10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2005

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File Number: 000-51798

NTELOS Holdings Corp.

(Exact name of registrant as specified in its charter)

Delaware	36-4573125
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

401 Spring Lane, Suite 300, PO Box 1990, Waynesboro, Virginia 22980

(Address of principal executive offices) (Zip Code)

(540) 946-3500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None.

Securities registered pursuant to Section 12(g) of the Act:

Common stock, $0.01 par value

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨  Yes    x  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨  Yes    x  No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ¨  Yes    x  No*

* The registrant became subject to the Securities Exchange Act of 1934 on February 8, 2006.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨                Accelerated filer  ¨                Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨  Yes    x  No

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant on June 30, 2005 was N/A and on March 21, 2006 was $215,250,000 (based on the closing price for shares of the registrant’s common stock as reported on The Nasdaq National Market on that date). In determining this figure, the registrant has assumed that all of its directors, officers and persons owning 10% or more of the outstanding common stock are affiliates. This assumption shall not be deemed conclusive for any other purpose.

There were 15,375,000 shares of the registrant’s common stock outstanding as of the close of business on March 21, 2006.

NTELOS HOLDINGS CORP.

2006 ANNUAL REPORT ON FORM 10-K

INDEX

Part I	2
Item 1. Business	2
Item 1A. Risk Factors	18
Item 1B. Unresolved Staff Comments	34
Item 2. Properties	34
Item 3. Legal Proceedings	35
Item 4. Submission of Matters to a Vote of Security Holders	35
Part II	35
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	35
Item 6. Selected Financial Data	39
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation	41
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	70
Item 8. Financial Statements and Supplementary Data	72
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	142
Item 9A. Controls and Procedures	142
Item 9B. Other Information	142
Part III	142
Item 10. Directors and Executive Officers of the Registrant	142
Item 11. Executive Compensation	144
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	148
Item 13. Certain Relationships and Related Transactions	150
Item 14. Principal Accounting Fees and Services	151
Part IV	152
Item 15. Exhibits, Financial Statement Schedules	152
Signatures	155

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PART I

FORWARD-LOOKING STATEMENTS

Any statements contained in this report that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. The words “anticipates,” “believes,” “expects,” “intends,” “plans,” “estimates,” “targets,” “projects,” “should,” “may,” “will” and similar words and expressions are intended to identify forward-looking statements. These forward-looking statements are contained throughout this report, for example in “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Such forward-looking statements reflect, among other things, our current expectations, plans and strategies, and anticipated financial results, all of which are subject to known and unknown risks, uncertainties and factors that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Many of these risks are beyond our ability to control or predict. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained throughout this report. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. These risks and other factors include those listed under “Risk Factors” and elsewhere in this report. Furthermore, forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

Item 1. Business.

Recent Developments

NTELOS Holdings Corp., a Delaware corporation, was formed in January 2005 by Citigroup Venture Capital Equity Partners, L.P., or CVC, and certain of its affiliates, collectively referred to herein as the CVC Entities, and Quadrangle Capital Partners LP, or Quadrangle, and certain of its affiliates, collectively referred to herein as the Quadrangle Entities for the purpose of acquiring NTELOS Inc. On January 18, 2005, we entered into a transaction agreement with NTELOS Inc. and certain of its shareholders to acquire NTELOS Inc. In accordance with this agreement, we acquired 24.9% of the NTELOS Inc. common stock and stock warrants on February 24, 2005. We completed our acquisition of all of NTELOS Inc.’s remaining common stock, warrants and vested options by means of a cash merger on May 2, 2005. Following the merger transaction on May 2, 2005, NTELOS Inc. became our wholly-owned subsidiary. In connection with this acquisition, we assumed approximately $625.7 million of debt of NTELOS Inc.

On October 17, 2005, we issued $135 million in aggregate principal amount of Floating Rate Senior Notes due 2013, which are referred to herein as the Floating Rate Notes. On the same day, we paid approximately $125 million of the net proceeds from the Floating Rate Notes as a dividend to the holders of our Class L common stock.

We recently completed an initial public offering of 15,375,000 shares of our common stock. The offering consisted of 14,375,000 shares of common stock sold by us on February 13, 2006 and 1,000,000 shares of common stock sold by us on March 15, 2006 pursuant to the exercise of the underwriters’ over-allotment option. After deducting the underwriting discounts and commissions and estimated offering expenses, we received net proceeds from the offering (including proceeds received from the sale of shares pursuant to the exercise of the underwriters’ over-allotment option) of approximately $169.5 million. We have used approximately $12.9 million of the net offering proceeds from our initial public offering to terminate our advisory agreements with the CVC Entities and the Quadrangle Entities. On April 15, 2006, we will use $144.0 million of net cash proceeds from the offering to redeem the Floating Rate Notes and pay accrued interest thereon. We intend to use the remaining proceeds of the offering in accordance with the disclosure set forth in the prospectus related to our initial public offering.

In connection with the closing of our initial public offering, each share of our Class L common stock was converted into approximately 2.19 shares of Class B common stock and each share of our Class A common stock was converted into approximately 2.15 shares of Class B common stock. The terms of our Class B common stock include a $30 million distribution preference. Holders of our Class B common stock are entitled to receive cash

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dividends or distributions of $30 million in the aggregate, if and when declared by our board of directors, out of funds legally available for that purpose prior to the payment of any dividends or distributions on our common stock.

As of March 21, 2006, the CVC Entities and the Quadrangle Entities beneficially owned 24,525,752 shares of our Class B common stock, or 58.6% of our outstanding common stock on an as-converted basis. In addition, six of the seven directors that serve on the board of directors of NTELOS Holdings Corp. are representatives or designees of CVC and Quadrangle. One of the three directors designated to serve on the board of directors by CVC is “independent” pursuant to the applicable Nasdaq rules.

Our principal executive offices are located at 401 Spring Lane, Suite 300, Waynesboro, Virginia 22980. The telephone number at that address is (540) 946-3500. Our internet address is www.ntelos.com. We conduct all of our business through our wholly-owned subsidiary NTELOS Inc. and its subsidiaries.

Overview

NTELOS Holdings Corp. is a leading provider of wireless and wireline communications services to consumers and businesses in Virginia and West Virginia under the NTELOS brand name. Our wireless operations are composed of an NTELOS branded retail business and a wholesale business that we operate under an exclusive contract with Sprint Nextel Corp. We hold digital wireless personal communication services, or PCS, licenses to operate in 29 basic trading areas, with a licensed population of approximately 8.7 million, and we have deployed a network using code division multiple access technology, or CDMA, in 20 basic trading areas which currently cover a total population of approximately 5.1 million potential subscribers. As of December 31, 2005, our wireless retail business had approximately 336,000 NTELOS branded subscribers. In 2004 we entered into a seven-year exclusive network agreement to be a wholesale provider of network services for Sprint Spectrum, the wireless subsidiary of Sprint Nextel. Under this agreement, which we refer to as the Strategic Network Alliance, we are the exclusive PCS network service provider through July 2011 to all Sprint Nextel wireless services offered to approximately three million people in our western Virginia and West Virginia service area, which we deliver over our CDMA third generation, one times radio transmission technology, or 3G 1xRTT, network, utilizing our own spectrum.

Founded in 1897, our wireline business is divided into two operations: RLEC and Competitive Wireline (CLEC/Network and internet). Our RLEC business is conducted through two subsidiaries that qualify as rural telephone companies under the Telecommunications Act of 1996. These two rural telephone companies, which we refer to as our RLECs, provide wireline communications services to residential and business customers in the western Virginia communities of Waynesboro, Covington, Clifton Forge and portions of Botetourt and Augusta Counties. Our Competitive Wireline business includes competitive local exchange carrier, or CLEC, communication services in Virginia and West Virginia outside our RLEC service area and a wholesale carriers’ carrier business. Our CLEC business markets and sells local, long distance, and high-speed data services almost exclusively to business customers, with residential service limited to bundled service offerings with DSL. We also own a 1,900-mile regional fiber-optic network which interconnects with many of the largest markets in the mid-Atlantic region to offer wholesale services to other national and wireless carriers. As of December 31, 2005, we operated 46,810 RLEC and 44,948 CLEC telephone access lines, and 13,890 broadband access connections in our markets, and we had completed the investment required to offer DSL services in 90% of our RLEC service area.

Wireless Business

Overview

Our wireless business operates a 100% CDMA digital PCS network in Virginia, West Virginia, and portions of Kentucky, Ohio and North Carolina with a total covered population, or POPs, of 5.1 million people (7.3 million licensed POPs in 20 basic trading areas having an average spectrum depth of 23 MHz). We began acquiring PCS spectrum in western Virginia and West Virginia in June 1995 and began operations in Virginia in late 1997 and in West Virginia in late 1998. We entered eastern Virginia in July 2000 with the acquisition of the eastern Virginia assets of PrimeCo Personal Communications, L.P., or PrimeCo, following the Bell Atlantic/GTE merger. As of December 31, 2005, we served approximately 336,000 NTELOS-branded retail subscribers.

The coverage of our wireless business in Virginia covers Richmond, Fredericksburg, Hampton Roads/Norfolk, Roanoke, Lynchburg, Charlottesville, Staunton, Harrisonburg, Winchester, Danville and

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Martinsville, as well as our headquarters in Waynesboro. The coverage of our wireless business also includes Charleston, Huntington, Morgantown, Beckley and Bluefield in West Virginia, Ashland, Kentucky, Portsmouth, Ohio and the Outer Banks of North Carolina.

Spectrum

We hold licenses for all of the 1900 MHz PCS spectrum used in our network. At December 31, 2005, we operated our CDMA network in 20 basic trading areas with licensed POPs of 7.3 million with an average spectrum depth of 23 MHz. We also hold licenses in 9 additional basic trading areas which are currently classified as excess spectrum. The following table shows a breakdown of our 1900 MHz PCS spectrum position.

NTELOS’ Spectrum Position (POPs in thousands)

as of December 31, 2005

Basic Trading Area		PCS Spectrum Block	Licensed POPs(1)		Covered POPs(1)	MHz
Number	Name
Virginia East
156	Fredericksburg, VA	E	203.1		87.8	10
324	Norfolk, VA	B	1,911.4		1,681.4	20
374	Richmond, VA	B	1,324.8		992.7	20
374	Richmond, VA—Partitioned Counties	B	50.6	(4)		30
	Subtotal		3,439.3		2,761.9	19	(2)
Virginia West
75	Charlottesville, VA	C	246.6		160.5	20
104	Danville, VA	B	167.4		95.3	30
179	Hagerstown, MD	E/F	403.1		182.1	20
183	Harrisonburg, VA	D/E	156.6		105.3	20
266	Lynchburg, VA	B	161.5		132.5	30
284	Martinsville, VA	B	89.9		63.8	30
376	Roanoke, VA	B	664.9		489.3	30
430	Staunton, VA	B	115.6		102.7	30
479	Winchester, VA	C	181.1		151.5	20
	Subtotal		2,186.7		1,483.0	26	(2)
West Virginia
35	Beckley, WV	B	167.9		61.7	20
48	Bluefield, WV	B	162.4		47.3	30
73	Charleston, WV(3)	A/B	486.3		243.3	30
82	Clarksburg, WV	E(5)	192.3		79.4	10
137	Fairmont, WV	C/F	57.2		41.1	40
197	Huntington, WV	B	370.2		226.7	30
306	Morgantown, WV	C/F	118.1		70.2	25
359	Portsmouth, OH	B	90.0		40.1	30
	Subtotal		1,644.4		809.8	28	(2)
	Total Operating Spectrum		7,270.4		5,054.7	23
Excess
471	Wheeling, WV	C	207.1		NA	30
474	Williamson, WV—Pikeville, KY	B	174.7		NA	30
23	Athens, OH	A	137.8		NA	15
80	Chillicothe, OH	A	104.3		NA	15
100	Cumberland, MD	C/D	163.9		NA	40
259	Logan, WV	B	36.7		NA	30
342	Parkersburg, WV—Marietta, OH	C/F	180.9		NA	30
487	Zanesville—Cambridge, OH	A	194.2		NA	15
12	Altoona, PA	C	222.0		NA	15
	Subtotal		1,422.6			24	(2)
	Total (5)		8,693.0		5,054.7	23

⁽¹⁾ Source: Map Info: Custom Data, Population Current Year and Five Year By Block Group: Entire U.S., SO #200982 ^© 2005

⁽²⁾ Weighted average MHz based on licensed POPs.

⁽³⁾ “A” block excludes Kanawha and Putnam counties.

⁽⁴⁾ Partitioned POPs not included in subtotal.

⁽⁵⁾ NTELOS acquired 10 MHz of spectrum in the Clarksburg, WV basic trading area on February 6, 2006.

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Other Spectrum

In addition to PCS spectrum, we hold wireless communications service, or WCS, licenses in Columbus, OH, Broadband Radio Service (BRS), licenses in western Virginia (BRS was formerly known as multichannel multipoint distribution service) and local multipoint distribution service, or LMDS, licenses in portions of Virginia, Kentucky, West Virginia and Maryland.

Wireless Operations

Wireless Retail Business

Overview. We offer wireless voice and data products and services to retail customers throughout our service area under the NTELOS brand name. Many of our service plans target the local value segment, focusing on customers who will use their wireless phone primarily in their home market. We offer these customers value by providing unlimited and large numbers of minutes and premier customer service across our network. We have also recently begun to offer national calling plans for those customers who will use their phone outside of their home market. Our relationships with Sprint Nextel and other carriers allow us to provide these national plans at competitive prices. We offer customers a variety of PostPay plans, as well as Pay in Advance and traditional PrePay alternatives. PostPay represents the bulk of our retail subscribers and the primary focus of our marketing efforts. As of December 31, 2005, PostPay represented 57% of gross additions year-to-date and 76% of total subscribers. Due to the higher churn in non-PostPay segments, we will continue to emphasize marketing to PostPay customers.

Service Offerings. The chart below briefly describes the plans and provides a breakdown of subscribers as of December 31, 2005:

Product	Retail Subscribers	% of Subscribers		Description
PostPay	256,283	76	%	•      Family of Plans
				•      Long Distance, Roaming, Features
				•      1- or 2-Year Service Agreement
				•      Allows Shared Lines
Pay in Advance	73,469	22	%	•      PostPay-Like Plans with Buckets of Minutes
				•      Competitive Cost of Entry
				•      Long Distance, Roaming, Features
				•      1-Year Service Agreement; No Credit Check
PrePay (“nStant Minutes”)	6,554	2	%	•      Traditional Prepay
				•      No Service Agreement
				•      Pay-As-You-Go

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• PostPay.

• Traditional PostPay plans are our most popular service offerings and account for approximately 76% of the base of our wireless customers. The current family of PostPay service offerings include UNLIMITED Regional minute plans which offer customers unlimited day, night, and weekend calling from anywhere on our digital network. This popular family of rate plans may include nationwide long distance and nationwide roaming minutes, and certain plans may be shared for an additional fee.

• Another recently introduced PostPay service offering is NTELOS NATION. These plans feature no roaming charges via buckets of daytime and night and weekend minutes that can be used anywhere in the country. All NATION plans include nationwide long distance, no roaming, lower overage charges, and may be shared to address family plan scenarios.

• All PostPay plans are available with one- or two-year service agreements and most can accommodate up to four shared lines for an additional monthly service fee. Plans may include nationwide long distance calling, roaming, and a variety of added-value features like incoming text messaging, Caller ID, and integrated voicemail. Additionally, users can take advantage of all data service offerings such as text and picture messaging, and downloading of games, ringtones, and other mobile applications.

• PrePay - Pay in advance type plans include the following separate categories of plans:

a) nAdvance. nAdvance represents 19% of the base, and is a hybrid alternative positioned to look like PostPay but operate like PrePay, nAdvance targets credit-challenged and no-credit customers, including teens and students. A one-year service agreement is required, and customers pay their monthly charges in advance by credit card, bank draft, or cash, thus eliminating credit checks and bad debt exposure. nAdvance customers can prepay to have access to certain data features.

b) HomeFree “No Roam.” This service represents 3% of the base, and is a “bridge” product positioned between traditional PostPay and PrePay services. The product provides a billing alternative for customers that qualify for PostPay with a deposit, but opt instead to prepay for an unlimited plan with restricted roaming and data capabilities. A one- or two year service agreement is required.

c) PrePay (“nStant Minutes”). A traditional pay-as-you-go PrePay service which currently comprises only 2% of the customer base. nStant Minutes provides an affordable, convenient PCS service with no monthly fees, no annual contract and no credit check. Minutes are replenished as needed by cash, credit card or prepaid cards.

Sales, Marketing and Customer Care. We target customers by advertising the “best value” available in a wireless provider. We target persons between the ages of 21 and 54 who use their phone primarily in their home market. Our belief is that many customers use their phone primarily in and around their home area, however, our NTELOS NATION plans allow us to address consumer needs for nationwide travel . We do not target heavy roamers such as business executives or national corporations, and our national plans take advantage of our access to the national Sprint Nextel wireless network under the Strategic Network Alliance.

We promote our PostPay products almost exclusively in our marketing communications. PrePay plans target only certain segments where a majority of the population would not want or qualify for PostPay service.

Advertising is focused on driving traffic to the company-owned retail stores and inside sales representatives. Company-owned distribution is a key component of our wireless growth strategy, with strong supporting distribution from indirect agent locations which extend our wireless retail points of presence. The focus on company-owned distribution is evidenced by wireless customer acquisitions. In the year ended December 31, 2005, 76% of gross additions were acquired through direct channels. Our direct distribution is supported by regional agents with 281 points of presence.

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Our wireless customer care call centers are located in Waynesboro and Daleville, Virginia. We operate a single virtual call center, supporting a reduction in headcount and uniform customer service across our region. Business operations are supported by an integrated systems infrastructure. We provide customer care and operations representatives with incentives to upsell additional products and features. Also, we utilize a retention team to focus on either renewing or maintaining our customers.

Wireless Wholesale Business

Overview. We provide digital PCS services on a wholesale basis to other PCS providers, most notably Sprint Nextel. Our wireless wholesale business began in 1999 when we signed a 10-year agreement with Horizon PCS to carry Horizon PCS’s traffic in our territories in western Virginia and West Virginia. On August 15, 2003, Horizon PCS filed for Chapter 11 bankruptcy protection. As a part of Horizon PCS’s restructuring, in June 2004 Sprint bought out Horizon PCS’s interest in the approximately 95,000 Sprint-branded subscribers in Horizon PCS’s territories which are serviced by our network. We subsequently entered into the Strategic Network Alliance with Sprint Nextel. The Strategic Network Alliance expires on July 31, 201l, which includes automatic five-year extensions unless the agreement’s notice provisions are exercised.

Our Strategic Network Alliance with Sprint Nextel. In 2004, we entered into the Strategic Network Alliance with Sprint Spectrum, a subsidiary of Sprint Nextel. Under the terms of our Strategic Network Alliance with Sprint Nextel, we are the exclusive PCS network service provider for all Sprint Nextel products and services in the following markets: Charlottesville, Danville, Lynchburg, Martinsville, Roanoke and Staunton-Waynesboro, Virginia; Beckley, Bluefield, Charleston, Clarksburg/Elkins, Fairmont, Huntington and Morgantown, West Virginia; and Ashland, Kentucky. Our CDMA network encompasses approximately 3.0 million POPs in these markets. The Strategic Network Alliance prohibits Sprint Nextel from directly or indirectly commencing construction of, contracting for or launching its own PCS or wireless communications network in these regions prior to 180 days prior to the termination of the agreement. The Sprint Nextel overbuild prohibition is automatically renewable together with the term of the Strategic Network Alliance for successive, five-year terms, expiring 180 days prior to the termination date of each renewal period. In addition, Sprint Nextel may construct its own cell sites or take such other action to provide geographic coverage in a portion of a market served by us where our network does not offer coverage, and Sprint Nextel requests that we provide coverage and we decline.

Under the Strategic Network Alliance, Sprint Nextel is required to pay us a per minute or per megabit rate for the voice and data services, respectively, that we provide to Sprint Nextel branded subscribers and the subscribers of mobile network operator partners of Sprint Nextel, such as Virgin Mobile and Qwest, who live in or travel through the Strategic Network Alliance service area. The Strategic Network Alliance specifies a series of usage rates for various types of services. Sprint Nextel pays a Travel rate to NTELOS for each voice minute of use by Sprint Nextel subscribers or MVNO partners of Sprint Nextel who use the NTELOS network for voice service while traveling in the Strategic Network Alliance service areas. Sprint Nextel also pays a Home rate to NTELOS for each voice minute of use by a Sprint Nextel subscriber who is a local subscriber in the Strategic Network Alliance service area. Sprint Nextel also pays a Data rate for each megabit of data service consumed by either a Sprint Nextel Home subscriber or a Sprint Nextel Travel subscriber within the Strategic Network Alliance service area. The agreement provides us with a price protection period of one year on the Travel rate per MOU, three years on the voice rate per MOU for Home subscribers, and two years for the per megabit Data rate. After the initial pricing term, our price structure with Sprint Nextel will fluctuate under a formula tied to Sprint Nextel’s national wireless retail customer revenue yield. The Strategic Network Alliance also permits our NTELOS branded customers to access Sprint Nextel’s national wireless network at reciprocal rates as the Sprint Nextel Travel rates.

The Strategic Network Alliance provides that the PCS service we provide to Sprint Nextel customers will be of a quality and clarity no worse than what we provide to our customers. We are not required under the Strategic Network Alliance to make any future investment in high speed data transfer technology or any other significant network upgrade requested by Sprint Nextel to support its customers unless Sprint Nextel and we agree in advance of such investment to the compensation to be provided to us by Sprint Nextel for making such investment. However, the Strategic Network Alliance does provide that we must augment or expand our facilities, including implementing commercially reasonable network upgrades, at our expense to provide the products and services supported by us as of the execution date of the Strategic Network Alliance and to maintain compliance with performance specifications set forth in the Strategic Network Alliance. Sprint Nextel has agreed to reimburse us for certain costs we incur in connection with the development and implementation of a long-term network solution

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which enables us to provide Sprint Nextel customers with WLNP. In addition, Sprint Nextel must reimburse us for a proportional amount of the expenses we incur to comply with all future network obligations mandated by governmental authorities or new industry standards, such as mobile equipment identifiers, or MEIDs.

Wireless Network

Network Technology. We have deployed CDMA digital PCS technology in each of our geographic regions. In Virginia West (excepting Harrisonburg and Winchester) and West Virginia, we have deployed a 3G 1xRTT network with high speed data capabilities.

Switching Centers. We employ four Mobile Switching Centers, or MSCs: two in the Virginia East region, one in the Virginia West region and one in West Virginia. The following table shows our switching center equipment:

Switching Center Equipment

Region	Location	Equipment
Virginia East	Richmond, VA	•      Lucent 5ESS and ECP Switch Complex
		•      Alcatel 3-1-0 6130 DACS
		•      Glenayre HDMU voicemail platform
		•      VeriSign prepay platform
		•      Company-owned facility
	Norfolk, VA	•      Lucent 5ESS and ECP Switch Complex
		•      Alcatel 3-1-0 6130 DACS
		•      Glenayre HDMU voicemail platform
		•      VeriSign prepay platform
		•      Company-owned facility
Virginia West	Waynesboro, VA	•      Nortel MTX Switch
		•      Motorola Cell Site Base Station Controllers (four)
		•      Tellabs 3-1-0 532L DACS
		•      Glenayre 4240 voicemail platform
		•      VeriSign prepay platform
		•      Company-owned facility
West Virginia	Charleston, WV	•      Nortel MTX Switch
		•      Motorola Cell Site Base Station Controllers (three)
		•      Tellabs 3-1-0 532L DACS
		•      Glenayre 4240 voicemail platform
		•      VeriSign prepay platform
		•      Leased facility (current term through 2013)

Intelligent Network. We have deployed a Lucent Intelligent Network solution consisting of a mated pair Service Control Point, or SCP, and an Enhanced Services Manager, or ESM. Our mated Stand-alone Home Location Register functionality resides on this platform. Additionally, we have deployed a Short Messaging Service Center (SMSC) platform, Over-the-Air-Function (OTAF) platform, and Multimedia Messaging Service (MMS) platform, all provided by Airwide Solutions. The SMSC platform supports text messaging, the OTAF platform supports network and subscriber initiated Preferred Roaming List downloads, and the MMS platform supports picture messaging.

Cell Sites. As of December 31, 2005, there were 897 cell sites in operation, of which 64 were repeaters. We own 91 of these cell sites and lease the remaining 806. 392, or 49%, of the leased cell sites are installed on facilities owned by Crown Communications and American Tower. We entered into master lease agreements with Crown Communications and American Tower in 2000 and 2001, respectively, with initial 5 and 12-year lease terms, respectively, and options to renew. Approximately 93% of our cell sites are 3G 1xRTT capable and 62% are 1x data capable.

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Network Performance. We currently process 50.3 million calls per week and demonstrate strong network operational performance metrics. For the year ended December 31, 2005, network performance has averaged less than 1.2% daily dropped calls and less than 0.3% blocked calls during the busy hour. Cell site availability as of December 31, 2005, exceeds 99.9%. We currently exceed Sprint Nextel’s network performance standards in the regions underlying the Strategic Network Alliance with Sprint Nextel.

Wireline Business

Overview

Founded in 1897 as the Clifton Forge-Waynesboro Telephone Company, our wireline business and its predecessor organizations have a long history of providing exceptional telephone service in the rural Virginia areas of Waynesboro, Covington, Clifton Forge and, with the acquisition of R&B Communications in 2001, Botetourt County. We divide our wireline business into two operations: RLEC and Competitive Wireline (CLEC/Network and internet). As an RLEC, we own and operate two local telephone companies and serve three rural Virginia regions. As a CLEC, we provide service to 16 areas in Virginia, West Virginia and Tennessee. Additionally, we offer both dial-up internet and high-speed broadband services in Virginia, West Virginia and Tennessee. As of December 31, 2005, we had approximately 138,000 access lines and data connections.

Our wireline business is supported by an extensive 1,900-mile fiber optic network. The network gives us the ability to originate, transport and terminate much of our customers’ communications traffic in many of our service areas. We utilize the network to backhaul communications traffic for retail services and to serve as a carriers’ carrier, providing transport services to third-parties for long distance, internet, wireless and private network services. Our fiber optic network is connected to and marketed with adjacent fiber optic networks in the mid-Atlantic region.

Wireline Operations

RLEC. We provide RLEC services to business and residential customers in three rural Virginia areas. We have owned and operated a 108-year-old telephone company in western Virginia since its inception in 1897. Additionally, we acquired a 105-year-old telephone company in southwestern Virginia through our acquisition of R&B Communications in 2001.

Competitive Wireline. Our CLEC/Network operation includes the results of our CLEC business and our wholesale carriers’ carrier network. The CLEC business was launched in 1998 and currently serves 16 areas in Virginia, West Virginia and Tennessee. We market almost exclusively to business customers with residential service limited to bundled service offerings with DSL. As of December 31, 2005, we had 44,948 CLEC lines in service, virtually all of which were business lines.

The CLEC operations are based on an “edge-out” strategy that seeks to take advantage of our RLEC network in order to deliver a high incremental return on investment to our core wireline business. Technicians, vehicles, operations and support systems, network planning and engineering, billing and core network assets are shared among the wireline segments.

In addition to utilizing a successful “edge-out” strategy, our CLEC business has also benefited from a commitment to an “on-net” access strategy for a true facilities-based approach. We have been careful in our decision to expand the CLEC network and generally require proven customer demand to dictate such investment choices. As a result, on-net access lines have been increasing as a percentage of the total lines. As of December 31, 2005, 52% of lines are served via leased T-1s or are on our network totally, 46% are leased voice-grade loops (UNE-Loop) and only 2% are resale lines. In addition to the higher-margin revenues that are characteristic of on-net expansion, we have also been able to deliver other competitive services such as high-bandwidth internet access and metro transport services as a direct result of on-net connectivity growth. Our dedication to the facilities-based strategy, combined with our commitment to customer service, has proven successful in attracting large customers in key vertical markets. Specifically, the education, healthcare, and government sectors have been particularly receptive to our CLEC business model.

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Through our wholesale carriers’ carrier network, we offer other carriers access to our 1,900-route-mile fiber network which provides connectivity to major retail cities. We sell backhaul services to major carriers. Through interconnections with other regional fiber networks, we are able to extend our network east to Richmond, Virginia, to Carlisle, Pennsylvania, and Washington, D.C., and to areas south of Greensboro, North Carolina.

We launched our internet business in Virginia in 1995. Presently, we provide internet services in Virginia, West Virginia and Tennessee. As of December 31, 2005, we had approximately 11,156 DSL lines, 822 dedicated business access lines, 1,890 portable broadband lines and 179 other connections utilizing our broadband service offering. In 2005, we introduced IP-enabled voice services that make up 1,122 of the total business access line.

We have access to MMDS spectrum within Virginia through license ownership or long-term leases in Charlottesville, Lynchburg, Roanoke, Harrisonburg and Winchester. In late 2003, we launched a wireless, high-speed internet access service, also known as “portable broadband,” using this spectrum. This service provides DSL-like internet access speeds without the need for any hardwired connection to the home or business. This service complements the DSL service area in our RLEC regions and expands the number of potential broadband customers in CLEC areas.

Products and Services

We offer a wide variety of voice services to our RLEC and CLEC customers, including:

Voice Service	•      Business and residential telephone service
Centrex	•      Replaces customers’ private branch exchange (PBX) system
	•      Provides the switching function, along with multiple access lines
Primary Rate ISDN Services	•      High capacity connections between customers’ PBX equipment and public switched telephone network
Long Distance Service	•      Domestic and international long distance services to RLEC and CLEC customers
	•      Uses network facilities or provides through resale arrangements with interexchange carriers
Customer Calling Features	•      Call waiting
	•      Caller ID
	•      Voice mail (can be integrated with our PCS service)

In addition to traditional voice services, we provide internet access and data services including:

High-Speed DSL Access	•      DSL technology enables a customer to receive high-speed internet access through a copper telephone line
Portable Broadband Access	•      Wireless offering to customers providing a portable broadband connection
	•      Up to 1.5 Mbps for downloads and 550 kbps for uploads
Dedicated Internet Access	•      Dedicated high-speed internet connectivity
Web Hosting	•      Domain services, collocation agreements and internet marketing services are also available
Local Dial-up Internet Access	•      Offers multiple e-mail accounts and personal web space

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Integrated Access	•      New IP-Enabled Product offering that combines voice and data services over a dedicated broadband facility
	•      Allows customers to dynamically allocate bandwidth to maximize voice and data transmissions
Metro Ethernet	•      Ethernet connectivity among multiple locations in the same city or region
	•      Speed ranging from 1.5 Mbps to 1 Gbps
Frame Relay / ATM	•      Private switched high-speed data connections for multiple-location businesses within a region
Hi-cap Private Line Service	•      High-capacity, non-switched facilities provided to end users and carriers for voice and data applications

Sales, Marketing and Customer Care

We largely focus our wireline marketing efforts on residential customers in the RLEC segment and institutional customers in the CLEC segment. In particular, marketing is centered on selling bundles and higher revenue-generating services to maximize penetration, average monthly revenues/unit in service, or ARPU, and retention. We seek to capitalize on the NTELOS brand name, positive service reputation and local presence of sales and service personnel in our wireline marketing efforts.

We utilize our own personnel to sell wireline products and services to our customers. We retain account executives to cultivate relationships with mid-size to large business customers in our RLEC and CLEC market areas. The wholesale business is supported by a dedicated channel team and ValleyNet partnership resources. We use an inside sales group to handle residential and small business voice and broadband sales. We maintain a wireline retail presence in Waynesboro, Daleville, and Covington, Virginia to allow walk-in payments and provide new services to RLEC customers.

Our wireline customer care call centers are located in Waynesboro and Daleville, Virginia. Following integration of the separate R&B Communications and NTELOS billing and information systems, we created a single virtual call center, supporting a reduction in headcount and uniform customer service across our region. Business operations are supported by an integrated systems infrastructure. We provide customer care and operations representatives with incentives to upsell additional products and features. Also, when customers’ contracts are near expiration or customers call in to discontinue service, our retention team focuses on either renewing or “saving” those customers.

Plant and Equipment

Our wireline network includes two Lucent 5ESS digital switches, which provide end-office functions for both the RLEC and CLEC businesses in Virginia. Our Waynesboro, Virginia switch also acts as an access tandem for our RLEC, CLEC and portions of our wireless traffic. Another Lucent 5ESS digital switch, located in Charleston, supports the CLEC business in West Virginia. We have twelve remote switching modules deployed throughout our RLEC territory and three more supporting our CLEC areas. VITAL, a company for which we serve as the managing partner, acts as a regional node on VeriSign’s nationwide SS7 network using a pair of Tekelec signal transfer points located on our premises.

We use Lucent, Tellabs and Ciena digital loop carriers throughout our RLEC and CLEC access network. For DSL service in the RLEC and CLEC areas, we primarily use Cisco and Paradyne equipment. Our centralized network operations center monitors wireline, wireless and data networks on a continuous basis using a Harris network management system. We provide ATM, Frame Relay, metro Ethernet and IP-enabled voice and transport services using a soft switch, routers and other equipment from Cisco Systems, Inc.

Competition

Many communications services can be provided without incurring a short-run incremental cost for an additional unit of service. As a result, once there are several facilities-based carriers providing a service in a given

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market, price competition is likely and can be severe. We have experienced price competition, which is expected to continue. In each of our service areas, additional competitors could build facilities. If additional competitors build facilities in our service areas, this price competition may increase significantly.

Wireless

We compete in our territory with both digital and analog service providers. Several wireless carriers compete in portions of our market areas, including Sprint Nextel and its affiliates (including Virgin Mobile USA), Verizon Wireless, ALLTEL, Cingular Wireless, T Mobile, Cellular One and U.S. Cellular, and affiliates of some of these companies. Many of these competitors have financial resources and customer bases greater than ours. Many of them have more established infrastructures, marketing programs and brand recognition. In addition, some of our competitors offer coverage in areas not serviced by our PCS network, or, because of their calling volumes or their affiliations with, or ownership of, wireless providers, offer roaming rates lower than ours. We expect these competitors will continue to build and upgrade their own networks in areas in which we operate. We also face competition from resellers, which provide wireless service to customers but do not hold FCC licenses or own facilities.

Wireline

Several factors have resulted in increased competition in the local telephone market, including:

• expansion of wireless networks and pricing plans which offer very high usage at a fixed cost, resulting in wireless substitution;

• growing customer demand for alternative products and services;

• technological advances in the transmission of voice, data and video;

• development of fiber optics and digital technology;

• legislation and regulations, including the Telecommunications Act, designed to promote competition; and

• approval of “271” petitions by the Regional Bell Operating Companies authorizing them to provide long distance services in all U.S. jurisdictions.

As the RLEC for Waynesboro, Clifton Forge, Covington and portions of Botetourt and Augusta Counties, Virginia, we are subject to competition, including from wireless carriers and cable companies. Although no CLECs have entered our incumbent markets to compete with us, it is possible that one or more may enter our markets. The regulatory environment governing RLEC operations has been, and we believe will likely continue to be, very liberal in its approach to promoting competition and network access. Other sources of potential competition include cable providers and wireless service providers. VoIP based carriers like Vonage could take voice customers from our RLECs using existing broadband connections (such as DSL or cable modem connections).

Our CLEC operations compete primarily with ILECs and, to a lesser extent, other CLECs. ILECs in our markets, Verizon and Sprint, have initiated aggressive “win-back” strategies. Although certain CLEC companies have exited from our markets, we continue to face competition in our CLEC markets from several other CLECs, including TelCove (formerly Adelphia Business Solutions and KMC Telecom), Fibernet, USLEC and Cox. We also face, and will continue to face, competition from other current and potential future market entrants.

The internet industry is characterized by the absence of significant barriers to entry and the rapid growth in internet usage among customers. As a result, we expect that our competition will increase from market entrants offering high-speed data services, including DSL, cable and wireless access. Our competition includes:

• access and content providers, such as America Online;

• local, regional and national internet service providers such as AT&T, Verizon (including Verizon Business) and Sprint Nextel;

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• cable modem services offered by incumbent cable providers such as Comcast (as the apparent purchaser of assets of Adelphia Communications Corporation in Virginia), Cox, Rapid and Charter.

Many of our competitors have financial resources, corporate backing, customer bases, marketing programs and brand names that are greater than ours. Additionally, competitors may charge less than we do for internet services, causing us to reduce, or preventing us from raising, our fees.

Employees

As of December 31, 2005, we employed 1,235 full-time and 39 part-time persons. Of these employees, 76 are covered by a collective bargaining agreement for a portion of our wireline operation. This agreement expires June 30, 2008. We believe that we have good relations with our employees.

Regulation

The following summary does not describe all present and proposed federal and state legislation and regulations affecting the telecommunications industry. Some legislation and regulations are currently the subject of judicial proceedings, legislative hearings and administrative proposals which could change the manner in which this industry operates. Neither the outcome of any of these developments, nor their potential impact on us, can be predicted at this time. Regulation can change rapidly in the telecommunications industry, and such changes may have an adverse effect on us in the future. See “Risk Factors” elsewhere in this report.

Regulation Overview

Our communications services are subject to varying degrees of federal, state and local regulation. Under the Communications Act, as amended by the Telecommunications Act, the FCC has jurisdiction over interstate and international common carrier services, over certain aspects of interconnection between carriers for the provision of competitive local services, and over the allocation, licensing, and regulation of wireless services. The Federal Aviation Administration regulates the location, lighting and construction of antenna structures. Our common carrier services are regulated to different degrees by state public service commissions, and local authorities have jurisdiction over public rights-of-way and antenna structures. In recent years, the regulation of the communications industry has been in a state of transition as Congress and state legislatures have passed laws seeking to foster greater competition in communications markets and various of these measures have been challenged in court.

Many of the services we offer are unregulated or subject only to minimal regulation. Our internet services are not considered to be common carrier services, although the regulatory treatment of internet services, including VoIP services, is evolving and still uncertain. Our wireless service is a commercial mobile radio service, or CMRS, and subject to FCC regulation as common carriage. The states are preempted from engaging in entry or rate regulation of CMRS, although the states may regulate other terms and conditions of such offerings.

Pursuant to the Communications Act, there are certain services that large ILECs are required by state and federal regulators to provide to our CLEC operations. The obligations of these ILECs to provide such services are in flux and could be further altered or removed by new legislation, regulations or court order.

Federal Regulation of the Wireless Communications Industry

The licensing, construction, modification, operation, sale, ownership and interconnection arrangements of wireless communications networks are regulated to varying degrees by the FCC, Congress, state regulatory agencies, the courts and other governmental bodies. Because we operate PCS systems, decisions by such bodies could have a significant impact on the competitive market structure among wireless providers and on the relationships between wireless providers and other carriers. These mandates may impose significant financial obligations on us and on other wireless providers. We are unable to predict the scope, pace or financial impact of legal or policy changes that could be adopted in these proceedings. Some examples of the kinds of regulation to which we are subject are presented below.

Licensing of PCS Systems. Broadband PCS licenses, such as those held by our subsidiaries, were generally originally awarded for specific geographic market area and for one of six specific spectrum blocks. The

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geographic license areas utilized included basic trading areas and collections of basic trading areas known as major trading areas, or MTAs, although geographic partitioning policies have permitted licensees to subdivide and transfer those original licenses into other geographic areas. The spectrum blocks awarded were originally either 30 MHz or 10 MHz licenses, although spectrum disaggregation rules have permitted licensees to subdivide such licenses into smaller bandwidths.

All PCS licenses have a 10-year term, at the end of which they must be renewed. The FCC’s rules provide a formal presumption that a PCS license will be renewed, called a “renewal expectancy,” if the PCS licensee (1) has provided substantial service during its past license term, and (2) has substantially complied with applicable FCC rules and policies and the Communications Act. The FCC defines substantial service as service which is sound, favorable and substantially above a level of mediocre service that might only minimally warrant renewal. If a licensee does not receive a renewal expectancy, then the FCC will accept competing applications for the license renewal period and, subject to a comparative hearing, may award the license to another party.

Under existing law, no more than 20% of an FCC PCS licensee’s capital stock may be owned, directly or indirectly, or voted by non-U.S. citizens or their representatives, by a foreign government or its representatives or by a foreign corporation. If an FCC PCS licensee is controlled by another entity, as is the case with our ownership structure, up to 25% of that entity’s capital stock may be owned or voted by non-U.S. citizens or their representatives, by a foreign government or its representatives or by a foreign corporation. Foreign ownership above the 25% holding company level may be allowed should the FCC find such higher levels not inconsistent with the public interest. The FCC has ruled that higher levels of foreign ownership in CMRS licensees, even up to 100%, are presumptively consistent with the public interest with respect to investors from certain nations. If our foreign ownership were to exceed the permitted level, the FCC could revoke our wireless licenses, although we could seek a declaratory ruling from the FCC allowing the foreign ownership or take other actions to reduce our foreign ownership percentage in order to avoid the loss of our licenses. We have no knowledge of any present foreign ownership in violation of these restrictions.

PCS Construction Requirements. All PCS licensees must satisfy buildout deadlines and geographic coverage requirements within five and/or ten years after the license grant date. Under the FCC’s original rules, these initial requirements are met for 10 MHz licenses when adequate service is offered to at least one-quarter of the population of the licensed area, or the licensee provides substantial service, within five years, and for 30 MHz licenses when adequate service is offered to at least one-third of the population within five years and two-thirds of the population within ten years. The FCC’s policies have now been modified, however, and 30 MHz licensees are permitted to make a demonstration of substantial service to meet the ten year build-out requirement. Failure to comply with these coverage requirements could cause the revocation of a provider’s wireless licenses or the imposition of fines and/or other sanctions.

Transfer and Assignment of PCS Licenses. The Communications Act and FCC rules require the FCC’s prior approval of the assignment or transfer of control of a license for a PCS system, with limited exceptions, and the FCC may prohibit or impose conditions on assignments and transfers of control of licenses. Non-controlling interests in an entity that holds an FCC license generally may be bought or sold without FCC approval. Although we cannot assure you that the FCC will approve or act in a timely fashion upon any future requests for approval of assignment or transfer of control applications that we file, we have no reason to believe that the FCC would not approve or grant such requests or applications in due course. Because an FCC license is necessary to lawfully provide PCS service, if the FCC were to disapprove any such filing, our business plans would be adversely affected.

Pursuant to an order released in December 2001, as of January 1, 2003, the FCC rules no longer impose explicit limits on the amount of PCS and other commercial mobile radio service, or CMRS, spectrum that an entity may hold in a particular geographic market. The FCC now engages in a case-by-case review of transactions that involve the consolidation of spectrum licenses.

General FCC Obligations. The FCC has a number of other complex requirements and proceedings that affect our operations, and that could increase the cost or diminish the revenues, of our business.

For example, the FCC requires CMRS carriers to make available emergency 911 services to subscribers, including enhanced emergency 911 services that provide the caller’s telephone number and detailed location information to emergency responders, as well as a requirement that emergency 911 services be made available to

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users with speech or hearing disabilities. Our obligations to implement these services occur in phases and on a market-by-market basis as emergency service providers request the implementation of enhanced emergency 911 services in their locales. Meeting these requirements will impose certain costs on us, and is partially dependent on the progress of our equipment vendor in making such handsets available at the rate at which our customers swap out their old handsets for newer models. Many carriers in the CMRS industry, including us, requested waivers of the FCC’s December 31, 2005 deadline to ensure that 95% of all subscriber handsets in service nationwide on our system can deliver subscriber location information. By order adopted January 26, 2006, the FCC granted us a limited extension of the December 31, 2005 requirement by extending the date that we must achieve 95% penetration until November 1, 2006.

FCC rules also require that local exchange carriers and most CMRS providers, including PCS providers, allow customers to change service providers without changing telephone numbers. For CMRS providers, this mandate is referred to as wireless local number portability, or WLNP. The FCC also has adopted rules governing the porting of wireline telephone numbers to wireless carriers. We may not be able to recover our costs of implementing number portability. In addition, number portability may have increased positive or negative effects on our business by making it easier for customers to switch among carriers.

The FCC has the authority to order interconnection between CMRS operators and ILECs, and FCC rules provide that all local exchange carriers must enter into reciprocal compensation arrangements with CMRS carriers for the exchange of local traffic, whereby each carrier compensates the other for terminating local traffic originating on the other carrier’s network. As a CMRS provider, we are required to pay reciprocal compensation to a wireline local exchange carrier that transports and terminates a local call that originated on our network. Similarly, we are entitled to receive reciprocal compensation when we transport and terminate a local call that originated on a wireline local exchange network. We negotiate interconnection arrangements for our network with major ILECs and smaller RLECs. If an agreement cannot be reached, under certain circumstances, parties to interconnection negotiations can submit outstanding disputes to state authorities or the FCC, as appropriate, for arbitration. Negotiated interconnection agreements are subject to state approval. The FCC’s interconnection rules and rulings, as well as state arbitration proceedings, will directly impact the nature and costs of facilities necessary for the interconnection of our network with other telecommunications networks. They will also determine the amount of revenue we receive for terminating calls originating on the networks of local exchange carriers and other telecommunications carriers. The FCC is currently considering changes to the local exchange-CMRS interconnection and other so-called intercarrier compensation schemes, and the outcome of such proceedings may affect the manner in which we are charged or compensated for the exchange of traffic.

The FCC historically has required that CMRS providers permit customers of other carriers to roam “manually” on their networks, for example, by supplying a credit card number, provided that the roaming customer’s handset is technically capable of accessing the roamed-on network. The FCC recently initiated an inquiry as to whether CMRS carriers, including us, must provide “automatic” roaming, which allows roaming customers to place calls as they do in their home coverage area, by simply entering a phone number and pressing “send.” The outcome of this proceeding could affect the availability, terms and conditions of existing and future roaming arrangements into which we enter with other wireless carriers.

Pursuant to the Communications Act, all telecommunications carriers that provide interstate telecommunications services, including CMRS providers like us, are required to make an “equitable and non-discriminatory contribution” to support the cost of federal universal service programs. These programs are designed to achieve a variety of public interest goals, including affordable telephone service nationwide, as well as subsidizing telecommunications services for schools and libraries. Contributions are calculated on the basis of each carrier’s interstate end-user telecommunications revenue. The Communications Act also permits states to adopt universal service regulations not inconsistent with the Communications Act or the FCC’s regulations, including requiring CMRS providers to contribute to their universal service funds. Additional costs may be incurred by us and ultimately by our subscribers as result of our compliance with these required contributions.

The Communications Assistance for Law Enforcement of 1994, or CALEA, requires all telecommunications carriers, including wireless carriers, to ensure that their equipment is capable of permitting the government, pursuant to a court order or other lawful authorization, to intercept any wire and electronic communications carried by the carrier to or from its subscribers. CALEA remains subject to FCC implementation

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proceedings. Compliance with the requirements of CALEA, further FBI requests, and the FCC’s rules could impose significant additional direct and/or indirect costs on us and other wireless carriers.

Wireless networks also are subject to certain FCC and FAA regulations regarding the relocation, lighting and construction of transmitter towers and antennas and are subject to regulation under the National Environmental Policy Act, the National Historic Preservation Act, and various environmental regulations. Compliance with these provisions could impose additional direct and/or indirect costs on us and other licensees. The FCC’s rules require antenna structure owners to notify the FAA of structures that may require marking or lighting, and there are specific restrictions applicable to antennas placed near airports.

We also are subject or potentially subject to number pooling rules; rules governing billing and subscriber privacy; rate averaging and integration requirements; and rules requiring us to offer equipment and services that are accessible to and usable by persons with disabilities. Some of these requirements pose technical and operational challenges to which we, and the industry as a whole, have not yet developed clear solutions. These requirements are all the subject of pending FCC or judicial proceedings, and we are unable to predict how they may affect our business, financial condition or results of operations.

We also must satisfy FCC requirements relating to technical and reporting matters. One such requirement is the coordination of proposed frequency usage with adjacent wireless users, permittees and licensees in order to avoid electrical interference between adjacent networks. In addition, the height and power of base radio transmitting facilities of certain wireless providers and the type of signals they emit must fall within specified parameters.

State Regulation and Local Approvals

The states in which we operate generally have agencies or commissions charged under state law with regulating telecommunications companies, and local governments generally seek to regulate placement of transmitters and rights of way. While the powers of state and local governments to regulate wireless carriers are limited to some extent by federal law, we will have to devote resources to comply with state and local requirements. For example, state and local governments generally may not regulate our rates or our entry into a market, but are permitted to manage public rights of way, for which they can require fair and reasonable compensation. Nevertheless, some states have attempted to assert certification requirements that we believe are in conflict with provisions of the Communications Act that prohibit states from regulating entry of wireless carriers.

States may also impose certain surcharges on our customers that could make our service, and the service of other wireless carriers, more expensive. In addition, a number of states and localities have banned, or are considering banning or restricting, the use of wireless phones while driving a motor vehicle.

Under the Communications Act, state and local authorities maintain authority over the zoning of sites where our antennas are located. These authorities, however, may not legally discriminate against or prohibit our services through their use of zoning authority. Therefore, while we may need approvals for particular sites or may not be able to choose the exact location for our sites we do not foresee significant problems in placing our antennas at sites in our territory.

Federal Regulation of Interconnection and Interexchange Services

The Telecommunications Act requires all common carriers (including wireless carriers) to interconnect on a non-discriminatory basis with other carriers, imposes additional requirements on wireline local exchange carriers, and imposes even more comprehensive requirements on the largest ILECs. The latter must provide access to their networks to competing carriers. Among other things, the Communications Act requires these large ILECs to provide physical collocation to competitors to allow them to place qualifying equipment in ILEC central offices; to “unbundle” certain elements of local exchange network facilities and provide these Unbundled Network Elements, or UNEs, to CLECs at “forward-looking” prices; and to establish reciprocal compensation for the transport and termination of local traffic. The FCC’s recent decision to eliminate the UNE Platform, or UNE-P, as well as the availability of UNE transport and high capacity UNE loops in some urban areas has had no material affect on our CLEC operations.

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ILEC operating entities that serve fewer than 50,000 lines are “rural telephone companies” under the definition in the Communications Act and are exempt from these additional requirements unless and until such exemption is removed by the state regulatory body. Each of our RLEC operations is considered separately and each is currently exempt from the requirements imposed on the largest ILECs.

Interconnection Agreements and Recent Regulatory Events. In order to obtain access to an ILEC network, a CLEC must negotiate an interconnection agreement or “opt-in” to an existing interconnection agreement. These agreements cover, among other items, reciprocal compensation rates and required UNEs. If the parties cannot agree on the terms of an interconnection agreement, the matter is submitted to the applicable state public utility commission or to the FCC for binding arbitration.

The FCC on December 15, 2004 revised its rules concerning ILECs’ obligations to unbundle and make network elements available to other carriers for use in providing local telecommunications services. The FCC, among other things, eliminated the mandatory ILEC provisioning of a UNE-P and established a 12 month transition plan for existing customers. The FCC also modified its rules to curtail, in certain markets, the availability to CLECs of high-capacity (i.e., DS-1 and DS-3) UNE loops and UNE dedicated transport. None of the markets in which our CLECs provide service were affected by this curtailment.

Access Charges. The FCC regulates the prices that ILECs and CLECs charge for access to their local telephone networks in originating or terminating interstate transmissions. In 2001, the FCC modified its interstate access rules for RLECs other than the large “price-cap” carriers. The plan adopted by the FCC for these smaller carriers (including our RLECs) was based on a proposal made by an ad hoc coalition referred to as the Multi-Association Group, or MAG, Plan. As it had previously done for the large ILECs, the FCC eliminated the “per-minute” access charges associated with the interstate portion of the loop (i.e., “Carrier Common Line” or “CCL” charges). The FCC replaced these per-minute charges with per-line charges. The rate changes ordered by the FCC were structured to be “revenue neutral” to the carriers. As part of this rate structure, the “cap” on monthly residential subscriber line charge, or SLC, through which carriers recover a portion of their loop costs from their end user customers, was increased to $5.00, and the cap on the business SLC was increased to $9.20, on January 1, 2002. Additional increases in the SLCs took effect in July 2002 and July 2003. To the extent that these increases in the SLCs were insufficient to achieve revenue neutrality for individual RLECs, the FCC established a new component of the federal Universal Service Fund known as the Interstate Common Line, or ICL, fund to make up this revenue shortfall.

NTELOS Telephone Company, or NTELOS Telephone, is an “average schedule” company for purposes of interstate access charges. NTELOS Telephone participates in the common line pool tariff administered by the National Exchange Carrier Association, or NECA, and therefore charges SLC rates computed by NECA, but files its own traffic sensitive (i.e., “per-minute”) tariff to establish access rates applicable to switching and transport of telecommunications traffic. R&B Telephone Company is a “rate-of-return” company for purposes of interstate access charges and participates in NECA’s common line pool and NECA’s traffic sensitive pool.

Pursuant to the FCC’s order on CLEC interstate access charges issued in 2001, our CLEC’s interstate access charges are now at parity with those of the largest ILECs with which our CLECs compete.

In its Intercarrier Compensation docket, the FCC is examining all aspects of intercarrier payments made on both the interstate and intrastate level, including access charges and reciprocal compensation rates for both wireless and wireline carriers of all sizes. It is not known what changes the FCC may make to intercarrier compensation, in what time frame the FCC may make them, and how such changes to intercarrier payments may affect us, or whether we will be able to recover any mandatory reductions in intercarrier charges through increased charges to our subscribers, increased universal service support, or other alternative sources of revenue.

Universal Service. Historically, network access charges were set at levels that subsidized the cost of providing local residential service. The Telecommunications Act requires the FCC to identify and remove such historical “implicit subsidies” of local service subsidy from network access rates, to establish an explicit Universal Service Fund to ensure the continuation of service to high-cost, low-income service areas and to develop a mechanism for the arrangements for payments into that fund by all providers of interstate telecommunications. In 1997, the FCC issued its first order implementing these directives and has continued to refine this implementation in

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subsequent orders since that time. The FCC’s universal service order established funding mechanisms for high-cost and low-income service areas.

Federal universal service fund “high cost” payments are received by our rural RLECs and support the high cost of operations in rural markets. Under universal service rules adopted by the FCC, the funds may be distributed only to a carrier that is designated as an “Eligible Telecommunications Carrier,” or ETC, by the FCC or a state regulatory commission. Our RLECs have been designated as ETCs. Under the Communications Act, however, competitors also can obtain the same per-line support payments as we do without regard for whether the competitor’s cost structure is similar to our own, if the FCC or the SCC determines that granting such support payments to competitors would be in the public interest. Our wireless carrier has been certified as an ETC in Virginia and West Virginia and is receiving universal service fund payments in those states. Several wireless carriers have been designated as ETCs in all or part of our RLEC service territory.

The FCC is considering changes to the universal service rules and it is not known how such changes may affect us. See “Risk Factors.”

Federal Regulation of Internet and DSL

To date, the FCC has treated internet service providers, or ISPs, as enhanced service providers, rather than common carriers. Therefore, ISPs are exempt from most federal and state regulation, including the requirement to pay access charges or contribute to the federal USF. As internet services expand, federal, state and local governments may adopt rules and regulations, or apply existing laws and regulations to the internet.

State Regulation of RLEC, CLEC and Interexchange Services

Most states require telecommunications providers to obtain authority from state regulatory commissions prior to offering common carrier services. State regulatory commissions generally regulate RLEC rates for intrastate services, including rates for intrastate access services paid by providers of intrastate long distance services. RLECs must file tariffs setting forth the terms, conditions and prices for their intrastate services. Our RLECs are subject to regulation in Virginia by the SCC. Our tariffs are approved by and on file with the SCC for RLEC services in our certificated service territory in and around Waynesboro, Covington and Clifton Forge, Virginia and in portions of Botetourt and Augusta Counties, Virginia. In addition, the SCC establishes service quality requirements applicable to RLECs, including ours, and resolves disputes involving intrastate communications services.

The Telecommunications Act preempts state statutes and regulations that restrict entry into the intrastate telecommunications market. As a result, we can provide the full range of competitive intrastate local and long distance services in all states in which we currently operate and in any states into which we may expand. We are certificated as a CLEC in Virginia, West Virginia and Tennessee. Although we file tariffs covering our CLEC services, our rates for such CLEC services generally fluctuate based on market conditions.

Local Government Authorizations

Certain governmental authorities require permits to open streets for construction and/or franchises to install or expand facilities. We obtain such permits and franchises as required.

Item 1A. Risk Factors.

RISK FACTORS

The following risk factors and other information included in this Form 10-K should be carefully considered. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may adversely impact our business operations. Our business, financial condition or results of operations could be materially adversely affected by any or all of these risks.

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Risks Relating to Our Business

Our substantial leverage could adversely affect our financial health.

We are highly leveraged. As of December 31, 2005, our total outstanding debt on a consolidated basis, including capital lease obligations, was approximately $759.4 million. On April 15, 2006, we will repay the Floating Rate Notes and unpaid accrued interest thereon with approximately $144.0 million from the proceeds of our initial public offering, resulting in a pro forma debt as of December 31, 2005 of $622.1 million following this repayment. Our substantial indebtedness could adversely affect our financial health and business and future operations by, among other things:

• making it more difficult for us to satisfy our obligations with respect to our indebtedness;

• increasing our vulnerability to adverse economic and industry conditions by making it more difficult for us to react quickly to changing conditions;

• limiting our ability to obtain any additional financing we may need to operate, develop and expand our business;

• requiring us to dedicate a substantial portion of any cash flows from operations to service our debt, which reduces the funds available for operations and future business opportunities;

• potentially making us more highly leveraged than our competitors, which could potentially decrease our ability to compete in our industry;

• exposing us to risks inherent in interest rate fluctuations because some of our borrowings will be at variable rates of interest, which could result in higher interest expense in the event of increases in interest rates; and

• limiting our flexibility in planning for, or reacting to, changes in our business, and the industry in which we operate.

The ability to make payments on our debt will depend upon our subsidiaries’ future operating performance, which is subject to general economic and competitive conditions and to financial, business and other factors, many of which we cannot control. If the cash flows from our subsidiaries operating activities are insufficient to service our debt obligations, we may take actions, such as delaying or reducing capital expenditures, attempting to restructure or refinance our debt, selling assets or operations or seeking additional equity capital. Any or all of these actions may not be sufficient to allow us to service our debt obligations. Further, we may be unable to take any of these actions on satisfactory terms, in a timely manner or at all. The NTELOS Inc. senior secured credit facilities limit our subsidiaries’ ability to take several of these actions. Our failure to generate sufficient funds to pay our debts or to successfully undertake any of these actions could, among other things, materially adversely affect the market value of the securities offered hereby and our ability to repay our obligations under our indebtedness.

The NTELOS Inc. senior secured credit facilities impose operating and financial restrictions, which may prevent us from capitalizing on business opportunities and taking some corporate actions.

The NTELOS Inc. senior secured credit facilities impose operating and financial restrictions on our subsidiaries. These restrictions generally:

• restrict our subsidiaries’ ability to incur additional indebtedness;

• restrict our subsidiaries from entering into transactions with affiliates;

• restrict our subsidiaries’ ability to consolidate, merge or sell all or substantially all of their assets;

• impose financial covenants relating to the business of our subsidiaries, including leverage and interest coverage ratios;

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• require our subsidiaries to use specified amounts of excess cash flow to repay indebtedness if our leverage ratio reaches specified levels;

• restrict our subsidiaries’ ability to grant dividends; and

• restrict our subsidiaries’ ability to make capital expenditures.

We cannot assure you that those covenants will not adversely affect our ability to pay dividends, finance our future operations or capital needs or pursue available business opportunities. A breach of any of these covenants could result in a default in respect of the NTELOS Inc. senior secured credit facilities. If a default occurs, our indebtedness under the NTELOS Inc. senior secured credit facilities could be declared immediately due and payable. As a result of general economic conditions, conditions in the lending markets, the results of our business or for any other reason, we may elect or be required to amend or refinance our indebtedness, at or prior to maturity, or enter into additional agreements for senior indebtedness.

We will require a significant amount of cash, which may not be available to us, to service our debt and fund our other liquidity needs.

Our aggregate capital expenditures for the year ended December 31, 2005 were $89 million, and we are budgeting capital expenditures for 2006 of approximately $87 million. Based on our total debt outstanding as of December 31, 2005 of $759.4 million, which includes capital lease obligations, we expect payments on our outstanding indebtedness (not including the payment of approximately $144.0 million from the proceeds of the initial public offering, inclusive of unpaid accrued interest through the repayment date, to retire the Floating Rate Notes on April 15, 2006) to be approximately $4.5 million in 2006. Our ability to make payments on, or to refinance or repay, our debt, fund planned capital expenditures and expand our business will depend largely upon our future operating performance. Our future operating performance is subject to general economic, financial, competitive, legislative and regulatory factors, as well as other factors that are beyond our control. Our business may not generate enough cash flow, or future borrowings may not be available to us under the NTELOS Inc. senior secured credit facilities or otherwise, in an amount sufficient to enable us to pay our debt or fund our other liquidity needs. If we are unable to generate sufficient cash to service our debt requirements, we will be required to refinance our indebtedness. We may not be able to refinance any of our debt under such circumstances, on commercially reasonable terms or at all. If we are unable to refinance our debt or obtain new financing under these circumstances, we would have to consider other options, including, sales of certain assets to meet our debt service requirements, sales of equity and negotiations with our lenders to restructure the applicable debt.

The agreements governing NTELOS Inc.’s senior secured credit facilities could restrict our ability to do some of these things. If we are forced to pursue any of the above options under distressed conditions, our business could be adversely affected.

The telecommunications industry is generally characterized by rapid development, introduction of new technologies, substantial regulatory changes and intense competition, any of which could cause us to suffer price reductions, customer losses, reduced operating margins and/or loss of market share.

The telecommunications industry has been, and we believe will continue to be, characterized by several trends, including the following:

• rapid development and introduction of new technologies and services, such as voice-over-internet protocol, or VoIP, push-to-talk services, or “push-to-talk,” location based services such as GPS mapping technology and high speed data services, including streaming video, mobile gaming and other applications;

• substantial regulatory change due to the continuing implementation of the Telecommunications Act of 1996, which amended the Communications Act of 1934, as amended, which included changes designed to stimulate competition for both local and long distance telecommunications services;

• increased competition within established markets from current and new market entrants that may provide competing or alternative services;

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• an increase in mergers and strategic alliances that allow one telecommunications provider to offer increased services or access to wider geographic markets; and

• the blurring of traditional dividing lines between, and the bundling of, different services, such as local telephone, long distance, wireless, video, data and internet services.

We expect competition to intensify as a result of new competitors and the development of new technologies, products and services. Some or all of these risks may cause us to have to spend significantly more in capital expenditures than we currently anticipate in order to keep existing, and attract new, customers. Many of our voice and data competitors, such as cable providers, wireless service providers, internet access providers and long distance carriers have brand recognition and financial, personnel, marketing and other resources that are significantly greater than ours. In addition, due to consolidation and strategic alliances within the telecommunications industry, we cannot predict the number of competitors that will emerge, especially as a result of existing or new federal and state regulatory or legislative actions. Such increased competition from existing and new entities could lead to price reductions, loss of customers, reduced operating margins and/or loss of market share.

As competition develops and technology evolves, and as a result of the FCC’s continuing implementation of the Telecommunications Act, the FCC, federal and state regulation of the telecommunications industry is changing rapidly. We anticipate that this state of regulatory flux will persist in the future, as the FCC and state regulators respond to competitive, technological, and legislative developments by modifying their existing regulations or adopting new ones.

Taken together or individually, new or changed regulatory requirements affecting any or all of the wireless, local, and long distance industries may harm our business and restrict the manner in which we operate our business. The enactment of new adverse regulation or regulatory requirements may slow our growth and have a material adverse effect upon our business, results of operations and financial condition. We cannot assure you that changes in current or future regulations adopted by the FCC or state regulators, or other legislative, administrative or judicial initiatives relating to the communications industry, would not have a material adverse effect on our business, results of operations and financial condition. In addition, pending congressional legislative efforts to reform the Communications Act may cause major industry and regulatory changes that are difficult to predict.

Wireless Telecommunications

We face substantial competition in the wireless telecommunications industry generally from competitors with substantially greater resources than we have that may be able to offer new technologies, services covering a broader geographical area and lower prices, which could decrease our profitability and cause prices for our services to continue to decline in the future.

We operate in an increasingly competitive environment. Our wireless business faces intense competition from other wireless providers, including Verizon Wireless, ALLTEL, Cellular One, T-Mobile, Cingular Wireless, U.S. Cellular and Sprint Nextel (including its affiliates and resellers, such as Virgin Mobile USA). Competition for customers is based principally upon services and features offered, system coverage, technical quality of the wireless system, price, customer service and network capacity. Our ability to compete will depend, in part, on our ability to anticipate and respond to various competitive factors affecting the telecommunications industry.

Many of our competitors are, or are affiliated with major communications companies that have substantially greater financial, technical and marketing resources than we have. These competitors may have greater name recognition and more established relationships with a larger base of current and potential customers and, accordingly, we may not be able to compete successfully. We expect that increased competition will result in more competitive pricing. Consolidation continues in the wireless industry with the recent combinations of Sprint and Nextel and AT&T Wireless and Cingular. Cingular Wireless, a national wireless company with significant resources, recently acquired the Virginia assets of Suncom, one of our main competitors in this market. Companies that have the resources to sustain losses for some time have an advantage over those companies without access to these resources. We cannot assure you that we will be able to achieve or maintain adequate market share or revenue or compete effectively in any of our markets. We believe we may have benefited and may continue to benefit by adding new subscribers following a consolidation of competitors in our market that has resulted in

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post-consolidation service disruption to customers of the competitors involved. These benefits may be temporary, however, and we may not be able to sustain this additional growth or retain these new customers.

Over the last three years, the per-minute rate for wireless services has declined. Competition may cause the prices for wireless products and services to continue to decline in the future. As per-minute rates continue to decline, our revenues and cash flows may be adversely impacted.

In 2003-2004 capital spending on our network was primarily focused on meeting the growing capacity demands of our customers. As a result, during this period we spent very little capital expanding our service area with new cell sites or enhancing our existing service area to improve in-building coverage or to solve coverage concerns. In 2005 we completed 60 new cells sites which improved the quality of our network and expanded coverage. We expect in the future to spend more capital on our network in order to expand our service area and maintain our high level of customer service.

We expect competition to intensify as a result of the rapid development of new technologies, including improvements in the capacity and quality of digital technology, such as the move to third generation, or 3G, wireless technologies. Several wireless carriers, including Verizon Wireless and Sprint Nextel, have announced plans to upgrade all or parts of their 3G networks to include “Evolution Data Optimized” 3G 1x-EVDO technology, or EVDO, which provides broadband wireless services at rates faster than the 3G one times radio transmission, or 1xRTT, technology we use in our western Virginia and West Virginia markets and faster than the second generation, or 2G, technology we currently use in our eastern Virginia market. Many wireless carriers have also added “push-to-talk” which allows subscribers to talk to each other quickly with a single push of a button, and some are developing technology to permit wireless handset video transmission. Such technological advances and industry changes could cause the technology used on our network to become dated. We may not be able to respond to such changes and implement new technology on a timely basis or at an acceptable cost. To the extent that we do not keep pace with technological advances, fail to offer technologies comparable to those of our competitors or fail to respond timely to changes in competitive factors in our industry, we could lose existing customers and experience a decline in revenues and net income. Each of these factors and sources of competition discussed above could have a material adverse effect on our business, financial condition and results of operations.

If we experience a high rate of wireless customer turnover or seek to prevent significant customer turnover, our revenues could decline and our costs could increase.

Many wireless providers in the U.S. have experienced and have sought to prevent a high rate of customer turnover. The rate of customer turnover may be the result of several factors, including limited network coverage, reliability issues such as blocked or dropped calls, handset problems, inability to roam onto third-party networks at competitive rates, or at all, price competition and affordability, customer care concerns, wireless number portability requirements that allow customers to keep their wireless phone number when switching between service providers and other competitive factors. In addition, customers could elect to switch to another carrier that has service offerings dependent on newer network technology. We cannot assure you that our strategies to address customer turnover will be successful. If we experience a high rate of wireless customer turnover or seek to prevent significant customer turnover or fail to replace lost customers, our revenues could decline and our costs could increase which could have a material adverse effect on our business, financial condition and operating results.

The loss of our largest customer, Sprint Nextel, a decrease in its usage or a demand by Sprint Nextel that we provide new products or services may result in lower revenues or higher expenses.

Sprint Nextel (and its predecessor in our area, Horizon PCS) accounted for approximately 18% of our operating revenues for the year ended December 31, 2005. If we were to lose Sprint Nextel as a customer, or if Sprint Nextel reduced its usage or became financially unable to pay our charges, our revenues could decline, which could cause our business, financial condition and operating results to suffer. The impact on us of the recent merger of Sprint and Nextel cannot be predicted at this time but could be substantial. One effect could be a request that we offer new products and services to Sprint Nextel customers. Also, Sprint Nextel is expected to acquire a controlling ownership interest in Nextel Partners Inc., a wireless affiliate of Sprint Nextel, by the end of the second quarter of 2006. Such a sale could result in the ownership of Nextel Partners by Sprint Nextel. Unlike Sprint Nextel, Nextel Partners owns a wireless network in all of the territory covered by our Strategic Network Alliance. Any future migration by Sprint Nextel of CDMA customers to their integrated digital enhanced network, or iDEN, technology

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could result in a decline in the usage of our network by Sprint Nextel and could cause an adverse impact on our business, financial condition and operating results.

The pricing arrangement under our Strategic Network Alliance with Sprint Nextel may fluctuate which could result in lower revenues.

Under the Strategic Network Alliance with Sprint Nextel, after an initial pricing term in which the price Sprint Nextel is required to pay us is set by the agreement, our price structure with Sprint Nextel will fluctuate under a formula tied to a national wireless retail customer revenue yield. In addition, Sprint Nextel prices its national calling plans based on its business objectives and it could set price levels or change other characteristics of its plans in a way that may not be economically advantageous for our business or may result in reduction of usage from Sprint Nextel customers.

If Sprint Nextel does not succeed, our business may not succeed.

If Sprint Nextel has a significant service disruption, fails to operate its business in an efficient manner or suffers a weakening of its brand name, our operating results would likely be negatively impacted. If Sprint Nextel should have significant financial problems, our business would suffer material adverse consequences, which could include termination or revision of our Strategic Network Alliance.

If the roaming rates we pay for our customers’ usage of third-party networks increase, our operating results may decline.

Many of our competitors have national networks which enable them to offer roaming and long-distance telephone services to their subscribers at a lower cost. We do not have a national network, and we must pay other carriers a per-minute charge for carrying roaming and long-distance calls made by our subscribers. To remain competitive, we absorb a substantial portion of the roaming and long-distance charges without increasing the prices we charge to our subscribers. We have entered into roaming agreements with other communications providers that govern the roaming rates that we are required to pay. In addition, under the terms of our Strategic Network Alliance, we have favorable roaming rates with Sprint Nextel. If these roaming agreements are terminated, the roaming rates that we are charged may increase and, accordingly, our cash flow and operating results may decline.

We may incur significantly higher wireless handset subsidy costs than we anticipate to upgrade existing subscribers.

As our subscriber base grows, and technological innovations occur, more existing subscribers will begin to upgrade to new wireless handsets. We subsidize a portion of the price of wireless handsets and incur sales commissions on the sale or upgrade of handsets. The cost of handsets increases as they are able to offer more applications. Furthermore, we generally pay more to purchase handsets than many of our national competitors who buy from manufacturers in large volumes. If more subscribers purchase or upgrade to new wireless handsets than we project, our operating results would be adversely affected.

Our largest competitors and Sprint Nextel may build networks in our markets or use alternative suppliers, which may result in decreased revenues and severe price-based competition.

Our current roaming partners, larger wireless providers and Sprint Nextel ultimately may build their own digital wireless networks in our service areas or obtain roaming services from alternative sources. Sprint Nextel controls 10 MHz of spectrum within our service territory in the 1900 MHz PCS band. While the terms of the Strategic Network Alliance generally prohibit Sprint Nextel from directly or indirectly commencing construction of, contracting for or launching its own PCS or wireless communications network in the Strategic Network Alliance service area until 180 days prior to termination of the Strategic Network Alliance, the initial term of which ends on July 31, 2011, it would adversely affect our revenues and operating results if Sprint Nextel or another wireless provider were to do so. Should this occur, use of our networks would decrease and our roaming and/or wholesale revenues would be adversely affected. Once a digital wireless system is built, there are only marginal costs to carrying an additional call, so a larger number of facility-based competitors in our service areas could stimulate significant price competition, as has occurred in many areas in the U.S., with a resulting reduction in our revenues and operating results.

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The loss of our licenses could adversely affect our ability to provide wireless services.

Our wireless licenses are generally valid for ten years from the effective date of the license. Licensees may renew their licenses for additional ten-year periods by filing renewal applications with the FCC. Our wireless licenses expire in various years. The renewal applications are subject to FCC review and potentially public comment to ensure that the licensees meet their licensing requirements and comply with other applicable FCC mandates. We applied for and were granted renewal of seven of these licenses in 2005. If we fail to file for renewal of other of our licenses at the appropriate time or fail to meet any regulatory requirements for renewal, we could be denied a license renewal and, accordingly, our ability to continue to provide service in that license area would be adversely affected. In addition, many of our licenses are subject to interim or final construction requirements. While the licensees have generally met “safe harbor” standards for ensuring such benchmarks are met, we have relied on, and will in the future rely on, “substantial service” thresholds for meeting build-out requirements. In such cases, there is no guarantee that the FCC will find our construction sufficient to meet the applicable construction requirement, in which case the FCC could terminate our license and our ability to continue to provide service in that license area would be adversely affected.

Our failure to comply with regulatory mandates could adversely affect our ability to provide wireless services.

The FCC regulates the licensing, operation, acquisition and sale of the licensed spectrum that is essential to our business. Our compliance with existing regulatory requirements, such as Enhanced 911, or E911, and Communications Assistance for Law Enforcement Act, or CALEA, depends on the availability of necessary equipment or software. Many carriers in the CMRS industry, including us, had requested waivers of the FCC’s December 31, 2005 deadline for requiring that 95% of all subscriber handsets in service nationwide on our system can deliver subscriber location information. By order adopted January 26, 2006, the FCC granted us a limited extension of the December 31, 2005 requirement by extending the date that we must achieve 95% penetration until November 1, 2006. Failure to comply with this or other regulatory requirements may have an adverse effect on our licenses or operations and could result in sanctions, fines or other penalties.

The licensing of additional spectrum by the FCC may adversely affect our ability to compete in providing wireless services.

The FCC, from time to time, auctions additional radio spectrum that may be suitable for services that compete, directly or indirectly, with our wireless offerings. For example, in the summer of 2006, the FCC intends to auction an additional 90 MHz of radio spectrum for “Advanced Wireless Services” that can be used for services like our wireless offerings. We may also participate in such auctions in order to obtain spectrum necessary to increase the capacity of our systems or to allow us to offer new services. Thus, the auction of new spectrum may adversely impact our business by creating new competitors, enhancing the ability of our existing competitors to offer services we cannot offer, requiring the company to expend additional funds to acquire spectrum necessary for continued growth, or restricting our growth because we cannot acquire additional necessary spectrum.

If we lose the right to install our equipment on wireless cell sites or are unable to renew expiring leases for wireless cell sites on favorable terms or at all, our business and operating results could be adversely impacted.

As of December 31, 2005, 806 of our base stations were installed on leased cell site facilities, with 392 installed on facilities owned by American Tower and Crown Communications. A large portion of these cell sites are leased from a small number of large cell site companies pursuant to master agreements that govern the general terms of our use of that company’s cell sites. If a master agreement with one of these cell site companies were to terminate, or if one of these cell site companies were unable to support our use of its cell sites, we would have to find new sites or rebuild the affected portion of our network. In addition, the concentration of our cell site leases with a limited number of cell site companies could adversely affect our operating results and financial condition if we are unable to renew our expiring leases with these cell site companies either on terms comparable to those we have today or at all. If any of the cell site leasing companies with which we do business were to experience severe financial difficulties, or file for bankruptcy protection, our ability to use cell sites leased from that company could be adversely affected. If a material number of cell sites were no longer available for our use, our financial condition and operating results could be adversely affected.

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We cannot predict the effect of technological changes on our business.

The wireless telecommunications industry is experiencing significant technological change. We believe our continued success will depend, in part, on our ability to anticipate or adapt to technological changes and to offer, on a timely basis, services that meet customer demands. We cannot assure you that we will obtain access to new technology on a timely basis or on satisfactory terms, which could have a material adverse effect on our business, financial condition and operating results.

For us to keep pace with these technological changes and remain competitive, we must continue to make significant capital expenditures to our integrated communications system. Customer acceptance of the services that we offer will continually be affected by technology-based differences in our product and service offerings. Currently we do not offer many high speed data applications offered by our competitors who have upgraded to EVDO technology. In addition, “push-to-talk” is becoming increasingly popular as it allows subscribers to save time on dialing or connecting to a network. Many of the companies that compete with us in our wireless markets offer “push-to-talk.” We do not offer our customers a “push-to-talk” service. As demand for this service continues to grow, and if we do not offer the technology, we may have difficulty attracting and retaining subscribers, which will have an adverse effect on our business.

In addition, other service providers have announced plans to develop a Wi-Fi or Wi-Max enabled handset. Such a handset would permit subscribers to communicate using voice and data services with their handset using VoIP technology in any area equipped with a wireless internet connection, or hot spot, potentially bypassing our network. The number of hot spots in the U.S. is growing rapidly, with some major cities and urban areas being covered entirely. The availability of VoIP or another alternative technology to our subscribers could greatly reduce the usage of our network, which would have an adverse effect on our financial condition and operating results.

To accommodate next generation advanced wireless products such as “push-to-talk,” high-speed data and high-bandwidth streaming video, we would be required to make significant technological changes to our network. We also may be required to purchase additional spectrum. We cannot assure you that we could make these technological changes or gain access to this spectrum at a reasonable cost or at all. Failure to provide these services could have a material adverse effect on our ability to compete with wireless carriers offering these new technologies.

Wireline Telecommunications

Our rural local telephone company subsidiaries face substantial competition from competitors that are less heavily regulated than we are, which could increase our expenses or force us to lower prices, causing our revenues and operating results to decline.

As the rural local telephone companies for the western Virginia communities of Waynesboro, Clifton Forge, Covington and portions of Botetourt and Augusta Counties, Virginia, we currently compete with a number of different providers, many of whom are unregulated or less heavily regulated than we are. Our rural telephone company subsidiaries qualify as rural local telephone companies under the Communications Act and are, therefore, exempt from many of the most burdensome obligations to facilitate the development of competition, such as the obligation to sell unbundled elements of our network to our competitors at “forward-looking” prices that the Communications Act places on larger carriers. Nevertheless, our rural telephone company subsidiaries face significant competition, particularly from competitors that do not need to rely on access to our network to reach their customers. For example, wireless providers continue to increase their market share and pose a significant competitive risk to our business. Further, cable providers that serve our markets, such as Comcast (as the apparent purchaser of assets of Adelphia Communications Corporation), are likely to offer wireline voice services to their cable customers. Cable providers have had significant success in other markets offering wireline voice services and any new offering of services in our rural telephone company subsidiaries markets by such a cable company or other VoIP providers could significantly harm our business. Furthermore, if our rural exemption were removed, competitive local exchange carriers, or CLECs, could more easily enter our rural telephone company subsidiaries’ markets. Moreover, the regulatory environment governing wireline local operations has been, and we believe will likely continue to be, very liberal in its approach to promoting competition and network access.

Consistent with the experience of other rural telephone companies, our rural telephone company subsidiaries have experienced a reduction in access lines caused by, among other things, customer migration to

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broadband internet service from dial-up internet service (resulting in a disconnection of “second lines”), wireless competition and business customer migration from Centrex services to IP-based and other PBX services using fewer lines. As penetration rates of these technologies increase in our markets, our revenues could decline. Our rural telephone company subsidiaries experienced a net loss of 1,486 access lines in the year ended December 31, 2005, or 3.1% of our access lines served in 2004. A continued net loss of access lines could impact our revenues and operating results.

Our rural telephone company subsidiaries are subject to several regulatory regimes and consequently faces substantial regulatory burdens and uncertainties.

Many of our competitors are unregulated or less heavily regulated than we are. For example, VoIP technology is used to carry voice communications services over a broadband internet connection. The FCC has ruled that VoIP services are jurisdictionally interstate and that some VoIP arrangements (those not using the Public Switched Telephone Network) are not subject to regulation as telephone services. The United States Supreme Court in the Brand X case recently upheld the FCC’s ruling that cable broadband internet services are not subject to common carrier telecommunications regulation. In addition, the SCC imposes service quality obligations on our rural telephone company subsidiaries and requires us to adhere to prescribed service quality standards, but many of our competitors are not subject to these standards. These standards measure the performance of various aspects of our business. If we fail to meet these standards, the SCC may impose fines or penalties or take other actions that may impact our revenues or increase our costs. Our rural telephone company subsidiaries have met or exceeded these service quality standards in recent years, including 2004 and 2005.

Cable companies and other VoIP providers are able to compete with our rural telephone company subsidiaries even though the “rural exemption” under the Telecommunications Act is in place. If this exemption were removed CLECs could more easily enter our rural telephone company subsidiaries’ markets. Moreover, the regulatory environment governing wireline local operations has been, and we believe will likely continue to be, very liberal in its approach to promoting competition and network access.

Regulatory developments at the FCC could reduce revenues that our rural telephone company subsidiaries receive from network access charges and the federal Universal Service Fund.

Intercarrier Compensation. For the year ended December 31, 2005, approximately $31 million of our rural telephone company subsidiaries’ revenues came from network access charges, which are paid to us by long distance carriers for originating and terminating calls in the areas we serve. These revenues are highly profitable for us. The amount of access charge revenues that we receive is based on rates set by the FCC for interstate long distance calls and the SCC for intrastate long distance calls. Such access rates are subject to change. Our federal access charges are periodically reset by the FCC. The SCC could conduct rate cases and/or “earnings” reviews, which could result in rate changes.

The FCC has reformed and continues to reform the structure of the federal access charge system. The FCC has an active proceeding addressing access and other intercarrier payments. Interested parties filed comments in this proceeding in the spring and summer of 2005 and various members of the FCC have indicated an intention to further reform the intercarrier compensation system.

Currently, VoIP providers generally do not pay us access charges for calls that originate or terminate on our network. Therefore, expanded use of VoIP technology could reduce the access or intercarrier revenues received by rural telephone companies like ours. The FCC is currently considering the extent to which VoIP providers should be obligated to pay, or entitled to receive, access charges, but we cannot predict the timing or ultimate result of this proceeding. If VoIP providers continue not to pay access charges to us, our revenues and operating results could be adversely affected to the extent that users substitute VoIP calls for traditional wireline communications.

Additionally, the intrastate access charges we receive may be reduced as a result of SCC regulatory action. The SCC in early 2005 ordered Verizon in Virginia to eliminate the carrier common line component of its intrastate access charges by February 1, 2006. The SCC did not extend that holding to rural telephone companies like ours. Nevertheless, reduced access revenues (caused by regulatory or market forces or both) could adversely affect our business, revenues or profitability.

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Universal Service Fund. The FCC is currently examining the way in which it collects carrier contributions to the federal Universal Service Fund. Today, as a telecommunications carrier, we contribute a percentage of our revenues, including DSL revenues, to the Universal Service Fund, which supports the delivery of services to high-cost areas and low-income consumers, as well as to schools, libraries, and rural health care providers. Many of our competitors, such as VoIP and cable broadband internet service providers, are not subject to this obligation. Any FCC reform of this system could cause these competitors to become subject to contribution obligations, but also could increase our own obligations. We cannot predict the outcome of this proceeding.

For the year ended December 31, 2005, we received approximately $5.2 million in payments from the federal Universal Service Fund in connection with our rural telephone company subsidiaries’ operations. The FCC is examining its Universal Service Fund rules and may change the amount of Universal Service Fund support available to carriers. The FCC may change its rules and reduce the amount of funding ultimately available to our rural telephone company subsidiaries. There can be no assurance that we will continue to receive the current level of Universal Service Fund revenues in the future. Loss of Universal Service Fund revenues could adversely affect our operating results.

In addition, under the Telecommunications Act, our competitors can obtain the same per-line level of federal Universal Service Fund subsidies as we do, without regard for whether their costs of providing service are similar to ours, if either the FCC or the SCC determines that granting these subsidies to competitors would be in the public interest and the competitors offer and advertise certain telephone services as required by the Telecommunications Act. The FCC has allowed such designation as an “Eligible Telecommunications Carrier” to several wireless carriers in Virginia, including us, in all or part of our rural telephone company subsidiaries’ service territory. Under current rules, any Universal Service Fund payments to our competitors would not affect the level of support received by our rural telephone company subsidiaries, but this could change as a result of future FCC reform of the Universal Service Fund.

In December 2004, Congress suspended the application of a law called the Antideficiency Act to the Universal Service Fund until December 31, 2005 and, in November 2005, suspended the application for an additional year until December 31, 2006. The Antideficiency Act prohibits government agencies from making financial commitments in excess of their funds on hand. Currently, the Universal Service Fund administrator makes commitments to fund recipients in advance of collecting the contributions from carriers that will pay for these commitments. The FCC has not determined whether the Antideficiency Act would apply to payments to our rural telephone company subsidiaries. Congress is now considering whether to extend the current temporary legislation that exempts the Universal Service Fund from the Antideficiency Act. If it does not grant this extension, however, the Universal Service Fund support payments to our rural telephone company subsidiaries may be delayed or reduced in the future, or contributors to the fund, including us, could see their contribution obligations rise significantly.

Our CLEC operations face substantial competition and uncertainty relating to its interconnection agreements with the incumbent local exchange carrier, or ILEC, networks covering the CLEC markets we serve.

Our CLEC operations compete primarily with ILECs, including Verizon (including Verizon Business) and Sprint Nextel, and, to a lesser extent, other CLECs, including TelCove (formerly Adelphia Business Solutions and KMC Telecom), Fibernet, USLEC and Cox. We will continue to face competition from other current and future market entrants.

We have interconnection agreements with the ILEC networks covering each market in which our CLEC serves. We are required to negotiate amendments to, extensions of, or replacements for these agreements as they expire. Additionally, we may be required to negotiate new interconnection agreements in order to enter new markets in the future. We may not be able to successfully negotiate amendments to existing agreements, negotiate new interconnection agreements, renew our existing interconnection agreements, opt in to new agreements or successfully arbitrate replacement agreements for interconnection on terms and conditions acceptable to us. Our inability to do so would adversely affect our existing operations and opportunities to expand our CLEC business in existing and new markets. As the FCC modifies, changes and implements rules related to unbundling of ILEC network elements and collocation of competitive facilities at ILEC central offices, we generally have to renegotiate our interconnection agreements to implement those new or modified rules. The FCC on December 15, 2004 revised

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its rules concerning ILECs’ obligations to unbundle and make network elements available to other carriers for use in providing local telecommunications services. The FCC, among other things, modified the availability of certain high-capacity loops (i.e. DS-1 and DS-3) and dedicated transport in markets meeting particular density criteria. Because our CLECs serve in more rural markets, our operations were unaffected by the FCC’s December 15, 2004 ruling. Our CLECs, however, may be unfavorably affected by future FCC rule changes and may be unable to negotiate successfully modifications to its interconnection agreements without arbitration or litigation.

Our competitors have substantial business advantages over our CLEC operations, and we may not be able to compete successfully.

The regional Bell operating companies and other large ILECs such as Sprint Nextel (which has been renamed Embarq and is expected to be separated from Sprint Nextel in the second quarter 2006) dominate the current market for business and consumer telecommunications services and have a virtual monopoly on telephone lines. These companies represent the dominant competition in much of our target service areas, and we expect this competition to intensify. The large ILECs have established brand names and reputations for high quality service in their service areas, possess sufficient capital to rapidly improve and deploy new equipment, own their telephone lines and can bundle digital data services with their existing analog voice services and other services, such as long-distance, wireless and video services, to achieve economies of scale in serving customers. Moreover, the large ILECs are aggressively implementing “win-back” programs to regain access line customers lost to competitors and use bundled services to assist in those programs. We pose a competitive risk to the large ILECs that serve our CLEC markets and, as both our competitors and our suppliers, they have no motivation to respond in a timely manner to our requests or to assist in the enhancement of the services we provide to our CLEC customers.

We face substantial competition in our internet and data services business from market participants that offer high speed data services and face regulatory uncertainty, each of which may adversely affect our business and results of operations.

We currently offer our internet and data services in rural markets and face competition from other internet and data service providers, including cable companies. The internet industry is characterized by the absence of significant barriers to entry and rapid growth in internet usage among customers. As a result, we expect that our competition will increase from market entrants offering high-speed data services, including DSL, cable and wireless access. Our competition includes:

• cable modem services offered by cable providers;

• ILECs, such as Verizon and the ILEC affiliates of Sprint Nextel (particularly for DSL services), in our CLEC territories; and

• local, regional and national internet service providers, or ISPs, both wireline and wireless.

Many of our competitors have financial resources, corporate backing, customer bases, marketing programs and brand names that are greater than ours. Additionally, competitors may charge less than we do for internet services, causing us to reduce, or preventing us from raising, our fees.

A significant portion of our dial-up internet customer base has transitioned to broadband services. We expect this trend to continue. Where we offer incumbent local exchange service or, to some extent, CLEC services, we have been able to maintain service to some of these customers through DSL services or service bundles. In those areas of our internet coverage area where we provide neither incumbent local exchange service nor CLEC service, we have been unable to retain dial-up internet customers who migrate to broadband services. In 2005 we experienced a 18.7% loss in the number of dial-up internet customers from 2004. Our internet service revenues for the year ended December 31, 2005 decreased to approximately $15.4 million from approximately $17.0 million for the year ended December 31, 2004.

In connection with our internet access offerings, we could become subject to laws and regulations as they are adopted or applied to the internet. To date, the FCC has treated ISPs as enhanced or information service providers, rather than common carriers. Therefore ISPs are exempt from most federal and state regulation, including the requirement to pay access charges or contribute to the federal Universal Service Fund. As internet services

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expand, federal, state and local governments may adopt rules and regulations, or apply existing laws and regulations to the internet. The FCC recently issued a decision that harmonizes the regulatory frameworks that apply to broadband access to the internet through telephone and cable providers’ communications networks.

General Matters

We require additional capital to respond to customer demand and to competition, and if we fail to raise the capital or fail to have continued access to the capital required to build out and operate our planned networks, we may experience a material adverse effect on our business.

We require additional capital to build out and operate wireless and wireline networks and for general working capital needs. Our aggregate capital expenditures for 2005 were $89 million. Of this amount, $56 million was associated with our wireless business of which approximately $15 million was for discretionary expansion projects for wireless network coverage expansion, expansion of our 3G 1xRTT capabilities and enhancements within the coverage area for improved in-building penetration. Capital expenditures related to our wireline business were approximately $25 million in 2005, of which approximately $5 million was for fiber network expansion and enhancements utilized by our RLEC and competitive wireline operations. The remaining $20 million was used to provide regular maintenance and support for our regulated RLEC operations and to support the increased minutes of usage, maintenance and growth we project for our competitive wireline voice and data offerings. In addition, the remaining approximately $8 million was invested to enhance and maintain our back office support systems to support the continued growth and introduction of new service offerings and applications across our wireless and wireline businesses. We expect our aggregate capital expenditures for 2006 to be approximately $87 million. Because of our intensely competitive market, we may be required, including under the terms of the Strategic Network Alliance, to expand the technical requirements of our wireless or wireline network or to build out additional areas within our territories that could result in increased capital expenditures. Any such unexpected capital expenditures may adversely affect our business, financial condition and operating results.

We are subject to numerous surcharges and fees from federal, state and local governments, and the applicability and amount of these fees is subject to great uncertainty.

Telecommunications providers pay a variety of surcharges and fees on their gross revenues from interstate and intrastate services. Interstate surcharges include federal Universal Service Fund fees and common carrier regulatory fees. In addition, state regulators and local governments impose surcharges, taxes and fees on our services and the applicability of these surcharges and fees to our services is uncertain in many cases and jurisdictions may argue as to whether we have correctly assessed and remitted those monies. The division of our services between interstate services and intrastate services is a matter of interpretation and may in the future be contested by the FCC or state authorities. In addition, periodic revisions by state and federal regulators may increase the surcharges and fees we currently pay. In 2004, the Virginia General Assembly passed legislation that required us to pay state sales taxes on purchases that were previously exempt from those taxes. As a result, we have added a surcharge to our customer bills to recover this increase in our taxes. It also is unknown if our tax burden will be similar to competitors using different technologies to provide similar services.

On March 7, 2006, the Virginia General Assembly passed legislation that significantly revises the taxation of communications services in Virginia. The Governor is expected to sign the legislation, which would take effect on January 1, 2007. The new law would apply a uniform, statewide, sales and use tax to retail communications and video services on a competitively neutral basis. The communications sales and use tax rate will be 5%. The sales and use tax will be remitted by communications providers to the Virginia Department of Taxation, which will administer the distribution of the Communications Sales and Use Tax Trust Fund. The redistribution of taxes and fees from the trust fund to the localities is intended to be revenue neutral and replaces franchise fees and utility taxes set by localities.

The Federal government and many states apply transaction-based taxes to sales of our products and services and to our purchases of telecommunications services from various carriers. It is possible that our transaction-based tax liabilities could change in the future. We may or may not be able to recover some or all of those taxes from our customers.

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We rely on a limited number of key suppliers and vendors for timely supply of equipment and services relating to our network infrastructure. If these suppliers or vendors experience problems or favor our competitors, we could fail to obtain sufficient quantities of the products and services we require to operate our businesses successfully.

We depend on a limited number of suppliers and vendors for equipment and services relating to our network infrastructure. If these suppliers experience interruptions or other problems delivering these network components on a timely basis, our subscriber growth and operating results could suffer significantly. Our initial choice of a network infrastructure supplier can, where proprietary technology of the supplier is an integral component of the network, cause us effectively to be locked into one or a few suppliers for key network components. As a result, we have become reliant upon a limited number of network equipment manufacturers, including Motorola Inc., Lucent Technologies, Inc. and Cisco Systems, Inc. If alternative suppliers and vendors become necessary, we may not be able to obtain satisfactory and timely replacement supplies on economically attractive terms, or at all.

A system failure could cause delays or interruptions of service, which could cause us to lose customers.

To be successful, we must provide our customers reliable network service. Some of the risks to our network and infrastructure include:

• physical damage to outside plant facilities;

• power surges or outages;

• software defects;

• human error;

• disruptions beyond our control, including disruptions caused by terrorist activities or severe weather; and

• failures in operational support systems.

Network disruptions may cause interruptions in service or reduced capacity for customers, either of which could cause us to lose customers and incur expenses.

We are dependent on third-party vendors for our information and billing systems. Any significant disruption in our relationship with these vendors could increase our cost and affect our operating efficiencies.

Sophisticated information and billing systems are vital to our ability to monitor and control costs, bill customers, process customer orders, provide customer service and achieve operating efficiencies. We currently rely on internal systems and third-party vendors to provide all of our information and processing systems. Some of our billing, customer service and management information systems have been developed by third parties and may not perform as anticipated. In addition, our plans for developing and implementing our information and billing systems rely to some extent on the delivery of products and services by third-party vendors. Our right to use these systems is dependent upon license agreements with third-party vendors. Some of these agreements are cancelable by the vendor, and the cancellation or nonrenewable nature of these agreements could impair our ability to process customer information and/or bill our customers. Since we rely on third-party vendors to provide some of these services, any switch in vendors could be costly and affect operating efficiencies.

If we lose our senior management, our business may be adversely affected.

The success of our business is largely dependent on our executive officers, as well as on our ability to attract and retain other highly qualified technical and management personnel. We believe that there is, and will continue to be, intense competition for qualified personnel in the telecommunications industry, and we cannot assure you that we will be able to attract and retain the personnel necessary for the development of our business. The loss of key personnel or the failure to attract additional personnel as required could have a material adverse effect on our business, financial condition and operating results.

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Unauthorized use of, or interference with, our network could disrupt service and increase our costs.

We may incur costs associated with the unauthorized use of our network including administrative and capital costs associated with detecting, monitoring and reducing the incidence of fraud. Fraudulent use of our network may impact interconnection costs, capacity costs, administrative costs, fraud prevention costs and payments to other carriers for fraudulent roaming.

Security breaches related to our physical facilities, computer networks, and informational databases may cause harm to our business and reputation and result in a loss of customers.

Our physical facilities and information systems may be vulnerable to physical break-ins, computer viruses, theft, attacks by hackers, or similar disruptive problems. If hackers gain improper access to our databases, they may be able to steal, publish, delete or modify confidential personal information concerning our subscribers. In addition, misuse of our customer information could result in more substantial harms perpetrated by third parties. This could damage our business and reputation, and result in a loss of customers.

There was no existing market for our common stock prior to our recent initial public offering, and we do not know if one will develop, which could depress our stock price. In addition, market and industry factors may cause fluctuations in our stock price.

There was no public market for our common stock prior to the recent initial public offering. We cannot predict the extent to which a trading market will develop or how liquid that market might become.

Factors may adversely affect the market price of our common stock, regardless of our actual operating performance. These factors that could cause fluctuations in our stock price may include, among other things:

• actual or anticipated variations in quarterly and annual operating results;

• changes in financial estimates by us or changes in financial estimates or recommendations by any securities analysts who might cover our stock;

• conditions or trends in our industry or regulatory changes

• conditions, trends or changes in the securities marketplace, including trading volumes;

• changes in the market valuations of other companies operating in our industry;

• technological innovations by us or our competitors;

• announcements by us or our competitors of significant acquisitions, strategic partnerships, significant contracts or divestitures;

• announcements of investigations, regulatory scrutiny of our operations or lawsuits filed against us;

• changes in general conditions in the United States and global economy, including those resulting from war, incidents of terrorism or responses to such events;

• loss of one or more significant customers, including Sprint Nextel;

• sales of large blocks of our common stock;

• changes in accounting principles;

• additions or departures of key personnel; and

• sales of our common stock, including sales of our common stock by our directors, executive officers or affiliates.

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The CVC Entities and the Quadrangle Entities continue to have significant influence over our business and could delay, deter or prevent a change of control, change in management or business combination that may be beneficial to our stockholders and as a result, may depress the market price of our stock.

As of March 21, 2006, the CVC Entities and the Quadrangle Entities beneficially owned 24,525,752 shares of our Class B common stock, or 58.6% of our outstanding common stock on an as-converted basis. In addition, six of the seven directors that serve on our board of directors are representatives or designees of CVC and Quadrangle. By virtue of such stock ownership and representation on the board of directors, the CVC Entities and the Quadrangle Entities continue to have a significant influence over day-to-day corporate and management policies and all matters submitted to our stockholders, including the election of the directors, and to exercise significant control over our business, policies and affairs. Such concentration of voting power could have the effect of delaying, deterring or preventing a change of control, change in management or business combination that might otherwise be beneficial to our stockholders and as a result, may depress the market price of our stock.

The interests of the CVC Entities and the Quadrangle Entities may not coincide with the interests of a holder of our common stock and because such entities continue to have significant influence over our business, they could cause us to enter into transactions or agreements adverse to the interests of our other stockholders.

The interests of the CVC Entities and the Quadrangle Entities may not always coincide with the interests of our other stockholders. Accordingly, because the CVC Entities and the Quadrangle Entities continue to have significant influence over our business, they could cause us to enter into transactions or agreements adverse to the interests of our other stockholders. On October 17, 2005, we paid approximately $125 million of the net proceeds from the Floating Rate Notes as a dividend to the holders of our Class L common stock, which consisted of the CVC Entities, the Quadrangle Entities and certain members of management. Moreover, subject to the availability of funds legally available therefore and declaration by our board of directors, we expect to pay a dividend of $30.0 million on our Class B common stock during the first six months of fiscal 2006. The holders of our Class B common stock consist of the CVC Entities, the Quadrangle Entities and certain members of management.

In addition, the CVC Entities and the Quadrangle Entities are in the business of making investments in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us. Each of the CVC Entities and the Quadrangle Entities may also pursue, for their own account, acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. Additionally, we have specifically renounced in our shareholders agreement any interest or expectancy that the CVC Entities and the Quadrangle Entities will offer to us any investment or business opportunity of which they are aware.

Our stock price may decline due to the large number of shares eligible for future sale.

Sales of substantial amounts of our common stock, or the possibility of such sales, may adversely affect the market price of our common stock. These sales may also make it more difficult for us to raise capital through the issuance of equity securities at a time and at a price we deem appropriate.

As of March 21, 2006, there were 15,375,000 shares of our common stock and 26,492,897 shares of our Class B common stock outstanding. All of the shares of our common stock sold in our initial public offering are freely transferable without restriction or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for any such shares which are held or which have been acquired by an “affiliate” of ours, as that term is defined in Rule 144 under the Securities Act, which shares are subject to the volume limitations and other restrictions of Rule 144. All of the shares of Class B common stock are “restricted securities” within the meaning of Rule 144. Of these restricted securities, none of the shares of Class B common stock are freely transferable under Rule 144(k) and the remainder are eligible for resale subject to the volume, manner of sale and other limitations of Rule 144, in each case immediately upon expiration of the 180-day lock-up period described below.

The CVC Entities, the Quadrangle Entities and certain members of our management have the right to require us to register their shares of our common stock, representing 26,492,897 shares of our common stock on an as-converted basis. Accordingly, the number of shares subject to registration rights is substantial and the sale of these shares may have a negative impact on the market price for our common stock.

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All shares of Class B common stock held by our current stockholders are subject to lock-up agreements and may not be sold to the public during the 180-day period following the date of completion of our initial public offering without the prior written consent of Lehman Brothers Inc. and Bear, Stearns & Co. Inc.

Provisions in our charter documents and the General Corporation Law of Delaware could discourage potential acquisition proposals, could delay, deter or prevent a change in control and could limit the price certain investors might be willing to pay for our common stock.

Certain provisions of the General Corporation Law of Delaware, the state in which we are organized, and our certificate of incorporation and by-laws may inhibit a change of control not approved by our board of directors or changes in the composition of our board of directors, which could result in the entrenchment of current management. These provisions include:

• advance notice requirements for stockholder proposals and director nominations;

• limitations on the ability of stockholders to amend, alter or repeal our by-laws;

• limitations on the removal of directors;

• the inability of the stockholders to act by written consent (subject to certain exceptions) if at any time the CVC Entities and the Quadrangle Entities and their permitted transferees no longer collectively beneficially own at least 50.1% of our capital stock entitled to vote generally in the election of directors; and

• the authority of the board of directors to issue, without stockholder approval, preferred stock with such terms as the board of directors may determine and additional shares of our common stock.

Requirements associated with being a public company require significant company resources and management attention.

Upon the completion of our initial public offering, we became subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the other rules and regulations of the Securities and Exchange Commission, or the SEC. We are also subject to various other regulatory requirements, including the Sarbanes-Oxley Act of 2002. In addition, we are subject to the rules of The Nasdaq National Market. Compliance with reporting and other requirements applicable to public companies create additional costs for us and require the time and attention of management. We currently expect to incur an estimated $1.8 million of incremental operating expenses in our first year of being a public company and an estimated $1.4 million per year thereafter. The incremental costs are estimates, and actual incremental expenses could be materially different from these estimates. We cannot predict or estimate the amount of the additional costs we may incur, the timing of such costs or the degree of impact that our management’s attention to these matters will have on our business.

We have availed ourselves of the “controlled company” exception under the rules of The Nasdaq National Market which eliminates the requirements that we have a majority of independent directors on our board of directors and that we have a compensation committee and a nominating and corporate governance committee composed entirely of independent directors. In addition, we have taken advantage of certain “grace periods” for newly public companies under certain of the new SEC and Nasdaq rules and regulations. These grace periods provide us a short period of time after we became a public company before we are required to be in full compliance with the SEC and Nasdaq rules and regulations. Our ability to satisfy these various requirements before the expiration of the applicable grace periods will depend largely on our ability to attract and retain qualified independent members of our board of directors, particularly to serve on our audit committee, which may be more difficult in light of these new rules and regulations. If we fail to satisfy the various requirements before the expiration of the applicable grace periods, our common stock may be delisted from Nasdaq, which would cause a decline in the trading price of our common stock and impair the ability of the holders of our common stock to sell and buy our common stock in a public market.

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In addition, our status as a public company could make it more difficult or more costly for us to obtain certain types of insurance, including directors’ and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

If we are not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 in a timely manner or with adequate compliance, we may be unable to provide the required financial information in a timely and reliable manner and may be subject to sanctions by regulatory authorities. The perception of these matters could cause our share price to fall.

Section 404 of the Sarbanes-Oxley Act requires that we evaluate and determine the effectiveness of our internal control over financial reporting as of December 31, 2007. If we or our independent registered public accounting firm determine that we have a material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. We will be evaluating our internal controls systems to allow management to report on, and our independent auditors to attest to, our internal controls. We are performing the system and process evaluation and testing (and any necessary remediation) required to comply with the management certification and auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. While we anticipate being able to fully implement the requirements relating to internal controls and all other aspects of Section 404 by the December 31, 2007 deadline, we cannot be certain as to the timing of completion of our evaluation, testing and remediation actions or the impact of the same on our operations. If we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, we might be subject to sanctions or investigation by regulatory authorities, such as the SEC or Nasdaq. Any such action could adversely affect our financial results or investors’ confidence in our company, and could cause our stock price to fall. In addition, the controls and procedures that we implement may not comply with all of the relevant rules and regulations of the SEC and Nasdaq. If we fail to develop and maintain effective controls and procedures, we may be unable to provide financial information in a timely and reliable manner. The perception of these matters could cause our share price to fall.

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties.

We are headquartered in Waynesboro, Virginia and own offices and facilities in a number of locations within our operating markets. We believe that our current facilities are adequate to meet our needs in our existing markets for the foreseeable future. The table below provides the location, description and approximate square footage of our material owned properties.

Location	Property Description	Approximate Square Footage
Harrisonburg, VA	CLEC POP	2,500
Waynesboro, VA	Retail Store	4,000
Richmond, VA	Wireless Switch Building	4,608
Norfolk, VA	Wireless Switch Building	4,970
Troutville, VA	Wireline Switch Building	8,400
Clifton Forge, VA	Wireline Switch Building	12,000
Covington, VA	Wireline Service Center	13,000
Waynesboro, VA	Wireless Switch Building	15,000
Clifton Forge, VA	Call Center Building (leased to third party)	15,620
Waynesboro, VA	Wireline Service Center	20,000
Daleville, VA	Regional Operations Center	21,000
Covington, VA	Wireline Switch Building	30,000
Waynesboro, VA	Corporate Headquarters	30,000
Waynesboro, VA	Wireline Switch Building	30,000

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Location	Property Description	Approximate Square Footage
Waynesboro, VA	Customer Care Building	31,000
Waynesboro, VA	Corporate Support Building	51,000
Daleville, VA	Wireline Service Center	9,400

We also lease the following material properties:

• Our Charleston, West Virginia regional operations center (wireless and wireline switching) under an Office Lease Agreement with Option to Purchase by and between Eagan Management Company and CFW Communications Company d/b/a NTELOS Inc., dated December 11, 1998; and

• Our Daleville, Virginia customer care facility under a Lease Agreement by and between The Layman Family LLC and R&B Communications, Inc., dated May 1, 2000, and First Amendment to Lease Agreement, dated May 30, 2003.

Item 3. Legal Proceedings.

We are involved in routine litigation in the ordinary course of our business. We do not believe that any pending or threatened litigation of which we are aware would have a material adverse effect on our financial condition or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock has been traded on The Nasdaq National Market under the symbol “NTLS” since February 9, 2006. Prior to that time, there was no established public trading market for our common stock.

Holders

There were approximately 1902 holders of record of our common stock and Class B common stock on March 21, 2006.

Dividends/Dividend Policy

We do not currently intend to pay any periodic cash dividends on our common stock, and instead intend to retain earnings, if any, for future operations and expansion and debt repayment. We are a holding company that does not operate any business of our own. As a result, we are dependent on cash dividends and distributions and other transfers from our subsidiaries to make dividend payments on our common stock. The amounts available to us to pay cash dividends are restricted by our subsidiaries’ debt agreements. Any decision to declare and pay dividends in the future will be made at the discretion of the board of directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our board of directors may deem relevant.

Consistent with the disclosure set forth in the prospectus related to our initial public offering, subject to the availability of funds legally available therefore and declaration by our board of directors, we could use cash on hand of $2.3 million at the parent company (NTELOS Holdings Corp.) on December 31, 2005, interest earned on the proceeds from the initial public offering, up to $12.5 million of the net proceeds from the initial public offering of our common stock and cash received in connection with future financing or refinancing to pay a dividend

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during the first six months of fiscal 2006 on our Class B common stock. Holders of our Class B common stock are entitled to payment of a $30 million distribution preference prior to payment of any dividends on our common stock. On December 31, 2005, there was an additional $25.9 million of cash on hand that was held by NTELOS Inc. and its subsidiaries that can not be used toward payment of the $30 million distribution preference pursuant to restrictions under the First Lien Credit Agreement until such time as the total debt outstanding to EBITDA, as defined in the credit agreement, is less than a ratio of 3.00:1.00.

On October 17, 2005, we used proceeds from the sale of our Floating Rate Notes to pay a dividend of approximately $125 million to the holders of our Class L common stock.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table sets forth information as of March 21, 2006, concerning the shares of our common stock which are authorized for issuance under our equity compensation plans.

Plan Category	Number of Securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)		(c)
Equity compensation plans approved by security holders
Equity Incentive Plan	419,753.27	$	3.87	2,048,356
Non-Employee Director Equity Plan	8,600.00	$	12.00	391,400
Employee Stock Purchase Plan	—		—	200,000
Equity compensation plans not approved by security holders	—		—	—
Total	428,353.27	$	4.03	2,639,756

Recent Sales of Unregistered Securities

The table set forth below lists the unregistered equity securities sold by us since our formation on January 14, 2005.

Individual or Group Name*	Type of Security	Date	Number of Shares	Consideration per Share
Named Executive Officers (including shares held in trust or by immediate family)
David R. Maccarelli	Class A Common Stock	5/02/05	96,806.00	$	1.00
Mary McDermott	Class A Common Stock	5/02/05	38,637.00	$	1.00
Michael B. Moneymaker	Class A Common Stock	5/02/05	103,888.00	$	1.00
James Quarforth	Class A Common Stock	5/02/05	270,423.00	$	1.00
Carl A. Rosberg	Class A Common Stock	5/02/05	118,056.00	$	1.00
Other management and employees, as a group (including shares held in trust or by immediate family)	Class A Common Stock	5/02/05	117,233.00	$	1.00
	Class A Common Stock	9/15/05	10,000.00	$	7.65
Named Executive Officers (including shares held in trust or by immediate family)
David R. Maccarelli	Class L Common Stock	5/02/05	22,760.00	$	11.00
Mary McDermott	Class L Common Stock	5/02/05	10,124.00	$	11.00
Michael B. Moneymaker	Class L Common Stock	5/02/05	24,425.00	$	11.00
James Quarforth	Class L Common Stock	5/02/05	63,579.00	$	11.00
Carl A. Rosberg	Class L Common Stock	5/02/05	27,756.00	$	11.00
Other management and employees, as a group (including shares held in trust or by immediate family)	Class L Common Stock	5/02/05	29,512.00	$	11.00

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Non-Officer Directors, as a group
Christopher D. Bloise	Class L Common Stock	4/27/05	**	1,295.94	$	11.00
Michael A. Delaney (a)	Class L Common Stock	4/27/05	**	10,367.52	$	11.00
Andrew S. Gesell	Class L Common Stock	4/27/05	**	1,943.91	$	11.00
Non-Officer Directors, as a group
Christopher D. Bloise	Class L Common Stock	5/02/05		3,048.58	$	11.00
Michael A. Delaney (a)	Class L Common Stock	5/02/05		24,388.68	$	11.00
Andrew S. Gesell	Class L Common Stock	5/02/05		4,572.88	$	11.00
CVC and Quadrangle Entities
Citigroup Venture Capital Equity Partners LP	Class L Common Stock	4/27/05	**	1,536,568.52	$	11.00
Citigroup Venture Capital Equity Partners LP	Class L Common Stock	5/02/05		3,765,952.67	$	11.00
CVC Executive Fund LP	Class L Common Stock	4/27/05	**	14,124.06	$	11.00
CVC Executive Fund LP	Class L Common Stock	5/02/05		34,567.77	$	11.00
CVC/SSB Employee Fund LP	Class L Common Stock	4/27/05	**	15,851.93	$	11.00
CVC/SSB Employee Fund LP	Class L Common Stock	5/02/05		38,796.62	$	11.00
Quadrangle Capital Partners-A LP	Class L Common Stock	4/27/05	**	432,194.51	$	11.00
Quadrangle Capital Partners-A LP	Class L Common Stock	5/02/05		1,052,954.89	$	11.00
Quadrangle Capital Partners LP	Class L Common Stock	4/27/05	**	1,128,145.15	$	11.00
Quadrangle Capital Partners LP	Class L Common Stock	5/02/05		2,766,587.41	$	11.00
Quadrangle Select Partners LP	Class L Common Stock	4/27/05	**	61,935.32	$	11.00
Quadrangle Select Partners LP	Class L Common Stock	5/02/05		150,875.89	$	11.00
Non-Director CVC Affiliates, as a group	Class L Common Stock	4/27/05	**	42,078.10	$	11.00
Non-Director CVC Affiliates, as a group	Class L Common Stock	5/02/05		99,135.99	$	11.00

* Certain of the individuals referenced above have disclaimed beneficial ownership of certain of these securities.

** Prior to April 27, 2005, NTELOS Holdings Corp. operated as a Delaware limited liability company. The investor’s original contribution date was February 24, 2005, and subsequently on April 27, 2005, pursuant to a plan of conversion was converted into the number of shares of Class L Common Stock of NTELOS Holdings Corp. set forth above, based on a conversion ratio of the contribution amount divided by $11.00.

^(a) Mr. Delaney resigned from the Board of Directors on February 8, 2006 and was replaced by Mr. Heneghan.

The sales of the above securities were exempt from the registration requirements of the Securities Act in reliance on Section 4(2) of the Securities Act, Regulation D or Rule 701 promulgated thereunder as transactions by an issuer not involving a public offering or transactions pursuant to compensatory benefit plans and contracts relating to compensation as provided under Rule 701.

Between our formation on January 14, 2005 and the closing of our initial public offering on February 13, 2006, we granted and issued options to purchase 148,300 shares of our Class A common stock with a weighted average price of $2.51 to a number of our employees and to our directors pursuant to the original NTELOS Holdings Corp. Equity Incentive Plan. In connection with the initial public offering, these options were converted into options to purchase 313,253.27 shares of our common stock with a weighted average exercise price of $1.18 per share. Since our initial public offering, we have granted and issued options to purchase 8,600 shares of our common stock with an exercise price of $12.00 per share to a new member of our board of directors pursuant to our Non-Employee Director Equity Plan and options to purchase 106,500 shares of our common stock with an exercise price of $11.80 per share to a number of our employees pursuant to our Amended and Restated Equity Incentive Plan. We believe that those options issued were exempt from the registration requirements of the Securities Act in reliance on Rule 701 promulgated thereunder as transactions pursuant to compensatory benefit plans and contracts relating to compensation as provided under Rule 701.

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On February 13, 2006, each share of Class L common stock was converted into approximately 2.19 shares of Class B common stock and each share of Class A common stock was converted into approximately 2.15 shares of Class B common stock.

Use of Proceeds From Registered Securities

We filed a registration statement on Form S-1 (File No. 333-128849) with respect to the offer and sale of 14,375,000 shares of our common stock, $0.01 par value and an additional 2,156,250 shares of our common stock to be sold solely to cover over-allotments, if any. The registration statement was declared effective by the SEC on February 8, 2006. All of the shares registered for sale were sold by the time the initial public offering terminated. On February 13, 2006, we sold 14,375,000 shares of common stock in our initial public offering. On March 15, 2006, we sold 1,000,000 shares of common stock pursuant to the exercise of the underwriters’ over-allotment option.

From February 8, 2006, the effective date of our registration statement, to March 15, 2006, the closing date of the sale of shares sold pursuant to the underwriters’ over-allotment option, we paid approximately $12.0 million in underwriting discounts and commissions to the underwriters and incurred an estimated $3.0 million in other offering expenses.

The managing underwriters of our offering were Lehman Brothers Inc. and Bear, Stearns & Co. Inc. After deducting the underwriting discounts and commissions and estimated offering expenses, we received net proceeds from the offering of approximately $169.5 million. None of the underwriting discounts and commissions or other offering expenses were direct or indirect payments to our directors, officers or their associates, to persons owning 10% or more of our common stock, to any affiliates of ours or to any other person or entity.

From February 13, 2006, in accordance with the disclosure set forth in the prospectus related to our initial public offering, we have used approximately $12.9 million of the net offering proceeds from our initial public offering to terminate our advisory agreements with the CVC Entities and the Quadrangle Entities. With the exception of such payments to the CVC Entities and the Quadrangle Entities, the use of the net offering proceeds did not constitute direct or indirect payments to our directors, officers or their associates, to persons owning 10% or more of our common stock, to any affiliates of ours or to any other person or entity.

We intend to use the remaining proceeds of the offering in accordance with the disclosure set forth in the prospectus related to our initial public offering. Pending the uses described therein, we have invested the remaining proceeds of the initial public offering in short-term, interest bearing, investment-grade securities.

Issuer Purchase of Equity Securities

None.

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Item 6. Selected Financial Data.

SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

	NTELOS INC.															NTELOS HOLDINGS CORP.
	PREDECESSOR COMPANY								PREDECESSOR REORGANIZED COMPANY
(in thousands)	Year Ended 12/31/2001			Year Ended 12/31/2002			1/1/2003 through 9/9/2003		9/10/2003 through 12/31/2003		Year Ended 12/31/2004		1/1/05 through 5/1/2005			1/14/2005 through 12/31/2005
Consolidated Statements of Operations Data:
Operating revenues:
Wireless communications	$	127,103		$	171,495		$	132,766	$	66,769	$	234,682	$	89,826		$	190,477
Wireline communications		87,931			98,220			71,103		32,434		105,251		35,508			73,444
Other communication services		9,968			9,151			3,920		962		1,769		343			569
		225,002			278,866			207,789		100,165		341,702		125,677			264,490
Operating expenses:
Cost of wireless sales (exclusive of items shown separately below)		47,808			48,868			31,836		15,113		47,802		18,703			38,582
Maintenance and support		62,508			64,408			42,056		18,784		62,929		21,084			45,452
Depreciation and amortization		82,281			82,924			51,224		18,860		65,175		23,799			59,103
Gain on sale of assets		(31,845	)		(8,472	)		—		—		—		(8,742	)		—
Asset impairment charge		—			402,880			545		—		—		—			—
Accretion of asset retirement obligation		—			—			437		225		680		252			489
Customer operations		75,596			82,146			58,041		30,233		82,812		29,270			63,330
Corporate operations		18,586			17,914			18,342		6,272		26,942		8,259			22,434
Capital and operational restructuring charges		—			4,285			2,427		—		798		15,403			183
		254,934			694,953			204,908		89,487		287,138		108,028			229,573
Operating income (loss)		(29,932	)		(416,087	)		2,881		10,678		54,564		17,649			34,917

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	NTELOS INC.																		NTELOS HOLDINGS CORP.
	PREDECESSOR COMPANY									PREDECESSOR REORGANIZED COMPANY
(in thousands)	Year Ended 12/31/2001			Year Ended 12/31/2002			1/1/2003 through 9/9/2003			9/10/2003 through 12/31/2003			Year Ended 12/31/2004			1/1/05 through 5/1/2005			1/14/2005 through 12/31/2005
Consolidated Statements of Operations Data, continued
Other income (expenses):
Equity loss from investee		(1,286	)		—			—			—			—			—			(1,213	)
Interest expense		(76,251	)		(78,351	)		(26,010	)		(6,427	)		(15,740	)		(10,839	)		(34,338	)
Gain(loss) on interstate swap agreement		—			—			—			—			—			(660	)		4,780
Other income (expenses)		5,679			(1,454	)		(436	)		768			374			270			1,595
Reorganization items, net		—			—			169,036			(145	)		81			—			—
		(71,858	)		(79,805	)		142,590			(5,804	)		(15,285	)		(11,229	)		(29,176	)
		(101,790	)		(495,892	)		145,471			4,874			39,279			6,420			5,741
Income tax expense (benefit)		(34,532	)		(6,464	)		706			258			1,001			8,150			4,591
		(67,258	)		(489,428	)		144,765			4,616			38,278			(1,730	)		1,150
Minority interests in (income) losses of subsidiaries		3,545			481			15			54			34			13			(52	)
Net income (loss) before cumulative effect of accounting change		(63,713	)		(488,947	)		144,780			4,670			38,312			(1,717	)		1,098
Cumulative effect of accounting change		—			—			(2,754	)		—			—			—			—
Net income (loss)		(63,713	)		(488,947	)		142,026			4,670			38,312			(1,717	)		1,098
Dividend requirements on predecessor preferred stock		(18,843	)		(20,417	)		(3,757	)		—			—			—			—
Reorganization items - predecessor preferred stock		—			—			286,772			—			—			—			—
Income (loss) applicable to common shares	$	(82,556	)	$	(509,364	)	$	425,041		$	4,670		$	38,312		$	(1,717	)	$	1,098

	NTELOS INC.									NTELOS HOLDINGS CORP.
	As of December 31, 2001		As of December 31, 2002			As of December 31, 2003		As of December 31, 2004		As of December 31, 2005
	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	$	7,293	$	12,216		$	48,722	$	34,187	$	28,134
Property and equipment, net		465,944		434,455			360,698		356,129		360,142
Total assets		1,196,886		729,521			650,223		620,457		895,843
Total debt		612,416		642,722			310,303		180,251		759,384
Redeemable convertible preferred stock		265,747		286,164			—		—		—
Total stockholders’ equity (deficit)		173,566		(342,677	)		205,547		318,181		1,098

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion of our financial condition in conjunction with our consolidated financial statements and the related notes included elsewhere in this report. This discussion contains forward looking statements that involve risks and uncertainties. For additional information regarding some of these risks and uncertainties that affect our business and the industry in which we operate, please see “Risk Factors” and “Forward-Looking Statements” elsewhere in this report.

Overview

We are a leading provider of wireless and wireline communications services to consumers and businesses in Virginia and West Virginia under the NTELOS brand name. Our wireless operations are composed of an NTELOS branded retail business and a wholesale business that we operate under an exclusive contract with Sprint Nextel. We believe our regional focus and contiguous service area provide us with a differentiated competitive position relative to our primary competitors, all of whom are national providers. Our wireless revenues have experienced a 21% compound annual growth rate from 2001 to 2005. Our wireless operating income has grown from a loss of approximately ($80.2) million in 2001 to approximately $32.3 million in 2005, an increase of $112.5 million. We hold digital PCS licenses to operate in 29 basic trading areas with a licensed population of approximately 8.7 million, and we have deployed a network using CDMA in 20 basic trading areas which currently covers a total population of approximately 5.1 million potential subscribers. As of December 31, 2005, our wireless retail business had approximately 336,000 NTELOS branded subscribers, representing a 6.7% penetration of our total covered population. In 2004 we entered into a seven-year exclusive network agreement to be a wholesale provider of network services for Sprint Spectrum, the wireless subsidiary of Sprint Nextel. Under the Strategic Network Alliance, we are the exclusive PCS network service provider through July 2011 to all Sprint Nextel wireless services offered to approximately 3 million people in our western Virginia and West Virginia service area, which we deliver over our CDMA 3G 1xRTT network utilizing our own spectrum. For the year ended December 31, 2005, we realized wholesale revenues of $62.7 million, primarily related to the Strategic Network Alliance, representing an increase of 22% over the same period in 2004 when we provided similar services under a predecessor agreement to one of Sprint Nextel’s affiliate partners.

Founded in 1897, our wireline business and its predecessor organizations have consistently outperformed the service benchmarks set by the Virginia State Corporation for telephone service. Our wireline incumbent local exchange carrier business is conducted through two subsidiaries that qualify as rural telephone companies, or RLECs, under the Telecommunications Act. These two RLECs provide wireline communications services to residential and business customers in the western Virginia communities of Waynesboro, Covington, Clifton Forge and portions of Botetourt and Augusta Counties. As of December 31, 2005, we operated 46,810 RLEC telephone access lines and 13,890 broadband access connections in our markets, and we had completed the investment required to offer DSL services in 90% of our RLEC service area. In 1998, we began to leverage our wireline network infrastructure to offer CLEC communication services in Virginia and West Virginia outside our RLEC coverage area, and as of December 31, 2005, we served customers with 44,948 CLEC access line connections. Our CLEC business markets and sells local, long distance, and high-speed data services almost exclusively to business customers, with residential service limited to bundled service offerings with DSL. We also own a 1,900-mile regional fiberoptic network which directly connects our networks with many of the largest markets in the mid-Atlantic region.

We were formed in January 2005 by the CVC Entities and the Quadrangle Entities for the purpose of acquiring NTELOS Inc. On January 18, 2005, we entered into a transaction agreement with NTELOS Inc. and certain of its shareholders to acquire NTELOS Inc. In accordance with this agreement, we acquired 24.9% of the NTELOS Inc. common stock and stock warrants on February 24, 2005. We completed our acquisition of all of NTELOS Inc.’s remaining common stock, warrants and vested options by means of a cash merger on May 2, 2005. In connection with our acquisition of NTELOS Inc. on May 2, 2005, we assumed approximately $625.7 million in debt including $624.0 million of the NTELOS Inc. senior secured credit facilities and $1.7 million of capital lease obligations. Following the merger transaction on May 2, 2005, NTELOS Inc. became our wholly-owned subsidiary. Accordingly, we began consolidating the results of NTELOS Inc. into our financial statements on this date. See

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Notes 1, 2 and 6 to our audited consolidated financial statements included herein for further discussion of the merger and recapitalization of NTELOS Inc. that occurred concurrent with the merger transaction.

