goals were exceeded. Bonuses may be paid upon partial or full achievement of company-wide and individual measures. Eighty-five percent of the executive’s bonus is determined based on the performance against certain 3P goals for Profit and Product. Fifteen percent of the executive’s bonus is based on the executive’s leadership and performance against certain of the 3P goals for People and the individual goals set for them for the applicable year. The bonus plan providesactual payout for a payoutparticipant is within a range of 0 – 120% of each participant’s bonus target. The performance against the company-wide 3P goals establishes the bonus pool level. The actual payout for a participant is determined within the 0 – 120% range based on his or her individual performance.target bonus. The Compensation Committee recommends and approvesdetermines the actual bonus payout for Mrs. Wilderotter that is subject(subject to the same range, andrange), which is then subsequently reviewed and approvedratified by the non-management directors on the board.directors. Mrs. Wilderotter recommends actual bonus payouts for the other named executive officers to the Compensation Committee for their final review and approval.

For 2006,2007, the Profit goals were weighted at 50% of the total goals and included targets for revenue, EBITDA, andcapital expenditures, operating free cash flow, and certain customer retention targets. For 2006, the People goals were weighted at 25% and consisted of targets for initiatives to hire and retain talented people and reinforce our performance culture. For 2006, the Product goals were weighted at 25% and consisted of sales targets for High Speed Broadband and Frontier product packages. Product goals also included targets for reducing customer trouble calls, implementing critical technology and automation upgrades, and launching specific new products.

For 2007, the Profit goals include targets for revenue, EBITDA and operating free cash flowacquisition integration and certain customer retention targets. The Product goals includeincluded the implementation of critical operational plans, call center consolidations, customer service system upgrades, and achieving sales targets for High Speed Broadband, Frontier product packages and wireless products. The Profit and Product goals were weighted at 85% for the Senior Leadership Team. The People goals included initiatives to hire and retain talented people and reinforce our performance culture and were part of the executive’s individual leadership component which was weighted at 15%. The bonus pool for 2007 was established based on the company’s performance on the Profit and Product goals.

For 2008, the Profit goals include targets for revenue, EBITDA, capital expenditures, operating free cash flow, customer retention and integration of recent acquisitions. The Product goals include the implementation of critical operational plans, billing conversions, customer service enhancements and achieving sales targets for High Speed Broadband, Frontier product packages, internet services and wireless products. The Profit and Product goals are weighted at 85%. for the Senior Leadership Team. The People goals are part of the executive’s individual leadership component which is weighted at 15%. for the Senior Leadership Team. The bonus pool for 20072008 will be established based on the company’s performance on the 3PProfit and Product goals. For 2007, the target bonus for the named executive officers will be 100% of their respective base salary.

Profit Sharing Plan.Plan. Consistent with our pay-for-performance philosophy, we provide eligible employees with a supplemental profit sharing match to the employees’ 401(k) account when the company exceeds its annual EBITDA objective. For each 1% above the company’s EBITDA goal, we make a matching contribution to the 401(k) accounts in our plan for employees of 0.5% of eligible base salary up to a maximum contribution of 3%. The eligible base salary is capped at the annual compensation limit in Section 401(a)(17) of the Internal Revenue Code, as adjusted for increases in the cost of living in accordance with the Code. The maximum eligible base salary for 20062007 is $220,000.$225,000. Executives participate in the same profit sharing plan and on the same basis as do all of our non-union, full-time employees. In order to receive the profit sharing award, the executive must contribute a minimum of 1% of his or her base salary into our 401(k) plan. We created the profit sharing plan in 2003, the year we froze the Citizens Pension Plan for all eligible non-union employees. The profit sharing plan was implemented to reinforce our performance culture with another element of performance-based compensation. We did not make profit sharing contributions in 2007 because we did not exceed our EBITDA target by 1%.

Perquisites and Other Benefits. We provide perquisites to our executive officers in limited situations where we believe it is appropriate to assist the executives in the performance of their duties, to make our executives

more efficient and effective and for recruitment and retention purposes. Perquisites provided to named executive officers during 20062007 included reimbursement of relocation expenses anda housing allowancesallowance in connection with relocation. We believe that providing relocation expenses and housing allowances is necessary to hire and retain talented executives critical to our long term success. The company also provided reimbursement of travel expenses for spouses of the named executive officers who attended a company recognition function. We believe that providing the housing allowance was necessary to hire and retain a talented executive critical to our long term success. We believe that the participation of spouses at this eventthe company recognition function contributed to the effectiveness of the company function.its effectiveness. The company also provided tax gross-up payments on these perquisites because we believe that the executive should not be responsible for the taxes on company-related expenses.

In addition, we provide other benefits to our named executive officers on the same basis as all of our non-union, full-time employees. These benefits include medical, dental and vision insurance, basic life and disability insurance and matching contributions to our 401(k) plan for employees who participate in the plan.

Equity Compensation

Restricted Stock Awards. This component of executive compensation is designed to achieve three primary objectives: (1) to incent and reward the executives for long termannual company performance, based on the value of the company stock, (2) to enable us to hire and retain talented executives and (3) to align the interests of our executives with those of our stockholders.stockholders through long-term executive ownership of common stock. Restricted stock awards are not widely distributed in the organization, onlygranted to approximately 75 employees, including the CEO, the other named executive officers, Senior Vice Presidents, Vice Presidents and approximately 30% of Directors, State Regional Vice Presidents and Assistant Vice Presidents are eligible.Presidents. Restricted stock awards for all officers with the title of Vice President and above in the company are targeted at the 75^th percentile of the peer group for long term compensation consistent with our philosophy of targeting the 50^th – 75^th percentile for total compensation. Based on this criterion, the Compensation Committee sets a target dollar range for restricted stock award eligibility for each executive level. The restricted stock plan has a minimum financial performance “gate” in order for any restricted stock grants to be awarded. We must achieveawarded (except in the case of Mrs. Wilderotter whose employment contract requires a minimum restricted stock award be made in each year). The Compensation Committee set a minimum performance threshold of 90% of all threeeach of the established financial goalsthree approved budgeted levels for revenue, EBITDA and operating free cash flow for the business plan year before any restricted stock awards willto be granted for that year, except with respect to Mrs. Wilderotter, as discussed below.in 2007. The amountactual dollar value of restricted stock that is awarded to each executive is based on his or her position level and individual performance. The dollar amount is then converted to a number of shares of restricted stock. All restricted stock awards for named executive officers vest in 25% increments over four years, except for Mrs. Wilderotter whose stock awards prior to 2007 vest in 20% increments over five years, per the terms of her employment agreement. In February 2006, the Compensation Committee approved the 2006 restrictedRestricted stock award program as described above.awards have no market or performance conditions to vesting. In February 2007, the Compensation Committee approved restricted stock awards foraltered the named executive officers as set forth below under “2006 Named Executive Officer Compensation.” In March 2007, the Compensation Committee determined to accelerate the vesting schedule of Mrs. Wilderotter’s February 2007 grant in accordanceand future grants to be consistent with the vesting schedule for all the other named executive officers, which is 25% per year. The value of the restricted stock awards represented between 40 and 60 percent of the named executive officers’ total compensation for 2007. In February 2008, the Compensation Committee approved the 2007granted restricted stock award program withawards to the same design and performance criterianamed executive officers as was in place for 2006.set forth below under “2007 Named Executive Officer Compensation.”

