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Verizon 2005 Interactive Annual Report

Item 4 on Proxy Card:
United Brotherhood of Carpenters Pension Fund, 101 Constitution Avenue, N.W., Washington, DC 20001, owner of 45,100 shares of the Company’s common stock, proposes the following:

RESOLVED: That the shareholders of Verizon Communications Inc. (“Company”) hereby request that the Board of Directors initiate the appropriate process to amend the Company’s governance documents (certificate of incorporation or bylaws) to provide that director nominees shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders.

SUPPORTING STATEMENT: Our Company is incorporated in Delaware. Delaware law provides that a company’s certificate of incorporation or bylaws may specify the number of votes that shall be necessary for the transaction of any business, including the election of directors. (DGCL, Title 8, Chapter 1, Subchapter VII, Section 216). The law provides that if the level of voting support necessary for a specific action is not specified in a corporation’s certificate or bylaws, directors “shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.”

Our Company presently uses the plurality vote standard to elect directors. This proposal requests that the Board initiate a change in the Company’s director election vote standard to provide that nominees for the board of directors must receive a majority of the vote cast in order to be elected or re-elected to the Board.

We believe that a majority vote standard in director elections would give shareholders a meaningful role in the director election process. Under the Company’s current standard, a nominee in a director election can be elected with as little as a single affirmative vote, even if a substantial majority of the votes cast are "withheld" from that nominee. The majority vote standard would require that a director receive a majority of the vote cast in order to be elected to the Board.

The majority vote proposal received high levels of support last year, winning majority support at Advanced Micro Devices, Freeport McMoRan, Marathon Oil, Marsh and McClennan, Office Depot, Raytheon, and others. Leading proxy advisory firms recommended voting in favor of the proposal.

Some companies have adopted board governance policies requiring director nominees that fail to receive majority support from shareholders to tender their resignations to the board. We believe that these policies are inadequate for they are based on continued use of the plurality standard and would allow director nominees to be elected despite only minimal shareholder support. We contend that changing the legal standard to a majority vote is a superior solution that merits shareholder support.

Our proposal is not intended to limit the judgment of the Board in crafting the requested governance change. For instance, the Board should address the status of incumbent director nominees who fail to receive a majority vote under a majority vote standard and whether a plurality vote standard may be appropriate in director elections when the number of director nominees exceeds the available board seats.

We urge your support of this important director election reform.

BOARD OF DIRECTORS’ POSITION
The Corporate Governance Committee has ensured that the Company has in place a robust process to identify, evaluate and select potential nominees for directors of the Company. The Committee, which is composed solely of independent directors, considers all nominees who are proposed by shareholders, management and other directors. In order to be selected, nominees must meet the criteria specified in Verizon’s Corporate Governance Guidelines. These criteria are more fully described in this Proxy Statement beginning on page 5 and are designed to ensure that the members of the Board of Directors are highly qualified, meet the Company’s independence standards, reflect a diversity of experience and viewpoints and serve the best interests of the Company and its shareholders.

The Board believes that the proponent’s characterization of the plurality voting process – in particular the suggestion that a director may be elected by a single affirmative vote – is not supported by historic results. The Company’s shareholders have a history of electing strong and independent Boards, not only by a plurality, but also in fact by a substantial majority of the votes cast.

The value of requiring a majority vote to elect directors is being actively discussed and evaluated by a number of independent groups, companies and interested investors. The Company and its Board members also track those developments. But there are numerous issues that would have to be resolved in connection with changing the required vote to elect directors, including the extent to which it is necessary to revise certain state laws. The dialogue is continuing on whether this change is appropriate and there is not yet consensus on a comprehensive approach that would address all of the issues related to implementing a change in the standard for the election of directors. The Board believes that requiring a majority vote standard could have unintended consequences, including instability in the Company’s governance processes.

For these reasons, the Board believes that the proposal is not in the best interests of the Company and its shareholders as currently proposed.

The Board of Directors recommends a vote AGAINST this proposal.

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* This is an interactive electronic version of Verizon’s 2005 Annual Report to Shareholders, and it is intended to be complete and accurate. The contents of this version are qualified in their entirety by reference to the printed version. A reproduction of the printed version is available in PDF format on this website.