For purposes of this discussion and to provide comparable period financial results and cash flows for the years ended December 31, 2004 and 2005, we have combined the results of NTELOS Inc. from January 1, 2005 to May 1, 2005 with our results from May 2, 2005 to December 31, 2005. We had no operating activities prior to our acquisition of NTELOS Inc.

Prior to filing for bankruptcy, competition in the wireless telecommunications sector resulted in a modification to NTELOS Inc.’s business forecast, including a general reduction in growth prospects. In addition, capital and lending prospects for telecommunications companies continued to deteriorate. Telecommunication asset value deterioration also exacerbated NTELOS Inc.’s ability to comply with certain covenants. At December 31, 2002, the carrying amount of NTELOS Inc.’s total outstanding debt was $642.7 million. At that time, NTELOS Inc. entered into an amendment and waiver with the lenders under its senior credit facility which restricted the amounts that it could borrow. As a result of the above factors, it was unable to reach an agreement with its debtholders on an out-of-court restructuring plan. Thereafter, on March 4, 2003, NTELOS Inc. and certain of its subsidiaries, filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia. As part of its reorganization, $357.2 million (face amount of $375.0 million) of NTELOS Inc.’s debt was converted to equity. NTELOS Inc. emerged from the Bankruptcy Court proceedings pursuant to the terms of the plan of reorganization on September 9, 2003.

Since 2003, our results of operations have substantially improved. Our wireless operating income has grown from a loss of approximately $(14.8) million in 2003 to approximately $32.3 million in 2005, an increase of $47.1 million and has grown $11.6 million, or approximately 56%, from 2004 to 2005. To facilitate comparisons with full year 2004 operating results, we have presented the results of NTELOS Inc. operations for 2003 for the predecessor and predecessor reorganized company on a combined basis representing results for the twelve months ended December 31, 2003. We believe this comparison provides the most practical way to comment on the results of operations.

Effects of Being a Public Company

We recently completed our initial public offering of 15,375,000 shares of our common stock. Upon completion of the initial public offering, we became subject to the periodic reporting requirements of the Exchange Act and the other rules and regulations of the SEC. We also are subject to various other regulatory requirements, including the Sarbanes-Oxley Act of 2002. In addition, we are subject to the rules of The Nasdaq National Market.

We are working with our independent legal, accounting and financial advisors to identify those areas in which changes should be made to our financial and management control systems to manage our growth and our obligations as a public company. These areas include corporate governance, corporate control, internal audit, disclosure controls and procedures and financial reporting and accounting systems. We have made, and will continue to make, changes in these and other areas, including our internal control over financial reporting.

In addition, compliance with reporting and other requirements applicable to public companies creates additional costs for us and will require the time and attention of management. We currently expect to incur an estimated $1.8 million of incremental operating expenses in our first year of being a public company and an estimated $1.4 million per year thereafter. The incremental costs are estimates, and actual incremental expenses could be materially different from these estimates. We cannot predict or estimate the amount of the additional costs we may incur, the timing of such costs or the degree of impact that our management’s attention to these matters will have on our business.

Section 404 of the Sarbanes-Oxley Act requires that we evaluate and determine the effectiveness of our internal control over financial reporting as of December 31, 2007. If we or our independent registered public accounting firm determine that we have weaknesses in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. We are currently evaluating our internal controls systems to allow management to report on, and our independent registered public accounting firm to attest to, our internal controls. We will be performing the system and process evaluation and testing (and any necessary remediation) required to comply with the management certification and auditor

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attestation requirements of Section 404 of the Sarbanes-Oxley Act. While we anticipate being able to fully implement the requirements relating to internal controls and all other aspects of Section 404 by the December 31, 2007 deadline, we cannot be certain as to the timing of completion of our evaluation, testing and remediation actions or the impact of the same on our operations.

Other Overview Discussion

Operating Revenues

Our revenues are generated from the following categories:

• wireless PCS, consisting of retail revenues from PostPay and PrePay voice services, data services, equipment revenues and other feature services; and wholesale revenues from the Strategic Network Alliance and roaming from other carriers;

• wireline communications, including RLEC service revenues, CLEC service revenues, internet, fiber optic network usage (or carriers’ carrier services), and long distance revenues; and

• other communications services revenues, including revenues from paging, our sale and lease of communications equipment and revenue from leasing excess building space.

Operating Expenses

Our operating expenses are generally incurred from the following categories:

• cost of wireless sales, exclusive of other operating expenses shown separately, including digital PCS handset equipment costs which, in keeping with industry practice, we sell to our customers at a price below our cost, and usage-based access charges, including long distance, roaming charges, and other direct costs incurred in accessing other telecommunications providers networks in order to provide wireless services to our end-use customers;

• maintenance and support expenses, including costs related to specific property, plant and equipment, as well as indirect costs such as engineering and general administration of property, plant and equipment; leased facility expenses for connection to other carriers, cell sites and switch locations;

• depreciation and amortization, including depreciable long lived property, plant and equipment and amortization of intangible assets where applicable;

• accretion of asset retirement obligation, or ARO;

• customer operations expenses, including marketing, product management, product advertising, selling, billing, customer care, and bad debt expenses;

• corporate operations expenses, including taxes other than income, executive, accounting, legal, purchasing, information technology, human resources and other general and administrative expenses, including non-cash compensation expense recognized in connection with the increase in fair value over the issuance price of the Class A common stock acquired by certain of our employees on or after the May 2, 2005 acquisition of NTELOS Inc.; and

• capital restructuring charges associated with our acquisition of NTELOS Inc.

Other Income (Expenses)

Our other income (expenses) are generated (incurred) from interest expense, including changes in fair value of our interest rate swap instrument, our equity share of the loss of NTELOS Inc. from our 24.9% investment in NTELOS Inc. for the period February 24, 2005 through May 1, 2005, reorganization items associated with our prior bankruptcy filing, and other income (expenses).

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Income Taxes

Our income tax liability or benefit and effective tax rate increases or decreases based upon changes in a number of factors, including our pre-tax income or loss, net operating losses and related carryforwards, valuation allowances, alternative minimum tax credit carryforwards, state minimum tax assessments, gain or loss on the sale of assets and investments, write-down of assets and investments, non-deductible amortization and other tax deductible amounts.

Minority Interests in Losses (Earnings) of Subsidiaries

Our minority interest relates to an RLEC segment investment in a partnership that owns certain signaling equipment and provides service to a number of small RLECs. We have a 97% majority interest in the Virginia PCS Alliance L.C., or the VA Alliance, that provides PCS services to a 1.8 million populated area in central and western Virginia. The VA Alliance has incurred significant operating losses since it initiated PCS services in 1997. We have recognized a minority interest credit adjustment only to the extent of capital contributions from the 3% minority owners. No such contributions were made during the years ended December 31, 2005 and 2004. Amounts related to the RLEC segment minority interest were not material for all periods presented.

Results of Operations

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

OVERVIEW

Operating revenues increased $48.5 million, or 14%, from $341.7 million for the year ended December 31, 2004, to $390.2 million for the year ended December 31, 2005. Operating income decreased $2.0 million, or 4% from $54.6 million for 2004 to $52.6 million for 2005.

As a result of a 11% growth in subscribers, a 9% increase in average revenue per handset/unit or “ARPU” and a 22% increase in wholesale revenue, primarily under our Strategic Network Alliance, our gross wireless operating revenues increased $45.6 million, or 19%, for 2005 as compared to 2004. Total wireless operating expenses before depreciation and amortization, accretion of asset retirement obligations, gain on sale of assets and capital restructuring charges over these periods grew $21.8 million, or 13%, driven by a $9.5 million increase, or 20%, in cost of sales due to a 19% increase in gross subscriber additions and the continued implementation of data products in 2005. Excluding cost of sales, the remaining increase of $12.3 million was primarily due to the $8.9 million increase in customer operations expenses primarily from increases in retention costs of the larger subscriber base and costs associated with the increase in subscribers and the $3.7 million increase in maintenance and support expenses primarily from additional network expenses related to the increase in cell sites and maintenance contracts on equipment.

Wireline communications services realized revenue improvement of $3.7 million, or 4%, in 2005 as compared to 2004. Wireline operating expenses before depreciation and amortization, accretion of asset retirement obligations, gain on sale of assets and capital restructuring charges increased $0.7 million, or 2%, in 2005 as compared to 2004. This is a composite of a $1.9 million decrease in our RLEC expenses offset by an increase of $2.6 million in competitive wireline expenses. RLEC customers decreased by 3% as of December 31, 2005 compared to December 31, 2004. Our CLEC and Broadband customers increased by 7% and 23%, respectively, as of December 31, 2005 compared to December 31, 2004, and our dial-up internet customers declined by 19% as of the year ended 2005 compared to 2004.

Other communications services revenue declined $0.9 million, from $1.8 million for 2004 to $0.9 million 2005 due to the exit from our wireless cable business in the first quarter of 2004 and reduced equipment sales in communications services and decline in the paging business.

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OPERATING REVENUES

	Year Ended December 31,				$ Variance			% Variance
Operating Revenues	2005		2004
	(dollars in thousands)
Wireless PCS	$	280,303	$	234,682	$	45,621		19	%
Wireline
RLEC		56,987		56,279		708		1	%
Competitive wireline		51,965		48,972		2,993		6	%
Total wireline		108,952		105,251		3,701		4	%
Other		912		1,769		(857	)	(48	)%
Total	$	390,167	$	341,702	$	48,465		14	%

The table below provides a reconciliation of subscriber revenues used to calculate ARPU to wireless communications revenue shown in our consolidated statements of operations.

	Year Ended December 31,
Wireless KPI Reconciliations	2005			2004
	(In thousands except for subscribers and ARPU)
Average Revenue per Handset/Unit (ARPU)1
Wireless communications revenue	$	280,303		$	234,682
Less: Equipment revenue from sales to new customers		(11,997	)		(10,195	)
Less: Equipment revenue from sales to existing customers		(4,135	)		(2,146	)
Less: Wholesale revenue		(62,651	)		(51,580	)
Plus (Less): Other revenues, eliminations and adjustments		1,192			(821	)
Wireless gross subscriber revenue	$	202,712		$	169,940
Average subscribers		321,719			293,219
Total ARPU	$	52.51		$	48.30

¹ Average monthly revenues per handset/unit in service, or ARPU, is an industry metric that measures service revenues per period divided by the weighted average number of handsets in service during that period. ARPU as defined may not be similar to ARPU measures of other companies, is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in the Company’s statement of operations. The Company closely monitors the effects of new rate plans and service offerings on ARPU in order to determine their effectiveness. ARPU provides management useful information concerning the appeal of NTELOS rate plans and service offerings and the Company’s performance in attracting and retaining high value customers.

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WIRELESS COMMUNICATIONS REVENUES—Wireless communications revenues increased $45.6 million, or 19%, primarily due to an increase in our NTELOS branded net subscriber revenue of $30.9 million, or 18%, an $11.2 million, or 22%, increase in wholesale and roaming revenues, and a $3.8 million increase in equipment sales revenues. Subscriber revenues reflected subscriber growth of 11%, or 34,100 subscribers, from 302,200 subscribers at December 31, 2004 to 336,300 subscribers at December 30, 2005 and an increase in ARPU of 9% from $48.30 for 2004 to $52.51 for 2005. The increase in ARPU was driven in part by increased data and other service revenue per subscriber. Gross subscriber additions were 19% greater in 2005, at 158,700, compared to 133,400 for 2004, contributing to the growth in both subscriber and equipment sales revenues. PostPay subscriber churn remained stable over the comparative periods at 2.3%. Reductions in total subscriber churn contributed to the net subscriber growth as total churn declined from 3.3% to 3.2% for 2004 and 2005, respectively. Growth in wholesale revenues was driven by increased voice and data usage under the Strategic Network Alliance as these revenues grew 21% from $50.8 million in 2004 to $61.7 million in 2005. Our wholesale revenues are derived primarily from the voice and data usage by Sprint Nextel customers who live in the Strategic Network Alliance service area, our Home wholesale subscribers, and those customers of Sprint Nextel, and affiliates of Sprint Nextel such as Virgin Mobile and Qwest, who use our voice and data services while traveling through the Strategic Network Alliance service area.

Our wireless wholesale business began in 1999 when we signed a ten-year agreement with Horizon PCS to carry Horizon PCS’s traffic in our territories in western Virginia and West Virginia. On August 15, 2003, Horizon PCS filed for Chapter 11 bankruptcy protection. On June 15, 2004, Sprint purchased from Horizon PCS the 97,000 PCS subscribers in the markets covered by our wholesale network service agreement. We refer to these subscribers together with new subscribers acquired by Sprint Nextel in the Strategic Network Alliance coverage area as Home wholesale subscribers. NTELOS Inc. and Sprint Nextel executed a new seven-year exclusive wholesale agreement, concurrent with this transaction which we refer to herein as the Strategic Network Alliance. While management believes the merger of Sprint and Nextel will likely have a positive impact for our wholesale business, the level of future wholesale revenue to be generated under this agreement is uncertain. Further, it is possible that there will be additional consolidation among the Sprint Nextel network affiliates and the potential impact of any such future consolidation is unknown. See “Risk Factors.”

WIRELINE COMMUNICATIONS REVENUES—Wireline communications revenues increased $3.7 million, or 4%, from $105.3 million for the twelve months ended December 31, 2004 to $109.0 million for the twelve months ended December 31, 2005.

• RLEC Revenues. RLEC revenues, which include local service, access and toll service, directory advertising and calling feature revenues from our RLEC customers increased $0.7 million, or 1%, from $56.3 million for the twelve months ended December 31, 2004, to $57.0 million for the twelve months ended December 31, 2005. Access lines decreased 3% over the respective periods, with lines totaling 48,300 at December 31, 2004 and 46,800 at December 31, 2005. These line losses are reflective of reduction in Centrex lines, wireless substitution, loss of second lines and the closings of small local dial-up ISPs who were our customers. These losses, to date, do not reflect the introduction of competitive voice service offerings, such as from cable companies or CLECs, in our markets. Should this type of competition be introduced in the future, our RLEC line loss may increase and related revenues may be adversely impacted. Somewhat offsetting revenue losses related to access line loss was a $2.0 million, or 6% improvement in access revenues, driven by increases in carrier access minutes from the twelve months ended December 31, 2004 to the twelve months ended December 31, 2005, due primarily to the growth in long distance usage from wireless end users partially offset by a bi-annual reduction in rates charged for tandem switching that went into effect on July 1, 2005. Despite this rate reduction, access

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revenues grew in the second half of 2005 to $18.7 million as compared to $18.1 million in the first six months of 2005.

• Competitive Wireline Revenues. Competitive wireline total operating revenues, including revenues from CLEC, network and internet operations increased $3.0 million, or 6%, from $49.0 million for the twelve months ended December 31, 2004, to $52.0 million for the twelve months ended December 31, 2005. Revenue from transport and private line/special access services in the CLEC/Network increased by $2.1 million, or 17%, over the comparative periods. Revenues from CLEC local access increased by $0.2 million or 2%, consistent with local access line growth, which excludes primary rate interface lines, from approximately 28,500 lines at December 31, 2004 to 29,400 lines at December 31, 2005. Losses of dial-up subscribers continued with 7,600 fewer customers at December 31, 2005, than at December 31 2004, a loss of 19%. Dial-up revenues reflected this loss and previous price reductions for this product with a $2.5 million or 27% loss from the twelve months ended December 31, 2004 to the twelve months ended December 31, 2005. Customer increases for broadband products, including DSL, dedicated internet and wireless broadband, totaled 30% and broadband revenues increased from $7.2 million for the twelve months ended December 31, 2004 to $8.4 million for the twelve months ended December 31, 2005. The market for DSL and other broadband internet products in our regions is significantly smaller than that of the dial-up product and thus increases in revenues on these products has trailed that of the decline in dial-up revenues. Revenues from integrated access new product offerings for 2005 were $0.5 million for the twelve months ended December 31, 2005. Long distance customers grew 24% over the comparable periods, from 32,500 at December 31, 2004 to 40,300 at December 31, 2005. Long distance revenues grew 14%, less than the customer growth percentage due to bundled pricing, from $3.4 million for the twelve months ended December 31, 2004 to $3.8 million for the twelve months ended December 31, 2005.

OTHER COMMUNICATIONS SERVICES REVENUES—Other communications services revenue declined $0.9 million, from $1.8 million in 2004 to $0.9 million in 2005, due to the exit from our wireless cable business in the first quarter of 2004 and reduced equipment sales in communication services and continued decline in our paging business.

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OPERATING EXPENSES

The following table identifies our operating expenses on a business segment basis, consistent with the table presenting operating revenues above:

Operating Expenses	Year Ended December 31,					$ Variance			% Variance
	2005			2004
	(dollars in thousands)
Wireless PCS	$	190,595		$	168,798	$	21,797		13	%
Wireline
RLEC		14,148			16,030		(1,882	)	(12	)%
Competitive wireline		33,001			30,420		2,581		8	%
Total wireline		47,149			46,450		699		2	%
Other		5,640			5,237		403		8	%
Operating expenses, before depreciation and amortization, accretion of asset retirement obligation, gain on sale of assets, capital restructuring charges and non-cash compensation		243,384			220,485		22,899		10	%
Non-cash compensation		3,730			—		3,730		N/M
Depreciation and amortization		82,902			65,175		17,727		27	%
Accretion of asset retirement obligations		741			680		61		9	%
Gain on sale of assets		(8,742	)		—		(8,742	)	(100	)%
Capital restructuring charges		15,586			798		14,788		N/M
Total operating expenses	$	337,601		$	287,138	$	50,463		18	%

The following describes our operating expenses on an aggregate basis and on a basis consistent with our financial statement presentation.

TOTAL OPERATING EXPENSES—As noted above, total operating expenses increased $50.5 million, or 18% from 2004 to 2005. Operating expenses before depreciation and amortization, accretion of asset retirement obligations, gain on sale of assets, capital restructuring charges and non-cash compensation charges increased $22.9 million, or 10%, from 2004 to 2005. Wireless operating expenses, before depreciation and amortization, accretion of asset retirement obligations, gain on sale of assets, capital restructuring charges and non-cash compensation charges increased $21.8 million, or 13% over the respective periods due to direct costs associated with a higher subscriber base and a 19% increase in customer gross additions for 2005 compared to 2004. Wireline operating expenses, before depreciation and amortization, accretion of asset retirement obligations, gain on sale of assets, capital restructuring charges and non-cash compensation charges increased $0.7 million, or 2% in 2005 as compared to 2004. RLEC operating expenses decreased $1.9 million due primarily to a decrease in bad debt expenses and reductions in compensation expenses related to efficiency-driven headcount reductions. Competitive wireline operating expenses increased $2.6 million due to the increased customer and revenue base, primarily related to increases in unbundled network element expenses and other network transport expenses and increases in primarily systems related back-office support expenses. Operating expenses, before depreciation and amortization, accretion

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of asset retirement obligations, gain on sale of assets, capital restructuring charges, and non-cash compensation charges from the other communication service businesses increased $0.4 million, or 8% from 2004 to 2005.

COST OF WIRELESS SALES—Cost of wireless sales increased $9.5 million, or 20%, from $47.8 million in 2004 to $57.3 million in 2005. Equipment cost of sales, or COS, increased $4.2 million, or 19%, primarily due to the year over year increase in the number of gross customer additions. Cell site access, toll and other wireless COS increased $5.3 million, or 20%, over the comparative periods related to the increased subscriber base and the continued increase in the percentage of the subscribers in larger minute plans resulting in higher average minutes per subscriber, both of which drive higher usage based network expenses captured in cost of wireless sales.

MAINTENANCE AND SUPPORT EXPENSES—Maintenance and support expenses increased $3.6 million, or 6%, from $62.9 million to $66.5 million for 2004 and 2005, respectively. The primary driver of this expense increase is related to non-usage based transport and access expense which increased due to the wireless PCS backhaul to support customer growth and minute growth, wireline CLEC customer growth and CLEC access line charge increases. Cell site costs also increased for wireless reflecting the larger subscriber base and the addition of 60 cell sites placed in service during 2005. Further cell site additions are expected in 2006 which will further increase this cost. These increases are partially offset by reductions in access expenses associated with dial-up internet related to the 19% decrease in the number of customers taking this service.

DEPRECIATION AND AMORTIZATION EXPENSES—Depreciation and amortization expenses increased $17.7 million, or 27%, from $65.2 million for 2004 to $82.9 million for 2005. As of the May 2, 2005 merger date, the Company revalued its long-lived assets. As a result, depreciable fixed assets were written down $12.2 million but other amortizable intangibles increased $54.5 million. The increase in other intangibles resulted in a monthly increase in amortization expense of approximately $0.8 million ($9.4 million annually) for the periods after May 1, 2005 as compared to amortization of other intangibles for the period ended May 1, 2005 and before. For 2005, we purchased approximately $89 million of depreciable property, plant and equipment driving significant year over year increased depreciation.

GAIN ON SALE OF ASSETS—We recorded gains on sale of assets totaling $8.7 million in 2005. This consisted primarily of the February 2005 sale of certain inactive PCS licenses covering populations in Pennsylvania resulting in a gain of approximately $5.2 million, and the sale of the MMDS spectrum licenses, spectrum leases and wireless cable equipment in the Richmond, Virginia market, resulting in a gain of approximately $3.5 million in April 2005. See Note 8 to NTELOS Inc.’s audited consolidated financial statements included herein.

ACCRETION OF ASSET RETIREMENT OBLIGATIONS—Accretion of asset retirement obligations increased $61,000 in 2005 over 2004, from $680,000 in 2004 to $741,000 in 2005. This charge is recorded in order to accrete the estimated asset retirement obligation over the life of the related asset up to its future expected settlement cost.

CUSTOMER OPERATIONS EXPENSES—Customer operations expenses increased $9.8 million, or 12%, from $82.8 million in 2004 to $92.6 million in 2005. This increase is related to the direct costs associated with the 11% increase in wireless PCS subscribers, the rapid growth in popularity of higher feature-rich handsets and the increased customer retention costs, all of which increased a combined $7.2 million, or 34%.

CORPORATE OPERATIONS EXPENSES—Corporate operations expenses increased $3.8 million, or 14%, from $26.9 million in 2004 to $30.7 million in 2005. Corporate operations expenses in 2005 included $1.3 million in advisory fees which commenced May 2, 2005 and $3.0 million of the total $3.7 million charge related to non-cash compensation charge were classified as corporate operations expenses. The remaining $0.7 million of non-cash compensation charges were split between customer operations and maintenance and support as indicated on the face of the statement of operations. The non-cash compensation charges relate to the accounting for the increase in the intrinsic value of Class A common stock and options as further discussed in Note 4 of the footnotes to the NTELOS Holding Company consolidated financial statements included herein. Additionally, we experienced increased expenses with respect to USF related regulatory fees, pension expenses due to a .5% decrease in the discount rate assumption effective May 2, 2005, and increases in compensation expenses. The aforementioned increases in 2005 expenses were partially offset by a $1.9 million operating tax accrual relating to certain unbilled locality taxes and $0.6 million of legal and professional fees related to the Horizon PCS settlement and our Sprint wholesale agreement recorded in 2004 and which were not recurring in 2005.

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CAPITAL RESTRUCTURING CHARGES—Capital restructuring charges of $15.6 million were recorded in 2005 for legal, financial and consulting costs, accelerated payment of certain retirement obligations, and retention related costs, all of which are directly attributable to the refinancing merger transactions. On January 18, 2005, NTELOS Inc. and certain of its shareholders entered into an agreement pursuant to which NTELOS Inc. would be recapitalized and sold to us. We were formed in contemplation of this transaction. On February 24, 2005, NTELOS Inc. borrowed $625 million from the new $660 million senior secured credit facilities and used these proceeds to refinance substantially all of its existing indebtedness and repurchase, pursuant to a tender offer for $440 million or approximately 75% of its existing common stock, warrants and options. On May 2, 2005, we acquired all of NTELOS Inc.’s remaining common shares, warrants and options by means of a merger. The recapitalization and sale is described in Note 2 of the footnotes to the NTELOS Holdings Corp. financial statements included herein.

OTHER INCOME (EXPENSES)

Interest expense on debt instruments for the comparative nine month periods increased $29.4 million, or 187%, from $15.7 million to $45.2 million. The increase was due to the signing of our new $660 million senior secured credit facilities on February 24, 2005 and the issuance on October 17, 2005 of $135 million of floating rate senior notes (“notes”). The proceeds of the $660 million senior secured credit facilities were used to repay the outstanding balance of the existing $325 million senior credit facility and other senior secured debt obligations (See Note 2 to NTELOS Inc.’s audited consolidated financial statements included herein). Including the interest exchanged in the interest rate swap agreement, interest expense relating to our new $625 million facility was $38.3 million in 2005. Interest expense relating to the retired $325 million senior credit facility in 2005 was $1.5 million compared to $7.6 million in 2004. Interest on the $135 million notes was $4.1 million in 2005. Other interest in 2004 related primarily to the $75 million of convertible senior notes which were converted to common stock on September 30, 2004. In 2005, the remaining $1.3 million of interest expense relates to amortization of debt issuance costs and interest on capital lease obligations.

Gain (loss) on interest rate swap instruments changed $4.6 million, from a loss of ($0.5) million in 2004 to a gain of $4.1 million in 2005. Concurrent with the inception of the new $625 million NTELOS Inc. senior secured credit facilities we entered into an interest rate swap agreement with a notional amount of $312.5 million. This interest rate swap agreement was not designated as an interest rate hedge instrument for accounting purposes and therefore the changes in the market value of the swap agreement were recorded as a charge or credit to gain (loss) on interest rate swap instruments. In 2004, we had a swap agreement with a notional amount of $162.5 million related to the $325 million senior credit facility. This agreement was also not designated as an interest rate hedge instrument for accounting purposes. Therefore, payments were split between associated swap agreement obligation and interest expense based on the projected future payment stream with a majority being recorded as a reduction of the liability. Changes between the fair value and carrying value of the previous swap obligation were also included as adjustments to gain (loss) on interest rate swap instruments.

Other income, which primarily relates to interest income from cash and cash equivalents, increased $1.5 million, from $0.4 million in 2004 to $1.9 million in 2005.

INCOME TAXES

Income tax expense was approximately $4.6 million in the period May 2, 2005 through December 31, 2005. This represents an effective tax rate of approximately 80.7%. The effective tax rate results primarily from recognition of non-deductible equity losses in NTELOS Inc. prior to consolidation, non-deductible equity compensation associated with our Class A common stock, and state minimum taxes. All of the company’s deferred tax assets that existed as of the merger date were fully reserved. Accordingly, the benefit of the utilization of these pre-merger deferred tax assets is recognized as a reduction to goodwill instead of the income tax provision. Approximately $4.0 million of pre-merger deferred tax asset utilization reduced goodwill during the reporting period.

During 2004, NTELOS Inc. recognized income tax expense of $1.0 million. This was related to state minimum taxes.

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We had approximately $232.9 million of available net operating losses at December 31, 2005, all of which will be subject to an annual utilization limit of $1.6 million. NTELOS Inc. generated approximately $84.9 million of net operating losses after it’s emergence from bankruptcy and prior to our May 2, 2005 merger. Annual utilization of these losses will be increased during the first five years following the merger for realized built-in gains estimated at $22.4 million each year. Due to the limited carry forward life of net operating losses and the amount of the annual utilization limitation, it is unlikely that we will be able to realize in excess of $43 million of the approximately $153.2 million of NTELOS Inc.’s net operating losses existing prior to their emergence from bankruptcy. See Note 12 to our December 31, 2005 audited consolidated financial statements.

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

OVERVIEW

As discussed below, pursuant to NTELOS Inc.’s reorganization on September 9, 2003, NTELOS Inc. issued new common stock of the Reorganized NTELOS Inc. and cancelled all previously outstanding securities. NTELOS Inc.’s former senior noteholders owned approximately 94% of the new common stock on September 9, 2003. The remaining stock was issued to former subordinated noteholders and purchasers of NTELOS Inc.’s new convertible notes in settlement of other claims and equity interests, as provided in the joint plan of reorganization.

On March 4, 2003, NTELOS Inc. and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code, in the United States Bankruptcy Court for the Eastern District of Virginia, which we refer to as the Bankruptcy Court. NTELOS Inc. emerged from the Bankruptcy Court protection pursuant to the terms of the plan of reorganization on September 9, 2003.

As discussed in Note 4 to NTELOS Inc.’s Audited Consolidated Financial Statements, NTELOS Inc. implemented the fresh start provisions, or fresh start, of the American Institute of Certified Public Accountants Statement of Position 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy Code, as of September 9, 2003. We refer to this as fresh start accounting. Pursuant to the Plan of Reorganization, NTELOS Inc. recognized income and credits from reorganization items relating to the cancellation of its senior notes, subordinated notes, preferred stock, and the reduction in and timing of amounts payable to certain unsecured creditors, net of the concurrent issuance of related new common stock and new common stock warrants. In addition, under fresh start accounting, NTELOS Inc. recognized adjustments for cancellation of its old common stock and old common stock warrants and elimination of its accumulated deficit and accumulated other comprehensive loss as of September 9, 2003. These adjustments, as well as the adjustments made to record NTELOS Inc.’s assets and liabilities at fair value reflect the application of fresh start accounting made to the reorganized NTELOS Inc. as of September 9, 2003.

As a consequence of the implementation of fresh start reporting on September 9, 2003 (See Note 2 to our audited consolidated financial statements), the financial information presented in the consolidated statements of operations, shareholders’ equity (deficit) and cash flows for the period beginning on September 10, 2003 and ending on December 31, 2003 is generally not comparable to the financial information presented for the prior periods. The presentation of financial information of the predecessor represents NTELOS Inc.’s financial statements for the specified periods prior to and concluding with NTELOS Inc.’s adoption of fresh start accounting. The presentation of financial information of the predecessor reorganized NTELOS Inc. represents NTELOS Inc.’s financial information for the specified period following NTELOS Inc.’s adoption of fresh start reporting.

In order to create meaningful year over year comparisons, the year ended December 31, 2003 represents the combination of the predecessor NTELOS Inc. (representing results from January 1, 2003 through September 9, 2003) and the predecessor reorganized company (representing results from September 10, 2003 through December 31, 2003).

Operating revenues increased $33.7 million, or 11%, from $308.0 million in 2003 to $341.7 million in 2004. Operating income improved by $41.0 million, from $13.6 million in 2003 to $54.6 million in 2004. Capital restructuring charges of $0.8 million and $2.4 million were recorded in 2004 and 2003, respectively. The significant increase in operating income is due primarily to the $35.1 million improvement in wireless revenue and a 2%

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reduction in total operating expenses largely related to a $4.9 million decrease in depreciation and amortization expense, reflecting the revaluation of NTELOS Inc.’s assets and the related reduction in the fixed asset carrying value of $57.8 million in connection with fresh start accounting in 2003. Income applicable to common shares for 2004 was $38.3 million as compared to $429.7 million in 2003. The 2003 income applicable to common shares included $455.7 million in reorganization items, net gain pursuant to NTELOS Inc.’s plan of reorganization and the related application of fresh start accounting. Additionally, interest expense and dividend requirements on predecessor NTELOS Inc. preferred stock decreased $16.7 million and $3.8 million, respectively, also related to the Plan of Reorganization, application of fresh start accounting and the significantly lower level of debt carried by the predecessor reorganized NTELOS Inc.

OPERATING REVENUES

Operating Revenues	Twelve Months Ended December 31,				$ Variance			% Variance
	2004		2003
	(dollars in thousands)
Wireless PCS	$	234,682	$	199,535	$	35,147		18	%
Wireline
RLEC		56,280		53,352		2,928		5	%
Competitive wireline		48,971		50,185		(1,214	)	(2	)%
Total wireline		105,251		103,537		1,714		2	%
Other		1,769		4,882		(3,113	)	(64	)%
Total operating revenues	$	341,702	$	307,954	$	33,748		11	%

WIRELESS COMMUNICATIONS REVENUES—Wireless communications revenues increased $35.1 million, or 18%, due to an increase in our NTELOS branded subscriber revenue of $17.2 million, or 11%, and an increase in wholesale revenue of $18.7 million, or 57%. Subscriber revenue grew primarily due to the addition of approximately 16,000 subscribers, an increase in monthly ARPU and a shift in the subscriber mix toward our higher value rate plans. PostPay subscribers comprised approximately 73% of the subscriber base at December 31, 2003 and grew to approximately 77% of the base by December 31, 2004.

In addition to subscriber growth and growth in these related revenues, wholesale revenues generated primarily through an agreement with Horizon PCS in 2003 and the first half of 2004, and subsequently with Sprint Nextel beginning in June 2004, increased $18.7 million, or 57%, from $32.9 million in 2003 to $51.6 million in 2004 driven primarily by increases in access minutes on our networks and the growth in the number of Sprint Nextel subscribers who live in the Strategic Network Alliance service area. We also have unrecognized revenues of approximately $7.2 million in 2003 due to Horizon PCS’s bankruptcy filing in August 2003. We continued to provide digital PCS services on a wholesale basis to Horizon PCS through June 15, 2004 and to Sprint Nextel commencing on June 16, 2004. Our wholesale revenues are derived primarily from the voice and data usage by Sprint Nextel customers who live in the Strategic Network Alliance service area, our Home subscribers, and those customers of Sprint Nextel, and affiliates of Sprint Nextel such as Virgin Mobile and Qwest, who use our voice and data services while traveling throughout our Strategic Network Alliance service area.

Horizon PCS had disputed certain categories of charges under our Strategic Network Alliance, alleging we overcharged Horizon PCS in the approximate amount of not less than $3.9 million plus interest, costs and expenses during the period commencing October 1999 and ending September 2002. Horizon PCS withheld these categories of charges from payments made from and after December 2002 and failed to timely pay their January 2003 invoice due following our bankruptcy date. On March 11, 2003, Horizon PCS filed a motion with the Bankruptcy Court which affected an administrative freeze as to the amounts payable on the January invoice. On March 12, 2003, we notified Horizon PCS of the failure to make payment on the January invoice, reserving the right to terminate the agreement with Horizon PCS in accordance with the terms thereof. On March 24, 2003, the parties entered a

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stipulation with the Bankruptcy Court pursuant to which Horizon PCS paid the January invoice and agreed to pay all future invoices and we agreed not to exercise our termination right, assuming all future payments are made in accordance with the agreement with Horizon PCS. The stipulation further provided that Horizon PCS was permitted to withhold amounts under monthly invoices in excess of monthly minimums ($3.0 million monthly through September 30, 2003 and $3.9 million monthly for the fourth quarter 2003) if it determined in good faith that such amounts in excess of the monthly minimums represented an overcharge by us, pending resolution of the dispute.

On July 30, 2003, Horizon PCS announced that it closed 19 stores and terminated approximately 300 employees. On August 15, 2003, Horizon PCS filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code. At that point, Horizon PCS had not paid the monthly base amounts due ($3.0 million per month as discussed above) for June 2003 and July 2003 and the total base amount unpaid for the period ending August 15, 2003 (pre-petition period) was $7.2 million. In September 2004, we received cash and stock with a combined value of $1.5 million in final settlement for Horizon PCS’s pre-petition receivables. We also reversed approximately $455,000 of reserves related to Horizon PCS’s pre-petition disputed issues resolved by this settlement.

WIRELINE COMMUNICATIONS REVENUES—Wireline communications revenues increased $1.7 million, or 2%, from $103.5 million in 2003 to $105.3 million in 2004.

• RLEC Revenues. RLEC revenues, which include local service, access and toll service, directory advertising and calling feature revenues from our RLEC business increased $2.9 million, or 5%, from $53.4 million in 2003 to $56.3 million in 2004. Access lines decreased 1,800 between the two comparative periods with 48,300 total lines at December 31, 2004; however, carrier access minutes increased by 56.7 million, or 18% from 2003 to 2004 driving a $3.2 million increase in access revenues primarily due to increased long distance usage from wireless end users.

• Competitive Wireline Revenues. Competitive Wireline revenues decreased from $50.2 million in 2003 to $49.0 million in 2004. During 2004, we added 2,700 CLEC access lines, a 7% increase, finishing the year with 42,100 access lines (not including inter-company lines), resulting in a $0.5 million revenue growth generated from traditional CLEC local service. Revenues from private line for business accounts increased $0.5 million, or 10%, from $4.9 million in 2003 to $5.4 million in 2004. Reciprocal compensation revenues (revenues earned for terminating calls from ILEC’s or other CLEC’s) and switched access revenues (revenue earned for originating or terminating calls from inter-exchange carriers) decreased $0.7 million to $1.6 million for 2004. Although switched access minutes grew in 2004, rate reductions resulted in an overall revenue decline. The expected erosion of dial-up internet subscribers continued with a loss of 10,058 of these customers in 2004, with an associated revenue loss of $3.2 million. In May 2004, we introduced a $9.95 (monthly) dial-up offer requiring automatic credit-card payment resulting in lower gross additions but a stable churn and improvements in bad debt experience. Our broadband products (DSL, dedicated internet and portable broadband), conversely, all experienced strong growth in 2004. Broadband customers increased by 42% from 7,626 in 2003 to 10,809 in 2004. Competitive pricing pressures in DSL prevented broadband revenue growth from completely offsetting the dial-up loss, but broadband revenue increased by $1.7 million, or 30%, from $5.5 million in 2003 to $7.2 million in 2004. Long distance revenues increased from $2.5 million in 2003 to $3.4 million in 2004 driven by customer growth of 28%, from 25,453 to 32,531 for years ending 2003 and 2004, respectively.

OTHER OPERATING REVENUES—Other operating revenues declined $3.1 million, or 64%, from 2003 to 2004, from $4.9 million to $1.8 million due to our sale of the wireline cable operations in fourth quarter 2003 and the exit from the wireless cable business in first quarter 2004.

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OPERATING EXPENSES

The following table identifies our operating expenses on a business segment basis, consistent with the table presenting operating revenues above.

Operating Expenses	Twelve Months Ended December 31,				$ Variance			% Variance
	2004		2003
	(dollars in thousands)
Wireless PCS	$	168,798	$	166,158	$	2,640		2	%
Wireline
RLEC		16,030		16,600		(570	)	(3	)%
Competitive wireline		30,420		28,666		1,754		6	%
Total wireline		46,450		45,266		1,184		3	%
Other		5,237		9,253		(4,016	)	43	%
Operating expenses, before depreciation and amortization, asset impairment charges, accretion of asset retirement obligation, and capital and operational restructuring charges		220,485		220,677		(192	)	0	%
Depreciation and amortization		65,175		70,084		(4,909	)	(7	)%
Asset impairment charges		—		545		(545	)	NM
Accretion of asset retirement obligation		680		662		18		3	%
Capital and operational restructuring charges		798		2,427		(1,629	)	(67	)%
Total operating expenses	$	287,138	$	294,395	$	(7,257	)	(2	)%

The following describes our operating expenses on an aggregate basis and on a basis consistent with our financial statement presentation.

TOTAL OPERATING EXPENSES—Total operating expenses decreased 2%, from $294.4 million in 2003 to $287.1 million in 2004, due largely to a $4.9 million decrease in depreciation and amortization expense, reflecting the revaluation of NTELOS Inc.’s assets and the related asset write-down of $57.8 million in connection with fresh start accounting in 2003. Operating expenses, excluding depreciation and amortization, asset impairment charges, accretion of asset retirement obligations and operational and capital restructuring charges decreased $0.2 million from $220.7 million for 2003 to $220.5 million for 2004. Increases in these costs in the wireless PCS segment were primarily driven by customer growth. Increases in these costs in the wireline segment were concentrated in the competitive wireline segment and were largely related to higher UNE loop and transport costs and those expenses related to customer growth such as selling expenses and long-distance cost-of-sales associated with continued subscriber growth and increased usage by existing subscribers. Consolidated bad-debt expense decreased $2.5 million from $9.7 million in 2003 to $7.2 million in 2004 with wireless bad debt improving $1.0 million due to improved collections efforts. Wireline bad debt improved $1.4 million due to customer bankruptcies in 2003.

COST OF WIRELESS SALES—Cost of wireless sales increased $0.9 million, or 2%, from $46.9 million in 2003 to $47.8 million in 2004. Equipment COS decreased by 7%, from $23.2 million in 2003 to $21.4 million in 2004. Subscriber gross additions decreased by 15% from 2003 to 2004, but sales shifted more to PostPay sales with higher handset subsidies. The decrease in equipment COS was slightly more than offset, however, by an increase in access COS of 11%, from $23.8 million in 2003 to $26.4 million in 2004 driven by increases in network access, long distance toll and costs of feature sales associated with continued growth in subscribers combined with increased usage by existing subscribers.

MAINTENANCE AND SUPPORT EXPENSES—Maintenance and support expenses increased $2.1 million, or 3%, from $60.8 million in 2003 to $62.9 million in 2004. This increase significantly lags the 11% increase in total operating revenues as we continue to benefit from significant network grooming and technological

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efficiency improvements made in 2002, 2003 and 2004. Variable expenses in this category increased consistent with customer and network access minute growth.

DEPRECIATION AND AMORTIZATION EXPENSES—Depreciation and amortization expenses decreased $4.9 million, or 7%, from $70.1 million in 2003 to $65.2 million in 2004. Through the application of fresh start accounting in connection with the September 9, 2003 emergence from bankruptcy, we fair valued fixed assets and recorded a $57.8 million reduction in the carrying value of our fixed assets accordingly. In 2003, we recorded accelerated depreciation on certain PCS equipment and on assets in the Portsmouth, Virginia customer care center, the operations of which were consolidated into the other two customer care centers. The PCS replacement was primarily in connection with the 3G 1xRTT upgrade required by an amendment to the Network Services Agreement with Horizon PCS (now Sprint Nextel). The impact of this accelerated depreciation and the asset write-downs was partially offset by depreciation expense related to $60.1 million of capital additions in 2004.

On January 1, 2002, we adopted SFAS No. 142, Goodwill and Other Intangible Assets, or SFAS No. 142. In accordance with the provisions of SFAS 142, we discontinued amortization of goodwill, wireless PCS spectrum licenses and the assembled workforce intangible asset as of that date, as these assets are considered indefinite lived intangible assets and are subject to periodic impairment testing rather than amortization. In connection with fresh start accounting applied on the September 9, 2003 bankruptcy emergence date, we recorded customer intangibles of $67.0 million on the RLEC, CLEC, and competitive wireline segments. Amortization of these intangibles from September 10, 2003 through December 31, 2003 was $1.3 million compared to $4.9 million in 2004.

ASSET IMPAIRMENT CHARGES—During the first quarter of 2003, we completed the 2002 annual SFAS No. 142 impairment testing of all goodwill and indefinite lived intangible assets as of October 1, 2002. We recorded an asset impairment charge in 2003 of $0.5 million relating to the impairment of goodwill in the wireline cable business due to the decline in customers prior to the sale of this business in September 2003.

CUSTOMER OPERATIONS EXPENSES—Customer operations expenses decreased $5.5 million, or 6%, from $88.3 million in 2003 to $82.8 million in 2004. Reduced wireless sales through the agent sales channel resulted in a $0.5 million year-over-year reduction in agent commission expense. In addition, wireless retention and fraud management costs were reduced in 2004 through our focused cost control initiatives. Bad debt expense on a consolidated basis decreased $2.5 million, from $9.7 million in 2003 to $7.2 million in 2004.

CORPORATE OPERATIONS EXPENSES—Corporate operations expenses increased $2.3 million, or 10%, from $24.6 million in 2003 to $26.9 million in 2004. This increase is primarily due to a $1.9 million operating tax accrual relating to certain unbilled locality taxes and $0.6 million of legal and professional fees related to the Horizon PCS settlement and the Strategic Network Alliance contract recorded in 2004.

CAPITAL AND OPERATIONAL RESTRUCTURING CHARGES—During the period January 1, 2003 through the March 3, 2003 bankruptcy filing date, legal, advisor and other professional fees were incurred which totaled $2.4 million in the continued effort to restructure our debt terms and capital structure. Related fees of this nature that were incurred during the bankruptcy period were classified as reorganization items. Capital restructuring charges for 2004 totaled $0.8 million for legal and advisory fees relating to the 2005 restructuring of our debt and capital structure.

OTHER INCOME (EXPENSES)

Interest expense decreased by $16.7 million, or 51%, from $32.4 million to $15.7 million for the years ended December 31, 2003 and 2004, respectively. The decrease was due to the cancellation of the senior and subordinated notes in connection with our reorganization in 2003 (see Note 4 to NTELOS Inc.’s Audited Consolidated Financial Statements). In addition, as further described in Note 11 to NTELOS Inc.’s Audited Consolidated Financial Statements, the change in the hedge designation of the swap agreements upon emergence from bankruptcy, also contributed to the change in interest expense.

NTELOS Inc. recorded $168.9 million of reorganization items in 2003 related to the filing of and emergence from Chapter 11 bankruptcy. See Note 4 to NTELOS Inc.’s Audited Consolidated Financial Statements.

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INCOME TAXES

Income tax expense remained at approximately $1 million for 2003 and 2004. We have been incurring net operating losses for the last several years. The benefits of these net operating losses have been fully reserved and therefore have not been recognized in the statement of operations. Income tax expense for each year represents state minimum taxes which are based on revenues from certain telecommunication sources.

We had $220.5 million of available net operating losses at December 31, 2004, of which $150.7 million were subject to an annual utilization limit of $9.2 million.

Quarterly Results

The following table sets forth selected unaudited consolidated quarterly statement of operations data for the four quarters in 2004 and 2005. To facilitate comparisons with results for other quarters, we have combined the results of NTELOS Inc. from April 1, 2005 to May 1, 2005 with our results from May 2, 2005 to June 30, 2005. We had no operating activities prior to the acquisition of NTELOS Inc. This unaudited information has been prepared on substantially the same basis as our consolidated financial statements appearing elsewhere in this report and includes all adjustments (consisting of normal recurring adjustments) we believe necessary for a fair statement of the unaudited consolidated quarterly data. The unaudited consolidated quarterly statement of operations data should be read together with the consolidated financial statements and related notes thereto included elsewhere in this report. The results for any quarter are not necessarily indicative of results for any future period, and you should not rely on them as such.

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NTELOS Inc.

Summary Operating Results

	Three Months Ended
	March 31, 2004		June 30, 2004		September 30, 2004		December 31, 2004		March 31, 2005			June 30, 2005			September 30, 2005		December 31, 2005
	Unaudited
	(in thousands)
Operating revenues
Wireless PCS operations	$	53,986	$	58,755	$	61,102	$	60,839	$	65,643		$	69,425		$	72,086	$	73,149
Wireline operations
RLEC		13,705		13,791		14,780		14,004		14,361			13,668			13,996		14,962
Competitive wireline		12,520		12,293		12,212		11,946		12,289			13,024			13,450		13,202
Wireline total		26,225		26,084		26,992		25,950		26,650			26,692			27,446		28,164
Other operations		625		490		325		329		277			190			222		223
Total operating revenues	$	80,836	$	85,329	$	88,419	$	87,118	$	92,570		$	96,307		$	99,754	$	101,536
Operating expenses
Wireless PCS operations	$	40,558	$	43,047	$	42,017	$	43,176	$	45,251		$	45,993		$	48,379	$	50,972
Wireline operations
RLEC		4,049		4,134		4,140		3,708		3,426			3,426			3,623		3,674
Competitive wireline		7,331		7,559		8,224		7,306		8,073			8,177			8,250		8,501
Wireline total		11,380		11,693		12,364		11,014		11,499			11,603			11,873		12,175
Other operations		1,341		1,585		1,031		1,279		1,019			1,244			1,532		1,845
Operating expenses, before depreciation and amortization, accretion of asset retirement obligation, gain on sale of assets, capital and operational restructuring charges and non-cash compensation		53,279		56,325		55,412		55,469		57,769			58,840			61,784		64,992
Non-cash compensation		—		—		—		—		—			—			1,519		2,211
Depreciation and amortization		15,525		15,902		16,297		17,451		17,504			21,007			22,436		21,955
Accretion of asset retirement obligation		156		176		202		146		189			161			218		173
Gain on sale of assets		—		—		—		—		(5,246	)		(3,496	)		—		—
Capital and operational restructuring charges		—		—		—		798		5,199			10,325			59		4
Total operating expenses		68,960		72,403		71,911		73,864		75,415			86,837			86,016		89,335
Operating income	$	11,876	$	12,926	$	16,508	$	13,254	$	17,155		$	9,470		$	13,738	$	12,203

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The following table sets forth selected unaudited consolidated quarterly statement of operations data as a percentage of total revenues for the four quarters in 2004 and 2005.

	Three Months Ended
	March 31, 2004		June 30, 2004		September 30, 2004		December 31, 2004		March 31, 2005		June 30, 2005		September 30, 2005		December 31, 2005
	Unaudited
Operating revenues
Wireless PCS operations	67	%	69	%	69	%	70	%	71	%	72	%	72	%	72	%
Wireline operations
RLEC	17	%	16	%	17	%	16	%	16	%	14	%	14	%	15	%
Competitive wireline	15	%	14	%	14	%	14	%	13	%	14	%	14	%	13	%
Wireline total	32	%	30	%	31	%	30	%	29	%	28	%	28	%	28	%
Other operations	1	%	1	%	0	%	0	%	0	%	0	%	0	%	0	%
Total operating revenues	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%
Operating expenses
Wireless PCS operations	50	%	50	%	48	%	50	%	49	%	48	%	48	%	50	%
Wireline operations
RLEC	5	%	5	%	5	%	4	%	3	%	4	%	4	%	4	%
Competitive wireline	9	%	9	%	9	%	9	%	9	%	8	%	8	%	8	%
Wireline total	14	%	14	%	14	%	13	%	12	%	12	%	12	%	12	%
Other operations	2	%	2	%	1	%	1	%	1	%	1	%	2	%	2	%
Operating expenses, before depreciation and amortization, accretion of asset retirement obligation, gain on sale of assets, capital and operational restructuring charges and non-cash compensation	66	%	66	%	63	%	64	%	62	%	61	%	62	%	64	%
Non-cash compensation	0	%	0	%	0	%	0	%	0	%	0	%	1	%	2	%
Depreciation and amortization	19	%	19	%	18	%	20	%	19	%	22	%	23	%	22	%
Accretion of asset retirement obligation	0	%	0	%	0	%	0	%	0	%	0	%	0	%	0	%
Gain on sale of assets	0	%	0	%	0	%	0	%	(6	%)	(4	%)	0	%	0	%
Capital and operational restructuring charges	0	%	0	%	0	%	1	%	6	%	11	%	0	%	0	%
Total operating expenses	85	%	85	%	81	%	85	%	81	%	90	%	86	%	88	%
Operating income	15	%	15	%	19	%	15	%	19	%	10	%	14	%	12	%

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Liquidity and Capital Resources

For the years ended December 31, 2004 and 2005, we funded our working capital requirements and capital expenditures from net cash provided from operating activities and borrowings under the former NTELOS Inc. credit facilities or the NTELOS Inc. senior secured credit facilities, as the case may be. We believe our cash from operations will continue to grow in the future as we continue to execute on our business strategy and increase our subscriber base, particularly in our wireless segment. In addition, the predictability of our cash flow is enhanced by our long-term Strategic Network Alliance with Sprint Nextel.

As of December 31, 2005, we had approximately $823.1 million in aggregate long term liabilities consisting of $754.9 million in outstanding long-term debt and approximately $68.2 million in other long-term liabilities. On February 24, 2005, NTELOS Inc. borrowed approximately $400 million under a senior secured first lien bank facility and $225 million under a senior secured second lien term loan facility. In addition, we have the ability to borrow under a $35 million revolving credit facility, none of which has been borrowed to date. The proceeds of the NTELOS Inc. senior secured credit facilities were used to payoff the existing debt of NTELOS Inc., finance the tender offer of NTELOS Inc. and to pay fees and expenses incurred in connection with such transactions. The revolving credit facility is available for our working capital requirements and other general corporate purposes. The aggregate maturities of our long-term debt, excluding capital lease obligations, based on the contractual terms of the instruments are $4.0 million per year from 2006 through 2009.

On October 17, 2005, we issued $135 million in aggregate principal amount of Floating Rate Notes. On the same day, we paid approximately $125 million of the net proceeds from this offering as a dividend to the holders of our Class L common stock. Our blended interest rate on our long-term debt as of December 31, 2005 is 8.5%. As of December 31, 2005, our total outstanding debt on a consolidated basis, including capital lease obligations was approximately $759.4 million. We will repay the Floating Rate Notes, including accrued interest, on April 15, 2006 using approximately $144.0 million from the proceeds of our recent initial public offering, resulting in a pro forma debt as of December 31, 2005 of $622.1 million following this repayment.

The NTELOS Inc. senior secured credit facilities impose operating restrictions on our subsidiaries. These restrictions generally:

• restrict our subsidiaries’ ability to incur additional indebtedness;

• restrict our subsidiaries from entering into transactions with affiliates;

• restrict our subsidiaries’ ability to consolidate, merge or sell all or substantially all of their assets;

• require our subsidiaries to use specified amounts of excess cash flow to repay indebtedness if our leverage ratio reaches specified levels; and

• restrict our subsidiaries’ ability to grant dividends.

We cannot assure you that those covenants will not adversely affect our ability to pay dividends, finance our future operations or capital needs or pursue available business opportunities. A breach of any of these covenants could result in a default in respect of the NTELOS Inc. senior secured credit facilities. If a default occurs, our indebtedness under the NTELOS Inc. senior secured credit facilities could be declared immediately due and payable.

During the term of the First Lien Facility, NTELOS Inc. is also bound by certain financial covenants, specifically a maximum ratio of total debt outstanding to EBITDA, a minimum interest coverage ratio and maximum capital expenditures. Under the NTELOS Inc. senior secured credit facilities, we will be considered in default if the maximum ratio of total debt outstanding to EBITDA (as defined therein) for NTELOS Inc., as of December 31, 2005, is greater than 5.75:1.00 (declining over the remaining term to a ratio of 4.75:1.00 as of December 31, 2008 and thereafter), or the minimum interest coverage ratio (as defined therein) for NTELOS Inc., as of December 31, 2005, is less than 2.00 (increasing over the remaining term to a ratio of 2.50:1.00 as of December 31, 2007 and thereafter). In addition, the aggregate capital expenditures for NTELOS Inc. for fiscal 2006 cannot exceed $90 million (which declines to $80 million for fiscal 2007 and declines by $5.0 million per year

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thereafter), subject to certain exceptions. Our ratios under the foregoing restrictive covenants as of December 31, 2005, and the amount of our aggregate capital expenditures incurred through December 31, 2005, are as follows:

	Actual	Covenant Requirement at December 31, 2005
Total debt outstanding to EBITDA	4.10	5.75:1.00
Minimum interest coverage ratio	3.36	2.00:1.00
Capital expenditures	$89.2 million	$95.0 million

The Second Lien Facility and the Floating Rate Notes contain covenants which are customary for high yield bond financings. As of December 31, 2005, we are in compliance with all of our debt covenants. Noncompliance with any one or more of the debt covenants may have an adverse effect on our ability to pay dividends, finance our future operations or capital needs or pursue available business opportunities in the event such noncompliance cannot be cured or should we be unable to obtain a waiver from the lenders of the NTELOS Inc. senior secured credit facilities or the holders of the Floating Rate Notes. If a default occurs, our indebtedness under the NTELOS Inc. senior secured credit facilities and the Floating Rate Notes could be declared immediately due and payable.

On October 21, 2005, we filed a waiver request related to the FCC’s requirement that 95% of our handsets be E911 capable. By order adopted January 26, 2006, the FCC granted us a limited extension of the December 31, 2005 requirement by extending the date that we must achieve 95% penetration until November 1, 2006. We expect to comply with this requirement by the November 1, 2006 deadline.

In addition to the long-term debt discussed above, we also enter into capital leases on vehicles used in our operations with lease terms of 4 to 5 years. At December 31, 2005, the net present value of these future minimum lease payments was $1.1 million.

In connection with the acquisition of NTELOS Inc., we recognized approximately $28.3 million in liabilities, including legal, financial, and consulting costs, additional costs associated with accelerated payout of certain retirement obligations and retention obligations, all but $0.7 million of which was paid off at December 31, 2005.

During the year ended December 31, 2005, net cash provided by operating activities was approximately $97.7 million. The primary sources of our net cash provided by operating activities included: approximately $0.6 million of net income, which is net of $97.1 million of depreciation, amortization and other non-cash charges (net). Therefore, cash generated from operations before taking into account changes in operating assets and liabilities was $97.7 million. This amount is net of $15.6 million in capital restructuring charges related to the tender offer and merger transactions. The total change in net operating assets and liabilities was less than a $0.1 million use of funds. The principal changes in operating assets and liabilities from December 31, 2004 to December 31, 2005 were as follows: accounts receivable increased by $8.6 million, or 29%, due primarily to a 17% increase in revenues for the relevant two month periods prior to December 31, 2005 and December 31, 2004 (periods for which some or all of the revenues remained in accounts receivable at the end of the applicable periods) and a slight decline in the accounts receivable aging; inventories and supplies decreased $0.2 million due to higher PCS handset shipment receipts just prior to December 31, 2004 as compared to December 31, 2005; other current assets increased $0.6 million; accounts payable increased by $6.3 million due primarily to higher capital expenditures during the last quarter of 2005 as compared to the same period in 2004; and, other current liabilities increased $5.8 million due to increases in advance billings and customer deposits associated with continued NTELOS branded subscriber growth and the increase in NTELOS branded service offerings that require a deposit and increases in accrued incentive compensation related to performance above plan. Retirement benefit payments during the year ended December 31, 2005 were approximately $9.7 million due primarily to accumulated benefit obligation payments under our non-qualified pension plan made in connection with the acquisition of NTELOS Inc. and increases in contributions to the pension plan as a result of an increase in the accumulated benefit obligation due to the decline in the applicable discount rate and lower than expected return on assets in the plan that did not keep pace with the growth in the pension plan obligations. In 2006, we expect to make approximately $6.4 million in additional retirement benefit contributions to our pension plan as a result of these conditions.

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During the year ended December 31, 2004, net cash provided by operating activities was approximately $109.6 million. The primary sources of our net cash provided by operating activities included: approximately $38.3 million of net income, changes in operating assets and liabilities totaling approximately $6.6 million and depreciation and amortization of approximately $65.2 million. The principal changes in operating assets and liabilities were as follows: accounts receivable decreased by $4.4 million, or 13.0%, due primarily to improved payment terms under the Strategic Network Alliance; inventories and supplies decreased $6.0 million due to efforts to reduce handset inventory levels in recognition of improvement in handset availability and improved inventory flow coupled with a significantly higher inventory level and related accounts payable at December 31, 2003 from a $5.6 million handset shipment received at year end 2003; an income tax receivable recognized in 2004 as a result of a settlement of certain prior year tax examinations, the proceeds of which will be used as payment against the convertible note payable to the principal owners that was entered into as part of the merger agreement (see Note 7 of our audited consolidated financial statements); other current assets increased by $1.0 million associated with continued growth in operations; accounts payable decreased by $5.7 million primarily due to the payable associated with the aforementioned year end 2003 inventory shipment; advance billings and customer deposits increased by $1.3 million associated with continued NTELOS branded subscriber growth and the increase in NTELOS branded service offerings that require a deposit; accrued interest decreased by $2.4 million due to the existence at December 31, 2003 of an interest accrual due semi-annually on the $75 million of convertible notes that were converted to equity in 2004; deferred revenues declined by $1.5 million from the amortization of previously deferred activation costs (see revenue accounting policy, Note 4 to our audited consolidated financial statements); and accrued payroll and other current liabilities increased by $1.7 million due to higher bonus accruals associated with exceeding financial performance objectives and higher accruals, including higher property tax accruals, consistent with continued growth in operations.

During 2006, NTELOS Holdings Corp., expects to receive cash tax savings generated by accelerated deductions associated with the $12.9 million termination payment on our advisory agreements, approximately $6.0 of loan origination cost and $8.8 million of accrued interest on our Floating Rate Notes that are expected to be repaid in April, and the use of approximately $24 million of net operating losses. In addition, as a result of certain built-in losses and limitations existing at the time of NTELOS Inc.’s emergence from bankruptcy we will experience a net positive of adjustment to taxable income of approximately $7.5 million. These accelerated deductions coupled with other expected reversals and or additions are projected to reduce our cash income taxes to levels consistent with those incurred by NTELOS Inc. in prior years.

The $7.5 million annual positive taxable income adjustment resulting from NTELOS Inc.’s bankruptcy change of control is expected to continue until September 2008. We expect to benefit annually from increased net operating loss limitations, resulting from our acquisition of NTELOS Inc., until the earlier of May 2010 or until we have utilized all of NTELOS Inc.’s post emergence net operating losses. The additional annual deduction is estimated at $22.4 million. Following the expiration of these adjustments we expect to benefit from annual net operating loss deductions of $1.6 million until approximately 2025.

Our net cash flows used in investing activities for 2005 were approximately $85.0 million and include the following:

• $89.2 million for the purchase of property and equipment comprised of (i) approximately $56.2 million related to purchases of equipment and infrastructure to support our growing subscriber base and increase wholesale usage, and maintenance and expansion of our network to support such growth and subscriber base, (ii) approximately $24.8 million to support the growth of the wireline equipment and infrastructure to support the growth in competitive wireline CLEC and broadband data customers and usage and maintenance of the plant and network infrastructure, and (iii) approximately $8.2 million related to information technology and corporate expenditures to enhance and maintain the back office support systems in order to support the continued growth and introduction of new service offerings and applications; offset by

• $29.1 million proceeds from the following (i) the sale of excess PCS spectrum in Pennsylvania for $15.5 million, (ii) the sale of MMDS spectrum in Richmond, Virginia for $4.8 million, (iii) the redemption of RTFC subordinated capital certificates of $7.2 million in connection with the payoff of the senior credit facility on February 24, 2005; and (iv) $1.2 million relating to the sale of a

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building in Winchester, Virginia; and (v) the sale of excess PCS spectrum in West Virginia for $0.4 million; and

• $25.0 million investment in restricted cash that we subsequently disbursed to fund part of the purchase of the remaining equity securities of NTELOS Inc. in connection with our acquisition of NTELOS Inc.

Our net cash flows used in investing activities for 2004 were approximately $59.6 million and included the following:

• $60.1 million for the purchase of property and equipment comprised of (i) approximately $35.8 million related to purchases of equipment and infrastructure to support our growing subscriber base and increase wholesale usage, and maintenance and expansion of our network to support such growth and subscriber base, (ii) approximately $18.6 million to support the growth of the wireline equipment and infrastructure to support the growth in competitive wireline CLEC and broadband data customers and usage and maintenance of the plant and network infrastructure, and (iii) approximately $5.7 million related to information technology and corporate expenditures to enhance and maintain the back office support systems in order to support the continued growth and introduction of new service offerings and applications; offset by

• $0.5 million proceeds from miscellaneous asset dispositions (investment sales).

We currently are budgeting capital expenditures for 2006 of approximately $87 million. We expect that our capital expenditures associated with our wireless business in 2006 will be approximately $61 million, of which approximately $28 million is for the completion of network wide 3G 1xRTT upgrade, continued incremental network coverage expansion and enhancements within our coverage area for improved in-building penetration, which taken together with the discretionary wireless capital expenditures targeted in 2005 will significantly strengthen our existing competitive position within our markets and allow us to provide 3G 1xRTT CDMA services across 100% of our cell sites. The remaining $33 million in wireless capital expenditures is targeted to maintain our existing networks and provide additional capacity to support our projected growth in our NTELOS branded subscribers and increased usage by existing subscribers and growth in voice and data usage under the Strategic Network Alliance. We expect that our capital expenditures associated with our wireline business in 2006 will be approximately $19 million, which is targeted to provide regular maintenance and support for our RLEC operations and to support the projected growth of our competitive wireline voice and data offerings. In addition, we expect to invest approximately $7 million in enhancements and upgrades to our information technology and corporate expenditures to enhance and maintain the back office support systems to support the continued growth and introduction of new service offerings and applications.

Net cash used in financing activities for NTELOS Inc. for 2005 aggregated $15.8 million, which primarily represents the following:

• $625.0 million in proceeds from the NTELOS Inc. senior secured credit facilities entered into in February 2005;

• $171.3 million in payments related to the pay-off in February 2005 of the former NTELOS Inc. credit facilities that were replaced by the NTELOS Inc. senior secured credit facilities;

• $440.0 million in payments related to our self-tender offer for common stock, warrants and options in connection with the restructuring;

• $6.7 million in payments on the NTELOS Inc. former credit facilities in connection with certain asset sales and scheduled repayments that were subsequently refinanced in February 2005;

• $4.0 million in scheduled repayments on the NTELOS Inc. first lien senior secured credit facility entered into in February 2005;

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• $4.7 million in payments related to interest paid on certain interest rate swap obligations that were subsequently refinanced in February 2005 in connection with the restructuring;

• $12.8 million in payments related to debt issuance costs related to the NTELOS Inc. senior secured credit facilities entered into in February 2005; and,

• $1.1 million in payments under other debt instruments and $0.1 million of other payments related to financing activities.

As noted above, these cash flows used in financing activities are for NTELOS Inc. In addition, NTELOS Holdings Corp. invested $125.7 million for the purchase of NTELOS Inc. This was financed by the sale of $120.0 million of common stock and the issuance of $5.7 million in convertible notes. In addition to this, NTELOS Holdings Corp. issued $133.7 million of Floating Rate Notes which were used to pay a $125.0 million dividend to Class L common stockholders. Finally, the $5.7 million convertible notes were repaid with the proceeds received from agreed upon sale of certain assets from NTELOS Inc.

Net cash used in financing activities for 2004 aggregated $64.6 million, which primarily represents the following:

• $45.8 million in scheduled and required payments and an optional prepayment against several long term debt instruments that were subsequently refinanced in February 2005 in connection with the restructuring;

• $10.2 million in payments under our former lines of credit and certain other debt instruments that were subsequently refinanced in February 2005 in connection with the restructuring; and

• $8.6 million in payments related to interest paid on certain interest rate swap obligations that were subsequently refinanced in February 2005 in connection with the restructuring.

As of December 31, 2004 and 2005, we had approximately $34.2 million and $28.1 million, respectively, in cash and cash equivalents and working capital (current assets minus current liabilities) of approximately $10.9 million and $7.4 million, respectively. Of the cash and cash equivalents on hand on December 31, 2005, $25.9 million was held by NTELOS Inc. and its subsidiaries which is subject to usage restrictions pursuant to the First Lien Credit Agreement.

We believe that our existing borrowing availability, our current cash balances and our cash flow from operations will be sufficient to satisfy our current working capital and capital expenditure requirements for at least the next twenty-four months.

We recently completed an initial public offering of 15,375,000 shares of common stock. We received proceeds from the offering of approximately $172.5 million, net of underwriting fees. We used approximately $12.9 million of the net proceeds to terminate advisory agreements with our two largest shareholders. We will use $144.0 million of the net proceeds to redeem our Floating Rate Notes on April 15, 2006. We also have outstanding 26,492,897 shares of Class B common stock which are convertible at any time at the option of the holder into shares of common stock. The terms of the Class B common stock include a $30 million distribution preference.

Consistent with the disclosure set forth in the prospectus related to our initial public offering, subject to the availability of funds legally available therefore and declaration by our board of directors, we could use cash on hand of $2.3 million at the parent company (NTELOS Holdings Corp.) on December 31, 2005, interest earned on the proceeds from the initial public offering, up to $12.5 million of the net proceeds from the initial public offering of our common stock and cash received in connection with future financings or refinancings to pay a dividend during the first six months of fiscal 2006 on our Class B common stock.

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Contractual Obligations and Commercial Commitments

We have contractual obligations and commercial commitments that may affect our financial condition. The following table summarizes our significant contractual obligations and commercial commitments as of December 31, 2005:

	Payments Due by Period
	Total(3)			Less than 1 year			2-3 years		4-5 years		After 5 years
	(in millions)
Long-term debt obligations	$	758.3	(1)	$	141.3	(2)	$	8.0	$	384.0	$	225.0
Capital lease obligations		1.1			.5			.6		—		—
Operating lease obligations		87.2			17.4			27.5		20.0		22.3
Purchase obligations		15.0			15.0					—		—
Total	$	861.6		$	174.2		$	36.1	$	404.0	$	247.3

⁽¹⁾ Includes a $400 million 6.5 year, first-lien term loan facility and a $225 million 7 year, second-lien term loan facility and a $137.3 million 8 year, floating rate senior notes instrument.

⁽²⁾ Includes an approximately $137.3 million payment for the repayment of the Floating Rate Notes, which will be repaid on April 15, 2006 from the proceeds of the initial public offering.

⁽³⁾ Excludes certain accumulated benefit obligation payments under our non-qualified pension plan made in connection with the acquisition of NTELOS Inc. See Note 13 to our audited consolidated financial statements.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements or financing activities with special purpose entities.

Critical Accounting Policies and Estimates

The fundamental objective of financial reporting is to provide useful information that allows a reader to comprehend our business activities. To aid in that understanding, management has identified our critical accounting policies for discussion herein. These policies have the potential to have a more significant impact on our financial statements, either because of the significance of the financial statement item to which they relate, or because they require judgment and estimation due to the uncertainty involved in measuring, at a specific point in time, events which are continuous in nature.

Principles of Consolidation

We purchased 24.9% of NTELOS Inc. and its subsidiaries on February 24, 2005 and purchased the remaining 75.1% on May 2, 2005. We accounted for the results of operations for NTELOS Inc. from February 24 through May 1, 2005 using the equity method of accounting. For the period commencing on the May 2, 2005 merger date, we consolidated the financial statements of NTELOS Inc. The consolidated financial statements include the accounts of us, NTELOS Inc. and all of its wholly-owned subsidiaries and those limited liability corporations where NTELOS Inc., as managing member, exercises control. All significant intercompany accounts and transactions have been eliminated.

Revenue Recognition Policies

We recognize revenue when services are rendered or when products are delivered, installed and functional, as applicable. Certain of our services require payment in advance of service performance. In such cases, we record a service liability at the time of billing and subsequently recognizes revenue over the service period.

With respect to NTELOS Inc.’s wireline and wireless businesses, we earn revenue by providing access to and usage of its networks. Local service and airtime revenues are recognized as services are provided. Wholesale

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revenues are earned by providing switched access and other switched and dedicated services, including wireless roamer management, to other carriers. Revenues for equipment sales are recognized at the point of sale. PCS handset equipment sold with service contracts are sold at prices below cost, based on the terms of service contract. We recognize the entire cost of the handsets at the point of sale, rather than deferring such costs over the service contract period.

Nonrefundable PCS activation fees and the portion of the activation costs directly related to acquiring new customers (primarily activation costs and sales commissions) are deferred and recognized ratably over the estimated life of the customer relationship ranging from 12 to 24 months in accordance with the SEC Staff Accounting Bulletin 101, as amended by SEC Staff Accounting Bulletin 104, collectively referred to as SAB No. 101. Similarly, in the wireline RLEC and competitive wireline segments, the Company charges nonrefundable activation fees for certain new service activations. Such activation fees and costs are deferred and recognized ratably over 5 years. Direct activation costs exceed activation revenues in all cases. As is allowed within the provisions of SAB No. 101, we deferred these costs up to but not in excess of the related deferred revenue.

Effective July 1, 2003, we adopted Emerging Issues Task Force No. 00-21, Accounting for Revenue Arrangements with Multiple Element Deliverables, or EITF No. 00-21. The EITF guidance addresses how to account for arrangements that may involve multiple revenue-generating activities, i.e., the delivery or performance of multiple products, services, and/or rights to use assets. In applying this guidance, separate contracts with the same party, entered into at or near the same time, will be presumed to be a bundled transaction, and the consideration will be measured and allocated to the separate units based on their relative fair values. The adoption of EITF No. 00-21 has required evaluation of each arrangement entered into by us for each type of sales transaction and each sales channel. The adoption of EITF No. 00-21 has resulted in substantially all of the activation fee revenue generated from our owned retail stores and associated direct costs being recognized at the time the related wireless handset is sold and is classified as equipment revenue and cost of equipment, respectively. Upon adoption of EITF No. 00-21, previously deferred revenues and costs were amortized over the remaining estimated life of the subscriber relationship, not to exceed 24 months. Revenue and costs for activations at third-party retail locations and related to our segments other than wireless will continue to be deferred and amortized over the estimated lives as prescribed by SAB No. 104. The balance of our deferred activation fees totaled $1.0 million at the May 2, 2005 merger date. Through purchase accounting, all deferred activation fees were adjusted to zero at that date.

Accounts Receivable

We sell our services to residential and commercial end-users and to other communication carriers primarily in Virginia and West Virginia. The carrying amount of our trade accounts receivable approximates fair value. We have credit and collection policies to ensure collection of trade receivables and require deposits on certain of our sales. We maintain an allowance for doubtful accounts, which management believes adequately covers all anticipated losses with respect to trade receivables. Actual credit losses could differ from such estimates.

Inventories and Supplies

Our inventories and supplies consist primarily of items held for resale such as PCS handsets, pagers, wireline business phones and accessories. We value our inventory at the lower of cost or market. Inventory cost is computed on a currently adjusted standard cost basis (which approximates actual cost on a first-in, first-out basis). Market value is determined by reviewing current replacement cost, marketability and obsolescence.

Long-lived Asset Recovery

Long-lived assets include property and equipment, radio spectrum licenses, long-term deferred charges and intangible assets to be held and used. Long-lived assets, excluding intangible assets with indefinite useful lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount should be addressed pursuant to Statement of Financial Accounting Standard No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, or SFAS No. 144. The criteria for determining impairment for such long-lived assets to be held and used is determined by comparing the carrying value of these long-lived assets to management’s best estimate of future undiscounted cash flows expected to result from the use of the assets.

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Depreciation of property, plant and equipment is calculated on a straight-line basis over the estimated useful lives of the assets. Buildings are depreciated over a 50-year life and leasehold improvements, which are categorized with land and building, are depreciated over the shorter of the estimated useful lives or the remaining lease term. Network plant and equipment are depreciated over various lives from 4 to 40 years, with an average life of approximately 13 years. Furniture, fixtures and other equipment are depreciated over various lives from 5 to 18 years.

Because we applied purchase accounting on the May 2, 2005 merger date, property, plant and equipment and other long-lived assets were adjusted to fair market value on that date and accumulated depreciation and amortization was reset to zero.

We believe that no impairment indicators exist as of December 31, 2005, which would require us to test for impairment in accordance with SFAS No. 144. In the event that there are changes in the planned use of our long- lived assets or our expected future undiscounted cash flows are reduced significantly, our assessment of our ability to recover the carrying value of these assets under SFAS No. 144 could change.

Goodwill and Indefinite Lived Intangibles

Goodwill, franchise rights and radio spectrum licenses are considered indefinite lived intangible assets. Indefinite lived intangible assets are not subject to amortization but are instead tested for impairment annually or more frequently if an event indicates that the asset might be impaired. We assess the recoverability of indefinite lived assets whenever adverse events or changes in circumstances indicate that impairment may have occurred and annually on October 1. Based on the results of this testing, goodwill and indefinite lived intangible assets were determined to be unimpaired at October 1, 2005. The Company reviewed the results of this testing as of December 31, 2005 and concluded that no material changes would have been made to the underlying assumptions that would have resulted in materially different test results from those performed as of October 1, 2005.

Accounting For Asset Retirement Obligations

Statement of Financial Accounting Standard No. 143, Accounting for Asset Retirement Obligations, or SFAS No. 143, establishes accounting standards for recognition and measurement of a liability for an asset retirement obligation and the associated asset retirement cost. The fair value of a liability for an asset retirement obligation is to be recognized in the period in which it is incurred if a reasonable estimate can be made. The associated retirement costs are capitalized and included as part of the carrying value of the long-lived asset and amortized over the useful life of the asset. Accretion expense related to the asset retirement obligations for the year ended December 31, 2005 was $0.7 million.

We enter into long-term leasing arrangements primarily for cell sites and retail store locations in our wireless segment. Additionally, in our wireline operations, we enter into various facility co-location agreements and are subject to locality ordinances. In both cases, we construct assets at these locations and, in accordance with the terms of many of these agreements, we are obligated to restore the premises to their original condition at the conclusion of the agreements, generally at the demand of the other party to these agreements. We recognized the fair value of a liability for an asset retirement obligation and capitalized that cost as part of the cost basis of the related asset, depreciating it over the useful life of the related asset.

Employee Benefit Plan Assumptions

NTELOS Inc. sponsors a non-contributory defined benefit pension plan covering all employees who meet eligibility requirements and were employed by NTELOS Inc. prior to October 1, 2003. The defined benefit pension plan was closed to NTELOS Inc. employees employed on or after October 1, 2003. Pension benefits vest after five years of service and are based on years of service and average final compensation subject to certain reductions if the employee retires before reaching age 65. NTELOS Inc.’s funding policy has been to contribute to the plan based on applicable regulatory requirements. Contributions are intended to provide not only for benefits based on service to date, but also for those expected to be earned in the future.

We sponsor a contributory defined contribution plan under Internal Revenue Code Section 401(k) for substantially all employees. Our policy is to contribute 60% of each participant’s annual contribution for

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contributions up to 6% of each participant’s annual compensation. Company contributions to this plan vest after three years of service. The employee elects the type of investment fund from the equity, bond and annuity alternatives offered by the plan.

NTELOS Inc. provides certain health care and life benefits for retired employees that meet eligibility requirements. Employees hired after January 1994 are not eligible for these benefits. Our share of the estimated costs of benefits that will be paid after retirement is generally being accrued by charges to expense over the eligible employees’ service periods to the dates they are fully eligible for benefits.

Income Taxes

Deferred income taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Accounting for Share Based Compensation

Emerging Issues Task Force Issue 00-23, Issues Related to the Accounting for Stock Compensation under APB Opinion No. 25, Accounting for Stock or “EITF 00-23” provides guidance on the accounting treatment for instruments which do not have all of the characteristics associated with equity. In certain cases, these instruments are required to be classified as a liability and may require recognition of compensation expense related to the difference between issuance price and the fair value of the instrument where the holders are employees of the Company.

On May 2, 2005, we sold to certain of our employees 735,043 shares of Class A common stock at a purchase price equal to its fair value of $1.00 per share. Additionally, on May 2, 2005, we granted options to purchase an aggregate of 120,075 shares of our Class A common stock with an exercise price of $1.00 per share. On September 15, 2005 we sold 10,000 shares of Class A common stock for a purchase price of $7.65 per share and granted options to purchase 15,000 shares of Class A common stock with an exercise price of $7.65 per share, the fair value of the Company’s Class A common stock as determined by the Board of Directors. On October 25, 2005, we granted options to purchase 15,000 shares of Class A common stock with an exercise price of $9.23 per share. The valuation methodology used to determine the fair value of our Class A common stock on May 2, 2005, September 15, 2005 and October 25, 2005 was consistent with the methodology used to value our acquisition of NTELOS Inc.

The shares of Class A common stock contain certain repurchase rights by us at adjusted cost price (as defined in our Shareholders Agreement), are exclusively owned by employees, and are subordinate to our Class L common stock, and therefore do not share the same risks and rewards characteristic of equity instruments. Therefore, the proceeds from the sale of our Class A common stock have been classified as a liability and this instrument is being accounted for as non-substantive equity until the repurchase rights expire. Accordingly, variable accounting is applied to the Class A common stock and options to purchase Class A common stock as further described below.

The Class L common stock contained a distribution preference which was fully satisfied upon closing of the initial public offering. Upon closing of the initial public offering, each share of Class A common stock and Class L common stock was converted into approximately 2.15 and 2.19 shares of Class B common stock, respectively, at which time the Class A deposit was reclassified to Class B common stock.

As noted previously, we have reported non-cash compensation expense related to the intrinsic value of the Class A common stock and the options to purchase Class A common stock due to the liability characteristics of the Class A common stock instrument. The non-cash compensation expense related to the Class A common stock is recognized over the period in which the repurchase rights expire and the non-cash compensation expense related to the options to purchase Class A common stock is recognized over their vesting period based on the accounting period-end cumulative intrinsic value. The intrinsic value of the Class A instruments continued to increase from the issuance date through the end of 2005. Based on our December 31, 2005 valuation work, we recorded non-cash

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compensation expense of $3.7 million for the period from May 2, 2005 through December 31, 2005 (based on an estimated fair value of approximately $13.66 per share, or $6.35 per share on a post-conversion basis). As noted below, there are several factors that discount the fair value prior to our initial public offering. At the initial public offering price of $12 per share, during the period from January 1, 2006 through the closing date of the offering we recognized additional non-cash compensation expense of approximately $10.2 million for 50% of the shares for which the repurchase rights expired and for 25% of the options which vested upon the closing of the offering. When the Class A common stock converted to Class B common stock in connection with the initial public offering and became a substantive equity instrument, the amount to be recognized as non-cash compensation expense became fixed at the intrinsic value on that date at the difference between the initial public offering price and the original issue price. Based on this, additional charges of approximately $7.6 million will be recognized over the remaining vesting period with $4.2 million, $2.8 million and $0.6 million to be recognized over the remainder of 2006, 2007, and 2008, respectively.

Significant Factors, Assumptions and Methodologies Used in Determining Fair Value

The primary factor in determining the fair value of the initial sale of Class A common stock and the exercise price of the Class A common stock options granted was our enterprise value as of the closing of our acquisition of NTELOS Inc. in May 2005. This value was derived after a competitive bidding process. As noted in Note 2 to our audited consolidated financial statements, we valued all of our assets and liabilities utilizing a combination of methods such as a market approach, cost approach and income approach. These valuations were prepared based on a number of projections, assumptions, risk assessments, industry and economic tables and other factors. Our total equity value was determined by subtracting the long-term debt, net of cash, from our enterprise value. We then determined the residual equity value that is apportioned to the Class L common stock and Class A common stock based on their respective ownership percentages, by subtracting from the total equity value the liquidation preference associated with the Class L common stock. The per share value of the Class A common stock was then derived by dividing the residual equity apportioned to the Class A common stock by the number of shares of Class A common stock outstanding.

The per share values used for the September and October 2005 equity transactions were determined based on the formula used to value our acquisition of NTELOS Inc. However, because the September 2005 stock issuance and option grant were during the third quarter 2005, they were based on our operating results for the June 30, 2005 trailing twelve month period. Therefore, the increase in valuation of the Class A common stock in September 2005 compared to the valuation when we acquired NTELOS Inc. in May 2005 was due in part to an increase in our operating performance during such period, which exceeded our performance goals. The October 2005 option grant was valued based on the September valuation as adjusted to estimate the additional increase expected in the trailing twelve months operating performance through September 30, 2005.

In conjunction with applying the foregoing valuation methodology and analysis, we also considered numerous objective and subjective factors to determine the value of shares of Class A common stock on each grant date, including the factors described below:

• our performance and operating results at the time of the subsequent equity transactions and the absence of material events or significant changes that would require a change in the methods used to determine the value of our common equity;

• the stock sale and option grants involved illiquid securities for a minority interest in a nonpublic company; and

• the shares of Class A common stock underlying the options and the shares of Class A common stock held are subject to repurchase rights generally over a four-year period and that if an employee is terminated with or without cause, we have the right to repurchase any Class A shares that have not vested at the lower of original cost and fair market value.

This valuation methodology was deemed appropriate based on the fact that there was no significant change in operations or material event that would warrant a different valuation multiple from that which was used in our acquisition of NTELOS Inc. which closed in the prior quarter.

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For purposes of recording compensation expense related to our Class A common stock and options, we have determined the pre-split fair value to be $1.53, $9.20 and $13.66 per share as of June 30, 2005, September 30, 2005 and December 31, 2005, respectively. This resulted in non-cash compensation expense of approximately $3.7 million for the period May 2, 2005 through December 31, 2005. We performed these valuations retrospectively. While these values are consistent with the transaction date valuations discussed above, the reporting date valuation method concentrated on the income approach. Various assumptions, including discount rates, were adjusted at each period to account for the changes in our operating plan, changes in the market and the progress of our initial public offering as we engaged underwriters during the third quarter and subsequently filed the registration statement covering such initial public offering. We believe this valuation approach is consistent with valuation methodologies applied to other similar companies for financial reporting purposes pursuing an initial public offering.

Significant Factors Contributing to the Difference between Fair Value as of the Date of the Option Grant and IPO Price.

Significant factors contributing to the difference between fair value as of the date of the sale of our Class A common stock and each of our grants of options to purchase Class A common stock and the initial public offering price include the following:

• our improved operating results, which results in a disproportionately higher increase in the value of our common equity;

• our successful completion of our Floating Rate Senior Notes offering in October 2005, which offers an indication of the market’s demand for our securities;

• the fact that there would be a public market for our common equity upon consummation of this proposed initial public offering;

• improved market valuations of comparable companies in our markets since the September and October option grants; and

• significant recent merger activity in the wireless industry.

Based on these factors, the multiple of operating results used in our valuation methodology has increased. In addition to the increase in the multiple, we have continued to realize growth at or above our expectations.

Although it is reasonable to expect that the completion of our initial public offering will add value to the Class A common stock because they will have increased liquidity and marketability, the amount of additional value can be measured with neither precision nor certainty.

Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based Payments, or SFAS No. 123R. SFAS No. 123R requires the recognition of the cost of employee services received in exchange for an award of equity instruments in the financial statements and measurement based on the grant-date fair value of the award. It requires the cost to be recognized over the period during which an employee is required to provide service in exchange for the award. Additionally, compensation expense will be recognized over the remaining employee service period for the outstanding portion of any awards for which compensation expense had not been previously recognized or disclosed under SFAS No. 123, Accounting for Stock-Based Compensation, or SFAS No. 123. SFAS No. 123R replaces SFAS No. 123 and supersedes Accounting Principles Board, or APB, Opinion No. 25, Accounting for Stock Issued to Employees, or APB No. 25, and its related interpretations. We are required to adopt SFAS No. 123R no later than January 1, 2006.

In connection with our initial public offering, we determined that the conversion of the options to purchase Class A common stock into options to purchase common stock and the partial accelerated expiration of our repurchase rights relating to the Class A common stock upon the closing of the initial public offering would be accounted for under the provisions of SFAS No. 123R. We believe that the exchange of options and modification to the Class A common stock will both need to be evaluated as modifications of these instruments. We will compare

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the fair values of the original instruments to the fair values of the new equity instruments and, to the extent there is any incremental fair value, recognize compensation expense. We do not anticipate that the effects of adopting SFAS No. 123R will have a material impact on our consolidated financial positions, results of operations or cash flows. In addition to this, the unrecognized compensation expenses associated with the Class A common stock and options determined under APB 25 and other related guidance will be recognized over the remaining period for which the Class A common stock repurchase rights expire and the Class A options vest.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We may choose to have interest accrue on loans outstanding under our $435 million senior secured first lien bank facility consisting of a $400 million term loan B facility, which we refer to as the Term Loan B Facility, and a $35 million revolving credit facility, which we refer to as the Revolving Credit Facility, and our $225 million senior secured second lien term loan facility, which we refer to as the Second Lien Facility, based on (a) the higher of  ¹/2 of 1% in excess of the federal funds rate and the rate of interest published by the Wall Street Journal as the prime rate, which we refer to as Base Rate Loans, or (b) the Eurodollar rate (adjusted for maximum reserves), which we refer to as Eurodollar Loans, in each case plus an applicable margin. With respect to the Revolving Credit Facility, the applicable margin for the Revolving Credit Facility is determined in accordance with a pricing grid tied to our total leverage ratio. As for the Term Loan B Facility, the applicable margin was initially set at 1.50% per annum in respect of Base Rate Loans and 2.50% per annum in respect of Eurodollar Loans. If our total leverage ratio is lower than 4.0x, the applicable margin is 1.25% per annum in respect of Base Rate Loans and 2.25% per annum in respect of Eurodollar Loans. The applicable margin for the Second Lien Facility is 4.00% per annum in respect of Base Rate Loans and 5.00% per annum in respect of Eurodollar Loans. As of December 31, 2005, $396.0 million was outstanding under the First Lien Facility, $225 million was outstanding under the Second Lien Facility and $137.3 million, net of unaccreted debt discount of $1.3 million, was outstanding in Floating Rate Senior Notes. We have other fixed rate, long-term debt totaling $1.1 million as of December 31, 2005.

We are exposed to market risks primarily related to interest rates. To manage this exposure and to comply with the terms and conditions of the First Lien Facility, we entered into a three year interest rate swap agreement effective as of February 24, 2005 with a notional amount of $312.5 million. The purpose of this swap agreement is to minimize our exposure to interest rate movements by effectively converting a portion of our long-term debt from variable rate debt to fixed rate debt. Our fixed rate payments due under the swap agreement are calculated at a per annum rate of 4.1066%. Our swap counterparty’s variable rate payments are based on three month U.S. Dollar LIBOR, which was 2.64% for the initial calculation period. The notional amount of the swap agreement does not represent an amount exchanged by the swap counterparty and us and thus is not a measure of our debt obligations. The notional amount is only a measure of our exposure to make fixed rate payments under the swap agreement. Interest rate differentials paid or received under the swap agreement are recognized for GAAP purposes over the three month maturity periods as adjustments to our interest expense. The parent corporation of our counterparty, which is a well known financial institution, has guaranteed the counterparty’s obligations to us under the swap agreement. Our obligations under the swap agreement are secured by substantially all of our real and personal property pursuant to the terms of the First Lien Facility. We have interest rate risk on borrowings under the First Lien Facility and the Second Lien Facility in excess of the $312.5 million covered by the swap agreement. We are exposed to loss if one or more of the counterparties default.

At December 31, 2005, we had exposure to credit loss on interest rate swaps of $4.1 million, the asset value of the interest rate swap agreement. At December 31, 2005, our senior bank debt totaled $621.0 million, or $308.5 million over the swap agreement. The effects of a one percentage point change in LIBOR rates would change the fair value of the swap agreement by $6.2 million for a one percentage point increase in the rate (to $10.3 million above face value) and $6.4 million for a one percentage point decrease in the rate (to $2.3 million below face value).

At December 31, 2005, our financial assets included cash and cash equivalents of $28.1 million. We believe there are minimal credit risks to us in connection with these financial assets because the counterparties are prominent financial institutions. Further, with respect to the cash and cash equivalents, there are no material market risks because such assets are fixed maturity, high quality instruments. In addition at December 31, 2005, we had securities and investments of $3.0 million which primarily consisted of $2.8 million of Class C stock holdings in the Rural Telephone Bank, which we refer to as RTB, (see Note 10 to our audited consolidated financial statements).

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The following sensitivity analysis indicates the impact at December 31, 2005, on the fair value of certain financial instruments, which are potentially subject to material market risks, assuming a ten percent increase and a ten percent decrease in the levels of our interest rates or, in the case of the swap agreement, a one percent increase and a one percent decrease in the interest rates:

At December 31, 2005	Book Value			Fair Value		Fair Value assuming noted decrease in market pricing			Fair Value assuming noted increase in market pricing
Marketable long-term notes	$	133.7	(1)	$	138.2	$	125.9		$	144.3
Marketable long-term debt		621.0			628.5		606.2			651.8
Non-marketable long-term debt		1.1			1.1		1.0			1.2
Interest rate swaps		4.1			4.1		(2.3	)		10.3

⁽¹⁾ Book value is net of $1.3 million of unaccreted discount and does not include accrued interest settled in additional notes in January 2006.

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Item 8. Financial Statements and Supplementary Data.

NTELOS HOLDINGS CORP.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Audited Consolidated Financial Statements
NTELOS Holdings Corp.
Independent Registered Public Accountants’ Report	73
Consolidated Balance Sheet as of December 31, 2005	74
Consolidated Statement of Operations for the period January 14, 2005 (inception) through December 31, 2005	76
Consolidated Statement of Cash Flows for the period January 14, 2005 (inception) through December 31, 2005	77
Consolidated Statement of Stockholders’ Equity for the period January 14, 2005 (inception) through December 31, 2005	78
Notes to Consolidated Financial Statements	79
NTELOS Inc.
Independent Registered Public Accountants’ Report	98
Consolidated Balance Sheets for the Predecessor Reorganized Company as of December 31, 2004 and 2003	99
Consolidated Statements of Operations for the Predecessor Reorganized Company for the period January 1, 2005 through May 1, 2005, for the year ended December 31, 2004 and for the period September 10, 2003 to December 31, 2003 and for the Predecessor Company for the period January 1, 2003 to September 9, 2003	101
Consolidated Statements of Cash Flows for the Predecessor Reorganized Company for the period January 1, 2005 through May 1, 2005, for the year ended December 31, 2004 and for the period September 10, 2003 to December 31, 2003 and for the Predecessor Company for the period January 1, 2003 to September 9, 2003	103
Consolidated Statements of Shareholder’s Equity (Deficit) for the Predecessor Reorganized Company for the period January 1, 2005 through May 1, 2005, for the year ended December 31, 2004 and for the period September 10, 2003 to December 31, 2003 and for the Predecessor Company for the period January 1, 2003 to September 9, 2003	105
Notes to Consolidated Financial Statements	107

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Report of Independent Registered Public Accounting Firm

The Board of Directors

NTELOS Holdings Corp.:

We have audited the accompanying consolidated balance sheet of NTELOS Holdings Corp. (the Company) as of December 31, 2005 and the related consolidated statements of operations, cash flows, and stockholders’ equity for the period January 14, 2005 (inception) to December 31, 2005. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of NTELOS Holdings Corp. as of December 31, 2005, and the results of its operations and its cash flows for the period January 14, 2005 (inception) to December 31, 2005, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

March 27, 2006

Richmond, Virginia

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NTELOS Holdings Corp.

Consolidated Balance Sheet

(In thousands)	December 31, 2005
Assets
Current Assets
Cash and cash equivalents	$	28,134
Accounts receivable, net of allowance of $13,035		37,691
Inventories and supplies		3,419
Other receivables and deposits		3,817
Prepaid expenses and other		5,593
		78,654
Securities and Investments
Deferred asset – interest rate swap		4,120
Other securities and investments		3,042
		7,162
Property, Plant and Equipment
Land and buildings		33,903
Network plant and equipment		320,690
Furniture, fixtures and other equipment		33,081
Total in service		387,674
Under construction		20,443
		408,117
Less accumulated depreciation		47,975
		360,142
Other Assets
Goodwill		162,395
Franchise rights		32,000
Other intangibles, less accumulated amortization of $9,470		113,580
Radio spectrum licenses in service		114,051
Other radio spectrum licenses		1,344
Radio spectrum licenses not in service		15,581
Deferred charges		10,934
		449,885
	$	895,843

See accompanying Notes to Consolidated Financial Statements.

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NTELOS Holdings Corp.

Consolidated Balance Sheet

(In thousands)	December 31, 2005
Liabilities and Stockholders’ Equity
Current Liabilities
Current portion of long-term debt	$	4,513
Accounts payable		30,628
Advance billings and customer deposits		16,112
Accrued payroll		11,164
Accrued interest		161
Deferred revenue		933
Accrued taxes		3,138
Other accrued liabilities		4,613
		71,262
Long-term Liabilities
Long-term debt		754,871
Other long-term liabilities:
Retirement benefits		34,389
Deferred income taxes		12,448
Long-term deferred liabilities		16,816
Class A common stock deposit and related non-cash compensation		4,530
		823,054
Minority Interests		429
Commitments and Contingencies
Stockholders’ Equity
Preferred Stock, par value $.01 per share, authorized 100 shares, none issued		—
Class L common stock, par value $.01 per share, authorized 14,000 shares; 11,364 shares issued and outstanding (liquidation value of $5,948)		—
Retained earnings		1,098
		1,098
	$	895,843

See accompanying Notes to Consolidated Financial Statements.

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NTELOS Holdings Corp.

Consolidated Statement of Operations

(In thousands, except per share data)	January 14, 2005 (inception) through December 31, 2005
Operating Revenues
Wireless communications	$	190,477
Wireline communications		73,444
Other communication services		569
		264,490
Operating Expenses
Cost of wireless sales (exclusive of items shown separately below)		38,582
Maintenance and support (inclusive of non-cash compensation charges of $305)		45,452
Depreciation and amortization		59,103
Accretion of asset retirement obligations		489
Customer operations (inclusive of non-cash compensation charges of $389)		63,330
Corporate operations (inclusive of non-cash compensation charges of $3,036)		22,434
Capital restructuring charges		183
		229,573
Operating Income		34,917
Other Income (Expense)
Equity share of net loss from NTELOS Inc		(1,213	)
Interest expense		(34,338	)
Gain on interest rate swap instrument		4,780
Other income		1,595
		(29,176	)
		5,741
Income Tax Expense		4,591
		1,150
Minority Interests in Income of Subsidiaries		(52	)
Net Income	$	1,098
Basic and Diluted Earnings Per Common Share
Income per share – basic and diluted	$	0.11
Average shares outstanding – basic and diluted		9,609

See accompanying Notes to Consolidated Financial Statements.

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NTELOS Holdings Corp.

Consolidated Statement of Cash Flows

(In thousands)	January 14, 2005 (inception) through December 31, 2005
Cash flows from operating activities
Net income	$	1,098
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		49,633
Amortization		9,470
Accretion of asset retirement obligations		489
Deferred income taxes		3,954
Gain on interest rate swap instrument		(4,780	)
Interest paid-in-kind on the floating rate notes		3,579
Class A common stock and stock option non-cash compensation		3,730
Retirement benefits and other		5,492
Equity share of net loss from NTELOS Inc.		1,213
Changes in assets and liabilities from operations, net of effect of acquisitions and dispositions:
Increase in accounts receivable		(5,223	)
Decrease in inventories and supplies		677
Decrease in other current assets		451
Changes in income taxes		6,402
Increase in accounts payable		9,254
Decrease in other current liabilities		(2,351	)
Retirement benefit payments		(1,699	)
Net cash provided by operating activities		81,389
Cash flows from investing activities
Purchase of property, plant and equipment		(69,073	)
Proceeds from sale of property, plan and equipment, investments and radio spectrum licenses		483
Purchase of ownership interest in NTELOS Inc., net of cash acquired		(103,765	)
Net cash used in investing activities		(172,355	)
Cash flows from financing activities
Proceeds from sale of common stock		119,979
Proceeds from issuance of convertible notes		5,755
Payment of convertible notes		(5,755	)
Proceeds from issuance of floating rate notes		133,650
Preference dividend to Class L common stockholders		(124,999	)
Scheduled repayments on long-term debt		(3,535	)
Debt and equity issuance costs		(5,882	)
Other		(113	)
Net cash provided by financing activities		119,100
Increase in cash and cash equivalents		28,134
Cash and cash equivalents:
Beginning of period		—
Ending of period	$	28,134

See accompanying Notes to Consolidated Financial Statements.

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NTELOS Holdings Corp.

Consolidated Statement of Stockholders’ Equity

(In thousands)	Common Shares			Membership Interests—Project Holdings LLC			Class L			Retained Earnings		Total Stockholders’ Equity
	Common		Class L
Balance, January 14, 2005 (inception)
Sale of membership interests	100			$	35,690		$	—		$	—	$	35,690
Conversion of membership interests of Project Holdings LLC to Class L shares in NTELOS Holdings Corp	(100	)	3,245		(35,690	)		35,690					—
Issuance of Class L Common Stock			8,199					89,309					89,309
Preference dividend to Class L common stockholders								(124,999	)				(124,999	)
Comprehensive income:
Net income											1,098		1,098
Balance, December 31, 2005	—		11,364	$	—		$	—		$	1,098	$	1,098

See accompanying Notes to Consolidated Financial Statements.

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NTELOS Holdings Corp.

Notes to Consolidated Financial Statements

Note 1. Organization

NTELOS Holdings Corp. (hereafter referred to as “Holdings Corp.” or the “Company”) was incorporated on January 14, 2005 by Quadrangle Capital Partners LP and Citigroup Venture Capital Equity Partners, L.P. (collectively referred to as the “Buyers” or “Investors”) to acquire the stock of NTELOS Inc. and its subsidiaries (collectively referred to as “NTELOS Inc.”). On January 18, 2005, Holdings Corp. entered into an agreement with NTELOS Inc. and certain of its shareholders (the “Transaction Agreement”) pursuant to which NTELOS Inc. would be acquired by Holdings Corp. at a price of $40.00 per share of common stock.

On February 24, 2005, Holdings Corp. purchased 24.9% of NTELOS Inc. common stock and stock warrants. On May 2, 2005, pursuant to the Transaction Agreement, the Company acquired all of NTELOS Inc.’s remaining common shares, warrants and vested options by means of a merger. As further discussed in Note 2, following completion of the merger transaction on May 2, 2005, NTELOS Inc. became a wholly owned subsidiary of Holdings Corp. Accordingly, the Company began consolidating the results of NTELOS Inc. into its financial statements on this date. From the date of its initial 24.9% investment in NTELOS Inc. to May 1, 2005, the Company accounted for the operating results of NTELOS Inc. under the equity method of accounting.

During the first quarter of 2006, the Company completed an initial public offering (“IPO”) of 15.4 million shares of common stock. The offering consisted of 14.4 million shares of common stock sold on February 13, 2006 and 1.0 million shares of common stock sold on March 15, 2006 pursuant to the exercise of the underwriters’ over-allotment option. The stock is traded on Nasdaq under the symbol NTLS (Note 11). Additionally, the Class L common stock and Class A common stock deposits were converted to 26.5 million shares of Class B common stock which is convertible at any time at the option of the holder into shares of common stock. The terms of the Class B common stock include a $30 million distribution preference.

NTELOS Holdings Corp., through NTELOS Inc., is an integrated communications provider that provides a broad range of products and services to businesses, telecommunication carriers and residential customers in Virginia, West Virginia and surrounding states. The Company’s primary services are wireless digital personal communications services (“PCS”), local and long distance telephone services, broadband network services and high-speed broadband Internet access (such as DSL and wireless modem).

NTELOS Holdings Corp. does not have any independent operations. For a description of the assets and liabilities of NTELOS Holdings Corp. see Note 6.

Note 2. Acquisition

Holdings Corp. is accounting for the merger in accordance with the purchase method of accounting under the provisions of Statement of Financial Accounting Standards No. 141, Business Combinations (“SFAS No. 141”). The combined purchase price of $125.7 million, inclusive of closing costs of $12.1 million, was financed through the issuance of $35.7 million of common stock in the initial closing (which was subsequently cancelled and replaced by approximately 3.2 million shares of Class L common stock), and an additional $89.3 million for Class L common stock (8.1 million shares) and the issuance of $0.7 million in Class A common stock (.7 million shares) both of which were issued in the final closing. Pursuant to the terms of the Transaction Agreement, $25.0 million of cash of NTELOS Inc. was used as part of the consideration to purchase the remaining equity. In addition, the Company issued $5.8 million 10% Convertible Notes to the Investors and used these proceeds toward financing the acquisition (Note 11). In December 2005, proceeds from a $5.6 million income tax receivable and a $0.2 million asset sale were used to repay these convertible notes.

The Company’s cost of acquiring NTELOS Inc. totaled $125.7 million and has been used to establish a new accounting basis for the Company’s consolidated assets and liabilities. Excluding $12.1 million used to pay transaction closing costs, these proceeds were used to purchase all of the equity of NTELOS Inc.

The Company considered a number of factors to determine the fair value of the Company at May 2, 2005. The Company valued all of its assets and liabilities except for current assets and liabilities related to operating activity and certain other items that have a readily determinable fair value. This work included the valuation of property, plant and equipment, identifiable intangible assets, long-term debt, favorable or unfavorable leases and other contractual obligations as of the merger date. The principal valuation techniques utilized a variety and combination of methods such as a market approach, cost approach and income approach. The valuations were prepared based on a number of projections, assumptions, risk assessments, industry and economic tables and other factors. In accordance with the provisions of purchase accounting, the historical common stock and retained earnings were eliminated.

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The excess of purchase price over the estimated fair value of net assets acquired resulted in $169.2 million of goodwill. The allocation of purchase consideration was as follows:

Current assets	$	65,653
Investments		2,609
Property, plant and equipment		340,519
Goodwill		169,248
Franchise rights		32,000
Definite-lived intangible assets		123,050
Radio spectrum license		131,244
Deferred charges		4,630
Total Assets		868,953
Current liabilities		50,381
Long-term debt		631,408
Other long-term liabilities		61,053
Minority interest		377
Net assets acquired at May 2, 2005	$	125,734

In connection with the merger, NTELOS Inc. recorded approximately $28.3 million in liabilities, including legal, financial, and consulting costs, additional costs associated with accelerated payout of certain retirement obligations and retention obligations, $0.7 million of which remained unpaid at December 31, 2005. Of the total amount incurred, $15.4 million was recorded as capital restructuring charges by NTELOS Inc. during the period January 1, 2005 through May 1, 2005 and $0.2 million by the Company subsequent to May 1, 2005. In addition to this, $12.8 million relates to debt issuance costs of the new first and second lien term loans which was originally included in deferred charges but was eliminated on May 2, 2005 through purchase accounting (Note 6).

Also in connection with the merger and application of purchase accounting, the Company determined the fair value of the lease terms for all of its significant leasing arrangements which includes leases on retail locations, cell sites and certain other business office locations. Based on this, the Company recorded a $4.3 million favorable lease asset (included in the caption “deferred charges”) and $7.3 million unfavorable lease liability (included in the caption “Other long-term liabilities”). These assets and liabilities are amortized to rent expense (included in the operating expense line item “maintenance and support”) over the lives of the underlying lease agreements.

The Company entered into advisory agreements with CVC Management LLC and Quadrangle Advisors LLC (the “Advisors”) whereby the Advisors will provide advisory and other services to the Company for a period of ten years for a combined annual advisory fee of $2.0 million. The Company recognized $1.3 million of advisory fees as corporate operations expense from the merger date through December 31, 2005. On February 13, 2006, in conjunction with the Company’s IPO, the Company terminated these agreements and paid a $12.9 million termination fee from the offering proceeds.

Note 3. Investment in NTELOS Inc.

Pursuant to the merger between Holdings Corp. and NTELOS Inc. on May 2, 2005, the Company’s ownership in NTELOS Inc. increased from 24.9% (held from February 24, 2005 to May 1, 2005) to 100%. From February 24, 2005 through May 1, 2005 the Company accounted for its investment in NTELOS Inc. under the equity method of accounting. On May 2, 2005, the Company began consolidating NTELOS Inc.

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Summarized financial information for NTELOS Inc. for the period February 24, 2005 through May 1, 2005 is contained in the following table:

Condensed Statement of Operations

(In thousands, except per share data)	For the period February 24, 2005 through May 1, 2005
Operating Revenues
Wireless communications	$	50,519
Wireline communications		19,385
Other communications services		170
		70,074
Operating Expenses
Cost of wireless sales (exclusive of items shown separately below)		10,670
Maintenance and support		11,690
Depreciation and amortization		13,430
Gain on sale of assets		(3,487	)
Accretion of asset retirement obligations		139
Customer operations		16,087
Corporate operations		4,261
Capital restructuring charges		10,991
		63,781
Operating Income		6,293
Other Income (Expense)
Other income		197
Other expenses, principally interest, net		(8,821	)
		(2,331	)
Income tax Expense		2,555
Minority Interest in Losses of Subsidiaries		(13	)
Net Loss	$	(4,873	)
Company’s Share of Net Loss recorded as equity loss from NTELOS Inc.	$	(1,213	)
Basic and Diluted Earnings per Class L Common Share:
Loss per share	$	(0.17	)
Average shares outstanding – basic and diluted		7,047

If the acquisition of NTELOS Inc. and its recapitalization described in Notes 2 and 6 had occurred as of the beginning of the year presented, the unaudited pro forma operating revenues and net loss for the year ended December 31, 2005 would have been $390.2 million and $(0.5) million, respectively and for the year ended December 31, 2004 would have been $341.7 million and $(5.6) million, respectively.

Note 4. Significant Accounting Policies

ACCOUNTING ESTIMATES: The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

PRINCIPLES OF CONSOLIDATION: As noted in Note 1 above, the Company purchased a 24.9% ownership interest in NTELOS Inc. and its subsidiaries on February 24, 2005 and purchased the remaining 75.1% ownership interest on May 2, 2005. The Company accounted for the results of operations for NTELOS Inc. from February 24 through May 1, 2005 using the equity method of accounting. For the period commencing on May 2, 2005, the Company consolidated the financial statements of NTELOS Inc. The consolidated financial statements include the accounts of the Company, NTELOS Inc. and all of its wholly-owned subsidiaries and those limited liability corporations where NTELOS Inc., as managing member, exercises control. All significant intercompany accounts and transactions have been eliminated.

REVENUE RECOGNITION: The Company recognizes revenue when services are rendered or when products are delivered, installed and functional, as applicable. Certain services of the Company require payment in advance of service

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performance. In such cases, the Company records a service liability at the time of billing and subsequently recognizes revenue over the service period.

With respect to the Company’s wireline and wireless businesses, the Company earns revenue by providing access to and usage of its networks. Local service and airtime revenues are recognized as services are provided. Wholesale revenues are earned by providing switched access and other switched and dedicated services, including wireless roamer management, to other carriers. Revenues for equipment sales are recognized at the point of sale. PCS handset equipment sold with service contracts are sold at prices below cost, based on the terms of service contract. The Company recognizes the entire cost of the handsets at the time of sale, rather than deferring such costs over the service contract period.

Nonrefundable PCS activation fees and the portion of the activation costs directly related to acquiring new customers (primarily activation costs and sales commissions) are deferred and recognized ratably over the estimated life of the customer relationship ranging from 12 to 24 months in accordance with the Securities and Exchange Commission’s Staff Accounting Bulletin 101 as amended by Securities and Exchange Commission’s Staff Accounting Bulletin 104 (collectively referred to as “SAB No. 104” below). Similarly, in the rural local exchange carrier (“RLEC”) and competitive wireline segments, the Company charges nonrefundable activation fees for certain new service activations. Such activation fees and costs are deferred and recognized ratably over 5 years. Direct activation costs exceed activation revenues in all cases. The Company defers direct activation costs up to but not in excess of the related deferred revenue.

Effective July 1, 2003, NTELOS Inc. adopted Emerging Issues Task Force No. 00-21 (“EITF No. 00-21”), Accounting for Revenue Arrangements with Multiple Element Deliverables. The EITF guidance addresses how to account for arrangements that involve multiple deliverables, i.e., the delivery or performance of multiple products, services, and/or rights to use assets. In applying this guidance, separate contracts with the same party, entered into at or near the same time, are presumed to be a bundled transaction, and the consideration are measured and allocated to the separate units based on their relative fair values. The adoption of EITF No. 00-21 required the evaluation of each type of arrangement entered into by the Company for each type of sales transaction and each sales channel. The adoption of EITF No.00-21 resulted in substantially all of the activation fee revenue generated from Company-owned retail stores and associated direct costs being recognized at the time the related wireless handset is sold and is classified as equipment revenue and cost of equipment, respectively. Upon adoption of EITF No. 00-21, previously deferred revenues and costs were amortized over the remaining estimated life of the subscriber relationship, not to exceed 24 months. Revenue and costs for activations at third party retail locations and related to the Company’s segments other than wireless continue to be deferred and amortized over the estimated lives as prescribed by SAB No. 104. The adoption of EITF No. 00-21 had the effect of increasing equipment revenue and related customer operations expenses for the period May 2, 2005 through December 31, 2005 by $0.5 million. These revenues and costs otherwise would have been deferred and amortized. The amounts of deferred revenue and costs under SAB No. 104 at December 31, 2005 was approximately $0.6 million.

CASH AND CASH EQUIVALENTS: The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents. The Company places its temporary cash investments with high credit quality financial institutions. At times, such investments may be in excess of the FDIC insurance limit. At December 31, 2005, total cash equivalents, consisting of amounts invested in a temporary business investment deposit account, were $24.1 million.

TRADE ACCOUNTS RECEIVABLE: The Company sells its services to residential and commercial end-users and to other communication carriers primarily in Virginia and West Virginia. The carrying amount of the Company’s trade accounts receivable approximates fair value. The Company has credit and collection policies to ensure collection of trade receivables and requires deposits on certain sales. The Company maintains an allowance for doubtful accounts which management believes adequately covers all anticipated losses with respect to trade receivables. Actual credit losses could differ from such estimates. The Company includes bad debt expense in customer operations expenses in the consolidated statement of operations. Bad debt expense for the consolidation period May 2 through December 31, 2005 was $5.7 million.

SECURITIES AND INVESTMENTS: Investments held by the Company are typically required holdings purchased in connection with debt instruments or are acquired through settlement of a receivable. The Company’s current senior debt holdings prohibit speculative investment purchases. Management’s policy for investments is to determine the appropriate classification of securities at the date of purchase and continually thereafter. As of December 31, 2005, all investments are accounted for under the cost method as the Company does not have significant ownership in equity securities and there is no ready market. Information regarding these and all other investments is reviewed continuously for evidence of impairment in value.

PROPERTY, PLANT AND EQUIPMENT AND OTHER LONG-LIVED ASSETS: Long-lived assets include property and equipment, radio spectrum licenses, long-term deferred charges and intangible assets to be held and used. Long-lived assets, excluding intangible assets with indefinite useful lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount should be addressed pursuant to Statement of Financial Accounting Standard No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”). Impairment is

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determined by comparing the carrying value of these long-lived assets to management’s best estimate of future undiscounted cash flows expected to result from the use of the assets. If the carrying value exceeds the estimated undiscounted cash flows, the impairment is measured as the excess of carrying value over the estimated fair value.

Depreciation of property, plant and equipment is calculated on a straight-line basis over the estimated useful lives of the assets. Buildings are depreciated over a 50-year life and leasehold improvements, which are categorized with land and building, are depreciated over the shorter of the estimated useful lives or the remaining lease terms. Network plant and equipment are depreciated over various lives from 4 to 40 years, with a weighted average life of approximately 13 years. Furniture, fixtures and other equipment are depreciated over various lives from 5 to 18 years.

Goodwill, franchise rights and radio spectrum licenses are considered indefinite lived intangible assets. Indefinite lived intangible assets are not subject to amortization but are instead tested for impairment annually or more frequently if an event indicates that the asset might be impaired. The Company assesses the recoverability of indefinite lived assets annually on October 1 and whenever adverse events or changes in circumstances indicate that impairment may have occurred.

Intangibles with a finite life are classified as other intangibles on the consolidated balance sheets. At December 31, 2005, other intangibles were comprised of the following:

($’s in thousands)	Estimated Life	Fair Value at May 2, 2005		Amortization for the period May 2 through December 31, 2005		Net Book Value at December 31, 2005
Customer relationships	3 to 15 yrs.	$	113,400	$	9,040	$	104,360
Trademarks	15 yrs.	$	9,650	$	430	$	9,220

ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS: Statement of Financial Accounting Standard No. 143, Accounting for Asset Retirement Obligations (“SFAS No. 143”) establishes accounting standards for recognition and measurement of a liability for an asset retirement obligation and the associated asset retirement cost. The fair value of a liability for an asset retirement obligation is to be recognized in the period in which it is incurred if a reasonable estimate can be made. The associated retirement costs are capitalized and included as part of the carrying value of the long-lived asset and amortized over the useful life of the asset. Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143 (“FIN 47”) clarifies the term “conditional asset retirement obligation” as used in SFAS No. 143 and also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement.

The Company enters into long-term leasing arrangements primarily for tower sites and retail store locations in its wireless segment. Additionally, in its wireline operations, the Company enters into various facility co-location agreements and is subject to locality ordinances. In both cases, the Company constructs assets at these locations and, in accordance with the terms of many of these agreements, the Company is obligated to restore the premises to their original condition at the conclusion of the agreements, generally at the demand of the other party to these agreements. The Company recognized the fair value of a liability for an asset retirement obligation and capitalized that cost as part of the cost basis of the related asset, depreciating it over the useful life of the related asset. The following table describes the changes to the Company’s asset retirement obligations liability, which is included in long-term deferred liabilities:

(In thousands)
Asset retirement obligations on the May 2, 2005 merger date	$	7,341
Additional asset retirement obligations recorded		589
Accretion of asset retirement obligations		489
Asset retirement obligations at December 31, 2005	$	8,419

INVENTORIES AND SUPPLIES: The Company’s inventories and supplies consist primarily of items held for resale such as PCS handsets, pagers, wireline business phones and accessories. The Company values its inventory at the lower of cost or market. Inventory cost is computed on a currently adjusted standard cost basis (which approximates actual cost on a first-in, first-out basis). Market value is determined by reviewing current replacement cost, marketability and obsolescence.

DEFERRED FINANCING COSTS: Deferred financing costs are amortized using the straight-line method, which approximates the effective interest method, over a period equal to the term of the related debt instrument.

ADVERTISING COSTS: The Company expenses advertising costs and marketing production costs as incurred.

PENSION BENEFITS: NTELOS Inc. sponsors a non-contributory defined benefit pension plan covering all employees who meet eligibility requirements and were employed by NTELOS Inc. prior to October 1, 2003. The defined benefit pension plan was closed to NTELOS Inc. employees employed on or after October 1, 2003. Pension benefits vest

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after five years of service and are based on years of service and average final compensation subject to certain reductions if the employee retires before reaching age 65. NTELOS Inc.’s funding policy has been to contribute to the plan based on applicable regulatory requirements. Section 412 of the Internal Revenue Code and ERISA Section 302 establishes a minimum funding requirements for defined benefit pension plans whereby the funded current liability percentage must be at least 90% of the current liability in order to prevent noticing to members of an underfunded plan. Contributions are made to stay above this threshold and are intended to provide not only for benefits based on service to date, but also for those expected to be earned in the future.

The Company also sponsors a contributory defined contribution plan under Internal Revenue Code Section 401(k) for substantially all employees. The Company’s policy is to contribute 60% of each participant’s annual contribution for contributions up to 6% of each participant’s annual compensation. Company contributions to this plan vest after three years of service.

RETIREMENT BENEFITS OTHER THAN PENSIONS: NTELOS Inc. provides certain health care and life benefits for retired employees that meet eligibility requirements. Employees hired after January 1994 are not eligible for these benefits. The Company’s share of the estimated costs of benefits that will be paid after retirement is generally being accrued by charges to expense over the eligible employees’ service periods to the dates they are fully eligible for benefits.

INCOME TAXES: Deferred income taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

STOCK-BASED COMPENSATION: The Company accounts for stock-based employee compensation plans under Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations and follows the disclosure provisions of SFAS No. 123, Accounting for Stock-Based Compensation and the revised disclosure requirements of SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure, an Amendment of SFAS No. 123.

The Company’s Class A common stock was sold to certain employees at a price equal to fair value at the purchase date. The Company retains certain repurchase rights at the adjusted cost price (the “Call Option”) relating to the Class A common stock that expire one-fourth annually over four years (Note 11). Based on the existence of these repurchase rights and other attributes of the Class A common stock, the Company treats this instrument as a non-substantive class of equity for accounting purposes and therefore has classified this instrument as a liability until the repurchase rights expire. The Company recognizes non-cash compensation expense related to the difference in the fair value of the Class A common stock at the end of each accounting period over its issue price (its “intrinsic value”). In addition to these shares, the Company has issued stock options to purchase Class A common stock (Note 14) that will also result in non-cash compensation expense being recognized for changes in the intrinsic value of the Class A common stock. For both Class A common stock and stock options exercisable into shares of Class A common stock, the Company records non-cash compensation expense over the period during which the repurchase rights expire (in the case of the Class A common stock) and the vesting period (in the case of the options). Total non-cash compensation expense recognized from the inception date to December 31, 2005 was $3.7 million. The Company has concluded that no additional compensation expense would be recorded under SFAS No. 123.

In 2005, the Company did not have equity instruments traded on any public markets. For purposes of determining fair value, the Company valued the Class A common stock in accordance with the guidelines established by the AICPA Audit and Accounting Practice Aid Series, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.

EARNINGS (LOSS) PER COMMON SHARE: All earnings (loss) per share amounts are calculated in accordance with Statement of Financial Accounting Standard No. 128 (“SFAS No. 128”). As noted above, the shares of Class A common stock are considered non-substantive equity for accounting purposes and therefore, are not considered for basic or diluted earnings per share calculations until such time as the Company’s Call Option has expired. All shares of Class A common stock remain subject to the Call Option at December 31, 2005. Therefore, for basic and diluted earnings (loss) per share, the denominator is the weighted average number of shares of Class L common stock outstanding during the year.

For purposes of calculating weighted average shares to be used in both the basic and diluted earnings per share calculation, the Company’s calculations are based on the period beginning on February 24, 2005, the date of our initial investment in NTELOS Inc. and commencement of our operations.

FAIR VALUE OF FINANCIAL INSTRUMENTS: Statement of Financial Accounting Standard No. 107, Disclosure About Fair Value of Financial Instruments (“SFAS No. 107”), requires certain disclosures regarding the fair value of financial instruments. Cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are reflected in the consolidated financial statements at cost which approximates fair value because of the short-term maturity of

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these instruments. The fair values of other financial instruments are based on quoted market prices or discounted cash flows based on current market conditions.

Statement of Financial Accounting Standard No. 133, as amended by SFAS No. 138, Accounting for Derivative Instruments and Hedging Activities (“SFAS No. 133 and 138”), requires all derivatives to be measured at fair value and recognized as either assets or liabilities on the Company’s balance sheet. Changes in the fair values of derivative instruments are recognized in either earnings or comprehensive income, depending on the designated use and effectiveness of the instruments (Note 9).

RECENT ACCOUNTING PRONOUNCEMENTS: In December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payments” (“SFAS No. 123R”). SFAS No. 123R requires the recognition of the cost of employee services received in exchange for an award of equity instruments in the financial statements and measurement based on the grant-date fair value of the award. It requires the cost to be recognized over the period during which an employee is required to provide service in exchange for the award. Additionally, compensation expense will be recognized over the remaining employee service period for the outstanding portion of any awards for which compensation expense had not been previously recognized or disclosed under SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS No. 123”). SFAS No. 123R replaces SFAS No. 123 and supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB No. 25”), and its related interpretations.

The Company is required to adopt SFAS No 123R no later than January 1, 2006. The Company does not believe that the effects of adoption will have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

Note 5. Disclosures About Segments of an Enterprise and Related Information

The Company manages its business segments with separable management focus and infrastructures.

Wireless PCS: The Company’s wireless PCS business carries digital phones and services, marketed in the retail and business-to-business channels throughout much of Virginia and West Virginia. The Company’s wireless PCS segment operates in three primary markets: Virginia East, Virginia West and West Virginia. The Virginia East market covers a populated area of 3.4 million people primarily in the Richmond and Hampton Roads areas of Virginia through Richmond 20MHz, LLC, a wholly owned subsidiary. The region was added in July 2000 from the PrimeCo VA acquisition. The Virginia West market currently serves a populated area of 2.2 million people in central and western Virginia primarily through the Virginia PCS Alliance, L.C. (“VA Alliance”), a 97% majority owned Limited Liability Company. The West Virginia market is served by West Virginia PCS Alliance, L.C. (“WV Alliance”), a wholly owned limited liability company, and currently serves a populated area of 1.6 million people primarily in West Virginia, but extending to parts of eastern Kentucky, southwestern Virginia and eastern Ohio. In addition to the markets indicated above, the Company has licenses, which are not currently active, that cover a populated area of approximately 1.4 million people.

In addition to the end-user customer business, the Company provides roaming services to other PCS providers and has a wholesale network access agreement with Sprint PCS, Inc. which NTELOS Inc. entered into in June 2004. Revenue from these wholesale service agreements was $43.0 million for the period May 2, 2005 through December 31, 2005.

RLEC: The Company has two RLEC businesses subject to the regulations of the State Corporation Commission of Virginia. NTELOS Inc. has owned one of these for over 100 years and the other was added in early 2001 through a merger with R&B Communications, Inc. These businesses serve several areas in western Virginia, are fully integrated and are managed as one consolidated operation. Principal products offered by this segment are local wireline telephone service, which includes advanced calling features, network access, long distance toll and directory advertising.

Competitive wireline: In addition to the RLEC services, the Company directly or indirectly owns 1,900 route-miles of fiber optic network and provides transport services for long distance, Internet and private network services. Much of this network is located within regions in which the Company sells products and services or provides connections for and between markets the Company serves. The Company’s network is connected and marketed through Valley Network Partnership (“ValleyNet”), a partnership of three nonaffiliated communications companies that have interconnected their networks to form a nonswitched, fiber optic network. The ValleyNet network is connected to and marketed with other adjacent fiber networks creating a connected fiber optic network serving the ten-state mid-Atlantic region, stretching from Pennsylvania to Florida north to south and west as far as Charleston, WV.

The Company also offers competitive local exchange carrier (“CLEC”) services. Through its wholly owned subsidiaries certified in Virginia, West Virginia and Tennessee, it currently provides CLEC service in 16 geographic markets. The Company has a facilities based strategy, offering broadband service applications such as Ethernet, PRI connections and competitive access utilizing its fiber network. Also within this segment, the Company provides Internet access services through a local presence in 54 markets in Virginia, West Virginia and Tennessee. The Company’s focus with internet has

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shifted to concentrate efforts on broadband service offerings. Metro Ethernet, dedicated high-speed access, integrated access, digital subscriber line (“DSL”) and portable broadband are the primary broadband products. These operations are managed as one consolidated operation within a single segment due to the interdependence of network and other assets and functional support.

