exv10w4



 





Exhibit 10.4


FIRST AMENDMENT TO




SECURITYHOLDERS AGREEMENT




     THIS FIRST AMENDMENT TO SECURITYHOLDERS AGREEMENT (this “Amendment”) is made and
entered into as of July 17, 2006 by and among Windstream Corporation (f.k.a. Valor Communications
Group, Inc.) (the “Company”) and the Investors signatory hereto.



     WHEREAS, the Company and the Investors entered into that certain Securityholders Agreement
(the “Securityholders Agreement”), dated as of February 14, 2005;



     WHEREAS, the Company entered into an Agreement and Plan of Merger, dated as of December 8,
2005, by and among Alltel Corporation, Alltel Holding Corp. (“Spinco”) and the Company (the
“Merger Agreement”), pursuant to which Spinco will merge with and into the Company upon the
terms and subject to the conditions set forth in the Merger Agreement (the “Merger”); and



     WHEREAS, as a condition to the consummation of the transactions contemplated by the Merger
Agreement, the Company and certain Investors agreed to amend the terms of the Securityholders
Agreement as set forth herein.



     NOW, THEREFORE, in consideration of the covenants and agreements contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto do hereby agree:




	1.	 	Definitions. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Securityholders Agreement.
	 
	2.	 	Amendments. Effective simultaneously with the consummation of the Merger,
Securityholders Agreement is hereby amended as follows:






	 	(A)	 	Section 1 of the Securityholders Agreement is hereby amended as follows:






	 	(I)	 	the definitions of “Company Offering,” “Delay
Notice,” “Information Delay Notice,” “Shelf Registration
Statement,” and “Transaction Delay Notice” are hereby deleted in
their entirety and replaced with the following:
	 
	 	 	 	“Company Offering” shall have the meaning set forth in
Section 4(c) hereof.
	 
	 	 	 	“Delay Notice” shall have the meaning set forth in Section
4(c) hereof.
	 
	 	 	 	“Information Delay Notice” shall have the meaning set forth
in Section 4(a) hereof.




 









 






	 	 	 	“Shelf Registration Statement” shall have the meaning set
forth in Section 4(a) hereof.
	 
	 	 	 	“Transaction Delay Notice” shall have the meaning set forth
in Section 4(c) hereof.
	 
	 	(II)	 	the following definitions are hereby added to Section 1 of the
Securityholders Agreement:
	 
	 	 	 	“Merger” shall mean the merger of Alltel Holding Corp. with
and into the Company pursuant to the Merger Agreement.
	 
	 	 	 	“Merger Agreement” shall mean that certain Agreement and
Plan of Merger, dated as of December 8, 2005, by and among the
Company, Alltel Corporation and Alltel Holding Corp.
	 
	 	 	 	“Underwritten Offering” shall have the meaning set forth in
Section 4(b) hereof.”
	 
	 	(III)	 	the following definitions are hereby deleted from Section 1 of
the Securityholders Agreement:
	 
	 	 	 	“Long-Form Registrations”
	 
	 	 	 	“Short-Form Registrations”
	 
	 	 	 	“Threshold Amount”
	 
	 	 	 	“Vestar Designee”
	 
	 	 	 	“Welsh Designee”






	 	(B)	 	Section 4 of the Securityholders Agreement is hereby amended by deleting such
Section in its entirety and substituting in lieu thereof the following:






“4. Shelf Registration; Underwritten Offerings;




(a) Shelf Registration.




(i) Filing of Shelf Registration Statement. As soon as practicable after
the consummation of the Merger, the Company shall, at its cost, prepare and file and
use its reasonable best efforts to cause to be declared effective a shelf
registration statement pursuant to Rule 415 of the Securities Act (the “Shelf
Registration Statement”) covering all of the Registrable Securities held by the
Investors. The Company shall use its reasonable best efforts to keep such Shelf
Registration Statement continuously effective, supplemented and amended as required
by the provisions of Section 7 hereof to the extent necessary to ensure that it is
available for resales of the Registrable Securities by the holders thereof entitled
to benefit



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from this Section 4(a), and to ensure that it conforms to the requirements of this
Agreement, the Securities Act and the policies, rules and regulations of the
Commission as announced from time to time, for a continuous period until the earlier
to occur of (i) the second anniversary of the effectiveness of the Shelf
Registration Statement (extended as may be necessary to compensate for any periods
during which sales of Registrable Securities are suspended under the Shelf
Registration Statement as provided in this Agreement) or (ii) the date on which each
of the Welsh Investors and the Vestar Investors may sell all of their respective
Registrable Securities without regard to volume limitation pursuant to Rule 144 of
the Securities Act.




