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PROPOSAL NO. 2
THE SUBSIDIARY’S VOTING PROVISION PROPOSAL

AUTHORIZE AN AMENDMENT OF THE AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION OF WINDSTREAM CORPORATION TO REMOVE THE VOTING PROVISION

General

In connection withThe following table shows the Spin-Off,compensation paid to the Board intends to convert its wholly-owned subsidiary, Windstream Corporation, into a limited liability company. This conversion will allow the Company to proceed with the Spin-Off without incurring a considerable tax liability. According to Windstream Corporation’s current certificate of incorporation, however, its conversion from a corporation into a limited liability company would require unanimous approval from the Company’s stockholders, which is unrealistic for a public corporation.

The Board therefore seeks stockholder approval to amend its subsidiary’s certificate of incorporation in order to remove a provision that would require the unanimous approval of the stockholders of Windstream Holdings of such conversion and instead allow Windstream Holdings to approve the conversion as the sole stockholder of Windstream Corporation, without a vote of the stockholders of Windstream Holdings.

Specifically, the proposed amendment would eliminate the following section from Windstream Corporation’s Amended and Restated Certificate of Incorporation (the “Voting Provision”):

Any act or transaction by or involving the Corporation, other than the election or removal ofnon-employee 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.

A complete copy of the proposed amendment is attached to this Proxy Statement asAnnex B.

Board Rationaleduring 2015:

In the course of diligence conducted in anticipation of the Reorganization and the Spin-Off, we determined that Windstream Holdings has a substantial excess loss account (“ELA”) in the stock of Windstream Corporation for U.S. federal income tax purposes. The ELA resulted from the creation of our holding company structure and prior stockholder distributions by Windstream Holdings and Windstream Corporation that were in excess of earnings and profits. Although the exact amount of the ELA is expected to fluctuate prior to the Spin-Off, we anticipate that it will increase in connection with any quarterly dividends paid by Windstream Holdings prior to the Spin-Off.

Absent any changes to the planned Reorganization and the Spin-Off, Windstream Holdings anticipates that the Spin-Off will trigger the ELA and, based on current estimates as of December 31, 2014, result in a tax liability to Windstream Holdings of approximately $600 - $800 million. In order to eliminate the ELA, we are proposing to convert Windstream Corporation into a Delaware limited liability company prior to the consummation of the Spin-Off (the “Conversion”). Following the Conversion, Windstream Corporation will be treated as an entity that is disregarded as separate from Windstream Holdings for U.S. federal income tax purposes and the ELA will no longer exist. Accordingly, the Conversion will allow us to proceed with the Spin-Off without incurring such tax liability.

Under the DGCL, the conversion of a wholly-owned subsidiary from a corporation into a limited liability company would not normally require a vote of the stockholders of the parent corporation. However, if the Voting Provision remains in place, the Conversion would require the unanimous approval of Windstream Holdings’ stockholders because Section 266 of the DGCL requires the unanimous approval of a corporation’s stockholders in order for a corporation to convert to a limited liability company. Obtaining the unanimous approval of stockholders of a public corporation is not a realistic alternative.

In addition to the foregoing reason for the elimination of the Voting Provision, the deletion of the Voting Provision will put Windstream Holdings in the same position as substantially all other public companies that operate through multiple subsidiaries. It is exceedingly uncommon in business organizations that operate in a holding

(1)		All stock award amounts in the table above reflect the aggregate fair value on the grant date based on the closing price per share of Windstream common stock on the date of grant of the restricted stock, computed in accordance with FASB ASC Topic 718.
(2)		Amount is for travel insurance available for all directors.
(3)		As disclosed in the Company’s Current Report on Form 8-K dated September 12, 2014, Dennis E. Foster retired from his director position effective February 1, 2015, in compliance with Windstream’sCorporate Governance Board Guidelines concerning mandatory retirement at age 75.
(4)		On April 24, 2015, Mr. Frantz resigned as a director of the Company to assume the role of Chairman of the Board of Directors of Communications Sales & Leasing, Inc.
(5)		Amount reflects change in pension value for the Windstream Pension Plan and Benefit Restoration Plan.

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company structureThere are currently eleven directors serving on the Board, all of whose terms expire at the Annual Meeting. Judy K. Jones and William A. Montgomery have advised the Board that they will not stand for re-election at the Annual Meeting.Upon the unanimous recommendation of our Governance Committee, the Board has unanimously nominated Jeffrey T. Hinson, Tony Thomas, Carol B. Armitage, Samuel E. Beall III, Jeannie Diefenderfer, William G. LaPerch, Larry Laque, Michael G. Stoltz, and Alan L. Wells for election as directors at the Annual Meeting and has determined that the size of the board will be reduced to nine following the expiration of the current terms of Ms. Jones and Mr. Montgomery. Each nominee elected will serve until the 2017 Annual Meeting of Stockholders or until their successors are duly elected and qualified or until the earliest of their removal, resignation or death.