Other: Other communications services ( “Other”) includes certain unallocated corporate related items and non-cash compensation charges, as well as results from the Company’s paging and other communication services businesses, which are not considered separate reportable segments. Total unallocated corporate operating expenses were $7.3 million for the period May 2, 2005 through December 31, 2005, inclusive of $1.3 million of advisory fees and $3.7 million of Class A common stock and option non-cash compensation charges (Notes 11 and 14). On February 13, 2006, in conjunction with the Company’s IPO (Note 1), the Company terminated these agreements and paid a $12.9 million termination fee.

The Company has one customer that accounted for 18% of its revenue. Revenue from this customer was primarily derived from a wireless PCS wholesale contract and RLEC and competitive wireline segments’ network access.

Summarized financial information for the Company’s reportable segments is shown in the following table. On the Statement of Operations, the wireless communications revenue caption is exclusively comprised of the wireless PCS segment and the wireline communications revenue captions is comprised of the RLEC and the competitive wireline segments.

(in thousands) As of December 31, 2005 and for the period May 2, 2005 through December 31, 2005	Wireless PCS		RLEC		Competitive Wireline		Other			Total
Operating Revenues	$	190,477	$	38,153	$	35,291	$	569		$	264,490
Operating Income (Loss)		20,082		18,036		5,231		(8,432	)		34,917
Depreciation and Amortization		40,005		10,560		7,809		729			59,103
Accretion of Asset Retirement Obligations		468		9		28		(16	)		489
Capital Restructuring Charges								183			183
Non-cash Compensation Charges								3,730			3,730
Total Segment Assets		515,239		204,005		102,468		1,288			823,000
Corporate Assets											72,843
Total Assets										$	895,843

Note:   The table above includes the period May 2, 2005 through December 31, 2005 only as Holdings Corp. consolidated NTELOS Inc. beginning May 2, 2005. Prior to this, the only activity on the Holdings Corp. statement of operations was the 24.9% equity share of NTELOS Inc.’s results of operations.

Note 6. Long-Term Debt

As of December 31, 2005, the Company’s outstanding long-term debt consisted of the following:

(In thousands)	December 31, 2005
First Lien Term Loan	$	396,000
Second Lien Term Loan		225,000
2013 Floating Rate Senior Notes, including accrued interest of $3,580		137,265
Capital lease obligations		1,119
		759,384
Less current portion		4,513
Long-Term Debt	$	754,871

Long-term debt, excluding capital lease obligations

In connection with its acquisition of NTELOS Inc. on May 2, 2005, Holdings Corp. assumed approximately $625.7 million in debt including $624.0 million of Senior Secured Credit Facilities (the “Facilities”) and $1.7 million of capital lease obligations. As of December 31, 2005 the outstanding debt balance consisted of $621.0 million in the Facilities and $1.1 million in capital lease obligations.

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The Facilities include (i) a $400 million, 6.5 year, first-lien term loan facility (the “First Lien Term Loan”), (ii) a $35 million, 5-year, revolving credit facility (the “Revolving Credit Facility”), and (iii) a $225 million, 7 year, second-lien term loan facility (the “Second Lien Term Loan”). NTELOS Inc. entered into the Facilities on February 24, 2005 and borrowed $625 million under the First and Second Term Loans on that date. A portion of the proceeds from the borrowing were used to pay off a majority of NTELOS Inc.’s existing debt and the existing interest rate swap agreements for an aggregate disbursement of approximately $183 million.

The First Lien Term Loan matures in 6.5 years from its issuance in February 2005, with quarterly repayments of $1 million for the initial 5.5 years, with the remainder due in equal quarterly payments over the year prior to maturity. The Revolving Credit Facility provides for borrowings up to $35 million for five years and is payable in full at maturity. The Second Lien Term Loan matures in 7 years from its issuance in February 2005 and is payable in full at maturity. The First Lien Term Loan bears interest at rates 2.5% above the Eurodollar rate or 1.5% above the Federal Funds rate, with a 25 basis point reduction in each of these rates when NTELOS Inc.’s leverage ratio is equal to or less than 4.0:1.0, as defined in the agreement. The Second Lien Term Loan bears interest at rates 5.0% above the Eurodollar rate or 4.0% above the Federal Funds rate. Interest on the First and Second Lien Term Loans is due and payable monthly. The First Lien Term Loan and Revolving Credit Facility are secured by a first priority pledge of substantially all property and assets of NTELOS Inc. and all material subsidiaries, as guarantors, excluding the regulated RLEC companies. The Second Lien Term Loan is secured by a second priority interest in all collateral pledged to the First Lien Term Loan and Revolving Credit Facility.

The First Lien Term Loan contains various restrictions and conditions including covenants relating to leverage and interest coverage ratio requirements and a limitation on future capital expenditures by NTELOS Inc. and its subsidiaries and dividends by NTELOS Inc. to the Company. The Second Lien Term Loan contains various restrictions and conditions including customary incurrence based covenants. The Second Lien Term Loan contains a 1% prepayment premium prior to its second anniversary date. NTELOS Inc.’s First Lien Credit Agreement restricts NTELOS Inc. from making loans, advances or cash dividends to NTELOS Holdings Corp. until such time as NTELOS Inc.’s total debt outstanding to EBITDA, as defined in the credit agreement, is less than a ratio of 3.00:1.00. At December 31, 2005, NTELOS Inc.’s total debt outstanding to EBITDA was 4.10:1.00.

NTELOS Inc. and its subsidiaries’ net assets were $134.3 million as of December 31, 2005 which were restricted pursuant to NTELOS Inc.’s First Lien Credit Agreement and could not be transferred to NTELOS Holdings Corp. in the form of loans, advances or cash dividends without a consent of the credit agreement lenders. At December 31, 2005, in addition to the Company’s $133.2 million investment in NTELOS Inc., the Company’s other significant assets and liabilities consisted of $2.3 million in cash, $8.0 million of other assets, $.6 million of current liabilities, $137.3 million of long-term notes (discussed below) and $4.5 million of Class A common stock deposits and related non-cash compensation.

On October 17, 2005, the Company issued $135 million in Floating Rate Senior Notes (“Floating Rate Notes”) at 99% of par. The Floating Rate Notes mature in October 2013. The Floating Rate Notes bear interest at a rate per annum, reset quarterly, equal to (i) three-month LIBOR plus 8.75% for the period from October 17, 2005 to October 14, 2006 (the “Base Rate”); (ii) Base Rate plus 1.5% for the period from October 15, 2006 to October 14, 2007; and (iii) Base Rate plus 2.5% from October 15, 2007 and thereafter, in each case, as determined by an agent appointed by the Company to calculate LIBOR for purposes of the indenture governing the Floating Rate Notes, which shall initially be the trustee. Interest on the Floating Rate Notes is payable quarterly in arrears on January 15, April 15, July 15 and October 15, commencing on January 15, 2006. On and prior to October 15, 2009, the Company has the option to pay interest through the issuance of additional Floating Rate Notes in a principal amount equal to such interest amount or in cash. At any time the Company may also make an election to pay interest in cash, after which all payments of interest must be made in cash. Any additional Floating Rate Notes will be identical to the originally issued Floating Rate Notes, except that interest will begin to accrue from the date they are issued rather than the original issue date. Under the terms of the Floating Rate Notes, after October 15, 2009, interest will be payable only in cash. These notes are unsecured obligations and rank equally with all of the Company’s existing and future senior unsecured indebtedness and senior to existing and future subordinated indebtedness, but are subordinate to our existing and future secured indebtedness to the extent of the collateral securing such indebtedness, and to all existing and future indebtedness and other liabilities of the Company’s subsidiaries. No scheduled principal payments are required prior to maturity. The Floating Rate Notes are non-callable until after April 14, 2006. From April 15, 2006 through April 14, 2007, the Floating Rate Notes are callable at par after which they are callable at a redemption price between 100% and 102% depending on the timing of redemption.

The Floating Rate Notes were recorded net of a $1.4 million discount associated with the issue price. The discount is being accreted over the life of the Floating Rate Notes and is reflected in interest expense in the statement of operations. Accretion of the discount for the period from October 17, 2005 to December 31, 2005 was less than $0.1 million.

On January 15, 2006, the Company elected to pay interest on the Floating Rate Notes through the issuance of additional Floating Rate Notes. As the Company has the ability and intent to pay interest through the issuance of additional Floating Rate Notes, the Company has included the $3.8 million of accrued interest at December 31, 2005 as additional Floating Rate Notes outstanding. The effective interest rate on the Floating Rate Notes as of December 31, 2005 was 13.0%. The Company closed on an IPO on February 13, 2006 and a portion of the proceeds from this offering will be used to repay these Notes, including unpaid interest thereon, totaling $144.0 million on April 15, 2006.

In connection with the First and Second Lien Term Loans described above, NTELOS Inc. deferred debt issuance costs of approximately $12.8 million which were being amortized to interest expense over the life of the Facilities. Amortization of these costs for the February 24 through May 1, 2005 (accounted for by the Company under the equity method of accounting) was $0.4 million. At May 2, 2005, NTELOS Inc. had a $12.4 million unamortized balance of deferred debt issuance costs related to the First Lien Term Loan and the Second Lien Term Loan. Through purchase accounting, the deferred financing fees were considered in determining the fair value of the debt and thus this balance was eliminated.

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In connection with the issuance of the Floating Rate Notes, Holdings, Corp. deferred debt issuance costs of approximately $5.4 million which are being amortized to interest expense over the life of the Floating Rate Notes. Amortization of these costs for the period ended December 31, 2005 was $0.1 million.

The aggregate maturities of long-term debt outstanding at December 31, 2005, excluding capital lease obligations, based on the contractual terms of the instruments are $4.0 million per year from 2006 through 2009, $97.3 million in 2010, and $645.0 million thereafter. Based on its contractual terms, the Floating Rate Notes mature in 2013 and have been included in the $645.0 million for debt payments subsequent to 2010. As noted above, the Company will use $144.0 million of the proceeds from its IPO to repay the Floating Rate Notes, including unpaid interest, on April 15, 2006.

The Company’s blended interest rate on its long-term debt as of December 31, 2005 is 8.5%.

Capital lease obligations

In addition to the long-term debt discussed above, the Company also enters into capital leases on vehicles used in its operations with lease terms of 4 to 5 years. At December 31, 2005, the net present value of these future minimum lease payments is $1.1 million, which is net of the amounts representing interest of $0.1 million. As of December 31, 2005 the principal portion of these obligations are due as follows: $0.5 million in 2006, $0.4 million in 2007, and $0.2 million in 2008.

Note 7. Convertible Notes Payable to Stockholders

The Company issued 10% convertible notes to certain of its stockholders on May 2, 2005, the proceeds of which were used toward financing the acquisition (Note 2). The notes were issued at face value, accrued interest quarterly at a rate of 10% per annum and were due in five years. The notes were required be prepaid in whole or in part without premium or penalty upon receipt of cash from the $5.6 million income tax receivable or $0.2 million of expected proceeds from a pending asset sale. These proceeds were received and the notes were settled in December 2005.

Note 8. Supplementary Disclosures of Cash Flow Information

The following information is presented as supplementary disclosures for the consolidated statements of cash flows for the periods indicated below.

(In thousands)	January 14, 2005 (inception) through December 31, 2005
Cash payments for:
Interest	$	31,206
Income taxes		965
Pension and other retirement plan contributions and distributions		1,699
Cash received for income tax refunds	$	7,469

Within the cash payments for interest amounts in the above table, $1.4 million relates to net interest paid on the interest rate swap agreements for the period May 2 through December 31, 2005.

Pursuant to the Transaction Agreement, NTELOS Inc. was required to move proceeds from the sale of certain assets into a segregated account and disbursed these funds on the May 2, 2005 merger closing date as part of the consideration used to purchase the remaining security interest not owned by the Buyers. The amount paid to the former NTELOS Inc. shareholders from this account was $25.0 million.

The Company received $7.5 million in income tax refunds in December 2005. This was related to the regular income tax receivable of $5.6 million discussed in Note 7, a refund for AMT carrybacks of $1.8 million (which was recorded as a reduction of Goodwill) and $0.1 million of interest income.

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Note 9. Financial Instruments

The Company is exposed to market risks with respect to certain of the financial instruments that it holds. The following is a summary by balance sheet category:

Cash and Short Term Investments

The carrying amount approximates fair value because of the short-term maturity of those instruments.

Long Term Investments

At December 31, 2005, the Company’s principal investment security was $2.8 million of Class C stock holdings in the Rural Telephone Bank (“RTB”). In connection with the Company’s application of purchase accounting, this asset was valued based on discounted cash flow of anticipated future dividends based on historical trends of RTB dividend payments to the class C stock. All of the investments carried under the cost method at December 31, 2005 are high quality instruments. For all periods prior to December 31, 2005, a reasonable estimate of fair value could not be made without incurring excessive costs for investments with no quoted market prices. Additional information regarding the Company’s investments is included in Note 10.

Interest Rate Swaps

NTELOS Inc. entered into an interest rate swap agreement with a notional amount of $312.5 million in order to manage its exposure to interest rate movements by effectively converting a portion of its long-term debt from variable to fixed rates. This swap agreement has maturities up to three years and involves the exchange of fixed rate payments for variable rate payments without the effect of leverage and without the exchange of the underlying face amount. Fixed interest rate payments are at a per annum rate of 4.1066%. Variable rate payments are based on three-month US dollar LIBOR. The weighted average LIBOR rate applicable to this agreement was 3.21% on the May 2, 2005 merger transaction closing date and 4.53% on December 31, 2005. The notional amounts do not represent amounts exchanged by the parties, and thus are not a measure of exposure to the Company. The amounts exchanged are based on the notional amounts and other terms of the swaps.

On May 2, 2005, the swap agreement had a fair value of a $0.7 million liability and on December 31, 2005, the fair value was a $4.1 million asset. The Company did not designate this swap as a cash flow hedge for accounting purposes and therefore recorded the changes in market value of the swap agreement as gain (loss) on interest rate swap instrument for the applicable periods.

The fair value of the interest rate swap agreement is based on a dealer quote. Neither the Company nor the counterparties, which are prominent banking institutions, are required to collateralize their respective obligations under these swaps. The Company is exposed to loss if the counterparty defaults. The Company is exposed to credit loss on its interest rate swap agreement to the extent the fair value of the swap is an asset. Therefore, at December 31, 2005, the Company’s credit exposure was $4.1 million.

The Company does not believe that any reasonably likely change in interest rates would have a material adverse effect on the financial position, the results of operations or cash flows of the Company. All interest rate swaps are reviewed with and, when necessary, are approved by the Board of Directors.

Debt Instruments

On December 31, 2005, the Company’s First and Second Lien Term Loans totaled $621.0 million. Of this amount, $308.5 million was not subject to the swap agreement. Therefore, the Company has variable rate exposure related to this amount. As indicated in the table below, the Company believes the face value of the senior debt approximates its fair value. In addition to this, the Company issued $135 million in Floating Rate Senior Notes on October 17, 2005. The Company has variable rate exposure related to these notes. As discussed in Note 16, using proceeds from the IPO, these notes will be repaid on or after April 15, 2006 when they become callable without a penalty. As indicated in the table below, the Company believes the face value of the senior debt approximates its fair value.

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The following table indicates the difference between face amount, carrying amount and fair value of the Company’s financial instruments at December 31, 2005.

Financial Instruments (In thousands)	Face amount			Carrying amount		Fair value
Nonderivatives:
Financial assets:
Cash and short-term investments	$	28,134		$	28,134	$	28,134
Long-term investments for which it is:
Practicable to estimate fair value	$	N/A		$	2,927	$	2,927
Not practicable to estimate fair value	$	N/A		$	115	$	115
Financial liabilities:
Marketable long-term debt	$	621,000		$	621,000	$	628,481
Non-marketable long-term debt	$	1,119		$	1,119	$	1,119
Marketable long-term notes (inclusive of Interest paid in kind)	$	135,000		$	137,265	$	138,233
Derivatives relating to debt:
Interest rate swaps – asset	$	312,500	*	$	4,120	$	4,120

* Notional amount

Note 10. Securities and Investments

The Company’s principal investment at December 31, 2005 is $2.8 million of Class C stock holdings in the RTB. This was a required investment for NTELOS Inc. related to the 5.0% to 6.05% notes payable NTELOS Inc. held with RTB. This debt was paid in full on February 24, 2005. On March 1, 2005, NTELOS Inc. converted approximately 44% of its original restricted, non-dividend paying class B stock investment into a dividend paying class C stock investment. On July 31, 2005, substantially all of the remaining 56% of the class B stock was converted into class C stock. In connection with the Company’s application of purchase accounting, this asset was valued based on discounted cash flow of anticipated future dividends based on historical trends for RTB dividend payments to the class C stock. The Company determined this to be the most appropriate method of valuing this investment due to the relative illiquid nature of the investment.

In October 2005, a bill was passed in Congress which will allow for the liquidation of the Company’s investment in class C stock in the RTB. The stated liquidation value is $4.2 million. The Company has submitted the stock redemption agreements related to this and expects to receive proceeds from this liquidation in the second quarter of 2006.

Note 11. Stockholders’ Equity, Class A Common Stock Deposit and Earnings Per Share

Stockholders’ Equity

The Company’s authorized capital consists of preferred stock and two classes of common stock – Class L and Class A. As of December 31, 2005, the following preferred and common stock were authorized and outstanding:

(In thousands)	Shares Authorized	Shares Outstanding
Preferred Stock	100	—
Class A Common Stock	1,000	734
Class L Common Stock	14,000	11,364

The shares of Class A common stock were purchased by employees of the Company. Of the total Class A Common stock outstanding at December 31, 2005, 724,000 shares were purchased at a price of $1.00 per share. All of the Class A Common stock is subject to certain repurchase rights of the Company at the adjusted cost price (the “Call Option”), which rights expire one-fourth annually over four years. The Company has recorded the proceeds from the Class A common stock issuance as a deposit classified in long-term liabilities due to the presence of the Call Option and other attributes of the Class A common stock. Upon expiration of the Call Option, the related amount will be reclassified to Stockholders Equity, under the caption “Class A common stock”.

Upon termination of an employee, the Company and/or, if approved by the Board of Directors, the holders of Class L shares have the right and option to repurchase within 90 days of the termination date (on a pro-rata basis) the portion of the employees’ Class A shares subject to the Call Option at the adjusted cost price (as defined in the Shareholders Agreement) and the portion not subject to the Call Option at fair market value.

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The Company estimated the fair value of the Class A common stock to be equal to the issue price on the date of issuance. As noted above, this instrument is treated as a non-substantive class of equity for accounting purposes and accordingly, the Company recognizes non-cash compensation expense related to the difference in the fair value of the Class A common stock at the end of each accounting period over its issue price (its “intrinsic value”). This compensation expense is recognized over the period to which the Call Option relates.

At December 31, 2005, the pre-split fair value of the shares of Class A common stock was $10.0 million or $13.66 per share, and its intrinsic value was $9.2 million. Accordingly, the Company recognized $3.2 million, the proportionate amount of this value related to the inception-to-date period ended December 31, 2005, as non-cash compensation expense. This expense has been classified as a component of maintenance and support, customer operations and corporate operations in the accompanying consolidated statement of operations.

Except as described below, all shares of each class of common stock are identical and entitle the holders thereof to the same rights and privileges.

Any distributions, except for the repurchase of any stock held by an employee of the Company, are first made to the holders of Class L shares equal to the aggregate unpaid yield plus the original cost of the shares, less any previous distributions representing a return of capital. The unpaid yield (totaling approximately $5.9 million at December 31, 2005) is at a rate of 10% per annum, calculated quarterly, based upon an adjusted original cost of $11 per share, less any distributions representing a return of capital, plus the accumulated unpaid yield for all prior quarters. On October 17, 2005, the Company paid a dividend to the holders of Class L shares in the amount of $125 million out of the proceeds from the $135 million Floating Rate Senior Notes issue on that date (Note 6).

The holders of Class L and Class A common shares have the general right to vote for all purposes as provided by law. Each holder of Class L and Class A common shares is entitled to one vote for each share held.

The original investments made by the Investors on February 24, 2005, totaling $35.7 million, were made to the limited liability corporation “Project Holdings LLC” in the form of membership interests. On April 27, 2005, NTELOS Holdings Corp. was formed with Projects Holdings LLC being converted to Holdings Corp. and the former membership interest being converted to Class L Common Stock of Holdings Corp.

During the first quarter of 2006, the Company completed an IPO of 15.4 million shares of common stock. The offering consisted of 14.4 million shares of common stock sold on February 13, 2006 and 1.0 shares of common stock sold on March 15, 2006 pursuant to the exercise of the underwriters’ over-allotment option. The stock is traded on Nasdaq under the symbol NTLS. Additionally, the Class L common stock and Class A common stock deposits were converted to 26.5 million shares of Class B common stock. Additionally, each Class A option to purchase common stock was converted into approximately 2.15 options to purchase common stock and substantially all became 25% vested (Note 14).

In connection with the closing of the IPO, each share of our Class L and Class A common stock was converted into approximately 2.15 shares of Class B common stock. Additionally, the $6.0 million outstanding Class L share distribution preference on February 13, 2006 was converted into additional Class B shares. Including this, the conversion ratio for the Class L shares was 2.19.

The terms of the Class B common stock include a $30 million distribution preference. Holders of the Class B common stock are entitled to receive cash dividends or distributions of $30 million in the aggregate, if and when declared by the board of directors, out of funds legally available for that purpose prior to the payment of any dividends or distributions on our common stock. Cash held by NTELOS Inc. and its subsidiaries, which was approximately $25.9 million at December 31, 2005, can not be used toward payment of the $30 million distribution preference pursuant to restrictions under the First Lien Credit Agreement until such time as the total debt outstanding to Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA” as defined in the credit agreement) is less than a ratio of 3.00:1.00.

In connection with the IPO, 50% of the repurchase rights expired related to a majority of the Class A common stock on that date. The repurchase rights continue for the portion of Class B common stock which was converted from Class A shares with an additional 25% expiring in May 2007 and the final 25% expiring in May 2008. As a result of the acceleration in the expiration of the repurchase rights coupled with the continued increase in the instrument’s intrinsic value up to the IPO price, the Company recorded a $10.2 million non-cash compensation charge related to the former Class A shares and options on February 13, 2006. Future non-cash compensation charges will be determined on the IPO date and recognized over the remaining period for which the repurchase rights relate. Total future charges for the remainder of 2006, 2007, and 2008 are estimated to be $4.2 million, $2.8 million and $0.6 million, respectively.

In connection with the Company’s IPO, we have determined that the conversion of the options to purchase Class A common stock into options to purchase common stock and the partial accelerated expiration of the Call Option relating to the Class A common stock upon the closing of the IPO will be accounted for under the provisions of SFAS No. 123R. We believe that the exchange of options and modification to the Class A common stock will both need to be evaluated as

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modifications of equity instruments. We will compare the fair values of the original equity instruments to the fair values of the new equity instruments and, to the extent there is any incremental fair value, recognize compensation expense.

Earnings Per Share

The components of the computations of basic and diluted earnings per share for the period January 14, 2005 (inception) through December 31, 2005 were as follows (in thousands):

Numerator:
Net Income	$	1,098
Denominator:
Denominator for basic and diluted earnings per common share – weighted average common shares		9,609

For purposes of calculating weighted average shares to be used in both the basic and diluted earnings per share calculation, the Company’s calculations are based on the period beginning on February 24, 2005, the date that the initial investment was made and operations commenced.

Note 12. Income Taxes

The components of income tax expense are as follows for the period January 14, 2005 (inception) through December 31, 2005:

(In thousands)
Current tax expense:
Federal	$	—
State		637
		637
Deferred tax expense:
Federal		3,337
State		617
		3,954
	$	4,591

Total income tax expense was different than an amount computed by applying the graduated statutory federal income tax rates to income before taxes. The reasons for the differences are as follows for the period January 14, 2005 (inception) through December 31, 2005:

(In thousands)
Computed tax expense at statutory rate of 35%	$	1,991
Nondeductible stock compensation		1,110
Nondeductible equity loss		425
Nondeductible charges		75
State income taxes, net of federal income tax benefit		815
Other		175
	$	4,591

Net deferred income tax assets and liabilities consist of the following components at December 31:

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(In thousands)	2005
Deferred income tax assets:
Retirement benefits other than pension	$	3,946
Pension		7,609
Net operating loss		46,501
Licenses		30,540
Debt Issuance and discount		4,257
Accrued expenses		3,276
Other		1,455
Gross deferred tax assets		97,584
Valuation allowance		(10,557	)
Net deferred tax assets		87,027
Deferred income tax liabilities:
Property and equipment		40,117
Intangibles		56,775
Interest rate swap		1,603
Investments		980
		99,475
Net deferred income tax liability	$	12,448

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the existing valuation allowances at December 31, 2005. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

The Company has available net operating losses (“NOL’s”) of approximately $229.8 million, of which approximately $153.2 million (as adjusted for realized built-in losses occurring post-confirmation of NTELOS Inc.) originated from the NTELOS Inc. subsidiary group and existed at emergence from its bankruptcy. These NOL’s, and the adjustments related to realized built-in losses, are subject to an annual utilization limitation of approximately $9.2 million. Subsequent to NTELOS Inc.’s emergence from bankruptcy and through May 2, 2005, the NTELOS Inc. subsidiary group incurred additional NOL’s of approximately $84.9 million. These NOL’s, in addition to amounts which are subject to the first limitation, are subject to an annual limitation of $1.6 million (prior to adjustment in the first five years following the merger for realized built-in gains estimated at $22.4 million each year). Due to the limited carryforward life of NOL’s and the amount of the annual limitation, it is likely that we will only be able to realize $43 million of NOL’s existing prior to our emergence from bankruptcy. However, the NOL’s that accumulated since our emergence are expected to be realized due to the anticipation of recognizing certain built-in gains in future periods as discussed above.

The NTELOS Inc. subsidiary group filed amended returns during 2004 to carryback other available NOL’s totaling approximately $17.8 million. These amended returns were filed following the conclusion of a federal tax examination. This examination was settled as a no change audit report for the years 1998 and 1999. The Company received the federal tax refund during December 2005.

SFAS No. 109 establishes guidelines for companies that realize the benefits of an acquired enterprise’s deferred tax assets in future periods. These provisions require that any subsequent reduction in a deferred tax asset valuation allowance recorded at the time of the merger, as a result of realizing a benefit of pre-acquisition deferred tax assets, be first credited to goodwill, then credited to other non-current identifiable intangible assets and then, if these assets are reduced to zero, credited directly to expense. Goodwill of approximately $4.0 million was reduced currently to reflect the expected benefit to be received from utilizing pre-acquisition NOL’s and other deferred tax assets.

Note 13. Pension Plans and Other Postretirement Benefits

NTELOS Holdings Corp. sponsors several qualified and nonqualified pension plans and other postretirement benefit plans (“OPEB’s”) for its employees. The following tables provide a reconciliation of the changes in the plans’ benefit

93

obligations and fair value of assets and a statement of the funded status as of and for the period May 2, 2005 through December 31, 2005, and the classification of amounts recognized in the consolidated balance sheets:

(In thousands)	Defined Benefit Pension Plan			Other Postretirement Benefit Plan
Change in benefit obligations:
Benefit obligations, beginning	$	45,082		$	10,043
Service cost		1,821			102
Interest cost		1,646			371
Actuarial (gain) loss		(1,263	)		2,168
Benefits paid		(828	)		(206	)
Benefit obligations, ending	$	46,458		$	12,478
Change in plan assets:
Fair value of plan assets, beginning	$	26,046		$	—
Actual return on plan assets		1,125			—
Employer contributions		—			205
Benefits paid		(828	)		(205	)
Fair value of plan assets, ending	$	26,343		$	—
Funded status:
Funded status	$	(20,115	)	$	(12,478	)
Unrecognized net actuarial (gain) loss		(923	)		2,168
Accrued benefit cost	$	(21,038	)	$	(10,310	)

* Note: The table above includes only the period May 2, 2005 through December 31, 2005 since Holdings Corp. consolidated NTELOS Inc. beginning May 2, 2005. Prior to this, the only activity on the Holdings Corp. statement of operations was the 24.9% equity share of NTELOS Inc.’s results of operations.

On the May 2, 2005 merger date, pursuant to the Company’s application of purchase accounting, the Company adjusted its pension and OPEB obligations to fair value. These obligations’ carrying values differ from their fair values due to the existence of unrecognized gains or losses and unamortized prior service costs. At May 2, 2005, the Company’s pension plans contained unrecognized net losses and unrecognized prior service costs of $8.4 million and $0.4 million, respectively. Therefore, the Company’s adjustment to fair value increased the pension obligation by $8.8 million. Similarly, the OPEB obligation contained unrecognized net gains of $1.0 million at May 2, 2005. Therefore, the Company’s adjustment to fair value decreased the OPEB obligation by $1.0 million.

The following table provides the components of net periodic benefit cost for the plans:

(In thousands)	Defined Benefit Pension Plan			Other Postretirement Benefit Plan
Components of net periodic benefit cost:
Service cost	$	1,821		$	102
Interest cost		1,646			371
Expected return on plan assets		(1,465	)		—
Net periodic benefit cost	$	2,002		$	473

Prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10% of the greater of the benefit obligation and the market-related value of assets are amortized over the average remaining service period of active participants. As noted above, in connection with purchase accounting, these elements of the Company’s accrued benefit costs were adjusted to zero on May 2, 2005.

The Company has two qualified nonpension post employment benefit plans. The health care plan is contributory, with participants’ contributions adjusted annually. The life insurance plan is also contributory. These obligations, along with all of the pension plans and other post retirement benefit plans, are NTELOS Inc. obligations assumed by the Company. Eligibility for the life insurance plan is restricted to active pension participants age 50-64 as of January 5, 1994. Neither plan is eligible to employees hired after January 1994. The accounting for the plans anticipates that the Company will maintain a consistent level of cost sharing for the benefits with the retirees.

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The assumptions used in the measurements of the Company’s benefit obligations at December 31, 2005 are shown in the following table:

	Defined Benefit Pension Plan		Other Post Employment Benefit Plan
Discount rate	5.50	%	5.50	%
Rate of compensation increase	3.50	%	—

The assumptions used in the measurements of the Company’s net cost for the Consolidated Statement of Operations for the period May 2, 2005 through December 31, 2005:

	Defined Benefit Pension Plan		Other Post Employment Benefit Plan
Discount rate	5.50	%	5.50	%
Expected return on plan assets	8.75	%	—
Rate of compensation increase	3.50	%	—

The Company reviews the assumptions noted in the above table annually or more frequently (such as the May 2, 2005 update) to reflect anticipated future changes in the underlying economic factors used to determine these assumptions. For measurement purposes, a 9.0% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2005. The rate was assumed to decrease gradually each year to a rate of 5.0% for 2011 and remain at that level thereafter.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The effect to the net periodic postretirement health care benefit cost of a 1% change on the medical trend rate per future year, while holding all other assumptions constant, would be $1.2 million for a 1% increase and $0.7 million for a 1% decrease.

In December 2003 the Medicare Prescription Drug, Improvement and Modernization Act of 2003 was signed into law. Effective in 2006 there will be a new Medicare Part D benefit, which will make available prescription drug coverage to those over 65. Employers that provide prescription drug benefits that are at least actuarially equivalent to Medicare Part D are entitled to an annual subsidy from Medicare, which is equal to 28% of prescription drug costs between $250 and $5,000, for each Medicare-eligible retiree who does not join Part D. The Company and its actuaries have determined that the NTELOS Prescription Drug Plan is at least actuarially equivalent to Medicare Part D.

In accordance with FASB Staff Position No. 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003”, issued on May 19, 2004, NTELOS Inc. elected to reflect the effect of this law as of December 31, 2004. This gain was eliminated on May 2, 2005 through purchase accounting as noted above.

In developing the expected long-term rate of return assumption for the assets of the Defined Benefit Pension Plan, the Company evaluated input from its third party pension plan asset managers, including their review of asset class return expectations and long-term inflation assumptions. The Company also considered the related historical 10-year average asset return at May 2, 2005, which was in line with the expected long-term rate of return assumptions for the respective periods.

The weighted average actual asset allocations and weighted average target allocation ranges by asset category for the Company’s pension plan assets were as follows:

Asset Category	Actual Allocation December 31, 2005		Target Allocation
Equity securities	75	%	75	%
Bond securities	25	%	25	%
Total	100	%	100	%

It is the Company’s policy to invest pension plan assets in a diversified portfolio consisting of an array of asset classes. The investment risk of the assets is limited by appropriate diversification both within and between asset classes. The assets are primarily invested in investment funds that invest in a broad mix of equities and bonds. The allocation between equity and bonds is reset quarterly to the target allocations. The assets are managed with a view to ensuring that sufficient liquidity will be available to meet expected cash flow requirements.

The Company expects to contribute $6.3 million to the pension plan in 2006.

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The following estimated future pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid in the years indicated:

Year(s)	Amount (in thousands)
2006	$	1,948
2007		1,922
2008		1,871
2009		1,943
2010		2,047
2011 - 2015	$	12,540

Other benefit plans

The accumulated benefit obligation of the Company’s nonqualified pension plans was approximately $3.1 million at December 31, 2005. The Company’s plans for postretirement benefits other than pensions have no plan assets and are closed to new participants. The Company also sponsors a defined contribution 401(k) plan. The Company’s matching contributions to this plan were $0.7 million for the period May 2, 2005 through December 31, 2005.

Note 14. Stock Plans

On May 2, 2005, the Company adopted a stock option plan (the “Equity Incentive Plan”) offered to certain key employees. The maximum number of remaining shares of Class A Common Stock that may be issued either under the Equity Incentive Plan or as additional Class A Common Stock shares is 145,000. Stock options must be granted under the Equity Incentive Plan at not less than 100% of fair value at the date of grant and have a maximum life of ten years from the date of grant. Options and other awards under the Equity Incentive Plan may be exercised in compliance with such requirements as determined by a committee of the Board of Directors. The options vest one-fourth annually, beginning one year after the grant date, subject to acceleration of one-fourth of the original option grant vesting on the closing of an IPO provided the option holder is still employed at such time.

A summary of the activity and status of the Equity Incentive Plan for the period ended December 31, 2005 is as follows:

	Period Ended December 31, 2005
Options	Shares	Weighted- Average Exercise Price
Outstanding at beginning of period	—	$	—
Granted	150,075		2.49
Forfeited	4,275		1.00
Cancelled	—		—
Outstanding at end of period	145,800	$	2.53
Exercisable at end of period	—		—
Weighted average fair value per option of options granted during the period		$	1.39

The fair value of each grant is estimated at the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend rate of 0%; risk-free interest rate of 3.84%; expected life of 5 years; and, a price volatility factor ranging from 43.0% to 69%.

Of the total options granted, 120,075 were granted on May 2, 2005 (115,800 of which remain outstanding on December 31, 2005). For all options issued, the option exercise price was equal to fair value at the date of issuance and therefore, the options had no intrinsic value on the date of grant and therefore, the Company recorded no compensation expense at that time. However, based on the determination that the underlying Class A common stock be accounted for as a non-substantive class of equity, the Company calculates non-cash compensation expense based on the intrinsic value of the options (difference in the fair value of the underlying stock at the end of each accounting period over the option exercise price). The Company recognizes this expense over the four year graded vesting period. The intrinsic value of the options at December 31, 2005 was $1.6 million. Accordingly, the Company recorded non-cash compensation expense associated with these options of $0.5 million for the inception to date period ended December 31, 2005.

The fair value of the common stock was determined contemporaneously with the grants.

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On February 13, 2006, in connection with the Company’s IPO of common stock (Note 1), the Class A common stock options were converted to approximately 313,250 common stock options exercisable for shares of common stock, based on a 2.15 conversion ratio. On that date, the weighted average intrinsic value per option after the conversion was $10.82 and the 25% vesting to occur May 2009 was accelerated to February 13, 2006.

Note 15. Commitments and Contingencies

Operating Leases

The Company has operating leases for administrative office space, retail space, tower space, channel rights and equipment, certain of which have renewal options. The leases for retail and tower space have initial lease periods of one to thirty years. These leases are associated with the operation of wireless digital PCS services primarily in Virginia and West Virginia. The leases for channel rights related to the Company’s MMDS spectrum, formerly used by the wireless cable operations and currently used to deliver a portable broadband Internet service in certain markets, have initial terms of three to ten years. The equipment leases have an initial term of three years. Rental expense for all operating leases was $13.9 million for the period May 2, 2005 through December 31, 2005. The total amount committed under these lease agreements at December 31, 2005 is: $16.3 million in 2006, $12.9 million in 2007, $11.6 million in 2008, $10.5 million in 2009, $6.3 million in 2010 and $18.0 million for the years thereafter.

Other Commitments and Contingencies

The Company (through NTELOS Inc.) entered into advisory agreements with CVC Management LLC and Quadrangle Advisors LLC (the “Advisors”) whereby the Advisors will provide advisory and other services to the Company for a period of ten years for a combined annual advisory fee of $2.0 million payable quarterly at the beginning of each quarter. Under certain conditions set forth in these agreements, the Company could terminate these agreements prior to expiration. On February 13, 2006, commensurate with its IPO (Note 1), the Company terminated this agreement, paying a $12.9 million termination fee on that date.

The Company is periodically involved in disputes and legal proceedings arising from normal business activities. In 2004, NTELOS Inc. accrued a charge of $1.9 million in corporate operations expense relating to certain operating tax issues. While the outcome of the operating tax issues and other such matters are currently not determinable, management does not expect that the ultimate costs to resolve such matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows and adequate provision for any probable losses has been made in our consolidated financial statements.

Other than the commitments noted separately above, the Company has commitments for capital expenditures of approximately $15 million as of December 31, 2005, all of which are expected to be satisfied prior to year ended December 31, 2006.

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Report of Independent Registered Public Accounting Firm

The Board of Directors

NTELOS Inc.:

We have audited the accompanying consolidated balance sheets of NTELOS Inc. and subsidiaries (the Company) as of December 31, 2004 (Predecessor Reorganized Company) and 2003 (Predecessor Reorganized Company), and the related consolidated statements of operations, cash flows, and shareholder’s equity (deficit) for the period January 1, 2005 to May 1, 2005 (Predecessor Reorganized Company), the year ended December 31, 2004 (Predecessor Reorganized Company), the period September 10, 2003 to December 31, 2003 (Predecessor Reorganized Company), and the period January 1, 2003 to September 9, 2003 (Predecessor Company). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of NTELOS Inc. and subsidiaries as of December 31, 2004 (Predecessor Reorganized Company) and 2003 (Predecessor Reorganized Company), and the results of their operations and their cash flows for the period January 1, 2005 to May 1, 2005 (Predecessor Reorganized Company), the year ended December 31, 2004 (Predecessor Reorganized Company), the period September 10, 2003 to December 31, 2003 (Predecessor Reorganized Company), and the period January 1, 2003 to September 9, 2003 (Predecessor Company), in conformity with U.S. generally accepted accounting principles.

As discussed in notes 1 and 4 to the consolidated financial statements, effective September 9, 2003, the Company was reorganized under a plan of reorganization confirmed by the United States Bankruptcy Court for the Eastern District of Virginia. In connection with its reorganization, the Company applied fresh start accounting on September 9, 2003.

As discussed in note 5 to the consolidated financial statements, the Company changed its method of accounting for asset retirement obligations in 2003.

/s/ KPMG LLP

October 6, 2005

Richmond, Virginia

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NTELOS Inc. and Subsidiaries

Consolidated Balance Sheets

	Predecessor Reorganized Company
($ in thousands)	December 31, 2004		December 31, 2003
Assets
Current Assets
Cash and cash equivalents	$	34,187	$	48,722
Accounts receivable, net of allowance of $12,826 in 2004 ($21,573 in 2003)		29,403		33,802
Inventories and supplies		3,647		9,600
Other receivables and deposits		3,652		3,183
Income tax receivable		5,529		—
Prepaid expenses and other		5,155		4,654
		81,573		99,961
Securities and Investments
Restricted investment		7,556		7,829
Other securities and investments		115		338
		7,671		8,167
Property, Plant and Equipment
Land and buildings		32,797		32,414
Network plant and equipment		350,746		300,712
Furniture, fixtures and other equipment		36,460		28,622
Total in service		420,003		361,748
Under construction		12,637		16,487
		432,640		378,235
Less accumulated depreciation		76,511		17,5377
		356,129		360,698
Other Assets
Goodwill		30,856		32,954
Franchise rights		32,000		32,000
Other intangibles, less accumulated amortization of $6,341 in 2004 ($1,494 in 2003)		70,167		75,007
Radio spectrum licenses in service		22,111		21,960
Other radio spectrum licenses		2,500		2,500
Radio spectrum licenses not in service		15,560		15,040
Deferred charges		1,890		1,936
		175,084		181,397
	$	620,457	$	650,223

See accompanying Notes to Consolidated Financial Statements.

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NTELOS Inc. and Subsidiaries

Consolidated Balance Sheets

	Predecessor Reorganized Company
($’s in thousands)	December 31, 2004		December 31, 2003
Liabilities and Shareholder’s Equity
Current Liabilities
Current portion of long-term debt	$	10,460	$	17,860
Deferred liabilities—interest rate swap		4,749		8,452
Accounts payable		23,776		29,471
Advance billings and customer deposits		13,667		12,333
Accrued payroll		8,065		7,541
Accrued interest		483		2,931
Deferred revenue		1,883		3,428
Income tax payable		—		56
Other accrued taxes		2,545		1,864
Other accrued liabilities		5,079		4,542
		70,707		88,478
Long-term Liabilities
Long-term debt		169,791		218,170
Convertible notes		—		74,273
Other long-term liabilities:
Retirement benefits		30,802		29,925
Deferred income taxes		12,448		12,448
Deferred liabilities—interest rate swap		—		5,392
Long-term deferred liabilities		18,138		15,432
		231,179		355,640
Minority Interests		390		558
Commitments and Contingencies
Shareholder’s Equity
Predecessor Reorganized Company preferred stock, no par value per share, authorized 1,000,000 shares; none issued		—		—
Predecessor Reorganized Company common stock, no par value per share, authorized 25,000,000 shares; shares issued and outstanding 13,759,000 in 2004 and 10,000,000 in 2003		272,049		197,727
Predecessor Reorganized Company stock warrants		3,150		3,150
Retained earnings		42,982		4,670
		318,181		205,547
	$	620,457	$	650,223

See accompanying Notes to Consolidated Financial Statements.

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NTELOS Inc. and Subsidiaries

Consolidated Statements of Operations

	Predecessor Reorganized Company									Predecessor Company
(In thousands, except per share data)	For the Period January 1, 2005 to May 1, 2005			December 31, 2004			September 10, 2003 to December 31, 2003			January 1, 2003 to September 9, 2003
Operating Revenues
Wireless communications	$	89,826		$	234,682		$	66,769		$	132,766
Wireline communications		35,508			105,251			32,434			71,103
Other communication services		343			1,769			962			3,920
		125,677			341,702			100,165			207,789
Operating Expenses
Cost of wireless sales (exclusive of items shown separately below)		18,703			47,802			15,113			31,836
Maintenance and support		21,084			62,929			18,784			42,056
Depreciation and amortization		23,799			65,175			18,860			51,224
Gain on sale of assets		(8,742	)		—			—			—
Asset impairment charge		—			—			—			545
Accretion of asset retirement obligations		252			680			225			437
Customer operations		29,270			82,812			30,233			58,041
Corporate operations		8,259			26,942			6,272			18,342
Capital and operational restructuring charges		15,403			798			—			2,427
		108,028			287,138			89,487			204,908
Operating Income		17,649			54,564			10,678			2,881
Other Income (Expense)
Interest expense		(11,499	)		(15,740	)		(6,427	)		(26,010	)
Other income (expense)		270			374			768			(436	)
Reorganization items, net		—			81			(145	)		169,036
		(11,229	)		(15,285	)		(5,804	)		142,590
		6,420			39,279			4,874			145,471
Income Tax Expense		8,150			1,001			258			706
		(1,730	)		38,278			4,616			144,765
Minority Interests in Losses of Subsidiaries		13			34			54			15
Net (Loss) Income before Cumulative Effect of Accounting Change		(1,717	)		38,312			4,670			144,780
Cumulative effect of accounting change		—			—			—			(2,754	)
Net (Loss) Income		(1,717	)		38,312			4,670			142,026
Dividend requirements on predecessor preferred stock		—			—			—			(3,757	)
Reorganization items—predecessor preferred stock		—			—			—			286,772
(Loss) Income Applicable to Common Shares	$	(1,717	)	$	38,312		$	4,670		$	425,041

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NTELOS Inc. and Subsidiaries

Consolidated Statements of Operations, continued

	Predecessor Reorganized Company							Predecessor Company
(In thousands, except per share data)	For the Period January 1, 2005 to May 1, 2005			December 31, 2004		September 10, 2003 to December 31, 2003		January 1, 2003 to September 9, 2003
Basic (Loss) Earnings Per Common Share:
(Loss) Income Applicable to Common Shares before Cumulative Effect of Accounting Change	$	(0.21	)	$	3.50	$	0.47	$	24.06
Cumulative effect of accounting change		—			—		—		(0.15	)
Loss (Income) Applicable to Common Shares	$	(0.21	)	$	3.50	$	0.47	$	23.91
Diluted (Loss) Earnings Per Common Share:
(Loss) Income Applicable to Common Shares before Cumulative Effect of Accounting Change	$	(0.21	)	$	3.04	$	0.49	$	24.06
Cumulative effect of accounting change		—			—		—		(0.15	)
Loss (Income) Applicable to Common Shares	$	(0.21	)	$	3.04	$	0.49	$	23.91
Average shares outstanding – basic		8,020			10,946		10,000		17,780
Average shares outstanding – diluted		8,020			14,285		13,982		17,780

See accompanying Notes to Consolidated Financial Statements.

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NTELOS Inc. and Subsidiaries

Consolidated Statements of Cash Flows

	Predecessor Reorganized Company									Predecessor Company
(In thousands)	For the Period January 1, 2005 to May 1, 2005			December 31, 2004			September 10, 2003 to December 31, 2003			January 1, 2003 to September 9, 2003
Cash flows from operating activities
Net income (loss)	$	(1,717	)	$	38,312		$	4,670		$	142,026
Cumulative effect of an accounting change		—			—			—			2,754
		(1,717	)		38,312			4,670			144,780
Professional fees expensed in connection with Chapter 11		—			—			(145	)		8,057
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposition of assets		(8,742	)		—			—			—
Non-cash restructuring and reorganization items		300			—			—			(177,093	)
Accrued pre-petition interest expense related to cancelled notes		—			—			—			10,322
Depreciation		22,183			60,300			14,580			51,450
Amortization		1,616			4,875			4,280			(226	)
Asset impairment charge		—			—			—			545
Accretion of asset retirement obligations		252			680			225			437
Retirement benefits and other		9,793			1,580			1,733			52
Amortization of loan origination costs		180			48			29			849
Changes in assets and liabilities from operations, net of effect of acquisitions and dispositions:
(Increase) decrease in accounts receivable		(3,418	)		4,399			(3,912	)		4,145
(Increase) decrease in inventories and supplies		(449	)		5,953			(6,520	)		(492	)
Increase in other current assets		(1,052	)		(970	)		(162	)		(639	)
Changes in income taxes		196			(30	)		104			(98	)
(Decrease) increase in accounts payable		(2,921	)		(1,820	)		14,322			8,033
Increase (decrease) in other current liabilities		8,107			1,336			(2,280	)		4,698
Retirement benefit payments		(7,980	)		(2,240	)		(3,583	)		—
Net cash provided by operating activities before reorganization items		16,348			112,423			23,341			54,820
Operating cash flows from reorganization items
Payment of liabilities subject to compromise		—			(2,091	)		(11,523	)		—
Professional fees paid for services rendered in connection with the Chapter 11 proceeding		(24	)		(708	)		(2,181	)		(4,946	)
Net cash used in reorganization items		(24	)		(2,799	)		(13,704	)		(4,946	)
Net cash provided by operating activities		16,324			109,624			9,637			49,874

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Consolidated Statements of Cash Flows, Continued

	Predecessor Reorganized Company									Predecessor Company
(In thousands)	December 31, 2004			December 31, 2004			September 10, 2003 to December 31, 2003			January 1, 2003 to September 9, 2003
Cash flows from investing activities
Purchases of property, plant and equipment		(20,099	)		(60,074	)		(24,334	)		(34,186	)
Proceeds from sale of property, plant and equipment, investments and radio spectrum licenses		28,620			496			7,859			6,955
Investment in restricted cash		(24,955	)		—			—			—
Net cash used in investing activities		(16,434	)		(59,578	)		(16,475	)		(27,231	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		625,000			—			—			—
Loan repayments associated with debt refinancing		(171,328	)		—			—			—
Proceeds from issuance of convertible notes		—			—			—			75,000
Payments on senior secured term loans		(7,713	)		(45,766	)		(1,924	)		(38,237	)
Payments under lines of credit (net) and other debt instruments		(556	)		(10,227	)		(6,759	)		(2,462	)
Payments on deferred liabilities—interest rate swap		(4,748	)		(8,588	)		(2,951	)		—
Tender offer repurchase of common stock, warrants and common stock options		(439,997	)		—			—			—
Debt issuance costs		(12,766	)		—			—			—
Other		—			—			—			(1,966	)
Net cash (used in) provided by financing activities		(12,108	)		(64,581	)		(11,634	)		32,335
(Decrease) increase in cash and cash equivalents		(12,218	)		(14,535	)		(18,472	)		54,978
Cash and cash equivalents:
Beginning of period		34,187			48,722			67,194			12,216
End of period	$	21,969		$	34,187		$	48,722		$	67,194

See accompanying Notes to Consolidated Financial Statements.

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NTELOS Inc. and Subsidiaries

Consolidated Statements of Shareholder’s Equity (Deficit)

	Common Stock											Accumulated Other Comprehensive Income			Total Shareholder’s Equity (Deficit)
($’s in thousands)	Shares		Amount			Warrants			Retained Earnings
Predecessor Company
Balance, December 31, 2002	17,780,000		$	182,380		$	22,874		$	(532,565	)	$	(15,366	)	$	(342,677	)
Comprehensive income:
Income before cumulative effect of accounting change										144,780
Cumulative effect of accounting change										(2,754	)
Derivative gain, net of $1,601 of deferred taxes													2,316
Comprehensive income																144,342
Dividends on preferred shares (contractual preferred stock dividends for the period ending September 9, 2003 were $14,351)										(3,757	)					(3,757	)
Reorganization item—accretion of preferred stock										(8,325	)					(8,325	)
Cancellation of preferred shares upon emergence from bankruptcy										295,096						295,096
Cancellation of predecessor common stock upon emergence from bankruptcy	(17,780,000	)		(182,380	)											(182,380	)
Cancellation of predecessor common stock warrants held by senior noteholders and concurring issuance of new common stock	9,434,000			186,526			(6,889	)								179,637
Cancellation of predecessor common stock warrants held by subordinated noteholders and concurring issuance of new common stock	500,000			9,886			(12,200	)								(2,314	)
Cancellation of predecessor common stock warrants held by preferred stockholders and concurring issuance of new common stock warrants							(635	)								(635	)
Issuance of new common stock in connection with the issuance of new senior notes	38,000			750												750
Issuance of new common stock in connection with settlement of deferred compensation obligation	28,000			565												565
Cancellation of other predecessor equity interests upon emergence from bankruptcy, net of $6,183 of deferred taxes										107,525			13,050			120,575
Balance, September 9, 2003	10,000,000		$	197,727		$	3,150		$	—		$	—		$	200,877

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NTELOS Inc. and Subsidiaries

Consolidated Statements of Shareholder’s Equity (Deficit), continued

	Common Stock											Accumulated Other Comprehensive Income		Total Shareholder’s Equity (Deficit)
(In thousands)	Shares		Amount			Warrants			Retained Earnings
Predecessor Reorganized Company
Balance, September 10, 2003	10,000,000		$	197,727		$	3,150		$	—		$	—	$	200,877
Comprehensive income:
Net income										4,670					4,670
Balance, December 31, 2003	10,000,000		$	197,727		$	3,150		$	4,670		$	—	$	205,547
Comprehensive income:
Net income										38,312					38,312
Cancellation of shares of senior notes not surrendered for conversion	(34,000	)		—
Conversion of senior notes	3,793,000			74,322											74,322
Balance, December 31, 2004	13,759,000		$	272,049		$	3,150		$	42,982		$	—	$	318,181
Comprehensive loss:
Net loss										(1,717	)				(1,717	)
Tender offer repurchase of stock, warrants and stock options	(10,364,000	)		(437,625	)		(2,372	)							(439,997	)
Tax benefit related to stock option repurchase				7,829											7,829
Balance, May 1, 2005	3,395,000		$	(157,747	)	$	778		$	41,265		$	—	$	(115,704	)

See accompanying Notes to Consolidated Financial Statements.

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NTELOS Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Organization

NTELOS Inc. (hereafter referred to as “NTELOS” or the “Company”) is an integrated communications provider that provides a broad range of products and services to businesses, telecommunication carriers and residential customers in Virginia, West Virginia and surrounding states. The Company’s primary services are wireless digital personal communications services (“PCS”), local and long distance telephone services, broadband network services, high-speed broadband Internet access (such as Digital Service Line (“DSL”) and wireless modem), and dial-up Internet access.

On January 18, 2005, the Company and certain of its shareholders entered into an agreement (the “Transaction Agreement”) pursuant to which the Company would be recapitalized and sold at a price of $40.00 per share of common stock (Note 2). On February 24, 2005, the Company borrowed $625 million from a new $660 million senior secured credit facility and used these proceeds to refinance substantially all of its existing indebtedness and repurchase, pursuant to a tender offer of $440 million or approximately 75%, its existing common stock, warrants and options. On May 2, 2005, pursuant to the Transaction Agreement, NTELOS Holding Corp. (“Holdings Corp.”), an entity formed by the third party buyers, acquired all of the Company’s remaining common shares, warrants and options by means of a merger. The recapitalization and sale is described in Note 2.

As further discussed in Note 3, effective May 2, 2005, the Company became a 100% owned subsidiary of Holdings Corp. Holdings Corp. is accounting for the merger under the provisions of Statement of Financial Accounting Standards No 141, Business Combinations (“SFAS No. 141”). Holdings Corp.’s cost of acquiring the Company has been used to establish the new accounting basis for the Company’s assets and liabilities effective May 2, 2005. The presentation of financial information of the Predecessor Company represents the Company’s financial statements for the specified periods prior to and concluding on May 1, 2005.

On March 4, 2003 (the “Petition Date”), the Company and certain of its subsidiaries (collectively, the “Debtors”), filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Virginia (the “Bankruptcy Court”). The Company emerged from the Bankruptcy Court proceedings pursuant to the terms of the Plan of Reorganization on September 9, 2003 (the “Effective Date”). Also pursuant to the Plan of Reorganization, the Company has recognized income and credits from reorganization items relating to the cancellation of its Senior Notes, Subordinated Notes, Preferred Stock, and the reduction in and timing of amounts payable to certain unsecured creditors, net of the concurrent issuance of related new common stock and new common stock warrants. In addition, the Company recognized adjustments for cancellation of its old common stock and old common stock warrants and elimination of its accumulated deficit and accumulated other comprehensive loss as of September 9, 2003. These adjustments, as well as the adjustments made to record the Company’s assets and liabilities at fair value reflect the application of fresh start accounting applied in accordance with the American Institute of Certified Public Accountants’ Statement of Position 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy Code (“SOP 90-7”).

As a consequence of the implementation of fresh start accounting, the financial information presented in the consolidated statements of operations, shareholder’s equity (deficit) and cash flows for periods subsequent to the Effective Date is generally not comparable to the financial information presented for the periods prior to the Effective Date. The Company, as it existed on and prior to September 9, 2003, is referred to as the “Predecessor Company” within these consolidated financial statements, and the Company is referred to as the “Predecessor Reorganized Company” for the periods from September 9, 2003 through May 1, 2005. The presentation of consolidated financial information of the Predecessor Company represents the Company’s consolidated financial statements for the specified periods prior to and concluding with the Company’s adoption of fresh start accounting. Details regarding the reorganization transactions and the related fresh start accounting are included in Note 4 below.

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Note 2. Merger and Recapitalization Transactions

On January 18, 2005, the Company and certain of its shareholders entered into the Transaction Agreement pursuant to which the Company would be recapitalized and sold to Holdings Corp., an entity formed on January 14, 2005 by Quadrangle Capital Partners LP and Citigroup Venture Capital Equity Partners, L.P., (the “Buyers”), at a price of $40.00 per share of common stock. The recapitalization and sale occurred through a series of transactions as set forth below.

Under the first step in the transaction, on February 24, 2005 the Company borrowed $625 million from a new $660 million senior secured credit facility and used these proceeds to refinance substantially all of its existing indebtedness and repurchase approximately 10,364,000 shares of common stock, 358,000 shares of common stock warrants and 969,000 shares of common stock options (approximately 75% of each) pursuant to a tender offer for $440 million. The purchase price was $40.00 per share for outstanding common stock, $16.27 per share for common stock issuable pursuant to the exercise of a warrant and $20.23 per share for common stock issuable pursuant to the exercise of vested options. The $16.27 per share price for the warrants and the $20.23 per share option price were derived by taking the difference between their respective strike price and the $40.00 per share price for the common stock shares. After the tender offer buyback, the Company had outstanding approximately 3,396,000 common shares, 117,000 warrants and 327,000 options.

On January 24, 2005, the Company provided notice to its common and warrant holders of their rights under the Company’s Shareholders Agreement to participate in the initial sale of securities between the Buyers and significant shareholders (as defined in the “Tag-Along Sale”). On February 24, 2005, immediately after completing the first step of the transaction noted above, Holdings Corp. acquired approximately 821,000 common shares (24.9%) for $40.00 per share and 33,000 warrants (24.9%) for $16.27 per share from certain significant shareholders and other common and warrant holders that elected to participate pursuant to a tag-along offer. As a result of the Tag-Along Sale, the Company’s Shareholders Agreement was amended to provide the Buyers with certain governance rights, including the right to designate two directors to be elected to the Company’s board of directors.

On May 2, 2005, pursuant to the Transaction Agreement, Holdings Corp. acquired all of the Company’s remaining common shares, warrants and options by means of a merger. The merger consideration was $40.00 per share of outstanding common stock, $16.27 per share of common stock issuable pursuant to the exercise of a warrant and $20.23 per share of common stock issuable pursuant to the exercise of options, respectively. Following completion of the merger, the Company became a 100% owned subsidiary of Holdings Corp.

In addition, pursuant to the terms of the Transaction Agreement, on May 2, 2005, the Company disbursed $25.0 million of restricted cash to purchase the remaining equity securities not owned by the Buyers. The Company has also recognized a payable to Holdings Corp. for $5.8 million representing the Company’s obligation to forward to Holdings Corp. the proceeds from the sale and collection on certain identified assets.

Effective with the completion of the merger, the Company’s articles of incorporation were amended and restated resulting in 1,000 authorized common shares and 100 common shares issued and outstanding, with a par value of $0.01 per share.

Note 3. Acquisition

Effective May 2, 2005, Holdings Corp.’s cost of acquiring the Company has been used to establish a new accounting basis for the Company’s assets and liabilities. The aggregate cost basis of Holdings Corp.’s equity in the Company was $125.7 million, inclusive of $12.1 million of transaction costs incurred by Holdings Corp.

Holdings Corp. is accounting for the merger under the provisions of SFAS No. 141. Holdings Corp.’s cost of acquiring the Company has been used to establish the new accounting basis for the Company’s assets and liabilities.

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Note 4. Reorganization and Fresh Start Accounting

On the Effective Date, the Company consummated the Plan of Reorganization and emerged from Chapter 11 reorganization proceedings with a significantly restructured balance sheet. The consummation of the Plan of Reorganization resulted in the following changes in the Company’s capital structure:

• The cancellation of its 13% Unsecured Senior Notes (“Senior Notes”) and its 13.5% Unsecured Subordinated Notes (“Subordinated Notes”).

• The cancellation of all outstanding shares of its Redeemable, Convertible Preferred Stock (“Preferred Stock”) and its Predecessor Common Stock and stock warrants.

• The issuance of $75 million of new 9% convertible notes (“Convertible Notes”) and the repayment of the $32.4 million outstanding revolver balance under its Senior Credit Facility. Additionally, the size of the revolver was decreased from $36 million to $32.4 million.

• Reduction in obligations to general unsecured creditors with allowed claims in excess of $10,000 to the net present value of 68% of their allowed claims payable in three installments over two years.

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As mentioned above, the Company adopted fresh start accounting as of September 9, 2003. Fresh start accounting requires that the Company adjust the historical cost of its assets and liabilities to their fair values as determined by the reorganization value of the Company and that the reorganization value be allocated among the reorganized entity’s net assets in conformity with procedures specified by SFAS No. 141. A reconciliation of the adjustments recorded in connection with the reorganization and the adoption of fresh start is presented below:

NTELOS Inc.

Condensed Consolidated Balance Sheet as of September 9, 2003

	Predecessor Company		Reclassification of Liabilities Subject to Compromise(6)		Effects of Plan of Reorganization(3)			Fresh Start Accounting Adjustments(7)			Predecessor Reorganized Company
(In thousands)	Pre-Confirmation(1)										Post-Confirmation
Assets
Current Assets
Cash and cash equivalents	$	26,560	$	—	$	40,634		$	—		$	67,194
Accounts receivable, net		29,603		—		—			—			29,603
Inventories and supplies		3,080		—		—			—			3,080
Other receivables and deposits		3,234		—		—			—			3,234
Prepaid expenses and other		4,070		—		—			—			4,070
Total Current Assets		66,547		—		40,634			—			107,181
Securities and Investments		8,319		—		(160	)		—			8,159
Property, Plant and Equipment, net		414,673		—		—			(57,803	)		356,870
Other Assets
Goodwill, net		84,530		—		(22,875	)		(23,207	)		38,448
Franchise rights		—		—		—			32,000			32,000
Other intangibles		1,210		—		—			75,290			76,500
Radio spectrum licenses		115,686		—		—			(76,186	)		39,500
Deferred charges		4,391		—		480			(1,423	)		3,448
Deferred income taxes		6,515		—		—			(6,515	)		—
Total Other Assets		212,332		—		(22,395	)		(41	)		189,896
Total Assets	$	701,871	$	—	$	18,079		$	(57,844	)	$	662,106

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NTELOS Inc.

Condensed Consolidated Balance Sheet as of September 9, 2003

	Predecessor Company			Reclassification of Liabilities Subject to Compromise(6)			Effects of Plan of Reorganization(3)			Fresh Start Accounting Adjustments(7)			Predecessor Reorganized Company
(In thousands)	Pre-Confirmation(1)												Post-Confirmation
Liabilities and Shareholders’ Equity (Deficit)
Current Liabilities
Current maturities of long-term debt	$	2,390		$	14,218		$	—		$	—		$	16,608
Liabilities subject to compromise		707,560			(707,560	)		—						—
Accounts payable		13,350			18,249			(1,771	)		67			29,895
Advance billings and customer deposits		12,220			701			—			107			13,028
Accrued payroll		3,459			4,804			—			—			8,263
Accrued interest		834			27,418			(28,219	)		—			33
Deferred revenue		850			3,813			—			—			4,663
Other accrued liabilities		7,595			2,801			(685	)		(433	)		9,278
Total Current Liabilities		748,258			(635,556	)		(30,675	)		(259	)		81,768
Liabilities Subject to Compromise		40,942			(40,942	)		—			—			—
Long-term Debt		10,799			621,505			(329,824	)		(882	)		301,598
Long-term Liabilities
Retirement benefits		3,321			23,054			—			6,035			32,410
Deferred income taxes		—			—			—			12,448			12,448
Other		16,005			31,939			(1,752	)		(13,695	)		32,497
Total Long-term Liabilities		19,326			54,993			(1,752	)		4,788			77,355
Minority Interests		508			—			—			—			508
Redeemable Convertible Preferred Stock Subject to Compromise		298,246			—			(298,246	)(4)		—			—
Shareholders’ Equity (Deficit)
Preferred stock		—			—			—			—			—
Common stock		182,380			—			197,727			(182,380	)		197,727
Predecessor stock warrants		22,874			—			(22,874	)(5)		—			—
Reorganized stock warrants								3,150	(4)		—			3,150
Retained earnings (accumulated deficit)		(608,098	)		—			500,573	(2)		107,525			—
Accumulated other comprehensive loss		(13,364	)		—			—			13,364			—
		(416,208	)		—			678,576			(61,491	)		200,877
Total Liabilities and Shareholders’ Equity (Deficit)	$	701,871		$	—		$	18,079		$	(57,844	)	$	662,106

⁽¹⁾ The historical balance sheet and the other historical financial statements and data relating to the Predecessor Company do not reflect the effects of fresh start accounting.

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⁽²⁾ This amount reconciles to the consolidated statement of operations as follows:

(In thousands)
Retained Earnings reorganization net credit adjustments	$	500,573
Less reorganization charges recorded prior to or subsequent to the September 9, 2003 emergence date:
Write-off of debt issuance costs in the first quarter 2003		28,066
Write-off of Preferred Stock issuance costs in the first quarter 2003		8,324
Reorganization professional fees and other, incurred throughout 2003		8,520
Consolidated Statement of operations—reorganization items, net credit	$	455,663
Reorganization items, net credit, January 1, 2003 through September 9, 2003	$	169,036
Reorganization items, net charge , September 10, 2003 through December 31, 2003		(145	)
Reorganization item—predecessor preferred stock, credit		286,772
Consolidated Statement of operations—reorganization items, net credit	$	455,663

⁽³⁾ The adjustments relate to the issuance of new common stock and stock warrants in exchange for certain outstanding notes and other liabilities and the issuance of Convertible Notes as follows:

• The issuance of 9,433,509 shares of New Common Stock with a value of $186.5 million to holders of Senior Notes and 500,000 shares of New Common Stock with a value of $9.9 million to holders of Subordinated Notes. Holders of Senior Notes received 94.3% of the New Common Stock (or approximately 68% on a fully diluted basis after giving effect to the conversion of the Convertible Notes). Holders of Subordinated Notes received 5% of the New Common Stock (or approximately 3.2% on a fully diluted basis after giving effect to the conversion of the Convertible Notes). The gain on discharge of Senior Notes and Subordinated Notes was determined as follows:

(In thousands)	Senior Notes			Subordinated Notes		Total
Accreted balance of outstanding notes	$	280,000		$	95,000	$	375,000
Accrued unpaid interest		20,265			7,153		27,418
Unamortized note discount		(3,326	)		—		(3,326	)
Net carrying balance of cancelled outstanding notes		296,939			102,153		399,092
Value of common stock issued		186,527			9,885		196,412
Gain on cancellation of outstanding notes	$	110,412		$	92,268	$	202,680

• Issuance of 28,560 shares of New Common Stock with a value of $564,712 to a former executive pursuant to the Plan of Reorganization.

• The issuance of $75.0 million of Convertible Notes with 37,931 shares of New Common Stock, valued at $750,000, to the Participating Noteholders. The Convertible Notes will accrue interest at a rate of 9.0% per annum, payable semi-annually in cash. The Convertible Notes are unsecured and otherwise rank pari passu with all other senior debt. The Convertible Notes are redeemable by the Company during the first two years at a redemption price of 109.0% of face value, for the third year at a redemption price of 104.5% of face value, and redeemable thereafter at face value. The Convertible Notes are convertible at the holders’ option into New Common Stock representing 27.5% of the New Common Stock on an as converted basis, before dilution for conversion of warrants or stock options. Proceeds from the issuance of the Convertible Notes were used to repay approximately $32.4 million of amounts borrowed under the pre-petition Senior Credit Facility revolver loan.

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⁽⁴⁾ Represents the cancellation of $112.5 million Series B Preferred Stock and $137.5 million Series C Preferred Stock. Holders of old Preferred Stock interests received 475,624 New Common Stock Warrants to purchase, at an exercise price of $23.73 per share, New Common Stock representing 3% of the fully diluted New Common Stock as summarized below:

(In thousands)
Preferred stock	$	250,000
Accrued dividends (paid-in-kind from original issuance)		48,246
Total carrying balance of preferred stock		298,246
Fair value of new warrants		(3,150	)
Net adjustment for settlement of preferred stock	$	295,096

The company used the Black-Scholes option pricing model to determine the value assigned to the New Common Stock Warrants as of the Effective Date. For purposes of this calculation the volatility factor was assumed to be 41% and the expected life of the New Warrants was assumed to be its maximum term of five years.

⁽⁵⁾ Common and preferred stock detachable warrants previously issued to various holders of preferred stock and debt were cancelled in accordance with the Plan of Reorganization. The balances as of September 9, 2003 were as follows:

(In thousands)
Detachable common stock warrants issued to holders of preferred stock	$	3,785
Detachable common stock warrants issued to holders of senior notes		6,889
Detachable common stock warrants issued to holders of subordinated notes		12,200
Total book value of common stock warrants cancelled	$	22,874

⁽⁶⁾ Represents the disposition of unpaid liabilities subject to compromise that remain outstanding following settlement of claims as of the Effective Date. All Priority Tax and Non-Tax Claims, Secured Bank Claims and Convenience Claims have been reclassified and presented in their customary financial statement line items at amounts expected to be paid in the ordinary course of business. General Unsecured Claims that are impaired and that will be liquidated in future periods in accordance with the Plan of Reorganization have been adjusted to the amounts expected to be paid.

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Following is an analysis of the reclassification and valuation adjustment:

(In thousands)
Liabilities subject to compromise, current				$	707,560
Liabilities subject to compromise, long-term					40,942
Total liabilities subject to compromise					748,502
Long-term debt and capital lease obligations					(264,049	)
Cancellation of long-term debt and related interest
Principal balance	$	(371,674	)
Accrued interest		(27,418	)
Total debt and interest cancellation					(399,092	)
Retirement and post-employment benefits					(23,054	)
Interest rate swap agreement					(16,220	)
Other long-term liabilities					(15,719	)
Priority tax and non-tax claims					(17,359	)
Deferred revenues and customer deposits					(4,514	)
Other current obligations					(4,082	)
Unsecured claims subject to discount					4,413
Recoverable value (68%)					3,001
Net discount adjustment					1,412
Net present value and other settlement adjustments					359
Total adjustments recognized as reorganization item credit				$	1,771
Following is an analysis of the distribution of funds for General Unsecured Claims:
Distribution on the Effective Date				$	1,351
Distribution on the first anniversary of the Effective Date					900
Distribution on the second anniversary of the Effective Date					750
Total distributions for General Unsecured Claims				$	3,001

⁽⁷⁾ The Company has accounted for the reorganization and the related transactions using the principles of “fresh start” accounting as required by SOP 90-7. Following are explanations of the various adjustments:

(a) The Company has estimated a total reorganization value of $535.3 million, with $200.9 million attributable to new shareholders’ equity. This equity value approximates the mid-point of the equity values derived by the use of accepted valuation models and methodologies employed by the Company’s financial advisors. In addition to this, the Company valued all of the Company’s assets and liabilities except for current assets and liabilities related to operating activity and certain other items that have a readily determinable fair value. This work was performed as of the emergence date and included the valuation of property, plant and equipment, identifiable intangible assets, long-term debt, favorable or unfavorable leases or other contractual obligations. The principal valuation techniques employed utilized a variety and combination of methods such as a market approach, cost approach and income approach. The valuations were prepared based on a number of projections, assumptions, risk assessments, and industry and economic tables and other factors. In accordance with the provisions of fresh start accounting, the historical common stock and retained earnings were eliminated.

(b) In accordance with SOP 90-7, the reorganization value has been allocated to specific tangible and identifiable intangible assets and liabilities. The excess of the Company’s historical tangible and identified intangible assets over the reorganization value is reflected as an adjustment to record these assets and liabilities at their fair value. As a result of this valuation work, property, plant and equipment, goodwill and radio spectrum licenses were written down by approximately $57.8 million, $23.2 million and $76.2 million, respectively. The write-downs related to radio spectrum licenses and goodwill are largely impacted by the total enterprise value of the underlying segments and the specific

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identification of intangible assets with specific value, such as the franchise right value associated with the rural local exchange carrier (“RLEC”) segment and the value associated with “other intangible assets” which is comprised of customer intangibles ($67.0 million) and trademarks ($9.5 million). Also, the deferred tax asset related to the interest rate swap agreement was eliminated. In addition to the changes in assets, adjustments were made to certain long-term liabilities, such as deferred gains, various retirement obligations (Note 14), deferred income taxes (Note 12) and long-term debt (Note 9). The balance of post-confirmation goodwill included $5.5 million of goodwill in the wireline cable business which was sold on September 19, 2003.

(c) The amount of shareholders’ equity in the fresh start balance sheet is not an estimate of the trading value of the New Common Stock after confirmation of the Plan, the value of which is subject to many uncertainties. The Company does not make any representation as to the trading value of the New Common Stock and New Warrants issued pursuant to the Plan.

Note 5. Significant Accounting Policies

ACCOUNTING ESTIMATES: The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

FINANCIAL STATEMENT CLASSIFICATION: Certain amounts in the prior year financial statements have been reclassified, with no effect on net income, to conform to classifications adopted in 2005. The Company has included bad debt expense in customer operations expense for all periods presented. Previously, the Company had reported operating revenues net of bad debt expense.

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and those limited liability corporations where the Company, as managing member, exercises control. All significant intercompany accounts and transactions have been eliminated.

REVENUE RECOGNITION: The Company recognizes revenue when services are rendered or when products are delivered, installed and functional, as applicable. Certain services of the Company require payment in advance of service performance. In such cases, the Company records a service liability at the time of billing and subsequently recognizes revenue over the service period.

With respect to the Company’s wireline and wireless businesses, the Company earns revenue by providing access to and usage of its networks. Local service and airtime revenues are recognized as services are provided. Wholesale revenues are earned by providing switched access and other switched and dedicated services, including wireless roamer management, to other carriers. Revenues for equipment sales are recognized at the point of sale. PCS handset equipment sold with service contracts are sold at prices below cost, based on the terms of service contract. The Company recognizes the entire cost of the handsets at the time of sale, rather than deferring such costs over the service contract period.

Nonrefundable PCS activation fees and the portion of the activation costs directly related to acquiring new customers (primarily activation costs and sales commissions) are deferred and recognized ratably over the estimated life of the customer relationship ranging from 12 to 24 months. Similarly, in the rural local exchange carrier (“RLEC”) and competitive wireline segments the Company charges nonrefundable activation fees for certain new service activations. Such activation fees are deferred and recognized ratably over 5 years. Direct activation costs exceed activation revenues in all cases. The Company defers direct activation costs up to but not in excess of the related deferred revenue.

Effective July 1, 2003, the Company adopted Emerging Issues Task Force No. 00-21 (“EITF No. 00-21”), Accounting for Revenue Arrangements with Multiple Element Deliverables. The EITF guidance addresses how to account for arrangements that may involve multiple revenue-generating activities, i.e., the delivery or performance of multiple products, services, and/or rights to use assets. In applying this guidance, separate contracts with the same party, entered into at or near the same time, will be presumed to be a bundled transaction and the consideration will

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be measured and allocated to the separate units based on their relative fair values. The adoption of EITF No. 00-21 has required evaluation of each arrangement entered into by the Company for each type of sales transaction and each sales channel. The adoption of EITF No.00-21 has resulted in substantially all of the activation fee revenue generated from Company-owned retail stores and associated direct costs being recognized at the time the related wireless handset is sold and is classified as equipment revenue and cost of equipment, respectively. Upon adoption of EITF No. 00-21, previously deferred revenues and costs continued to be amortized over the remaining estimated life of a subscriber, not to exceed 24 months.

Revenue and costs for activations at third party retail locations and related to the Company’s segments other than wireless continue to be deferred and amortized over the estimated lives as prescribed by Securities and Exchange Commission’s Staff Accounting Bulletin 101 as amended by staff accounting Bulletin 104 (collectively referred to as “SAB No. 104”). The adoption of EITF No. 00-21 had the effect of increasing equipment revenue and related customer operations expenses for the Predecessor Reorganized Company for the period January 1, 2005 through May 1, 2005, for the year ended 2004 and for the period September 10, 2003 through December 31, 2003 by $0.6 million, $0.1 million and $0.4 million respectively. The effect on the Predecessor Company for the period January 1, 2003 through September 9, 2003 was $0.3 million. These revenues and costs otherwise would have been deferred and amortized. The amounts of deferred revenue and costs under SAB No. 104 at December 31, 2004 and December 31, 2003 were approximately $0.9 million and $0.8 million, respectively.

CASH AND CASH EQUIVALENTS: The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents. The Company places its temporary cash investments with high credit quality financial institutions. At times, such investments may be in excess of the FDIC insurance limit. At December 31, 2004 and December 31, 2003, total cash equivalents, consisting of a business investment deposit account and other amounts on deposit, were $32.1 million and $46.1 million, respectively.

TRADE ACCOUNTS RECEIVABLE: The Company sells its services to residential and commercial end-users and to other communication carriers primarily in Virginia and West Virginia. The carrying amount of the Company’s trade accounts receivable approximates fair value. The Company has credit and collection policies to ensure collection of trade receivables and requires deposits on certain of its sales. The Company maintains an allowance for doubtful accounts which management believes adequately covers all anticipated losses with respect to trade receivables. Actual credit losses could differ from such estimates. The Company includes bad debt expenses in customer operations expense in the consolidated statement of operations. Bad debt expense for the Predecessor Reorganized Company for the period January 1, 2005 through May 1, 2005, for the year ended December 31, 2004 and for the period September 10, 2003 through December 31, 2003 was $2.3 million, $7.2 million and $3.1 million, respectively. Bad debt expense for the Predecessor Company for the period January 1, 2003 through September 9, 2003 was $6.6 million.

SECURITIES AND INVESTMENTS: Investments held by the Company are typically required holdings purchased in connection with debt instruments or are acquired through settlement of a receivable. The Company’s current senior debt holdings prohibit speculative investment purchases. Management’s policy for investments is to determine the appropriate classification of securities at the date of purchase and continually thereafter. Currently, all investments are accounted for under the cost method as the Company does not have significant ownership in equity securities and there is no ready market. Information regarding these and all other investments is reviewed continuously for evidence of impairment in value.

PROPERTY, PLANT AND EQUIPMENT AND OTHER LONG-LIVED ASSETS: Long-lived assets include property and equipment, radio spectrum licenses, long-term deferred charges and intangible assets to be held and used. Long-lived assets, excluding intangible assets with indefinite useful lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount should be addressed pursuant to Statement of Financial Accounting Standard No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”). The criteria for determining impairment for such long-lived assets to be held and used is determined by comparing the carrying value of these long-lived assets to management’s best estimate of future undiscounted cash flows expected to result from the use of the assets. If the carrying value exceeds the estimated undiscounted cash flows, the impairment is measured as the excess of carrying value over the estimated fair value.

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Depreciation of property, plant and equipment is calculated on a straight-line basis over the estimated useful lives of the assets. Buildings are depreciated over a 50-year life and leasehold improvements, which are categorized with land and building, are depreciated over the shorter of the estimated useful lives or the remaining lease terms. Network plant and equipment are depreciated over various lives from 4 to 40 years, with an average life of approximately 13 years. Furniture, fixtures and other equipment are depreciated over various lives from 5 to 18 years.

Goodwill, franchise rights and radio spectrum licenses are considered indefinite lived intangible assets. Indefinite lived intangible assets are not subject to amortization but are instead tested for impairment annually or more frequently if an event indicates that the asset might be impaired. The Company assesses the recoverability of indefinite lived assets annually on October 1 and whenever adverse events or changes in circumstances indicate that impairment may have occurred. At May 1, 2005, no impairment indicators existed that would trigger impairment testing prior to the scheduled annual testing date of October 1.

Intangibles with a finite life are classified as other intangibles on the consolidated balance sheets. At December 31, 2004 and 2003, other intangibles were comprised of trademarks and customer intangibles. Trademarks are amortized over 15 years and customer intangibles are amortized over 5 to 25 years.

Amortization for other intangibles of the Predecessor Reorganized Company for the period January 1, 2005 to May 1, 2005, for the year ended December 31, 2004 and for the period September 10, 2003 through December 2003 was $1.6 million, $4.9 million and $1.5 million, respectively. Amortization of other intangibles of the Predecessor Company was $0.9 million for the period January 1, 2003 through September 9, 2003.

In 2004, the Company recorded net adjustments of $2.1 million to the Goodwill balances recorded at the September 10, 2003 fresh-start balance sheet date of the Predecessor Reorganized Company primarily relating to the $5.5 million realization of tax net operating loss assets that existed on September 10, 2003 that were previously fully reserved (Note 12), offset by a $3.4 million net charge relating to final fresh start adjustments for the valuation of certain fixed assets and current liabilities.

ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS: In June 2001, the FASB issued Statement of Financial Accounting Standard No. 143, Accounting for Asset Retirement Obligations (“SFAS No. 143”). SFAS No. 143 establishes accounting standards for recognition and measurement of a liability for an asset retirement obligation and the associated asset retirement cost. The fair value of a liability for an asset retirement obligation is to be recognized in the period in which it is incurred if a reasonable estimate can be made. The associated retirement costs are capitalized and included as part of the carrying value of the long-lived asset and amortized over the useful life of the asset. SFAS No. 143 was effective for the Company beginning January 1, 2003. Accordingly, effective January 1, 2003, the Company changed its method of accounting for asset retirement obligations. Previously, the Company recognized amounts related to asset retirement obligations as operating expense when the specific work was performed.

The Company recorded the effect of the adoption of this standard as of January 1, 2003 in its statement of operations by reporting a $2.8 million charge for the cumulative effect of this accounting change. There is no income tax impact on this amount as the $1.1 million income tax benefit is fully offset by the related valuation allowance (see Note 12). Additionally, $5.6 million of asset retirement obligations were recorded along with the net book value of $2.7 million of retirement obligation assets. In addition to the cumulative effect impact reported in the statement of operations, the Company reported depreciation charges related to the retirement obligation assets and accretion expenses related to the asset retirement obligations for the period ended September 9, 2003 (Predecessor Company) of $0.3 million and $0.4 million, respectively. These depreciation charges and accretion expenses for the Predecessor Reorganized Company for the period January 1, 2005 through May 1, 2005 were $0.2 million and $0.3 million respectively, for the year ended 2004 were $0.5 million and $0.7 million, respectively, and for the period September 10, 2003 through December 31, 2003 were $0.1 million and $0.2 million, respectively.

The Company enters into long-term leasing arrangements primarily for tower sites and retail store locations in its wireless segment. Additionally, in its wireline operations, the Company enters into various facility co-location agreements and is subject to locality ordinances. In both cases, the Company constructs assets at these locations and, in accordance with the terms of many of these agreements, the Company is obligated to restore the premises to their original condition at the conclusion of the agreements, generally at the demand of the other party to these

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agreements. The Company recognized the fair value of a liability for an asset retirement obligation and capitalized that cost as part of the cost basis of the related asset, depreciating it over the useful life of the related asset. The following table describes the changes to the Company’s asset retirement obligations liability, which is included in long-term deferred liabilities (in thousands):

	Predecessor Reorganized Company		Predecessor Reorganized Company
	December 31, 2004		December 31, 2003
Asset retirement obligations at end of prior year	$	6,278	$	—
Liability recognized in transition		—		5,484
Additional asset retirement obligations recorded		124		132
Accretion of asset retirement obligations		680		662
Asset retirement obligations at year end	$	7,082	$	6,278

INVENTORIES AND SUPPLIES: The Company’s inventories and supplies consist primarily of items held for resale such as PCS handsets, pagers, wireline business phones and accessories. The Company values its inventory at the lower of cost or market. Inventory cost is computed on a currently adjusted standard cost basis (which approximates actual cost on a first-in, first-out basis). Market value is determined by reviewing current replacement cost, marketability and obsolescence.

DEFERRED FINANCING COSTS: Deferred financing costs are amortized using the straight-line method, which approximates the effective interest method, over a period equal to the term of the related debt instrument. Deferred financing costs related to the First Lien Term Loan and the Second Lien Term Loan was being amortized over a period of 6 ¹/2 to 7 years. Amortization of deferred financing costs is included in interest expense and was $0.3 million for the Predecessor Reorganized Company period beginning on the February 24, 2005 closing date of the new financing through May 1, 2005. These deferred financing costs, which totaled $12.4 on May 1, 2005, were eliminated on May 2, 2005 upon application of purchase accounting and recording the related debt instrument at fair value.

The Company had deferred financing costs associated with previous financings. Amortization of these costs for the Predecessor Reorganized Company period January 1, 2005 to February 23, 2005, for the year ended December 31, 2004 and for the period September 10, 2003 through December 2003 was $0.3 million, $0.2 million and $0.1 million, respectively. Amortization of these costs of the Predecessor Company was $0.5 million for the period January 1, 2003 through September 9, 2003.

ADVERTISING COSTS: The Company expenses advertising costs and marketing production costs as incurred.

PENSION BENEFITS: The Company sponsors a non-contributory defined benefit pension plan covering all employees who meet eligibility requirements and were employed prior to October 1, 2003. The defined benefit pension plan was closed to employees employed on or after October 1, 2003. Pension benefits vest after five years of service and are based on years of service and average final compensation subject to certain reductions if the employee retires before reaching age 65. The Company’s funding policy has been to contribute to the plan based on applicable regulatory requirements. Section 412 of the Internal Revenue Code and ERISA Section 302 establishes a minimum funding requirements for defined benefit pension plans whereby the funded current liability percentage must be at least 90% of the current liability in order to prevent noticing to members of an underfunded plan. Contributions are made to stay above this threshold and are intended to provide not only for benefits based on service to date, but also for those expected to be earned in the future.

NTELOS Inc. also sponsors a contributory defined contribution plan under Internal Revenue Code Section 401(k) for substantially all employees. Effective April 1, 2003, the Company reinstated its policy to contribute 60% of each participant’s annual contribution for contributions up to 6% of each participant’s annual compensation. Company contributions to this plan vest after three years of service.

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RETIREMENT BENEFITS OTHER THAN PENSIONS: NTELOS Inc. provides certain health care and life benefits for retired employees that meet eligibility requirements. Employees hired after January 1994 are not eligible for these benefits. The Company’s share of the estimated costs of benefits that will be paid after retirement is generally being accrued by charges to expense over the eligible employees’ service periods to the dates they are fully eligible for benefits.

INCOME TAXES: Deferred income taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

STOCK-BASED COMPENSATION: The Company accounts for stock-based employee compensation plans under Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations and follows the disclosure provisions of SFAS No. 123, Accounting for Stock-Based Compensation and the revised disclosure requirements of SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure, an Amendment of SFAS No. 123.

Upon the effective date of the Plan of Reorganization, all options under the Predecessor Company stock option plan were cancelled and the plan was terminated. On September 16, 2003, the Predecessor Reorganized Company adopted a new stock option plan for purposes of retaining key employees and enabling them to participate in the future success of the Company (Note 15).

On February 24, 2005, approximately 75% of the then outstanding stock options were purchased at a price of $20.23 per share issuable pursuant to the settlement of vested options as part of the tender offer transaction. On May 2, 2005, the remaining 25% of the stock options vested pursuant to the change in control terms in the stock option agreements and were purchased at a price of $20.23 per share in connection with the closing of the Merger (Notes 2 and 3).

Had compensation cost been recorded based on the fair value of awards at the grant date, the pro forma impact on the Company’s (loss) income applicable to common shares would have been as follows (in thousands, except per share data):

	Predecessor Reorganized Company							Predecessor Company
	January 1, 2005 through May 1, 2005			Year ended December 31, 2004		September 10, 2003 through December 31, 2003		January 1, 2003 through September 9, 2003
(Loss) Income applicable to common shares, as reported	$	(1,717	)	$	38,312	$	4,670	$	425,041
Deduct: Total stock-based employee compensation expense determined under fair value based method, net of tax		740			739		925		898
(Loss) Income applicable to common shares, pro forma	$	(2,457	)	$	37,573	$	3,745	$	424,143
(Loss) earnings per common share:
Basic—as reported	$	(0.21	)	$	3.50	$	0.47	$	23.91
Basic—pro forma	$	(0.31	)	$	3.43	$	0.37	$	23.86
Diluted—as reported	$	(0.21	)	$	3.04	$	0.49	$	23.91
Diluted—pro forma	$	(0.31	)	$	2.99	$	0.42	$	23.86

The fair value of each grant is estimated at the grant date using the Black-Scholes option-pricing model with the following assumptions: dividend rate of 0%; risk-free interest rate of 2.5% for all periods in 2003 through May 1, 2005; expected life of 5 years for all periods in 2003 through 2005; and, a price volatility factor of 65.7% to

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92.4% for the Predecessor Company periods ended September 9, 2003. In accordance with the provisions of SFAS No. 123 for non-public companies, a price volatility factor was not required or used for all Predecessor Reorganized Company periods.

EARNINGS (LOSS) PER COMMON SHARE: All earnings (loss) per share amounts are calculated in accordance with SFAS No. 128. Basic and diluted earnings (loss) per share is presented for income (loss) applicable to common shares before cumulative effect for accounting change and for income (loss) applicable to common shares. The numerator for both basic and diluted earnings (loss) per share is net of the dividend requirements and reorganization items on preferred stock. For basic earnings (loss) per common share, the denominator is the weighted average number of common shares outstanding during the year. For diluted earnings (loss) per common share, the denominator is calculated using the weighted average number of common and dilutive common equivalent shares outstanding during the period. Common equivalent shares consist of the incremental shares of common stock issuable upon the exercise of stock options and warrants (using the treasury stock method), and the incremental shares of common stock issuable upon the conversion of the convertible preferred stock and convertible notes (using the if-converted method). Common equivalent shares are excluded from the calculation if their effect is anti-dilutive. In the case of a loss per common share, net of dividend requirements and reorganization items on preferred stock, the denominator for the diluted per common share calculation is average basic shares outstanding, as using average diluted shares outstanding would result in an antidilutive effect.

FAIR VALUE OF FINANCIAL INSTRUMENTS: Statement of Financial Accounting Standard No. 107, Disclosure About Fair Value of Financial Instruments (“SFAS No. 107”), requires certain disclosures regarding the fair value of financial instruments. Cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are reflected in the consolidated financial statements at cost which approximates fair value because of the short-term maturity of these instruments. The fair values of other financial instruments are based on quoted market prices or discounted cash flows based on current market conditions.

In June 1998, the FASB issued Statement of Financial Accounting Standard No. 133, as amended by SFAS No. 138, Accounting for Derivative Instruments and Hedging Activities (“SFAS No. 133 and 138”). SFAS Nos. 133 and 138 require all derivatives to be measured at fair value and recognized as either assets or liabilities on the Company’s balance sheet. Changes in the fair values of derivative instruments are recognized in either earnings or comprehensive income, depending on the designated use and effectiveness of the instruments (Note 11).

RECENT ACCOUNTING PRONOUNCEMENTS: In March 2005, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143 (“FIN 47”). FIN 47 clarifies the term “conditional asset retirement obligation” as used in Statement of Financial Accounting Standards (“SFAS”) No. 143, “Accounting for Asset Retirement Obligations,” and also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement. FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005. The Company does not anticipate that the implementation of FIN 47 will have a material impact on its consolidated financial position, results of operations or cash flows.

In December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payments” (“SFAS No. 123R”). SFAS No. 123R requires the recognition of the cost of employee services received in exchange for an award of equity instruments in the financial statements and measurement based on the grant-date fair value of the award. It requires the cost to be recognized over the period during which an employee is required to provide service in exchange for the award. Additionally, compensation expense will be recognized over the remaining employee service period for the outstanding portion of any awards for which compensation expense had not been previously recognized or disclosed under SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”). SFAS No. 123R replaces SFAS No. 123 and supersedes APB Opinion No. 25 and its related interpretations.

The Company is required to adopt SFAS No 123R no later than January 1, 2006. The Company does not believe that the effects of adoption will have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

Note 6. Disclosures about Segments of an Enterprise and Related Information

The Company manages its business segments with separable management focus and infrastructures.

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Wireless PCS: The Company’s wireless PCS business carries digital phones and services, marketed in the retail and business-to-business channels throughout much of Virginia and West Virginia. The Company’s Wireless PCS segment operates in three primary markets: Virginia East, Virginia West and West Virginia. The Virginia East market currently serves a populated area of 3.4 million people primarily in the Richmond and Hampton Roads areas of Virginia through Richmond 20MHz, LLC, a wholly owned subsidiary. The region was added in July 2000 from the PrimeCo VA acquisition. The Virginia West market currently serves a populated area of 2.2 million people in central and western Virginia primarily through the Virginia PCS Alliance, L.C. (“VA Alliance”), a 97% majority owned Limited Liability Company. The West Virginia market is served by West Virginia PCS Alliance, L.C. (“WV Alliance”), a wholly owned limited liability company, and currently serves a populated area of 1.6 million people primarily in West Virginia, but extending to parts of eastern Kentucky, southwestern Virginia and eastern Ohio. In addition to the markets indicated above, the Company has licenses, which are not active, that currently cover a populated area of approximately 1.4 million people.

In addition to the end-user customer business, the Company provides roaming services to other PCS providers and has a wholesale network access agreement with Sprint Nextel entered into in June 2004. Prior to this, the Company had a wholesale network access agreement with Horizon Personal Communications, Inc., a Sprint affiliate (Note 16). Revenue from these wholesale service agreements was $19.9 million, $51.6 million, $14.3 million, and $18.6 million for the Predecessor Reorganized Company period from January 1, 2005 through May 1, 2005, for the year ended 2004 and the period from September 10, 2003 through December 31, 2003, and the Predecessor Company period January 1, 2003 through September 9, 2003, respectively.

RLEC: The Company has RLEC businesses subject to the regulations of the State Corporation Commission of Virginia. NTELOS Inc. has owned one of these for over 100 years and the other was added in early 2001 through a merger with R&B Communications, Inc. These businesses serve several areas in western Virginia, are fully integrated and are managed as one consolidated operation. Principal products offered by this segment are local service, which includes advanced calling features, network access, long distance toll and directory advertising.

Competitive wireline: In addition to the RLEC services, the Company directly or indirectly owns 1,900 route miles of fiber optic network and provides transport services for long distance, Internet and private network services. Much of this network is located in regions that the Company sells products and services or provides connections for and between markets the Company serves. The Company’s network is connected and marketed through Valley Network Partnership (“ValleyNet”), a partnership of three nonaffiliated communications companies that have interconnected their networks to a nonswitched, fiber optic network. The ValleyNet network is connected to and marketed with other adjacent fiber networks creating a connected fiber optic network serving the ten state mid-Atlantic region, stretching from Pennsylvania to Florida north to south and west as far as Charleston, WV.

The Company also offers competitive local exchange carrier (“CLEC”) services. Through its wholly owned subsidiaries certified in Virginia, West Virginia and Tennessee, it currently provides CLEC service in 16 geographic markets. The Company has a facilities based strategy, offering broadband service applications such as Ethernet, PRI connections and competitive access utilizing its fiber network. Also within this segment, the Company provides Internet access services through a local presence in 54 markets in Virginia, West Virginia and Tennessee. The Company’s focus with internet has shifted to concentrate efforts on broadband service offerings. Metro Ethernet, dedicated high-speed access, integrated access, digital subscriber line (“DSL”) and portable broadband are the primary broadband products. These operations are managed as one consolidated operation within a single segment due to the interdependence of network and other assets and functional support.

Other: Other communications services includes certain unallocated corporate related items, as well as results from the Company’s paging, other communication services and wireline and wireless cable businesses, which are not considered separate reportable segments. The wireline cable business was sold in 2003 (Note 8) and the wireless cable business discontinued its operations in first quarter 2004. Wireless cable was not accounted for as a discontinued operation as the financial position, results of operations and cash flows of this business were immaterial to the consolidated financial statements during 2003 and 2004. Total unallocated corporate operating expenses were $0.9 million, $2.8 million, $0.5 million, and $5.0 million for the Predecessor Reorganized Company period January 1, 2005 through May 1, 2005, for the year ended December 31, 2004 and the period from September 10, 2003 through December 31, 2003, and the Predecessor Company period January 1, 2003 through September 9, 2003, respectively. In addition, restructuring charges were $15.4 million, $0.8 million, and $2.4 million for the Predecessor Reorganized Company for the periods January 1, 2005 through May 1, 2005, for the year ended December 31, 2004 and for the Predecessor Company period January 1, 2003 through September 9, 2003, respectively.

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The Company has one customer that accounted for greater than 10% of its revenue during the year ended 2004 and the 2005 periods. Revenue from this customer was primarily derived from a wireless PCS wholesale contract and RLEC and competitive wireline segments’ network access. The percent of operating revenue from this customer for the Predecessor Reorganized Company periods January 1, 2005 through May 1, 2005 and for the year ended 2004 were approximately 18% and 10%, respectively.

Summarized financial information for the Company’s reportable segments is shown in the following table. On the Statement of Operations, the wireless communications revenue caption is exclusively comprised of the wireless PCS segment and the wireline communications revenue captions is comprised of the RLEC and the competitive wireline segments.

(in thousands)	Wireless PCS			RLEC		Competitive Wireline			Other			Total
Predecessor Reorganized Company
For the period January 1, 2005 through May 1, 2005
Operating Revenues	$	89,826		$	18,834	$	16,674		$	343		$	125,677
Operating Income (Loss)		12,205			10,611		2,595			(7,762	)		17,649
Depreciation & Amortization		16,768			3,618		3,308			105			23,799
Accretion of Asset Retirement Obligations		231			4		13			4			252
Gain on Sale of Assets		(51	)		—		(21	)		(8,670	)		(8,742	)
Capital and Operational Restructuring Charges		—			—		—			15,403			15,403
As of and for the year ended December 31, 2004
Operating Revenues	$	234,682		$	56,280	$	48,971		$	1,769		$	341,702
Operating Income (Loss)		20,722			28,998		9,773			(4,929	)		54,564
Depreciation & Amortization		44,557			11,239		8,740			639			65,175
Accretion of Asset Retirement Obligations		605			12		37			26			680
Capital and Operational Restructuring Charges		—			—		—			798			798
Total Segment Assets		290,624			154,867		87,101			2,687			535,279
Corporate Assets													85,178
Total Assets												$	620,457

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(in thousands)	Wireless PCS			RLEC		Competitive Wireline		Other			Total
As of December 31, 2003 and for the period September 10, 2003 through December 31, 2003
Operating Revenues	$	66,769		$	17,159	$	15,275	$	962		$	100,165
Operating Income (Loss)		138			8,419		2,852		(731	)		10,678
Depreciation & Amortization		11,546			3,741		3,267		306			18,860
Accretion of Asset Retirement Obligations		201			6		18		—			225
Total Segment Assets		316,720			161,402		82,679		2,931			563,732
Corporate Assets												86,491
Total Assets											$	650,223
Predecessor Company
For the period January 1, 2003 through September 9, 2003
Operating Revenues	$	132,766		$	36,193	$	34,910	$	3,920		$	207,789
Operating Income (Loss)		(14,927	)		18,538		7,627		(8,357	)		2,881
Depreciation & Amortization		36,010			6,044		7,731		1,439			51,224
Accretion of Asset Retirement Obligations		409			4		24		—			437
Asset Impairment Charge		—			—		—		545			545
Capital and Operational Restructuring Charges		—			—		—		2,427			2,427

Note 7. Asset Impairment Charges

The Company performed its annual SFAS No. 142 impairment testing on goodwill and indefinite lived intangible assets for 2004 on October 1, 2004. Based on the results of this testing, goodwill and indefinite lived intangible assets were determined to be unimpaired at October 1, 2004. The Company reviewed the results of the October 1, 2004 testing as of December 31, 2004 and concluded that no material changes would have been made to the underlying assumptions that would have resulted in materially different test results from those performed as of October 1, 2004.

During the period ended September 9, 2003, the Company determined that there was sufficient evidence of impairment indicators to warrant impairment testing of the Company’s wireline cable operations. Due to the customer decline and its effect on the selling price of this business, the goodwill of this business was determined to be impaired and, therefore, the Company recorded a $0.5 million asset impairment charge during the period ended September 9, 2003. The Company closed on the sale of this business on September 19, 2003.

As discussed in Note 4, all other long lived assets required to be tested under the provisions of SFAS No. 142 and SFAS No. 144 were revalued in the Company’s application of fresh start accounting. There were no significant changes within the Company or in industry or general economic external factors from the September 9, 2003 reorganization date to October 1, 2003, the date the Company has chosen to perform its annual SFAS No. 142 impairment testing or through December 31, 2003.

Note 8. Asset Dispositions

On November 18, 2004, the Company signed an agreement to sell certain inactive PCS licenses covering a population of approximately 2 million in Pennsylvania for $15.5 million. Each license covered 10 MHz of spectrum.

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The book value of these licenses was $10.0 million. Final closing occurred in February 2005, with the Company recognizing net proceeds of $15.2 million and recognized a gain of $5.2 million.

On November 11, 2004, the Company signed an agreement to sell all of the MMDS spectrum licenses, spectrum leases and wireless cable equipment in the Richmond, VA market for a minimum of $4.2 million and up to $5.0 million, conditioned on the satisfactory completion of certain deliverables. Additionally, the Company assigned all spectrum leases and tower leases for this market to the buyer. The book value of the licenses is $1.5 million and the equipment assets have a book value of less than $0.1 million. During the period ending May 1, 2005 the Company closed on the sale of substantially all of these assets and recognized net proceeds of $4.8 million and recognized a gain of $3.5 million.

On December 31, 2003, the Company sold a vacant building, the underlying land and certain equipment for its net book value of $1.8 million.

On September 19, 2003, the Company closed on the sale of the wireline cable business at its book value of $7.6 million and, in connection with this asset sale, made a mandatory payment on the Senior Credit Facility of $1.9 million. The Company did not reclassify the wireline cable business as a discontinued operation in the statements of operations as the operating results of this business are immaterial to the Company’s consolidated results of operations. The revenues and net loss of the wireline cable business for the period January 1, 2003 through the September 19, 2003 sale date were $1.2 million and $0.7 million, respectively, which represent .5% of both the consolidated revenues and net income.

On May 6, 2003, the Company closed on the sale of its Portsmouth, Virginia call center building for its book value of $6.9 million. This 100,000 square foot facility housed part of the Company’s wireless customer care center and certain other support personnel, as well as provided $0.7 million of annual rental income from third party tenants. The Company continues to occupy 7,000 square feet of the facility through a seven year operating lease agreement. The customer care operations have been transitioned to other Company owned or leased facilities. In connection with this transition, the Company incurred approximately $0.7 million of transition related costs such as severance costs, training and duplicated employee costs during the transition period, and additional facility rental expense. In accordance with the April 17, 2003 court orders approving this transaction, the net proceeds from this sale were applied against the $325 million Senior Credit Facility entered into on September 9, 2003 (the “Senior Credit Facility”).

Note 9. Long-Term Debt

As of December 31, 2004 and December 31, 2003, the Company’s outstanding long-term debt consisted of the following:

(In thousands)	December 31, 2004		December 31, 2003
Variable rate Senior Credit Facility	$	169,176	$	216,432
6.25% to 7.0% Notes payable secured by certain PCS radio spectrum licenses		4,413		6,360
5.0% to 6.05% Notes payable secured by certain assets		4,974		5,095
9.0% Unsecured Senior Convertible Notes		—		74,273
Capital lease obligations		1,688		8,143
		180,251		310,303
Less current portion		10,460		17,860
Long-Term Debt	$	169,791	$	292,443

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Long-term debt, excluding capital lease obligations

2005 Financing

On February 24, 2005, the Company entered into $660 million of Senior Secured Credit Facilities (the “Facilities”) consisting of (i) a $400 million, 6.5 year, first-lien term loan facility (the “First Lien Term Loan”), (ii) a $35 million, 5-year, revolving credit facility (the “Revolving Credit Facility”), and (iii) a $225 million, 7 year, second-lien term loan facility (the “Second Lien Term Loan”).

The Company borrowed $625 million under the First and Second Lien Term Loans and used the proceeds to retire the remaining obligations under its existing $325 million Senior Credit Facility entered into on September 9, 2003 (the “Senior Credit Facility”), the existing interest rate swap agreements, 6.25% to 7.0% Notes payable secured by certain PCS radio spectrum licenses and 5.0% to 6.05% Notes payable secured by certain assets for an aggregate disbursement of approximately $183 million. Based on the Company’s application of fresh start accounting (effective September 9, 2003), the 5.0% to 6.05% notes payable carrying value had been reduced below the face value based on fair value interest rates of 7.1% to 8.9%. At the date of retirement, the difference between face value and carrying value of approximately $0.8 million was recorded as a component of interest expense.

In connection with the retirement described above, the Company recorded interest expense of approximately $0.3 million related to the write-off of deferred debt issuance costs. Additionally, in connection with the retirement of the portion of the original Senior Credit Facility held by RTFC, the investment in RTFC subordinated capital certificates of $7.2 million was netted and accordingly reduced the principal due at the time of the retirement.

The First Lien Term Loan matures in 6.5 years, with quarterly payments of $1 million for the initial 5.5 years, with the remainder due in equal quarterly payments over the year prior to maturity. The Revolving Credit Facility provides for borrowings up to $35 million for five years and is payable in full at maturity. The Second Lien Term Loan matures in 7 years and is payable in full at maturity. The First Lien Term Loan bears interest at rates 2.5% above the Eurodollar rate or 1.5% above the Federal Funds rate, with a 25 basis point reduction in each of these rates when the Company’s leverage ratio is equal to or less than 4.0:1.0, as defined in the agreement. The Second Lien Term Loan bears interest at rates 5.0% above the Eurodollar rate or 4.0% above the Federal Funds rate. Interest on the First and Second Lien Term Loans is due and payable monthly. The First Lien Term Loan and Revolving Credit Facility are secured by a first priority pledge of substantially all property and assets of the Company and all material subsidiaries, as guarantors, excluding the regulated telephone companies. The Second Lien Term Loan is secured by a second priority interest in all collateral pledged to the First Lien Term Loan and Revolving Credit Facility. The First Lien Term Loan contains various restrictions and conditions including covenants relating to leverage and interest coverage ratio requirements and a limitation on future capital expenditures and dividends. The Second Lien Term Loan contains various restrictions and conditions including customary incurrence based covenants. The Second Lien Term Loan contains a 2% prepayment premium prior to its first anniversary date and a 1% prepayment premium prior to its second anniversary date.

In connection with the transactions described above, NTELOS Inc. deferred debt issuance costs of approximately $12.8 million which were being amortized to interest expense over the life of the Facilities. Amortization of these costs for the February 24 through May 1, 2005 was $0.4 million. At May 1, 2005, the Company had a $12.4 million unamortized balance of debt financing costs related to the First Lien Term Loan and the Second Lien Term Loan. Through purchase accounting, on May 2, 2005 the deferred financing fees were considered in determining the fair value of the debt and thus this balance was eliminated.

The aggregate maturities of long-term debt outstanding, excluding capital lease obligations, based on the contractual terms of the instruments are $4.0 million per year from 2005 through 2009, $97.3 million in 2010 and $507.7 million thereafter.

2003 and 2004 Financing

On March 4, 2003, the Company and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code (see Notes 1 and 4). In addition, the Company did not make

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the scheduled semi-annual interest payments due on February 18, 2003 on its 13% Senior Notes (“Senior Notes”) due 2010 and 13.5% Subordinated Notes (“Subordinated Notes”) due 2011 of $18.2 million and $6.4 million, respectively.

On September 9, 2003, the Company emerged from bankruptcy. In connection with the emergence, the Company cancelled its Senior Notes and Subordinated Notes which had carrying values, net of unamortized discounts, of $276.7 million and $95.0 million, respectively, and total accrued and unpaid interest of $27.4 million (Notes 1 and 4).

The Company had a balance outstanding under the Senior Credit Facility of $169.2 million and $216.4 million as of December 31, 2004 and December 31, 2003, respectively. On February 24, 2005, in connection with a series of equity transactions, the Company borrowed $625 million from a new $660 million Senior Secured Credit Facility and used these proceeds to liquidate all of the existing indebtedness with the exception of the capital lease obligations and to repurchase approximately 75% of its existing common stock, warrants and options (Note 2).

The Senior Credit Facility outstanding at December 31, 2004 and 2003 contained a tranche A term loan, tranche B term loan, tranche C term loan and a revolving credit facility and was secured by substantially all assets not secured against other senior debt. At December 31, 2004, the amounts outstanding were $19.5 million, $91.0 million, $58.7 million and $0, respectively, with $32.4 million available under the revolving credit facility. At December 31, 2003, the amounts outstanding relative to each of these was $45.4 million, $98.7 million, $72.3 million and $0, respectively, with $32.4 available under the revolving credit facility. Commitment fees are incurred on the unused portion of the revolving credit facility. The Senior Credit Facility loans began maturing in 2002 with a $0.5 million principal payment on the tranche B term loan made quarterly beginning in third quarter 2002 and a $1.3 million principal payment on the tranche A term loan made quarterly beginning in third quarter 2003. The Senior Credit Facility had maturities which totaled $7.2 million during 2004. Final maturity was 2008. The Senior Credit Facility also required that a percentage of asset sale proceeds be used to repay the outstanding balance of the tranche A, B and C term loans. For fiscal year 2004 and 2003, net proceeds from assets sales used to paydown the Senior Credit Facility were $0.1 million and $8.2 million, respectively. The loans bore interest at rates of 3% to 4% above the Eurodollar rate or 2.5% to 3% above the federal funds rates. The loans contained certain financial covenants and restrictions to their use.

On September 30, 2004, the Company made an optional prepayment on the Senior Credit Facility of $40.0 million that reduced the remainder of the required future quarterly mandatory payments due for tranche A and tranche B through 2008 and 2007, respectively.

The Company incurred loan origination fees and other closing costs related to the Senior Credit Facility totaling $19.9 million. In accordance with SOP 90-7, these costs were written off and recorded as reorganization items in the first quarter of 2003. Loan origination fees and closing costs for the amended Senior Credit Facility totaling $0.5 million were recorded at emergence as deferred charges and are being amortized over the life of the facility and had a net balance of $0.3 million at December 31, 2004.

On September 9, 2003, the Company issued $75 million of new 9% Unsecured Senior Convertible Notes (“Convertible Notes”), along with 37,931 shares of New Common Stock, valued at 1% of the purchase price or $750,000. The Convertible Notes were recorded net of the $750,000 fair value of common stock and were being accreted as interest expense up to the face value under the effective interest method over the ten year term of the instrument. Interest was paid on the Convertible Notes semi-annually.

On September 30, 2004, the Company converted the Convertible Notes to 3,793,116 shares of Common Stock. At the date of conversion, the book value of the Convertible Notes, net of the unaccreted discount, was $74.3 million. Therefore, the book value of the 3.8 million shares of Common Stock issued upon conversion was $19.594 per share.

Based on the Company’s application of fresh start accounting, the 5.0% to 6.05% Notes payable carrying value was reduced $0.9 million below the face value based on fair value interest rates of 7.1% to 8.9%.

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Blended interest rates and future maturities

The Company’s blended interest rate on its long-term debt as of December 31, 2004 and 2003 was 9.6% and 8.8%, respectively.

Capital lease obligations

In addition to the long-term debt discussed above, the Company has certain equipment capital leases entered into in 2000, all of which mature in 2005. The Company also enters into capital leases on vehicles used in its operations with lease terms of 4 to 5 years. At December 31, 2004, the net present value of the future minimum lease payments on vehicles is $0.9 million which is net of the amounts representing interest of $0.1 million. The principal portion of these future maturities are as follows: $0.3 million in 2005, $0.4 million in 2006, and $0.2 million in 2007.

Note 10. Supplementary Disclosures of Cash Flow Information

The following information is presented as supplementary disclosures for the consolidated statements of cash flows for the periods indicated below.

	Predecessor Reorganized Company						Predecessor Company
(In thousands)	January 1, 2005 through May 1, 2005		Year ended December 31, 2004		September 10, 2003 through December 31, 2003		January 1, 2003 through September 30, 2003
Cash payments for:
Interest	$	7,829	$	27,563	$	7,302	$	15,034
Income taxes, net of refunds received		103		1,058		429		529
Pension and other retirement plan contributions and distributions	$	7,980	$	2,240	$	3,583	$	—
Non-cash financing activity: Conversion of convertible Notes (Note 9)	$	—	$	74,322	$	—	$	—

Within the cash payments for interest amounts in the above table, $1.1 million, $8.9 million, $2.8 million, and $6.0 million relate to interest paid on the interest rate swap agreements for the Predecessor Reorganized Company period January 1 through May 1, 2005, for the year ended December 31, 2004, the period from September 10, 2003 through December 31, 2003 and the Predecessor Company period January 1, 2003 through September 9, 2003, respectively.

As discussed in Note 3, pursuant to the Transaction Agreement, the Company was required to move proceeds from the sale of certain assets into a segregated account and disbursed these funds on the May 2, 2005 merger closing date as part of the consideration used to purchase the remaining security interest not owned by the Buyers. The amount paid to the Buyers from this account was $25.0 million. In addition, the Company has recognized a payable to Holdings Corp. for $5.8 million representing the Company’s obligation to remit to Holdings Corp. the proceeds from the sale and collection on certain identified assets. Receipt of these funds is expected prior to December 31, 2005.

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Note 11. Financial Instruments

The Company is exposed to market risks with respect to certain of the financial instruments that it holds. The following is a summary by balance sheet category:

Cash and Short Term Investments

The carrying amount approximates fair value because of the short-term maturity of those instruments.

Long Term Investments

At December 31, 2004, the Company’s principal investment was $7.6 million in restricted investments, $7.2 million of which were RTFC subordinated capital certificates (“SCC”) and $0.3 million of which was stock held with the RTB. Both were required holdings related to the Company’s associated debt with these entities. These debt obligations were retired on February 24, 2005 (Note 9). As discussed in Note 9, in connection with the retirement of the portion of the original Senior Credit Facility held by RTFC, the Company’s investment in SCCs was liquidated. In connection with the application of purchase accounting on May 2, 2005, the Company’s investment in RTB was valued at $2.5 million based on discounted cash flow of anticipated future dividends based on historical trends of RTB dividend payments to the class C stock (Note 3). At December 31, 2004, this and all other investments carried under the cost method are high quality instruments. For all periods prior to May 2, 2005, a reasonable estimate of fair value could not be made without incurring excessive costs for investments with no quoted market prices. Additional information regarding the Company’s investments is included in Note 13.

Interest Rate Swaps

Pursuant to the requirements of the new Senior Secured Credit Facility, on February 24, 2005 the Company entered into a new interest rate swap agreement with a notional amount of $312.5 million in order to manage its exposure to interest rate movements by effectively converting a portion of its long-term debt from variable to fixed rates. This swap agreement has maturities up to three years and involves the exchange of fixed rate payments for variable rate payments without the effect of leverage and without the exchange of the underlying face amount. Fixed interest rate payments are at a per annum rate of 4.1066%. Variable rate payments are based on three month US dollar LIBOR. The weighted average LIBOR rate applicable to this agreement was 3.21% on the May 2, 2005 merger transaction closing date. The notional amounts do not represent amounts exchanged by the parties, and thus are not a measure of exposure to the Company. The amounts exchanged are based on the notional amounts and other terms of the swaps.

For the Predecessor Reorganized Company period February 24, 2005 through May 1, 2005 this swap agreement was not designated as a cash flow hedge for accounting purposes per the provisions of SFAS No. 133 and therefore the changes in market value of the swap agreement were recorded as a charge or credit to interest expense. On May 1, 2005, the swap had a fair value of a $0.7 million liability.

During September 2000, in accordance with conditions of the Senior Notes, the Company entered into two interest rate swap agreements with aggregate notional amounts of $162.5 million, with maturities of up to 5 years, to manage its exposure to interest rate movements by effectively converting a portion of its long-term debt from variable to fixed rates. The net face amount of interest rate swaps subject to variable rates as of December 31, 2004 and 2003 was $162.5 million. These agreements involve the exchange of fixed rate payments for variable rate payments without the effect of leverage and without the exchange of the underlying face amount. Fixed interest rate payments are at a per annum rate of 6.76%. Variable rate payments are based on one month US dollar LIBOR. The weighted average LIBOR rate applicable to these agreements was 1.67% and 1.24% for 2004 and 2003, respectively. The notional amounts do not represent amounts exchanged by the parties, and thus are not a measure of exposure to the Company. The amounts exchanged are normally based on the notional amounts and other terms of the swaps. The Company retired these swap agreements for $4.1 million on February 24, 2005 commensurate with the retirement of the related Senior Credit Facilities.

The fair values of the interest rate swap agreements are based on dealer quotes. At May 1, 2005, the Company had no exposure to credit loss on interest rate swaps. The fair value of the interest rate swap agreements at December 31, 2004 and 2003 was a liability of $4.7 million and $13.8 million, respectively.

Neither the Company nor the counterparties, which are prominent banking institutions, are required to collateralize their respective obligations under these swaps. The Company is exposed to loss if one or more of the counterparties default. At December 31, 2004 and 2003, the Company had no exposure to credit loss on interest rate swaps.

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The Company does not believe that any reasonably likely change in interest rates would have a material adverse effect on the financial position, the results of operations or cash flows of the Company. All interest rate swaps are reviewed with and, when necessary, are approved by the Company’s Board of Directors.

Debt Instruments

On May 1, 2005, the Company’s First and Second Lien Term Loans totaled $624.0 million. Of this amount, $311.5 million was not subject to the new swap agreement. Similarly, on December 31, 2004, the Company’s Senior Credit Facility totaled $169.2 million. Of this amount, $6.7 million was not subject to the former swap agreements. Therefore, the Company had variable rate exposure related to this amount. As indicated in the table below, the Company believes the face value of the senior debt approximates its fair value.

The following table indicates the difference between face amount, carrying amount and fair value of the Company’s financial instruments at December 31, 2004 and 2003:

Financial Instruments (In thousands)	Face amount			Carrying amount		Fair value
December 31, 2004
Nonderivatives:
Financial assets:
Cash and short-term investments	$	34,187		$	34,187	$	34,187
Long-term investments for which it is:
Practicable to estimate fair value	$	N/A		$	7,556	$	7,556
Not practicable to estimate fair value		N/A			115		115
Financial liabilities:
Non-marketable long-term debt	$	181,021		$	180,251	$	180,251
Derivatives relating to debt:
Interest rate swaps	$	162,500	*	$	4,749	$	4,749
December 31, 2003
Nonderivatives:
Financial assets:
Cash and short-term investments	$	48,722		$	48,722	$	48,722
Long-term investments for which it is:
Practicable to estimate fair value	$	N/A		$	7,829	$	7,829
Not practicable to estimate fair value		N/A			338		338
Financial liabilities:
Non-marketable long-term debt and convertible notes	$	312,159		$	310,303	$	310,303
Derivatives relating to debt:
Interest rate swaps	$	162,500	*	$	13,844	$	13,844

* Notional amount

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Note 12. Income Taxes

The components of income tax expense (benefit) are as follows for the periods indicated below:

	Predecessor Reorganized Company								Predecessor Company
(In thousands)	January 1, 2005 through May 1, 2005		Year ended December 31, 2004			September 10, 2003 through December 31, 2003			January 1, 2003 through September 9, 2003
Current tax expense:
Federal	$	—	$	—		$	—		$	—
State		379		1,001			258			706
		379		1,001			258			706
Deferred tax expense (benefit):
Federal		6,082		12,567			1,513			51,084
State		1,264		2,381			293			9,360
Valuation allowance for temporary differences		425		(14,948	)		(1,806	)		(60,444	)
		7,771		—			—			—
	$	8,150	$	1,001		$	258		$	706

Total income tax expense (benefit) was different than an amount computed by applying the graduated statutory federal income tax rates to income before taxes. The reasons for the differences are as follows:

	Predecessor Reorganized Company								Predecessor Company
(In thousands)	January 1, 2005 through May 1, 2005		Year Ended December 31, 2004			September 10, 2003 through December 31, 2003			January 1, 2003 through September 9, 2003
Computed tax expense at statutory rate of 35%	$	2,252	$	13,748		$	1,706		$	50,915
Nondeductible reorganization items		4,405		—			—			3,692
State Income taxes, net of federal income tax benefit		1,068		2,201			358			6,543
Nondeductible asset impairments		—		—			—			—
Valuation allowance for temporary differences		425		(14,948	)		(1,806	)		(60,444	)
	$	8,150	$	1,001		$	258		$	706

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Net deferred income tax assets and liabilities consist of the following components at December 31, 2004 and December 31, 2003:

(In thousands)	December 31, 2004			December 31, 2003
Deferred income tax assets:
Retirement benefits other than pension	$	4,314		$	4,128
Pension		4,862			5,114
Net operating loss		86,072			139,171
Alternative minimum tax credit carryforwards		—			709
Licenses		68,916			76,826
Interest rate swap		1,847			5,385
Debt issuance and discount		4,318			4,374
Accrued expenses		4,946			4,737
Federal and state tax credits		—			403
Other		2,603			2,390
Gross deferred tax assets		177,878			243,237
Valuation allowance		(111,741	)		(195,960	)
Net deferred tax assets		66,137			47,277
Deferred income tax liabilities:
Property and equipment		36,969			18,100
Intangibles		39,812			41,625
Investments		1,804			—
		78,585			59,725
Net deferred income tax liability	$	12,448		$	12,448

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the existing valuation allowances at December 31, 2004. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. Income tax expense for 2003 and 2004 relate primarily to state minimum taxes.

The Company realized substantial cancellation of indebtedness income as a result of the discharge of existing indebtedness in accordance with the Plan of Reorganization during 2003. The amount of the cancellation of indebtedness income was equal to the difference between the fair market value of any property (including new common stock) received by holders of indebtedness and the adjusted issue price (plus the amount of any accrued but unpaid interest) of the indebtedness exchanged for such property. Realized cancellation of indebtedness income that occurs in a case under the Bankruptcy Code is not recognized for income tax purposes. However, the amount excluded from gross income is applied to reduce tax attributes of the debtor.

The Internal Revenue Service has issued new temporary regulations that modify the attribute reduction methodology related to certain discharge of indebtedness income that consolidated groups must follow. These regulations provide for a multi-tiered look-through approach that reduces consolidated net operating losses (“NOL’s”) and all other consolidated tax attributes, including consolidated tax attributes that are attributable to members other than the debtor member. As a result of these new regulations, the Company was required to reduce certain tax attributes, including its NOL’s, certain other losses, credit carryforwards (if any), and the tax basis in its assets. These attributes were reduced based on certain elections finalized during 2004 in connection with the filing of the 2003 federal income tax return.

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In 2004, the Company reduced available net operating losses (“NOL’s”) by approximately $177.4 million, unused tax credits of $1.1 million, and other asset basis by approximately $5.0 million. As a result of the tax elections noted above, and the amended returns discussed below, the Company had remaining available NOL’s of approximately $143.1 million (prior to adjustment for realized built-in losses occurring post-confirmation) at emergence from bankruptcy. These NOL’s, and the adjustments related to realized built-in losses, are subject to an annual utilization limitation of approximately $9.2 million. These NOL’s will be further limited by the annual limitation discussed below relating to our recent merger.

The Company filed amended returns during 2004 to carryback other available NOL’s totaling approximately $17.8 million. These amended returns were filed following the conclusion of our federal tax examination for the years 1998 and 1999.

Subsequent to emergence and through the effective date of our merger (Note 2), the Company has incurred additional NOL’s of approximately $84.9 million. These NOL’s, in addition to amounts which are subject to the first limitation, are subject to an annual limitation of $1.6 million (prior to adjustment for realized built-in gains occurring after the merger). Due to the limited carryforward life of NOL’s and the amount of the annual limitation, it is unlikely that we will be able to realize in excess of $43 million of NOL’s existing prior to our emergence from bankruptcy. However, the NOL’s that accumulated since our emergence are expected to be realized due to the anticipation of recognizing certain built-in gains in future periods.

SFAS No. 109 establishes guidelines for companies that qualify for fresh start accounting under SOP 90-7 and have a valuation allowance on their net deferred tax assets at the date of emergence from bankruptcy. These provisions require that any subsequent reduction in a deferred tax asset valuation allowance, as a result of realizing a benefit of preconfirmation deferred tax assets, be first credited to goodwill, then credited to other identifiable intangible assets existing at the date of fresh start accounting and then, if these assets are reduced to zero, credited directly to additional paid in capital. At December 31, 2004, the Company has reduced its deferred tax asset valuation allowance related to the preconfirmation deferred tax asset by $5.5 million related to the anticipated refunds from the amended returns discussed above. Goodwill was reduced by a similar amount.

SFAS No. 109 requires that any subsequent reduction in a deferred tax asset valuation allowance, as a result of realizing a benefit of pre-acquisition deferred tax assets, be first credited against goodwill, then credited to other non-current identifiable intangible assets and then, if these assets are reduced to zero, credited directly to expense. Goodwill of approximately $0.5 million was reduced currently to reflect the expected benefit to be received from utilizing pre-acquisition NOL’s.

Note 13. Securities and Investments

Investments consist of the following:

(In thousands)	Type of Ownership	Carrying Value
		December 31, 2004		December 31, 2003
Cost Method:
Restricted investments	Cooperative subordinated capital certificates	$	7,556	$	7,829
Cash surrender value of life insurance policies	Guaranteed rate government securities		—		225
Other	Equity securities		115		113
		$	7,671	$	8,167

The Company acquired RTFC subordinated capital certificates (“SCC”) of $7.5 million concurrent with the tranche C Senior Credit Facility borrowings of $75 million. The debt instrument required the Company to purchase SCC’s equal to 10% of the tranche C term loan of the Senior Credit Facility. The SCC’s are nonmarketable securities, stated at historical cost and included in restricted investments. As the RTFC loans are repaid, the SCC’s are refunded through a cash payment to maintain a 10% SCC to outstanding loan balance ratio. At December 31,

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2004 and 2003, the carrying value of SCC’s was $7.2 million and $7.5 million, respectively. In connection with the refinancing and RTFC loan payoff on February 24, 2005, these SCC’s were redeemed in full.

