Investor blasts Warwick Valley Telephone's board, opposes increased director compensation

By Lisa Kerner

Charlotte, N.C., April 4 - Warwick Valley Telephone Co. shareholder Santa Monica Partners, LP, sent another letter to the company's board critical of "management's absolute inability to develop and execute a strategic plan to revive the company's direction" and citing the board's "lack of communication with shareholders."

The letter was included in a schedule 13D filed with the Securities and Exchange Commission.

Santa Monica Partners also reacted to a section of the company's recently filed proxy statement that said "the board has determined to increase the compensation to directors to $25,000 per director annually: for a total of $225,000, up from $71,325 in 2006."

The investor group accused the board of "overseeing the overall reduction of the company's earnings by 23% and steering the company's core telephone business further into the red."

In the letter, signed by principal Joshua M. Eudowe, Santa Monica Partners asked the board members to "stop treating shareholders with such disrespect and do your job."

Santa Monica Partners' Lawrence J. Goldstein has contacted the board several times, according to previous SEC filings. Most recently, Goldstein criticized the board for the decline of the company's stock to $15.00, its lowest since 2003.

In addition, Goldstein asked why key employees and board members have not purchased any shares of stock in Warwick for the past four years. The investor specifically named Kelly C. Bloss, interim chief executive officer Thomas A. Gray and Douglas J. Mello as having never purchased a single share of the company's stock.

The reporting persons beneficially own 130,889 shares, or 2.4%, of the Warwick, N.Y., communication services company's stock.

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