Holders of proxies solicited by this Proxy Statement will vote the proxies received by them as directed on the proxy card or, if no direction is made, for the stockholderselection of the holding companyBoard’s nine nominees. If any nominee is unable or declines to have direct voting rights as to matters that affect only subsidiaries of the holding company. By lifting this requirement, Windstream Holdings will gain the flexibility and efficiency currently realized by nearly all other companies who operate under the same, or similar, holding company and subsidiary structure.

Impact on Stockholder Rights

The amendment would have no effect on the right of stockholders of Windstream Holdings to vote on matters relating to Windstream Holdings, suchserve as a merger or consolidation of Windstream Holdings, a sale of all or substantially all of Windstream Holdings’ assets, amendments to Windstream Holdings’ certificate of incorporation, or any other matter requiring the approval of Windstream Holdings stockholders under applicable law.

While this amendment would eliminate the right of the stockholders of Windstream Holdings to vote on transactions occurring at the Windstream Corporation level, Windstream Holdings’ stockholders will retain their right under applicable law to approve a sale of substantially all of the assets of Windstream Corporation. Delaware law requires stockholder approval before a corporation can sell all or substantially all of its assets. Section 271 of the DGCL expressly provides that, for purposes of determining whether all or substantially all of a corporation’s assets are being sold, the property and assets of the corporation include the property and assets of its subsidiaries. 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 sale of substantially all of Windstream Corporation’s assets because such a transaction would constitute a sale of substantially all of the assets of Windstream Holdings.

Consequences of Non-Approval

If the Subsidiary’s Voting Provision Proposal is not approved, the Board will consider whether proceeding with the Spin-Off, notwithstanding this additional tax liability of approximately $600 - $800 million, is in the best interests of stockholders. As a result, if the Subsidiary’s Voting Provision Proposal is not approved, the Board may determine to abandon the Spin-Off.

The Spin-Off of Windstream Holdings’ fiber and copper network and other fixed real estate assets into a publicly-traded REIT provides a number of strategic benefits to Windstream Holdings stockholders. The Spin-Off is expected to unlock stockholder value by creating two independent public companies with distinct investment characteristics. If the Spin-Off is not consummated, the Company would not realize these benefits.

Board Recommendation; Vote Required

The Board believes that the proposed amendment to Windstream Corporation’s certificate of incorporation is in the best interests of the Company and its stockholders based on the factors and considerations listed above, including the elimination of a significant tax liability based on the Conversion, and the negative financial implications of non-approval. Accordingly, the Board recommends that the stockholders of Windstream Holdings vote in favor of the proposed amendment, which eliminates the Voting Provision from Windstream Corporation’s Amended and Restated Certificate of Incorporation. If holders of a majority of the outstanding shares of Common Stock of Windstream Holdings vote in favor of the proposal, then Windstream Corporation will promptly file an amendment to its Amended and Restated Certificate of Incorporation with the State of Delaware to delete the Voting Provision. Abstentions from voting and broker non-votes, if any, will have the same effect as votes against the adoption of the proposal.

YOUR BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE “FOR” THE SUBSIDIARY’S VOTING PROVISION PROPOSAL.

PROXIES SOLICITED BY THE BOARD WILL BE VOTED “FOR” THE SUBSIDIARY’S VOTING
PROVISION PROPOSAL UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.

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PROPOSAL 3
THE ADJOURNMENT PROPOSAL

APPROVE AN ADJOURNMENT TO SOLICIT ADDITIONAL PROXIES, IF NECESSARY

General

If this proposal is adopted, the Special Meeting may be adjourned to another time and place, if necessary or appropriate, in the sole discretion of the chairman of the Special Meeting, to obtain a quorum or to permit, among other things, further solicitation of proxies if necessary to obtain additional votes in favor of the Reclassification Proposal and the Subsidiary’s Voting Provision Proposal.

Board Recommendation; Vote Required

Accordingly, we are asking Windstream Holdings stockholders to authorize the holder of any proxy solicited by the Board to vote in favor of the proposal that the chairman of the Board adjourn the Windstream Holdings Special Meeting, if necessary and appropriate, in the sole discretion of the chairman of the Special Meeting, to obtain a quorum or to solicit additional proxies if there are not sufficient votes to approve the Reclassification Proposal and the Subsidiary’s Voting Provision Proposaldirector at the time of the Special Meeting. We currently intendAnnual Meeting, the proxy holders will vote for a nominee designated by the present Board to adjournfill the Special Meeting if there are insufficient votesvacancy or, in the event no such designation is made, proxies will be voted for a lesser number of nominees.

Set forth below is biographical information for each nominee, including age, a brief listing of principal occupations for at least the past five years, other major affiliations, and the specific experience, qualifications, attributes and skills that qualify each candidate to serve on Windstream’s Board of Directors.

