Exhibit 10.29

[mar0705_ex1029x1x1.jpg]

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

VERIZON EXECUTIVE DEFERRAL PLAN
SUMMARY PLAN DESCRIPTION

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

VERIZON EXECUTIVE DEFERRAL PLAN

--------------------------------------------------------------------------------

  TABLE OF CONTENTS INTRODUCTION   1       PLAN HIGHLIGHTS   2      
PARTICIPATING IN THE PLAN   4      Active Participation   4      Inactive
Participation   4       YOUR ACCOUNT BALANCE   5      Your Beginning Balance   5
     Adding to Your Balance   5      Investing Your Account   8       PAYMENTS
FROM THE PLAN   10      Making an Election   10      Default Form and Timing of
Payments   11      Timing of Payments   11      Form of Payments   11    
 Special Rules   11       VESTING AND OTHER ISSUES   13      Vesting   13    
 Forfeiture   13       MISCELLANEOUS MATTERS   14      Plan Administration   14
     Amendment and Termination   14      Effect on Other Benefit Plans   14    
 Hypothetical Nature of Plan Accounts and Investments   14      Plan Assets Not
Held in Trust   15      Assignment and Alienation   15      Withholding and
Other Tax Consequences   15      Continued Employment   15

--------------------------------------------------------------------------------

JANUARY 1, 2005   TABLE OF CONTENTS

--------------------------------------------------------------------------------

INTRODUCTION

The new Verizon Executive Deferral Plan (the “Plan” or “EDP”) provides an easy
way for you to set aside a portion of your annual base salary, your entire
short-term incentive award and certain long-term incentive awards for the future
in order to avoid current Federal, State and Local income taxes (where
applicable) and to receive valuable contributions from the Company. It reaches
beyond the limits of a traditional 401(k) to provide exceptional value. For
non-employee directors, it allows for the deferral of your annual cash retainer
and associated meeting fees and equity compensation.

 * The EDP allows you to defer a portion of your annual base salary, all of your
   short-term incentive award or non-employee director’s annual retainer and
   associated meeting fees and certain long-term incentive awards that otherwise
   provide for deferral into the Plan; and
   
   
 * The EDP also allows you to receive the full company matching contribution on
   the amounts you defer up to 6% of your compensation, without any limitations
   imposed by the Internal Revenue Code (non-employee members of the board of
   directors are not eligible for any company matching contributions). The
   deferral of any long-term incentive awards will not eligible for company
   matching contributions.

Because the EDP is an account-based plan, your benefit will equal the balance in
a hypothetical account kept for you under the Plan. You can invest your EDP
account in a broad variety of investment options and your account balance will
increase or decrease depending on the performance of the investments you choose.
Therefore, you should exercise care when making your investment choices.

The savings opportunities of the EDP mean you can set aside significantly more
money for your future than you could if you could make deferrals only under the
management savings plan. Verizon expects these advantages to serve you well as
you strive to meet your future financial goals.

You should be aware that the Plan is a new plan that succeeds the Verizon Income
Deferral Plan (the “IDP”) and the Verizon Deferred Compensation Plan for
Non-Employee Directors (the “Directors’ Plan”), which were frozen as of December
31, 2004. If you were a participant in the IDP or the Directors’ Plan, vested
amounts in your account in those plans as of December 31, 2004, remain in those
plans and subject to the rules that govern those plans. However, in order to
comply with changes in the law that were effective January 1, 2005, amounts in
your IDP account that were not vested as of December 31, 2004, have been
transferred to the EDP and are now subject to the rules that govern EDP accounts
generally.

This booklet is intended to summarize the terms of the Executive Deferral Plan,
effective January 1, 2005. To the extent this summary conflicts with the terms
of the Plan, the terms of the Plan will control. If you would like to review the
terms of the Plan or if you have any questions about your Plan benefits, please
contact the Total Rewards department at 1-888-560-3669.

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 1

--------------------------------------------------------------------------------

PLAN HIGHLIGHTS

--------------------------------------------------------------------------------

Nature of Plan and Benefit Your Plan benefit is expressed in terms of an account
balance and will equal the value of that account balance when you receive
payments from the Plan. The value of your account balance will increase or
decrease based upon your investment elections. The Plan is an unfunded,
nonqualified benefit plan.