(ii) Suspension of the Shelf Registration Statement. The Company may
suspend sales under the Shelf Registration Statement if the Company determines in
its good faith judgment after consultation with its securities counsel that the
filing of an amendment or supplement to the Shelf Registration Statement is
necessary in order to effect resales pursuant to the Shelf Registration Statement
and such filing would require disclosure of material non-public information which
the Company has a bona fide business purpose for preserving as confidential and the
Company provides the Investors written notice (the “Information Delay
Notice”) thereof promptly after the Company makes such determination, the
Company may suspend resales of Registrable Securities under the Shelf Registration
Statement for up to 75 days. Notwithstanding the foregoing, with respect to
suspensions of resales of Registrable Securities under the Shelf Registration
Statement described above (x) the Company shall use its reasonable best efforts to
cause to be terminated as soon as it is practicable, any such period under which
sales of Registrable Securities are suspended under the Shelf Registration Statement
and (y) the Company shall not deliver more than one Information Delay Notice within
any period of 180 consecutive days.




(iii) Notice Requirement. Not more than four (4) business days nor less
than two (2) business days prior to effecting any sale of Registrable Securities
under the Shelf Registration Statement representing in excess of 0.25% of the
Company’s then outstanding common stock on a fully diluted basis, the Welsh
Investors shall provide written notice to the Company of their intention to effect
such sale.




(b) Underwritten Offering.




(i) Request for Underwritten Offering. At any time after the
90th day following the consummation of the Merger, the holders of at
least 50% of the outstanding Registrable Securities initially held by the Welsh
Investors, the Vestar Investors and their respective affiliates (the “Requesting
Party”) may request the Company effect an underwritten offering under the Shelf
Registration Statement of all or any portion of the Registrable Securities held by
the Requesting Party (an “Underwritten Offering”). The Requesting Party
shall be entitled to request up to one (1) Underwritten Offering pursuant to this
Section



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4(b); provided that the Company’s obligation with respect to any such
Underwritten Offering shall be deemed satisfied only when 75% of the Registrable
Securities of the Requesting Party specified in such notice and of any other party
that has requested pursuant to Section 4(b)(ii) below that its Registrable
Securities be included in such Underwritten Offering shall have been sold pursuant
thereto.




(ii) Participation by Other Investors in an Underwritten Offering;
Procedure. Promptly following receipt of any notice under this Section 4 from
any Requesting Party, the Company shall immediately notify the other Investors and
shall use its reasonable best efforts to include in such Underwritten Offering the
number of Registrable Securities specified in any notice received from such
requesting Investors (and in any notices received from such Investors within 20 days
after notice from the Company), in each case subject to Section 4(c) below.




(iii) Designation of Managing Underwriter. The Board may designate the
managing underwriter of an offering pursuant to this Section 4(b), such underwriter
to be reasonably acceptable to the Majority Sellers.




(c) Certain Restrictions.




(i) Notwithstanding anything in this Section 4 to the contrary, the only securities
that the Company shall be required to register pursuant to this Section 4 shall be
Registrable Securities.




(ii) If, upon receipt of a request pursuant to Section 4(b), the Company is advised
in writing by a nationally recognized investment banking firm in the United States
selected by the Company that, in such firm’s opinion, an Underwritten Offering by
the Company at the time and on the terms requested would adversely affect any public
offering of securities of the Company (other than in connection with employee
benefit and similar plans) (a “Company Offering”) with respect to which the
Company has commenced preparations for a registration prior to the receipt of a
registration request pursuant to Section 4(b) and the Company furnishes the
Investors with a certificate signed by the Chief Executive Officer or Chief
Financial Officer of the Company to such effect (the “Transaction Delay
Notice” and, together with any Information Delay Notice, a “Delay
Notice”) promptly after such request, the Company shall not be required to
effect a registration pursuant to Section 4(b) until the earliest of (i) 30 days
after the completion of such Company Offering, (ii) promptly after the abandonment
of such Company Offering or (iii) 120 days after the date of the Transaction Delay
Notice; provided that in any event the Company shall not be required to
effect any Underwritten Offering prior to the termination, waiver or reduction of
any “blackout period” required by the underwriters to be applicable to the Investors
in connection with any Company Offering; and provided further that
in no event shall the Company delay such Underwritten Offering for more than 180
days.



