Delaware		4812		34-0868285
(State of other jurisdiction of		(Primary standard industrial		(IRS Employer
incorporation or organization)		classification code number)		Identification Number)

		Copies to:
Friedman Kaplan Seiler & Adelman LLP		Wachtell, Lipton, Rosen & Katz		Kutak Rock LLP
Attention: Barry A. Adelman and		Attention: Daniel A. Neff and		Attention: John P. Fletcher
Gregg S. Lerner		Mark Gordon		425 West Capitol Avenue, Suite 1100
1633 Broadway		51 West 52nd Street		Little Rock, AR 72201
New York, New York 10019		New York, New York 10019		(501) 975-3000 (TEL)
(212) 833-1100 (TEL)		(212) 403-1000 (TEL)		(501) 975-3001 (FAX)
(212) 833-1250 (FAX)		(212) 403-2000 (FAX)

---

 

SUBJECT TO COMPLETION	MAY 2, 2005

	Very truly yours,
	John W. Stanton
	Chairman and Chief Executive Officer

---

 

	1. To consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger, dated as of January 9, 2005 (referred to in the proxy statement/ prospectus as the “merger agreement”), by and among ALLTEL Corporation, a Delaware corporation (“ALLTEL”), Wigeon Acquisition LLC, a Washington limited liability company and a wholly-owned subsidiary of ALLTEL (“Merger Sub”), and Western Wireless Corporation, a Washington corporation (“Western Wireless”), and to approve and adopt the merger contemplated thereby (referred to in the proxy statement/ prospectus as the “merger”), pursuant to which Western Wireless will merge with and into Merger Sub, after which Merger Sub will survive the transaction and continue to be a wholly-owned subsidiary of ALLTEL and the separate corporate existence of Western Wireless will cease.
	2. To elect nine directors to serve until the next annual meeting of shareholders and until their successors are elected and qualified or until the consummation of the merger.
	3. To ratify the selection of PricewaterhouseCoopers LLP as Western Wireless’ independent registered public accounting firm for 2005.
	4. To approve the Western Wireless Corporation 2005 Long-Term Equity Incentive Plan.
	5. To adjourn or postpone the annual meeting, if necessary, to solicit additional proxies for the approval and adoption of the merger agreement and the merger.
	6. To transact such other business as may properly come before the annual meeting or any adjournments thereof.

	By Order of the Board of Directors,
	Jeffrey A. Christianson
	Senior Vice President, General Counsel and Secretary

---

 

Western Wireless Corporation:		ALLTEL Corporation:
Investor Relations 3650 131st Avenue SE Bellevue, Washington 98006 (425) 586-8700 email address: investor.relations@wwireless.com		Investor Relations Department One Allied Drive Little Rock, Arkansas 72202 (877) 446-3628 email address: alltel.investor.relations@alltel.com

ii

---

 

				Page
REFERENCES TO ADDITIONAL INFORMATION					ii
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND THE MERGER					1
SUMMARY					5
	The Companies				5
	Recent Developments				5
	What You Will Be Entitled to Receive Pursuant to the Merger Agreement				6
	In Order to Make an Election, You Must Properly Complete and Deliver the Form of Election, the Letter of Transmittal and Your Western Wireless Common Stock Certificates				7
	The Annual Meeting				7
	Recommendation of the Western Wireless Board Regarding the Merger; Western Wireless’ Reasons for the Merger				8
	Opinion of Financial Advisor to Western Wireless				8
	ALLTEL’s Reasons for the Merger				8
	Interests of Certain Persons in the Merger				9
	Conditions to the Merger				9
	Termination				10
	Material United States Federal Income Tax Consequences				10
	Comparison of Rights of ALLTEL Shareholders and Western Wireless Shareholders				11
	Comparative Market Price Information				11
	Listing and Trading of ALLTEL Common Stock				11
	Regulatory Approvals				11
	Litigation Regarding the Merger				12
	Dissenters’ Rights				12
	Selected Historical Consolidated Financial Data of ALLTEL				13
	Selected Historical Consolidated Financial Data of Western Wireless				16
	Selected Unaudited Pro Forma Condensed Combined Financial Data				17
	Comparative Historical and Pro Forma Per Share Data				18
	Comparative Stock Prices and Dividends				20
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND THE MERGER (PROPOSAL NO. 1)					22
	Introduction				22
	The Companies				22
		ALLTEL Corporation			22
		Wigeon Acquisition LLC			23
		Western Wireless Corporation			23
	Risk Factors				25
		Risks Related to the Merger			25
		Risks Related to ALLTEL			28
	The Merger				30
		General			30
		Background of the Merger			30
		Recommendation of the Western Wireless Board; Western Wireless’ Reasons for the Merger			33
		Opinion of Financial Advisor to Western Wireless			37

iii

---

 

				Page
		ALLTEL’s Reasons for the Merger			48
		Interests of Certain Persons in the Merger			49
		Stock Exchange Listing			51
		Resale of Shares of ALLTEL Common Stock Issued In The Merger			51
		Accounting Treatment			52
		Material United States Federal Income Tax Consequences of the Merger			52
		Regulatory/ Third Party Matters			55
		Delisting and Deregistration of Western Wireless Common Stock			56
		Litigation Regarding the Merger			56
	The Merger Agreement				57
		Form of the Merger			57
		Merger Consideration			57
		Conversion of Shares; Exchange Agent; Form of Election; Procedures for Exchange of Certificates; Fractional Shares			62
		Effective Time			63
		Management and Organizational Documents after the Merger			63
		Representations and Warranties			64
		Covenants			65
		Conditions to the Merger			73
		Termination			74
		Amendment and Supplement; Waiver			75
		Expenses			75
	Voting Agreement				75
	Dissenters’ Rights				77
		General			77
		Requirements for Exercising Dissenters’ Rights			77
		Appraisal Procedures			78
	Description of ALLTEL Capital Stock				80
		General			80
		ALLTEL Common Stock and Related Rights			80
		Delaware Anti-Takeover Statute			82
		Fair Price Provisions			83
		Rights of Appraisal			83
		ALLTEL Preferred Stock			84
		Equity Units			84
		Transfer and Rights Agent, Registrar			85
		Stock Exchange Listing			85
	Comparison of Rights of ALLTEL and Western Wireless Shareholders				86
	Unaudited Pro Forma Combined Condensed Financial Information				100
	Notes To Unaudited Pro Forma Combined Condensed Financial Statements				104
ELECTION OF DIRECTORS (PROPOSAL NO. 2)					111
	Information about the Nominees				111
	Board of Directors, Committees and Corporate Governance				112

iv

---

 

			Page
	Compensation of Directors			113
	Code of Business Conduct and Ethics			114
	Audit Committee Report			114
	Principal Accountant Fees and Services			115
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PROPOSAL NO. 3)				115
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT				115
EXECUTIVE COMPENSATION				118
	Summary Compensation Table			118
	Option Grants For 2004 Fiscal Year			119
	Option Exercises and Values			119
	Employment Agreements			120
	Retention Bonus Plan and Severance Plan			120
	Compensation Committee Interlocks and Insider Participation			121
	Compensation Committee Report on Executive Compensation			122
	Performance Graph			124
	Certain Relationships and Related Transactions			124
	Compliance with Section 16(a) of the Exchange Act			125
APPROVAL OF WESTERN WIRELESS CORPORATION 2005 LONG-TERM EQUITY INCENTIVE PLAN (PROPOSAL NO. 4)				126
	General Information			126
	Summary of the 2005 Plan			126
	Federal Income Tax Consequences			129
	Vote Required			131
	Securities Authorized for Issuance Under Equity Compensation Plans			132
POSTPONEMENT OR ADJOURNMENT FOR THE PURPOSE OF OBTAINING ADDITIONAL VOTES FOR THE MERGER (PROPOSAL NO. 5)				133
THE ANNUAL MEETING				134
	Date, Time and Place of the Annual Meeting			134
	Purpose of the Annual Meeting			134
	Recommendation of the Western Wireless Board			134
	Required Vote			134
	Record Date			135
	Quorum			135
	Proxies			135
	Other Matters			136
	Revocation			136
	Solicitation of Proxies			136
	Shareholder Proposals			137
SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS				138
EXPERTS				139
LEGAL MATTERS				139
WHERE YOU CAN FIND MORE INFORMATION				140

v

---

 

		Page
ANNEX A — AGREEMENT AND PLAN OF MERGER			A-1
ANNEX B — VOTING AGREEMENT			B-1
ANNEX C — OPINION OF FINANCIAL ADVISOR TO WESTERN WIRELESS			C-1
ANNEX D — CHAPTER 23B.13 OF THE WASHINGTON BUSINESS CORPORATION ACT — DISSENTERS’ RIGHTS			D-1
ANNEX E — WESTERN WIRELESS CORPORATION AUDIT COMMITTEE CHARTER			E-1
ANNEX F — WESTERN WIRELESS CORPORATION 2005 LONG-TERM EQUITY INCENTIVE PLAN			F-1

vi

---

 

Q:		What is the proposed transaction?
A:		You are being asked to vote to approve and adopt an agreement and plan of merger among ALLTEL, Merger Sub and Western Wireless and approve and adopt the merger contemplated by the agreement and plan of merger (in this proxy statement/prospectus, we refer to the agreement and plan of merger as the “merger agreement” and the merger contemplated thereby as the “merger”). In the merger, Western Wireless will merge with and into Merger Sub, a newly formed limited liability company and wholly-owned subsidiary of ALLTEL. After the merger, Merger Sub will be the surviving entity and the separate corporate existence of Western Wireless will cease.
Q:		What will I be entitled to receive pursuant to the merger agreement?
A:		The basic consideration in the merger is $9.25 in cash and 0.535 shares of ALLTEL common stock for each share of Western Wireless Class A and Class B common stock (which are collectively referred to in this proxy statement/prospectus as the “Western Wireless common stock”) outstanding immediately prior to completion of the merger, and you are entitled to elect to receive this basic mix. Alternatively, you may elect to receive either $40 in cash or 0.7 shares of ALLTEL common stock for each share of Western Wireless common stock that you own by making a “cash” election or a “stock” election, respectively. The cash and stock elections are subject to proration to preserve an overall mix of $9.25 in cash and approximately, but not less than, 0.535 shares of ALLTEL common stock for all of the outstanding shares of Western Wireless common stock taken together. As a result, even if you make the all cash or all stock election you may receive a prorated amount of cash and ALLTEL common stock. If you fail to make an election, you will be deemed to have made the mixed election. A discussion of the proration mechanism as well as examples of hypothetical prorations can be found in this proxy statement/prospectus under the heading “The Merger Agreement — Merger Consideration.” You will not be entitled to receive any fractional shares of ALLTEL common stock. Instead, you will be entitled to receive cash, without interest, for any fractional share of ALLTEL common stock you might otherwise have been entitled to receive based on the closing price of the ALLTEL common stock on the date the merger occurs.
Q:		Do I have dissenters’ rights in respect of the merger?
A:		Yes. If you do not vote in favor of the approval and adoption of the merger agreement and the merger, deliver to Western Wireless before the annual meeting a written notice of dissent and otherwise comply with the requirements of Washington law, you will be entitled to assert dissenters’ rights. A copy of Chapter 23B.13 of the Washington Business Corporation Act, which sets forth the requirements for perfecting dissenters’ rights, is attached as Annex D to this proxy statement/ prospectus. If you hold your shares in the name of another person, such as a broker or nominee, you must act promptly to cause the record holder to follow the steps identified properly and in a timely manner (or, alternatively, submit the record holder’s written consent to your dissent prior to or at the time you submit your notice of dissent) to perfect dissenters’ rights. See “Dissenters’ Rights” beginning on page      . If any Western Wireless shareholder who demands dissenters’ rights under Washington law withdraws and does not duly reassert the right to dissent prior to the annual meeting or loses (through failure to perfect or otherwise) the right to dissent, then such shareholder’s shares will no longer be dissenting shares and will automatically be converted into the right to receive $9.25 in cash and 0.535 shares of ALLTEL common stock for each of his or her shares of Western Wireless common stock.
Q:		What are the material United States federal income tax consequences of the merger to me?
A:		The transaction is intended to be tax-free for United States federal income tax purposes, except with respect to any cash received by Western Wireless shareholders. See “The Merger — Material United States Federal Income Tax Consequences of the Merger” beginning on page        .

1

---

 

Q:		When do you expect the merger to be completed?
A:		We expect to complete the merger promptly after Western Wireless shareholders approve and adopt the merger agreement and the merger at the annual meeting and after the satisfaction or waiver of all other conditions to the merger, including the receipt of all regulatory approvals that are required to be obtained pursuant to the merger agreement. We currently expect this to occur mid-year 2005.
Q:		When must I elect the type of the merger consideration that I prefer to receive?
A:		If you are a holder of Western Wireless common stock and wish to elect the type of merger consideration you prefer to receive in the merger, you should carefully review and follow the instructions set forth in the form of election provided to Western Wireless shareholders together with this proxy statement/ prospectus. These instructions require that a properly completed and signed form of election be received by the exchange agent by the election deadline, which we will announce before the expected completion of the merger. If you do not submit a properly completed and signed form of election to the exchange agent by the election deadline, then you will be deemed to have elected to receive $9.25 cash and 0.535 shares of ALLTEL common stock in exchange for each of your shares of Western Wireless common stock.
Q:		Should I send in my stock certificates with my proxy card?
A:		No. Please DO NOT send your stock certificates with your proxy card. Rather, prior to the election deadline, you should send your Western Wireless common stock certificates to the exchange agent, together with your completed, signed form of election. If your shares are held in “street name,” you should follow your broker’s or banker’s instructions for making an election with respect to your shares.
Q:		Can I change my election after I submit an election form?
A:		You may revoke your election of merger consideration with respect to all or a portion of the shares of Western Wireless common stock subject thereto by delivering written notice thereof to the exchange agent prior to the election deadline. If you instructed a broker to submit an election for your shares, you must follow your broker’s directions for changing those instructions. In addition, any election of merger consideration you make will automatically be revoked if the merger agreement is terminated.
		If an election is properly revoked with respect to shares of Western Wireless common stock represented by stock certificates, the certificates representing such shares will be promptly returned to the holder that submitted them to the exchange agent.
Q:		Who can help answer my questions?
A:		If you have any questions about the merger or if you need additional copies of this proxy statement/ prospectus or the enclosed proxy card you should contact:
Q:		Where can I find more information about Western Wireless and ALLTEL?
A:		You can find more information about Western Wireless and ALLTEL from various sources described under the heading “Where You Can Find More Information” on page        .

Q:		What matters will we vote on at the annual meeting?
A:		You will vote on the following proposals:
		• to approve and adopt the merger agreement and the merger;
		• to elect nine directors to serve until the next annual meeting of shareholders and until their successors are elected and qualified or until the consummation of the merger;
		• to ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2005;
		• to approve the Western Wireless Corporation 2005 Long-Term Equity Incentive Plan;

2

---

 

		• to adjourn or postpone the annual meeting, if necessary, to solicit additional proxies for the approval and adoption of the merger agreement and the merger; and
		• to transact such other business as may properly come before the annual meeting.
Q:		What is the required vote to approve and adopt the merger agreement and the merger?
A:		The merger agreement and the merger must be approved and adopted by the holders of shares of Western Wireless Class A and Class B common stock outstanding as of the record date, voting together as a single class, representing at least two-thirds of all the votes entitled to be cast by such holders. Abstentions from voting and broker non-votes (shares held by a broker or nominee as to which a broker or nominee indicates on the proxy that it does not have the authority, either express or discretionary, to vote on a particular matter), since they are not affirmative votes, will have the same practical effect as a vote against the proposal to approve and adopt the merger agreement and the merger. You should be aware that shareholders who hold an aggregate of approximately 41% of the aggregate number of votes entitled to be cast on the record date have already agreed with ALLTEL to vote in favor of the approval and adoption of the merger agreement and the merger at the annual meeting of shareholders. No vote of the shareholders of ALLTEL is required.
Q:		What is the required vote for the other matters at the annual meeting?
A:		Ratification of the selection of the independent registered public accounting firm, and approval of the Western Wireless Corporation 2005 Long-Term Equity Incentive Plan, require the affirmative vote of holders of shares of Western Wireless Class A and Class B common stock outstanding as of the record date, voting together as a single class, representing a majority of the votes present at the meeting, in person or by proxy. For the election of directors, if a quorum is present, a nominee for election to a position on the board of directors will be elected as a director if the votes cast for the nominee exceed the votes cast against the nominee and exceed the votes cast for any other nominee for that position. For the election of directors, abstentions from voting and broker non-votes (shares held by a broker or nominee as to which a broker or nominee indicates on the proxy that it does not have the authority, either express or discretionary, to vote on a particular matter) will have the legal effect of neither a vote for nor against the nominee. For all other matters, abstentions from voting and broker non-votes, since they are not affirmative votes, will have the same practical effect as a vote against the respective matters.
Q:		Who is entitled to vote at the annual meeting?
A:		Holders of record of Western Wireless common stock at the close of business on                           , 2005, which is the date Western Wireless’ board of directors has fixed as the record date for the annual meeting, are entitled to vote at the annual meeting.
Q:		What does the Western Wireless board of directors recommend?
A:		The Western Wireless board of directors has unanimously approved the merger agreement and the merger and has also unanimously determined that the merger agreement and the merger are advisable, fair to and in the best interests of Western Wireless and its shareholders. Accordingly, the Western Wireless board unanimously recommends that Western Wireless shareholders vote “FOR” the approval and adoption of the merger agreement and the merger at the annual meeting.
		The Western Wireless board of directors also unanimously recommends that Western Wireless shareholders vote “FOR” each of the director nominees listed under the heading “Election of Directors — Information about the Nominees,” “FOR” the ratification of the selection of PricewaterhouseCoopers LLP as Western Wireless’ independent registered public accounting firm for 2005 and “FOR” the approval of the Western Wireless Corporation 2005 Long-Term Equity Incentive Plan at the annual meeting.

3

---

 

Q:		What do I need to do to vote my shares at the annual meeting?
A:		After carefully reading and considering the information included and incorporated by reference in this proxy statement/prospectus, please submit your proxy as soon as possible so that your shares may be voted at the annual meeting. If your shares of Western Wireless common stock are registered in your own name you may submit your proxy by filling out and signing the proxy card, and then mailing your signed proxy card in the enclosed envelope.
		If your shares are held in “street name,” you should follow the directions your broker or bank provides in order to ensure your shares are voted at the annual meeting.
		Your proxy card will instruct the persons named on the proxy card to vote your shares at the annual meeting as you direct. If you sign and send in your proxy card and do not indicate how you want to vote, your proxy will be voted “FOR” the approval and adoption of each of the proposals being considered at the annual meeting, including the merger agreement and the merger.
Q:		May I change my vote after I have mailed my signed proxy card?
A:		You may change your vote at any time before your proxy is voted at the annual meeting. If your shares of Western Wireless common stock are registered in your own name, you can do this in one of three ways. First, you can deliver to Western Wireless prior to the annual meeting a written notice stating that you want to revoke your proxy. Second, you can complete and deliver to Western Wireless prior to the annual meeting a new proxy card. If you choose either of these two methods, Western Wireless must receive your notice of revocation or your new proxy card prior to the annual meeting at the following address: Western Wireless Corporation, Attn: Investor Relations, 3650 131st Avenue SE, Bellevue, Washington 98006. Third, you can attend the Western Wireless annual meeting and vote in person. Simply attending the meeting, however, will not revoke your proxy, as you must vote at the annual meeting in order to revoke a prior proxy.
		If you have instructed a broker or bank to vote your shares, you must follow the directions you received from your broker or bank to change your vote.

4

---

 

5

---

 

6

---

 

7

---

 

8

---

 

9

---

 

10

---

 

11

---

 

12

---

 

13

---

 

14

---

 

15

---

 

16

---

 

17

---

 

18

---

 

19

---

 

20

---

 

21

---

 

22

---

 

23

---

 

24

---

 

25

---

 

	•	if the merger agreement is terminated and Western Wireless thereafter enters into an alternative transaction, Western Wireless may be required, in specific circumstances, to pay a termination fee of $120 million;
	•	the price of Western Wireless’ common stock may decline to the extent that the current market price of Western Wireless’ common stock reflects an assumption that the merger will be completed; and
	•	Western Wireless must pay its expenses related to the merger, including substantial legal, accounting and financial advisory fees, and employee retention bonuses, even if the merger is not completed. This could affect Western Wireless’ results of operations and potentially its stock price.

26

---

 

27

---

 

28

---

 

29

---

 

30

---

 

31

---

 

32

---

 

33

---

 

	•	Based on the closing market price of shares of ALLTEL common stock on the last trading day prior to the announcement of the merger agreement, the per share value of the merger consideration to be received by Western Wireless shareholders represented a premium of approximately:

	•	40.35% over the closing price of Western Wireless Class A common stock on December 16, 2004, the last trading day prior to the Western Wireless board’s decision to contact other potential acquirors and continue negotiations with ALLTEL;
	•	29.03% over the closing price of Western Wireless Class A common stock on January 5, 2005, the last trading day prior to the widespread circulation of rumors of a possible transaction between Western Wireless and ALLTEL;
	•	39.64% and 45.99%, respectively, over the average closing prices of Western Wireless Class A common stock for the three- and six-month periods leading up to the announcement of the merger agreement; and
	•	19.37% over the highest trading price of Western Wireless Class A common stock at any time during the one-year period preceding December 16, 2004.

	•	The combined company would be the leading nationwide 850 MHz operator for rural markets and that the addition of Western Wireless’ operations would complement ALLTEL’s geographic coverage and provide greater scale and purchasing power;
	•	The combined company would have a strong balance sheet and substantial cash flow to finance future expansion as well as to invest in improving and adding new services for customers; and
	•	The larger geographic footprint and increased number of subscribers of the combined company would make it attractive as an acquisition target to a greater number of national operators than Western Wireless would be as an independent company.

34

---

 

	•	remaining an independent company and continuing Western Wireless’ strategy of expanding the geographic scope of its services and expanding the scope of the products and services offered to its customers, in order to be able to compete effectively with larger wireless carriers in the U.S.;
	•	pursuing one or more significant acquisitions of other wireless telecommunications providers; and
	•	entering into a combination with or being acquired by a major telecommunications company of national scale.

	•	the risks and uncertainties associated with the strategic alternatives available to Western Wireless, including the competitive challenges in view of the emergence of a few national wireless providers, the increasing capital costs that would be required to maintain Western Wireless’ multiple technologies strategy in rural areas as the industry evolved to next generation technologies, as compared with the potential shareholder value that the board believed might result from a merger with ALLTEL on the proposed terms;
	•	the strong strategic fit between Western Wireless’ mobile telecommunications business and operations, resulting from the geographical contiguity between Western Wireless’ domestic properties and ALLTEL’s existing wireless operations, which combined with minimal overlap of their markets would enable the combined company to serve a much larger geographic area in the United States, ranging from the Southeast to the Western and mountain states of the country;
	•	the fact that efforts by Western Wireless’ financial advisor to contact other potential acquirors did not result in any indications of interest; and
	•	the material terms of the merger agreement.

35

---

 

	•	the risks of the type and nature described under “Risk Factors”;
	•	the possibility that the FTC, FCC or state or foreign regulatory authorities might seek to impose conditions on or enjoin or otherwise prevent or delay the merger, which possibility the board considers to be low;
	•	the risks and costs to Western Wireless if the merger does not close, including the diversion of management and employee attention, potential employee attrition, employee retention costs and the potential effect on business and customer relationships;
	•	the restrictions on the conduct of Western Wireless’ business prior to the consummation of the merger, requiring Western Wireless to conduct its business in the ordinary course, subject to specific limitations, which may delay or prevent Western Wireless from undertaking business opportunities that may arise pending completion of the merger;
	•	the requirement that Western Wireless submit the merger agreement to its shareholders even if the Western Wireless board withdraws its recommendation, to the extent permitted by applicable law, which could delay or prevent Western Wireless’ ability to pursue a superior proposal if one were to become available;
	•	the fact that holders of approximately 41% of the aggregate number of votes entitled to be cast have agreed with ALLTEL to vote in favor of the transaction and against any competing proposal, which could contribute to the merger being approved even if a superior proposal were to become available;
	•	the requirement that Western Wireless pay to ALLTEL a termination fee of $120 million, if the merger agreement were to be terminated and if, under specified circumstances and during specified periods thereafter, Western Wireless were to enter into an agreement regarding the acquisition of Western Wireless by merger or business combination, or a “merger of equals,” or an acquisition of 40% or more of its assets or shares of common stock with a third party; and
	•	the risk that because the exchange ratios for the stock election and the stock portion of the mixed election will not be adjusted in the event the market price of ALLTEL common stock declines and the cash and stock elections are subject to proration, the dollar value of the merger consideration to Western Wireless’ shareholders receiving ALLTEL common stock in the merger could decrease prior to the completion of the merger. The merger agreement does not contain a “collar” or other mechanism that could mitigate the effect of a decrease in the trading price of ALLTEL shares.

36

---

 

	•	reviewed the Agreement and Plan of Merger, dated January 9, 2005, among ALLTEL, Merger Sub and Western Wireless and the Voting Agreement, dated January 9, 2005, among ALLTEL and the shareholders of Western Wireless named therein;
	•	reviewed Western Wireless’ and ALLTEL’s Annual Reports to Shareholders and Annual Reports on Form 10-K for the years ended December 31, 2001, 2002 and 2003, their Quarterly Reports on Form 10-Q for the periods ended March 31, 2004, June 30, 2004 and September 30, 2004, their Current Reports on Form 8-K for the three years ended January 9, 2005 and the preliminary results of Western Wireless and ALLTEL for the quarter ended December 31, 2004 provided to Bear Stearns by the managements of Western Wireless and ALLTEL, respectively;
	•	reviewed certain operating and financial information relating to Western Wireless’ and ALLTEL’s business and prospects. This information included projections (described below as “Case 1” and “Case 2”) for the six years ending December 31, 2009 for Western Wireless prepared by Western Wireless’ management and for the year ending December 31, 2004 for ALLTEL prepared by ALLTEL’s management. Bear Stearns also reviewed publicly available research analyst projections for the five years ending December 31, 2009 for ALLTEL and reviewed and discussed such projections with the managements of ALLTEL and Western Wireless;
	•	reviewed certain estimates of cost savings and other combination benefits expected to result from the merger, prepared and provided to Bear Stearns by ALLTEL’s management;

37

---

 

	•	met with certain members of Western Wireless’ and ALLTEL’s senior managements to discuss each entity’s respective businesses, operations, historical and projected financial results and future prospects;
	•	reviewed the historical prices, trading multiples and trading volumes of the common stock of each of Western Wireless and ALLTEL;
	•	reviewed publicly available financial data, stock market performance data and trading multiples of companies which Bear Stearns deemed generally comparable to each of Western Wireless and ALLTEL;
	•	reviewed the terms of recent mergers and acquisitions of companies which Bear Stearns deemed generally comparable to Western Wireless and the merger;
	•	performed discounted cash flow analyses based on the projections for each of Western Wireless and ALLTEL and synergy estimates for the combined company furnished to Bear Stearns;
	•	reviewed the pro forma financial results, financial condition and capitalization of ALLTEL giving effect to the merger; and
	•	conducted such other studies, analyses, inquiries and investigations as Bear Stearns deemed appropriate.