--------------------------------------------------------------------------------

Deferrals for Active
Participants
 * You can defer up to 100% of the portion of your base salary that exceeds a
   limit included in the Internal Revenue Code ($210,000 in 2005) (your
   “Eligible Base Salary”).
   
   
 * You can defer up to 100% of your short-term incentive award or directors’
   cash retainer and associated meeting fees.
   
   
 * You may also be able to defer up to 100% of your long-term incentive award or
   annual equity grant to the extent otherwise permitted pursuant to the terms
   of the award.
   
   
 * Generally, deferral elections for Eligible Base Salary or directors’ fees for
   a year must be submitted during an enrollment period in November or December
   of the preceding year and cannot be changed after December 31st of that
   preceding year. For example, if you make an election in December 2004 to
   defer a percentage of your 2005 base salary, you cannot change that election
   after December 31, 2004, and it will remain in effect for all of 2005.
   
   
 * Generally, deferral elections for performance based short-term and long-term
   incentive awards must be made during an enrollment period in May or June of
   the year in which the award is earned and cannot be changed after June 30th
   of that year. For example, if you make an election in June 2005 to defer a
   percentage of your short-term incentive award earned in 2005 (and payable in
   2006), you cannot change that election after June 30, 2005, and it will
   remain in effect for all of 2005.
   
   
 * If you are promoted or hired into an eligible position, you will be provided
   a 30-day window in which to submit your salary and/or incentive deferral
   elections, if appropriate. A similar rule applies to newly-appointed
   non-employee members of the board of directors.

   

Company
Contributions

 * The Company will add a “matching contribution credit” to your account equal
   to-
   
   
   * if you defer at least 6% of the sum of your Eligible Base Salary and
     short-term incentive under the Plan, 5% of the sum of your Eligible Base
     Salary and short-term incentive; or
     
     
   * if you defer less than 6% of the sum of your Eligible Base Salary and
     short-term incentive under the Plan, 100% of the first 4% and 50% of the
     next 2% of the sum of the Eligible Base Salary and short-term incentive
     that you defer.
     
     
   * non-employee members of the board of directors are not eligible for any
     company matching contribution credits.
     
     
   * any deferrals of long-term incentive awards are not eligible for company
     matching contribution credits.

--------------------------------------------------------------------------------

Account Investments Generally, you can elect to have your EDP account treated as
if it were invested in any of the investment options available under the Verizon
Savings Plan for Management Employees. You can also elect to have your EDP
account treated as if it were invested in an account that provides a return that
mirrors the yield on certain corporate bonds.

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 2

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Distributions from the
Plan of Your Personal
Deferrals
 * At the time you elect to defer you must also elect when and how you would
   like to have your benefit distributed. You may elect one of the following
   distribution forms:
   
   
   * One lump sum payment, or
     
     
   * Annual installments (for between 2 and 20 years)
     
     
 * Distributions can generally begin at separation from service or on a
   specified date either before or after your separation from service.
   
   
 * If you elect to receive a distribution based on a specified date rather than
   beginning at separation from service, the earliest you can receive a
   distribution with respect to a deferred amount is at least 2 years following
   the year the full deferral has been credited to your account.
   
   
 * If you elect to receive a lump sum or begin receiving installments at
   separation from service, your distribution election is irrevocable.
   
   
 * If you elect to receive a distribution based on a specific date, you can
   change your distribution elections with respect to a deferred amount provided
   that (1) you make the election change at least 12 months prior to the
   original distribution date, (2) you delay the date you would have otherwise
   received your distributions by at least 5 years, and (3) you will not receive
   your distribution sooner or over a shorter period of time. You may not switch
   from annual installments to a lump sum distribution.

--------------------------------------------------------------------------------

Distributions from the
Plan of Company
Contributions All Company contributions in your EDP account (including amounts
transferred to the EDP from the IDP or Directors’ Plan) will be distributed in a
lump sum payment following your separation from service (or six months after
your separation from service if you are a “key” employee).