The Company’s principal investment at May 1, 2005 was $0.3 million of class C stock holdings in the RTB. This was a required investment related to the 5.0% to 6.05% notes payable NTELOS Inc. held with RTB. This debt was paid in full on February 24, 2005 (Note 2). On March 1, 2005, the Company converted approximately 44% of its original restricted, non-dividend paying class B stock investment into the dividend paying class C stock investment. On May 2, 2005, through purchase accounting, this investment was revalued at $2.5 million. On July 31, 2005, substantially all of the remaining 56% of the class B stock was converted into class C stock. In connection with the Company’s application of purchase accounting, this asset was valued based on discounted cash flow of anticipated future dividends based on historical trends for RTB dividend payments to the class C stock. The Company determined this to be the most appropriate method of valuing this investment due to the relative illiquid nature of the investment.

Note 14. Pension Plans and Other Postretirement Benefits

The Company sponsors several qualified and nonqualified pension plans and other postretirement benefit plans (“OPEB’s”) for its employees. The following tables provide a reconciliation of the changes in the plans’ benefit obligations and fair value of assets and a statement of the funded status as of and for the years ended December 31, 2004 and 2003, and the classification of amounts recognized in the consolidated balance sheets:

	Defined Benefit Pension Plan
	Predecessor Reorganized Company
(In thousands)	December 31, 2004			December 31, 2003
Change in benefit obligations:
Benefit obligations, beginning	$	33,741		$	27,694
Service cost		2,040			1,573
Interest cost		1,968			1,809
Amendment		—			—
Actuarial (gain) loss		1,926			4,454
Benefits paid		(1,800	)		(1,789	)
Benefit obligations, ending	$	37,875		$	33,741
Change in plan assets:
Fair value of plan assets, beginning	$	20,388		$	16,389
Actual return on plan assets		1,767			2,205
Employer contributions		2,240			3,583
Benefits paid		(1,800	)		(1,789	)
Fair value of plan assets, ending	$	22,595		$	20,388
Funded status:	$	(15,280	)	$	(13,353	)
Unrecognized net actuarial gain		2,197			195
Accrued benefit cost	$	(13,083	)	$	(13,158	)

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	Other Postretirement Benefit Plan
	Predecessor Reorganized Company
(In thousands)	December 31, 2004			December 31, 2003
Change in benefit obligations:
Benefit obligations, beginning	$	10,610		$	9,712
Service cost		165			166
Interest cost		623			640
Actuarial (gain) loss		(1,422	)		258
Benefits paid		(239	)		(166	)
Benefit obligations, ending	$	9,737		$	10,610
Change in plan assets:
Fair value of plan assets, beginning	$	—		$	—
Employer contributions		239			166
Benefits paid		(239	)		(166	)
Fair value of plan assets, ending	$	—		$	—
Funded status:
Funded status	$	(9,737	)	$	(10,610	)
Unrecognized net actuarial gain		(1,423	)		—
Accrued benefit cost	$	(11,160	)	$	(10,610	)

On September 9, 2003, pursuant to the Company’s application of fresh start accounting upon emergence from bankruptcy (Note 4), the Company adjusted its pension and OPEB obligations to fair value. These obligations’ carrying values differ from their fair values due to the existence of unrecognized gains or losses and unamortized prior service costs.

At September 9, 2003, the Company’s pension plan contained unrecognized prior service costs and unrecognized net losses of $0.6 million and $7.8 million, respectively. Therefore, the Company’s adjustment to fair value increased the pension obligation by $8.4 million. Similarly, the OPEB obligation was adjusted to fair value resulting in a decreased in the OPEB obligation by the $1.5 million unrecognized net gains as of that date.

The following table provides the components of net periodic benefit cost for the plans:

	Defined Benefit Pension Plan
	Predecessor Reorganized Company									Predecessor Company
(In thousands)	January 1, 2005 through May 1, 2005			Year Ended December 31, 2004			September 10, 2003 through December 31, 2003			January 1, 2003 through September 30, 2003
Components of net periodic benefit cost:
Service cost	$	760		$	2,040		$	491		$	1,082
Interest cost		739			1,968			565			1,244
Expected return on plan assets		(711	)		(1,843	)		(472	)		(1,039	)
Amortization of prior service cost		—			—			—			292
Recognized net actuarial gain		10			—			—			—
Net periodic benefit cost	$	798		$	2,165		$	584		$	1,579

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	Other Post Employment Benefit Plan
	Predecessor Reorganized Company								Predecessor Company
(In thousands)	January 1, 2005 through May 1, 2005			Year Ended December 31, 2004		September 10, 2003 through December 31, 2003			January 1, 2003 through September 30, 2003
Components of net periodic benefit cost:
Service cost	$	44		$	165	$	52		$	114
Interest cost		190			623		200			440
Recognized net actuarial gain		(14	)		—		(5	)		(11	)
Net periodic benefit cost	$	220		$	788	$	247		$	543

Prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10% of the greater of the benefit obligation and the market-related value of assets are amortized over the average remaining service period of active participants.

The Company has multiple nonpension post employment benefit plans. The health care plan is contributory, with participants’ contributions adjusted annually. The life insurance plans are also contributory. Eligibility for the life insurance plan is restricted to active pension participants age 50-64 as of January 5, 1994. Neither plan is eligible to employees hired after January 1994. The accounting for the plans anticipates that the Company will maintain a consistent level of cost sharing for the benefits with the retirees.

The assumptions used in the measurements of the Company’s benefit obligations at December 31, 2004 and 2003 are shown in the following table:

	Defined Benefit Pension Plan				Other Post Employment Benefit Plan
	2004		2003		2004		2003
Discount rate	6.00	%	6.00	%	6.00	%	6.00	%
Rate of compensation increase	3.50	%	3.50	%	—		—

The assumptions used in the measurements of the Company’s net cost for the Consolidated Statement of Operations in fiscal periods in 2004 and 2003:

	Defined Benefit Pension Plan
	Predecessor Reorganized Company						Predecessor Company
	January 1, 2005 through May 1, 2005		Year Ended December 31, 2004		September 10, 2003 through December 31, 2003		January 1, 2003 through September 30, 2003
Discount rate	6.00	%	6.00	%	6.75	%	6.75	%
Expected return on plan assets	9.00	%	9.00	%	9.00	%	9.00	%
Rate of compensation increase	3.50	%	3.50	%	3.50	%	3.50	%

	Other Post Employment Benefit Plan
	Predecessor Reorganized Company						Predecessor Company
	January 1, 2005 through May 1, 2005		Year Ended December 31, 2004		September 10, 2003 through December 31, 2003		January 1, 2003 through September 30, 2003
Discount rate	6.00	%	6.00	%	6.75	%	6.75	%

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The Company reviews the assumptions noted in the above table on an annual basis. These assumptions are reviewed annually to reflect anticipated future changes in the underlying economic factors used to determine these assumptions. For measurement purposes, a 9.0% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2005. The rate was assumed to decrease gradually each year to a rate of 5.0% for 2011 and remain at that level thereafter.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The effect to the net periodic postretirement health care benefit cost of a 1% change on the medical trend rate per future year, while holding all other assumptions constant, would be $0.8 million for a 1% increase and $0.6 million for a 1% decrease.

In December 2003 the Medicare Prescription Drug, Improvement and Modernization Act of 2003 was signed into law. Effective in 2006 there will be a new Medicare Part D benefit, which will make available prescription drug coverage to those over 65. Employers that provide prescription drug benefits that are at least actuarially equivalent to Medicare Part D are entitled to an annual subsidy from Medicare, which is equal to 28% of prescription drug costs between $250 and $5,000, for each Medicare-eligible retiree who does not join Part D. The Company and its actuaries have determined that the NTELOS Prescription Drug Plan is at least actuarially equivalent to Medicare Part D.

In accordance with FASB Staff Position No. 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003”, issued on May 19, 2004, the Company elected to reflect the effect of this law as of December 31, 2004. Accordingly, the Company realized a $1.2 million gain related to the Medicare Act subsidy. This gain was being accounted for as an unrecognized actuarial gain amortized over ten years beginning in 2005. In connection with the purchase accounting as of May 2, 2005, the post retirement plan obligation was fair valued and the actuarial gain eliminated accordingly.

The Company’s weighted average expected long-term rate of return on pension assets was 9.0% for the Predecessor Reorganized Company period January 1, 2005 through May 1, 2005. In developing this assumption, the Company evaluated input from its third party pension plan asset managers, including their review of asset class return expectations and long-term inflation assumptions. The Company also considered its historical 10-year average return (at December 31, 2004), which was in line with the expected long-term rate of return assumption.

The weighted average actual asset allocations and weighted average target allocation ranges by asset category for the Company’s pension plan assets were as follows:

	Actual Allocation				Target Allocation
Asset Category	December 31, 2004		December 31, 2003
Equity securities	75	%	75	%	75	%
Bond securities	25	%	25	%	25	%
Total	100	%	100	%	100	%

It is the Company’s policy to invest pension plan assets in a diversified portfolio consisting of an array of asset classes. The investment risk of the assets is limited by appropriate diversification both within and between asset classes. The assets are primarily invested in investment funds that invest in a broad mix of equities and bonds. The allocation between equity and bonds is reset quarterly to the target allocations. The assets are managed with a view to ensuring that sufficient liquidity will be available to meet expected cash flow requirements.

The Company has contributed $1.2 million to the pension plan during the period January 1, 2005 through May 1, 2005. The Company does not expect to make additional contributions during the remainder of 2005, and 2006 contributions are expected to be approximately $6.3 million.

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The following estimated future benefit payments, which reflect expected future service, as appropriate, are expected to be paid in the years indicated:

Year(s)	Amount
	(in thousands)
May 2, 2005 through December 31, 2005	$	1,293
2006		1,948
2007		1,922
2008		1,871
2009		1,943
2010		2,047
2011 - 2015	$	12,660

Other benefit plans

The accumulated benefit obligation of the Company’s nonqualified pension plan was approximately $6.5 million and $6.0 million at December 31, 2004 and 2003, respectively, $4.2 million of which was paid out on February 24, 2005, concurrent with the recapitalization (Note 2). On May 2, 2005, an additional $0.8 million was paid out commensurate with the merger and related change of control provisions of the plan. The Company’s plans for postretirement benefits other than pensions have no plan assets and are closed to new participants.

The Company also sponsors a defined contribution 401(k) plan. The Company’s matching contributions to this plan were $0.3 million, $0.8 million and $0.3 million for the Predecessor Reorganized Company period of January 1, 2005 through May 1, 2005, for the year ended December 31, 2004 and for the period from September 10, 2003 through December 31, 2003, respectively. The Company’s matching contributions to this plan for the Predecessor Company period January 1, 2003 through September 9, 2003 was $0.3 million. The Company ceased matching contributions to the defined contribution plan for the period April 1, 2002 through March 31, 2003 as part of the actions taken in a 2002 operational restructuring plan. Company matching contributions were reinstated on April 1, 2003.

Note 15. Stock Plans

On May 2, 2005, Holding Corp. adopted a stock option plan offered to certain key employees of NTELOS Inc. At June 30, 2005, 120,075 options from the Option Plan with an exercise price of $1.00 are outstanding. The options vest one-fourth annually, beginning one year after the grant date.

Upon the effective date of the Plan of Reorganization, all options under the Predecessor Company stock option plan were cancelled and the plan was terminated. On September 16, 2003, the Predecessor Reorganized Company adopted a new stock option plan (“Option Plan”) for purposes of retaining key employees and enabling them to participate in the future success of the Company. The maximum number of shares of Common Stock that could be issued under the Option Plan and to which options may relate is 1,585,414 shares of Common Stock. The Predecessor Reorganized Company also adopted a new Non-Employee Director’s Stock Option Plan (“Director’s Plan”) which provided for the grant of stock options to a non-employee director and provided the non-employee director the opportunity to receive stock options in lieu of a retainer fee. A maximum of 160,000 shares of common stock could be issued upon the exercise of options granted under the Director’s Plan. Hereinafter the Option Plan and Directors Plan may be referred to as the “Plans”. Stock options granted under the Plans could not be for less than 100% of fair value at the date of grant and had a maximum life of ten years from the date of grant. Options and other awards under the Plans could be exercised in compliance with such requirements as determined by a committee of the Board of Directors. At December 31, 2003, 1,298,295 options were granted from the Plans with an exercise price of $19.77. One-third of the options vest immediately, one-third vest one year after the grant date and the remaining one-third vests two years after the grant date.

On February 24, 2005, in connection with the first step of the merger and recapitalization transactions (Note 2), the Company repurchased approximately 969,000 shares (approximately 75%) of the common stock options outstanding for $20.23 per share for common stock issuable pursuant to the exercise of vested options. On May 2, 2005, pursuant to the Transaction Agreement, the Buyers acquired all of the Company’s remaining options for $20.23 per share of common stock issuable pursuant to the exercise of options.

A summary of the activity and status of the Plans for Predecessor Reorganized Company for the period ended May 1, 2005, the year ended December 31, 2004, the period September 10, 2003 through December 31, 2003

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and for the Predecessor Company period January 1, 2003 through September 9, 2003 are as follows (in thousands except per option amounts):

	Predecessor Reorganized Company											Predecessor Company
	January 1, 2005 through May 1, 2005				Year Ended December 31, 2004				September 10, 2003 to December 31, 2003			January 1, 2003 to September 9, 2003
	Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price		Shares	Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
Outstanding at beginning of period	1,296,245		$	19.77	1,298,295		$	19.77	—	$	—	1,569,916		$	18.28
Granted	—			—	—			—	1,298,295		19.77	—			—
Exercised	(1,296,245	)		19.77	—			—	—		—	—			—
Forfeited	—			—	(2,050	)		19.77	—		—	—			—
Cancelled	—			—	—			—	—		—	(1,569,916	)		18.28
Outstanding at end of period	—			—	1,296,245			19.77	1,298,295		19.77	—			—
Exercisable at end of period	—		$	—	865,530		$	19.77	432,765	$	19.77	—		$	—
Weighted average fair value per option of options granted during the period	N/A				$2.80				N/A			N/A

Note 16. Commitments and Contingencies

Operating Leases

The Company has several operating leases for administrative office space, retail space, tower space, channel rights and equipment, certain of which have renewal options. The leases for retail and tower space have initial lease periods of one to thirty years. These leases are associated with the operation of wireless digital PCS services primarily in Virginia and West Virginia. The leases for channel rights related to the Company’s MMDS spectrum, formerly used by the wireless cable operations and currently used to deliver a portable broadband Internet service in certain markets, have initial terms of three to ten years. The equipment leases have an initial term of three years. Rental expense for all operating leases was $6.2 million for the period January 1, 2005 through May 1, 2005, $18.0 million for the year ended 2004, $12.0 million for the period January 1 through September 9, 2003 and $5.1 million for the period September 10, 2003 through December 31, 2003. The total amount committed under these lease agreements at May 1, 2005 is: $11.7 million for the period May 2, 2005 through December 31, 2005, $15.9 million in 2006, $13.4 million in 2007, $12.0 million in 2008, $11.2 million in 2009, $6.3 million in 2010 and $12.3 million for the years thereafter.

Other Commitments and Contingencies

The Company entered into advisory agreements with CVC Management LLC and Quadrangle Advisors LLC (the “Advisors”) whereby the Advisors will provide advisory and other services to the Company for a period of ten years for a combined annual advisory fee of $2.0 million. Under certain conditions set forth in these agreements, the Company could terminate these agreements prior to their expiration. However, should that occur, the Company would be required to pay a termination fee equal to the present value of future scheduled payments.

The Company provided digital PCS services on a wholesale basis to Horizon Personal Communications, Inc. (“Horizon”), a Sprint PCS affiliate, in certain contiguous geographic areas the Company serves through the period ended June 15, 2004. On June 15, 2004, Horizon and its debtor affiliates sold their economic interests in their PCS subscribers in this geographic area to Sprint PCS. The Company entered into a seven-year definitive agreement to continue providing digital PCS services on a wholesale basis to Sprint PCS.

On June 5, 2004, the Company entered into a settlement agreement with Horizon resolving disputes over the pricing and payment for voice, data and other services provided to Horizon for the period from August 15, 2003 to June 15, 2004. Pursuant to this settlement, the Company retained all payments actually made by Horizon for services rendered during the period commencing August 15, 2003 and ended December 31, 2003, and received payment of $3.866 million per month from Horizon for services rendered during the period commencing January 1,

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2004 and ending June 15, 2004. The Company made adjustments during 2004 to recognize the outcome of this settlement and the related settlement costs.

This settlement did not resolve disputed categories of charges under the Network Services Agreement for the period prior to August 15, 2003 (the “pre-petition period” under Horizon’s bankruptcy case) as well as the matters submitted to arbitration by both parties (other than the parties dispute as to the appropriate pricing for services provided during the period commencing January 1, 2004 through June 15, 2004). On August 26, 2004, the Company reached agreement with Horizon on the amount of its pre-petition period allowed claim. On September 23, 2004, Horizon’s bankruptcy reorganization plan (the “Horizon Plan”) was confirmed. Accordingly, the Company recognized revenue of $2.1 million in 2004 representing the value of the cash and Horizon stock that was received by the Company in October 2004 pursuant to the terms of the Horizon Plan and on account of the Company’s pre-petition period allowed claim and related revenue reserve adjustments. The Horizon stock received in this settlement was sold in October 2004.

The Company is periodically involved in disputes and legal proceedings arising from normal business activities. During the second quarter of 2004, the Company accrued a charge of $1.9 million in corporate operations expense relating to certain operating tax issues. In addition, although the Company has consummated its Plan of Reorganization and emerged from its Chapter 11 proceedings, one dispute with respect to the amount of allowed claim owed by the Company to one of its creditors remains outstanding. While the outcome of this and other such matters are currently not determinable, management does not expect that the ultimate costs to resolve such matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows and adequate provision for any probable losses has been made in our consolidated financial statements.

Other than the commitments noted separately above, the Company has commitments for capital expenditures of approximately $15 million as of May 1, 2005, all of which are expected to be satisfied prior to fiscal year ended December 31, 2005. In addition to this, the Company entered into a purchase agreement with Lucent Technologies in July 2005 which has a $11.7 million purchase commitment that must be satisfied by September 30, 2006.

Note 17. Capital and Operational Restructuring Charges

During the Predecessor Reorganized Company period January 1, 2005 through May 1, 2005 and for the fiscal year 2004, the Company recorded $15.4 million and $0.8 million, respectively, of capital restructuring charges. These charges relating to legal, financial and consulting costs, accelerated payout of certain retirement obligations, and retention related costs, all of which are directly attributable to the refinancing and merger transactions. In addition to this, the Company incurred $12.8 million of debt issuance costs associated with the new first and second lien term loans which were capitalized and were being amortized over the life of the loans but which were subsequently eliminated through purchase accounting.

During the period January 1, 2003 through September 9, 2003, the Company incurred $11.3 million of legal, financial, and bankruptcy related professional fees in connection with the Company’s comprehensive financial restructuring. The portion of these professional fees which relate to the period January 1, 2003 through March 3, 2003 (period prior to the Bankruptcy filing) was $2.4 million and is classified as operational and capital restructuring charges. The remaining $8.9 million of these professional fees from March 4, 2003 through September 9, 2003 are classified in reorganization items. These reorganization items were $0.3 million for the period September 10, 2003 through December 31, 2003.

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Note 18. Earnings Per Share

The computations of basic and diluted earnings per share from continuing operations for each of the periods presented were as follows (in thousands):

	Predecessor Reorganized Company							Predecessor Company
	For the period January 1, 2005 to May 1, 2005			December 31, 2004		September 10, 2003 to December 31, 2003		January 1, 2003 to September 9, 2003
Numerator:
Net (loss) Income	$	(1,717	)	$	38,312	$	4,670	$	142,026
Preferred stock dividend		—			—		—		(3,757	)
Reorganization items—predecessor preferred stock		—			—		—		286,772
Numerator for basic (loss) earnings per share		(1,717	)		38,312		4,670		425,041
Effect of dilutive securities:
Interest expense on Convertible Notes		—			5,086		2,113		—
Numerator for diluted (loss) earnings per share	$	(1,717	)	$	43,398	$	6,783	$	425,041
Denominator:
Denominator for basic earnings per common share – weighted average common shares		8,020			10,946		10,000		17,780
Effect of dilutive securities
Convertible notes		—			2,813		3,793		—
Employee stock options		—			526		189		—
Denominator for diluted earnings per common share – adjusted weighted shares		8,020			14,285		13,982		17,780

For additional information regarding the preferred stock and stock options, see Notes 9 and 17, respectively. We account for the effect of the Convertible Notes issued on September 10, 2003 (and subsequently converted on September 30, 2004) in the diluted earnings per common share calculation using the “if converted” method. Under that method, the Convertible Notes are assumed to be converted to shares at the conversion price of $19.77 of the face value of the Convertible Notes as of the beginning of the related period, and interest expense related to this instrument is added back to net income. Since the Convertible Notes were convertible on September 30, 2004, this conversion is calculated in the basic weighted average common shares and the dilutive effect relates to the difference between the total shares which were converted (3,793) and the effect on the weighted average common shares (956). There was no tax effect to the interest expense based on the tax position during these periods (Note 12).

Note 19. Quarterly Financial Information (Unaudited)

Quarterly financial information for the Predecessor Reorganized Company periods January 1, 2005 through May 1, 2005, fiscal year 2004, and September 10, 2003 through December 31, 2003, and for the Predecessor Company periods January 1, 2005 through September 9, 2003 is presented below:

	Predecessor Reorganized Company
(In thousands)	First Quarter			April 1, 2005 to May 1, 2005
2005
Operating Revenues	$	92,570		$	33,107
Operating Income		17,155			494
Net Income (Loss)		4,917			(6,634	)
Depreciation and Amortization		17,504			6,295
Accretion of Asset Retirement Obligation		189			63
Gain on Sale of Assets1		(5,246	)		(3,496	)
Capital and Operational Restructuring Charges		5,199			10,204

140

	Predecessor Reorganized Company
(In thousands)	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
2004
Operating Revenues2	$	80,836	$	85,329	$	88,419	$	87,118
Operating Income3		11,876		12,926		16,508		13,254
Net Income		5,789		9,684		11,704		11,135
Depreciation and Amortization		15,525		15,902		16,297		17,451
Accretion of Asset Retirement Obligation		156		176		202		146
Capital and Organizational Restructuring Charges		—		—		—		798

	Predecessor Company								Predecessor Reorganized Company
(In thousands)	First Quarter			Second Quarter			7/1/03 to 9/9/03		9/10/03 to  9/30/03			Fourth Quarter
2003
Operating Revenues4	$	75,787		$	75,190		$	56,812	$	18,473		$	81,692
Operating Income (Loss)		2,762			(733	)		852		1,450			9,228
Reorganization items, net		(29,358	)		(3,968	)		202,362		(59	)		(86	)
Net Income (Loss)		(45,026	)		(11,427	)		198,479		(208	)		4,878
Dividend requirements on predecessor preferred stock		3,757			—			—		—			—
Reorganization items—predecessor preferred stock		(8,325	)		—			295,097		—			—
Income (Loss) Applicable to Common Shares		(57,108	)		(11,427	)		493,576		(208	)		4,878
Depreciation and Amortization		17,911			20,187			13,126		4,145			14,715
Accretion of Asset Retirement Obligation		152			171			114		35			190
Asset Impairment Charge		—			—			545		—			—
Capital and Organizational Restructuring Charges		2,427			—			—		—			—

¹ The Company received $15.5 million in proceeds and recognized a $5.2 million in gain associated with the sale of certain PCS spectrum licenses in the first quarter 2005. Additionally, the Company received $4.8 million in proceeds and recognized a $3.5 million gain on the sale of certain MMDS radio spectrum licenses in the second quarter 2005.

² Revenues in the second quarter 2004 includes approximately $2.0 million to adjust for the settlement of Horizon PCS billings during the first quarter 2004.

³ Operating expenses for the second quarter 2004 include $1.8 million accrued to reflect an estimated utility tax liability.

⁴ The Company did not recognize wholesale wireless revenues in the second and third quarters 2003 of $3.0 million and $4.2 million, respectively, since collection was not considered probable prior to Horizon filing Chapter 11 bankruptcy in August 2003.

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the three months ended December 31, 2005 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

PART III

Item 10. Directors and Executive Officers of the Registrant.

Executive Officers and Directors

The following table sets forth certain information, as of February 28, 2006, with respect to our executive officers and directors. All of our officers and directors hold office until their respective successors are elected and qualified or until their earlier resignation or removal.

Name	Age	Position
James S. Quarforth	51	Chief Executive Officer, President and Chairman of the Board of Directors
Carl A. Rosberg	53	Executive Vice President, President—Wireless
David R. Maccarelli	53	Executive Vice President, President—Wireline
Michael B. Moneymaker	48	Executive Vice President and Chief Financial Officer, Treasurer and Secretary
Mary McDermott	51	Senior Vice President—Legal and Regulatory Affairs
Christopher Bloise	30	Director
Andrew Gesell	38	Director
Daniel J. Heneghan	50	Director
Michael Huber	37	Director
Henry Ormond	33	Director
Steven Rattner	53	Director

Executive Officers

James S. Quarforth has served as Chief Executive Officer, President and Chairman of our board of directors since May 2, 2005. Prior to this, Mr. Quarforth served in these capacities with NTELOS Inc. since June

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2003 and he has been NTELOS Inc.’s and its subsidiaries’ Chief Executive Officer since May 1, 1999. He served as NTELOS Inc.’s President and Chief Executive Officer from May 1, 1990 to May 1, 1999 and as the Chairman of the Board of Directors of NTELOS Inc. from May 1, 1999 to February 13, 2001. He has been a director of NTELOS Inc. since 1987.

Carl A. Rosberg has been our Executive Vice President, President-Wireless, since May 2, 2005. Prior to this, Mr. Rosberg served in this capacity with NTELOS Inc. from June 2003 until May 2, 2005. Mr. Rosberg served as NTELOS Inc.’s Executive Vice President and Chief Operating Officer from February 2001 to June 2003 and as President and Chief Operating Officer from May 1999 to February 2001, when the merger between NTELOS Inc. and R&B Communications, Inc. became effective. From May 1990 to May 1999, he served as Senior Vice President of NTELOS Inc. Prior to joining NTELOS Inc., Mr. Rosberg held senior financial positions with Shenandoah Telecommunications Company.

David R. Maccarelli has been our Executive Vice President, President-Wireline, since May 2, 2005. Prior to this, Mr. Maccarelli served in this capacity with NTELOS Inc. from June 2003 until May 2, 2005. Mr. Maccarelli served as NTELOS Inc.’s Senior Vice President—Wireline Engineering and Operations from May 2002 to June 2003. From February 2001 to May 2002, he served as NTELOS Inc.’s Senior Vice President and Chief Technology Officer and from January 1994 to February 2001 as NTELOS Inc.’s Senior Vice President. From January 1993 to December 1993, he served as Vice President—Network Services of NTELOS Inc. From June 1974 to December 1992, he held numerous leadership positions with Bell Atlantic. These positions encompassed operations, engineering, regulatory and business development.

Michael B. Moneymaker has been our Executive Vice President and Chief Financial Officer, Treasurer and Secretary since May 2, 2005. Prior to this, Mr. Moneymaker served in these capacities with NTELOS Inc. from June 2003 until May 2, 2005. Mr. Moneymaker served as NTELOS Inc.’s Senior Vice President and Chief Financial Officer, Treasurer and Secretary from May 2000 to June 2003. From May 1999 to May 2000, he served as NTELOS Inc.’s Vice President and Chief Financial Officer, Treasurer and Secretary. From May 1998 to April 1999, he served as NTELOS Inc.’s Vice President and Chief Financial Officer. From October 1995 to April 1998, he served as NTELOS Inc.’s Vice President of Finance. Previously, he was a Senior Manager for Ernst & Young from October 1989 until October 1995.

Mary McDermott has been our Senior Vice President—Legal and Regulatory Affairs since May 2, 2005. Prior to this, Ms. McDermott served in these capacities with NTELOS Inc. from August 2001 until May 2, 2005. From March 2000 to August 2001 she served as Senior Vice President and General Counsel of Pathnet Telecommunications, Inc. In April 2001, Pathnet Telecommunications, Inc. filed a Voluntary Petition under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware. From April 1998 to March 2000, she served as Senior Vice President/Chief of Staff for Government Relations for the Personal Communications Industry Association. From May 1994 to April 1998, she served as Vice President—Legal and Regulatory Affairs for the United States Telecom Association.

Each of the above executive officers were executive officers, and in the case of Messrs. Quarforth and Rosberg, were also directors, of NTELOS Inc. when it filed a Voluntary Petition under Chapter 11 of the United States Bankruptcy Code in March 2003. NTELOS Inc. emerged from bankruptcy in September 2003.

Directors

Christopher Bloise has been a director since August 30, 2005. Mr. Bloise has been a Principal with Citigroup Venture Capital Ltd., or CVC, a private equity fund management company, since November 2005 and previously served as a Vice President of CVC since 2004. Prior to joining CVC, Mr. Bloise was the Director of Finance for Focalex, Inc., a technology firm focused on online direct marketing and affiliate services. Prior to this, Mr. Bloise worked at Credit Suisse First Boston in its investment banking division, where he worked on a number of transactions for technology and telecommunications companies.

Andrew Gesell has been a director since April 27, 2005. Mr. Gesell has been a Partner of CVC since November 2005 and previously served as a Principal of CVC since 2004. From 1998 until he joined CVC in 2004, Mr. Gesell worked with Credit Suisse First Boston, an investment banking company, most recently as a Director

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working with technology companies. Prior to CSFB, Mr. Gesell was a consultant with Ernst & Young, providing bankruptcy and restructuring advisory services.

Daniel J. Heneghan has been a director since February 9, 2006. Mr. Heneghan is currently retired. Mr. Heneghan previously served as the Chief Financial Officer of Intersil Corporation from September 1999 through June 2005. From 1996 to August 1999, Mr. Heneghan was Vice President and Controller of the semiconductor business at Harris Corporation (“Harris”). From 1994 to 1996, Mr. Heneghan was Vice President and General Manager of Digital Products in the semiconductor business at Harris. Mr. Heneghan also served at various times as Division Controller of the semiconductor business, Director of Planning and Director of Finance at Harris.

Michael Huber has been a director since April 27, 2005. Since January, 2004, Mr. Huber has served as a Managing Principal of Quadrangle Group LLC. From June 2000 to December 2003, Mr. Huber served as a Vice President of Quadrangle. Prior to joining Quadrangle, Mr. Huber was a Vice President and an Associate in the Media and Communications Group at Lazard. Mr. Huber currently serves on the boards of directors of NuVox Communications, Publishing Group of America, and as a managing member of Access Spectrum LLC.

Henry Ormond has been a director since May 2, 2005. Mr. Ormond has served as a Vice President of Quadrangle since 2003. Prior to joining Quadrangle in 2001, Mr. Ormond was a member of the private equity group at Whitney & Co., where he focused on middle market growth buyouts. Prior to joining Whitney & Co., Mr. Ormond worked at Morgan Stanley in its investment banking division.

Steven Rattner has been a director since May 2, 2005. Mr. Rattner is a Managing Principal of Quadrangle. Prior to the formation of Quadrangle in March 2000, Mr. Rattner served as Deputy Chairman and Deputy Chief Executive Officer of Lazard Frères & Co., which he joined as a General Partner in 1989 and where he founded the firm’s Media and Communications Group. Prior to joining Lazard Frères & Co., Mr. Rattner was a Managing Director at Morgan Stanley, where he also founded the firm’s Media and Communications Group. Mr. Rattner is a director of Protection One, Inc., and also serves on the boards of directors of a number of national and local charitable, civic and educational organizations and institutions and of IAC/InterActiveCorp.

Family Relationships

There are no family relationships between any of our executive officers and directors.

Section 16(b) Beneficial Ownership Reporting Compliance

Not applicable.

Audit Committee Financial Expert

We have determined that we have an “audit committee financial expert,” Daniel J. Heneghan, serving on our audit committee. Mr. Heneghan is “independent” as that term is defined under the applicable Nasdaq rules and qualifies as an “audit committee financial expert” under SEC rules.

Audit Committee

Our audit committee presently consists of Daniel J. Heneghan (Chairperson), Christopher Bloise and Henry Ormond. As required by SEC and Nasdaq rules, we intend for the audit committee to have a majority of “independent” directors, as defined in Rules 4200(a)(15) and 4350(d) of the NASD Listing Standards for Nasdaq-listed companies and Section 10A(m)(3)(a) and (B) of the Securities Exchange Act of 1934, as amended, within 90 days of our initial public offering and to be fully independent within one year of such offering.

Item 11. Executive Compensation.

Our directors and/or the directors of our subsidiaries who are also employed by us do not receive additional compensation for service as directors.

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The following table sets forth compensation information for certain of our officers whose total annual salary and bonus exceeded $100,000 for the years ended December 31, 2005, 2004 and 2003. These executives are referred to as the “named executive officers” elsewhere in this report.

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Annual Compensation			Long-Term Compensation			All Other Compensation(1)
					Awards		Payouts
		Salary	Bonus	Other Annual Compensation	Restricted Stock Value	Securities Underlying Options	LTIP Payouts
		($)	($)	($)	($)	(Shs.)	($)	($)
James S. Quarforth Chief Executive Officer & President	2005 2004 2003	414,576 398,826 370,858	528,065 463,145 365,518	—   —   —	—   —   —	0 0 332,937	—   —   —	13,601 14,387 12,416
Carl A. Rosberg Executive Vice President, President—Wireless	2005 2004 2003	281,730 277,537 250,690	332,371 254,800 200,000	—   —   —	—   —   —	0 0 158,541	—   —   —	11,442 11,830 9,481
David R. Maccarelli Executive Vice President, President—Wireline	2005 2004 2003	223,254 213,283 181,682	239,440 195,794 137,000	—   —   —	—   —   —	0 0 130,005	—   —   —	9,903 10,493 8,664
Michael B. Moneymaker Executive Vice President & Chief Financial Officer, Treasurer and Secretary	2005 2004 2003	234,814 231,433 205,414	327,389 229,452 175,000	—   —   —	—   —   —	0 0 139,515	—   —   —	9,867 9,851 8,702
Mary McDermott Senior Vice President— Legal and Regulatory Affairs	2005 2004 2003	181,854 177,645 172,525	177,308 146,770 111,187	—   —   —	—   —   —	0 0 57,075	—   —   —	9,002 8,966 6,663

⁽¹⁾ In 2005, we made (a) contributions to the savings plan of $7,560 for James S. Quarforth, $7,560 for Carl A. Rosberg, $7,560 for Michael B. Moneymaker, $7,560 for David R. Maccarelli, and $7,226 for Mary McDermott, (b) group life insurance premium payments of $1,044 for James S. Quarforth, $983 for Carl A. Rosberg, $820 for Michael B. Moneymaker, $779 for David R. Maccarelli, and $633 for Mary McDermott, (c) accidental death and dismemberment payments of $90 for James S. Quarforth, $85 for Carl A. Rosberg, $71 for Michael B. Moneymaker, $67 for David R. Maccarelli, and $55 for Mary McDermott, (d) long-term disability premium payments of $1,050 for James S. Quarforth, $986 for Carl A. Rosberg, $822 for Michael B. Moneymaker, $781 for David R. Maccarelli, and $636 for Mary McDermott, (e) additional life insurance premium payments of $1,175 for James S. Quarforth, $1,828 for Carl A. Rosberg, $594 for Michael B. Moneymaker, $716 for David R. Maccarelli, and $452 for Mary McDermott, and (f) additional long-term disability premium payments of $2,682 for James S. Quarforth.

In 2004, we made (a) contributions to the savings plan of $7,380 for James S. Quarforth, $7,380 for Carl A. Rosberg, $7,380 for Michael B. Moneymaker, $7,380 for David R. Maccarelli, and $7,380 for Mary McDermott, (b) group life insurance premium payments of $1,044 for James S. Quarforth, $968 for Carl A. Rosberg, $807 for Michael B. Moneymaker, $743 for David R. Maccarelli, and $620 for Mary McDermott, (c) accidental death and dismemberment payments of $72 for James S. Quarforth, $83 for Carl A. Rosberg, $70 for Michael B. Moneymaker, $64 for David R. Maccarelli, and $53 for Mary McDermott, (d) long-term disability premium payments of $840 for James S. Quarforth, $971 for Carl A. Rosberg, $810 for Michael B. Moneymaker, $747 for David R. Maccarelli, and $622 for Mary McDermott, (e) additional life insurance premium payments of $2,369 for James S. Quarforth, $2,428 for Carl A. Rosberg, $784 for Michael B. Moneymaker, $1,559 for David R. Maccarelli, and $291 for Mary McDermott, and (f) additional long-term disability premium payments of $2,682 for James S. Quarforth.

In 2003, we made (a) contributions to the savings plan of $7,200 for James S. Quarforth, $7,200 for Carl A. Rosberg, $7,200 for Michael B. Moneymaker, $7,200 for David R. Maccarelli, and $6,187 for Mary McDermott, (b) group life insurance premium payments of $1,044 for James S. Quarforth, $832 for Carl A.

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Rosberg, $647 for Michael B. Moneymaker, $567 for David R. Maccarelli, and $585 for Mary McDermott; (c) accidental death and dismemberment payments of $72 for James S. Quarforth, $72 for Carl A. Rosberg, $56 for Michael B. Moneymaker, $49 for David R. Maccarelli, and $50 for Mary McDermott, (d) long-term disability premium payments of $840 for James S. Quarforth, $667 for Carl A. Rosberg, $520 for Michael B. Moneymaker, $456 for David R. Maccarelli, and $469 for Mary McDermott, (e) additional life insurance premium payments of $1,139 for James S. Quarforth, $710 for Carl A. Rosberg, $279 for Michael B. Moneymaker, $392 for David R. Maccarelli, and $291 for Mary McDermott, and (f) additional long-term disability premium payments of $2,121 for James S. Quarforth.

Our named executive officers have not been granted any options to acquire our common stock.

In 2003, when NTELOS Inc. commenced bankruptcy proceedings, our executive officers held options to acquire 636,980 shares of NTELOS Inc. common stock, of which 460,864 were vested. All of these options were cancelled when NTELOS Inc. emerged from bankruptcy in September 2003. Upon emergence from bankruptcy, NTELOS Inc. granted to our existing executive officers options to acquire NTELOS Inc. common stock as set forth in the above table. All securities of NTELOS Inc., including these options, were acquired in connection with our acquisition of NTELOS Inc.

Employment Agreements

NTELOS Inc. entered into new employment agreements on May 2, 2005 (the “Effective Date”) with its executive officers, James S. Quarforth, Carl A. Rosberg, David R. Maccarelli, Michael B. Moneymaker and Mary McDermott. We have amended these agreements effective as of consummation of the initial public offering to include the Company as a party and to make certain other changes. These new employment agreements replaced employment agreements previously entered into with the executives.

The employment agreement with Mr. Quarforth terminates on January 1, 2010. Each of the other employment agreements terminates on May 2, 2009. The agreements will renew automatically for successive one-year periods after the scheduled termination, unless either party gives written notice to the other at least six months prior to the end of the original term (or any subsequent term, as the case may be). However, in the event of a change in control (as defined in the employment agreement), if the executive is still employed by the Company or NTELOS Inc. at such time, the term shall be extended so that the term shall not expire for at least 24 months from the date of the change in control.

Each executive is entitled to receive the base salary set forth in his or her employment agreement which will be reviewed annually throughout the term of the agreement. The salary for each executive beginning April 1, 2006 is set forth below:

Name	Salary
James S. Quarforth	$	433,252
Carl A. Rosberg		292,150
David R. Maccarelli		235,422
Michael B. Moneymaker		245,125
Mary McDermott		190,000

In addition to base salary, the executives are entitled to participate in all employee benefit plans of the Company or NTELOS Inc., including the executive supplemental retirement plan (a non-qualified deferred compensation plan) and any stock-based incentive plan. The executives are also eligible to participate in the team incentive plan with an annual bonus potential up to a specified percentage of base salary (up to 60% of base salary for Mr. Quarforth, 55% for Messrs. Rosberg, Maccarelli and Moneymaker and 50% for Ms. McDermott). The Company and NTELOS Inc. also pay the premiums on a term life insurance policy for each of the executives in accordance with his or her employment agreement.

Each executive’s employment agreement will terminate automatically upon his or her death. The Company or NTELOS Inc. may terminate each executive’s employment if he or she becomes disabled. In addition, the

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Company or NTELOS Inc. may terminate the executive’s employment for any other reason with or without cause (as defined in the employment agreement). The executive may terminate his or her employment upon prior written notice of at least 60 days. If the executive terminates his or her employment for good reason (as defined in the employment agreement) it will be deemed a termination of the executive’s employment without cause by the Company.

If an executive’s employment is terminated for any reason, the executive shall be entitled to receive (i) earned and unpaid base salary to the date of termination; (ii) unreimbursed business and entertainment expenses; and (iii) the employee benefits to which he or she is entitled pursuant to relevant employee benefit plans. If an executive’s employment is terminated because of disability, the executive also will be entitled to receive a pro rata portion of his or her bonus payments from the team incentive plan. If an executive is terminated, other than for cause or by death or disability, or if he or she terminates employment for good reason, the executive is entitled to (i) a percentage of his or her base salary (75% for Ms. McDermott, 50% for Messrs. Quarforth and Moneymaker and 40% for Messrs. Rosberg and Maccarelli) for 24 months; (ii) a lump sum, determined on a net present value basis, equal to two times the full bonus potential under the team incentive plan for the year of the termination; (iii) continued participation in the employee welfare benefit plans (other than disability and life insurance); and (iv) post-retirement medical benefits, regardless of whether they otherwise are eligible for them, under the Company’s post-retirement benefit plan. Notwithstanding the foregoing, to the extent necessary to comply with Section 409A of the Internal Revenue Code of 1986, termination payments may be delayed for a period of six months as necessary to avoid any excise tax. If an executive dies while still an employee of the Company, he or she is entitled to payment of any earned and unpaid bonus payments under the team incentive plan.

If any benefits payable or to be provided under the employment agreements and any other payments from the Company or any affiliate would subject the executive to any excise taxes and penalties imposed on “parachute payments” within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended, or any similar tax imposed by state or local law, then such payments or benefits will be reduced (but not below $0) if, and only to the extent that, such reduction will allow the executive to receive a greater net after tax amount than the executive would receive without such reduction.

During the executive’s employment and for a period of 24 months thereafter (the “non-competition period”), the executive will (i) not compete, directly or indirectly, with the Company or any subsidiary or (ii) solicit certain current and former employees. As payment for the executive’s non-competition and non-solicitation agreement, the executive will receive an amount equal to a percentage of his or her base salary during the non-competition period, but only if the Company or NTELOS Inc. has terminated the executive without cause or if the executive has terminated his or her employment for good reason. The applicable percentages are 60% for Messrs. Rosberg and Maccarelli, 50% for Messrs. Quarforth and Moneymaker and 25% for Ms. McDermott. If the executive breaches any of the non-competition or non-solicitation restrictions, the executive will not receive any further payments and the executive will repay any payments previously received. The agreements also prohibit the executives from using any confidential or proprietary information of the Company or NTELOS Inc. at any time for any reason not connected to their employment with the Company or NTELOS Inc.

Pension Plan/Defined Benefit Plan Disclosure

The following table reflects the estimated aggregate retirement benefits to which certain of our executive officers, including each of the named executive officers in the Summary Compensation Table, are expected to be entitled under the provisions of our non-contributory, funded employee retirement plan and the executive supplemental retirement plan (the “Plans”). The table illustrates the amount of aggregate annual retirement benefits payable under the Plans for an executive retiring in 2005 at age 65 computed on a straight life annuity. The amount of benefit assumes that the executive has completed a minimum of 15 years of service. Additional aggregate benefits are not earned for service in addition to 35 years. Amounts listed will be reduced by social security benefits and by supplemental retirement plan distributions made on February 24, 2005 and May 2, 2005 and offset by employer 401(k) contributions.

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Annual Retirement Benefits Payable for Respective Years of Service
Average Annual Compensation	15 Years	20 Years	25 Years	30 Years	35 Years
$200,000	$100,000	$115,000	$130,000	$145,000	$160,000
$300,000	$150,000	$172,500	$195,000	$217,500	$240,000
$400,000	$200,000	$230,000	$260,000	$290,000	$320,000
$500,000	$250,000	$287,500	$325,000	$362,500	$400,000
$600,000	$300,000	$345,000	$390,000	$435,000	$480,000
$700,000	$350,000	$402,500	$455,000	$507,500	$560,000
$800,000	$400,000	$460,000	$520,000	$580,000	$640,000
$900,000	$450,000	$517,500	$585,000	$652,500	$720,000

The number of credited years of service as of December 31, 2005 for James S. Quarforth, David R. Maccarelli, Carl A. Rosberg, Michael B. Moneymaker, and Mary McDermott is 26 years, 14 years, 18 years, 11 years, and 5 years, respectively.

Director Compensation

As of the initial public offering, all non-employee directors (excluding directors who are not independent directors that are designated by the CVC Entities or the Quadrangle Entities pursuant to our shareholders agreement) will receive a retainer of $25,008 per year, payable monthly. In addition, each such non-employee director will receive an initial grant and thereafter, commencing on January 1, 2007, an annual grant of 8,600 options to purchase shares of our common stock with an exercise price equal to fair market value. Additionally, the chairperson of our audit committee will receive an annual retainer of $12,000, and the chairperson of our compensation committee will receive an annual retainer of $5,004, such retainers to be paid in lieu of committee meeting fees. Each such non-employee director will also receive $2,000 for each board meeting and stockholder meeting attended in person and $1,000 if attended telephonically in lieu of attending in person. For attendance at board committee meetings, each such non-employee director will receive $1,000 for attending in person or $600 for attending telephonically in lieu of attending in person. We will reimburse each of our directors for reasonable travel and other expenses incurred in connection with attending all board and board committee meetings.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth information, as of March 21, 2006, regarding the beneficial ownership of our Class B common stock and common stock. Each share of Class B common stock is convertible into an equal number of shares of common stock at any time at the option of the holder. None of the stockholders identified below owned any shares of common stock as of March 21, 2006.

Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power over securities. Except in cases where community property laws apply or as indicated in the footnotes to this table, we believe that each stockholder identified in the table possesses sole voting and investment power over all shares of common stock shown as beneficially owned by the stockholder. Percentage of beneficial ownership is based on 26,492,897 shares of our Class B common stock and 15,375,000 shares of common stock outstanding as of March 21, 2006. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days are considered outstanding and beneficially owned by the person holding the options for the purposes of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless indicated otherwise in the footnotes, the address of each individual listed in the table is c/o NTELOS Holdings Corp., 401 Spring Lane, Suite 300, PO Box 1990, Waynesboro, Virginia 22980.

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	Total Common Stock and Class B Common Stock(1)
Name and Address of Beneficial Owner	Number	%
Directors, named executive officers and stockholders owning more than 5%:
Quadrangle Capital Partners LP.(2) 375 Park Avenue New York, NY 10152	12,262,880	29.3	%
Citigroup Venture Capital Equity Partners, L.P.(3) 399 Park Avenue New York, NY 10043	11,853,222	28.3
Christopher Bloise(4)	11,862,748	28.3
Andrew Gesell(4)	11,867,511	28.3
Daniel Heneghan	0	0.0
Michael Huber(5)	12,262,880	29.3
Henry Ormond(5)	12,262,880	29.3
Steven Rattner(5)	12,262,880	29.3
James S. Quarforth	527,048	1.3
Carl A. Rosberg	293,018	*
Michael B. Moneymaker	276,760	*
David R. Maccarelli	154,765	*
Mary McDermott	105,210	*
All directors and executive officers as a group (11 persons)(6)	25,496,718	60.9

* Less than 1%

⁽¹⁾ Each outstanding share of our common stock and our Class B common stock will be entitled to one vote on all matters submitted to a vote of holders of our common stock and our Class B common stock. The holders of our common stock and our Class B common stock will generally vote as a single class on all matters with respect to which the holders of common stock or Class B common stock are entitled to vote. Our Class B common stock may be converted into an equal number of shares of common stock at any time at the option of the holder.

⁽²⁾ Includes 8,539,829 shares of Class B common stock owned by Quadrangle Capital Partners LP, 466,622 shares of Class B common stock owned by Quadrangle Select Partners LP and 3,256,429 shares of Class B common stock owned by Quadrangle Capital Partners-A LP.

⁽³⁾ Includes 11,626,633 shares of Class B common stock owned by Citigroup Venture Capital Equity Partners, L.P., 119,825 shares of Class B common stock owned by CVC/SSB Employee Fund, L.P. and 106,764 shares of Class B common stock owned by CVC Executive Fund LLC. Excludes 409,650 shares of Class B common stock owned by certain present and former employees of the CVC Entities (or entities controlled by such employees) for which beneficial ownership is disclaimed.

⁽⁴⁾ Includes 11,853,222 shares beneficially owned by Citigroup Venture Capital Equity Partners, L.P. Individual is a principal of Citigroup Venture Capital Equity Partners, L.P. and disclaims beneficial ownership of securities beneficially owned by Citigroup Venture Capital Partners, L.P.

⁽⁵⁾ Includes 12,262,880 shares beneficially owned by Quadrangle Capital Partners, L.P. Individual is a principal of Quadrangle Capital Partners, L.P. and disclaims beneficial ownership of securities beneficially owned by Quadrangle Capital Partners, L.P.

⁽⁶⁾ Includes 11,853,222 shares beneficially owned by Citigroup Venture Capital Equity Partners, L.P. and 12,262,880 shares beneficially owned by Quadrangle Capital Partners, L.P. Messrs. Bloise, Delaney and Gesell are principals of Citigroup Venture Capital Equity Partners, L.P. and disclaim beneficial ownership of securities beneficially owned by Citigroup Venture Capital Partners, L.P. Messrs. Huber, Ormond and Rattner are principals of Quadrangle Capital Partners, L.P. and disclaim beneficial ownership of securities beneficially owned by Quadrangle Capital Partners, L.P.

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Item 13. Certain Relationships and Related Transactions.

Shareholders Agreement

On May 2, 2005, we entered into a shareholders agreement with the CVC Entities, the Quadrangle Entities and management stockholders which was amended and restated on February 13, 2006 in connection with our initial public offering. Our board of directors consists of seven members. In accordance with the shareholders agreement, three directors have been designated by each of the CVC Entities and Quadrangle Entities and one director will be the chief executive officer of the Company for so long as he or she is employed by the Company. Prior to the offering, the CVC Entities replaced one of their non-independent director designees with a designee who is an “independent” director, as the term is defined in the rules of The Nasdaq Stock Market. Within 90 days of our initial public offering, the Quadrangle Entities will replace one of their non-independent director designees with a director who is “independent” under the rules of The Nasdaq Stock Market. Further, the shareholders agreement provides that within one year of our initial public offering the board will be expanded to consist of eight members and the CVC Entities and the Quadrangle Entities will jointly designate an additional “independent” director under the rules of The Nasdaq Stock Market. Any additional directorships resulting in an increase in the number of directors may only be filled by the vote of the directors then in office. Each director is elected for a term of one year and serves until a successor is duly elected and qualified or until his or her death, resignation or removal. A director may only be removed in accordance with the shareholders agreement and otherwise by an affirmative vote of a majority of the combined voting power of our outstanding capital stock. Pursuant to the shareholders agreement, each of the CVC Entities and the Quadrangle Entities may designate only two directors, who do not need to be “independent,” if its respective ownership falls below 20%, one director, who does not need to be “independent,” if their respective ownership falls below 10% and no directors if their respective ownership falls below 5%.

In accordance with the shareholders agreement, we may not take certain significant actions, such as a merger or sale of assets in excess of $3 million, incurrences of indebtedness, amendments of organizational documents and certain other matters, subject to certain specified exceptions, without the approval of a majority of the members of our board of directors. The required quorum for any meeting of our board of directors must include at least one non-independent director designated by the CVC Entities and at least one non-independent director designated by the Quadrangle Entities, respectively, for as long as the CVC Entities and Quadrangle Entities, respectively, are entitled to designate one or more members of our board of directors in accordance with the terms of the shareholders agreement.

The shareholders agreement covers matters of corporate governance, restrictions on transfer of our securities, registration rights and information rights.

Advisory Agreements

We were formed in January 2005 by the CVC Entities and the Quadrangle Entities for the purpose of acquiring NTELOS Inc. In connection with the acquisition, we entered into advisory agreements with each of CVC Management LLC and Quadrangle Advisors LLC, pursuant to which each may provide financial, advisory and consulting services to us. There were no minimum levels of service required to be provided pursuant to the advisory agreements. The services that were provided include executive and management services, support and analysis of financing alternatives and assistance with various finance functions. In exchange for these services, CVC Management LLC and Quadrangle Advisors LLC were each entitled to an annual advisory fee of $1.0 million per year, paid quarterly, plus out-of-pocket expenses, for the term of the advisory agreements. At the closing of the acquisition of NTELOS Inc., CVC Management LLC and Quadrangle Advisors LLC each received transaction fees totaling approximately $3,750,000, plus reasonable out-of-pocket expenses. We reimbursed CVC Management LLC and Quadrangle Advisors LLC an aggregate of approximately $20,500 in out-of-pocket expenses during the term of these advisory agreements. In addition, prior to termination of these advisory agreements CVC Management LLC and Quadrangle Advisors LLC were entitled to a transaction fee in connection with the consummation of each acquisition, divestiture or financing in an amount equal to 0.50% of the aggregate value of such transaction.

Each advisory agreement includes customary indemnification provisions in favor of each of CVC Management LLC and Quadrangle Advisors LLC. These advisory agreements were terminated in connection with

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our initial public offering for an aggregate consideration of $12.9 million. This termination fee was calculated in accordance with the terms of the advisory agreements and equals the net present value of all annual advisory fees that would have been payable under the advisory agreements from the consummation of our initial public offering through the end of the initial ten-year terms of the advisory agreements. Certain provisions in the advisory agreements, including indemnification, survived such termination. We believe that the advisory agreements were on terms comparable to the terms typically contained in advisory agreements for similar services performed by financial sponsors for their portfolio companies.

Stock Subscription Agreements

In connection with the acquisition of NTELOS Inc., members of management were given an opportunity to purchase shares of Class L common stock at $11.00 per share and Class A common stock at $1.00 per share through subscription agreements that were entered into in connection with the NTELOS Holdings Corp. Equity Incentive Plan, dated May 2, 2005, which sets forth restrictions regarding the Class L common stock and Class A common stock. Except as described below, all shares of each class of common stock were identical and entitled the holders thereof to the same rights and privileges.

Any distributions, except for the repurchase of any stock held by an employee of the Company, were first to be made to the holders of Class L shares equal to the aggregate unpaid yield plus the original cost of the shares, less any previous distributions representing a return of capital. The unpaid yield was at a rate of 10% per annum, calculated quarterly, based upon an adjusted original cost of $11.00 per share, less any distributions representing a return of capital, plus the accumulated unpaid yield for all prior quarters.

The holders of Class L and Class A common shares had the general right to vote for all purposes as provided by law. Each holder of Class L and Class A common shares was entitled to one vote for each share held.

In October 2005, we paid a $125 million dividend to the holders of our Class L common stock.

As of the consummation of our initial public offering, all shares of our Class A common stock and Class L common stock were converted into shares of our Class B common stock.

Purchase of 10% Notes

At the closing of the acquisition of NTELOS Inc., the CVC Entities and the Quadrangle Entities lent to us $5,755,000 in the aggregate in exchange for our issuance to them of promissory notes which we refer to herein as the 10% Notes. We issued to each of the CVC Entities and the Quadrangle Entities $2,877,500 in principal amount of the 10% Notes. The 10% Notes issued to the CVC Entities includes an aggregate of $95,049 principal amount of notes issued to principals of Citigroup Venture Capital Equity Partners, L.P., including our directors Delaney, Gesell and Bloise. We repaid the 10% Notes in full on December 30, 2005.

Employment Agreements

At the closing of the acquisition of NTELOS Inc., we entered into amendments to our employment agreements with certain members of our management. For a description of the terms of these employment agreements, see “Executive Compensation—Employment Agreements.”

Item 14. Principal Accounting Fees and Services.

The following is a description of the fees billed and to be billed to the Company by KPMG LLP for the years ended 2005 and 2004.

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	Year Ended December 31,
	2004		2005
Audit fees	$	294,750	$	1,588,630
Audit-related fees		—		—
Tax fees		—		—
All other fees		2,400		775
Total	$	297,150	$	1,589,405

Audit Fees

Audit fees include fees paid by the Company to KPMG in connection with the annual audit of the Company ’s consolidated financial statements, KPMG’s review of the Company’s interim financial statements and KPMG’s review of the Company’s Annual Report on Form 10-K. Audit fees also include fees for services performed by KPMG that are closely related to the audit and in many cases could only be provided by the Company’s independent auditors. Such services include comfort letters and consents related to SEC registration statements and certain reports relating to the Company’s regulatory filings.

Audit Related Fees

KPMG did not perform any audit related services for the Company during the years ended 2005 and 2004.

Tax Fees

KPMG did not perform any tax services for the Company during the years ended 2005 and 2004.

All Other Fees

Other fees include fees paid by the Company to KPMG in connection with personal financial planning meetings and seminars.

Audit Committee Pre-Approval Policy

The audit committee’s policy is that all audit and non-audit services provided by its independent registered public accounting firm, shall either be approved before the independent registered public accounting firm is engaged for the particular services or shall be rendered pursuant to pre-approval procedures established by the audit committee. These services may include audit services and permissible audit-related services, tax services and other services. Pre-approval spending limits for all services to be performed by the independent registered public accounting firm are established periodically by the audit committee, detailed as to the particular service or category of services to be performed and implemented by our financial officers. The term of any pre-approval is twelve months from the date of pre-approval, unless the audit committee specifically provides for a different period. Any audit or non-audit service fees that we may incur that fall outside the limits pre-approved by the audit committee for a particular service or category of services require separate and specific pre-approval by the audit committee prior to the performance of services. For each fiscal year, the audit committee may determine the appropriate ratio between the total amount of fees for audit, audit-related and tax and other services. The audit committee may revise the list of pre-approved services from time to time. In all pre-approval instances, the audit committee will consider whether such services are consistent with the SEC rules on auditor independence.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a) The following documents are filed as a part of this Annual Report on Form 10-K:

(1) Consolidated Financial Statements

The consolidated financial statements required to be filed in the Annual Report on Form 10-K are listed in Item 8 hereof.

(3) Exhibits

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The exhibits listed below and on the accompanying Index to Exhibits immediately following the signature page hereto are filed as part of, or incorporated by reference into, this Report on Form 10-K.

EXHIBIT INDEX

Exhibit No.	Description
1.1*	Underwriting Agreement.
2.1(1)	Transaction Agreement dated as of January 18, 2005, by and among NTELOS Inc., Project Holdings Corp., Project Merger Sub Corp. and certain shareholders of Project Holdings Corp. signatories thereto (as amended by Amendment No. 1 dated as of January 24, 2005).
2.2(1)	Subscription Agreement, dated February 24, 2005, by and among Project Holdings LLC (predecessor of NTELOS Holdings Corp.) and the purchasers listed on the signature pages thereto.
2.3(1)	Plan of Conversion of Project Holdings LLC (predecessor of NTELOS Holdings Corp.) dated April 27, 2005.
2.4(1)	Subscription and Purchase Agreement, dated as of May 2, 2005, by and among NTELOS Holdings Corp. (“Holdings”) and the purchasers listed on the signature pages thereto.
2.5*	Agreement and Plan of Merger by and between Holdings and NTELOS Merger Corp.
3.1*	Amended and Restated Certificate of Incorporation of Holdings.
3.2*	Amended and Restated By-laws of Holdings.
4.3*	Amended and Restated Shareholders Agreement by and among Holdings and the shareholders listed on the signature pages thereto.
10.1(1)	First Lien Credit Agreement, dated as of February 24, 2005.
10.2(1)	Second Lien Credit Agreement, dated as of February 24, 2005.
10.3*	Employment Agreement, dated as of May 2, 2005, between NTELOS Inc. and James S. Quarforth (including amendment thereto).
10.4*	Employment Agreement, dated as of May 2, 2005, between NTELOS Inc. and Michael B. Moneymaker (including amendment thereto).
10.5*	Employment Agreement, dated as of May 2, 2005, between NTELOS Inc. and Carl A. Rosberg (including amendment thereto).
10.6*	Employment Agreement, dated as of May 2, 2005, between NTELOS Inc. and David R. Maccarelli (including amendment thereto).
10.7*	Employment Agreement, dated as of May 2, 2005, between NTELOS Inc. and Mary McDermott (including amendment thereto).
10.8*	Holdings Amended and Restated Equity Incentive Plan.
10.9*	Holdings Employee Stock Purchase Plan, as amended.
10.10(1)	Resale Agreement by and among West Virginia PCS Alliance, L.C., Virginia PCS Alliance, L.C., NTELOS Inc. and Sprint Spectrum L. P.
10.11(1)	Advisory Agreement dated February 24, 2005, by and between Project Holdings LLC (predecessor of Holdings), Project Merger Sub Corp. and Quadrangle Advisors LLC.
10.12(1)	Advisory Agreement dated February 24, 2005, by and between Project Holdings LLC (predecessor of Holdings), Project Merger Sub Corp. and CVC Management LLC.
10.13(1)	Form of 10% Promissory Note dated May 2, 2005.
10.14(1)	Purchase Agreement dated October 12, 2005, by and among Holdings and Bear, Stearns & Co. Inc., Lehman Brothers Inc. and UBS Securities LLC.
10.15(1)	Registration Rights Agreement dated October 17, 2005, by and among Holdings and Bear, Stearns & Co. Inc., Lehman Brothers Inc. and UBS Securities LLC.
10.16(1)	Indenture dated as of October 17, 2005, between Holdings and Wells Fargo Bank, N.A., as trustee.
10.17*	Holdings Non-Employee Director Equity Plan.
10.18*	Termination of Advisory Agreements.
10.19*	NTELOS Inc. 2005 Executive Supplemental Retirement Plan.
10.20*	Form of Award Agreement under Holdings Amended and Restated Equity Incentive Plan.
10.21(2)	Form of Award Agreement under Holdings Non-Employee Director Equity Plan.
21.1*	Subsidiaries of Holdings.
31.1*	Certificate of James S. Quarforth, Chief Executive Officer and President pursuant to Rule 13a-14(a).
31.2*	Certificate of Michael B. Moneymaker, Executive Vice President and Chief Financial Officer, Treasurer and Secretary pursuant to Rule 13a-14(a).
32.1*	Certificate of James S. Quarforth, Chief Executive Officer and President pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certificate of Michael B. Moneymaker, Executive Vice President and Chief Financial Officer, Treasurer and Secretary pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Filed herewith.

⁽¹⁾ Filed as an exhibit to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 (File No. 333-128849), filed November 15, 2005.

⁽²⁾ Filed as an exhibit to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 (File No. 333-128849), filed January 26, 2006.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report on Annual Report on Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized.

NTELOS HOLDINGS CORP.
By:	/s/ James S. Quarforth
	Name:	James S. Quarforth
	Title:	President, Chief Executive Officer and Chairman of the Board of Directors

Pursuant to the requirements of the Securities Exchange Act of 1934, this report on Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ James S. Quarforth	President, Chief Executive Officer and	March 28, 2006
James S. Quarforth	Chairman of the Board of Director (principal executive officer)
/s/ Michael B. Moneymaker	Executive Vice President, Chief Financial	March 28, 2006
Michael B. Moneymaker	Officer, Treasurer and Secretary (principal financial and accounting officer)
/s/ Christopher Bloise	Director	March 28, 2006
Christopher Bloise
/s/ Andrew Gesell	Director	March 28, 2006
Andrew Gesell
/s/ Daniel Heneghan	Director	March 28, 2006
Daniel Heneghan
/s/ Michael Huber	Director	March 28, 2006
Michael Huber
/s/ Henry Ormond	Director	March 28, 2006
Henry Ormond
/s/ Steven Rattner	Director	March 28, 2006
Steven Rattner

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EX-1.1

Exhibit 1.1

NTELOS HOLDINGS CORP.

14,375,000 Shares of Common Stock

UNDERWRITING AGREEMENT

February 8, 2006

Lehman Brothers Inc.

Bear, Stearns & Co. Inc.

As Representatives of the several

Underwriters named in Schedule 1 attached hereto,

c/o Lehman Brothers Inc.

745 Seventh Avenue

New York, New York 10019

Ladies and Gentlemen:

NTELOS Holdings Corp., a Delaware corporation (the “Company”), proposes to sell an aggregate of 14,375,000 shares (the “Firm Stock”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”). In addition, the Company proposes to grant to the underwriters (the “Underwriters”) named in Schedule 1 attached to this agreement (this “Agreement”) options to purchase up to an aggregate of 2,156,250 shares of the Common Stock on the terms set forth in Section 2 (the “Option Stock”). The Firm Stock and the Option Stock, if purchased, are hereinafter collectively called the “Stock.” This is to confirm the agreement concerning the purchase of the Stock from the Company by the Underwriters.

1. Representations, Warranties and Agreements of the Company. The Company represents, warrants and agrees that:

(a) A registration statement on Form S-1 with respect to the Stock has (i) been prepared by the Company in conformity with the requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations (the “Rules and Regulations”) of the Securities and Exchange Commission (the “Commission”) thereunder; (ii) been filed with the Commission under the Securities Act; and (iii) become effective under the Securities Act. Copies of such registration statement and any amendment thereto have been delivered by the Company to you as the representatives (the “Representatives”) of the Underwriters. As used in this Agreement:

(i) “Applicable Time” means 8:30 a.m. (New York City time) on February 9, 2006;

(ii) “Effective Date” means the date and time as of which such registration statement, or the most recent post-effective amendment thereto, was declared effective by the Commission;

(iii) “Issuer Free Writing Prospectus” means each “free writing prospectus” (as defined in Rule 405 of the Rules and Regulations) prepared by or,

to the knowledge of the Company, on behalf of the Company or used or referred to by the Company in connection with the offering of the Stock;

(iv) “Preliminary Prospectus” means any preliminary prospectus relating to the Stock included in such registration statement or filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations;

(v) “Oral Pricing Information” means the pricing information set forth on Exhibit D that the Underwriters have or will orally provide to prospective purchasers prior to confirming sales;

(vi) “Pricing Disclosure Package” means, as of the Applicable Time, the most recent Preliminary Prospectus, together with the Oral Pricing Information and each Issuer Free Writing Prospectus filed by the Company on or before the Applicable Time;

(vii) “Prospectus” means the final prospectus relating to the Stock, as filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations;

(viii) “Registration Statement” means such registration statement, as amended as of the Effective Date, including any Preliminary Prospectus or the Prospectus and all exhibits to such registration statement; and

(ix) “Prospectus Delivery Period” means such period of time after the first date of the public offering of the Stock as in the opinion of counsel for the Underwriters a prospectus relating to the Stock is required by law to be delivered (or required to be delivered but for Rule 172 under the Securities Act) in connection with the sale of the Stock by any Underwriter or dealer.

Any reference to the “most recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus included in the Registration Statement or filed pursuant to Rule 424(b) on or prior to the date hereof. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus or suspending the effectiveness of the Registration Statement, and no proceeding or examination for such purpose has been instituted or threatened by the Commission.

(b) The Company was not at the time of initial filing of the Registration Statement and at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Rules and Regulations) of the Stock, is not on the date hereof and will not be on the applicable Delivery Date an “ineligible issuer” (as defined in Rule 405).

(c) The Registration Statement conformed and will conform in all material respects on the Effective Date and on the applicable Delivery Date, and any amendment to the Registration Statement filed after the date hereof will conform in all material respects when filed, to the requirements of the Securities Act and the Rules and Regulations. The most recent Preliminary Prospectus conformed, and the Prospectus will conform, in all material respects when filed with the Commission pursuant to Rule 424(b) and on the applicable Delivery Date to the requirements of the Securities Act and the Rules and Regulations.

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(d) The Registration Statement did not, as of the Effective Date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, that no representation or warranty is made as to information contained in or omitted from the Registration Statement in reliance upon and in conformity with written information furnished to the Company through the Representatives by or on behalf of any Underwriter specifically for inclusion therein, which information is specified in Section 8(e).

(e) The Prospectus will not, as of its date and on the applicable Delivery Date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that no representation or warranty is made as to information contained in or omitted from the Prospectus in reliance upon and in conformity with written information furnished to the Company through the Representatives by or on behalf of any Underwriter specifically for inclusion therein, which information is specified in Section 8(e).

(f) The Pricing Disclosure Package did not, as of the Applicable Time, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the price of the Stock and disclosures directly relating thereto and derived therefrom will be included in all relevant portions of the Prospectus; provided that no representation or warranty is made as to information contained in or omitted from the Pricing Disclosure Package in reliance upon and in conformity with written information furnished to the Company through the Representatives by or on behalf of any Underwriter specifically for inclusion therein, which information is specified in Section 8(e).

(g) Each Issuer Free Writing Prospectus (including, without limitation, any road show that is a free writing prospectus under Rule 433), when considered together with the Pricing Disclosure Package as of the Applicable Time, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the price of the Stock and disclosures directly relating thereto and derived therefrom will be included in all relevant portions of the Prospectus.

(h) Each Issuer Free Writing Prospectus conformed or will conform in all material respects to the requirements of the Securities Act and the Rules and Regulations on the date of first use, and the Company has complied with all prospectus delivery and any filing requirements applicable to such Issuer Free Writing Prospectus pursuant to the Rules and Regulations. The Company has not made any offer relating to the Stock that would constitute an Issuer Free Writing Prospectus without the prior consent of the

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Representatives. The Company has retained in accordance with the Rules and Regulations all Issuer Free Writing Prospectuses that were not required to be filed pursuant to the Rules and Regulations. The Company has taken all actions necessary so that any “road show” (as defined in Rule 433 of the Rules and Regulations) in connection with the offering of the Stock will not be required to be filed pursuant to the Rules and Regulations.

(i) The Company has an authorized capitalization as set forth in each of the most recent Preliminary Prospectus and the Prospectus, and all of the issued shares of capital stock of the Company have been duly authorized and validly issued, are fully paid and non-assessable, conform to the description thereof contained in each of the most recent Preliminary Prospectus and the Prospectus and were issued in compliance with federal and state securities laws and not in violation of any preemptive right, resale right, right of first refusal or similar right. All of the Company’s options, warrants and other rights to purchase or exchange any securities for shares of the Company’s capital stock have been duly authorized and validly issued, conform to the description thereof contained in each of the most recent Preliminary Prospectus and the Prospectus and were issued in compliance with federal and state securities laws. All of the issued shares of capital stock of each subsidiary of the Company have been duly authorized and validly issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims, except for such liens, encumbrances, equities or claims as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(j) The shares of the Stock to be issued and sold by the Company to the Underwriters hereunder have been duly authorized and, upon payment and delivery in accordance with this Agreement, will be validly issued, fully paid and non-assessable, will conform to the description thereof contained in each of the most recent Preliminary Prospectus and the Prospectus, will be issued in compliance with federal and state securities laws and will be free of statutory and contractual preemptive rights, resale rights, rights of first refusal and similar rights.

(k) The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement. This Agreement has been duly and validly authorized, executed and delivered by the Company.

(l) Except for the registration of the Stock under the Securities Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and applicable state or foreign securities laws in connection with the purchase and sale of the Stock by the Underwriters, no consent, approval, authorization or order of, or filing or registration with, any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets is required for the execution, delivery and performance of this Agreement by the Company, the consummation of the transactions contemplated hereby and the application of the proceeds from the sale of the Stock as described under “Use of Proceeds” in each of the most recent Preliminary Prospectus and the Prospectus.

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(m) Except as identified in the most recent Preliminary Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities registered pursuant to the Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Securities Act.

(n) The Company has not sold or issued any securities that would be integrated with the offering of the Stock contemplated by this Agreement pursuant to the Securities Act, the Rules and Regulations or the interpretations thereof by the Commission.

(o) The historical financial statements (including the related notes and supporting schedules) included in the most recent Preliminary Prospectus comply as to form in all material respects with the requirements of Regulation S-X under the Securities Act and present fairly the financial condition, results of operations and cash flows of the entities purported to be shown thereby at the dates and for the periods indicated and have been prepared in conformity with accounting principles generally accepted in the United States applied on a consistent basis throughout the periods involved.

(p) The pro forma financial statements included in the most recent Preliminary Prospectus include assumptions that provide a reasonable basis for presenting the significant effects directly attributable to the transactions and events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma adjustments reflect the proper application of those adjustments to the historical financial statement amounts in the pro forma financial statements included in the most recent Preliminary Prospectus. The pro forma financial statements included in the most recent Preliminary Prospectus comply as to form in all material respects with the applicable requirements of Regulation S-X under the Act.

(q) There are no legal or governmental proceedings or contracts or other documents of a character required to be described in the Registration Statement or the most recent Preliminary Prospectus or, in the case of documents, to be filed as exhibits to the Registration Statement, that are not described and filed as required. Neither the Company nor any of its subsidiaries has knowledge that any other party to any such contract, agreement or arrangement has any intention not to render full performance as contemplated by the terms thereof; and that statements made in the most recent Preliminary Prospectus under the captions “Regulation” insofar as they purport to constitute summaries of the terms of statutes, rules or regulations, legal or governmental proceedings or contracts and other documents, constitute accurate summaries of the terms of such statutes, rules and regulations, legal and governmental proceedings and contracts and other documents in all material respects.

(r) Except as described in the most recent Preliminary Prospectus, no relationship, direct or indirect, exists between or among the Company, on the one hand,

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and the directors, officers, stockholders, customers or suppliers of the Company, on the other hand, that is required to be described in the most recent Preliminary Prospectus or the Prospectus which is not so described.

(s) (i) The Company and each of its subsidiaries have established and maintain disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange Act), (ii) such disclosure controls and procedures are designed to ensure that the information required to be disclosed by the Company and its subsidiaries in the reports they file or submit under the Exchange Act is accumulated and communicated to management of the Company and its subsidiaries, including their respective principal executive officers and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure to be made and (iii) such disclosure controls and procedures are effective in all material respects to perform the functions for which they were established.

(t) Since the date of the most recent balance sheet of the Company and its consolidated subsidiaries reviewed or audited by KPMG LLP and the audit committee of the board of directors of the Company, (i) the Company has not been advised of (A) any significant deficiencies in the design or operation of internal controls that could adversely affect the ability of the Company and each of its subsidiaries to record, process, summarize and report financial data, or any material weaknesses in internal controls and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the internal controls of the Company and each of its subsidiaries, and (ii) there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

(u) No subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or assets to the Company or any other subsidiary of the Company, except as described in or contemplated by the most recent Preliminary Prospectus.

(v) The Company has not distributed and, prior to the later to occur of any Delivery Date and completion of the distribution of the Stock, will not distribute any offering material in connection with the offering and sale of the Stock other than any Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus to which the Representatives have consented in accordance with Section 1(h) or 5(a)(vi)

(w) The Company has not taken and will not take, directly or indirectly, any action designed to or that has constituted or that could reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the shares of the Stock.

(x) The Stock has been approved for inclusion, subject to official notice of issuance and evidence of satisfactory distribution, in The NASDAQ National Market.

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(y) Subsequent to the respective dates as of which information is given in the most recent Preliminary Prospectus, the Company has not declared, paid or made any dividends or other distributions of any kind on or in respect of its capital stock and there has been no material adverse change or any development involving a prospective material adverse change, in the capital stock or the long-term debt, or material increase in the short-term debt, of the Company or any subsidiary from that set forth in the most recent Preliminary Prospectus, whether or not arising from transactions in the ordinary course of business, in or affecting (i) the business, condition (financial or otherwise), results of operations, stockholders’ equity, properties or prospects of the Company and its subsidiaries taken as a whole; (ii) the ability of the Company to consummate the sale of the Stock or any of the other transactions contemplated hereby.

(z) Each of the Company and each of its subsidiaries has been duly organized and is validly existing as a corporation, partnership or limited liability company in good standing under the laws of its jurisdiction of incorporation or organization. Each of the Company and each of its subsidiaries has all requisite power and authority to carry on its business as it is currently being conducted and as described in the most recent Preliminary Prospectus, and to own, lease and operate its respective properties.

(aa) Each of the Company and each of its subsidiaries is duly qualified and authorized to do business and is in good standing as a foreign corporation, partnership or limited liability company in each jurisdiction in which the character or location of its properties (owned, leased or licensed) or the nature or conduct of its business requires such qualification, except for those failures to be so qualified or in good standing which (individually or in the aggregate) could not reasonably be expected to have a material adverse effect on (A) the properties, business, results of operations, condition (financial or otherwise), stockholders’ equity, properties or prospects of the Company and its subsidiaries taken as a whole; (B) the long-term debt or capital stock of the Company or any of its subsidiaries; (C) the issuance or marketability of the Stock or (D) the validity of this Agreement or the transactions described in the most recent Preliminary Prospectus under the caption “Use of Proceeds” (any such effect being a “Material Adverse Effect”).

(bb) The subsidiaries listed on Exhibit B are the only subsidiaries of the Company within the meaning of Rule 405 under the Act. Except for these subsidiaries, the Company holds no ownership or other interest, nominal or beneficial, direct or indirect, in any corporation, partnership, joint venture or other business entity. All of the issued shares of capital stock of or other ownership interests in each subsidiary have been duly and validly authorized and issued and are fully paid and non-assessable and are owned, directly or indirectly, by the Company (except in the case of Valley Network Partnership, Virginia Independent Telephone Alliance and Virginia PCS Alliance, L.C.), free and clear of any lien, charge, mortgage, pledge, security interest, claim, limitation on voting rights, equity, trust or other encumbrance, preferential arrangement, defect or restriction of any kind whatsoever (any “Lien”), except for any such security interest, claim, lien, limitation on voting rights or encumbrance pursuant to the first and second lien Credit Facilities, dated as of February 24, 2005, by and among NTELOS Inc., the

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guarantors party thereto, the lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent (the “Credit Facilities”).

(cc) Except as disclosed in the most recent Preliminary Prospectus, neither the Company nor any of its subsidiaries has outstanding subscriptions, rights, warrants, calls, commitments of sale or options to acquire, or any preemptive rights or other rights to subscribe for or to purchase, or any contracts or commitments to issue or sell, or instruments convertible into or exchangeable for, any capital stock or other equity interest in, the Company or its subsidiaries.

(dd) Neither the Company nor any of its subsidiaries is (i) in violation of its certificate or articles of incorporation, bylaws, certificate of formation, limited liability company agreement, partnership agreement or other organizational documents, (ii) in default under, and no event has occurred which, with notice or lapse of time or both or otherwise, would constitute a default under, or result in the creation or imposition of any Lien upon, any of its property or assets pursuant to, any bond, debenture, note, indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject, or (iii) in violation of any law, rule, regulation, ordinance, directive, judgment, decree or order of any judicial, regulatory or other legal or governmental agency or body (including, without limitation, environmental laws, statutes, ordinances, rules, regulations, judgments or court decrees, the Federal Communications Act of 1934, as amended (the “Communications Act”), rules or regulations of the Federal Communications Commission (“FCC”), applicable state public utility and telecommunications regulations and the rules and regulations of state public utilities commissions in which the Company and its subsidiaries conducts business), foreign or domestic, except (in the case clauses (ii) and (iii) above) defaults or violations that could not (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect and except (in the case of clause (ii) alone) for any Lien disclosed in the most recent Preliminary Prospectus.

(ee) None of (i) the execution, delivery, and performance by the Company of this Agreement and consummation of the transactions contemplated hereby, (ii) the issuance and sale of the Stock, or (iii) consummation by the Company of the transactions described in the most recent Preliminary Prospectus under the caption “Use of Proceeds,” (A) violates or will violate, conflicts with or will conflict with, requires or will require consent under, or results or will result in a breach of any of the terms and provisions of, or constitutes or will constitute a default (or an event which with notice or lapse of time, or both, would constitute a default) under, or results or will result in the creation or imposition of any Lien upon any properties or assets of the Company or any of its subsidiaries or an acceleration of any indebtedness of the Company or any of its subsidiaries pursuant to (1) any provision of the certificate or articles of incorporation, bylaws, certificate of formation, limited liability company agreement, partnership agreement or other organizational document of the Company or any of its subsidiaries, (2) any bond, debenture, note, indenture, mortgage, deed of trust, loan agreement or other agreement, instrument, franchise, license or permit to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiary or their

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respective properties, operations or assets is or may be bound, (3) or any statute, law, ordinance, rule or regulation (including, without limitation, the Communications Act, the rules and regulations of the FCC, applicable state public utility and telecommunications regulations and the rules and regulations of state public utilities commissions in which the Company or any of its subsidiaries conducts business) applicable to the Company or any of its subsidiaries or any of their properties or assets or (4) any directive, judgment, decree or order of any judicial, regulatory or other legal or governmental agency or body (including, without limitation, the FCC and state public utilities commissions in which the Company or any of its subsidiaries conducts business), domestic or foreign, except (in the case of clauses (2), (3) and (4) above) as could not (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect.

(ff) Each of the Company and its subsidiaries has all consents, approvals, authorizations, orders, registrations, qualifications, licenses, filings and permits of, with and from all judicial, regulatory and other legal or governmental agencies, bodies or administrative agencies (including, without limitation, the FCC and state public utilities commissions in which the Company or any of its subsidiaries conducts business), and all third parties, foreign and domestic (collectively, the “Consents”), necessary to own, lease and operate its properties and conduct its business as it is now being conducted and as disclosed in the most recent Preliminary Prospectus, except where the failure to obtain such consents, approvals, authorizations, orders, registrations, qualifications and permits and to make such filings could not (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect, and each such Consent is valid and in full force and effect, and neither the Company nor any of its subsidiaries has received notice of any investigation or proceedings which, if decided adversely to the Company or any of its subsidiaries, could reasonably be expected to result in the revocation of, or imposition of a restriction on, any Consent that could reasonably be expected to have a Material Adverse Effect. Each of the Company and its subsidiaries is in compliance with all applicable laws, rules, regulations, ordinances, directives, judgments, decrees and orders, foreign and domestic, except where failure to be in compliance could not (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect. No Consent contains a materially burdensome restriction not adequately disclosed in the most recent Preliminary Prospectus.

(gg) Except as disclosed in the most recent Preliminary Prospectus, there is (i) no judicial, regulatory, arbitral or other legal or governmental action, suit, investigation or proceeding or other litigation or arbitration before or by any court, arbitrator or governmental agency, body or official (including, without limitation, the FCC and state public utilities commissions in which the Company or any of its subsidiaries conducts business), domestic or foreign, pending to which the Company or any of its subsidiaries is or may be a party or of which the business, property, operations or assets of the Company or any of its subsidiaries is or may be subject, (ii) no statute, rule, regulation or order that has been enacted, adopted or issued by any governmental agency (including, without limitation, the FCC and state public utilities commissions in which the Company or any of its subsidiaries conducts business) or that has been proposed by any governmental body, and (iii) no injunction, restraining order or order of any nature by a federal or state court or foreign court of competent jurisdiction to which

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the Company or any of its subsidiaries is or may be subject or to which the business, property, operations or assets of the Company or any of its subsidiaries is or may be subject, that, (individually or in the aggregate), if determined adversely to the Company or any of its subsidiaries, could reasonably be expected to have a Material Adverse Effect; to the Company’s knowledge, no such proceeding, litigation or arbitration is threatened or contemplated; and the defense of all such proceedings, litigation and arbitration against or involving the Company or any of its subsidiaries could not reasonably be expected to have a Material Adverse Effect.

(hh) There exists as of the date hereof (after giving effect to the transactions contemplated by the Prospectus) no event or condition that would constitute a default or an event of default (in each case as defined in the offering documents) under any of the offering documents that would result in a Material Adverse Effect or materially adversely affect the ability of the Company to consummate the sale of the Stock and the other transactions contemplated by the most recent Preliminary Prospectus.

(ii) No action has been taken and no statute, rule, regulation or order has been enacted, adopted or issued by any governmental agency (including, without limitation, the FCC and state public utilities commissions in which the Company or any of its subsidiaries conducts business) that prevents the sale of the Stock or prevents or suspends the use of the most recent Preliminary Prospectus or the Prospectus; no injunction, restraining order or order of any nature by a federal or state court of competent jurisdiction has been issued that prevents the sale of the Stock or prevents or suspends the sale of the Stock in any jurisdiction referred to in Section 1(z) hereof; and every request of any securities authority or agency of any jurisdiction for additional information has been complied with in all material respects.

(jj) There is (i) no significant unfair labor practice complaint pending against the Company or any of its subsidiaries nor, to the knowledge of the Company, threatened against any of them, before the National Labor Relations Board, any state or local labor relations board or any foreign labor relations board, and no significant grievance or significant arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Company or any of its subsidiaries or, to the knowledge of the Company, threatened against any of them, (ii) no significant strike, labor dispute, slowdown, or stoppage pending against the Company or any of its subsidiaries nor, to the knowledge of the Company, threatened against any of them, (iii) no labor disturbance by the employees of the Company or any of its subsidiaries or, to the knowledge of the Company, no such disturbance is imminent and the Company is not aware of any existing or imminent labor disturbances by the employees of any of its respective, or any subsidiary’s, principal suppliers, manufacturers, customers or contractors that, in any such case (individually or in the aggregate), could reasonably be expected to have a Material Adverse Effect, and (iv) no union representation question existing (to the knowledge of the Company) with respect to the employees of the Company of any of its subsidiaries. To the knowledge of the Company, no collective bargaining organizing activities are taking place with respect to the Company. None of the Company or any of its subsidiaries has violated (i) any federal, state or local law or foreign law relating to discrimination in hiring, promotion or pay of employees or (ii) any

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applicable wage or hour laws, except those violations that could not reasonably be expected to have a Material Adverse Effect.

(kk) No non-exempt “prohibited transaction” (as defined in either Section 406 of the Employee Retirement Income Security Act of 1974, as amended, including the rules, regulations and published interpretations thereunder (“ERISA”) or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”)), “accumulated funding deficiency” (as defined in Section 302 of ERISA) or other event of the kind described in Section 4043(b) of ERISA (other than events with respect to which the 30-day notice requirement under Section 4043 of ERISA has been waived) has occurred with respect to any employee benefit plan for which the Company or any of its subsidiaries would have any liability that could reasonably be expected to have a Material Adverse Effect; each employee benefit plan for which the Company or any of its subsidiaries would have any liability has been administered in compliance with applicable law, including (without limitation) ERISA and the Code, except where the failure to be in compliance could not reasonably be expected to have a Material Adverse Effect; the Company has not incurred and does not reasonably expect to incur liability under Title IV of ERISA with respect to the termination of, or withdrawal from any “pension plan”; and each plan for which the Company would have any liability that is intended to be qualified under Section 401(a) of the Code has received an IRS determination letter that it is so qualified and, to the Company’s knowledge, nothing has occurred, whether by action or by failure to act, which could cause the loss of such qualification. The sale of the Stock will not involve any prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code.

(ll) There has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission or other release of any kind of toxic or other wastes or other hazardous substances by, due to, or caused by the Company or any of its subsidiaries (or, to the Company’s knowledge, any other entity for whose acts or omissions the Company is or may be liable) upon any property now or previously owned or leased by the Company or any of its subsidiaries, or upon any other property, which would be a violation by the Company or any of its subsidiaries of or give rise to any liability on the part of the Company or any of its subsidiaries under any applicable law, rule, regulation, order, judgment, decree or permit relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Law”), except where the storage, generation, transportation, handling, treatment, disposal, discharge, emission or other release could not reasonably be expected to have a Material Adverse Effect. To the Company’s knowledge, there has been no disposal discharge, emission or other release of any kind onto such property or into the environment surrounding such property of any toxic or other wastes or other hazardous substances that could reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has agreed to assume, undertake or provide indemnification for any liability of any other person under any Environmental Law, including any obligation for cleanup or remedial action. There is no pending or, to the knowledge of the Company, threatened administrative, regulatory or judicial action, claim or notice of noncompliance or violation, investigation or

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proceedings relating to any Environmental Law against the Company or any of its subsidiaries that could reasonably be expected to have a Material Adverse Effect.

(mm) There is no alleged liability, or to the knowledge of the Company, potential liability (including, without limitation, alleged or potential liability or investigatory costs, cleanup costs, governmental response costs, natural resource damages, property damages, personal injuries or penalties) of the Company or any of its subsidiaries arising out of, based on or resulting from (i) the presence or release into the environment of any Hazardous Material (as defined) at any location, whether or not owned by the Company or such subsidiary, as the case may be, or (ii) any violation or alleged violation of any Environmental Law that could reasonably be expected to have a Material Adverse Effect. The term “Hazardous Material” means (i) any “hazardous substance” as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, (ii) any “hazardous waste” as defined by the Resource Conservation and Recovery Act, as amended, (iii) any petroleum or petroleum product, (iv) any polychlorinated biphenyl, and (v) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material, waste or substance regulated under or within the meaning of any other law relating to protection of human health or the environment or imposing liability or standards of conduct concerning any such chemical material, waste or substance.

(nn) The Company and each of its subsidiaries owns or leases all such properties as are necessary to the conduct of its business as presently operated and as proposed to be operated as described in the most recent Preliminary Prospectus. The Company and its subsidiaries have (i) good and marketable title in fee simple to all of real property and good and marketable title to all personal property owned by them, in each case free and clear of all Liens or such as do not (individually or in the aggregate) materially affect the value of such property or interfere with the use made or proposed to be made of such property by the Company and its subsidiaries); (ii) peaceful and undisturbed possession of any real property and buildings held under lease or sublease by the Company and its subsidiaries and such leased or subleased real property and buildings are held by them under valid, subsisting and enforceable leases and no default exists thereunder, (including, to the knowledge of the Company, defaults by the landlord) with such exceptions as are not material to, and do not materially interfere with, the use made and proposed to be made of such property and buildings by the Company and its subsidiaries; (iii) all licenses, certificates, permits, authorizations, approvals, franchises and other rights from, and have made all declarations and filings with, all federal, state and local authorities, all self-regulatory authorities and all courts and other tribunals (each, an “Authorization”) necessary to engage in the business conducted by any of them in the manner described in the most recent Preliminary Prospectus, except where the failure to obtain such Authorizations could not reasonably be expected to have a Material Adverse Effect; and (iv) no reason to believe that any governmental body or agency is considering limiting, suspending or revoking any such Authorization. All such Authorizations are valid and in full force and effect and the Company and each of its subsidiaries is in compliance in all material respects with the terms and conditions of all such Authorizations and with the rules and regulations of the regulatory authorities having jurisdiction with respect thereto, except where the failure of such Authorizations

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to be valid and in full force and effect or where the failure to be in compliance with the terms and conditions of such Authorizations could not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any notice of any claim adverse to its ownership of any real or personal property or of any claim against the continued possession of any real property, whether owned or held under lease or sublease by the Company or any of its subsidiaries, except for such claims that could not reasonably be expected to have a Material Adverse Effect.

(oo) The Company and each of its subsidiaries (i) owns or possesses adequate right to use all patents, patent applications, patent rights, licenses, formulae, customer lists, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, software, systems or procedures), trademarks, service marks, trade names, trademark registrations, service mark registrations, computer programs, technical data and information, and know-how and other intellectual property (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures, the “Intellectual Property”) necessary for the conduct of their respective businesses as presently being conducted and as described in the most recent Preliminary Prospectus, except where the failure to own or possess such rights could not reasonably be expected to have a Material Adverse Effect and (ii) have no reason to believe that the conduct of their respective businesses does or will conflict with, any such right of others and have not received any notice of any claim of conflict with any such rights of others, except for such conflicts that could not reasonably be expected to have a Material Adverse Effect (except for such right, or claimed right pursuant to the Credit Facilities). To the knowledge of the Company, all material technical information developed by and belonging to the Company or any of its subsidiaries, which has not been patented, has been kept confidential. Neither the Company nor any of its subsidiaries has granted or assigned to any other person or entity any right to manufacture, have manufactured, assemble or sell the current products and services of the Company and its subsidiaries other than those products and services described in the most recent Preliminary Prospectus. To the knowledge of the Company, there is no infringement by third parties of any Intellectual Property of the Company or any of its subsidiaries; there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the Company’s or any of its subsidiaries’ rights in or to any Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim; and there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others that the Company or any of its subsidiaries infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others, and the Company are unaware of any other fact which would form a reasonable basis for any such claim, except for such actions, suits, proceedings or claims that could not reasonably be expected to have a Material Adverse Effect.

(pp) Each of the Company and its subsidiaries has timely filed (including in accordance with applicable extensions) all material tax returns required to be filed by it and has paid or made provision (to the extent required by accounting principles generally accepted in the United States (“GAAP”)) for the payment of all taxes, assessments,

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governmental or other similar charges, including without limitation, all sales and use taxes and all taxes that the Company or any of its subsidiaries is obligated to withhold from amounts owing to employees, creditors and third parties, with respect to the periods covered by such tax returns (whether or not such amounts are shown as due on any tax return). Except as disclosed in the most recent Preliminary Prospectus, no material deficiency assessment with respect to a proposed adjustment of the Company’s or any of its subsidiaries’ federal, state, local or foreign taxes is pending or, to the knowledge of the Company, threatened. Except as disclosed in the most recent Preliminary Prospectus, there are no material proposed additional tax assessments against the Company or any of its subsidiaries, or the assets or property of the Company or any of its subsidiaries. The accruals and reserves on the books and records of the Company and its subsidiaries in respect of tax liabilities for any taxable period not finally determined are adequate (in accordance with GAAP) to meet any assessments and related liabilities for any such period and, since December 31, 2004, the Company and its subsidiaries have not incurred any liability for taxes other than in the ordinary course of its business. There is no tax Lien, whether imposed by any federal, state, foreign or other taxing authority, outstanding against the assets, properties or business of the Company or any of its subsidiaries, except for any tax not yet due and payable.

(qq) The Company and its subsidiaries (i) make and keep accurate books and records and (ii) maintain a system of effective internal control over financial reporting as defined in Rule 13a-15 under the Exchange Act and a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accounting for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(rr) The Company and its subsidiaries maintain insurance in such amounts and covering such risks as the Company reasonably considers adequate for the conduct of its business and the value of its properties and as is customary for companies engaged in similar businesses in similar industries, all of which insurance is in full force and effect, except where the failure to maintain such insurance could not reasonably be expected to have a Material Adverse Effect. There are no material claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause. The Company reasonably believes that it will be able to renew its existing insurance as and when such coverage expires or will be able to obtain replacement insurance adequate for the conduct of the business and the value of its properties at a cost that could not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance.

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(ss) Except as disclosed in the most recent Preliminary Prospectus, no relationship, direct or indirect, exists between or among the Company, any of its subsidiaries or any affiliate of the Company, on the one hand, and any director, officer, stockholder, customer or supplier of the Company, any of its subsidiaries or any affiliate of the Company, on the other hand, required by the Act to be described in the most recent Preliminary or the Prospectus. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective family members. The Company has not, directly or indirectly, including through any of its subsidiaries, extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer of the Company.

(tt) The Company and each of its subsidiaries is not now and, after sale of the Stock, as contemplated hereunder and application of the net proceeds of such sale as described in the most recent Preliminary Prospectus under the caption “Use of Proceeds,” will not be, an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”).

(uu) KPMG LLP and Ernst & Young LLP who have certified or will certify the financial statements and supporting schedules and information of the Company and its subsidiaries that are included or to be included as part of the most recent Preliminary Prospectus and the Prospectus and who have delivered the initial letter referred to in Section 9(h) hereof, are independent registered public accounting firms as required by the Act and the Exchange Act.

(vv) The statistical, industry-related and market-related data included in the most recent Preliminary Prospectus are based on or derived from sources which the Company reasonably and in good faith believes to be reliable and accurate, and such data agree with the sources from which they are derived.

(ww) Neither the Company nor any of its subsidiaries is, nor will any of them be, after giving effect to the execution, delivery and performance of the most recent Preliminary Prospectus and the consummation of the transactions contemplated thereby, (i) left with unreasonably small capital with which to carry on their respective businesses as proposed to be conducted; (ii) unable to pay their debts (contingent or otherwise) as they mature; or (iii) insolvent. The fair value and present fair saleable value of the assets of the Company exceeds the amount that will be required to be paid on or in respect of its existing debts and other liabilities (including contingent liabilities) as they become absolute and matured. The assets of the Company and its subsidiaries do not constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. Immediately after the consummation of the sale of the Stock, (i) the fair value and present fair saleable value of the assets of the Company and its subsidiaries will exceed the sum of their stated liabilities and identified contingent liabilities as they become absolute and matured, and (ii) the assets of the Company and its subsidiaries will not constitute unreasonably small capital to carry out its business as now conducted, including the capital needs of the Company, taking into account the projected capital requirements and capital availability.

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(xx) Except pursuant to this Agreement, there are no contracts, agreements or understandings between or among the Company and its subsidiaries, and any other person that would give rise to a valid claim against the Company or any of its subsidiaries or the Representatives for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Stock.

(yy) Except as described in the most recent Preliminary Prospectus, none of the Company or any of its subsidiaries is in default under any of the contracts described in the Prospectus, has received a notice or claim of any such default or has knowledge of any breach of such contracts by the other party or parties thereto, except such defaults or breaches as would not, individually or in the aggregate, have a Material Adverse Effect.

(zz) Neither the Company, any of its subsidiaries nor, to the Company’s knowledge, any of its employees or agents has at any time during the last five years (i) made any unlawful contribution to any candidate for foreign office, or failed to disclose fully any contribution in violation of law, or (ii) made any payment to any federal or state governmental officer or official, or other person charged with similar public or quasi-public duties, other than payments required or permitted by the laws of the United States of any jurisdiction thereof.

(aaa) The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operation–Critical Accounting Policies” in the most recent Preliminary Prospectus accurately and fully describes, in all material respects, (i) accounting policies which the Company reasonably believes are the most important in the portrayal of the financial condition and results of operations of the Company and its consolidated subsidiaries and which require management’s most difficult, subjective or complex judgments (“Critical Accounting Policies”); (ii) judgments and uncertainties affecting the application of Critical Accounting Policies; and (iii) explanation of the likelihood that materially different amounts would be reported under different conditions or using different assumptions.

(bbb) The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” in the most recent Preliminary Prospectus accurately and fully describes (i) all material trends, demands, commitments, events, uncertainties and risks, and the potential effects thereof, that the Company reasonably believes would materially affect liquidity and are reasonably likely to occur; and (ii) all off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources of the Company and its subsidiaries taken as a whole.

(ccc) To the knowledge of the Company after due inquiry, the minute books and records of the Company and its subsidiaries relating to all proceedings of their respective stockholders, boards of directors, and committees of their respective boards of

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directors made available to Latham & Watkins LLP, counsel for the Representatives, are their original minute books and records or are true, correct and complete copies thereof, with respect to all proceedings of said stockholders, boards of directors and committees since December 31, 2000 through the date hereof. In the event that definitive minutes have not been prepared with respect to any proceedings of such stockholders, boards of directors or committees, the Company has provided Latham & Watkins LLP with originals or true, correct and complete copies of draft minutes or written agendas relating thereto, which drafts and agendas, if any, reflect all events that occurred in connection with such proceedings. To the knowledge of the Company after due inquiry, all material instruments, records, agreements and other documents requested in Latham & Watkins LLP’s document request letter dated September 2, 2005 have been provided to, or made available for inspection by, Latham & Watkins LLP.

(ddd) The Company acknowledges and agrees that (i) the purchase and sale of the Stock pursuant to this Agreement, including the determination of the offering price of the Stock and any related discounts and commissions, is an arm’s-length commercial transaction, between the Company, on the one hand, and the Representatives, on the other hand, (ii) in connection with the offering contemplated hereby and the process leading to such transaction each Representative is and has been acting solely as a principal and is not the agent or fiduciary of the Company, or its respective stockholders, creditors, employees or any other party, (iii) no Representative has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Representative has advised or is currently advising the Company on other matters), and no Representative has any obligation to the Company with respect to the offering contemplated hereby except the obligations expressly set forth in this Agreement, (iv) the Representatives and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company, and (v) the Representatives have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.

Any certificate signed by any officer of the Company and delivered to the Representatives or counsel for the Underwriters in connection with the offering of the Stock shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter.

2. Purchase of the Stock by the Underwriters. On the basis of the representations and warranties contained in, and subject to the terms and conditions of, this Agreement, the Company agrees to sell 14,375,000 shares of the Firm Stock to the several Underwriters, and each of the Underwriters, severally and not jointly, agrees to purchase the number of shares of the Firm Stock set forth opposite that Underwriter’s name in Schedule 1 hereto. Each Underwriter shall be obligated to purchase from the Company that number of shares of the Firm Stock that represents the same proportion of the number of shares of the Firm Stock to be sold by the Company as the number of shares of the Firm Stock set forth opposite the name of such Underwriter in Schedule 1 represents of the total number of shares of the Firm Stock to be purchased by all of the Underwriters pursuant to this Agreement. The respective

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purchase obligations of the Underwriters with respect to the Firm Stock shall be rounded among the Underwriters to avoid fractional shares, as the Representatives may determine.

In addition, the Company grants to the Underwriters an option to purchase up to 2,156,250 shares of Option Stock. Such options are exercisable in the event that the Underwriters sell more shares of Common Stock than the number of Firm Stock in the offering and as set forth in Section 4 hereof. Each Underwriter agrees, severally and not jointly, to purchase the number of shares of Option Stock (subject to such adjustments to eliminate fractional shares as Lehman Brothers Inc. and Bear, Stearns & Co. Inc. may determine) that bears the same proportion to the total number of shares of Option Stock to be sold on such Delivery Date as the number of shares of Firm Stock set forth in Schedule 1 hereto opposite the name of such Underwriter bears to the total number of shares of Firm Stock.

The price of both the Firm Stock and any Option Stock purchased by the Underwriters shall be $11.22 per share.

The Company shall not be obligated to deliver any of the Firm Stock or Option Stock to be delivered on the applicable Delivery Date, except upon payment for all such Stock to be purchased on such Delivery Date as provided herein.

3. Offering of Stock by the Underwriters. Upon authorization by Lehman Brothers Inc. and Bear, Stearns & Co. Inc. of the release of the Firm Stock, the several Underwriters propose to offer the Firm Stock for sale upon the terms and conditions to be set forth in the Prospectus.

4. Delivery of and Payment for the Stock. Delivery of and payment for the Firm Stock shall be made at 10:00 a.m., New York City time, on the third full business day following the date of this Agreement or at such other date or place as shall be determined by agreement between the Representatives and the Company. This date and time are sometimes referred to as the “Initial Delivery Date.” Delivery of the Firm Stock shall be made to the Representatives for the account of each Underwriter against payment by the several Underwriters through the Representatives and of the respective aggregate purchase prices of the Firm Stock being sold by the Company to or upon the order of the Company of the purchase price by wire transfer in immediately available funds to the accounts specified by the Company. Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder. Delivery of the Firm Stock shall be made through the facilities of The Depository Trust Company unless Lehman Brothers Inc. and Bear, Stearns & Co. Inc. shall otherwise instruct.

The option granted in Section 2 will expire 30 days after the date of this Agreement and may be exercised in whole or from time to time in part by written notice being given to the Company by Lehman Brothers Inc. and Bear, Stearns & Co. Inc.; provided that if such date falls on a day that is not a business day, the option granted in Section 2 will expire on the next succeeding business day. Such notice shall set forth the aggregate number of shares of Option Stock as to which the option is being exercised, the names in which the shares of Option Stock are to be registered, the denominations in which the shares of Option Stock are to be issued and the date and time, as determined by Lehman Brothers Inc. and Bear, Stearns & Co.

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Inc., when the shares of Option Stock are to be delivered; provided, however, that this date and time shall not be earlier than the Initial Delivery Date nor earlier than the second business day after the date on which the option shall have been exercised nor later than the fifth business day after the date on which the option shall have been exercised. Each date and time the shares of Option Stock are delivered is sometimes referred to as an “Option Stock Delivery Date,” and the Initial Delivery Date and any Option Stock Delivery Date are sometimes each referred to as a “Delivery Date.”

Delivery of the Option Stock by the Company and payment for the Option Stock by the several Underwriters through the Representatives shall be made at 10:00 a.m., New York City time, on the date specified in the corresponding notice described in the preceding paragraph or at such other date or place as shall be determined by agreement between Lehman Brothers Inc. and Bear, Stearns & Co. Inc. and the Company. On the Option Stock Delivery Date, the Company shall deliver or cause to be delivered the Option Stock to the Representatives for the account of each Underwriter against payment by the several Underwriters through the Representatives and of the respective aggregate purchase prices of the Option Stock being sold by the Company to or upon the order of the Company of the purchase price by wire transfer in immediately available funds to the accounts specified by the Company. Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder. The Company shall deliver the Option Stock through the facilities of DTC unless Lehman Brothers Inc. and Bear, Stearns & Co. Inc. shall otherwise instruct.

5. Further Agreements of the Company and the Underwriters. (a) The Company agrees:

(i) To prepare the Prospectus in a form approved by the Representatives and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement; to make no further amendment or any supplement to the Registration Statement or the Prospectus prior to the last Delivery Date except as provided herein; to advise the Representatives, promptly after it receives notice thereof, of the time when any amendment or supplement to the Registration Statement or the Prospectus has been filed and to furnish the Representatives with copies thereof; to advise the Representatives, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of the Prospectus or any Issuer Free Writing Prospectus, of the suspension of the qualification of the Stock for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding or examination for any such purpose or of any request by the Commission for the amending or supplementing of the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of the Prospectus or any Issuer Free Writing Prospectus or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal;

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(ii) To furnish promptly to each of the Representatives and to counsel for the Underwriters a signed copy of the Registration Statement as originally filed with the Commission, and each amendment thereto filed with the Commission, including all consents and exhibits filed therewith;

(iii) To deliver promptly to the Representatives such number of the following documents as the Representatives shall reasonably request: (A) conformed copies of the Registration Statement as originally filed with the Commission and each amendment thereto (in each case excluding exhibits other than this Agreement and the computation of per share earnings), (B) during the Prospectus Delivery Period, each Preliminary Prospectus, the Prospectus and any amended or supplemented Prospectus and (C) during the Prospectus Delivery Period, each Issuer Free Writing Prospectus; and, if the delivery of a prospectus is required at any time after the date hereof in connection with the offering or sale of the Stock or any other securities relating thereto and if at such time any events shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary to amend or supplement the Prospectus in order to comply with the Securities Act, to notify the Representatives and, upon their request, to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Representatives may from time to time reasonably request of an amended or supplemented Prospectus that will correct such statement or omission or effect such compliance;

(iv) To file promptly with the Commission any amendment or supplement to the Registration Statement or the Prospectus that may, in the judgment of the Company or Lehman Brothers Inc. and Bear, Stearns & Co. Inc., be required by the Securities Act or requested by the Commission;

(v) Prior to filing with the Commission any amendment or supplement to the Registration Statement or to the Prospectus or filing any Issuer Free Writing Prospectus, to furnish a copy thereof to the Representatives and counsel for the Underwriters and obtain the consent of the Representatives to the filing;

(vi) Not to make any offer relating to the Stock that would constitute an Issuer Free Writing Prospectus without the prior written consent of the Representatives.

(vii) To retain in accordance with the Rules and Regulations all Issuer Free Writing Prospectuses not required to be filed pursuant to the Rules and Regulations; and if at any time after the date hereof any events shall have occurred as a result of which any Issuer Free Writing Prospectus, as then amended or supplemented, would conflict with the information in the Registration Statement, the most recent Preliminary Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or,

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if for any other reason it shall be necessary to amend or supplement any Issuer Free Writing Prospectus, to notify the Representatives and, upon their request, to file such document and to prepare and furnish without charge to each Underwriter as many copies as the Representatives may from time to time reasonably request of an amended or supplemented Issuer Free Writing Prospectus that will correct such conflict, statement or omission or effect such compliance;

(viii) As soon as practicable after the Effective Date (it being understood that the Company shall have until at least 410 or, if the fourth quarter following the fiscal quarter that includes the Effective Date is the last fiscal quarter of the Company’s fiscal year, 455 days after the end of the Company’s current fiscal quarter), to make generally available to the Company’s security holders and to deliver to the Representatives an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act and the Rules and Regulations (including, at the option of the Company, Rule 158);

(ix) Promptly from time to time to take such action as the Representatives may reasonably request to qualify the Stock for offering and sale under the securities laws of such jurisdictions as the Representatives may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Stock; provided that in connection therewith the Company shall not be required to (i) qualify as a foreign corporation in any jurisdiction in which it would not otherwise be required to so qualify, (ii) file a general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any jurisdiction in which it would not otherwise be subject;

(x) For a period commencing on the date hereof and ending on the 180th day after the date of the Prospectus (the “Lock-Up Period”), provided, however, that the undersigned shall be permitted to file a registration statement (and publicly disclose the same) as described in clause (3) below beginning on the 141^st day of the Lock-Up Period (in any event, however, the shares of Common Stock registered pursuant to any such registration statement shall remain subject to the prohibitions of this section for the entire Lock-Up Period), not to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any shares of Common Stock or securities convertible into or exchangeable for Common Stock (other than the Stock and shares issued pursuant to the Class B shares convertible into shares of Common Stock which are issued and outstanding on the Initial Delivery Date or pursuant to employee benefit plans, qualified stock option plans or other employee compensation plans existing on the date hereof or pursuant to currently outstanding options, warrants or rights), or sell or grant options, rights or warrants with respect to any shares of Common Stock or securities convertible into or exchangeable for Common Stock (other than the grant of options pursuant to option plans existing on the date hereof), (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such shares of Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or other securities, in cash or

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otherwise, (3) file or cause to be filed a registration statement, including any amendments, with respect to the registration of any shares of Common Stock or securities convertible, exercisable or exchangeable into Common Stock or any other securities of the Company or (4) publicly disclose the intention to do any of the foregoing, in each case without the prior written consent of Lehman Brothers Inc. and Bear, Stearns & Co. Inc., as joint book-running managers (the “Joint Book Runners”) on behalf of the Underwriters, and to cause each officer, director and stockholder of the Company set forth on Schedule 3 hereto to furnish to the Representatives, prior to the Initial Delivery Date, a letter or letters, substantially in the form of Exhibit A hereto (the “Lock-Up Agreements”); notwithstanding the foregoing, if (1) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or announces material news or a material event relating to the Company or (2) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the Lock-Up Period, then the restrictions imposed in the preceding paragraph shall continue to apply until the expiration of the 18-day period beginning on the date of issuance of the earnings release or the announcement of the material news or the occurrence of the material event, unless the Joint Book Runners, on behalf of the Underwriters, waive such extension in writing; and

(xi) To apply the net proceeds from the sale of the Stock being sold by the Company as set forth in the Prospectus.

(b) Each Underwriter severally agrees that:

(i) It has not and will not use, authorize use of, refer to, or participate in the planning for use of, any “free writing prospectus,” as defined in Rule 405 under the Securities Act (which term includes use of any written information furnished to the Commission by the Company and not incorporated by reference into the Registration Statement and any press release issued by the Company) other than (i) any filed Issuer Free Writing Prospectus or any Issuer Free Writing Prospectus prepared pursuant to Section 5(a)(v) above, or (ii) any free writing prospectus prepared by such underwriter and consented to by the Company in advance, including any such free writing prospectus that is consented to by the Company in advance that contains “issuer information” (as defined in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation by reference) in the most Preliminary Prospectus or a previously filed Issuer Free Writing Prospectus (each such free writing prospectus referred to in clause (ii), an “Underwriter Free Writing Prospectus,” and any such “issuer information” referred to in clause (ii) with respect to whose use the Company has given its consent, “Permitted Issuer Information”); and

(ii) It will retain copies of each free writing prospectus used or referred to by it to the extent required by Rule 433 under the Securities Act.

6. Expenses. The Company agrees, whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, to pay all costs, expenses, fees and taxes incident to and in connection with (a) the authorization, issuance, sale and

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delivery of the Stock and any stamp duties or other taxes payable in that connection, and the preparation and printing of certificates for the Stock; (b) the preparation, printing and filing under the Securities Act of the Registration Statement (including any exhibits thereto), any Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any amendment or supplement thereto; (c) the distribution of the Registration Statement (including any exhibits thereto), any Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any amendment or supplement thereto, all as provided in this Agreement; (d) the production and distribution of this Agreement, any supplemental agreement among Underwriters and any other related documents in connection with the offering, purchase, sale and delivery of the Stock; (e) any required review by the National Association of Securities Dealers, Inc. (the “NASD”) of the terms of sale of the Stock (including related fees and expenses of counsel to the Underwriters); (f) the listing of the Stock on The NASDAQ National Market and/or any other exchange; (g) the qualification of the Stock under the securities laws of the several jurisdictions as provided in Section 5(a)(ix) and the preparation, printing and distribution of a Blue Sky Memorandum (including related fees and expenses of counsel to the Underwriters); (i) the investor presentations on any “road show” undertaken in connection with the marketing of the Stock, including, without limitation, expenses associated with any electronic roadshow, travel and lodging expenses of the affiliates and officers of the Company (provided that the Company and the Underwriters shall share equally the costs of any aircraft chartered in connection with the roadshow); and (j) all other costs and expenses incident to the performance of the obligations of the Company under this Agreement; provided that, except as provided in this Section 6 and in Section 11, the Underwriters shall pay their own costs and expenses, including the costs and expenses of their counsel, any transfer taxes on the Stock which they may sell and the expenses of advertising any offering of the Stock made by the Underwriters.

7. Conditions of Underwriters’ Obligations. The respective obligations of the Underwriters hereunder are subject to the accuracy, when made and on each Delivery Date, of the representations and warranties of the Company contained herein, to the performance by the Company of its obligations hereunder, and to each of the following additional terms and conditions:

(a) The Prospectus shall have been timely filed with the Commission in accordance with Section 5(a)(i); no stop order suspending the effectiveness of the Registration Statement or preventing or suspending the use of the Prospectus or any Issuer Free Writing Prospectus shall have been issued and no proceeding or examination for such purpose shall have been initiated or threatened by the Commission; and any request of the Commission for inclusion of additional information in the Registration Statement or the Prospectus or otherwise shall have been complied with.

(b) No Underwriter shall have discovered and disclosed to the Company on or prior to such Delivery Date that the Registration Statement, the Prospectus or the Pricing Disclosure Package, or any amendment or supplement thereto, contains an untrue statement of a fact which, in the opinion of Latham & Watkins LLP, counsel for the Underwriters, is material or omits to state a fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading.

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(c) All corporate proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the Stock, the Registration Statement, the Prospectus and any Issuer Free Writing Prospectus, and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.

(d) Hunton & Williams LLP shall have furnished to the Representatives its written opinion and its disclosure letter, as counsel to the Company, addressed to the Underwriters and dated such Delivery Date, in form and substance reasonably satisfactory to the Representatives, substantially in the form attached hereto as Exhibit C-1(a) and Exhibit C-1(b), respectively.

(e) Wiley Rein & Fielding LLP shall have furnished to the Representatives its written opinion, as counsel to the Company, addressed to the Underwriters and dated such Delivery Date, in form and substance reasonably satisfactory to the Representatives, substantially in the form attached hereto as Exhibit C-2.

(f) Mary McDermott, Esq., general counsel to the Counsel, shall have furnished to the Representatives its written opinion, as counsel to the Company, addressed to the Underwriters and dated such Delivery Date, in form and substance reasonably satisfactory to the Representatives, substantially in the form attached hereto as Exhibit C-3.

(g) The Representatives shall have received from Latham & Watkins LLP, counsel for the Underwriters, such opinion or opinions, dated such Delivery Date, with respect to the issuance and sale of the Stock, the Registration Statement, the Prospectus and the Pricing Disclosure Package and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters.

(h) At the time of execution of this Agreement, the Representatives shall have received from KPMG LLP a letter, in form and substance satisfactory to the Representatives, addressed to the Underwriters and dated the date hereof (i) confirming that they are independent public accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, and (ii) stating, as of the date hereof (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the most recent Preliminary Prospectus, as of a date not more than three days prior to the date hereof), the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection with registered public offerings.

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(i) With respect to the letter of KPMG LLP referred to in Section 7(h) and delivered to the Representatives concurrently with the execution of this Agreement (the “initial letter”), the Company shall have furnished to the Representatives a letter (the “bring-down letter”) of such accountants, addressed to the Underwriters and dated such Delivery Date (i) confirming that they are independent public accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down letter (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than three days prior to the date of the bring-down letter), the conclusions and findings of such firm with respect to the financial information and other matters covered by the initial letter and (iii) confirming in all material respects the conclusions and findings set forth in the initial letter.

(j) The Company shall have furnished to the Representatives a certificate, dated such Delivery Date, of its Chief Executive Officer and its Chief Financial Officer stating that:

(i) The representations, warranties and agreements of the Company in Section 1 are true and correct on and as of such Delivery Date, and the Company has complied with all its agreements contained herein and satisfied all the conditions on its part to be performed or satisfied hereunder at or prior to such Delivery Date;

(ii) No stop order suspending the effectiveness of the Registration Statement has been issued, and no proceedings or examination for that purpose have been instituted or, to the knowledge of such officers, threatened; and

(iii) They have carefully examined the Registration Statement, the Prospectus and the Pricing Disclosure Package, and, in their opinion, (A) (1) the Registration Statement, as of the Effective Date, and (2) the Prospectus, as of its date and on the applicable Delivery Date, or (3) the Pricing Disclosure Package, as of the Applicable Time, did not and do not contain any untrue statement of a material fact and did not and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (except in the case of the Registration Statement, in the light of the circumstances under which they were made) not misleading, except, in the case of the Pricing Disclosure Package, that the price of the Stock and disclosures directly relating thereto and derived therefrom are included in the relevant portions of the Prospectus, and (B) since the Effective Date, no event has occurred that should have been set forth in a supplement or amendment to the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus that has not been so set forth.

(k) Except as described in the most recent Preliminary Prospectus, (i) neither the Company nor any of its subsidiaries shall have sustained, since the date of the latest audited financial statements included in the most recent Preliminary Prospectus,

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any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree or (ii) since such date there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), results of operations, stockholders’ equity, properties, management, business or prospects of the Company and its subsidiaries taken as a whole, the effect of which, in any such case described in clause (i) or (ii), is, in the judgment of Lehman Brothers Inc. and Bear, Stearns & Co. Inc., so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Stock being delivered on such Delivery Date on the terms and in the manner contemplated in the Prospectus.

(l) Subsequent to the execution and delivery of this Agreement (i) no downgrading shall have occurred in the rating accorded the Company’s debt securities by any “nationally recognized statistical rating organization”, as that term is defined by the Commission for purposes of Rule 436(g)(2) of the Rules and Regulations, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s debt securities.

(m) Subsequent to the execution and delivery of this Agreement there shall not have occurred any of the following: (i) trading in securities generally on the New York Stock Exchange or the American Stock Exchange or in the over-the-counter market, or trading in any securities of the Company on any exchange or in the over-the-counter market, shall have been suspended or materially limited or the settlement of such trading generally shall have been materially disrupted or minimum prices shall have been established on any such exchange or such market by the Commission, by such exchange or by any other regulatory body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been declared by federal or state authorities, (iii) the United States shall have become engaged in hostilities, there shall have been an escalation in hostilities involving the United States or there shall have been a declaration of a national emergency or war by the United States or (iv) there shall have occurred such a material adverse change in general economic, political or financial conditions, including, without limitation, as a result of terrorist activities after the date hereof (or the effect of international conditions on the financial markets in the United States shall be such), as to make it, in the judgment of Lehman Brothers Inc. and Bear, Stearns & Co. Inc., impracticable or inadvisable to proceed with the public offering or delivery of the Stock being delivered on such Delivery Date on the terms and in the manner contemplated in the Prospectus.

(n) The NASDAQ National Market, Inc. shall have approved the Stock for listing, subject only to official notice of issuance and evidence of satisfactory distribution.

(o) The Lock-Up Agreements between the Representatives and the officers, directors and stockholders of the Company set forth on Schedule 2, delivered to the Representatives on or before the date of this Agreement, shall be in full force and effect on such Delivery Date.

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All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters.

8. Indemnification and Contribution.

(a) The Company shall indemnify and hold harmless each Underwriter, its directors, officers and employees and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, but not limited to, any loss, claim, damage, liability or action relating to purchases and sales of Stock), to which that Underwriter, director, officer, employee or controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in (A) the most recent Preliminary Prospectus, the Registration Statement, the Prospectus or in any amendment or supplement thereto, (B) any Issuer Free Writing Prospectus or in any amendment or supplement thereto, (C) any Permitted Issuer Information used or referred to in any “free writing prospectus” (as defined in Rule 405) used or referred to by any Underwriter, (D) any “road show” (as defined in Rule 433) made to potential investors by the Company not constituting an Issuer Free Writing Prospectus (a “Non-Prospectus Road Show”) or (E) any Blue Sky application or other document prepared or executed by the Company (or based upon any written information furnished by the Company for use therein) specifically for the purpose of qualifying any or all of the Stock under the securities laws of any state or other jurisdiction (any such application, document or information being hereinafter called a “Blue Sky Application”), (ii) the omission or alleged omission to state in the most recent Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement thereto or in any Permitted Issuer Information, any Non-Prospectus Road Show or any Blue Sky Application, any material fact required to be stated therein or necessary to make the statements therein not misleading or (iii) any act or failure to act or any alleged act or failure to act by any Underwriter in connection with, or relating in any manner to, the Stock or the offering contemplated hereby, and which is arising out of or based upon matters covered by clause (i) or (ii) above (provided that the Company shall not be liable under this clause (iii) to the extent that it is determined in a final judgment by a court of competent jurisdiction that such loss, claim, damage, liability or action resulted directly from any such acts or failures to act undertaken or omitted to be taken by such Underwriter through its gross negligence or willful misconduct), and shall, subject to Section 8(c), reimburse each Underwriter and each such director, officer, employee or controlling person promptly upon demand for any legal or other expenses reasonably incurred by that Underwriter, director, officer, employee or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing

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Prospectus or in any such amendment or supplement thereto or in any Permitted Issuer Information, any Non-Prospectus Road Show or any Blue Sky Application, in reliance upon and in conformity with written information concerning such Underwriter furnished to the Company through the Representatives by or on behalf of any Underwriter specifically for inclusion therein, which information consists solely of the information specified in Section 8(e) or (ii) any free writing prospectus prepared or made by the Underwriters without the consent of the Company. The foregoing indemnity agreement is in addition to any liability which the Company may otherwise have to any Underwriter or to any director, officer, employee or controlling person of that Underwriter.

(b) Each Underwriter, severally and not jointly, shall indemnify and hold harmless the Company, its directors (including any person who, with his or her consent, is named in the Registration Statement as about to become a director of the Company), officers and employees, and each person, if any, who controls the Company or within the meaning of Section 15 of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Company or any such director, officer, employee or controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement thereto, or in any Non-Prospectus Road Show or Blue Sky Application, or (ii) the omission or alleged omission to state in any Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement thereto, or in any Non-Prospectus Road Show or Blue Sky Application, any material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning such Underwriter furnished to the Company through the Representatives by or on behalf of that Underwriter specifically for inclusion therein, which information is limited to the information set forth in Section 8(e). The foregoing indemnity agreement is in addition to any liability that any Underwriter may otherwise have to the Company or any such director, officer, employee or controlling person.

(c) Promptly after receipt by an indemnified party under this Section 8 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 8 except to the extent it has been materially prejudiced by such failure and, provided, further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 8. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After

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notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 8 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that Lehman Brothers Inc. and Bear, Stearns & Co. Inc. shall have the right to employ one counsel (in each relevant jurisdiction) to represent jointly the Representatives and those other Underwriters and their respective directors, officers, employees and controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Underwriters against the Company under this Section 8 if (i) the Company and the Underwriters shall have so mutually agreed; (ii) the Company has failed within a reasonable time to retain one counsel (in each relevant jurisdiction) reasonably satisfactory to the Underwriters; (iii) the Underwriters and their respective directors, officers, employees and controlling persons shall have reasonably concluded that there may be legal defenses available to them that are different from or in addition to those available to the Company; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Underwriters or their respective directors, officers, employees or controlling persons, on the one hand, and the Company, on the other hand, and representation of both sets of parties by the same counsel would be inappropriate under the applicable rules of professional conduct due to actual or potential differing interests between them, and in any such event the fees and expenses of such separate counsel shall be paid by the Company. No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and does not include any findings of fact or admissions of fault or culpability as to the indemnified party, or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a final judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment.

(d) If the indemnification provided for in this Section 8 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other, from the offering of the Stock or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative

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benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other, with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Stock purchased under this Agreement (before deducting expenses) received by the Company, as set forth in the table on the cover page of the Prospectus, on the one hand, and the total underwriting discounts and commissions received by the Underwriters with respect to the shares of the Stock purchased under this Agreement, as set forth in the table on the cover page of the Prospectus, on the other hand. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 8(d) were to be determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 8(d) shall be deemed to include, for purposes of this Section 8(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8(d), no Underwriter shall be required to contribute any amount in excess of the amount by which the net proceeds of the Stock underwritten by it exceeds the amount of any damages that such Underwriter has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute as provided in this Section 8(d) are several in proportion to their respective underwriting obligations and not joint.

(e) The Underwriters severally confirm and the Company acknowledges and agrees that the statements regarding delivery of shares by the Underwriters set forth on the cover page of, and the concession and reallowance figures and the paragraphs relating to stabilization, short positions and penalty bids, discretionary shares and electronic distributions by the Underwriters appearing under the caption “Underwriting” in, the most recent Preliminary Prospectus are correct and constitute the only information concerning such Underwriters furnished in writing to the Company by or on behalf of the Underwriters specifically for inclusion in any Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement thereto or in any Marketing Materials.