	Summary of Financial Analyses

38

---

 

	Western Wireless Valuation

	•	Centennial Communications Corp.;
	•	Dobson Communications Corporation;
	•	Nextel Partners, Inc. (valuation is as of November 30, 2004 — prior to public disclosure of Nextel’s transaction with Sprint);
	•	Rural Cellular Corporation;
	•	Triton PCS Holdings, Inc.; and
	•	United States Cellular Corporation.

	•	Millicom International Cellular S.A.; and
	•	Orascom Telecom Holding S.A.E.

39

---

 

			Enterprise Value as
			a Multiple of CY
			2005E EBITDA
Domestic Wireless Companies
	High			14.7x
	Mean			9.0x
	Low			6.6x
International Wireless Companies
	High			5.1x
	Mean			4.8x
	Low			4.5x

										30% Control
		No Premium								Premium
		Low				High				Low				High
Case 1		$	28.10			$	32.21			$	36.53			$	41.87
Case 2		$	30.39			$	34.71			$	39.51			$	45.12
Merger Consideration														$	39.27

40

---

 

	•	Sprint Corporation/Nextel Communications, Inc. — December 15, 2004;
	•	Alamosa Holdings, Inc./AirGate PCS, Inc. — December 8, 2004;
	•	Rogers Wireless Communications Inc./Microcell Telecommunications Inc. — September 20, 2004;
	•	Cingular Wireless LLC/AT&T Wireless Services, Inc. — February 17, 2004; and
	•	Dobson Communications Corporation/American Cellular Corporation — July 14, 2003.

	•	Sprint Corporation/Nextel Communications Inc. — December 15, 2004;
	•	Alamosa Holdings, Inc./AirGate PCS, Inc. — December 8, 2004;
	•	Cingular Wireless LLC/AT&T Wireless Services, Inc. — February 17, 2004;
	•	Dobson Communications Corporation/American Cellular Corporation — July 14, 2003;
	•	ALLTEL Corporation/CenturyTel, Inc. (wireless operations) — March 19, 2002; and
	•	Verizon Communications Inc./Price Communications Wireless, Inc. — November 15, 2000.

	•	Rural Cellular Corporation/Triton Cellular Partners, L.P. — November 8, 1999;
	•	Dobson Communications Corporation/American Cellular Corporation — October 6, 1999;
	•	Vodafone Group PLC/CommNet Cellular Inc. — July 19, 1999;
	•	Welsh, Carson, Anderson & Stowe VIII, L.P./Centennial Cellular Corp. — July 2, 1998; and
	•	Dobson Communications Corporation/Sygnet Wireless, Inc. — July 29, 1998.

			Enterprise Value
			as a Multiple of
			1-Year Forward
			EBITDA
Current Market Transactions
	High			10.8x
	Mean			8.0x
	Low			6.5x
Most Comparable Transactions
	High			12.1x
	Mean			8.1x
	Low			6.5x
All Transactions (including Other Transactions)
	High			13.1x
	Mean			8.8x
	Low			6.5x

41

---

 

		Low				High
Case 1		$	32.21			$	39.05
Case 2		$	34.71			$	41.90
Merger Consideration						$	39.27

42

---

 

	•	Citizens Communications Company;
	•	CenturyTel, Inc.;
	•	Commonwealth Telephone Enterprises, Inc.;
	•	Qwest Communications International Inc.; and
	•	Telephone and Data Systems, Inc.

			Enterprise Value
			as a Multiple of
			2005E EBITDA
Wireline Comparable Companies
	High			7.9x
	Mean			6.4x
	Low			5.2x

43

---

 

	•	Carlyle Group/Verizon Hawaii Inc. — May 21, 2004;
	•	Consolidated Communications, Inc./TXU Corp. — April 14, 2004;
	•	Homebase Acquisition Texas Corp./Illinois Consolidated Telephone Co. — July 17, 2002; and
	•	Valor Telecommunications, LLC/Kerrville Communications Corp. — February 14, 2002.

			Enterprise Value
			as a Multiple of
			LTM EBITDA
Most Comparable Transactions
	High			7.4x
	Mean			7.2x
	Low			6.9x
Other Transactions
	High			12.0x
	Mean			8.5x
	Low			6.2x
All Transactions
	High			12.0x
	Mean			8.2x
	Low			6.2x

44

---

 

	Merger Consequences

		Case 1
		No Synergies								With Synergies
Western Wireless Shareholder Value Accretion/(Dilution):
Western Wireless:ALLTEL — Western Wireless:ALLTEL
Low:Low — High:High			8.2	%			4.5	%			11.4	%			7.4	%
Low:High — High:Low			14.0	%			(0.7	%)			17.2	%			2.2	%

45

---

 

		Case 2
		No Synergies								With Synergies
Western Wireless Shareholder Value Accretion/(Dilution):
Western Wireless:ALLTEL — Western Wireless:ALLTEL
Low:Low — High:High			(7.9	%)			(10.7	%)			(5.3	%)			(8.3	%)
Low:High — High:Low			(3.1	%)			(15.0	%)			(0.5	%)			(12.6	%)

		Net Income Contribution
		2004E				2005P				2006P				2007P
Case 1
Western Wireless			13.6	%			18.1	%			20.2	%			21.3	%
ALLTEL			86.4	%			81.9	%			79.8	%			78.7	%

		EBITDA Contribution
		2004E				2005P				2006P				2007P
Western Wireless			16.1	%			18.3	%			20.4	%			22.0	%
ALLTEL			83.9	%			81.7	%			79.6	%			78.0	%

		Free Cash Flow Contribution
		2004E				2005P				2006P				2007P
Western Wireless			12.3	%			25.4	%			26.2	%			28.1	%
ALLTEL			87.7	%			74.6	%			73.8	%			71.9	%

		Net Income Contribution
		2004E				2005P				2006P				2007P
Case 2
Western Wireless			16.4	%			22.6	%			27.5	%			30.0	%
ALLTEL			83.6	%			77.4	%			72.5	%			70.0	%

		EBITDA Contribution
		2004E				2005P				2006P				2007P
Western Wireless			16.1	%			19.0	%			22.0	%			24.1	%
ALLTEL			83.9	%			81.0	%			78.0	%			75.9	%

		Free Cash Flow Contribution
		2004E				2005P				2006P				2007P
Western Wireless			12.4	%			17.0	%			21.5	%			22.8	%
ALLTEL			87.9	%			83.0	%			78.5	%			77.2	%

46

---

 

47

---

 

48

---

 

49

---

 

Directors and
Executive Officers		Position		Value of Options
John W. Stanton		Chairman, Director and Chief Executive Officer
Donald Guthrie		Vice Chairman
Theresa E. Gillespie		Vice Chairman and Director
John L. Bunce, Jr.		Director
Mitchell R. Cohen		Director
Daniel J. Evans		Director
Jonathan M. Nelson		Director
Peggy V. Phillips		Director
Peter H. Van Oppen		Director
Mikal J. Thomsen		President and Director
Eric Hertz		Chief Operating Officer
M. Wayne Wisehart		Executive Vice President and Chief Financial Officer
Bradley J. Horwitz		Executive Vice President and President, Western Wireless International
Gerald J. “Jerry” Baker		Senior Vice President
Jeffrey A. Christianson		Senior Vice President, General Counsel and Secretary
Thorpe M. “Chip” Kelly, Jr.		Senior Vice President
Scott A. Soley		Vice President and Controller (Chief Accounting Officer)

50

---

 

Executive Officer		Retention Amount
Eric Hertz		$	325,000
M. Wayne Wisehart		$	240,000
Gerald J. “Jerry” Baker		$	182,000
Jeffrey A. Christianson		$	220,000
Thorpe M. “Chip” Kelly, Jr.		$	168,000
Scott A. Soley		$	140,200

51

---

 

	•	banks or other financial institutions,
	•	tax-exempt organizations,
	•	insurance companies,
	•	dealers in securities or foreign currency,
	•	traders in securities who elect to apply a mark-to-market method of accounting,
	•	pass-through entities and investors in such entities,
	•	foreign persons, foreign entities and U.S. expatriates,
	•	persons whose functional currency is not the U.S. dollar,
	•	holders who received their Western Wireless common stock through the exercise of employee stock options, through a tax-qualified retirement plan or otherwise as compensation, and
	•	holders who hold Western Wireless common stock as part of a hedge, straddle, constructive sale, conversion transaction or other integrated investment.

52

---

 

53

---

 

54

---

 

55

---

 

56

---

 

57

---

 

		Consideration to be Received per Share of
Type of Election		Western Wireless Common Stock
Mixed		$9.25 in cash and 0.535 shares of ALLTEL common stock
Stock		0.7 shares of ALLTEL common stock, before proration
Cash		$40 in cash, before proration

	•	Step 1. Derive the available cash election amount: the available cash election amount is the aggregate cash amount less the amount of cash to be paid in respect of shares as to which a valid mixed election is made.
	•	Step 2. Derive the cash election amount: the cash election amount is the product of $40 and the number of shares of Western Wireless common stock as to which a valid cash election is made.

58

---

 

	•	Step 3. Derive the cash proration factor: the cash proration factor equals the available cash election amount divided by the cash election amount.
	•	Step 4. Derive the prorated cash consideration: each share of Western Wireless common stock as to which a valid cash election is made will be converted into the right to receive an amount in cash equal to the product of $40 multiplied by the cash proration factor.
	•	Step 5. Derive the stock consideration: each share of Western Wireless common stock as to which a valid cash election is made will be converted into the right to receive a number of shares of ALLTEL common stock equal to the product of (1) 0.7 and (2) a number equal to one minus the cash proration factor.

	•	Step 1. Derive the available cash election amount: the available cash election amount is the aggregate cash amount less the amount of cash to be paid in respect of shares as to which a valid mixed election is made.
	•	Step 2. Derive the cash election amount: the cash election amount is the product of $40 and the number of shares of Western Wireless common stock as to which a valid cash election is made.
	•	Step 3. Derive the excess cash amount: the excess cash amount is the difference between the available cash election amount and the cash election amount.
	•	Step 4. Derive the prorated cash consideration: each share of Western Wireless common stock as to which a valid stock election is made will receive an amount in cash equal to the excess cash amount divided by the number of shares of Western Wireless common stock as to which a valid stock election is made.
	•	Step 5. Derive the stock proration factor: the stock proration factor is a fraction the numerator of which is $40 minus the per share cash consideration calculated in Step 4 and the denominator of which is $40.
	•	Step 6. Derive the prorated stock consideration: each share of Western Wireless common stock as to which a valid stock election is made will be converted into the right to receive a number of shares of ALLTEL common stock equal to the product of (1) 0.7 and (2) the stock proration factor.

	•	the amount of cash equal to 0.6 multiplied by $40, multiplied by the number of shares of Western Wireless common stock you hold, or 100, for a total of $2,400 in cash; and
	•	the number of shares of ALLTEL common stock equal to 0.7 multiplied by 0.4, multiplied by the number of shares of Western Wireless common stock you hold, or 100, for a total of 28 shares of ALLTEL common stock.

59

---

 

	•	$4 multiplied by the number of shares of Western Wireless common stock you hold, or 100, for a total of $400; and
	•	the amount of shares of ALLTEL common stock equal to 0.7 multiplied by 0.9, multiplied by the number of shares of Western Wireless common stock you hold, or 100, for a total of 63 shares of ALLTEL common stock.

	•	which election you make;
	•	which elections other Western Wireless shareholders make; and
	•	various assumed prices of ALLTEL common stock on the date of closing of the merger.

Price per Share of		Value of Mixed
ALLTEL		Election				Value of Cash				Value of Stock
Common Stock		per Share				Election per Share				Election per Share
$52		$	37.07			$	37.34			$	36.40
$57		$	39.75			$	39.93			$	39.90
$58		$	40.28			$	40.45			$	40.60
$63		$	42.96			$	43.04			$	44.10

Price per Share
of ALLTEL		Value of Mixed				Value of Cash				Value of Stock
Common Stock		Election per Share				Election per Share				Election per Share
$52		$	37.07			$	38.07			$	36.40
$57		$	39.75			$	39.95			$	39.90
$58		$	40.28			$	40.33			$	40.60
$63		$	42.96			$	42.21			$	44.10

60

---

 

Price per Share
of ALLTEL		Value of Mixed				Value of Cash				Value of Stock
Common Stock		Election per Share				Election per Share				Election per Share
$52		$	37.07			$	38.90			$	36.40
$57		$	39.75			$	39.97			$	39.90
$58		$	40.28			$	40.19			$	40.60
$63		$	42.96			$	41.26			$	44.10

Price per Share
of ALLTEL		Value of Mixed				Value of Cash				Value of Stock
Common Stock		Election per Share				Election per Share				Election per Share
$52		$	37.07			$	40.00			$	36.89
$57		$	39.75			$	40.00			$	39.92
$58		$	40.28			$	40.00			$	40.52
$63		$	42.96			$	40.00			$	43.55

	Explanation of Potential Adjustment to Merger Consideration

	Other Potential Adjustments

61

---

 

	Fractional Shares

	Federal Income Tax Consequences

62

---

 

63

---

 

	•	due organization, good standing and qualification;
	•	capital structure;
	•	authority to enter into the merger agreement and no conflicts with or violations of governance documents, contracts or laws;
	•	documents filed with the SEC and financial statements;
	•	establishment and maintenance of internal controls and procedures;
	•	no undisclosed liabilities;
	•	compliance with applicable laws;
	•	possession of required licenses and regulatory approvals;
	•	compliance with environmental laws;
	•	employee benefit plan matters and other employment matters;
	•	conduct of business in the ordinary course since December 31, 2003, and no event has occurred which would have a material adverse effect;
	•	no litigation or investigations;
	•	accuracy of information supplied in connection with this proxy statement/ prospectus and the registration statement of which it is a part;
	•	no ownership of ALLTEL common stock by Western Wireless or Western Wireless common stock by ALLTEL;
	•	tax matters;
	•	labor matters;
	•	intellectual property;
	•	material contracts;
	•	domestic communications regulatory matters;
	•	inapplicability of state takeover statutes;
	•	no affiliate transactions; and
	•	finders’ or brokers’ fees.

	•	no shareholder rights plan;
	•	the receipt of a fairness opinion from a financial advisor;
	•	required shareholder vote; and

64

---

 

	•	foreign communications regulatory matters.

	•	such state of facts, event, change or effect that has had a material adverse effect on the business, operations or financial condition of Western Wireless and its subsidiaries, taken as a whole or of ALLTEL and its subsidiaries, taken as a whole, as the case may be.

	•	generally affect the rural, regional or nationwide wireless voice and data industry in the United States or in other countries in which Western Wireless or its subsidiaries conduct business, including regulatory and political developments;
	•	generally affect the economy or financial markets in the United States or in other countries in which Western Wireless or its subsidiaries conduct business; or
	•	result from the announcement or the existence of the merger agreement and the transactions contemplated thereby.

	•	authorize or pay any dividends on, or make any distribution with respect to, its outstanding capital stock, or permit any subsidiary that is not wholly-owned to authorize or pay any such dividends or make any such distributions;
	•	split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
	•	increase compensation, severance or other benefits payable to its directors, officers or employees;
	•	grant severance or termination pay to employees or enter into severance agreements with, or settle employment claims by, employees;
	•	enter into employment agreements with directors or officers;
	•	establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of current or former directors, officers or employees or their beneficiaries;

65

---

 

	•	enter into or make loans to officers, directors, employees, affiliates, agents or consultants or make changes in any existing borrowing or lending arrangements for or on behalf of such persons;
	•	materially change accounting policies or procedures or any of its methods of reporting income, deductions or other material items for income tax purposes;
	•	approve or authorize actions for submission for shareholder approval that is intended or would reasonably be expected to prevent, delay or adversely affect the consummation of the merger;
	•	authorize, propose or announce an intention to authorize or propose, or enter into agreements with respect to, mergers, consolidations or business combinations or acquisitions of assets or securities with a value or purchase price in the aggregate in excess of $100 million or which would reasonably be expected to have the effect of delaying, preventing, or reducing the likelihood of consummation of the merger or obtaining regulatory or other consents or approvals contemplated by the merger agreement;
	•	amend its articles of incorporation or by-laws;
	•	issue, sell, pledge, dispose or encumber its capital stock, other ownership interests, or any securities or rights convertible into or exchangeable for any such shares or ownership interests or permit or authorize any of the above, other than, among other things, in connection with (i) the exercise of stock options outstanding on January 9, 2005 and (ii) the conversion of Western Wireless’ outstanding publicly traded convertible notes;
	•	grant, confer or award options, warrants, convertible securities or other rights to acquire shares of its capital stock or take any action to cause to be exercisable any otherwise non-exercisable option under an existing stock option plan;
	•	purchase, redeem or otherwise acquire its capital stock, or any rights, warrants or options to acquire its capital stock;
	•	repurchase, redeem or repay certain outstanding notes of Western Wireless;
	•	incur, assume, guarantee, prepay or otherwise become liable for any indebtedness for borrowed money;
	•	make loans, advances or capital contributions to, or investments in, any other person or entity;
	•	sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber (including securitizations), or subject to any lien or otherwise dispose of, any material portion of its properties or assets, including the capital stock of its subsidiaries, other than in the ordinary course of business consistent with past practice;
	•	make or change any material tax election, settle or compromise any material tax liability, claim or assessment or change its fiscal year;
	•	modify, amend, terminate or waive any rights under any material contract in any material respect;
	•	enter into any material contracts;
	•	adopt any shareholder rights plan, “poison pill” or similar anti-takeover device; or
	•	agree to take any of the actions listed above.

66

---

 

	•	authorize or pay any dividends on, or make any distributions with respect to, its outstanding capital stock, or permit any subsidiary that is not wholly-owned to authorize or pay any such dividends or make any such distributions, except that ALLTEL may continue to pay regular quarterly cash dividends on its common and preferred stock consistent with past practice in timing and amount (including customary increases);
	•	purchase, redeem or otherwise acquire its capital stock, or any rights, warrants or options to acquire its capital stock, except in accordance with ALLTEL’s repurchase program consistent with past practice;
	•	split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
	•	materially change accounting policies or procedures or any of its methods of reporting income, deductions or other material items for income tax purposes;
	•	issue any shares of ALLTEL capital stock or repurchase, redeem or cause to cease to be issued and outstanding any shares of ALLTEL common stock if, in either case, the taking of such action would give rise to a vote of ALLTEL’s shareholders with respect to the merger or the issuance of ALLTEL common stock pursuant to the merger agreement;
	•	authorize, propose or announce an intention to authorize or propose, or enter into agreements with respect to any mergers, consolidations, business combinations or acquisitions of assets or securities with a value or purchase price in the aggregate in excess of $750 million or which would reasonably be expected to have the effect of delaying, preventing, or reducing the likelihood of consummation of the merger or obtaining regulatory or other consents or approvals contemplated by the merger agreement;
	•	amend ALLTEL’s articles of incorporation or by-laws or the certificate of formation or limited liability company agreement of Merger Sub;
	•	issue, sell, pledge, dispose or encumber its capital stock, other ownership interests or any securities or rights convertible into or exchangeable for any such shares or ownership interests, or permit or authorize any of the above, other than, among other things, in connection with (i) the exercise of stock options outstanding on January 9, 2005 and (ii) compensation or retention of employees in the ordinary course of business consistent with past practice;
	•	sell, lease, license, transfer, exchange, swap, mortgage or encumber (including securitizations), or subject to any lien or dispose of properties or assets relating to its wireless telephony service business, including the capital stock of its subsidiaries, other than in the ordinary course of business consistent with past practice;
	•	make or change any material tax election, settle or compromise any material tax liability, claim or assessment or change its fiscal year; or
	•	agree to take any of the actions listed above.

67

---

 

	•	the acquisition of Western Wireless by merger or business combination transaction, or for a “merger of equals” with Western Wireless;
	•	the acquisition by any person of twenty percent (20%) or more of the assets of Western Wireless and its subsidiaries, taken as a whole; or
	•	the acquisition by any person of twenty percent (20%) or more of the outstanding shares of Western Wireless common stock.

68

---

 

69

---

 

70

---

 

71

---

 

72

---

 

	•	the approval and adoption of the merger agreement and the merger by Western Wireless’ shareholders;
	•	the absence of any statute, rule, regulation, executive order, decree, ruling or injunction prohibiting the consummation of the merger;
	•	the continuing effectiveness of the registration statement of which this proxy statement/ prospectus forms a part;

73

---

 

	•	the approval of the shares of ALLTEL common stock to be issued in connection with the merger for listing on the NYSE;
	•	the termination or expiration of the applicable waiting periods pursuant to the HSR Act;
	•	the obtaining of any other regulatory approvals of Western Wireless or ALLTEL required to be obtained for the consummation of the merger, other than regulatory approvals the failure to obtain which would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Western Wireless or ALLTEL;
	•	the obtaining of all necessary FCC approvals and consents, other than any such consents the failure to obtain which would not reasonably be expected to have a material adverse effect on Western Wireless or ALLTEL, on terms which, subject to certain exceptions described under the heading “The Merger Agreement — Covenants — Filings; Other Actions”, would not require ALLTEL to divest itself of any businesses, assets or product lines; and
	•	the receipt by each of ALLTEL and Western Wireless, from its respective legal counsel, of an opinion substantially to the effect that the merger will be treated as a reorganization under section 368(a) of the Code.

	•	the merger is not consummated by August 31, 2005 (which date can be extended by ALLTEL or Western Wireless to November 30, 2005 if, as of August 31, 2005, all conditions to closing other than regulatory approvals have been satisfied) through no fault of the party seeking to terminate the merger agreement;
	•	there are final, non-appealable legal restraints preventing the merger and the party seeking to terminate the merger agreement has used all reasonable efforts to remove such legal restraints;
	•	Western Wireless shareholders fail to approve and adopt the merger agreement and the merger at the annual meeting, except that Western Wireless will not be permitted to terminate the merger agreement because of the failure to obtain the shareholder approval if such failure was caused by (i) Western Wireless’ actions or inactions that constitute a material breach of the merger agreement or (ii) a breach of the voting agreement by any party thereto other than ALLTEL; or
	•	the other party has materially breached a representation, warranty, covenant or agreement of that party contained in the merger agreement, resulting in a failure of a condition to the non-breaching party’s obligation to effect the merger, and such breach cannot be cured by August 31, 2005 (or November 30, 2005, if extended);

	•	Western Wireless terminates the merger agreement because the merger has not been completed by August 31, 2005 (or if either party has properly extended the termination date under the merger agreement, by November 30, 2005), which failure to complete was not proximately caused by ALLTEL’s breach in any material respect of its obligations under the merger agreement, or either Western Wireless or ALLTEL terminates the merger agreement because the Western Wireless shareholders fail to approve the merger and the merger agreement at the annual meeting, and

74

---

 

	•	prior to the termination of the merger agreement, a Company Alternative Proposal (as defined above) shall have been commenced, publicly proposed or publicly disclosed prior to, and in each case, not withdrawn at the time of, the annual meeting, and
	•	Western Wireless enters into an agreement regarding the acquisition of Western Wireless by merger or business combination, or a “merger of equals,” or the acquisition of 40% or more of its assets or shares of common stock with the third party making such Company Alternative Proposal within nine months after the termination or Western Wireless enters into an agreement regarding the acquisition of Western Wireless by merger or business combination, or a “merger of equals,” or the acquisition of 40% or more of its assets or shares of common stock with any other party within six months after the termination.

	•	extend the time of performance of any of the obligations or other acts of the other parties pursuant to the merger agreement;
	•	waive any inaccuracies in the representations and warranties of the other party contained in the merger agreement or in any document delivered pursuant to the merger agreement; or
	•	waive compliance with any of the agreements or conditions of the other party contained in the merger agreement which may be legally waived.

75

---

 

76

---

 

	•	deliver to Western Wireless before the vote is taken at the Western Wireless annual meeting regarding the merger agreement and the merger, written notice of your intent to exercise your dissenters’ rights and demand payment for your shares of Western Wireless common stock if the merger is completed, which notice must be separate from your proxy. Your vote against the merger agreement alone will not constitute written notice of your intent to exercise your dissenters’ rights;
	•	not vote your shares in favor of the merger agreement; and
	•	follow the statutory procedures for perfecting dissenters’ rights under Washington law, which are described below under the heading “Appraisal Procedures.”

77

---

 

	•	the address where the demand for payment and certificates representing shares of Western Wireless common stock must be sent and the date by which certificates must be deposited;
	•	the date on which your payment demand must be received by Western Wireless, which date will not be fewer than 30 nor more than 60 days after the date the written notice is delivered to you;
	•	a form for demanding payment that states the date of the first announcement to the news media or to shareholders of the proposed merger (January 10, 2005) and requires certification from the person asserting dissenters’ rights of whether or not the person acquired beneficial ownership of Western Wireless common stock before the date of the first announcement; and
	•	a copy of Chapter 23B.13 of the WBCA.

	•	financial data relating to Western Wireless, including a balance sheet, an income statement, a statement of changes in shareholders’ equity as of and for a fiscal year ended not more than sixteen months before the date of payment, and the latest available interim financial statements, if any;
	•	an explanation by Western Wireless of how it estimated the fair value of the shares;

78

---

 

	•	an explanation by Western Wireless of how the interest was calculated;
	•	a statement of the dissenter’s right to demand supplemental payment if such shareholder believes that the amount paid is less than the fair value of the shares or under certain other circumstances enumerated in the statute and described below; and
	•	a copy of Chapter 23B.13 of the WBCA.

79

---

 

80

---

 

	•	the public announcement that any person (other than ALLTEL, any subsidiary of ALLTEL or any employee benefit plan of ALLTEL) together with its affiliates and associates (an “Acquiring Person”), beneficially owns 15% or more of ALLTEL common stock; or
	•	the close of business on the tenth business day after any person commences a tender or exchange offer if upon completion that person would beneficially own 15% or more of ALLTEL common stock.

	•	ALLTEL engages in a merger or other business combination transaction in which ALLTEL does not survive,
	•	ALLTEL engages in a merger or other business combination transaction with another person in which ALLTEL survives, but in which ALLTEL common stock is changed or exchanged, or
	•	50% or more of ALLTEL’s assets, cash flow or earning power is sold or transferred,

81

---

 

	•	cure any ambiguity;
	•	correct or supplement any defective or inconsistent provision;
	•	shorten or lengthen any required time period; or
	•	change any provisions in the Rights Agreement in any manner which does not adversely affect the interests of the Rights holders (other than an Acquiring Person).