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(iii) If upon receipt of a request pursuant to Section 4(b) or while a request
pursuant to Section 4(b) is pending, the Company delivers an Information Delay
Notice to the Investors, the Company shall not be required to comply with its
obligations under Section 4(b) until the earlier of (i) the date upon which such
material information is disclosed to the public or ceases to be material or (ii) 75
days after the Investors’ receipt of such notice.




(iv) Notwithstanding the foregoing provisions of this Section 4(c), the Company
shall be entitled to serve only one Delay Notice within any period of 180
consecutive days.”




	 	(C)	 	Section 5 of the Securityholders Agreement is hereby amended by deleting the
final sentence of such Section in its entirety and substituting in lieu thereof the
following:
	 
	 	 	 	“If the method of disposition of any such registration shall be an underwritten
public offering and the managing underwriter advises the Company in writing that the
number of securities requested to be included in such offering exceeds the number of
securities which can be sold therein without adversely affecting the marketability
of the offering, the Company will include in such registration, as may be determined
by the managing underwriters: (A) first, all the securities which the Company
proposes to sell for its own account, and (B) second, the Registrable Securities and
any other securities requested to be included in such registration, pro rata among
the holders of such Registrable Securities or other securities, based on the number
of such Registrable Securities or other securities which they own.”






	 	(D)	 	Section 6(a) of the Securityholders Agreement is hereby amended by deleting
such Section in its entirety and substituting in lieu thereof the following:
	 
	 	 	 	“(a) As may be required by the managing underwriter of an underwritten registration
of securities of the Company pursuant to the Securities Act, in its sole discretion,
the Welsh Investors and the Vestar Investors shall not effect any public sale or
distribution (including sales pursuant to Rule 144) of Registrable Securities for
the lesser of (i) the period from seven days prior to and 90 days following the
effective date of any such underwritten registration of securities of the Company
(or, in the case of an underwritten offering of shares pursuant to an effective
shelf registration statement (other than the Shelf Registration Statement), the
seven days prior to and 90 days following the time such offering is to commence) and
(ii) the period of time required by the managing underwriter of such underwritten
registration, provided that the Welsh Investors and the Vestar Investors
shall not be subject to the restrictions contained in this Section 6(a) more than
once in any period of 180 consecutive days.”
	 
	 	(E)	 	Section 6 of the Agreement is hereby amended to include the following
subsection (c):




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	 	 	 	“(c) Notwithstanding anything to the contrary set forth herein, for a period of 90
days following the consummation of the Merger, the Welsh Investors shall not,
without the prior written consent of the Company, directly or indirectly sell,
contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer, or enter into any swap or other agreement or transaction
that transfers, in whole or in part, the economic consequences of ownership of, any
Registrable Securities (including any transfer under the Shelf Registration
Statement). The foregoing restrictions, however, shall not apply to any transfers
(i) as a bona fide gift or gifts; (ii) to any trust for the direct or indirect
benefit of the Welsh Investors (or any limited partner or stockholder of any Welsh
Investor) or the immediate family of the Welsh Investors (or any limited partner of
stockholder of any Welsh Investor); (iii) as a distribution to limited partners or
stockholders of any Welsh Investor; or (iv) to any Welsh Investor’s affiliates or to
any investment fund or other entity controlled or managed by the such Welsh
Investor; provided that in any such case, prior to such transfer, the
Company shall receive a signed agreement from such transferee agreeing to the
restrictions set forth above for the balance of the 90 day period, as well as the
other provisions of this Agreement, and an opinion of counsel, reasonably
satisfactory to the Company, that such transfer is exempt from registration under
the Securities Act. For purposes of this Agreement, “immediate family” shall mean
any relationship by blood, marriage or adoption, not more remote than first cousin.
The Welsh Investors also agree and consent to the entry of stop transfer
instructions with the Company’s transfer agent and registrar against the transfer of
the Registrable Securities except in compliance with the foregoing restrictions.”
	 