--------------------------------------------------------------------------------

Vesting
 * Your personal deferrals under the Plan are vested immediately.
   

 * The matching contribution credits vest at the same time you vest in the
   matching contributions under the Verizon Savings Plan for Management
   Employees.
   
   
 * Your matching contribution credits will also vest if your employment is
   involuntarily terminated and you sign a release, if you become disabled, if
   you die, or if there is a change in control of Verizon.
   
   
 * Any other Company contributions transferred to the EDP from another plan
   (including Retirement Contribution Credits transferred from the IDP) will
   vest according to the vesting schedule in place under the other plan at the
   time of the transfer.

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 3

--------------------------------------------------------------------------------

PARTICIPATING IN THE PLAN

You can participate in the Plan on either an “active” or an “inactive” basis.
The principal difference between the two is that, as an “active” participant,
you can make deferrals into your EDP account and you are eligible to receive
matching contribution credits. As either an “active” or “inactive” participant,
you can invest your EDP account in the investment options available under the
Plan and make elections that will determine when you receive distributions of
your Plan account.

ACTIVE PARTICIPATION

If you were a director level employee or above (“Eligible Participant”) or a
non-employee member of the Company’s Board of Directors (the “Board”) on January
1, 2005, you are automatically an active participant in the Plan on that date.
If you are hired or promoted to an Eligible Participant position or became a
non-employee member of the Company’s Board of Directors after January 1, 2005,
you will automatically be an active participant in the Plan on the date you
become an Eligible

Participant or a non-employee member of the Board. Once you become an active
participant, you will remain an active participant eligible for the Plan
provisions applicable to Eligible Participants for as long as you are an
Eligible Participant or a non-employee member of the Board. If you are demoted
to position not eligible for participation in the EDP, you will become an
inactive participant after your demotion.

INACTIVE PARTICIPATION

You will become an inactive participant if your employment with the Company
ends, if you decide not to defer any part of your Eligible Base Salary,
short-term incentive, long-term incentive or director’s fees under the Plan, if
you are demoted below the status of director or any equivalent level, or if you
cease to be a non-employee member of the Board. Once you become an inactive
participant, you will remain an inactive participant as long as you have a
positive balance in your EDP account or until you again become an active
participant.

 

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 4

--------------------------------------------------------------------------------

YOUR ACCOUNT BALANCE

YOUR BEGINNING BALANCE

Depending on the circumstances under which you became an active participant, you
might have a beginning balance in your EDP account when you first become
eligible for the Plan provisions applicable to active participants.

If you participated in the Verizon Income Deferral Plan (IDP) or the Verizon
Deferred Compensation Plan for Non-Employee Directors (Directors’ Plan) prior to
January 1, 2005, any unvested benefit under those plans will be transferred to
the EDP and credited to your EDP account as a beginning balance. (As noted in
“Effect on Other Benefit Plans” beginning on page 14, you will no longer be
eligible for a benefit under the plan from which the benefit was transferred
with respect to the amounts transferred to the EDP.) Any amounts in your
beginning EDP account that were transferred from the IDP will be characterized
as “Personal Deferral Credits,” “Matching Contribution Credits,” or “Retirement
Contribution Credits” (as defined below) by the Plan’s administrator depending
on the nature of those credits under the plan from which the amounts were
transferred.

Amounts transferred to the Plan might be subject to various restrictions in
addition to those described in this summary. The Plan’s administrator will
advise you if any such restrictions apply to any part of your EDP account.

ADDING TO YOUR BALANCE

The balance in your EDP account can increase while you are an active participant
through your deferral of salary, short-term incentive, long-term incentives,
directors’ fees or annual equity awards into your EDP account and through
Company Matching Contributions that are credited to your EDP account. As
previously noted, the value of your account may increase or decrease due to
investment performance.

Your Deferral of Compensation

Personal Deferral Credits

The Internal Revenue Code limits the amount of your pay that can be treated as
“compensation” under the Company’s “qualified” savings plan and “qualified”
pension plan. This limit is $210,000 for the year 2005. Any base salary you earn
over this limit is referred to under the Plan as “Eligible Base Salary.”