9. Defaulting Underwriters. If, on any Delivery Date, any Underwriter defaults in the performance of its obligations under this Agreement, the remaining non-defaulting

30

Underwriters shall be obligated to purchase the Stock that the defaulting Underwriter agreed but failed to purchase on such Delivery Date in the respective proportions which the number of shares of the Firm Stock set forth opposite the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the total number of shares of the Firm Stock set forth opposite the names of all the remaining non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the remaining non-defaulting Underwriters shall not be obligated to purchase any of the Stock on such Delivery Date if the total number of shares of the Stock that the defaulting Underwriter or Underwriters agreed but failed to purchase on such date exceeds 9.09% of the total number of shares of the Stock to be purchased on such Delivery Date, and any remaining non-defaulting Underwriter shall not be obligated to purchase more than 110% of the number of shares of the Stock that it agreed to purchase on such Delivery Date pursuant to the terms of Section 2. If the foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or those other underwriters satisfactory to Lehman Brothers Inc. and Bear, Stearns & Co. Inc. who so agree, shall have the right, but shall not be obligated, to purchase, in such proportion as may be agreed upon among them, all the Stock to be purchased on such Delivery Date. If the remaining Underwriters or other underwriters satisfactory to Lehman Brothers Inc. and Bear, Stearns & Co. Inc. do not elect to purchase the shares that the defaulting Underwriter or Underwriters agreed but failed to purchase on such Delivery Date, this Agreement (or, with respect to any Option Stock Delivery Date, the obligation of the Underwriters to purchase, and of the Company to sell, the Option Stock) shall terminate without liability on the part of any non-defaulting Underwriter or the Company, except that the Company will continue to be liable for the payment of expenses to the extent set forth in Sections 6 and 11. As used in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the context requires otherwise, any party not listed in Schedule 1 hereto that, pursuant to this Section 9, purchases Stock that a defaulting Underwriter agreed but failed to purchase.

Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company for damages caused by its default. If other Underwriters are obligated or agree to purchase the Stock of a defaulting or withdrawing Underwriter, either Lehman Brothers Inc. and Bear, Stearns & Co. Inc. or the Company may postpone the Delivery Date for up to seven full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters may be necessary in the Registration Statement, the Prospectus or in any other document or arrangement.

10. Termination. The obligations of the Underwriters hereunder may be terminated by Lehman Brothers Inc. and Bear, Stearns & Co. Inc. by notice given to and received by the Company prior to delivery of and payment for the Firm Stock if, prior to that time, any of the events described in Sections 7(k), 7(l) and 7(m) shall have occurred or if the Underwriters shall decline to purchase the Stock for any reason permitted under this Agreement.

11. Reimbursement of Underwriters’ Expenses. If (a) the Company fails to tender the Stock for delivery to the Underwriters by reason of any failure, refusal or inability on the part of the Company to perform any agreement on its part to be performed, or because any other condition (other than Section 7(m)) to the Underwriters’ obligations hereunder required to be fulfilled by the Company is not fulfilled for any reason or (b) the Underwriters shall decline to purchase the Stock for any reason permitted under this Agreement (other than as permitted under Section 7(m)), the Company will reimburse the Underwriters for all reasonable out-of-pocket

31

expenses (including fees and disbursements of counsel) incurred by the Underwriters in connection with this Agreement and the proposed purchase of the Stock, and upon demand the Company shall pay the full amount thereof to the Representatives. If this Agreement is terminated pursuant to Section 9 by reason of the default of one or more Underwriters, the Company shall not be obligated to reimburse any defaulting Underwriter on account of those expenses.

12. Research Analyst Independence. The Company acknowledges that the Underwriters’ research analysts and research departments are required to be independent from their respective investment banking divisions and are subject to certain regulations and internal policies, and that such Underwriters’ research analysts may hold views and make statements or investment recommendations and/or publish research reports with respect to the Company and/or the offering that differ from the views of their respective investment banking divisions. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriters with respect to any conflict of interest that may arise from the fact that the views expressed by their independent research analysts and research departments may be different from or inconsistent with the views or advice communicated to the Company by such Underwriters’ investment banking divisions. The Company acknowledges that each of the Underwriters is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short positions in debt or equity securities of the companies that may be the subject of the transactions contemplated by this Agreement.

13. No Fiduciary Duty. The Company acknowledges and agrees that in connection with this offering, sale of the Stock or any other services the Underwriters may be deemed to be providing hereunder, notwithstanding any preexisting relationship, advisory or otherwise, between the parties or any oral representations or assurances previously or subsequently made by the Underwriters: (i) no fiduciary or agency relationship between the Company and any other person, on the one hand, and the Underwriters, on the other, exists; (ii) the Underwriters are not acting as advisors, expert or otherwise, to the Company, including, without limitation, with respect to the determination of the public offering price of the Stock, and such relationship between the Company, on the one hand, and the Underwriters, on the other, is entirely and solely commercial, based on arms-length negotiations; (iii) any duties and obligations that the Underwriters may have to the Company shall be limited to those duties and obligations specifically stated herein; and (iv) the Underwriters and their respective affiliates may have interests that differ from those of the Company. The Company hereby waives any claims that the Company may have against the Underwriters with respect to any breach of fiduciary duty in connection with the Offering.

14. Notices, Etc. All statements, requests, notices and agreements hereunder shall be in writing, and:

(a) if to the Underwriters, shall be delivered or sent by mail, telex or facsimile transmission to Lehman Brothers Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Syndicate Registration (Fax: 646-497-4815), with a copy, in the case of any notice pursuant to Section 8(d), to the Director of Litigation, Office of the General Counsel, Lehman Brothers Inc., 399 Park Avenue, 10^th Floor, New York, New York 10022 (Fax: 212-520-0421);

32

(b) if to the Company, shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Michael B. Moneymaker (Fax: 540-946-3595); and

provided, however, that any notice to an Underwriter pursuant to Section 8(d) shall be delivered or sent by mail or facsimile transmission to such Underwriter care of the Representatives at the following address: Lehman Brothers Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Syndicate Registration (Fax: 646-497-4815), with a copy to the Director of Litigation, Office of the General Counsel, Lehman Brothers Inc., 399 Park Avenue, 10^th Floor, New York, New York 10022 (Fax: 212-520-0421). Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof. The Company shall be entitled to act and rely upon any request, consent, notice or agreement given or made on behalf of the Representatives by Lehman Brothers Inc. and Bear, Stearns & Co. Inc.

15. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the Underwriters, the Company and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (A) the representations, warranties, indemnities and agreements of the Company contained in this Agreement shall also be deemed to be for the benefit of the directors, officers and employees of the Underwriters and each person or persons, if any, who control any Underwriter within the meaning of Section 15 of the Securities Act and (B) the indemnity agreement of the Underwriters contained in Section 8(b) of this Agreement shall be deemed to be for the benefit of the directors of the Company, the officers of the Company who have signed the Registration Statement and any person controlling the Company within the meaning of Section 15 of the Securities Act. Nothing in this Agreement is intended or shall be construed to give any person, other than the persons referred to in this Section 15, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein.

16. Survival. The respective indemnities, representations, warranties and agreements of the Company and the Underwriters contained in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall survive the delivery of and payment for the Stock and shall remain in full force and effect, regardless of any investigation made by or on behalf of any of them or any person controlling any of them.

17. Definition of the Terms “Business Day” and “Subsidiary”. For purposes of this Agreement, (a) “business day” means each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close and (b) “subsidiary” has the meaning set forth in Rule 405 of the Rules and Regulations.

18. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

33

19. Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original but all such counterparts shall together constitute one and the same instrument.

20. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

34

If the foregoing correctly sets forth the agreement among the Company and the Underwriters, please indicate your acceptance in the space provided for that purpose below.

Very truly yours,
NTELOS HOLDINGS CORP.
By:	/s/ Michael B. Moneymaker
	Michael B. Moneymaker
	Executive Vice President, Chief Financial Officer, Secretary and Treasurer

35

Accepted:
LEHMAN BROTHERS INC. BEAR, STEARNS & CO. INC.
For themselves and as Representatives of the several Underwriters named in Schedule 1 hereto
By LEHMAN BROTHERS INC.
By:	/s/ Brian M. Reilly
	Brian M. Reilly
	Managing Director
By BEAR, STEARNS & CO. INC.
By:	/s/ Stephen Parish
	Stephen Parish
	Authorized Representative

36

SCHEDULE 1

Underwriters	Number of Shares of Firm Stock
Lehman Brothers Inc.	5,031,250
Bear, Stearns & Co. Inc.	5,031,250
UBS Securities LLC	2,156,250
Raymond James & Associates, Inc.	1,078,125
Wachovia Capital Markets, LLC	1,078,125
Total	14,375,000

SCHEDULE 2

PERSONS DELIVERING LOCK-UP AGREEMENTS

Directors

Christopher Bloise

Michael Delaney

Andrew Gesell

Michael Huber

Henry Ormond

Steven Rattner

Officers

James S. Quarforth

Carl A. Rosberg

David R. Maccarelli

Michael B. Moneymaker

Mary McDermott

Frank L. Berry

Dave J. Keller

Robert L. McAvoy Jr.

Denise H. Ramey

Robbie W. Cale

David L. Coats

Duane K. Breeden

Kenneth R. Boward

S. Craig Highland

Shareholders

ABG Investment Management, LLC

Alchemy, L.P.

Alyssa B. Quarforth

Andrew S. Gesell

BG Partners L.P.

Cameron J. Rosberg

Carl A. Rosberg Revocable Trust

Cheryl B. Rosberg Revocable Trust

Christopher D. Bloise

Citigroup Venture Capital Equity Partners, L.P.

Claus Von Hermann

Clayton M. Albertson

CVC Executive Fund LLC

CVC/SSB Employee Fund, L.P.

David F. Thomas

David J. Keller

David L. Coats

David R. Maccarelli

Denise H. Ramey

Drew A. Rosberg

Duane K. Breeden

Francis C. Guido

Frank L. Berry

Harris Newman

James A. Urry

Jeffrey F. Vogel

John P. Civantos

Joseph M. Silvestri

Kenneth R. Boward

Markus Ehrler

Mary McDermott

Michael A. Delaney

Michael B. Moneymaker

Michael B. Moneymaker, as custodian for Christopher M. Moneymaker

Michael B. Moneymaker, as custodian for Ryan E. Moneymaker

Michael D. Stephenson

Michael S. Gollner

Quadrangle Capital Partners LP

Quadrangle Capital Partners-A LP

Quadrangle Select Partners LP

Richard A. Mayberry Jr

Robbie W. Cale

Robert L. McAvoy, Jr.

S Craig & C Lynn Highland as joint tenants in common

S Craig Highland, as custodian for Lesleigh H. Highland

S Craig Highland, as custodian for Zachary L. Highland

Scott C. Quarforth

Scott F. Elkins

Sixty-Four BR Partnership

The James S. Quarforth Revocable Trust

The Maccarelli Irrevocable Trust

The Quarforth Irrevocable Trust

EXHIBIT A

LOCK-UP LETTER AGREEMENT

LEHMAN BROTHERS INC.

BEAR, STEARNS & CO. INC.

As Representatives of the several

Underwriters named in Schedule 1,

c/o Lehman Brothers Inc.

745 Seventh Avenue

New York, New York 10019

Ladies and Gentlemen:

The undersigned understands that you and certain other firms (the “Underwriters”) propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) providing for the purchase by the Underwriters of shares (the “Stock”) of Common Stock, par value $0.01 per share (the “Common Stock”), of NTELOS Holdings Corp., a Delaware corporation (the “Company”), and that the Underwriters propose to reoffer the Stock to the public (the “Offering”).

In consideration of the execution of the Underwriting Agreement by the Underwriters, and for other good and valuable consideration, the undersigned hereby irrevocably agrees that, without the prior written consent of the Representatives, on behalf of the Underwriters, the undersigned will not, directly or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any shares of Common Stock (including, without limitation, shares of Common Stock that may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and shares of Common Stock that may be issued upon exercise of any option or warrant) or securities convertible into or exchangeable for Common Stock (other than the Stock), (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of shares of Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise, (3) cause to be filed a registration statement with respect to any shares of Common Stock or securities convertible, exercisable or exchangeable into Common Stock or any other securities of the Company (with the exception of a filing on Form S-8 related to the Company’s incentive plan) or (4) publicly disclose the intention to do any of the foregoing, for a period of 180 days after the date of the final prospectus relating to the Offering (such 180-day period, the “Lock-Up Period”), provided, however, that the undersigned shall be permitted to cause to be filed such a registration statement (and publicly disclose the same) beginning on the 141^st day of the Lock-Up Period. For the avoidance of doubt, the shares of Common Stock registered pursuant to any such registration statement remain subject to the aforementioned prohibitions of this Lock-Up Letter Agreement for the entire Lock-Up Period.

The foregoing paragraph shall not apply to bona fide gifts, sales or other dispositions of shares of any class of the Company’s capital stock, in each case that are made exclusively between and among the undersigned or members of the undersigned’s family (including any trust for the benefit of the undersigned or the undersigned’s immediate family), or affiliates of the undersigned, including its partners (if a partnership) or members (if a limited liability company); provided that it shall be a condition to any such transfer that (i) the transferee/donee agrees to be bound by the terms of the lock-up letter agreement (including, without limitation, the restrictions set forth in the preceding sentence) to the same extent as if the transferee/donee were a party hereto, (ii) no filing by any party (donor, donee, transferor or transferee) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), shall be required or shall be voluntarily made in connection with such transfer or distribution (other than a filing on a Form 5, Schedule 13D or Schedule 13G (or 13D-A or 13G-A) made after the expiration of the 180-day period referred to above), (iii) each party (donor, donee, transferor or transferee) shall not be required by law (including without limitation the disclosure requirements of the Securities Act of 1933, as amended, and the Exchange Act) to make, and shall agree to not voluntarily make, any public announcement of the transfer or disposition, and (iv) the undersigned notifies Lehman Brothers’ Equity Capital Markets at least two business days prior to the proposed transfer or disposition.

Notwithstanding the foregoing paragraph, for purposes of allowing the Underwriters to comply with NASD Rule 2711(f)(4) and NYSE Rule 472(f)(4), if (1) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or announces material news or a material event relating to the Company or (2) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the Lock-Up Period, then the restrictions imposed by this Lock-Up Letter Agreement shall continue to apply until the expiration of the 18-day period beginning on the date of issuance of the earnings release or the announcement of the material news or material event, unless Lehman Brothers Inc. waives such extension in writing.

The undersigned hereby further agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this Lock-Up Letter Agreement during the period from the date of this Lock-Up Letter Agreement to and including the 34^th day following the expiration of the Lock-Up Period, it will give notice thereof to the Company and will not consummate such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period (as such may have been extended pursuant to the foregoing paragraph) has expired.

In furtherance of the foregoing, the Company and its transfer agent are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Lock-Up Letter Agreement.

2

It is understood that, if the Company notifies the Underwriters that it does not intend to proceed with the Offering, if the Underwriting Agreement does not become effective, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Stock, the undersigned is hereby automatically released from its obligations under this Lock-Up Letter Agreement.

The undersigned understands that the Company and the Underwriters will proceed with the Offering in reliance on this Lock-Up Letter Agreement.

Whether or not the Offering actually occurs depends on a number of factors, including market conditions. Any Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriters.

[Signature page follows]

3

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Letter Agreement and that, upon request, the undersigned will execute any additional documents necessary in connection with the enforcement hereof. Any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

Very truly yours,
By:
	Name:
	Title:

Dated:                                 

4

EXHIBIT B

LIST OF SUBSIDIARIES

Subsidiary	Jurisdiction of Incorporation or Organization
NTELOS Media, Inc.	Virginia
NTELOS Cable Inc.	Virginia
NTELOS Cable of Virginia Inc.	Virginia
NTELOS Communications Inc.	Virginia
NTELOS Communications Services Inc.	Virginia
NTELOS Cornerstone Inc.	Virginia
NTELOS Inc.	Virginia
NTELOS Licenses Inc.	Virginia
NTELOS Network Inc.	Virginia
NTELOS PCS Inc.	Virginia
NTELOS Telephone Inc.	Virginia
NTELOS Telephone LLC	Virginia
NTELOS Net LLC	Virginia
NTELOS Netaccess Inc.	Virginia
NTELOS PCS North Inc.	Virginia
NTELOS of West Virginia, Inc.	Virginia
NA Communications Inc.	Virginia
NH Licenses LLC	Virginia
R&B Cable, Inc.	Virginia
R&B Communications, Inc.	Virginia
R&B Network, Inc.	Virginia
Richmond 20MHz, LLC	Delaware
Roanoke & Botetourt Network, LLC	Virginia
Roanoke and Botetourt Telephone Company	Virginia
R&B Telephone LLC	Virginia
The Beeper Company	Virginia
Valley Network Partnership	Virginia
Virginia Independent Telephone Alliance, L.C.	Virginia
Virginia PCS Alliance, L.C.	Virginia
Virginia RSA 6 LLC	Virginia
Virginia Telecommunications Partnership	Virginia
West Virginia PCS Alliance, L.C.	Virginia

5

EXHIBIT C-1

FORM OF OPINION OF ISSUER’S COUNSEL

C-1-1

EXHIBIT C-2

FORM OF OPINION OF ISSUER’S REGULATORY COUNSEL

C-2-1

EXHIBIT C-3

FORM OF OPINION OF ISSUER’S GENERAL COUNSEL

C-3-1

EXHIBIT D

PRICING INFORMATION

ISSUER:	NTELOS HOLDINGS CORP
OFFERING SIZE:	14,375,000 SHARES - ALL PRIMARY
GREENSHOE:	2,156,250 SHARES - ALL PRIMARY
SYMBOL:	NTLS
OFFER PRICE:	$12
INITIAL FILED RANGE:	$15 - $17
GROSS SPREAD:	$0.78
	6.50%
MANAGEMENT:	$0.16
UNDERWRITING:	$0.16
SELLING CONCESSION:	$0.46
TRADE DATE:	2/8/2006
SETTLEMENT DATE:	2/13/2006
MANAGER(S):	LEH, BEAR(JOINT BOOKS) UBS(JL), RAJA, WCHV(CO’S)
CUSIP NUMBER:	67020Q107
TRADER:	PAUL SANGIMINO
PHONE NUMBER:	526-5700
POT SPLIT:	100% JUMP BALL 70% CAP ON BOOKRUNNERS (35% LEH, 35% BEAR)
COMMENTS:	LEHMAN IS BILLING, DELIVERING & STABILIZING
SHARES OUTSTANDING:	40,867,897 (SHARES POST OFFERING)

D-1

EX-2.5

Exhibit 2.5

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (the “Plan of Merger”), dated as of February 13, 2006, is by and between NTELOS Merger Corp., a Delaware corporation (“Merger Sub”), and NTELOS Holdings Corp., a Delaware corporation (“Holdings” and, after the Effective Time (as defined below), the “Surviving Corporation”).

This Plan of Merger is intended to effect a recapitalization of Holdings pursuant to Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended, through the share exchanges described in paragraph 6 hereof.

The parties hereby prescribe the terms and conditions of merger and the mode of carrying the same into effect as follows:

1. Merger of Merger Sub with and into Holdings. At the Effective Time (as such term is defined in Section 7 hereof), Merger Sub will merge with and into Holdings (the “Merger”), and the separate existence of Merger Sub will cease. Holdings will be the surviving corporation. As a result of the Merger, all of the assets of Merger Sub shall be transferred to Holdings, and Holdings shall assume all of the liabilities and obligations of Merger Sub.

2. Approval of Merger. The Plan of Merger has been authorized and approved by the Board of Directors and stockholders of Holdings and Merger Sub, in accordance with the laws of the State of Delaware.

3. Certificate of Incorporation. At the Effective Time, the Certificate of Incorporation of the Surviving Corporation shall be the Restated Certificate of Incorporation attached hereto as Exhibit 1, until thereafter amended as provided therein and by applicable law.

4. Directors and Officers. At the Effective Time, the directors and officers of Holdings shall be the directors and officers of the Surviving Corporation.

5. Bylaws. At the Effective Time, the Amended and Restated Bylaws of Holdings shall be the Bylaws of the Surviving Corporation, until thereafter amended as provided therein and by law.

6. Shares. At the Effective Time:

a. Each then issued and outstanding share, and each share then held in the treasury, of the stock of Merger Sub will, by virtue of the Merger and without any action on the part of the holder thereof, be cancelled without conversion or issuance of any shares of stock of the Surviving Corporation with respect thereto.

b. Each then issued and outstanding share of Class A Common Stock, par value $.01 per share, of Holdings (the “Class A Common”) will, by virtue of the Merger and without any action on the part of the holder thereof, be converted into 2.14851359397165 shares of Class B Common Stock, par value $.01 per share, of the Surviving Corporation (the “Class B

Common”). Any shares of Class A Common of Holdings held in treasury shall be cancelled without conversion or issuance of any shares of stock of the Surviving Corporation.

c. Each then issued and outstanding share of Class L Common Stock, par value $.01 per share, of Holdings (the “Class L Common”) will, by virtue of the Merger and without any action on the part of the holder thereof, be converted into 2.1926613643729400 shares of Class B Common Stock of the Surviving Corporation. Any shares of Class L Common of Holdings held in treasury shall be cancelled without conversion or issuance of any shares of stock of the Surviving Corporation.

d. No fractional shares of Class B Common shall be issued as a result of the conversions provided for in Sections 6.b and 6.c above. In lieu of any fractional shares, the holder of shares of Class A Common or Class L Common, as applicable, whose shares would have converted into a fractional share of Class B Common but for the application of this Section 6.d, shall be entitled to receive a cash payment in lieu of such fractional share in an amount equal to the value of such fractional interest determined based on the initial public offering price of Holdings’ common stock pursuant to Holdings’ initial public offering being consummated in conjunction herewith. Such payment with respect to fractional shares is merely intended to provide a mechanical rounding off of the conversions set forth herein, and is not separately bargained for consideration.

7. Filing, Effective Time. If this Plan of Merger has not been terminated pursuant to Section 8 hereof: (i) this Plan of Merger shall be filed by the parties hereto with the Secretary of State of the State of Delaware in accordance with Delaware law; and (ii) this Plan of Merger shall become effective upon the acceptance of such filing with the Secretary of State of the State of Delaware, and such time is referred to herein as the “Effective Time.”

8. Termination. This Plan of Merger may be terminated and the Merger abandoned by the Boards of Directors of either Holdings or Merger Sub at any time prior to the Effective Time.

9. Tax Matters. This Plan of Merger and the transactions effected hereby are intended to constitute a “plan of reorganization” within the meaning of Treasury Regulation 1.368-2.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have caused this duly approved Agreement and Plan of Merger to be executed by their respective authorized officers as of the 13^th day of February, 2006.

NTELOS HOLDINGS CORP.
By:	/s/ Michael B. Moneymaker
	Michael B. Moneymaker
	Executive Vice President, Chief Financial Officer, Secretary and Treasurer
NTELOS MERGER CORP.
By:	/s/ Michael B. Moneymaker
	Michael B. Moneymaker
	Executive Vice President, Chief Financial Officer, Secretary and Treasurer

EX-3.1

Exhibit 3.1

RESTATED CERTIFICATE OF INCORPORATION

OF

NTELOS HOLDINGS CORP.

The name of the Corporation is NTELOS Holdings Corp. (the “Corporation”). The date of filing of its original Certificate of Incorporation with the Secretary of State of the State of Delaware was January 14, 2005 under the name Project Holdings Corp. On February 22, 2005, Project Holdings Corp. was converted into a Delaware limited liability company under the name Project Holdings LLC pursuant to a Certificate of Conversion filed with the Secretary of State of the State of Delaware . On April 27, 2005, Project Holdings LLC was converted from a Delaware limited liability company to a Delaware corporation under the name Ntelos Holdings Corp. pursuant to a Certificate of Conversion filed with the Secretary of State of the State of Delaware. Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware (the “DGCL “), this Restated Certificate of Incorporation restates the provisions of the Certificate of Incorporation of this Corporation filed on April 27, 2005. The text of the Certificate of Incorporation is hereby restated in its entirety to read as follows

1. Name. The name of the Corporation is NTELOS Holdings Corp.

2. Registered Office and Agent. The registered office of the Corporation within the State of Delaware shall be in the City of Wilmington, County of New Castle. The name of the Corporation’s registered agent in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808.

3. Purpose. The purposes for which the Corporation is formed are to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware and to possess and exercise all of the powers and privileges granted by such law and any other law of Delaware.

4. Authorized Capital. The aggregate number of shares of stock which the Corporation shall have authority to issue is Eighty-Two Million One Hundred Thousand (82,100,000) shares, divided into three (3) classes consisting of One Hundred Thousand (100,000) shares of Preferred Stock, par value $.01 per share (“Preferred Stock”); Fifty-Five Million (55,000,000) shares of Common Stock, par value $.01 per share (“Common Stock”) and Twenty-Seven Million (27,000,000) shares of Class B Common Stock, par value $.01 per share (“Class B Common Stock”). The Common Stock and the Class B Common Stock are hereinafter sometimes collectively referred to as “Corporation Common Stock.”

The following is a statement of the designations, preferences, qualifications, limitations, restrictions and the special or relative rights granted to or imposed upon the shares of each such class.

A. PREFERRED STOCK

1. Issue in Series. Preferred Stock may be issued from time to time in one or more series, each such series to have the terms stated herein or in the resolution of the Board of Directors of the Corporation providing for its issue. All shares of any one series of Preferred Stock will be identical, but shares of different series of Preferred Stock need not be identical or rank equally insofar as provided by law or herein.

2. Creation of Series. The Board of Directors will have authority by resolution to cause to be created one or more series of Preferred Stock, and to determine and fix with respect to each series prior to the issuance of any shares of the series to which such resolution relates:

a. The distinctive designation of the series and the number of shares which will constitute the series, which number may be increased or decreased (but not below the number of shares then outstanding) from time to time by action of the Board of Directors;

b. The rights in respect of dividends (or method of determining the dividends), if any, payable to the holders of shares of the series, and the times of payment of any dividends on the shares of the series, and whether any dividends will be cumulative, and if so, from what date or dates;

c. The price or prices at which, and the terms and conditions on which, the shares of the series may be redeemed at the option of the Corporation, if any;

d. Whether or not the shares of the series will be entitled to the benefit of a retirement or sinking fund to be applied to the purchase or redemption of such shares and, if so entitled, the amount of such fund and the terms and provisions relative to the operation thereof;

e. Whether or not the shares of the series will be convertible into, or exchangeable for, any other shares of stock of the Corporation or other securities, and if so convertible or exchangeable, the conversion price or prices, or the rates of exchange, and any adjustments thereof, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange;

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f. The rights of the shares of the series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation;

g. Whether or not the shares of the series will have priority over or be on a parity with or be junior to the shares of any other series or class in any respect or will be entitled to the benefit of limitations restricting the issuance of shares of any other series or class having priority over or being on a parity with the shares of such series in any respect, or restricting the payment of dividends on or the making of other distributions in respect of shares of any other series or class ranking junior to the shares of the series as to dividends or assets, or restricting the purchase or redemption of the shares of any such junior series or class, and the terms of any such restriction;

h. Whether the series will have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights; and

i. Any other preferences, qualifications, privileges, options and other relative or special rights and limitations of that series.

B. COMMON STOCK AND CLASS B COMMON STOCK

Except as otherwise provided herein, all shares of Common Stock and Class B Common Stock shall be identical and shall entitle the holders thereof to the same rights and privileges.

1. Transfers. The Corporation shall not close its books against the transfer of any share of Corporation Common Stock, or of any share of Corporation Common Stock issued or issuable upon conversion of shares of the other class of Corporation Common Stock, in any manner that would interfere with the timely conversion of such shares of Corporation Common Stock.

2. Subdivision and Combinations of Shares. If the Corporation in any manner subdivides (by stock split, stock dividend or otherwise) or combines (by stock split, stock dividend or otherwise) the outstanding shares of any class of Corporation Common Stock, the outstanding shares of the other class of Corporation Common Stock shall be proportionately subdivided or combined. In no event shall a stock split or stock dividend constitute a payment of Unpaid Preference.

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3. Distributions. At the time of each Distribution, such Distribution shall be made to the holders of the Class B Common Stock and Common Stock in accordance with the following priority:

a. First, the holders of Class B Common Stock shall be entitled to receive all or a portion of such Distribution (allocated ratably among such holders based upon the number of shares of Class B Common Stock held by each such holder as of the time of such Distribution) equal to the aggregate Unpaid Preference on all outstanding shares of Class B Common Stock as of the time of such Distribution, and no Distribution or any portion thereof shall be made under paragraph 3.b below until the entire amount of the Unpaid Preference on the outstanding shares of Class B Common Stock as of the time of such Distribution has been paid in full. The Distributions made pursuant to this paragraph 3.a to holders of Class B Common Stock shall constitute a payment of Distribution Preference on Class B Common Stock.

b. Second, after the required amount of a Distribution has been made in full pursuant to paragraph 3.a above, the holders of Corporation Common Stock as a group, shall be entitled to receive the remaining portion of such Distribution (allocated ratably among such holders based upon the number of shares of Corporation Common Stock held by each such holder as of the time of such Distribution).

c. In the case of any non-liquidating Distribution, such Distribution shall be made to the holders of the Class B Common Stock and Common Stock in the manner and in the priority set forth in paragraphs 3.a and 3.b hereof; provided that if such non-liquidating Distribution shall be payable in shares of Class B Common Stock or Common Stock, the payments in shares of Class B Common Stock shall be payable to holders of Class B Common Stock and the payments in shares of Common Stock shall be payable to holders of Common Stock.

4. Voting Rights. The holders of Class B Common Stock and Common Stock shall have the general right to vote for all purposes, including the election of directors, as provided by law. Each holder of Class B Common Stock and Common Stock shall be entitled to one vote for each share thereof held. The holders of record of Class B Common Stock and holders of record of Common Stock shall vote as a single class on all matters, except as otherwise required by law or this Restated Certificate of Incorporation. In the election of directors, each stockholder shall be entitled to cast for any one candidate no greater number of votes than the number of shares held by such stockholder; no stockholder shall be entitled to cumulate votes on behalf of any candidate. The affirmative vote of the

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holders of a majority of the outstanding Class B Common Stock, voting separately as a class, shall be required for any amendment, alteration or repeal (including by merger, consolidation or otherwise by operation of law) of any provision of this Restated Certificate of Incorporation that would adversely affect the powers, privileges or rights of the Class B Common Stock or the holders thereof in such capacity (in either case except for changes affecting only those powers, privileges or rights shared by both classes of Corporation Common Stock and affecting such powers, privileges or rights equally with respect to both classes of Corporation Common Stock).

5. Merger, etc. In connection with any merger, consolidation, or recapitalization in which holders of Class B Common Stock or Common Stock generally receive, or are given the opportunity to receive, consideration for their shares, all payments shall be made to the holders of Class B Common Stock and Common Stock in the manner and in the priority set forth in paragraphs 3.a and 3.b hereof in such a manner as will preserve the economic intent of such paragraphs.

6. Conversion.

a. At any time and from time to time any holder of Class B Common Stock may, at such holder’s option, convert all or any portion of such holder’s shares of Class B Common Stock into an equal number of fully paid and nonassessable shares of Common Stock by: (A) if such shares are held in certificated form, delivery and surrender to the Corporation of the certificates representing the shares of Class B Common Stock to be so converted or (B) if such shares are held in book-entry form, delivery of written notice to the Corporation. Any conversion pursuant to this Section 4.B.6.a shall be deemed to have been effected at the time of such surrender or delivery of such written notice, as the case may be. Upon such surrender or delivery of written notice pursuant to this Section 4.B.6.a, the Corporation shall deliver or cause to be delivered to or upon the written order of the record owner of such shares of Class B Common Stock certificates representing the number of fully paid and nonassessable shares of Common Stock into which the shares of Class B Common Stock represented by such surrendered certificates or covered by such written notice, as the case may be, have been converted in accordance with the provisions of this Section 4.B.6.a.

b. The Corporation will pay any and all documentary, stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock on the conversion of shares of Class B Common Stock pursuant to this Section 4.B.6; provided, however, that the

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Corporation shall not be required to pay any tax which may be payable in respect of any registration of transfer involved in the issue or delivery of shares of Common Stock in a name other than that of the record owner of Class B Common Stock converted or to be converted, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Corporation the amount of any such tax or has established, to the reasonable satisfaction of the Corporation, that such tax has been paid.

c. As long as any shares of Class B Common Stock shall be outstanding, the Corporation shall reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of shares of Class B Common Stock, that number of shares of Common Stock necessary to effect the conversion of all of the then outstanding shares of Class B Common Stock. If at any time, the Board of Directors of the Corporation determines that the number of authorized but unissued shares of Common Stock would be insufficient to effect the conversion of all of the then outstanding shares of Class B Common Stock, the Corporation shall take such action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient to effect such conversion.

d. Upon the conversion of all or any portion of Class B Common Stock pursuant to Section 4.B.6, the Class B Common Stock so converted shall be cancelled and retired and may not be reissued. Following the conversion pursuant to this Section 4.B.6 of all outstanding shares of Class B Common Stock and the filing of a certificate of retirement with the Secretary of State of the State of Delaware in accordance with Section 243 of the DGCL, all references in this Restated Certificate of Incorporation to Corporation Common Stock shall be deemed to refer only to the Common Stock.

7. Preemptive Rights. Neither holders of the Common Stock nor holders of Class B Common Stock shall have preemptive rights.

8. Restrictions on Issuance. Except for issuances of shares of Class B Common Stock required pursuant to Section 4.B.2 hereof, no more than 26,492,897 shares of Class B Common Stock (as proportionately adjusted for all stock splits, stock dividends and other recapitalizations affecting the Class B Common Stock) may be issued by the Corporation.

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9. Definitions.

“Distribution” means each distribution made by the Corporation to holders of capital stock, whether in cash, property, or securities of the Corporation and whether by dividend, liquidating distributions or otherwise; provided that none of the following shall be a Distribution: (a) any redemption or repurchase by the Corporation of any capital stock held by an employee, director or former employee or director of the Corporation or any of its subsidiaries or (b) any exchange of any capital stock, or any subdivision (by stock split, stock dividend or otherwise) or any combination (by stock split, stock dividend or otherwise) of any outstanding shares of capital stock.

“Distribution Preference” of each share of Class B Common Stock shall be equal to $1.13237899199925 (as proportionally adjusted for all stock splits, stock dividends and other recapitalizations affecting the Class B Common Stock).

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a government or any branch, department, agency, political subdivision or official thereof.

“Unpaid Preference” of any share of Class B Common Stock means an amount equal to the excess, if any, of (a) $1.13237899199925 per share (as proportionally adjusted for all stock splits, stock dividends and other recapitalizations affecting the Class B Common Stock), over (b) the aggregate amount of Distributions made by the Corporation that constitute a return of Distribution Preference of such share.

5. Business Combinations with Interested Stockholders. The Corporation elects not to be governed by section 203 of the Delaware General Corporation Law (“DGCL”) immediately upon filing of this certificate pursuant to DGCL section 203(b)(1).

6. Bylaws. The board of directors of the Corporation is authorized to adopt, amend or repeal the bylaws of the Corporation, except as otherwise specifically provided therein.

7. Elections of Directors. Elections of directors need not be by written ballot unless the bylaws of the Corporation shall so provide.

8. Right to Amend. Except for any amendments that require the approval of the holders of the Class B Common Stock voting as a separate class as set forth herein, the Corporation reserves the right to amend any provision contained in this Restated Certificate of Incorporation as the same may from time to time be in effect in the manner now or hereafter prescribed by law, and all rights conferred on stockholders or others hereunder are subject to such reservation.

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9. Limitation on Liability. The directors of the Corporation shall be entitled to the benefits of all limitations on the liability of directors generally that are now or hereafter become available under the DGCL. Without limiting the generality of the foregoing, no director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. Any repeal or modification of this Section 9 shall be prospective only, and shall not affect, to the detriment of any director, any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification.

10. Indemnification.

A. A director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the DGCL.

B. 1. Each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the DGCL. The right to indemnification conferred in this Section 10 shall also include the right to be paid by the Corporation the expenses incurred in connection with any such proceeding in advance of its final disposition to the fullest extent authorized by the DGCL. The right to indemnification conferred in this Section 10 shall be a contract right.

2. The Corporation may, by action of its Board of Directors, provide indemnification to such of the employees and agents of the Corporation to such extent and to such effect as the Board of Directors shall determine to be appropriate and authorized by the DGCL.

C. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the DGCL.

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D. The rights and authority conferred in this Section 10 shall not be exclusive of any other right which any person may otherwise have or hereafter acquire.

E. Neither the amendment nor repeal of this Section 10, nor the adoption of any provision of this Restated Certificate of Incorporation or the bylaws of the Corporation, nor, to the fullest extent permitted by the DGCL, any modification of law, shall eliminate or reduce the effect of this Section 10 in respect of any acts or omissions occurring prior to such amendment, repeal, adoption or modification.

IN WITNESS WHEREOF, the undersigned has caused this Restated Certificate of Incorporation to be signed by Michael B. Moneymaker its Executive Vice President, Chief Financial Officer, Secretary and Treasurer on February 13, 2006.

NTELOS HOLDINGS CORP.

/s/ Michael B. Moneymaker

Michael B. Moneymaker

Executive Vice President, Chief Financial Officer, Secretary and Treasurer

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EX-3.2

Exhibit 3.2

AMENDED AND RESTATED BYLAWS

OF

NTELOS HOLDINGS CORP.

(Effective February 13, 2006)

ARTICLE 1

OFFICES

Section 1.01. Registered Office. The registered office of the Corporation within the State of Delaware shall be in the City of Wilmington, County of New Castle, and the name of the registered agent shall be Corporation Service Company.

Section 1.02. Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.

Section 1.03. Books. The books of the Corporation may be kept within or without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE 2

MEETINGS OF STOCKHOLDERS

Section 2.01. Time and Place of Meetings. All meetings of stockholders shall be held at such place, either within or without the State of Delaware, on such date and at such time as may be determined from time to time by the Board of Directors (or the Chairman in the absence of a designation by the Board of Directors).

Section 2.02. Annual Meetings. An annual meeting of stockholders, commencing with the year 2006, shall be held on such date and at such time as may be fixed by the Board of Directors for the election of directors, and to transact such other business as may properly be brought before the meeting. Stockholders may, unless the restated certificate of incorporation otherwise provides, act by written consent to elect directors to the extent permitted by Section 2.07 of these bylaws. If such consent is less than unanimous, an annual meeting must still be held unless all of the directorships to which directors could be elected at an annual meeting held at the effective time of such action are vacant and are filled by such action.

Section 2.03. Special Meetings. Special meetings of stockholders may be called by the Board of Directors or the Chairman of the Board and shall be called by the Secretary at the request in writing of stockholders holding not less than 20% of the number of outstanding shares of capital stock entitled to vote at the meeting of stockholders. Such request shall state the purpose or purposes of the proposed meeting.

Section 2.04. Notice of Meetings and Adjourned Meetings; Waivers of Notice. (a) Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting, delivered either personally, by mail or by electronic transmission as permitted by law, shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (“Delaware Law”), such notice shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder of record entitled to vote at such meeting. Unless these bylaws otherwise require, when a meeting is adjourned to another time or place (whether or not a quorum is present), notice need not be given of the adjourned meeting if the time, place, if any, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

(b) A written waiver of any such notice signed by the person entitled thereto, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 2.05. Quorum. Unless otherwise provided under the restated certificate of incorporation or these bylaws and subject to Delaware Law, the presence, in person or by proxy, of the holders of a majority of the outstanding capital stock of the Corporation entitled to vote at a meeting of stockholders shall constitute a quorum for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders present in person or represented by proxy shall adjourn the meeting, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified.

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Section 2.06. Voting. (a) Unless otherwise provided in the restated certificate of incorporation and subject to Delaware Law, each stockholder shall be entitled to one vote for each outstanding share of capital stock of the Corporation held by such stockholder. Any share of capital stock of the Corporation held by the Corporation shall have no voting rights. Unless otherwise provided in Delaware Law, the restated certificate of incorporation, or these bylaws, the affirmative vote of a majority of the shares of capital stock of the Corporation present, in person or by written proxy, at a meeting of stockholders and entitled to vote on the subject matter shall be the act of the stockholders.

(b) Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to a corporate action in writing without a meeting may authorize another person or persons to act for him by written proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period.

Section 2.07. Action by Consent. (a) Unless otherwise provided in the restated certificate of incorporation and subject to Section 2.07(c) hereof, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding capital stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take the action were delivered to the Corporation as provided in Section 2.07(b).

(b) Every written consent shall bear the date of signature of each stockholder who signs the consent, and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered in the manner required by this section and Delaware Law to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.

(c) Notwithstanding anything contained herein to the contrary, if at any time the CVC Entities and the Quadrangle Entities no longer collectively beneficially own (determined

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pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of 1934), in the aggregate, at least 50.1% of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, then any action required or permitted to be taken by the stockholders of the corporation (except for actions required to be taken by the holders of Corporation’s Class B Common Stock voting as a separate class) must be effected at a duly called annual or special meeting of such holders and may no longer be effected by any consent in writing by such holders.

(d) As used herein: (1) “CVC Entities” means the persons and entities identified as “CVC Entities” in the Shareholders Agreement and their “Permitted Transferees” under the Shareholders Agreement; (2) “Quadrangle Entities” means the entities identified as “Quadrangle Entities” in the Shareholders Agreement and their “Permitted Transferees” under the Shareholders Agreement; and (3) “Shareholders Agreement” means the Shareholders Agreement, dated as of May 2, 2005, as amended and restated as of February 13, 2006, among the Corporation, the Institutional Shareholders party thereto and the Management Shareholders party thereto.

Section 2.08. Organization. At each meeting of stockholders, the Chairman of the Board, if one shall have been elected, or in the Chairman’s absence or if one shall not have been elected, the director designated by the vote of the majority of the directors present at such meeting, shall act as chairman of the meeting. The Secretary (or in the Secretary’s absence or inability to act, the person whom the chairman of the meeting shall appoint secretary of the meeting) shall act as secretary of the meeting and keep the minutes thereof.

Section 2.09. Order of Business. The order of business at all meetings of stockholders shall be as determined by the chairman of the meeting.

Section 2.10. Notice of Stockholder Business and Nominations. (a) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders at an annual meeting of stockholders may be made (i) by or at the direction of the Board of Directors, or (ii) by any stockholder of the Corporation who is entitled to vote at the meeting, who complies with the notice procedures set forth in clauses (b), (c) and (d) of this Section 2.10 and who was a stockholder of record at the time such notice is delivered to the Secretary or any Assistant Secretary of the Corporation.

(b) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (ii) of paragraph (a) of this Section 2.10, the stockholder must have given timely notice thereof in writing to the Secretary or any Assistant Secretary of the Corporation. To be timely, a stockholder’s notice must be given, either by personal delivery or by United States certified mail, postage prepaid, and received at the principal executive offices of the Corporation (i) not less than 120 days nor more than 150 days before the first anniversary of the date of the Corporation’s proxy statement in connection with the last annual meeting of stockholders or (ii) if no annual meeting was held in the previous year or the date of the applicable annual meeting has been changed by more than 30 days from the date of the previous year’s annual meeting, not less than 10 days following the earlier of the day on which notice of

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the meeting date was mailed and the public announcement of such meeting date. In no event shall the adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described above.

(c) For nominations, such stockholder’s notice shall set forth (i) as to each person whom the stockholder proposes to nominate for election as a director, (A) the name, age, business address and residential address of such person, (B) the principal occupation or employment of such person, (C) the class, series and number of shares of stock of the Corporation that are beneficially owned by such person, (D) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors or is otherwise required by the rules and regulations of the Securities and Exchange Commission promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”) and (E) the written consent of such person to be named in the proxy statement as a nominee and to serve as a director if elected and (ii) as to the stockholder giving the notice, (A) the name, and business address and residential address, as they appear on the Corporation’s stock transfer books, of such stockholder, (B) a representation that such stockholder is a stockholder of record and intends to appear in person or by proxy at such meeting to nominate the person or persons specified in the notice, (C) the class, series and number of shares of stock of the Corporation beneficially owned by such stockholder and (D) a description of all arrangements or understandings between such stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by such stockholder. The Secretary or any Assistant Secretary shall deliver each such stockholder’s notice that has been timely received to the Board of Directors or a committee designated by the Board of Directors for review.

(d) As to any other business that the stockholder proposes to bring before the meeting, such stockholder’s notice shall set forth (A) a brief description of the business desired to be brought before the annual meeting, including the complete text of any resolutions to be presented at the annual meeting, and the reasons for conducting such business at the annual meeting, (B) the name, business address and residential address, as they appear on the Corporation’s stock transfer books, of such stockholder proposing such business, (C) a representation that such stockholder is a stockholder of record and intends to appear in person or by proxy at such meeting to bring the business before the meeting specified in the notice, (D) the class, series and number of shares of stock of the Corporation beneficially owned by the stockholder and (E) any material interest of the stockholder in such business. The Secretary or any Assistant Secretary shall deliver each such stockholder’s notice that has been timely received to the Board of Directors or a committee designated by the Board of Directors for review.

(e) Only such business as shall have been brought before a special meeting of the stockholders pursuant to the Corporation’s notice of meeting pursuant to Section 2.04 of these bylaws shall be conducted at such meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting by or at the direction of the Board of Directors. Nominations by stockholders of persons for election to the Board of Directors may be made at

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such special meeting of stockholders if the stockholder’s notice as required by Section 2.10(c) of these bylaws shall be delivered to the Secretary or any Assistant Secretary at the principal executive offices of the Corporation not earlier than the 150th day prior to such special meeting and not later than the close of business on the later of the 120th day prior to such special meeting or the 10^th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the adjournment of a special meeting commence a new time period for the giving of a stockholder’s notice as described above.

(f) Only persons who are nominated in accordance with the procedures set forth in these bylaws shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in these bylaws. Except as otherwise provided by law, the restated certificate of incorporation or herein, the Chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in these bylaws and, if any proposed nomination or business is not in compliance with these bylaws, to declare that such defective proposal or nomination shall be disregarded.

(g) For purposes of these bylaws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14, or 15(d) of the Exchange Act.

(h) Notwithstanding the foregoing provisions of these bylaws, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in these bylaws shall be deemed to affect any right of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

ARTICLE 3

DIRECTORS

Section 3.01. General Powers. Except as otherwise provided in Delaware Law or the restated certificate of incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

Section 3.02. Number, Election and Term Of Office. The Board of Directors shall consist of the number of directors as the Board of Directors may determine from time to time, subject to compliance with Section 2.01 of the Shareholders Agreement. The directors shall be elected by a plurality of the votes cast at each meeting of the stockholders for the election of directors, provided a quorum is present. Each director so elected shall hold office until such

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director’s successor is elected and qualified or until such director’s earlier death, resignation or removal. Directors need not be stockholders.

Section 3.03. Quorum and Manner of Acting. The required quorum for Board action shall consist of a majority of the directors in office, which such majority shall include at least one non-independent designee of the CVC Entities and at least one non-independent designee of the Quadrangle Entities, respectively, for so long as the CVC Entities and Quadrangle Entities, respectively, are entitled to designate one or more directors pursuant to the Shareholders Agreement. When a meeting is adjourned to another time or place (whether or not a quorum is present), notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Board of Directors may transact any business which might have been transacted at the original meeting. If a quorum shall not be present at any meeting of the Board of Directors the directors present thereat shall adjourn the meeting, from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 3.04. Time and Place of Meetings. The Board of Directors shall hold its meetings at such place, either within or without the State of Delaware, and at such time as may be determined from time to time by the Board of Directors (or the Chairman in the absence of a determination by the Board of Directors).

Section 3.05. Annual Meeting. The Board of Directors shall meet for the purpose of organization, the election of officers and the transaction of other business, as soon as practicable after each annual meeting of stockholders, on the same day and at the same place where such annual meeting shall be held. Notice of such meeting need not be given. In the event such annual meeting is not so held, the annual meeting of the Board of Directors may be held at such place either within or without the State of Delaware, on such date and at such time as shall be specified in a notice thereof given as hereinafter provided in Section 3.07 herein or in a waiver of notice thereof signed by any director who chooses to waive the requirement of notice.

Section 3.06. Regular Meetings. After the place and time of regular meetings of the Board of Directors shall have been determined and notice thereof shall have been once given to each member of the Board of Directors, regular meetings may be held without further notice being given.

Section 3.07. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board or the President or any two directors. Notice of special meetings of the Board of Directors shall be given to each director at least twenty-four hours before the date of the meeting in such manner as is determined by the Board of Directors.

Section 3.08. Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and

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not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders, any action or matter expressly required by Delaware Law to be submitted to the stockholders for approval,(b) adopting, amending or repealing any bylaw of the Corporation or (c) fixing the number of directors to constitute the full Board of Directors pursuant to Section 3.02 of these bylaws or Section 2.01 of the Shareholders Agreement. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Section 3.09. Action by Consent. Unless otherwise restricted by the restated certificate of incorporation, the Shareholders Agreement or these bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions, are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

Section 3.10. Telephonic Meetings. Unless otherwise restricted by the restated certificate of incorporation or these bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or such committee, as the case may be, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

Section 3.11. Resignation. Any director may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the Secretary of the Corporation. The resignation of any director shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 3.12. Vacancies. Unless otherwise provided in the restated certificate of incorporation, all vacancies shall be filled in accordance with Section 2.03 of the Shareholders Agreement and otherwise by the majority vote of the remaining directors of the Corporation at the next meeting of the Board of Directors, even if there is less than a quorum.

Section 3.13. Removal. A director may only be removed in accordance with Section 2.02 of the Shareholders Agreement and otherwise by the affirmative vote of the holders of a majority of the combined voting power of the then outstanding stock of the Corporation entitled

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to vote generally in the election of directors at any meeting of such stockholders called expressly for that purpose and at which a quorum of stockholders is present.

Section 3.14. Compensation. Unless otherwise restricted by the restated certificate of incorporation or these bylaws, the Board of Directors shall have authority to fix the compensation of directors, including fees and reimbursement of expenses.

Section 3.15 . Election and Duties of the Chairman of the Board. A Chairman of the Board shall be elected by the Board of Directors and hold office until the next annual meeting of the Board of Directors or until his or her successor is elected. The Chairman of the Board will preside at the meetings of the Board of Directors, and shall have such other powers and duties as may be conferred upon him or her by the Board of Directors.

ARTICLE 4

OFFICERS

Section 4.01. Principal Officers. The principal officers of the Corporation shall be a Chief Executive Officer, a President, one or more Vice Presidents, a Treasurer and a Secretary who shall have the duty, among other things, to record the proceedings of the meetings of stockholders and directors in a book kept for that purpose. The Corporation may also have such other principal officers, including one or more Controllers, as the Board may in its discretion appoint. One person may hold the offices and perform the duties of any two or more of said offices, except that no one person shall hold the offices and perform the duties of President and Secretary.

Section 4.02. Election, Term of Office and Remuneration. The principal officers of the Corporation shall be elected annually by the Board of Directors at the annual meeting thereof. Each such officer shall hold office until his successor is elected and qualified, or until his earlier death, resignation or removal. The remuneration of all officers of the Corporation shall be fixed by the Board of Directors. Any vacancy in any office shall be filled in such manner as the Board of Directors shall determine.

Section 4.03. Subordinate Officers. In addition to the principal officers enumerated in Section 4.01 herein, the Corporation may have one or more Assistant Treasurers, Assistant Secretaries and Assistant Controllers and such other subordinate officers, agents and employees as the Board of Directors may deem necessary, each of whom shall hold office for such period as the Board of Directors may from time to time determine. The Board of Directors may delegate to any principal officer the power to appoint and to remove any such subordinate officers, agents or employees.

Section 4.04. Removal. Except as otherwise permitted with respect to subordinate officers, any officer may be removed, with or without cause, at any time, by resolution adopted by the Board of Directors.

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Section 4.05. Resignations. Any officer may resign at any time by giving written notice to the Board of Directors (or to a principal officer if the Board of Directors has delegated to such principal officer the power to appoint and to remove such officer). The resignation of any officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 4.06. Powers and Duties. The officers of the Corporation shall have such powers and perform such duties incident to each of their respective offices and shall have such other duties as may from time to time be conferred upon or assigned to them by the Board of Directors.

ARTICLE 5

GENERAL PROVISIONS

Section 5.01. Fixing the Record Date. (a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided that the Board of Directors may fix a new record date for the adjourned meeting.

(b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by Delaware Law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by Delaware Law, the record date for determining stockholders entitled to consent to corporate action in

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writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

(c) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 5.02. Dividends. Subject to limitations contained in Delaware Law and the restated certificate of incorporation, the Board of Directors may declare and pay dividends upon the shares of capital stock of the Corporation, which dividends may be paid either in cash, in property or in shares of the capital stock of the Corporation.

Section 5.03. Year. The fiscal year of the Corporation shall commence on January 1 and end on December 31 of each year.

Section 5.04. Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.

Section 5.05. Voting of Stock Owned by the Corporation. The Board of Directors may authorize any person, on behalf of the Corporation, to attend, vote at and grant proxies to be used at any meeting of stockholders of any corporation (except this Corporation) in which the Corporation may hold stock.

Section 5.06. Amendments. These bylaws or any of them, may be altered, amended or repealed, or new bylaws may be made, by the stockholders entitled to vote thereon at any annual or special meeting thereof or by the Board of Directors.

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EX-4.3

Exhibit 4.3

AMENDED AND RESTATED

SHAREHOLDERS AGREEMENT

dated as of

February 13, 2006

among

NTELOS HOLDINGS CORP.,

QUADRANGLE CAPITAL PARTNERS LP,

QUADRANGLE SELECT PARTNERS LP,

QUADRANGLE CAPITAL PARTNERS-A LP,

CITIGROUP VENTURE CAPITAL EQUITY PARTNERS, L.P.,

CVC/SSB EMPLOYEE FUND, L.P.,

CVC EXECUTIVE FUND LLC

and

THE MANAGEMENT SHAREHOLDERS NAMED HEREIN

AMENDED AND RESTATED

SHAREHOLDERS AGREEMENT

AMENDED AND RESTATED SHAREHOLDERS AGREEMENT (this “Agreement”) dated as of February 13, 2006 among (i) NTELOS Holdings Corp., a Delaware corporation (the “Company”), (ii) Quadrangle Capital Partners LP, a Delaware limited partnership, Quadrangle Select Partners LP, a Delaware limited partnership, and Quadrangle Capital Partners-A LP, a Delaware limited partnership (collectively, the “Quadrangle Entities”), (iii) Citigroup Venture Capital Equity Partners, L.P., a Delaware limited partnership (“CVC Equity”), CVC/SSB Employee Fund, L.P., a Delaware limited partnership, CVC Executive Fund LLC, a Delaware limited liability company and the other Persons listed on the signature pages hereof under “CVC Entities” (collectively, the “CVC Entities” and, together with the Quadrangle Entities, the “Institutional Shareholders”) and (iv) the Persons listed on the signature pages hereof under “Management Shareholders” (the “Management Shareholders”).

W I T N E S S E T H :

WHEREAS, pursuant to the Transaction Agreement (as defined below) certain parties hereto own or will be acquiring Company Securities (as defined below);

WHEREAS, the parties listed on the signature pages hereof entered into the Shareholder Agreement dated May 2, 2005 (the “Original Agreement”) to govern certain of their rights, duties and obligations after consummation of the transactions contemplated by the Transaction Agreement;

WHEREAS, in connection with the consummation of the First Public Offering (as defined herein), in accordance with Section 7.04 of the Original Agreement the parties executing the signature pages to this Agreement wish to amend and restate the Original Agreement in its entirety;

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01. Definitions. (a) The following terms, as used herein, have the following meanings:

“Adjusted Cost Price” means, with respect to each of the Unvested Incentive Shares, the original purchase price paid by the applicable Management

Shareholder for such Unvested Incentive Shares (including any Unvested Incentive Shares which have been converted into other shares of capital of the Company, and adjusted for any stock dividend payable upon, or subdivision or combination of, the Unvested Incentive Shares).

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person, provided that no securityholder of the Company shall be deemed an Affiliate of any other securityholder solely by reason of any investment in the Company. For the purpose of this definition, the term “control” (including with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Aggregate Ownership” means, with respect to any Shareholder or group of Shareholders, and with respect to any class of Company Securities, the total amount of such class of Company Securities “beneficially owned” (as such term is defined in Rule 13d-3 of the Exchange Act) (without duplication) by such Shareholder or group of Shareholders as of the date of such calculation, calculated on a Fully Diluted basis.

“Board” means the board of directors of the Company.

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized by law to close.

“Bylaws” means the Bylaws of the Company, as amended and restated and thereafter amended from time to time.

“Cause” shall exist with respect to a Management Shareholder if such Management Shareholder has (i) committed an act of fraud, embezzlement, misappropriation or breach of fiduciary duty against the Company or any Subsidiary of the Company or a felony involving the business, assets, customers or clients of the Company or any Subsidiary of the Company or has been convicted by a court of competent jurisdiction or has plead guilty or nolo contendere to any other felony; (ii) committed a material breach of any written confidentiality, non-compete, non-solicitation or business opportunity covenant contained in any agreement entered into by such Management Shareholder and the Company or any of its Affiliates; or (iii) substantially failed to perform such Management Shareholder’s duties to the Company or any Subsidiary, including by committing a material breach of any written covenant contained in any

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agreement entered into by such Management Shareholder and the Company or any Subsidiary of the Company (other than a confidentiality, non-compete, non-solicitation or business opportunity covenant) after written notice and an opportunity to cure (not to exceed 30 days) (it being understood that conduct pursuant to a Management Shareholder’s exercise of good faith business judgment should not constitute “Cause”).

“Change-of-Control” means, with respect to the Company, (i) the acquisition by any Person or any such “group” (other than the Institutional Shareholders and their Permitted Transferees) of securities of the Company representing more than 51% of the combined voting power of the Company’s then outstanding voting securities with respect to matters submitted to a vote of the stockholders generally or (ii) a sale or transfer by the Company of substantially all of the consolidated assets of the Company and its Subsidiaries to a Person that is not an Affiliate of the Company prior to such sale or transfer.

“Charter” means the Amended and Restated Certificate of Incorporation of the Company, as the same may be amended from time to time.

“Class B Common Stock” means the Class B Common Stock, par value $.01 per share, of the Company having the rights described in the Charter and any stock into which such Class B Common Stock may thereafter be converted or changed. “Class B Common Shares” means shares of Class B Common Stock.

“Closing Date” means May 2, 2005.

“Code” means the Internal Revenue Code of 1986.

“Common Stock” means the Common Stock, par value $.01 per share, of the Company having the rights, including voting rights, described in the Charter and any stock into which such Common Stock may thereafter be converted or changed. “Common Shares” means shares of Common Stock.

“Company Common Stock” means the Common Stock and the Class B Common Stock. “Company Common Shares” means shares of Company Common Stock.

“Company Securities” means (i) the Company Common Stock, (ii) securities convertible into or exchangeable for Company Common Stock, and (iii) options, warrants or other rights to acquire Company Common Stock or any other equity or equity-linked security issued by the Company.

“Exchange Act” means the Securities Exchange Act of 1934.

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“Fair Market Value” means, with respect to any purchase of Unvested Incentive Shares pursuant to Section 4.04, the fair market value as determined by the Board in its good faith judgment, using commonly accepted valuation techniques where applicable, based upon the amount that would be recovered by the holder of such Unvested Incentive Share if all of the capital stock of the Company were sold to a buyer in a single transaction and the proceeds from such transaction were allocated to the holders of the capital stock of the Company as if the proceeds were distributed in a liquidation of the Company pursuant to the Charter.

“First Public Offering” means the initial Public Offering being consummated in connection with the execution of this amendment and restatement to the Original Agreement.

“Five Percent Shareholder” means a Shareholder whose Aggregate Ownership of Company Common Shares divided by the Aggregate Ownership of such Company Common Shares by all Shareholders is 5% or more.

“Fully Diluted” means, with respect to any class of Company Securities, all outstanding shares of such class of Company Securities and all shares issuable in respect of securities convertible into or exchangeable for such shares, all stock appreciation rights, options, warrants and other rights to purchase or subscribe for shares of such class of Company Securities or securities convertible into or exchangeable for shares of such class of Company Securities.

“GAAP” means generally accepted accounting principles in the United States.

“Incentive Shares” means any and all of the Company Common Shares issued in respect of the Company’s formerly outstanding shares of Class A Common Stock, par value $.01 per share, and all other securities of the Company (or a successor to the Company) received on account of ownership of such Company Common Shares, including any and all securities issued in connection with any merger, consolidation, stock dividend, stock distribution, stock split, reverse stock split, stock combination, recapitalization, reclassification, subdivision, conversion or similar transaction in respect thereof.

“Independent Director” means a member of the Board who is “independent” as and to the extent defined by, and who otherwise satisfies the “independence” requirements for a member of a board of directors as set forth in, the applicable rules and regulations from time to time promulgated by the Nasdaq Stock Market, Inc. and the SEC.

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“Joint Venture” means any joint venture, partnership or other similar arrangement of which the Company or any Subsidiary is a member.

“NASD” means the National Association of Securities Dealers, Inc.

“Permitted Transferee” means

(i) in the case of any Quadrangle Entity, (A) any other Quadrangle Entity, (B) any general or limited partner of any Quadrangle Entity, and any corporation, partnership or other Person that is an Affiliate of any such general or limited partner (collectively, “Quadrangle Affiliates”), (C) any managing director, general partner, director, limited partner, officer or employee of any Quadrangle Entity or any Quadrangle Affiliate, or any spouse, lineal descendent, sibling, parent, heir, executor, administrator, testamentary trustee, legatee or beneficiary of any of the foregoing persons described in this clause (C) (collectively, “Quadrangle Associates”), or (D) any trust the beneficiaries of which, any charitable trust the grantor of which or any corporation, limited liability company or partnership the stockholders, members or general or limited partners of which, include only the Quadrangle Entities, Quadrangle Affiliates, Quadrangle Associates, their spouses or their lineal descendants;

(ii) in the case of any CVC Entity, (A) any other CVC Entity, (B) any general or limited partner of CVC Entity, and any corporation, partnership or other Person that is an Affiliate of any such general or limited partner (collectively, “CVC Affiliates”), (C) any managing director, general partner, director, limited partner, officer or employee of any CVC Entity or any CVC Affiliate, or any spouse, lineal descendent, sibling, parent, heir, executor, administrator, testamentary trustee, legatee or beneficiary of any of the foregoing persons described in this clause (C) (collectively, “CVC Associates”), or (D) any trust the beneficiaries of which, any charitable trust the grantor of which or any corporation, limited liability company or partnership the stockholders, members or general or limited partners of which, include only the CVC Entities, CVC Affiliates, CVC Associates, their spouses or their lineal descendants; and

(iii) in the case of any Management Shareholder, (A) a Person to whom Company Common Shares are Transferred from such Management Shareholder (1) by will or the laws of descent and distribution or (2) by gift without consideration of any kind, provided that, in the case of clause (2), such transferee is the spouse or the lineal descendant, sibling or parent of such Management Shareholder, or (B) a

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trust that is for the exclusive benefit of such Management Shareholder or its Permitted Transferees under (A) above.

“Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Public Offering” means an underwritten public offering of Registrable Securities of the Company pursuant to an effective registration statement under the Securities Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form or a registration statement relating to a Unit Offering.

“Registrable Securities” means, at any time, any Company Common Shares until (i) a registration statement covering such Company Common Shares has been declared effective by the SEC and such Company Common Shares have been disposed of pursuant to such effective registration statement, (ii) such Company Common Shares are sold under circumstances in which all of the applicable conditions of Rule 144 (or any similar provisions then in force) under the Securities Act are met or such Company Common Shares may be sold pursuant to Rule 144(k) or (iii) such Company Common Shares are otherwise Transferred, the Company has delivered a new certificate or other evidence of ownership for such Company Common Shares not bearing the legend required pursuant to this Agreement and such Company Common Shares may be resold without subsequent registration under the Securities Act; provided that in no event shall any Unvested Incentive Shares be considered Registrable Securities.

“Registration Expenses” means any and all expenses incident to the performance of or compliance with any registration or marketing of securities, including all (i) registration and filing fees, and all other fees and expenses payable in connection with the listing of securities on any securities exchange or automated interdealer quotation system, (ii) fees and expenses of compliance with any securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection with “blue sky” qualifications of the securities registered), (iii) expenses in connection with the preparation, printing, mailing and delivery of any registration statements, prospectuses and other documents in connection therewith and any amendments or supplements thereto, (iv) security engraving and printing expenses, (v) internal expenses of the Company (including all salaries and expenses of its officers and employees performing legal or accounting duties), (vi) reasonable fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses relating to any comfort letters or costs associated with the delivery by independent certified

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public accountants of any comfort letters requested pursuant to Section 5.04(h)), (vii) reasonable fees and expenses of any special experts retained by the Company in connection with such registration, (viii) reasonable fees and expenses of the Shareholders, including one counsel for all of the Shareholders participating in the offering selected (A) by the Institutional Shareholders, in the case of any offering in which such Shareholders participate, or (B) in any other case, by the Shareholders holding the majority of the Registrable Securities to be sold for the account of all Shareholders in the offering, (ix) fees and expenses in connection with any review by the NASD of the underwriting arrangements or other terms of the offering, and all fees and expenses of any “qualified independent underwriter,” including the fees and expenses of any counsel thereto, (x) fees and disbursements of underwriters customarily paid by issuers or sellers of securities, but excluding any underwriting fees, discounts and commissions attributable to the sale of Registrable Securities, (xi) costs of printing and producing any agreements among underwriters, underwriting agreements, any “blue sky” or legal investment memoranda and any selling agreements and other documents in connection with the offering, sale or delivery of the Registrable Securities, (xii) transfer agents’ and registrars’ fees and expenses and the fees and expenses of any other agent or trustee appointed in connection with such offering, (xiii) expenses relating to any analyst or investor presentations or any “road shows” undertaken in connection with the registration, marketing or selling of the Registrable Securities, (xiv) fees and expenses payable in connection with any ratings of the Registrable Securities, including expenses relating to any presentations to rating agencies and (xv) all out-of pocket costs and expenses incurred by the Company or its appropriate officers in connection with their compliance with Section 5.04(m).

“Rule 144” means Rule 144 (or any successor provisions) under the Securities Act.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933.

“Shareholder” means each Person (other than the Company) who shall be a party to or bound by this Agreement, whether in connection with the execution and delivery of the Original Agreement, pursuant to Sections 3.03 or 7.03 or otherwise, so long as such Person shall “beneficially own” (as such term is defined in Rule 13d-3 of the Exchange Act) any Company Securities.

“Subsidiary” means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a

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majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person.

“Termination with Cause” means termination of a Management Shareholder’s employment with the Company and all of its Subsidiaries that is determined by the Board acting in good faith to be a Termination for Cause.

“Termination without Cause” means any termination of a Management Shareholder’s employment by the Company and all of its Subsidiaries that is not determined by the Board acting in good faith to be a Termination with Cause.

“Transaction Agreement” means the Transaction Agreement dated as of January 18, 2005 by and among NTELOS Inc., Project Holdings Corp. (as predecessor to the Company), Project Merger Sub Corp. and certain shareholder signatories thereto, as amended.

“Transfer” means, with respect to any Company Security, (i) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer such security or any participation or interest therein, whether directly or indirectly, or agree or commit to do any of the foregoing and (ii) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation or other transfer of such security or any participation or interest therein or any agreement or commitment to do any of the foregoing.

“Unit Offering” shall mean a Public Offering of a combination of debt and equity securities of the Company in which (i) not more than ten percent (10%) of the gross proceeds received from the sale of such securities is attributed to such equity securities, and (ii) after giving effect to such offering, the Company does not have a class of equity securities required to be registered under the Exchange Act.

“Unvested Incentive Shares” means that portion of the aggregate Incentive Shares held by the applicable Management Shareholder that does not consist of Vested Incentive Shares.

“Vested Incentive Shares” means that portion of the aggregate Incentive Shares held by the applicable Management Shareholder equal to the following percentages: (i) after consummation of the First Public Offering and on or prior to May 2, 2007, 50%; (ii) after May 2, 2007 and on or prior to May 2, 2008, 75%; and (iii) after May 2, 2008, 100%; provided that upon (x) a Change-of-Control, 100% of the Incentive Shares held by any single Management Shareholder will become Vested Incentive Shares and (y) a Termination without Cause of such Management Shareholder after May 2, 2006, an additional portion of such

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Management Shareholder’s Incentive Shares scheduled to become Vested Incentive Shares by the next anniversary of the Closing Date (May 2, 2007 or May 2, 2008, as applicable) will become Vested Incentive Shares determined by multiplying the number of such Management Shareholder’s Incentive Shares that would have become Vested Incentive Shares upon the next anniversary of the Closing Date times a fraction, the numerator of which is the number of full calendar quarters that as of the date of such Management Shareholder’s termination of employment have elapsed since the last anniversary of the Closing Date and the denominator of which is four. Upon the exercise of options for Incentive Shares by a Management Shareholder, such Incentive Shares shall be considered Vested Incentive Shares for purposes of this Agreement, provided that such Incentive Shares shall not be included for purposes of determining the percentages in the immediately preceding sentence.

(b) The term “Quadrangle Entities”, to the extent such parties shall have transferred any of their Company Securities to “Permitted Transferees”, shall mean the Quadrangle Entities and the Permitted Transferees of the Quadrangle Entities, taken together, and any right or action that may be exercised or taken at the election of the Quadrangle Entities may be taken at the election of the Quadrangle Entities and such Permitted Transferees.

(c) The term “CVC Entities”, to the extent such parties shall have transferred any of their Company Securities to “Permitted Transferees”, shall mean the CVC Entities and the Permitted Transferees of the CVC Entities, taken together, and any right or action that may be exercised or taken at the election of the CVC Entities may be taken at the election of the CVC Entities and such Permitted Transferees.

(d) The term “Management Shareholder”, to the extent any such party shall have transferred any of its Company Securities to “Permitted Transferees”, shall mean such Management Shareholder and the Permitted Transferees of such Management Shareholder, taken together, and any right or action that may be exercised or taken at the election of such Management Shareholder may be taken at the election of such Management Shareholder and such Permitted Transferees.

(e) Each of the following terms is defined in the Section set forth opposite such term:

Term	Section
Agreement	Preamble
Board Representatives	2.10
Company	Preamble
Competing Activity	6.04

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Term	Section
Confidential Information	6.01(b)
CVC Entities	Preamble
CVC Equity	Preamble
CVC Representative	6.06(a)
Damages	5.05
Demand Registration	5.01(a)
Indemnified Party	5.07
Indemnifying Party	5.07
Inspectors	5.04(g)
Institutional Shareholders	Preamble
Lock-Up Period	5.03
Maximum Offering Size	5.01(e)
Option Purchase Price	4.04(c)
Management Shareholders	Preamble
Piggyback Registration	5.02(a)
Purchase Option	4.04(a)
Quadrangle Entities	Preamble
Records	5.04(g)
Registering Shareholders	5.01(a)
Replacement Nominee	2.03(a)
Representatives	6.01(b)
Requesting Shareholders	5.01(a)
Shareholder	7.03
Termination Date	4.04(a)

Section 1.02. Other Definitional and Interpretative Provisions. Unless specified otherwise, in this Agreement the obligations of any party consisting of more than one person are joint and several. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and

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comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to a statute are to that statute, as amended from time to time, and to the rules and regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.

ARTICLE 2

CORPORATE GOVERNANCE

Section 2.01. Composition of the Board. (a) Following the consummation of the First Public Offering, the Board shall consist of seven directors, of whom:

(i) three directors (at least one of whom must be an Independent Director upon and following the 90^th day following consummation of the First Public Offering) will be designated by the Quadrangle Entities; which number shall be reduced to (x) two directors (none of whom must be an Independent Director) if the Aggregate Ownership of the Quadrangle Entities is less than 20% but equal to or greater than 10%, (y) one director (who need not be an Independent Director) if the Aggregate Ownership of the Quadrangle Entities is less than 10% but greater than or equal to 5% and (z) zero directors if the Aggregate Ownership of the Quadrangle Entities is less than 5%;

(ii) three directors (at least one of whom must be an Independent Director upon and following consummation of the First Public Offering) will be designated by the CVC Entities; which number shall be reduced to (x) two directors (none of whom must be an Independent Director) if the Aggregate Ownership of the CVC Entities is less than 20% but equal to or greater than 10%, (y) one director (who need not be an Independent Director) if the Aggregate Ownership of the CVC Entities is less than 10% but greater than or equal to 5% and (z) zero directors if the Aggregate Ownership of the Quadrangle Entities is less than 5%; and

(iii) one director will be the chief executive officer of the Company for so long as he or she is employed by the Company.

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Prior to the first anniversary of the First Public Offering (or earlier if requested by CVC Equity), the Board shall be expanded to eight members to include an additional Independent Director designated jointly by the Quadrangle Entities and the CVC Entities.

(b) Each Shareholder entitled to vote for the election of directors to the Board agrees that it will vote its Company Common Shares or execute written consents, as the case may be, and take all other necessary action (including causing the Company to call a special meeting of Shareholders) in order to ensure that the composition of the Board is as set forth in this Section 2.01.

(c) The Company agrees to cause each individual designated pursuant to Section 2.01(a) or 2.03 to be nominated to serve as a director on the Board, and to take all other necessary actions (including calling a special meeting of the Board and/or shareholders) to ensure that the composition of the Board is as set forth in this Section 2.01.

Section 2.02. Removal. Each Shareholder agrees that if, at any time, it is then entitled to vote for the removal of directors of the Company, it will not vote any of its Company Common Shares in favor of the removal of any director who shall have been designated or nominated in accordance with Section 2.01, unless the Person or Persons entitled to designate or nominate such director shall have consented to such removal in writing, provided that if the Person or Persons entitled to designate or nominate any director pursuant to Section 2.01 shall request in writing the removal, with or without cause, of such director, each Shareholder shall vote its Company Common Shares in favor of such removal.

Section 2.03. Vacancies. If, as a result of death, permanent disability, retirement, resignation, removal (with or without Cause) or otherwise, there shall exist or occur any vacancy on the Board:

(a) the Person or Persons entitled under Section 2.01 to designate or nominate such director whose death, permanent disability, retirement, resignation or removal resulted in such vacancy may, subject to the provisions of Section 2.01, designate another individual (the “Replacement Nominee”) to fill such vacancy and serve as a director of the Company; and

(b) subject to Section 2.01, each Shareholder then entitled to vote for the election of the Replacement Nominee as a director of the Company agrees that it will vote its Company Common Shares, or execute a proxy or written consent, as the case may be, in order to ensure that the Replacement Nominee be elected to the Board.

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Any vacancies resulting from an increase in the number of directors may only be filled by the directors then in office.

Section 2.04. Meetings. The Board shall hold a regularly scheduled meeting at least once every calendar quarter.

Section 2.05. Action by the Board. (a) A quorum of the Board shall consist of a majority of the directors, provided that such majority shall include at least one director designated by the Quadrangle Entities who is not an Independent Director and at least one director designated by the CVC Entities who is not an Independent Director, respectively, for so long as the Quadrangle Entities and CVC Entities, respectively, are entitled to designate one or more directors pursuant to Section 2.01 hereof.

(b) All actions of the Board shall require (i) the affirmative vote of at least a majority of the directors present at a duly convened meeting of the Board at which a quorum is present (in person or telephonically) or (ii) the unanimous written consent of the Board, provided that, in the event that there is a vacancy on the Board and an individual has been nominated to fill such vacancy, the first order of business shall be to fill such vacancy.

(c) The Board may create executive, compensation, audit and such other committees as it may determine. The Quadrangle Entities and the CVC Entities shall have the right to designate a number of directors comprising each such committee that is proportionate to the number of directors that such Shareholders are entitled to designate pursuant to Section 2.01; provided that no such Shareholder shall have the right to designate any member of a special committee formed in connection with any transaction, or proposed transaction, between the Company or any Subsidiary, on the one hand, and such Shareholder or an Affiliate of such Shareholder, on the other hand.

(d) No action by the Company (including but not limited to any action by the Board or any committee thereof) shall be taken after the date of the Original Agreement, and the Company shall not permit any action to be taken by any Subsidiary or any Joint Venture (but only, with respect to any Joint Venture, to the extent that the Company or a Subsidiary has the right pursuant to the terms of such Joint Venture to not permit such action to be taken), with respect to any of the following matters without the affirmative approval of the Board:

(i) (1) any merger or consolidation of the Company, any Subsidiary or any Joint Venture with or into any Person, other than a wholly owned Subsidiary, or of any Subsidiary or Joint Venture with or into any Person other than the Company or any other wholly owned

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Subsidiary, (2) any sale of the Company, any Subsidiary, any Joint Venture or any significant operations of the Company, any Subsidiary or any Joint Venture or (3) any acquisition or disposition of assets, business, operations or securities by the Company, any Subsidiary or any Joint Venture (in a single transaction or a series of related transactions) having a value in each case in this clause (3) in excess of $3,000,000;

(ii) the declaration of any dividend on or the making of any distribution with respect to, or the recapitalization, reclassification, redemption, repurchase or other acquisition of, any securities of the Company, any Subsidiary or any Joint Venture, except (i) as expressly permitted by this Agreement or the Charter and (ii) any dividend made from a Subsidiary of the Company to another Subsidiary of the Company or from a Subsidiary of the Company to the Company;

(iii) any liquidation, dissolution, commencement of bankruptcy, liquidation or similar proceedings with respect to the Company, any Subsidiary or any Joint Venture;

(iv) any incurrence, refinancing, alteration of material terms or prepayment by the Company, any Subsidiary or any Joint Venture of indebtedness for borrowed money (or the guaranty by the Company, any Subsidiary or any Joint Venture of any such indebtedness), or the issuance or registration with the SEC of any security by the Company, any Subsidiary or any Joint Venture, in each case other than (i) pursuant to the First Lien Credit Agreement dated as of February 24, 2005, among NTELOS Inc., the subsidiary guarantors named therein, the initial lenders, initial issuing bank and swing line bank each as named therein, Morgan Stanley Senior Funding, Inc., as administrative agent, Morgan Stanley & Co. Incorporated, as collateral agent and Bear Stearns Corporate Lending Inc., as syndication agent, (ii) the Second Lien Credit Agreement dated as of February 24, 2005, among NTELOS Inc., the subsidiary guarantors named therein, the lenders named therein, Morgan Stanley Senior Funding, Inc., as administrative agent, Morgan Stanley & Co. Incorporated, as collateral agent and Bear Stearns Corporate Lending Inc., as syndication agent, (iii) pursuant to any other revolving credit agreement previously approved by the Board in compliance with this Section 2.05(d), (iv) pursuant to any employee or stock option plans previously approved by the Board in compliance with this Section 2.05(d) or (v) as specifically contemplated by this Agreement;

(v) any individual or related series of capital expenditures or capital leases which are inconsistent in any material respect with the

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annual capital expenditure budget approved by the Board in compliance with this Section 2.05(d);

(vi) any entering into, amending or modifying in any material respect any agreement of the Company, any Subsidiary or any Joint Venture, which is made outside the ordinary course of business and is material to the Company and its Subsidiaries as a whole;

(vii) any entering into of any agreement, indenture or other instrument that contains any provision that would restrict either the payment of dividends on the Company Common Stock or the repurchase of Company Common Stock in accordance with Section 4.04;

(viii) any determination of compensation, benefits, perquisites or other incentives for executive officers of the Company, any Subsidiary or any Joint Venture or the approval or amendment of any plans or contracts in connection therewith, any approval of or amendment to any equity or other compensation or benefit plans for employees of the Company, Subsidiary or any Joint Venture or the grant of any stock option or other equity compensation to any employee of the Company, any Subsidiary or any Joint Venture, other than any such determinations, amendments or grants (i) required by law, (ii) to satisfy agreements currently in place or deliver the benefits intended thereunder or (iii) to renew insurance or administrative service contracts relating to benefits plans if such renewals come due in the ordinary course;

(ix) any appointment or dismissal of any of the Chief Executive Officer, President, Chief Financial Officer, Chief Operating Officer, any division head or any other executive officer in any similar capacity of the Company, any Subsidiary or any Joint Venture;

(x) any appointment or removal of the regular legal counsel, financial advisors, underwriters, investment bankers or, other than in connection with renewals of coverage at comparable levels in the ordinary course, company-wide insurance providers of the Company, any Subsidiary or any Joint Venture;

(xi) any exercise or waiver of the Company’s rights under this Agreement, any amendment to the Charter or Bylaws or any adoption of or amendment to the certificate of incorporation, bylaws or other organizational documents of any Subsidiary or Joint Venture;

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(xii) any approval of the annual business plan, budget, capital expenditure budget or long-term strategic plan of the Company, any Subsidiary or any Joint Venture;

(xiii) any modification of the long-term business strategy or scope of the business of the Company, any Subsidiary or any Joint Venture;

(xiv) any increase or decrease to the number of directors that comprise the entire board of directors or similar governing body of the Company, any Subsidiary or any Joint Venture;

(xv) any contract with, obligation to or transaction or series of transactions between, the Company, any Subsidiary or any Joint Venture, on the one hand, and one or more of its stockholders, other equityholders or their respective Affiliates, on the other hand;

(xvi) any initiation or settlement of any material litigation, arbitration, mediation or other dispute resolution proceeding outside of the ordinary course of business; or

(xvii) the entry into, or the termination, disposition or material amendment of the terms of, any Joint Venture.

Section 2.06. Conflicting Charter or Bylaw Provisions. Each Shareholder shall vote its Company Common Shares or execute proxies or written consents, as the case may be, and shall take all other actions necessary, to ensure that the Company’s Charter and Bylaws (i) facilitate, and do not at any time conflict with, any provision of this Agreement and (ii) permit each Shareholder to receive the benefits to which each such Shareholder is entitled under this Agreement.

Section 2.07. Notice of Meeting. Each director shall receive notice and the agenda of each meeting of the Board or any committee thereof at least five days prior to such meeting.

Section 2.08. Subsidiary Governance. The Company and each Shareholder agree that the Quadrangle Entities and the CVC Entities shall have the right to designate a number of directors comprising the board of directors of each Subsidiary and each committee thereof that is proportionate to the number of directors that such Shareholders are entitled to designate pursuant to Section 2.01. Each Shareholder agrees to vote its Company Common Shares and to cause its representatives on the Board, subject to their fiduciary duties, to vote and take other appropriate action to effectuate the agreements in this Section 2.08 in respect of any Subsidiary.

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Section 2.09. Affiliate Transactions. The Company shall not, and shall not permit any of its Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with or for the benefit of, any Affiliate of the Company, unless (i) such transaction is on terms that are no less favorable to the Company or such Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Subsidiary with an unrelated Person, (ii) if a Quadrangle Entity or any Affiliate of a Quadrangle Entity is a party to such transaction, CVC Equity (so long as the CVC Entities maintain Aggregate Ownership of at least 5%) shall have consented to such transaction in its capacity as a stockholder of the Company and (iii) if a CVC Entity or any Affiliate of a CVC Entity is a party to such transaction, each Quadrangle Entity (so long as the Quadrangle Entities maintain Aggregate Ownership of at least 5%) shall have consented to such transaction in its capacity as stockholder of the Company.

Section 2.10. Board Observers. During the periods described below in this Section 2.10, each Quadrangle Entity and each CVC Entity shall have the right to appoint a representative (collectively, the “Board Representatives”) to attend each meeting of the Board as a non-voting observer, whether such meeting is conducted in person or by teleconference. The Board Representatives shall have the right to present matters for consideration by the Board and to speak on matters presented by others. Subject to the confidentiality provisions of this Section 2.10, the Company shall cause the Board Representatives to be provided with all communications and materials that are provided by the Company or its consultants to the members of the Board generally, at the same time and in the same manner that such communications and materials are provided to such members, including all notices, board packages, reports, presentations, minutes and consents. The Board Representatives shall be entitled to meet and consult with the senior executive management team of the Company on a quarterly basis to discuss the quarterly and annual business plans of the Company and the Company’s Subsidiaries and to review the progress of the Company and the Company’s Subsidiaries in achieving their plans. In addition, upon request to the chief executive officer of the Company, the members of the senior executive management team of the Company shall make themselves available during normal business hours to meet with the Board Representatives on an interim basis, as the Board Representatives may reasonably request from time to time.

The Company shall use its reasonable best efforts to notify the Board Representatives of any significant business issues or initiatives affecting the Company or the Company’s Subsidiaries, such as changes in the Company’s capital structure, incurrence of any significant indebtedness, significant business

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acquisitions, dispositions or similar transactions, developments or proposals entailing a potentially significant liability, nomination of directors, appointment or election of senior management personnel, and adoption of contracts, plans or other compensation arrangements covering senior management personnel. Whenever reasonably practicable, such notice shall be provided to the Board Representatives in a manner that affords the Board Representatives an opportunity to consult with the Company prior to any significant action on such issues or initiatives. Upon reasonable request by the Board Representatives to the chief executive officer of the Company, the Board Representatives shall be entitled, at their cost and expense, to inspect the books and records and the facilities of the Company and the Company’s Subsidiaries during normal business hours and to request and receive reasonable information regarding the financial condition and operations of the Company and the Company’s Subsidiaries. The right of each Quadrangle Entity and each CVC Entity to appoint a Board Representative, and the rights of such Board Representatives described above, shall exist solely during the periods, if any, in which such entity is intended to qualify as a “venture capital operating company” under U.S. Department of Labor Regulation 29 C.F.R. Section 2510.3-101 and such entity does not possess the right to elect or appoint a member of the Board. Notwithstanding any other provision of this Section 2.10 to the contrary, the Board shall have the right to keep confidential from the Board Representatives for such period of time as the Board deems reasonable any information and copies of written materials the Company is required by law or agreement with a third party to keep confidential. As a condition of the exercise of their rights under this Section 2.10, the Board Representatives shall enter into such agreements or undertakings with the Company to maintain the confidentiality of information provided to them in connection with the exercise of such rights as the Company may reasonably request.

ARTICLE 3

RESTRICTIONS ON TRANSFER

Section 3.01. General. (a) Each Shareholder understands and agrees that the Company Securities acquired pursuant to the Transaction Agreement have not been registered under the Securities Act and are restricted securities thereunder. Each Shareholder agrees that it will not Transfer any Company Securities (or solicit any offers in respect of any Transfer of any Company Securities), except in compliance with, or pursuant to an applicable exemption from, the Securities Act, any applicable foreign or state securities or “blue sky” laws, and the terms and conditions of this Agreement.

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(b) Any attempt to Transfer any Company Securities not in compliance with this Agreement shall be null and void and the Company shall not, and shall cause any transfer agent not to, give any effect in the Company’s stock records to such attempted Transfer.

Section 3.02. Legends. (a) In addition to any other legend that may be required, each certificate for Company Securities that is issued to any Shareholder shall bear a legend in substantially the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY FOREIGN OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE AMENDED AND RESTATED SHAREHOLDERS AGREEMENT DATED AS OF FEBRUARY 13, 2006, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM NTELOS HOLDINGS CORP. OR ANY SUCCESSOR THERETO.”

(b) If any Company Securities shall be either (i) disposed of pursuant to a registration statement that has been declared effective by the SEC or (ii) sold under circumstances in which all of the applicable conditions of Rule 144 are met, the Company, upon the written request of the holder thereof, shall issue to such holder a new certificate evidencing such shares without the first sentence of the legend required by Section 3.02(a) endorsed thereon. If any Company Securities cease to be subject to any and all restrictions on Transfer set forth in this Agreement, the Company, upon the written request of the holder thereof, shall issue to such holder a new certificate evidencing such Company Securities without the second sentence of the legend required by Section 3.02(a) endorsed thereon.

Section 3.03. Permitted Transferees. (a) Notwithstanding anything in this Agreement to the contrary, any Shareholder may at any time Transfer any or all of its Company Securities to one or more of its Permitted Transferees without the consent of the Board or any Management Shareholder or group of Shareholders and without compliance with Sections 3.04 and 3.05 so long as (a) such Permitted Transferee shall have agreed in writing to be bound by the terms of this Agreement in the form of Exhibit A attached hereto and (b) the Transfer to such Permitted Transferee is not in violation of applicable federal or state securities laws.

(b) If any Permitted Transferee of any Shareholder to which Company Common Shares have been transferred ceases to be a Permitted Transferee of

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such Shareholder, such Permitted Transferee shall, and such Shareholder shall cause such Permitted Transferee to, transfer back to such Shareholder (or to another Permitted Transferee of such Shareholder) any Company Common Shares it owns on or prior to the date that such Permitted Transferee ceases to be a Permitted Transferee of such Shareholder.

Section 3.04. Restrictions on Transfers by the Institutional Shareholders. Except as provided in Section 3.03 hereof, each Institutional Shareholder may transfer its Company Securities only as follows:

(a) in a Transfer to which CVC Equity (in the case of a Transfer by any of the Quadrangle Entities) consents or the Quadrangle Entities (in the case of a Transfer by any of the CVC Entities) consent;

(b) in a Transfer pursuant to Article 5 hereof; or

(c) in a Transfer made at least 18 months following the date of the First Public Offering that complies with Rule 144 under the Securities Act (including Rule 144(k) to the extent available to all CVC Entities and their Permitted Transferees on the one hand or all Quadrangle Entities and their Permitted Transferees on the other hand); provided that the amount of Company Securities to be Transferred pursuant to Rule 144 by the CVC Entities and their Permitted Transferees, on the one hand, and the Quadrangle Entities and their Permitted Transferees, on the other hand, shall be aggregated for purposes of determining compliance with the volume limitations set forth in paragraph (e) of Rule 144.

Section 3.05. Restrictions on Transfers by the Management Shareholders. Except as provided in Section 3.03, each Management Shareholder may transfer its Company Securities only as follows:

(a) in a Transfer pursuant to Section 4.04;

(b) in a Transfer pursuant to Article 5 hereof; or

(c) in a Transfer of Company Securities which are not Unvested Incentive Shares made following the consummation of the First Public Offering.

ARTICLE 4

PURCHASE OPTION

Section 4.01. Intentionally Omitted.

Section 4.02. Intentionally Omitted.

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Section 4.03. Intentionally Omitted.

Section 4.04. Purchase Option. (a) In the event that on or prior to the fourth anniversary of the Closing Date, any Management Shareholder shall cease to be employed by the Company or any of its Subsidiaries for any reason (including, but not limited to, death, disability, retirement at age 65 or more under the Company’s or of its Subsidiaries’ normal retirement policies, resignation or termination by the Company or any of its Subsidiaries, as the case may be, with or without Cause), not including a leave of absence approved by the Company, such Management Shareholder shall give prompt notice to the Company of such termination (except in the case of termination by the Company), and the Company, and/or, if approved by the Board, the Company’s designee, shall have the right and option at any time within 90 days after the later of the effective date of such termination of employment (the “Termination Date”) or the date of the Company’s receipt of the aforesaid notice, (which 90-day period shall be extended if such transaction is subject to regulatory approval until the expiration of five Business Days after all such approvals have been received, but in no event later than 180 days), to purchase from such Management Shareholder, any or all of the Unvested Incentive Shares then owned by such Management Shareholder (and his or her Permitted Transferees) at a purchase price equal to the Option Purchase Price (as defined below). The Company shall give notice to the terminated Management Shareholder of its intention (or the intention of its designee, as applicable) to purchase Unvested Incentive Shares at any time not later than 90 days after the Termination Date (which 90-day period shall be extended if such transaction is subject to regulatory approval until the expiration of five Business Days after all such approvals have been received, but in no event later than 180 days). The right of the Company (or its designee, as applicable) set forth in this Section 4.04 to purchase a terminated Management Shareholder’s Unvested Incentive Shares (and the Unvested Incentive Shares of the persons or entities deemed to be included in the definition of such Management Shareholder pursuant to this Agreement) is hereinafter referred to as the “Purchase Option.”

(b) The Purchase Option shall be exercised by written notice to the terminated Management Shareholder signed by an officer of the Company on behalf of the Company. Such notice shall set forth the number of Unvested Incentive Shares desired to be purchased and shall set forth a time and place of closing which shall be no earlier than 10 days and no later than 60 days after the date such notice is sent. At such closing, the seller shall deliver the certificates evidencing the number of Unvested Incentive Shares to be purchased by the Company and/or its designee(s), accompanied by stock powers duly endorsed in blank or duly executed instruments of transfer, and any other documents that are necessary to transfer to the Company and/or its designee good title to such of the Unvested Incentive Shares to be transferred, free and clear of all pledges, security

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interests, liens, charges, encumbrances, equities, claims and options of whatever nature other than those imposed under this Agreement, and concurrently with such delivery, the Company and/or its designee shall deliver to the seller the full amount of the Option Purchase Price for such Securities in cash by certified or bank cashier’s check.

(c) The “Option Purchase Price” for the Unvested Incentive Shares to be purchased from such Management Shareholder pursuant to the Purchase Option shall equal the price calculated as set forth below:

Type of Employment Cessation	Unvested Incentive Shares Option Purchase Price
Resignation or termination for any reason other than Cause	Adjusted Cost Price
Termination with Cause	Lesser of Fair Market Value or Adjusted Cost Price

Notwithstanding anything to the contrary contained herein, in connection with the exercise of any Purchase Option pursuant to Section 4.04, the Company may offset from the Option Purchase Price paid to any Management Shareholder the aggregate amount of any outstanding principal and accrued but unpaid interest due on any indebtedness of such Management Shareholder to the Company.

ARTICLE 5

REGISTRATION RIGHTS

Section 5.01. Demand Registration. (a) If at any time following the earlier of (x) 180 days after the effective date of the registration statement for the First Public Offering and (y) the expiration of the period during which the managing underwriters for the First Public Offering shall prohibit the Company from effecting any other public sale or distribution of Company Securities, the Company shall receive a joint request from the Quadrangle Entities and the CVC Entities (the “Requesting Shareholders”) that the Company effect the registration under the Securities Act of all or any portion of such Requesting Shareholder’s Registrable Securities, and specifying the intended method of disposition thereof, then the Company shall promptly give notice of such requested registration (each such request, a “Demand Registration”) at least 15 Business Days prior to the anticipated filing date of the registration statement

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relating to such Demand Registration to the Management Shareholders and thereupon shall use its best efforts to effect, as expeditiously as possible, the registration under the Securities Act of:

(i) all Registrable Securities for which the Requesting Shareholders have requested registration under this Section 5.01, and

(ii) subject to the restrictions set forth in Sections 5.01(e) and 5.02, all other Registrable Securities of the same class as those requested to be registered by the Requesting Shareholders that any Shareholders with rights to request registration under Section 5.02 (all such Shareholders, together with the Requesting Shareholders, the “Registering Shareholders”) have requested the Company to register by request received by the Company within 15 Business Days after such Shareholders receive the Company’s notice of the Demand Registration,

all to the extent necessary to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered, provided that, subject to Section 5.01(d), the Company shall not be obligated to effect more than three Demand Registrations for the Institutional Shareholders, other than Demand Registrations to be effected pursuant to a Registration Statement on Form S-3 (or any successor thereto), for which an unlimited number of Demand Registrations shall be permitted; provided further that the Company shall not be obligated to effect a Demand Registration unless the aggregate proceeds expected to be received from the sale of the Registrable Securities requested to be included in such Demand Registration equals or exceeds $15,000,000. In no event shall the Company be required to effect more than one Demand Registration hereunder within any six-month period.

(b) Promptly after the expiration of the 15 Business Day-period referred to in Section 5.01(a)(ii), the Company will notify all Registering Shareholders of the identities of the other Registering Shareholders and the number of shares of Registrable Securities requested to be included therein. At any time prior to the effective date of the registration statement relating to such registration, the Requesting Shareholders may revoke such request, without liability to any of the other Registering Shareholders, by providing a notice to the Company revoking such request.

(c) The Company shall be liable for and pay all Registration Expenses in connection with any Demand Registration.

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(d) A Demand Registration shall not be deemed to have occurred:

(i) unless the registration statement relating thereto (A) has become effective under the Securities Act and (B) has remained effective for a period of at least 180 days (or such shorter period in which all Registrable Securities of the Registering Shareholders included in such registration have actually been sold thereunder), provided that such registration statement shall not be considered a Demand Registration if, after such registration statement becomes effective, (1) such registration statement is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court and (2) less than 75% of the Registrable Securities included in such registration statement have been sold thereunder; or

(ii) if the Maximum Offering Size is reduced in accordance with Section 5.01(e) such that less than 662/3% of the Registrable Securities of the Requesting Shareholders sought to be included in such registration are included.

(e) If a Demand Registration involves an underwritten Public Offering and the managing underwriter advises the Company and the Requesting Shareholders that, in its view, the number of shares of Registrable Securities requested to be included in such registration (including any securities that the Company proposes to be included that are not Registrable Securities) exceeds the largest number of shares that can be sold without having an adverse effect on such offering, including the price at which such shares can be sold (the “Maximum Offering Size”), the Company shall include in such registration, in the priority listed below, up to the Maximum Offering Size:

(i) first, all Registrable Securities requested to be registered by the Institutional Shareholders (allocated, if necessary for the offering not to exceed the Maximum Offering Size, pro rata among such entities on the basis of the relative number of Registrable Securities so requested to be included in such registration by each),

(ii) second, all Registrable Securities requested to be included in such registration by any other Registering Shareholder (allocated, if necessary for the offering not to exceed the Maximum Offering Size, pro rata among such Management Shareholders on the basis of the relative number of Registrable Securities so requested to be included in such registration by each such Shareholder), and

(iii) third, any securities proposed to be registered for the account of any other Persons (including the Company), with such priorities among them as the Company shall determine.

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(f) Upon notice to each Requesting Shareholder, the Company may postpone effecting a registration pursuant to this Section 5.01 on one occasion during any period of twelve consecutive months for a reasonable time specified in the notice but not exceeding 90 days (which period may not be extended or renewed), if (i) an investment banking firm of recognized national standing shall advise the Company and the Requesting Shareholders in writing that effecting the registration would materially and adversely affect an offering of securities of the Company the preparation of which had then been commenced or (ii) the Company is in possession of material non-public information the disclosure of which during the period specified in such notice the Company reasonably believes would not be in the best interests of the Company.

Section 5.02. Piggyback Registration. (a) If at any time after the First Public Offering the Company proposes to register any Company Securities under the Securities Act (other than a registration on Form S-8 or S-4, or any successor forms, relating to Company Common Shares issuable upon exercise of employee stock options or in connection with any employee benefit or similar plan of the Company or in connection with a direct or indirect acquisition by the Company of another Person), whether or not for sale for its own account, the Company shall each such time give prompt notice at least 30 Business Days prior to the anticipated filing date of the registration statement relating to such registration to each Shareholder, which notice shall set forth such Shareholder’s rights under this Section 5.02 and shall offer such Shareholder the opportunity to include in such registration statement the number of Registrable Securities of the same class or series as those proposed to be registered as each such Shareholder may request (a “Piggyback Registration”), subject to the provisions of Section 5.02(b). Upon the request of any such Shareholder made within 15 Business Days after the receipt of notice from the Company (which request shall specify the number of Registrable Securities intended to be registered by such Shareholder), the Company shall use its reasonable best efforts to effect the registration under the Securities Act of all Registrable Securities that the Company has been so requested to register by all such Shareholders, to the extent requisite to permit the disposition of the Registrable Securities so to be registered, provided that (i) if such registration involves an underwritten Public Offering, all such Shareholders requesting to be included in the Company’s registration must sell their Registrable Securities to the underwriters selected as provided in Section 5.04(f)(i) on the same terms and conditions as apply to the Company or the Requesting Shareholders, as applicable, and (ii) if, at any time after giving notice of its intention to register any Company Securities pursuant to this Section 5.02(a) and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register such securities, the Company shall give notice to all such Shareholders and, thereupon, shall be relieved of its obligation to register any Registrable Securities in

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connection with such registration. No registration effected under this Section 5.02 shall relieve the Company of its obligations to effect a Demand Registration to the extent required by Section 5.01. The Company shall pay all Registration Expenses in connection with each Piggyback Registration.

(b) If a Piggyback Registration involves an underwritten Public Offering (other than any Demand Registration, in which case the provisions with respect to priority of inclusion in such offering set forth in Section 5.01(e) shall apply) and the managing underwriter advises the Company that, in its view, the number of Shares that the Company and such Shareholders intend to include in such registration exceeds the Maximum Offering Size, the Company shall include in such registration, in the following priority, up to the Maximum Offering Size:

(i) first, so much of the Company Securities proposed to be registered for the account of the Company as would not cause the offering to exceed the Maximum Offering Size,

(ii) second, all Registrable Securities requested to be included in such registration by any Shareholders pursuant to Section 5.02 (allocated, if necessary for the offering not to exceed the Maximum Offering Size, pro rata among such Shareholders on the basis of the relative number of shares of Registrable Securities so requested to be included in such registration by each), provided, that, the managing underwriter may select shares of Registrable Securities for inclusion, or exclude shares completely, in such Piggyback Registration on a basis other than a pro rata basis if, in the reasonable opinion of such underwriter, selection on such other basis, or inclusion of such shares, would be material to the success of the offering, and

(iii) third, any securities proposed to be registered for the account of any other Persons with such priorities among them as the Company shall determine.

Section 5.03. Lock-Up Agreements. If any registration of Registrable Securities shall be effected in connection with a Public Offering, neither the Company nor any Shareholder shall effect any public sale or distribution, including any sale pursuant to Rule 144, of any Company Securities or other security of the Company (except as part of such Public Offering) during the period beginning 14 days prior to the effective date of the applicable registration statement until the earlier of (i) such time as the Company and the lead managing underwriter shall agree, which period of time shall be the lock-up period applicable to all shareholders of the Company, and (ii) 180 days (such earlier period, the “Lock-Up Period” for the applicable registration statement). In the

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event of a conflict between this Section 5.03 and any separate lock-up agreement executed between a Shareholder and the lead managing underwriter of a Public Offering with respect to that Public Offering, the terms of such lock-up agreement shall govern and control.

Section 5.04. Registration Procedures. Whenever Shareholders request that any Registrable Securities be registered pursuant to Section 5.01 or 5.02, subject to the provisions of such Sections, the Company shall use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof as quickly as practicable, and, in connection with any such request:

(a) The Company shall as expeditiously as possible prepare and file with the SEC a registration statement on any form for which the Company then qualifies or that counsel for the Company shall deem appropriate and which form shall be available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its reasonable best efforts to cause such filed registration statement to become and remain effective for a period of not less than 180 days, or in the case of a shelf registration statement, one year (or such shorter period in which all of the Registrable Securities of the Registering Shareholders included in such registration statement shall have actually been sold thereunder).

(b) Prior to filing a registration statement or prospectus or any amendment or supplement thereto, the Company shall, if requested, furnish to each participating Shareholder and each underwriter, if any, of the Registrable Securities covered by such registration statement copies of such registration statement as proposed to be filed, and thereafter the Company shall furnish to such Shareholder and underwriter, if any, such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 or Rule 430A under the Securities Act and such other documents as such Shareholder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Shareholder. Each Shareholder shall have the right to request that the Company modify any information contained in such registration statement, amendment and supplement thereto pertaining to such Shareholder and the Company shall use its reasonable best efforts to comply with such request, provided that the Company shall not have any obligation so to modify any information if the Company reasonably expects that so doing would cause the prospectus to contain an untrue statement

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of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.

(c) After the filing of the registration statement, the Company shall (i) cause the related prospectus to be supplemented by any required prospectus supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act, (ii) comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement during the applicable period in accordance with the intended methods of disposition by the Registering Shareholders thereof set forth in such registration statement or supplement to such prospectus and (iii) promptly notify each Registering Shareholder holding Registrable Securities covered by such registration statement of any stop order issued or threatened by the SEC or any state securities commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered.

(d) The Company shall use its reasonable best efforts to (i) register or qualify the Registrable Securities covered by such registration statement under such other securities or “blue sky” laws of such jurisdictions in the United States as any Registering Shareholder holding such Registrable Securities reasonably (in light of such Shareholder’s intended plan of distribution) requests and (ii) cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be reasonably necessary or advisable to enable such Shareholder to consummate the disposition of the Registrable Securities owned by such Shareholder, provided that the Company shall not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 5.04(d), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction.

(e) The Company shall immediately notify each Registering Shareholder holding such Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and promptly prepare and make available to each such Shareholder and file with the SEC any such supplement or amendment.

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(f) (i) The Institutional Shareholders shall have the right, in their sole discretion, to select an underwriter or underwriters in connection with any Public Offering resulting from the exercise by the Institutional Shareholders of a Demand Registration which underwriter or underwriters may include an Affiliate of an Institutional Shareholder and (ii) the Company shall select an underwriter or underwriters in connection with any other Public Offering. In connection with any Public Offering, the Company shall enter into customary agreements (including an underwriting agreement in customary form) and take such all other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities in any such Public Offering, including the engagement of a “qualified independent underwriter” in connection with the qualification of the underwriting arrangements with the NASD.

(g) Upon execution of confidentiality agreements in form and substance reasonably satisfactory to the Company, the Company shall make available for inspection by any Registering Shareholder and any underwriter participating in any disposition pursuant to a registration statement being filed by the Company pursuant to this Section 5.04 and any attorney, accountant or other professional retained by any such Shareholder or underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”) as shall be reasonably necessary or desirable to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any Inspectors in connection with such registration statement. Records that the Company determines, in good faith, to be confidential and that it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such registration statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Each Registering Shareholder agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it or its Affiliates as the basis for any market transactions in the Company Securities unless and until such information is made generally available to the public. Each Registering Shareholder further agrees that, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, it shall give notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential.

(h) The Company shall furnish to each Registering Shareholder and to each such underwriter, if any, a signed counterpart, addressed to such Shareholder or underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a comfort letter or comfort letters from the Company’s independent public

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accountants, each in customary form and covering such matters of the kind customarily covered by opinions or comfort letters, as the case may be, as a majority of such Shareholders or the managing underwriter therefor reasonably requests.

(i) The Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement or such other document covering a period of twelve months, beginning within three months after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

(j) The Company may require each such Registering Shareholder promptly to furnish in writing to the Company such information regarding the distribution of the Registrable Securities as the Company may from time to time reasonably request and such other information as may be legally required in connection with such registration.

(k) Each such Registering Shareholder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5.04(e), such Shareholder shall forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Shareholder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 5.04(e), and, if so directed by the Company, such Shareholder shall deliver to the Company all copies, other than any permanent file copies then in such Shareholder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. If the Company shall give such notice, the Company shall extend the period during which such registration statement shall be maintained effective (including the period referred to in Section 5.04(a)) by the number of days during the period from and including the date of the giving of notice pursuant to Section 5.04(e) to the date when the Company shall make available to such Shareholder a prospectus supplemented or amended to conform with the requirements of Section 5.04(e).

(l) The Company shall use its reasonable best efforts to list all Registrable Securities covered by such registration statement on any securities exchange or quotation system on which any of the Registrable Securities are then listed or traded.

(m) The Company shall have appropriate officers of the Company (i) prepare and make presentations at any “road shows” and before analysts and

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rating agencies, as the case may be, (ii) take other actions to obtain ratings for any Registrable Securities and (iii) otherwise use their reasonable best efforts to cooperate as reasonably requested by the underwriters in the offering, marketing or selling of the Registrable Securities.

(n) The Company will provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by a registration statement from and after a date not later than the effective date of such registration statement.

Section 5.05. Indemnification by the Company. The Company agrees to indemnify and hold harmless each Registering Shareholder holding Registrable Securities covered by a registration statement, its officers, directors, employees, partners and agents, and each Person, if any, who controls such Shareholder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses) (“Damages”) caused by or relating to any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus relating to the Registrable Securities (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by or relating to any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such Damages are caused by or related to any such untrue statement or omission or alleged untrue statement or omission so made based upon information furnished in writing to the Company by such Shareholder or on such Shareholder’s behalf expressly for use therein, provided that, with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus, or in any prospectus, as the case may be, the indemnity agreement contained in this paragraph shall not apply to the extent that any Damages result from the fact that a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) was not sent or given to the Person asserting any such Damages at or prior to the written confirmation of the sale of the Registrable Securities concerned to such Person if it is determined that the Company has provided such prospectus to such Shareholder and it was the responsibility of such Shareholder to provide such Person with a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) and such current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) would have cured the defect giving rise to such Damages. The Company also agrees to indemnify any underwriters of the Registrable Securities, their officers and directors and each Person who controls such underwriters within the meaning of Section 15 of the Securities Act

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or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of the Shareholders provided in this Section 5.05.

Section 5.06. Indemnification by Participating Shareholders. Each Registering Shareholder holding Registrable Securities included in any registration statement agrees, severally but not jointly, to indemnify and hold harmless the Company, its officers, directors and agents and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such Shareholder, but only (i) with respect to information furnished in writing by such Shareholder or on such Shareholder’s behalf expressly for use in any registration statement or prospectus relating to the Registrable Securities, or any amendment or supplement thereto, or any preliminary prospectus or (ii) to the extent that any Damages result from the fact that a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) was not sent or given to the Person asserting any such Damages at or prior to the written confirmation of the sale of the Registrable Securities concerned to such Person if it is determined that it was the responsibility of such Shareholder to provide such Person with a current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) and such current copy of the prospectus (or such amended or supplemented prospectus, as the case may be) would have cured the defect giving rise to such loss, claim, damage, liability or expense. Each such Shareholder also agrees to indemnify and hold harmless underwriters of the Registrable Securities, their officers and directors and each Person who controls such underwriters within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of the Company provided in this Section 5.06. As a condition to including Registrable Securities in any registration statement filed in accordance with Article 5, the Company may require that it shall have received an undertaking reasonably satisfactory to it from any underwriter to indemnify and hold it harmless to the extent customarily provided by underwriters with respect to similar securities. No Registering Shareholder shall be liable under this Section 5.06 for any Damages in excess of the net proceeds realized by such Shareholder in the sale of Registrable Securities of such Shareholder to which such Damages relate.

Section 5.07. Conduct of Indemnification Proceedings. If any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to this Article 5, such Person (an “Indemnified Party”) shall promptly notify the Person against whom such indemnity may be sought (the “Indemnifying Party”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and

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shall assume the payment of all fees and expenses, provided that the failure of any Indemnified Party so to notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure to notify. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) in the reasonable judgment of such Indemnified Party representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that, in connection with any proceeding or related proceedings in the same jurisdiction, the Indemnifying Party shall not be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by the Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment. Without the prior written consent of the Indemnified Party, no Indemnifying Party shall effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.

Section 5.08. Contribution. If the indemnification provided for in this Article 5 is unavailable to the Indemnified Parties in respect of any Damages, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Damages (i) as between the Company and the Registering Shareholders holding Registrable Securities covered by a registration statement on the one hand and the underwriters on the other, in such proportion as is appropriate to reflect the relative benefits received by the Company and such Shareholders on the one hand and the underwriters on the other, from the offering of the Registrable Securities, or if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of the Company and such Shareholders on the one hand and of such underwriters on the other in connection with the statements or omissions that resulted in such Damages, as well as any other relevant equitable

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considerations and (ii) as between the Company on the one hand and each such Shareholder on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of each such Shareholder in connection with such statements or omissions, as well as any other relevant equitable considerations. The relative benefits received by the Company and such Shareholders on the one hand and such underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the Company and such Shareholders bear to the total underwriting discounts and commissions received by such underwriters, in each case as set forth in the table on the cover page of the prospectus. The relative fault of the Company and such Shareholders on the one hand and of such underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and such Shareholders or by such underwriters. The relative fault of the Company on the one hand and of each such Shareholder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Company and the Registering Shareholders agree that it would not be just and equitable if contribution pursuant to this Section 5.08 were determined by pro rata allocation (even if the underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the Damages referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5.08, no underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any Damages that such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no Registering Shareholder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities of such Shareholder were offered to the public (less underwriters’ discounts and commissions) exceeds the amount of any Damages that such Shareholder has otherwise been required to pay by reason of such untrue or alleged untrue

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statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Each Registering Shareholder’s obligation to contribute pursuant to this Section 5.08 is several in the proportion that the proceeds of the offering received by such Shareholder bears to the total proceeds of the offering received by all such Registering Shareholders and not joint.

Section 5.09. Participation in Public Offering. No Person may participate in any Public Offering hereunder unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements and the provisions of this Agreement in respect of registration rights.

Section 5.10. Other Indemnification. Indemnification similar to that specified herein (with appropriate modifications) shall be given by the Company and each Registering Shareholder participating therein with respect to any required registration or other qualification of securities under any federal or state law or regulation or governmental authority other than the Securities Act.

Section 5.11. Cooperation by the Company. If any Shareholder shall transfer any Registrable Securities pursuant to Rule 144, the Company shall cooperate, to the extent commercially reasonable, with such Shareholder and shall provide to such Shareholder such information as such Shareholder shall reasonably request.

Section 5.12. No Transfer of Registration Rights. None of the rights of Shareholders under this Article 5 shall be assignable by any Shareholder to any Person acquiring Securities in any Public Offering or pursuant to Rule 144.

ARTICLE 6

CERTAIN COVENANTS AND AGREEMENTS

Section 6.01. Confidentiality. (a) Each Shareholder agrees that Confidential Information (as defined below) furnished and to be furnished to it was and will be made available in connection with such Shareholder’s investment in the Company. Each Shareholder agrees that it will use, and that it will cause any Person to whom Confidential Information is disclosed pursuant to clause (i) below to use, the Confidential Information only in connection with its investment

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in the Company and not for any other purpose (including, without limitation, to disadvantage competitively the Company or any Management Shareholder). Each Shareholder further acknowledges and agrees that it will not disclose any Confidential Information to any Person, provided that Confidential Information may be disclosed (i) to such Shareholder’s Representatives (as defined below) in the normal course of the performance of their duties or to any financial institution providing credit to such Shareholder, (ii) to the extent required by applicable law, rule or regulation (including complying with any oral or written questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process to which a Shareholder is subject, provided that such Shareholder gives the Company prompt notice of such request(s), to the extent practicable, so that the Company may seek an appropriate protective order or similar relief (and the Shareholder shall cooperate with such efforts by the Company, and shall in any event make only the minimum disclosure required by such law, rule or regulation)), (iii) to any Person to whom such Shareholder is contemplating a Transfer of its Company Securities (provided that such Transfer would not be in violation of the provisions of this Agreement and as long as such potential transferee is advised of the confidential nature of such information and agrees to be bound by a confidentiality agreement in form and substance reasonably satisfactory to the Company and consistent with the provisions hereof), (iv) to any regulatory authority or rating agency to which the Shareholder or any of its Affiliates is subject or with which it has regular dealings, as long as such authority or agency is advised of the confidential nature of such information or (v) if the prior written consent of the Board shall have been obtained. Nothing contained herein shall prevent the use (subject, to the extent possible, to a protective order) of Confidential Information in connection with the assertion or defense of any claim by or against the Company or any Shareholder.

(b) “Confidential Information” means any information concerning the Company and Persons that are or become its Subsidiaries or the financial condition, business, operations or prospects of the Company and Persons that are or become its Subsidiaries in the possession of or furnished to any Shareholder (including, without limitation by virtue of its present or former right to designate a director of the Company), provided that the term “Confidential Information” does not include information that (i) is or becomes generally available to the public other than as a result of a disclosure by a Shareholder or its partners, directors, officers, employees, agents, counsel, investment advisers or representatives (all such persons being collectively referred to as “Representatives”) in violation of this Agreement, (ii) is or was available to such Shareholder on a non-confidential basis prior to its disclosure to such Shareholder or its Representatives by the Company or (iii) was or becomes available to such Shareholder on a non-confidential basis from a source other than the Company, provided that such source is or was (at the time of receipt of the relevant

36

information) not, to the best of such Shareholder’s knowledge, bound by a confidentiality agreement with (or other confidentiality obligation to) the Company or another Person.

Section 6.02. Information. So long as any Company Securities remain outstanding, the Company shall deliver to each Five Percent Shareholder:

(a) as soon as practicable and, in any event within 30 days after the end of each month, the unaudited consolidated balance sheet of the Company and the Subsidiaries as at the end of such month and the related unaudited statement of operations and cash flow for such month, and for the portion of the fiscal year then ended, in each case prepared in accordance with GAAP, setting forth in comparative form the figures for the corresponding month and portion of the previous fiscal year, and the figures for the corresponding month and portion of the then current fiscal year as in the Company’s annual operating budget;

(b) as soon as practicable and in any event within 45 days after the end of the first three fiscal quarters of each fiscal year of the Company, consolidated balance sheets of the Company and the Subsidiaries as at the end of such period and the related consolidated statements of income, stockholders’ equity and cash flow of the Company and the Subsidiaries for such fiscal quarter, in each case prepared in accordance with GAAP, setting forth in each case in comparative form the consolidated figures for the corresponding periods of the previous fiscal year, all in reasonable detail and certified by the Company’s Chief Financial Officer that they fairly present the financial condition of the Company and the Subsidiaries as at the dates indicated and the results of their operations and changes in their financial position for the periods indicated, subject to normal year-end adjustments;

(c) as soon as practicable and in any event within 90 days after the end of each fiscal year of the Company, consolidated balance sheets of the Company and the Subsidiaries as at the end of such year and the related consolidated statements of income, stockholders’ equity and cash flow of the Company and the Subsidiaries for such fiscal year setting forth in each case, in comparative form, the consolidated figures for the previous year, all in reasonable detail and accompanied by a report thereon of independent certified public accountants of recognized national standing selected by the Company, which report shall be unqualified as to going concern and scope of audit and shall state that such consolidated financial statements present fairly the financial position of the Company and the Subsidiaries as at the dates indicated and the results of their operations and changes in their financial position for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise stated therein) and that the examination by such accountants in

37

connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards;

(d) promptly upon their becoming available, copies of all financial statements, reports, notices and proxy statements sent or made available generally by the Company to its securityholders or by any Subsidiary to its securityholders other than the Company or another Subsidiary, all regular and periodic reports and all registration statements and prospectuses, if any, filed by the Company or any Subsidiary with any securities exchange or with the SEC, and all press releases and other written statements made available generally by the Company or any Subsidiary to the public; and

(e) as promptly as reasonably practicable, such additional information regarding the financial position or business of the Company and its Subsidiaries as such Five Percent Shareholder may reasonably request.

Section 6.03. Certain Financial Information. So long as any Company Securities remain outstanding, the Company shall deliver to each Shareholder, whose Aggregate Ownership of Company Common Shares divided by the Aggregate Ownership of such Company Common Shares by all Shareholders is 10% or more:

(a) all information provided in writing to lenders pursuant to the Company’s credit facility; and

(b) promptly upon receipt thereof, copies of all reports submitted to the Company by independent public accountants in connection with each annual, interim or special audit of the Company’s financial statements made by such accountant, including, without limitation, the comment letter submitted by such accountants to management in connection with their annual audit.

Section 6.04. Business Opportunity. To the fullest extent permitted by applicable law and the Company’s Charter, the doctrine of corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Company and any Institutional Shareholder. No Institutional Shareholder nor any of its Affiliates shall have any obligation to refrain from (i) engaging in the same or similar activities or lines of business as the Company or developing or marketing any products or services that compete, directly or indirectly, with those of the Company, (ii) investing or owning any interest publicly or privately in, or developing a business relationship with, any Person engaged in the same or similar activities or lines of business as, or otherwise in competition with, the Company or (iii) doing business with any client or customer of the Company (each of the activities referred to in clauses (i)-(iii), a “Competing Activity”);

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provided that, with respect to each Competing Activity in which an Institutional Shareholder engages, such Institutional Shareholder shall, and shall cause its Affiliates to, use its reasonable best efforts to (A) avoid taking any actions that would be reasonably likely to have a significant adverse regulatory impact on the Company and the Subsidiaries, taken as a whole, and (B) implement appropriate internal controls to protect Confidential Information in a manner consistent with the obligations of such Institutional Shareholder pursuant to Section 6.01.

Section 6.05. Intentionally Omitted.

Section 6.06. Appointment of CVC Shareholder Representative. (a) Each CVC Entity hereby covenants and agrees that CVC Equity (the “CVC Representative”) is fully and exclusively authorized, empowered and appointed to serve as its sole representative and agent, to take any and all action, including the execution and delivery of any documents, and make any and all decisions and determinations that may be required or permitted to be taken or made hereunder by such CVC Entity, to perform all of the obligations of such CVC Entity required or permitted to be performed hereunder, and to execute, deliver and perform on behalf of such CVC Entity any and all amendments hereto. Any such action, decision or determination taken or made by the CVC Representative, and any such amendment, shall be absolutely and irrevocably binding on such CVC Entity as if such CVC Entity had personally taken such action or made such decision or determination in its, his or her individual (or, as applicable, fiduciary) capacity.

(b) Notwithstanding any other provision of this Agreement, (i) each CVC Entity hereby irrevocably relinquishes its, his or her right to act independently and other than through the CVC Representative, and (ii) no CVC Entity shall have any right by virtue of any provision in this Agreement or otherwise to institute any suit, action or proceeding in equity or at law upon or under or with respect to any matter hereunder, any such rights being irrevocably and exclusively delegated to the CVC Representative, who, acting in accordance with the terms hereof, shall be the sole party entitled to enforce any rights of such CVC Entity with respect to any matter hereunder.

(c) The CVC Representative hereby acknowledges the foregoing authorization and appointment, agrees to serve as such and covenants and agrees with each other party hereto that it will fulfill all its obligations hereunder. All actions taken, notices given or received and documents executed by the CVC Representative pursuant to the authority granted hereunder may be relied upon by the Company and the Shareholders, and neither the Company nor any Shareholder shall be required to make any inquiry regarding such actions, notices or documents.

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(d) The Shareholder serving as CVC Representative may be replaced with another Shareholder at any time and from time to time by the vote of a majority of the Company Common Shares held by all CVC Entities. Such successor CVC Representative shall thereupon succeed to and become vested with all the rights and duties of the predecessor CVC Representative, and such predecessor CVC Representative shall be discharged from its duties and obligations hereunder. The successor CVC Representative shall notify the Company and each Shareholder as promptly as practicable after such replacement.

ARTICLE 7

MISCELLANEOUS

Section 7.01. Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto and supersedes all prior and contemporaneous agreements and understandings, both oral and written, among the parties hereto with respect to the subject matter hereof, including the Subscription Agreement dated as of February 25, 2005 among Project Holdings LLC (as predecessor to the Company) and certain of the parties to this Agreement and the letter agreement dated January 18, 2005, as amended, between CVC Equity and Quadrangle GP Investors LP.

Section 7.02. Binding Effect; Benefit. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, legal representatives and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

Section 7.03. Assignability. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any party hereto pursuant to any Transfer of Company Securities or otherwise, except that any Permitted Transferee acquiring Company Securities and any Person acquiring Company Securities who is required by the terms of this Agreement or any employment agreement or stock purchase, option, stock option or other compensation plan of the Company or any Subsidiary to become a party hereto shall (unless already bound hereby) execute and deliver to the Company an agreement to be bound by this Agreement in the form of Exhibit A hereto and shall thenceforth be a “Shareholder”. Any Shareholder who ceases to own beneficially any Company Securities shall cease to be bound by the terms hereof (other than Section 6.01 and this Article 7).

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Section 7.04. Waiver; Amendment. No provision of this Agreement may be waived except by an instrument in writing executed by the party against whom the waiver is to be effective. No provision of this Agreement may be amended or otherwise modified except by an instrument in writing executed by the Company with approval of the Board and each Institutional Shareholder; provided that any amendment or modification of Section 3.05, 4.04 or Article 5 that would adversely and disproportionately affect the Management Shareholders relative to the Institutional Shareholders may be effected only with the consent of Management Shareholders holding more than 50% of the outstanding Company Common Shares held by all Management Shareholders at the time of such proposed amendment or modification.

Section 7.05. Notices. All notices, requests and other communications to any party shall be in writing (including facsimile transmissions) and shall be given,

if to the Company to:

NTELOS Holdings Corp.

401 Spring Lane, Suite 300

P.O. Box 1990

Waynesboro, Virginia 22980

Attention: James S. Quarforth

Fax: (540) 946-3595

with a copy to the Quadrangle Entities and the CVC Entities at the addresses listed below;

if to any of the Quadrangle Entities, to:

Quadrangle Capital Partners LP

375 Park Avenue

New York, NY 10152

Attention: Kimberley Carlson

Fax: (212) 418-1701

with a copy to:

Davis Polk & Wardwell

450 Lexington Avenue

New York, NY 10017

Attention: Phillip R. Mills

Fax: (212) 450-3800

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if to any of the CVC Entities, to:

Citicorp Venture Capital

399 Park Avenue, 14th Floor

New York, NY 10043

Attention: Michael A. Delaney

Fax: (212) 888-2940

with a copy to:

Dechert LLP

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, PA 19103-2793

Attention: Geraldine A. Sinatra

Fax: (215) 994-2222

if to a Management Shareholder, to the address or facsimile number set forth on the signature pages hereto with respect to such Management Shareholder.

All notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt. Any notice, request or other written communication sent by facsimile transmission shall be confirmed by certified mail, return receipt requested, posted within one business day, or by personal delivery, whether courier or otherwise, made within two business days after the date of such facsimile transmissions.

Any Person who becomes a Shareholder shall provide its address and fax number to the Company, which shall promptly provide such information to each Management Shareholder.

Section 7.06. Fees and Expenses. Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense; provided that the Company shall pay all out-of-pocket costs and expenses of the Institutional Shareholders, including the reasonable fees and expenses of counsel, incurred in connection with the preparation of this Agreement, or any amendment or waiver hereof, and the transactions contemplated hereby and all matters related hereto.