	 	(F)	 	Section 7 of the Securityholders Agreement is hereby amended as follows:






	 	(I)	 	The first sentence of Section 7 of the Securityholders
Agreement is hereby amended by deleting such sentence in its entirety and
substituting in lieu thereof the following:






“If and whenever the Company is required to effect or cause the registration of any
Registrable Securities or an Underwritten Offering of such securities under the
Securities Act as provided in this Agreement, the Company will, as expeditiously as
possible:”




	 	(II)	 	Section 7(a) of the Securityholders Agreement is hereby amended
by deleting such section in its entirety and substituting in lieu thereof the
following:






“(a) use its reasonable best efforts to prepare and file with the Commission a
registration statement or prospectus on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate, and which form
shall be available for the sale of the Registrable Securities in accordance with the
intended methods of distribution thereof, and use its reasonable best efforts to
cause such registration statement to become and remain effective as



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promptly as practicable; provided that before filing with the Commission a
registration statement or any amendments or supplements thereto, the Company will
(i) furnish to the selling Investors copies of the form of prospectus (including the
preliminary prospectus) proposed to be filed and furnish to counsel for the selling
Investors copies of all such documents proposed to be filed, which documents will be
subject to the review of such counsel and, in the case of any registration hereunder
other than an incidental registration pursuant to Section 5, shall not be filed
without the approval of such counsel (which approval shall not be unreasonably
withheld, conditioned or delayed) and (ii) notify the selling Investors of any stop
order issued or threatened by the Commission and take all reasonable actions
required to prevent the entry of such stop order or to remove it if entered.”




	 	(III)	 	Section 7(b) of the Securityholders Agreement is hereby
amended by deleting such section in its entirety and substituting in lieu
thereof the following:
	 
	 	“(b)	 	 [Reserved]”
	 
	 	(IV)	 	Section 7(e) of the Securityholders Agreement is hereby amended
by adding the word “reasonable” prior to the words “best efforts” appearing on
the first line thereof.
	 
	 	(V)	 	Section 7(j) of the Securityholders Agreement is hereby amended
by adding the word “reasonable” prior to the words “best efforts” appearing on
the first line thereof.
	 
	 	(VI)	 	Section 7(k) of the Securityholders Agreement is hereby amended
by adding the parenthetical “(in the case of an Underwritten Offering)” to the
end of such Section.
	 
	 	(VII)	 	Section 7(m) of the Securityholders Agreement is hereby
amended by adding the word “reasonable” prior to the words “best efforts”
appearing on the first line thereof.
	 
	 	(VIII)	 	Section 7(n) of the Securityholders Agreement is hereby amended by adding the
word “reasonable” prior to the words “best efforts” appearing on the first line
thereof.






	 	(G)	 	Section 9 of the Securityholders Agreement is hereby amended by deleting such
Section in its entirety and substituting in thereof the following:
	 
	 	 	 	“9.       [Reserved]”
	 
	 	(H)	 	Section 13 of the Securityholders Agreement is hereby amended to include the
following subsection (q):




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“(q) Term. This Agreement, including the Company’s obligation to maintain
the Shelf Registration Statement and all rights of holders thereunder, shall
terminate effective upon the earlier to occur of the (A) second anniversary of the
effectiveness of the Shelf Registration Statement (extended as may be necessary to
compensate for any periods during which sales of Registrable Securities are
suspended under the Shelf Registration Statement as provided in this Agreement) or
(B) the date on which all Registrable Securities can be sold without regard to
volume limitations or manner of sale restrictions pursuant to Rule 144 promulgated
under the Securities Act.”




	3.	 	No Other Amendments. Except for the amendments expressly set forth and referred to
in Section 2 hereof, the Securityholders Agreement shall remain unchanged and in full force
and effect. In the event that the Merger Agreement is terminated for any reason, then this
Amendment will be of no force or effect and the Securityholders Agreement will not be amended
by any of the amendments set forth in Section 2 hereof.
	 
	4.	 	Entire Agreement. The Securityholders Agreement, as amended by this Amendment,
constitutes the entire agreements and understandings of the parties hereto in respect of the
subject matter contained herein, and there are no restrictions, promises, representations,
warranties, covenants, or undertakings with respect to the subject matter hereof, other than
those expressly set forth or referred to herein. The Securityholders Agreement, as amended by
this Amendment, supersedes all prior agreements and understandings among the parties hereto
with respect to the subject matter hereof.
	 