You can elect to defer receipt of all or part of your Eligible Base Salary or
your director’s fees into your EDP account. In addition, you may defer all or
part of your short-term incentive from the Short-Term Incentive Plan into your
EDP account, provided that you are still an active participant in the Plan when
the short-term incentive is payable. You may also be able to defer receipt of
certain other forms of compensation (including certain long-term incentive
awards) if permitted by the Plan’s administrator.

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 5

--------------------------------------------------------------------------------

If you elect to defer compensation under the Plan, you waive your right to
receive the amount deferred at the time it would otherwise be paid and agree
instead to receive the amount deferred under the terms of the Plan.

Any deferrals of Eligible Base Salary, short-term incentive, long-term incentive
or directors’ fees are known under the Plan as “Personal Deferral Credits,” and
the balance of your EDP account attributable to Personal Deferral Credits,
including any investment earnings (or minus any investment losses) on these
credits, is known as your “Employee Balance.”

Making an Election to Defer Compensation

If you elect to defer all or part of your Eligible Base Salary, short-term
incentive, director’s fee, or other eligible compensation, your election must be
made according to any terms and conditions the Plan’s administrator may impose
and is effective as soon as practicable after you deliver it to the Plan’s
administrator.

Eligible Base Salary deferral elections must be submitted during an annual
enrollment period specified by the Plan’s administrator. The enrollment period
for Eligible Base Salary will be in November or December of the year prior to
when the salary is earned. (For example, elections with respect to 2005 base
salary must be made during November or December of 2004.) At the time you elect
to defer Eligible Base Salary, you must also make an election on how and when
you would like to receive your benefit.

Your election will apply only to Eligible Base Salary earned after the effective
date of the election-you cannot make your election retroactive. Your election
will remain in effect only through the end of the tax year for which the
election was made and will not be renewed automatically for the following year.
In addition, you can not change or revoke your election after December 31st.
(For example, the election you make in November or December of 2004 will remain
in effect throughout 2005 unless you change it before December 31, 2004.)
Similar rules apply to the deferral of directors’ fees.

To defer all or part of your performance based short-term incentive or long-term
incentive, you must submit an annual election to the Plan’s administrator during
the specified enrollment period, generally in May before the year in which the
award becomes payable. (For example, you will make your deferral election with
respect to your 2005 annual bonus (which is payable in 2006) during May 2005.)
Performance based short-term and long-term incentive deferrals are irrevocable
after June 30th. Your election will remain in effect only until the end of the
year for which the election is made and will not be renewed automatically for
the following year.

If you are promoted or hired into an eligible position, you will be provided a
30-day window in which to submit your salary and/or incentive deferral
elections, if appropriate. If a newly eligible employee does not submit a
deferral election within 30 days of the effective date of hire or promotion, his
or her deferral election will be solicited during the next standard

 

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 6

--------------------------------------------------------------------------------

enrollment period as specified by the Plan’s administrator.

All personal deferral credits are managed in class years. Compensation deferred
as follows constitutes one class year:

 * One full tax year of Eligible Base Salary or directors’ fees; and
   
   
 * One annual short-term or long-term incentive award.

Each class year requires a corresponding distribution election. No deferral
election will be valid unless it is accompanied by a distribution election.

The Company’s Contributions

Matching Contribution Credits

If you elect to defer all or part of your Eligible Base Salary and/or short-term
incentive, you will receive additional credits in your EDP account when your
Personal Deferral Credits are credited to your EDP account. These credits are
known under the Plan as “Matching Contribution Credits,” and the balance of your
EDP account attributable to Matching Contribution Credits, including any
investment earnings (or minus any investment losses) on these credits, is known
as “Employer Contributions.” Matching Contribution Credits are designed to
replicate the Company matching contributions under the Company’s “qualified”
savings plan. Non-employee Directors are not eligible for Matching Contribution
Credits.