Dividends are paid on shares of vested and unvested restricted stock at the same rate and at the same time that we pay dividends on shares of our common stock. We pay dividends on unvested restricted stock in order to reward executives for the performance of the company on the same basis as stockholders, and thereby more closely aligning the interests of our executives with those of our stockholders.

To further align our executives’ interests with those of our stockholders, in 2007, our board of directors approved new stock ownership guidelines for the CEO and the other members of the Senior Leadership Team. The CEO is expected to own shares of common stock of the company having a minimum value of two times her base salary and each other member of the Senior Leadership Team is expected to own shares of common stock of the company having a minimum value of one times his or her base salary. The CEO and the other members of the Senior Leadership Team have three years after joining the Senior Leadership Team to be compliant and must retain ownership of at least that amount as long as he or she serves on the Senior Leadership Team. The guidelines are based on a survey of our peer group and our board’s judgment regarding a meaningful investment in our company. Restricted stock grants are counted for purposes of fulfilling this requirement. Currently, all members of the Senior Leadership Team, including the CEO, are in compliance with these guidelines.

Mrs. Wilderotter’s employment agreement provides that she will receive an annual minimum restricted stock award valued at between $1,000,000 and $2,000,000, as determined by the Compensation Committee. The Compensation Committee has discretion to increase Mrs. Wilderotter’s annual restricted stock award in excess of her employment agreement terms. We believe that Mrs. Wilderotter’s restricted stock award terms put a greater percentageprovides incentive for her to drive company performance and to remain with of the company. It is also consistent with the goal of making the majority of her compensation at risk and provide additional incentive for Mrs. Wilderotter to drive company performance.performance-based. The Compensation Committee determines the actual amount of the restricted stock award for Mrs. Wilderotter based on the company’s performance and her individual performance, which is then subsequently reviewed and recommends the award toratified by the non-management directors on the board for final approval.directors. Mrs. Wilderotter recommends the restricted stock awards for the other executives, including the other named executive officers, to the Compensation Committee for their final review and approval.

The Compensation Committee follows a general practice of making all restricted stock awards to our executive officers on a single date each year, with the exception of awards to eligible new hires, which are awarded onas of the

date of hire. The Compensation Committee makes grants at its meeting in February to facilitatebased on the prior year’s results.

Long-Term Incentive Program Awards. In March 2008, the Compensation Committee, rewarding prior year performancein consultation with the non-management directors of the board of directors and the Committee’s independent compensation consultant, adopted the LTIP. The LTIP will be offered under the Amended and Restated 2000 Equity Incentive Plan and covers the named executive officers and certain other officers. The LTIP is designed to incent and reward the company’s senior executives if they achieve aggressive growth goals for revenue and free cash flow over a three year period, which we refer to as the “Measurement Period.” For purposes of the LTIP, revenue is defined as the company’s total revenues less regulatory revenues, and free cash flow is defined as the company’s publicly reported free cash flow, adjusted to reflect the company as a full cash taxpayer during the Measurement Period. The growth in these numbers will be measured from a 2007 base, which in the case of free cash flow was also adjusted to reflect the individual recipients.company as a full cash taxpayer and for certain other items. The LTIP provides that the effect of certain items may be included or excluded from the calculations of free cash flow. There are minimum performance gates that must be achieved for revenue and free cash flow growth for any LTIP award to be granted. LTIP awards will be granted in the form of common stock following the Measurement Period if performance goals for revenue and free cash flow are achieved over the Measurement Period. The LTIP plan metrics of revenue and free cash flow were selected because they drive strong alignment between management and our stockholders on our long term performance. In March 2008, the Compensation Committee approved LTIP award targets for each of the named executive officers and the performance goals for the 2008-2010 Measurement Period, as set forth below under “2007 Named Executive Officer Compensation.”

Stock Options. We do not currently make stock option awards to executive officers and have not done so since 2002. Given the historical price range of our common stock, the stock’s volatility characteristics and our common stock dividend, we believe a selective restricted stock grant is more valuable and appropriate than an option grant and, therefore, a stronger hiring and retention tool. Further, restricted stock awards result in the issuance of fewer shares.

Post-Employment Compensation

Citizens Pension Plan. This defined benefit pension plan was frozen for all non-union participants in 2003 or earlier depending on the participant’s employment history. The plan was frozen both with respect to participation and benefit accruals. John Casey, Executive Vice President, and Daniel McCarthy, Executive Vice President and Chief Operating Officer, and John Casey, our former Executive Vice President who retired from the company in November 2007, are the only named executive officers for 2007 who have vested benefits under the Citizens Pension Plan, as all other named executive officers joined the company after the plan was frozen.

Termination of Employment and Change-in-Control Arrangements. In order to attract talented executives, we provide post-employment benefits to our named executive officers, depending on the benefits negotiated with the individual executives upon him or her joining the company. These benefits for the named executive officers who have such benefits are described under “Employment Arrangements; Potential Payments upon Termination or Change-in-Control” below. The Company’s change-in-control arrangements promote the unbiased and disinterested efforts of our executives to maximize stockholder value before, during and after a change-in-control of the company which may impact the employment status of the executives.

Other Benefits. We currently offer to retired members of the board of directors the opportunity to continue their medical, dental and vision coverage from us for themselves and their spouses, with the retired board member paying 100% of the cost. As a member of the board of directors, Mrs. Wilderotter will be eligible to continue her medical, dental and vision coverage if she so elects by paying 100% of the cost of such coverage when she retires fromleaves the board, if such coverage is available at that time. No other named executive officer is on the board and thus notnone of them are eligible for this benefit. We do not currently offer post-retirement healthcare benefits to any non-union employees who retire from the company.