Biography

Carol B. Armitage has served as a director since September 2007, and is a member of theGovernance and Audit Committees. Upon her election at the timeAnnual Meeting, Mr. Armitage will serve on the Audit and Compensation Committees. Ms. Armitage has served as a telecommunications consultant since 1998. From 1995 to 1997 she served as Senior Vice President – Technology and Strategy at General Instrument. Prior to 1995, she held various management and engineering positions during sixteen years of service with Bell Laboratories and Network Systems (which later became Lucent). From 2000 until August 2015, Ms. Armitage served and held various leadership positions on the board of directors of SCALA, Inc., a provider of digital signage and advertising management solutions, including as Board Chairman from March 2010 to March 2012, and Vice Chairman from 2000 to February 2010, and again from March 2012 to September 2015. From 2002 to 2004, Ms. Armitage served as Chairman of the Special Meeting to approve bothBoard and on the Reclassification ProposalAudit Committee of YDI Wireless (now known as Proxim Wireless Corporation), then a public company engaged in the development and the Subsidiary’s Voting Provision Proposal.provision of wireless fiber technologies. 

YOUR BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE “FOR” THE ADJOURNMENT PROPOSAL.Skills and Qualifications Specifically Applicable to Windstream

PROXIES SOLICITED BY THE BOARD WILL BE VOTED “FOR” THE ADJOURNMENT
PROPOSAL UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.Ms. Armitage’s qualifications for election to the Board include her extensive knowledge of technologies impacting the telecommunications industry based on her deep industry experience and her educational training including an M.S. in electrical engineering from Princeton University. Her service on the boards of other companies, including as Chair, has given her additional experience in business operations, strategic planning, financial reporting, and mergers and acquisitions.

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SAMUEL E. BEALL, III	Age: 65			Director Since:2006
Independent Director
Occupation:Investment Banker/Private Investor Current Board Committees ●Compensation (Chair) Future Committee Assignments ●Compensation ●Governance Other Current Public Board Memberships ●None	Qualification Highlights:
	✓		Leadership – Former Board Chair - Public Company; and Former Chairman and CEO - Public Company
	✓		Corporate Governance; Business Strategy and Functions; Financial Literacy and Reporting
	✓		Risk Management and Assessment
	✓		Executive Compensation Design

Biography

Samuel E. Beall, III has served as a director since November 2006 and is currently the Chairof the Compensation Committee. Upon his election at the Annual Meeting, Mr. Beall will serve on the Compensation and Governance Committees. Mr. Beall is Strategic Partner of Arlington Capital Advisors, a boutique investment bank, and is a principal in Beall Investments LLC, a private investment company. Mr. Beall served as Chairman of the Board and Chief Executive Officer of Ruby Tuesday, Inc. (NYSE: RT), which owns and operates casual dining restaurants under the Ruby Tuesday brand, from May 1995 to June 2012, and as President of Ruby Tuesday, Inc. from July 2004 until June 2012. Mr. Beall currently serves on the board of directors of Pilot Travel Centers LLC, a private company operating travel centers and travel plazas throughout North America.

Skills and Qualifications Specifically Applicable to Windstream

Mr. Beall’s qualifications for election to the Board include his experience as the chief executive officer of a public company, which provides him the ability to understand and address Windstream’s challenges and opportunities as a public company. As a former chief executive officer of a public company and a director of several private businesses, he has insight on managing complex business operations, overseeing business risk, designing compensation programs that motivate people, developing national advertising campaigns, assessing corporate governance issues, and financial reporting requirements for public companies.

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Biography

Jeannie Diefenderfer has served as a director since February 2016 and, upon her election at the Annual Meeting, she will serve on the Governance Committee. She is the founder and CEO of courageNpurpose, LLC, a consulting firm providing advisory services to boards and CEOs in strategic initiatives to drive operational and business efficacy. Previously she spent over 10 years in executive leadership roles at Verizon Communications, including leading Verizon’s global customer care organization for its largest enterprise customers, serving as Chief Procurement Officer, and as Senior Vice President of Global Engineering & Planning. Ms. Diefenderfer is a member of the Boards of Directors of MRV Communications, Inc. (NASDAQ: MRV), where she serves on the Compensation and Nominating and Governance Committees, and Westell Technologies, Inc. (NASDAQ: WSTL). She is also a member of the Accenture Network Advisory Council and a strategic advisor to Vasona Networks and Federated Wireless.

Skills and Qualifications Specifically Applicable to Windstream

Ms. Diefenderfer’s qualifications for election to the Board include over 28 years of technical and operational experience in the telecommunications industry, her senior executive positions, and her service on other public and advisory Boards, providing her the ability to offer insight on corporate governance matters and business issues to be addressed by Windstream. Her experience with strategic planning and advising on business matters provides her with key insight on situations arising within Windstream.

