The Committee recognizes that, from time to time, it may be appropriate to enter into agreements with certain key executives to ensure that Verizon continues to retain their services. In general, these agreements provide the key executives with certain protection (in the form of severance pay) if they are involuntarily terminated or their employment with the Company ends prior to the time they would have otherwise elected to retire.

In 2000, the Company entered into agreements with Messrs. Babbio, Strigl and Barr and Ms. Toben. In exchange for the benefits offered under the agreements, these executives have agreed not to engage in competitive activities or to interfere with Verizon’s business relations for a specified period of time following the termination of their employment. The agreements provide that each of these executives will receive certain additional benefits, including financial planning services, use of Company aircraft and automobile and certain housing arrangements.

The executives will receive the compensation and benefits outlined below for the term of their agreements. An executive who resigns or retires will be entitled only to the benefits that would be provided to a similarly situated senior executive upon termination. If an executive’s employment terminates following a change in control of Verizon, or due to a good reason, or as a result of death or disability, the executive will generally receive the same benefits as if he or she were involuntarily terminated without cause. However, if the executive’s termination is the result of a disability, the lump sum payment will be offset by amounts payable to the executive under any Company-sponsored disability plan. If an executive’s employment is involuntarily terminated without cause, his or her outstanding stock options will vest and will be exercisable until the earlier of five years after the date of termination or the maximum term of the option. In addition, the executive’s performance stock units and restricted stock units will vest and will become payable on the scheduled date, provided that, with respect to the performance stock units, Verizon attains the applicable performance goals. If an executive is terminated for cause or voluntarily resigns, he or she will no longer receive any salary or benefits and will forfeit any unvested outstanding stock options and the unvested portion of any outstanding performance stock units and restricted stock units. All separation payments provided to the named executive officers under their employment agreements are in lieu of any Company-sponsored severance.

The Board of Directors will seek shareholder ratification of any new severance agreement between a senior executive officer and the Company that provides for a total cash value severance payment exceeding 2.99 times the sum of the executive’s base salary plus bonus. This limitation applies to the cash value of any post-employment consulting arrangement entered into between the senior executive officer and the Company, but does not apply to the cash value of any benefits that are payable or become payable pursuant to Company policy applicable to management.

The individual agreements of the named executive officers are summarized below.

Lawrence T. Babbio, Jr. Mr. Babbio’s agreement renews automatically so that the agreement always has a term of at least two years. His agreement currently provides for:

• an annual base salary of not less than $1,000,000;
• an annual short-term bonus between 0 and 2 times base salary; and
• annual long-term bonus opportunities of at least 5 times base salary.

If Mr. Babbio’s employment is involuntarily terminated without cause, he will receive a lump sum payment equal to 2 times (i) his base salary, (ii) the greater of 50% or the percentage of his maximum short-term bonus opportunity awarded in the year immediately preceding the termination of his employment, and (iii) 100% of his long-term bonus opportunity provided for under his agreement.

Dennis F. Strigl. Mr. Strigl’s agreement renews automatically so that the agreement always has a term of at least two years. His agreement currently provides for:

• an annual base salary of not less than $800,000;
• an annual short-term bonus between 0 and 2 times base salary; and
• annual long-term bonus opportunities of at least 5 times base salary.

If Mr. Strigl’s employment is involuntarily terminated without cause, he will receive a lump sum payment equal to 2 times (i) his base salary, (ii) 50% of his maximum short-term bonus opportunity, and (iii) 100% of his long-term bonus opportunity provided for under his agreement.

William P. Barr. Mr. Barr’s agreement renews automatically so that the agreement always has a term of at least two years. His agreement currently provides for:

• an annual base salary of not less than $700,000;
• an annual short-term bonus between 0 and 1.5 times base salary; and
• annual long-term bonus opportunities of at least 4.25 times base salary.

If Mr. Barr’s employment is involuntarily terminated without cause, he will receive a lump sum payment equal to 2 times (i) his base salary, (ii) 50% of his maximum short-term bonus opportunity, and (iii) 100% of his long-term bonus opportunity provided for under his agreement.

Doreen A. Toben. Ms. Toben’s agreement provides for a two-year term that ends on June 30, 2006. Thereafter, the term of employment will automatically renew for successive two-year terms unless Verizon provides advance written notice.

Her agreement currently provides for:

• an annual base salary of not less than $700,000;
• an annual short-term bonus between 0 and 1.5 times base salary; and
• annual long-term bonus opportunities of at least 4.25 times base salary.

If Ms. Toben’s employment is involuntary terminated without cause, she will receive a lump sum payment equal to 2 times (i) her base salary and (ii) 50% of her maximum short-term bonus opportunity.