<SUBMISSION>
<ACCESSION-NUMBER>0000950134-02-009527
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>8
<PERIOD>20020630
<FILING-DATE>20020812
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<CONFORMED-NAME>VERIZON COMMUNICATIONS INC
<CIK>0000732712
<ASSIGNED-SIC>4813
<IRS-NUMBER>232259884
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
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<ACT>34
<FILE-NUMBER>001-08606
<FILM-NUMBER>02727519
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1095 AVE OF THE AMERICAS
<CITY>NEW YORK
<STATE>NY
<ZIP>10036
<PHONE>2123952121
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1717 ARCH ST 47TH FL
<CITY>PHILADELPHIA
<STATE>PA
<ZIP>19103
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>BELL ATLANTIC CORP
<DATE-CHANGED>19920703
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d98774e10vq.txt
<DESCRIPTION>FORM 10-Q FOR QUARTER ENDED JUNE 30, 2002
<TEXT>
<PAGE>
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q


    (Mark one)
        [X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 2002

                                       OR

        [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        For the transition period from to


                          Commission file number 1-8606

                           VERIZON COMMUNICATIONS INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


              DELAWARE                                          23-2259884
      (STATE OF INCORPORATION)                               (I.R.S. EMPLOYER
                                                             IDENTIFICATION NO.)

      1095 AVENUE OF THE AMERICAS                                   10036
         NEW YORK, NEW YORK                                       (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                  REGISTRANT'S TELEPHONE NUMBER (212) 395-2121

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [x] No [ ]

At June 30, 2002, 2,728,421,871 shares of the registrant's Common Stock were
outstanding, after deducting 23,228,613 shares held in treasury.


================================================================================



<PAGE>
                                TABLE OF CONTENTS

ITEM NO.

<Table>
<Caption>
PART I. FINANCIAL INFORMATION                                                 PAGE
                                                                              ----
<S>  <C>                                                                      <C>

1.   FINANCIAL STATEMENTS (UNAUDITED)

     CONDENSED CONSOLIDATED STATEMENTS OF INCOME
     Three and six months ended June 30, 2002 and 2001                           1

     CONDENSED CONSOLIDATED BALANCE SHEETS
     June 30, 2002 and December 31, 2001                                         2

     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
     Six months ended June 30, 2002 and 2001                                     3

     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                        4

2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
     RESULTS OF OPERATIONS                                                      16

3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                 36


PART II. OTHER INFORMATION

4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                        37

6.   EXHIBITS AND REPORTS ON FORM 8-K                                           38
</Table>


<PAGE>

PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                  Verizon Communications Inc. and Subsidiaries

<Table>
<Caption>
(Dollars in Millions, Except Per Share Amounts)
(Unaudited)                                          THREE MONTHS ENDED JUNE 30,   SIX MONTHS ENDED JUNE 30,
                                                     --------------------------    --------------------------
                                                            2002           2001           2002           2001
                                                     -----------    -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>            <C>
OPERATING REVENUES                                   $    16,835    $    16,909    $    33,210    $    33,175

Operations and support expense (exclusive of items
   shown below)                                           10,796          9,713         20,560         19,012
Depreciation and amortization                              3,356          3,400          6,676          6,760
Sales of assets, net                                          --             (5)          (220)            (5)
                                                     -----------    -----------    -----------    -----------

OPERATING INCOME                                           2,683          3,801          6,194          7,408
Loss from unconsolidated businesses                       (3,361)        (3,664)        (4,904)        (3,448)
Other income and (expense), net                                4            114             69            184
Interest expense                                            (798)          (909)        (1,612)        (1,830)
Minority interest                                           (313)          (209)          (556)          (307)
Mark-to-market adjustment - financial instruments             (8)           (37)           (11)          (153)
                                                     -----------    -----------    -----------    -----------
Income (loss) before provision for income taxes,
   extraordinary item and cumulative effect of
   accounting change                                      (1,793)          (904)          (820)         1,854
Provision for income taxes                                   325            117          1,294          1,121
                                                     -----------    -----------    -----------    -----------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM AND
   CUMULATIVE EFFECT OF ACCOUNTING CHANGE                 (2,118)        (1,021)        (2,114)           733
Extraordinary item, net of tax                                 3             --             (6)            --
Cumulative effect of accounting change, net of tax            --             --           (496)          (182)
                                                     -----------    -----------    -----------    -----------
NET INCOME (LOSS)                                    $    (2,115)   $    (1,021)   $    (2,616)   $       551
                                                     ===========    ===========    ===========    ===========