Biography

Jeffrey T. Hinson has served as a director since Windstream’s formation in 2006 and as Chairman of the Board since May 2013. Mr. Hinson served on the Audit Committee from 2006 to May 2013 and as Chair of the Audit Committee from May 2010 to May 2013. Mr. Hinson has been the President of YouPlus Media LLC, a video content marketing firm, since June 2009. From July 2007 to July 2009, Mr. Hinson served as the President and Chief Executive Officer and a member of the board of directors of Border Media Partners, LLC, a Hispanic-focused radio broadcasting company. Mr. Hinson previously served in a number of roles at Univision Communications Inc., a Spanish language media company, including as Executive Vice President and Chief Financial Officer (March 2004 to June 2005) and as Senior Vice President and Chief Financial Officer of Univision Radio, the radio division of Univision (September 2003 to March 2004). Since 2005, Mr. Hinson has been a director and Chairman of the Audit Committee of Live Nation Entertainment, Inc. (NYSE: LYV), a global entertainment company that promotes live music events, operates music venues, sells tickets to entertainment and sporting events, and provides management services to music recording artists. He also serves as a director, and as Chairman of the Audit Committee, of TiVo, Inc. (NASDAQ: TIVO), a provider of subscription-based DVR services and interactive video advertising. Until 2014, Mr. Hinson served as a director, Audit Committee member and Chairman of the Nominating and Governance Committee of Ares Commercial Real Estate Corporation (NYSE: ACRE), a specialty finance company and real estate investment trust focused on originating, investing in and managing middle-market commercial real estate loans and investments.

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Skills and Qualifications Specifically Applicable to Windstream

Mr. Hinson’s qualifications for election to the Board include his extensive professional background and experience, his previously held senior-executive level positions at two public companies for approximately 15 years, his service on other public company boards, including committee membership and committee chair roles, his extensive experience with companies in the media sector, and his financial and accounting expertise. His service on the board of other public companies in diverse industries provides him unique insight into corporate governance matters affecting public companies and offers him a broad perspective on the challenges and opportunities facing Windstream.

Biography

William G. LaPerch has served as a director since September 2014 and is a memberof the Compensation and Governance Committees. Upon his election at the Annual Meeting, he will continue to serve on these Committees, and he will become the Chair of the Compensation Committee. Mr. LaPerch has been President of LaPerch Consulting, LLC (a provider of consulting services to private equity firms) from September 2012 to the present. From 2004 to 2012, Mr. LaPerch served as the President and Chief Executive Officer and a member of the board of directors of AboveNet, Inc., then a publicly traded provider of bandwidth infrastructure services, prior to which he served as Senior Vice President Operations. Mr. LaPerch served in executive management positions at Metromedia Fiber Network (a provider of metro fiber services and predecessor to AboveNet) from 2000 to 2003, several key leadership roles in the operations and engineering at MCI Worldcom, Inc. (a global communications company) from 1989 to 2000, and operations and engineering positions at NYNEX Corporation (a regional telephone company) from 1982 to 1989. Mr. LaPerch is currently a member of the Board of Directors Digital Realty Trust, Inc. (NYSE: DLR) and serves on the Compensation Committee and as Chair of the Nominating and Governance Committee, and a member of the board of directors of several privately held network services and technology companies. From November 2012 to August 2015, Mr. LaPerch served as a member of the board of directors of Imation Corp. (NYSE: IMN), a global scalable storage and data security company.

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Skills and Qualifications Specifically Applicable to Windstream

Mr. LaPerch’s qualifications for election to the Board include his ability to provide guidance and perspective on a wide range of issues facing Windstream based on his long tenure as a senior executive in the telecommunications industry and leading a publicly-traded telecommunications company as President and CEO. His operational experience in unique aspects of Windstream’s business, including bandwidth consumption, colocation, interconnection, and the complex regulatory framework in which the company operates, provides Mr. LaPerch with a deep understanding of Windstream’s business and opportunities available to the Company. Through his current and former board and committee service for two public companies, and his past and present involvement with several private companies, Mr. LaPerch has valuable expertise regarding corporate governance matters and can provide key insight to the Board on these matters.

Biography

Larry Laque has served as a director since February 2016. Upon his election at the Annual Meeting, he will serve as a member of the Audit Committee. Mr. Laque currently serves as Executive Vice President – Global Real Estate and Facilities for Discovery Communications, Inc. (NASDAQ: DISCA). In addition to his current position, he has held key leadership roles at Discovery during the last 14 years, including Executive Vice President and Co-CIO and Co-Head of Enterprise Operational Services from 2010 to 2015, and in executive positions in the IT organization from 2002 to 2010. Prior to joining Discovery in 2002, he held several leadership positions in network planning and implementation, operations and customer service at MCI Worldcom, Inc. and MCI Communications from 1982 to 2002.

Skills and Qualifications Specifically Applicable to Windstream

Mr. Laque’s qualifications for election to the Board include his extensive executive experience in the telecommunications and media sectors, with over thirty years of experience in key operational and leadership positions at global companies. His experience as an IT executive provides him unique perspective on security and cybersecurity risks that may face public companies, including Windstream. He possesses insight into overseeing operations of large organizations, managing teams, and addressing corporate issues and business risks that may be presented. He understands financial statements and can advise on financial reporting matters.

