OF
DIRECTORS OR SIMILAR GOVERNING BODIES OF VERIZON OR ANY VERIZON SUBSIDIARY ON
WHICH THEY SERVE, AND FROM ALL POSITIONS AS OFFICERS OF VERIZON OR ANY VERIZON
SUBSIDIARY IN WHICH THEY SERVE.
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SECTION 2.4
SPECIAL DIVIDEND; NEW
FINANCING; DEBT EXCHANGE.
(A)
THE SPINCO BOARD WILL ESTABLISH A SPECIAL
DIVIDEND RECORD DATE AND WILL AUTHORIZE SPINCO TO PAY OUT OF FUNDS LEGALLY
AVAILABLE THEREFOR THE SPECIAL DIVIDEND ON THE DISTRIBUTION DATE TO VERIZON, AS
THE HOLDER OF RECORD OF SPINCO COMMON STOCK AS OF THE SPECIFIED RECORD DATE.
THE SPECIAL DIVIDEND WILL BE PAID TO VERIZON ON THE DISTRIBUTION DATE
IMMEDIATELY PRIOR TO THE DISTRIBUTION.
(B)
AT OR PRIOR TO THE DISTRIBUTION DATE, SPINCO
WILL (I) ENTER INTO THE AGREEMENTS ASSOCIATED WITH THE NEW FINANCING AND USE A
PORTION OF THE PROCEEDS THEREOF TO PAY THE SPECIAL DIVIDEND AND (II) DISTRIBUTE
SPINCO SECURITIES TO VERIZON.
THE PRINCIPAL AMOUNT OF THE SPINCO SECURITIES
WILL BE AN AMOUNT EQUAL TO (X) $1.7 BILLION LESS (Y) THE AMOUNT OF THE SPECIAL
DIVIDEND, WITH THE PRECISE AGGREGATE PRINCIPAL AMOUNT OF THE SPINCO SECURITIES
TO BE SET FORTH ON A CERTIFICATE TO BE DELIVERED BY VERIZON TO SPINCO, WITH A
COPY TO THE COMPANY, NO LATER THAN 30 DAYS PRIOR TO THE DISTRIBUTION DATE.
(C)
THE RIGHTS AND OBLIGATIONS OF THE PARTIES
IN RESPECT OF PURSUING AND OBTAINING THE NEW FINANCING ARE SET FORTH IN THE
MERGER AGREEMENT AND NO ADDITIONAL RIGHTS OR OBLIGATIONS SHALL BE DEEMED TO
ARISE UNDER THIS AGREEMENT IN CONNECTION THEREWITH.
(D)
THE PARTIES ACKNOWLEDGE THAT VERIZON INTENDS
TO ENTER INTO ARRANGEMENTS PRIOR TO OR FOLLOWING THE DISTRIBUTION DATE PROVIDING
FOR THE EXCHANGE OF OUTSTANDING SPINCO SECURITIES FOR DEBT OBLIGATIONS OF
VERIZON OR ITS AFFILIATES OR THE TRANSFER OF SPINCO SECURITIES TO OTHER VERIZON
CREDITORS OR STOCKHOLDERS (THE "DEBT EXCHANGE"), PROVIDED THAT THE PARTIES
FURTHER ACKNOWLEDGE THAT (I) IF VERIZON DESIRES TO CONSUMMATE THE DEBT EXCHANGE
CONCURRENTLY WITH THE DISTRIBUTION, VERIZON SHALL NOT BE OBLIGATED TO CONSUMMATE
THE DISTRIBUTION UNLESS VERIZON SHALL HAVE ENTERED INTO SUCH ARRANGEMENTS AND
THE DEBT EXCHANGE SHALL BE CONSUMMATED CONCURRENTLY WITH THE DISTRIBUTION AND
(II) IF VERIZON ELECTS NOT TO PURSUE THE DEBT EXCHANGE AT THE TIME OF THE
DISTRIBUTION OR THEREAFTER, VERIZON MAY DISPOSE OF THE SPINCO SECURITIES IN
ANOTHER MANNER, BUT WILL IN ANY EVENT DISPOSE OF ALL OF ITS INTEREST IN THE
SPINCO SECURITIES WITHIN 360 DAYS FOLLOWING THE DISTRIBUTION DATE.
(E)
AT VERIZON'S ELECTION, TO BE EXERCISED BY
VERIZON NO LATER THAN 15 DAYS PRIOR TO THE DISTRIBUTION DATE (THE "ELECTION"),
NOTWITHSTANDING ANY OTHER PROVISION OF THE TRANSACTION AGREEMENTS, THE FOLLOWING
ALTERNATIVE TRANSACTION STRUCTURE MAY BE ADOPTED IN LIEU OF THE TRANSACTION
STEPS CURRENTLY DESCRIBED IN THE TRANSACTION DOCUMENTS:
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(I) THE ENTITY REFERRED TO AS SPINCO SHALL BE FORMED BY VERIZON NEW ENGLAND,
INSTEAD OF BY VERIZON;
(II) THE SPECIAL DIVIDEND SHALL BE A DIVIDEND PAID BY SPINCO TO VERIZON NEW
ENGLAND, INSTEAD OF BEING PAID BY SPINCO TO VERIZON;
(III) SPINCO SECURITIES SHALL BE NOTES ISSUED BY SPINCO