82

---

 

83

---

 

	•	the distinctive serial designation and the number of shares constituting such series;
	•	the dividend rates or the amount of dividends to be paid on the shares of such series, whether dividends shall be cumulative and, if so, from which date or dates, the payment and record date or dates for dividends, and the participating and other rights, if any, with respect to dividends;
	•	the voting powers, full or limited, if any, of the shares of such series;
	•	whether the shares of such series shall be redeemable and, if so, the price or prices at which, and the terms and conditions on which, such shares may be redeemed;
	•	the amount or amounts payable upon the shares of such series and any preferences applicable thereto in the event of voluntary or involuntary liquidation, dissolution or winding up of the company;
	•	whether the shares of such series shall be entitled to the benefit of a sinking or retirement fund to be applied to the purchase or redemption of such shares, and if so entitled, the amount of such fund and the manner of its application, including the price or prices at which such shares may be redeemed or purchased through the application of such fund;
	•	whether the shares of such series shall be convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of ALLTEL or a subsidiary and, if so convertible or exchangeable, the conversion price or prices, the rate or rates of exchange, and the adjustments thereof, if any, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange;
	•	the price or other consideration for which the shares of such series shall be issued;
	•	whether the shares of such series which are redeemed or converted shall have the status of authorized but unissued shares of undesignated preferred stock (or series thereof) and whether such shares may be reissued as shares of the same or any other class or series of stock; and
	•	such other powers, preferences, rights, qualifications, limitations and restrictions thereof as the board of directors may deem advisable.

84

---

 

85

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
Authorized Capital Stock; Voting		ALLTEL’s certificate of incorporation provides that the authorized capital stock of ALLTEL consists of (i) 100,000,000,000 shares of common stock, $1.00 par value per share, (ii) 50,000,000 shares of voting cumulative preferred stock, par value $25.00 per share, and (iii) 50,000,000 shares of no par cumulative non-voting preferred stock, having no par value per share. Each share of ALLTEL common stock is entitled to one vote per share.		The amended and restated articles of incorporation of Western Wireless provide that the authorized capital stock of Western Wireless consists of 300,000,000 shares of common stock, no par value per share (of which 237,276,129 are designated Class A Common Stock and 62,723,871 are designated Class B Common Stock) and 50,000,000 shares of preferred stock, no par value per share. Each share of Class A Common Stock entitles the holder to one vote, and each share of Class B Common Stock entitles the holder to ten votes.
Size of Board of Directors		Delaware law provides that the board of directors of a Delaware corporation must consist of one or more directors with the number specified in or fixed in accordance with the certificate of incorporation or by-laws. The ALLTEL		Washington law provides that the board of directors of a Washington corporation must consist of one or more directors, with the number specified in or fixed in accordance with the articles of incorporation or by-laws. The

86

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
		by-laws provide that the number of directors will be fixed from time to time by the ALLTEL board of directors. The ALLTEL by-laws provide that the board of directors be divided into three classes with each class having at least three directors. The number of directors in each class may be fixed or changed from time to time. The number of ALLTEL directors is currently fixed at thirteen.		Western Wireless articles of incorporation provide that the number of directors shall be specified in, and may from time to time be increased in such manner as may be prescribed in, the by-laws. The by-laws of Western Wireless provide that the board of directors shall consist of at least one and not more than nine members as determined by the shareholders or the board of directors. The number of Western Wireless directors is currently fixed at nine.
Cumulative Voting		Delaware law allows for a corporation’s certificate of incorporation to permit shareholders to cumulate their votes. However, the certificate of incorporation of ALLTEL does not so provide, and accordingly, holders of ALLTEL common stock have no cumulative voting rights in connection with the election of directors.		Under Washington law, unless a corporation’s articles of incorporation provide otherwise, shareholders are permitted to cumulate their votes in connection with the election of directors. The articles of incorporation of Western Wireless provide that there is to be no cumulative voting.
Special Meetings of Shareholders		Under Delaware law, a special meeting of the shareholders may be called by the board of directors of the corporation or by any other person authorized to do so in the certificate of incorporation or by-laws. The ALLTEL by-laws provide that a special meeting may be convened at any time by the chairman, the president or the secretary, by the directors acting at a meeting or a majority of the directors acting without a meeting.		Under Washington law, a special meeting of the shareholders may be called by a corporation’s board of directors, the persons authorized to do so in the corporation’s articles of incorporation or by-laws or, unless limited or denied by a corporation’s articles of incorporation, by the holders of at least 10% of all the votes entitled to be cast on any issue proposed to be considered at the special meeting. The Western Wireless by-laws provide that, except as otherwise provided by law, special meetings of shareholders will be held whenever called by the board of directors or an authorized committee of the board of directors.
Notice of Shareholder Meetings		In accordance with Delaware law, ALLTEL’s by-laws provide that written notice of any shareholders meeting must be given to each shareholder entitled to vote not less than 10 or more than 60 days before the date of the meeting.		The Western Wireless by-laws provide that written notice of any shareholders meeting must be given to each shareholder entitled to vote not less than 10 nor more than 60 days before the meeting, unless a greater period of notice is required by law in a particular case. Washington law states that notice of not less than 20 or more than

87

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
				60 days before the shareholder meeting must be given in the case of a meeting to act on an amendment to the articles of incorporation, a plan of merger or share exchange, the sale, lease, exchange or other disposition of all or substantially all of the corporation’s assets or the dissolution of the corporation.
Action by Written Consent of Shareholders Without a Meeting		As permitted by Delaware law, the ALLTEL by-laws provide that any action that may be taken at a meeting of the shareholders may be taken without a meeting, without prior notice and without a vote, but only if written consents approving the action are signed by all shareholders entitled to vote on the action and delivered to the corporation or the appropriate officer.		Under Washington law and the Western Wireless by-laws, action by the shareholders may be taken without a meeting only if written consents approving the action are signed by all shareholders entitled to vote on the action and delivered to the corporation.
Removal of Directors		Delaware law provides that shareholders holding a majority of shares entitled to vote may remove any director or the entire board of directors; provided, however, that in the case of a Delaware corporation with a classified board, unless otherwise provided in the certificate of incorporation, shareholders may only remove a director for cause. ALLTEL has a classified board of directors but because the certificate of incorporation does not contain this provision, shareholders holding a majority of the shares may only remove a director for cause.		Under Washington law, a director may be removed with or without cause unless a corporation’s articles of incorporation provide that directors may be removed only for cause. The articles of incorporation of Western Wireless do not so provide. Under the articles of incorporation of Western Wireless, a director may be removed by the shareholders only at a special meeting and such director will be removed upon the affirmative vote of not less than a majority of the number of votes attributable to all shares of capital stock of the corporation outstanding and entitled to vote.
Vacancies on the Board of Directors		Delaware law provides that, unless the governing documents of a Delaware corporation provide otherwise, vacancies and newly created directorships resulting from a resignation or an increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum. ALLTEL’s certificate of incorporation and by-laws provide that vacancies resulting from increases in the size of any class of directors or otherwise from the		Under Washington law, unless a corporation’s articles of incorporation provide otherwise, a vacancy on the board of directors, including a vacancy resulting from an increase in the number of directors, may be filled by the shareholders, by the board of directors, or if the directors in office constitute fewer than a quorum, by the affirmative vote of a majority of all the directors in office. The articles of incorporation and by-laws of Western Wireless provide that a vacancy may be

88

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
		removal, resignation, death or disqualification of any director shall be filled by the affirmative vote of a majority of the remaining directors, even if less than a quorum.		filled by the affirmative vote of a majority of the remaining directors, even if less than a quorum.
Amendment of Articles of Incorporation or Certificate of Incorporation		Under Delaware law, unless a higher vote is required in the certificate of incorporation of a corporation, an amendment to such certificate of incorporation generally may be approved by a majority of the outstanding shares entitled to vote on the proposed amendment. Notwithstanding any provision of a corporation’s certificate of incorporation to the contrary, under Delaware law, holders of a class of a corporation’s stock are entitled to vote as a class on the approval and adoption of any amendment to the corporation’s certificate of incorporation which would: • increase or decrease the aggregate number of authorized shares of such class (subject to certain exceptions); • increase or decrease the par value of the shares of such class; or • alter or change the powers, preferences or rights of such class so as to affect them adversely. Under the ALLTEL certificate of incorporation, the affirmative vote of the holders of at least 85% of the voting stock of ALLTEL is required to approve an amendment to the ALLTEL fair price provision, unless such amendment is recommended to ALLTEL shareholders by a majority of the members of the ALLTEL Board and two-thirds of the ALLTEL continuing directors.		Under Washington law, a board of directors may adopt one or more amendments to the articles of incorporation to make certain ministerial changes without shareholder action, including changes to the corporate name and, if the corporation has only one class of shares outstanding, changes to the number of outstanding shares in order to effectuate a stock split or stock dividend, or changes to, or the elimination of, provisions with respect to the par value of a corporation’s stock. Other amendments to the articles of incorporation must be recommended to the shareholders by the board of directors and the holders of a majority of the outstanding shares of stock entitled to vote on the amendment must approve the amendment unless another percentage is specified: • in the articles of incorporation, • by the board of directors as a condition to its recommendation or • by the provisions of the WBCA. The articles of incorporation of Western Wireless provide that the provisions of the articles of incorporation may be repealed or amended only upon the affirmative vote of not less than a majority of the number of votes attributable to all shares of capital stock of the corporation outstanding and entitled to vote. However, the articles of incorporation also state that provisions relating to preemptive rights, cumulative voting and redemption of outstanding shares of capital stock may not be repealed or amended in any

89

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
				respect, unless such action is approved by the affirmative vote of not less than 662/3% of the number of votes attributable to all shares of capital stock of the corporation outstanding and entitled to vote.
Amendment of By-laws		In accordance with Delaware law, ALLTEL’s by-laws may be altered, amended or repealed by the shareholders or by the board of directors. New by-laws may also be adopted by the shareholders or board of directors. The alteration, amendment or repeal of the by-laws or the adoption of new by-laws, can be effected at any annual meeting of shareholders, any meeting of the board of directors, or at any special meeting of the shareholders.		Under Washington law, a corporation’s board of directors can amend or repeal the by-laws, or adopt new by-laws, unless the articles of incorporation or the WBCA reserves this power exclusively to the shareholders in whole or in part (the articles of incorporation of Western Wireless do not do so) or if the shareholders, in amending or repealing a particular by-law, provide expressly that the board of directors may not amend or repeal that by-law. A corporation’s shareholders may amend or repeal the by-laws, or adopt new by-laws.
Delivery and Notice Requirements of Shareholder Nominations and Proposals		The ALLTEL by-laws provide that for business to be brought at any annual meeting such business must be either (a) in accordance with a notice of annual meeting, (b) by or at the direction of the ALLTEL Board or (c) otherwise properly brought before the annual meeting by a shareholder. To be properly brought before an annual meeting by a shareholder, the shareholder must give timely notice in proper form to ALLTEL’s Secretary and be received by ALLTEL not less than 90 nor more than 120 days prior to the one year anniversary of the annual meeting in the immediately preceding year. Other than the limitations described above in “Special meetings of shareholders”, the ALLTEL by-laws contain no provision regarding how actions may be brought by shareholders before a special meeting.		The by-laws of Western Wireless provide that any shareholder seeking to bring business before or to nominate a director at any meeting of shareholders, must deliver written notice to the principal executive offices of Western Wireless not less than (i) with respect to an annual meeting of shareholders, 120 calendar days in advance of the one-year anniversary of the date that Western Wireless’ proxy statement was released to shareholders in connection with the previous year’s annual meeting, and (ii) with respect to a special meeting of shareholders, a reasonable time before Western Wireless’ proxy statement is to be released.
Proxies		Under Delaware law, each shareholder entitled to vote at a meeting of shareholders or to express consent or dissent to corporate action in writing		Under Washington law, a proxy is valid for eleven months after receipt of the appointment form, unless the form provides for a longer period. The proxy

90

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
		without a meeting may grant a proxy, but no such proxy may be voted or acted upon after 3 years from its date, unless the proxy provides for a longer period. A duly executed proxy will be irrevocable if it states that it is irrevocable and if, and only as long as, the appointment is coupled with an interest.		is revocable unless it states that it is irrevocable and the appointment is coupled with an interest.
Preemptive Rights		Delaware law provides that no shareholder will have any preemptive rights to purchase additional securities of the corporation unless the certificate of incorporation expressly grants these rights. ALLTEL’s certificate of incorporation does not grant any preemptive rights.		Under Washington law, shareholders have preemptive rights unless the corporation’s articles of incorporation provide otherwise. The articles of incorporation of Western Wireless provide that no statutory preemptive rights will exist with respect to the shares of capital stock of Western Wireless.
Shareholder Rights Plans		ALLTEL is party to the Rights Agreement pursuant to which ALLTEL’s board declared a dividend of one Right for each share of ALLTEL common stock outstanding on February 9, 1997 and for each share of ALLTEL common stock issued between that date and the earlier of: • the public announcement that any person (other than ALLTEL, its subsidiaries or its employee benefit plans) together with its affiliates and associates, beneficially owns 15% or more of ALLTEL common stock; or • the close of business on the tenth business day after any person commences a tender or exchange offer if upon completion that person would beneficially own 15% or more of ALLTEL common stock. Each holder of a Right may purchase from ALLTEL, upon the occurrence of certain events, 1/1000 of a share of ALLTEL’s Series K Stock at the Purchase Price. The Rights are not exercisable until the earlier of the two events listed above		Western Wireless does not have a shareholder rights plan.

91

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
		and will expire at the close of business on January 31, 2007 unless earlier redeemed by ALLTEL. If an Acquiring Person acquires 15% or more of ALLTEL common stock then each holder of a Right shall have the right to purchase at the then current Purchase Price and in lieu of Series K Stock, shares of ALLTEL common stock having a value equal to two times the Purchase Price. The Rights have certain anti-takeover effects. The Rights will cause substantial dilution to a person or a group that attempts to acquire ALLTEL without conditioning the offer on: (a) the Rights being redeemed; (b) a substantial number of Rights being acquired; or (c) being deemed a Qualifying Offer under the Rights Agreement. See “Description of ALLTEL Capital Stock — ALLTEL Common Stock and Related Rights” above for more information.
Dividends		Subject to any restrictions contained in a corporation’s certificate of incorporation, Delaware law generally provides that a corporation may declare and pay dividends out of “surplus” (defined as the excess, if any, of net assets (total assets less total liabilities) over capital) or, when no surplus exists, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year, except that dividends may not be paid out of net profits if the net assets of the corporation are less than the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets.		Under Washington law, a board of directors may approve, and a corporation may make, a distribution to shareholders only to the extent that: • such distribution does not leave the corporation unable to pay its debts as they become due in the usual course of business, and • after the distribution, the corporation’s total assets would not be less than the sum of its total liabilities plus, unless the articles of incorporation provide otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

92

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
Limitation of Personal Liability of Directors		In accordance with Delaware law, ALLTEL’s certificate of incorporation provides that a director of ALLTEL will not be personally liable to ALLTEL or ALLTEL’s shareholders for monetary damages for breach of fiduciary duties, except for liability for: • any breach of the director’s duty of loyalty to ALLTEL or ALLTEL’s shareholders; • acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; • payment of a dividend or the repurchase or redemption of stock in violation of Delaware law; or • any transaction from which the director derived an improper personal benefit.		Western Wireless’ articles of incorporation provide that a director will not be personally liable to the corporation or its shareholders for monetary damages for conduct as a director, except for: • Acts or omissions involving intentional misconduct or a knowing violation of law; • Conduct violating Section 23B.08.310 of the WBCA (which involves liability for unlawful distributions by the corporation); • Any transaction from which the director will personally receive a benefit in money, property, or services to which the director is not legally entitled. Western Wireless’ articles of incorporation further provide that if the WBCA is amended to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of Western Wireless will be eliminated or limited to the fullest extent permitted by the WBCA, as so amended.
Indemnification of Directors and Officers		ALLTEL’s certificate of incorporation requires ALLTEL to indemnify any party to the fullest extent permitted by the DGCL who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding because he is or was a director, officer, employee or agent of ALLTEL, or is or was serving at the request of ALLTEL as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. In addition ALLTEL to the fullest extent authorized under Delaware law shall pay in advance of the final disposition of any such proceeding all expenses incurred by any director or officer in		Under Washington law, the standards for allowing indemnification of officers and directors are substantially the same as those under Delaware law. The Western Wireless articles of incorporation require Western Wireless to indemnify its directors and officers to the fullest extent permitted by Washington law. The Western Wireless by-laws provide that the corporation must indemnify its directors and officers and may indemnify its employees and agents to the full extent permitted by the WBCA against liability arising out of a proceeding to which each such individual was made a party because

93

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
		connection with such proceeding. The right to indemnification is not exclusive of any other right which that individual may have or hereafter acquire under any statute, provision of ALLTEL’s certificate of incorporation or by-laws, agreement, vote of shareholders or disinterested directors or otherwise. ALLTEL is authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, and purchase insurance on behalf of any person required or permitted to be indemnified.		he/she is or was a director, officer, employee or agent of Western Wireless. The by-laws also state that Western Wireless will advance expenses incurred by each such individual who is a party to a proceeding in advance of final disposition of the proceeding, as provided by applicable law, the articles of incorporation, or by written agreement. Notwithstanding the foregoing, Western Wireless is not obligated to indemnify its directors, officers, employees and agents for any amounts paid in settlement of any proceeding without Western Wireless’ prior written consent to such settlement and payment. Further, Western Wireless is not obligated to indemnify or advance expenses to any such individual with respect to any proceeding: • brought voluntarily by the party seeking indemnification and not by way of defense (except with respect to proceedings brought to establish or enforce a right to indemnification); • instituted in bad faith or frivolously by such individual seeking to enforce or interpret the provisions of Western Wireless’ articles of incorporation or by-laws; • to the extent such individual has otherwise actually received payment (under any insurance policy or otherwise) of the amounts otherwise indemnifiable; or • if Western Wireless is prohibited by its articles of incorporation, the WBCA or other applicable law from paying such indemnification and/or advancement of expenses.

94

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
				Washington law provides that a corporation may not indemnify a director or officer in connection with: • a proceeding by or in the right of the corporation in which the director or officer did not meet the standards of conduct described in the WBCA; or • any other proceeding charging improper personal benefit to the director or officer, whether or not involving action in such individual’s official capacity, in which the director or officer is adjudged liable on the basis that personal benefit was improperly received. Western Wireless is authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, and purchase insurance on behalf of any person required or permitted to be indemnified.
Appraisal/ Dissenters’ Rights		Under the DGCL, ALLTEL shareholders may exercise a right to dissent from certain corporate actions and obtain payment of the fair value of their shares. The DGCL provides appraisal rights only in certain mergers or consolidations and not (unless the certificate of incorporation of a corporation so provides, which the ALLTEL Certificate does not) for a sale or transfer of all or substantially all of a corporation’s assets or an amendment to its certificate of incorporation. Moreover, the DGCL does not provide appraisal rights in connection with a merger or consolidation (unless the certificate of incorporation so provides, which the ALLTEL Certificate does not): • to the holders of shares of a constituent corporation listed on a national securities exchange (or designated as a national market system security by the National		Under Washington law, a shareholder is entitled to dissent from, and obtain the fair value in cash of his or her shares in connection with, certain corporate actions, including certain mergers, share exchanges, and sales or exchanges of all or substantially all of the corporation’s property other than in the usual and regular course of business, and any amendment of the articles of incorporation that materially reduces shares owned to a fraction of a share if the fractional share so created is to be acquired for cash. In order to exercise dissenters’ rights, a Western Wireless shareholder must comply with the procedures set forth in Chapter 23B.13 of the WBCA, a copy of which is attached to this proxy statement/prospectus as Annex D. A summary of Chapter 23B.13 is set forth in the section entitled “Dissenters’ Rights.”

95

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
		Association of Securities Dealers, Inc.) or • held of record by more than 2,000 shareholders, unless the applicable agreement of merger requires the holders of such shares to receive any property other than shares of stock of the resulting or surviving corporation, shares of stock of any other corporation listed on a national securities exchange (or designated as described above) or held of record by more than 2,000 holders, cash in lieu of any fractional shares or any combination of the foregoing. In addition, the DGCL denies appraisal rights if the shareholders of the surviving corporation in a merger did not have to vote to approve the merger. Appraisal rights are not available to ALLTEL shareholders with respect to the merger.
Certain Business Combination Restrictions		The DGCL contains a business combination statute that protects publicly-traded Delaware corporations, such as ALLTEL, from hostile takeovers, and from actions following the takeover, by prohibiting some transactions once an acquiror has gained a significant holding in the corporation. Section 203 of the DGCL prohibits business combinations, including mergers, sales and leases of assets, issuances of securities and similar transactions by a corporation or a subsidiary with an interested shareholder that beneficially owns 15% or more of a corporation’s voting stock, within three years after the person becomes an interested shareholder, unless: • prior to the time the person becomes an interested shareholder, the board of directors of the target corporation approved either the business		Under Washington law, public companies based in Washington (or that have significant business contacts with the state) are prohibited, with specified exceptions, from engaging in significant business transactions with any person or group of persons who beneficially own 10% or more of the voting shares of the target corporation for a period of five years after such share acquisition, unless the transaction or acquisition of shares is approved by a majority of the members of the board of directors of the target corporation prior to the time of the initial acquisition of shares by the acquiring person. These significant business transactions include: • a merger, share exchange or consolidation with, a disposition of assets with an aggregate market value over 5% of the total market value of all of the target’s assets or all of the

96

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
		combination or the transaction which will result in the person becoming an interested shareholder; • after the completion of the transaction in which the person becomes an interested shareholder, the interested shareholder holds at least 85% of the voting stock of the corporation, excluding for purposes of determining the number of shares outstanding those shares owned by (i) persons who are both officers and directors, and (ii) specified employee stock plans; or • after the person becomes an interested shareholder, the business combination is approved by the target corporation’s board of directors and holders of at least 662/3% of the outstanding voting stock, excluding shares held by the interested shareholder. A corporation can elect not to be governed by Section 203, however, The ALLTEL has not made this election and is therefore governed by Section 203. The ALLTEL certificate of incorporation also contains a fair price provision that requires the approval by the holders of at least 85% of the voting power of the outstanding shares of any class of stock of ALLTEL entitled to vote generally in the election of directors as a condition for all Section 203 business combinations involving ALLTEL and a Section 203 interested shareholder, unless certain conditions are met.		target’s outstanding shares to, or the issuance or redemption of shares to or from, the acquiring person or its affiliates or associates; • termination of 5% or more of the Washington-based employees of the target corporation over the course of the five-year period following the acquiring person’s acquisition of 10% or more of the shares of the target corporation, if such termination is the result of the acquiring person’s acquisition; • the liquidation or dissolution of the target corporation pursuant to an arrangement with an acquiring person; • a reclassification of securities of the target corporation pursuant to an arrangement with the acquiring person that has the effect of increasing the proportionate share of voting securities owned by the acquiring person; or • an issuance to the acquiring person, or a transfer or redemption in favor of the acquiring person, by the target corporation of shares, options, warrants or other rights to acquire shares of the target corporation if the issuance, transfer or redemption is not made to all shareholders of the target corporation on the same proportional basis. After the five-year period, certain significant business transactions still may not occur unless they comply with certain fair price provisions of the statute or are approved by the disinterested shareholders. The Western Wireless board of directors has expressly approved the merger agreement so that the restrictions set forth above with respect to business combinations do not apply to the merger agreement or the

97

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
				transactions contemplated thereby.
Vote on Certain Fundamental Issues		Delaware law permits a corporation to include supermajority provisions in its certificate of incorporation and by-laws with respect to the approval of various issues. However, other than the effect of Section 203 of the DGCL and ALLTEL’s “fair price” provisions, the certificate of incorporation and by-laws of ALLTEL do not contain any supermajority voting requirement provisions related to matters upon which the shareholders of ALLTEL may vote.		Under Washington law, the following must be approved by two-thirds of all votes entitled to be cast by each voting group entitled to vote as a separate group: • a merger, • a share exchange, • a sale of all, or substantially all, of a corporation’s assets, other than in the ordinary course of business; and • a dissolution. A corporation may provide for lower voting requirements for these fundamental actions, provided that the minimum vote requirement may not be below a majority of all votes entitled to be cast. The articles of incorporation of Western Wireless do not contain such a provision.
Transactions With Officers or Directors		Under the DGCL, certain contracts or transactions in which one or more of a corporation’s directors or officers has an interest are not void or voidable solely because of such interest if either: - the stockholders or a majority of the disinterested members of the board of directors approve in good faith any such contract or transaction after full disclosure of the material facts; or - the contract or transaction is “fair” as to the corporation at the time it was approved.		The WBCA sets forth a safe harbor for transactions between a corporation and one or more of its directors. A conflicting interest transaction may not be enjoined, set aside or give rise to damages if: - it is approved by a majority of qualified directors, but no fewer than two; - it is approved by the affirmative vote of the majority of all qualified shares after notice and disclosure to the stockholders; or - at the time of commitment, the transaction is established to have been fair to the corporation. For purposes of this provision, a “qualified director” is one who does not have either: (1) a conflicting interest respecting the transaction; or (2) a

98

---

 

		ALLTEL Shareholder Rights		Western Wireless Shareholder Rights
				familial, financial, professional, or employment relationship with a second director who does have a conflicting interest respecting the transaction, which relationship would, in the circumstances, reasonably be expected to exert an influence on the first director’s judgment when voting on the transaction. “Qualified shares” are defined generally as shares other than those beneficially owned, or the voting of which is controlled, by a director, or an affiliate of the director, who has a conflicting interest respecting the transaction.