Market and Peer Group Reviews

In order to assess the competitiveness of the executive compensation levels, the Compensation Committee engaged Watson Wyatt & Companyits independent compensation consultant to conduct a comprehensive study in December 2005 for our senior executives.with respect to the compensation of the Senior Leadership Team. The study was conducted comparing our top fivesenior executives to the top fivecomparable executives as reported in the proxy statements of our peer group. In addition an analysis of the results from three published surveys was also included:

For the proxy study, allAll elements of our named executive officers’ total compensation were compared to the total compensation of the executive officers named in the Summary Compensation Tables of the 20052006 proxy statements of tentwelve peer companies. The ten peer companies in our peer group were:for 2007 consisted of the following companies:

The peer group for 2007 was changed from 2006 by removing Liberty Global, due to its international business, and Vonage Holdings Corp., because it had revenues of less than $1 billion and by adding Mediacom Communications Corp., MetroPCS Communications Inc., PATEC Holding Corp. and Windstream Corporation, because the Compensation Committee believes these companies more closely match our peer group criteria and are the companies with whom we compete for talent.

In addition an analysis of the results from two published surveys was also done:

To determine the best job match for the published surveys, companies with revenues for companies of approximately $2between $1 billion and $5 billion were used and both the telecommunications and general industry (as defined by the survey publishers) comparisons were used. The market analysis included examining where each officer compared to the results in

each of the fourtwo studies referenced above for base salary, total cash compensation, long term incentives and total direct compensation.

Overall, the compensation study undertaken by the independent compensation consultant indicated that the total compensation for Mrs. Wilderotter, Mr. Shassian and Mr. McCarthy was in the 25^th – 50^th percentile of our peer group, primarily due to lower equity compensation and total compensation for Mr. Hayes and Mrs. McKenney was in the 50^th – 75^th percentile. The Compensation Committee reviewed and considered the results of this survey were then considered by the Compensation Committeeindependent compensation consultant’s study and other factors as described above under “Compensation Program Design” in determining Mrs. Wilderotter’s compensation for 2006 and by Mrs. Wilderotter in making compensation recommendations for the senior officers for 2006 to the Compensation Committee.

In September 2006, the Compensation Committee commissioned an additional study with Frederic W. Cook & Co. Inc. to review the CEO’s compensation and focus on compensation designed to drive long term performance and retention. The Compensation Committee approved the peer group which was modified slightly based on market changes and comprisedthat of the following ten companies:

An analysis of peer group proxy statements was conducted comparing Mrs.Wilderotter’s compensation to the compensation of the chief executive at each of the peer companies. The analysis included the following elements of pay: base salary, actual bonus amounts paid, total annual compensation (the sum of salary and annual incentive bonus), long term incentives (LTI) broken down into stock options, other restricted stock andSenior Leadership Team for performance shares and other special retention grants. As a part of this study, the Compensation Committee reviewed a tally sheet of Mrs. Wilderotter’s restricted stock awards and reviewed a summary of her current compensation package. The Compensation Committee discussed the results of this study in October 2006 and reviewed them with the non-management directors. This analysis was used to determine Mrs. Wilderotter’s 2006 bonus and restricted stock awards and 2007 compensation targets.2007.

20062007 Named Executive Officer Compensation

OnIn February 22, 2007,2008, the Compensation Committee met to evaluate the performance of the named executive officers, including our CEO, and to make determinations on merit increases to salaries for 2008 and, incentive bonus payouts for 2006 and restricted stock awards.awards related to 2007 performance. For Mrs. Wilderotter, the Committee reviewed our financial performance (as measured by revenue, EBITDA, capital expenditures and operating free cash flow), our performance on all the weighted 3P goals and her performance against her specific 2006 goals. 2007 goals, including the acquisitions of Commonwealth Telephone Enterprises and Global Valley Networks and development of the executive team. The Committee’s total compensation recommendations for 2007 reflected its assessment of Mrs. Wilderotter’s performance relative to her goals and took into account competitive market data provided by the Compensation Committee’s independent compensation consultant.Based on this review and the factors discussed above under “Elements of the Executive Compensation Program,” the Committee, made a recommendation toin consultation with the other non-management directors on the board, to grant toapproved for Mrs. Wilderotter a merit increase to her 2008 base salary a 2006and an incentive bonus payout and a restricted stock award (each as set forth below.

below) for 2007 performance. The non-management directors reviewedCompensation Committee also approved a one-time grant to Mrs. Wilderotter of 120,000 shares of common stock in recognition of Mrs. Wilderotter’s strategic restructuring of the Compensation Committee’s recommendationcompany over the last three years and approved the successful integration of the Commonwealth acquisition. Taken together, these awards place her total compensation for Mrs. Wilderotter.2007 in the 50^th – 75^th percentile of our peer group. For the other named executive officers whose performance was judged based on the same 3P criteria as Mrs. Wilderotter, the Compensation Committee reviewed Mrs. Wilderotter’s performance assessments which were based on the same factors described above, and her recommendations with respect to merit increases, incentive bonus payouts and restricted stock awards. The Committee then discussed their assessments of each named executive officer and approved the following base salaries for 2007,2008, bonus payouts and restricted stock awards. Jerry Elliot,awards set forth below. John Casey, our former Chief Financial OfficerExecutive Vice President who resignedretired from his positionthe company in May 2006,November 2007, was not included in these award determinations.

The Compensation Committee also approved LTIP award targets for each of the Company’s current named executive officers, as set forth below, and the performance goals for the 2008-2010 Measurement Period. Amounts set forth below under the Long-Term Incentive Award Target column are equal to 100% of the LTIP target for the named executive officers. There are minimum performance gates that must be achieved for any grant to be made—over the Measurement Period, cumulative revenues must grow by at least 0.5% compounded and free cash flow must grow by a cumulative total of $40 million, in each case, from the defined 2007 base. Grants will range from 0-100% of the award target or higher, depending upon the extent to which the performance goals are met or exceeded. If the performance goals are exceeded, grants in excess of 100% of the award target will be made based on a percentage of the excess free cash flow achieved. An executive must maintain a satisfactory performance rating during the Measurement Period and must be employed by us at the time of grant in order to be eligible for any grant under the LTIP. The Compensation Committee will determine grants for the 2008-2010 Measurement Period in February 2011.

