Verizon Communications (VZ)

THE MERGER

Section 1.1 The Merger. At the Effective Time, upon the terms and subject to the conditions set forth in this Agreement and in accordance with the applicable provisions of the Delaware General Corporation Law (the “DGCL”), Merger Sub shall be merged with and into the Company, whereupon the separate corporate existence of Merger Sub shall cease, and the Company shall continue as the surviving company in the Merger (the “Surviving Corporation”) and a wholly owned subsidiary of Buyer.

Section 1.2 Closing. The closing of the Merger (the “Closing”) shall take place at the offices of Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York, at 10:00 a.m. on the date (the “Closing Date”) following the satisfaction or waiver (to the extent permitted by applicable Law) of the conditions set forth in Article VI (other than conditions that by their nature are to be satisfied at the Closing, but subject to the

satisfaction or waiver of such conditions) that is the earlier of (a) any Business Day as may be specified by Buyer on no less than three Business Days’ prior notice to the Company and (b) the final day of the Financing Period, or such other date or time specified by the parties in writing; provided that in no event shall the Closing Date be prior to December 12, 2008.

Section 1.3 Effective Time; Share Issuance. On the Closing Date (or such other date as Buyer and the Company may agree in writing), the Company shall execute and file the certificate of merger (the “Certificate of Merger”) with the Secretary of State of the State of Delaware in accordance with the relevant provisions of the DGCL and other applicable Delaware Law. The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Secretary of State of the State of Delaware, or at such later date or time as may be agreed by Buyer and the Company in writing and specified in the Certificate of Merger in accordance with the DGCL (such time as the Merger becomes effective is referred to herein as the “Effective Time”). Immediately prior to, and conditioned upon the occurrence of, the Effective Time, the Company shall sell to Buyer, and Buyer shall purchase from the Company, for an amount equal to the aggregate consideration to be paid in respect of Company Securities pursuant to Section 1.8 (the “Share Purchase Amount”) payable as provided in Section 1.9, one duly authorized, validly issued, fully paid and non-assessable share of Company Common Stock.

Section 1.4 Effects of the Merger. The Merger shall have the effects set forth in this Agreement and the applicable provisions of the DGCL.

Section 1.5 Company Charter and By-laws of the Surviving Corporation.

(a) The certificate of incorporation of the Company shall be amended in the Merger to read in its entirety to be the same as the certificate of incorporation of Merger Sub, and, as so amended, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended in accordance with its terms and the DGCL, except that the name of the Surviving Corporation shall be “Alltel Corporation.”

(b) The bylaws of Merger Sub, as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation until duly amended as provided therein or in the certificate of incorporation of the Surviving Corporation or applicable Law, except that the name of the Surviving Corporation shall be Alltel Corporation.

Section 1.6 Directors. The directors of Merger Sub as of immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

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Section 1.7 Officers. The officers of the Company as of immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

Section 1.8 Conversion.

(a) Conversion of Company Common Stock. At the Effective Time, in accordance with the terms and subject to the conditions of this Agreement, by virtue of the Merger and without any action on the part of any holder of any shares of Company Common Stock, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than (x) shares to be canceled pursuant to Section 1.8(b) and (y) shares of Company Common Stock held by any holder of Company Common Stock that has properly demanded appraisal of any of its shares of Company Common Stock in accordance with Section 262 of the DGCL and not withdrawn such demand) shall be canceled and converted into the right to receive in cash, without interest, an amount (the “Full Cash Amount”) equal to the quotient obtained by dividing (A) (1) the Purchase Price, minus (2) the Supplemental Retention Amount, to the extent paid or payable at or prior to Closing, plus (3) the aggregate exercise price of all Company Options in respect of which a payment is required to be made pursuant to Section 1.8(c), by (B) the total number of shares of Company Common Stock and Company Options in respect of which a payment is required to be made pursuant to Section 1.8(c) that are outstanding immediately prior to the Effective Time, other than any Company Securities held by the Company or its Subsidiaries; provided that such amount shall be calculated and payable in accordance with Section 1.11.

(b) Cancellation of Company Securities Owned by the Company and Parent. At the Effective Time, any Company Securities that are owned by the Company, Parent or any of their respective Subsidiaries immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof.

(c) Company Options. Each Company Option issued and outstanding as of the Effective Time shall be canceled and, except in the case of any Performance Based Option (as defined in the Option Plan), shall be converted into the right to receive in cash, without interest, an amount equal to the product of (i) the excess, if any, of (A) the Full Cash Amount over (B) the exercise price payable by the holder of such Company Option for a share of Company Common Stock (regardless of whether such Company Options were then exercisable) and (ii) the number of shares of Company Common Stock subject to such Company Option as of immediately prior to the Effective Time; provided that such amount shall be calculated and payable in accordance with Section 1.11. For the avoidance of doubt, the immediately preceding sentence means that each Company Option with an exercise price at or above the Full Cash Amount and each Performance Based Option shall be canceled without any right to receive any consideration therefor. The Company shall take any and all actions necessary to effectuate this Section 1.8(c), including adopting any plan amendments and using its reasonable best efforts to obtain any required consents.