99

---

 

100

---

 

101

---

 

							Settle
							Purchase
							Obligation
							Related to								Western				Pro Forma
			ALLTEL,				Equity				ALLTEL,				Wireless,				Add (Deduct)
			as Reported				Units				as Adjusted				as Reported				Adjustments				Combined
(Dollars in millions)
Assets
Cash and short-term investments			$	484.9			$	1,385.0	(a)		$	1,869.9			$	278.6			$	(2,070.5	)(f)		$	78.0
Other current assets				1,131.9				—				1,131.9				493.0				(148.4	)(b)(d)(g)			1,476.5
Total current assets				1,616.8				1,385.0				3,001.8				771.6				(2,218.9	)			1,554.5
Investments				804.9				—				804.9				11.0				107.2	(b)			923.1
Goodwill				4,875.7				—				4,875.7				—				3,835.6	(f)			8,711.3
Other intangibles				1,306.1				—				1,306.1				1,237.4				(196.9	)(c)(f)			2,346.6
Property, plant and equipment, net				7,548.1				—				7,548.1				1,054.1				427.5	(f)			9,029.7
Other assets				452.1				—				452.1				44.7				—				496.8
Total Assets			$	16,603.7			$	1,385.0			$	17,988.7			$	3,118.8			$	1,954.5			$	23,062.0
Liabilities and Shareholders’ Equity
Current liabilities			$	1,460.3			$	—			$	1,460.3			$	707.3			$	258.8	(d)(f)		$	2,426.4
Long-term debt				5,352.4				—				5,352.4				2,013.2				(1,144.9	)(f)			6,220.7
Deferred income taxes				1,715.1				—				1,715.1				47.4				(14.5	)(g)			1,748.0
Other liabilities				947.2				—				947.2				86.9				—				1,034.1
Shareholders’ equity:
	Preferred stock			0.3				—				0.3				—				—				0.3
	Common stock			302.3				24.3	(a)			326.6				1,130.6				(1,076.9	)(e)(f)			380.3
	Additional paid-in capital			197.9				1,360.7	(a)			1,558.6				—				3,065.4	(f)			4,624.0
	Unrealized holding gain on investments			153.9				—				153.9				(1.7	)			1.7	(e)			153.9
	Foreign currency translation adjustment			0.5				—				0.5				25.9				(25.9	)(e)			0.5
	Retained earnings			6,473.8				—				6,473.8				(890.8	)			890.8	(e)			6,473.8
	Total shareholders’ equity			7,128.7				1,385.0				8,513.7				264.0				2,855.1				11,632.8
Total Liabilities and Shareholders’ Equity			$	16,603.7			$	1,385.0			$	17,988.7			$	3,118.8			$	1,954.5			$	23,062.0

102

---

 

							Settle
							Purchase
							Obligation
							and Remarket								Western				Pro Forma
			ALLTEL,				Equity Unit				ALLTEL,				Wireless,				Add (Deduct)
			As Reported				Notes				as Adjusted				as Reported				Adjustments				Combined
(Dollars in millions, except per share amounts)
Revenues and sales:
	Service revenues		$	7,374.3			$	—			$	7,374.3			$	1,835.6			$	(12.8	)(k)		$	9,197.1
	Product sales			871.8				—				871.8				82.1				—				953.9
	Total revenues and sales			8,246.1				—				8,246.1				1,917.7				(12.8	)			10,151.0
Costs and expenses:
	Cost of services			2,374.2				—				2,374.2				523.2				75.9	(k)(l)			2,973.3
	Cost of products sold			1,075.5				—				1,075.5				188.9				—				1,264.4
	Selling, general, administrative and other			1,524.2				—				1,524.2				626.5				(63.1	)(l)			2,087.6
	Depreciation and amortization			1,299.7				—				1,299.7				270.7				149.6	(m)			1,720.0
	Restructuring and other charges			50.9				—				50.9				—				—				50.9
	Total costs and expenses			6,324.5				—				6,324.5				1,609.3				162.4				8,096.2
Operating income				1,921.6				—				1,921.6				308.4				(175.2	)			2,054.8
Equity earnings in unconsolidated partnerships				68.5				—				68.5				6.2				—				74.7
Minority interest in consolidated partnerships				(80.1	)			—				(80.1	)			(11.5	)			—				(91.6	)
Other income (expense), net				34.5				—				34.5				(4.2	)			(9.6	)(n)			20.7
Interest expense				(352.5	)			22.1	(h)			(330.4	)			(140.8	)			51.3	(o)			(419.9	)
Loss on extinguishment of debt				—				—				—				(16.3	)			—				(16.3	)
Income from continuing operations before income taxes				1,592.0				22.1				1,614.1				141.8				(133.5	)			1,622.4
Income tax expense (benefit)				565.3				8.6	(i)			573.9				(91.1	)			(52.0	)(p)			430.8
Net income from continuing operations				1,026.7				13.5				1,040.2				232.9				(81.5	)			1,191.6
Preferred dividends				0.1				—				0.1				—				—				0.1
Net income from continuing operations applicable to common shares			$	1,026.6			$	13.5			$	1,040.1			$	232.9			$	(81.5	)		$	1,191.5
Earnings per share from continuing operations:
	Basic		$	3.34							$	3.13											$	3.09
	Diluted		$	3.33							$	3.12											$	3.04
Average common shares outstanding:
	Basic			307.3				24.3	(j)			331.6								53.7	(q)			385.3
	Diluted			308.4				24.3	(j)			332.7								60.5	(r)			393.2

103

---

 

	a.	The pro forma adjustment represents the effects of the May 17, 2005 issuance of ALLTEL common stock to settle the purchase contract obligation related to ALLTEL’s outstanding equity units as if such transaction took place on December 31, 2004. In August 2002, ALLTEL sold 27.7 million equity units in an underwritten public offering. Each equity unit consists of a corporate unit, with a $50 stated amount comprised of a purchase contract and $50 principal amount of senior notes. The purchase contract obligates the holder to purchase, and obligates ALLTEL to sell, on May 17, 2005, for $50, a variable number of newly issued common shares of ALLTEL common stock. The number of ALLTEL shares issued will be determined at the time the purchase contracts are settled based upon the then current price of ALLTEL’s common stock. If the price of ALLTEL’s common stock is equal to or less than $49.50, then ALLTEL will deliver 1.0101 shares to the holder of the equity unit. If the price of ALLTEL’s common stock is greater than $49.50 but less than $60.39, then ALLTEL will deliver a fraction of shares equal to $50 divided by the then current price of ALLTEL’s common stock. Finally, if the price of ALLTEL’s common stock is equal to or greater than $60.39, then ALLTEL will deliver 0.8280 shares to the holder. Accordingly, upon settlement of the purchase contracts on May 17, 2005, ALLTEL will receive proceeds of $1,385.0 million and will deliver between 22.9 million and 28.0 million common shares in the aggregate. The proceeds from the settlement of the purchase contracts is expected to finance the approximate $1.0 billion cash portion of the merger transaction with Western Wireless and a portion of the $1.2 billion of term loans outstanding under the Western Wireless credit facility. The number of ALLTEL common shares to be issued to settle the purchase contracts was assumed to be 24,259,327 shares and was based on ALLTEL’s five-day average stock price through April 29, 2005 of $57.09.

The $50 principal amount of senior notes mature on May 17, 2007 and accrued interest at an initial annual rate of 6.25 percent. On February 17, 2005, ALLTEL completed a remarketing of the senior notes that reset the annual interest rate on the notes to 4.656 percent. The proceeds of the remarketed senior notes were used to purchase a portfolio of U.S. Treasury securities that have been pledged to secure the corporate unit holders’ obligations under the purchase contract component of the corporate unit.

	b.	This adjustment is to reclassify as of the merger date the Western Wireless marketable equity securities of $107.2 million from other current assets to investments to conform to ALLTEL’s financial statement presentation of equity securities.

	c.	This adjustment is to eliminate as of the merger date the recorded values of the Western Wireless customer base, cellular and PCS licenses of $1,206.8 million and to write-off the remaining unamortized debt issuance costs of $30.6 million in connection with the termination of the Western Wireless credit facility. See Note (f).

	d.	This adjustment is to eliminate as of the merger date the existing Western Wireless current portion of deferred activation fees of $4.7 million and the corresponding amount of deferred acquisition costs of $4.7 million in accordance with Emerging Issues Task Force (“EITF”) No. 01-3, “Accounting in a Business Combination for Deferred Revenue of an Acquiree”.

	e.	This adjustment is to eliminate the Western Wireless shareholder equity accounts as of the merger date.

	f.	This adjustment represents the estimated purchase price allocation as of December 31, 2004. For purposes of determining the purchase price allocation, the fair market value of all tangible and

104

---

 

		intangible assets and liabilities were estimated at December 31, 2004. The allocation of purchase price was as follows:

Consideration:
	ALLTEL common stock issued(1)		$	3,068.5
	Repayment of Western Wireless term loans, net of acquired Western Wireless cash balances(2)			905.3
	Cash (including direct transaction costs)(3)			986.6
	Additional cost of acquisition — Western Wireless stock-based compensation plans(4)			50.6
	Total			5,011.0
Allocated to:
	Current assets			344.6
	Property, plant and equipment (including fair value adjustment)(5)			1,481.6
	Investments and other tangible assets			162.9
	Identifiable intangible assets(6)			1,040.5
	Current liabilities acquired(7)(8)			(966.1	)
	Long-term debt assumed (including fair value adjustment)(9)			(768.3	)
	Other long-term liabilities acquired (including deferred taxes)			(119.8	)
	Goodwill(6)		$	3,835.6

(1)	The value of ALLTEL common stock issued was based on 53,748,854 shares issued to Western Wireless shareholders and was calculated on the basis of (1) 100,172,587 Western Wireless shares outstanding at February 28, 2005 and (2) the calculation of the per share consideration received by Western Wireless shareholders on the basis of (a) an exchange ratio of 0.53656 and (b) the five day trailing average closing price of ALLTEL common stock through April 29, 2005 of $57.09. The actual exchange ratio could vary between 0.535 and 0.538 (the greater the number of Western Wireless shareholders electing the all-stock or all-cash elections, the closer this number will be to 0.538 and, conversely, the greater the number of Western Wireless shareholders electing the mixed election, the closer this number will be to 0.535). The final value of ALLTEL shares issued to effect the merger will be based on (1) the actual number of Western Wireless shares outstanding as of the merger date, (2) the actual exchange ratio determined once the Western Wireless shareholder elections have been completed and (3) the average closing price of ALLTEL common stock for a five day period commencing two days prior to the completion of the Western Wireless shareholder elections. Based on ALLTEL’s five-day average stock price through April 29, 2005 and the number of Western Wireless shares outstanding at February 28, 2005, the number of ALLTEL shares to be issued would range between 53,592,334 and 53,905,373 shares and the value of the ALLTEL shares would range between $3,059.6 million and $3,077.5 million, with the difference reflected as an adjustment to goodwill. The mid-point of these ranges were used in preparing the accompanying pro forma combined condensed financial statements.
(2)	Pursuant to the change in control provisions included in the Western Wireless credit facility agreement, any amounts outstanding as of the date of merger will become immediately due and payable. At December 31, 2004, Western Wireless had $1,183.9 million of term loans outstanding under its credit facility and had cash and cash equivalents of $278.6 million. The net debt of $905.3 million represents additional consideration given by ALLTEL in the merger transaction.
(3)	The cash consideration paid by ALLTEL consisted of $926.6 million paid to Western Wireless shareholders and was calculated on the basis of (1) 100,172,587 Western Wireless shares outstanding at February 28, 2005 and (2) the exchange ratio of $9.25 per share. The determination of the actual amount of cash paid will be based on the number of Western Wireless shares outstanding as of the

105

---

 

	merger date. The cash consideration also included $60.0 million of direct cash costs related to the transaction. The direct cash costs consisted of estimates for professional fees (including banking fees) and other direct costs of the transaction.

ALLTEL expects to fund as of the merger date the (1) repayment of term loans outstanding under the Western Wireless credit facility agreement (2) the cash consideration paid to the shareholders of Western Wireless and (3) direct cash costs of the transaction utilizing the available ALLTEL and Western Wireless cash on hand at the merger date with the balance of the cash outlays funded from the proceeds received from the settlement of the equity unit purchase contracts on May 17, 2005 as discussed in Note (a) above and $100.0 million in borrowings under ALLTEL’s commercial paper program computed as follows:

Cash consideration:
	Repayment of Western Wireless term loans, net of acquired Western Wireless cash balances(2)		$	905.3
	Cash payments to Western Wireless shareholders and for direct transaction costs(3)			986.6
	Total cash required to complete the merger transaction			1,891.9
Funded from:
	Cash proceeds from settlement of equity unit purchase contracts — See Note(a)			(1,385.0	)
	ALLTEL cash on hand			(406.9	)
	Commercial paper borrowings required		$	100.0

If the merger is consummated prior to May 17, 2005, ALLTEL will fund the cash outlays with either additional commercial paper borrowings or short-term bank financing. ALLTEL’s maximum borrowing capacity under its commercial paper program is $1.5 billion, of which all $1.5 billion was available for issuance at December 31, 2004. The actual amount of term loans outstanding to be repaid under the Western Wireless credit facility, the amount of available ALLTEL and Western Wireless cash balances and any borrowings required under the ALLTEL commercial paper program will be determined at the merger date. The additional interest expense related to the issuance of the $100.0 million of commercial paper has been included in the adjustments to the unaudited pro forma combined condensed statement of income. See Note (o).

(4)	Under the 1998 Stock Appreciation Plan of the Western Wireless subsidiary which holds the international operations, selected management employees of the international operations had been granted stock appreciation rights (“SARs”) with respect to that subsidiary. The SARs vest ratably over a four-year period from the date of grant. The SARs exercise price is based on the implied enterprise value of the international operations on the grant date. The amount of compensation expense that would be recognized as of the merger date related to the SARs of the Western Wireless subsidiary which holds the international operations was estimated to be $35.1 million based on the implied fair value of Western Wireless’ international operations used to determine the estimated purchase price allocation. Upon consummation of the transaction, unvested Western Wireless stock options granted to directors and certain key Western Wireless management employees will vest as a result of a change in reporting relationship. The amount of compensation expense that would be recognized as of the merger date as a result of the accelerated vesting of the Western Wireless stock options was estimated to be $15.5 million based on the specified conversion ratio of the stock options to ALLTEL common stock equivalents of 0.7 per share. The additional compensation expense attributable to the SARs and stock options of Western Wireless represents additional consideration given by ALLTEL in the merger transaction and has been reflected as an increase in ALLTEL’s additional paid in capital balance as of the merger date.
(5)	Fair value adjustments of approximately $427.5 million have been made to the carrying value of property, plant and equipment related to the international operations of Western Wireless. Western Wireless acquired its Austrian subsidiary, tele.ring Telekom Services GmbH (“tele.ring”) in a

106

---

 

	purchase transaction in June 2001 for a price substantially below the net book value of the acquired assets. This adjustment is to write-up the carrying value of tele.ring’s property, plant and equipment to equal the net book value of the assets as reported for statutory audit purposes. For purposes of preparing the pro forma combined financial statements, ALLTEL has assumed that the statutory net book value approximates fair value, as ALLTEL does not have sufficient information to determine replacement cost of Western Wireless’ property, plant and equipment at this time. Accordingly, the fair value of the acquired property, plant and equipment was based on certain assumptions and does not necessarily represent the ultimate fair value of such assets that will be determined by an independent valuation firm subsequent to the consummation of the merger. The depreciation and amortization effect of the fair value adjustment to property, plant, and equipment has been included in the adjustments to the unaudited pro forma combined condensed statement of income. See Note (m).
(6)	The identifiable intangibles consisted of (1) value assigned to the Western Wireless customer base as of December 31, 2004 of $317.5 million and (2) value assigned to the Western Wireless cellular licenses as of December 31, 2004 of $723.0 million, of which $500.0 million related to the international operations. For purposes of preparing the unaudited pro forma combined condensed statement of income, ALLTEL expects to amortize the fair value of the customer base and the international cellular licenses on a straight-line basis over their respective average estimated lives of five years and twenty years. The domestic cellular licenses recorded of $223.0 million have been classified as indefinite-lived intangible assets and are not subject to amortization because ALLTEL expects both the renewal by the granting authorities and the cash flows generated from the domestic cellular licenses to continue indefinitely. Goodwill of $3,835.6 million represents the excess of the purchase price of the acquired business over the fair value of the underlying identifiable net tangible and intangible assets at December 31, 2004. The premium paid by ALLTEL in the merger is due to the strategic importance of the Western Wireless merger. As a result of the merger, ALLTEL expects to increase its wireless revenue mix from approximately 60 percent to nearly 70 percent of its total consolidated revenues. ALLTEL will achieve additional scale by adding approximately 1.3 million domestic wireless customers (excluding reseller customers) in 19 midwestern and western states that are contiguous to ALLTEL’s existing wireless properties, increasing the number of wireless customers served by ALLTEL to more than 10 million customers in 33 states. ALLTEL also will add approximately 1.6 million international wireless customers in six countries. In addition, the merger will permit ALLTEL to increase its retail position in these domestic, rural markets where it can leverage ALLTEL’s brand and marketing experience and bring significant value to customers by offering competitive national rate plans. ALLTEL also will diversify its wireless roaming revenue sources and, as a result of offering multiple technologies, ALLTEL will become a leading independent roaming partner for the four national carriers in the markets served by ALLTEL. ALLTEL also will enhance its strategic options as the wireless industry continues to restructure while preserving ALLTEL’s strong financial position. Finally, ALLTEL expects to achieve reductions in centralized operations costs and interest expense savings as a result of the merger. The preliminary allocation of value to the intangible assets was based on assumptions as to the value of customers and cellular licenses. These values were determined by use of a market approach, which seeks to measure the value of assets as compared to similar transactions in the marketplace. To determine market values, ALLTEL utilized a third party valuation firm to derive current market values for the customer base (computed on a per customer basis) and cellular licenses (computed on a per POP basis) from publicly available data for similar transactions in the wireless industry. These valuations are preliminary and do not necessarily represent the ultimate fair value of such assets that will be determined by an independent valuation firm subsequent to the consummation of the merger.
(7)	The merger agreement provides for Western Wireless to establish a $20.0 million retention pool for retaining the services of key Western Wireless employees, including executive officers, pursuant to which Western Wireless has adopted a Retention Bonus Plan. The cash retention bonus will be paid by Western Wireless regardless of whether the merger is completed or whether the employee is voluntarily or involuntarily terminated prior to the scheduled payment date of the retention bonus.

107

---

 

Western Wireless has specifically identified the employees and the respective dollar amount of the bonus that will be payable to each participating employee under the Retention Bonus Plan. Accordingly, the $20.0 million of costs associated with the Retention Bonus Plan has been recognized as a liability assumed by ALLTEL as of the consummation date of the merger and has been included in the allocation of the acquisition cost in accordance with EITF 95-3 “Recognition of Liabilities in Connection with a Purchase Business Combination”.

(8)	As a result of a change in control, the holders of the Western Wireless 4.625 percent convertible subordinated notes due 2023 have the right to cause Western Wireless to repurchase their convertible subordinated notes at par upon completion of the merger, and accordingly, this debt has been reclassified as short-term debt in the pro forma combined condensed balance sheet. The fair value of this debt was estimated to be $243.5 million at December 31, 2004 compared to its carrying value of $115.0 million. Immediately following the merger and assuming none of the convertible subordinated notes have been converted prior to the merger date, the fair value adjustment or premium of $128.5 million would be recognized as income because at that point the right to cause Western Wireless to repurchase the convertible subordinated notes becomes effective. A pro forma adjustment to recognize the premium has not been reflected in the pro forma combined condensed statement of income due to the non-recurring nature of this item. Upon closing of the merger transaction, each $1,000 principal amount of the convertible subordinated notes will become convertible into 34.6144 shares of ALLTEL common stock and $598.47 in cash based on the mixed election exchange ratio.
(9)	Fair value adjustments of approximately $54.0 million have been made to the carrying value of the long term debt that was assumed by a subsidiary of ALLTEL in the merger transaction. ALLTEL expects to amortize the effect of the fair value adjustment to long-term debt as a reduction to interest expense over the term of each debt issue. The effect of the fair value adjustment to interest expense has been included in the adjustments to the unaudited pro forma combined condensed statement of income. See Note (o).

	A summary of the effects of the pro forma adjustments (b) to (g) on cash and short-term investments, other current assets, current liabilities, long-term debt and additional paid in capital was as follows:

Effects of pro forma adjustments on cash and short-term investments:
Repayment of Western Wireless term loans, net of required commercial paper borrowings — Note(f)(2)(3)		$	(1,083.9	)
Cash payments to Western Wireless shareholders and for direct transaction costs — Note(f)(3)			(986.6	)
Net decrease in cash and short-term investments resulting from pro forma adjustments		$	(2,070.5	)
Effects of pro forma adjustments on other current assets:
Reclassification of Western Wireless marketable equity securities to investments — Note(b)		$	(107.2	)
Eliminate current portion of deferred activations costs — Note(d)			(4.7	)
Eliminate current portion of Western Wireless deferred income taxes — Note(g)			(36.5	)
Net decrease in other current assets resulting from pro forma adjustments		$	(148.4	)
Effects of pro forma adjustments on current liabilities:
Reclassification of Western Wireless 4.625% convertible subordinated notes to short-term debt — Note(f)(8)		$	115.0
Fair value adjustment to Western Wireless 4.625% convertible subordinated notes — Note(f)(8)			128.5
Record liability related to Western Wireless retention bonus plan — Note(f)(7)			20.0
Eliminate current portion of deferred activation fees — Note(d)			(4.7	)
Net increase in current liabilities resulting from pro forma adjustments		$	258.8

108

---

 

Effects of pro forma adjustments on long-term debt:
Repayment of Western Wireless term loans(f)(2)		$	(1,183.9	)
Reclassification of Western Wireless 4.625% convertible subordinated notes to short-term debt — Note(f)(8)			(115.0	)
Additional commercial paper borrowings of ALLTEL to fund the cash consideration – Note(f)(3)			100.0
Fair value adjustment to long-term debt of Western Wireless — Note(f)(9)			54.0
Net decrease in long-term debt resulting from pro forma adjustments		$	(1,144.9	)
Effects of pro forma adjustments on additional paid in capital
Issuance of ALLTEL common stock to effect the merger transaction — Note(f)(1)		$	3,014.8
Additional cost of acquisition — Western Wireless stock-based compensation plans — Note(f)(4)			50.6
Net increase in additional paid in capital resulting from pro forma adjustments		$	3,065.4

	g.	This adjustment is to record the incremental deferred taxes required under SFAS No. 109, “Accounting for Income Taxes”, for the difference between the revised book basis, i.e., fair value, of Western Wireless assets other than goodwill and liabilities recorded under purchase accounting and the carryover tax basis of those assets and liabilities. Because certain of the identifiable intangible assets recognized in the purchase price allocation had no tax basis at the time of the transaction, a deferred tax liability has been recognized for the difference in book and tax basis of the identifiable intangible assets. The pro forma adjustment to deferred income taxes was based on ALLTEL’s effective tax rate of 38.9 percent.

	h.	This adjustment reflects the favorable effect on interest expense resulting from ALLTEL’s remarketing of $1,385.0 million of aggregate principal amount of senior notes completed on February 17, 2005 discussed in Note (a) above.
	i.	This adjustment is to reflect the tax effect of the adjustment described in Note (h) above and was based on ALLTEL’s effective tax rate of 38.9 percent.
	j.	The adjustment to both the weighted average shares outstanding and the diluted weighted average shares outstanding is to reflect the additional ALLTEL common shares of 24,259,327 to be issued to settle the equity unit purchase contracts on May 17, 2005 as described in Note (a) above.
	k.	This adjustment is to eliminate intercompany roaming activity between ALLTEL and Western Wireless.
	l.	This adjustment is to reflect the reclassification of Western Wireless Universal Service Fund (“USF”) expense of $25.9 million and Western Wireless bad debt expense of $37.2 million from selling, general, administrative and other expenses to cost of services. Such presentation is consistent with ALLTEL’s classification of these expenses in the statement of income.
	m.	This adjustment is to reflect the incremental increase in depreciation expense reflecting the fair value adjustment to the property, plant and equipment of the international operations of Western Wireless described in Note (f)(5) above assuming the transaction had been consummated on January 1, 2004. For purposes of determining this amount, the estimated life of the international property, plant and equipment was assumed to be 7 years as of January 1, 2004. This adjustment also reflects the amortization of the finite-lived identifiable intangible assets recorded in this transaction as previously described in Note (f)(6) above. For purposes of determining the amount of the adjustment, the estimated life of the customer base was assumed to be 5 years and the estimated life of the international cellular licenses was assumed to be 20 years.

109

---

 

Effects on depreciation and amortization expense:
Additional depreciation expense due to fair value adjustment — Note(f)(5) ($427.5 million/7 years)		$	61.1
Amortization of customer lists — Note(f)(6) ($317.5 million/5 years)			63.5
Amortization of international cellular licenses — Note(f)(6) ($500.0 million/20 years)			25.0
Net increase in depreciation and amortization expense		$	149.6

	n.	The adjustment reflects the reduction in interest income resulting from the assumed use of ALLTEL available cash on hand of $406.9 million and Western Wireless available cash on hand of $278.6 million to fund a portion of the repayment of term loans outstanding under the Western Wireless credit facility and the cash consideration required to complete the merger as discussed in Note (f)(3) above. The reduction in interest income was based on ALLTEL’s and Western Wireless’ historical yields earned on cash and short-term investments during the year ended December 31, 2004. During 2004, ALLTEL earned 1.4 percent on its cash and short-term investments, while Western Wireless earned 1.45 percent on its cash and short-term investments.
	o.	The adjustment reflects the favorable effects on interest expense resulting from (1) repayment of the term loans outstanding under the Western Wireless credit facility assumed to occur on January 1, 2004, and (2) amortizing the fair value adjustment to long-term debt discussed in Note (f) (9) above. As of January 1, 2004, the fair value adjustment to long-term debt was estimated to be $33.0 million. This adjustment also reflects the incremental increase in interest expense resulting from the issuance on January 1, 2004 of $100.0 million of commercial paper borrowings by ALLTEL to fund a portion of the cash consideration required to complete the merger as described in Note (f)(3) above and was based on ALLTEL’s current short-term borrowing rate of 2.51 percent.

Effects on interest expense:
Reduction in interest expense due to repayment of Western Wireless term loans — Note(f)(2)		$	(51.0	)
Reduction in interest expense due to amortizing fair value adjustment — Note(f)(9)			(2.8	)
Additional interest expense from issuance of $100.0 million of commercial paper borrowings — Note(f)(3)			2.5
Net decrease in interest expense		$	(51.3	)

	p.	This adjustment is to reflect the tax effect of the pro forma adjustments described in Notes (k) through (o) above and was based on ALLTEL’s effective tax rate of 38.9 percent.
	q.	The adjustment to weighted average shares outstanding is to reflect the additional ALLTEL common shares of 53,748,854 to effect the completion of the merger as described in Note (f)(1) above.
	r.	The adjustment to diluted weighted average shares outstanding is to reflect the additional ALLTEL common shares issued to effect the completion of the merger as described in Note (q) above, as well as additional shares of 6.7 million to reflect the dilutive effects of the Western Wireless stock options and the assumed conversion of the Western Wireless 4.625 percent subordinated notes into ALLTEL common stock.