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Biography

Michael G. Stoltz has served as a director since September 2014. Mr. Stoltz currentlyserves as chair of the Audit Committee and will remain so upon his election at the Annual Meeting. He was an audit partner of Ernst & Young LLP from 2002 to 2014, primarily focusing on the communications, media and entertainment industries. He led E&Y’s Communications Advisory Services Group from 2002 until mid-2004, which focused on providing advisory services to communications companies. Prior to joining E&Y, Mr. Stoltz was a partner with Arthur Andersen where he provided audit, finance and specialized project services to clients in the energy, governmental and telecommunications sectors.

Skills and Qualifications Specifically Applicable to Windstream

Mr. Stoltz’s qualifications for election to the Board include his approximately 40 years of experience serving in an auditor capacity in the telecommunications, media and entertainment industries, with a focus on large global companies. His broad experience as the former audit partner for publicly-traded communications companies uniquely qualifies Mr. Stoltz to advise Windstream not only on general financial and accounting matters, but also various technical accounting and corporate governance matters that the Board may address from time to time. He possesses key insight on financial reporting processes and external reporting issues. The Board has determined that Mr. Stoltz qualifies as an “audit committee financial expert,” as defined by the rules of the SEC. Mr. Stoltz’s lengthy involvement with telecommunications companies provide him with valuable expertise regarding issues facing Windstream and the complex regulatory environment in which the company operates.

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Biography

Tony Thomas was appointed President & Chief Executive Officer (CEO) andto the Board of Directors on December 11, 2014. He previously held the following positions at Windstream prior to his appointment as President & CEO: President-REIT Operations (September to December 2014); Chief Financial Officer (August 2009 to September 2014); Treasurer (May 2012 to August 2013); and Controller (July 2006 to August 2009). Mr. Thomas also served as Controller of Alltel Holding Corp. from June 2006 to July 2006, the predecessor entity to Windstream Holdings, Inc., and held various other leadership positions with Alltel Corporation, a former publicly-traded wireless company, from 1998 to 2006, including Vice President of Investor Relations and Vice President of Southeast Regional Finance. Mr. Thomas joined Alltel after its merger with 360 Communications in 1998. Prior to entering the communications industry, Mr. Thomas was a senior auditor with Ernst & Young LLP focusing on the telecom practice.

Skills and Qualifications Specifically Applicable to Windstream

The Board believes it is important for Windstream’s CEO to serve on the Board, as the position of CEO puts Mr. Thomas in a unique position to understand the challenges and issues facing Windstream. Mr. Thomas’s qualifications for election to the Board include the same demonstrated skills and experience that qualify him to serve as CEO. Mr. Thomas has worked in the communications industry for more than 20 years and has played an integral role in Windstream’s growth, as during his five-year tenure as CFO, the Company completed seven acquisitions totaling more than $5.6 billion in transaction value. As CEO, Windstream completed a transformative transaction by spinning off certain real estate assets into a publicly-traded real estate investment trust, Communications Sales & Leasing, Inc. (NASDAQ: CSAL). Additionally, Windstream completed the sale of its data center operations and entered into a key reciprocal strategic partnership with the buyer to provide data center and network services to each other’s customers. Mr. Thomas has deep capital market expertise, having led almost $10 billion in debt transactions, as CFO and Treasurer of Windstream. Mr. Thomas’s knowledge of the Company and his experience as a company leader since its spin-off from Alltel Corporation in 2006 provide him with a wide-ranging perspective regarding Windstream’s opportunities and overall strategy and qualify him to serve as both CEO and as a director on the Board.

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Biography

Alan L. Wells has served as a director since 2010 and is a memberof the Audit and Compensation Committees. Upon his election at the Annual Meeting, he will continue to serve on the Audit Committee, will leave the Compensation Committee and will become Chair of the Governance Committee. He is a founding partner of FinancialAdvisory Partners, LLC, which makes private equity investments and provides investment banking services to mid-sized companies in the Midwest. He served as Chief Executive Officer of Iowa Telecommunication Services, Inc. (formerly NYSE: IWA) from 2002 to 2010 and Chairman of its board of directors from 2004 to 2010. He joined Iowa Telecom in 1999 as President and Chief Operating Officer, and was appointed to the role of President and Chief Executive Officer in 2002. Prior to joining Iowa Telecom, Mr. Wells was Senior Vice President and Chief Financial Officer at MidAmerican Energy Holdings Company (NYSE: MEC), a Des Moines, Iowa-based electric and gas utility holding company, from 1997 until 1999. During the same period, Mr. Wells also served as President of MidAmerican’s non-regulated businesses. Mr. Wells held various executive and management positions with MidAmerican, its subsidiaries, and Iowa-Illinois Gas and Electric, one of its predecessors, from 1993 through 1999. Prior to that, Mr. Wells was with Deloitte Consulting (previously Deloitte & Touche Consulting) and previously held various positions with the Public Utility Commission of Texas and Illinois Power Company. He has been a CPA for over twenty years.