For each Plan year, your Matching Contribution Credits will be determined as
follows-

 * If you defer at least 6% of the sum of your Eligible Base Salary and
   short-term incentive into your EDP account, you will receive Matching
   Contribution Credits equal to 5% of the sum of your Eligible Base Salary and
   short-term incentive; or
   
   
 * If you defer less than 6% of the sum of your Eligible Base Salary and
   short-term incentive into your EDP account, you will receive Matching
   Contribution Credits equal to the sum of-
   
   
   * 100% of the first 4% of the sum of the Eligible Base Salary and short- term
     incentive that you defer; and
     
     
   * 50% of the next 2% of the sum of the Eligible Base Salary and short- term
     incentive that you defer.

However, if you are no longer an active participant in the Plan when your
short-term incentive is payable, you generally cannot defer your short-term
incentive and, as a result, will not be eligible to receive Matching
Contribution Credits with respect to your short-term incentive.

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 7

--------------------------------------------------------------------------------

 

EXAMPLE. You have $50,000 in Eligible Base Salary and earn a $100,000 short-term
incentive in 2004. You defer 100% of your Eligible Base Salary and 75% of your
short-term incentive into your EDP account. For the year, you will have $132,500
in total contributions to your EDP account, calculated as follows:

Personal Deferral Credits: $125,000 (100% of $50,000 plus 75% of $100,000); and

Matching Contribution Credits: $7,500 (Because you have deferred at least 6% of
your total Eligible Base Salary plus short-term incentive into your EDP account,
your Matching Contribution Credits equal 5% of $150,000, or $7,500.)

Retirement Contribution Credits

Participants who were eligible to receive Retirement Contribution Credits under
the IDP with respect to base salary and incentives earned in 2004 will receive
those credits under the EDP in the early part of 2005. No Retirement
Contribution Credits will be made with respect to base salary and incentives
earned after 2004.

INVESTING YOUR ACCOUNT Investment Options

You will be able to invest your EDP account as long as you are either an active
or an inactive participant in the Plan. The investment options available under
the Plan mirror those available under the Verizon Savings Plan for Management
Employees and are subject to any restrictions imposed by the Verizon Savings
Plan for

Management Employees. For example, the restriction in the Verizon Savings Plan
for Management Employees that you cannot buy shares under the Company stock fund
within seven days after you sell shares in that fund applies under the Verizon
Shares Fund in the EDP as well. In addition, you can invest your EDP account in
a “Moody’s” investment fund that provides a return that mirrors the yield on
certain long-term, high-grade corporate bonds.

Allocating Your Account Balance Among the Investment Options

When you first become a participant in the Plan, your initial EDP account
balance (if you have one as discussed under “Your Beginning Balance” on page 5)
will be allocated in the same manner these credits were allocated in the IDP or
the Directors’ Plan. Thereafter, you may elect (or change an existing election)
at any time to allocate all or any part of your existing or new Personal
Deferral Credits to any of the investment options available under the Plan,
except that, again as noted above and under “Your Beginning Balance” on page 5,
special rules apply with respect to certain restricted amounts in your EDP
account. If, upon becoming an active participant, you do not make an election
with respect to your Personal Deferral Credits, those credits will be invested
in the “Moody’s” investment fund until you make a valid election.

Your Matching Contribution Credits will all be allocated to the Verizon Shares
Fund, an investment option that mirrors the return on the Company’s common
stock. You can transfer your Matching Contribution

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 8

--------------------------------------------------------------------------------

Credits to any other investment fund only in accordance with the
“diversification” transfer rules for matching contributions under the Verizon
Savings Plan for Management Employees. In general, if you have at least one year
of service with Verizon, these diversification transfer rules permit you to
transfer up to 50% of your Matching Contribution Credits out of the Verizon
Shares Fund beginning at age 50 and up to 100% of your Matching Contribution
Credits out of the Verizon Shares Fund beginning at age 55. For more information
about these diversification transfer rules, please consult the summary materials
provided for the Verizon Savings Plan for Management Employees.

Exchange Restrictions on Four Funds

The EDP restricts exchanges (transfers) into the investment options that mirror
the four funds listed below in order to encourage longer-term investing and
discourage excessive short-term trading:

 * Active International Equity Fund
   
   
 * Passive International Equity Index Fund
   
   
 * Fidelity REIT Collective Pool
   
   
 * Active U.S. Small Capitalization Fund

Participants who make exchanges (transfers) out of any of these four investment
options will not be able to exchange back into the same option for seven
calendar days. You may continue to exchange out of these options at any time,
but you must wait seven calendar days before exchanging back into that same
investment option.