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(d) Certain Adjustments. The amounts payable pursuant to this Agreement in respect of Company Securities shall be adjusted to reflect fully the effect of any stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into Company Common Stock), reorganization, recapitalization or other like change with respect to Company Common Stock occurring after the date hereof and prior to the Effective Time.

(e) Conversion of Merger Sub Interests. Each of the shares of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted as of the Effective Time into and shall represent one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation.

Section 1.9 Closing Date Payments. At the Closing, at the Company’s direction, Buyer shall deliver (i) to the Exchange Agent, by wire transfer of immediately available funds to an account designated by the Exchange Agent, for payment in accordance with Section 1.11, an amount (the “Exchange Fund”) equal to the Share Purchase Amount minus the aggregate amount payable pursuant to Section 1.8(c) in respect of Company Options and (ii) to the Company, by wire transfer of immediately available funds to an account designated by the Company, an amount equal to the aggregate amount payable pursuant to Section 1.8(c) in respect of Company Options.

Section 1.10 Merger Consideration Schedule. Seller shall have sole responsibility for allocation of the payments contemplated by this Article I among the Company Securityholders and shall deliver to the Exchange Agent and Buyer at the Closing a complete and correct schedule (the “Merger Consideration Schedule”) setting forth the name of and payment instructions for each Company Securityholder and the amount payable to each Company Securityholder pursuant to Section 1.11. Seller shall have sole responsibility for any inaccuracies in the Merger Consideration Schedule.

Section 1.11 Payment for Company Securities.

(a) As of the Effective Time, each Company Securityholder shall be entitled to receive the amount specified in Section 1.8(a) in respect of each share of Company Common Stock owned by such holder and the amount specified in Section 1.8(c) in respect of each Company Option owned by such holder. In the event of a transfer of ownership of any shares of Company Common Stock that is not registered in the transfer records of Company, the proper amount of cash may be paid to a transferee if such transferee presents to the Exchange Agent documents reasonably required to evidence and effect such transfer and reasonable evidence that any applicable stock transfer Taxes have been paid.

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(b) As promptly as practicable after the Effective Time (but in no event later than the close of business on the Closing Date), (i) the Exchange Agent shall deliver to each holder of Company Common Stock and (ii) the Company shall deliver to each holder of any Company Option, the amount to which such holder is entitled pursuant to Section 1.11(a) with respect thereto, in each case as set forth on the Merger Consideration Schedule.

(c) Any portion of the Exchange Fund that remains undistributed to the holders of Company Common Stock for one year after the Effective Time, and all certificates or other documents in possession of the Exchange Agent relating to the transactions contemplated hereby as of the end of that period, shall be promptly delivered to the Company, and the Exchange Agent’s duties shall thereupon terminate. Thereafter, each former holder of Company Common Stock shall be entitled to receive from the Company, subject to any applicable abandoned property, escheat or similar Law, the payments required to be made pursuant to this Agreement in respect of the Company Common Stock formerly held by such holder, without any interest thereon, calculated in accordance with this Agreement. Any portion of the Exchange Fund remaining unclaimed by holders of Company Common Stock as of a date that is immediately prior to such time as such amounts would otherwise escheat to or become property of any Governmental Authority shall, to the extent permitted by applicable Law, become the property of the Company, free and clear of any claims or interest of any Person previously entitled thereto. None of Parent, Buyer, the Surviving Corporation or the Exchange Agent shall be liable to any Company Securityholder for any cash delivered to a Governmental Authority or public official pursuant to any abandoned property, escheat or similar Law.

(d) Each of the Exchange Agent, Parent, Buyer and the Surviving Corporation shall be entitled to deduct and withhold from any amounts otherwise payable to any Company Securityholder such amounts as the Exchange Agent, Parent, Buyer or the Surviving Corporation is required to deduct and withhold with respect to the making of such payment under the Code, or any provision of U.S. federal, state or local tax law or any other non-U.S. tax law or any other applicable legal requirement. To the extent that amounts are so withheld by the Exchange Agent, Parent, Buyer or the Surviving Corporation in accordance with such requirements and paid over to the appropriate Governmental Authority in accordance with applicable Law, such amounts shall be treated for all purposes of this Agreement as having been paid to the Company Securityholder in respect of which such withholding was made.

Section 1.12 No Further Ownership Rights in Company Securities. All cash paid in respect of Company Securities in accordance with the terms hereof shall be deemed to have been paid in full satisfaction of all rights pertaining to such Company Securities, and there shall be no further registration of transfers on the records of the Surviving Corporation of shares of Company Common Stock that were outstanding immediately prior to the Effective Time.

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Section 1.13 Appointment of Exchange Agent. At the Closing, Buyer and Seller shall enter into an exchange agent agreement (the “Exchange Agreement”) with an exchange agent (the “Exchange Agent”) selected by Seller and reasonably satisfactory to Buyer. The Exchange Agreement shall not contain any provisions that are not contemplated by this Agreement other than customary mechanical provisions.