BASIC EARNINGS (LOSS) PER COMMON SHARE:
Income (loss) before extraordinary item and
   cumulative effect of accounting change            $      (.78)   $      (.38)   $      (.78)   $       .27
Extraordinary item, net of tax                                --             --             --             --
Cumulative effect of accounting change, net of tax            --             --           (.18)          (.07)
                                                     -----------    -----------    -----------    -----------
Net Income (Loss)                                    $      (.78)   $      (.38)   $      (.96)   $       .20
                                                     ===========    ===========    ===========    ===========
Weighted-average shares outstanding (in millions)          2,726          2,707          2,723          2,706
                                                     -----------    -----------    -----------    -----------

DILUTED EARNINGS (LOSS) PER COMMON SHARE:
Income (loss) before extraordinary item and
   cumulative effect of accounting change            $      (.78)   $      (.38)   $      (.78)   $       .27
Extraordinary item, net of tax                                --             --             --             --
Cumulative effect of accounting change, net of tax            --             --           (.18)          (.07)
                                                     -----------    -----------    -----------    -----------
NET INCOME (LOSS)                                    $      (.78)   $      (.38)   $      (.96)   $       .20
                                                     ===========    ===========    ===========    ===========
Weighted-average shares outstanding - diluted
   (in millions)                                           2,726          2,707          2,723          2,728
                                                     -----------    -----------    -----------    -----------

Dividends declared per common share                  $      .385    $      .385    $       .77    $       .77
                                                     ===========    ===========    ===========    ===========
</Table>



See Notes to Condensed Consolidated Financial Statements



                                       1
<PAGE>



                      CONDENSED CONSOLIDATED BALANCE SHEETS
                  Verizon Communications Inc. and Subsidiaries

<Table>
<Caption>
(Dollars in Millions, Except Per Share Amounts) (Unaudited)                       JUNE 30,   DECEMBER 31,
                                                                                      2002           2001
                                                                               -----------   ------------
<S>                                                                            <C>            <C>
ASSETS
Current assets
  Cash and cash equivalents                                                    $     2,962    $       979
  Short-term investments                                                               769          1,991
  Accounts receivable, net of allowances of $2,449 and $2,153                       13,068         14,254
  Inventories                                                                        1,843          1,968
  Net assets held for sale                                                           1,323          1,199
  Prepaid expenses and other                                                         3,176          2,796
                                                                               -----------    -----------
Total current assets                                                                23,141         23,187
                                                                               -----------    -----------

Plant, property and equipment                                                      175,802        169,586
  Less accumulated depreciation                                                    101,418         95,167
                                                                               -----------    -----------
                                                                                    74,384         74,419
                                                                               -----------    -----------

Investments in unconsolidated businesses                                             5,881         10,202
Intangible assets, net                                                              45,231         44,262
Other assets                                                                        19,656         18,725
                                                                               -----------    -----------
Total assets                                                                   $   168,293    $   170,795
                                                                               ===========    ===========

LIABILITIES AND SHAREOWNERS' INVESTMENT
Current liabilities
  Debt maturing within one year                                                $    16,969    $    18,669
  Accounts payable and accrued liabilities                                          13,130         13,947
  Other                                                                              5,581          5,404
                                                                               -----------    -----------
Total current liabilities                                                           35,680         38,020
                                                                               -----------    -----------

Long-term debt                                                                      44,639         45,657
Employee benefit obligations                                                        13,628         11,898
Deferred income taxes                                                               18,824         16,543
Other liabilities                                                                    4,056          3,989

Minority interest                                                                   22,824         22,149

Shareowners' investment
  Series preferred stock ($.10 par value; none issued)                                  --             --
  Common stock ($.10 par value; 2,751,650,484 shares issued in both periods)           275            275
  Contributed capital                                                               24,713         24,676
  Reinvested earnings                                                                5,842         10,704
  Accumulated other comprehensive loss                                                (924)        (1,187)
                                                                               -----------    -----------
                                                                                    29,906         34,468
  Less common stock in treasury, at cost                                               606          1,182
  Less deferred compensation - employee stock ownership plans and other                658            747
                                                                               -----------    -----------
Total shareowners' investment                                                       28,642         32,539
                                                                               -----------    -----------
Total liabilities and shareowners' investment                                  $   168,293    $   170,795
                                                                               ===========    ===========
</Table>