110

---

 

111

---

 

112

---

 

113

---

 

	Respectfully Submitted,
	John L. Bunce, Jr. (Chairman)
	Peggy V. Philips
	Peter H. van Oppen

114

---

 

			2004				2003
Audit Fees			$	3,636,000			$	1,209,000
Audit-Related Fees			$	34,000			$	11,000
Tax Fees			$	139,000			$	250,000
All Other Fees			$	0			$	30,000
	Total		$	3,809,000			$	1,500,000

115

---

 

		Shares Beneficially Owned(2)												Percentage Beneficially Owned
		Class A				Class B				Total				Class A				Class B				Total				Outstanding
Name and Address(1)		Shares				Shares				Shares				Shares				Shares				Shares				Votes
John W. Stanton(3)			6,034,313				6,050,693				12,085,006				6.45	%			88.48	%			12.05	%			41.05	%
John L. Bunce, Jr.(4)			291,639				0				291,639				*				0				*				*
Mitchell R. Cohen(5)			46,117				0				46,117				*				0				*				*
Daniel J. Evans(6)			30,669				0				30,669				*				0				*				*
Theresa E. Gillespie(3)			6,034,313				6,050,693				12,085,006				6.45	%			88.48	%			12.05	%			41.05	%
Jonathan M. Nelson(7)			687,132				0				687,132				*				0				*				*
Peggy V. Phillips			0				0				0				*				0				*				*
Mikal J. Thomsen(8)			714,325				231,458				945,783				*				3.38	%			*				1.88	%
Peter H. van Oppen(9)			188,575				0				188,575				*				*				*				*
Bradley J. Horwitz(10)			387,021				21,700				408,721				*				*				*				*
Eric Hertz(11)			134,100				0				134,100				*				0				*				*
M. Wayne Wisehart(12)			69,500				0				69,500				*				0				*				*
T. Rowe Price Associates, Inc.(13)			6,399,400				0				6,399,400				6.86	%			0				6.39	%			3.96	%
Columbia Wanger Asset Management, L.P.(14)			5,450,500				0				5,450,500				5.84	%			0				5.44	%			3.22	%
Iridian Asset Management LLC(15)			5,134,400				0				5,134,400				5.50	%			0				5.13	%			3.03	%
All directors and executive officers as a group (17 persons)(16)			9,395,789				6,393,968				15,789,757				9.87	%			93.50	%			15.48	%			44.22	%

	*	Less than 1%

(1)	The address of T. Rowe Price Associates, Inc. (“T. Rowe Price”) is 100 East Pratt Street, Baltimore, Maryland 21202. The address of Columbia Wanger Asset Management, L.P. is 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606. The address of Iridian Asset Management LLC is 276 Post Road West, Westport, Connecticut 06880. The address of Western Wireless’ directors and executive officers is 3650 131(st) Avenue SE, Bellevue, Washington 98006.
(2)	Computed in accordance with Rule 13d-3(d)(1) of the Exchange Act.
(3)	Includes (i) 869,880 shares of Class A common stock and 1,686,069 shares of Class B common stock held by PN Cellular, Inc. (“PN Cellular”), which is substantially owned and controlled by Mr. Stanton and Ms. Gillespie, (ii) 576,859 shares of Class A common stock and 1,274,519 shares of Class B common stock held by Stanton Communications Corporation (“SCC”), which is substantially owned and controlled by Mr. Stanton and Ms. Gillespie, (iii) 4,420,919 shares of Class A common stock and 3,025,668 shares of Class B common stock held by Mr. Stanton and Ms. Gillespie, as tenants in common, (iv) 64,437 shares of Class B common stock held by The Stanton Family Trust, and (v) stock options which become exercisable within sixty days of March 1, 2005, held by Mr. Stanton and Ms. Gillespie to purchase 1,335 and 165,320 shares of Class A common stock, respectively. Mr. Stanton and Ms. Gillespie are married and share voting and investment power with respect to the shares jointly owned by them, as well as the shares held by PN Cellular, SCC and The Stanton Family Trust (the “Stanton Entities”).
(4)	Includes stock options which become exercisable within sixty days of March 1, 2005, held by Mr. Bunce to purchase 5,496 shares of Class A common stock. Options granted to Mr. Bunce prior

116

---

 

	to December 31, 1999 are held for the benefit of Hellman & Friedman Capital Partners II, L.P. and affiliates (“Hellman & Friedman”).
(5)	Includes stock options which become exercisable within sixty days of March 1, 2005, held by Mr. Cohen to purchase 5,496 shares of Class A common stock. Options granted to Mr. Cohen prior to December 31, 1999 are held for the benefit of Hellman & Friedman.
(6)	Includes stock options which become exercisable within sixty days of March 1, 2005, held by Mr. Evans to purchase 10,669 shares of Class A common stock.
(7)	Includes 487,490 shares owned by the Jonathan M. Nelson Family Foundation (the “Foundation”). Mr. Nelson is President and a Director of the Foundation and may be deemed to share voting and investment power over such shares. Mr. Nelson disclaims beneficial ownership of the shares held by the Foundation. Also includes stock options which become exercisable within sixty days of March 1, 2005, held by Mr. Nelson to purchase 3,642 shares of Class A common stock.
(8)	Includes stock options which become exercisable within sixty days of March 1, 2005, held by Mr. Thomsen to purchase 587,992 shares of Class A common stock. Although the table reports all stock options as exercisable into Class A common stock, 109,294 of the stock options held by Mr. Thomsen are exercisable into either Class A common stock or Class B common stock at Mr. Thomsen’s discretion. Mr. Thomsen jointly holds voting and investment power with respect to all of such shares with his wife, except for shares issued or issuable upon the exercise of stock options.
(9)	Includes 5,000 shares of Class A common stock held by Mr. van Oppen’s wife, and 9,025 shares of Class A common stock held in trusts for the benefit of Mr. van Oppen’s son, niece and nephews. Mr. van Oppen disclaims beneficial ownership of those shares. Also includes stock options vested within sixty days of March 1, 2005, held by Mr. van Oppen to purchase 8,375 shares of Class A common stock.

(10)	Includes stock options vested within sixty days of March 1, 2005, held by Mr. Horwitz to purchase 219,021 shares of Class A common stock. Although this table reports all stock options as exercisable into Class A common stock, 47,788 of the stock options held by Mr. Horwitz are exercisable into either Class A common stock or Class B common stock at Mr. Horwitz’ discretion.
(11)	Includes 2,000 shares of Class A common stock held by Mr. Hertz’ wife and 400 shares of Class A common stock held in trust for the benefit of Mr. Hertz’ daughter. Mr. Hertz disclaims beneficial ownership of those shares. Also includes stock options vested within sixty days of March 1, 2005, held by Mr. Hertz to purchase 106,250 shares of Class A common stock.
(12)	Includes stock options vested within sixty days of March 1, 2005, held by Mr. Wisehart to purchase 50,000 shares of Class A common stock.
(13)	Beneficial ownership is as of December 31, 2004, as reported in a Schedule 13G/A filed on February 14, 2005. These shares are owned by various individual and institutional investors to which T. Rowe Price serves as investment adviser with power to direct investments and/or sole power to vote the securities. For purposes of the reporting requirements of the Exchange Act, T. Rowe Price is deemed to be a beneficial owner of such securities; however, T. Rowe Price expressly disclaims that it is, in fact, the beneficial owner of such securities
(14)	Beneficial ownership is as of December 31, 2004, as reported in a Schedule 13G/A filed on February 14, 2005.
(15)	Beneficial ownership is as of December 31, 2004, as reported in the Schedule 13G filed on February 8, 2005.
(16)	Includes stock options vested within sixty days of March 1, 2005, held by directors and executive officers to purchase 1,819,559 shares of Class A common stock. Although this table reports all stock options as exercisable into Class A common stock, 286,942 of the options held by executive officers are exercisable into either Class A common stock or Class B common stock at the respective holder’s discretion.

117

---

 

															Long-Term Compensation Awards
															Restricted				Securities
															Stock				Underlying				All Other
			Annual Compensation
			Fiscal				Salary				Bonus				Awards				Options/				Compensation
Name and Principal Position			Year				($)				($)				($)(1)				SARs (#)				($)(2)
John W. Stanton				2004				270,475				600,000				0				0				6,150
	Chairman and Chief Executive			2003				300,000				0				875,600				0				6,000
	Officer			2002				412,500				0				315,220				0				5,500
Mikal J. Thomsen				2004				330,475				427,500				0				22,500				6,150
	President and Chief Operating			2003				325,000				0				328,350				40,000				6,000
	Officer			2002				325,000				0				174,080				120,000				5,500
Eric Hertz				2004				331,150				323,000				0				125,000				6,150
	Chief Operating Officer			2003				325,000				90,000				218,900				75,000				6,000
				2002	(3)			187,326				59,000				117,760				100,000				251,827	(4)
Bradley J. Horwitz				2004				270,475				373,458				0				45,000				6,150
	Executive Vice President			2003				265,000				0				328,350				30,000				6,000
				2002				265,000				0				168,960				40,000				5,500
M. Wayne Wisehart				2004				246,150				220,000				0				80,000				6,150
	Executive Vice President			2003	(5)			221,667				54,000				153,230				75,000				64,000	(6)
	and Chief Financial Officer

(1)	This column shows the market value of restricted stock grants on the date of grant. Each restricted stock grant in the fiscal years 2002 and 2003 is fully vested.
(2)	Consists of matching Western Wireless contributions under Western Wireless’ 401(k) Profit Sharing Plan and Trust, a portion of which was refunded to Western Wireless and/or Messrs. Stanton, Thomsen, and Horwitz and Hertz in cash each year because non-discrimination (employee participation) thresholds established by the Internal Revenue Service were not met.
(3)	Mr. Hertz was elected chief operating officer of Western Wireless in May 2002.
(4)	Of this amount, $200,000 represents a relocation payment and $51,827 represents a payment made by Western Wireless in 2002 to cover taxes on Mr. Hertz’ initial restricted stock grant.
(5)	Mr. Wisehart was elected executive vice president and chief financial officer of Western Wireless in January 2003.
(6)	Of this amount, $60,000 represents a relocation payment.

118

---

 

						% of Total
		Number of				Options												Potential Realizable Value at
		Securities				Granted to												Assumed Annual Rates of Stock Price
		Underlying				Employees				Exercise or								Appreciation for Option Term(2)
		Options				in Fiscal				Base Price				Expiration
Name		Granted(1)				Year				($/Sh)				Date				0% ($)				5% ($)				10% ($)
John W. Stanton			—				—				—				—				—				—				—
Mikal J. Thomsen			2,500				0.1				29.40				12/30/14				0			$	46,224			$	117,140
			20,000				1.1				21.89				1/15/14				0			$	275,330			$	697,740
Bradley J. Horwitz			25,000				1.4				29.40				12/30/14				0			$	462,238			$	1,171,401
			20,000				1.1				21.89				1/15/14				0			$	275,330			$	697,740
Eric Hertz			50,000				2.8				29.40				12/30/14				0			$	924,475			$	2,342,801
			75,000				4.1				21.89				1/15/14				0			$	1,032,488			$	2,616,527
M. Wayne Wisehart			30,000				1.7				29.40				12/30/14				0			$	554,685			$	1,405,681
			50,000				2.8				21.89				1/15/14				0			$	688,325			$	1,744,351

(1)	The options vest in four equal annual increments beginning December 30, 2005 (but subject to shareholder approval of the 2005 Long-Term Equity Incentive Plan) and January 1, 2005, respectively (subject, however, to acceleration in connection with the merger).
(2)	The potential realizable value portion of the table illustrates value that might be realized upon exercise of the options immediately prior to the expiration of their term, assuming the specified compounded rates of appreciation on Western Wireless’ Class A common stock over the term of the options. These numbers do not take into account certain provisions of the options providing for cancellation of the option following termination of employment.

										Number of Securities								Value of Unexercised
										Underlying Unexercised								in-the-Money
		Shares								Options/SARs at Fiscal								Options/SARs at
		Acquired on								Year-End (#)								Fiscal Year-End ($)
		Exercise				Value Realized
Name		(#)				($)				Exercisable				Unexercisable				Exercisable				Unexercisable
John W. Stanton			0				—				1,335				0				26,807				0
Mikal J. Thomsen			58,500				1,633,759				548,992				76,500				9,860,276				873,600
Bradley J. Horwitz			0				—				202,521	*			75,500				13,480,314	*			692,250
Eric Hertz			0				—				68,750				231,250				1,750,875				3,213,375
M. Wayne Wisehart			0				—				18,750				136,250				453,375				1,730,625

*	Includes 4,000 vested Performance Units issued pursuant to the Western Wireless International Holding Company 1998 Stock Appreciation Plan, as amended.

119

---

 

120

---

 

121

---

 

122

---

 

123

---

 

	Respectfully submitted,
	Jonathan M. Nelson (Chairman)
	Mitchell R. Cohen
	Daniel J. Evans

124

---

 

125

---

 

	•	attracting and retaining the most talented employees, consultants and directors available, and
	•	aligning the long-term interests of employees, consultants and directors with those of Western Wireless’ shareholders by providing an opportunity to acquire an interest in Western Wireless’ business, and by providing rewards for exceptional performance and long-term incentives for future contributions to Western Wireless’ success.

	•	nonqualified stock options;
	•	incentive stock options;
	•	restricted stock;
	•	restricted stock units; and
	•	stock appreciation rights (“SARs”).

126

---

 

127

---

 

	•	six months and one day (except in the case of an incentive stock option in which case such period shall be shortened to three months) after the date of termination of the participant’s service with Western Wireless other than in circumstances covered by the following two bulletpoints;
	•	twelve months after the date on which a participant ceased performing services as a result of his or her total and permanent disability; and
	•	twenty-four months from the date of the death of a participant whose service with Western Wireless terminated as a result of his or her death.

128

---

 

129

---

 

130

---

 

131

---

 

Name and Position		Number of Units(1)
John W. Stanton Chairman and Chief Executive Officer			0
Mikal J. Thomsen President and Chief Executive Officer			2,500
Eric Hertz Chief Operating Officer			50,000
Bradley J. Horwitz Executive Vice President			25,000
M. Wayne Wisehart Executive Vice President and Chief Financial Officer			30,000
Executive Group			208,500
Non-Executive Director Group			15,000
Non-Executive Officer Employee Group			771,000

(1)	The options granted under the 2005 Plan were granted at an exercise price of $29.40, the average of the opening and closing sales prices of Western Wireless Class A common stock on the Nasdaq Stock Market on December 30, 2004, the date of grant; vest in four equal annual increments beginning December 30, 2005 (subject to acceleration in connection with the merger); and expire December 30, 2014.

Number of

Securities to be

Number of Securities

Issued upon

Weighted Average

Remaining Available for

Exercise of

Exercise Price of

Future Issuance under Equity

Outstanding

Outstanding

Compensation Plans

Options, Warrants

Options, Warrants

(Excluding Securities

and Rights(a)

and Rights(b)

Reflected in Column(a))(c)

Equity compensation plans approved by security holders

4,085,882

$

15.01

656,990

Equity compensation plans not approved by security holders

994,500

29.40

7,005,500

Total

5,080,382

$

12.76

7,662,490

(1)

(1)	The following plans have securities available for future issuance: Western Wireless Corporation 2005 Long-Term Equity Incentive Plan (subject to shareholder approval) (7,005,500 shares), and Western Wireless Corporation Executive Restricted Stock Plan, as amended (656,990 shares).

132

---

 

133

---

 

	1.	vote on a proposal to approve and adopt the merger agreement and the merger;
	2.	elect nine directors to serve until the next annual meeting of shareholders and until their successors are elected and qualified or until the consummation of the merger;
	3.	ratify the selection of PricewaterhouseCoopers LLP as Western Wireless’ independent registered public accounting firm for 2005; and
	4.	vote on a proposal to approve and adopt the Western Wireless Corporation 2005 Long-Term Equity Incentive Plan.

134

---

 

	•	shares held by persons who attend or are represented at the Western Wireless annual meeting whether or not the shares are voted;
	•	shares for which Western Wireless received properly executed proxies; and
	•	shares held by brokers or banks in nominee or street name for beneficial owners if those brokers or banks return an executed proxy card indicating that the beneficial owner has not given the broker or bank specific instructions on how to vote those shares.

135

---

 

	•	delivering a signed notice of revocation or properly executed proxy bearing a later date to Western Wireless Corporation, Attn: Investor Relations, 3650 131st Avenue SE, Bellevue, Washington 98006; or
	•	attending the Western Wireless annual meeting and voting your shares in person.

136

---

 

137

---

 

	•	adverse changes in economic conditions, nationally, internationally and in the regions and countries in which ALLTEL and Western Wireless operate;
	•	the extent, timing, and overall effects of competition in the communications business;
	•	material changes in the communications industry generally that could adversely affect vendor relationships with equipment and network suppliers and customer relationships with wholesale customers;
	•	material changes in communications technology;
	•	the risks associated with the integration of acquired businesses;
	•	adverse changes in the terms and conditions of the ALLTEL’s and Western Wireless’ wireless roaming agreements;
	•	the potential for adverse changes in the ratings given to ALLTEL’s and Western Wireless’ debt securities by nationally accredited ratings organizations;
	•	the availability and cost of financing in the corporate debt markets;
	•	the uncertainties related to ALLTEL’s and Western Wireless’ strategic investments;
	•	the effects of work stoppages;
	•	the effects of litigation;
	•	the effects of federal and state legislation, rules, and regulations governing the communications industry;
	•	product liability and other claims asserted against ALLTEL or Western Wireless; and
	•	those factors listed under the heading “Risk Factors.”

138

---

 

139

---

 

	ALLTEL filings with the SEC:

	•	Annual Report on Form 10-K for the fiscal year ended December 31, 2004;
	•	Proxy Statement on Schedule 14A, dated March 2, 2005;
	•	Current Reports on Form 8-K filed on January 10, 2005, January 11, 2005, February 15, 2005, March 3, 2005, March 7, 2005 and the Form 8-K filed April 21, 2005 regarding the departure of Mr. Frank Reed from the board of directors;
	•	The description of ALLTEL common stock (discussed above under the heading “Description of ALLTEL Capital Stock — ALLTEL Common Stock and Related Rights”) contained in ALLTEL’s Registration Statement on Form 8-A (File No. 1-4996) filed February 9, 1987; and

140

---

 

	•	The description of the Rights Agreement (discussed above under the heading “Description of ALLTEL Capital Stock — ALLTEL Common Stock and Related Rights”) contained in ALLTEL’s Registration Statement on Form 8-A (File No. 1-4996) filed February 4, 1997.

	Western Wireless filings with the SEC:

	•	Annual Report on Form 10-K for the fiscal year ended December 31, 2004;
	•	Current Reports on Form 8-K filed on January 11, 2005, January 13, 2005, February 14, 2005, February 16, 2005 and March 4, 2005.

Western Wireless Corporation:		ALLTEL Corporation:
Investor Relations 3650 131st Avenue SE Bellevue, Washington 98006 (425) 586-8700 email address: investor.relations@wwireless.com		Investor Relations Department One Allied Drive Little Rock, Arkansas 72202 (877) 446-3628 email address: alltel.investor.relations@alltel.com

141

---

 

A-1

---

 

				Page
ARTICLE I
THE MERGER
Section 1.1		The Merger			A-5
Section 1.2		Closing			A-5
Section 1.3		Effective Time			A-6
Section 1.4		Effects of the Merger			A-6
Section 1.5		Certificate of Formation and Limited Liability Company Agreement of the Surviving Company			A-6
Section 1.6		Manager			A-6
Section 1.7		Officers			A-6
ARTICLE II CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
Section 2.1		Effect on Stock			A-6
Section 2.2		Company Election Procedures			A-8
Section 2.3		Exchange of Certificates			A-10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1		Qualification, Organization, Etc.			A-13
Section 3.2		Capital Stock			A-14
Section 3.3		Corporate Authority Relative to this Agreement; No Violation			A-15
Section 3.4		Reports and Financial Statements			A-16
Section 3.5		Internal Controls and Procedures			A-16
Section 3.6		No Undisclosed Liabilities			A-17
Section 3.7		No Violation of Law; Permits			A-17
Section 3.8		Environmental Laws and Regulations			A-17
Section 3.9		Employee Benefit Plan			A-18
Section 3.10		Absence of Certain Changes or Events			A-19
Section 3.11		Investigations; Litigation			A-19
Section 3.12		Proxy Statement; Registration Statement; Other Information			A-20
Section 3.13		No Rights Plan			A-20
Section 3.14		Lack of Ownership of Parent Common Stock			A-20
Section 3.15		Tax Matters			A-20
Section 3.16		Labor Matters			A-21
Section 3.17		Intellectual Property			A-22
Section 3.18		Opinion of Financial Advisor			A-22
Section 3.19		Required Vote of the Company Shareholders			A-22
Section 3.20		Material Contracts			A-22
Section 3.21		Domestic Communications Regulatory Matters			A-23
Section 3.22		Foreign Communications Regulatory Matters			A-24
Section 3.23		Company’s Articles of Incorporation and WBCA 23B.19			A-24
Section 3.24		Affiliate Transactions			A-25
Section 3.25		Finders or Brokers			A-25

A-2

---

 

				Page
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT
Section 4.1		Qualification; Organization, Etc.			A-25
Section 4.2		Capital Stock			A-26
Section 4.3		Corporate Authority Relative to this Agreement; No Violation			A-26
Section 4.4		Reports and Financial Statements			A-27
Section 4.5		Internal Controls and Procedures			A-28
Section 4.6		No Undisclosed Liabilities			A-28
Section 4.7		No Violation of Law; Permits			A-28
Section 4.8		Environmental Laws and Regulations			A-29
Section 4.9		Employee Benefit Plan			A-29
Section 4.10		Absence of Certain Changes or Events			A-30
Section 4.11		Investigations; Litigation			A-30
Section 4.12		Proxy Statement; Registration Statement; Other Information			A-30
Section 4.13		Lack of Ownership of the Company Common Stock			A-30
Section 4.14		Tax Matters			A-30
Section 4.15		Labor Matters			A-32
Section 4.16		Intellectual Property			A-32
Section 4.17		Parent Material Contracts			A-32
Section 4.18		Communications Regulatory Matters			A-33
Section 4.19		Parent’s Certificate of Incorporation			A-34
Section 4.20		Affiliate Transactions			A-34
Section 4.21		No Vote of Parent Stockholders			A-34
Section 4.22		Finders or Brokers			A-34
ARTICLE V
COVENANTS AND AGREEMENTS
Section 5.1		Conduct of Business by the Company or Parent			A-34
Section 5.2		Tax-Free Reorganization Treatment			A-39
Section 5.3		Investigation			A-39
Section 5.4		No Solicitation			A-40
Section 5.5		Proxy Material; Registration Statement			A-41
Section 5.6		Affiliate Agreements			A-43
Section 5.7		Stock Options; Restricted Stock; Employee Matters			A-43
Section 5.8		Notification of Certain Matters			A-45
Section 5.9		Filings; Other Action			A-45
Section 5.10		Takeover Statute			A-46
Section 5.11		Public Announcements			A-46
Section 5.12		Indemnification and Insurance			A-47
Section 5.13		Accountants’ “Comfort” Letters			A-47
Section 5.14		Additional Reports and Information			A-47
Section 5.15		Section 16 Matters			A-48
Section 5.16		Control of Operations			A-48
Section 5.17		Internal Controls and Procedures			A-48

A-3

---

 

				Page
Section 5.18		Real Estate Transfer Taxes			A-48
Section 5.19		Parent Covenant Concerning Subsidiary Indebtedness			A-48
ARTICLE VI CONDITIONS TO THE MERGER
Section 6.1		Conditions to Each Party’s Obligation to Effect the Merger			A-49
Section 6.2		Conditions to Obligation of the Company to Effect the Merger			A-49
Section 6.3		Conditions to Obligation of Parent to Effect the Merger			A-50
ARTICLE VII
TERMINATION
Section 7.1		Termination or Abandonment			A-50
Section 7.2		Termination Fee			A-51
Section 7.3		Amendment or Supplement			A-52
Section 7.4		Extension of Time, Waiver, Etc.			A-52
ARTICLE VIII
MISCELLANEOUS
Section 8.1		No Survival of Representations and Warranties			A-52
Section 8.2		Expenses			A-52
Section 8.3		Counterparts; Effectiveness			A-52
Section 8.4		Governing Law			A-53
Section 8.5		Jurisdiction; Enforcement			A-53
Section 8.6		Waiver of Jury Trial			A-53
Section 8.7		Notices			A-53
Section 8.8		Assignment; Binding Effect			A-54
Section 8.9		Date For Any Action			A-54
Section 8.10		Severability			A-54
Section 8.11		Entire Agreement; No Third-Party Beneficiaries			A-54
Section 8.12		Headings			A-54
Section 8.13		Interpretation			A-54
Section 8.14		Definitions			A-55
Exhibit A — Form of Voting Agreement
Exhibit B — Form of the Company Affiliate Agreement
Schedule 2.1(d)(ii)
Schedule 5.9(d)
Company Disclosure Schedule
Parent Disclosure Schedule

A-4

---

 

A-5

---

 

	(a) Subject to Section 5.12 of this Agreement, at the Effective Time, the certificate of formation of Merger Sub, as in effect immediately prior to the Effective Time, shall be the certificate of formation of the Surviving Company until thereafter changed or amended as provided by the WLLCA or therein, except that as of the Effective Time, Paragraph 1 of the certificate of formation of the Surviving Company shall be amended to reflect the name of the Company (or a variation thereof) as the name of the Surviving Company.
	(b) Subject to Section 5.12 of this Agreement, at the Effective Time, the limited liability company agreement of Merger Sub, as in effect immediately prior to the Effective Time, shall become the limited liability company agreement of the Surviving Company, until thereafter changed or amended as provided by the WLLCA, the certificate of formation of the Surviving Company and such limited liability company agreement.

(a) Conversion of Company Common Stock. Subject to Section 2.1(d) and 2.1(e), each issued and outstanding share of Class A Common Stock, no par value per share (“Class A Common Stock”), and each issued and outstanding share of Class B Common Stock, no par value per share (“Class B Common Stock”), in each case, of the Company (together, Class A Common Stock and Class B Common Stock, “Company Common Stock” or “Shares”) (other than shares to be cancelled in accordance with Section 2.1(b) and any Dissenting Shares (as defined, and to the extent provided

A-6

---

 

	in, Section 2.1(e)) shall thereupon be converted into and shall thereafter represent the right to receive the following consideration (the “Merger Consideration”):

	(i) Each share of Company Common Stock with respect to which an election to receive a combination of stock and cash (a “Mixed Election”) has been effectively made and not revoked or lost pursuant to Section 2.2 (each, a “Mixed Consideration Electing Share”) and each Non- Electing Company Share (as that term is defined in Section 2.2(c) hereof) shall be converted into the right to receive the combination (which combination shall hereinafter be referred to as the “Mixed Consideration”) of (x) $9.25 in cash (the “Per Share Cash Amount”) and (y) 0.535 of a share of validly issued, fully paid and non-assessable shares of Parent Common Stock (the “Mixed Election Stock Exchange Ratio”), subject to adjustment in accordance with Section 2.1(d).
	(ii) Each share of Company Common Stock with respect to which an election to receive cash (a “Cash Election”) has been effectively made and not revoked or lost pursuant to Section 2.2 (each, a “Cash Electing Company Share”) shall be converted (provided that the Available Cash Election Amount (as defined below) equals or exceeds the Cash Election Amount (as defined below)) into the right to receive $40.00 in cash without interest (the “Per Share Cash Election Consideration”); if, however, (A) the product of the number of Cash Electing Company Shares and the Per Share Cash Election Consideration (such product being the “Cash Election Amount”) exceeds (B) the difference between (x) the product of Per Share Cash Amount and the total number of shares of Company Common Stock (other than the Cancelled Shares, as such term is defined in Section 2.1(b) hereof) issued and outstanding immediately prior to the Effective Time minus (y) the product of the number of Mixed Consideration Electing Shares and the Per Share Cash Amount (such difference being the “Available Cash Election Amount”), then each Cash Electing Company Share shall be converted into a right to receive (1) an amount of cash (without interest) equal to the product of (p) the Per Share Cash Election Consideration and (q) a fraction, the numerator of which shall be the Available Cash Election Amount and the denominator of which shall be the Cash Election Amount (such fraction being the “Cash Fraction”) and (2) a number of validly issued, fully paid and non-assessable shares of Parent Common Stock equal to the product of (r) the Exchange Ratio and (s) one (1) minus the Cash Fraction.
	(iii) Each share of Company Common Stock with respect to which an election to receive stock consideration (a “Stock Election”) is properly made and not revoked or lost pursuant to Section 2.2 (each, a “Stock Electing Company Share”) shall be converted (provided that the Cash Election Amount equals or exceeds the Available Cash Election Amount), into the right to receive 0.7 shares of validly issued, fully paid and non-assessable shares of Parent Common Stock (the “Exchange Ratio”), subject to adjustment in accordance with Section 2.1(d) (together with any cash in lieu of fractional shares of Parent Common Stock to be paid pursuant to Section 2.4(e), the “Stock Consideration”), however, if the Available Cash Election Amount exceeds the Cash Election Amount, then each Stock Electing Company Share shall be converted into the right to receive (1) an amount of cash (without interest) equal to the amount of such excess divided by the number of Stock Electing Company Shares and (2) a number of validly issued, fully paid and non-assessable shares of Parent Common stock equal to the product of (x) the Exchange Ratio and (y) a fraction, the numerator of which shall be the Per Share Cash Election Consideration minus the amount calculated in clause (1) of this paragraph and the denominator of which shall be the Per Share Cash Election Consideration.

