Windstream 2013 Annual Report Download - page 64

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PROPOSAL NO. 4
AMENDMENT OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
WINDSTREAM CORPORATION
On August 30, 2013, our predecessor, Windstream Corporation, adopted a new holding company structure
pursuant to Section 251(g) of the Delaware General Corporation Law (the “DGCL”), which permits the formation
of a holding company structure without a vote of the stockholders of the constituent corporations. As part of this
transaction, Windstream Corporation became a wholly-owned subsidiary of our current company, Windstream
Holdings, Inc. (which is referred to in this Proxy Statement as “Windstream”). In connection with the holding
company formation and pursuant to the requirements of Section 251(g), Windstream Corporation’s Amended and
Restated Certificate of Incorporation was amended to include the following provision:
Any act or transaction by or involving the Corporation, other than the election or removal of directors of
the Corporation, that requires for its adoption under the DGCL or under this Certificate of Incorporation
the approval of the stockholders of the Corporation shall, pursuant to Section 251(g) of the DGCL, require,
in addition, the approval of the stockholders of Windstream Holdings, Inc., a Delaware corporation, or
any successor thereto by merger, by the same vote as is required by the DGCL or this Certificate of
Incorporation, as the case may be.
It is uncommon in business organizations that operate in a holding company structure for the stockholders of
the holding company to have direct voting rights as to matters that affect only subsidiaries of the holding company.
Such voting rights could adversely impact the anticipated operational benefits of the holding company structure.
For example, we are considering amending Windstream Corporation’s Amended and Restated Certificate of
Incorporation to reduce the number of shares of its authorized capital stock in order to reduce its Delaware franchise
tax. Further, it is possible in the future that we may wish to accomplish one or more internal reorganizations of
our corporate structure that may involve a merger of Windstream Corporation with another subsidiary. These and
similar events would have no impact on the stockholders of Windstream (except for cost savings and efficiencies to
be gained) but would be substantially more cumbersome and costly if we had to seek approval of the stockholders of
the holding company to effect them.
Approval of this proposal would not impact our stockholders’ right to approve a merger, or sale of substantially
all of the assets, of Windstream Corporation. Delaware law requires stockholder approval before a corporation can be
a party to a merger or consolidation or sell all or substantially all of its assets. The only asset Windstream Holdings
owns is the common stock of Windstream Corporation. Therefore, even if the proposed amendment to Windstream
Corporation’s Amended and Restated Certificate of Incorporation is approved, the stockholders of Windstream
Holdings would still have the right to vote on a proposed merger of Windstream Corporation with a third party or a
sale of substantially all of its assets because such a transaction would constitute a sale of substantially all of the assets
of Windstream Holdings.
Therefore, in order to provide maximum flexibility and efficiency under the holding company structure that has
been established, Windstream proposes to eliminate the above mentioned provision from Windstream Corporation’s
Amended and Restated Certificate of Incorporation. The Board of Directors believes that the deletion of this
provision of Windstream Corporation’s Amended and Restated Certificate of Incorporation will allow the Company
to manage its entire organization more effectively. If this proposed amendment is approved by the stockholders of
Windstream, we intend to promptly file an appropriate amendment to Windstream Corporation’s Amended and
Restated Certificate of Incorporation with the State of Delaware.
Board Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
“FOR” PROPOSAL NO. 4.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED “FOR” PROPOSAL NO. 4
UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.