See Notes to Condensed Consolidated Financial Statements




                                       2
<PAGE>

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Verizon Communications Inc. and Subsidiaries


<Table>
<Caption>
(Dollars in Millions) (Unaudited)                                                             SIX MONTHS ENDED JUNE 30,
                                                                                                  2002             2001
                                                                                         -------------    -------------
<S>                                                                                      <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) before extraordinary item and cumulative effect of accounting change       $      (2,114)   $         733
Adjustments to reconcile income (loss) before extraordinary item and cumulative effect
   of accounting change to net cash provided by operating activities:
     Depreciation and amortization                                                               6,676            6,760
     Sales of assets, net                                                                         (220)              (5)
     Mark-to-market adjustment - financial instruments                                              11              153
     Employee retirement benefits                                                                 (726)          (1,118)
     Deferred income taxes                                                                         784             (349)
     Provision for uncollectible accounts                                                        1,465              782
     Loss from unconsolidated businesses                                                         4,904            3,448
     Changes in current assets and liabilities, net of effects from
       acquisition/disposition of businesses                                                      (927)          (2,961)
     Other, net                                                                                    189              215
                                                                                         -------------    -------------
Net cash provided by operating activities                                                       10,042            7,658
                                                                                         -------------    -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures                                                                            (5,510)          (9,163)
Acquisitions, net of cash acquired, and investments                                               (998)          (2,212)
Proceeds from disposition of businesses                                                            770               --
Proceeds from spectrum payment refund                                                            1,479               --
Net change in short-term investments                                                             1,126            1,010
Other, net                                                                                        (380)            (510)
                                                                                         -------------    -------------
Net cash used in investing activities                                                           (3,513)         (10,875)
                                                                                         -------------    -------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term borrowings                                                               5,583            8,253
Repayments of long-term borrowings and capital lease obligations                                (3,938)          (1,604)
Increase (decrease) in short-term obligations, excluding current maturities                     (4,623)             620
Dividends paid                                                                                  (2,096)          (2,079)
Proceeds from sale of common stock                                                                 424              242
Other, net                                                                                         104             (356)
                                                                                         -------------    -------------
Net cash provided by (used in) financing activities                                             (4,546)           5,076
                                                                                         -------------    -------------

Increase in cash and cash equivalents                                                            1,983            1,859
Cash and cash equivalents, beginning of period                                                     979              757
                                                                                         -------------    -------------
Cash and cash equivalents, end of period                                                 $       2,962    $       2,616
                                                                                         =============    =============
</Table>

See Notes to Condensed Consolidated Financial Statements



                                       3
<PAGE>
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  Verizon Communications Inc. and Subsidiaries
                                   (Unaudited)

1.   BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared based upon Securities and Exchange Commission (SEC) rules that permit
reduced disclosure for interim periods. These financial statements reflect all
adjustments that are necessary for a fair presentation of results of operations
and financial condition for the interim periods shown including normal recurring
accruals and other items. The results for the interim periods are not
necessarily indicative of results for the full year. For a more complete
discussion of significant accounting policies and certain other information, you
should refer to the financial statements included in the Verizon Communications
Inc. (Verizon) Annual Report on Form 10-K for the year ended December 31, 2001,
as amended by the Annual Report on Form 10-K/A for the year ended December 31,
2001.

We have reclassified certain amounts from prior year's data to conform to the
2002 presentation.

2.   MERGER CHARGES AND OTHER STRATEGIC ACTIONS

In connection with the Bell Atlantic Corporation-GTE Corporation merger on June
30, 2000, we incurred charges associated with employee severance of $584 million
($371 million after-tax) for the separation of approximately 5,500 management
employees who were entitled to benefits under pre-existing separation plans, as
well as an accrual of ongoing Statement of Financial Accounting Standards (SFAS)
No. 112, "Employers' Accounting for Postemployment Benefits," obligations for
GTE employees. As of June 30, 2002, the severances in connection with the Bell
Atlantic-GTE merger are complete.