Internal Revenue Code Section 162(m) Policy

Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public companies for compensation over $1,000,000 paid to the chief executive officer or any of the four most highly compensated executive officers (other than the chief executive officer). Section 162(m) provides that qualifying performance-based compensation will not be subject to the tax deduction limit if certain requirements are met. The Compensation Committee believes it is important to maximize the corporate tax deduction, thereby minimizing our tax liabilities. Accordingly, the Compensation Committee has designed the 2008 Citizens Incentive Plan and amended the 2000 Equity Incentive Plan to make compensation awarded under these plans deductible under Section 162(m). Subject to stockholder approval at the meeting, theseThese plans will go into effect with respect to 2008 compensation, which is payable in 2009. Amounts that are guaranteed under our existing employment agreements with the named executive officers are not deductible under Section 162(m) as such amounts are not subject to performance-based criteria. We may award amounts in the future that are not deductible under Section 162(m) if the Compensation Committee determines that it is in the best interests of the company and our stockholders to do so.

COMPENSATION COMMITTEE REPORT

The compensation committee of our board of directors has submitted the following report for inclusion in this proxy statement:

Our Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with management. Based on our Committee’s review of and the discussions with management with respect to the Compensation Discussion and Analysis, our Committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into the Company’s Annual Report on Form 10-K.

The foregoing report is provided by the following directors, who constitute the Committee:

Submitted by:

Lawton Wehle Fitt, Chair

Kathleen Q. Abernathy

Jeri B. Finard

Myron A. Wick, III

The information contained in the foregoing report shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall the information be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the company specifically incorporates it by reference in a filing.

Summary Compensation Table

The following table sets forth, for services rendered to us and our subsidiaries for each of the fiscal yearyears ended December 31, 2007 and 2006, the compensation awarded to, earned by, or paid to our Chief Executive Officer, our Chief Financial Officer, and each of our other three most highly compensated current executive officers in 2006.2007, and a former executive officer.

TheTax Gross-Ups. For 2007, the amounts in this column for Mr. Hayes also include tax gross-up payments as follows:in the amount of $20,767.

TheDividends. For 2007, the amounts in this column also include dividends paid on restricted stock for each of the named executive officers as follows:

Separation Payments. For 2007, the amounts in this column for Mr. Casey include payments made in connection with his retirement from the company in November 2007 and represent one year’s base salary and his 2007 target bonus ($830,000 in the aggregate). These payments will be made on May 27, 2008, six months and one day after the effectiveness of Mr. Casey’s separation agreement. Amounts also include the value of continued medical, dental and life insurance and other health benefits for Mr. Casey and his family for one year from his departure date ($17,539).

Grant of Plan-Based Awards

The following table sets forth information concerning cash awards under our non-equity incentive compensation plan (the Citizens Incentive Plan) for 20062007 and grants of restricted stock made during 20062007 to the named executive officers.

Awards under the Citizens Incentive Plan for 20062007 shown under the Estimated FuturePossible Payouts Under Non-Equity Incentive Plan Awards columns were paid in February 2007March 2008 based on performance metrics set for 20062007 and achievement of individual goals, as described above under “Compensation Discussion and Analysis.” Target awards under the Citizens Incentive Plan are set as a percentage of base salary. Targets for 20062007 were set at 100% of base salary for each of Mrs. Wilderotter, Mr. Shassian and Mr. Casey andthe named executive officers other than Ms. McKenney, whose target was set at 85%75% of her base salary for each of Mr. McCarthy and Mr. Hayes.salary. Payouts can range from 0% to 120% of the target. The actual amounts of these awards for 20062007 for the named executive officers are reported above in the Summary Compensation Table in the column entitled “Non-Equity Incentive Plan Compensation.”

The stock awards referred to in the above table are grants of restricted stock. For the named executive officers other than Mrs. Wilderotter, theThe grants vest in four equal annual installments commencing one year after the grant date. For Ms. Wilderotter, the grant vests in five equal annual installments commencing one year after the grant date in accordance with her employment agreement.

All such grants of restricted stock were made under our Amended and Restated 2000 Equity Incentive Plan in 2006.2007. Each of the named executive officers is entitled to receive dividends on shares of restricted stock at the same rate and at the same time we pay dividends on shares of our common stock. The common stock dividend rate for 20062007 was $1.00 per share, paid quarterly. Amounts shown in the Grant Date Fair Value of Stock Award column do not include dividends. Such dividends are included in the Summary Compensation Table under the “All Other Compensation” column. No above-market or preferential dividends were paid with respect to any restricted shares.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information regarding outstanding shares of restricted stock held by the named executive officers at year-end. None of the named executive officers held any options to purchase common stock at year-end. To the extent applicable, the information in the table reflects adjustments for stock splits and stock dividends paid subsequent to the date of grant. The market value of shares of common stock reflected in the table is based upon the closing price of the common stock on December 29, 2006,31, 2007, which was $14.37$12.73 per share.

Option Exercises and Stock Vested

The following table sets forth information regarding stock options exercised by, and the shares of restricted stock that vested for each of the named executive officers in 2006. The value of2007. No named executive officer acquired any shares acquired upon the exercise of stock options is based on the difference between the closing price of the shares on the exercise date and the exercise price.in 2007. The value of restricted stock realized upon vesting is based on the closing price of the shares on the vesting date.

Pension Benefits

We have a noncontributory, qualified retirement plan, the Citizens Pension Plan, covering a majority of our employees that provides benefits that, in most cases, are based on formulas related to base salary and years of service. The plan has been amended to provide that, effective February 1, 2003, no further benefits will be accrued under the plan by most non-union participants (including all executive officers). Messrs. Casey and McCarthy are the only named executive officers who have vested benefits under the plan, which is referred to as “frozen.” The estimated annual pension benefits (assumed to be paid in the normal form of an annuity) for Messrs. Casey and McCarthy are $7,210 and $22,641 respectively. These amounts are calculated under the plan based on their respective 2.3 and 11 years of service credit at the time the plan was frozen and the compensation limits established in accordance with federal tax law in the computation of retirement benefits under qualified plans. Benefits are not subject to reduction for Social Security payments or other offset amounts. For a discussion of valuation assumptions, see Note 2423 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2006.2007.