	(b) Parent and Merger Sub-Owned Shares. Each share of Company Common Stock that is owned by Parent or Merger Sub immediately prior to the Effective Time (the “Cancelled Shares”) shall automatically be cancelled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor.

A-7

---

 

	(c) Conversion of Merger Sub Interests. Each issued and outstanding limited liability company interest of Merger Sub shall be converted into one validly issued limited liability company interest of the Surviving Company.
	(d) Adjustments. (i) If at any time during the period between the date of this Agreement and the Effective Time, any change in the outstanding shares of capital stock of Parent or the Company shall occur as a result of any reclassification, recapitalization, stock split (including a reverse stock split) or combination, exchange or readjustment of shares, or any stock dividend or stock distribution with a record date during such period, the Merger Consideration, the Per Share Cash Amount, the Mixed Election Stock Exchange Ratio, the Exchange Ratio and any other similarly dependent items, as the case may be, shall be equitably adjusted; provided, however, that nothing contained herein shall be deemed to permit any action that Parent is otherwise prohibited from taking pursuant to this Agreement.
	(ii) The matters contained in Schedule 2.1(d)(ii) are incorporated here.
	(e) Dissenting Shares. (i) Notwithstanding any provision of this Agreement to the contrary other than Section 2.1(e)(ii), any Shares of Company Common Stock held by a holder who has demanded and perfected dissenters rights for such shares in accordance with the provisions of Section 23B.13 of the WBCA and who, as of the Effective Time, has not effectively withdrawn or lost such dissenters’ rights (“Dissenting Shares”), shall not be converted into or represent a right to receive Merger Consideration pursuant to Section 2.1(a), but instead shall be converted into the right to receive only such consideration as may be determined to be due with respect to such Dissenting Shares under the WBCA. From and after the Effective Time, a holder of Dissenting Shares shall not be entitled to exercise any of the voting rights or other rights of a member or equity owner of the Surviving Company or of a shareholder of Parent. For purposes of the calculations in Section 2.1(a), all Non-Electing Company Shares and shares of Company Common Stock that constitute Dissenting Shares immediately prior to the Effective Time shall be deemed to be Mixed Consideration Electing Shares.
	(ii) Notwithstanding the provisions of Section 2.1(a), if any holder of shares of Company Common Stock who demands dissenters’ rights of such shares under the WBCA shall effectively withdraw or lose (through failure to perfect or otherwise) the right to dissent, then, as of the later of the Effective Time and the occurrence of such event, such holder’s shares shall no longer be Dissenting Shares and shall automatically be converted into and represent only the right to receive Merger Consideration payable or issuable in respect of Mixed Consideration Electing Shares as set forth in Section 2.1(a) of this Agreement, without any interest thereon.
	(iii) The Company shall give Parent (A) prompt notice of any written demands for dissenters’ rights of any shares of Company Common Stock, withdrawals of such demands, and any other instruments served pursuant to the WBCA and received by the Company which relate to any such demand for dissenters’ rights and (B) the opportunity to participate in all negotiations and proceedings which take place prior to the Effective Time with respect to demands for dissenters’ rights under the WBCA. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands for dissenters’ rights of Company Common Stock or offer to settle or settle any such demands.

A-8

---

 

A-9

---

 

	(i) the number of whole shares of Parent Common Stock, if any, into which such holder’s shares of Company Common Stock represented by such holder’s properly surrendered Certificates or Company Book-Entry Shares, as applicable, were converted in accordance with this Article II (after taking into account all shares of Company Common Stock to which an election or non-election of the same type were made), and such Certificates or Company Book-Entry Shares so surrendered shall be forthwith cancelled, and
	(ii) a check in an amount of U.S. dollars (after giving effect to any required withholdings pursuant this Section 2.3(b)) equal to (I) the amount of cash (including the Per Share Cash Election Consideration or the Per Share Cash Election Amount, as applicable and cash in lieu of fractional interests in shares of Parent Common Stock to be paid pursuant to Section 2.3(e)), if any, into which such holder’s shares of Company Common Stock represented by such holder’s properly surrendered Certificates or Company Book-Entry Shares, as applicable, were converted in accordance with this Article II, plus (II) any cash dividends or other distributions that such holder has the right to receive pursuant to Section 2.3(c); provided, however, that the holders of such Certificates or Company Book-Entry Shares, as applicable, shall be permitted to specifically elect on such letter of

A-10

---

 

transmittal those shares of stock that are to be Mixed Consideration Electing Shares, Cash Electing Company Shares, and/or Stock Electing Company Shares, at such holder’s option. In the event of a transfer of ownership of Company Common Stock which is not registered in the transfer records of the Company, a Parent Certificate representing the proper number of shares of Parent Common Stock may be issued to a person other than the person in whose name the Certificate so surrendered is registered if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the person requesting such issuance shall pay any transfer or other non-income Taxes (as defined in Section 3.15(k)) required by reason of the issuance of shares of Parent Common Stock to a person other than the registered holder of such Certificate or establish to the reasonable satisfaction of Parent that any such Tax has been paid or is not applicable. Parent or the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable under this Agreement to any holder of Company Common Stock such amounts as Parent or the Exchange Agent are required to withhold or deduct under the Code or any provision of state, local or foreign Tax Law with respect to the making of such payment. To the extent that amounts are so withheld by Parent or the Exchange Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Company Common Stock in respect of whom such deduction and withholding were made by Parent or the Exchange Agent. Until surrendered as contemplated by this Section 2.3, each Certificate or Company Book-Entry Share shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the applicable Merger Consideration as contemplated by this Article II and cash, if any, in lieu of any fractional share in accordance with Section 2.3(e). No interest will be paid or will accrue on any cash payable to holders of Certificates under the provisions of this Article II.

A-11

---

 

	(i) No Parent Certificates or scrip representing fractional shares of Parent Common Stock shall be issued upon the surrender for exchange of Certificates, no dividend or distribution of Parent shall relate to such fractional share interests, and such fractional share interests will not entitle the owner thereof to vote or to any rights of a stockholder of Parent.
	(ii) As promptly as practicable following the Effective Time, the Surviving Company shall pay to the Exchange Agent, for the benefit of each holder of Company Common Stock, an amount in cash, if any, equal to the product obtained by multiplying (A) the fractional share interest to which such holder (after taking into account all shares of Company Common Stock held at the Effective Time by such holder) would otherwise be entitled by (B) the closing price for a share of Parent Common Stock as reported on the NYSE Composite Transactions Tape (as reported in The Wall Street Journal, or, if not reported thereby, any other authoritative source) on the day of the Effective Time. The Surviving Company shall pay any commissions, transfer Taxes and other out-of-pocket transaction costs in connection with the sale, if any, of any Parent Common Stock in connection with this Section 2.3(e).

A-12

---

 

A-13

---

 

A-14

---

 

A-15

---

 

A-16

---

 

A-17

---

 

A-18

---

 

	(a) there is no investigation or review pending (or, to the knowledge of the Company, threatened) by any Governmental Entity with respect to the Company, any of the Company’s Subsidiaries or, to the knowledge of the Company, any of the Company Minority Interest Businesses, which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company; and
	(b) there are no actions, suits, inquiries, investigations or proceedings pending (or, to the knowledge of the Company, threatened) against or affecting the Company, any of the Company’s Subsidiaries or, to the knowledge of the Company, any of the Company Minority Interest Businesses, or any of their respective properties at law or in equity before, and there are no orders, judgments or

A-19

---

 

	decrees of or before any Governmental Entity, in each case, which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.

A-20

---

 

A-21

---

 

A-22

---

 

A-23

---

 

A-24

---

 

A-25

---

 

A-26

---

 

A-27

---

 

A-28

---

 

A-29

---

 

	(a) there is no investigation or review pending (or, to the knowledge of Parent, threatened) by any Governmental Entity with respect to Parent or any of its Subsidiaries which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Parent; and
	(b) there are no actions, suits, inquiries, investigations or proceedings pending (or, to Parent’s knowledge, threatened) against or affecting Parent or its Subsidiaries, or any of their respective properties at law or in equity before, and there are no orders, judgments or decrees of or before any Governmental Entity, in each case, which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Parent.

A-30

---

 

A-31

---

 

A-32

---

 

A-33

---

 

(a) the Company covenants and agrees with Parent that the business of the Company and its Subsidiaries shall be conducted only in, and such entities shall not take any action except in, the ordinary course of business; and the Company for itself and on behalf of its Subsidiaries agrees with Parent to use its commercially reasonable efforts to preserve substantially intact their business organizations and goodwill (except that any of its Subsidiaries may be merged with or into, or be consolidated with any of its other Subsidiaries or may be liquidated into the Company or any of its Subsidiaries), to keep available the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conducted and to preserve their present relationships with significant customers and suppliers and with other persons with whom they have significant business relations; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of

A-34

---

 

	such other provision. The Company agrees with Parent, on behalf of itself and its Subsidiaries, that between the date hereof and the Effective Time, the Company:

	(i) shall not, and shall not (except in the ordinary course of business consistent with past practice) permit any of its Subsidiaries that is not wholly-owned to, authorize or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock (whether in cash, assets, stock or other securities of the Company or its Subsidiaries);
	(ii) shall not, and shall not permit any of its Subsidiaries to, split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock, except for any such transaction by a wholly-owned Subsidiary of the Company which remains a wholly-owned Subsidiary after consummation of such transaction;
	(iii) except as required pursuant to existing written agreements or employee benefit plans in effect prior to the execution of this Agreement, or as otherwise required by Law, shall not, and shall not permit any of its Subsidiaries to (A) except in the ordinary course of business, consistent with past practice, increase the compensation, severance or other benefits payable or to become payable to its directors, officers or employees, (B) other than, in the case of employees who are not executive officers, in the ordinary course of business, consistent with past practice, grant any severance or termination pay to, or enter into any severance agreement or settle any employment claim by any employee with, any employee of the Company or any of its Subsidiaries, (C) enter into any employment agreement with any director or officer of the Company or any of its Subsidiaries (except to the extent necessary to replace a departing employee or as is customary practice in any foreign jurisdiction and except for employment agreements terminable on less than 30 days’ notice without penalty), or (D) establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees or any of their beneficiaries, except, in each case, as would not result in a material increase in the cost of maintaining such collective bargaining agreement, plan, trust, fund, policy or arrangement;
	(iv) shall not, and shall not permit any of its Subsidiaries, to enter into or make any loans to any of its officers, directors, employees, affiliates, agents or consultants (other than loans or advances in the ordinary course of business consistent with past practice) or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons, except as required by the terms of any Company Benefit Plan;
	(v) shall not, and shall not permit any of its Subsidiaries to, materially change accounting policies or procedures or any of its methods of reporting income, deductions or other material items for income Tax purposes, except as required by GAAP, SEC rule or policy or applicable Law;
	(vi) approve or authorize any action to be submitted to the shareholders of the Company for approval that is intended or would reasonably be expected to, prevent, impede, interfere with, delay, postpone or adversely affect the transactions contemplated by this Agreement, provided that, nothing shall prevent the Company from holding its 2005 Annual Meeting of shareholders in the ordinary course, substantially consistent with past practice;
	(vii) except in respect of the Merger, or any mergers, consolidations or business combinations in the ordinary course of business among the Company’s wholly-owned Subsidiaries, shall not, and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to authorize or propose, or enter into agreements with respect to, any mergers, consolidations or business combinations or acquisitions of assets or securities (A) with a value or purchase price (inclusive of assumption or incurrence of long-term indebtedness incurred in connection therewith, including any current portion thereof) in the aggregate in excess of $100 million in the case of all transactions collectively (which consideration may not be paid in

A-35

---

 

	equity securities of the Company), or (B) which would reasonably be expected to have the legal or practical effect of delaying or preventing, or reducing the likelihood of consummation of the Merger or the obtaining of any regulatory or other consent or approval contemplated hereby;
	(viii) shall not, and shall not permit any of its Subsidiaries to, adopt any amendments to its articles of incorporation or by-laws;
	(ix) shall not, and shall not permit any of its Subsidiaries to, issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock or other ownership interest in the Company or any Subsidiaries or any securities convertible into or exchangeable for any such shares or ownership interest, or any rights, warrants or options to acquire or with respect to any such shares of capital stock, ownership interest or convertible or exchangeable securities or take any action to cause to be exercisable any otherwise unexercisable option under any existing stock option plan (except as otherwise required by the express terms of any unexercisable options outstanding on the date hereof) (other than (A) issuances of Company Common Stock in respect of any exercise of stock options outstanding on the date hereof and disclosed in Section 5.1(a) of the Company Disclosure Schedule, (B) issuances of Company Common Stock upon conversion of the 4.625% Notes in accordance with the terms of such Notes as in effect on the date hereof, (C) the sale of shares of Company Common Stock pursuant to the exercise of options to purchase Company Common Stock if necessary to effectuate an optionee direction upon exercise or for withholding, and (D) issuance of shares of capital stock under the ESPP which shares are acquired by the Company in accordance with the terms of this Agreement or the ESPP);
	(x) shall not, and shall not permit any of its Subsidiaries to, grant, confer or award any options, warrants, convertible security or other rights to acquire any shares of its capital stock or take any action to cause to be exercisable any otherwise unexercisable option under any existing stock option plan (except as otherwise required by the express terms of any unexercisable options outstanding on the date hereof);
	(xi) shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, purchase, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares, except that the Company shall be permitted to acquire shares of Company Common Stock from time to time as permitted by or in accordance with Article IX of the Company’s articles of incorporation;
	(xii) shall not, and shall not permit any of its Subsidiaries to, repurchase, redeem or repay the 4.625% Notes or the 9.250% Senior Notes of the Company due 2013 (the “9.250% Notes” and together with the 4.625% Notes, the “Notes”);
	(xiii) shall not, and shall not permit any of its Subsidiaries to, incur, assume, guarantee, prepay or otherwise become liable for any indebtedness for borrowed money (directly, contingently or otherwise), other than in the ordinary course of business consistent with past practice and except for (A) indebtedness for borrowed money incurred pursuant to the Company’s existing $1.5 billion Credit Agreement, dated as of May 28, 2004, (B) indebtedness for borrowed money in replacement of or to refinance existing indebtedness for borrowed money, (C) guarantees by the Company of indebtedness for borrowed money of wholly-owned Subsidiaries of the Company, which indebtedness is incurred in compliance with this Section 5.1(a), (D) interest rate swaps on customary commercial terms, consistent with past practices, (E) indebtedness for borrowed money incurred pursuant to agreements in effect prior to the execution of this Agreement, and (F) indebtedness for borrowed money not to exceed $400 million in aggregate principal amount outstanding at any time incurred by the Company or any of its Subsidiaries in connection with the Company’s international operations (inclusive of the principal amount of indebtedness for borrowed money incurred to replace, renew, extend, refinance or refund any existing indebtedness incurred in connection with the Company’s international operations);

A-36

---

 

	(xiv) shall not, and shall not permit any of its Subsidiaries to, make any loans, advances or capital contributions to, or investments in, any other person, other than by the Company or a Subsidiary of the Company to or in the Company or any Subsidiary of the Company;
	(xv) shall not sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber (including securitizations), or subject to any Lien or otherwise dispose of any material portion of its properties or assets, including the capital stock of Subsidiaries other than in the ordinary course of business consistent with past practice and except (A) for ordinary course sales of mobile telephone equipment to customers of the Company or services in the ordinary course of business, (B) for sales, leases, licenses, transfers, mortgages or encumbrances of obsolete assets, (C) pursuant to existing agreements in effect prior to the execution of this Agreement, and (D) as may be required by applicable Law or any Governmental Entity in order to permit or facilitate the consummation of the transactions contemplated hereby;
	(xvi) shall not, and shall not permit any of its Subsidiaries to, except as required by Law, (i) make or change any material Tax election or settle or compromise any material Tax liability, claim or assessment or agree to an extension or waiver of the limitation period to any material Tax claim or assessment or grant any power of attorney with respect to material Taxes or (ii) change its fiscal year;
	(xvii) shall not, and shall not permit any of its Subsidiaries to, modify, amend, terminate or waive any rights under any Material Contract in any material respect other than in the ordinary course of business;
	(xviii) shall not, and shall not permit any of its Subsidiaries to, enter into any Company Material Contracts other than in the ordinary course of business;
	(xix) shall not adopt a shareholder rights plan, “poison pill” or similar anti-takeover device unless, by its terms, such shareholder rights plan, “poison pill” or similar anti-takeover device is not applicable to the transactions contemplated by this Agreement and the Voting Agreement; and
	(xx) shall not, and shall not permit any of its Subsidiaries to, agree, in writing or otherwise, to take any of the foregoing actions.

(b) Parent covenants and agrees with the Company that the business of Parent and its Subsidiaries shall be conducted only in, and such entities shall not take any action except in, the ordinary course of business; and Parent for itself and on behalf of its Subsidiaries agrees with the Company to use its commercially reasonable efforts to preserve substantially intact their business organizations and goodwill (except that any of its Subsidiaries may be merged with or into, or be consolidated with any of its other Subsidiaries or may be liquidated into Parent or any of its Subsidiaries), to keep available the services of those of their present officers, employees and consultants who are integral to the operation of their businesses as presently conducted and to preserve their present relationships with significant customers and suppliers and with other persons with whom they have significant business relations; provided, however, that no action by Parent or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Parent agrees with the Company, on behalf of itself and its Subsidiaries, that between the date hereof and the Effective Time, Parent:

(i) shall not, and shall not (except in the ordinary course of business consistent with past practice) permit any of its Subsidiaries that is not wholly-owned to, authorize or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock (whether in cash, assets, stock or other securities of Parent or its Subsidiaries), except that Parent may continue to pay regular quarterly cash dividends on the Parent Common Stock and Parent Preferred Stock consistent with past practice in timing and amount (including customary increases);

A-37

---

 

	(ii) shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, purchase, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares, except in accordance with Parent’s stock repurchase program consistent with past practice;
	(iii) shall not, and shall not permit any of its Subsidiaries to, split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock, except for any such transaction by a wholly-owned Subsidiary of Parent which remains a wholly-owned Subsidiary after consummation of such transaction;
	(iv) shall not, and shall not permit any of its Subsidiaries to, materially change accounting policies or procedures or any of its methods of reporting income, deductions or other material items for income Tax purposes, except as required by GAAP, SEC rule or policy or applicable Law;
	(v) (1) (A) shall not issue any shares of Parent Common Stock (or other securities convertible into or exercisable for shares of Parent Common Stock) in any transaction or (B) repurchase, redeem or cause to cease to be issued and outstanding any shares of Parent Common Stock if in either case the taking of any such actions, individually or in the aggregate, would have the effect of giving rise to a vote of Parent’s stockholders with respect to the Merger or the issuance of shares of Parent Common Stock pursuant to the terms of this Agreement, and (2) except in respect of the Merger, or any mergers, consolidations or business combinations in the ordinary course of business among Parent’s wholly-owned Subsidiaries, shall not, and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to authorize or propose, or enter into agreements with respect to any mergers, consolidations or business combinations or acquisitions of assets or securities (A) with a value or purchase price (inclusive of assumption or incurrence of long-term indebtedness incurred in connection therewith, including any current portion thereof) in the aggregate in excess of $750 million in the case of all transactions collectively (of which no more than $50 million may be paid in equity securities of Parent), or (B) which would reasonably be expected to have the legal or practical effect of delaying or preventing, or reducing the likelihood of consummation of the Merger or the obtaining of any regulatory or other consent or approval contemplated hereby; provided, that Parent shall inform the Company prior to entering into a definitive agreement relating to any material acquisition;
	(vi) shall not, and shall not permit Merger Sub to, adopt any amendments to its certificate of incorporation or by-laws;
	(vii) shall not, and shall not permit any of its Subsidiaries to, issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock or other ownership interest in Parent or any Subsidiaries or any securities convertible into or exchangeable for any such shares or ownership interest, or any rights, warrants or options to acquire or with respect to any such shares of capital stock, ownership interest or convertible or exchangeable securities or take any action to cause to be exercisable any otherwise unexercisable option under any existing stock option plan (except as otherwise required by the express terms of any unexercisable options outstanding on the date hereof) (other than (A) issuances of Parent Common Stock in respect of any exercise of stock options outstanding on the date hereof and disclosed in Section 5.1(b) of the Parent Disclosure Schedule, (B) issuances of up to $50 million of equity securities of Parent as consideration for the acquisition of, or in respect of rights, warrants or options to acquire, equity securities of any Person that is the subject of an acquisition permitted by this Agreement, (C) the sale of shares of Parent Common Stock pursuant to the exercise of options to purchase Parent Common Stock if necessary to effectuate an optionee direction upon exercise or for withholding, and (D) issuance of stock options, restricted stock or shares of capital stock or other ownership

A-38

---

 

	interests of Parent or its Subsidiaries in the ordinary course of business consistent with past practice in connection with compensation or retention of officers, directors or employees of the Company or its Subsidiaries);
	(viii) shall not sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber (including securitizations), or subject to any Lien or otherwise dispose of properties or assets relating to its wireless telephony service business, including the capital stock of Subsidiaries other than in the ordinary course of business consistent with past practice and except (A) for ordinary course sales of mobile telephone equipment to customers of Parent or services in the ordinary course of business, (B) for sales, leases, licenses, transfers, mortgages or encumbrances of obsolete assets, (C) pursuant to existing agreements in effect prior to the execution of this Agreement, (D) as may be required by applicable Law or any Governmental Entity in order to permit or facilitate the consummation of the transactions contemplated hereby, and (E) for the disposition (other than by way of a dividend or distribution to its shareholders) of properties or assets relating to its wireline telephony service business;
	(ix) shall not, and shall not permit any of its Subsidiaries to, except as required by Law, (i) make or change any material Tax election or settle or compromise any material Tax liability, claim or assessment or agree to an extension or waiver of the limitation period to any material Tax claim or assessment or grant any power of attorney with respect to any material Taxes or (ii) change its fiscal year; and
	(x) shall not, and shall not permit any of its Subsidiaries to, agree, in writing or otherwise, to take any of the foregoing actions.

A-39

---

 

A-40

---

 

	(i) As soon as is reasonably practicable, Parent and the Company shall prepare and the Company shall file with the SEC the Proxy Statement and Parent and the Company shall prepare and Parent shall file a registration statement on Form S-4 under the Securities Act with respect to the Parent Common Stock issuable in the Merger (the “Registration Statement”) which shall, except to the extent provided in Section 5.4(e), include the recommendation of the Company’s Board of Directors that the Company’s shareholders approve and adopt this Agreement, and shall each use all reasonable efforts to have the Proxy Statement cleared by the SEC under the Exchange Act and the Registration Statement declared effective by the SEC under the Securities Act;
	(ii) as soon as is reasonably practicable Parent shall take all such action as may be required under state blue sky or securities laws in connection with the transactions contemplated by this Agreement;

A-41

---

 

	(iii) Parent shall promptly prepare and file with the NYSE and such other stock exchanges as shall be agreed upon listing applications covering the shares of Parent Common Stock issuable in the Merger and use all reasonable efforts to obtain, prior to the Effective Time, approval for the listing of such Parent Common Stock, subject only to official notice of issuance;
	(iv) cooperate with each other in order to lift any injunctions or remove any other impediment to the consummation of the transactions contemplated herein; and
	(v) cooperate with each other in obtaining a written opinion of its respective legal counsel, Jones Day or Wachtell, Lipton, Rosen & Katz, in the case of the Company and Skadden, Arps, Slate, Meagher & Flom LLP, in the case of Parent (“Tax Counsel”), in a form reasonably satisfactory to the Company and Parent, respectively (each such opinion, a “Tax Opinion”), dated as of the Effective Time, to the effect that, on the basis of facts, representations and assumptions set forth in such opinion, the Merger will be treated as a reorganization within the meaning of Section 368(a) of the Code and Parent and the Company each will be treated as a party to the reorganization within the meaning of Section 368(b) of the Code. Each of the Company, Parent and Merger Sub shall deliver to Tax Counsel for purposes of the Tax Opinion customary representations and covenants, including those contained in certificates of the Company, Parent, Merger Sub and others, reasonably satisfactory in form and substance to Tax Counsel.

A-42

---

 

A-43

---

 

A-44

---

 

A-45

---

 

A-46

---

 

A-47

---

 

A-48

---

 

	(a) The Company Shareholder Approval shall have been obtained, all in accordance with applicable Law and the rules and regulations of The Nasdaq Stock Market.
	(b) No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or enforced by any court or other tribunal or Governmental Entity which prohibits the consummation of the Merger, and shall continue to be in effect.
	(c) The Registration Statement shall have become effective in accordance with the provisions of the Securities Act and no stop order suspending such effectiveness shall have been issued and remain in effect.
	(d) The shares of Parent Common Stock issuable in the Merger shall have been approved for listing on the NYSE, subject only to official notice of issuance.
	(e) Any applicable waiting period under the HSR Act shall have expired or been earlier terminated and any other Company Approvals and Parent Approvals required to be obtained for the consummation, as of the Effective Time, of the transactions contemplated by this Agreement, other than any Company Approvals and Parent Approvals the failure to obtain which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company or Parent (“Required Approval”) shall have been obtained.
	(f) (i) Unless waived by the Company and Parent, all FCC Consents other than any FCC Consents the failure to obtain which would not reasonably be expected to have a Material Adverse Effect on the Company or Parent shall have been granted without the imposition of any condition that Parent or the Company would not be required to agree to pursuant to Section 5.9, and (ii) all such FCC Consents shall be in full force and effect.
	(g) Each of the Company and Parent shall have received a Tax Opinion of its respective Tax Counsel, dated as of the Effective Time, substantially to the effect that, on the basis of facts, representations and assumptions set forth in such opinion, the Merger will be treated as a reorganization within the meaning of Section 368(a) of the Code and each of Parent and the Company will be treated as a party to the reorganization within the meaning of Section 368(b) of the Code. In rendering such Tax Opinion, Tax Counsel may require and rely upon customary representations and covenants, including those contained in certificates of the Company, Parent, Merger Sub and others, reasonably satisfactory in form and substance to such Tax Counsel.

