Earthlink 2011 Annual Report Download - page 42

Table of Contents
Risks Related to Ownership of Our Common Stock
We may reduce, or cease payment of, quarterly cash dividends.
The payment of future quarterly dividends is discretionary and is subject to determination by our Board of Directors each quarter following
its review of our financial condition, results of operations, cash requirements, investment opportunities and such other factors as are deemed
relevant by our Board of Directors. Changes in our business needs, including funding for acquisitions and working capital, or a change in tax
laws relating to dividends, among other factors, could cause our Board of Directors to decide to reduce, or cease the payment of, dividends in the
future. In addition, the agreements governing our Senior Notes and our senior secured revolving credit facility contain restrictions on the amount
of dividends we can pay. There can be no assurance that we will not decrease or discontinue quarterly cash dividends, and if we do, our stock
price could be negatively impacted.
Our stock price may be volatile.
The trading price of our common stock may be subject to fluctuations in response to certain events and factors, such as our entry into
business combinations or other major transactions; quarterly variations in results of operations; changes in financial estimates; changes in
recommendations or reduced coverage by securities analysts; the operating and stock price performance of other companies that investors may
deem comparable to us; news reports relating to trends in the markets in which we operate; market trends unrelated to our performance; and
general economic conditions. A significant drop in our stock price could also expose us to the risk of securities class action lawsuits, which could
result in substantial costs and divert management's attention and resources, which could adversely affect our business. Finally, volatility or a lack
of positive performance in our stock price may adversely affect our ability to retain key employees, many of whom have been granted stock
incentive awards.
Provisions of our third restated certificate of incorporation, amended and restated bylaws and other elements of our capital structure could
limit our share price and delay a change of management.
Our third restated certificate of incorporation, amended and restated bylaws and shareholder rights plan contain provisions that could make
it more difficult or even prevent a third party from acquiring us without the approval of our incumbent Board of Directors. These provisions,
among other things, limit the right of stockholders to call special meetings of stockholders and authorize the Board of Directors to issue preferred
stock in one or more series without any action on the part of stockholders. These provisions could limit the price that investors might be willing
to pay in the future for shares of our common stock and significantly impede the ability of the holders of our common stock to change
management. In addition, we have adopted a rights plan, which has anti-
takeover effects. The rights plan, if triggered, could cause substantial
dilution to a person or group that attempts to acquire our common stock on terms not approved by the Board of Directors. These provisions and
agreements that inhibit or discourage takeover attempts could reduce the market value of our common stock.
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