 

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 9

--------------------------------------------------------------------------------

DISTRIBUTIONS FROM THE PLAN

MAKING AN ELECTION

Each time you elect to defer either Eligible Base Salary, short term incentive
awards or directors’ fees into the EDP, you also need to indicate how and when
you would like to receive your benefit – this is called class year accounting.
You may elect one of the following distribution forms with respect to each class
year of deferrals:

 * One lump sum payment, or
   
   
 * Annual installments (for between 2 and 20 years)

You can elect to receive your benefit at separation from service or at a
specific date. (In the case of installments, this is the date when the first
installment is paid.) However, if you elect to receive a distribution based on a
specific date, you may not elect a distribution date that is earlier than 2
years following the year the full deferral was credited to your account.

If you elect to receive a distribution based on a specific date, you can make a
subsequent election to change an existing election with respect to a class year
of deferrals provided that (1) you make the election change at least 12 months
prior to the original distribution date, (2) you delay the date you would have
otherwise received your distributions by at least 5 years, and (3) under the
terms of the new election, you will not receive your distribution sooner or over
a shorter period of time.

Consequently, you cannot make a subsequent election that results in your
receiving your distribution sooner. In addition, you cannot change from
installment payments to a lump sum and you cannot change from 20 annual
installments to 5 annual installments. Lastly, if you have elected to receive a
distribution as of a specific date, you cannot change that election to receive
payment at separation from service, as this may accelerate your distribution.
Please keep these rules in mind when you are making your initial elections.

Once you are in distribution status for a particular class year of deferrals,
you can no longer submit another distribution election to further defer
receiving the distribution of that class year of deferrals.

EXAMPLE. You have elected to receive your Excess Base Salary deferred in 2005 in
two annual installments beginning on January 1, 2008. On December 1, 2007, you
submit a new election to receive your Excess Base Salary deferred in 2005 in a
lump-sum on January 1, 2013. Because you did not submit this new election within
12 months of when your payment was scheduled to begin, your new election is
invalid, and you will receive your first installment in January 2008. You will
receive your second installment in January 2009 because once your benefit is in
distribution status, you can not change your election.

 

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 10

--------------------------------------------------------------------------------

If you attempt to modify your election and all or any part of your new election
is invalid, any valid election in effect immediately before you submitted the
modification will continue to be effective. If there is no such valid election
in effect, the default rules discussed under “Default Form and Timing of
Payments” beginning on page 11 will apply.

If you elect to commence payments when your employment ends and your employment
ends during the first 12 months after you submit your election, you will receive
your payments at the end of the 12 month period required in order for your
election to be valid. All vested Company Contributions will be distributed in a
lump sum payment after you separate from service (or six months after you
separate from service if you are a “key” employee of the Company, as discussed
under “Special Rules” below).

DEFAULT FORM AND TIMING OF PAYMENTS

If you do not have a valid election to receive payments of all or any part of
your vested EDP account, you will receive payments of your EDP account (or the
part of your EDP account for which no valid election has been made) in a lump
sum as soon as administratively practicable after the month in which you
separate from service with the Company.

TIMING OF PAYMENTS

You can elect to begin receiving payments of your Personal Deferrals -

 * on any specific date that is 2 years following the year that the Personal
   Deferral was credited to your account; or
   
   
 * at your separation from service with the Company (including its affiliates).

All vested Matching Contributions and any other Company Contributions will be
distributed to you in a lump sum payment as soon as administratively practicable
following your separation from service.

In addition, there are some special rules that apply to the timing of payments
for “key” employees of the Company, which are discussed below under “Special
Rules”.

FORM OF PAYMENTS

Subject to certain limitations discussed below under “Special Rules”, your
vested Plan benefit can be paid in-

 * a single sum; or
   
   
 * annual installments over a period of two to twenty years, subject to the
   “Special Rules” discussed below.

Distributions from the EDP will be made to your Fidelity brokerage account
unless other arrangements are made at least 2 weeks prior to the valuation date
of the distribution.