During the fourth quarter of 2001, we recorded a special charge of $765 million
($477 million after-tax) for the voluntary and involuntary separation of
approximately 10,000 employees. Also, during the second quarter of 2002, we
recorded a special charge of $734 million ($475 million after-taxes and minority
interest) primarily associated with employee severance costs and
severance-related activities in connection with the voluntary and involuntary
separation of approximately 8,000 employees. As of June 30, 2002, a total of
approximately 8,900 employees have been separated under the 2001 and 2002
severance programs, excluding a significant number of voluntary separations that
were not processed by June 30, 2002. The remaining severance liability relating
to these programs is $1,085 million, which includes future payments to employees
separated as of June 30, 2002. We expect to complete the severance programs
within a year of when the charge was recorded.

Also, during the second quarter of 2002, we recorded pretax charges of $394
million ($254 million after-tax) primarily resulting from a pretax impairment
charge in connection with our financial statement exposure to WorldCom Inc. of
$300 million ($183 million after-tax) and other pretax charges of $94 million
($71 million after-tax). In addition, during the second quarter of 2002, we
recorded a pretax charge of $175 million ($114 million after-tax) related to a
proposed settlement of a litigation matter that arose from our decision to
terminate an agreement with NorthPoint Communications Group, Inc. (NorthPoint)
to combine the two companies' digital subscriber line (DSL) businesses (see Note
14).

We expect to incur a total of approximately $2 billion of transition costs
through the end of 2002 related to the merger and the formation of the wireless
joint venture. These costs are incurred to integrate systems, consolidate real
estate and relocate employees. They also include approximately $500 million for
advertising and other costs to establish the Verizon brand. Transition costs
incurred through the second quarter of 2002 total $1,931 million. Transition
costs for the three and six months ended June 30, 2002 were $102 million and
$198 million ($57 million and $109 million after taxes and minority interest),
respectively. Transition costs for the three and six months ended June 30, 2001
were $279 million and $442 million ($162 million and $250 million after taxes
and minority interest), respectively.

3.   SALES OF ASSETS, NET

During the first quarter of 2002, we recorded a net pretax gain of $220 million
($116 million after-tax), primarily resulting from a pretax gain on the sale of
TSI Telecommunication Services Inc. (TSI) of $466 million ($275 million




                                       4
<PAGE>

after-tax), partially offset by an impairment charge in connection with our exit
from the video business and other charges of $246 million ($159 million
after-tax).

During the second quarter of 2001, we completed the sale of the overlapping
Cincinnati wireless market. The pretax gain was $80 million ($48 million
after-tax). In addition, during the second quarter of 2001, an agreement to sell
the overlapping Chicago wireless market at a price lower than the net book value
of the Chicago assets was executed. Consequently, we recorded an impairment
charge of $75 million ($45 million after-tax) related to the expected sale. The
sale of the Chicago market closed in the second half of 2001.

4.   EXTRAORDINARY ITEM

During the second quarter of 2002, we recognized a pretax extraordinary gain of
$4 million ($3 million after-tax) related to the extinguishment of $243 million
of debt prior to the stated maturity date. Results for the six months ended June
30, 2002 include the retirement in the first quarter of 2002 of $1,536 million
of debt prior to the stated maturity date, resulting in a pretax extraordinary
charge of $15 million ($9 million after-tax).

5.   NET ASSETS HELD FOR SALE

In October 2001, we agreed to sell all 675,000 of our switched access lines in
Alabama and Missouri to CenturyTel Inc. (CenturyTel) for $2.2 billion. In early
July 2002, we completed the sale of approximately 300,000 switched access lines
and related local exchange operations in Alabama to CenturyTel for approximately
$1.0 billion in cash. The Missouri sale has been approved by the Missouri Public
Service Commission and the Federal Communications Commission (FCC). We expect to
close the Missouri transaction in the third quarter of 2002.

Also in October 2001, we agreed to sell approximately 600,000 switched access
lines in Kentucky to ALLTEL Corporation for $1.9 billion. This sale was
completed on July 31, 2002.

In December 2001, we agreed to sell TSI, for approximately $800 million. The
transaction closed on February 14, 2002 (see Note 3).

6.   INVESTMENTS

Marketable Securities

We have investments in marketable securities, primarily common stocks, which are
considered "available-for-sale" under SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." These investments have been included
in our condensed consolidated balance sheets in Investments in Unconsolidated
Businesses and Other Assets.


Under SFAS No. 115, available-for-sale securities are required to be carried at
their fair value, with unrealized gains and losses (net of income taxes) that
are considered temporary in nature recorded in Accumulated Other Comprehensive
Loss. The fair values of our investments in marketable securities are determined
based on market quotations.