Skills and Qualifications Specifically Applicable to Windstream

Mr. Wells’ qualifications for election to the Board include his broad background and experience, his wide range of operational and financial experiences in regulated industries, and his prior experience as a senior executive with two public companies. The Windstream Board has determined that Mr. Wells qualifies as an “audit committee financial expert,” as defined by the rules of the SEC. Through his prior experience as a senior executive in the telecommunications and other regulated industries, he has insight on managing complex regulated enterprises, developing strategic plans in changing regulatory environments, overseeing financial reporting processes, executing large capital market transactions, and addressing various corporate governance matters arising in public companies.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Stock Ownership Guidelines. In November 2015, the Windstream Board of Directors adopted new minimum stock ownershipguidelines for Windstream’s directors and executive officers. The spin-off of Communications Sales & Leasing, Inc., and the reverse stock split in April 2015 resulted in a recapitalization of the Company, and upon the recommendation of the Compensation Committee, the Board revised the guidelines to include new ownership levels consistent with the changes in capital structure. The new guidelinesrequire directors and executive officers to meet minimum stock ownership levelsequal to the lesser of (i) a value-based multiple of salary or retainer, as applicable, or (ii) a fixed number of shares of common stock.

Directors who are not executive officers are expected to maintain minimum beneficial ownership of shares of Windstream commonstock at levels equaling the lesser of either (i) 40,000 shares of common stock or (ii) a number of shares valued at least three times the annual retainer paid to non-management directors. Executive officers are expected to maintain minimum beneficial ownership of shares ofWindstream common stock at levels equaling the lesser of either (i) a number of shares equal to the value-based multiple or (ii) the specified fixed number of shares, each as provided in the following table.

Directors and executive officers in their positions at the time of adoption of the new guidelines have until December 31, 2020, to attain the ownership levels described above, and each new director and executive officer will have a transition period of five years from the date of his or her appointment to attain the applicable ownership level. During the transition period and until the director or officer satisfies the specified ownership levels, the guidelines impose a retention ratio that provides that each officer and director is expected to retain at least 50% of the shares received, net of tax payment obligations, upon the vesting of restricted stock or the exercise of stock options. Directors and officers are also required to hold for at least six months all shares received, net of tax payment obligations, upon vesting of restricted equity awards or the exercise of stock options. For the purposes of the guidelines, unvested time-based shares or units of restricted stock are considered beneficially owned, while unvested performance-based shares or units of restricted stock do not count toward satisfaction of the stock ownership guidelines for executive officers.

The table below sets forth the applicable guideline share amount for each named executive officer and the number of shares of Windstream common stock that each such officer is deemed to own under the guidelines as of March 1, 2016.

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The table below sets forth the applicable guideline share amount for each non-management director standing for election at the Annual Meeting and the number of shares of Windstream common stock that each such director is deemed to own under the guidelines as of March 1, 2016.

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Security Ownership of Directors and Executive Officers.Set forth below is certain information, as of December 31, 2014,March 1, 2016, as to shares of Windstream Holdings Common Stockcommon stock beneficially owned by each director, by each named executive officer, who was serving as an executive officer during 2014, and by all directors and executive officers of Windstream Holdings as a group. Except as otherwise indicated by footnote, the nature of the beneficial ownership is sole voting and investment power, and no shares are pledged as security:

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Security Ownership of Certain Beneficial Owners.Owners. Set forth below is information, as of December 16, 2014,March 17, 2016, withrespect to any person known to Windstream Holdings to be the beneficial owner of more than 5% of any class of Windstream Holdings’Windstream’s voting securities, all of which are shares of Common Stock:common stock:

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AUDIT COMMITTEE REPORT

This report provides information concerning the Audit Committee of Windstream Holdings, Inc.’s Board of Directors. The Audit Committee’s Charter is available on the Investor Relations page of Windstream Holdings, Inc.’s website atwww.windstream.com/investors. The Audit Committee is comprised entirely of independent directors, as defined and required by SEC rules and regulations and NASDAQ listing standards, and directors who are financially literate. Additionally, Messrs. Stoltz and Wells and Ms. Jones qualify as audit committee financial experts.

In connection with its function to oversee and monitor the financial reporting process of Windstream Holdings, Inc. and its subsidiaries, the Audit Committee has reviewed and discussed with management of Windstream Holdings, Inc. and Windstream Services, LLC, which is a wholly-owned subsidiary of Windstream Holdings, Inc., the audited consolidated financial statements for the year ended December 31, 2015 of Windstream Holdings, Inc. and Windstream Services, LLC; discussed with PricewaterhouseCoopers LLP, the independent registered public accountant of Windstream Holdings, Inc. and Windstream Services, LLC, the matters required to be discussed by Auditing Standard No. 16, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (United States); received the written disclosures and the letter from PricewaterhouseCoopers LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence; and has discussed with PricewaterhouseCoopers LLP its independence.