(a) (i) The representations and warranties of Parent contained herein (other than the representation and warranties set forth in Sections 4.2, 4.3(a), 4.4(b), 4.10 and 4.21) shall be true and correct as of the Effective Time with the same effect as though made as of the Effective Time except (x) for changes specifically permitted by the terms of this Agreement, (y) that the accuracy of representations and warranties that by their terms speak as of the date of this Agreement or some other date will be determined as of such date and not as of the Effective Time and (z) where any such failure of the representations and warranties in the aggregate to be true and correct would not reasonably be expected to have a Material Adverse Effect on Parent; (ii) the representations and warranties of Parent set forth in Sections 4.2, 4.3(a) and 4.4(b) shall be true and correct in all material respects both when made and at and as of the Effective Time except (x) for changes specifically permitted by the terms of this Agreement, (y) that the accuracy of representations and

A-49

---

 

	warranties that by their terms speak as of the date of this Agreement or some other date will be determined as of such date, and (iii) the representations and warranties contained in Sections 4.10 and 4.21 shall have been true and correct in all respects when made and as of the Effective Time;
	(b) Parent shall have performed in all material respects all obligations and complied with all covenants required by this Agreement to be performed or complied with by it prior to the Effective Time; and
	(c) Parent shall have delivered to the Company a certificate, dated the Effective Time and signed by its Chief Executive Officer or any Executive Vice President certifying to the effect that the conditions set forth in Sections 6.2(a) and 6.2(b) have been satisfied.

	(a) (i) The representations and warranties of the Company contained herein (other than the representations and warranties in Sections 3.2(a), 3.3(a), 3.4(b) and 3.10) shall be true and correct as of the Effective Time with the same effect as though made as of the Effective Time except (x) for changes specifically permitted by the terms of this Agreement, (y) that the accuracy of representations and warranties that by their terms speak as of the date of this Agreement or some other date will be determined as of such date and (z) where any such failure of the representations and warranties in the aggregate to be true and correct would not reasonably be expected to have a Material Adverse Effect on the Company; (ii) the representations and warranties of the Company set forth in Sections 3.2(a), 3.3(a) and 3.4(b) shall be true and correct in all material respects both when made and at and as of the Effective Time except (x) for changes specifically permitted by the terms of this Agreement, (y) that the accuracy of representations and warranties that by their terms speak as of the date of this Agreement or some other date will be determined as of such date and (iii) the representations and warranties contained in Section 3.10 shall have been true and correct in all respects when made and as of the Effective Time;
	(b) The Company, shall have performed in all material respects all obligations and complied with all covenants required by this Agreement to be performed or complied with by it prior to the Effective Time;
	(c) The Company shall have delivered to Parent a certificate, dated the Effective Time and signed by its Chief Executive Officer or Executive Vice President certifying to the effect that the conditions set forth in Sections 6.3(a) and 6.3(b) have been satisfied.
	(d) Except as disclosed in the Company SEC Documents or in the Company Disclosure Schedule or as expressly contemplated by this Agreement, since the date of this Agreement, there shall have been no event, occurrence, development or state of circumstances or facts that would reasonably be expected to have a Material Adverse Effect on the Company.

	(a) by the mutual written consent of the Company and Parent;
	(b) by either the Company or Parent if (i) the Effective Time shall not have occurred on or before August 31, 2005 and (ii) the party seeking to terminate this Agreement pursuant to this clause 7.1(b) shall not have breached in any material respect its obligations under this Agreement in any manner that shall have proximately caused the failure to consummate the Merger on or before such

A-50

---

 

	date, except that if, as of August 31, 2005, all conditions set forth in Section 6.1, 6.2 and 6.3 of this Agreement have been satisfied or waived (other than those that are satisfied by action taken at the Closing) other than the conditions set forth in Section 6.1(e) or (f), then either Parent or the Company may extend the Termination Date to November 30, 2005, by providing written notice to the other party on or before August 31, 2005;
	(c) by either the Company or Parent if (i) a statute, rule, regulation or executive order shall have been enacted, entered or promulgated prohibiting the consummation of the Merger or (ii) an order, decree, ruling or injunction shall have been entered permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger and such order, decree, ruling or injunction shall have become final and non-appealable and the party seeking to terminate this Agreement pursuant to this clause 7.1(c)(ii) shall have used all reasonable efforts to remove such injunction, order, decree or ruling;
	(d) by either the Company or Parent if the Company Meeting shall have concluded and the Company Shareholder Approval contemplated by this Agreement shall not have been obtained, except that the right to terminate this Agreement under this Section 7.1(d) shall not be available to the Company where the failure to obtain the Company Shareholder Approval shall have been caused by (i) the action or failure to act of the Company and such action or failure to act constitutes a material breach by the Company of this Agreement or (ii) a breach of the Voting Agreement by any party thereto other than Parent;
	(e) by the Company, if Parent shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (1) would result in a failure of a condition set forth in Section 6.1 or 6.2 and (2) cannot be cured by the Termination Date, provided that the Company shall have given Parent written notice, delivered at least thirty (30) days prior to such termination, stating the Company’s intention to terminate this Agreement pursuant to this Section 7.1(e) and the basis for such termination;
	(f) by Parent, if the Company shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (1) would result in a failure of a condition set forth in Section 6.1 or 6.3 and (2) cannot be cured by the Termination Date, provided that Parent shall have given the Company written notice, delivered at least thirty (30) days prior to such termination, stating Parent’s intention to terminate the Agreement pursuant to this Section 7.1(f) and the basis for such termination;

A-51

---

 

	(a) extend the time for the performance of any of the obligations or acts of the other party;
	(b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered pursuant hereto; or
	(c) waive compliance with any of the agreements or conditions of the other party contained herein.

A-52

---

 

	ALLTEL Corporation
	One Allied Drive
	Little Rock, Arkansas 72202
	Attention: Chief Executive Officer
	(with a copy to the Corporate Secretary)
	Telecopy: (501) 905-5444

	Western Wireless Corporation
	3650 131st Avenue, S.E.
	Suite 400
	Bellevue, Washington 98006
	Attention: Chief Executive Officer
	Telecopy: (425) 586-8700

A-53

---

 

	Wachtell, Lipton, Rosen & Katz
	51 West 52nd Street
	New York, New York 10019
	Telecopy:(212) 403-2000
	Attention: Daniel A. Neff
	Mark Gordon
	and
	Friedman Kaplan Seiler & Adelman LLP
	1633 Broadway
	New York, New York 10019
	Attention: Barry A. Adelman
	Gregg S. Lerner
	Telecopy: (212) 833-1250

A-54

---

 

2005 Plan			14
4.625% Notes			15
9.250% Notes			36
affiliates			43
Agreement			5
Articles of Merger			6
associate			35
Available Cash Election Amount			7
Cash Electing Company Share			7
Cash Election			7
Cash Election Amount			6
Cash Fraction			7
Certificates			8
Class A Common Stock			6
Class B Common Stock			6
Closing Date			5

A-55

---

 

Code			5
Communications Act			15
Company			5
Company Action Notice			40
Company Alternative Proposal			41
Company Approvals			15
Company Benefit Plans			18
Company Book-Entry Shares			8
Company Change of Recommendation			40
Company Common Stock			6
Company Disclosure Schedule			13
Company Employees			44
Company License Schedule			23
Company Licenses			23
Company Material Contracts			22
Company Meeting			42
Company Minority Interest Business			13
Company Permits			17
Company Preferred Stock			14
Company Recommendation			42
Company SEC Documents			16
Company Shareholder Approval			22
Company Stock Awards			14
Company Stock Options			43
Company Superior Proposal			41
ComReg			24
Confidentiality Agreement			39
Current Offering			43
Disclosure Schedule			25
Dissenting Shares			8
Effective Time			6
Election Date			9
eligible guarantor institution			9
Employees			21
Environmental Claims			18
Environmental Laws			18
ERISA			18
ERISA Affiliate			19
ESPP			14
Exchange Act			9
Exchange Agent			8
Exchange Ratio			7
FCC			23
FCC Applications			45
FCC Consents			45

A-56

---

 

FCC Rules			23
Foreign Benefit Plan			19
Foreign License Schedule			24
Form of Election			9
GAAP			16
Governmental Entity			15
HSR Act			15
Indemnified Parties			47
Intellectual Property			22
knowledge			18
Laws			17
Lien			13
Material Adverse Effect			13
Maximum Amount			47
Merger			5
Merger Consideration			7
Merger Sub			5
Mixed Consideration Electing Share			7
Mixed Election			7
No Par Preferred Stock			26
Non-Electing Company Share			9
Notes			36
Option Plan			14
Par Preferred Stock			26
Parent			5
Parent Approvals			27
Parent Benefit Plans			29
Parent Certificates			10
Parent Common Stock			26
Parent Disclosure Schedule			25
Parent Employees			32
Parent License Schedule			33
Parent Licenses			33
Parent Material Contracts			32
Parent Permits			29
Parent Preferred Stock			26
Parent SEC Documents			27
Per Share Cash Election Consideration			7
person			55
Program			45
Proxy Statement			20
PUCs			15
Qualifying Person			51
Qualifying Transaction			52
Registration Statement			41

A-57

---

 

Regulatory Law			46
Representatives			39
Required Approval			49
Retention Bonus			44
Retention Pool			44
RTR-GmbH			24
Sarbanes-Oxley Act			17
SEC			16
Securities Act			15
Shares			6
Stock Consideration			7
Stock Electing Company Share			7
Stock Election			7
Subsequent Company SEC Documents			16
Subsequent Parent SEC Documents			27
Subsidiaries			55
Surviving Company			5
Tax Authority			21
Tax Counsel			42
Tax Opinion			42
Tax Return			21
Taxes			21
Termination Date			34
TKK			24
Voting Agreement			5
WARN Act			22
WBCA			5
WLLCA			5

A-58

---

 

	ALLTEL CORPORATION

	By:	/s/ Scott T. Ford

	Name: Scott T. Ford
	Title:   President and Chief Executive Officer
	WIGEON ACQUISITION LLC

	By:	/s/ Scott T. Ford

	Name: Scott T. Ford
	Title:   President
	WESTERN WIRELESS CORPORATION

	By:	/s/ John W. Stanton

	Name: John W. Stanton
	Title:   Chairman and Chief Executive Officer

A-59

---

 

(a) Authority. Such Shareholder, if not an individual, is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization (as applicable). Such Shareholder has all requisite legal power (corporate or other) and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by such Shareholder and constitutes a valid and binding obligation of such Shareholder enforceable in accordance with its terms subject to (i) bankruptcy, insolvency, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally, and (ii) general principles of equity (regardless of whether considered in a proceeding at law or in equity). If such Shareholder is married and the Subject Shares of such Shareholder constitute community property or otherwise need spousal or other approval for this

B-1

---

 

	Agreement to be legal, valid and binding with respect to such Subject Shares, this Agreement has been duly authorized, executed and delivered by, and constitutes a valid and binding agreement of, such Shareholder’s spouse, enforceable against such spouse in accordance with its terms subject to (i) bankruptcy, insolvency, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally, and (ii) general principles of equity (regardless of whether considered in a proceeding at law or in equity). If such Shareholder is a trust, no consent of any beneficiary is required for the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.
	(b) No Conflicts. (i) No filing by any Shareholder with any governmental body or authority, and no authorization, consent or approval of any other person is necessary for the execution of this Agreement by any Shareholder and the consummation by any Shareholder of the transactions contemplated hereby and (ii) none of the execution and delivery of this Agreement by such Shareholders, the consummation by any Shareholder of the transactions contemplated hereby or compliance by any Shareholder with any of the provisions hereof shall (A) if such shareholder is not an individual, conflict with or result in any breach of the organizational documents of any Shareholder, (B) result in, or give rise to, a violation or breach of or a default under (with or without notice or lapse of time, or both) any of the terms of any material contract, trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease, permit, understanding, agreement or other instrument or obligation to which any Shareholder is a party or by which any Shareholder or any of its Subject Shares or assets may be bound, or (C) violate any applicable order, writ, injunction, decree, judgment, statute, rule or regulation, except for any of the foregoing as would not reasonably be expected to prevent any Shareholder from performing its obligations under this Agreement.
	(c) The Subject Shares. Schedule A sets forth, opposite each Shareholder’s name, the number of Subject Shares over which such Shareholder has record or beneficial ownership as of the date hereof. As of the date hereof, each Shareholder is the record or beneficial owner of the Subject Shares denoted as being owned by such Shareholder on Schedule A (or is trustee of a trust that is the record holder of and whose beneficiaries are the beneficial owners of such Subject Shares) and has the sole power to vote (or cause to be voted) such Subject Shares. Except as set forth on such Schedule A, no Shareholder nor any controlled affiliate of a Shareholder owns or holds any right to acquire any additional shares of any class of capital stock of the Company or other securities of the Company or any interest therein or any voting rights with respect to any securities of the Company. Each Shareholder has good and valid title to the Subject Shares denoted as being owned by such Shareholder on Schedule A, free and clear of any and all pledges, mortgages, liens, charges, proxies, voting agreements, encumbrances, adverse claims, options, security interests and demands of any nature or kind whatsoever, other than those created by this Agreement, as disclosed on Schedule A, or as would not prevent any Shareholder from performing its obligations under this Agreement.
	(d) Reliance By Parent. Such Shareholder understands and acknowledges that Parent is entering into, and causing Merger Sub to enter into, the Merger Agreement in reliance upon such Shareholder’s execution and delivery of this Agreement.
	(e) Litigation. As of the date hereof, there is no action, proceeding or investigation pending or threatened against such Shareholder that questions the validity of this Agreement or any action taken or to be taken by such Shareholder in connection with this Agreement.

(a) Due Organization, etc. Parent is duly organized, validly existing and in good standing under the laws of the State of Delaware. Parent has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by Parent and constitutes a valid and binding obligation of Parent enforceable in accordance with its terms subject to (i) bankruptcy,

B-2

---

 

	insolvency, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally, and (ii) general principles of equity (regardless of whether considered in a proceeding at law or in equity).
	(b) Conflicts. (i) No filing by Parent with any governmental body or authority, and no authorization, consent or approval of any other person is necessary for the execution of this Agreement by Parent and the consummation by Parent of the transactions contemplated hereby and (ii) none of the execution and delivery of this Agreement by Parent, the consummation by Parent of the transactions contemplated hereby or compliance by Parent with any of the provisions hereof shall (A) conflict with or result in any breach of the organizational documents of Parent, (B) result in, or give rise to, a violation or breach of or a default under (with or without notice or lapse of time, or both) any of the terms of any material contract, loan or credit agreement, note, bond, mortgage, indenture, lease, permit, understanding, agreement or other instrument or obligation to which Parent is a party or by which Parent or any of its assets may be bound, or (C) violate any applicable order, writ, injunction, decree, judgment, statute, rule or regulation, except for any of the foregoing as would not prevent Parent from performing its obligations under this Agreement.
	(c) Reliance by the Shareholders. Parent understands and acknowledges that the Shareholders are entering into this Agreement in reliance upon the execution and delivery of the Merger Agreement by Parent.

	(a) At the Company Meeting or at any adjournment, postponement or continuation thereof or in any other circumstances occurring prior to the Company Meeting upon which a vote, consent or other approval (including by written consent) with respect to the Merger and the Merger Agreement is sought , each Shareholder shall vote (or cause to be voted) the Subject Shares (and each class thereof) (i) in favor of the approval of the Merger and the approval and adoption of the Merger Agreement; and (ii) except with the written consent of Parent, against any Company Alternative Proposal. Any such vote shall be cast or consent shall be given in accordance with such procedures relating thereto so as to ensure that it is duly counted for purposes of determining that a quorum is present and for purposes of recording the results of such vote or consent. Each Shareholder agrees not to enter into any agreement or commitment with any person the effect of which would be inconsistent with or violative of the provisions and agreements contained in this Section 3(a).
	(b) Each Shareholder agrees not to, directly or indirectly, (i) sell, transfer, tender, pledge, encumber, assign or otherwise dispose of (collectively, a “Transfer”) or enter into any agreement, option or other arrangement with respect to, or consent to a Transfer of, or convert or agree to convert, any or all of the Subject Shares to any person if such Transfer or agreement, option or other arrangement would result in the Shareholder’s inability to perform his or her obligations under Section 3(a) hereof, other than in accordance with the Merger Agreement, or (ii) grant any proxies (other than the Company proxy card in connection with the Company Meeting if and to the extent such proxy is consistent with the Shareholder’s obligations under Section 3(a) hereof), deposit any Subject Shares into any voting trust or enter into any voting arrangement, whether by proxy, voting agreement or otherwise, with respect to any of the Subject Shares, other than pursuant to this Agreement. Each Shareholder further agrees not to commit or agree to take any of the foregoing actions or take any action that would have the effect of preventing, impeding, interfering with or adversely affecting its ability to perform its obligations under this Agreement.
	(c) Such Shareholder shall not, nor shall such Shareholder permit any controlled affiliate of such Shareholder to, nor shall such Shareholder act in concert with or permit any controlled affiliate to act in concert with any person to make, or in any manner participate in, directly or indirectly, a “solicitation” (as such term is used in the rules of the Securities and Exchange Commission) of

B-3

---

 

proxies or powers of attorney or similar rights to vote, or seek to advise or influence any person with respect to the voting of, any shares of Common Stock intended to facilitate any Company Alternative Proposal or to cause shareholders of the Company not to vote to approve and adopt the Merger Agreement. Such Shareholder shall not, and shall direct any investment banker, attorney, agent or other adviser or representative of such Shareholder not to, directly or indirectly, through any officer, director, agent or otherwise, enter into, solicit, initiate, conduct or continue any discussions or negotiations with, or knowingly encourage or respond to any inquiries or proposals by, or provide any information to, any person, other than Parent, relating to any Company Alternative Proposal. Each Shareholder hereby represents that, as of the date hereof, it is not engaged in discussions or negotiations with any party other than Parent with respect to any Company Alternative Proposal.

B-4

---

 

B-5

---

 

	ALLTEL Corporation
	One Allied Drive
	Little Rock, Arkansas 72202
	Attention: Chief Executive Officer
	(with a copy to the Corporate Secretary)
	Telecopy: (501) 905-5444

	Wachtell, Lipton, Rosen & Katz
	51 West 52(nd) Street
	New York, New York 10019
	Telecopy: (212) 403-2000
	Attention: Daniel A. Neff
	Mark Gordon
	and
	Friedman, Kaplan, Seiler, Adelman LLP
	1633 Broadway
	New York, New York 10019
	Telecopy: (212) 833-1250
	Attention: Barry A. Adelman
	Gregg S. Lerner

B-6

---

 

B-7

---

 

	ALLTEL CORPORATION

	By:	/s/ Scott T. Ford

	Name:        Scott T. Ford

	Title:	President and Chief Executive Officer

	/s/ John W. Stanton
	Name:        John. W. Stanton
	/s/ Theresa E. Gillespie
	Name:        Theresa E. Gillespie
	STANTON FAMILY TRUST

	By:	/s/ John W. Stanton

	Name:        John W. Stanton

	Title:	Trustee

	PN CELLULAR, INC.

	By:	/s/ John W. Stanton

	Name:        John W. Stanton

	Title:	Chief Executive Officer

	STANTON COMMUNICATIONS
	CORPORPATION

	By:	/s/ John W. Stanton

	Name:        John W. Stanton

	Title:	Chief Executive Officer

B-8

---

 

•	reviewed the Agreement and the Voting Agreement, dated as of January 9, 2005, among ALLTEL and the shareholders of Western Wireless named therein;
•	reviewed Western Wireless’ and ALLTEL’s Annual Reports to Shareholders and Annual Reports on Form 10-K for the years ended December 31, 2001, 2002 and 2003, their Quarterly Reports on Form 10-Q for the periods ended March 31, 2004, June 30, 2004 and September 30, 2004, their Current Reports on Form 8-K for the three years ended the date hereof and the preliminary results of Western Wireless and ALLTEL for the quarter ended December 31, 2004 provided to us by the managements of Western Wireless and ALLTEL, respectively;
•	reviewed certain operating and financial information relating to Western Wireless’ and ALLTEL’s business and prospects. This information included projections for the six years ended December 31, 2009 for Western Wireless prepared by Western Wireless’ management and for the year ended December 31, 2004 for ALLTEL prepared by ALLTEL’s management. We also reviewed publicly available research analyst projections for the five years ended December 31, 2009 for ALLTEL and reviewed and discussed such projections with the managements of ALLTEL and Western Wireless.
•	reviewed certain estimates of cost savings and other combination benefits expected to result from the Merger, prepared and provided to us by ALLTEL’s management;

C-1

---

 

•	met with certain members of Western Wireless’ and ALLTEL’s senior managements to discuss each entity’s respective businesses, operations, historical and projected financial results and future prospects;
•	reviewed the historical prices, trading multiples and trading volumes of the common shares of each of Western Wireless and ALLTEL;
•	reviewed publicly available financial data, stock market performance data and trading multiples of companies which we deemed generally comparable to each of Western Wireless and ALLTEL;
•	reviewed the terms of recent mergers and acquisitions of companies which we deemed generally comparable to Western Wireless and the Merger;
•	performed discounted cash flow analyses based on the projections for each of Western Wireless and ALLTEL and synergy estimates for the combined company furnished to us;
•	reviewed the pro forma financial results, financial condition and capitalization of ALLTEL giving effect to the Merger; and
•	conducted such other studies, analyses, inquiries and investigations as we deemed appropriate.

C-2

---

 

By:	/s/ Louis P. Friedman

	Louis P. Friedman
	Vice Chairman — Investment Banking

C-3

---

 

	(1) “Corporation” means the issuer of the shares held by a dissenter before the corporate action, or the surviving or acquiring corporation by merger or share exchange of that issuer.
	(2) “Dissenter” means a shareholder who is entitled to dissent from corporate action under RCW 23B.13.020 and who exercises that right when and in the manner required by RCW 23B.13.200 through 23B.13.280.
	(3) “Fair value,” with respect to a dissenter’s shares, means the value of the shares immediately before the effective date of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable.
	(4) “Interest” means interest from the effective date of the corporate action until the date of payment, at the average rate currently paid by the corporation on its principal bank loans or, if none, at a rate that is fair and equitable under all the circumstances.
	(5) “Record shareholder” means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.
	(6) “Beneficial shareholder” means the person who is a beneficial owner of shares held in a voting trust or by a nominee as the record shareholder.
	(7) “Shareholder” means the record shareholder or the beneficial shareholder.

	(a) Consummation of a plan of merger to which the corporation is a party (i) if shareholder approval is required for the merger by RCW 23B.11.030, 23B.11.080, or the articles of incorporation and the shareholder is entitled to vote on the merger, or (ii) if the corporation is a subsidiary that is merged with its parent under RCW 23B.11.040;
	(b) Consummation of a plan of share exchange to which the corporation is a party as the corporation whose shares will be acquired, if the shareholder is entitled to vote on the plan;
	(c) Consummation of a sale or exchange of all, or substantially all, of the property of the corporation other than in the usual and regular course of business, if the shareholder is entitled to vote on the sale or exchange, including a sale in dissolution, but not including a sale pursuant to court order or a sale for cash pursuant to a plan by which all or substantially all of the net proceeds of the sale will be distributed to the shareholders within one year after the date of sale;
	(d) An amendment of the articles of incorporation, whether or not the shareholder was entitled to vote on the amendment, if the amendment effects a redemption or cancellation of all of the shareholder’s shares in exchange for cash or other consideration other than shares of the corporation; or

D-1

---

 

	(e) Any corporate action taken pursuant to a shareholder vote to the extent the articles of incorporation, bylaws, or a resolution of the board of directors provides that voting or nonvoting shareholders are entitled to dissent and obtain payment for their shares.

	(a) The proposed corporate action is abandoned or rescinded;
	(b) A court having jurisdiction permanently enjoins or sets aside the corporate action; or
	(c) The shareholder’s demand for payment is withdrawn with the written consent of the corporation.

	(a) The beneficial shareholder submits to the corporation the record shareholder’s consent to the dissent not later than the time the beneficial shareholder asserts dissenters’ rights, which consent shall be set forth either (i) in a record or (ii) if the corporation has designated an address, location, or system to which the consent may be electronically transmitted and the consent is electronically transmitted to the designated address, location, or system, in an electronically transmitted record; and
	(b) The beneficial shareholder does so with respect to all shares of which such shareholder is the beneficial shareholder or over which such shareholder has power to direct the vote.

D-2

---

 

	(a) State where the payment demand must be sent and where and when certificates for certificated shares must be deposited;
	(b) Inform holders of uncertificated shares to what extent transfer of the shares will be restricted after the payment demand is received;
	(c) Supply a form for demanding payment that includes the date of the first announcement to news media or to shareholders of the terms of the proposed corporate action and requires that the person asserting dissenters’ rights certify whether or not the person acquired beneficial ownership of the shares before that date;
	(d) Set a date by which the corporation must receive the payment demand, which date may not be fewer than thirty nor more than sixty days after the date the notice in subsection (1) of this section is delivered; and
	(e) Be accompanied by a copy of this chapter.

D-3

---

 

	(a) The corporation’s balance sheet as of the end of a fiscal year ending not more than sixteen months before the date of payment, an income statement for that year, a statement of changes in shareholders’ equity for that year, and the latest available interim financial statements, if any;
	(b) An explanation of how the corporation estimated the fair value of the shares;
	(c) An explanation of how the interest was calculated;
	(d) A statement of the dissenter’s right to demand payment under RCW 23B.13.280; and
	(e) A copy of this chapter.

	(a) The dissenter believes that the amount paid under RCW 23B.13.250 or offered under RCW 23B.13.270 is less than the fair value of the dissenter’s shares or that the interest due is incorrectly calculated;
	(b) The corporation fails to make payment under RCW 23B.13.250 within sixty days after the date set for demanding payment; or
	(c) The corporation does not effect the proposed action and does not return the deposited certificates or release the transfer restrictions imposed on uncertificated shares within sixty days after the date set for demanding payment.

D-4

---

 

	(a) Against the corporation and in favor of any or all dissenters if the court finds the corporation did not substantially comply with the requirements of RCW 23B.13.200 through 23B.13.280; or
	(b) Against either the corporation or a dissenter, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by chapter 23B.13 RCW.

D-5

---

 

	•	Reviewing the financial information provided to shareholders and others, the business risk environment and the audit process.
	•	Reviewing the systems of internal control which management and the Board of Directors have established.
	•	Providing an open avenue of communication between the Board of Directors, management, the internal audit department and the outside auditors.
	•	Ensuring compliance with the Company’s Code of Business Conduct and Ethics.
	•	Ensuring the ultimate accountability of the outside auditors to the Board of Directors and the Audit Committee, and exercising that authority though the selection, evaluation and if necessary, replacement of the outside auditors.