The following table shows certain summarized information related to our
investments in marketable securities:

<Table>
<Caption>
(Dollars in Millions)                                                          GROSS           GROSS
                                                                          UNREALIZED      UNREALIZED
                                                               COST            GAINS          LOSSES       FAIR VALUE
                                                       -------------     ------------    -----------     ------------
<S>                                                    <C>               <C>             <C>             <C>
AT JUNE 30, 2002
Investments in unconsolidated businesses               $         765     $        625    $       (15)    $      1,375
Other assets                                                     206               26             --              232
                                                       -------------     ------------    -----------     ------------
                                                       $         971     $        651    $       (15)    $      1,607
                                                       =============     ============    ===========     ============
AT DECEMBER 31, 2001
Investments in unconsolidated businesses               $       1,337     $        578    $       (80)    $      1,835
Other assets                                                     243               26             --              269
                                                       -------------     ------------    -----------     ------------
                                                       $       1,580     $        604    $       (80)    $      2,104
                                                       =============     ============    ===========     ============
</Table>

We continually evaluate our investments in marketable securities for impairment
due to declines in market value considered to be other than temporary. That
evaluation includes, in addition to persistent, declining stock prices,




                                       5
<PAGE>

general economic and company-specific evaluations. In the event of a
determination that a decline in market value is other than temporary, a charge
to earnings is recorded for all or a portion of the unrealized loss, and a new
cost basis in the investment is established.

At June 30, 2002 and December 31, 2001, the unrealized gains on marketable
securities related primarily to our investment in Telecom Corporation of New
Zealand Limited (TCNZ).

Investment Ownership Changes

On January 25, 2002, Verizon exercised its option to purchase an additional 12%
of Telecomunicaciones de Puerto Rico, Inc. (TELPRI) common stock, from the
government of Puerto Rico. We now hold 52% of TELPRI stock, up from 40% held at
December 31, 2001. As a result of gaining control of TELPRI, Verizon changed the
accounting for its investment in TELPRI from the equity method to full
consolidation, effective January 1, 2002.


On March 28, 2002, Verizon transferred 5.5 million of its shares in CTI
Holdings, S.A. (CTI), our wireless investment in Argentina, to an indirectly
wholly-owned subsidiary of Verizon and subsequently transferred ownership of
that subsidiary to a newly created trust for CTI employees. This decreased our
ownership percentage in CTI from 65% to 48%. We also reduced our representation
on CTI's Board of Directors from five of nine members to four of nine
(subsequently reduced to two of five members). As a result of these actions that
surrender control of CTI, we changed the method of accounting for our investment
in CTI from consolidation to the equity method.

Investment-Related Charges

During the second quarter of 2002, we recorded pretax losses of $3,558 million
($3,305 million after-tax), including a loss of $2,443 million ($2,443 million
after-tax) related to our interest in Genuity Inc. (Genuity) (see "Other
Securities" below for additional information); a loss of $580 million ($430
million after-tax) to the market value of our investment in TELUS Corporation
(TELUS); a loss of $303 million ($201 million after-tax) to the market value of
our investment in Cable & Wireless plc (C&W) and a loss of $232 million ($231
million after-tax) relating to several other investments. We determined that
market value declines in these investments were considered other than temporary.

During the first quarter of 2002, we recorded a pretax loss of $1,400 million
($1,400 million after-tax) due to the other than temporary decline in the market
value of our investment in Compania Anonima Nacional Telefonos de Venezuela
(CANTV). As a result of the political and economic instability in Venezuela,
including the devaluation of the Venezuelan bolivar, and the related impact on
CANTV's future economic prospects, we no longer expected that the future
undiscounted cash flows applicable to CANTV were sufficient to recover our
investment. Accordingly, we wrote our investment down to market value as of
March 31, 2002.

During the first quarter of 2002, we recorded a pretax loss of $516 million
($436 million after-tax) to market value due primarily to the other than
temporary decline in the market value of our investment in Metromedia Fiber
Network, Inc. (MFN). We wrote off our remaining investment and other financial
statement exposure related to MFN in the first quarter of 2002 primarily as a
result of its deteriorating financial condition and related defaults. In
addition, we delivered to MFN a notice of termination of our fiber optic
capacity purchase agreement.