SPECIAL RULES

Twenty-Year Limit on Benefit Payments

Your vested Plan benefits must be fully paid within 20 years of when your

 

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 11

--------------------------------------------------------------------------------

employment with Verizon (and its affiliates) ends. This could impact your
benefit payments in the following ways-

 * if you elect to receive all or part of your Plan benefit in a single sum on a
   specific date and the date you elect is more than 20 years from the date your
   employment with Verizon ends, you will be deemed to have elected to receive
   your lump sum 20 years from the date your employment ends;
   
   
 * if you elect to receive all or part of your Plan benefit in annual
   installments and, upon payment commencement, your annual installments would
   last more than 20 years from the date your employment with Verizon ends, you
   will be deemed to have elected the number of installments equal to the
   maximum number of installments between your payment commencement date and the
   date that is 20 years from the date your employment ended.

Special Rule for Key Employees

Employees who, at the time of distribution, are “key” employees of Verizon
cannot receive distributions from the EDP until at least six months after their
separation from service from Verizon and its affiliates. In general, those
corporate officers who earn in excess of an amount specified in the Internal
Revenue Code are “key” employees. For 2005, the specified amount is $135,000.

Special Rules that Apply at Disability

If you become disabled (as defined in the Plan) before your employment with
Verizon ends, you will receive your Plan benefit according to the terms of any
valid election made in accordance with the general terms of the Plan then in
effect or under the default rules for form and timing of payments discussed
beginning on page 11. However, in no event will you receive any installment
payments before the first business day of the first calendar quarter that begins
after the date of your disability.

If you become disabled after your employment with Verizon ends, you may only
change your election regarding the form and timing of your Plan payments in
accordance with the otherwise applicable terms of the Plan.

Special Rules that Apply at Death

At time of death, your beneficiary will receive a lump sum payout of your
account as soon as administratively practicable.

Your beneficiary or beneficiaries will not be permitted to name their own
beneficiaries or to change the form or timing of the benefit payments that they
will receive.

Hardship Payments

You may at any time request payment of all or part of your Personal Deferral
Credits if you can demonstrate to the Plan’s administrator that you have
incurred unusual, extraordinary expenses or hardship caused by events beyond
your control, such as an accident or illness. The maximum amount that you can
withdraw under these circumstances is the amount necessary to relieve the
hardship or financial emergency on which the request is based.

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 12

--------------------------------------------------------------------------------

VESTING AND OTHER ISSUES

VESTING

“Vesting” refers to your right to the balance in all or part of your EDP
account.

Your Employee Balance

You are always 100% vested in your Personal Deferral Credits, unless you and the
Company have a written agreement providing that part of your Personal Deferral
Credits will vest on a different schedule.

Your Employer Contributions

You will be fully vested in your Matching Contribution upon the earliest to
occur of the following-

 * your account in the Verizon Savings Plan for Management Employees is fully
   vested, which usually occurs after three years of service with Verizon;
   
   
 * your employment with the Company is involuntarily terminated without cause,
   and you execute a release in a form acceptable to the Plan’s administrator or
   the Plan’s administrator otherwise determines that all or a portion of your
   Matching Contribution Credits should be vested;
   
   
 * you become disabled or die while employed with Verizon; or
   

 * there is a change in control of Verizon

You will vest in any employer contributions transferred to the EDP under the
terms of the plan from which those amounts were transferred. In addition, you
will vest in any Retirement Contribution Credits received with respect to 2004
salary and bonuses under the vesting provisions of the IDP applicable to
Retirement Contribution Credits. Note if you are retirement eligible or become
retirement eligible under the terms of the Verizon Management Pension Plan all
Retirement Contribution Credits will be fully vested on such date.

FORFEITURE

You can never forfeit your Personal Deferral Credits or the vested portion of
your Matching Contribution Credits. However, if you resign from Verizon or if
you are terminated for cause, you will forfeit any unvested account balance.

In addition, the IDP rules with respect to forfeitures for violations of
non-competition and non-solicit covenants continue to apply to unvested
Retirement Contribution Credits transferred from the IDP and to Retirement
Contribution Credits provided under the EDP with respect to salary and
incentives earned in 2004.