Employment Arrangements; Potential Payments Upon Termination or Change-in-Control

Mary Agnes Wilderotter

We entered into an employment agreement with Mary Agnes Wilderotter, dated as of November 1, 2004, pursuant to which Mrs. Wilderotter was appointed President and Chief Executive Officer. In December 2005, Mrs. Wilderotter was appointed Chairman of the board of directors and Chief Executive Officer.directors. Under the terms of Mrs. Wilderotter’s employment agreement, her initial annual base salary was $700,000, which can be and has been increased from time to time by the Compensation Committee. The employment agreement has an initial term of five years, which expires in November of 2009. The agreement automatically renews at the end of the initial or any renewal term for an additional one-year term, unless either party provides prior notice of non-renewal. Mrs. Wilderotter is also entitled to a target bonus amount equal to 100% of her base salary. Upon commencement of her employment, Mrs. Wilderotter received a grant of 150,000 restricted shares of common stock. With respect to each fiscal year during the employment term after 2004, Mrs. Wilderotter will receive a minimum grant of restricted shares of common stock with an aggregate value on the date of each grant equal to between $1,000,000 and $2,000,000, as determined by the Compensation Committee. The agreement provides that these restricted stock grants each vest ratably over five years. In MarchFebruary 2007, the Compensation Committee determined to acceleratealtered the vesting schedule for the grant of 160,000 shares of restricted stock made to Mrs. Wilderotter inWilderotter’s February 2007 so asgrant and future grants to vest in four equal installments commencing one year after the grant date, in accordancebe consistent with the vesting schedule for all other named executive officers. Under the terms of the employment agreement, Mrs. Wilderotter was reimbursed for the cost of relocation.officers, which is 25% per year.

If Mrs. Wilderotter’s employment is terminated without “cause” or by Mrs. Wilderotter with “good reason” (each as defined in the employment agreement), or we do not renew her employment agreement at the end of a term, we would be required to pay Mrs. Wilderotter an amount equal to her base salary and a pro-rated portion of her target bonus through the date of termination and any bonus earned but unpaid as of the date of termination for any previously completed fiscal year, plus the greater of three times the sum of her base salary and target bonus (payable in equal installments over 36 months) or base salary and target bonus due for the remainder of the term, and all of her restricted shares will vest. Mrs. Wilderotter is also entitled to receive reimbursement for any unreimbursed business expenses, any accrued but unpaid vacation and continued medical, dental and life insurance and other health benefits until the end of the severance period or the date on which Mrs. Wilderotter becomes eligible to receive comparable benefits from any subsequent employer, whichever is earlier. As a director, Mrs. Wilderotter may continue to participate in these plans following the severance period at her cost.

If Mrs. Wilderotter’s employment is terminated due to her death or in connection with a disability, she or her estate will be entitled to payment of base salary for six months following the termination and a pro-rated portion of the target bonus, and all restricted shares will vest. Mrs. Wilderotter is also entitled to receive reimbursement for any unreimbursed business expenses, any accrued but unpaid vacation, pension, profit sharing, medical, dental and life insurance and other employee benefit plans to which Mrs. Wilderotter is entitled upon termination of her employment for a period of two years at our cost.

In the event of a constructive termination following a “change in control” (as defined in the employment agreement), Mrs. Wilderotter will be entitled to the amounts she would receive in connection with a termination by us without cause or by her with good reason, potentially subject to reduction if such amounts would be subject to excise taxes under Section 4999 of the Internal Revenue Code of 1986. If the amount payable by us, less such excise taxes payable by Mrs. Wilderotter, exceeds by at least 125% the amount payable without causing the loss of deduction to us under Section 280G of the Internal Revenue Code, Mrs. Wilderotter will be entitled to additional amounts to make her whole for such excise taxes. If the amounts payable by us, less such excise taxes payable by Mrs. Wilderotter, are less than 125% of the amount payable without causing the loss of deduction to us and the imposition of excise taxes to Mrs. Wilderotter under Sections 280G and 4999 of the Internal Revenue Code, the amount payable by us will be reduced to the extent necessary such that we will not lose our deduction under Section 280G of the Internal Revenue Code and such that Mrs. Wilderotter will not be subject to excise taxes.

The following table sets forth the amounts Mrs. Wilderotter would have been entitled to from us under the various provisions of her employment agreement had her employment been terminated as of December 31, 2006.2007.

Donald R. Shassian

We entered into a letter agreement with Donald R. Shassian, dated March 7, 2006, pursuant to which Mr. Shassian was appointed Chief Financial Officer. In February 2008, Mr. Shassian was appointed Executive Vice President and Chief Financial Officer. Under the terms of Mr. Shassian’s letter agreement, he earns anhis initial annual base salary of $425,000.was $425,000, which can be and has been increased from time to time by the Compensation Committee. The letter agreement provides for a target annual incentive bonus of 100% of his base salary. In addition, Mr. Shassian received two sign-on bonuses: $25,000 payable 30 days after his start date and $50,000 payable on the first anniversary of his start date. Mr. Shassian also received a sign-on grant of 50,000 shares of restricted stock that vests ratably over four years. Additionally, with respect to each fiscal year during his employment term commencing with 2007, Mr. Shassian is eligible to receive a grant of restricted shares of common stock in an amount to be determined by the Compensation Committee. In the event his position is eliminated, his responsibilities materially change or his title, base salary or annual incentive target change for any reason other than cause during the first year following a change in control of the company, Mr. Shassian will be entitled to two years of base salary and target bonus.

In July 2007, we agreed with Mr. Shassian that, if, within one year following a change in control of the company, (a) he is terminated by the company without cause or (b) he terminates his employment as a result of (i) a material decrease in his base salary, target bonus or long term incentive compensation target from those in effect immediately prior to the change in control for any reason other than cause, (ii) the relocation of his principal office more than 50 miles from its current location or (iii) a material decrease in his responsibilities, title or authority for any reason other than cause, all restrictions on restricted shares held by him will immediately lapse and his restricted shares shall become non-forfeitable.

The following table sets forth the amounts Mr. Shassian would have been entitled to from us under his letter agreement had his employment been terminated as of December 31, 20062007 following a change in control. Mr. Shassian would not be entitled to any severance amounts upon termination for any other reason.

John H. Casey, III

We entered into an employment agreement with John H. Casey, III, dated as of February 15, 2005. Mr. Casey has been employed by us since 1999 and currently serves as an Executive Vice President. Under the terms of Mr. Casey’s employment agreement, his initial annual base salary was $400,000, which can be and has been increased from time to time by the Chief Executive Officer and the board of directors. The employment agreement has an initial term of five years, which expires in February of 2010. The agreement automatically renews at the end of the initial or any renewal term for an additional one-year term, unless either party provides prior notice of non-renewal. Mr. Casey is entitled to a target bonus amount equal to 100% of his base salary. Additionally, with respect to each fiscal year during his employment term, Mr. Casey is eligible to receive a

grant of restricted shares of common stock in an amount to be determined by the Compensation Committee. Restricted stock grants in 2005 will vest ratably over three years; all grants following 2005 will vest ratably over four years.