During the first quarter of 2002, we recorded a pretax loss of $230 million
($190 million after-tax) to fair value due to the other than temporary decline
in the fair value of our remaining investment in CTI as a result of the impact
of the deterioration of the Argentinean economy and the devaluation of the
Argentinean peso on CTI's financial position. As a result of the first quarter
2002 charge, and a charge recorded in 2001, our financial exposure related to
our equity investment in CTI has been eliminated.

During the second quarter of 2001, we recognized a pretax loss of $3,913 million
($2,926 million after-tax) primarily relating to our investments in C&W, NTL
Incorporated (NTL) and MFN. We determined, based on the evaluations described
above, that the market value declines in these investments were considered other
than temporary.

Other Securities

Prior to the merger of Bell Atlantic and GTE, we owned and consolidated Genuity
(a tier-one interLATA Internet backbone and related data business). In June
2000, as a condition of the merger, 90.5% of the voting equity of




                                       6
<PAGE>

Genuity was issued in an initial public offering. As a result of the initial
public offering and our loss of control, we deconsolidated Genuity. Our
remaining ownership interest in Genuity contained a contingent conversion
feature that gave us the option (if prescribed conditions were met), among other
things, to regain control of Genuity. Our ability to legally exercise this
conversion feature was dependent on obtaining approvals to provide long distance
service in the former Bell Atlantic states and satisfaction of other regulatory
and legal requirements.

On July 24, 2002, we converted all but one of our shares of Class B common stock
of Genuity into shares of Class A common stock of Genuity. We now own just under
a 10% voting and economic interest in Genuity. As a result, we have relinquished
the right to convert our current ownership into a controlling interest as
described above. See Note 14 for additional information on our ongoing business
relationship and future commitments to Genuity.

As a result of Genuity's continuing operating losses and a significant decrease
in the market price of the Class A common stock of Genuity during the second
quarter, we have determined that recoverability of our investment in Genuity is
not reasonably assured. As a result, we have recorded a pretax charge of $2,443
million to reduce the carrying value of our interest in Genuity to its estimated
fair value.

7.   ACCOUNTING CHANGE - GOODWILL AND OTHER INTANGIBLE ASSETS

Accounting Change

Effective January 1, 2002, we adopted SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 142 no longer permits the amortization of goodwill
and indefinite-lived intangible assets. Instead, these assets must be reviewed
annually (or more frequently under various conditions) for impairment in
accordance with this statement. This impairment test uses a fair value approach
rather than the undiscounted cash flows approach. The goodwill impairment test
under SFAS No. 142 requires a two-step approach, which is performed at the
reporting unit level, as defined in SFAS No. 142. Step one identifies potential
impairments by comparing the fair value of the reporting unit to its carrying
amount. Step two, which is only performed if there is a potential impairment,
compares the carrying amount of the reporting unit's goodwill to its implied
value, as defined in SFAS No. 142. If the carrying amount of the reporting
unit's goodwill exceeds the implied fair value of that goodwill, an impairment
loss is recognized for an amount equal to that excess. The amortization of
goodwill included in our investments in equity investees is no longer recorded
in accordance with the new rules. Intangible assets that do not have indefinite
lives are amortized over their useful lives and reviewed for impairment in
accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets."

The initial impact of adoption on our consolidated financial statements was
recorded as a cumulative effect of an accounting change resulting in a charge of
$496 million, net of tax. This charge is comprised of $204 million ($203 million
after-tax) for goodwill, $294 million ($293 million after-tax) for wireless
licenses and goodwill of equity method investments and for other intangible
assets. In accordance with SFAS No. 142, we ceased amortizing existing goodwill
(including goodwill recorded on our equity investments), acquired workforce
intangible assets and wireless licenses which we determined have an indefinite
life (see discussion below).

Wireless Licenses

In conjunction with the adoption of SFAS No. 142, we have reassessed the useful
lives of previously recognized intangible assets. A significant portion of our
intangible assets are licenses, including licenses associated with equity method
investments, that provide our wireless operations with the exclusive right to
utilize certain radio frequency spectrum to provide cellular communication
services. While licenses are issued for only a fixed time, generally ten years,
such licenses are subject to renewal by the FCC. Renewals of licenses have
occurred routinely and at nominal cost. Moreover, we have determined that there
are currently no legal, regulatory, contractual, competitive, economic or other
factors that limit the useful life of our wireless licenses. As a result, the
wireless licenses will be treated as an indefinite-lived intangible asset under
the provisions of SFAS No. 142 and will not be amortized but rather will be
tested for impairment. We will reevaluate the useful life determination for
wireless licenses each reporting period to determine whether events and
circumstances continue to support an indefinite useful life.