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Section 7.07. Headings. The headings contained in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement.

Section 7.08. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

Section 7.09. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the conflicts of laws rules of such state.

Section 7.10. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 7.11. Specific Enforcement. Each party hereto acknowledges that the remedies at law of the other parties for a breach or threatened breach of this Agreement would be inadequate and, in recognition of this fact, any party to this Agreement, without posting any bond, and in addition to all other remedies that may be available, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy that may then be available.

Section 7.12. Consent to Jurisdiction. The parties hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the District of Delaware or any Delaware state court sitting in Delaware, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of Delaware, and each of the parties hereby irrevocably consents to the nonexclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient form. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees

43

that service of process on such party as provided in Section 7.05 shall be deemed effective service of process on such party.

Section 7.13. Severability. If one or more provisions of this Agreement are held to be unenforceable to any extent under applicable law, such provision shall be interpreted as if it were written so as to be enforceable to the maximum possible extent so as to effectuate the parties’ intent to the maximum possible extent, and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms to the maximum extent permitted by law.

Section 7.14. Recapitalization. If any capital stock or other securities are issued in respect of, in exchange for, or in substitution of, any Company Securities by reason of any reorganization, recapitalization, reclassification, merger, consolidation, spin-off, partial or complete liquidation, stock dividend, split-up, sale of assets, distribution to stockholders or combination of the Company Securities or any other change in capital structure of the Company, appropriate adjustments shall be made with respect to the relevant provisions of this Agreement so as fairly and equitably to preserve, as far as practicable, the original rights and obligations of the parties hereto under this Agreement.

Section 7.15. No Inconsistent Agreements. The Company will not hereafter enter into any agreement with respect to its securities that is inconsistent with, or grants rights superior to the rights granted to the Shareholders pursuant to, this Agreement.

Section 7.16. Effective Time; Legal Effect. This Agreement shall become effective to amend and restate the Original Agreement in its entirety and shall be binding upon all Shareholders who executed the Original Agreement effective upon the occurrence of both of the following: (i) the execution of this Agreement by the required signatories pursuant to Sections 7.04 and 6.06 hereof and (ii) the consummation on the date of this Agreement of the First Public Offering.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

THE COMPANY:
NTELOS HOLDINGS CORP.
By:	/s/ Michael B. Moneymaker
	Name: Michael B. Moneymaker
	Title: Executive Vice President, Chief Financial Officer, Secretary and Treasurer

QUADRANGLE ENTITIES:
QUADRANGLE CAPITAL PARTNERS LP
By:	Quadrangle GP Investors LP, as its General Partner
By:	Quadrangle GP Investors LLC, as its General Partner
By:	/s/ Michael Huber
	Name: Michael Huber
	Title: Managing Member
QUADRANGLE SELECT PARTNERS LP
By:	Quadrangle GP Investors LP, as its General Partner
By:	Quadrangle GP Investors LLC, as its General Partner
By:	/s/ Michael Huber
	Name: Michael Huber
	Title: Managing Member
QUADRANGLE CAPITAL PARTNERS-A LP
By:	Quadrangle GP Investors LP, as its General Partner
By:	Quadrangle GP Investors LLC, as its General Partner
By:	/s/ Michael Huber
	Name: Michael Huber
	Title: Managing Member

CVC ENTITIES:
CITIGROUP VENTURE CAPITAL EQUITY PARTNERS, L.P.
By:	CVC Partners LLC, as its General Partner
By:	/s/ Michael A. Delaney
	Name: Michael A. Delaney
	Title:
CVC/SSB EMPLOYEE FUND, L.P.
By:	CVC Partners LLC, as its General Partner
By:	/s/ Michael A. Delaney
	Name: Michael A. Delaney
	Title:
CVC EXECUTIVE FUND LLC
By:	Citigroup Venture Capital GP Holdings, Ltd., as managing member
By:	/s/ Michael A. Delaney
	Name: Michael A. Delaney
	Title:

/s/ Clayton M. Albertson

Clayton M. Albertson

/s/ Christopher D. Bloise

Christopher D. Bloise

/s/ John P. Civantos

John P. Civantos

/s/ Michael A. Delaney

Michael A. Delaney

/s/ Markus Ehrler

Markus Ehrler

/s/ Scott F. Elkins

Scott F. Elkins

/s/ Andrew S. Gesell

Andrew S. Gesell

/s/ Michael S. Gollner

Michael S. Gollner

/s/ Richard A. Mayberry, Jr.

Richard A. Mayberry, Jr.

ALCHEMY, L.P.
By:	/s/ Thomas F. McWilliams
	Name: Thomas F. McWilliams
	Title:   General Partner

/s/ Harris Newman

Harris Newman

BG PARTNERS L.P.
By:	/s/ Paul C. Schorr IV
	Name: Paul C. Schorr IV
	Title:   General Partner

/s/ Joseph M. Silvestri

Joseph M. Silvestri

/s/ Michael D. Stephensen

Michael D. Stephensen

/s/ David F. Thomas

David F. Thomas

/s/ James A. Urry

James A. Urry

SIXTY-FOUR BR PARTNERSHIP
By:	/s/ Stuyvie Comfort
	Name: Stuyvie Comfort
	Title:   Partner Sixty Four BR Partnership

/s/ Claus von Hermann

Claus von Hermann

/s/ Jeffrey F. Vogel

Jeffrey F. Vogel

ABG INVESTMENT MANAGEMENT, LLC
By:	/s/ John Weber
	Name: John Weber
	Title: Partner
MANAGEMENT SHAREHOLDERS:
THE JAMES S. QUARFORTH REVOCABLE TRUST, dated April 25, 2005
By:	/s/ James S. Quarforth
	Name: James S. Quarforth
	Title: Trustee

MANAGEMENT SHAREHOLDERS (continued):
THE QUARFORTH IRREVOCABLE TRUST, dated May 1, 2005
By: Bank of America Trust Company of Delaware, N.A., as its Trustee
By:	/s/ Deborah E. Taylor
	Name: Deborah E. Taylor
	Title: Vice President
/s/ Alyssa B. Quarforth
Alyssa B. Quarforth
/s/ Scott C. Quarforth
Scott C. Quarforth

MANAGEMENT SHAREHOLDERS (continued):
CHERYL B. ROSBERG REVOCABLE TRUST, dated November 6, 2001
By:	/s/ Cheryl B. Rosberg
	Name: Cheryl B. Rosberg
	Title: Trustee
CARL A. ROSBERG REVOCABLE TRUST, dated November 6, 2001
By:	/s/ Carl A. Rosberg
	Name: Carl A. Rosberg
	Title: Trustee
/s/ Drew Alan Rosberg
Drew Alan Rosberg
/s/ Cameron Jordan Rosberg
Cameron Jordan Rosberg

MANAGEMENT SHAREHOLDERS (continued):
/s/ David R. Maccarelli
David R. Maccarelli
THE MACCARELLI IRREVOCABLE TRUST, dated May 1, 2005
By: Bank of America Trust Company of Delaware, N.A., as its Trustee
By:	/s/ Deborah E. Taylor
	Name: Deborah E. Taylor
	Title: Vice President
/s/ Michael B. Moneymaker
Michael B. Moneymaker

/s/ Michael B. Moneymaker, as Custodian

Michael B. Moneymaker, as Custodian for Christopher M. Moneymaker

/s/ Michael B. Moneymaker, as Custodian

Michael B. Moneymaker, as Custodian for Ryan Edward Moneymaker

/s/ Mary McDermott

Mary McDermott

/s/ Frank L. Berry

Frank L. Berry

/s/ David J. Keller

David J. Keller

MANAGEMENT SHAREHOLDERS (continued):

/s/ Robert L. McAvoy Jr.

Robert L. McAvoy Jr.

/s/ Francis C. Guido

Francis C. Guido

/s/ Denise H. Ramey

Denise H. Ramey

/s/ Robbie W. Cale

Robbie W. Cale

/s/ David L. Coats

David L. Coats

MANAGEMENT SHAREHOLDERS (continued):

/s/ Duane K. Breeden

Duane K. Breeden

/s/ Kenneth R. Boward

Kenneth R. Boward

/s/ S. Craig Highland

S. Craig Highland, as Custodian for Lesleigh

Hope Highland

/s/ S. Craig Highland

S. Craig Highland, as Custodian for Zachary

Lane Highland

MANAGEMENT SHAREHOLDERS (continued):
S. CRAIG HIGHLAND AND C. LYNN HIGHLAND, as Joint Tenants in Common
By:	/s/ S. Craig Highland
	S. Craig Highland
By:	/s/ C. Lynn Highland
	C. Lynn Highland

EXHIBIT A

JOINDER TO SHAREHOLDERS AGREEMENT

This Joinder Agreement (this “Joinder Agreement”) is made as of the date written below by the undersigned (the “Joining Party”) in accordance with the Amended and Restated Shareholders Agreement dated as of February 13, 2006 (the “Shareholders Agreement”) among NTELOS Holdings Corp., Quadrangle Capital Partners LP, Quadrangle Select Partners LP, Quadrangle Capital Partners-A LP, Citigroup Venture Capital Equity Partners, L.P., CVC/SSB Employee Fund, L.P., CVC Executive Fund LLC and the other parties listed on the signature pages thereof, as the same may be amended from time to time. Capitalized terms used, but not defined, herein shall have the meaning ascribed to such terms in the Shareholders Agreement.

The Joining Party hereby acknowledges, agrees and confirms that, by its execution of this Joinder Agreement, the Joining Party shall be deemed to be a party to the Shareholders Agreement as of the date hereof and shall have all of the rights and obligations of a “Shareholder” thereunder as if it had executed the Shareholders Agreement. The Joining Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Shareholders Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of the date written below.

Date:                              ,             

[NAME OF JOINING PARTY]
By:
	Name:
	Title:
	Address for Notices:

EX-10.3

Exhibit 10.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), dated as of May 2, 2005 between James S. Quarforth (the “Executive”) and NTELOS Inc., a Virginia corporation (the “Company”), recites and provides as follows:

WHEREAS, the Company considers it essential to the best interests of its shareholders to foster the continuing employment of its key management personnel; and

WHEREAS, the Board of Directors of the Company (the “Board”) expects that the Executive will continue to make substantial contributions to the growth and prospects of the Company; and

WHEREAS, the Company and the Executive previously entered into an employment agreement dated October 1, 2003; and

WHEREAS, the Company and the Executive now desire to terminate such prior employment agreement and replace it with this Agreement; and

WHEREAS, the parties intend this Agreement to supersede the prior employment agreement and any other prior agreements or undertakings among the parties with respect to the subject matter contained herein; and

WHEREAS, the Executive will continue to serve the Company in reliance upon the undertakings of the Company contained herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein, the receipt and sufficiency of which are hereby acknowledged by each of the parties, the Company and the Executive agree as follows:

1. Employment.

(a) Position. On the terms and subject to the conditions set forth herein, the Company agrees to employ the Executive as Chief Executive Officer throughout the Employment Term (as defined below). At the request of the Board and without additional compensation, the Executive shall also serve as an officer and/or director of any or all of the subsidiaries of the Company.

(b) Duties and Responsibilities. The Executive shall have such duties and responsibilities that are consistent with the Executive’s position as the Board determines and shall perform such duties and carry out such responsibilities to the best of the Executive’s ability for the purpose of advancing the business of the Company and its subsidiaries. Subject to the provisions of Section 1(c) below, during the Employment Term the Executive shall devote the Executive’s full business time, skill and attention to the business of the Company and its subsidiaries, and, except as specifically approved by the Board, shall not engage in any other business activity or have any other business affiliation.

(c) Other Activities. Anything in this Agreement to the contrary notwithstanding, as part of the Executive’s business efforts and duties on behalf of the Company, the Executive may participate fully in social, charitable and civic activities, and, if specifically approved by the Board, the Executive may serve on the boards of directors of other companies, provided that such activities do not unreasonably interfere with the performance of and do not involve a conflict of interest with the Executive’s duties or responsibilities hereunder.

2. Employment Term. The “Employment Term” hereunder shall commence on the date set forth above and shall continue in full force and effect until January 1, 2010 unless terminated earlier pursuant to the terms and conditions of this Agreement. The Employment Term will renew hereunder automatically for successive one-year periods unless either party gives written notice to the other not less than six (6) months prior to the end of Employment Term hereof (or any subsequent anniversary, as the case may be) that such party does not wish the Employment Term to be so extended, and under such circumstances, the Employment Term and this Agreement will terminate by its terms, and without liability to either party, on January 1, 2010 (or such subsequent anniversary, as the case may be).

3. Compensation. During the Employment Term, the Company will pay and/or otherwise provide the Executive with compensation and related benefits as follows:

(a) Base Salary. The Company agrees to pay the Executive, for services rendered hereunder, an initial base salary at the annual rate of $418,601 (the “Base Salary”). Base Salary will be reviewed annually throughout the Employment Term by the Compensation Committee of the Board. Notwithstanding anything in this Agreement to the contrary, the Company may reduce the Executive’s Base Salary by up to 10% during the Employment Term, but only as part of a salary reduction program pursuant to which the Base Salaries of the Chief Executive Officer, all Executive Vice Presidents and all Senior Vice Presidents are reduced by the same percentage at the same time and for the same period of time. The Base Salary shall be payable in equal periodic installments, not less frequently than monthly, less any sums which may be required to be deducted or withheld under applicable provisions of law. The Base Salary for any partial year shall be prorated based upon the number of days elapsed in such year.

(b) Stock-Based Incentive Compensation. The Executive shall be eligible to participate in the Company’s stock-based incentive compensation plan pursuant to its terms (“Stock-Based Incentive Payment”) when the Company establishes such a plan.

(c) Supplemental Retirement Plan. During the Employment Term (and thereafter to the extent expressly provided herein), the Executive shall be entitled to participate in the NTELOS Inc. Executive Supplemental Retirement Plan according to the terms thereof, and the Executive’s designation as a participant in such plan shall not be revoked or rescinded prior to the termination of the Executive’s employment with the Company.

(d) Team Incentive Plan. The Executive shall be eligible to participate in the Company’s team incentive plan with an annual incentive target of sixty percent (60%) of Base Salary (“Incentive Payment”), subject to achievement of such program’s objectives and final approval of the Board. Notwithstanding the foregoing or the terms of the team incentive plan, the full Incentive Payment the Executive is eligible to receive under the team incentive plan

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based on objective performance factors must be paid and cannot be reduced or eliminated as a result of individual performance factors other than as a result of a good faith determination by the Board.

(e) Benefits. During the Employment Term (and thereafter to the extent expressly provided herein), the Executive shall be entitled to participate in all of the Company’s employee benefit plans applicable to the Company’s comparable senior executives according to the terms of those plans. In addition to the foregoing compensation, the Company agrees that during the Employment Term it shall provide to the Executive a monthly automobile allowance pursuant to Company policy.

(f) Vacation. The Executive shall be entitled to a minimum of five weeks of vacation annually, during which time the Executive shall receive compensation in accordance with the terms of this Agreement.

(g) Term Life Insurance. During the Employment Term, and in addition to any other benefits to which Executive shall be entitled, the Company agrees to pay the premiums on a term life insurance contract covering the Executive that pays a death benefit of at least $906,000. The Company in its discretion shall select the term life insurance contract on which it will pay the premiums; but, the Executive shall be the owner of such contract and will be or will designate the beneficiary of such contract. The Company (i) will include and report such premium payments in the Executive’s taxable income to the extent required under applicable law and (ii) also will pay to the Executive an additional payment in an amount such that after payment by the Executive of all taxes imposed on the additional payment, the Executive retains an amount of the additional payment equal to the taxes imposed upon the Executive with respect to the Company’s payment of the premiums on the term life insurance contract. The amount of the additional payment shall be determined based on the Executive’s likely effective rates of federal, state and local income taxation for the calendar year in which the additional payment is to be made, net of the likely reduction in federal income taxes that is obtained from any deduction of state and local taxes. Executive agrees, for purposes of calculating the amount of the additional payment, to provide the Company such information as the Company may reasonably request to determine the amount of the additional payment and to cooperate with the Company in good faith in order to effectively make such determination. The Company shall hold all such information secret and confidential and shall not, without the prior written consent of the Executive or as otherwise may be required by law or legal process, communicate or divulge such information to anyone other than the Company and those in need of such information for purposes of determining the amount of the additional payment. Notwithstanding any other provision of this Agreement, in the event the term life insurance contract described herein extends beyond the termination of Executive’s employment with the Company, the Executive, and not the Company, shall be obligated to pay the premiums on such term life insurance contract accruing after the Executive’s termination of employment with the Company.

4. Termination of Employment.

(a) By the Company For Cause. The Company may terminate the Executive’s employment under this Agreement at any time for Cause (as defined in Section 4(e)) and shall provide written notice of termination to the Executive (which notice shall specify in reasonable

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detail the basis upon which such termination is made). Notwithstanding the foregoing, in no event, shall any termination of employment be deemed for Cause unless the Executive’s employment is terminated within 180 days of when the Company learns of the act or conduct that constitutes Cause and the Chief Executive Officer of the Company or the Board of Directors concludes that the situation warrants a determination that the Executive’s employment terminated for Cause. In the event the Executive’s employment is terminated for Cause, all provisions of this Agreement (other than Sections 5 through 15 hereof) and the Employment Term shall be terminated; provided, however, that such termination shall not divest the Executive of any previously vested benefit or right unless the terms of such vested benefit or right specifically require such divestiture where the Executive’s employment is terminated for Cause. In addition, the Executive shall be entitled to payment of the Executive’s earned and unpaid Base Salary to the date of termination. The Executive also shall be entitled to unreimbursed business and entertainment expenses in accordance with the Company’s policy, and unreimbursed medical, dental and other employee benefit expenses incurred in accordance with the Company’s employee benefit plans (the payments and benefits described in this subsection (a) hereinafter referred to as the “Standard Termination Payments”).

(b) Upon Death or Disability. If the Executive dies, all provisions of Section 3 of this Agreement (other than rights or benefits arising as a result of such death) and the Employment Term shall be automatically terminated; provided, however, that an amount equal to the earned and unpaid Incentive Payments to the date of death and the Standard Termination Payments shall be paid to the Executive’s surviving spouse or, if none, the Executive’s estate, and the death benefits under the Company’s employee benefit plans shall be paid to the Executive’s beneficiary or beneficiaries as properly designated in writing by the Executive. If the Executive is unable to perform the essential functions of the Executive’s job under this Agreement, with or without reasonable accommodation, by reason of physical or mental disability or incapacity (“Disability”) and such disability or incapacity shall have continued for any period aggregating six months within any 12 consecutive months, the Company may terminate this Agreement and the Employment Term at any time thereafter. In such event, the Executive shall be entitled to receive the Executive’s normal compensation hereunder during said time of disability or incapacity, and shall thereafter be entitled to receive the “Disability Incentive Payment” (as described in the last sentence of this subsection (b)) and the Standard Termination Payments. The portion of the payment representing the Disability Incentive Payment shall be paid in a lump sum determined on a net present value basis, using a reasonable discount rate determined by the Board. The Disability Incentive Payment shall be equal to the target Incentive Payment that the Executive would have been eligible to receive for the year in which the Employment Term is terminated multiplied by a fraction, the numerator of which is the number of days in such year before and including the day of termination of the Employment Term and the denominator of which is the total number of days in such year.

(c) By the Company Without Cause.

(i) The Company may terminate the Executive’s employment under this Agreement at any time without Cause (for purposes of clarity, it is acknowledged that expiration of the Employment Term (including notice of non-renewal) shall not be considered a termination without Cause), and other than by reason of the Executive’s death or disability. The Company shall provide written

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notice of termination to the Executive, which notice shall specify the effective date of such termination and that the termination is without Cause (the “Termination Date”). If the Termination Date is later than the date of the notice, then from the date of the notice through the Termination Date, the Executive shall continue to perform the normal duties of the Executive’s employment hereunder, and shall be entitled to receive when due all compensation and benefits applicable to the Executive hereunder. Thereafter, conditioned upon the Executive executing and not revoking a general release in favor of the Company, the Board and their affiliates, in a form mutually acceptable to both parties hereto, the Company shall pay the Executive the amounts set forth in this subsection (c). Under such circumstances, the Company shall pay the Executive an amount equal to fifty percent (50%) of the Executive’s Base Salary for a period of twenty-four (24) months (the “Termination Period”), in such periodic installments as were being paid immediately prior to the Termination Date.

(ii) The Company shall pay the Executive a lump sum, determined on a net present value basis, using a reasonable discount rate determined by the Board, equal to the full target Incentive Payment for the year that includes the Termination Date multiplied by a fraction, the numerator of which is the number of months in the Termination Period and the denominator of which is 12.

(iii) The Company shall also be obligated to pay to the Executive the Standard Termination Payments.

(iv) During the Termination Period, the Executive and the Executive’s dependents will be entitled to continued participation in the “employee welfare benefit plans” (as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974) in which the Executive and the Executive’s dependents participated on the Executive’s Termination Date with respect to any such plans for which such continued participation is allowed pursuant to applicable law and the terms of the plan. In lieu of coverage for which such continued participation is not allowed, the Executive will be reimbursed, on a net after-tax basis, for the cost of individual insurance coverage for the Executive and the Executive’s dependents under a policy or policies that provide benefits (other than disability coverage) not less favorable than the benefits (other than disability coverage) provided under such employee welfare benefit plans. Notwithstanding the foregoing, the coverage or reimbursements for coverage provided under this subsection (iv) shall cease if the Executive and/or the Executive’s dependents become covered under an employee welfare benefit plan of another employer of the Executive that provides the same or similar type of benefits.

(v) In addition, Executive and the Executive’s dependents will be entitled to receive from the Company, and the Company shall provide to the Executive and the Executive’s dependents, medical benefits not less favorable than and on the same terms and for the same periods as those provided under the Company’s Postretirement Medical And Life Insurance Benefits Plan, as in effect on the date hereof or the Termination Date, whichever is more favorable to the

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Executive, regardless of whether the Executive or the Executive’s dependents are otherwise eligible to participate in such plan. The Company, if it chooses, may provide such medical coverage under such Postretirement Medical and Life Insurance Benefits Plan, if the Executive otherwise is eligible thereunder, or in lieu of medical coverage under such plan, the Company may pay for or may procure individual insurance coverage for the Executive and the Executive’s dependents under a policy or policies that provide medical benefits and terms not less favorable than the medical benefits and terms provided under such Post Retirement Medical And Life Insurance Benefits Plan, as in effect on the date hereof or the Termination Date, whichever is more favorable to the Executive.

(d) By the Executive. The Executive may terminate the Executive’s employment, and any further obligations which the Executive may have to perform services on behalf of the Company hereunder at any time after the date hereof; by sending written notice of termination to the Company not less than sixty (60) days prior to the effective date of such termination. During such sixty (60) day period, the Executive shall continue to perform the normal duties of the Executive’s employment hereunder, and shall be entitled to receive when due all compensation and benefits applicable to the Executive hereunder. Except as provided below, if the Executive shall elect to terminate the Executive’s employment hereunder (other than as a result of the Executive’s death or disability), then the Executive shall remain vested in all vested benefits provided for hereunder or under any benefit plan of the Company in which the Executive is a participant and shall be entitled to receive the Standard Termination Payments, but the Company shall have no further obligation to make payments or provide benefits to the Executive under Section 3 hereof. Anything in this Agreement to the contrary notwithstanding, the termination of the Executive’s employment by the Executive for Good Reason (as defined in Section 4(e)), shall be deemed to be a termination of the Executive’s employment without Cause by the Company for purposes of this Agreement, and the Executive shall be entitled to the payments and benefits set forth in Section 4(c) above, subject to the Executive executing and not revoking a general release in favor of the Company, the Board and their affiliates, in a form mutually acceptable to both parties hereto. Notwithstanding the foregoing, in no event shall any termination of employment by the Executive be deemed for Good Reason unless the Executive terminates employment within 180 days of when the Executive learns of the act or conduct that constitutes Good Reason.

(e) Definitions. For purposes of this Agreement, the following definitions will apply:

(i) Cause. The term “Cause” means: (i) gross or willful misconduct; (ii) willful and repeated failure to comply with the lawful directives of the Board or any supervisory personnel; (iii) any criminal act or act of dishonesty or willful misconduct that has a material adverse impact on the property, operations, business or reputation of the Company or its subsidiaries or any act of fraud, dishonesty or misappropriation involving the Company or its subsidiaries; (iv) any conviction or plea of guilty or nolo contendere to a felony or a crime involving dishonesty; (v) the material breach of the terms of any confidentiality, non-competition, non-solicitation or employment agreement the employee has with the Company or its subsidiaries; (vi) acts of malfeasance or negligence in a

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matter of material importance to the Company or its subsidiaries; (vii) the material failure to perform the duties and responsibilities of employee’s position after written notice and a reasonable opportunity to cure (not to exceed 45 days); (viii) grossly negligent conduct; or (ix) activities materially damaging to the property, operations, business or reputation of the Company or its subsidiaries (it being understood that conduct or activities pursuant to employee’s exercise of good faith business judgment shall not be in violation of this Section 4(e)(i)). For purposes of this Agreement, Executive will also be deemed to be terminated for “Cause” if, in connection with the sale, transfer, conveyance or other disposition of all or substantially all of the assets (whether by asset sale, stock sale, merger, combination or otherwise) of one or more of the Company’s Material Lines of Business (a “Material Line of Business Sale”), (i) one or more of the purchasers in such Material Line of Business Sale offers employment (the “Employment Offer”) to Executive which Employment Offer would not permit Executive to terminate employment pursuant to clauses (i), (ii), (iii), (iv) or (v) of the definition of Good Reason contained herein, (ii) Executive declines such Employment Offer, and (iii) the Company terminates Executive’s employment within six (6) months of the consummation of the Material Line of Business Sale.

(ii) Good Reason. “Good Reason” means, after written notice by the Executive to the Board, and a reasonable opportunity for the Company to cure (not to exceed 45 days), that (i) the Executive’s Base Salary is not paid or is reduced by more than 10 percent in the aggregate or other than as part of a salary reduction program pursuant to which the Base Salaries of the Chief Executive Officer, all Executive Vice Presidents and all Senior Vice Presidents are reduced by the same percentage at the same time and for the same period of time, (ii) the Executive’s target Incentive Payment is reduced, (iii) the Executive’s job duties and responsibilities are diminished, provided however, that the Executive’s termination, for any or no reason, from the position of Chairman of the Board shall not be considered “Good Reason” hereunder (additionally, a reduction in the size of the Company as a result of a Sale of a Material Line of Business shall not alone constitute a diminution in the Executive’s job duties and responsibilities and any dimunition in the Executive’s job duties and responsibilities after notice of non-renewal of the Employment Term is given by either party shall not be considered “Good Reason” hereunder), (iv) the Executive is required to relocate to a facility more than 50 miles from Waynesboro, Virginia, (v) the Executive is not provided benefits (e.g., health insurance) that are comparable in all material respects to those previously provided to the Executive, (vi) the Executive is directed by the Board or an officer of the Company or an affiliate (or the Company’s successor or an affiliate thereof) to engage in conduct that Company counsel, or mutually agreed upon counsel if requested by the Executive, has advised is likely to be illegal and that such counsel states with specificity why such direction is likely to be illegal (including a proposal for modification of such direction which in counsel’s opinion would not be likely to be illegal), or (vii) the Executive is directed by the Board or an officer of the Company or an affiliate (or the Company’s successor or an affiliate thereof) to refrain from acting and Company counsel, or mutually agreed upon counsel if requested by the Executive,

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has advised that such failure to act is likely to be illegal and that such counsel states with specificity why such direction is likely to be illegal (including a proposal for modification of such direction which in counsel’s opinion would not be likely to be illegal). If the Executive is directed to engage in conduct that he reasonably believes is likely to be illegal or to refrain from acting and the Executive reasonably believes that such failure to act is likely to be illegal, the Executive can express such reservations to the Board or directing officer, and the Company shall, at its expense, engage Company counsel, or mutually agreed upon counsel if requested by the Executive, to advise as to whether such conduct or failure to act is likely to be illegal. Subject to the last sentence of Section 4(d) hereof, if any of the events occur that would entitle the Executive to terminate the Executive’s employment for Good Reason hereunder and the Executive does not exercise such right to terminate the Executive’s employment, any such failure shall not operate to waive the Executive’s right to terminate the Executive’s employment for that or any subsequent action or actions, whether similar or dissimilar, that would constitute Good Reason. For purposes of clarity, it is acknowledged that expiration of the Employment Term (including notice of non-renewal) shall not be considered “Good Reason” hereunder.

(iii) Material Line of Business. “Material Line of Business” means any line or lines of business or service or group of services which represent(s) in the aggregate either 25% or more of the Company’s consolidated revenues or 25% or more of the Company’s consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for the twelve month period ended on the last day of the most recently ended fiscal quarter for the Company.

5. Confidential Information. The Executive understands and acknowledges that during the Executive’s employment with the Company, the Executive has been and will be making use of, acquiring or adding to the Company’s Confidential Information (as defined below). In order to protect the Confidential Information, the Executive will not, during the Executive’s employment with the Company or at any time thereafter, in any way utilize any of the Confidential Information except in connection with the Executive’s employment by the Company. The Executive will not at any time use any Confidential Information for the Executive’s own benefit or the benefit of any person except the Company. At the end of the Executive’s employment with the Company, the Executive will surrender and return to the Company any and all Confidential Information in the Executive’s possession or control, as well as any other Company property that is in the Executive’s possession or control. The Executive acknowledges and agrees that any breach of this Section 5 would be a material breach of this Agreement. The term “Confidential Information” shall mean any information that is confidential and proprietary to the Company, including but not limited to the following general categories:

(i) trade secrets;

(ii) lists and other information about current and prospective customers;

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(iii) plans or strategies for sales, marketing, business development, or system build-out;

(iv) sales and account records;

(v) prices or pricing strategy or information;

(vi) current and proposed advertising and promotional programs;

(vii) engineering and technical data;

(viii) the Company’s methods, systems, techniques, procedures, designs, formulae, inventions and know-how; personnel information;

(ix) legal advice and strategies; and

(x) other information of a similar nature not known or made available to the public or the Company’s Competitors (as defined in Section 8).

Confidential Information includes any such information that the Executive may prepare or create during the Executive’s employment with the Company, as well as such information that has been or may be created or prepared by others. This promise of confidentiality is in addition to any common law or statutory rights of the Company to prevent disclosure of its Trade Secrets and/or Confidential Information.

6. Return of Documents. All writings, records and other documents and things containing any Confidential Information in the Executive’s custody or possession shall be the exclusive property of the Company, shall not be copied and/or removed from the premises of the Company, except in pursuit of the business of the Company, and shall be delivered to the Company, without retaining any copies, upon the termination of the Executive’s employment or at any time as requested by the Company.

7. Reaffirm Obligations. Upon termination of the Executive’s employment with the Company, the Executive shall, if requested by the Company, reaffirm in writing Employee’s recognition of the importance of maintaining the confidentiality of the Company’s proprietary information and trade secrets and reaffirm all of the obligations set forth in Section 5 of this Agreement.

8. Non-Compete; Non-Solicitation. The Executive agrees that:

(a) while the Executive is employed by the Company, the Executive will not, directly or indirectly, compete with the business conducted by the Company, and the Executive will not, directly or indirectly, provide any services to a Competitor.

(b) For a period of 24 months after the Executive’s employment with the Company ends for any reason (the “Non-Competition Period”), the Executive will not compete with the Company by performing or causing to be performed the same or similar types of duties or services that the Executive performed for the Company for a Competitor of the Company in

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any capacity whatsoever, directly or indirectly, within any city or county of the continental United States in which, at the time the Executive’s employment with the Company ends, the Company provides services or products, offers to provide services or products, or has documented plans to provide or offer to provide services or products within the Non-Competition Period provided that the Executive has knowledge of those plans at the time the Executive’s employment with the Company ends (the “Service Area”). Additionally, the Executive agrees that during the Non-Competition Period, the Executive will not, directly or indirectly, sell, attempt to sell, provide or attempt to provide, any wireless or wireline telecommunication services, including but not limited to internet services, to any person or entity who was a customer or an actively sought prospective customer of the Company, at any time during the Executive’s employment with the Company. The restrictions set forth above shall immediately terminate and shall be of no further force or effect in the event of a default by the Company in the payment of any consideration, if any, to which the Executive is entitled under Section 8(i) below, which default is not cured within thirty (30) days after written notice thereof. The Executive acknowledges and agrees that because of the nature of the Company’s business, the nature of the Executive’s job responsibilities, and the nature of the Confidential Information and Trade Secrets of the Company which the Company will give the Executive access to, any breach of this provision by the Executive would result in the inevitable disclosure of the Company’s Trade Secrets and Confidential Information to its direct competitors.

(c) While the Executive is employed by the Company and during the Non-Competition Period, the Executive will not, directly or indirectly, solicit or encourage any employee of the Company to terminate employment with the Company; hire, or cause to be hired, for any employment by a Competitor, any person who within the preceding 12 month period has been employed by the Company, or assist any other person, firm, or corporation to do any of the acts described in this subsection (c).

(d) The Executive acknowledges and agrees that the Company has a legitimate business interest in preventing him from engaging in activities competitive with it as described in this Section 8 and that any breach of this Section 8 would constitute a material breach of this Section 8 and this Agreement.

(e) The Company may notify anyone employing the Executive or evidencing an intention to employ the Executive during the Non-Competition Period as to the existence and provisions of this Agreement and may provide such person or organization a copy of this Agreement. The Executive agrees that the Executive will provide the Company the identity of any employer the Executive plans to go to work for during the Non-Competition Period along with the Executive’s anticipated job title, anticipated job duties with any such employer, and anticipated start date. The Company will analyze the proposed employment and make a determination as to whether it would violate this Section 8. If the Company determines that the proposed employment would not pose an unacceptable threat to the Company’s interests, the Company will notify the Executive in writing that it does not object to the employment. The Executive further agrees to provide a copy of this Agreement to anyone who employs the Executive during the Non-Competition Period.

(f) The Executive acknowledges and agrees that this Section 8 is intended to limit the Executive’s right to compete only to the extent necessary to protect the Company’s

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legitimate business interest. The Executive acknowledges and agrees that the Executive will be reasonably able to earn a livelihood without violating the terms of this Section 8. If any of the provisions of this Section 8 should ever be deemed to exceed the time, geographic area, or activity limitations permitted by applicable law, the Executive agrees that such provisions may be reformed to the maximum time, geographic area and activity limitations permitted by applicable law, and the Executive authorizes a court or other trier of fact having jurisdiction to so reform such provisions. In the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive waives and forfeits any and all rights to any further benefits under this Agreement, including but not limited to the consideration set forth in subsection (i) below as well as any additional payments, compensation, benefits or severance pay he may otherwise be entitled to receive under this Agreement. Additionally, in the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive agrees to repay the Company for any of the consideration set forth in subsection (i) below that the Executive received prior to the breach as well as any additional payments, compensation, benefits or severance pay the Executive might otherwise have previously received under Section 4(c) of this Agreement.

(g) For purposes of this Section 8, the following definitions will apply:

(i) “Directly or indirectly” as used in this Agreement includes an interest in or participation in a business as an individual, partner, shareholder, owner, director, officer, principal, agent, employee, consultant, trustee, lender of money, or in any other capacity or relation whatsoever. The term includes actions taken on behalf of the Executive or on behalf of any other person. “Directly or indirectly” does not include the ownership of less than 5% of the outstanding shares of any corporation, if such shares are publicly traded in the over-the-counter market or listed on a national securities exchange.

(ii) “Competitor” as used in this Agreement means any person, firm, association, partnership, corporation or other entity that competes or attempts to compete with the Company by providing or offering to provide wireless or wireline telecommunication services, including but not limited to internet services, within any city or county in which the Company provides or offers those services or products.

(h) Notwithstanding any other provision of this Section 8, the Executive will not be considered to have violated any prohibition against competing with the Company for engaging in any of the following activities: (1) being employed or retained by (i) any parent, subsidiary or affiliate organization of any Competitor where that parent, subsidiary or affiliate organization does not itself, and the Executive’s employment will not cause the Executive to, compete or attempt to compete with the Company by providing or offering to provide wireless or wireline telecommunications services, including but not limited to internet services, within the Service Area or (ii) any Competitor, directly or indirectly, so long as Executive’s employment or service does not relate to working within the Service Area or activities that would benefit the Competitor principally within the Service Area; or (2) working or providing services within the Service Area so long as the Executive’s employment or service does not relate to the type of

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services provided or offered by the Company within that Service Area or to services for which the Company has documented plans to provide, offer or supply within that Service Area at the time of Executive’s termination of employment; or (3) selling or attempting to sell wireless or wireline telecommunications services, including but not limited to internet services, so long as the services or products, which the Executive is selling or attempting to sell to a customer, do not relate to the type of services or products provided or offered by the Company to such customer or for which the Company has documented plans to provide, offer or supply to such customer at the time of Executive’s termination of employment; provided, however, that the Executive is nevertheless prohibited from: (i) selling, attempting to sell, and providing or attempting to provide, to any person who was a customer, or who was actively sought as a customer, of the Company at the time of Executive’s termination of employment any wireless or wireline telecommunications services, including but not limited to internet services, that are the type of services or products that the Company sold, attempted to sell or provided or attempted to provide to such customer as described in (b) above and (ii) soliciting or encouraging any employee of the Company to terminate employment or taking any other of the prohibited actions as described in (c) above.

(i) In consideration of the Executive’s undertakings set forth in this Section 8 with respect to periods after termination of employment, but only in the event that the Executive is entitled to the benefits and payments under Section 4(c) above, the Company will pay the Executive an amount equal to fifty percent (50%) of his Base Salary during the Non-Competition Period, in such periodic installments as his Base Salary was being paid immediately prior to termination of employment. In the event the Executive is not entitled to the benefits and payments under Section 4(c) above, the Company will not pay Executive any of the consideration set forth in this Section 8(i).

(j) In the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive waives and forfeits any and all rights to any further payments under subsection (i) or otherwise under this Agreement. This waiver and forfeiture shall be effective even in the event a court refuses to enforce the restrictions set forth in this Section 8.

9. Representations. The Executive represents and warrants to the Company that the execution, delivery and performance of this Agreement by the Executive does not conflict with, or result in the breach by the Executive or violation by the Executive of, any other agreement to which the Executive is a party or by which the Executive is bound. The Executive hereby agrees to indemnify the Company, its officers, directors and shareholders and hold them harmless from and against any liability (including, without limitation, reasonable attorneys’ fees and expenses) which they may at any time suffer or incur arising out of or relating to any breach of an agreement, representation or warranty made by the Executive herein. The Company represents and warrants that this Agreement and the transactions contemplated hereby have been duly authorized by the Company by all necessary corporate and shareholder action, and that the execution, delivery and performance of this Agreement by the Company does not conflict with, or result in the breach or violation by the Company of, its Articles of Incorporation or Amended and Restated Bylaws or any other agreement to which the Company is a party or by which it is bound. The Company hereby agrees to indemnify the Executive and hold the Executive harmless from and against any liability (including, without limitation, reasonable attorneys’ fees

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and expenses) which the Executive may at any time suffer or incur arising out of or relating to any breach of an agreement, representation or warranty made by the Company herein.

10. Remedies. The parties hereto agree that the Company would suffer irreparable harm from a breach by the Executive of any of the covenants or agreements contained herein. Therefore, in the event of the actual or threatened breach by the Executive of any of the provisions of this Agreement, the Company may, in addition and supplementary to other rights and remedies existing in its favor, apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any violation of the provisions hereof. The Executive agrees that if a lawsuit or other proceeding is brought to enforce the terms of this Agreement or determine the validity of its terms and the Company prevails, the Company will be entitled to recover from the Executive its reasonable attorneys’ fees and court costs. The Executive agrees that these provisions are reasonable.

11. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Company and its affiliates and their successors and assigns, and shall be binding upon and inure to the benefit of the Executive and the Executive’s legal representatives and assigns, provided that in no event shall the Executive’s obligations to perform services for the Company and its affiliates be delegated or transferred by the Executive. The Company may assign or transfer its rights hereunder to a successor corporation in the event of a merger, consolidation or transfer or sale of all or substantially all of the assets of the Company or of the Company’s business (provided, however, that no such assignment or transfer shall have the effect of relieving the Company of any liability to the Executive hereunder or under any other agreement or document contemplated herein), but only if such assignment or transfer does not result in employment terms, conditions, duties or responsibilities which are or may be materially different than the terms, conditions, duties or responsibilities of the Executive hereunder. If the Company assigns or transfers its rights under this Agreement to a successor corporation, the Executive’s obligations under Section 8 of this Agreement will be construed and enforceable with respect to the business and geographic scope of the Company only and will not be construed or enforceable with respect to the business and geographic scope of any successor corporation to which the Company’s rights may be assigned or transferred to the extent such business or geographic scope is greater than that of the Company at the time of such assignment or transfer. The Executive may not transfer or assign the Executive’s rights and obligations under this Agreement.

12. Modification or Waiver. No amendment, modification, waiver, termination or cancellation of this Agreement shall be binding or effective for any purpose unless it is made in a writing signed by the party against whom enforcement of such amendment, modification, waiver, termination or cancellation is sought. No course of dealing between or among the parties to this Agreement shall be deemed to affect or to modify, amend or discharge any provision or term of this Agreement. No delay on the part of the Company or the Executive in the exercise of any of their respective rights or remedies shall operate as a waiver thereof, and no single or partial exercise by the Company or the Executive of any such right or remedy shall preclude other or further exercises thereof. A waiver of a right or remedy on any one occasion shall not be construed as a bar to or waiver of any such right or remedy on any other occasion.

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13. Governing Law; Jurisdiction. This Agreement and all rights, remedies and obligations hereunder, including, but not limited to, matters of construction, validity and performance shall be governed by the laws of the Commonwealth of Virginia without regard to its conflict of laws principles or rules. To the full extent lawful, each of the Company and the Executive hereby consents irrevocably to personal jurisdiction, service and venue in connection with any claim or controversy arising out of this Agreement in the courts of the Commonwealth of Virginia located in Waynesboro, Virginia, and in the federal courts in the Western District of Virginia.

14. Excise Taxes.

(a) If any payment or distribution by the Company or any affiliate to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then the benefits payable or provided under this Agreement (or other Payments as described above) shall be reduced (but not in excess of the amount of the benefits payable or provided under this Agreement) if, and only to the extent that, such reduction will allow the Executive to receive a greater Net After Tax Amount than such Executive would receive absent such reduction.

(b) The Accounting Firm (as defined below) will first determine the amount of any Parachute Payments (as defined below) that are payable to the Executive. The Accounting Firm also will determine the Net After Tax Amount attributable to the Executive’s total Parachute Payments.

(c) The Accounting Firm will next determine the largest amount of payments that may be made to the Executive without subjecting the Executive to the Excise Tax (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.

(d) The Executive then will receive the total Parachute Payments or the total Capped Payments, whichever provides the Executive with the higher Net After Tax Amount; however, if the reductions imposed under this Section 14 are in excess of the amount of benefits payable or provided under this Agreement, then the total Parachute Payments will be adjusted by reducing the amount of any noncash or cash benefits under this Agreement or any other plan, agreement or arrangement as directed by the Executive. The Accounting Firm will notify the Executive and the Company if it determines that the Parachute Payments must be reduced and

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will send the Executive and the Company a copy of its detailed calculations supporting that determination.

(e) As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determinations under this Section 14, it is possible that the Executive will have received Parachute Payments or Capped Payments in excess of the amount that should have been paid or distributed (“Overpayments”), or that additional Parachute Payments or Capped Payments should be paid or distributed to the Executive (“Underpayments”). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Executive, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, that Overpayment may, at the Executive’s discretion, be treated for all purposes as a loan ab initio that the Executive must repay to the Company immediately together with interest at the applicable Federal rate under Code Section 7872; provided, however, that no loan will be deemed to have been made and no amount will be payable by the Executive to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which the Executive is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999 and the Executive will receive a greater Net After Tax Amount than such Executive would otherwise receive. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Executive and the Company of that determination and the amount of that Underpayment will be paid to the Executive promptly by the Company.

(f) For purposes of this Section 14, the following terms shall have their respective meanings:

(i) “Accounting Firm” means the independent accounting firm currently engaged by the Company, or a mutually agreed upon independent accounting firm if requested by the Executive; and

(ii) “Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Code Sections 1, 3101 (b) and 4999 and any State or local income taxes applicable to the Executive on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment.

(iii) “Parachute Payment” means a payment that is described in Code Section 280G(b)(2), determined in accordance with Code Section 280G and the regulations promulgated or proposed thereunder.

(g) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by the preceding subsections shall be borne by the Company.

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(h) The Company and the Executive shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or the Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by the preceding subsections. Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

15. Severability. Whenever possible each provision and term of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision or term of this Agreement shall be held to be prohibited by or invalid under such applicable law, then such provision or term shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or affecting in any manner whatsoever the remainder of such provisions or term or the remaining provisions or terms of this Agreement. If any provision contained in Sections 5 or 8 of this Agreement shall for any reason be held to be excessively broad or unreasonable as to time, territory, or interest to be protected, a court is hereby empowered and requested to construe such provision by narrowing it so as to make it reasonable and enforceable to the extent provided under applicable law.

16. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same Agreement.

17. Headings. The headings of the Sections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part hereof and shall not affect the construction or interpretation of this Agreement.

18. Entire Agreement. This Agreement (together with all documents and instruments referred to herein) constitutes the entire agreement, and supersedes all other prior agreements and undertakings, both written and oral, among the parties with respect to the subject matter hereof, including any employment or management continuity agreement under which the Executive hereby agrees to waive all rights and which is hereby terminated.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

NTELOS Inc.
By:	/s/    MICHAEL B. MONEYMAKER
	Michael B. Moneymaker
	Executive Vice President & CFO

Executive

/s/    JAMES QUARFORTH        

James Quarforth

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EMPLOYMENT CONTRACT AMENDMENT

THIS AMENDMENT (“Amendment”) to the Employment Agreement (the “Employment Agreement”) dated as of May 2, 2005 by and between NTELOS Inc., a Virginia corporation (“Company”), and James S. Quarforth (the “Executive”) is made as of February 13, 2006, by and between NTELOS, NTELOS Holdings Corp., a Delaware corporation (“Holdings”) and the Executive (collectively, the “Parties”).

Background

Holdings will be engaging in an initial public offering and NTELOS will remain a wholly owned subsidiary of Holdings. NTELOS and the Executive wish to add Holdings as a party to the Employment Agreement, upon which both NTELOS and Holdings will jointly share the liabilities and benefits under the Employment Agreement. Additionally, the Parties wish to make certain other amendments to the Employment Agreement, as set forth herein,. The Executive consents to this Amendment, including without limitation, the addition of Holdings as a party to the Agreement.

Terms

In consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereto promise and agree as follows:

1. Pursuant to Section 11 of the Employment Agreement, Holdings shall become a party to the Employment Agreement and, jointly with NTELOS, inure to all the benefits and the liabilities under the Employment Agreement, as NTELOS has under the Agreement. Henceforth both Holdings and NTELOS shall jointly share the liabilities and benefits under the Employment Agreement.

2. To reflect the addition of Holdings as a party to the Employment Agreement, unless the context requires otherwise, the definition of and all references to “Company” in the Employment Contract shall refer to both Holdings and NTELOS.

3. All references to “Board” in the Employment Agreement shall refer to the Board of Directors of Holdings.

4. Section 2 of the Employment Agreement shall be amended by adding the following after the last sentence of Section 2:

“Notwithstanding the foregoing, if the Employment Term has less than 24 months remaining upon the occurrence of a “Change in Control” (as such term is defined in Section 4(e)(iv)), then the Employment Term shall be automatically extended so that the Employment Term will not expire until the date which is 24 months from the date of the Change in Control, subject to the automatic renewal, as described above.”

5. Section 4(b) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(b):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then the Disability Incentive Payment shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date.”

6. Section 4(c)(i) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(i):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then the payments required under this Section 4(c)(i) shall not commence until the first day which is at least six months after the Termination Date. All payments, which would have otherwise been required to be made over such six month period, shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date. Thereafter, payments shall continue as so provided above for the remainder of the Termination Period.”

7. Section 4(c)(ii) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(ii):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then the payment shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date.”

8. Section 4(c)(iv) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(iv):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then such reimbursements (only to the extent such would otherwise be subject to Code Section 409A) shall not commence until the first day which is at least six months after the Termination Date. All reimbursements, which would have otherwise been required to be made over such six month period, shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date. Thereafter, reimbursements shall continue as so provided above for the remainder of the Termination Period.”

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9. A new Section 4(e)(iv) shall be added the Employment Agreement, which shall read in its entirety, as follows:

“Change in Control” means any of the following described in clauses (I) through (V) below, provided that a “Change in Control” shall not mean any event listed in clauses (I) through (V) that occurs directly or indirectly as a result of or in connection with Quadrangle Capital Partners LP, a Delaware limited partnership, Quadrangle Select Partners LP, a Delaware limited partnership, and Quadrangle Capital Partners—A LP, a Delaware limited partnership (collectively the “Quadrangle Entities”) and/or Citigroup Venture Capital Equity Partners, L.P., a Delaware limited partnership, CVC/SSB Employee Fund, L.P., a Delaware limited partnership, CVC Executive Fund LLC, a Delaware limited liability company (collectively the “CVC Entities”) and/or their Affiliates, related funds and co-investors becoming the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Holdings representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities, or the shareholders of Holdings approve a merger, consolidation or reorganization of Holdings with any other company and such merger, consolidation or reorganization is consummated, and after such merger, consolidation or reorganization any of the Quadrangle Entities, the CVC Entities and/or their respective Affiliates, related funds and co-investors acquire more than fifty-one percent (51%) of the combined voting power of Holdings’ then outstanding securities:

I. any Person is or becomes the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Holdings representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities;

II. consummation of a merger, consolidation or reorganization of Holdings with any other company, or a sale of all or substantially all the assets of Holdings (a “Transaction”), other than (i) a Transaction that would result in the voting securities of Holdings outstanding immediately prior thereto continuing to represent either directly or indirectly more than fifty-one percent (51%) of the combined voting power of the then outstanding securities of Holdings or such surviving or purchasing entity;

III. the shareholders of Holdings approve a plan of complete liquidation of Holdings and such liquidation is consummated; or

IV. a sale, transfer, conveyance or other disposition (whether by asset sale, stock sale, merger, combination or otherwise) (a “Sale”) of a Material Line of Business (other than any such sale to

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the Quadrangle Entities, the CVC Entities or their Affiliates, related funds and co-investors ), except that with respect to this clause (IV) there shall only be a Change in Control with respect to the Executive who is employed at such time in such Material Line of Business (whether full or part-time), and the Executive does not receive an offer for “comparable employment” with the purchaser and the Executive’s employment is terminated by Holdings or any Affiliate of Holdings no later than six (6) months after the consummation of the Sale of the Material Line of Business. For these purposes, “comparable employment” means that (i) the Executive’s base salary and target incentive payments are not reduced in the aggregate, (ii) the Executive’s job duties and responsibilities are not diminished (but a reduction in size of Holdings as the result of a Sale of a Material Line of Business, or the fact that the purchaser is smaller than Holdings, shall not alone constitute a diminution in the Executive’s job duties and responsibilities), (iii) the Executive is not required to relocate to a facility more than fifty (50) miles from the Executive’s principal place of employment at the time of the Sale and (iv) the Executive is provided benefits that are comparable in the aggregate to those provided to the Executive immediately prior to the Sale; or

V. During any period of twelve (12) consecutive months commencing upon the effective date of this Amendment, the individuals who constitute the Board, upon the effective date of this Amendment, and any new director who either (i) was elected by the Board or nominated for election by Holdings’ stockholders was approved by a vote of more than fifty percent (50%) of the directors then still in office who either were directors, upon the effective date of the Plan, or whose election or nomination for election was previously so approved or (ii) was appointed to the Board pursuant to the designation of Quadrangle Entities and/or the CVC Entities, cease for any reason to constitute a majority of the Board.

For purposes of the foregoing, “Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

For purposes of the foregoing, “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.

10. Section 8(i) of the Employment Agreement shall be amended by adding the following before the last sentence of Section 8(i):

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“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Section 409A, then such payments shall be made in the same time and manner as provided in Section 4(c)(i) above.”

11. Other than as specifically provided in the Amendment, the Employment Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their respective representatives, thereunto duly authorized, as of the date first above written.

HOLDINGS:	NTELOS HOLDINGS CORP.
	By:	/s/    MICHAEL B. MONEYMAKER
	Name:	Michael B. Moneymaker
	Title:	Executive Vice President and Chief Financial Officer, Treasurer and Secretary
NTELOS:	NTELOS INC.
	By:	/s/    MICHAEL B. MONEYMAKER
	Name:	Michael B. Moneymaker
	Title:	Executive Vice President and Chief Financial Officer, Treasurer and Secretary
EXECUTIVE :		/s/    JAMES S. QUARFORTH
	Name:	James S. Quarforth

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EX-10.4

Exhibit 10.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), dated as of May 2, 2005 between Michael B. Moneymaker (the “Executive”) and NTELOS Inc., a Virginia corporation (the “Company”) recites and provides as follows:

WHEREAS, the Company considers it essential to the best interests of its shareholders to foster the continuing employment of its key management personnel; and

WHEREAS, the Board of Directors of the Company (the “Board”) expects that the Executive will continue to make substantial contributions to the growth and prospects of the Company; and

WHEREAS, the Company and the Executive previously entered into an employment agreement dated October 1, 2003; and

WHEREAS, the Company and the Executive now desire to terminate such prior employment agreement and replace it with this Agreement; and

WHEREAS, the parties intend this Agreement to supersede the prior employment agreement and any other prior agreements or undertakings among the parties with respect to the subject matter contained herein; and

WHEREAS, the Executive will continue to serve the Company in reliance upon the undertakings of the Company contained herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein, the receipt and sufficiency of which are hereby acknowledged by each of the parties, the Company and the Executive agree as follows:

1. Employment.

(a) Position. On the terms and subject to the conditions set forth herein, the Company agrees to employ the Executive as Executive Vice President throughout the Employment Term (as defined below). At the request of the Board and without additional compensation, the Executive shall also serve as an officer and/or director of any or all of the subsidiaries of the Company.

(b) Duties and Responsibilities. The Executive shall have such duties and responsibilities that are consistent with the Executive’s position as the Board determines and shall perform such duties and carry out such responsibilities to the best of the Executive’s ability for the purpose of advancing the business of the Company and its subsidiaries. Subject to the provisions of Section 1(c) below, during the Employment Term the Executive shall devote the Executive’s full business time, skill and attention to the business of the Company and its subsidiaries, and, except as specifically approved by the Board, shall not engage in any other business activity or have any other business affiliation.

(c) Other Activities. Anything in this Agreement to the contrary notwithstanding, as part of the Executive’s business efforts and duties on behalf of the Company, the Executive may participate fully in social, charitable and civic activities, and, if specifically approved by the Board, the Executive may serve on the boards of directors of other companies, provided that such activities do not unreasonably interfere with the performance of and do not involve a conflict of interest with the Executive’s duties or responsibilities hereunder.

2. Employment Term. The “Employment Term” hereunder shall commence on the date set forth above and shall continue in full force and effect until the fourth anniversary of such date when the Employment Term shall terminate, unless terminated earlier pursuant to the terms and conditions of this Agreement. The Employment Term will renew hereunder automatically for successive one-year periods unless either party gives written notice to the other not less than six (6) months prior to the end of the fourth anniversary hereof (or any subsequent anniversary, as the case may be) that such party does not wish the Employment Term to be so extended, and under such circumstances, the Employment Term and this Agreement will terminate by its terms, and without liability to either party, on such fourth anniversary (or such subsequent anniversary, as the case may be).

3. Compensation. During the Employment Term, the Company will pay and/or otherwise provide the Executive with compensation and related benefits as follows:

(a) Base Salary. The Company agrees to pay the Executive, for services rendered hereunder, an initial base salary at the annual rate of $235,125 (the “Base Salary”). Base Salary will be reviewed annually throughout the Employment Term by the Compensation Committee of the Board. Notwithstanding anything in this Agreement to the contrary, the Company may reduce the Executive’s Base Salary by up to 10% during the Employment Term, but only as part of a salary reduction program pursuant to which the Base Salaries of the Chief Executive Officer, all Executive Vice Presidents and all Senior Vice Presidents are reduced by the same percentage at the same time and for the same period of time. The Base Salary shall be payable in equal periodic installments, not less frequently than monthly, less any sums which may be required to be deducted or withheld under applicable provisions of law. The Base Salary for any partial year shall be prorated based upon the number of days elapsed in such year.

(b) Stock-Based Incentive Compensation. The Executive shall be eligible to participate in the Company’s stock-based incentive compensation plan pursuant to its terms (“Stock-Based Incentive Payment”) when the Company establishes such a plan.

(c) Supplemental Retirement Plan. During the Employment Term (and thereafter to the extent expressly provided herein), the Executive shall be entitled to participate in the NTELOS Inc. Executive Supplemental Retirement Plan according to the terms thereof, and the Executive’s designation as a participant in such plan shall not be revoked or rescinded prior to the termination of the Executive’s employment with the Company.

(d) Team Incentive Plan. The Executive shall be eligible to participate in the Company’s team incentive plan with an annual incentive target of fifty-five percent (55%) of Base Salary (“Incentive Payment”), subject to achievement of such program’s objectives and final approval of the Board. Notwithstanding the foregoing or the terms of the team incentive

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plan, the full Incentive Payment the Executive is eligible to receive under the team incentive plan based on objective performance factors must be paid and cannot be reduced or eliminated as a result of individual performance factors other than as a result of a good faith determination by the Chief Executive Officer.

(e) Benefits. During the Employment Term (and thereafter to the extent expressly provided herein), the Executive shall be entitled to participate in all of the Company’s employee benefit plans applicable to the Company’s comparable senior executives according to the terms of those plans. In addition to the foregoing compensation, the Company agrees that during the Employment Term it shall provide to the Executive a monthly automobile allowance pursuant to Company policy.

(f) Vacation. The Executive shall be entitled to a minimum of four weeks of vacation annually, during which time the Executive shall receive compensation in accordance with the terms of this Agreement.

(g) Term Life Insurance. During the Employment Term, and in addition to any other benefits to which Executive shall be entitled, the Company agrees to pay the premiums on a term life insurance contract covering the Executive that pays a death benefit of at least $493,000. The Company in its discretion shall select the term life insurance contract on which it will pay the premiums; but, the Executive shall be the owner of such contract and will be or will designate the beneficiary of such contract. The Company (i) will include and report such premium payments in the Executive’s taxable income to the extent required under applicable law and (ii) also will pay to the Executive an additional payment in an mount such that after payment by the Executive of all taxes imposed on the additional payment, the Executive retains an amount of the additional payment equal to the taxes imposed upon the Executive with respect to the Company’s payment of the premiums on the term life insurance contract. The amount of the additional payment shall be determined based on the Executive’s likely effective rates of federal, state and local income taxation for the calendar year in which the additional payment is to be made, net of the likely reduction in federal income taxes that is obtained from any deduction of state and local taxes. Executive agrees, for purposes of calculating the amount of the additional payment, to provide the Company such information as the Company may reasonably request to determine the amount of the additional payment and to cooperate with the Company in good faith in order to effectively make such determination. The Company shall hold all such information secret and confidential and shall not, without the prior written consent of the Executive or as otherwise may be required by law or legal process, communicate or divulge such information to anyone other than the Company and those in need of such information for purposes of determining the amount of the additional payment. Notwithstanding any other provision of this Agreement, in the event the term life insurance contract described herein extends beyond the termination of Executive’s employment with the Company, the Executive, and not the Company, shall be obligated to pay the premiums on such term life insurance contract accruing after the Executive’s termination of employment with the Company.

4. Termination of Employment.

(a) By the Company For Cause. The Company may terminate the Executive’s employment under this Agreement at any time for Cause (as defined in Section 4(e)) and shall

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provide written notice of termination to the Executive (which notice shall specify in reasonable detail the basis upon which such termination is made). Notwithstanding the foregoing, in no event, shall any termination of employment be deemed for Cause unless the Executive’s employment is terminated within 180 days of when the Company learns of the act or conduct that constitutes Cause and the Chief Executive Officer of the Company or the Board of Directors concludes that the situation warrants a determination that the Executive’s employment terminated for Cause. In the event the Executive’s employment is terminated for Cause, all provisions of this Agreement (other than Sections 5 through 15 hereof) and the Employment Term shall be terminated; provided, however, that such termination shall not divest the Executive of any previously vested benefit or right unless the terms of such vested benefit or right specifically require such divestiture where the Executive’s employment is terminated for Cause. In addition, the Executive shall be entitled to payment of the Executive’s earned and unpaid Base Salary to the date of termination. The Executive also shall be entitled to unreimbursed business and entertainment expenses in accordance with the Company’s policy, and unreimbursed medical, dental and other employee benefit expenses incurred in accordance with the Company’s employee benefit plans (the payments and benefits described in this subsection (a) hereinafter referred to as the “Standard Termination Payments”).

(b) Upon Death or Disability. If the Executive dies, all provisions of Section 3 of this Agreement (other than rights or benefits arising as a result of such death) and the Employment Term shall be automatically terminated; provided, however, that an amount equal to the earned and unpaid Incentive Payrnents to the date of death and the Standard Termination Payments shall be paid to the Executive’s surviving spouse or, if none, the Executive’s estate, and the death benefits under the Company’s employee benefit plans shall be paid to the Executive’s beneficiary or beneficiaries as properly designated in writing by the Executive. If the Executive is unable to perform the essential functions of the Executive’s job under this Agreement, with or without reasonable accommodation, by reason of physical or mental disability or incapacity (“Disability”) and such disability or incapacity shall have continued for any period aggregating six months within any 12 consecutive months, the Company may terminate this Agreement and the Employment Term at any time thereafter. In such event, the Executive shall be entitled to receive the Executive’s normal compensation hereunder during said time of disability or incapacity, and shall thereafter be entitled to receive the “Disability Incentive Payment” (as described in the last sentence of this subsection (b)) and the Standard Termination Payments. The portion of the payment representing the Disability Incentive Payment shall be paid in a lump sum determined on a net present value basis, using a reasonable discount rate determined by the Board. The Disability Incentive Payment shall be equal to the target Incentive Payment that the Executive would have been eligible to receive for the year in which the Employment Term is terminated multiplied by a fraction, the numerator of which is the number of days in such year before and including the day of termination of the Employment Term and the denominator of which is the total number of days in such year.

(c) By the Company Without Cause.

(i) The Company may terminate the Executive’s employment under this Agreement at any time without Cause (for purposes of clarity, it is acknowledged that expiration of the Employment Term (including notice of non-renewal) shall not be considered a termination without Cause), and other than by

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reason of the Executive’s death or disability. The Company shall provide written notice of termination to the Executive, which notice shall specify the effective date of such termination and that the termination is without Cause (the “Termination Date”). If the Termination Date is later than the date of the notice, then from the date of the notice through the Termination Date, the Executive shall continue to perform the normal duties of the Executive’s employment hereunder, and shall be entitled to receive when due all compensation and benefits applicable to the Executive hereunder. Thereafter, conditioned upon the Executive executing and not revoking a general release in favor of the Company, the Board and their affiliates, in a form mutually acceptable to both parties hereto, the Company shall pay the Executive the amounts set forth in this subsection (c). Under such circumstances, the Company shall pay the Executive an amount equal to fifty percent (50%) of the Executive’s Base Salary for a period of twenty-four (24) months (the “Termination Period”), in such periodic installments as were being paid immediately prior to the Termination Date.

(ii) The Company shall pay the Executive a lump sum, determined on a net present value basis, using a reasonable discount rate determined by the Board, equal to the full target Incentive Payment for the year that includes the Termination Date multiplied by a fraction, the numerator of which is the number of months in the Termination Period and the denominator of which is 12.

(iii) The Company shall also be obligated to pay to the Executive the Standard Termination Payments.

(iv) During the Termination Period, the Executive and the Executive’s dependents will be entitled to continued participation in the “employee welfare benefit plans” (as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974) in which the Executive and the Executive’s dependents participated on the Executive’s Termination Date with respect to any such plans for which such continued participation is allowed pursuant to applicable law and the terms of the plan. In lieu of coverage for which such continued participation is not allowed, the Executive will be reimbursed, on a net after-tax basis, for the cost of individual insurance coverage for the Executive and the Executive’s dependents under a policy or policies that provide benefits (other than disability coverage) not less favorable than the benefits (other than disability coverage) provided under such employee welfare benefit plans. Notwithstanding the foregoing, the coverage or reimbursements for coverage provided under this subsection (iv) shall cease if the Executive and/or the Executive’s dependents become covered under an employee welfare benefit plan of another employer of the Executive that provides the same or similar type of benefits.

(v) In addition, Executive and the Executive’s dependents will be entitled to receive from the Company, and the Company shall provide to the Executive and the Executive’s dependents, medical benefits not less favorable than and on the same terms and for the same periods as those provided under the Company’s Postretirement Medical And Life Insurance Benefits Plan, as in effect

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on the date hereof or the Termination Date, whichever is more favorable to the Executive, regardless of whether the Executive or the Executive’s dependents are otherwise eligible to participate in such plan. The Company, if it chooses, may provide such medical coverage under such Postretirement Medical and Life Insurance Benefits Plan, if the Executive otherwise is eligible thereunder, or in lieu of medical coverage under such plan, the Company may pay for or may procure individual insurance coverage for the Executive and the Executive’s dependents under a policy or policies that provide medical benefits and terms not less favorable than the medical benefits and terms provided under such Post Retirement Medical And Life Insurance Benefits Plan, as in effect on the date hereof or the Termination Date, whichever is more favorable to the Executive.

(d) By the Executive. The Executive may terminate the Executive’s employment, and any further obligations which the Executive may have to perform services on behalf of the Company hereunder at any time after the date hereof; by sending written notice of termination to the Company not less than sixty (60) days prior to the effective date of such termination. During such sixty (60) day period, the Executive shall continue to perform the normal duties of the Executive’s employment hereunder, and shall be entitled to receive when due all compensation and benefits applicable to the Executive hereunder. Except as provided below, if the Executive shall elect to terminate the Executive’s employment hereunder (other than as a result of the Executive’s death or disability), then the Executive shall remain vested in all vested benefits provided for hereunder or under any benefit plan of the Company in which the Executive is a participant and shall be entitled to receive the Standard Termination Payments, but the Company shall have no further obligation to make payments or provide benefits to the Executive under Section 3 hereof. Anything in this Agreement to the contrary notwithstanding, the termination of the Executive’s employment by the Executive for Good Reason (as defined in Section 4(e)), shall be deemed to be a termination of the Executive’s employment without Cause by the Company for purposes of this Agreement, and the Executive shall be entitled to the payments and benefits set forth in Section 4(c) above, subject to the Executive executing and not revoking a general release in favor of the Company, the Board and their affiliates, in a form mutually acceptable to both parties hereto. Notwithstanding the foregoing, in no event shall any termination of employment by the Executive be deemed for Good Reason unless the Executive terminates employment within 180 days of when the Executive learns of the act or conduct that constitutes Good Reason.

(e) Definitions. For purposes of this Agreement, the following definitions will apply:

(i) Cause. The term “Cause” means: (i) gross or willful misconduct; (ii) willful and repeated failure to comply with the lawful directives of the Board or any supervisory personnel; (iii) any criminal act or act of dishonesty or willful misconduct that has a material adverse impact on the property, operations, business or reputation of the Company or its subsidiaries or any act of fraud, dishonesty or misappropriation involving the Company or its subsidiaries; (iv) any conviction or plea of guilty or nolo contendere to a felony or a crime involving dishonesty; (v) the material breach of the terms of any confidentiality, non-competition, non-solicitation or employment agreement the employee has

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with the Company or its subsidiaries; (vi) acts of malfeasance or negligence in a matter of material importance to the Company or its subsidiaries; (vii) the material failure to perform the duties and responsibilities of employee’s position after written notice and a reasonable opportunity to cure (not to exceed 45 days); (viii) grossly negligent conduct; or (ix) activities materially damaging to the property, operations, business or reputation of the Company or its subsidiaries (it being understood that conduct or activities pursuant to employee’s exercise of good faith business judgment shall not be in violation of this Section 4(e)(i)). For purposes of this Agreement, Executive will also be deemed to be terminated for “Cause” if, in connection with the sale, transfer, conveyance or other disposition of all or substantially all of the assets (whether by asset sale, stock sale, merger, combination or otherwise) of one or more of the Company’s Material Lines of Business (a “Material Line of Business Sale”), (i) one or more of the purchasers in such Material Line of Business Sale offers employment (the “Employment Offer”) to Executive which Employment Offer would not permit Executive to terminate employment pursuant to clauses (i), (ii), (iii), (iv) or (v) of the definition of Good Reason contained herein, (ii) Executive declines such Employment Offer, and (iii) the Company terminates Executive’s employment within six (6) months of the consummation of the Material Line of Business Sale.

(ii) Good Reason. “Good Reason” means, after written notice by the Executive to the Board, and a reasonable opportunity for the Company to cure (not to exceed 45 days), that (i) the Executive’s Base Salary is not paid or is reduced by more than 10 percent in the aggregate or other than as part of a salary reduction program pursuant to which the Base Salaries of the Chief Executive Officer, all Executive Vice Presidents and all Senior Vice Presidents are reduced by the same percentage at the same time and for the same period of time, (ii) the Executive’s target Incentive Payment is reduced, (iii) the Executive’s job duties and responsibilities are diminished (but a reduction in the size of the Company as a result of a Sale of a Material Line of Business shall not alone constitute a diminution in the Executive’s job duties and responsibilities and any dimunition in the Executive’s job duties and responsibilities after notice of non-renewal of the Employment Term is given by either party shall not be considered “Good Reason” hereunder), (iv) the Executive is required to relocate to a facility more than 50 miles from Waynesboro, Virginia, (v) the Executive is not provided benefits (e.g., health insurance) that are comparable in all material respects to those previously provided to the Executive, (vi) the Executive is directed by the Board or an officer of the Company or an affiliate (or the Company’s successor or an affiliate thereof) to engage in conduct that Company counsel, or mutually agreed upon counsel if requested by the Executive, has advised is likely to be illegal and that such counsel states with specificity why such direction is likely to be illegal (including a proposal for modification of such direction which in counsel’s opinion would not be likely to be illegal), or (vii) the Executive is directed by the Board or an officer of the Company or an affiliate (or the Company’s successor or an affiliate thereof) to refrain from acting and Company counsel, or mutually agreed upon counsel if requested by the Executive, has advised that such failure to act is likely to be illegal and that such counsel states

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with specificity why such direction is likely to be illegal (including a proposal for modification of such direction which in counsel’s opinion would not be likely to be illegal). If the Executive is directed to engage in conduct that he reasonably believes is likely to be illegal or to refrain from acting and the Executive reasonably believes that such failure to act is likely to be illegal, the Executive can express such reservations to the Board or directing officer, and the Company shall, at its expense, engage Company counsel, or mutually agreed upon counsel if requested by the Executive, to advise as to whether such conduct or failure to act is likely to be illegal. Subject to the last sentence of Section 4(d) hereof, if any of the events occur that would entitle the Executive to terminate the Executive’s employment for Good Reason hereunder and the Executive does not exercise such right to terminate the Executive’s employment, any such failure shall not operate to waive the Executive’s right to terminate the Executive’s employment for that or any subsequent action or actions, whether similar or dissimilar, that would constitute Good Reason. For purposes of clarity, it is acknowledged that expiration of the Employment Term (including notice of non-renewal) shall not be considered “Good Reason” hereunder.

(iii) Material Line of Business. “Material Line of Business” means any line or lines of business or service or group of services which represent(s) in the aggregate either 25% or more of the Company’s consolidated revenues or 25% or more of the Company’s consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for the twelve month period ended on the last day of the most recently ended fiscal quarter for the Company.

5. Confidential Information. The Executive understands and acknowledges that during the Executive’s employment with the Company, the Executive has been and will be making use of, acquiring or adding to the Company’s Confidential Information (as defined below). In order to protect the Confidential Information, the Executive will not, during the Executive’s employment with the Company or at any time thereafter, in any way utilize any of the Confidential Information except in connection with the Executive’s employment by the Company. The Executive will not at any time use any Confidential Information for the Executive’s own benefit or the benefit of any person except the Company. At the end of the Executive’s employment with the Company, the Executive will surrender and return to the Company any and all Confidential Information in the Executive’s possession or control, as well as any other Company property that is in the Executive’s possession or control. The Executive acknowledges and agrees that any breach of this Section 5 would be a material breach of this Agreement. The term “Confidential Information” shall mean any information that is confidential and proprietary to the Company, including but not limited to the following general categories:

(i) trade secrets;

(ii) lists and other information about current and prospective customers;

(iii) plans or strategies for sales, marketing, business development, or system build-out;

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(iv) sales and account records;

(v) prices or pricing strategy or information;

(vi) current and proposed advertising and promotional programs;

(vii) engineering and technical data;

(viii) the Company’s methods, systems, techniques, procedures, designs, formulae, inventions and know-how; personnel information;

(ix) legal advice and strategies; and

(x) other information of a similar nature not known or made available to the public or the Company’s Competitors (as defined in Section 8).

Confidential Information includes any such information that the Executive may prepare or create during the Executive’s employment with the Company, as well as such information that has been or may be created or prepared by others. This promise of confidentiality is in addition to any common law or statutory rights of the Company to prevent disclosure of its Trade Secrets and/or Confidential Information.

6. Return of Documents. All writings, records and other documents and things containing any Confidential Information in the Executive’s custody or possession shall be the exclusive property of the Company, shall not be copied and/or removed from the premises of the Company, except in pursuit of the business of the Company, and shall be delivered to the Company, without retaining any copies, upon the termination of the Executive’s employment or at any time as requested by the Company.

7. Reaffirm Obligations. Upon termination of the Executive’s employment with the Company, the Executive shall, if requested by the Company, reaffirm in writing Employee’s recognition of the importance of maintaining the confidentiality of the Company’s proprietary information and trade secrets and reaffirm all of the obligations set forth in Section 5 of this Agreement.

8. Non-Compete; Non-Solicitation. The Executive agrees that:

(a) while the Executive is employed by the Company, the Executive will not, directly or indirectly, compete with the business conducted by the Company, and the Executive will not, directly or indirectly, provide any services to a Competitor.

(b) For a period of 24 months after the Executive’s employment with the Company ends for any reason (the “Non-Competition Period”), the Executive will not compete with the Company by performing or causing to be performed the same or similar types of duties or services that the Executive performed for the Company for a Competitor of the Company in any capacity whatsoever, directly or indirectly, within any city or county of the continental United States in which, at the time the Executive’s employment with the Company ends, the Company provides services or products, offers to provide services or products, or has

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documented plans to provide or offer to provide services or products within the Non-Competition Period provided that the Executive has knowledge of those plans at the time the Executive’s employment with the Company ends (the “Service Area”). Additionally, the Executive agrees that during the Non-Competition Period, the Executive will not, directly or indirectly, sell, attempt to sell, provide or attempt to provide, any wireless or wireline telecommunication services, including but not limited to internet services, to any person or entity who was a customer or an actively sought prospective customer of the Company, at any time during the Executive’s employment with the Company. The restrictions set forth above shall immediately terminate and shall be of no further force or effect in the event of a default by the Company in the payment of any consideration, if any, to which the Executive is entitled under Section 8(i) below, which default is not cured within thirty (30) days after written notice thereof. The Executive acknowledges and agrees that because of the nature of the Company’s business, the nature of the Executive’s job responsibilities, and the nature of the Confidential Information and Trade Secrets of the Company which the Company will give the Executive access to, any breach of this provision by the Executive would result in the inevitable disclosure of the Company’s Trade Secrets and Confidential Information to its direct competitors.

(c) While the Executive is employed by the Company and during the Non-Competition Period, the Executive will not, directly or indirectly, solicit or encourage any employee of the Company to terminate employment with the Company; hire, or cause to be hired, for any employment by a Competitor, any person who within the preceding 12 month period has been employed by the Company, or assist any other person, firm, or corporation to do any of the acts described in this subsection (c).

(d) The Executive acknowledges and agrees that the Company has a legitimate business interest in preventing him from engaging in activities competitive with it as described in this Section 8 and that any breach of this Section 8 would constitute a material breach of this Section 8 and this Agreement.

(e) The Company may notify anyone employing the Executive or evidencing an intention to employ the Executive during the Non-Competition Period as to the existence and provisions of this Agreement and may provide such person or organization a copy of this Agreement. The Executive agrees that the Executive will provide the Company the identity of any employer Executive plans to go to work for during the Non-Competition Period along with the Executive’s anticipated job title, anticipated job duties with any such employer, and anticipated start date. The Company will analyze the proposed employment and make a determination as to whether it would violate this Section 8. If the Company determines that the proposed employment would not pose an unacceptable threat to the Company’s interests, the Company will notify the Executive in writing that it does not object to the employment. The Executive further agrees to provide a copy of this Agreement to anyone who employs the Executive during the Non-Competition Period.

(f) The Executive acknowledges and agrees that this Section 8 is intended to limit the Executive’s right to compete only to the extent necessary to protect the Company’s legitimate business interest. The Executive acknowledges and agrees that the Executive will be reasonably able to earn a livelihood without violating the terms of this Section 8. If any of the provisions of this Section 8 should ever be deemed to exceed the time, geographic area, or

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activity limitations permitted by applicable law, the Executive agrees that such provisions may be reformed to the maximum time, geographic area and activity limitations permitted by applicable law, and the Executive authorizes a court or other trier of fact having jurisdiction to so reform such provisions. In the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive waives and forfeits any and all rights to any further benefits under this Agreement, including but not limited to the consideration set forth in subsection (i) below as well as any additional payments, compensation, benefits or severance pay he may otherwise be entitled to receive under this Agreement. Additionally, in the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive agrees to repay the Company for any of the consideration set forth in subsection (i) below that the Executive received prior to the breach as well as any additional payments, compensation, benefits or severance pay the Executive might otherwise have previously received under Section 4(c) of this Agreement.

(g) For purposes of this Section 8, the following definitions will apply:

(i) “Directly or indirectly” as used in this Agreement includes an interest in or participation in a business as an individual, partner, shareholder, owner, director, officer, principal, agent, employee, consultant, trustee, lender of money, or in any other capacity or relation whatsoever. The term includes actions taken on behalf of the Executive or on behalf of any other person. “Directly or indirectly” does not include the ownership of less than 5% of the outstanding shares of any corporation, if such shares are publicly traded in the over-the-counter market or listed on a national securities exchange.

(ii) “Competitor” as used in this Agreement means any person, firm, association, partnership, corporation or other entity that competes or attempts to compete with the Company by providing or offering to provide wireless or wireline telecommunication services, including but not limited to internet services, within any city or county in which the Company provides or offers those services or products.

(h) Notwithstanding any other provision of this Section 8, the Executive will not be considered to have violated any prohibition against competing with the Company for engaging in any of the following activities: (1) being employed or retained by (i) any parent, subsidiary or affiliate organization of any Competitor where that parent, subsidiary or affiliate organization does not itself, and the Executive’s employment will not cause the Executive to, compete or attempt to compete with the Company by providing or offering to provide wireless or wireline telecommunications services, including but not limited to internet services, within the Service Area or (ii) any Competitor, directly or indirectly, so long as Executive’s employment or service does not relate to working within the Service Area or activities that would benefit the Competitor principally within the Service Area; or (2) working or providing services within the Service Area so long as the Executive’s employment or service does not relate to the type of services provided or offered by the Company within that Service Area or to services for which the Company has documented plans to provide, offer or supply within that Service Area at the time of Executive’s termination of employment; or (3) selling or attempting to sell wireless or

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wireline telecommunications services, including but not limited to internet services, so long as the services or products, which the Executive is selling or attempting to sell to a customer, do not relate to the type of services or products provided or offered by the Company to such customer or for which the Company has documented plans to provide, offer or supply to such customer at the time of Executive’s termination of employment; provided, however, that the Executive is nevertheless prohibited from: (i) selling, attempting to sell, and providing or attempting to provide, to any person who was a customer, or who was actively sought as a customer, of the Company at the time of Executive’s termination of employment any wireless or wireline telecommunications services, including but not limited to internet services, that are the type of services or products that the Company sold, attempted to sell or provided or attempted to provide to such customer as described in (b) above and (ii) soliciting or encouraging any employee of the Company to terminate employment or taking any other of the prohibited actions as described in (c) above.

(i) In consideration of the Executive’s undertakings set forth in this Section 8 with respect to periods after termination of employment, but only in the event that the Executive is entitled to the benefits and payments under Section 4(c) above, the Company will pay the Executive an amount equal to fifty percent (50%) of his Base Salary during the Non-Competition Period, in such periodic installments as his Base Salary was being paid immediately prior to termination of employment. In the event the Executive is not entitled to the benefits and payments under Section 4(c) above, the Company will not pay Executive any of the consideration set forth in this Section 8(i).

(j) In the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive waives and forfeits any and all rights to any further payments under subsection (i) or otherwise under this Agreement. This waiver and forfeiture shall be effective even in the event a court refuses to enforce the restrictions set forth in this Section 8.

9. Representations. The Executive represents and warrants to the Company that the execution, delivery and performance of this Agreement by the Executive does not conflict with, or result in the breach by the Executive or violation by the Executive of, any other agreement to which the Executive is a party or by which the Executive is bound. The Executive hereby agrees to indemnify the Company, its officers, directors and shareholders and hold them harmless from and against any liability (including, without limitation, reasonable attorneys’ fees and expenses) which they may at any time suffer or incur arising out of or relating to any breach of an agreement, representation or warranty made by the Executive herein. The Company represents and warrants that this Agreement and the transactions contemplated hereby have been duly authorized by the Company by all necessary corporate and shareholder action, and that the execution, delivery and performance of this Agreement by the Company does not conflict with, or result in the breach or violation by the Company of, its Articles of Incorporation or Amended and Restated Bylaws or any other agreement to which the Company is a party or by which it is bound. The Company hereby agrees to indemnify the Executive and hold the Executive harmless from and against any liability (including, without limitation, reasonable attorneys’ fees and expenses) which the Executive may at any time suffer or incur arising out of or relating to any breach of an agreement, representation or warranty made by the Company herein.

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10. Remedies. The parties hereto agree that the Company would suffer irreparable harm from a breach by the Executive of any of the covenants or agreements contained herein. Therefore, in the event of the actual or threatened breach by the Executive of any of the provisions of this Agreement, the Company may, in addition and supplementary to other rights and remedies existing in its favor, apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any violation of the provisions hereof. The Executive agrees that if a lawsuit or other proceeding is brought to enforce the terms of this Agreement or determine the validity of its terms and the Company prevails, the Company will be entitled to recover from the Executive its reasonable attorneys’ fees and court costs. The Executive agrees that these provisions are reasonable.

11. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Company and its affiliates and their successors and assigns, and shall be binding upon and inure to the benefit of the Executive and the Executive’s legal representatives and assigns, provided that in no event shall the Executive’s obligations to perform services for the Company and its affiliates be delegated or transferred by the Executive. The Company may assign or transfer its rights hereunder to a successor corporation in the event of a merger, consolidation or transfer or sale of all or substantially all of the assets of the Company or of the Company’s business (provided, however, that no such assignment or transfer shall have the effect of relieving the Company of any liability to the Executive hereunder or under any other agreement or document contemplated herein), but only if such assignment or transfer does not result in employment terms, conditions, duties or responsibilities which are or may be materially different than the terms, conditions, duties or responsibilities of the Executive hereunder. If the Company assigns or transfers its rights under this Agreement to a successor corporation, the Executive’s obligations under Section 8 of this Agreement will be construed and enforceable with respect to the business and geographic scope of the Company only and will not be construed or enforceable with respect to the business and geographic scope of any successor corporation to which the Company’s rights may be assigned or transferred to the extent such business or geographic scope is greater than that of the Company at the time of such assignment or transfer. The Executive may not transfer or assign the Executive’s rights and obligations under this Agreement.

12. Modification or Waiver. No amendment, modification, waiver, termination or cancellation of this Agreement shall be binding or effective for any purpose unless it is made in a writing signed by the party against whom enforcement of such amendment, modification, waiver, termination or cancellation is sought. No course of dealing between or among the parties to this Agreement shall be deemed to affect or to modify, amend or discharge any provision or term of this Agreement. No delay on the part of the Company or the Executive in the exercise of any of their respective rights or remedies shall operate as a waiver thereof, and no single or partial exercise by the Company or the Executive of any such right or remedy shall preclude other or further exercises thereof. A waiver of a right or remedy on any one occasion shall not be construed as a bar to or waiver of any such right or remedy on any other occasion.

13. Governing Law; Jurisdiction. This Agreement and all rights, remedies and obligations hereunder, including, but not limited to, matters of construction, validity and performance shall be governed by the laws of the Commonwealth of Virginia without regard to its conflict of laws principles or rules. To the full extent lawful, each of the Company and the

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Executive hereby consents irrevocably to personal jurisdiction, service and venue in connection with any claim or controversy arising out of this Agreement in the courts of the Commonwealth of Virginia located in Waynesboro, Virginia, and in the federal courts in the Western District of Virginia.

14. Excise Taxes.

(a) If any payment or distribution by the Company or any affiliate to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then the benefits payable or provided under this Agreement (or other Payments as described above) shall be reduced (but not in excess of the amount of the benefits payable or provided under this Agreement) if, and only to the extent that, such reduction will allow the Executive to receive a greater Net After Tax Amount than such Executive would receive absent such reduction.

(b) The Accounting Firm (as defined below) will first determine the amount of any Parachute Payments (as defined below) that are payable to the Executive. The Accounting Firm also will determine the Net After Tax Amount attributable to the Executive’s total Parachute Payments.

(c) The Accounting Firm will next determine the largest amount of payments that may be made to the Executive without subjecting the Executive to the Excise Tax (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.

(d) The Executive then will receive the total Parachute Payments or the total Capped Payments, whichever provides the Executive with the higher Net After Tax Amount; however, if the reductions imposed under this Section 14 are in excess of the amount of benefits payable or provided under this Agreement, then the total Parachute Payments will be adjusted by reducing the amount of any noncash or cash benefits under this Agreement or any other plan, agreement or arrangement as directed by the Executive. The Accounting Firm will notify the Executive and the Company if it determines that the Parachute Payments must be reduced and will send the Executive and the Company a copy of its detailed calculations supporting that determination.

(e) As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determinations under this Section 14, it

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is possible that the Executive will have received Parachute Payments or Capped Payments in excess of the amount that should have been paid or distributed (“Overpayments”), or that additional Parachute Payments or Capped Payments should be paid or distributed to the Executive (“Underpayments”). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Executive, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, that Overpayment may, at the Executive’s discretion, be treated for all purposes as a loan ab initio that the Executive must repay to the Company immediately together with interest at the applicable Federal rate under Code Section 7872; provided, however, that no loan will be deemed to have been made and no amount will be payable by the Executive to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which the Executive is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999 and the Executive will receive a greater Net After Tax Amount than such Executive would otherwise receive. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Executive and the Company of that determination and the amount of that Underpayment will be paid to the Executive promptly by the Company.

(f) For purposes of this Section 14, the following terms shall have their respective meanings:

(i) “Accounting Firm” means the independent accounting firm currently engaged by the Company, or a mutually agreed upon independent accounting firm if requested by the Executive; and

(ii) “Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any State or local income taxes applicable to the Executive on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment.

(iii) “Parachute Payment” means a payment that is described in Code Section 280G(b)(2), determined in accordance with Code Section 280G and the regulations promulgated or proposed thereunder.

(g) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by the preceding subsections shall be borne by the Company.

(h) The Company and the Executive shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or the Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the

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determinations and calculations contemplated by the preceding subsections. Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

15. Severability. Whenever possible each provision and term of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision or term of this Agreement shall be held to be prohibited by or invalid under such applicable law, then such provision or term shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or affecting in any manner whatsoever the remainder of such provisions or term or the remaining provisions or terms of this Agreement. If any provision contained in Sections 5 or 8 of this Agreement shall for any reason be held to be excessively broad or unreasonable as to time, territory, or interest to be protected, a court is hereby empowered and requested to construe such provision by narrowing it so as to make it reasonable and enforceable to the extent provided under applicable law.

16. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same Agreement.

17. Headings. The headings of the Sections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part hereof and shall not affect the construction or interpretation of this Agreement.

18. Entire Agreement. This Agreement (together with all documents and instruments referred to herein) constitutes the entire agreement, and supersedes all other prior agreements and undertakings, both written and oral, among the parties with respect to the subject matter hereof, including any employment or management continuity agreement under which the Executive hereby agrees to waive all rights and which is hereby terminated.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

NTELOS Inc.
By:	/s/    JAMES S. QUARFORTH
	James S. Quarforth
	Chief Executive Officer
Executive
/s/    MICHAEL B. MONEYMAKER
Michael B. Moneymaker

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EMPLOYMENT CONTRACT AMENDMENT

THIS AMENDMENT (“Amendment”) to the Employment Agreement (the “Employment Agreement”) dated as of May 2, 2005 by and between NTELOS Inc., a Virginia corporation (“Company”), and Michael B. Moneymaker (the “Executive”) is made as of February 13, 2006, by and between NTELOS, NTELOS Holdings Corp., a Delaware corporation (“Holdings”) and the Executive (collectively, the “Parties”).

Background

Holdings will be engaging in an initial public offering and NTELOS will remain a wholly owned subsidiary of Holdings. NTELOS and the Executive wish to add Holdings as a party to the Employment Agreement, upon which both NTELOS and Holdings will jointly share the liabilities and benefits under the Employment Agreement. Additionally, the Parties wish to make certain other amendments to the Employment Agreement, as set forth herein,. The Executive consents to this Amendment, including without limitation, the addition of Holdings as a party to the Agreement.

Terms

In consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereto promise and agree as follows:

1. Pursuant to Section 11 of the Employment Agreement, Holdings shall become a party to the Employment Agreement and, jointly with NTELOS, inure to all the benefits and the liabilities under the Employment Agreement, as NTELOS has under the Agreement. Henceforth both Holdings and NTELOS shall jointly share the liabilities and benefits under the Employment Agreement.

2. To reflect the addition of Holdings as a party to the Employment Agreement, unless the context requires otherwise, the definition of and all references to “Company” in the Employment Contract shall refer to both Holdings and NTELOS.

3. All references to “Board” in the Employment Agreement shall refer to the Board of Directors of Holdings.

4. Section 2 of the Employment Agreement shall be amended by adding the following after the last sentence of Section 2:

“Notwithstanding the foregoing, if the Employment Term has less than 24 months remaining upon the occurrence of a “Change in Control” (as such term is defined in Section 4(e)(iv)), then the Employment Term shall be automatically extended so that the Employment Term will not expire until the date which is 24 months from the date of the Change in Control, subject to the automatic renewal, as described above.”

5. Section 4(b) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(b):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then the Disability Incentive Payment shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date.”

6. Section 4(c)(i) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(i):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then the payments required under this Section 4(c)(i) shall not commence until the first day which is at least six months after the Termination Date. All payments, which would have otherwise been required to be made over such six month period, shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date. Thereafter, payments shall continue as so provided above for the remainder of the Termination Period.”

7. Section 4(c)(ii) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(ii):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then the payment shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date.”

8. Section 4(c)(iv) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(iv):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then such reimbursements (only to the extent such would otherwise be subject to Code Section 409A) shall not commence until the first day which is at least six months after the Termination Date. All reimbursements, which would have otherwise been required to be made over such six month period, shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date. Thereafter, reimbursements shall continue as so provided above for the remainder of the Termination Period.”

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9. A new Section 4(e)(iv) shall be added the Employment Agreement, which shall read in its entirety, as follows:

“Change in Control” means any of the following described in clauses (I) through (V) below, provided that a “Change in Control” shall not mean any event listed in clauses (I) through (V) that occurs directly or indirectly as a result of or in connection with Quadrangle Capital Partners LP, a Delaware limited partnership, Quadrangle Select Partners LP, a Delaware limited partnership, and Quadrangle Capital Partners—A LP, a Delaware limited partnership (collectively the “Quadrangle Entities”) and/or Citigroup Venture Capital Equity Partners, L.P., a Delaware limited partnership, CVC/SSB Employee Fund, L.P., a Delaware limited partnership, CVC Executive Fund LLC, a Delaware limited liability company (collectively the “CVC Entities”) and/or their Affiliates, related funds and co-investors becoming the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Holdings representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities, or the shareholders of Holdings approve a merger, consolidation or reorganization of Holdings with any other company and such merger, consolidation or reorganization is consummated, and after such merger, consolidation or reorganization any of the Quadrangle Entities, the CVC Entities and/or their respective Affiliates, related funds and co-investors acquire more than fifty-one percent (51%) of the combined voting power of Holdings’ then outstanding securities:

I. any Person is or becomes the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Holdings representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities;

II. consummation of a merger, consolidation or reorganization of Holdings with any other company, or a sale of all or substantially all the assets of Holdings (a “Transaction”), other than (i) a Transaction that would result in the voting securities of Holdings outstanding immediately prior thereto continuing to represent either directly or indirectly more than fifty-one percent (51%) of the combined voting power of the then outstanding securities of Holdings or such surviving or purchasing entity;

III. the shareholders of Holdings approve a plan of complete liquidation of Holdings and such liquidation is consummated; or

IV. a sale, transfer, conveyance or other disposition (whether by asset sale, stock sale, merger, combination or otherwise) (a “Sale”) of a Material Line of Business (other than any such sale to

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the Quadrangle Entities, the CVC Entities or their Affiliates, related funds and co-investors ), except that with respect to this clause (IV) there shall only be a Change in Control with respect to the Executive who is employed at such time in such Material Line of Business (whether full or part-time), and the Executive does not receive an offer for “comparable employment” with the purchaser and the Executive’s employment is terminated by Holdings or any Affiliate of Holdings no later than six (6) months after the consummation of the Sale of the Material Line of Business. For these purposes, “comparable employment” means that (i) the Executive’s base salary and target incentive payments are not reduced in the aggregate, (ii) the Executive’s job duties and responsibilities are not diminished (but a reduction in size of Holdings as the result of a Sale of a Material Line of Business, or the fact that the purchaser is smaller than Holdings, shall not alone constitute a diminution in the Executive’s job duties and responsibilities), (iii) the Executive is not required to relocate to a facility more than fifty (50) miles from the Executive’s principal place of employment at the time of the Sale and (iv) the Executive is provided benefits that are comparable in the aggregate to those provided to the Executive immediately prior to the Sale; or

V. During any period of twelve (12) consecutive months commencing upon the effective date of this Amendment, the individuals who constitute the Board, upon the effective date of this Amendment, and any new director who either (i) was elected by the Board or nominated for election by Holdings’ stockholders was approved by a vote of more than fifty percent (50%) of the directors then still in office who either were directors, upon the effective date of the Plan, or whose election or nomination for election was previously so approved or (ii) was appointed to the Board pursuant to the designation of Quadrangle Entities and/or the CVC Entities, cease for any reason to constitute a majority of the Board.

For purposes of the foregoing, “Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

For purposes of the foregoing, “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.

10. Section 8(i) of the Employment Agreement shall be amended by adding the following before the last sentence of Section 8(i):

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“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Section 409A, then such payments shall be made in the same time and manner as provided in Section 4(c)(i) above.”

11. Other than as specifically provided in the Amendment, the Employment Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their respective representatives, thereunto duly authorized, as of the date first above written.

HOLDINGS:	NTELOS HOLDINGS CORP.
	By:	/s/    JAMES S. QUARFORTH
	Name:	James S. Quarforth
	Title:	Chief Executive Officer, President and Chairman of the Board of Directors
NTELOS:	NTELOS INC.
	By:	/s/    JAMES S. QUARFORTH
	Name:	James S. Quarforth
	Title:	Chief Executive Officer, President and Chairman of the Board of Directors
EXECUTIVE :		/s/    MICHAEL B. MONEYMAKER
	Name:	Michael B. Moneymaker

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EX-10.5

Exhibit 10.5

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), dated as of May 2, 2005 between Carl A. Rosberg (the “Executive”) and NTELOS Inc., a Virginia corporation (the “Company”), recites and provides as follows:

WHEREAS, the Company considers it essential to the best interests of its shareholders to foster the continuing employment of its key management personnel; and

WHEREAS, the Board of Directors of the Company (the “Board”) expects that the Executive will continue to make substantial contributions to the growth and prospects of the Company; and

WHEREAS, the Company and the Executive previously entered into an employment agreement dated October 1, 2003; and

WHEREAS, the Company and the Executive now desire to terminate such prior employment agreement and replace it with this Agreement; and

WHEREAS, the parties intend this Agreement to supersede the prior employment agreement and any other prior agreements or undertakings among the parties with respect to the subject matter contained herein; and

WHEREAS, the Executive will continue to serve the Company in reliance upon the undertakings of the Company contained herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein, the receipt and sufficiency of which are hereby acknowledged by each of the parties, the Company and the Executive agree as follows:

1. Employment.

(a) Position. On the terms and subject to the conditions set forth herein, the Company agrees to employ the Executive as Executive Vice President throughout the Employment Term (as defined below). At the request of the Board and without additional compensation, the Executive shall also serve as an officer and/or director of any or all of the subsidiaries of the Company.

(b) Duties and Responsibilities. The Executive shall have such duties and responsibilities that are consistent with the Executive’s position as the Board determines and shall perform such duties and carry out such responsibilities to the best of the Executive’s ability for the purpose of advancing the business of the Company and its subsidiaries. Subject to the provisions of Section 1 (c) below, during the Employment Term the Executive shall devote the Executive’s full business time, skill and attention to the business of the Company and its subsidiaries, and, except as specifically approved by the Board, shall not engage in any other business activity or have any other business affiliation.

(c) Other Activities. Anything in this Agreement to the contrary notwithstanding, as part of the Executive’s business efforts and duties on behalf of the Company, the Executive may participate fully in social, charitable and civic activities, and, if specifically approved by the Board, the Executive may serve on the boards of directors of other companies, provided that such activities do not unreasonably interfere with the performance of and do not involve a conflict of interest with the Executive’s duties or responsibilities hereunder.

2. Employment Term. The “Employment Term” hereunder shall commence on the date set forth above and shall continue in full force and effect until the fourth anniversary of such date when the Employment Term shall terminate, unless terminated earlier pursuant to the terms and conditions of this Agreement. The Employment Term will renew hereunder automatically for successive one-year periods unless either party gives written notice to the other not less than six (6) months prior to the end of the fourth anniversary hereof (or any subsequent anniversary, as the case may be) that such party does not wish the Employment Term to be so extended, and under such circumstances, the Employment Term and this Agreement will terminate by its terms, and without liability to either party, on such fourth anniversary (or such subsequent anniversary, as the case may be).

3. Compensation. During the Employment Term, the Company will pay and/or otherwise provide the Executive with compensation and related benefits as follows:

(a) Base Salary. The Company agrees to pay the Executive, for services rendered hereunder, an initial base salary at the annual rate of $282,150 (the “Base Salary”). Base Salary will be reviewed annually throughout the Employment Term by the Compensation Committee of the Board. Notwithstanding anything in this Agreement to the contrary, the Company may reduce the Executive’s Base Salary by up to 10% during the Employment Term, but only as part of a salary reduction program pursuant to which the Base Salaries of the Chief Executive Officer, all Executive Vice Presidents and all Senior Vice Presidents are reduced by the same percentage at the same time and for the same period of time. The Base Salary shall be payable in equal periodic installments, not less frequently than monthly, less any sums which may be required to be deducted or withheld under applicable provisions of law. The Base Salary for any partial year shall be prorated based upon the number of days elapsed in such year.

(b) Stock-Based Incentive Compensation. The Executive shall be eligible to participate in the Company’s stock-based incentive compensation plan pursuant to its terms (“Stock-Based Incentive Payment”) when the Company establishes such a plan.

(c) Supplemental Retirement Plan. During the Employment Term (and thereafter to the extent expressly provided herein), the Executive shall be entitled to participate in the NTELOS Inc. Executive Supplemental Retirement Plan according to the terms thereof, and the Executive’s designation as a participant in such plan shall not be revoked or rescinded prior to the termination of the Executive’s employment with the Company.

(d) Team Incentive Plan. The Executive shall be eligible to participate in the Company’s team incentive plan with an annual incentive target of fifty-five percent (55%) of Base Salary (“Incentive Payment”), subject to achievement of such program’s objectives and final approval of the Board. Notwithstanding the foregoing or the terms of the team incentive

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plan, the full Incentive Payment the Executive is eligible to receive under the team incentive plan based on objective performance factors must be paid and cannot be reduced or eliminated as a result of individual performance factors other than as a result of a good faith determination by the Chief Executive Officer.

(e) Benefits. During the Employment Term (and thereafter to the extent expressly provided herein), the Executive shall be entitled to participate in all of the Company’s employee benefit plans applicable to the Company’s comparable senior executives according to the terms of those plans. In addition to the foregoing compensation, the Company agrees that during the Employment Term it shall provide to the Executive a monthly automobile allowance pursuant to Company policy.

(f) Vacation. The Executive shall be entitled to a minimum of four weeks of vacation annually, during which time the Executive shall receive compensation in accordance with the terns of this Agreement.

(g) Term Life Insurance. During the Employment Term, and in addition to any other benefits to which Executive shall be entitled, the Company agrees to pay the premiums on a term life insurance contract covering the Executive that pays a death benefit of at least $592,000. The Company in its discretion shall select the term life insurance contract on which it will pay the premiums; but, the Executive shall be the owner of such contract and will be or will designate the beneficiary of such contract. The Company (i) will include and report such premium payments in the Executive’s taxable income to the extent required under applicable law and (ii) also will pay to the Executive an additional payment in an amount such that after payment by the Executive of all taxes imposed on the additional payment, the Executive retains an amount of the additional payment equal to the taxes imposed upon the Executive with respect to the Company’s payment of the premiums on the term life insurance contract. The amount of the additional payment shall be determined based on the Executive’s likely effective rates of federal, state and local income taxation for the calendar year in which the additional payment is to be made, net of the likely reduction in federal income taxes that is obtained from any deduction of state and local taxes. Executive agrees, for purposes of calculating the amount of the additional payment, to provide the Company such information as the Company may reasonably request to determine the amount of the additional payment and to cooperate with the Company in good faith in order to effectively make such determination. The Company shall hold all such information secret and confidential and shall not, without the prior written consent of the Executive or as otherwise may be required by law or legal process, communicate or divulge such information to anyone other than the Company and those in need of such information for purposes of determining the amount of the additional payment. Notwithstanding any other provision of this Agreement, in the event the term life insurance contract described herein extends beyond the termination of Executive’s employment with the Company, the Executive, and not the Company, shall be obligated to pay the premiums on such tern life insurance contract accruing after the Executive’s termination of employment with the Company.

4. Termination of Employment.

(a) By the Company For Cause. The Company may terminate the Executive’s employment under this Agreement at any time for Cause (as defined in Section 4(e)) and shall

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provide written notice of termination to the Executive (which notice shall specify in reasonable detail the basis upon which such termination is made). Notwithstanding the foregoing, in no event, shall any termination of employment be deemed for Cause unless the Executive’s employment is terminated within 180 days of when the Company learns of the act or conduct that constitutes Cause and the Chief Executive Officer of the Company or the Board of Directors concludes that the situation warrants a determination that the Executive’s employment terminated for Cause. In the event the Executive’s employment is terminated for Cause, all provisions of this Agreement (other than Sections 5 through 15 hereof) and the Employment Term shall be terminated; provided, however, that such termination shall not divest the Executive of any previously vested benefit or right unless the terms of such vested benefit or right specifically require such divestiture where the Executive’s employment is terminated for Cause. In addition, the Executive shall be entitled to payment of the Executive’s earned and unpaid Base Salary to the date of termination. The Executive also shall be entitled to unreimbursed business and entertainment expenses in accordance with the Company’s policy, and unreimbursed medical, dental and other employee benefit expenses incurred in accordance with the Company’s employee benefit plans (the payments and benefits described in this subsection (a) hereinafter referred to as the “Standard Termination Payments”).

(b) Upon Death or Disability. If the Executive dies, all provisions of Section 3 of this Agreement (other than rights or benefits arising as a result of such death) and the Employment Term shall be automatically terminated; provided, however, that an amount equal to the earned and unpaid Incentive Payments to the date of death and the Standard Termination Payments shall be paid to the Executive’s surviving spouse or, if none, the Executive’s estate, and the death benefits under the Company’s employee benefit plans shall be paid to the Executive’s beneficiary or beneficiaries as properly designated in writing by the Executive. If the Executive is unable to perform the essential functions of the Executive’s job under this Agreement, with or without reasonable accommodation, by reason of physical or mental disability or incapacity (“Disability”) and such disability or incapacity shall have continued for any period aggregating six months within any 12 consecutive months, the Company may terminate this Agreement and the Employment Term at any time thereafter. In such event, the Executive shall be entitled to receive the Executive’s normal compensation hereunder during said time of disability or incapacity, and shall thereafter be entitled to receive the “Disability Incentive Payment” (as described in the last sentence of this subsection (b)) and the Standard Termination Payments. The portion of the payment representing the Disability Incentive Payment shall be paid in a lump sum determined on a net present value basis, using a reasonable discount rate determined by the Board. The Disability Incentive Payment shall be equal to the target Incentive Payment that the Executive would have been eligible to receive for the year in which the Employment Term is terminated multiplied by a fraction, the numerator of which is the number of days in such year before and including the day of termination of the Employment Term and the denominator of which is the total number of days in such year.

(c) By the Company Without Cause.

(i) The Company may terminate the Executive’s employment under this Agreement at any time without Cause (for purposes of clarity, it is acknowledged that expiration of the Employment Term (including notice of non-renewal) shall not be considered a termination without Cause), and other than by

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reason of the Executive’s death or disability. The Company shall provide written notice of termination to the Executive, which notice shall specify the effective date of such termination and that the termination is without Cause (the “Termination Date”). If the Termination Date is later than the date of the notice, then from the date of the notice through the Termination Date, the Executive shall continue to perform the normal duties of the Executive’s employment hereunder, and shall be entitled to receive when due all compensation and benefits applicable to the Executive hereunder. Thereafter, conditioned upon the Executive executing and not revoking a general release in favor of the Company, the Board and their affiliates, in a form mutually acceptable to both parties hereto, the Company shall pay the Executive the amounts set forth in this subsection (c). Under such circumstances, the Company shall pay the Executive an amount equal to forty percent (40%) of the Executive’s Base Salary for a period of twenty-four (24) months (the “Termination Period”), in such periodic installments as were being paid immediately prior to the Termination Date.

(ii) The Company shall pay the Executive a lump sum, determined on a net present value basis, using a reasonable discount rate determined by the Board, equal to the full target Incentive Payment for the year that includes the Termination Date multiplied by a fraction, the numerator of which is the number of months in the Termination Period and the denominator of which is 12.

(iii) The Company shall also be obligated to pay to the Executive the Standard Termination Payments.

(iv) During the Termination Period, the Executive and the Executive’s dependents will be entitled to continued participation in the “employee welfare benefit plans” (as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974) in which the Executive and the Executive’s dependents participated on the Executive’s Termination Date with respect to any such plans for which such continued participation is allowed pursuant to applicable law and the terms of the plan. In lieu of coverage for which such continued participation is not allowed, the Executive will be reimbursed, on a net after-tax basis, for the cost of individual insurance coverage for the Executive and the Executive’s dependents under a policy or policies that provide benefits (other than disability coverage) not less favorable than the benefits (other than disability coverage) provided under such employee welfare benefit plans. Notwithstanding the foregoing, the coverage or reimbursements for coverage provided under this subsection (iv) shall cease if the Executive and/or the Executive’s dependents become covered under an employee welfare benefit plan of another employer of the Executive that provides the same or similar type of benefits.

(v) In addition, Executive and the Executive’s dependents will be entitled to receive from the Company, and the Company shall provide to the Executive and the Executive’s dependents, medical benefits not less favorable than and on the same terms and for the same periods as those provided under the Company’s Postretirement Medical And Life Insurance Benefits Plan, as in effect

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on the date hereof or the Termination Date, whichever is more favorable to the Executive, regardless of whether the Executive or the Executive’s dependents are otherwise eligible to participate in such plan. The Company, if it chooses, may provide such medical coverage under such Postretirement Medical and Life Insurance Benefits Plan, if the Executive otherwise is eligible thereunder, or in lieu of medical coverage under such plan, the Company may pay for or may procure individual insurance coverage for the Executive and the Executive’s dependents under a policy or policies that provide medical benefits and terms not less favorable than the medical benefits and terms provided under such Post Retirement Medical And Life Insurance Benefits Plan, as in effect on the date hereof or the Termination Date, whichever is more favorable to the Executive.

(d) By the Executive. The Executive may terminate the Executive’s employment, and any further obligations which the Executive may have to perform services on behalf of the Company hereunder at any time after the date hereof; by sending written notice of termination to the Company not less than sixty (60) days prior to the effective date of such termination. During such sixty (60) day period, the Executive shall continue to perform the normal duties of the Executive’s employment hereunder, and shall be entitled to receive when due all compensation and benefits applicable to the Executive hereunder. Except as provided below, if the Executive shall elect to terminate the Executive’s employment hereunder (other than as a result of the Executive’s death or disability), then the Executive shall remain vested in all vested benefits provided for hereunder or under any benefit plan of the Company in which the Executive is a participant and shall be entitled to receive the Standard Termination Payments, but the Company shall have no further obligation to make payments or provide benefits to the Executive under Section 3 hereof. Anything in this Agreement to the contrary notwithstanding, the termination of the Executive’s employment by the Executive for Good Reason (as defined in Section 4(e)), shall be deemed to be a termination of the Executive’s employment without Cause by the Company for purposes of this Agreement, and the Executive shall be entitled to the payments and benefits set forth in Section 4(c) above, subject to the Executive executing and not revoking a general release in favor of the Company, the Board and their affiliates, in a form mutually acceptable to both parties hereto. Notwithstanding the foregoing, in no event shall any termination of employment by the Executive be deemed for Good Reason unless the Executive terminates employment within 180 days of when the Executive learns of the act or conduct that constitutes Good Reason.

(e) Definitions. For purposes of this Agreement, the following definitions will apply:

(i) Cause. The term “Cause” means: (i) gross or willful misconduct; (ii) willful and repeated failure to comply with the lawful directives of the Board or any supervisory personnel; (iii) any criminal act or act of dishonesty or willful misconduct that has a material adverse impact on the property, operations, business or reputation of the Company or its subsidiaries or any act of fraud, dishonesty or misappropriation involving the Company or its subsidiaries; (iv) any conviction or plea of guilty or nolo contendere to a felony or a crime involving dishonesty; (v) the material breach of the terms of any confidentiality, non-competition, non-solicitation or employment agreement the employee has

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with the Company or its subsidiaries; (vi) acts of malfeasance or negligence in a matter of material importance to the Company or its subsidiaries; (vii) the material failure to perform the duties and responsibilities of employee’s position after written notice and a reasonable opportunity to cure (not to exceed 45 days); (viii) grossly negligent conduct; or (ix) activities materially damaging to the property, operations, business or reputation of the Company or its subsidiaries (it being understood that conduct or activities pursuant to employee’s exercise of good faith business judgment shall not be in violation of this Section 4(e)(i)). For purposes of this Agreement, Executive will also be deemed to be terminated for “Cause” if, in connection with the sale, transfer, conveyance or other disposition of all or substantially all of the assets (whether by asset sale, stock sale, merger, combination or otherwise) of one or more of the Company’s Material Lines of Business (a “Material Line of Business Sale”), (i) one or more of the purchasers in such Material Line of Business Sale offers employment (the “Employment Offer”) to Executive which Employment Offer would not permit Executive to terminate employment pursuant to clauses (i), (ii), (iii), (iv) or (v) of the definition of Good Reason contained herein, (ii) Executive declines such Employment Offer, and (iii) the Company terminates Executive’s employment within six (6) months of the consummation of the Material Line of Business Sale.

(ii) Good Reason. “Good Reason” means, after written notice by the Executive to the Board, and a reasonable opportunity for the Company to cure (not to exceed 45 days), that (i) the Executive’s Base Salary is not paid or is reduced by more than 10 percent in the aggregate or other than as part of a salary reduction program pursuant to which the Base Salaries of the Chief Executive Officer, all Executive Vice Presidents and all Senior Vice Presidents are reduced by the same percentage at the same time and for the same period of time, (ii) the Executive’s target Incentive Payment is reduced, (iii) the Executive’s job duties and responsibilities are diminished (but a reduction in the size of the Company as a result of a Sale of a Material Line of Business shall not alone constitute a diminution in the Executive’s job duties and responsibilities and any diminution in the Executive’s job duties and responsibilities after notice of non-renewal of the Employment Term is given by either party shall not be considered “Good Reason” hereunder), (iv) the Executive is required to relocate to a facility more than 50 miles from Waynesboro, Virginia, (v) the Executive is not provided benefits (e.g., health insurance) that are comparable in all material respects to those previously provided to the Executive, (vi) the Executive is directed by the Board or an officer of the Company or an affiliate (or the Company’s successor or an affiliate thereof) to engage in conduct that Company counsel, or mutually agreed upon counsel if requested by the Executive, has advised is likely to be illegal and that such counsel states with specificity why such direction is likely to be illegal (including a proposal for modification of such direction which in counsel’s opinion would not be likely to be illegal), or (vii) the Executive is directed by the Board or an officer of the Company or an affiliate (or the Company’s successor or an affiliate thereof) to refrain from acting and Company counsel, or mutually agreed upon counsel if requested by the Executive, has advised that such failure to act is likely to be illegal and that such counsel states

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with specificity why such direction is likely to be illegal (including a proposal for modification of such direction which in counsel’s opinion would not be likely to be illegal). If the Executive is directed to engage in conduct that he reasonably believes is likely to be illegal or to refrain from acting and the Executive reasonably believes that such failure to act is likely to be illegal, the Executive can express such reservations to the Board or directing officer, and the Company shall, at its expense, engage Company counsel, or mutually agreed upon counsel if requested by the Executive, to advise as to whether such conduct or failure to act is likely to be illegal. Subject to the last sentence of Section 4(d) hereof, if any of the events occur that would entitle the Executive to terminate the Executive’s employment for Good Reason hereunder and the Executive does not exercise such right to terminate the Executive’s employment, any such failure shall not operate to waive the Executive’s right to terminate the Executive’s employment for that or any subsequent action or actions, whether similar or dissimilar, that would constitute Good Reason. For purposes of clarity, it is acknowledged that expiration of the Employment Term (including notice of non-renewal) shall not be considered “Good Reason” hereunder.

(iii) Material Line of Business. “Material Line of Business” means any line or lines of business or service or group of services which represent(s) in the aggregate either 25% or more of the Company’s consolidated revenues or 25% or more of the Company’s consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for the twelve month period ended on the last day of the most recently ended fiscal quarter for the Company.

5. Confidential Information. The Executive understands and acknowledges that during the Executive’s employment with the Company, the Executive has been and will be making use of, acquiring or adding to the Company’s Confidential Information (as defined below). In order to protect the Confidential Information, the Executive will not, during the Executive’s employment with the Company or at any time thereafter, in any way utilize any of the Confidential Information except in connection with the Executive’s employment by the Company. The Executive will not at any time use any Confidential Information for the Executive’s own benefit or the benefit of any person except the Company. At the end of the Executive’s employment with the Company, the Executive will surrender and return to the Company any and all Confidential Information in the Executive’s possession or control, as well as any other Company property that is in the Executive’s possession or control. The Executive acknowledges and agrees that any breach of this Section 5 would be a material breach of this Agreement. The term “Confidential Information” shall mean any information that is confidential and proprietary to the Company, including but not limited to the following general categories:

(i) trade secrets;

(ii) lists and other information about current and prospective customers;

(iii) plans or strategies for sales, marketing, business development, or system build-out;

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(iv) sales and account records;

(v) prices or pricing strategy or information;

(vi) current and proposed advertising and promotional programs;

(vii) engineering and technical data;

(viii) the Company’s methods, systems, techniques, procedures, designs, formulae, inventions and know-how; personnel information;

(ix) legal advice and strategies; and

(x) other information of a similar nature not known or made available to the public or the Company’s Competitors (as defined in Section 8).

Confidential Information includes any such information that the Executive may prepare or create during the Executive’s employment with the Company, as well as such information that has been or may be created or prepared by others. This promise of confidentiality is in addition to any common law or statutory rights of the Company to prevent disclosure of its Trade Secrets and/or Confidential Information.

6. Return of Documents. All writings, records and other documents and things containing any Confidential Information in the Executive’s custody or possession shall be the exclusive property of the Company, shall not be copied and/or removed from the premises of the Company, except in pursuit of the business of the Company, and shall be delivered to the Company, without retaining any copies, upon the termination of the Executive’s employment or at any time as requested by the Company.

7. Reaffirm Obligations. Upon termination of the Executive’s employment with the Company, the Executive shall, if requested by the Company, reaffirm in writing Employee’s recognition of the importance of maintaining the confidentiality of the Company’s proprietary information and trade secrets and reaffirm all of the obligations set forth in Section 5 of this Agreement.

8. Non-Compete; Non-Solicitation. The Executive agrees that:

(a) while the Executive is employed by the Company, the Executive will not, directly or indirectly, compete with the business conducted by the Company, and the Executive will not, directly or indirectly, provide any services to a Competitor.

(b) For a period of 24 months after the Executive’s employment with the Company ends for any reason (the “Non-Competition Period”), the Executive will not compete with the Company by performing or causing to be performed the same or similar types of duties or services that the Executive performed for the Company for a Competitor of the Company in any capacity whatsoever, directly or indirectly, within any city or county of the continental United States in which, at the time the Executive’s employment with the Company ends, the Company provides services or products, offers to provide services or products, or has

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documented plans to provide or offer to provide services or products within the Non-Competition Period provided that the Executive has knowledge of those plans at the time the Executive’s employment with the Company ends (the “Service Area”). Additionally, the Executive agrees that during the Non-Competition Period, the Executive will not, directly or indirectly, sell, attempt to sell, provide or attempt to provide, any wireless or wireline telecommunication services, including but not limited to internet services, to any person or entity who was a customer or an actively sought prospective customer of the Company, at any time during the Executive’s employment with the Company. The restrictions set forth above shall immediately terminate and shall be of no further force or effect in the event of a default by the Company in the payment of any consideration, if any, to which the Executive is entitled under Section 8(i) below, which default is not cured within thirty (30) days after written notice thereof. The Executive acknowledges and agrees that because of the nature of the Company’s business, the nature of the Executive’s job responsibilities, and the nature of the Confidential Information and Trade Secrets of the Company which the Company will give the Executive access to, any breach of this provision by the Executive would result in the inevitable disclosure of the Company’s Trade Secrets and Confidential Information to its direct competitors.

(c) While the Executive is employed by the Company and during the Non-Competition Period, the Executive will not, directly or indirectly, solicit or encourage any employee of the Company to terminate employment with the Company; hire, or cause to be hired, for any employment by a Competitor, any person who within the preceding 12 month period has been employed by the Company, or assist any other person, firm, or corporation to do any of the acts described in this subsection (c).

(d) The Executive acknowledges and agrees that the Company has a legitimate business interest in preventing him from engaging in activities competitive with it as described in this Section 8 and that any breach of this Section 8 would constitute a material breach of this Section 8 and this Agreement.

(e) The Company may notify anyone employing the Executive or evidencing an intention to employ the Executive during the Non-Competition Period as to the existence and provisions of this Agreement and may provide such person or organization a copy of this Agreement. The Executive agrees that the Executive will provide the Company the identity of any employer Executive plans to go to work for during the Non-Competition Period along with the Executive’s anticipated job title, anticipated job duties with any such employer, and anticipated start date. The Company will analyze the proposed employment and make a determination as to whether it would violate this Section 8. If the Company determines that the proposed employment would not pose an unacceptable threat to the Company’s interests, the Company will notify the Executive in writing that it does not object to the employment. The Executive further agrees to provide a copy of this Agreement to anyone who employs the Executive during the Non-Competition Period.

(f) The Executive acknowledges and agrees that this Section 8 is intended to limit the Executive’s right to compete only to the extent necessary to protect the Company’s legitimate business interest. The Executive acknowledges and agrees that the Executive will be reasonably able to earn a livelihood without violating the terms of this Section 8. If any of the provisions of this Section 8 should ever be deemed to exceed the time, geographic area, or

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activity limitations permitted by applicable law, the Executive agrees that such provisions may be reformed to the maximum time, geographic area and activity limitations permitted by applicable law, and the Executive authorizes a court or other trier of fact having jurisdiction to so reform such provisions. In the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive waives and forfeits any and all rights to any further benefits under this Agreement, including but not limited to the consideration set forth in subsection (i) below as well as any additional payments, compensation, benefits or severance pay he may otherwise be entitled to receive under this Agreement. Additionally, in the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive agrees to repay the Company for any of the consideration set forth in subsection (i) below that the Executive received prior to the breach as well as any additional payments, compensation, benefits or severance pay the Executive might otherwise have previously received under Section 4(c) of this Agreement.

(g) For purposes of this Section 8, the following definitions will apply:

(i) “Directly or indirectly” as used in this Agreement includes an interest in or participation in a business as an individual, partner, shareholder, owner, director, officer, principal, agent, employee, consultant, trustee, lender of money, or in any other capacity or relation whatsoever. The term includes actions taken on behalf of the Executive or on behalf of any other person. “Directly or indirectly” does not include the ownership of less than 5% of the outstanding shares of any corporation, if such shares are publicly traded in the over-the-counter market or listed on a national securities exchange.

(ii) “Competitor” as used in this Agreement means any person, firm, association, partnership, corporation or other entity that competes or attempts to compete with the Company by providing or offering to provide wireless or wireline telecommunication services, including but not limited to internet services, within any city or county in which the Company provides or offers those services or products.

(h) Notwithstanding any other provision of this Section 8, the Executive will not be considered to have violated any prohibition against competing with the Company for engaging in any of the following activities: (1) being employed or retained by (i) any parent, subsidiary or affiliate organization of any Competitor where that parent, subsidiary or affiliate organization does not itself, and the Executive’s employment will not cause the Executive to, compete or attempt to compete with the Company by providing or offering to provide wireless or wireline telecommunications services, including but not limited to internet services, within the Service Area or (ii) any Competitor, directly or indirectly, so long as Executive’s employment or service does not relate to working within the Service Area or activities that would benefit the Competitor principally within the Service Area; or (2) working or providing services within the Service Area so long as the Executive’s employment or service does not relate to the type of services provided or offered by the Company within that Service Area or to services for which the Company has documented plans to provide, offer or supply within that Service Area at the time of Executive’s termination of employment; or (3) selling or attempting to sell wireless or

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wireline telecommunications services, including but not limited to internet services, so long as the services or products, which the Executive is selling or attempting to sell to a customer, do not relate to the type of services or products provided or offered by the Company to such customer or for which the Company has documented plans to provide, offer or supply to such customer at the time of Executive’s termination of employment; provided, however, that the Executive is nevertheless prohibited from: (i) selling, attempting to sell, and providing or attempting to provide, to any person who was a customer, or who was actively sought as a customer, of the Company at the time of Executive’s termination of employment any wireless or wireline telecommunications services, including but not limited to internet services, that are the type of services or products that the Company sold, attempted to sell or provided or attempted to provide to such customer as described in (b) above and (ii) soliciting or encouraging any employee of the Company to terminate employment or taking any other of the prohibited actions as described in (c) above.

(i) In consideration of the Executive’s undertakings set forth in this Section 8 with respect to periods after termination of employment, but only in the event that the Executive is entitled to the benefits and payments under Section 4(c) above, the Company will pay the Executive an amount equal to sixty percent (60%) of his Base Salary during the Non-Competition Period, in such periodic installments as his Base Salary was being paid immediately prior to termination of employment. In the event the Executive is not entitled to the benefits and payments under Section 4(c) above, the Company will not pay Executive any of the consideration set forth in this Section 8(i).

(j) In the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive waives and forfeits any and all rights to any further payments under subsection (i) or otherwise under this Agreement. This waiver and forfeiture shall be effective even in the event a court refuses to enforce the restrictions set forth in this Section 8.

9. Representations. The Executive represents and warrants to the Company that the execution, delivery and performance of this Agreement by the Executive does not conflict with, or result in the breach by the Executive or violation by the Executive of, any other agreement to which the Executive is a party or by which the Executive is bound. The Executive hereby agrees to indemnify the Company, its officers, directors and shareholders and hold them harmless from and against any liability (including, without limitation, reasonable attorneys’ fees and expenses) which they may at any time suffer or incur arising out of or relating to any breach of an agreement, representation or warranty made by the Executive herein. The Company represents and warrants that this Agreement and the transactions contemplated hereby have been duly authorized by the Company by all necessary corporate and shareholder action, and that the execution, delivery and performance of this Agreement by the Company does not conflict with, or result in the breach or violation by the Company of, its Articles of Incorporation or Amended and Restated Bylaws or any other agreement to which the Company is a party or by which it is bound. The Company hereby agrees to indemnify the Executive and hold the Executive harmless from and against any liability (including, without limitation, reasonable attorneys’ fees and expenses) which the Executive may at any time suffer or incur arising out of or relating to any breach of an agreement, representation or warranty made by the Company herein.

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10. Remedies. The parties hereto agree that the Company would suffer irreparable harm from a breach by the Executive of any of the covenants or agreements contained herein. Therefore, in the event of the actual or threatened breach by the Executive of any of the provisions of this Agreement, the Company may, in addition and supplementary to other rights and remedies existing in its favor, apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any violation of the provisions hereof. The Executive agrees that if a lawsuit or other proceeding is brought to enforce the terms of this Agreement or determine the validity of its terms and the Company prevails, the Company will be entitled to recover from the Executive its reasonable attorneys’ fees and court costs. The Executive agrees that these provisions are reasonable.

11. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Company and its affiliates and their successors and assigns, and shall be binding upon and inure to the benefit of the Executive and the Executive’s legal representatives and assigns, provided that in no event shall the Executive’s obligations to perform services for the Company and its affiliates be delegated or transferred by the Executive. The Company may assign or transfer its rights hereunder to a successor corporation in the event of a merger, consolidation or transfer or sale of all or substantially all of the assets of the Company or of the Company’s business (provided, however, that no such assignment or transfer shall have the effect of relieving the Company of any liability to the Executive hereunder or under any other agreement or document contemplated herein), but only if such assignment or transfer does not result in employment terms, conditions, duties or responsibilities which are or may be materially different than the terms, conditions, duties or responsibilities of the Executive hereunder. If the Company assigns or transfers its rights under this Agreement to a successor corporation, the Executive’s obligations under Section 8 of this Agreement will be construed and enforceable with respect to the business and geographic scope of the Company only and will not be construed or enforceable with respect to the business and geographic scope of any successor corporation to which the Company’s rights may be assigned or transferred to the extent such business or geographic scope is greater than that of the Company at the time of such assignment or transfer. The Executive may not transfer or assign the Executive’s rights and obligations under this Agreement.

12. Modification or Waiver. No amendment, modification, waiver, termination or cancellation of this Agreement shall be binding or effective for any purpose unless it is made in a writing signed by the party against whom enforcement of such amendment, modification, waiver, termination or cancellation is sought. No course of dealing between or among the parties to this Agreement shall be deemed to affect or to modify, amend or discharge any provision or term of this Agreement. No delay on the part of the Company or the Executive in the exercise of any of their respective rights or remedies shall operate as a waiver thereof, and no single or partial exercise by the Company or the Executive of any such right or remedy shall preclude other or further exercises thereof. A waiver of a right or remedy on any one occasion shall not be construed as a bar to or waiver of any such right or remedy on any other occasion.

13. Governing Law; Jurisdiction. This Agreement and all rights, remedies and obligations hereunder, including, but not limited to, matters of construction, validity and performance shall be governed by the laws of the Commonwealth of Virginia without regard to its conflict of laws principles or rules. To the full extent lawful, each of the Company and the

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Executive hereby consents irrevocably to personal jurisdiction, service and venue in connection with any claim or controversy arising out of this Agreement in the courts of the Commonwealth of Virginia located in Waynesboro, Virginia, and in the federal courts in the Western District of Virginia.

14. Excise Taxes.

(a) If any payment or distribution by the Company or any affiliate to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terns of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then the benefits payable or provided under this Agreement (or other Payments as described above) shall be reduced (but not in excess of the amount of the benefits payable or provided under this Agreement) if, and only to the extent that, such reduction will allow the Executive to receive a greater Net After Tax Amount than such Executive would receive absent such reduction.

(b) The Accounting Firm (as defined below) will first determine the amount of any Parachute Payments (as defined below) that are payable to the Executive. The Accounting Firm also will determine the Net After Tax Amount attributable to the Executive’s total Parachute Payments.

(c) The Accounting Firm will next determine the largest amount of payments that may be made to the Executive without subjecting the Executive to the Excise Tax (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.

(d) The Executive then will receive the total Parachute Payments or the total Capped Payments, whichever provides the Executive with the higher Net After Tax Amount; however, if the reductions imposed under this Section 14 are in excess of the amount of benefits payable or provided under this Agreement, then the total Parachute Payments will be adjusted by reducing the amount of any noncash or cash benefits under this Agreement or any other plan, agreement or arrangement as directed by the Executive. The Accounting Firm will notify the Executive and the Company if it determines that the Parachute Payments must be reduced and will send the Executive and the Company a copy of its detailed calculations supporting that determination.

(e) As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determinations under this Section 14, it

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is possible that the Executive will have received Parachute Payments or Capped Payments in excess of the amount that should have been paid or distributed (“Overpayments”), or that additional Parachute Payments or Capped Payments should be paid or distributed to the Executive (“Underpayments”). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Executive, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, that Overpayment may, at the Executive’s discretion, be treated for all purposes as a loan ab initio that the Executive must repay to the Company immediately together with interest at the applicable Federal rate under Code Section 7872; provided, however, that no loan will be deemed to have been made and no amount will be payable by the Executive to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which the Executive is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999 and the Executive will receive a greater Net After Tax Amount than such Executive would otherwise receive. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Executive and the Company of that determination and the amount of that Underpayment will be paid to the Executive promptly by the Company.

(f) For purposes of this Section 14, the following terms shall have their respective meanings:

(i) “Accounting Firm” means the independent accounting firm currently engaged by the Company, or a mutually agreed upon independent accounting firm if requested by the Executive; and

(ii) “Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any State or local income taxes applicable to the Executive on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment.

(iii) “Parachute Payment” means a payment that is described in Code Section 280G(b)(2), determined in accordance with Code Section 280G and the regulations promulgated or proposed thereunder.

(g) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by the preceding subsections shall be borne by the Company.

(h) The Company and the Executive shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or the Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the

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determinations and calculations contemplated by the preceding subsections. Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

15. Severability. Whenever possible each provision and term of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision or term of this Agreement shall be held to be prohibited by or invalid under such applicable law, then such provision or term shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or affecting in any manner whatsoever the remainder of such provisions or term or the remaining provisions or terms of this Agreement. If any provision contained in Sections 5 or 8 of this Agreement shall for any reason be held to be excessively broad or unreasonable as to time, territory, or interest to be protected, a court is hereby empowered and requested to construe such provision by narrowing it so as to make it reasonable and enforceable to the extent provided under applicable law.

16. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same Agreement.

17. Headings. The headings of the Sections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part hereof and shall not affect the construction or interpretation of this Agreement.

18. Entire Agreement. This Agreement (together with all documents and instruments referred to herein) constitutes the entire agreement, and supersedes all other prior agreements and undertakings, both written and oral, among the parties with respect to the subject matter hereof, including any employment or management continuity agreement under which the Executive hereby agrees to waive all rights and which is hereby terminated.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

NTELOS Inc.
By:	/s/    JAMES S. QUARFORTH
	James S. Quarforth
	Chief Executive Officer

Executive

/s/    CARL A. ROSBERG        

Carl A. Rosberg

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EMPLOYMENT CONTRACT AMENDMENT

THIS AMENDMENT (“Amendment”) to the Employment Agreement (the “Employment Agreement”) dated as of May 2, 2005 by and between NTELOS Inc., a Virginia corporation (“Company”), and Carl A. Rosberg (the “Executive”) is made as of February 13, 2006, by and between NTELOS, NTELOS Holdings Corp., a Delaware corporation (“Holdings”) and the Executive (collectively, the “Parties”).

Background

Holdings will be engaging in an initial public offering and NTELOS will remain a wholly owned subsidiary of Holdings. NTELOS and the Executive wish to add Holdings as a party to the Employment Agreement, upon which both NTELOS and Holdings will jointly share the liabilities and benefits under the Employment Agreement. Additionally, the Parties wish to make certain other amendments to the Employment Agreement, as set forth herein,. The Executive consents to this Amendment, including without limitation, the addition of Holdings as a party to the Agreement.

Terms

In consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereto promise and agree as follows:

1. Pursuant to Section 11 of the Employment Agreement, Holdings shall become a party to the Employment Agreement and, jointly with NTELOS, inure to all the benefits and the liabilities under the Employment Agreement, as NTELOS has under the Agreement. Henceforth both Holdings and NTELOS shall jointly share the liabilities and benefits under the Employment Agreement.

2. To reflect the addition of Holdings as a party to the Employment Agreement, unless the context requires otherwise, the definition of and all references to “Company” in the Employment Contract shall refer to both Holdings and NTELOS.

3. All references to “Board” in the Employment Agreement shall refer to the Board of Directors of Holdings.

4. Section 2 of the Employment Agreement shall be amended by adding the following after the last sentence of Section 2:

“Notwithstanding the foregoing, if the Employment Term has less than 24 months remaining upon the occurrence of a “Change in Control” (as such term is defined in Section 4(e)(iv)), then the Employment Term shall be automatically extended so that the Employment Term will not expire until the date which is 24 months from the date of the Change in Control, subject to the automatic renewal, as described above.”

5. Section 4(b) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(b):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then the Disability Incentive Payment shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date.”

6. Section 4(c)(i) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(i):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then the payments required under this Section 4(c)(i) shall not commence until the first day which is at least six months after the Termination Date. All payments, which would have otherwise been required to be made over such six month period, shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date. Thereafter, payments shall continue as so provided above for the remainder of the Termination Period.”

7. Section 4(c)(ii) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(ii):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then the payment shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date.”

8. Section 4(c)(iv) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(iv):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then such reimbursements (only to the extent such would otherwise be subject to Code Section 409A) shall not commence until the first day which is at least six months after the Termination Date. All reimbursements, which would have otherwise been required to be made over such six month period, shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date. Thereafter, reimbursements shall continue as so provided above for the remainder of the Termination Period.”

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9. A new Section 4(e)(iv) shall be added the Employment Agreement, which shall read in its entirety, as follows:

“Change in Control” means any of the following described in clauses (I) through (V) below, provided that a “Change in Control” shall not mean any event listed in clauses (I) through (V) that occurs directly or indirectly as a result of or in connection with Quadrangle Capital Partners LP, a Delaware limited partnership, Quadrangle Select Partners LP, a Delaware limited partnership, and Quadrangle Capital Partners—A LP, a Delaware limited partnership (collectively the “Quadrangle Entities”) and/or Citigroup Venture Capital Equity Partners, L.P., a Delaware limited partnership, CVC/SSB Employee Fund, L.P., a Delaware limited partnership, CVC Executive Fund LLC, a Delaware limited liability company (collectively the “CVC Entities”) and/or their Affiliates, related funds and co-investors becoming the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Holdings representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities, or the shareholders of Holdings approve a merger, consolidation or reorganization of Holdings with any other company and such merger, consolidation or reorganization is consummated, and after such merger, consolidation or reorganization any of the Quadrangle Entities, the CVC Entities and/or their respective Affiliates, related funds and co-investors acquire more than fifty-one percent (51%) of the combined voting power of Holdings’ then outstanding securities:

I. any Person is or becomes the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Holdings representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities;

II. consummation of a merger, consolidation or reorganization of Holdings with any other company, or a sale of all or substantially all the assets of Holdings (a “Transaction”), other than (i) a Transaction that would result in the voting securities of Holdings outstanding immediately prior thereto continuing to represent either directly or indirectly more than fifty-one percent (51%) of the combined voting power of the then outstanding securities of Holdings or such surviving or purchasing entity;

III. the shareholders of Holdings approve a plan of complete liquidation of Holdings and such liquidation is consummated; or

IV. a sale, transfer, conveyance or other disposition (whether by asset sale, stock sale, merger, combination or otherwise) (a “Sale”) of a Material Line of Business (other than any such sale to

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the Quadrangle Entities, the CVC Entities or their Affiliates, related funds and co-investors ), except that with respect to this clause (IV) there shall only be a Change in Control with respect to the Executive who is employed at such time in such Material Line of Business (whether full or part-time), and the Executive does not receive an offer for “comparable employment” with the purchaser and the Executive’s employment is terminated by Holdings or any Affiliate of Holdings no later than six (6) months after the consummation of the Sale of the Material Line of Business. For these purposes, “comparable employment” means that (i) the Executive’s base salary and target incentive payments are not reduced in the aggregate, (ii) the Executive’s job duties and responsibilities are not diminished (but a reduction in size of Holdings as the result of a Sale of a Material Line of Business, or the fact that the purchaser is smaller than Holdings, shall not alone constitute a diminution in the Executive’s job duties and responsibilities), (iii) the Executive is not required to relocate to a facility more than fifty (50) miles from the Executive’s principal place of employment at the time of the Sale and (iv) the Executive is provided benefits that are comparable in the aggregate to those provided to the Executive immediately prior to the Sale; or

V. During any period of twelve (12) consecutive months commencing upon the effective date of this Amendment, the individuals who constitute the Board, upon the effective date of this Amendment, and any new director who either (i) was elected by the Board or nominated for election by Holdings’ stockholders was approved by a vote of more than fifty percent (50%) of the directors then still in office who either were directors, upon the effective date of the Plan, or whose election or nomination for election was previously so approved or (ii) was appointed to the Board pursuant to the designation of Quadrangle Entities and/or the CVC Entities, cease for any reason to constitute a majority of the Board.

For purposes of the foregoing, “Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

For purposes of the foregoing, “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.

10. Section 8(i) of the Employment Agreement shall be amended by adding the following before the last sentence of Section 8(i):

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“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Section 409A, then such payments shall be made in the same time and manner as provided in Section 4(c)(i) above.”

11. Other than as specifically provided in the Amendment, the Employment Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their respective representatives, thereunto duly authorized, as of the date first above written.

HOLDINGS:	NTELOS HOLDINGS CORP.
	By:	/s/    JAMES S. QUARFORTH
	Name:	James S. Quarforth
	Title:	Chief Executive Officer, President and Chairman of the Board of Directors
NTELOS:	NTELOS INC.
	By:	/s/    JAMES S. QUARFORTH
	Name:	James S. Quarforth
	Title:	Chief Executive Officer, President and Chairman of the Board of Directors
EXECUTIVE :		/s/    CARL A. ROSBERG
	Name:	Carl A. Rosberg

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EX-10.6

Exhibit 10.6

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “‘Agreement”), dated as of May 2, 2005 between David R. Maccarelli (the “Executive”) and NTELOS Inc., a Virginia corporation (the “Company”), recites and provides as follows:

WHEREAS, the Company considers it essential to the best interests of its shareholders to foster the continuing employment of its key management personnel; and

WHEREAS, the Board of Directors of the Company (the “Board”) expects that the Executive will continue to make substantial contributions to the growth and prospects of the Company; and

WHEREAS, the Company and the Executive previously entered into an employment agreement dated October 1, 2003; and

WHEREAS, the Company and the Executive now desire to terminate such prior employment agreement and replace it with this Agreement; and

WHEREAS, the parties intend this Agreement to supersede the prior employment agreement and any other prior agreements or undertakings among the parties with respect to the subject matter contained herein; and

WHEREAS, the Executive will continue to serve the Company in reliance upon the undertakings of the Company contained herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein, the receipt and sufficiency of which are hereby acknowledged by each of the parties, the Company and the Executive agree as follows:

1. Employment.

(a) Position. On the terms and subject to the conditions set forth herein, the Company agrees to employ the Executive as Executive Vice President throughout the Employment Term (as defined below). At the request of the Board and without additional compensation, the Executive shall also serve as an officer and/or director of any or all of the subsidiaries of the Company.

(b) Duties and Responsibilities. The Executive shall have such duties and responsibilities that are consistent with the Executive’s position as the Board determines and shall perform such duties and carry out such responsibilities to the best of the Executive’s ability for the purpose of advancing the business of the Company and its subsidiaries. Subject to the provisions of Section 1(c) below, during the Employment Term the Executive shall devote the Executive’s full business time, skill and attention to the business of the Company and its subsidiaries, and, except as specifically approved by the Board, shall not engage in any other business activity or have any other business affiliation.

(c) Other Activities. Anything in this Agreement to the contrary notwithstanding, as part of the Executive’s business efforts and duties on behalf of the Company, the Executive may participate fully in social, charitable and civic activities, and, if specifically approved by the Board, the Executive may serve on the boards of directors of other companies, provided that such activities do not unreasonably interfere with the performance of and do not involve a conflict of interest with the Executive’s duties or responsibilities hereunder.

2. Employment Term. The “Employment Term” hereunder shall commence on the date set forth above and shall continue in full force and effect until the fourth anniversary of such date when the Employment Term shall terminate, unless terminated earlier pursuant to the terms and conditions of this Agreement. The Employment Term will renew hereunder automatically for successive one-year periods unless either party gives written notice to the other not less than six (6) months prior to the end of the fourth anniversary hereof (or any subsequent anniversary, as the case may be) that such party does not wish the Employment Term to be so extended, and under such circumstances, the Employment Term and this Agreement will terminate by its terms, and without liability to either party, on such fourth anniversary (or such subsequent anniversary, as the case may be).

3. Compensation. During the Employment Term, the Company will pay and/or otherwise provide the Executive with compensation and related benefits as follows:

(a) Base Salary. The Company agrees to pay the Executive, for services rendered hereunder, an initial base salary at the annual rate of $225,422 (the “Base Salary”). Base Salary will be reviewed annually throughout the Employment Term by the Compensation Committee of the Board. Notwithstanding anything in this Agreement to the contrary, the Company may reduce the Executive’s Base Salary by up to 10% during the Employment Term, but only as part of a salary reduction program pursuant to which the Base Salaries of the Chief Executive Officer, all Executive Vice Presidents and all Senior Vice Presidents are reduced by the same percentage at the same time and for the same period of time. The Base Salary shall be payable in equal periodic installments, not less frequently than monthly, less any sums which may be required to be deducted or withheld under applicable provisions of law. The Base Salary for any partial year shall be prorated based upon the number of days elapsed in such year.

(b) Stock-Based Incentive Compensation. The Executive shall be eligible to participate in the Company’s stock-based incentive compensation plan pursuant to its terms (“Stock-Based Incentive Payment”) when the Company establishes such a plan.

(c) Supplemental Retirement Plan. During the Employment Term (and thereafter to the extent expressly provided herein), the Executive shall be entitled to participate in the NTELOS Inc. Executive Supplemental Retirement Plan according to the terms thereof, and the Executive’s designation as a participant in such plan shall not be revoked or rescinded prior to the termination of the Executive’s employment with the Company.

(d) Team Incentive Plan. The Executive shall be eligible to participate in the Company’s team incentive plan with an annual incentive target of fifty-five percent (55%) of Base Salary (“Incentive Payment”), subject to achievement of such program’s objectives and final approval of the Board. Notwithstanding the foregoing or the terms of the team incentive

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plan, the full Incentive Payment the Executive is eligible to receive under the team incentive plan based on objective performance factors must be paid and cannot be reduced or eliminated as a result of individual performance factors other than as a result of a good faith determination by the Chief Executive Officer.

(e) Benefits. During the Employment Term (and thereafter to the extent expressly provided herein), the Executive shall be entitled to participate in all of the Company’s employee benefit plans applicable to the Company’s comparable senior executives according to the terms of those plans. In addition to the foregoing compensation, the Company agrees that during the Employment Term it shall provide to the Executive a monthly automobile allowance pursuant to Company policy.

(f) Vacation. The Executive shall be entitled to a minimum of four weeks of vacation annually, during which time the Executive shall receive compensation in accordance with the terms of this Agreement.

(g) Term Life Insurance. During the Employment Term, and in addition to any other benefits to which Executive shall be entitled, the Company agrees to pay the premiums on a term life insurance contract covering the Executive that pays a death benefit of at least $473,000. The Company in its discretion shall select the term life insurance contract on which it will pay the premiums; but, the Executive shall be the owner of such contract and will be or will designate the beneficiary of such contract. The Company (i) will include and report such premium payments in the Executive’s taxable income to the extent required under applicable law and (ii) also will pay to the Executive an additional payment in an amount such that after payment by the Executive of all taxes imposed on the additional payment, the Executive retains an amount of the additional payment equal to the taxes imposed upon the Executive with respect to the Company’s payment of the premiums on the term life insurance contract. The amount of the additional payment shall be determined based on the Executive’s likely effective rates of federal, state and local income taxation for the calendar year in which the additional payment is to be made, net of the likely reduction in federal income taxes that is obtained from any deduction of state and local taxes. Executive agrees, for purposes of calculating the amount of the additional payment, to provide the Company such information as the Company may reasonably request to determine the amount of the additional payment and to cooperate with the Company in good faith in order to effectively make such determination. The Company shall hold all such information secret and confidential and shall not, without the prior written consent of the Executive or as otherwise may be required by law or legal process, communicate or divulge such information to anyone other than the Company and those in need of such information for purposes of determining the amount of the additional payment. Notwithstanding any other provision of this Agreement, in the event the term life insurance contract described herein extends beyond the termination of Executive’s employment with the Company, the Executive, and not the Company, shall be obligated to pay the premiums on such term life insurance contract accruing after the Executive’s termination of employment with the Company.

4. Termination of Employment.

(a) By the Company For Cause. The Company may terminate the Executive’s employment under this Agreement at any time for Cause (as defined in Section 4(e)) and shall

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provide written notice of termination to the Executive (which notice shall specify in reasonable detail the basis upon which such termination is made). Notwithstanding the foregoing, in no event, shall any termination of employment be deemed for Cause unless the Executive’s employment is terminated within 180 days of when the Company learns of the act or conduct that constitutes Cause and the Chief Executive Officer of the Company or the Board of Directors concludes that the situation warrants a determination that the Executive’s employment terminated for Cause. In the event the Executive’s employment is terminated for Cause, all provisions of this Agreement (other than Sections 5 through 15 hereof) and the Employment Term shall be terminated; provided, however, that such termination shall not divest the Executive of any previously vested benefit or right unless the terms of such vested benefit or right specifically require such divestiture where the Executive’s employment is terminated for Cause. In addition, the Executive shall be entitled to payment of the Executive’s earned and unpaid Base Salary to the date of termination. The Executive also shall be entitled to unreimbursed business and entertainment expenses in accordance with the Company’s policy, and unreimbursed medical, dental and other employee benefit expenses incurred in accordance with the Company’s employee benefit plans (the payments and benefits described in this subsection (a) hereinafter referred to as the “Standard Termination Payments”).

(b) Upon Death or Disability. If the Executive dies, all provisions of Section 3 of this Agreement (other than rights or benefits arising as a result of such death) and the Employment Term shall be automatically terminated; provided, however, that an amount equal to the earned and unpaid Incentive Payments to the date of death and the Standard Termination Payments shall be paid to the Executive’s surviving spouse or, if none, the Executive’s estate, and the death benefits under the Company’s employee benefit plans shall be paid to the Executive’s beneficiary or beneficiaries as properly designated in writing by the Executive. If the Executive is unable to perform the essential functions of the Executive’s job under this Agreement, with or without reasonable accommodation, by reason of physical or mental disability or incapacity (“Disability”) and such disability or incapacity shall have continued for any period aggregating six months within any 12 consecutive months, the Company may terminate this Agreement and the Employment Term at any time thereafter. In such event, the Executive shall be entitled to receive the Executive’s normal compensation hereunder during said time of disability or incapacity, and shall thereafter be entitled to receive the “Disability Incentive Payment” (as described in the last sentence of this subsection (b)) and the Standard Termination Payments. The portion of the payment representing the Disability Incentive Payment shall be paid in a lump sum determined on a net present value basis, using a reasonable discount rate determined by the Board. The Disability Incentive Payment shall be equal to the target Incentive Payment that the Executive would have been eligible to receive for the year in which the Employment Term is terminated multiplied by a fraction, the numerator of which is the number of days in such year before and including the day of termination of the Employment Term and the denominator of which is the total number of days in such year.

(c) By the Company Without Cause.

(i) The Company may terminate the Executive’s employment under this Agreement at any time without Cause (for purposes of clarity, it is acknowledged that expiration of the Employment Term (including notice of non- renewal) shall not be considered a termination without Cause), and other than by

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reason of the Executive’s death or disability. The Company shall provide written notice of termination to the Executive, which notice shall specify the effective date of such termination and that the termination is without Cause (the “Termination Date”). If the Termination Date is later than the date of the notice, then from the date of the notice through the Termination Date, the Executive shall continue to perform the normal duties of the Executive’s employment hereunder, and shall be entitled to receive when due all compensation and benefits applicable to the Executive hereunder. Thereafter, conditioned upon the Executive executing and not revoking a general release in favor of the Company, the Board and their affiliates, in a form mutually acceptable to both parties hereto, the Company shall pay the Executive the amounts set forth in this subsection (c). Under such circumstances, the Company shall pay the Executive an amount equal to forty percent (40%) of the Executive’s Base Salary for a period of twenty-four (24) months (the “Termination Period”), in such periodic installments as were being paid immediately prior to the Termination Date.

(ii) The Company shall pay the Executive a lump sum, determined on a net present value basis, using a reasonable discount rate determined by the Board, equal to the full target Incentive Payment for the year that includes the Termination Date multiplied by a fraction, the numerator of which is the number of months in the Termination Period and the denominator of which is 12.

(iii) The Company shall also be obligated to pay to the Executive the Standard Termination Payments.

(iv) During the Termination Period, the Executive and the Executive’s dependents will be entitled to continued participation in the “employee welfare benefit plans” (as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974) in which the Executive and the Executive’s dependents participated on the Executive’s Termination Date with respect to any such plans for which such continued participation is allowed pursuant to applicable law and the terms of the plan. In lieu of coverage for which such continued participation is not allowed, the Executive will be reimbursed, on a net after-tax basis, for the cost of individual insurance coverage for the Executive and the Executive’s dependents under a policy or policies that provide benefits (other than disability coverage) not less favorable than the benefits (other than disability coverage) provided under such employee welfare benefit plans. Notwithstanding the foregoing, the coverage or reimbursements for coverage provided under this subsection (iv) shall cease if the Executive and/or the Executive’s dependents become covered under an employee welfare benefit plan of another employer of the Executive that provides the same or similar type of benefits.

(v) In addition, Executive and the Executive’s dependents will be entitled to receive from the Company, and the Company shall provide to the Executive and the Executive’s dependents, medical benefits not less favorable than and on the same terms and for the same periods as those provided under the Company’s Postretirement Medical And Life Insurance Benefits Plan, as in effect

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on the date hereof or the Termination Date, whichever is more favorable to the Executive, regardless of whether the Executive or the Executive’s dependents are otherwise eligible to participate in such plan. The Company, if it chooses, may provide such medical coverage under such Postretirement Medical and Life Insurance Benefits Plan, if the Executive otherwise is eligible thereunder, or in lieu of medical coverage under such plan, the Company may pay for or may procure individual insurance coverage for the Executive and the Executive’s dependents under a policy or policies that provide medical benefits and terms not less favorable than the medical benefits and terms provided under such Post Retirement Medical And Life Insurance Benefits Plan, as in effect on the date hereof or the Termination Date, whichever is more favorable to the Executive.

(d) By the Executive. The Executive may terminate the Executive’s employment, and any further obligations which the Executive may have to perform services on behalf of the Company hereunder at any time after the date hereof; by sending written notice of termination to the Company not less than sixty (60) days prior to the effective date of such termination. During such sixty (60) day period, the Executive shall continue to perform the normal duties of the Executive’s employment hereunder, and shall be entitled to receive when due all compensation and benefits applicable to the Executive hereunder. Except as provided below, if the Executive shall elect to terminate the Executive’s employment hereunder (other than as a result of the Executive’s death or disability), then the Executive shall remain vested in all vested benefits provided for hereunder or under any benefit plan of the Company in which the Executive is a participant and shall be entitled to receive the Standard Termination Payments, but the Company shall have no further obligation to make payments or provide benefits to the Executive under Section 3 hereof. Anything in this Agreement to the contrary notwithstanding, the termination of the Executive’s employment by the Executive for Good Reason (as defined in Section 4(e)), shall be deemed to be a termination of the Executive’s employment without Cause by the Company for purposes of this Agreement, and the Executive shall be entitled to the payments and benefits set forth in Section 4(c) above, subject to the Executive executing and not revoking a general release in favor of the Company, the Board and their affiliates, in a form mutually acceptable to both parties hereto. Notwithstanding the foregoing, in no event shall any termination of employment by the Executive be deemed for Good Reason unless the Executive terminates employment within 180 days of when the Executive learns of the act or conduct that constitutes Good Reason.

(e) Definitions. For purposes of this Agreement, the following definitions will apply:

(i) Cause. The term “Cause” means: (i) gross or willful misconduct; (ii) willful and repeated failure to comply with the lawful directives of the Board or any supervisory personnel; (iii) any criminal act or act of dishonesty or willful misconduct that has a material adverse impact on the property, operations, business or reputation of the Company or its subsidiaries or any act of fraud, dishonesty or misappropriation involving the Company or its subsidiaries; (iv) any conviction or plea of guilty or nolo contendere to a felony or a crime involving dishonesty; (v) the material breach of the terms of any confidentiality, non-competition, non-solicitation or employment agreement the employee has

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with the Company or its subsidiaries; (vi) acts of malfeasance or negligence in a matter of material importance to the Company or its subsidiaries; (vii) the material failure to perform the duties and responsibilities of employee’s position after written notice and a reasonable opportunity to cure (not to exceed 45 days); (viii) grossly negligent conduct; or (ix) activities materially damaging to the property, operations, business or reputation of the Company or its subsidiaries (it being understood that conduct or activities pursuant to employee’s exercise of good faith business judgment shall not be in violation of this Section 4(e)(i)). For purposes of this Agreement, Executive will also be deemed to be terminated for “Cause” if, in connection with the sale, transfer, conveyance or other disposition of all or substantially all of the assets (whether by asset sale, stock sale, merger, combination or otherwise) of one or more of the Company’s Material Lines of Business (a “Material Line of Business Sale”), (i) one or more of the purchasers in such Material Line of Business Sale offers employment (the “Employment Offer”) to Executive which Employment Offer would not permit Executive to terminate employment pursuant to clauses (i), (ii), (iii), (iv) or (v) of the definition of Good Reason contained herein, (ii) Executive declines such Employment Offer, and (iii) the Company terminates Executive’s employment within six (6) months of the consummation of the Material Line of Business Sale.

(ii) Good Reason. “Good Reason” means, after written notice by the Executive to the Board, and a reasonable opportunity for the Company to cure (not to exceed 45 days), that (i) the Executive’s Base Salary is not paid or is reduced by more than 10 percent in the aggregate or other than as part of a salary reduction program pursuant to which the Base Salaries of the Chief Executive Officer, all Executive Vice Presidents and all Senior Vice Presidents are reduced by the same percentage at the same time and for the same period of time, (ii) the Executive’s target Incentive Payment is reduced, (iii) the Executive’s job duties and responsibilities are diminished (but a reduction in the size of the Company as a result of a Sale of a Material Line of Business shall not alone constitute a diminution in the Executive’s job duties and responsibilities and any diminution in the Executive’s job duties and responsibilities after notice of non-renewal of the Employment Term is given by either party shall not be considered “Good Reason” hereunder), (iv) the Executive is required to relocate to a facility more than 50 miles from Waynesboro, Virginia, (v) the Executive is not provided benefits (e.g., health insurance) that are comparable in all material respects to those previously provided to the Executive, (vi) the Executive is directed by the Board or an officer of the Company or an affiliate (or the Company’s successor or an affiliate thereof) to engage in conduct that Company counsel, or mutually agreed upon counsel if requested by the Executive, has advised is likely to be illegal and that such counsel states with specificity why such direction is likely to be illegal (including a proposal for modification of such direction which in counsel’s opinion would not be likely to be illegal), or (vii) the Executive is directed by the Board or an officer of the Company or an affiliate (or the Company’s successor or an affiliate thereof) to refrain from acting and Company counsel, or mutually agreed upon counsel if requested by the Executive, has advised that such failure to act is likely to be illegal and that such counsel states

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with specificity why such direction is likely to be illegal (including a proposal for modification of such direction which in counsel’s opinion would not be likely to be illegal). If the Executive is directed to engage in conduct that he reasonably believes is likely to be illegal or to refrain from acting and the Executive reasonably believes that such failure to act is likely to be illegal, the Executive can express such reservations to the Board or directing officer, and the Company shall, at its expense, engage Company counsel, or mutually agreed upon counsel if requested by the Executive, to advise as to whether such conduct or failure to act is likely to be illegal. Subject to the last sentence of Section 4(d) hereof, if any of the events occur that would entitle the Executive to terminate the Executive’s employment for Good Reason hereunder and the Executive does not exercise such right to terminate the Executive’s employment, any such failure shall not operate to waive the Executive’s right to terminate the Executive’s employment for that or any subsequent action or actions, whether similar or dissimilar, that would constitute Good Reason. For purposes of clarity, it is acknowledged that expiration of the Employment Term (including notice of non- renewal) shall not be considered “Good Reason” hereunder.

(iii) Material Line of Business. “Material Line of Business” means any line or lines of business or service or group of services which represent(s) in the aggregate either 25% or more of the Company’s consolidated revenues or 25% or more of the Company’s consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for the twelve month period ended on the last day of the most recently ended fiscal quarter for the Company.

5. Confidential Information. The Executive understands and acknowledges that during the Executive’s employment with the Company, the Executive has been and will be making use of, acquiring or adding to the Company’s Confidential Information (as defined below). In order to protect the Confidential Information, the Executive will not, during the Executive’s employment with the Company or at any time thereafter, in any way utilize any of the Confidential Information except in connection with the Executive’s employment by the Company. The Executive will not at any time use any Confidential Information for the Executive’s own benefit or the benefit of any person except the Company. At the end of the Executive’s employment with the Company, the Executive will surrender and return to the Company any and all Confidential Information in the Executive’s possession or control, as well as any other Company property that is in the Executive’s possession or control. The Executive acknowledges and agrees that any breach of this Section 5 would be a material breach of this Agreement. The term “Confidential Information” shall mean any information that is confidential and proprietary to the Company, including but not limited to the following general categories:

(i) trade secrets;

(ii) lists and other information about current and prospective customers;

(iii) plans or strategies for sales, marketing, business development, or system build-out;

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(iv) sales and account records;

(v) prices or pricing strategy or information;

(vi) current and proposed advertising and promotional programs;

(vii) engineering and technical data;

(viii) the Company’s methods, systems, techniques, procedures, designs, formulae, inventions and know-how; personnel information;

(ix) legal advice and strategies; and

(x) other information of a similar nature not known or made available to the public or the Company’s Competitors (as defined in Section 8).

Confidential Information includes any such information that the Executive may prepare or create during the Executive’s employment with the Company, as well as such information that has been or may be created or prepared by others. This promise of confidentiality is in addition to any common law or statutory rights of the Company to prevent disclosure of its Trade Secrets and/or Confidential Information.

6. Return of Documents. All writings, records and other documents and things containing any Confidential Information in the Executive’s custody or possession shall be the exclusive property of the Company, shall not be copied and/or removed from the premises of the Company, except in pursuit of the business of the Company, and shall be delivered to the Company, without retaining any copies, upon the termination of the Executive’s employment or at any time as requested by the Company.

7. Reaffirm Obligations. Upon termination of the Executive’s employment with the Company, the Executive shall, if requested by the Company, reaffirm in writing Employee’s recognition of the importance of maintaining the confidentiality of the Company’s proprietary information and trade secrets and reaffirm all of the obligations set forth in Section 5 of this Agreement.

8. Non-Compete; Non-Solicitation. The Executive agrees that:

(a) while the Executive is employed by the Company, the Executive will not, directly or indirectly, compete with the business conducted by the Company, and the Executive will not, directly or indirectly, provide any services to a Competitor.

(b) For a period of 24 months after the Executive’s employment with the Company ends for any reason (the “Non-Competition Period”), the Executive will not compete with the Company by performing or causing to be performed the same or similar types of duties or services that the Executive performed for the Company for a Competitor of the Company in any capacity whatsoever, directly or indirectly, within any city or county of the continental United States in which, at the time the Executive’s employment with the Company ends, the Company provides services or products, offers to provide services or products, or has

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documented plans to provide or offer to provide services or products within the Non- Competition Period provided that the Executive has knowledge of those plans at the time the Executive’s employment with the Company ends (the “Service Area”). Additionally, the Executive agrees that during the Non-Competition Period, the Executive will not, directly or indirectly, sell, attempt to sell, provide or attempt to provide, any wireless or wireline telecommunication services, including but not limited to internet services, to any person or entity who was a customer or an actively sought prospective customer of the Company, at any time during the Executive’s employment with the Company. The restrictions set forth above shall immediately terminate and shall be of no further force or effect in the event of a default by the Company in the payment of any consideration, if any, to which the Executive is entitled under Section 8(i) below, which default is not cured within thirty (30) days after written notice thereof. The Executive acknowledges and agrees that because of the nature of the Company’s business, the nature of the Executive’s job responsibilities, and the nature of the Confidential Information and Trade Secrets of the Company which the Company will give the Executive access to, any breach of this provision by the Executive would result in the inevitable disclosure of the Company’s Trade Secrets and Confidential Information to its direct competitors.

(c) While the Executive is employed by the Company and during the Non- Competition Period, the Executive will not, directly or indirectly, solicit or encourage any employee of the Company to terminate employment with the Company; hire, or cause to be hired, for any employment by a Competitor, any person who within the preceding 12 month period has been employed by the Company, or assist any other person, firm, or corporation to do any of the acts described in this subsection (c).

(d) The Executive acknowledges and agrees that the Company has a legitimate business interest in preventing him from engaging in activities competitive with it as described in this Section 8 and that any breach of this Section 8 would constitute a material breach of this Section 8 and this Agreement.

(e) The Company may notify anyone employing the Executive or evidencing an intention to employ the Executive during the Non-Competition Period as to the existence and provisions of this Agreement and may provide such person or organization a copy of this Agreement. The Executive agrees that the Executive will provide the Company the identity of any employer Executive plans to go to work for during the Non-Competition Period along with the Executive’s anticipated job title, anticipated job duties with any such employer, and anticipated start date. The Company will analyze the proposed employment and make a determination as to whether it would violate this Section 8. If the Company determines that the proposed employment would not pose an unacceptable threat to the Company’s interests, the Company will notify the Executive in writing that it does not object to the employment. The Executive further agrees to provide a copy of this Agreement to anyone who employs the Executive during the Non-Competition Period.

(f) The Executive acknowledges and agrees that this Section 8 is intended to limit the Executive’s right to compete only to the extent necessary to protect the Company’s legitimate business interest. The Executive acknowledges and agrees that the Executive will be reasonably able to earn a livelihood without violating the terms of this Section 8. If any of the provisions of this Section 8 should ever be deemed to exceed the time, geographic area, or

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activity limitations permitted by applicable law, the Executive agrees that such provisions may be reformed to the maximum time, geographic area and activity limitations permitted by applicable law, and the Executive authorizes a court or other trier of fact having jurisdiction to so reform such provisions. In the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive waives and forfeits any and all rights to any further benefits under this Agreement, including but not limited to the consideration set forth in subsection (i) below as well as any additional payments, compensation, benefits or severance pay he may otherwise be entitled to receive under this Agreement. Additionally, in the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive agrees to repay the Company for any of the consideration set forth in subsection (i) below that the Executive received prior to the breach as well as any additional payments, compensation, benefits or severance pay the Executive might otherwise have previously received under Section 4(c) of this Agreement.

(g) For purposes of this Section 8, the following definitions will apply:

(i) “Directly or indirectly” as used in this Agreement includes an interest in or participation in a business as an individual, partner, shareholder, owner, director, officer, principal, agent, employee, consultant, trustee, lender of money, or in any other capacity or relation whatsoever. The term includes actions taken on behalf of the Executive or on behalf of any other person. “Directly or indirectly” does not include the ownership of less than 5% of the outstanding shares of any corporation, if such shares are publicly traded in the over-the-counter market or listed on a national securities exchange.

(ii) “Competitor” as used in this Agreement means any person, firm, association, partnership, corporation or other entity that competes or attempts to compete with the Company by providing or offering to provide wireless or wireline telecommunication services, including but not limited to internet services, within any city or county in which the Company provides or offers those services or products.

(h) Notwithstanding any other provision of this Section 8, the Executive will not be considered to have violated any prohibition against competing with the Company for engaging in any of the following activities: (1) being employed or retained by (i) any parent, subsidiary or affiliate organization of any Competitor where that parent, subsidiary or affiliate organization does not itself, and the Executive’s employment will not cause the Executive to, compete or attempt to compete with the Company by providing or offering to provide wireless or wireline telecommunications services, including but not limited to internet services, within the Service Area or (ii) any Competitor, directly or indirectly, so long as Executive’s employment or service does not relate to working within the Service Area or activities that would benefit the Competitor principally within the Service Area; or (2) working or providing services within the Service Area so long as the Executive’s employment or service does not relate to the type of services provided or offered by the Company within that Service Area or to services for which the Company has documented plans to provide, offer or supply within that Service Area at the time of Executive’s termination of employment; or (3) selling or attempting to sell wireless or

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wireline telecommunications services, including but not limited to internet services, so long as the services or products, which the Executive is selling or attempting to sell to a customer, do not relate to the type of services or products provided or offered by the Company to such customer or for which the Company has documented plans to provide, offer or supply to such customer at the time of Executive’s termination of employment; provided, however, that the Executive is nevertheless prohibited from: (i) selling, attempting to sell, and providing or attempting to provide, to any person who was a customer, or who was actively sought as a customer, of the Company at the time of Executive’s termination of employment any wireless or wireline telecommunications services, including but not limited to internet services, that are the type of services or products that the Company sold, attempted to sell or provided or attempted to provide to such customer as described in (b) above and (ii) soliciting or encouraging any employee of the Company to terminate employment or taking any other of the prohibited actions as described in (c) above.

(i) In consideration of the Executive’s undertakings set forth in this Section 8 with respect to periods after termination of employment, but only in the event that the Executive is entitled to the benefits and payments under Section 4(c) above, the Company will pay the Executive an amount equal to sixty percent (60%) of his Base Salary during the Non-Competition Period, in such periodic installments as his Base Salary was being paid immediately prior to termination of employment. In the event the Executive is not entitled to the benefits and payments under Section 4(c) above, the Company will not pay Executive any of the consideration set forth in this Section 8(i).

(j) In the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive waives and forfeits any and all rights to any further payments under subsection (i) or otherwise under this Agreement. This waiver and forfeiture shall be effective even in the event a court refuses to enforce the restrictions set forth in this Section 8.

9. Representations. The Executive represents and warrants to the Company that the execution, delivery and performance of this Agreement by the Executive does not conflict with, or result in the breach by the Executive or violation by the Executive of, any other agreement to which the Executive is a party or by which the Executive is bound. The Executive hereby agrees to indemnify the Company, its officers, directors and shareholders and hold them harmless from and against any liability (including, without limitation, reasonable attorneys’ fees and expenses) which they may at any time suffer or incur arising out of or relating to any breach of an agreement, representation or warranty made by the Executive herein. The Company represents and warrants that this Agreement and the transactions contemplated hereby have been duly authorized by the Company by all necessary corporate and shareholder action, and that the execution, delivery and performance of this Agreement by the Company does not conflict with, or result in the breach or violation by the Company of, its Articles of Incorporation or Amended and Restated Bylaws or any other agreement to which the Company is a party or by which it is bound. The Company hereby agrees to indemnify the Executive and hold the Executive harmless from and against any liability (including, without limitation, reasonable attorneys’ fees and expenses) which the Executive may at any time suffer or incur arising out of or relating to any breach of an agreement, representation or warranty made by the Company herein.

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10. Remedies. The parties hereto agree that the Company would suffer irreparable harm from a breach by the Executive of any of the covenants or agreements contained herein. Therefore, in the event of the actual or threatened breach by the Executive of any of the provisions of this Agreement, the Company may, in addition and supplementary to other rights and remedies existing in its favor, apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any violation of the provisions hereof. The Executive agrees that if a lawsuit or other proceeding is brought to enforce the terms of this Agreement or determine the validity of its terms and the Company prevails, the Company will be entitled to recover from the Executive its reasonable attorneys’ fees and court costs. The Executive agrees that these provisions are reasonable.

11. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Company and its affiliates and their successors and assigns, and shall be binding upon and inure to the benefit of the Executive and the Executive’s legal representatives and assigns, provided that in no event shall the Executive’s obligations to perform services for the Company and its affiliates be delegated or transferred by the Executive. The Company may assign or transfer its rights hereunder to a successor corporation in the event of a merger, consolidation or transfer or sale of all or substantially all of the assets of the Company or of the Company’s business (provided, however, that no such assignment or transfer shall have the effect of relieving the Company of any liability to the Executive hereunder or under any other agreement or document contemplated herein), but only if such assignment or transfer does not result in employment terms, conditions, duties or responsibilities which are or may be materially different than the terms, conditions, duties or responsibilities of the Executive hereunder. If the Company assigns or transfers its rights under this Agreement to a successor corporation, the Executive’s obligations under Section 8 of this Agreement will be construed and enforceable with respect to the business and geographic scope of the Company only and will not be construed or enforceable with respect to the business and geographic scope of any successor corporation to which the Company’s rights may be assigned or transferred to the extent such business or geographic scope is greater than that of the Company at the time of such assignment or transfer. The Executive may not transfer or assign the Executive’s rights and obligations under this Agreement.

12. Modification or Waiver. No amendment, modification, waiver, termination or cancellation of this Agreement shall be binding or effective for any purpose unless it is made in a writing signed by the party against whom enforcement of such amendment, modification, waiver, termination or cancellation is sought. No course of dealing between or among the parties to this Agreement shall be deemed to affect or to modify, amend or discharge any provision or term of this Agreement. No delay on the part of the Company or the Executive in the exercise of any of their respective rights or remedies shall operate as a waiver thereof, and no single or partial exercise by the Company or the Executive of any such right or remedy shall preclude other or further exercises thereof. A waiver of a right or remedy on any one occasion shall not be construed as a bar to or waiver of any such right or remedy on any other occasion.

13. Governing Law; Jurisdiction. This Agreement and all rights, remedies and obligations hereunder, including, but not limited to, matters of construction, validity and performance shall be governed by the laws of the Commonwealth of Virginia without regard to its conflict of laws principles or rules. To the full extent lawful, each of the Company and the

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Executive hereby consents irrevocably to personal jurisdiction, service and venue in connection with any claim or controversy arising out of this Agreement in the courts of the Commonwealth of Virginia located in Waynesboro, Virginia, and in the federal courts in the Western District of Virginia.

14. Excise Taxes.

(a) If any payment or distribution by the Company or any affiliate to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then the benefits payable or provided under this Agreement (or other Payments as described above) shall be reduced (but not in excess of the amount of the benefits payable or provided under this Agreement) if, and only to the extent that, such reduction will allow the Executive to receive a greater Net After Tax Amount than such Executive would receive absent such reduction.

(b) The Accounting Firm (as defined below) will first determine the amount of any Parachute Payments (as defined below) that are payable to the Executive. The Accounting Firm also will determine the Net After Tax Amount attributable to the Executive’s total Parachute Payments.

(c) The Accounting Firm will next determine the largest amount of payments that may be made to the Executive without subjecting the Executive to the Excise Tax (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.

(d) The Executive then will receive the total Parachute Payments or the total Capped Payments, whichever provides the Executive with the higher Net After Tax Amount; however, if the reductions imposed under this Section 14 are in excess of the amount of benefits payable or provided under this Agreement, then the total Parachute Payments will be adjusted by reducing the amount of any noncash or cash benefits under this Agreement or any other plan, agreement or arrangement as directed by the Executive. The Accounting Firm will notify the Executive and the Company if it determines that the Parachute Payments must be reduced and will send the Executive and the Company a copy of its detailed calculations supporting that determination.

(e) As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determinations under this Section 14, it

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is possible that the Executive will have received Parachute Payments or Capped Payments in excess of the amount that should have been paid or distributed (“Overpayments”), or that additional Parachute Payments or Capped Payments should be paid or distributed to the Executive (“Underpayments”). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Executive, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, that Overpayment may, at the Executive’s discretion, be treated for all purposes as a loan ab initio that the Executive must repay to the Company immediately together with interest at the applicable Federal rate under Code Section 7872; provided, however, that no loan will be deemed to have been made and no amount will be payable by the Executive to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which the Executive is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999 and the Executive will receive a greater Net After Tax Amount than such Executive would otherwise receive. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Executive and the Company of that determination and the amount of that Underpayment will be paid to the Executive promptly by the Company.

(f) For purposes of this Section 14, the following terms shall have their respective meanings:

(i) “Accounting Firm” means the independent accounting firm currently engaged by the Company, or a mutually agreed upon independent accounting firm if requested by the Executive; and

(ii) “Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any State or local income taxes applicable to the Executive on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment.

(iii) “Parachute Payment” means a payment that is described in Code Section 280G(b)(2), determined in accordance with Code Section 280G and the regulations promulgated or proposed thereunder.

(g) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by the preceding subsections shall be borne by the Company.

(h) The Company and the Executive shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or the Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the

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determinations and calculations contemplated by the preceding subsections. Any determination by the Accounting Finn shall be binding upon the Company and the Executive.

15. Severability. Whenever possible each provision and term of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision or term of this Agreement shall be held to be prohibited by or invalid under such applicable law, then such provision or term shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or affecting in any manner whatsoever the remainder of such provisions or term or the remaining provisions or terms of this Agreement. If any provision contained in Sections 5 or 8 of this Agreement shall for any reason be held to be excessively broad or unreasonable as to time, territory, or interest to be protected, a court is hereby empowered and requested to construe such provision by narrowing it so as to make it reasonable and enforceable to the extent provided under applicable law.

16. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same Agreement.

17. Headings. The headings of the Sections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part hereof and shall not affect the construction or interpretation of this Agreement.

18. Entire Agreement. This Agreement (together with all documents and instruments referred to herein) constitutes the entire agreement, and supersedes all other prior agreements and undertakings, both written and oral, among the parties with respect to the subject matter hereof, including any employment or management continuity agreement under which the Executive hereby agrees to waive all rights and which is hereby terminated.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

NTELOS Inc.
By:	/s/    JAMES S. QUARFORTH
	James S. Quarforth Chief Executive Officer
Executive
/s/    DAVID R. MACCARELLI
David R. Maccarelli

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EMPLOYMENT CONTRACT AMENDMENT

THIS AMENDMENT (“Amendment”) to the Employment Agreement (the “Employment Agreement”) dated as of May 2, 2005 by and between NTELOS Inc., a Virginia corporation (“Company”), and David R. Maccarelli (the “Executive”) is made as of February 13, 2006, by and between NTELOS, NTELOS Holdings Corp., a Delaware corporation (“Holdings”) and the Executive (collectively, the “Parties”).

Background

Holdings will be engaging in an initial public offering and NTELOS will remain a wholly owned subsidiary of Holdings. NTELOS and the Executive wish to add Holdings as a party to the Employment Agreement, upon which both NTELOS and Holdings will jointly share the liabilities and benefits under the Employment Agreement. Additionally, the Parties wish to make certain other amendments to the Employment Agreement, as set forth herein,. The Executive consents to this Amendment, including without limitation, the addition of Holdings as a party to the Agreement.

Terms

In consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereto promise and agree as follows:

1. Pursuant to Section 11 of the Employment Agreement, Holdings shall become a party to the Employment Agreement and, jointly with NTELOS, inure to all the benefits and the liabilities under the Employment Agreement, as NTELOS has under the Agreement. Henceforth both Holdings and NTELOS shall jointly share the liabilities and benefits under the Employment Agreement.

2. To reflect the addition of Holdings as a party to the Employment Agreement, unless the context requires otherwise, the definition of and all references to “Company” in the Employment Contract shall refer to both Holdings and NTELOS.

3. All references to “Board” in the Employment Agreement shall refer to the Board of Directors of Holdings.

4. Section 2 of the Employment Agreement shall be amended by adding the following after the last sentence of Section 2:

“Notwithstanding the foregoing, if the Employment Term has less than 24 months remaining upon the occurrence of a “Change in Control” (as such term is defined in Section 4(e)(iv)), then the Employment Term shall be automatically extended so that the Employment Term will not expire until the date which is 24 months from the date of the Change in Control, subject to the automatic renewal, as described above.”

5. Section 4(b) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(b):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then the Disability Incentive Payment shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date.”

6. Section 4(c)(i) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(i):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then the payments required under this Section 4(c)(i) shall not commence until the first day which is at least six months after the Termination Date. All payments, which would have otherwise been required to be made over such six month period, shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date. Thereafter, payments shall continue as so provided above for the remainder of the Termination Period.”

7. Section 4(c)(ii) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(ii):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then the payment shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date.”

8. Section 4(c)(iv) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(iv):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then such reimbursements (only to the extent such would otherwise be subject to Code Section 409A) shall not commence until the first day which is at least six months after the Termination Date. All reimbursements, which would have otherwise been required to be made over such six month period, shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date. Thereafter, reimbursements shall continue as so provided above for the remainder of the Termination Period.”

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9. A new Section 4(e)(iv) shall be added the Employment Agreement, which shall read in its entirety, as follows:

“Change in Control” means any of the following described in clauses (I) through (V) below, provided that a “Change in Control” shall not mean any event listed in clauses (I) through (V) that occurs directly or indirectly as a result of or in connection with Quadrangle Capital Partners LP, a Delaware limited partnership, Quadrangle Select Partners LP, a Delaware limited partnership, and Quadrangle Capital Partners—A LP, a Delaware limited partnership (collectively the “Quadrangle Entities”) and/or Citigroup Venture Capital Equity Partners, L.P., a Delaware limited partnership, CVC/SSB Employee Fund, L.P., a Delaware limited partnership, CVC Executive Fund LLC, a Delaware limited liability company (collectively the “CVC Entities”) and/or their Affiliates, related funds and co-investors becoming the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Holdings representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities, or the shareholders of Holdings approve a merger, consolidation or reorganization of Holdings with any other company and such merger, consolidation or reorganization is consummated, and after such merger, consolidation or reorganization any of the Quadrangle Entities, the CVC Entities and/or their respective Affiliates, related funds and co-investors acquire more than fifty-one percent (51%) of the combined voting power of Holdings’ then outstanding securities:

I. any Person is or becomes the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Holdings representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities;

II. consummation of a merger, consolidation or reorganization of Holdings with any other company, or a sale of all or substantially all the assets of Holdings (a “Transaction”), other than (i) a Transaction that would result in the voting securities of Holdings outstanding immediately prior thereto continuing to represent either directly or indirectly more than fifty-one percent (51%) of the combined voting power of the then outstanding securities of Holdings or such surviving or purchasing entity;

III. the shareholders of Holdings approve a plan of complete liquidation of Holdings and such liquidation is consummated; or

IV. a sale, transfer, conveyance or other disposition (whether by asset sale, stock sale, merger, combination or otherwise) (a “Sale”) of a Material Line of Business (other than any such sale to

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the Quadrangle Entities, the CVC Entities or their Affiliates, related funds and co-investors ), except that with respect to this clause (IV) there shall only be a Change in Control with respect to the Executive who is employed at such time in such Material Line of Business (whether full or part-time), and the Executive does not receive an offer for “comparable employment” with the purchaser and the Executive’s employment is terminated by Holdings or any Affiliate of Holdings no later than six (6) months after the consummation of the Sale of the Material Line of Business. For these purposes, “comparable employment” means that (i) the Executive’s base salary and target incentive payments are not reduced in the aggregate, (ii) the Executive’s job duties and responsibilities are not diminished (but a reduction in size of Holdings as the result of a Sale of a Material Line of Business, or the fact that the purchaser is smaller than Holdings, shall not alone constitute a diminution in the Executive’s job duties and responsibilities), (iii) the Executive is not required to relocate to a facility more than fifty (50) miles from the Executive’s principal place of employment at the time of the Sale and (iv) the Executive is provided benefits that are comparable in the aggregate to those provided to the Executive immediately prior to the Sale; or

V. During any period of twelve (12) consecutive months commencing upon the effective date of this Amendment, the individuals who constitute the Board, upon the effective date of this Amendment, and any new director who either (i) was elected by the Board or nominated for election by Holdings’ stockholders was approved by a vote of more than fifty percent (50%) of the directors then still in office who either were directors, upon the effective date of the Plan, or whose election or nomination for election was previously so approved or (ii) was appointed to the Board pursuant to the designation of Quadrangle Entities and/or the CVC Entities, cease for any reason to constitute a majority of the Board.

For purposes of the foregoing, “Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

For purposes of the foregoing, “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.

10. Section 8(i) of the Employment Agreement shall be amended by adding the following before the last sentence of Section 8(i):

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“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Section 409A, then such payments shall be made in the same time and manner as provided in Section 4(c)(i) above.”

11. Other than as specifically provided in the Amendment, the Employment Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their respective representatives, thereunto duly authorized, as of the date first above written.

HOLDINGS:	NTELOS HOLDINGS CORP.
	By:	/s/    JAMES S. QUARFORTH
	Name:	James S. Quarforth
	Title:	Chief Executive Officer, President and Chairman of the Board of Directors
NTELOS:	NTELOS INC.
	By:	/s/    JAMES S. QUARFORTH
	Name:	James S. Quarforth
	Title:	Chief Executive Officer, President and Chairman of the Board of Directors
EXECUTIVE :		/s/    DAVID R. MACCARELLI
	Name:	David R. Maccarelli

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EX-10.7

Exhibit 10.7

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), dated as of May 2, 2005 between Mary McDermott (the “Executive”) and NTELOS Inc., a Virginia corporation (the “Company”), recites and provides as follows:

WHEREAS, the Company considers it essential to the best interests of its shareholders to foster the continuing employment of its key management personnel; and

WHEREAS, the Board of Directors of the Company (the “Board”) expects that the Executive will continue to make substantial contributions to the growth and prospects of the Company; and

WHEREAS, the Company and the Executive previously entered into an employment agreement dated October 1, 2004; and

WHEREAS, the Company and the Executive now desire to terminate such prior employment agreement and replace it with this Agreement; and

WHEREAS, the parties intend this Agreement to supersede the prior employment agreement and any other prior agreements or undertakings among the parties with respect to the subject matter contained herein; and

WHEREAS, the Executive will continue to serve the Company in reliance upon the undertakings of the Company contained herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein, the receipt and sufficiency of which are hereby acknowledged by each of the parties, the Company and the Executive agree as follows:

1. Employment.

(a) Position. On the terms and subject to the conditions set forth herein, the Company agrees to employ the Executive as a Senior Vice President throughout the Employment Term (as defined below). At the request of the Board and without additional compensation, the Executive shall also serve as an officer and/or director of any or all of the subsidiaries of the Company.

(b) Duties and Responsibilities. The Executive shall have such duties and responsibilities that are consistent with the Executive’s position as the Board determines and shall perform such duties and carry out such responsibilities to the best of the Executive’s ability for the purpose of advancing the business of the Company and its subsidiaries. Subject to the provisions of Section 1(c) below, during the Employment Term the Executive shall devote the Executive’s full business time, skill and attention to the business of the Company and its subsidiaries, and, except as specifically approved by the Board, shall not engage in any other business activity or have any other business affiliation.

(c) Other Activities. Anything in this Agreement to the contrary notwithstanding, as part of the Executive’s business efforts and duties on behalf of the Company, the Executive may participate fully in social, charitable and civic activities, and, if specifically approved by the Board, the Executive may serve on the boards of directors of other companies, provided that such activities do not unreasonably interfere with the performance of and do not involve a conflict of interest with the Executive’s duties or responsibilities hereunder.

2. Employment Term. The “Employment Term” hereunder shall commence on the date set forth above and shall continue in full force and effect until the fourth anniversary of such date when the Employment Term shall terminate, unless terminated earlier pursuant to the terms and conditions of this Agreement. The Employment Term will renew hereunder automatically for successive one-year periods unless either party gives written notice to the other not less than six (6) months prior to the end of the fourth anniversary hereof (or any subsequent anniversary, as the case may be) that such party does not wish the Employment Term to be so extended, and under such circumstances, the Employment Term and this Agreement will terminate by its terms, and without liability to either party, on such fourth anniversary (or such subsequent anniversary, as the case may be).

3. Compensation. During the Employment Terms, the Company will pay and/or otherwise provide the Executive with compensation and related benefits as follows:

(a) Base Salary. The Company agrees to pay the Executive, for services rendered hereunder, an initial base salary at the annual rate of $182,875 (the “Base Salary”). Base Salary will be reviewed annually throughout the Employment Term by the Compensation Committee of the Board. Notwithstanding anything in this Agreement to the contrary, the Company may reduce the Executive’s Base Salary by up to 10% during the Employment Term, but only as part of a salary reduction program pursuant to which the Base Salaries of the Chief Executive Officer, all Executive Vice Presidents and all Senior Vice Presidents are reduced by the same percentage at the same time and for the same period of time. The Base Salary shall be payable in equal periodic installments, not less frequently than monthly, less any sums which may be required to be deducted or withheld under applicable provisions of law. The Base Salary for any partial year shall be prorated based upon the number of days elapsed in such year.

(b) Stock-Based Incentive Compensation. The Executive shall be eligible to participate in the Company’s stock-based incentive compensation plan pursuant to its terms (“Stock-Based Incentive Payment”) when the Company establishes such a plan.

(c) Supplemental Retirement Plan. During the Employment Term (and thereafter to the extent expressly provided herein), the Executive shall be entitled to participate in the NTELOS Inc. Executive Supplemental Retirement Plan according to the terms thereof, and the Executive’s designation as a participant in such plan shall not be revoked or rescinded prior to the termination of the Executive’s employment with the Company.

(d) Team Incentive Plan. The Executive shall be eligible to participate in the Company’s team incentive plan with an annual incentive target of fifty percent (50%) of Base Salary (“Incentive Payment”), subject to achievement of such program’s objectives and final approval of the Board. Notwithstanding the foregoing or the terms of the team incentive plan,

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the full Incentive Payment the Executive is eligible to receive under the team incentive plan based on objective performance factors must be paid and cannot be reduced or eliminated as at result of individual performance factors other than as a result of a good faith determination by the Chief Executive Officer.

(e) Benefits. During the Employment Term (and thereafter to the extent expressly provided herein), the Executive shall be entitled to participate in all of the Company’s employee benefit plans applicable to the Company’s comparable senior executives according to the terms of those plans. In addition to the foregoing compensation, the Company agrees that during the Employment Term it shall provide to the Executive a monthly automobile allowance pursuant to Company policy.

(f) Vacation. The Executive shall be entitled to a minimum of four weeks of vacation annually, during which time the Executive shall receive compensation in accordance with the terms of this Agreement.

(g) Term Life Insurance. During the Employment Term, and in addition to any other benefits to which Executive shall be entitled, the Company agrees to pay the premiums on a term life insurance contract covering the Executive that pays a death benefit of at least $371,000. The Company in its discretion shall select the term life insurance contract on which it will pay the premiums; but, the Executive shall be the owner of such contract and will be or will designate the beneficiary of such contract. The Company (i) will include and report such premium payments in the Executive’s taxable income to the extent required under applicable law and (ii) also will pay to the Executive an additional payment in an amount such that after payment by the Executive of all taxes imposed on the additional payment, the Executive retains an amount of the additional payment equal to the taxes imposed upon the Executive with respect to the Company’s payment of the premiums on the term life insurance contract. The amount of the additional payment shall be determined based on the Executive’s likely effective rates of federal, state and local income taxation for the calendar year in which the additional payment is to be made, net of the likely reduction in federal income taxes that is obtained from any deduction of state and local taxes. Executive agrees, for purposes of calculating the amount of the additional payment, to provide the Company such information as the Company may reasonably request to determine the amount of the additional payment and to cooperate with the Company in good faith in order to effectively make such determination. The Company shall hold all such information secret and confidential and shall not, without the prior written consent of the Executive or as otherwise may be required by law or legal process, communicate or divulge such information to anyone other than the Company and those in need of such information for purposes of determining the amount of the additional payment. Notwithstanding any other provision of this Agreement, in the event the term life insurance contract described herein extends beyond the termination of Executive’s employment with the Company, the Executive, and not the Company, shall be obligated to pay the premiums on such term life insurance contract accruing after the Executive’s termination of employment with the Company.

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4. Termination of Employment.

(a) By the Company For Cause. The Company may terminate the Executive’s employment under this Agreement at any time for Cause (as defined in Section 4(e)) and shall provide written notice of termination to the Executive (which notice shall specify in reasonable detail the basis upon which such termination is made). Notwithstanding the foregoing, in no event, shall any termination of employment be deemed for Cause unless the Executive’s employment is terminated within 180 days of when the Company learns of the act or conduct that constitutes Cause and the Chief Executive Officer of the Company or the Board of Directors concludes that the situation warrants a determination that the Executive’s employment terminated for Cause. In the event the Executive’s employment is terminated for Cause, all provisions of this Agreement (other than Sections 5 through 15 hereof) and the Employment Term shall be terminated; provided, however, that such termination shall not divest the Executive of any previously vested benefit or right unless the terms of such vested benefit or right specifically require such divestiture where the Executive’s employment is terminated for Cause. In addition, the Executive shall be entitled to payment of the Executive’s earned and unpaid Base Salary to the date of termination. The Executive also shall be entitled to unreimbursed business and entertainment expenses in accordance with the Company’s policy, and unreimbursed medical, dental and other employee benefit expenses incurred in accordance with the Company’s employee benefit plans (the payments and benefits described in this subsection (a) hereinafter referred to as the “Standard Termination Payments”).

(b) Upon Death or Disability. If the Executive dies, all provisions of Section 3 of this Agreement (other than rights or benefits arising as a result of such death) and the Employment Term shall be automatically terminated; provided, however, that an amount equal to the earned and unpaid Incentive Payments to the date of death and the Standard Termination Payments shall be paid to the Executive’s surviving spouse or, if none, the Executive’s estate, and the death benefits under the Company’s employee benefit plans shall be paid to the Executive’s beneficiary or beneficiaries as properly designated in writing by the Executive. If the Executive is unable to perform the essential functions of the Executive’s job under this Agreement, with or without reasonable accommodation, by reason of physical or mental disability or incapacity (“Disability”) and such disability or incapacity shall have continued for any period aggregating six months within any 12 consecutive months, the Company may terminate this Agreement and the Employment Term at any time thereafter. In such event, the Executive shall be entitled to receive the Executive’s normal compensation hereunder during said time of disability or incapacity, and shall thereafter be entitled to receive the “Disability Incentive Payment” (as described in the last sentence of this subsection (b)) and the Standard Termination Payments. The portion of the payment representing the Disability Incentive Payment shall be paid in a lump sum determined on a net present value basis, using a reasonable discount rate determined by the Board. The Disability Incentive Payment shall be equal to the target Incentive Payment that the Executive would have been eligible to receive for the year in which the Employment Term is terminated multiplied by a fraction, the numerator of which is the number of days in such year before and including the day of termination of the Employment Term and the denominator of which is the total number of days in such year.

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(c) By the Company Without Cause.

(i) The Company may terminate the Executive’s employment under this Agreement at any time without Cause (for purposes of clarity, it is acknowledged that expiration of the Employment Term (including notice of non-renewal) shall not be considered a termination without Cause), and other than by reason of the Executive’s death or disability. The Company shall provide written notice of termination to the Executive, which notice shall specify the effective date of such termination and that the termination is without Cause (the “Termination Date”). If the Termination Date is later than the date of the notice, then from the date of the notice through the Termination Date, the Executive shall continue to perform the normal duties of the Executive’s employment hereunder, and shall be entitled to receive when due all compensation and benefits applicable to the Executive hereunder. Thereafter, conditioned upon the Executive executing and not revoking a general release in favor of the Company, the Board and their affiliates, in a form mutually acceptable to both parties hereto, the Company shall pay the Executive the amounts set forth in this subsection (c). Under such circumstances, the Company shall pay the Executive an amount equal to seventy-five percent (75%) of the Executive’s Base Salary for a period of twenty-four (24) months (the ‘Termination Period”), in such periodic installments as were being paid immediately prior to the Termination Date.

(ii) The Company shall pay the Executive a lump sum, determined on a net present value basis, using a reasonable discount rate determined by the Board, equal to the full target Incentive Payment for the year that includes the Termination Date multiplied by a fraction, the numerator of which is the number of months in the Termination Period and the denominator of which is 12.

(iii) The Company shall also be obligated to pay to the Executive the Standard Termination Payments.

(iv) During the Termination Period, the Executive and the Executive’s dependents will be entitled to continued participation in the “employee welfare benefit plans” (as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974) in which the Executive and the Executive’s dependents participated on the Executive’s Termination Date with respect to any such plans for which such continued participation is allowed pursuant to applicable law and the terms of the plan. In lieu of coverage for which such continued participation is not allowed, the Executive will be reimbursed, on a net after-tax basis, for the cost of individual insurance coverage for the Executive and the Executive’s dependents under a policy or policies that provide benefits (other than disability coverage) not less favorable than the benefits (other than disability coverage) provided under such employee welfare benefit plans. Notwithstanding the foregoing, the coverage or reimbursements for coverage provided under this subsection (iv) shall cease if the Executive and/or the Executive’s dependents become covered under an employee welfare benefit plan of another employer of the Executive that provides the same or similar type of benefits.

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(v) In addition, Executive and the Executive’s dependents will be entitled to receive from the Company, and the Company shall provide to the Executive and the Executive’s dependents, medical benefits not less favorable than and on the same terms and for the same periods as those provided under the Company’s Postretirement Medical And Life Insurance Benefits Plan, as in effect on the date hereof or the Termination Date, whichever is more favorable to the Executive, regardless of whether the Executive or the Executive’s dependents are otherwise eligible to participate in such plan. The Company, if it chooses, may provide such medical coverage under such Postretirement Medical and Life Insurance Benefits Plan, if the Executive otherwise is eligible thereunder, or in lieu of medical coverage under such plan, the Company may pay for or may procure individual insurance coverage for the Executive and the Executive’s dependents under a policy or policies that provide medical benefits and terms not less favorable than the medical benefits and terms provided under such Post Retirement Medical And Life Insurance Benefits Plan, as in effect on the date hereof or the Termination Date, whichever is more favorable to the Executive.

(d) By the Executive. The Executive may terminate the Executive’s employment, and any further obligations which the Executive may have to perform services on behalf of the Company hereunder at any time after the date hereof; by sending written notice of termination to the Company not less than sixty (60) days prior to the effective date of such termination. During such sixty (60) day period, the Executive shall continue to perform the normal duties of the Executive’s employment hereunder, and shall be entitled to receive when due all compensation and benefits applicable to the Executive hereunder. Except as provided below, if the Executive shall elect to terminate the Executive’s employments hereunder (other than as a result of the Executive’s death or disability), then the Executive shall remain vested in all vested benefits provided for hereunder or under any benefit plan of the Company in which the Executive is a participant and shall be entitled to receive the Standard Termination Payments, but the Company shall have no further obligation to make payments or provide benefits to the Executive under Section 3 hereof. Anything in this Agreement to the contrary notwithstanding, the termination of the Executive’s employment by the Executive for Good Reason (as defined in Section 4(e)), shall be deemed to be a termination of the Executive’s employment without Cause by the Company for purposes of this Agreement, and the Executive shall be entitled to the payments and benefits set forth in Section 4(c) above, subject to the Executive executing and not revoking a general release in favor of the Company, the Board and their affiliates, in a form mutually acceptable to both parties hereto. Notwithstanding the foregoing, in no event shall any termination of employment by the Executive be deemed for Good Reason unless the Executive terminates employment within 180 days of when the Executive learns of the act or conduct that constitutes Good Reason.

(e) Definitions. For purposes of this Agreement, the following definitions will apply:

(i) Cause. The term “Cause” means: (i) gross or willful misconduct; (ii) willful and repeated failure to comply with the lawful directives of the Board or any supervisory personnel; (iii) any criminal act or act of dishonesty or willful misconduct that has a material adverse impact on the property, operations,

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business or reputation of the Company or its subsidiaries or any act of fraud, dishonesty or misappropriation involving the Company or its subsidiaries; (iv) any conviction or plea of guilty or nolo contendere to a felony or a crime involving dishonesty; (v) the material breach of the terms of any confidentiality, non-competition, non-solicitation or employment agreement the employee has with the Company or its subsidiaries; (vi) acts of malfeasance or negligence in a matter of material importance to the Company or its subsidiaries; (vii) the material failure to perform the duties and responsibilities of employee’s position after written notice and a reasonable opportunity to cure (not to exceed 45 days); (viii) grossly negligent conduct; or (ix) activities materially damaging to the property, operations, business or reputation of the Company or its subsidiaries (it being understood that conduct or activities pursuant to employee’s exercise of good faith business judgment shall not be in violation of this Section 4(e)(i)). For purposes of this Agreement, Executive will also be deemed to be terminated for “Cause” if, in connection with the sale, transfer, conveyance or other disposition of all or substantially all of the assets (whether by asset sale, stock sale, merger, combination or otherwise) of one or more of the Company’s Material Lines of Business (a “Material Line of Business Sale”), (i) one or more of the purchasers in such Material Line of Business Sale offers employment (the “Employment Offer”) to Executive which Employment Offer would not permit Executive to terminate employment pursuant to clauses (i), (ii), (iii), (iv) or (v) of the definition of Good Reason contained herein, (ii) Executive declines such Employment Offer, and (iii) the Company terminates Executive’s employment within six (6) months of the consummation of the Material Line of Business Sale.

(ii) Good Reason. “Good Reason” means, after written notice by the Executive to the Board, and a reasonable opportunity for the Company to cure (not to exceed 45 days), that (i) the Executive’s Base Salary is not paid or is reduced by more than 10 percent in the aggregate or other than as part of a salary reduction program pursuant to which the Base Salaries of the Chief Executive Officer, all Executive Vice Presidents and all Senior Vice Presidents are reduced by the same percentage at the same time and for the same period of time, (ii) the Executive’s target Incentive Payment is reduced, (iii) the Executive’s job duties and responsibilities are diminished (but a reduction in the size of the Company as a result of a Sale of a Material Line of Business shall not alone constitute a diminution in the Executive’s job duties and responsibilities and any diminution in the Executive’s job duties and responsibilities after notice of non-renewal of the Employment Term is given by either party shall not be considered “Good Reason” hereunder), (iv) the Executive is required to relocate to a facility more than 50 miles from Waynesboro, Virginia, (v) the Executive is not provided benefits (e.g., health insurance) that are comparable in all material respects to those previously provided to the Executive, (vi) the Executive is directed by the Board or an officer of the Company or an affiliate (or the Company’s successor or an affiliate thereof) to engage in conduct that Company counsel, or mutually agreed upon counsel if requested by the Executive, has advised is likely to be illegal and that such counsel states with specificity why such direction is likely to be illegal (including a proposal for modification of such direction which in

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counsel’s opinion would not be likely to be illegal), or (vii) the Executive is directed by the Board or an officer of the Company or an affiliate (or the Company’s successor or an affiliate thereof) to refrain from acting and Company counsel, or mutually agreed upon counsel if requested by the Executive, has advised that such failure to act is likely to be illegal and that such counsel states with specificity why such direction is likely to be illegal (including a proposal for modification of such direction which in counsel’s opinion would not be likely to be illegal). If the Executive is directed to engage in conduct that she reasonably believes is likely to be illegal or to refrain from acting and the Executive reasonably believes that such failure to act is likely to be illegal, the Executive can express such reservations to the Board or directing officer, and the Company shall, at its expense, engage Company counsel, or mutually agreed upon counsel if requested by the Executive, to advise as to whether such conduct or failure to act is likely to be illegal. Subject to the last sentence of Section 4(d) hereof, if any of the events occur that would entitle the Executive to terminate the Executive’s employment for Good Reason hereunder and the Executive does not exercise such right to terminate the Executive’s employment, any such failure shall not operate to waive the Executive’s right to terminate the Executive’s employment for that or any subsequent action or actions, whether similar or dissimilar, that would constitute Good Reason. For purposes of clarity, it is acknowledged that expiration of the Employment Term (including notice of non-renewal) shall not be considered “Good Reason” hereunder.

(iii) Material Line of Business. “Material Line of Business” means any line or lines of business or service or group of services which represent(s) in the aggregate either 25% or more of the Company’s consolidated revenues or 25% or more of the Company’s consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for the twelve month period ended on the last day of the most recently ended fiscal quarter for the Company.

5. Confidential Information. The Executive understands and acknowledges that during the Executive’s employment with the Company, the Executive has been and will be making use of, acquiring or adding to the Company’s Confidential Information (as defined below). In order to protect the Confidential Information, except as provided in Section 8(k) below, the Executive will not, during the Executive’s employment with the Company or at any time thereafter, in any way utilize any of the Confidential Information except in connection with the Executive’s employment by the Company. The Executive will not at any time use any Confidential Information for the Executive’s own benefit or the benefit of any person except the Company. At the end of the Executive’s employment with the Company, the Executive will surrender and return to the Company any and all Confidential Information in the Executive’s possession or control, as well as any other Company property that is in the Executive’s possession or control. The Executive acknowledges and agrees that any breach of this Section 5 would be a material breach of this Agreement. The term “Confidential Information” shall mean any information that is confidential and proprietary to the Company, including but not limited to the following general categories:

(i) trade secrets;

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(ii) lists and other information about current and prospective customers;

(iii) plans or strategies for sales, marketing, business development, or system build-out;

(iv) sales and account records;

(v) prices or pricing strategy or information;

(vi) current and proposed advertising and promotional programs;

(vii) engineering and technical data;

(viii) the Company’s methods, systems, techniques, procedures, designs, formulae, inventions and know-how; personnel information;

(ix) legal advice and strategies; and

(x) other information of a similar nature not known or made available to the public or the Company’s Competitors (as defined in Section 8).

Confidential Information includes any such information that the Executive may prepare or create during the Executive’s employment with the Company, as well as such information that has been or may be created or prepared by others. This promise of confidentiality is in addition to any (i) obligation of the Executive to protect confidential information under the applicable Virginia Rules of Professional Conduct, statutes, or common law, and (ii) common law or statutory rights of the Company to prevent disclosure of its Trade Secrets and/or Confidential Information.

6. Return of Documents. All writings, records and other documents and things containing any Confidential Information in the Executive’s custody or possession shall be the exclusive property of the Company, shall not be copied and/or removed from the premises of the Company, except in pursuit of the business of the Company, and shall be delivered to the Company, without retaining any copies, upon the termination of the Executive’s employment or at any time as requested by the Company.

7. Reaffirm Obligations. Upon termination of the Executive’s employment with the Company, the Executive shall, if requested by the Company, reaffirm in writing Employee’s recognition of the importance of maintaining the confidentiality of the Company’s proprietary information and trade secrets and reaffirm all of the obligations set forth in Section 5 of this Agreement.

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8. Non-Compete; Non-Solicitation. The Executive agrees that:

(a) while the Executive is employed by the Company, the Executive will not, directly or indirectly, compete with the business conducted by the Company, and the Executive will not, directly or indirectly, provide any services to a Competitor.

(b) Except as provided in Section 8(k) below, for a period of 24 months after the Executive’s employment with the Company ends for any reason (the “Non-Competition Period”), the Executive will not compete with the Company by performing or causing to be performed the same or similar types of duties or services that the Executive performed for the Company, other than services related to the practice of law which shall not be restricted hereunder other than by the applicable Virginia Rules of Professional Responsibility, for a Competitor of the Company in any capacity whatsoever, directly or indirectly, within any city or county of the continental United States in which, at the time the Executive’s employment with the Company ends, the Company provides services or products, offers to provide services or products, or has documented plans to provide or offer to provide services or products within the Non-Competition Period provided that the Executive has knowledge of those plans at the time the Executive’s employment with the Company ends (the “Service Area”). Additionally, the Executive agrees that during the Non-Competition Period, the Executive will not, directly or indirectly, sell, attempt to sell, provide or attempt to provide, any wireless or wireline telecommunication services, including but not limited to internet services, to any person or entity who was a customer or an actively sought prospective customer of the Company, at any time during the Executive’s employment with the Company. The restrictions set forth above shall immediately terminate and shall be of no further force or effect in the event of a default by the Company in the payment of any consideration, if any, to which the Executive is entitled under Section 8(i) below, which default is not cured within thirty (30) days after written notice thereof. The Executive acknowledges and agrees that because of the nature of the Company’s business, the nature of the Executive’s job responsibilities, and the nature of the Confidential Information and Trade Secrets of the Company which the Company will give the Executive access to, any breach of this provision by the Executive would result in the inevitable disclosure of the Company’s Trade Secrets and Confidential Information to its direct competitors.

(c) While the Executive is employed by the Company and during the Non-Competition Period, the Executive will not, directly or indirectly, solicit or encourage any employee of the Company to terminate employment with the Company; hire, or cause to be hired, for any employment by a Competitor, any person who within the preceding 12 month period has been employed by the Company, or assist any other person, firm, or corporation to do any of the acts described in this subsection (c).

(d) The Executive acknowledges and agrees that the Company has a legitimate business interest in preventing her from engaging in activities competitive with it as described in this Section 8 and that any breach of this Section 8 would constitute a material breach of this Section 8 and this Agreement.

(e) The Company may notify anyone employing the Executive or evidencing an intention to employ the Executive during the Non-Competition Period as to the existence and provisions of this Agreement and may provide such person or organization a copy of this

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Agreement. The Executive agrees that the Executive will provide the Company the identity of any employer Executive plans to go to work for during the Non-Competition Period along with the Executive’s anticipated job title, anticipated job duties with any such employer, and anticipated start date. The Company will analyze the proposed employment and make a determination as to whether it would violate this Section 8. If the Company determines that the proposed employment would not pose an unacceptable threat to the Company’s interests, the Company will notify the Executive in writing that it does not object to the employment. The Executive further agrees to provide a copy of this Agreement to anyone who employs the Executive during the Non-Competition Period.

(f) The Executive acknowledges and agrees that this Section 8 is intended to limit the Executive’s right to compete only to the extent necessary to protect the Company’s legitimate business interest. The Executive acknowledges and agrees that the Executive will be reasonably able to earn a livelihood without violating the terms of this Section 8. If any of the provisions of this Section 8 should ever be deemed to exceed the time, geographic area, or activity limitations permitted by applicable law, the Executive agrees that such provisions may be reformed to the maximum time, geographic area and activity limitations permitted by applicable law, and the Executive authorizes a court or other trier of fact having jurisdiction to so reform such provisions. In the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive waives and forfeits any and all rights to any further benefits under this Agreement, including but not limited to the consideration set forth in subsection (i) below as well as any additional payments, compensation, benefits or severance pay she may otherwise be entitled to receive under this Agreement. Additionally, in the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive agrees to repay the Company for any of the consideration set forth in subsection (i) below that the Executive received prior to the breach as well as any additional payments, compensation, benefits or severance pay the Executive might otherwise have previously received under Section 4(c) of this Agreement.

(g) For purposes of this Section 8, the following definitions will apply:

(i) “Directly or indirectly” as used in this Agreement includes an interest in or participation in a business as an individual, partner, shareholder, owner, director, officer, principal, agent, employee, consultant, trustee, lender of money, or in any other capacity or relation whatsoever. The term includes actions taken on behalf of the Executive or on behalf of any other person. “Directly or indirectly” does not include the ownership of less than 5% of the outstanding shares of any corporation, if such shares are publicly traded in the over-the-counter market or listed on a national securities exchange.

(ii) “Competitor” as used in this Agreement means any person, firm, association, partnership, corporation or other entity that competes or attempts to compete with the Company by providing or offering to provide wireless or wireline telecommunication services, including but not limited to internet services, within any city or county in which the Company provides or offers those services or products.

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(h) Notwithstanding any other provision of this Section 8, the Executive will not be considered to have violated any prohibition against competing with the Company for engaging in any of the following activities: (1) being employed or retained by (i) any parent, subsidiary or affiliate organization of any Competitor where that parent, subsidiary or affiliate organization does not itself, and the Executive’s employment will not cause the Executive to, compete or attempt to compete with the Company by providing or offering to provide wireless or wireline telecommunications services, including but not limited to internet services, within the Service Area or (ii) any Competitor, directly or indirectly, so long as Executive’s employment or service does not relate to working within the Service Area or activities that would benefit the Competitor principally within the Service Area; or (2) working or providing services within the Service Area so long as the Executive’s employment or service does not relate to the type of services provided or offered by the Company within that Service Area or to services for which the Company has documented plans to provide, offer or supply within that Service Area at the time of Executive’s termination of employment; or (3) selling or attempting to sell wireless or wireline telecommunications services, including but not limited to internet services, so long as the services or products, which the Executive is selling or attempting to sell to a customer, do not relate to the type of services or products provided or offered by the Company to such customer or for which the Company has documented plans to provide, offer or supply to such customer at the time of Executive’s termination of employment; provided, however, that the Executive is nevertheless prohibited from: (i) selling, attempting to sell, and providing or attempting to provide, to any person who was a customer, or who was actively sought as a customer, of the Company at the time of Executive’s termination of employment any wireless or wireline telecommunications services, including but not limited to internet services, that are the type of services or products that the Company sold, attempted to sell or provided or attempted to provide to such customer as described in (b) above and (ii) soliciting or encouraging any employee of the Company to terminate employment or taking any other of the prohibited actions as described in (c) above.

(i) In consideration of the Executive’s undertakings set forth in this Section 8 with respect to periods after termination of employment, but only in the event that the Executive is entitled to the benefits and payments under Section 4(c) above, the Company will pay the Executive an amount equal to twenty-five percent (25%) of her Base Salary during the Non-Competition Period, in such periodic installments as her Base Salary was being paid immediately prior to termination of employment. In the event the Executive is not entitled to the benefits and payments under Section 4(c) above, the Company will not pay Executive any of the consideration set forth in this Section 8(i).

(j) In the event the Executive breaches any of the restrictions or provisions set forth in this Section 8, the Executive waives and forfeits any and all rights to any further payments under subsection (i) or otherwise under this Agreement. This waiver and forfeiture shall be effective even in the event a court refuses to enforce the restrictions set forth in this Section 8.

(k) The Executive and the Company acknowledge and agree that no part of this Section 8 or of Sections 5, 6 or 7 are intended to (i) restrict the Executive’s right to practice law after the Executive’s employment with the Company ends or (ii) relieve the Executive from, or cause the Executive to violate, any of her duties or responsibilities (ethical or otherwise) as an

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attorney admitted to practice in the Commonwealth of Virginia. None of the provisions of Sections 5, 6, 7 or 8 shall be deemed a restriction on the Executive’s right to practice law after the Executive’s employment with the Company ends or be interpreted in a way that would be a violation of the Executive’s duties or responsibilities (ethical or otherwise) as an attorney admitted to practice in the Commonwealth of Virginia. The Executive and the Company agree that Sections 5, 6, 7 and 8 will be interpreted to mean the maximum restrictions on Executive otherwise permitted by the applicable guidelines of professional conduct for attorneys admitted to practice in the Commonwealth of Virginia, so as to restrict Executive’s activities consistent with Sections 5, 6, 7 or 8 without limiting her from practicing law after the Executive’s employment with the Company ends.

9. Representations. The Executive represents and warrants to the Company that the execution, delivery and performance of this Agreement by the Executive does not conflict with, or result in the breach by the Executive or violation by the Executive of, any other agreement to which the Executive is a party or by which the Executive is bound. The Executive hereby agrees to indemnify the Company, its officers, directors and shareholders and hold them harmless from and against any liability (including, without limitation, reasonable attorneys’ fees and expenses) which they may at any time suffer or incur arising out of or relating to any breach of an agreement, representation or warranty made by the Executive herein. The Company represents and warrants that this Agreement and the transactions contemplated hereby have been duly authorized by the Company by all necessary corporate and shareholder action, and that the execution, delivery and performance of this Agreement by the Company does not conflict with, or result in the breach or violation by the Company of, its Articles of Incorporation or Amended and Restated Bylaws or any other agreement to which the Company is a party or by which it is bound. The Company hereby agrees to indemnify the Executive and hold the Executive harmless from and against any liability (including, without limitation, reasonable attorneys’ fees and expenses) which the Executive may at any time suffer or incur arising out of or relating to any breach of an agreement, representation or warranty made by the Company herein.

10. Remedies. The parties hereto agree that the Company would suffer irreparable harm from a breach by the Executive of any of the covenants or agreements contained herein. Therefore, in the event of the actual or threatened breach by the Executive of any of the provisions of this Agreement, the Company may, in addition and supplementary to other rights and remedies existing in its favor, apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any violation of the provisions hereof. The Executive agrees that if a lawsuit or other proceeding is brought to enforce the terms of this Agreement or determine the validity of its terms and the Company prevails, the Company will be entitled to recover from the Executive its reasonable attorneys’ fees and court costs. The Executive agrees that these provisions are reasonable.

11. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Company and its affiliates and their successors and assigns, and shall be binding upon and inure to the benefit of the Executive and the Executive’s legal representatives and assigns, provided that in no event shall the Executive’s obligations to perform services for the Company and its affiliates be delegated or transferred by the Executive. The Company may assign or transfer its rights hereunder to a successor corporation in the event of a merger, consolidation or transfer or sale of all or substantially all of the assets of the Company or of the

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Company’s business (provided, however, that no such assignment or transfer shall have the effect of relieving the Company of any liability to the Executive hereunder or under any other agreement or document contemplated herein), but only if such assignment or transfer does not result in employment terms, conditions, duties or responsibilities which are or may be materially different than the terms, conditions, duties or responsibilities of the Executive hereunder. If the Company assigns or transfers its rights under this Agreement to a successor corporation, the Executive’s obligations under Section 8 of this Agreement will be construed and enforceable with respect to the business and geographic scope of the Company only and will not be construed or enforceable with respect to the business and geographic scope of any successor corporation to which the Company’s rights may be assigned or transferred to the extent such business or geographic scope is greater than that of the Company at the time of such assignment or transfer. The Executive may not transfer or assign the Executive’s rights and obligations under this Agreement.

12. Modification or Waiver. No amendment, modification, waiver, termination or cancellation of this Agreement shall be binding or effective for any purpose unless it is made in a writing signed by the party against whom enforcement of such amendment, modification, waiver, termination or cancellation is sought. No course of dealing between or among the parties to this Agreement shall be deemed to affect or to modify, amend or discharge any provision or term of this Agreement. No delay on the part of the Company or the Executive in the exercise of any of their respective rights or remedies shall operate as a waiver thereof, and no single or partial exercise by the Company or the Executive of any such right or remedy shall preclude other or further exercises thereof. A waiver of a right or remedy on any one occasion shall not be construed as a bar to or waiver of any such right or remedy on any other occasion.

13. Governing Law; Jurisdiction. This Agreement and all rights, remedies and obligations hereunder, including, but not limited to, matters of construction, validity and performance shall be governed by the laws of the Commonwealth of Virginia without regard to its conflict of laws principles or rules. To the full extent lawful, each of the Company and the Executive hereby consents irrevocably to personal jurisdiction, service and venue in connection with any claim or controversy arising out of this Agreement in the courts of the Commonwealth of Virginia located in Waynesboro, Virginia, and in the federal courts in the Western District of Virginia.

14. Excise Taxes.

(a) If any payment or distribution by the Company or any affiliate to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then the benefits payable or provided under this Agreement (or other Payments as described above) shall be reduced (but not in excess of the amount of the

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benefits payable or provided under this Agreement) if, and only to the extent that, such reduction will allow the Executive to receive a greater Net After Tax Amount than such Executive would receive absent such reduction.

(b) The Accounting Firm (as defined below) will first determine the amount of any Parachute Payments (as defined below) that are payable to the Executive. The Accounting Firm also will determine the Net After Tax Amount attributable to the Executive’s total Parachute Payments.

(c) The Accounting Firm will next determine the largest amount of payments that may be made to the Executive without subjecting the Executive to the Excise Tax (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to the Capped Payments.

(d) The Executive then will receive the total Parachute Payments or the total Capped Payments, whichever provides the Executive with the higher Net After Tax Amount; however, if the reductions imposed under this Section 14 are in excess of the amount of benefits payable or provided under this Agreement, then the total Parachute Payments will be adjusted by reducing the amount of any noncash or cash benefits under this Agreement or any other plan, agreement or arrangement as directed by the Executive. The Accounting Firm will notify the Executive and the Company if it determines that the Parachute Payments must be reduced and will send the Executive and the Company a copy of its detailed calculations supporting that determination.

(e) As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determinations under this Section 14, it is possible that the Executive will have received Parachute Payments or Capped Payments in excess of the amount that should have been paid or distributed (“Overpayments”), or that additional Parachute Payments or Capped Payments should be paid or distributed to the Executive (“Underpayments”). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against the Company or the Executive, which assertion the Accounting Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been made, that Overpayment may, at the Executive’s discretion, be treated for all purposes as a loan ab initio that the Executive must repay to the Company immediately together with interest at the applicable Federal rate under Code Section 7872; provided, however, that no loan will be deemed to have been made and no amount will be payable by the Executive to the Company unless, and then only to the extent that, the deemed loan and payment would either reduce the amount on which the Executive is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999 and the Executive will receive a greater Net After Tax Amount than such Executive would otherwise receive. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Executive and the Company of that determination and the amount of that Underpayment will be paid to the Executive promptly by the Company.

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(f) For purposes of this Section 14, the following terms shall have their respective meanings:

(i) “Accounting Firm” means the independent accounting firm currently engaged by the Company, or a mutually agreed upon independent accounting firm if requested by the Executive; and

(ii) “Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any State or local income taxes applicable to the Executive on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment.

(iii) “Parachute Payment” means a payment that is described in Code Section 280G(b)(2), determined in accordance with Code Section 280G and the regulations promulgated or proposed thereunder.

(g) The fees and expenses of the Accounting Firm for its services in connection with the determinations and calculations contemplated by the preceding subsections shall be borne by the Company.

(h) The Company and the Executive shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or the Executive, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determinations and calculations contemplated by the preceding subsections. Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

15. Severability. Whenever possible each provision and term of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision or term of this Agreement shall be held to be prohibited by or invalid under such applicable law, then such provision or term shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or affecting in any manner whatsoever the remainder of such provisions or term or the remaining provisions or terms of this Agreement. If any provision contained in Sections 5 or 8 of this Agreement shall for any reason be held to be excessively broad or unreasonable as to time, territory, or interest to be protected, a court is hereby empowered and requested to construe such provision by narrowing it so as to make it reasonable and enforceable to the extent provided under applicable law.

16. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same Agreement.

17. Headings. The headings of the Sections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part hereof and shall not affect the construction or interpretation of this Agreement.

18. Entire Agreement. This Agreement (together with all documents and instruments referred to herein) constitutes the entire agreement, and supersedes all other prior

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agreements and undertakings, both written and oral, among the parties with respect to the subject matter hereof, including any employment or management continuity agreement under which the Executive hereby agrees to waive all rights and which is hereby terminated.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

NTELOS Inc.
By:	/s/    JAMES S. QUARFORTH
	James S. Quarforth
	Chief Executive Officer
Executive
/s/    MARY MCDERMOTT
Mary McDermott

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EMPLOYMENT CONTRACT AMENDMENT

THIS AMENDMENT (“Amendment”) to the Employment Agreement (the “Employment Agreement”) dated as of May 2, 2005 by and between NTELOS Inc., a Virginia corporation (“Company”), and Mary McDermott (the “Executive”) is made as of February 13, 2006, by and between NTELOS, NTELOS Holdings Corp., a Delaware corporation (“Holdings”) and the Executive (collectively, the “Parties”).

Background

Holdings will be engaging in an initial public offering and NTELOS will remain a wholly owned subsidiary of Holdings. NTELOS and the Executive wish to add Holdings as a party to the Employment Agreement, upon which both NTELOS and Holdings will jointly share the liabilities and benefits under the Employment Agreement. Additionally, the Parties wish to make certain other amendments to the Employment Agreement, as set forth herein,. The Executive consents to this Amendment, including without limitation, the addition of Holdings as a party to the Agreement.

Terms

In consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereto promise and agree as follows:

1. Pursuant to Section 11 of the Employment Agreement, Holdings shall become a party to the Employment Agreement and, jointly with NTELOS, inure to all the benefits and the liabilities under the Employment Agreement, as NTELOS has under the Agreement. Henceforth both Holdings and NTELOS shall jointly share the liabilities and benefits under the Employment Agreement.

2. To reflect the addition of Holdings as a party to the Employment Agreement, unless the context requires otherwise, the definition of and all references to “Company” in the Employment Contract shall refer to both Holdings and NTELOS.

3. All references to “Board” in the Employment Agreement shall refer to the Board of Directors of Holdings.

4. Section 2 of the Employment Agreement shall be amended by adding the following after the last sentence of Section 2:

“Notwithstanding the foregoing, if the Employment Term has less than 24 months remaining upon the occurrence of a “Change in Control” (as such term is defined in Section 4(e)(iv)), then the Employment Term shall be automatically extended so that the Employment Term will not expire until the date which is 24 months from the date of the Change in Control, subject to the automatic renewal, as described above.”

5. Section 4(b) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(b):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then the Disability Incentive Payment shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date.”

6. Section 4(c)(i) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(i):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then the payments required under this Section 4(c)(i) shall not commence until the first day which is at least six months after the Termination Date. All payments, which would have otherwise been required to be made over such six month period, shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date. Thereafter, payments shall continue as so provided above for the remainder of the Termination Period.”

7. Section 4(c)(ii) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(ii):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then the payment shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date.”

8. Section 4(c)(iv) of the Employment Agreement shall be amended by adding the following after the last sentence of Section 4(c)(iv):

“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Code Section 409A, then such reimbursements (only to the extent such would otherwise be subject to Code Section 409A) shall not commence until the first day which is at least six months after the Termination Date. All reimbursements, which would have otherwise been required to be made over such six month period, shall be paid to the Executive in one lump sum payment, as soon as administratively feasible after the first day which is at least six months after the Termination Date. Thereafter, reimbursements shall continue as so provided above for the remainder of the Termination Period.”

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9. A new Section 4(e)(iv) shall be added the Employment Agreement, which shall read in its entirety, as follows:

“Change in Control” means any of the following described in clauses (I) through (V) below, provided that a “Change in Control” shall not mean any event listed in clauses (I) through (V) that occurs directly or indirectly as a result of or in connection with Quadrangle Capital Partners LP, a Delaware limited partnership, Quadrangle Select Partners LP, a Delaware limited partnership, and Quadrangle Capital Partners—A LP, a Delaware limited partnership (collectively the “Quadrangle Entities”) and/or Citigroup Venture Capital Equity Partners, L.P., a Delaware limited partnership, CVC/SSB Employee Fund, L.P., a Delaware limited partnership, CVC Executive Fund LLC, a Delaware limited liability company (collectively the “CVC Entities”) and/or their Affiliates, related funds and co-investors becoming the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Holdings representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities, or the shareholders of Holdings approve a merger, consolidation or reorganization of Holdings with any other company and such merger, consolidation or reorganization is consummated, and after such merger, consolidation or reorganization any of the Quadrangle Entities, the CVC Entities and/or their respective Affiliates, related funds and co-investors acquire more than fifty-one percent (51%) of the combined voting power of Holdings’ then outstanding securities:

I. any Person is or becomes the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Holdings representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities;

II. consummation of a merger, consolidation or reorganization of Holdings with any other company, or a sale of all or substantially all the assets of Holdings (a “Transaction”), other than (i) a Transaction that would result in the voting securities of Holdings outstanding immediately prior thereto continuing to represent either directly or indirectly more than fifty-one percent (51%) of the combined voting power of the then outstanding securities of Holdings or such surviving or purchasing entity;

III. the shareholders of Holdings approve a plan of complete liquidation of Holdings and such liquidation is consummated; or

IV. a sale, transfer, conveyance or other disposition (whether by asset sale, stock sale, merger, combination or otherwise) (a “Sale”) of a Material Line of Business (other than any such sale to

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the Quadrangle Entities, the CVC Entities or their Affiliates, related funds and co-investors ), except that with respect to this clause (IV) there shall only be a Change in Control with respect to the Executive who is employed at such time in such Material Line of Business (whether full or part-time), and the Executive does not receive an offer for “comparable employment” with the purchaser and the Executive’s employment is terminated by Holdings or any Affiliate of Holdings no later than six (6) months after the consummation of the Sale of the Material Line of Business. For these purposes, “comparable employment” means that (i) the Executive’s base salary and target incentive payments are not reduced in the aggregate, (ii) the Executive’s job duties and responsibilities are not diminished (but a reduction in size of Holdings as the result of a Sale of a Material Line of Business, or the fact that the purchaser is smaller than Holdings, shall not alone constitute a diminution in the Executive’s job duties and responsibilities), (iii) the Executive is not required to relocate to a facility more than fifty (50) miles from the Executive’s principal place of employment at the time of the Sale and (iv) the Executive is provided benefits that are comparable in the aggregate to those provided to the Executive immediately prior to the Sale; or

V. During any period of twelve (12) consecutive months commencing upon the effective date of this Amendment, the individuals who constitute the Board, upon the effective date of this Amendment, and any new director who either (i) was elected by the Board or nominated for election by Holdings’ stockholders was approved by a vote of more than fifty percent (50%) of the directors then still in office who either were directors, upon the effective date of the Plan, or whose election or nomination for election was previously so approved or (ii) was appointed to the Board pursuant to the designation of Quadrangle Entities and/or the CVC Entities, cease for any reason to constitute a majority of the Board.

For purposes of the foregoing, “Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

For purposes of the foregoing, “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.

10. Section 8(i) of the Employment Agreement shall be amended by adding the following before the last sentence of Section 8(i):

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“Notwithstanding the foregoing, if the Executive is a “specified employee” within the meaning of Section 409A, then such payments shall be made in the same time and manner as provided in Section 4(c)(i) above.”

11. Other than as specifically provided in the Amendment, the Employment Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their respective representatives, thereunto duly authorized, as of the date first above written.

HOLDINGS:	NTELOS HOLDINGS CORP.
	By:	/s/    JAMES S. QUARFORTH
	Name:	James S. Quarforth
	Title:	Chief Executive Officer, President and Chairman of the Board of Directors
NTELOS:	NTELOS INC.
	By:	/s/    JAMES S. QUARFORTH
	Name:	James S. Quarforth
	Title:	Chief Executive Officer, President and Chairman of the Board of Directors
EXECUTIVE :		/s/    MARY MCDERMOTT
	Name:	Mary McDermott

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EX-10.8

Exhibit 10.8

NTELOS HOLDINGS CORP. AMENDED AND RESTATED EQUITY INCENTIVE PLAN

(Effective as of February 13, 2006)

NTELOS HOLDINGS CORP. AMENDED AND RESTATED

EQUITY INCENTIVE PLAN

1. Purpose of the Plan

The purpose of the Plan is to assist the Company and its Subsidiaries in attracting and retaining valued employees, officers, consultants and other service providers by offering them a greater stake in the Company’s success and a closer identity with it, and to encourage ownership of the Company’s stock by such individuals.

2. Definitions

2.1 “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. Unless the context requires otherwise, when a specified Person is not referenced, the term “Affiliate” shall refer to Affiliates of the Company and/or its Subsidiaries.

2.2 “Award” means a grant of an Incentive Award, Option, Restricted Stock, Restricted Stock Unit or SAR under the Plan.

2.3 “Award Agreement” means the agreement or agreements between the Company and a Holder pursuant to which an Award is granted and which specifies the terms and conditions of that Award, including the vesting requirements applicable to that Award.

2.4 “Board” means the Board of Directors of the Company.

2.5 “Cause” shall mean Cause as such term is defined in any employment agreement between the Participant and the Company or its Subsidiaries or Affiliates. If no such agreement or definition exists, “Cause” shall exist with respect to a Participant if such Participant has (i) committed an act of fraud, embezzlement, misappropriation or breach of fiduciary duty against the Company, any Subsidiary or any Affiliate or a felony involving the business, assets, customers or clients of the Company, any Subsidiary or any Affiliate or has been convicted by a court of competent

jurisdiction or has plead guilty or nolo contendere to any other felony; (ii) committed a material breach of any written confidentiality, non-compete, non-solicitation or business opportunity covenant contained in any agreement entered into by such Participant and the Company, any Subsidiary or any Affiliate; or (iii) substantially failed to perform such Participant’s duties to the Company, any Subsidiary or any Affiliate, including by committing a material breach of any written covenant contained in any agreement entered into by such Participant and the Company, any Subsidiary or any Affiliate (other than a confidentiality, non-compete, non-solicitation or business opportunity covenant) after written notice and an opportunity to cure (not to exceed 30 days) (it being understood that conduct pursuant to an Participant’s exercise of good faith business judgment should not constitute “Cause” under clause (iii) above).

2.6 “Change in Control” means any of the following described in clauses (a) through (e) below, provided that a “Change in Control” shall not mean any event listed in clauses (a) through (e) that occurs directly or indirectly as a result of or in connection with Quadrangle Capital Partners LP, a Delaware limited partnership, Quadrangle Select Partners LP, a Delaware limited partnership, and Quadrangle Capital Partners - A LP, a Delaware limited partnership (collectively the “Quadrangle Entities”) and/or Citigroup Venture Capital Equity Partners, L.P., a Delaware limited partnership, CVC/SSB Employee Fund, L.P., a Delaware limited partnership, CVC Executive Fund LLC, a Delaware limited liability company (collectively the “CVC Entities”) and/or their Affiliates, related funds and co-investors becoming the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Company securities representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities, or the shareholders of the Company approve a merger, consolidation or reorganization of the Company with any other company and such merger, consolidation or reorganization is consummated, and after such merger, consolidation or reorganization any of the Quadrangle Entities, the CVC Entities and/or their respective Affiliates, related

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funds and co-investors acquire more than fifty-one percent (51%) of the combined voting power of the Company’s then outstanding securities:

(a) any Person is or becomes the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Company securities representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities;

(b) consummation of a merger, consolidation or reorganization of the Company with any other company, or a sale of all or substantially all the assets of the Company (a “Transaction”), other than (i) a Transaction that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent either directly or indirectly more than fifty-one percent (51%) of the combined voting power of the then outstanding securities of the Company or such surviving or purchasing entity;

(c) the shareholders of the Company approve a plan of complete liquidation of the Company and such liquidation is consummated; or

(d) a sale, transfer, conveyance or other disposition (whether by asset sale, stock sale, merger, combination or otherwise) (a “Sale”) of a Material Line of Business (other than any such sale to the Quadrangle Entities, the CVC Entities or their Affiliates, related funds and co-investors), except that with respect to this clause (d) there shall only be a Change in Control with respect to a Holder who is employed at such time in such Material Line of Business (whether full or part-time), and the Holder does not receive an offer for “comparable employment” with the purchaser and the Holder’s employment is terminated by the Company or any Affiliate no later than six (6) months after the consummation of the Sale of the Material Line of Business. For these purposes, “comparable employment” means that (i) the Holder’s base salary and target incentive payments are not reduced in the aggregate, (ii) the Holder’s job duties and responsibilities are not diminished (but a reduction in size of the Company as the result of a Sale of a Material Line of Business, or the fact that the purchaser is smaller than the Company, shall not alone constitute a diminution in the Holder’s job duties and responsibilities), (iii) the Holder is not required to relocate to a facility more than fifty (50) miles from the Holder’s principal place of employment at the time of the Sale and (iv) the Holder is provided benefits that are comparable in the aggregate to those provided to the Holder immediately prior to the Sale; or

(e) During any period of twelve (12) consecutive months commencing upon the effective date of the Plan, the individuals who constitute the Board, upon the effective date of the Plan, and any new director who either (i) was elected by the Board or nominated for election by the Company’s stockholders was approved by a vote of more than fifty percent (50%) of the directors then still in office who either were directors, upon the effective date of the Plan, or whose election or nomination for election was previously so approved or (ii) was appointed to the Board pursuant to the designation of Quadrangle Entities and/or the CVC Entities, cease for any reason to constitute a majority of the Board.

For purposes of the foregoing, “Material Line of Business” means any line or lines of business or service or group of services which represent(s) in the aggregate either twenty-five percent (25%) or more of the

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Company’s consolidated revenues or twenty-five percent (25%) or more of the Company’s consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for the twelve-month period ended on the last day of the most recently ended fiscal quarter for the Company.

2.7 “Class B Common Stock “ means Class B Common Stock of the Company, par value $0.01 per share.

2.8 “Code” means the Internal Revenue Code of 1986, as amended.

2.9 “Committee” means the committee designated by the Board to administer the Plan under Section 4. The Committee shall have at least two members, each of whom shall be a member of the Board, and shall be both a Non-Employee Director and an Outside Director.

2.10 “Common Stock” means the Common Stock of the Company, par value $0.01 per share, Class B Common Stock, or such other class or kind of shares or other securities resulting from the application of Section 8, as applicable.

2.11 “Company” means NTELOS Holdings Corp., a Delaware corporation, or any successor corporation.

2.12 “Disability” means a physical, mental or other impairment within the meaning of Section 22(e)(3) of the Code.

2.13 “Employee” means an officer or other employee of the Company, a Subsidiary or an Affiliate, including a director who is such an employee.

2.14 “Exercise Price” means the exercise price per share of Common Stock of an Option or the base value of a SAR.

2.15 “Fair Market Value” means, on any given date, the closing price of a share of Common Stock on the principal national securities exchange (including NASDAQ) on which the Common Stock is listed or traded on such date or, if Common Stock was not traded on such date, on the last preceding day on which the Common Stock was traded. If at any time such Common Stock

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is not listed on any securities exchange, the Fair Market Value shall be the value of such Common Stock as determined in good faith by the Board.

2.16 “Holder” means a Participant to whom an Award is made.

2.17 “Incentive Award” means an Award granted pursuant to Section 10, stated with reference to a specified dollar amount or number of shares of Common Stock which, subject to such terms and conditions as may be prescribed by the Committee, entitles the Participant to receive shares of Common Stock, a cash payment or a combination thereof from the Company or an Affiliate.

2.18 “Incentive Stock Option” means an Option intended to meet the requirements of an incentive stock option as defined in section 422 of the Code and designated as an Incentive Stock Option.

2.19 “Named Executive Officer” means a Holder who, as of the last day of a taxable year, is the Chief Executive Officer of the Company (or is acting in such capacity) or one of the four highest compensated officers of the Company (other than the Chief Executive Officer) or is otherwise one of the group of “covered employees,” as defined in the regulations promulgated under Code Section 162(m).

2.20 “1934 Act” means the Securities Exchange Act of 1934, as amended.

2.21 “Non-Employee Director” means a member of the Board who meets the definition of a “non-employee director” under Rule 16b-3(b)(3) promulgated by the Securities and Exchange Commission under the 1934 Act.

2.22 “Non-Qualified Option” means an Option not intended to be an Incentive Stock Option, and designated as a Non-Qualified Option.

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2.23 “Option” means any stock option granted from time to time under Section 7 of the Plan. Options granted under the Plan may be Non-Qualified Options or Incentive Stock Options, as determined by the Committee.

2.24 “Outside Director” means a member of the Board who meets the definition of an “outside director” under Treasury Regulation § 1.162-27(e)(3).

2.25 “Participant” means a person granted an Award.

2.26 “Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

2.27 “Plan” means the NTELOS Holdings Corp. Amended and Restated Equity Incentive Plan herein set forth, as amended from time to time.

2.28 “Restricted Stock” means Common Stock subject to a Restriction Period awarded by the Committee under Section 6 of the Plan.

2.29 “Restricted Stock Units” means an Award granted pursuant to Section 9, in the amount determined by the Committee, stated with reference to a specified number of shares of Common Stock, that in accordance with the terms of an Agreement entitles the holder to receive shares of Common Stock, upon the lapse of any Restriction Period.

2.30 “Restriction Period” means the period during which an Award of Restricted Stock awarded under Section 6 of the Plan or an Award of a Restricted Stock Unit awarded under Section 9 of the Plan is subject to forfeiture. The Restriction Period shall not lapse with respect to any Restricted Stock or Restricted Stock Unit until all conditions, imposed under this Plan or under the Award Agreement, have been satisfied.

2.31 “SAR” means a stock appreciation right granted pursuant to Section 8, that in accordance with the terms of an Award Agreement entitles the Holder to receive a number of

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shares of Common Stock based on the increase in the Fair Market Value of the shares underlying the stock appreciation right during a stated period specified by the Committee.

2.32 “Subsidiary” means, with respect to the Company, any corporation, partnership, association or other business entity of which (i) if a corporation, a majority of the overall economic equity or a majority of the total voting power of shares of stock entitled (regardless of whether, at the time, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by the Company or one or more of the other Subsidiaries of the Company or a combination thereof or (ii) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by the Company or one or more of the other Subsidiaries of the Company or a combination thereof.

2.33 “Ten Percent Shareholder” means a person who on any given date owns, either directly or indirectly (taking into account the attribution rules contained in section 424(d) of the Code), stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or a corporate Subsidiary.

2.34 “Termination Date” means the day on which a Holder’s employment or service with the Company and its Subsidiaries and Affiliates terminates or is terminated.

3. Eligibility

3.1 Any Employee of the Company, its Subsidiaries or its Affiliates is eligible to participate in this Plan. In addition, any other person that provides services to the Company, its Subsidiaries or Affiliates is eligible to participate in this Plan.

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4. Administration and Implementation of Plan

4.1 The Plan shall be administered by the Committee, which shall have full power to interpret and administer the Plan and full authority to act in selecting the Participants to whom Awards will be granted, in determining whether, and to what extent, Awards may be transferable by the Holder, in determining the amount and type of Awards to be granted to each such Participant, in determining the terms and conditions of Awards granted under the Plan and in determining the terms of the Award Agreements that will be entered into with Holders. Additionally, the Committee may impose restrictions, including without limitation, confidentiality and non-solicitation restrictions, on the grant, vesting, exercise or payment of an Award as it determines appropriate.

4.2 The Committee’s powers shall include, but not be limited to, the power to determine whether, to what extent and under what circumstances an Option may be exchanged for cash, Restricted Stock, or some combination thereof; to determine whether a Change in Control of the Company has occurred; and to determine, in accordance with Section 11, the effect, if any, of a Change in Control of the Company upon outstanding Awards.

4.3 The Committee shall have the power to adopt regulations for carrying out the Plan and to make changes to such regulations as it shall, from time to time, deem advisable. Any interpretation by the Committee of the terms and provisions of the Plan and the administration thereof, and all actions taken by the Committee, shall be final and binding on Holders. The Holder shall take whatever additional actions and execute whatever additional documents the Committee may in its reasonable judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on the Holder pursuant to the express provisions of the Plan and the Award Agreement.

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4.4 The Committee may condition the grant of any Award or the lapse of any Restriction Period (or any combination thereof) upon the Holder’s achievement of a Performance Goal that is established by the Committee before the grant of the Award. For this purpose, a “Performance Goal” shall mean a goal that must be met by the end of a period specified by the Committee (but that is substantially uncertain to be met before the grant of the Award) based upon the Company’s, a Subsidiary’s, an Affiliate’s or a business unit’s: (i) total stockholder return, (ii) total stockholder return as compared to total return (on a comparable basis) of a publicly available index, (iii) net income, (iv) pretax earnings, (v) funds from operations, (vi) earnings before interest expense, taxes, depreciation and amortization, (vii) operating margin, (viii) earnings per share, (ix) return on equity, capital, assets or investment, (x) operating earnings, (xi) working capital, (xii) ratio of debt to stockholders equity or (xiii) revenue. The Committee shall have discretion to determine the specific targets with respect to each of these categories of Performance Goals. Before granting an Award or permitting the lapse of any Restriction Period on an Award subject to this Section, the Committee shall certify in writing that the applicable Performance Goal has been satisfied. Performance Goals may also be linked only to a specified period of service with the Company, its Subsidiaries, or its Affiliates; provided however, that in such case, the Committee shall not be required to certify that such Performance Goal has been satisfied.

4.5 The Committee may amend any outstanding Awards without the consent of the Holder to the extent it deems appropriate; provided however, that in the case of amendments adverse to the Holder, the Committee must obtain the Holder’s consent to any such amendment, provided further that such consent shall not be required if, as determined by the Committee in its sole discretion, such amendment is required to either (a) comply with Section 409A of the Code or (b) prevent the Holder from being subject to any excise tax or penalty under Section 409A.

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4.6 To the extent applicable law so permits, the Committee, in its discretion, may delegate to one or more officers of the Company all or part of the Committee’s authority and duties with respect to Awards to be granted to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act and who are not Named Executive Officers. The Committee may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Committee’s delegate or delegates that were consistent with the terms of the Plan and the Committee’s prior delegation.

5. Shares of Stock Subject to the Plan

5.1 Subject to adjustment as provided in Section 11, the total number of shares of Common Stock available for Awards under the Plan shall be 4,050,000. This limit shall also include all equity awards previously granted under the prior version of this Plan, the NTELOS Holdings Corp. Equity Incentive Plan, including all restricted shares of Common Stock that have been converted into shares of Class B Common Stock, and all options granted under such plan. Such equity awards granted under the NTELOS Holdings Corp. Equity Incentive Plan shall count against the above maximum limit based on the number shares outstanding subsequent to the share conversion occurring in connection with the initial public offering of the Company (approximately 1,895,144 shares of Common Stock). After the effective date of this Plan, no shares of Class B Common Stock shall be available for Awards under this Plan.

5.2 The maximum number of shares of Common Stock available for Awards in any combination that may be granted to any individual Participant shall not exceed 1,000,000 during any calendar year (the “Individual Limit”). Subject to Section 5.3 and Section 12, any Award that is canceled by the Committee shall count against the Individual Limit. Notwithstanding the foregoing, the Individual Limit may be adjusted to reflect the effect on Awards of any transaction or event

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described in Section 11. Additionally, the maximum Incentive Award cash payment that any one Participant may receive during any calendar year shall not exceed $1,000,000.

5.3 Any shares issued by the Company through the assumption or substitution of outstanding grants from an acquired company shall not reduce the shares available for Awards under the Plan. Any shares issued hereunder may consist, in whole or in part, of authorized and unissued shares or treasury shares. If any shares subject to any Award granted hereunder are forfeited or such Award otherwise terminates, the shares subject to such Award, to the extent of any such forfeiture or termination, shall again be available for Awards under the Plan. Shares of Restricted Stock issued upon exercise of Options granted under the Plan shall not further reduce the shares available for Awards under the Plan.

5.4 No Option or SAR shall be exercisable, no shares of Common Stock shall be issued, no certificates for shares of Common Stock shall be delivered and no payment shall be made under the Plan except in compliance with all applicable laws.

6. Restricted Stock

An Award of Restricted Stock is a grant by the Company of a specified number of shares of Common Stock to the Participant, which shares may be subject to forfeiture during a Restriction Period upon the happening of events or other conditions as specified in the Award Agreement. Such an Award of Restricted Stock shall be subject to the following terms and conditions:

6.1 Restricted Stock shall be evidenced by Award Agreements. Such agreements shall conform to the requirements of the Plan and may contain such other provisions as the Committee shall deem advisable. At the time of grant of an Award of Restricted Stock, the Committee will determine the price, if any, to be paid by the Holder for each share of Common Stock subject to the Award, and such price, if any, shall be set forth in the Award Agreement.

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6.2 Unless otherwise provided by the Board or the Committee, upon determination of the number of shares of Restricted Stock to be granted to the Holder, the Committee shall direct that a certificate or certificates representing that number of shares of Common Stock be issued to the Holder with the Holder designated as the registered owner. The certificate(s), if any, representing such shares shall bear appropriate legends as to sale, transfer, assignment, pledge or other encumbrances to which such shares are subject during the Restriction Period and shall be deposited by the Holder, together with a stock power endorsed in blank, with the Company, to be held in escrow during the Restriction Period.

6.3 During the Restriction Period the Holder shall have the right to receive the Holder’s allocable share of any cash dividends declared and paid by the Company on its Common Stock and to vote the shares of Restricted Stock.

6.4 The Committee may condition the expiration of the Restriction Period upon: (i) the Participant’s continued service over a period of time with the Company, its Subsidiaries or its Affiliates, (ii) the achievement by the Participant, the Company, its Subsidiaries or its Affiliates of any other Performance Goals set by the Committee, or (iii) any combination of the above conditions, as specified in the Award Agreement. If the specified conditions are not attained, the Holder shall forfeit the portion of the Award with respect to which those conditions are not attained, and the underlying Common Stock shall be forfeited to the Company. Notwithstanding any provision contained herein to the contrary, the Committee, in its sole discretion, may grant Awards of Restricted Stock under this Section 6 that are not subject to any Restriction Period.

6.5 At the end of the Restriction Period, if all such conditions have been satisfied, the restrictions imposed hereunder shall lapse with respect to the applicable number of shares of Restricted Stock as determined by the Committee, and any legend described in Section 6.2 that is then no longer applicable, shall be removed and such number of shares delivered to the Holder (or,

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where appropriate, the Holder’s legal representative). Subject to Section 4, the Board may, in its sole discretion, accelerate the vesting and delivery of shares of Restricted Stock.

6.6 At the time of the grant or upon the lapse of the Restriction Period of an Award of Restricted Stock, the Committee will determine the consideration permissible for the payment of the purchase price, if any, of the Award of Restricted Stock. The purchase price per of share of Common Stock acquired pursuant to the Award of Restricted Stock shall be paid in one of the following ways: (i) in cash at the time of purchase; (ii) at the discretion of the Committee and to the extent legally permissible, according to a deferred payment or other similar arrangement with the Holder; (iii) by services rendered or to be rendered to the Company; or (iv) in any other form of legal consideration that may be acceptable to the Committee, in its sole discretion.

6.7 Notwithstanding the foregoing, any Award of Restricted Stock granted prior to the effective date of this plan shall be governed by the terms and conditions of the prior version of this plan, the NTELOS Holdings Corp. Equity Incentive Plan.

7. Options

Options give a Participant the right to purchase a specified number of shares of Common Stock, as delineated in the Award Agreement, from the Company for a specified time period at a fixed price. Options may be either Incentive Stock Options or Non-Qualified Stock Options. The grant of Options shall be subject to the following terms and conditions:

7.1 Options shall be evidenced by Award Agreements. Such agreements shall conform to the requirements of the Plan, and may contain such other provisions as the Committee shall deem advisable, including without limitation, specifying the number of shares underlying the Award, the type of the Option and the Exercise Price of the Option.

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7.2 The Exercise Price of an Option shall be determined by the Committee, however, the Exercise Price shall be not less than the Fair Market Value of a share of the applicable Common Stock underlying such Option on the date of grant. In the case of any Incentive Stock Option granted to a Ten Percent Shareholder, the Exercise Price per share shall not be less than 110% of the Fair Market Value of a share of Common Stock on the date of grant.

7.3 The Option agreements shall specify when and under what terms and conditions an Option may be exercisable. The term of an Option shall in no event be greater than ten years (five years in the case of an Incentive Stock Option granted to a Ten Percent Shareholder). The Option shall also expire, be forfeited and terminate at such times and in such circumstances as otherwise provided hereunder or under the Award Agreement.

7.4 Incentive Stock Options may only be granted to Employees of the Company or a corporate Subsidiary (provided however that solely for this purpose, grants of Incentive Stock Options to an employee of a Subsidiary may only be made if the Company controls at least a majority of the total voting power of such Subsidiary, as determined in accordance with Section 424 of the Code and the regulations thereunder) and may not be granted to Employees of Affiliates or Employees of non-corporate Subsidiaries (or Employees of a Subsidiary where the Company does not control a majority of the voting power in such Subsidiary). Any Incentive Stock Options, which first become exercisable in any one calendar year that are in excess of the $100,000 statutory limit shall be treated as Non-Qualified Stock Options, with respect only to such excess. A Holder shall notify the Company of any sale or other disposition of shares of Common Stock acquired pursuant to an Incentive Stock Option if such sale or disposition occurs (i) within two years of the grant of an Incentive Stock Option or (ii) within one year of the issuance of shares of Common Stock to the Holder. Such notice shall be in writing and directed to the Secretary of the Company. The Company shall not be liable to any Holder or any other person if the Internal Revenue Service or any court or

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other authority having jurisdiction over such matter determines for any reason that an Option intended to be an Incentive Stock Option does not so qualify as an Incentive Stock Option.

7.5 The total number of shares of Common Stock subject to an Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Committee may deem appropriate. The vesting provisions of individual Options, as provided in the Award Agreement, may vary. Unless otherwise determined by the Committee, no Option shall become exercisable until such Option becomes vested.

7.6 The Holder shall not have any rights as a shareholder with respect to any shares of Common Stock underlying the Options until such time as the shares of Common Stock have been so issued.

7.7 Subject to vesting and other restrictions provided for hereunder or otherwise imposed in accordance herewith, an Option may be exercised, and payment in full of the aggregate Exercise Price made, by a Holder (or, where appropriate, a permitted transferee of the Holder) only by notice (in the form prescribed by the Committee) to the Company specifying the number of shares of Common Stock to be purchased. Without limiting the scope of the Committee’s discretion hereunder, the Committee may impose such other restrictions, including without limitation, confidentiality and non-solicitation restrictions, on the award or the exercise of Options (whether or not in the nature of the foregoing restrictions) as it may deem necessary or appropriate.

7.8 The aggregate Exercise Price shall be paid in full upon the exercise of the Option. Payment must be made by one of the following methods:

(a) cash or a certified or bank cashier’s check;

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(b) if approved by the Committee in its sole discretion, Common Stock previously owned and held for such period of time as necessary to avoid a charge for financial accounting purposes and having an aggregate Fair Market Value on the date of exercise equal to the aggregate Exercise Price; or

(c) by any combination of such methods of payment or any other legal method acceptable to the Committee in its discretion.

7.9 If a Holder incurs a Termination Date due to death or Disability, any unexercised Option granted to the Holder may thereafter be exercised by the Holder (or, where appropriate, a transferee of the Holder), to the extent it was exercisable as of the Termination Date or on such accelerated basis as the Committee may determine at or after grant, (x) for a period of 6 months from the Termination Date or (y) until the expiration of the stated term of the Option, if shorter. Any portion of the Option that remains unexercised after the expiration of such period, regardless of whether such portion of the Option is vested or unvested, shall terminate and be forfeited with no further compensation due to the Holder.

7.10 Unless otherwise provided by the Committee at or after grant, if a Holder incurs a Termination Date due to Cause, all unexercised Options, regardless of whether the unexercised portion of the Option is vested or unvested, awarded to the Holder shall terminate and be forfeited as of the Termination Date with no further compensation due to the Holder.