	5.	 	Applicable Law. This Amendment shall be governed by, and construed in accordance
with, the internal laws of the State of Delaware without regard to principles of conflicts of
law to the extent that the application of the laws of another jurisdiction would be required
thereby.
	 
	6.	 	Severability. The invalidity, illegality or unenforceability of one or more of the
provisions of this Amendment in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Amendment in such jurisdiction or the validity,
legality or enforceability of this Amendment, including any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties hereunder shall
be enforceable to the fullest extent permitted by law.
	 
	7.	 	Counterparts. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the same
Amendment.
	 
	8.	 	Headings. The headings and captions contained herein are for convenience of
reference only and shall not control or affect the meaning or construction of any provision
hereof.





*****




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     IN WITNESS WHEREOF the parties have executed this Amendment as of the day and year first
written above.



	 	 	 	 	 	 	 
	 	 	VALOR COMMUNICATIONS GROUP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ William M. Ojile, JR.	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: William M. Ojile, JR.	 	 
	 

	 	 	 	Title: Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	INVESTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	WCA Management Corporation	 	 
	 	 	The Patrick Welsh 2004 Irrevocable Trust	 	 
	 	 	Russell L. Carson	 	 
	 	 	The Bruce K. Anderson 2004 Irrevocable Trust	 	 
	 	 	Andrew M. Paul	 	 
	 	 	Pondfield Holdings, L.P.	 	 
	 	 	Thomas E. McInerney	 	 
	 	 	Robert A. Municucci	 	 
	 	 	Anthony J. deNicola	 	 
	 	 	Paul B. Queally	 	 
	 	 	Lawrence B. Sorrel	 	 
	 	 	D. Scott Mackesy	 	 
	 	 	John Clark	 	 
	 	 	Sean M. Traynor	 	 
	 	 	John Almeida, Jr.	 	 
	 	 	Sanjay Swani	 	 
	 	 	Eric Lee	 	 
	 	 	Jonathan M. Rather	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Jonathan M. Rather	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Jonathan M. Rather, Individually and as	 	 
	 

	 	 	 	Attorney-in-Fact	 	 






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	 	 	WELSH CARSON ANDERSON & STOWE IX, L.P.	 	 
	 

	 	 	 	By: WCAS IX Associates LLC,	 	 
	 

	 	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Anthony J. de Nicola	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	WCAS IX ASSOCIATES LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Anthony J. de Nicola	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	WCAS IX ASSOCIATES LLC	 	 
	 	 	as agent for Participating LP’s	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Anthony J. de Nicola	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	WCAS CAPITAL PARTNERS III, L.P.	 	 
	 	 	By: WCAS III Associates LLC,	 	 
	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Anthony J. de Nicola	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 






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	 	 	WELSH CARSON ANDERSON & STOWE VIII, L.P.	 	 
	 

	 	 	 	By: WCAS VIII Associates LLC,	 	 
	 

	 	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Anthony J. de Nicola	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	WCAS VIII ASSOCIATES LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Anthony J. de Nicola	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	WCAS VIII ASSOCIATES LLC	 	 
	 	 	as agent for Participating LP’s	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Anthony J. de Nicola	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	VESTAR CAPITAL PARTNERS III, L.P.	 	 
	 	 	By: Vestar Associates III, L.P.	 	 
	 	 	Its: General Partner	 	 
	 	 	By: Vestar Associates Corporation III	 	 
	 	 	It’s: General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Jack Feder	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 






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	 	 	VESTAR CAPITAL PARTNERS IV, L.P.	 	 
	 

	 	 	 	By: Vestar Associates IV, L.P.	 	 
	 

	 	 	 	Its: General Partner	 	 
	 

	 	 	 	By: Vestar Associates Corporation IV	 	 
	 

	 	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Jack Feder	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	VESTAR/VALOR, LLC	 	 
	 	 	By: Vestar Associates IV, L.P.	 	 
	 	 	Its: Managing Member	 	 
	 	 	By: Vestar Associates Corporation IV	 	 
	 	 	Its: General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Jack Feder	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 







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