If Mr. Casey’s employment is terminated without “cause” or if he resigns his employment for “good reason” (each as defined in the employment agreement), or we do not renew his employment agreement at the end of a term, we would be required to pay Mr. Casey an amount equal to one year of the then current base salary and the target bonus, both payable on the date of termination, and all restricted shares of common stock will vest. Mr. Casey is also entitled to receive continued medical, dental, and life insurance and other health benefits for one year from the date of termination or the date on which Mr. Casey becomes eligible to receive comparable benefits from any subsequent employer, whichever is earlier.

If Mr. Casey’s employment is terminated due to his death or in connection with a disability, he or his estate will be entitled to payment of base salary for six months following the termination and a pro-rated portion of the target bonus, and all restricted shares will vest. Mr. Casey is also entitled to receive reimbursement for any unreimbursed business expenses, any accrued but unpaid vacation, pension, profit sharing, medical, dental and life insurance and other employee benefit plans to which Mr. Casey is entitled upon termination of his employment for a period of two years at our cost.

In the event of a constructive termination as a result of a “change in control” (as defined in the employment agreement), Mr. Casey will be entitled to the amounts he would receive in connection with a termination by us without cause or by him with good reason, potentially subject to reduction if such amounts would be subject to excise taxes under Section 4999 of the Internal Revenue Code of 1986.

The following table sets forth the amounts Mr. Casey would have been entitled to from us under the various provisions of his employment agreement had his employment been terminated as of December 31, 2006.

Peter B. Hayes

We entered into a letter agreement with Peter B. Hayes, dated December 31, 2004, pursuant to which Mr. Hayes was appointed Senior Vice President, Sales, Marketing & Business Development. In December 2005, Mr. Hayes was appointed Executive Vice President, Sales, Marketing & Business Development. Under the terms of Mr. Hayes letter agreement, he earns anhis initial annual base salary ofwas $275,000, which wascan be and has been increased from time to $283,250 effective April 2006.time by the Compensation Committee. The letter agreement provides for a target annual incentive bonus of 75% of his base salary, which was increased to 85% for 2006. In February 2007, Mr. Hayes’ target annual incentive bonus was increased2006 and to 100% for 2007. Mr. Hayes also received a sign-on grant of 50,000 shares of restricted stock that vested ratably over three years. In the event of a constructive termination following a “change in control” (as defined in the letter agreement), he will be entitled to one year of base salary, 100% of bonus pro-rated for the year of termination and one year of continued medical benefits. Under the terms of the letter agreement, Mr. Hayes was reimbursed for the cost of relocation and is paid a housing allowance during his first yearallowance.

In July 2007, we also agreed with Mr. Hayes that all restrictions on restricted shares held by him will lapse and become non-forfeitable after a change in control of employment.the company under the same circumstances as described above for Mr. Shassian.

The following table sets forth the amounts Mr. Hayes would have been entitled to from us under his letter agreement had his employment been terminated as of December 31, 20062007 following a change in control. Mr. Hayes would not be entitled to any severance amounts upon termination for any other reason.

Jerry ElliottDaniel J. McCarthy

Jerry Elliot resignedIn July 2007, we agreed with Daniel J. McCarthy, Executive Vice President and Chief Operating Officer, that all restrictions on restricted shares held by him will lapse and become non-forfeitable after a change in control of the company under the same circumstances as described above for Mr. Shassian. Had Mr. McCarthy’s employment been terminated as of December 31, 2007 following a memberchange in control, the value of our boardhis accelerated restricted shares would have been $836,998, which is the dollar value of directors, effective April 10, 2006 and as our President, effective May 10, 2006. Mr. Elliott had earlier resigned his position as Acting Chief Financial Officer in connection with the appointment of our new Chief Financial Officer, each effective April 17, 2006. Upon Mr. Elliott’s resignation, all65,750 shares of unvested restricted stock held by him were cancelledon December 31, 2007 based on the closing sales price of $12.73 per share of our common stock on December 31, 2007. Mr. McCarthy would not be entitled to any severance amounts upon termination for any other reason. In addition, Mr. McCarthy is also entitled to his pension benefit as set forth under “Pension Benefits.”

Cecilia K. McKenney

We entered into a letter agreement with Cecilia K. McKenney, dated January 13, 2006, pursuant to which Ms. McKenney was appointed Senior Vice President, Human Resources. In February 2008, Ms. McKenney was appointed Executive Vice President, Human Resources and Call Center Sales & Service. Under the terms of Ms. McKenney’s letter agreement, her initial annual base salary was $275,000, which can be and has been increased from time to time by the Compensation Committee. The letter agreement provides for a target annual

incentive bonus of 60% of her base salary, which was increased to 75% for 2007. In addition, Ms. McKenney received a sign-on bonus of $50,000 payable 30 days after her start date. Ms. McKenney also received a sign-on grant of 30,000 shares of restricted stock that vests ratably over four years. Additionally, with respect to each fiscal year during her employment term commencing with 2007, Ms. McKenney is eligible to receive a grant of restricted shares of common stock in an amount to be determined by the Compensation Committee. In the event her position is eliminated, her responsibilities materially change or her title, base salary or annual incentive target change for any reason other than cause during the first year following a change in control of the company, Ms. McKenney will be entitled to one year of base salary and target bonus.

In July 2007, we also agreed with Ms. McKenney that all restrictions on restricted shares held by her will lapse and become non-forfeitable after a change in control of the company under the same circumstances as described above for Mr. Shassian.

The following table sets forth the amounts Ms. McKenney would have been entitled to from us had her employment been terminated as of December 31, 2007 following a change in control. Ms. McKenney would not be entitled to any severance amounts upon termination for any other reason.

John H. Casey, III

John H. Casey, III retired as Executive Vice President effective November 15, 2007. Upon Mr. Casey’s departure he entered into a Separation Agreement and Release pursuant to which he will receive on May 27, 2008, six months and one day after the effectiveness of his separation agreement, $830,000 in cash, representing one year of base salary and his 2007 target bonus. In addition, the restrictions on all 81,667 shares of restricted stock held by him lapsed. Mr. Casey will also be entitled to continued medical, dental and life insurance and other health benefits for one year from his departure date. In addition, Mr. Casey will be entitled to his pension benefit as set forth under “Pension Benefits.” During 2008, Mr. Casey will provide us with one month’s consulting services at no further obligations under his employment agreement.cost to us.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee currently consists of Mr. Harfenist,Ms. Fitt, as Chairman,Chair, and Ms. Abernathy, Ms. Finard Ms. Fitt and Mr. Wick. Except as described below, noneNone of our executive officers served as: (i) a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on our Compensation Committee; (ii) a director of another entity, one of whose executive officers served on our Compensation Committee; or (iii) a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as one of our directors. During a part of 2005, Mr. Singer served as a member of our Compensation Committee. Mr. Singer is an executive officer of American Tower Corporation. Until May 2004, Mrs. Wilderotter, our Chief Executive Officer, served as a director of American Tower Corporation and also served on that company’s compensation committee. This created an interlock that does not satisfy the independence rules of the NYSE. When it was established that such an interlock existed, Mr. Singer resigned from our Compensation Committee and is no longer deemed to be an independent director of our company. According to the NYSE rules, the interlock will expire in May 2007. At such time, the board will determinate whether Mr. Singer is independent under the listing standards of the NYSE.