	•	Three or more members of the Board of Directors, each of whom shall be “independent” of the management of the Company, and free from any relationship that, in the opinion of the Board, would interfere with his or her independence. For the purposes hereof, “independent” shall mean a director who meets the independence requirements of th National Association of Securities Dealers, Inc. (the “NASD”), the Securities and Exchange Commission (the “SEC”), and any other regulations applicable tot he Company form time to time.
	•	Each member shall, in the judgment of the Board of Directors, be financially literate and be able to read and understand the fundamental financial statements of the Company, including the Company’s balance sheet, income statement and cash flow statement. At least one member of the Audit Committee shall, in the judgment of the Board of Directors, be an “audit committee financial expert” as the term is defined in applicable SEC rules.
	•	The members Audit Committee shall be appointed by the Board and the Board may remove any member from the Audit Committee at any time with or without cause.

	•	Conduct regular meetings, not less than one each quarter, either in person or telephonically, as would be necessary to ensure the successful achievement of the Board of Director’s oversight

E-1

---

 

		responsibilities. The majority of the members of the Audit Committee shall constitute a quorum. The Audit Committee may act by unanimous written consent.
	•	Meet at least annually with management and with the outside auditors to discuss any matters that the Audit Committee or each of these groups believes requires discussion.
	•	Meet in separate executive sessions with management and the outside auditors, as necessary or appropriate, to discuss any matters that the Audit Committee or any of these groups believe should be discussed privately with the Audit Committee.
	•	Conduct special meetings which may be called by the Chairman of the Audit Committee, or at the request of management or the outside auditors.
	•	Report to the full Board of Directors with respect to its meetings and on any significant matter arising from the Audit Committee’s work with such recommendations as the Audit Committee may deem appropriate.

	•	Select and retain the outside auditors, oversee the work of the outside auditors, review the fees of the outside auditors, and if necessary, review and approve the discharge of the outside auditors. Approve in advance the engage of the outside auditors and their fees for all audit and permitted non-audit services. Adopt specific policies and procedures for such preapproval, ensuring that they provide sufficient detail so that the Audit Committee’s responsibilities are not delegated to management. Ensure that the Audit Committee’s approval of any audit and permitted non-audit services is publicly disclosed pursuant to applicable rules.
	•	Enable direct communication between the outside auditors and the Audit Committee at any time. Instruct the outside auditors to report directly to the Audit Committee any serious difficulties or disputes with management, and ensure such issues are resolved in a timely and appropriate manner.
	•	At least annually, obtain and review the letter and written disclosures from the outside auditor consistent with Independence Standards Board Standard No. 1, including a written statement by the outside auditor delineating all relationships between the auditor and the Company; engage in a dialogue with the auditor with respect to that firm’s independence and any disclosed relationships or services that may impact the objectivity and independence of the auditor; and take, or recommend that the Board take, appropriate action to oversee the independence of the outside auditor.
	•	Discuss with the outside auditor the matters required to be discussed by Statement of Auditing Standards (“SAS”) No. 61, Communications with Audit Committee, SAS No. 89, Audit Adjustments, and SAS No. 90, Audit Committee Communications, all as amended from time to time, together with any other matters as may be required for public disclosure or otherwise applicable laws, rules and regulations.
	•	At least annually, evaluate the outside auditors’ qualifications and performance.
	•	Prepare annually the report required by the rules of the SEC to be included in the Company’s annual proxy statement.
	•	Review and discuss with the outside auditors their audit procedures, including the scope and timing of the audit, the results of the annual audit examination, any accompanying management letters, and any reports of the outside auditors with respect to interim periods.
	•	Review and assess the adequacy of the audit committee charter at least annually, or as conditions require.
	•	Review and discuss with management and the outside auditors the Company’s annual audited financial statements, including disclosures made in Management’s Discussion and Analysis, and

E-2

---

 

		make a recommendation regarding the inclusion of the audited financial statements in the Company’s annual report on Form 10-K to the Board of Directors.
	•	Review and discuss with management and the outside auditors the Company’s quarterly financial statements, including disclosures made in Management’s Discussion and Analysis, prior to the filing of the Company’s quarterly report on Form 10-Q, and the results of the outside auditors’ review of the quarterly financial statements.
	•	Make specific inquiry with respect to the outside auditors’ judgment regarding the “quality” of financial information in addition to compliance with accounting standards and conventions.
	•	Review with management and the outside auditors the adequacy and effectiveness of the Company’s internal controls, and the outside auditors’ related attestation. Consider with management and the internal and outside auditors whether any changes to such internal controls are appropriate.
	•	Review disclosures made to the Audit Committee by the Company’s chief executive officer and chief financial officer during their certification process for the Company’s reports on Form 10-K and Form 10-Q regarding any significant deficiencies in the design or operations of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company’s internal controls.
	•	Review with management and the outside auditors the accounting policies which may be viewed as critical, and review any significant changes in accounting policies of the Company and accounting and financial reporting proposal that may have a significant impact on the Company’s financial reports.
	•	Review with management the Company’s major financial risk exposures and steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies.
	•	Review compliance with audit committee membership requirements annually, or as new members are added to the Committee. Periodically evaluate the performance of and take steps to improve the effectiveness of the Audit Committee in meeting its responsibilities under the audit committee charter.
	•	Review the internal audit department’s staffing, budget and responsibilities. Enable direct communication between the Audit Committee and the internal audit department at any time, as needed, to address concerns.
	•	Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and the confidential, and anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
	•	Approve all related party transactions, as defined by applicable NASD rules, to which the Company is a party for potential conflict of interest situations.
	•	Review the procedures established by management to monitor compliance with the Company’s Code of Business Conduct and Ethics. Receive reports from management regarding the Company’s compliance with the Code of Business Conduct and Ethics.
	•	Review with management and the outside auditors changes in accounting standards or rules proposed by the Financial Accounting Standards Board or the SEC that may effect the Company’s financial statements.
	•	The Audit Committee may form a delegate authority to subcommittees and may delegate authority to one or more designated members of the Audit Committee when necessary or appropriate.
	•	Make relevant inquiries and take necessary actions to fulfill the undertakings set forth in this charter.

E-3

---

 

---

 

						Page
1.		Purpose of the Plan					F-1
2.		Definitions					F-1
		(a)		Award			F-1
		(b)		Award Agreement			F-1
		(c)		Beneficial Ownership			F-1
		(d)		Board			F-1
		(e)		Code			F-1
		(f)		Committee			F-1
		(g)		Common Stock			F-1
		(h)		Company			F-1
		(i)		Company Holdings			F-1
		(j)		Consultant			F-1
		(k)		Continuous Status as a Participant			F-1
		(l)		Director			F-2
		(m)		Disability			F-2
		(n)		Employee			F-2
		(o)		Exchange Act			F-2
		(p)		Executive Officers			F-2
		(q)		Fair Market Value			F-2
		(r)		FAS 123			F-3
		(s)		FLSA			F-3
		(t)		Former Plan			F-3
		(u)		Incentive Stock Option			F-3
		(v)		Independent Director			F-3
		(w)		Maximum Annual Participant Award			F-3
		(x)		Nasdaq			F-3
		(y)		New Awards			F-3
		(z)		Non-Employee Director			F-3
		(aa)		Nonqualified Stock Option			F-3
		(bb)		Option			F-3
		(cc)		Option Price			F-3
		(dd)		Parent			F-3
		(ee)		Participant			F-3
		(ff)		Performance Criteria			F-3
		(gg)		Plan			F-3
		(hh)		Reorganization			F-3
		(ii)		Reprice			F-3
		(jj)		Restricted Stock			F-3
		(kk)		Restricted Stock Units			F-3
		(ll)		SAR			F-3
		(mm)		SEC			F-3
		(nn)		Share			F-4

F-i

---

 

						Page
		(oo)		Stand-Alone SARs			F-4
		(pp)		Subcommittee			F-4
		(qq)		Subsidiary			F-4
		(rr)		Tandem SARs			F-4
3.		Shares Subject to the Plan					F-4
		(a)		Reservation of Shares			F-4
		(b)		Substitutions and Assumptions			F-4
		(c)		Securities Law Compliance			F-4
4.		Adjustments to Shares Subject to the Plan					F-5
		(a)		Changes in Capitalization			F-5
		(b)		Issuance of Securities			F-5
		(c)		Corporate Structure			F-5
5.		Plan Administration					F-5
		(a)		Authority			F-5
		(b)		Powers of the Committee			F-6
		(c)		Effect of Committee’s Decision			F-6
		(d)		Delegation and Administration			F-6
6.		General Eligibility					F-7
		(a)		Awards			F-7
		(b)		Maximum Annual Participant Award			F-7
		(c)		No Employment/Service Rights			F-7
7.		Grant, Terms and Conditions of Options					F-7
		(a)		Designation			F-7
		(b)		Option Price			F-7
		(c)		Term of Options			F-7
		(d)		Vesting			F-7
		(e)		Substitution of SARs for Options			F-8
		(f)		Exercise			F-8
8.		Grant, Terms and Conditions of Stock Awards					F-8
		(a)		Designation			F-8
		(b)		Restrictions			F-8
		(c)		Performance Criteria			F-8
		(d)		Vesting			F-8
9.		Grant, Terms and Conditions of SARs					F-9
		(a)		Grants			F-9
		(b)		Tandem SARs			F-9
		(c)		Stand-Alone SARs			F-9
10.		Procedure for Exercise; Rights as a Shareholder					F-9
		(a)		Procedure			F-9
		(b)		Method of Payment			F-10
		(c)		Withholding Obligations			F-10
		(d)		Shareholder Rights			F-10
		(e)		Non-Transferability of Awards			F-10

F-ii

---

 

						Page
11.		Expiration of Awards					F-10
		(a)		Expiration, Termination or Forfeiture of Awards			F-10
		(b)		Extension of Term			F-11
12.		Term, Amendment and Termination of the Plan					F-11
		(a)		Term of Plan			F-11
		(b)		Amendment and Termination			F-11
		(c)		Participants in Foreign Countries			F-11
		(d)		Effect of Amendment or Termination			F-11
13.		Shareholder Approval					F-11

F-iii

---

 

	(a) “Award” shall mean any award or benefits granted under the Plan, including Options, Restricted Stock, Restricted Stock Units, and SARs.
	(b) “Award Agreement” shall mean a written or electronic agreement between the Company and the Participant setting forth the terms of the Award. Such agreements may contain other terms and conditions, including without limitation a nondisclosure agreement and noncompetition agreement, which the Committee deems appropriate for inclusion in an Award Agreement. The provisions of the various Award Agreements or other agreements entered into under the Plan need not be identical.
	(c) “Beneficial Ownership” shall have the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.
	(d) “Board” shall mean the Board of Directors of the Company.
	(e) “Code” shall mean the Internal Revenue Code of 1986, as amended.
	(f) “Committee” shall mean the Compensation Committee appointed by the Board, which at all times shall consist solely of Independent Directors.
	(g) “Common Stock” shall mean the Class A Common Stock of the Company, no par value per share.
	(h) “Company” shall mean Western Wireless Corporation, a Washington corporation and any successor thereto.
	(i) “Company Holdings” shall have the meaning set forth in Section 4(c) of the Plan.
	(j) “Consultant” shall mean any person, except an Employee, engaged by the Company or any Subsidiary of the Company, to render personal services to such entity, including as an advisor.
	(k) “Continuous Status as a Participant” shall mean (i) for Employees, the absence of any interruption or termination of service as an Employee, (ii) for Directors, the absence of any interruption or termination of service as a Director, and (iii) for Consultants, the absence of any interruption, expiration, or termination of such person’s consulting or advisory relationship with the Company or the occurrence of any termination event as set forth in such person’s Award Agreement. Continuous Status as a Participant shall not be considered interrupted (A) for an Employee in the case of sick leave, maternity leave, infant care leave, medical emergency leave, military leave, or any other leave of absence in each case so long as such leave has been properly approved and taken in accordance with the policies of the Company or any applicable Subsidiary as may be in effect from

F-1

---

 

	time to time, and (B) for a Consultant, in the case of any temporary interruption in such person’s availability to provide services to the Company which has been authorized in writing by a vice president of the Company prior to its commencement. In the event a Subsidiary ceases to be a Subsidiary, such event will constitute termination of Continuous Status as a Participant with respect to Participants providing services as an Employee, Consultant or Director of such Subsidiary.
	(l) “Director” shall mean a member of the Board.
	(m) “Disability” shall mean (i) in the case of a Participant whose employment with the Company or a Subsidiary is subject to the terms of an employment or consulting agreement that includes a definition of “Disability,” the term “Disability” as used in this Plan shall have the meaning set forth in such employment or consulting agreement during the period that such employment or consulting agreement remains in effect; and (ii) in all other cases, the term “Disability” as used in this Plan shall mean a “permanent and total disability” as the term is defined for purposes of Section 22(e)(3) of the Code.
	(n) “Employee” shall mean any person, including an officer, who is a common law employee of, receives remuneration for personal services to, is reflected on the official human resources database as an employee of, and is on the payroll of the Company or any Subsidiary of the Company. A person is on the payroll if he or she is paid from or at the direction of the payroll department of the Company, or any Subsidiary of the Company. Persons providing services to the Company, or to any Subsidiary of the Company, pursuant to an agreement with a staff leasing organization, temporary workers engaged through or employed by temporary or leasing agencies, and workers who hold themselves out to the Company, or a Subsidiary to which they are providing services, as being independent contractors, or as being employed by or engaged through another company while providing the services, and persons covered by a collective bargaining agreement (unless the collective bargaining agreement applicable to the person specifically provides for participation in this Plan) are not Employees for purposes of this Plan, whether or not such persons are, or may be reclassified by the courts, the Internal Revenue Service, the U.S. Department of Labor, or other person or entity, as common law employees of the Company, or any Subsidiary, either solely or jointly with another person or entity.
	(o) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
	(p) “Executive Officers” shall mean the officers of the Company as such term is defined in Rule 16a-1 under the Exchange Act.
	(q) “Fair Market Value” shall mean, as of any date, the value of the Common Stock determined as follows:

	(i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market System, the Fair Market Value of a Share of Common Stock shall be the average of the opening and closing sales prices for such stock (or the closing bid, if no sales were reported) as quoted on such system or exchange (or the exchange with the greatest volume of trading in Common Stock) on the day of determination, as reported in the Wall Street Journal or such other source as the Committee deems reliable;
	(ii) If the Common Stock is quoted on the Nasdaq System (but not on the National Market System thereof) or is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination, as reported in the Wall Street Journal or such other source as the Committee deems reliable; and
	(iii) In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Committee as required.

F-2

---

 

	(r) “FAS 123” shall mean Statement of Financial Accounting Standard 123, “Accounting for Stock-based Compensation,” as promulgated by the Financial Accounting Standards Board.
	(s) “FLSA” shall mean the Fair Labor Standards Act of 1938, as amended.
	(t) “Former Plan” shall mean the Western Wireless Corporation Amended and Restated 1994 Management Incentive Stock Option Plan.
	(u) “Incentive Stock Option” shall mean any Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.
	(v) “Independent Director” shall mean a Director who: (1) meets the independence requirements of Nasdaq, or if Nasdaq shall cease to be the principal exchange or quotation system upon which the shares of Common Stock are listed or quoted, then such exchange or quotation system as the Company elects to list or quote its shares of Common Stock and that the Committee designates as the Company’s principal exchange or quotation system; (2) qualifies as an “outside director” under Section 162(m) of the Code; (3) qualifies as a “non-employee director” under Rule 16b-3 promulgated under the Exchange Act; and (4) satisfies independence criteria under any other applicable laws or regulations relating to the issuance of Shares to Employees.
	(w) “Maximum Annual Participant Award” shall have the meaning set forth in Section 5(b) of the Plan.
	(x) “Nasdaq” shall mean The Nasdaq Stock Market, Inc.
	(y) “New Awards” shall have the meaning set forth in Section 4(c) of the Plan.
	(z) “Non-Employee Director” shall mean a Director who is not an Employee.
	(aa) “Nonqualified Stock Option” shall mean an Option that does not qualify or is not intended to qualify as an Incentive Stock Option.
	(bb) “Option” shall mean a stock option granted pursuant to Section 7 of the Plan.
	(cc) “Option Price” shall mean the per share purchase price of a Share purchased pursuant to an Option, as specified by the Committee in the applicable Award Agreement.
	(dd) “Parent” shall mean a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
	(ee) “Participant” shall mean an Employee, Director or Consultant who holds an outstanding Award.
	(ff) “Performance Criteria” shall have the meaning set forth in Section 8(c).
	(gg) “Plan” shall mean this Western Wireless Corporation 2005 Long-Term Equity Incentive Plan, including any amendments thereto.
	(hh) “Reorganization” shall have the meaning set forth in Section 4(c) of the Plan.
	(ii) “Reprice” shall mean the adjustment or amendment of the exercise price of Options or SARs previously awarded whether through amendment, cancellation, replacement of grants or any other means.
	(jj) “Restricted Stock” shall mean a grant of Shares pursuant to Section 8 of the Plan.
	(kk) “Restricted Stock Units” shall mean a grant of the right to receive Shares in the future or their cash equivalent (or both) pursuant to Section 8 of the Plan.
	(ll) “SAR” shall mean a stock appreciation right awarded pursuant to Section 9 of the Plan.
	(mm) “SEC” shall mean the Securities and Exchange Commission.

F-3

---

 

	(nn) “Share” shall mean one share of Common Stock, as adjusted in accordance with Section 4 of the Plan.
	(oo) “Stand-Alone SARs” shall have the meaning set forth in Section 9(c) of the Plan.
	(pp) “Subcommittee” shall have the meaning set forth in Section 5(d) of the Plan.
	(qq) “Subsidiary” shall mean (1) in the case of an Incentive Stock Option a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code, and (2) in the case of a Nonqualified Stock Option, Restricted Stock, a Restricted Stock Unit or a SAR, in addition to a subsidiary corporation as defined in (1), (A) a limited liability company, partnership or other entity in which the Company controls fifty percent (50%) or more of the voting power or equity interests, or (B) an entity with respect to which the Company possesses the power, directly or indirectly, to direct or cause the direction of the management and policies of that entity, whether through the Company’s ownership of voting securities, by contract or otherwise.
	(rr) “Tandem SARs” shall have the meaning set forth in Section 9(a) of the Plan.

F-4

---

 

F-5

---

 

	(i) to grant Incentive Stock Options to Employees and to grant Nonqualified Stock Options, Restricted Stock, Restricted Stock Units, and SARs to Employees, Consultants and Directors and to determine the terms and conditions of such Awards, including the determination of the Fair Market Value of the Shares and the exercise price, and to modify or amend each Award, with the consent of the Participant when required;
	(ii) to determine the Employees, Consultants and Directors to whom Awards, if any, will be granted hereunder, the timing of such Awards, and the number of Shares to be represented by each Award;
	(iii) to construe and interpret the Plan, the Awards granted hereunder, and any Award Agreement;
	(iv) to prescribe, amend, and rescind rules and regulations relating to the Plan, including the form of Award Agreement, and manner of acceptance of an Award, such as correcting a defect or supplying any omission, or reconciling any inconsistency so that the Plan or any Award Agreement complies with applicable law, regulations and listing requirements and to avoid unanticipated consequences deemed by the Committee to be inconsistent with the purposes of the Plan or any Award Agreement;
	(v) to establish performance criteria for Awards made pursuant to the Plan in accordance with a methodology established by the Committee, and to determine whether performance goals have been attained;
	(vi) to accelerate or defer (with the consent of the Participant) the exercise or vested date of any Award;
	(vii) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Award previously granted by the Committee;
	(viii) to establish subplans, procedures or guidelines for the grant of Awards to Employees, Directors and Consultants, including such persons working for the Company outside of the United States;
	(ix) to authorize the cancellation, forfeiture or suspension of an Award; and
	(x) to make all other determinations deemed necessary or advisable for the administration of the Plan;

F-6

---

 

F-7

---

 

F-8

---

 

	(i) Participants may be granted a Tandem SAR, exercisable upon such terms and conditions as the Committee shall establish, to elect between the exercise of the underlying Option for Shares or the surrender of the Option in exchange for a distribution from the Company in an amount equal to the excess of (A) the Fair Market Value (on the Option surrender date) of the number of Shares in which the Participant is at the time vested under the surrendered Option (or surrendered portion thereof) over (B) the aggregate exercise price payable for such vested Shares.
	(ii) No such Option surrender shall be effective unless it is approved by the Committee, either at the time of the actual Option surrender or at any earlier time. If the surrender is so approved, then the distributions to which the Participant shall become entitled under this Section 9(b) may be made in Shares valued at Fair Market Value (on the Option surrender date), in cash, or partly in Shares and partly in cash, as the Committee shall deem appropriate.
	(iii) If the surrender of an Option is not approved by the Committee, then the Participant shall retain whatever rights he or she had under the surrendered Option (or surrendered portion thereof) on the Option surrender date and may exercise such rights at any time prior to the later of (A) five (5) business days after the receipt of the rejection notice or (B) the last day on which the Option is otherwise exercisable in accordance with the terms of the instrument evidencing such Option, but in no event may such rights be exercised more than ten (10) years after the date of the Option grant.

	(i) A Participant may be granted a Stand-Alone SAR not tied to any underlying Option under Section 7 of the Plan. The Stand-Alone SAR shall cover a specified number of Shares and shall be exercisable upon such terms and conditions as the Committee shall establish. Upon exercise of the Stand-Alone SAR, the holder shall be entitled to receive a distribution from the Company in an amount equal to the excess of (A) the aggregate Fair Market Value (on the exercise date) of the Shares underlying the exercised right over (B) the aggregate base price in effect for those Shares.
	(ii) The number of Shares underlying each Stand-Alone SAR and the base price in effect for those Shares shall be determined by the Committee at the time the Stand-Alone SAR is granted. In no event, however, may the base price per Share be less than the Fair Market Value per underlying Share on the grant date.
	(iii) The distribution with respect to an exercised Stand-Alone SAR may be made in Shares valued at Fair Market Value on the exercise date, in cash, or partly in Shares and partly in cash, as the Committee shall deem appropriate.

F-9

---

 

	(i) Six (6) months and one (1) day (except in the case of an Incentive Stock Option in which case such period shall be shortened to three (3) months) after the date of termination of a Participant’s Continuous Status as a Participant other than in circumstances covered by (ii) or (iii) below;
	(ii) twelve (12) months after the date on which a Participant ceased performing services as a result of his or her total and permanent Disability; and

F-10

---

 

	(iii) twenty-four (24) months from the date of the death of a Participant whose Continuous Status as a Participant terminated as a result of his or her death.

F-11

---

 

Item 20.	Indemnification of Directors and Officers.

Item 21.	Exhibits and Financial Statements

	2	.1		Agreement and Plan of Merger, dated as of January 9, 2005, by and among ALLTEL Corporation, Wigeon Acquisition LLC and Western Wireless Corporation (included as Annex A to the Proxy Statement/Prospectus forming a part of this registration statement). Pursuant to Item 601(b)(2) of Regulation S-K, certain schedules, exhibits and similar attachments to this Agreement have not been filed with this exhibit. The schedules contain various items relating to the assets of the business being acquired and the representations and warranties made by the parties to the Agreement. The Registrant agrees to furnish supplementally any omitted schedule, exhibit or similar attachment to the SEC upon request.
	3	.1		Amended and Restated Certificate of Incorporation of ALLTEL Corporation, as amended.*
	3	.3		By-laws of ALLTEL Corporation, as amended as of January 29, 1998 (incorporated herein by reference to Exhibit 3(b) to ALLTEL’s Form 10-K for the fiscal year ended December 31, 1997).

II-1

---

 

	4	.1		Rights Agreement dated as of January 30, 1997, between ALLTEL Corporation and First Union National Bank of North Carolina (incorporated herein by reference to ALLTEL’s Registration Statement on Form 8-A (File No. 1-4996) filed February 4, 1997).
	5	.1		Form of Opinion of Kutak Rock LLP as to the legality of the securities to be issued.
	8	.1		Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding certain Federal income tax matters.
	8	.2		Form of Opinion of Jones Day regarding certain Federal income tax matters.
	23	.1		Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm of ALLTEL Corporation.
	23	.2		Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm of Western Wireless Corporation.
	23	.3		Consent of Kutak Rock LLP (included in Exhibit 5.1).
	23	.4		Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 8.1).
	23	.5		Consent of Jones Day (included in Exhibit 8.2).
	24	.1		Powers of Attorney.*
	99	.1		Voting Agreement by and among ALLTEL Corporation and John W. Stanton, Theresa E. Gillespie, the Stanton Family Trust, PN Cellular, Inc. and Stanton Communications Corporation, dated as of January 9, 2005 (included as Annex B to the Proxy Statement/ Prospectus forming a part of this registration statement).
	99	.2		Form of Proxy Card of Western Wireless Corporation.
	99	.3		Form of Merger Consideration Election Form.**
	99	.4		Consent of Bear, Stearns & Co. Inc.

	*	Filed with the original filing of this Registration Statement on Form S-4 (Reg. No. 333-123596) on March 25, 2005.

**	To be filed by amendment.

Item 22.	Undertakings.

	(A)(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

	(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933.
	(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
	(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

	(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the

II-2

---

 

	securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
	(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
	(B) For purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
	(C) To respond to requests for information that is incorporated by reference into the proxy statement/prospectus pursuant to Items 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
	(D) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
	(E) That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
	(F) That every prospectus: (i) that is filed pursuant to paragraph (E) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-3

---

 

	ALLTEL CORPORATION

	By:	/s/ Scott T. Ford

	(Scott T. Ford, President
	and Chief Executive Officer)

Signature				Title
/s/ Joe T. Ford*   (Joe T. Ford)				Chairman of the Board
/s/ Scott T. Ford   (Scott T. Ford)				President, Chief Executive Officer, and Director
/s/ Jeffery R. Gardner   (Jeffery R. Gardner)				Chief Financial Officer and Executive Vice President (Principal Financial Officer)
/s/ Sharilyn S. Gasaway   (Sharilyn S. Gasaway)				Controller (Principal Accounting Officer)
/s/ John R. Belk*   (John R. Belk)				Director
/s/ William H. Crown*   (William H. Crown)				Director
/s/ Dennis E. Foster*   (Dennis E. Foster)				Director
/s/ Lawrence L. Gellerstedt, III*   (Lawrence L. Gellerstedt, III)				Director
/s/ Emon A. Mahony, Jr.*   (Emon A. Mahony, Jr.)				Director
/s/ John P. McConnell*   (John P. McConnell)				Director

II-4

---

 

Signature				Title
/s/ Josie C. Natori*   (Josie C. Natori)				Director
/s/ Gregory W. Penske*   (Gregory W. Penske)				Director
/s/ Warren A. Stephens*   (Warren A. Stephens)				Director
/s/ Ronald Townsend*   (Ronald Townsend)				Director
*BY /s/ Francis X. Frantz   (Francis X. Frantz, Attorney in Fact)

II-5