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors of Windstream Holdings, Inc. and Windstream Services, LLC that the audited consolidated financial statements for the year ended December 31, 2015 be included in the Annual Report on Form 10-K of Windstream Holdings, Inc. and Windstream Services, LLC for the fiscal year ended December 31, 2015 for filing with the Securities and Exchange Commission.

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis provides information regarding the compensation paid to our Chief Executive Officer, Chief Financial Officer and certain other current and former executive officers who were the most highly compensated in fiscal year 2015. These individuals, referred to as “named executive officers” or “NEOs”, are identified by name in the Summary Compensation Table.

Compensation Philosophy

Windstream’s executive compensation program is designed to achieve the following objectives:

Executive Summary

Heading into 2015, Windstream was undergoing leadership changes, restructuring into business units, and pursuing a spin-off of its real estate assets. Given these changes and uncertainties, the Compensation Committee determined that any substantive changes to the executive compensation program should be postponed until 2016, resulting in the 2015 executive compensation program remaining similar to prior years but with the following changes affecting the NEOs:

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Although the changes did not completely implement all suggestions made by some stockholders during our outreach efforts in 2014 and 2015, theCompensation Committee believes the 2015 compensation structure was appropriate, responsive, and aligned with the Company’s strategy, structure, and priorities while not being additionally disruptive to the leadership team.

2015 Performance Results

Despite the significant organizational, operational, and leadership changes, the Company produced strong financial results while also accomplishing several major objectives:

These financial results were aligned with expectations for the year set by the Board, and the strategic accomplishments position the Company for continued success.

2015 Compensation Results

These financial results and strategic accomplishments resulted in the following compensation results for the NEOs:

The Compensation Committee believes that these “near or at target” payout results are well aligned with the Company’s financial performance and strategic accomplishments during 2015.

2016 Compensation

With the organizational, operational, and leadership changes completed during 2015, the Compensation Committee used the second half of the year to review and consider more substantive changes to the executive compensation program for 2016 that would be responsive to the following primary considerations:

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In light of these considerations, the Compensation Committee approved the following plan design changes to the executive compensation program for 2016:

The Compensation Committee believes that these changes are responsive to stockholders, reflective of the new organizational structure and priorities, and will continue to align pay and performance.

The Company received positive stockholder support in 2015 via the annual Say on Pay vote, and it hopes to obtain continued stockholder support this year and in future years. The Compensation Committee believes the solid results for 2015 were indicative of a tight linkage between pay and performance and that the changes we have adopted for 2016 will further strengthen this linkage as we move forward. Additionally, we highlight the following practices that we believe further demonstrate our commitment to sound governance principles and responsible practices with respect to executive compensationfor executive officers:

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Say on Pay. Stockholders at the 2016 Annual Meeting will be asked to approve, on an advisory basis, the compensation of our NEOs. Stockholder advisory votes on executive compensation are currently solicited on an annual basis.

The following are key considerations that stockholders should take into account when assessing our executive compensation program. The Company:

	executed a focused operational strategy which is driving improved financial results
	●	implemented a business segment structure with clear, focused strategies
	●	improved financial performance and met financial guidance
	allocated capital and returned value to stockholders
	●	significantly enhanced its network capabilities by completing key broadband network upgrades to improve our internet service offerings and expanding the carrier network to focus on key growth areas
	●	returned a dividend to our shareholders and repurchased 7.5 million shares of our common stock, over 7% of the outstanding shares, whichsuch share repurchases did not impact short-term or long-term incentive payouts for NEOs because the performance measures (Total Service Revenue and Adjusted OIBDAR) were not impacted by the repurchase program
	optimized the balance sheet
	●	completed the spin-off of CS&L and divested the data center business at an attractive valuation, enabling us to reduce debt by $3.5 billion
	●	improved its debt maturity profile and reduced interest expense

How We knowDetermine Compensation

Compensation Committee. Windstream’s Compensation Committee is presently comprised of Samuel E. Beall, III,as Chair, William G. LaPerch, William A. Montgomery, and Alan L. Wells. The Windstream Board has determined that each member of the Compensation Committee is an independent director under NASDAQ listing standards and a “non-employee director” for purposes of Section 16 of the Exchange Act and Messrs. Beall, LaPerch and Montgomery are considered “outside directors” as defined in Section 162(m) of the Internal Revenue Code and comprise the 162(m) subcommittee. Assuming their election to the Board at the upcoming Annual Meeting, as of the date of the Annual Meeting, the members of the Compensation Committee will be Mr. LaPerch, as Chair, Mr. Beall, and Carol Armitage. The Compensation Committee assists the Board in fulfilling its oversight responsibility related to the compensation programs, plans, and awards for Windstream’s directors and principal officers. The Compensation Committee annually reviews and approves goals relevant to our CEO’s compensation and, based on an annual evaluation of these performance goals, determines and approves our CEO’s compensation. The Committee conducts this review using a survey of compensation data of comparable employers that is prepared by the Committee’s outside compensation consultant based on criteria specified by the Committee.