COMPENSATION COMMITTEE REPORT

The compensation committee of our board of directors has submitted the following report for inclusion in this proxy statement:

Our Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with management. Based on our Committee’s review of and the discussions with management with respect to the Compensation Discussion and Analysis, our Committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement.

The foregoing report is provided by the following directors, who constitute the Committee:

The information contained in the foregoing report shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall the information be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the company specifically incorporates it by reference in a filing.

PROPOSED 2008 CITIZENS INCENTIVE PLANAMENDMENTS TO RESTATED CERTIFICATE OF INCORPORATION

(ItemItems 2 and 3 on the Proxy Card)

The board of directors adoptedapproved the 2008 Citizens Incentive Plan (the “Incentive Plan”)Name Change Amendment and the Purposes Clause Amendment on April 4, 2007,February 21, 2008, subject to stockholder approval. Approval of either Amendment is not conditioned upon approval of the other Amendment.

Name Change Amendment

If the Incentive PlanName Change Amendment is approved, annual incentive awards grantedwe will amend Article FIRST of our Restated Certificate of Incorporation to certain executive officerschange our name from “Citizens Communications Company” to “Frontier Communications Corporation” in order to align our company name with the brand name under which we operate and are known in our markets. The amendment to the Incentive PlanRestated Certificate of Incorporation to effectuate the Name Change Amendment will be able to qualify as “performance-based compensation” under Section 162(m) oftake the Internal Revenue Code of 1986 (the “Code”) and be fully tax deductible by us.following form:

Our compensation program includes annual cash incentive awards“Article FIRST is hereby amended to attract, retain and motivate key employees. The Compensation Committee believes it is important that these annual incentive awards be performance-based and fully tax deductible. Set forth below is a summary of the principal features of the Incentive Plan. This summary is qualifiedread in its entirety by reference to the termsas follows:

FIRST: The name of this corporation is FRONTIER COMMUNICATIONS CORPORATION.”

We expect formal implementation of the Incentive Plan, a copyname change to be completed shortly after filing of whichthe Amendment with the Delaware Secretary of State (assuming stockholder approval is includedreceived). However, transitional uses of the name “Citizens Communications Company” may continue for some time in this proxy statement asorder minimize the risk of both vendor and customer confusion. Implementation costs during fiscal year 2008 are not expected to be material.

Appendix APurposes Clause Amendment.

Introduction

Section 162(m)Article THIRD of our Restated Certificate of Incorporation currently consists of 26 paragraphs which enumerate the purposes for which our company may legally act. The Purposes Clause Amendment will replace the enumerated purposes clause with a general purposes clause. The Purposes Clause Amendment is intended to simplify our complex and cumbersome certificate of incorporation by deleting sections which are no longer necessary. The enumerated purposes clause, which was adopted upon our company’s incorporation in most cases only1935, is not required by Delaware law. Delaware law permits publicly-held companiescorporations to realize tax deductions for compensationuse a general statement of more than $1 million paidpurposes, which allows a corporation to engage in any year tolawful activity.Replacing the chief executive officerenumerated purposes clause with a general purposes clause will not have a substantive effect on our company or any of the other four most highly paid executive officers (“Covered Employees”) if such payments constitute “performance-based compensation.” One requirement for compensation to be performance-based under Section 162(m) is that we obtain stockholder approval of the material terms of the performance goals that apply to such compensation. Material terms include (1) the description of eligible participants, (2) the business performance measures on which Section 162(m) goals may be based, and (3) the maximum amount payable to an individual participant for a year upon attainment of a Section 162(m) goal. If stockholders fail to approve the Incentive Plan at the meeting, no awards will be made under the Incentive Plan. The Compensation Committee retains the authority to develop and implement alternate means of fairly compensating Covered Employees.

Overview of Plan Awardsour stockholders.

The Incentive Plan provides annual award opportunities for our key employees. The Incentive Plan provides for two types of awards: (i) those intended to comply with Section 162(m)’s performance-based compensation exception (“162(m) Bonuses”), and (ii) those not intended to comply with such exception (“General Bonuses”). If approved by stockholders, the first awards under the Incentive Plan will be made in 2009 based on 2008 performance. No awards will be made under our existing cash incentive plan after 2008 if the Incentive Plan becomes effective.

Administration

The Incentive Plan will be administered by the Compensation Committee, which is composed entirely of non-employee directors who meet the criteria to be “outside directors” under Section 162(m) and “independent directors” under the rules of the SEC and the NYSE. The Committee’s powers include the authority, within the limitations set forth in the Incentive Plan, to select the persons to be granted awards, to construe and interpret the Incentive Plan, and to make reasonable rules and regulations for the administration of the Incentive Plan. The Committee may delegate its authority under the Incentive Plan with respect to General Bonuses, but it may not delegate its authority with respect to 162(m) Bonuses.

Eligibility to Receive Awards

The Compensation Committee or its delegates will select our employees who will be eligible to receive awards under the Incentive Plan. In the case of 162(m) Bonuses, the Committee may select for eligibility employees who are executive officers and employees who could become executive officers by the end of our fiscal year. In the case of General Bonuses, the Committee or its delegates may select any employees who are employed in key positions or who make a substantial contribution to us. The number of eligible employees is neither fixed nor predetermined. Accordingly, it is not possible to anticipate the exact number of individuals who

will be eligible for grants under the Incentive Plan.However, for 2007, there are approximately 2,500 employees who are eligible for bonuses under the incentive plan currently in effect.

Annual Incentive Award Details

In general, it is expected that the Compensation Committee will grant 162(m) Bonuses to the most senior executives to the extent necessary to permit their annual incentives to be fully tax deductible. The Committee or its delegate may grant General Bonuses to any eligible employee.