Previous wireless business combinations have been for the purpose of acquiring
existing licenses and related infrastructure to enable us to build out our
existing nationwide wireless network. The primary asset acquired in such
combinations has been wireless licenses. In the allocation of the purchase price
of these previous acquisitions, amounts classified as goodwill have related
predominately to the expected synergies of placing the acquired licenses in our
national footprint. Further, in purchase accounting, the values assigned to both
wireless licenses and goodwill



                                       7
<PAGE>

were principally determined based on an allocation of the excess of the purchase
price over the other acquired net assets. We believe that the nature of our
wireless licenses and related goodwill are fundamentally indistinguishable.

In light of these considerations, on January 1, 2002, amounts previously
classified as goodwill, approximately $7.9 billion for the year ended December
31, 2001, were reclassified into wireless licenses. Also, assembled workforce,
previously included in other intangible assets, will no longer be recognized
separately from wireless licenses. Amounts for 2001 have been reclassified to
conform to the presentation adopted on January 1, 2002. In conjunction with this
reclassification, and in accordance with the provisions of SFAS No. 109,
"Accounting for Income Taxes," we have recognized a deferred tax liability of
approximately $1.6 billion related to the difference in the tax basis versus
book basis of the wireless licenses. This reclassification, including the
related impact on deferred taxes, had no impact on our results of operations.
This reclassification and the methodology to be subsequently used to test
wireless licenses for impairment under SFAS No. 142 as described in the next
paragraph have been reviewed with the staff of the SEC.

When testing the carrying value of the wireless licenses for impairment, we will
determine the fair value of the aggregated wireless licenses by subtracting from
wireless operations' discounted cash flows the fair value of all of the other
net tangible and intangible assets of our wireless operations. If the fair value
of the aggregated wireless licenses as determined above is less than the
aggregated carrying amount of the licenses, an impairment will be recognized.
Upon adoption of SFAS No. 142, a test for impairment of wireless licenses was
performed with no impairment recognized. Future tests for impairment will be
performed at least annually and more often if events or circumstances warrant.

Impact of SFAS No. 142

The following tables present the impact of SFAS No. 142 on reported income
(loss) before extraordinary item and cumulative effect of accounting change,
reported net income (loss) and earnings (loss) per share had the standard been
in effect for the three and six months ended June 30, 2001:

<Table>
<Caption>
(Dollars in Millions)                                     THREE MONTHS ENDED JUNE 30,       SIX MONTHS ENDED JUNE 30,
                                                         ----------------------------    ----------------------------
                                                                  2002           2001             2002           2001
                                                         -------------   ------------    -------------   ------------
<S>                                                      <C>             <C>             <C>             <C>
REPORTED INCOME (LOSS) BEFORE EXTRAORDINARY ITEM AND
  CUMULATIVE EFFECT OF ACCOUNTING CHANGE                 $      (2,118)  $     (1,021)   $      (2,114)  $        733
   Goodwill amortization                                            --             14               --             23
   Wireless licenses amortization                                   --             83               --            168
                                                         -------------   ------------    -------------   ------------
ADJUSTED INCOME (LOSS) BEFORE EXTRAORDINARY ITEM AND
   CUMULATIVE EFFECT OF ACCOUNTING CHANGE                $      (2,118)  $       (924)   $      (2,114)  $        924
                                                         =============   ============    =============   ============
</Table>

<Table>
<Caption>
                                                          THREE MONTHS ENDED JUNE 30,       SIX MONTHS ENDED JUNE 30,
                                                         ----------------------------    ----------------------------
                                                                  2002           2001             2002           2001
                                                         -------------   ------------    -------------   ------------
<S>                                                      <C>             <C>             <C>             <C>
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE              $        (.78)  $       (.38)   $        (.78)  $        .27
   Goodwill amortization                                            --            .01               --            .01
   Wireless licenses amortization                                   --            .03               --            .06
                                                         -------------   ------------    -------------   ------------
ADJUSTED EARNINGS (LOSS) PER SHARE - BASIC AND DILUTED   $        (.78)  $       (.34)   $        (.78)  $        .34
                                                         =============   ============    =============   ============
</Table>