Independent Consultant. The Compensation Committee has the authority to retain and terminate any executive compensation consultant to be used in the evaluation of director, CEO or executive officer compensation and to approve the consultant’s fees and other retention terms. It is the policy of the Compensation Committee that the compensation consultant should perform no services for Windstream other than services as consultant to the Compensation Committee. During 2015, the Compensation Committee engaged Pearl Meyer & Partners, LLC (“PM&P”) to assist the Committee in the review and design of Windstream’s executive compensation program. PM&P reports directly to the Compensation Committee. During 2015, PM&P conducted a competitive review of Windstream’s executive pay levels and executive pay program designs, with such data and information being used by the Committee, along with all other relevant information, to inform the Committee’s decisions regarding the executive compensation program. PM&P provided a self-assessment to the Compensation Committee in 2015 relative to the independence standards required by the stock exchanges. The self-assessment included the following information:

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Competitive Market Analysis. As part of the process of approving executive compensation levels and plan designs, the Compensation Committee regularly reviews and considers competitive market data. This competitive market analysis generally takes place in the fall of each year and is used as part of the decision-making process for the following year. During 2014, PM&P provided, and the Compensation Committee reviewed, competitive market data as part of its process for approving 2015 executive compensation levels and plan designs.

Given the limited number of direct industry peers with a similar business model and of comparable size, the competitive market analysis focused on compensation survey data from reputable surveys that are size-adjusted using regression formulas. The 2014 market analysis used compensation surveys from Watson Wyatt, Mercer, and PM&P, and all data was size-adjusted to reflect annual revenues of $6 billion. In considering the survey data, the Committee did not request the identity of or review the specific companies that are included in any of the surveys reference above.

In addition to compensation levels, the Committee often requests that PM&P provide proxy data with respect to compensation plan designs and company performance. Because these elements are less impacted by company size, PM&P’s 2014 market analysis included plan design and company performance data from a specific group of companies which included:

The Committee believes that the consideration of plan designs and performance levels among these companies provides an additional useful reference point for the plan designs and degree of pay and performance alignment at Windstream. Examples of plan design include the number and weighting of performance metrics and the types of performance metrics used in incentive plans, the allocation of cash and equity in total direct compensation, and the allocation of fixed compared to performance-based compensation. This group of companies represents a broad group of FORTUNE 500 companies in telecom, technology and services industry.

While consideration is given to the competitive market data, the Compensation Committee uses it primarily as a reference point and does not specifically target compensation to any market percentile. In addition to competitive market data, the Committee reviews and considers factors such as:

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Only after careful consideration of all relevant facts and circumstances does the Committee exercise judgment and make compensation decisions.

Windstream Management

Elements of 2015 Compensation

For 2015, the compensation of Windstream’s NEOs consists of three principal components:

The compensation program for the NEOs also includes the Windstream 2007 Deferred Compensation Plan, the Windstream 401(k) Plan, change-in-control agreements, and limited perquisites.

Base Salary. Base salary represents a stable means of cash compensation to our executive officers. Our goal in setting base salary amounts is to provide competitive compensation that reflects the contributions and skill levels of each executive. However, consistent with our philosophy of tying pay to performance, our executives receive a relatively small percentage of their overall compensation in the form of base salary.

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Short-Term Cash Incentive Payments.Windstream maintains short-term cash incentive plans designed primarily to motivate executives to achieve Company-wide performance goals over annual or quarterly periods. Under these plans, the Compensation Committee sets different target payout amounts (as a percentage of base salary) for all executive officers in order to reflect such individual’s contributions to Windstream and the market level of compensation for such position. The Compensation Committee believes these short-term incentive plans are a key part of its goal to make a substantial portion of total direct compensation at-risk.

During 2015, the NEOs participated in a short-term cash incentive plan based on Windstream’s achievement of certain Adjusted OIBDAR, Total Service Revenue and Business Unit Contribution Margin levels. The Compensation Committee selected these financial measures because they provide strong alignment with the Company’s focused operational strategy and our capital allocation policy. The Compensation Committee previously established Adjusted OIBDA as a performance metric in first quarter 2015. Following the Company’s spin-off of CS&L in April 2015, however, this metric was revised to Adjusted OIBDAR—which excludes the lease payment made to CS&L—in order to retain comparability and consistency with the external financial presentation of the Company. References in this Proxy Statement to Adjusted OIBDA include Adjusted OIBDAR, unless otherwise noted. Set forth below is more detail regarding these financial measures:

Under the short-term incentive plan, executive officers are eligible to receive payments in proportion to Windstream’s achievement of certain levels of each performance measure set at minimum (or threshold), target and maximum levels. The Compensation Committee sets each performance goal at levels it believes to be difficult but achievable and designed to drive results. No payout is made if performance is below the threshold levels, and performance between threshold, target and maximum levels results in prorated payouts.

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The table below sets forth the 2015 performance goal levels for Messrs. Thomas, Gunderman, Fletcher, and Eichler: