Iowa Telecom Announces Settlement Of Merger Litigation

Iowa Telecommunications Services, Inc. (NYSE Symbol: IWA) today announced that Iowa Telecom and Windstream Corporation have entered into a tentative settlement of the pending shareholder litigation concerning the Company’s acquisition by Windstream pursuant to the merger agreement signed on November 23, 2009. Following the announcement of the merger on November 24, 2009, several purported shareholders of the Company filed putative class action lawsuits challenging the merger and certain terms of the merger agreement. The directors of Iowa Telecom firmly believe that they acted in good faith and in the best interests of Iowa Telecom and its shareholders in approving the merger and the merger agreement. Iowa Telecom and its directors believe that the merger consideration is fair and that the merger is in the best interests of Iowa Telecom and its shareholders. Iowa Telecom, its directors and Windstream deny that any of them violated any law or breached any duty to shareholders of Iowa Telecom or anyone else and have vigorously defended the lawsuits.

However, Iowa Telecom and its directors have determined that, in order to eliminate the uncertainty, distraction, burden and expense of future litigation and to permit the merger to proceed without possible delays from litigation, it is in the best interests of Iowa Telecom and its shareholders to enter into a settlement of the pending lawsuits. Iowa Telecom, its directors and Windstream have entered into a memorandum of understanding with counsel for the plaintiffs in the various shareholder lawsuits that provides for a settlement of all of these lawsuits. Pursuant to the proposed settlement, Iowa Telecom and Windstream have agreed to make certain revisions to the disclosure in the proxy statement to be mailed to Iowa Telecom’s shareholders in connection with the approval of the merger, which revisions were proposed by counsel for the plaintiffs. No changes in the merger agreement or the terms of the merger will be made, and no payments will be made to shareholders in addition to those provided for in the merger agreement. In exchange for these revised disclosures, following completion of confirmatory discovery and final court approval of the settlement, the plaintiffs will dismiss their lawsuits with prejudice and release Iowa Telecom, its directors, Windstream and other related persons from any and all claims relating to the merger or the proxy statement for the merger. Iowa Telecom, its directors and Windstream have all agreed that they will not oppose certain requests for attorney fees by counsel for the plaintiffs. The settlement is subject to certain conditions, including, in addition to certain confirmatory due diligence by plaintiffs’ counsel and court approval, certification of a class for settlement purposes and consummation of the merger.