Windstream 2012 Annual Report Download - page 50

(i) amendments to certain provisions of the Windstream Certificate related to the limitation of liability of
directors and indemnification of directors and officers, the prohibition of stockholder action by written
consent, the calling of special meetings by stockholders, the election to be covered by Section 203 of the
Delaware General Corporation Law, and the procedures required to amend the Windstream Certificate; and
(ii) amendments to certain provisions of the Windstream Bylaws related to bringing matters before an annual
stockholder meeting, nominating and electing directors, filling vacancies on the board, and the procedures
required to amend the Windstream Bylaws.
Virtually all other matters submitted to our stockholders for approval have a majority vote requirement. For
example, the Windstream Bylaws require that, in an uncontested election, each director be elected by the affirmative vote of a
majority of the votes cast for his or her election. Additionally, unless otherwise required by applicable law, the Windstream
Certificate or the Windstream Bylaws, stockholder approval of any other matter (other than the election of directors) requires
the affirmative vote of a majority of shares present and entitled to vote on the matter.
The Board believes that our voting standards do not “frustrate the will of our 66%-shareholder majority,” as the
proponent alleges. Rather, our voting standards are intended to preserve and maximize the value of Windstream for all of our
stockholders by protecting against the self-interested actions of a few large stockholders, many of whom may have agendas
opposed to the long-term value of Windstream. Without these protections, it would be possible for an activist investor with
self-serving interests or a group of minority stockholders to approve a significant change to corporate governance or an
extraordinary transaction that may not be in the best interest of Windstream and that may be opposed by as many as half of
our stockholders. Because stockholders do not have the same fiduciary duties as our directors, a group of short-term
stockholders may act in their own self-interests to the detriment of other stockholders. Accordingly, the Board of Directors
believes that our voting standards, which protect stockholders against the self-interested actions of short-term investors,
should not be changed as proposed.
The proponent contends that this proposal “should also be evaluated in the context of our Company’s overall
corporate governance.” We agree with this statement, and we believe that Windstream has a strong corporate governance as
reflected by the following attributes:
x7 of 9 (or over 75%) of our directors, and our Chairman of the Board, are independent;
xThe roles of Chairman and CEO have been separate positions since our formation in 2006;
xOur executive compensation program was approved by over 92% of the votes of our stockholders in the
annual “say-on-pay” vote conducted in 2012;
xOur directors are elected pursuant to a majority voting standard and a director resignation policy for
directors who fail to receive a majority vote.
This profile is reflected in our Corporate Governance Board Guidelines which are designed to enhance long-term stockholder
value, align the interests of the Board and management with those of our stockholders, and promote high ethical conduct
among our directors and employees. The independence of the Board is a key safeguard, and we believe our independent
Board is in the best position to, among other things, evaluate and approve changes to Windstream’s corporate governance
structure that it determines to be in the best interests of Windstream and its stockholders.
For all of these reasons, we believe that implementation of this proposal is not in the long-term best interests of our
stockholders, will not enhance our corporate governance practices and could be harmful to stockholders in the future.
Board Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
“AGAINST” PROPOSAL NO. 6.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED “AGAINST” PROPOSAL NO. 6
UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.
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