Windstream 2013 Annual Report Download - page 74

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stockholders from receiving accurate and complete information on important pending actions. Currently, any matter
that Windstream or its stockholders wishes to present for a stockholder vote must be noticed in advance and presented
at a meeting of stockholders. This allows all stockholders to consider, discuss and vote on pending stockholder
actions. In contrast, the written consent proposal at issue would permit owners of a bare majority of shares with no
fiduciary duties to other stockholders to initiate action with no prior notice either to the other stockholders or to the
Company, and without giving all stockholders an opportunity to participate and consider arguments for and against
any action, including the Company’s position.
As stated above, the Board believes that important matters should be the subject of stockholder meetings
because it gives all stockholders the ability to consider the matter. To that end, the Board has approved, subject to
stockholder approval at the Annual Meeting, amendments to the Windstream Certificate and Windstream Bylaws to
permit stockholders holding 20% or more of our outstanding common stock to call a special meeting. See Proposal
No. 5. The Board believes that enabling stockholders to call special meetings obviates the need to permit stockholder
action by written consent by providing a means for stockholders to raise important matters outside of the normal
annual meeting cycle, while also allowing all stockholders to take part in extraordinary events affecting the Company.
In other words, if a matter is of such importance that it must be addressed before the next annual meeting, the Board
believes that a special meeting of stockholders is the channel best suited to ensure that all stockholders have the
opportunity to vote on the matter, which the Board believes is in best interests of Windstream and our stockholders.
Accordingly, the Board recommends that stockholders vote in support of Proposal No. 5 and AGAINST this proposal.
The Board also opposes this proposal because action by written consent can occur with little or no advance
notice to the Company, minority stockholders and the market. As a result, the Board may not have a meaningful
opportunity to consider the merits of the proposed action, to consider alternative courses of action or to communicate
its views to stockholders. For example, hostile or insurgent stockholders have relied on consent solicitations as a
coercive tool to threaten or fundamentally change companies without providing all stockholders with notice or an
opportunity to be engaged in the consideration of such changes at a stockholders meeting.
Furthermore, giving stockholders the right to act by written consent in lieu of a meeting can expose the
Company to numerous consent solicitations which would force the Company to incur significant expense and cause
disruption to its operations.
The proposal’s supporting statement also comments on a stockholder proposal that was approved at the 2013
annual meeting. In response to this vote and after obtaining the views of several large institutional stockholders on
this topic, the Board has implemented “majority of votes cast” as our general voting standard and has recommended
Proposal No. 6 to eliminate “super-majority voting” requirements. In an effort to ensure stockholder approval of this
Proposal No. 6, we have implemented measures to increase voter participation including an interactive shareholder
forum and stratified distribution of proxy materials by delivering “full set” voting materials to our larger shareholders.
We believe these efforts demonstrate our responsiveness to our stockholder’s interests and concerns.
The proposal’s supporting statement also makes a number of negative statements regarding our corporate
governance practices. Despite the suggestions of this proponent to the contrary, the Company is committed to good
corporate governance, which promotes the long-term interests of stockholders, strengthens the Board of Directors
and management accountability and helps build public trust in the company. Highlights of our strong corporate
governance profile include the following factors:
• 8 out of 9 director nominees are independent;
• Roles of Chairman and CEO are separate;
• Our Chairman is independent;
• We have a director resignation policy for directors who fail to receive majority of votes cast.
Our stockholders have confirmed their support for our strong corporate governance profile by electing our
current slate of directors by a vote in excess of 98 % of votes cast at the 2013 annual meeting.
In summary, the Board does not believe that adoption of this proposal would be in the best interests of the
Company’s stockholders.