Lumen Technologies Inc

This management proposal asks shareholders to approve amendments to Lumen’s Articles of Incorporation to remove existing supermajority voting provisions and replace them with majority-of-votes-cast standards or the closest equivalent permitted under Louisiana law. Management seeks shareholder approval to align corporate governance with the shareholder advisory vote passed in 2025 and to streamline corporate decision-making for matters like director removal, certain business combinations, and amendments to the Articles and Bylaws. The Board argues this change increases efficiency, reduces entrenched protections that can deter passive institutional investment, and restores fiduciary discretion to evaluate large shareholders and transactions case-by-case. Approval requires different thresholds for Items 3A and 3B under Louisiana law; Item 3A requires a majority of votes entitled to be cast by holders of outstanding voting shares, while Item 3B requires approval by holders of at least 80% of voting power (though Item 3B would be updated to the closest majority standard permitted by law if adopted). The Board recommends voting FOR because it believes removal of supermajority requirements will enable more responsive governance, reduce barriers to passive capital, and facilitate constructive transactions while maintaining statutory safeguards and implementing parallel Bylaw changes. The proposal has legal and shareholder-relationship implications: it reduces protection against hostile transactions but aligns Lumen with modern governance norms and shareholder expectations, and it follows earlier shareholder support for similar measures in 2025.

See Item 3A summary. Item 3B is a companion proposal focused on amending the Articles’ Article VII provisions (such as limits on indemnification and limitations of liability) that currently require an 80% shareholder vote and would replace that high threshold with the closest standard permitted under Louisiana law. The Board recommends FOR to modernize governance standards and align shareholder voting with majority-of-votes-cast norms while preserving directors’ fiduciary responsibilities.

Management requests shareholder approval to amend the Articles to narrow the 'Related Person' definition that triggers onerous 'Business Combination' protections if a shareholder exceeds 10% ownership. Specifically, the amendment provides Board‑approved exceptions (i) for persons whose ownership was Board‑approved prior to becoming a Related Person, (ii) for existing Related Persons who receive Board approval within a three-month window of the amendment becoming effective, and (iii) for persons whose ownership exceeds 10% solely as a result of Company actions (e.g., repurchases) so long as they don’t acquire more shares thereafter without approval. Management argues that the current automatic 10% trigger is rigid and deters passive institutional investment, limits the Board’s ability to distinguish between hostile actors and supportive investors, and can impede constructive transactions. The Board views the amendment as restoring fiduciary discretion, aligning Lumen with modern governance norms, and facilitating investor confidence and value‑enhancing transactions. The Board recommends FOR. Approving this amendment would give the Board the power to grant waivers for large passive investments, but still leaves other protective measures for truly problematic activists. The change affects anti‑takeover protections and could lower default transaction thresholds, but is presented as balanced by Board oversight and tailored exceptions to avoid abuse.

Management requests approval to increase the 2024 Equity Incentive Plan share reserve by 45.6 million shares to support equity-based compensation for employees, officers and directors. The HRCC, with Compensia’s analysis, evaluated historic burn rates, projected usage, overhang and peer benchmarks and concluded the requested increase is reasonable and sufficient for approximately three years under current grant practices. The proposal restores 100% equity LTI for 2025 and maintains governance protections: minimum one-year vesting (with limited 5% exception), no discounted options or repricings without shareholder approval, responsible recycling rules, limits on annual director awards, no excise gross-ups, clawback provisions, and double‑trigger change‑in‑control vesting. Approving the amendment enables the Company to continue awarding performance- and time‑based equity critical for retention and alignment during transformation; against concerns about dilution, the committee notes projected overhang remains within acceptable ranges and disclosures on usage and peers. The HRCC unanimously recommends FOR.

This management advisory proposal asks shareholders to approve, on a non-binding basis, the compensation of the named executive officers as disclosed in the proxy, including the CD&A and compensation tables. Management and the HRCC emphasize pay-for-performance alignment: 93% of CEO’s 2025 target compensation at risk, strong STI payout (136.4% in 2025), LTI performance (88.5% payout for 2023 PBRS) and enhancements to LTI design and governance. The HRCC reviewed market benchmarks, peer groups, shareholder engagement and revised incentive designs; they recommend FOR because the programs drive long‑term alignment, retention during transformation, include governance protections (clawbacks, no repricing without shareholder approval, double-trigger change‑in‑control), and SRCC concluded realized/realizable pay aligns with TSR and strategic outcomes. While nonbinding, the HRCC views the vote as important feedback and commits to continued engagement.