162(m) Bonuses. For 162(m) Bonuses, the Compensation Committee will establish in writing, during the first 90 days of our fiscal year, one or more specified performance goals for the year and the maximum amount payable to any individual participant upon achievement of such performance goals. Under Section 162(m), goals established for 162(m) Bonuses must be substantially uncertain of attainment at the time they are established. The Committee may also establish lower amounts payable for lower levels of achievement of the specified performance goals for the year. No 162(m) Bonus will be paid for a year if the minimum performance goal for that year is not met. The maximum dollar amount that may be paid to an individual participant under a 162(m) Bonus for a single calendar year is $3 million.

The goals to be used for purposes of 162(m) Bonuses may be set by the Compensation Committee using one or more of the following business performance measures: earnings before income taxes, depreciation and amortization, or EBITDA; operating cash flow; free cash flow; free cash flow per share; earnings per share; economic value added; revenue; net income; operating profit; operating margin; total return to stockholders; debt/capital ratio; return on total capital; return on equity or assets; cost control; common stock price; capital expenditures; price/earnings growth ratio; and book value per share. The performance goals may be measured individually, alternatively or in any combination, and they may be established based on company-wide objectives or objectives related to a specific division, subsidiary, affiliate, department, region or function in which the participant is employed. The Committee may adjust the goals, or provide for the manner in which performance will be measured against the goals, to reflect the impact of specified corporate transactions (such as a stock split or stock dividend), special charges, accounting or tax law changes and other extraordinary or nonrecurring events, provided such awards would not be adversely affected under Section 162(m). Within 60 days following the end of the relevant fiscal year, the Committee must determine and certify in writing whether the specified performance goals were satisfied for such year.

Notwithstanding attainment of an established goal, the Compensation Committee has the discretion to reduce, but not increase, some or all of a 162(m) Bonus that would otherwise be paid.

General Bonuses. For General Bonuses, the amount payable under an award may be stated as a dollar amount or as a percentage of the participant’s base compensation. The Compensation Committee (or its delegate) may provide for a threshold level of performance below which no bonus will be paid and a maximum level of performance above which no additional amount will be paid, and it may provide for the payment of different amounts of compensation for different levels of performance. In establishing the terms of General Bonuses, the Committee or its delegate may establish goals using the performance measures described above for 162(m) Bonuses; alternatively, any other goals or objectives may be used.

Change in Control

The Incentive Plan provides that if there is a change in control, as defined in the Incentive Plan, during any measurement period, then executives will receive payment of pro-rated target awards within 60 days after the date of the change in control.

Amendment and Termination

The board may amend, suspend or terminate the Incentive Plan in whole or in part at any time. However, without stockholder approval, no amendment to the Incentive Plan may change (1)certificate of incorporation to effectuate the classPurposes Clause Amendment will take the following form:

“Article THIRD is hereby amended to read in its entirety as follows:

THIRD: The purpose of participants who are eligiblethe corporation is to engage in any lawful act or activity for 162(m) Bonuses, (2) the business performance measures thatwhich corporations may be used with 162(m) Bonuses, or (3) the dollar limit on the 162(m) Bonus that may be paid to an individual participant for any one year.

Federal Tax Consequences

Under the Code, a grant of an awardorganized under the Incentive Plan would have no federal income tax consequences. The paymentGeneral Corporation Law of the award would be taxableDelaware, as from time to a participant as ordinary income in the year paid. The payment of an award, however, may be deferred by the participant if such deferral is permitted under a deferral plan or arrangement approved by us. We intend for all payments under the Incentive Plan to be exempt from the rules for deferred compensation that are set forth in Section 409A of the Code or for these payments to comply with its requirements. Amounts taxable to participants under the Incentive Plan would be deductible by us as compensation.

New Incentive Plan Benefits

No benefits or amounts have been granted, awarded or received under the Incentive Plan and no awards are determinable at this time. For 2006, the named executive officers received cash incentive awards as set forth in the Summary Compensation Table under “Non-Equity Incentive Plan Compensation.time amended.” The executive officers as a group (8 persons) received $2,593,138 and all other employees as a group (2,012 persons) received $16,294,691 in cash incentive awards. These figures do not include employees of our Commonwealth subsidiaries, which we acquired in March 2007. Non-employee directors do not participate in our cash incentive plans.

Voting Recommendation

Approval of the Incentive Plan will permit us to attract, retain and motivate key employees, while maximizing our tax deductions.

The board of directors recommends that you voteFOR this proposal.these proposals.

PROPOSED AMENDMENT TOSTOCKHOLDER PROPOSAL

AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLAN

(Item 34 on the Proxy Card)

We have received a stockholder proposal from the Communications Workers of America General Fund, or “CWA,” 501 Third Street, N.W., Washington, D.C. 20001. The CWA has requested that we include the following proposal and supporting statement in our proxy statement for the meeting, and if properly presented at the meeting, this proposal will be voted on at the meeting. The CWA beneficially owns at least $2,000 in market value of our common stock. The stockholder proposal and supporting statement are quoted verbatim in italics below.

Our management does not support the adoption of the resolution proposed below and asks stockholders to consider management’s response, which follows the stockholder proposal. The board of directors adopted an amendment (the “Amendment”) to therecommends a voteAGAINST this proposal.

Shareholder Proposal

Resolved: The shareholders of Citizens Communications Company Amendedrequest that the Board of Directors adopt a policy that shareholders will be given the opportunity at each annual meeting of shareholders to vote on an advisory resolution, to be proposed by Company’s management, to approve or disapprove the compensation of the named executive officers disclosed in the Summary Compensation Table of the proxy statement. The board should provide appropriate disclosures to ensure that shareholders understand that the vote is advisory and Restated 2000 Equity Incentive Plan (the “2000 Plan”will neither abrogate any employment agreement nor affect any compensation already paid or awarded.

Supporting Statement

In our view, existing U.S. corporate governance arrangements, including SEC rules and as amendedstock exchange listing standards, do not provide shareholders with adequate means for communicating their views on senior executive compensation to boards of directors. In contrast, in the United Kingdom shareholders of public companies are permitted to cast an advisory vote on the “directors’ remuneration report,” which discloses executive compensation. Such a vote is not binding, but it gives shareholders an opportunity to communicate views in a manner that could influence senior executive compensation.

“Say on Pay” in the U.K., we believe, serves a constructive purpose. A study by the Amendment,Yale School of Management found that the “Amended 2000 Plan”)resulting dialogue between boards and shareholders appeared to moderate pay increases, enhance the ability of compensation committees to stand up to insider pressures, and add legitimacy to the executive compensation process. (See Stephen Davis, “Does ‘Say on April 4, 2007. Subject to stockholderPay’ Work?” Millstein Center for Corporate Governance and Performance, Yale, 2007)