 

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 13

--------------------------------------------------------------------------------

MISCELLANEOUS MATTERS

PLAN ADMINISTRATION

The Plan’s administrator is the most senior Human Resources officer of the
Company, which will generally be the Executive Vice President-Human Resources.
However, if you are an “insider” for purposes of certain securities laws, the
Plan’s administrator is the Human Resources Committee of the Company’s Board of
Directors. The Plan’s administrator has full discretionary authority and
responsibility to administer and interpret the Plan, and has the discretion to
charge participants for reasonable Plan administration expenses. All decisions
of the Plan’s administrator are final and controlling for purposes of the Plan.

AMENDMENT AND TERMINATION

The Company intends to operate the Plan indefinitely. However, the Company has
the right to amend or terminate the Plan at any time as long as (except with
respect to certain changes in the law) no amendment or termination adversely
affects the present dollar value of the vested balance in your EDP account at
the time the amendment is made or the Plan is terminated. In addition, for five
years following a change in control of Verizon, no amendment may adversely
affect your rights under the Plan other than your right to future Matching
Contribution Credits.

EFFECT ON OTHER BENEFIT PLANS

By participating in the Plan, you agree that the Plan will provide all of your
Company-sponsored non-qualified deferred compensation benefits beginning January
1, 2005. You will no longer be eligible to make personal contributions or
receive company contributions under the Verizon Income Deferral Plan or the
Directors’ Plan.

However, amounts you deferred into the IDP or Directors’ Plan that were vested
on or before December 31, 2004, and were not transferred to the EDP will remain
in the IDP or Directors’ Plan and subject to the applicable provisions of those
plans as they may be amended from time to time. Amounts you deferred into the
IDP or Directors’ Plan that were not vested on or before December 31, 2004, and
were transferred to the EDP as of January 1, 2005, will be subject to the terms
of the EDP and not subject to the terms of the IDP or Directors’ Plan after
December 31, 2004.

HYPOTHETICAL NATURE OF PLAN ACCOUNTS AND INVESTMENTS

Your EDP account is hypothetical in nature. That is, your Personal Deferral
Credits and your Matching Contribution Credits are maintained for bookkeeping
purposes only-there are no actual funds or assets in any of these accounts.

 

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 14

--------------------------------------------------------------------------------

Similarly, the investments under the Plan are only hypothetical in nature. You
will instruct the Plan’s administrator as to how you would like your EDP account
invested. However, because your EDP account is only hypothetical, the Plan’s
administrator will not necessarily make any actual investments in accordance
with your instructions. Nonetheless, the Plan’s administrator will track your
investment selections and will credit your EDP account with investment gains (or
losses) based on the gains (or losses) on the investments you choose.

PLAN ASSETS NOT HELD IN TRUST

Unlike the Verizon Savings Plan for Management Employees and the Verizon
Management Pension Plan, the EDP is not funded and your benefits under the Plan
are not protected by a trust. (If your EDP account were funded by a trust, you
would be subject to immediate income tax on your vested Plan benefits, even
though you would not receive your vested Plan benefits until some future
date-one that is possibly many years in the future.) Consequently, in the
unlikely event that the Company becomes bankrupt, you will only be a general,
unsecured creditor of the Company with respect to the balance in your EDP
account, and you may not receive all of your benefits.

ASSIGNMENT AND ALIENATION

In general, your rights under the Plan may not be assigned or alienated.
However, the Plan will recognize and abide by the terms of certain domestic
relations orders.

WITHHOLDING AND OTHER TAX CONSEQUENCES

The Plan’s administrator has full authority to withhold any taxes (including
employment taxes) applicable to amounts deferred from your compensation, credits
made to your EDP account, or payments of your Plan benefit. All deferrals and
company match to the EDP are subject to FICA taxes (Medicare and Social Security
up to annual limits).

CONTINUED EMPLOYMENT

Nothing in the Plan confers on you the right to continue in the employment or
service of the Company or to receive an annual base salary of any particular
amount.

 

--------------------------------------------------------------------------------

JANUARY 1, 2005   PAGE 15

 

--------------------------------------------------------------------------------