7.11 If a Holder incurs a Termination Date for any reason, other than as described in Section 7.9 or 7.10 above, any vested unexercised Option granted to the Holder may thereafter be exercised by the Holder (or, where appropriate, a transferee of the Holder), to the extent it was vested and exercisable at the time of termination or on such accelerated basis as the Committee may determine at or after grant, (x) for a period of 30 days from the Termination Date, provided that such period shall be 60 days from the Termination Date if the Holder incurs a termination of service or employment by the Company, its Subsidiaries and its Affiliates other than for Cause or (y) until the expiration of the stated term of the Option, whichever period is shorter. Any portion of the Option that

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remains unexercised after the expiration of such period, regardless of whether such portion of the Option is vested or unvested, shall terminate and be forfeited with no further compensation due to the Holder.

7.12 Notwithstanding the foregoing, any Award of an Option granted prior to the effective date of this plan shall be governed by the terms and conditions of the prior version of this plan, the NTELOS Holdings Corp. Equity Incentive Plan.

8. Stock Appreciation Rights

SARs give a Participant the right to receive, upon exercise of the SAR, the increase in the Fair Market Value of a specified number of shares of Common Stock from the date of grant of the SAR to the date of exercise, where such increase shall be payable in shares of Common Stock. The grant of SARs shall be subject to the following terms and conditions:

8.1 An Award of an SAR shall be evidenced by an Award Agreement. Such agreement shall conform to the requirements of the Plan and may contain such other provisions as the Committee shall deem advisable. An SAR may be granted in tandem with all or a portion of a related Option under the Plan (“Tandem SAR”), or may be granted separately (“Freestanding SAR”). A Tandem SAR may be granted either at the time of the grant of the Option or at any time thereafter during the term of the Option and shall be exercisable only to the extent that the related Option is exercisable.

8.2 The base price of a Tandem SAR shall be the Exercise Price of the related Option. The base price of a Freestanding SAR shall be not less than 100% of the Fair Market Value of the Common Stock on the date of grant of the Freestanding SAR.

8.3 For purposes of Section 5.1 and 5.2, an Option and Tandem SAR shall be treated as a single Award. In addition, no Participant may be granted Tandem SARs (under this Plan and all other incentive stock option plans of the Company and its Subsidiaries) that are related to

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Incentive Stock Options which are first exercisable in any calendar year for shares of Common Stock having an aggregate Fair Market Value (determined as of the date the related Incentive Stock Options are granted) that exceeds $100,000.

8.4 An SAR shall entitle the Holder to receive from the Company a payment equal to the excess of the Fair Market Value of a share of Common Stock on the date of exercise of the SAR over the base price, multiplied by the number of shares of Common Stock with respect to which the SAR is exercised. Such payment shall be in shares of Common Stock. Upon exercise of a Tandem SAR as to some or all of the shares of Common Stock covered by the grant, the related Option shall be canceled automatically to the extent of the number of shares of Common Stock covered by such exercise, and such shares shall no longer be available for purchase under the Option pursuant to Section 7. Conversely, if the related Option is exercised as to some or all of the shares of Common Stock covered by the grant, the related Tandem SAR, if any, shall be canceled automatically to the extent of the number of shares of Common Stock covered by the Option exercise.

8.5 SARs shall be subject to the same terms and conditions applicable to Options as stated in sections 7.3, 7.5, 7.6, 7.8, 7.9, 7.10 and 7.11. SARs shall also be subject to such other terms and conditions consistent with the Plan as shall be determined by the Committee.

9. Restricted Stock Units

An Award of Restricted Stock Units is a grant by the Company of a specified number of shares of Common Stock to a Participant, which, upon lapse of a Restriction Period as specified in the applicable Award Agreement, shall entitle the Holder to a share of Common Stock for each share underlying the Restricted Stock Unit Award. Such an Award shall be subject to the following terms and conditions:

9.1 Restricted Stock Units shall be evidenced by Award Agreements. Such agreements shall conform to the requirements of the Plan and may contain such other provisions as the Committee shall deem advisable.

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9.2 During the Restriction Period the Holder shall not have any rights as a shareholder with respect to any shares of Common Stock underlying the Restricted Stock Units until such time as the shares of Common Stock have been so issued.

9.3 The Committee may condition the expiration of the Restriction Period with respect to a grant of Restricted Stock Units upon: (i) the Participant’s continued service over a period of time with the Company, its Subsidiaries or Affiliates, (ii) the achievement by the Participant, the Company, its Subsidiaries or Affiliates of any other Performance Goals set by the Committee, or (iii) any combination of the above conditions, as specified in the Award Agreement. If the specified conditions are not attained, the Holder shall forfeit the portion of the Award with respect to which those conditions are not attained, and the underlying Common Stock shall be forfeited to the Company.

9.4 At the end of the Restriction Period, if all such conditions have been satisfied, the Holder shall be entitled to receive a share of Common Stock for each share underlying the Restricted Stock Unit Award that is now free from restriction and such number of shares delivered to the Holder (or, where appropriate, the Holder’s legal representative). Subject to Section 4, the Board may, in its sole discretion, accelerate the vesting of Restricted Stock Units.

10. Incentive Awards

An Incentive Award is a grant by the Company of compensation payable only upon the satisfaction of certain conditions in reference to a certain dollar amount, shares of Common Stock or both. Such an Award shall be subject to the following terms and conditions:

10.1 Incentive Awards shall be evidenced by Award Agreements. Such agreements shall conform to the requirements of the Plan and may contain such other provisions as the Committee shall deem advisable.

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10.2 The Holder shall not have any rights as a shareholder with respect to an Incentive Award until such time as the Incentive Award has been earned and settled, provided that such settlement is made in shares of Common Stock.

10.3 The applicable Award Agreement shall set forth the Performance Goals or continued employment requirements which must be satisfied in order for the Holder to receive the value of the Incentive Award. If the specified conditions are not attained, the Holder shall forfeit the portion of the Award with respect to which those conditions are not attained, and the underlying Common Stock, if any, shall be forfeited to the Company.

10.4 The amount payable when an Incentive Award is earned may be settled in cash, by the issuance of shares of Common Stock or by a combination thereof. A fractional share of Common Stock shall not be deliverable when an Incentive Award is earned, but a cash payment will be made in lieu thereof.

11. Adjustments upon Changes in Capitalization

11.1 In the event of a reorganization, recapitalization, stock split, spin-off, split-off, split-up, stock dividend, issuance of stock rights, combination of shares, merger, consolidation or any other change in the corporate structure of the Company affecting Common Stock, or any distribution to stockholders other than a cash dividend, the Committee shall make appropriate adjustment in the number and kind of shares authorized by the Plan and any other adjustments to outstanding Awards as it determines appropriate.

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11.2 In the event of a Change of Control of the Company, the Committee may, on a Holder by Holder basis:

(a) accelerate the vesting of all outstanding Options and/or SARs issued under the Plan that remain unvested and terminate the Option and/or SAR immediately prior to the date of any such transaction, provided that the Holder shall have been given at least seven days written notice of such transaction and of the Committee’s intention to cancel the Option and/or SARs with respect to all Common Stock for which the Option and/or SAR remains unexercised;

(b) fully vest and/or accelerate the Restriction Period of any Awards;

(c) terminate the Award immediately prior to any such transaction, provided that the Holder shall have been given at least seven days written notice of such transaction and of the Committee’s intention to cancel the Award with respect to all Common Stock for which the Award remains unexercised or subject to restriction or forfeiture, provided further however, that during such notice period, the Holder will be able to give notice of exercise of any portion of the Award that will become vested upon the occurrence of the Change of Control, however, the actual exercise of such Option and/or SAR, or portion thereof, shall be contingent on the occurrence of a Change in Control

(d) after having given the Holder a chance to exercise any outstanding Options and/or SARs, terminate any or all of the Holder’s unexercised Options and/or SARs;

(e) cancel any outstanding Awards with respect to all Common Stock for which the Award remains unexercised or for which the Award is subject to forfeiture in exchange for a cash payment of an amount equal to the difference between the then Fair Market Value (provided that the Committee may, in its sole discretion, determine that the Fair Market Value of an Award that will remain unvested or subject to forfeiture as of the date of the Change of Control is zero) of the Award less the Exercise Price of an Option and/or SAR, or the unpaid base price (if any) of Restricted Stock. If the Fair Market Value of the Common Stock subject to the Award is less than the Exercise Price of an Option and/or SAR or the price (if any) of Restricted Stock, the Award shall be deemed to have been paid in full and shall be canceled with no further payment due the Holder;

(f) require that the Award be assumed by the successor corporation or that awards for shares or other interests in the successor corporation with equivalent value be substituted for such Award; or

(g) take such other action as the Committee shall determine to be reasonable under the circumstances to permit the Holder to realize the value of the Award.

The application of the foregoing provisions, including, without limitation, the issuance of any substitute options, shall be determined in good faith by the Committee in its sole discretion. Any adjustment may provide for the elimination of fractional shares of Common Stock in exchange for a cash payment equal to the Fair Market Value of the eliminated fractional shares of Common Stock.

11.3 Committee Authority: The judgment of the Committee with respect to any matter referred to in this Section 11 shall be conclusive and binding upon each Holder without the need for any amendment to the Plan.

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12. Effective Date, Termination and Amendment

The Plan is effective on February 13, 2006, the date the Plan was approved by the Board, contingent, however, on approval of the amendment and restatement by the Company’s stockholders within 12 months of such date. The Plan shall remain in full force and effect until the earlier of May 2, 2015, or the date it is terminated by the Board. The Board shall have the power to amend, suspend or terminate the Plan at any time, provided that any such termination of the Plan shall not affect Awards outstanding under the Plan at the time of termination. Notwithstanding the foregoing, an amendment will be contingent on approval of the Company’s stockholders, to the extent required by law or by the rules of any stock exchange on which the Company’s securities are traded or if the amendment would (i) increase the benefits accruing to Participants under the Plan, including without limitation, any amendment to the Plan or any agreement to permit a repricing or decrease the Exercise Price of any outstanding Options, (ii) increase the aggregate number of shares of Common Stock that may be issued under the Plan, or (iii) modify the requirements as to eligibility for participation in the Plan.

13. Transferability

Awards may not be pledged, assigned or transferred for any reason during the Holder’s lifetime, and any attempt to do so shall be void. Notwithstanding the generality of the foregoing, the Committee may (but need not) grant Awards (other than ISOs issued either separately or in conjunction with a SAR) that are transferable by the Holder, during the Holder’s lifetime. The transferee of the Holder shall, in all cases, be subject to the Plan and the provisions of the Award Agreement between the Company and the Holder.

14. General Provisions

14.1 The Committee may postpone any grant, exercise, vesting or payment of an Award for such time as the Committee in its sole discretion may deem necessary in order to permit the Company (i) to effect, amend or maintain any necessary registration of the Plan or the shares of

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Common Stock issuable pursuant to the Award under the securities laws; (ii) to take any action in order to (A) list such shares of Common Stock or other shares of stock of the Company on a stock exchange if shares of Common Stock or other shares of stock of the Company are not then listed on such exchange or (B) comply with restrictions or regulations incident to the maintenance of a public market for its shares of Common Stock or other shares of stock of the Company, including any rules or regulations of any stock exchange on which the shares of Common Stock or other shares of stock of the Company are listed; (iii) to determine that such shares of Common Stock in the Plan are exempt from such registration or that no action of the kind referred to in (ii)(B) above needs to be taken; (iv) to comply with any other applicable law, including without limitation, securities laws; (v) during any such time the Company or any Affiliate is prohibited from doing any of such acts under applicable law, including without limitation, during the course of an investigation of the Company or any Affiliate, or under any contract, loan agreement or covenant or other agreement to which the Company or any Affiliate is a party or (vi) to otherwise comply with any prohibition on such acts or payments during any applicable blackout period; and the Company shall not be obligated by virtue of any terms and conditions of any Agreement or any provision of the Plan to recognize the grant, exercise, vesting or payment of an Award or to grant, sell or issue shares of Common Stock or make any such payments in violation of the securities laws or the laws of any government having jurisdiction thereof or any of the provisions hereof. Any such postponement shall not extend the term of the Award and neither the Company nor its directors and officers nor the Committee shall have any obligation or liability to any Participant or to any other person with respect to shares of Common Stock or payments as to which the Award shall lapse because of such postponement.

14.2 Nothing contained in the Plan, or any Award granted pursuant to the Plan, shall confer upon any Participant any right to continued employment or service with the

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Company or any Subsidiary or Affiliate, nor interfere in any way with the right of the Company, a Subsidiary or an Affiliate to terminate the employment or service of any Participant at any time.

14.3 Nothing contained in the Plan, and no action taken pursuant to the provisions of the Plan, shall create or shall be construed to create a trust of any kind, or a fiduciary relationship between the Committee, the Company or its Subsidiaries or Affiliates, or their officers or the Board, on the one hand, and the Holder, the Company, its Subsidiaries or Affiliates or any other person or entity, on the other.

14.4 For purposes of this Plan, a transfer of employment between the Company, its Subsidiaries and its Affiliates shall not be deemed a termination of employment; notwithstanding the foregoing, a transfer of employment of a Participant between the Company or its Subsidiaries to an Affiliate or a non-corporate Subsidiary (or a Subsidiary where the Company does not control a majority of the voting power in such Subsidiary) shall be deemed a termination of employment with regard to any Incentive Stock Options (or any Tandem SARs that are related to Incentive Stock Options) that have been granted to such Participant.

14.5 The Company shall indemnify and hold harmless the members of the Committee and the Board, from and against any and all liabilities, costs and expenses incurred by such persons as a result of any act or omission to act in connection with the performance of such person’s duties, responsibilities and obligations under the Plan, to the maximum extent permitted by law, other than such liabilities, costs and expenses as may result from the gross negligence, bad faith, willful misconduct or criminal acts of such persons.

14.6 Holders shall be responsible to make appropriate provision for all taxes required to be withheld in connection with any Award or the transfer of shares of Common Stock pursuant to this Plan. Such responsibility shall extend to all applicable Federal, state, local or foreign withholding taxes. The Company shall, at the election of the Holder, have the right to retain the

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number of shares of Common Stock or a portion of the value of any Award whose Fair Market Value equals the amount to be withheld in satisfaction of the applicable withholding taxes.

14.7 To the extent that Federal laws (such as the 1934 Act, the Code or the Employee Retirement Income Security Act of 1974) do not otherwise control, the Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of Delaware and construed accordingly.

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EX-10.9

Exhibit 10.9

NTELOS HOLDINGS CORP.

EMPLOYEE STOCK PURCHASE PLAN

(As Amended and Restated Effective as of March 20, 2006)

1. PURPOSE

The purpose of the NTELOS Holdings Corp. Employee Stock Purchase Plan (the “Plan”) is to give eligible employees of NTELOS Holdings Corp. and its designated subsidiaries an opportunity to buy stock of NTELOS Holdings Corp. through payroll deductions. NTELOS Holdings Corp. intends for the Plan to qualify as an employee stock purchase plan within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended, and the Plan shall be construed accordingly.

2. DEFINITIONS

“Board” means the Board of Directors of the Company.

“Code” means the Internal Revenue Code of 1986, as amended, and any successor thereto.

“Committee” means the Compensation Committee of the Board, if the Board appoints it to administer the Plan, or the Board itself if the Compensation Committee is not appointed to administer the Plan.

“Common Stock” means the Common Stock, $0.01 par value per share, of the Company.

“Company” means NTELOS Holdings Corp., a Delaware corporation.

“Compensation” means the Form W-2 earnings an Employer pays to a Participant during an applicable period as modified below. For purposes of this definition, Form W-2 earnings means wages within the meaning of Section 3401(a) of the Code in connection with income tax withholding at the source, and all other compensation paid to the Participant by an Employer in the course of its trade or business, for which the Employer is required to furnish the Participant with a written statement under Sections 6041(d), 6051(a)(3) and 6052 of the Code, determined without regard to exclusions based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Section 3401(a)(2) of the Code). Compensation shall include only amounts actually paid to the Participant during the applicable period. Compensation includes any amount which is contributed to an employee benefit plan for the Participant by the Employer pursuant to a salary reduction agreement and which is not includable in the gross income of the Participant under Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code. Compensation also includes, by way of example and not limitation, the Participant’s base salary or pay and any bonuses (other than signing bonuses) Participant receives, such as the team incentive plan bonus. Notwithstanding the foregoing, Compensation shall not include signing bonuses (but will include other bonuses, such as, by way of example and not limitation, the team incentive plan bonus), relocation pay, educational allowances, any form of equity compensation, such as compensation attributable to stock options, restricted stock, stock appreciation rights, restricted stock units, phantom stock or other

similar awards, fringe benefit programs, such as car allowances, relocation reimbursements or expatriate allowances, or any payments received under any employee benefit plans including without limitation any non-qualified deferred compensation or short-term or long-term disability plan.

“Contributions Account” means the bookkeeping account the Company establishes under the Plan for each Participant.

“Effective Date” means the later of (i) April 1, 2006 or (ii) the first day of the calendar month following both the Initial Public Offering of the Company and the filing with the Securities and Exchange Commission of a Form S-8 to register the Common Stock available for purchase under the Plan.

“Eligible Employee” means any Employee whose customary employment is for more than 20 hours per week and for more than five months in a calendar year and who is not both a “highly compensated employee” as provided under Section 414(q) of the Code and either the chief executive officer, president, executive vice president, or senior vice president of the Company. Eligible Employee includes an officer of an Employer within the meaning of Section 16 of the Exchange Act, if such officer is otherwise eligible under the terms of the Plan.

“Employee” means any person whom an Employer employs in accordance with Section 3401 of the Code and the regulations thereunder. The definition of Employee shall be construed in accordance with Sections 421 and 423 of the Code and the regulations thereunder.

“Employer” means the Company and each designated Subsidiary that adopts the Plan in accordance with Section 12.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fair Market Value” of the Common Stock on the Valuation Date means the closing price of a share of Common Stock on the principal national securities exchange (including NASDAQ) on which the Common Stock is listed or traded on such date or, if Common Stock was not traded on such date, on the last preceding day on which the Common Stock was traded. If at any time such Common Stock is not listed on any national securities exchange, the Fair Market Value shall be the value of such Common Stock as determined in good faith by the Committee in any other manner consistent with the Code and accompanying regulations that the Committee determines appropriate.

“Initial Public Offering” means issuance or sale by the Company of Common Stock required to be registered under Section 12 of the Exchange Act, such that immediately following the transaction the Company is subject to the reporting obligations of Section 12 of the Exchange Act.

“Participant” means an Eligible Employee who has enrolled in the Plan in accordance with Section 4.

“Participation Period” means each calendar month during which an offer to purchase Common Stock is made to Eligible Employees under the Plan. The first Participation Period shall begin on the first day of the calendar month following the Effective Date that the Committee designates as the first Participation Period.

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“Plan” means the NTELOS Holdings Corp. Employee Stock Purchase Plan, as it now exists or as it hereafter may be amended.

“Purchase Date” means the date of exercise of a Purchase Right granted under the Plan. The Purchase Date shall be the last day of each Participation Period.

“Purchase Price” means the price per share of Common Stock under a Purchase Right as determined in accordance with Section 5(b).

“Purchase Right” means the right granted to a Participant under the Plan to purchase shares of Common Stock in accordance with the terms of the Plan.

“Subsidiary” means any corporation, other than the Company, in an unbroken chain of corporations beginning with the Company if, at the time of the Purchase Date, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain, including a corporation that becomes a Subsidiary after the Effective Date of the Plan.

“Valuation Date” means the date as of which the Fair Market Value of Common Stock is being determined.

3. STOCK SUBJECT TO PLAN

The aggregate number of shares of Common Stock that may be purchased under the Plan shall not exceed 200,000 shares. The number of shares of Common Stock that may be purchased under the Plan is subject to adjustment pursuant to Section 10. Shares of Common Stock purchased under the Plan may be authorized but unissued shares, treasury shares or shares purchased on the open market or by private purchase. The Company hereby agrees to reserve sufficient authorized shares of Common Stock to provide for the exercise of Purchase Rights granted under the Plan. If any Purchase Right granted under the Plan expires unexercised or is terminated, surrendered or canceled without being exercised, in whole or in part, for any reason, the number of shares of Common Stock subject to such Purchase Right shall again be available for grant as a Purchase Right and shall not reduce the aggregate number of shares of Common Stock available for the grant of Purchase Rights as set forth herein. If the total number of shares of Common Stock to be purchased on a Purchase Date exceeds the number of shares of Common Stock then available under the Plan, the Committee shall allocate the available shares of Common Stock among the Participants on a pro-rata basis based on the balances on the Purchase Date of the Participants’ Contributions Accounts.

4. PARTICIPATION

(a) Eligibility. Any Eligible Employee whom an Employer employs on the Purchase Date for a Participation Period shall be eligible to participate in the Plan during such Participation Period, subject to the terms and conditions of the Plan. The Company from time to

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time, and as it deems appropriate, will notify each Employee whom the Company reasonably anticipates will be an Eligible Employee on the Purchase Date of a Participation Period (and who is not already a Participant), of his or her eligibility to participate in the Plan for the Participation Period, subject to the terms and conditions of the Plan.

(b) Initial Enrollment. An Eligible Employee shall become a Participant by completing a participation agreement authorizing payroll deductions on a form the Committee provides or in such other manner as the Committee may determine and delivering such participation agreement to the Company no later than 10 days prior to the last business day of the month immediately preceding the applicable Participation Period. With respect to any Employee who becomes an Eligible Employee after such time and before the Purchase Date for the applicable Participation Period, such Eligible Employee shall become a Participant by completing a participation agreement as the Committee may reasonably determine. Following the timely submission of a valid participation agreement, payroll deductions for a Participant shall commence on the first payroll period that occurs on or after the first day of the applicable Participation Period or, if applicable, after the delivery of the participation agreement, and shall continue for successive Participation Periods during which the Participant participates in the Plan, unless the Participant withdraws from the Plan pursuant to Section 7, terminates employment with all Employers, ceases to be an Eligible Employee pursuant to Section 8 or the Participant would own stock possessing 5% or more of the Company or any Subsidiary, as set forth in Section 5(c)(i).

(c) Enrollment after Withdrawal or Termination of Employment. A Participant who ceases participation in the Plan may again become a Participant in the Plan for any subsequent Participation Period if he or she again becomes eligible to participate in the Plan on the Purchase Date for such Participation Period and delivers a new participation agreement to the Company no later than the timeframe that would apply for initial enrollment as described in Section 4(b).

(d) Amount of Payroll Deduction. A Participant shall elect on his or her participation agreement to have deductions made from his or her Compensation for each Participation Period in any whole percent which does not exceed 12%.

(e) Participant’s Contributions Account. All payroll deductions that a Participant makes shall be credited to the Participant’s Contributions Account. No interest or earnings shall accrue on any payroll deductions credited to a Participant’s Contributions Account.

(f) Changes in Payroll Deductions. Except as otherwise provided in this Section 4(f) and in Sections 4(b) (in connection with late eligibility), 7 (in connection with withdrawal from the Plan) and 8 (in connection with the Participant’s termination of employment), a Participant may not increase or decrease the amount of his or her payroll deductions during a Participation Period. However, a Participant may increase or decrease the amount of his or her payroll deductions for a later Participation Period by delivering a new participation agreement to the Company no later than ten 10 days prior to the last business day of the month immediately preceding such later Participation Period.

(g) Participation During Leave of Absence. The Committee in its discretion shall determine the extent to which any leave of absence for governmental or military service, illness,

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temporary disability or other reasons will impact an individual’s enrollment or participation in the Plan or his or her rights thereunder. For purposes of this Plan, the employment relationship will be treated as continuing intact while an individual is on military, sick leave or other bona fide leave of absence (such as temporary employment by the Government) if the period of such leave does not exceed three (3) months, or, if longer, so long as the individual’s right to reemployment is provided either by statute or contract. Where the period of leave exceeds three (3) months and the individual’s right to reemployment is not provided either by statute or contract, the employment relationship will be deemed to have terminated on the first day immediately following such three-month period. Unless the Committee otherwise provides, if a Participant goes on an unpaid leave of absence during a Participation Period, no further payroll deductions will be made for such Participation Period. However, unless such Participant withdraws from the Plan pursuant to Section 7, he or she will continue to be a Participant for the Participation Period and the Participant’s Purchase Rights for the Participation Period shall be automatically exercised on the Purchase Date for such Participation Period in accordance with Section 6. Additionally, unless such Participant withdraws from the Plan pursuant to Section 7, he or she will continue to be a Participant for any ensuing Participation Period so long as further payroll deductions may be made for such Participation Periods. When the employment relationship is deemed to have terminated, the Participant will be subject to the provisions of Section 8 hereof.

5. GRANT OF PURCHASE RIGHTS

(a) Number of Shares Subject to Purchase Right. For each Participation Period, each Participant shall be granted a Purchase Right to purchase on the Purchase Date of such Participation Period, at the applicable Purchase Price, such number of shares of Common Stock (including fractional shares) as is determined by dividing the amount of the Participant’s payroll deductions allocated to the Participant’s Contributions Account for the Participation Period by the applicable Purchase Price, subject to the maximum limit of shares of Common Stock that may be purchased or are available as described herein. All Participants receiving Purchase Rights shall have the same rights and privileges under the Plan with respect to such Purchase Rights.

(b) Purchase Price. The Purchase Price per share of Common Stock for a Participant shall be 85 Percent of the Fair Market Value per share of the Common Stock on the Purchase Date for the Participation Period.

(c) Certain Limitations. Notwithstanding any other provision of the Plan, no Participant shall be granted a Purchase Right for a Participation Period:

(i) To the extent that, immediately after the Purchase Right becomes exercisable on the Purchase Date, the Participant would own stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or any Subsidiary within the meaning of Section 423(b)(3) of the Code. For purposes of this Section 5(c)(i), stock ownership of a Participant shall be determined under the stock attribution rules of Section 424(d) of the Code, and stock that the Participant may purchase under outstanding Purchase Rights or options shall be treated as stock the Participant owns.

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(ii) To the extent that the Participant’s rights to purchase stock under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company and any Subsidiary would accrue at a rate that exceeds $25,000 in Fair Market Value of such stock (determined as of the Purchase Date) for each calendar year in which any Purchase Right is outstanding at any time. For this purpose, the right to purchase stock accrues when the Purchase Right first becomes exercisable during the calendar year. This limitation is meant to comply with the requirements of Section 423(b)(8) of the Code and will be construed accordingly.

(iii) If the Participant makes a hardship withdrawal from a cash or deferred arrangement established by the Company or any Subsidiary and is prohibited from making employee contributions to the Plan under Section 401(k) of the Code and the Treasury Regulations thereunder, in which case the Participant shall be deemed to have withdrawn from the Plan in accordance with Section 7 as of the date of such hardship withdrawal.

(iv) For more than 1,000 shares of Common Stock for any Participation Period.

Any Purchase Right granted under the Plan shall be deemed to be modified to the extent necessary to satisfy this Section 5(c). To the extent necessary to comply with this Section 5(c), a Participant’s payroll deductions may be decreased to Zero Percent at any time during a Participation Period (or such other percentage required to comply with the terms of the Plan). In that event, payroll deductions shall recommence, if at all, at the rate provided in such Participant’s Participation Agreement at the beginning of the first Participation Period for which payroll deductions can commence after compliance with this Section 5(c), unless the Participant withdraws from the Plan pursuant to Section 7, terminates employment with all Employers or otherwise ceases to be an Eligible Employee pursuant to Section 8.

6. EXERCISE OF PURCHASE RIGHTS

(a) Automatic Exercise. Notwithstanding any other provision of the Plan, the Participant’s Purchase Right for the purchase of Common Stock during a Participation Period shall be automatically exercised on the Purchase Date applicable to such Participation Period, and the maximum number of shares of Common Stock (including fractional shares) under the Purchase Right shall be purchased for the Participant at the applicable Purchase Price with the accumulated payroll deductions in his or her Contributions Account at that time (subject to the limitations set forth in Section 5(c) or termination of the Purchase Right as provided in Sections 7 or 8).

(b) Delivery of Stock. As soon as reasonably practicable after each Purchase Date, the shares of Common Stock each Participant purchases on such Purchase Date shall be credited to an account in such Participant’s name with one or more brokers the Committee designates. A Participant will be issued a certificate for his or her shares of Common Stock when his or her participation in the Plan is terminated, the Plan is terminated, or upon request.

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(c) Termination of Purchase Right. A Purchase Right granted during a Participation Period that is not automatically exercised on the Purchase Date shall expire at the end of the last day of the Participation Period, unless earlier terminated as provided in Section 7 or Section 8.

(d) Excess Account Balances. Any payroll deductions credited to a Participant’s Contributions Account for a Participation Period that have not been used to purchase Common Stock on the Purchase Date for such Participation Period (as a result of the limitations set forth in Section 5(c), a withdrawal from the Plan in accordance with Section 7, a termination of employment with all Employers or ceasing to be an Eligible Employee in accordance with Section 8 or otherwise) shall be paid to the Participant (without interest) within 30 days after the last day of the Participation Period. Any amounts to be paid to a Participant after his or her death shall be paid to the personal representative of the Participant’s estate.

(e) Rights as a Shareholder. No Participant shall have any rights as a shareholder unless and until certificates for shares of Common Stock have been issued to the Participant or the transfer agent for the Common Stock reflects the Participant’s ownership in the Company’s stock ledger or other appropriate record of Common Stock ownership.

7. WITHDRAWAL

A Participant may withdraw from participation for a Participation Period (and any subsequent Participation Period) by giving written notice to the Company in a form acceptable to the Company, and such withdrawal generally will be effective as soon as administratively practical after the Participant delivers his or her written notice of withdrawal to the Company. If the Participant desires to withdraw by the first day of a Participation Period, the Company must receive the Participant’s written notice of withdrawal no later than 10 days prior to the last business day of the month immediately preceding such Participation Period. In the event of a withdrawal (i) any outstanding Purchase Rights will be terminated and the balance in the Participant’s Contributions Account will be paid to the Participant as described in Section 6(d) and (ii) no further payroll deductions will be made after the withdrawal is effective. A Participant’s withdrawal from participation for any Participation Period will not have any effect upon his or her eligibility to participate in any succeeding Participation Period or in any similar plan which any Employer may hereafter adopt. Notwithstanding the foregoing, however, if a Participant withdraws during a Participation Period, payroll deductions shall not resume at the beginning of a succeeding Participation Period unless the Participant timely delivers to the Company a new participation agreement and otherwise complies with the terms of the Plan. Notwithstanding the foregoing, this Section 7 is subject to the provisions of Section 8, which governs any withdrawal in connection with a termination of employment.

8. TERMINATION OF EMPLOYMENT

Upon termination of a Participant’s employment with all Employers for any reason or in the event that a Participant otherwise ceases to be an Eligible Employee, the Participant shall be deemed to have withdrawn from participation in the Plan as of the date of his or her termination of employment, or, if applicable, as of the date he or she otherwise ceased to be an Eligible Employee. In that case, (i) any outstanding Purchase Rights will be terminated and the balance in the Participant’s Contributions Account will be paid to the Participant as described in Section

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6(d) and (ii) no further payroll deductions will be made for such Participation Period after the Participant’s last payroll period with all Employers, or, if applicable, after the Participant’s last payroll period with all Employers as an Eligible Employee.

9. TRANSFERABILITY

A Participant may not transfer, assign, pledge or otherwise dispose of a Purchase Right (or any rights attendant to a Purchase Right) granted pursuant to the Plan other than by will or the laws of descent and distribution. No Purchase Right shall be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of a Purchase Right, or levy of attachment or similar process upon the Purchase Right not specifically permitted herein, shall be null and void and without effect, except that the Committee in its discretion may treat such act as an election to withdraw during a Participation Period in accordance with Section 7 hereof. A Purchase Right is exercisable during the Participant’s lifetime only by the Participant.

10. ADJUSTMENTS AFFECTING PURCHASE RIGHTS

(a) Changes in Capitalization. The Board, in its sole discretion, may adjust the number of shares of Common Stock available under the Plan, the number of shares of Common Stock subject to each outstanding Purchase Right, and the Purchase Price for such shares of Common Stock in order to reflect any increase or decrease in the number of issued shares of Common Stock resulting from any stock split or reclassification of Common Stock, payment of any stock dividend, or any other similar increases or decreases in the number of outstanding shares of Common Stock without the receipt of consideration therefor. Adjustments the Board makes pursuant to this Section 10(a) shall be final and binding on all parties.

(b) Dissolution, Merger, and Consolidation. Upon dissolution or liquidation of the Company, upon a merger or consolidation of the Company in which the Company is not the surviving corporation or upon any other similar event or transaction, each Participant who holds Purchase Rights under the Plan shall be entitled to purchase at the next Purchase Date the same relative cash, securities, and/or other property which a holder of Common Stock was entitled to receive at the time of such transaction. The Board shall take whatever action is deemed reasonably necessary to assure that Participants receive the benefits described in this Section 10(b).

11. SHAREHOLDER APPROVAL OF PLAN

The Board adopted the Plan on January 25, 2006 and the shareholders of the Company approved the Plan on February 8, 2006. The Board amended and restated the Plan as set forth herein on March 20, 2006, which amendment and restatement does not require shareholder approval.

12. ADOPTION OF PLAN BY SUBSIDIARIES

The Company, by action of the Board, may authorize any of its Subsidiaries to adopt the Plan. A Subsidiary, if the Company has authorized it to do so, may adopt the Plan by action of its board of directors.

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13. ADMINISTRATION AND CLAIMS PROCEDURES

(a) The Committee shall administer the Plan. References to the “Committee” shall include the Committee, the Board if it is acting in its administrative capacity with respect to the Plan, and any delegates the Committee appoints pursuant to Section 13(b). Each member of the Committee, if not the Board, serves at the pleasure of the Board, which may change the membership of the Committee or fill any vacancy at any time. The Committee shall select one of its members as a chairman and shall hold meetings at the times and places as it may deem advisable. The Committee shall take all actions by majority decision. Any action evidenced by a written instrument that the majority of the members of the Committee sign shall be as fully effective as if the Committee had taken the action by a majority vote at a meeting duly called and held.

(b) Subject to the provisions of the Plan, the Committee shall have full and final authority, in its discretion, to take any action with respect to the Plan, including, without limitation, the following: (i) to establish rules and procedures for the administration of the Plan; (ii) to prescribe the form(s) of any agreements or other written instruments used in connection with the Plan; (iii) to determine the terms and provisions of the Purchase Rights granted hereunder; and (iv) to construe and interpret the Plan, the Purchase Rights, the rules and regulations, and the agreements or other written instruments, and to make all other determinations necessary or advisable for the administration of the Plan. The determinations of the Committee on all matters regarding the Plan shall be final and binding upon each Employer, each Employee, each Participant and any other person claiming a right under the Plan. Except to the extent prohibited by the Plan or by applicable law, the Committee may appoint one or more persons to assist in the administration of the Plan and may delegate all or any part of its responsibilities and powers, other than any power to amend or terminate the Plan, to any such person or persons. The Committee in its discretion may administer the Plan as it deems appropriate, including without limitation using paperless and electronic means to administer the Plan.

(c) Subject to the indemnification provisions of the Company’s Articles of Incorporation and Bylaws and applicable law, the Company shall indemnify members of the Committee against the reasonable expenses, including attorney’s fees, such members actually and necessarily incur in connection with the defense of any action, suit or proceeding, or in connection with any appeal thereof, to which they or any of them may be a party by reason of action taken or not taken in connection with the Plan or any Purchase Right hereunder, and against all amounts they or any of them pay in settlement thereof or in satisfaction of a judgment in any action, suit or proceeding. However, the Company shall not indemnify a member of the Committee for matters as to which he or she (i) shall be adjudged in the action, suit or proceeding to be liable for gross negligence or intentional misconduct or (ii) derived an improper personal benefit.

(d) It is not necessary for a Participant to file a claim in order to receive benefits under this Plan. On receipt of a claim for benefits, however, the Committee will respond in writing within 90 days. If necessary, the Committee’s first notice will indicate any special circumstances requiring an extension of time for the Committee’s decision. The extension notice must indicate the date by which the Committee expects to render its decision; an extension of

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time for processing may not exceed 90 days after the end of the initial 90-day period for a determination. If the claimant’s claim is wholly or partially denied, the Committee must give written notice of such denial within the time provided in the preceding sentences. An adverse notice must specify the reason for the denial. There also must be specific reference to the provisions of the Plan or related documents or law on which the denial is based. If additional materials or information is necessary for the claimant to perfect his or her claim for benefits, it must be described and there must be an explanation of why that material or information is necessary. An adverse notice must disclose appropriate information about the steps that the claimant must take if he or she desires to submit a claim for review of the adverse decision. If notice that a claim has been denied is not furnished within the time required herein, the claim is deemed denied.

(e) On proper written request for a review from the claimant to the Committee, there must be a review by the Committee. The Committee must receive the claimant’s written request before the 61st day after the claimant’s receipt of notice that a claim has been denied according to (d) above. The claimant and his or her authorized representative are entitled to be present and heard if any hearing is used as part of the review. The Committee will determine whether there will be a hearing. Before any hearing, the claimant or a duly authorized representative may review all Plan documents and other papers that affect the claim and may submit issues and comments in writing. The Committee must schedule any hearing to give sufficient time for this review and submission, giving notice as to the schedule and deadlines for the submissions. The Committee must advise the claimant in writing of the final determination after review. The decision on review must be written in a manner calculated to be understood by the claimant and must include specific reasons for the decision and specific references to the pertinent provisions of the Plan or related documents or law on which the decision is based. The written final determination must be rendered within 60 days after the request for review is received, unless special circumstances (in the Committee’s discretion) require an extension of time for processing. If an extension is necessary, the decision must be rendered as soon as possible but no later than 120 days after the receipt of the request for review.

(f) A claimant may not file any suit or other action for benefits under this Plan unless and until he or she submits a proper written request for a review of any adverse decision of such claim for benefits and then exhausts the administrative process described herein. A claimant then shall have 90 days from the date he or she receives an adverse final determination of such claim on review under (e) above in which to file suit in a court of competent jurisdiction for benefits under the Plan. If the claimant does not file suit within such 90-day period, the claimant shall be forever barred from doing so.

14. AMENDMENT AND TERMINATION OF THE PLAN

The Board may at any time and from time to time modify, amend, suspend or terminate the Plan or any Purchase Right granted hereunder, provided, however, that (i) shareholder approval shall be required of any amendment to the Plan to the extent Section 423 of the Code or other applicable law, rule or regulation requires shareholder approval (including without limitation any amendment that increases the aggregate number of shares of Common Stock that may be purchased under the Plan or changes individuals who are eligible to participate in the Plan other than as set forth herein); and (ii) no amendment to the Plan or a Purchase Right may

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materially and adversely affect any Purchase Right outstanding at the time of the amendment without the consent of the holder thereof, except to the extent the Plan otherwise provides, as necessary to comply with applicable law or as necessary to ensure that the Plan and any Purchase Rights granted hereunder comply with the requirements of Section 423 of the Code. The Plan shall terminate automatically at the time all shares of Common Stock subject to the Plan have been purchased hereunder. Upon termination of the Plan, the Committee shall give notice to affected Participants, terminate all payroll deductions, terminate all outstanding Purchase Rights, and pay Participants (without interest) any balances remaining in their Contributions Accounts as soon as practicable following Plan termination, unless the Committee in its discretion makes alternative provisions for handling the termination of the Plan.

15. UNFUNDED PLAN

Neither a Participant nor any other person shall, by reason of the Plan, acquire any right in or title to any assets, funds or property of the Company or any Subsidiary, including, without limitation, any specific funds, assets or other property which the Company or any Subsidiary, in its discretion, may set aside in anticipation of any liability under the Plan. Neither the Company nor any Subsidiary shall be required to set aside any specific funds, assets or property in anticipation of any liability under the Plan. A Participant shall have only a contractual right to the Common Stock or amounts, if any, payable under the Plan, unsecured by any assets of the Company or any Subsidiary. Nothing contained in the Plan shall constitute a guarantee that the assets of such corporations shall be sufficient to pay any benefits to any person.

16. USE OF FUNDS

The proceeds the Company receives from the sale of Common Stock pursuant to Purchase Rights will be used for general corporate purposes.

17. WITHHOLDING TAXES

Upon the exercise of any Purchase Right under the Plan, in whole or in part, or at the time of disposition of some or all of the Common Stock acquired pursuant to the exercise of a Purchase Right or any other applicable time, the Participant’s Employer shall withhold the minimum legally required applicable federal, state and local taxes from a Participant’s Compensation or shall require the Participant to remit to the Employer amounts sufficient to satisfy all such federal, state and local withholding tax requirements prior to the delivery or transfer of any certificate or certificates for shares of Common Stock.

18. NO RIGHT OF CONTINUED EMPLOYMENT

Neither the Plan nor any Purchase Right shall confer upon a Participant the right to continue in the employment of the Company or any Subsidiary or affect any right of the Company or any Subsidiary to terminate the employment of such Participant at any time for any reason.

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19. DISPOSITIONS OF STOCK

A Participant who acquires shares of Common Stock pursuant to the exercise of Purchase Rights under this Plan shall notify the Committee, in writing, if he or she sells, transfers, or otherwise disposes of such shares of Common Stock before two years after the Purchase Date on which the Participant acquired such shares.

20. NOTICES

Every direction, revocation or notice authorized or required by the Plan shall be deemed delivered to the Company on the date it is received by the Company at its principal executive offices and shall be deemed delivered to an Eligible Employee on the date he or she receives it.

21. APPLICABLE LAW

To the extent not inconsistent with Section 423 of the Code and any Treasury Regulations thereunder, all questions pertaining to the validity, construction and administration of the Plan and any Purchase Rights granted hereunder shall be determined in conformity with the laws of the State of Delaware, without regard to the conflict of laws provisions of any state, to the extent not preempted by federal law.

22. OTHER RESTRICTIONS ON PURCHASE RIGHTS AND SHARES

Notwithstanding any other provision of the Plan, no Purchase Rights may be granted or exercised under the Plan for a Participation Period unless the shares of Common Stock to be purchased under such Purchase Rights are covered by an effective registration statement pursuant to the Securities Act of 1933, as amended, as of the first day of such Participation Period. The Company may impose such restrictions on any Purchase Rights and shares of Common Stock acquired upon exercise of Purchase Rights as it may deem advisable, including without limitation restrictions under the federal securities laws, the requirements of any stock exchange or similar organization and any blue sky or state securities laws applicable to such shares. Notwithstanding any other Plan provision to the contrary, the Company shall not be obligated to grant any Purchase Rights or issue, deliver or transfer shares of Common Stock under the Plan or make any other distribution of benefits under the Plan, or take any other action, unless such grant, delivery, distribution or action is in compliance with all applicable laws, rules and regulations (including but not limited to the requirements of the Securities Act of 1933, as amended, the federal securities laws, or any blue sky or state securities laws). For example, and not by way of limitation, the Company may postpone or terminate the grant of a Purchase Right or the issuance of shares of Common Stock during any Participation Period where the Company is prohibited from doing such acts under applicable law, including without limitation, during any applicable blackout period under the Sarbanes-Oxley Act of 2002. The Company may cause a restrictive legend to be placed on any certificate issued for shares of Common Stock under the Plan in such form from time to time as applicable laws and regulations may require or legal counsel of the Company may advise.

23. SEVERABILITY

If any provision of the Plan is deemed illegal or invalid, the Plan shall be construed and enforced as if the illegal or invalid provision had not been included in the Plan, and such illegality or invalidity shall not affect the remaining provisions of the Plan.

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IN WITNESS WHEREOF, the Company has caused this Plan to be executed as of the 20th day of March, 2006.

NTELOS HOLDINGS CORP.
By:	/s/ Michael B. Moneymaker
Name:	Michael B. Moneymaker
Its:	Executive Vice President and Chief Financial Officer

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EX-10.17

Exhibit 10.17

NTELOS HOLDINGS CORP.

NON-EMPLOYEE DIRECTOR EQUITY PLAN

NTELOS HOLDINGS CORP.

NON-EMPLOYEE DIRECTOR EQUITY PLAN

1. Purpose of the Plan

The purpose of the Plan is to promote the interests of the Company by attracting and retaining qualified and experienced individuals for service as Non-Employee Directors, and to motivate these individuals to exercise their best efforts on the Company’s behalf.

2. Definitions

2.1 “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.

2.2 “Award” means a grant of an Option, Restricted Stock, or Restricted Stock Unit under the Plan.

2.3 “Award Agreement” means the agreement or agreements between the Company and a Holder pursuant to which an Award is granted and which specifies the terms and conditions of that Award, including the vesting requirements applicable to that Award.

2.4 “Board” means the Board of Directors of the Company.

2.5 “Change in Control” means any of the following described in clauses (a) through (d) below, provided that a “Change in Control” shall not mean any event listed in clauses (a) through (d) that occurs directly or indirectly as a result of or in connection with Quadrangle Capital Partners LP, a Delaware limited partnership, Quadrangle Select Partners LP, a Delaware limited partnership, and Quadrangle Capital Partners - A LP, a Delaware limited partnership (collectively the “Quadrangle Entities”) and/or Citigroup Venture Capital Equity Partners, L.P., a Delaware limited partnership, CVC/SSB Employee Fund, L.P., a Delaware limited partnership, CVC Executive Fund LLC,

a Delaware limited liability company (collectively the “CVC Entities”) and/or their Affiliates, related funds and co-investors becoming the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Company securities representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities, or the shareholders of the Company approve a merger, consolidation or reorganization of the Company with any other company and such merger, consolidation or reorganization is consummated, and after such merger, consolidation or reorganization any of the Quadrangle Entities, the CVC Entities and/or their respective Affiliates, related funds and co-investors acquire more than fifty-one percent (51%) of the combined voting power of the Company’s then outstanding securities:

(a) any Person is or becomes the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Company securities representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities;

(b) consummation of a merger, consolidation or reorganization of the Company with any other company, or a sale of all or substantially all the assets of the Company (a “Transaction”), other than (i) a Transaction that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent either directly or indirectly more than fifty-one percent (51%) of the combined voting power of the then outstanding securities of the Company or such surviving or purchasing entity;

(c) the shareholders of the Company approve a plan of complete liquidation of the Company and such liquidation is consummated; or

(d) During any period of twelve (12) consecutive months commencing upon the effective date of the Plan, the individuals who constitute the Board, upon the effective date of the Plan, and any new director who either (i) was elected by the Board or nominated for election by the Company’s stockholders was approved by a vote of more than fifty percent (50%) of the directors then still in office who either were directors, upon the effective date of the Plan, or whose election or nomination for election was previously so approved or (ii) was appointed to the Board pursuant to the designation of Quadrangle Entities and/or the CVC Entities, cease for any reason to constitute a majority of the Board.

2.6 “Code” means the Internal Revenue Code of 1986, as amended.

2.7 “Common Stock” means the common stock of the Company, par value $0.01 per share, or such other class or kind of shares or other securities resulting from the application of Section 9.

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2.8 “Company” means NTELOS Holdings Corp., a Delaware corporation, and any successor thereto.

2.9 “Disability” means a physical, mental or other impairment within the meaning of Section 22(e)(3) of the Code.

2.10 “Fair Market Value” means, on any given date, the closing price of a share of Common Stock on the principal national securities exchange (including NASDAQ) on which the Common Stock is listed or traded on such date or, if Common Stock was not traded on such date, on the last preceding day on which the Common Stock was traded. If at any time such Common Stock is not listed on any securities exchange, the Fair Market Value shall be the value of such Common Stock as determined in good faith by the Board.

2.11 “Holder” means a Non-Employee Director who receives an Award.

2.12 “1934 Act” means the Securities Exchange Act of 1934, as amended.

2.13 “Non-Employee Director” means a member of the Board who is not an employee of the Company or its subsidiaries, excluding any such member of the Board designated (and who continues to be designated) by the Quadrangle Entities and/or the CVC Entities pursuant to Section 2.01(a) of the Shareholders Agreement who is not an “Independent Director” (as defined in the Shareholders Agreement).

2.14 “Non-Qualified Option” means an Option not intended to be an incentive stock option as defined in Section 422 of the Code.

2.15 “Option” means the right granted from time to time under Section 6 of the Plan to purchase Common Stock for a specified period of time at a stated price.

2.16 “Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

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2.17 “Plan” means the NTELOS Holdings Corp. Non-Employee Director Equity Plan herein set forth, as amended from time to time.

2.18 “Restricted Stock” means Common Stock subject to a Restriction Period awarded by the Board under Section 7 of the Plan.

2.19 “Restricted Stock Units” means an Award granted pursuant to Section 8, in the amount determined by the Board, stated with reference to a specified number of shares of Common Stock, that in accordance with the terms of an Agreement entitles the holder to receive shares of Common Stock, upon the lapse of any Restriction Period.

2.20 “Restriction Period” means the period during which an Award of Restricted Stock awarded under Section 7 of the Plan or an Award of a Restricted Stock Unit awarded under Section 8 of the Plan is subject to forfeiture and is non-transferable. The Restriction Period shall not lapse with respect to any Restricted Stock or Restricted Stock Unit until all conditions, imposed under this Plan or under the Award Agreement, have been satisfied.

2.21 “Shareholders Agreement” means the Amended and Restated Shareholders Agreement, dated February 13, 2006, by and among the Company, the Quadrangle Entities, the CVC Entities and the other shareholders of the Company named therein.

3. Eligibility

All Non-Employee Directors are eligible to receive grants of Awards under the Plan.

4. Administration and Implementation of Plan

4.1 The Plan shall be administered by the Board, which shall have full power to interpret and administer the Plan and full authority to act in selecting the Non-Employee Directors to whom Awards will be granted, in determining whether, and to what extent, Awards may be transferable by the Holder, in determining the amount and type of Awards to be granted to each such Non-Employee

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Director, in determining the terms and conditions of Awards granted under the Plan and in determining the terms of the Award Agreements that will be entered into with Holders.

4.2 The Board’s powers shall also include, but not be limited to, the power to determine whether, to what extent and under what circumstances an Option may be exchanged for cash, Restricted Stock, or some combination thereof; to determine whether a Change in Control of the Company has occurred; and to determine, in accordance with Section 9, the effect, if any, of a Change in Control of the Company upon outstanding Awards.

4.3 The Board shall have the power to adopt regulations for carrying out the Plan and to make changes in such regulations as it shall, from time to time, deem advisable. The Board may amend any outstanding Awards without the consent of the Holder to the extent it deems appropriate; provided however, that in the case of amendments adverse to the Holder, the Board must obtain the Holder’s consent to any such amendment, except that such consent shall not be required if, as determined by the Board in its sole discretion, such amendment is required to either (a) comply with Section 409A of the Code or (b) prevent the Holder from being subject to any excise tax or penalty under Section 409A of the Code. Any interpretation by the Board of the terms and provisions of the Plan and the administration thereof, and all action taken by the Board, shall be final, binding and conclusive for all purposes and upon all Holders.

5. Shares of Stock Subject to the Plan

5.1 Subject to adjustment as provided in Section 9, the total number of shares of Common Stock available for the grant of Awards under the Plan shall be 400,000 shares. Any shares issued hereunder may consist, in whole or in part, of authorized and unissued shares or treasury shares. If any shares subject to any Award granted hereunder are forfeited or such Award otherwise terminates without the issuance of such shares, the shares subject to such Award, to the extent of any such forfeiture or termination, shall again be available for grant under the Plan.

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5.2 Any shares issued by the Company through the assumption or substitution of outstanding grants from an acquired company shall not reduce the shares available under the Plan.

6. Options

Options give a Non-Employee Director the right to purchase a specified number of shares of Common Stock from the Company for a specified time period at a fixed price. Options granted under the Plan will be Non-Qualified Stock Options and shall be subject to the following terms and conditions:

6.1 Option Grants: Options shall be evidenced by a written Award Agreement. Such Award Agreements shall conform to the requirements of the Plan, and may contain such other provisions or restrictions as the Board shall deem advisable.

6.2 Number of Options: All grants of Options under the Plan shall be automatic and non-discretionary with regard to the number and timing of grants as set forth in this Section, provided however that, the Board, in its sole discretion, may determine to decrease the number of shares of Common Stock in any award provided for in this Section. Each Non-Employee Director who is elected or appointed to the Board shall receive, as soon as administratively feasible on or after the date on which the Non-Employee Director takes office, an Option to purchase 8,600 shares of Common Stock. Additionally, commencing January 1, 2007, each Non-Employee Director serving as a director on the first business day of the Company’s fiscal year shall receive an Option to purchase 8,600 shares of Common Stock. Notwithstanding the foregoing, if, at the time of any grant, there are insufficient shares of Common Stock reserved under the Director Plan in order to make grants to all Non-Employee Directors then scheduled to receive a grant under this Section 6.2, the Options granted at such time to each Non-Employee Director shall be proportionately adjusted.

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6.3 Option Price: The price per share at which Common Stock may be purchased upon exercise of an Option shall be determined by the Board, but shall be not less than the Fair Market Value of a share of Common Stock on the date of grant.

6.4 Term of Options: An Award Agreement shall specify when an Option may be exercisable and the terms and conditions applicable thereto. The term of an Option shall in no event be greater than ten years. The Option shall also expire, be forfeited and terminate at such times and in such circumstances as otherwise provided hereunder or under the Award Agreement.

6.5 Vesting of Options: Subject to a Holder’s continued service as a Non-Employee Director, an Option shall vest and become exercisable as to 100% of the shares of Common Stock underlying the Option on the first anniversary of the date of grant of such Option; provided however that, the Board in its sole discretion may determine to decrease the percentage of shares that so vest and/or increase the period of vesting in any Option grant. The Option may be subject to such other terms and conditions on the time or times when it may be exercised as the Board may deem appropriate. The vesting provisions of individual Options, as provided in the Award Agreement may vary. Unless otherwise determined by the Board, no Option shall become exercisable until such Option becomes vested.

6.6 The Holder shall not have any rights as a shareholder with respect to any shares of Common Stock underlying the Options until such time as the shares of Common Stock have been so issued upon exercise of the Option.

6.7 Payment of Option Price: An Option may be exercised only for a whole number of shares of Common Stock. The Board shall establish the time and the manner in which an Option may be exercised. The option price of the shares of Common Stock received upon the exercise of an Option shall be paid: (i) in full in cash or by certified or cashier’s check at the time of the exercise, (ii) with the consent of the Board, in whole or in part in Common Stock, which to the extent necessary to

8

avoid adverse accounting treatment must have been held by the Holder for at least six months, valued at Fair Market Value on the date of exercise, (iii) by any other legal method acceptable to the Board; or (iv) by any combination of such methods.

6.8 Termination Upon a Change in Control: If a Holder is removed from the Board within one year of the date of a Change in Control, the Board, in its sole discretion, may provide that all or any portion of such Holder’s outstanding, unvested Options shall become vested and exercisable. If a Holder is removed from the Board within one year of the date of a Change in Control, any unexercised Option granted to the Holder may thereafter be exercised by the Holder (or, where appropriate, a transferee of the Holder), to the extent it was exercisable as of the date of termination (or as so accelerated under this Section), (x) for a period of 6 months from the date of termination or (y) until the expiration of the stated term of the Option, if shorter. Any portion of the Option that remains unexercised after the expiration of such period, regardless of whether such portion of the Option is vested or unvested, shall terminate and be forfeited with no further compensation due to the Holder.

6.9 Termination Due to Death or Disability: If a Holder incurs a termination of service as a Non-Employee Director due to death or Disability, any unexercised Option granted to the Holder may thereafter be exercised by the Holder (or, where appropriate, a transferee of the Holder), to the extent it was exercisable as of the date of termination, (x) for a period of 12 months from the date of termination or (y) until the expiration of the stated term of the Option, if shorter. Any portion of the Option that remains unexercised after the expiration of such period, regardless of whether such portion of the Option is vested or unvested, shall terminate and be forfeited with no further compensation due to the Holder.

6.10 Other Termination: If a Non-Employee Director terminates or is terminated from his position as a Non-Employee Director for any reason other than as specified in Sections 6.8 or 6.9 above, any unexercised Option granted to the Holder may thereafter be exercised by

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the Holder (or, where appropriate, the Holder’s transferee or legal representative), to the extent it was exercisable at the time of termination or on such accelerated basis as the Board may determine at or after grant, for a period of 3 months from the date of such termination or until the expiration of the stated term of the Option, whichever period is shorter. Any portion of the Option that remains unexercised after the expiration of such period, regardless of whether such portion of the Option is vested or unvested, shall terminate and be forfeited with no further compensation due to the Holder.

6.11 No Option shall be exercisable, no shares of Common Stock shall be issued and no certificates for shares of Common Stock shall be delivered, under this Plan except in compliance with all applicable federal and state laws and regulations

7. Restricted Stock

An Award of Restricted Stock is a grant by the Company of a specified number of shares of Common Stock to a Non-Employee Director, which shares may be subject to forfeiture during a Restriction Period upon the happening of events or other conditions as specified in the Award Agreement. Such an Award of Restricted Stock shall be subject to the following terms and conditions:

7.1 Restricted Stock shall be evidenced by Award Agreements. Such agreements shall conform to the requirements of the Plan and may contain such other provisions as the Board shall deem advisable. At the time of grant of an Award of Restricted Stock, the Board will determine the price, if any, to be paid by the Holder for each share of Common Stock subject to the Award, and such price, if any, shall be set forth in the Award Agreement.

7.2 Unless otherwise provided by the Board, upon determination of the number of shares of Restricted Stock to be granted to the Holder, the Board shall direct that a certificate or certificates representing that number of shares of Common Stock be issued to the Holder with the Holder designated as the registered owner. The certificate(s), if any, representing such shares shall bear appropriate legends as to sale, transfer, assignment, pledge or other encumbrances to which

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such shares are subject during the Restriction Period and shall be deposited by the Holder, together with a stock power endorsed in blank, with the Company, to be held in escrow during the Restriction Period.

7.3 During the Restriction Period the Holder shall have the right to receive the Holder’s allocable share of any cash dividends declared and paid by the Company on its Common Stock and to vote the shares of Restricted Stock.

7.4 The Board may condition the expiration of the Restriction Period upon the Holder’s continued service over a period of time with the Company or upon any other criteria, as specified in the Award Agreement. If the specified conditions are not attained, the Holder shall forfeit the portion of the Award with respect to which those conditions are not attained, and the underlying Common Stock shall be forfeited to the Company. Notwithstanding any provision contained herein to the contrary, the Board, in its sole discretion, may grant Awards of Restricted Stock under this Section 7 that are not subject to any Restriction Period.

7.5 At the end of the Restriction Period, if all such conditions have been satisfied, the restrictions imposed hereunder shall lapse with respect to the applicable number of shares of Restricted Stock as determined by the Board, and any legend described in Section 7.2 that is then no longer applicable, shall be removed and such number of shares delivered to the Holder (or, where appropriate, the Holder’s legal representative). Subject to Section 4, the Board may, in its sole discretion, accelerate the vesting and delivery of shares of Restricted Stock.

7.6 At the time of the grant or upon the lapse of the Restriction Period of an Award of Restricted Stock, the Board will determine the consideration permissible for the payment of the purchase price, if any, of the Award of Restricted Stock. The purchase price per of share of Common Stock acquired pursuant to the Award of Restricted Stock shall be paid in one of the following ways: (i) in cash at the time of purchase; (ii) at the discretion of the Board and to the extent

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legally permissible, according to a deferred payment or other similar arrangement with the Holder; (iii) by services rendered or to be rendered to the Company; or (iv) in any other form of legal consideration that may be acceptable to the Board, in its sole discretion.

8. Restricted Stock Units

An Award of Restricted Stock Units is a grant by the Company of a specified number of shares of Common Stock to a Non-Employee Director, which, upon lapse of a Restriction Period as specified in the applicable Award Agreement, shall entitle the Holder to a share of Common Stock for each share underlying the Restricted Stock Unit Award. Such an Award shall be subject to the following terms and conditions:

8.1 Restricted Stock Units shall be evidenced by Award Agreements. Such agreements shall conform to the requirements of the Plan and may contain such other provisions as the Board shall deem advisable.

8.2 During the Restriction Period the Holder shall not have any rights as a shareholder with respect to any shares of Common Stock underlying the Restricted Stock Units until such time as the shares of Common Stock have been so issued.

8.3 The Board may condition the expiration of the Restriction Period with respect to a grant of Restricted Stock Units upon (i) the Holder’s continued service over a period of time with the Company or (ii) any other criteria, as specified in the Award Agreement. If the specified conditions are not attained, the Holder shall forfeit the portion of the Award with respect to which those conditions are not attained, and the underlying Common Stock shall be forfeited to the Company.

8.4 At the end of the Restriction Period, if all such conditions have been satisfied, the Holder shall be entitled to receive a share of Common Stock for each share underlying the Restricted Stock Unit Award that is now free from restriction and such number of shares delivered to

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the Holder (or, where appropriate, the Holder’s legal representative). Subject to Section 4, the Board may, in its sole discretion, accelerate the vesting of Restricted Stock Units.

9. Adjustments upon Changes in Capitalization

9.1 In the event of a reorganization, recapitalization, stock split, spin-off, split-off, split-up, stock dividend, issuance of stock rights, combination of shares, merger, consolidation or any other change in the corporate structure of the Company affecting Common Stock, or any distribution to stockholders other than a cash dividend, the Board shall make appropriate adjustment in the number and kind of shares authorized by the Plan and any other adjustments to outstanding Awards as it determines appropriate.

9.2 In the event of a Change of Control of the Company, the Board may, on a Holder by Holder basis:

(a) accelerate the vesting of all outstanding Options issued under the Plan that remain unvested and terminate the Option immediately prior to the date of any such transaction, provided that the Holder shall have been given at least seven days written notice of such transaction and of the Board’s intention to cancel the Option with respect to all Common Stock for which the Option remains unexercised;

(b) fully vest and/or accelerate the Restriction Period of any Awards;

(c) terminate the Award immediately prior to any such transaction, provided that the Holder shall have been given at least seven days written notice of such transaction and of the Board’s intention to cancel the Award with respect to all Common Stock for which the Award remains unexercised or subject to restriction or forfeiture, provided further however, that during such notice period, the Holder will be able to give notice of exercise of any portion of the Award that will become vested upon the occurrence of the Change of Control, however, the actual exercise of such Option, or portion thereof, shall be contingent on the occurrence of a Change in Control

(d) after having given the Holder a chance to exercise any outstanding Options, terminate any or all of the Holder’s unexercised Options;

(e) cancel any outstanding Awards with respect to all Common Stock for which the Award remains unexercised or for which the Award is subject to forfeiture in exchange for a cash payment of an amount equal to the difference between the then Fair Market Value (provided that the Board may, in its sole discretion, determine that the Fair Market Value of an Award that will remain unvested or subject to forfeiture as of the date of the Change of Control is zero) of the Award less the Exercise Price of an Option, or the unpaid base price (if any) of Restricted Stock. If the Fair Market Value of the Common Stock subject to the Award is less than the Exercise Price of an Option or the price

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(if any) of Restricted Stock, the Award shall be deemed to have been paid in full and shall be canceled with no further payment due the Holder;

(f) require that the Award be assumed by the successor corporation or that awards for shares or other interests in the successor corporation with equivalent value be substituted for such Award; or

(g) take such other action as the Board shall determine to be reasonable under the circumstances to permit the Holder to realize the value of the Award.

The application of the foregoing provisions, including, without limitation, the issuance of any substitute options, shall be determined in good faith by the Board in its sole discretion. Any adjustment may provide for the elimination of fractional shares of Common Stock in exchange for a cash payment equal to the Fair Market Value of the eliminated fractional shares of Common Stock.

9.3 Authority: The judgment of the Board with respect to any matter referred to in this Section 9 shall be conclusive and binding upon each Holder without the need for any amendment to the Plan.

10. Effective Date, Termination and Amendment

The Plan, which has been approved by the shareholders of the Company, shall become effective on February 13, 2006. The Plan shall remain in full force and effect until the earlier of February 13, 2016, or the date it is terminated by the Board. The Board shall have the power to amend, suspend or terminate the Plan at any time. Termination of the Plan pursuant to this Section 10 shall not affect Awards outstanding under the Plan at the time of termination.

11. Transferability

Except as provided below, Awards may not be pledged, assigned or transferred for any reason during the Holder’s lifetime, and any attempt to do so shall be void. The Board may grant Awards that are transferable by the Holder during the Holder’s lifetime, but such Awards shall be transferable only to the extent specifically provided in an agreement entered into with the Holder. The transferee of the Holder shall, in all cases, be subject to the provisions of the agreement between the Company and the Holder; provided however, that such transferee may not transfer the Award during the transferee’s lifetime.

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12. General Provisions

12.1 Nothing in the Plan or any Award granted pursuant to the Plan shall be deemed to create any obligation on behalf of the Board to nominate any Non-Employee Director for re-election to the Board by the Company’s shareholders.

12.2 Holders shall be responsible to make appropriate provision for all taxes required to be withheld in connection with any Award or the transfer of shares of Common Stock pursuant to this Plan. Such responsibility shall extend to all applicable Federal, state, local or foreign withholding taxes. The Company shall, at the election of the Holder, have the right to retain the number of shares of Common Stock or a portion of the value of any Award whose Fair Market Value equals the amount to be withheld in satisfaction of the applicable withholding taxes.

12.3 To the extent that Federal laws (such as the 1934 Act, the Code or the Employee Retirement Income Security Act of 1974) do not otherwise control, the Plan and all determinations made and actions taken pursuant hereto shall be governed by the law of the State of Delaware and construed accordingly.

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EX-10.18

Exhibit 10.18

NTELOS Holdings Corp.

NTELOS Inc.

401 Spring Lane, Suite 300

PO Box 1990

Waynesboro, Virginia 22980

February 13, 2006

CVC Management LLC

399 Park Avenue, 14^th Floor

New York, NY 10043

Quadrangle Advisors LLC

375 Park Avenue

New York, NY 10152

Ladies and Gentlemen:

Reference is made to (i) the Advisory Agreement (the “CVC Advisory Agreement”), dated February 24, 2005, by and among NTELOS Holdings Corp., a Delaware corporation and successor to Project Holdings LLC (“Holdings”), NTELOS Inc., a Virginia corporation and successor to Project Merger Sub Corp. (“NTELOS”), and CVC Management LLC as Advisor (“CVC Management”) and (ii) the Advisory Agreement (the “Quadrangle Advisory Agreement”), dated February 24, 2005, by and among Holdings, NTELOS and Quadrangle Advisors LLC as Advisor (“Quadrangle Advisors”). The CVC Advisory Agreement and the Quadrangle Advisory Agreement are collectively referred to herein as the “Advisory Agreements.” Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Advisory Agreements.

This letter confirms our agreement as follows:

1. If a First Public Offering occurs on or before February 14, 2006, then as soon as practicable (and in any event within one business day of the closing thereof), Holdings shall pay $6,470,500 to CVC Management and $6,470,500 to Quadrangle Advisors (collectively, the “Fees”) plus the amount, if any, of reasonable out-of-pocket expenses incurred by either CVC Management and its affiliates or Quadrangle Advisors and its affiliates, respectively, in connection with the provision of services by each of them under their respective Advisory Agreements that have been invoiced to Holdings and not previously paid.

2. Each of the parties to the Advisory Agreements hereby agrees that the Fees set forth in paragraph 1 above represent the Termination Fee as set forth in Section 1(c) of each of the Advisory Agreements and has been calculated in accordance with Section 1(c) of each of the Advisory Agreements based on an 8% discount rate.

3. Upon payment of the Fees and expenses as set forth in paragraph 1 hereof, Sections 1 (Term), 2 (Services), 3 (Advisory Fee), 4 (Transaction Fees) and 5 (Personnel), of each of the Advisory Agreements shall terminate and be of no further force and effect. Except as

NTELOS Holdings Corp.

NTELOS Inc.

February 13, 2006

Page 2

provided herein, all other provisions of the Advisory Agreements shall remain in full force and effect, including without limitation, Section 6 (Liability) and Section 7 (Indemnity) of the Advisory Agreements; provided, however, the obligations of each of CVC Management and Quadrangle Advisors with respect to Competing Activities set forth in Section 6 of each of the Advisory Agreements shall terminate and be of no further force or effect (subject to the continuing obligations with respect to Competing Activities contained in the Shareholders Agreement, dated as of May 2, 2005, as amended, among Holdings, the Institutional Shareholders named therein and the Management Shareholders named therein).

4. Each of Holdings and NTELOS, on behalf of themselves and their subsidiaries (collectively, the “NTELOS Group”) on the one hand, and CVC Management and its affiliates (collectively, the “CVC Group”) and Quadrangle Advisors and its affiliates (collectively, the “Quadrangle Group”), on the other hand, acknowledges and agrees that the CVC Group and the Quadrangle Group, on the one hand, and the NTELOS Group on the other hand, as the case may be, shall not have and are hereby released from any liability to the other parties hereto arising under the Advisory Agreements; provided that the foregoing shall in no way limit the obligation of Holdings to pay the Fees and expenses in accordance with paragraph 1 hereof and the indemnification provided for in Section 7 of the respective Advisory Agreements.

5. This letter agreement shall terminate and be void without further force or effect if the First Public Offering has not occurred on or before February 14, 2006.

Please indicate your agreement with the foregoing by signing where indicated below, whereupon this letter shall become a binding written agreement among us.

NTELOS Holdings Corp.

NTELOS Inc.

February 13, 2006

Page 3

Sincerely,
NTELOS HOLDINGS CORP.
By:	/s/ Michael B. Moneymaker
	Name: Michael B. Moneymaker
	Title: Executive Vice President, Chief Financial Officer, Treasurer and Secretary
NTELOS INC.
By:	/s/ Michael B. Moneymaker
	Name: Michael B. Moneymaker
	Title: Executive Vice President, Chief Financial Officer, Treasurer and Secretary
Acknowledged and Agreed:
CVC MANAGEMENT LLC
By:	/s/ Michael Delaney
	Name: Michael Delaney
	Title:
QUADRANGLE ADVISORS LLC
By:	/s/ Michael Huber
	Name: Michael Huber
	Title: Managing Principal

EX-10.19

Exhibit 10.19

NTELOS INC.

2005 EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

Effective January 1, 2005

and as Subsequently Amended Effective as of

January 11, 2005, February 23, 2005, April 27, 2005 and January 25, 2006.

INTRODUCTION

On March 22, 1982, the Board of Directors of Clifton Forge-Waynesboro Telephone Company adopted an unfunded non-qualified deferred compensation plan (the “Old Plan”). The purpose of the Old Plan was to supplement the retirement benefits payable under the Company’s tax-qualified plans to those key employees selected to participate. The Board determined that the adoption of the Old Plan would assist it in attracting and retaining those employees whose judgment, abilities and experience will contribute to its continued progress.

Effective January 1, 1994, the Old Plan was amended and restated to (1) change the name of the Old Plan to reflect the change in the Old Plan’s sponsorship, (2) revise the benefit formula and (3) provide pre-retirement death and disability benefits to those participants who die or become disabled while employed by the Company. Effective January 1, 2000, the Old Plan was amended primarily (1) to provide participants with certain benefits upon termination of employment after a change in control and (2) to modify the calculation of benefits provided under the Old Plan. Effective January 1, 2002, the Old Plan was amended primarily to (1) modify the definition of a change in control, (2) modify the noncompetition provisions of the Old Plan, (3) provide for certain accelerated payments upon a change in control, and (4) limit the Company’s ability to amend the Old Plan. Effective July 1, 2002, the Old Plan was amended to (1) modify the definition of final pay and (2) provide that, in the event of a merger or acquisition, prior service with the merged or acquired entity would not be credited for purposes of the Old Plan. Effective September 16, 2003, the Old Plan was amended to (1) provide that benefits provided under the Old Plan would not be reduced to reflect early commencement for individuals employed on September 16, 2003 whose employment subsequently was terminated by the Company without cause or by the participant for good reason, (2) modify the definitions of cause and change in control, (3) modify the noncompetition provisions of the Old Plan, (4) add a confidentiality provision and (5) make such other changes as are set forth herein.

In response to the enactment of Section 409A of the Code, the Company froze the Old Plan, so that benefits provided under the Old Plan were limited to benefits that were earned or accrued and vested or nonforfeitable (within the meaning of Section 409A of the Code) as of December 31, 2004 (and related earnings and losses to the extent applicable). In connection with the amendment of the Old Plan, the Company also adopted this new unfunded non-qualified deferred compensation plan (the “Plan”), effective January 1, 2005, which provided that its provisions would be the same as those under the Old Plan (but without a duplication of benefits), except that (1) the Plan would not include any term, condition or provision that does not satisfy Section 409A of the Code (except as otherwise permitted under the Section 409A transition rules) and (2) the benefits provided under the Plan would include only benefits earned or accrued under the Plan which are forfeitable or unvested as of December 31, 2004 and benefits earned or accrued on or after January 1, 2005 (and related earnings and losses to the extent applicable). The foregoing amendment of the Old Plan and adoption of this Plan were contingent on the consent of the affected participants, which consent the Company obtained.

In connection with the Company’s proposed tender offer to acquire shares of its stock, effective as of January 11, 2005, the Company also amended the Old Plan and this Plan to remove all noncompetition and confidentiality forfeiture provisions relating to benefits of Participants who were actively employed by the Company on December 31, 2004, to the extent such benefits were

earned or accrued as of December 31, 2004 and otherwise vested or nonforfeitable (not considering those forfeiture provisions) and also to vest fully and remove all such forfeiture provisions relating to certain benefits of Mary McDermott that were earned and accrued as of December 31, 2004 under the Old Plan and this Plan. The Company vested the accrued benefits of Mary McDermott that would be equal to the amount of her benefits that were earned and accrued as of December 31, 2004 under the Old Plan and this Plan treating her as if she (i) had seven (7) years of service solely for purposes of determining her rights for benefits if she were to voluntarily terminate employment (but not for purposes of calculating her “Applicable Percentage”) and (ii) was fully vested in the NTELOS Inc. Savings and Security Plan and the Revised Retirement Plan for the Employees of NTELOS Inc. Contingent on consummation of the tender offer, effective as of January 11, 2005, the Company terminated the portions of the Old Plan and this Plan that related to the benefits of Participants who were actively employed by the Company on December 31, 2004, to the extent such benefits were earned and accrued as of December 31, 2004 and vested or nonforfeitable (after the vesting and elimination of the forfeiture provisions described above). In connection therewith, the Company made a lump sum distribution to the affected Participants of the present value of their vested benefits under the terminated portions of the Old Plan and this Plan. The benefits of Participants who were actively employed by the Company on December 31, 2004 that were earned and accrued as of such time and that were vested or nonforfeitable (after the vesting and elimination of the forfeiture provisions described herein) were not increased by any additional Years of Service to which the Participant may be entitled in connection with any severance pay the Participant might receive nor did they reflect the provisions of Old Plan Section 3.02(d) (Section 3.02(c) in this Plan) which gives certain Participants who were employed by the Company on September 16, 2003 and whose employment subsequently is terminated by the Company without Cause or by the Participant for Good Reason certain additional benefits, which provisions shall only continue with respect to the portion of this Plan that has not been terminated.

In connection with the Company’s proposed tender offer to acquire shares of its stock, effective as of February 23, 2005, the Company amended the definition of Final Pay to exclude (i) any compensation a Participant recognizes relating to the exercise, cancellation, sale, transfer or other disposition of seventy-five percent (75%) of the stock options granted to the Participant under the NTELOS Inc. Stock Option Plan that are outstanding as of February 1, 2005 and (ii) if the tender offer is consummated by August 15, 2005, any compensation the Participant recognizes relating to the exercise, cancellation, sale, transfer or other disposition of the remaining twenty-five percent (25%) of the stock options granted to the Participant under the NTELOS Inc. Stock Option Plan that are outstanding as of February 1, 2005.

In connection with the freezing of the Old Plan and the adoption of this Plan and in order to clarify that there are no duplication of benefits between the Old Plan and this Plan, effective as of April 27, 2005, the Company amended the definition of Final Pay to exclude amounts paid pursuant to this Plan and the Old Plan.

On May 2, 2005, a change in control as defined under the previous plan document occurred, pursuant to which the Quadrangle Entities (as defined herein) and the CVC Entities (as defined herein) became the owners of more than 50% of the combined voting power of the then outstanding securities of the Company. Accordingly, pursuant to the terms of the Plan and consistent with Section 409A of the Code, the benefits that were earned or accrued and vested or

2

nonforfeitable through that time (calculated consistent with the terms of the Plan) were paid. All such amounts that were paid in connection with such change in control reduces on an Actuarial Equivalent basis (but not below zero) any further benefits otherwise payable to any such Participant under the Plan.

Finally, effective as of January 25, 2006, the Company amended the Plan to exclude from the definition of “Final Pay” any compensation income a Participant might recognize relating to the grant, vesting, exercise, payment, cancellation, sale, transfer or other disposition of any form of equity award, such as compensation income attributable to stock options, restricted stock, stock appreciation rights, restricted stock units, phantom stock or other similar awards, unless the equity award to which that compensation income relates was granted to the Participant in lieu of salary, wages, bonuses and similar amounts, in which case all compensation income relating to any equity award granted in lieu of salary, wages, bonuses and the like shall be included within Final Pay. The Board, in its sole discretion, shall determine if any such equity award was granted in lieu of salary, wages, bonuses and the like.

This Plan is intended to be a plan that is unfunded and maintained primarily for the purpose of providing deferred compensation for a “select group of management or highly compensated employees” (as such phrase is used in the Employee Retirement Income Security Act of 1974). The Plan must be administered and construed in a manner that is consistent with that intent. This Plan document reflects the Plan as established effective January 1, 2005, and as subsequently amended as of January 11, 2005, February 23, 2005, April 27, 2005 and January 25, 2006. This Plan document has not yet been amended to comply in form with Section 409A of the Code; however, the Plan shall be read to exclude any term, condition or provision that does not satisfy Section 409A of the Code, taking into account the transition guidance to allow all such terms, conditions or provisions to remain in effect to the maximum extent allowed under the transition guidance without running afoul of Section 409A of the Code.

ARTICLE I

DEFINITIONS

The following phrases or terms have the indicated meanings:

1.01. Affiliate means (i) any entity that is a member of a controlled group of corporations as defined in Code Section 1563(a), determined without regard to Code Sections 1563(a)(4) and 1563(e)(3)(c), of which the Company is a member according to Code Section 414(b); (ii) an unincorporated trade or business that is under common control with the Company as determined according to Code Section 414(c); or (iii) a member of an affiliated service group of which the Company is a member according to Code Section 414(m).

1.02. Annuity Starting Date means the first day of the first period for which a benefit is payable under the Plan.

1.03. Board means the Board of Directors of NTELOS Inc.

1.04. Cause has the same definition as under any employment agreement between the Company and the Participant or, if no such employment agreement exists or if such employment agreement does not contain any such definition, Cause means the Participant’s (i) gross or willful

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misconduct, (ii) willful and repeated failure to comply with the lawful directives of the Board or any supervisory personnel, (iii) criminal act or act of dishonesty or willful misconduct that has a material adverse impact on the property, operations, business or reputation of the Company or any subsidiary, (iv) illegal act or act of fraud, dishonesty or misappropriation involving the Company or any subsidiary, (v) commission of or plea of guilty or nolo contendere to a felony or a crime involving dishonesty, (vi) material breach of the terms of any confidentiality, non-competition, non-solicitation or employment agreement that the Participant has with the Company, (vii) negligence or malfeasance in a matter of material importance to the Company or any subsidiary, (viii) material failure to perform the duties and responsibilities of the Participant’s position after written notice and a reasonable opportunity to cure (not to exceed 90 days), (ix) grossly negligent conduct, or (x) conduct or activities materially damaging to the property, operations, business or reputation of the Company or any subsidiary (it being understood that conduct or activities pursuant to the Participant’s exercise of good faith business judgment shall not justify a termination for Cause under clause (x)). The Participant also will be deemed to have been terminated for Cause if, in connection with the sale, transfer, conveyance or other disposition of all or substantially all of the assets (whether by asset sale, stock sale, merger, combination or otherwise) of one or more of the Company’s Material Lines of Business (a “Sale” of a “Material Line of Business), one or more purchasers of any such Material Line of Business offers “comparable employment” to the Participant, the Participant declines such offer of employment and the Company terminates the Participant’s employment, for any reason whatsoever, within six (6) months after the consummation of the Sale of the Material Line of Business. For this purpose, “comparable employment” means that (i) the Participant’s base salary and target incentive payments are not reduced more than 10 percent in the aggregate, (ii) the Participant’s job duties and responsibilities are not diminished (but a reduction in the size of the Company as a result of the Sale of a Material Line of Business shall not alone constitute a diminution in the Participant’s job duties and responsibilities), (iii) the Participant is not required to relocate to a facility more than 50 miles from Participant’s principal place of employment at the time of the Sale, and (iv) the Participant is provided benefits that are comparable in the aggregate to those provided to the Participant immediately prior to the Sale. In no event shall any termination of employment be deemed for Cause unless the Participant’s employment is terminated within 120 days of when the Company or any subsidiary learns of the act or conduct alleged to constitute Cause and the Company’s Chief Executive Officer or his designee or the Board concludes that the situation warrants a determination that the Participant’s employment terminated for Cause; however, in the case of the Chief Executive Officer, any determination that the Chief Executive Officer’s employment terminated for Cause shall be made by the Board acting without the Chief Executive Officer.

1.05. Change in Control means any of the following described in clauses (a) through (e) below, provided that a “Change in Control” shall not mean any event listed in clauses (a) through (e) that occurs directly or indirectly as a result of or in connection with Quadrangle Capital Partners LP, a Delaware limited partnership, Quadrangle Select Partners LP, a Delaware limited partnership, and Quadrangle Capital Partners - A LP, a Delaware limited partnership (collectively the “Quadrangle Entities”) and/or Citigroup Venture Capital Equity Partners, L.P., a Delaware limited partnership, CVC/SSB Employee Fund, L.P., a Delaware limited partnership, CVC Executive Fund LLC, a Delaware limited liability company (collectively the “CVC Entities”) and/or their Related Parties, related funds and co-investors, becoming the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of

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Company securities representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities, or the shareholders of the Company approve a merger, consolidation or reorganization of the Company with any other company and such merger, consolidation or reorganization is consummated, and after such merger, consolidation or reorganization any of the Quadrangle Entities, the CVC Entities and/or their respective Related Parties, related funds and co-investors, acquire more than fifty-one percent (51%) of the combined voting power of the Company’s then outstanding securities:

(a) any Person is or becomes the owner or “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Company securities representing more than fifty-one percent (51%) of the combined voting power of the then outstanding securities;

(b) consummation of a merger, consolidation or reorganization of the Company with any other company, or a sale of all or substantially all the assets of the Company (a “Transaction”), other than (i) a Transaction that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent either directly or indirectly more than fifty-one percent (51%) of the combined voting power of the then outstanding securities of the Company or such surviving or purchasing entity;

(c) the shareholders of the Company approve a plan of complete liquidation of the Company and such liquidation is consummated;

(d) a sale, transfer, conveyance or other disposition (whether by asset sale, stock sale, merger, combination or otherwise) (a “Sale”) of a Material Line of Business (other than any such sale to the Quadrangle Entities, the CVC Entities or their Related Parties, related funds and co-investors, except that with respect to this clause (d) there shall only be a Change in Control with respect to a Participant who is employed at such time in such Material Line of Business (whether full or part-time), and the Participant does not receive an offer for “comparable employment” with the purchaser and the Participant’s employment is terminated by the Company or any Related Party of the Company no later than six (6) months after the consummation of the Sale of the Material Line of Business. For these purposes, “comparable employment” means that (i) the Participant’s base salary and target incentive payments are not reduced in the aggregate, (ii) the Participant’s job duties and responsibilities are not diminished (but a reduction in size of the Company as the result of a Sale of a Material Line of Business, or the fact that the purchaser is smaller than the Company, shall not alone constitute a diminution in the Participant’s job duties and responsibilities), (iii) the Participant is not required to relocate to a facility more than fifty (50) miles from the Participant’s principal place of employment at the time of the Sale and (iv) the Participant is provided benefits that are comparable in the aggregate to those provided to the Participant immediately prior to the Sale; or

(e) during any period of twelve (12) consecutive months commencing upon the effective date of the Plan, the individuals who constitute the Board, upon the effective date of the Plan, and any new director who either (i) was elected by the Board or nominated for election by the Company’s stockholders was approved by a vote of more than fifty percent (50%) of the directors then still in office who either were directors, upon the effective date of the Plan, or whose election or nomination for election was previously so approved or (ii) was appointed to

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the Board pursuant to the designation of Quadrangle Entities and/or the CVC Entities, cease for any reason to constitute a majority of the Board.

For purposes of the foregoing, “Material Line of Business” means any line or lines of business or service or group of services which represent(s) in the aggregate either twenty-five percent (25%) or more of the Company’s consolidated revenues or twenty-five percent (25%) or more of the Company’s consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for the twelve-month period ended on the last day of the most recently ended fiscal quarter for the Company. For purposes of the foregoing, “Related Party” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.

1.06. Code means the Internal Revenue Code of 1986, as amended.

1.07. Company means NTELOS Inc.

1.08. Control Change Date means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of events, the “Control Change Date” shall be the date on which the last of such events occurs.

1.09. Disability or Disabled has the same meaning as such terms have under the Company’s long-term disability plan.

1.10. Eligible Employee means an individual who (i) is employed by the Company or an Affiliate; and (ii) is a member of management or is a highly compensated employee.

1.11. Exchange Act means the Securities Exchange Act of 1934 as amended.

1.12. Final pay means one-twelfth of the average of the Participant’s five consecutive years when his earnings from the Company as reported on Form W-2, plus any salary reduction amounts, were the highest; provided, however, that for any year, or portion thereof, in which Donna Persing was working for the Company under a reduced schedule, her earnings shall not be less than $163,000 for such year, or the pro rata equivalent for a portion of any year, plus a bonus calculated using the above salary and applying to that salary the applicable % if bonuses are paid during the period under a reduced schedule. In all cases, Final Pay shall be determined without regard to, and shall not include, amounts paid pursuant to this Plan and/or the Old Plan. Additionally, notwithstanding the foregoing, Final Pay shall not include any compensation income the Participant recognizes relating to the grant, vesting, exercise, payment, cancellation, sale, transfer or other disposition of any form of equity award, such as compensation income attributable to stock options, restricted stock, stock appreciation rights, restricted stock units, phantom stock or other similar awards, unless the equity award to which that compensation income relates was granted to the Participant in lieu of salary, wages, bonuses and similar amounts, in which case all compensation income relating to any equity award granted in lieu of salary, wages, bonuses and the like shall be included within Final Pay. The Board, in its sole discretion, shall determine if any such equity award was granted in lieu of salary, wages, bonuses and the like.

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1.13. Good Reason has the same definition as such term or any similar concept under any employment agreement between the Company and the Participant. In no event shall the Participant be considered to have terminated employment for “Good Reason” under this Plan if the Participant has no employment agreement or has an employment agreement that does not contain a definition of “Good Reason” or any similar concept.

1.14. Old Plan has the meaning given in the Introduction of the Plan.

1.15. Participant means an Eligible Employee who is designated by the Board to participate in the Plan in accordance with Article II. An individual shall remain a Participant only so long as the individual remains an Eligible Employee or is entitled to benefits under the Plan.

1.16. Person means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

1.17. Plan means this 2005 NTELOS Inc. Executive Supplemental Retirement Plan in its present form and as hereafter amended.

1.18. Qualified Pre-Retirement Survivor Annuity means the monthly benefit payable to the Participant’s Surviving Spouse, if any, on the death of the Participant prior to his Annuity Starting Date in the form determined under Section 1.33 of the Retirement Plan.

1.19. Retirement and Retire mean severance from employment with the Company or an Affiliate on or after becoming eligible for early, normal or postponed retirement under the Retirement Plan.

1.20. Retirement Plan means the Revised Retirement Plan for the Employees of NTELOS Inc.

1.21. Supplemental Benefit Account means an account established under a funded plan on behalf of a Plan Participant who also participates in such plan.

1.22. Surviving Spouse means, for purposes of Plan Section 3.03, the person to whom the Participant legally married throughout the one-year period ending on the date of the Participant’s death.

1.23. Year of Service means a Participant’s years of service for purposes of vesting under the Retirement Plan. Except as otherwise specifically provided herein, Years of Service also includes any period in which a Participant is entitled to receive severance pay under any Company severance pay plan or under an agreement between the Company and the Participant. Notwithstanding any provision of the Retirement Plan to the contrary, for any individual who became an Employee of the Company as a result of the Company’s merger with or acquisition of such individual’s employer, or as a result of the Company’s merger with or acquisition of any such employer’s operating assets, service prior to such acquisition shall not be taken into account in determining such Employee’s Year(s) of Service for purposes of Plan Section 3.01(a).

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ARTICLE II

PARTICIPATION

An Eligible Employee who is designated to participate in the Plan by the Board shall become a Participant in the Plan as of the date specified by the Board. A Participant shall continue to participate until such date he is no longer an Eligible Employee or until he is no longer entitled to benefits under the Plan. In no event may the Board declare that a Participant is no longer a Participant or revoke or rescind a Participant’s designation as such other than as described in the preceding sentence.

ARTICLE III

BENEFITS

3.01. Amount of Benefit

(a) Upon Retirement, a Participant shall be entitled to a monthly Retirement benefit which shall commence on such Retirement date and which shall be payable on the first day of each month thereafter. For all Participants, the amount of such monthly Retirement benefit shall be equal to (i) minus (ii), (iii), (iv), (v) and (vi) below, as reduced if applicable as described in Section 3.06 of the Plan, where:

(i) equals the Participant’s Final Pay times the Applicable Percentage (as shown on Exhibit I to the Plan);

(ii) equals the monthly Retirement Annuity payable under the Retirement Plan (determined as a straight life annuity);

(iii) equals the monthly benefit payable to the Participant at age 62 under the Federal Social Security Act in effect as of the date of determination, assuming that the Participant had continued in the employ of the Company until his age 62 and whether or not the Participant is currently receiving such benefit;

(iv) equals the monthly benefit (determined as a straight life annuity) that would be payable to the Participant based on the employer-provided benefit under the NTELOS Inc. Savings and Security Plan assuming that the Participant contributed to such plan at the maximum rate allowable by law and permitted under such plan and that such contribution earns interest at interest rate paid on twenty-four month Treasury bills as in effect on the first day of each calendar year from the date of contribution to the date of determination;

(v) equals the monthly benefit (determined as a straight life annuity and on an Actuarial Equivalent basis) of the benefit amount calculated in connection with the lump sum distribution paid under the Old Plan and this Plan to the Participants who were actively employed by the Company on December 31, 2004 and who received a lump sum distribution of the present value of their benefits that were earned and accrued as of December 31, 2004 and vested or nonforfeitable (after the vesting and elimination of the forfeiture provisions described in the Introduction of the Plan) under the terminated portions of the Old Plan and this Plan;

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(vi) equals the monthly benefit (determined as a straight life annuity and on an Actuarial Equivalent Basis) of the benefit amount calculated in connection with the lump sum distribution paid under the Old Plan and this Plan to the Participants in connection with the change in control that occurred on May 2, 2005, pursuant to which the Quadrangle Entities and the CVC Entities became the owners of more than 50% of the combined voting power of the then outstanding securities of the Company (but not including any amount in this (vi) that would reduce the Retirement benefit below zero); and

(vii) equals the monthly benefit (determined as a straight life annuity), if any, payable to Participant under the Old Plan (other than the amounts described in (v) and (vi) above).

(b) From time to time, the Board may, in its sole and absolute discretion, increase the monthly benefit payable to a Participant in pay status to reflect cost-of-living increases.

3.02. Timing and Form of Payment

(a) The payment of any benefit under this Article shall begin as of the same date that the Participant’s retirement benefit under the Retirement Plan is scheduled to commence.

(b) The benefits payable under this Article shall be paid in the manner designated by the Board in its sole discretion. If the Board has made no designation of the manner in which the Plan’s benefits shall be paid as of the date such benefits become payable to the Participant, the Board shall be deemed to have made a designation that the Plan’s benefit payments shall be payable on behalf of the Participant, for the same period and in the same manner and in the same form as the Participant elected under the Retirement Plan.

(c) Except as provided in the next sentence, benefits not paid in a straight life annuity or commencing prior to what would have been the Participant’s normal retirement date under the Retirement Plan must be the Actuarial Equivalent of a straight life annuity and must be reduced to reflect early commencement based on the factors and assumptions employed under the Retirement Plan. Notwithstanding the preceding sentence, however, for any Participant who is employed by the Company on September 16, 2003 and whose employment subsequently is terminated by the Company without Cause or by the Participant for Good Reason, benefits commencing prior to what would have been the Participant’s normal retirement date under the Retirement Plan that are reduced to reflect early commencement shall not be reduced below the minimum benefit percentage (as set forth in the next sentence), calculated consistent with the methodology employed under the Retirement Plan. The minimum benefit percentage equals the sum of (i) 50% plus (ii) the percentage that equals (A) the Participant’s years of service for purposes of vesting under the Retirement Plan (which shall not include any years of service creditable under the second sentence of Section 1.23) divided by (B) the total number of years of service the Participant needs (based on his or her age and taking into account increases in age as additional years of service are rendered) to equal at least 85 (C) multiplied by 50%. Attached hereto as Exhibit 3.02(c) is an example of how the minimum benefit percentage shall be calculated and applied with respect to any benefits commencing prior to what would have been the Participant’s normal retirement date.

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3.03. Death Benefits

If a Participant dies prior to what would have been his Annuity Starting Date under the Retirement Plan, the Participant’s Surviving Spouse, if any, shall be entitled to a Qualified Pre-Retirement Survivor’s Annuity commencing on what would have been the Participant’s earliest retirement age under the Plan. The amount of the Qualified Pre-Retirement Survivor Annuity will be determined under the formula in Plan Section 3.01(a) based on the Participant’s Years of Service as of his date of death and as reduced if applicable as described in Section 3.06 of the Plan. In the event of a Participant’s death after his Annuity Starting Date, benefits will be paid in accordance with the form of benefit determined under Plan Section 3.02(b) above.

3.04. Disability Benefits

Participants who have completed fifteen (15) Years of Service and who become Disabled while in the employ of the Company or an Affiliate shall be entitled to a monthly retirement allowance computed under Plan Section 3.01(a) and based on his Years of Service as of the date he became Disabled and as reduced if applicable as described in Section 3.06 of the Plan. Notwithstanding the preceding sentence, however, if the Participant who becomes Disabled while in the employ of the Company or an Affiliate has not completed fifteen (15) Years of Service, such Participant shall be entitled to receive the benefits described in Section 5.02(b), if any, as if the Company at such time had discharged the Participant without Cause and as reduced if applicable as described in Section 3.06 of the Plan. Benefits shall be payable when the Participant reaches his earliest retirement date under the Plan. If such Participant dies before he is eligible to commence benefits, his surviving spouse shall be entitled to a Qualified Pre-Retirement Survivor’s Annuity as determined under Plan Section 3.03.

3.05. Forfeiture

(a) Benefits payable under this Plan shall be forfeited if, (i) while the Participant is employed by the Company, the Participant competes, directly or indirectly, with the business conducted by the Company or directly or indirectly provides services to any Competitor or (ii) within twenty-four (24) months after the Participant’s employment with the Company ends for any reason (the “Non-Competition Period”), the Participant competes with the Company by performing or causing to be performed the same or similar types of duties or services that the Participant performed for the Company for a Competitor of the Company in any capacity whatsoever, directly or indirectly, within any city or county of the continental United States in which, at the time of the Participant’s employment with the Company ends, the Company provides services or products, offers to provide services or products, or has documented plans to provide or offer to provide services or products within the Non-Competition Period provided that the Participant has knowledge of those plans at the time the Participant’s employment with the Company ends (the “Service Area”). Additionally, the Participant agrees that during the Non-Competition Period, the Participant will not, directly or indirectly, sell, attempt to sell, provide or attempt to provide, any wireless or wireline telecommunication services, including but not limited to internet services, to any person or entity who was a customer or an actively sought prospective customer of the Company, at any time during the Participant’s employment with the Company. The restrictions set forth in this Section 3.05 shall immediately terminate and shall be of no further force or effect in the event of a default by the Company in the payment of any

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consideration, if any, to which the Participant is entitled hereunder, which default is not cured within thirty (30) days after written notice thereof. The Participant acknowledges and agrees that because of the nature of the Company’s business, the nature of the Participant’s job responsibilities, and the nature of the Confidential Information (as defined in Section 3.07 below) and trade secrets of the Company which the Company will give the Participant access to, any breach of this provision by the Participant would result in the inevitable disclosure of the Company’s trade secrets and Confidential Information to its direct Competitors.

(b) Benefits payable under this Plan also shall be forfeited if, while the Participant is employed by the Company or within the Non-Competition Period, the Participant, directly or indirectly, solicits or encourages any employee of the Company to terminate employment with the Company; hires, or causes to be hired, for any employment by a Competitor, any person who within the preceding 12-month period has been employed by the Company, or assist any other person, firm or corporation to do any of the acts described in this sentence.

(c) The Participant acknowledges and agrees that the Company has a legitimate business interest in preventing the Participant from engaging in activities competitive with it as described in this Section 3.05 and that any breach of this Section 3.05 would constitute a material breach of this Section 3.05 the conditions for payments under this Plan.

(d) The Company may notify anyone employing the Participant or evidencing an intention to employ the Participant during the Non-Competition Period as to the existence and provisions of this Plan and may provide such person or organization a copy of these provisions. The Participant agrees that the Participant will provide the Company the identity of any employer the Participant plans to go to work for during the Non-Competition Period along with the Participant’s anticipated job title, anticipated job duties with any such employer, and anticipated start date. The Company will analyze the proposed employment and make a determination as to whether it would violate this Section 3.05. If the Company determines that the proposed employment would not pose an unacceptable threat to the Company’s interests, the Company will notify the Participant in writing that it does not object to the employment. The Participant further agrees to provide a copy of these provisions of the Plan to anyone who employs the Participant during the Non-Competition Period.

(e) The Participant acknowledges and agrees that this Section 3.05 is intended to limit the Participant’s right to compete only to the extent necessary to protect the Company’s legitimate business interest. The Participant acknowledges and agrees that the Participant will be reasonably able to earn a livelihood without violating the terms of this Section 3.05. If any of the provisions of this Section 3.05 should ever be deemed to exceed the time, geographic area or activity limitations permitted by applicable law, the Participant agrees that such provisions may be reformed to the maximum time, geographic area and activity limitations permitted by applicable law, and the Participant authorizes a court or other trier of fact having jurisdiction to so reform such provisions. In the event the Participant breaches any of the restrictions or provisions set forth in this Section 3.05, the Participant waives and forfeits any and all rights to any further benefits under the Plan. Additionally, in the event the Participant breaches any of the restrictions or provisions set forth in this Section 3.05, the Participant agrees to repay the Company for any of the consideration paid pursuant to the Plan.

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(f) For purposes of this Section 3.05, the following definitions will apply:

(i) “Directly or indirectly” as used in this Plan includes an interest in or participation in a business as an individual, partner, shareholder, owner, director, officer, principal, agent, employee, consultant, trustee, lender of money, or in any other capacity or relation whatsoever. The term includes actions taken on behalf of the Participant or on behalf of any other person. “Directly or indirectly” does not include the ownership of less than 5% of the outstanding shares of any corporation, if such shares are publicly traded in the over-the-counter market or listed on a national securities exchange.

(ii) “Competitor” as used in this Plan means any person, firm, association, partnership, corporation or other entity that competes or attempts to compete with the Company by providing or offering to provide wireless or wireline telecommunication services, including but not limited to internet services, within any city or county in which the Company provides or offers those services or products.

(g) Notwithstanding any other provision of this Section 3.05, the Participant will not be considered to have violated any prohibition against competing with the Company if the Participant is (1) employed or retained by (i) any parent, subsidiary or affiliate organization of any Competitor where that parent, subsidiary or affiliate organization does not itself, and the Participant’s employment will not cause the Participant to compete or attempt to compete with the Company by providing or offering to provide wireless or wireline telecommunications services, including but not limited to internet services, within the Service Area or (ii) any Competitor, directly or indirectly, so long as the Participant’s employment or service does not relate to working within the Service Area or to activities that would benefit the Competitor principally within the Service Area or (2) working or providing services within the Service Area so long as the Participant’s employment or service does not relate to the type of services provided or offered by the Company within that Service Area or to services for which the Company has documented plans to provide, offer or supply within that Service Area at the time of Participant’s termination of employment or (3) selling or attempting to sell wireless or wireline telecommunications services, including but not limited to internet services, so long as the services or products, which the Participant is selling or attempting to sell to a customer, do not relate to the type of services or products provided or offered by the Company to such customer or for which the Company has documented plans to provide, offer or supply to such customer at the time of Participant’s termination of employment; provided, however, that the Participant is nevertheless prohibited from (i) selling, attempting to sell, and providing or attempting to provide, to any person who was a customer, or who was actively sought as a customer, of the Company at the time of Participant’s termination of employment any wireless or wireline telecommunications services, including but not limited to internet services, that are the type of services or products that the Company sold, attempted to sell or provided or attempted to provide to such customer as described in (a) above and (ii) soliciting or encouraging any employee of the Company to terminate employment or taking any other of the prohibited actions as described in (b) above.

(h) Notwithstanding any other provision of this Section 3.05, for any Participant who was actively employed by the Company on December 31, 2004, these forfeiture provisions shall not apply to any benefits that were earned or accrued as of December 31, 2004 and otherwise

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vested or nonforfeitable (not considering these forfeiture provisions) and with respect to Mary McDermott, the portion of her benefits that were earned or accrued as of December 31, 2004 under the Old Plan and this Plan shall be fully vested and nonforfeitable, and not subject to forfeiture under these provisions, with respect to the amount of her benefits that are earned and accrued as of December 31, 2004 treating her as if she (i) had seven (7) years of service solely for purposes of determining her rights for benefits if she were to voluntarily terminate employment (but not for purposes of calculating her “Applicable Percentage”) and (ii) was fully vested in the NTELOS Inc. Savings and Security Plan and the Retirement Plan.

3.06. Change in Control

(a) On a Control Change Date, notwithstanding any other provision of the Plan, a Participant shall be entitled to a lump sum cash payment which shall be made on the Control Change Date equal to the Actuarial Equivalent of all his benefits under the Plan as of the date he would have been eligible to Retire and determined under Plan Section 3.01(a), based on his Years of Service as the Control Change Date (which shall include any Years of Service creditable under the second sentence of Section 1.23), provided, however, that no such benefits under this Section 3.06(a) shall be payable if Participant is not an Eligible Employee as of the Control Change Date.

(b) Notwithstanding any other provision of the Plan, on and after a Control Change Date, a Participant who is not an Eligible Employee on a Control Change Date and who has commenced receiving or is otherwise entitled to receive benefits under the Plan (other than on account of this Section 3.06(b)), and a Participant who is an Eligible Employee as of the Control Change Date and who commences receiving or otherwise becomes entitled to receive benefits under the Plan (other than on account of this Section 3.06(b)) after such Control Change Date because of Retirement, death or becoming Disabled, shall be entitled to a lump sum cash payment which shall be made on the Control Change Date, or for a Participant who is an Eligible Employee as of the Control Change Date as soon as practical after the Participant otherwise becomes entitled to receive benefits under the Plan, equal to the Actuarial Equivalent of all his remaining benefits under the Plan as of such time.

(c) Notwithstanding any other provision of this Plan, any payment made to a Participant under this Section 3.06 shall reduce on an Actuarial Equivalent basis (but not below zero) any further benefits otherwise payable to such Participant under this Plan. In the event Participant does not become entitled to any further benefits under this Plan, Participant shall not be required to return any payment made under this Section 3.06.

3.07. Confidential Information

The Participant understands and acknowledges that during the Participant’s employment with the Company, the Participant has been and will be making use of, and acquiring or adding to the Company’s Confidential Information (as defined below). In order to protect the Confidential Information, the Participant will not, during the Participant’s employment with the Company or at any time thereafter, in any way utilize any of the Confidential Information except in connection with the Participant’s employment by the Company. The Participant will not at any time use any Confidential Information for the Participant’s own benefit or for the benefit of any

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person except the Company. At the end of the Participant’s employment with the Company, the Participant will surrender and return to the Company any and all Confidential Information in the Participant’s possession or control, as well as any other Company property in the Participant’s possession or control. The Participant acknowledges and agrees that benefits payable under the Plan shall be forfeited if the Participant breaches any of the provisions of this Section 3.07.

The term “Confidential Information” shall mean any information that is confidential and proprietary to the Company, including but not limited to the following general categories:

(a) trade secrets;

(b) lists and other information about current and prospective customers;

(c) plans or strategies for sales, marketing, business development, or system build-out;

(d) sales and account records;

(e) prices or pricing strategy or information;

(f) current and proposed advertising and promotional programs;

(g) engineering and technical data;

(h) the Company’s methods, systems, techniques, procedures, designs, formulae, inventions and know-how; personnel information;

(i) legal advice and strategies; and

(j) other information of a similar nature not known or made available to the public or the Company’s Competitors (as defined in Section 3.05).

Confidential Information includes any such information that the Participant may prepare or create during the Participant’s employment with the Company, as well as such information that has been or may be created or prepared by others. This promise of confidentiality is in addition to any common law or statutory rights of the Company to prevent disclosure of its Trade Secrets and/or Confidential Information.

Notwithstanding any other provision of this Section 3.07, for any Participant who was actively employed by the Company on December 31, 2004, these forfeiture provisions shall not apply to any benefits that were earned or accrued as of December 31, 2004 and otherwise vested or nonforfeitable (not considering these forfeiture provisions) and with respect to Mary McDermott, the portion of her benefits that were earned or accrued as of December 31, 2004 under the Old Plan and this Plan shall be fully vested and nonforfeitable, and not subject to forfeiture under these provisions, with respect to the amount of her benefits that were earned and accrued as of December 31, 2004 treating her as if she (i) had seven (7) years of service solely for purposes of determining her rights for benefits if she were to voluntarily terminate employment (but not for

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purposes of calculating her “Applicable Percentage”) and (ii) was fully vested in the NTELOS Inc. Savings and Security Plan and the Retirement Plan.

ARTICLE IV

GUARANTEES

NTELOS Inc. and any Affiliate participating in the Plan have only a contractual obligation to pay the benefits described in Article III. All benefits are to be satisfied solely out of the general corporate assets of the Company or the appropriate Affiliate which shall remain subject to the claims of its creditors. No assets of the Company or a participating Affiliate will be segregated or committed to the satisfaction of its obligations to any Participant or Beneficiary under this Plan. Notwithstanding the foregoing, the Company may establish a grantor trust in anticipation of its obligations to Participants and Beneficiaries but the assets of any such trust shall remain subject to the claims of the Company’s creditors. If the Company, in its sole discretion, elects to purchase life insurance on the life of a Participant in connection with the Plan, the Participant must submit to a physical examination, if required by the insurer, and otherwise cooperate in the issuance of such policy or his rights under the Plan will be forfeited.

ARTICLE V

TERMINATION OF EMPLOYMENT

5.01. No Guarantee of Employment

The Plan does not in any way limit the right of the Company or an Affiliate at any time and for any reason to terminate the Participant’s employment or such Participant’s status as an Eligible Employee. In no event shall the Plan, by its terms or by implication, constitute an employment contract of any nature whatsoever between the Company or an Affiliate and a Participant.

5.02. Termination of Employment

(a) Except as provided in subsection (b), a Participant who ceases to be an Eligible Employee or whose employment with the Company and its Affiliates is terminated either with or without Cause, for reasons other than Retirement, death or becoming Disabled while in the employ of the Company or an Affiliate, shall immediately cease to be a Participant under this Plan and shall forfeit all rights under this Plan. A Participant on authorized leave of absence from the Company shall not be deemed to have terminated employment or lost his status as an Eligible Employee for the duration of such leave of absence.

(b) A Participant who terminates his employment with the Company prior to Retirement, death or becoming Disabled while in the employ of the Company or an Affiliate but (i) after completing seven (7) Years of Service or (ii) after a Control Change Date, shall be entitled to benefits under the Plan as of the date he would have been eligible to Retire and determined under Plan Section 3.01(a), based on his Years of Service as of his termination of employment (which shall include any Years of Service creditable under the second sentence of Section 1.23); provided, however, that no benefits shall be payable if (1) the Participant terminates his employment voluntarily (other than a voluntary termination (a) after completing seven (7) Years of Service or (b) with Good Reason after a Change in Control) or (2) the Company discharges the Participant with Cause as determined by the Board. Notwithstanding

15

the foregoing, however, if a Participant terminates his employment with the Company after a Control Change Date and is otherwise entitled to receive benefits under this Section 5.02(b), such Participant shall be entitled to a lump sum cash payment which shall be made as soon as practical after termination of employment equal to the Actuarial Equivalent of all his benefits under the Plan, which payment shall reduce on an Actuarial Equivalent basis (but not below zero) any further benefits otherwise payable to such Participant under this Plan.

ARTICLE VI

COORDINATION OF BENEFITS

The amount payable in any month to a Participant or Beneficiary, under the Plan shall be reduced, but not below zero, by the Actuarial Equivalent of any amount paid or payable to the Participant for the month in question or a prior or future month from a Supplemental Benefit Account.

This limitation shall not apply to the extent that its application would result in the payment of an after-tax benefit under the Plan and a Supplemental Benefit Account that is less than the benefit otherwise payable under Article III on an after-tax basis. In determining the amount payable under Plan and from a Supplemental Benefit Account on an after-tax basis, the Committee shall make its determination using the maximum rates of federal, state, and local income taxes that are applicable to the Participant or Beneficiary.

ARTICLE VII

TERMINATION, AMENDMENT OR MODIFICATION OF PLAN

7.01. Amendment or Termination

Except as otherwise specifically provided, the Company reserves the right to terminate, amend or modify this Plan, wholly or partially, at any time and from time to time; provided, however, that without a Participant’s consent, the Board may not terminate, amend or modify (i) Section 1.04, Section 1.05, Section 1.12, Article II, Article III, Section 5.02(b), Section 7.01, Section 7.03 and Exhibit I at any time or (ii) any other provision of the Plan within twelve (12) months before a Control Change Date or after a Control Change Date. Such right to terminate, amend or modify the Plan shall be exercised by the Board.

7.02. Notice Requirement

(a) Plan Section 7.01 notwithstanding, no action to terminate the Plan shall be taken except upon written notice to each Participant to be affected thereby, which notice shall be given not less than thirty (30) days prior to such action.

(b) Any notice which shall be or may be given under the Plan shall be in writing and shall be mailed by United States mail, postage prepaid. If notice is to be given to the Company such notice shall be addressed to it at Post Office Box 1990, Waynesboro, Virginia 22980-1990; addressed to the attention of the Corporate Secretary. If notice is to be given to a Participant, such notice shall be addressed to the Participant’s last known address.

16

7.03. Special Rule

The rights of the Company set forth in Plan Section 7.01 are subject to the condition that the Board shall take no action to terminate the Plan or decrease any benefit that has accrued (based on the Participant’s Years of Service as of the time of the Board’s action) or become payable to a Participant, after the Participant accrues or commences receiving such benefits, without such Participant’s consent, until all such benefits are paid in full or Participant is no longer entitled to receive them, in each case pursuant to the terms of the Plan. For purposes of this Plan Section 7.03, a Participant shall be treated as having accrued a benefit on and after the time the Participant is credited with a Year of Service under the Plan and Years of Service shall include any Years of Service creditable under the second sentence of Section 1.23. Notwithstanding the foregoing, nothing in this Plan Section 7.03 shall prevent the Board from amending the Plan to preclude any further Eligible Employees from becoming Participants in the Plan or to preclude any Participant from further accruing any additional amount of benefits under the Plan after such time above the amount of benefits accrued based on the Participant’s Years of Service as of the time of the Board’s action. In the event the Board, as described in the preceding sentence, amends the Plan to preclude the further accrual of any additional amount of benefits under the Plan after the time of the Board’s action, notwithstanding any other provision of this Plan, the amount of such Participant’s benefits described in Article III, Plan Section 5.02(b) or otherwise shall be calculated as described in the applicable provisions of the Plan and based on the Participant’s Years of Service credited on or before the time of the Board’s action; however, in that event, any other provision of the Plan that requires a determination of a Participant’s Years of Service for any purpose other than calculating the amount of the Participant’s benefits described in Article III, Plan Section 5.02(b) or otherwise (including without limitation for the purpose of determining any entitlement to receipt of such amount of benefits) shall include any Years of Service credited to the Participant after the time of the Board’s action.

7.04. Effect of Plan Termination

Except as provided in Plan Section 7.03, upon the termination of this Plan by the Board, the Plan shall no longer be of any further force or effect, and neither the Company, any Affiliate nor any Participant shall have any further obligation or right under this Plan.

ARTICLE VIII

OTHER BENEFITS AND AGREEMENTS

The benefits provided for a Participant under the Plan are in addition to any other benefits available to such Participant under any other plan or program of the Company for its employees, and, except as may otherwise be expressly provided for, the Plan shall supplement and shall not supersede, modify or amend any other plan or program of the Company in which a Participant is participating.

ARTICLE IX

RESTRICTIONS ON TRANSFER OF BENEFITS

No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. No right or benefit

17

hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefit. If any Participant under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then such right or benefit, in the discretion of the Board, shall cease and terminate, and, in such event, the Board may hold or apply the same or any part thereof for the benefit of such Participant, his or her spouse, children, or other dependents, or any of them, in such manner and in such portion as the Board may deem proper.

ARTICLE X

ADMINISTRATION OF THE PLAN

10.01. The Board

The Plan shall be administered by the Board. Subject to the provisions of the Plan, the Board may adopt such rules and regulations as may be necessary to carry out the purposes hereof. The Board’s interpretation and construction of any provision of the Plan shall be final and conclusive.

10.02. Indemnification of the Board

The Company shall indemnify and save harmless each member of the Board against any and all expenses and liabilities arising out of his administration of the Plan, excepting only expenses and liabilities arising out of his own willful misconduct. Expenses against which a member of the Board shall be indemnified hereunder shall include without limitation, the amount of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted under the Plan, or a proceeding brought or settlement thereof. The foregoing right of indemnification shall be in addition to any other rights to which any such member may be entitled.

10.03. Powers of the Board

In addition to the powers hereinabove specified, the Board shall have the power to compute and certify the amount and kind of benefits from time to time payable to Participants under the Plan, to authorize all disbursements for such purposes, and to determine whether a Participant is entitled to a benefit under the Plan.

10.04. Information

To enable the Board to perform his functions, the Company shall supply full and timely information to the Board on all matters relating to the compensation of all Participants, their retirement, death or other cause for termination of employment, and such other pertinent facts as the Board may require.

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ARTICLE XI

MISCELLANEOUS

11.01. Binding Nature

The Plan shall be binding upon the Company, any participating Affiliates and its successors and assigns; subject to the powers set forth in Article VII, and upon a Participant and his assigns, heirs, executors and administrators.

11.02. Governing Law

To the extent not preempted by federal law, the Plan shall be governed and construed under the laws of the Commonwealth of Virginia (including its choice of law rules, except to the extent those rules would require the application of the law of a state other than Virginia) as in effect at the time of their adoption and execution, respectively.

11.03. Use of Masculine and Feminine; Singular and Plural

Masculine pronouns wherever used shall include feminine pronouns and the use of the singular shall include the plural.

ARTICLE XII

ADOPTION

The Company has adopted this Plan pursuant to action taken by the Board.

NTELOS INC.
BY:	/s/ Michael B. Moneymaker
NAME:	Michael B. Moneymaker
TITLE:	Executive Vice President, Chief Financial Officer, Treasurer and Secretary

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EXHIBIT I

Participant’s Years of Service	Applicable Percentage
1	5.0
2	10.0
3	15.0
4	20.0
5	25.0
6	30.0
7	34.0
8	36.0
9	38.0
10	40.0
11	42.0
12	44.0
13	46.0
14	48.0
15	50.0
16	51.5
17	53.0
18	54.5
19	56.0
20	57.5
21	59.0
22	60.5
23	62.0
24	63.5
25	65.0
26	66.5
27	68.0
28	69.5
29	71.0
30	72.5
31	74.0
32	75.5
33	77.0
34	78.5
35	80.0

EX-10.20

Exhibit 10.20

[NTELOS HOLDINGS CORP. LETTERHEAD]

[Grant Date]

[Grantee Name]

[Grantee Address]

Dear [Grantee Name]:

Pursuant to the NTELOS Holdings Corp. Amended and Restated Equity Incentive Plan (the “Plan”), the Plan’s administrative committee (the “Committee”) hereby grants to you an Incentive Stock Option (“Option”) to purchase [                    ] shares of Common Stock of NTELOS Holdings Corp., par value $.01, at an Exercise Price of $[            ] per share, which is not less than the Fair Market Value of a share of Common Stock on the date of grant of this Option.

This Award is subject to the applicable terms and conditions of the Plan, which are incorporated herein by reference, and in the event of any contradiction, distinction or difference between this letter and the terms of the Plan, the terms of the Plan will control. All capitalized terms used herein have the meanings set forth herein or in the Plan, as applicable.

Subject to your continued employment with the Company or any of its Subsidiaries until such time, your Award will vest and become exercisable as follows (the “Time Vesting Schedule”):

[25% of Award] shares will vest on [             200__];

An additional [25% of Award] shares will vest on [             200__];

An additional [25% of Award] shares will vest on [             200__]; and

The final [25% of Award] shares will vest on [             200__].

In addition to the Time Vesting Schedule, the following enhanced vesting provisions shall also apply to your Award. In the event that during your employment with the Company or any of its Subsidiaries, a Change in Control, as defined in the Plan, occurs, then your entire Award will fully vest and become exercisable.

To the extent that the aggregate Fair Market Value of Common Stock with respect to which this Option and all other options intended to be Incentive Stock Options (whether granted pursuant to the Plan or any other plan of the Company and its subsidiaries) that are exercisable for the first time by you during any calendar year exceeds $100,000, such Options above the $100,000 limit will be treated as Non-Qualified Options.

Subject to the terms of the Plan and your continued employment through such date, any vested and exercisable portion of the Option will remain available for purchase until the expiration date of [                    ] (the “Expiration Date”). However, notwithstanding the foregoing, upon your Termination Date, the Option shall remain exercisable only in accordance with the terms of the Plan (the “Exercise Period”). Any vested and exercisable portion of your Award that is not so exercised within the applicable Exercise Period shall be forfeited with no further compensation due to you. Additionally, unless otherwise provided by the Committee, any portion of your Award that is not vested or exercisable as of your Termination Date shall be forfeited with no further compensation due to you.

All or part of the exercisable Options may be exercised by you upon (a) your written notice to the Company of exercise and (b) your payment of the Exercise Price in full at the time of exercise in any manner provided for under the terms of the Plan. This Option is nontransferable, other than by will or the laws of descent and distribution. This Option is exercisable during your lifetime only by you.

By accepting this Award, you agree upon grant of your Award to be bound by the following confidentiality and non-solicitation restrictions:

Confidentiality. You understand and acknowledge that during your employment with the Company, you have been and will be making use of, acquiring or adding to the Company’s Confidential Information (as defined below). In order to protect the Confidential Information, you will not, during your employment with the Company or at any time thereafter, in any way utilize any of the Confidential Information except in connection with your employment by the Company. You will not at any time use any Confidential Information for your own benefit or the benefit of any person except the Company. At the end of your employment with the Company, you will surrender and return to the Company any and all Confidential Information in your possession or control, as well as any other Company property that is in your possession or control. The term “Confidential Information” shall mean any information that is confidential and proprietary to the Company, including but not limited to the following general categories: (a) trade secrets; (b) lists and other information about current and prospective customers; (c) plans or strategies for sales, marketing, business development, or system build-out; (d) sales and account records; (e) prices or pricing strategy or information; (f) current and proposed advertising and promotional programs; (g) engineering and technical data; (h) the Company’s methods, systems, techniques, procedures, designs, formulae, inventions and know-how; personnel information; (i) legal advice and strategies; and (j) other information of a similar nature not known or made available to the public or the Company’s competitors. “Confidential Information” shall also include any such information that you may prepare or create during your employment with the Company, as well as such information that has been or may be created or prepared by others. This promise of confidentiality is in addition to any common law or statutory rights of the Company to prevent disclosure of its trade secrets and/or Confidential Information.

Non-Solicitation. While you are employed by the Company and for 1 year after your Termination Date, you will not, directly or indirectly, solicit or encourage any employee of the Company to terminate employment with the Company; hire, or cause to be hired, for any employment by a Competitor, any person who within the preceding 12 month period has been employed by the Company, or assist any other person, firm, or corporation to do any of the foregoing acts. Additionally, while you are employed by the Company and for 1 year after your Termination Date, you will not, directly or indirectly, sell, attempt to sell, provide or attempt to provide, any wireless or wireline telecommunication services, including but not limited to internet services, to any person or entity who was a customer or an actively sought prospective customer of the Company, at any time during the Executive’s employment with the Company.

In the event you breach any of the foregoing confidentiality or non-solicitation restrictions, in addition to any contractual or common law right the Company may have against you, you will waive and forfeit any and all rights to any further benefits under this agreement or under the Plan and you will repay the Company for any benefit you may have already received under this agreement or under the Plan.

The Company may impose any additional conditions or restrictions on the Award or the exercise of the Option as it deems necessary or advisable to ensure that all rights granted under the Plan satisfy the requirements of applicable securities laws. The Company shall not be obligated to issue or deliver any shares if such action violates any provision of any law or regulation of any governmental authority or national securities exchange.

The Committee may amend the terms of this Award to the extent it deems appropriate to carry out the terms of the Plan. The construction and interpretation of any provision of this Award or the Plan shall be final and conclusive when made by the Committee.

Nothing in this letter shall confer on you the right to continue in the service of the Company or any of its Subsidiaries or interfere in any way with the right of the Company or any of its Subsidiaries to terminate your employment at any time, which rights shall be subject to the terms and conditions of any applicable employment agreement or other contractual relationship between you and the Company or any of its Subsidiaries.

Please sign and return a copy of this agreement to [                    ], designating your approval of this letter. This acknowledgement must be returned within thirty (30) days of the date hereof; otherwise, the Award will lapse and become null and void. Your signature will also acknowledge that you have received and reviewed the Plan and that you agree to be bound by the applicable terms of such document.

Very truly yours,

NTELOS HOLDINGS CORP.

By:

ACKNOWLEDGED AND ACCEPTED

Dated:

Enclosures                 (Copy of Plan)

EX-21.1

Exhibit 21.1

NTELOS Holdings Corp. Subsidiaries

NTELOS Media Inc.	Virginia
NTELOS Cable, Inc.	Virginia
NTELOS Cable of Virginia, Inc.	Virginia
NTELOS Communications, Inc.	Virginia
NTELOS Communications Services Inc.	Virginia
NTELOS Cornerstone, Inc.	Virginia
NTELOS Inc.	Virginia
NTELOS Licenses Inc.	Virginia
NTELOS Network, Inc.	Virginia
NTELOS PCS, Inc.	Virginia
NTELOS Telephone Inc.	Virginia
NTELOS Telephone LLC	Virginia
NTELOS Net LLC	Virginia
NTELOS Netaccess Inc.	Virginia
NTELOS PCS North, Inc.	Virginia
NTELOS of West Virginia, Inc.	Virginia
NA Communications Inc.	Virginia
NH Licenses LLC	Virginia
R&B Cable, Inc.	Virginia
R&B Communications Inc.	Virginia
R&B Network, Inc.	Virginia
Richmond 20 MHz, LLC	Delaware

Roanoke and Botetourt Telephone Company	Virginia
Roanoke and Botetourt Network LLC	Virginia
R&B Telephone LLC	Virginia
The Beeper Company	Virginia
Valley Network Partnership	Virginia
Virginia Independent Telephone Alliance, LC	Virginia
Virginia PCS Alliance, LC	Virginia
Virginia RSA 6 LLC	Virginia
Virginia Telecommunications Partnership	Virginia
West Virginia PCS Alliance, LC	Virginia

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, James S. Quarforth, certify that:

1. I have reviewed this annual report on Form 10-K for the year ended December 31, 2005 of NTELOS HOLDINGS CORP. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [Omitted in reliance on SEC Release No. 33-8238: 34-47986 Section III-E.];

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting and

5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: March 28, 2006

/s/ James S. Quarforth

James S. Quarforth

Chief Executive Officer, President and Chairman of the Board of Directors

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Michael B. Moneymaker, certify that:

1. I have reviewed this annual report on Form 10-K for the year ended December 31, 2005 of NTELOS HOLDINGS CORP. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [Omitted in reliance on SEC Release No. 33-8238: 34-47986 Section III-E.];

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting and

5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: March 28, 2006

/s/ Michael B. Moneymaker

Michael B. Moneymaker

Executive Vice President, Chief Financial Officer, Treasurer and Secretary

EX-32.1

Exhibit 32.1

NTELOS HOLDINGS CORP.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of NTELOS HOLDINGS CORP. (the “Company”) on Form 10-K for the year ended December 31, 2005 (the “Report”), I, James S. Quarforth, Chief Executive Officer and President of the Company, do hereby certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ James S. Quarforth
	James S. Quarforth
	Chief Executive Officer, President and Chairman of the Board of Directors

March 28, 2006

EX-32.2

Exhibit 32.2

NTELOS HOLDINGS CORP.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of NTELOS HOLDINGS CORP. (the “Company”) on Form 10-K for the year ended December 31, 2005 (the “Report”), I, Michael B. Moneymaker, Executive Vice President, Chief Financial Officer, Treasurer and Secretary of the Company, do hereby certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Michael B. Moneymaker
	Michael B. Moneymaker
	Executive Vice President, Chief Financial Officer, Treasurer and Secretary

March 28, 2006