<Table>
<Caption>
(Dollars in Millions)                                     THREE MONTHS ENDED JUNE 30,     SIX MONTHS ENDED JUNE 30,
                                                         ----------------------------    ----------------------------
                                                                  2002           2001             2002           2001
                                                         -------------   ------------    -------------   ------------
<S>                                                      <C>             <C>             <C>             <C>
REPORTED NET INCOME (LOSS)                               $      (2,115)  $     (1,021)   $      (2,616)  $        551
   Goodwill amortization                                            --             14               --             23
   Wireless licenses amortization                                   --             83               --            168
                                                         -------------   ------------    -------------   ------------
ADJUSTED NET INCOME (LOSS)                               $      (2,115)  $       (924)   $      (2,616)  $        742
                                                         =============   ============    =============   ============
</Table>

<Table>
<Caption>
                                                          THREE MONTHS ENDED JUNE 30,     SIX MONTHS ENDED JUNE 30,
                                                         ----------------------------    ----------------------------
                                                                  2002           2001            2002            2001
                                                         -------------   ------------    -------------   ------------
<S>                                                      <C>             <C>             <C>            <C>
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE              $        (.78)  $       (.38)   $        (.96) $         .20
   Goodwill amortization                                            --            .01              --             .01
   Wireless licenses amortization                                   --            .03              --             .06
                                                         -------------   ------------    -------------   ------------
ADJUSTED EARNINGS (LOSS) PER SHARE - BASIC AND DILUTED   $        (.78)  $       (.34)   $        (.96) $         .27
                                                         =============   ============    =============   ============
</Table>

The preceding tables exclude $27 million and $45 million, or $.01 per share and
$.02 per share, in the second quarter and the first six months of 2001,
respectively, related to amortization of goodwill and other intangible assets
with indefinite lives of equity method investments.



                                       8
<PAGE>
Goodwill

Changes in the carrying amount of goodwill for the six months ended June 30,
2002 are as follows:

<Table>
<Caption>
                                              DOMESTIC    DOMESTIC                INFORMATION  CORPORATE &
(Dollars in Millions)                          TELECOM    WIRELESS INTERNATIONAL     SERVICES        OTHER     TOTAL
                                             ---------    -------- -------------  -----------  -----------    --------
<S>                                          <C>          <C>          <C>           <C>          <C>         <C>
BALANCE AS OF DECEMBER 31, 2001              $     401    $     --     $    627      $    558     $    112    $  1,698
   Goodwill reclassifications                       --          --          416            29           --         445
   Goodwill acquired during the period              --          --           51            --           --          51
   CTI Goodwill in impairment charge                --          --         (220)           --           --        (220)
   Goodwill impairment losses under SFAS
     No. 142                                       (90)         --           --            (2)        (112)       (204)
                                             ---------    --------     --------      --------     --------    --------
BALANCE AS OF JUNE 30, 2002                  $     311    $     --     $    874      $    585     $     --    $  1,770
                                             =========    ========     ========      ========     ========    ========
</Table>

Other Intangible Assets

The major components and average useful lives of our other acquired intangible
assets follows:

<Table>
<Caption>
(Dollars in Millions)                                              AS OF JUNE 30, 2002         AS OF DECEMBER 31, 2001
                                                        ------------------------------   -----------------------------
                                                        GROSS CARRYING     ACCUMULATED   GROSS CARRYING     ACCUMULATED
                                                                AMOUNT    AMORTIZATION           AMOUNT    AMORTIZATION
                                                        --------------    ------------   --------------   -------------
<S>                                                       <C>             <C>               <C>           <C>
 Amortized intangible assets:
   Customer lists (4 to 6 years)                          $      3,372    $      1,563      $     3,349   $       1,279
   Non-network software (3 to 7 years)                           4,009           1,096            3,187             793
   Other (2 to 30 years)                                            50              24               74              29
                                                          ------------    ------------      -----------   -------------
 Total                                                    $      7,431    $      2,683      $     6,610   $       2,101
                                                          ============    ============      ===========   =============
 Unamortized intangible assets:
  Wireless licenses                                       $     38,713                      $    38,055
                                                          ============                      ===========
</Table>

Intangible assets amortization expense was $285 million and $570 million for the
three and six months ended June 30, 2002, respectively. It is estimated to be
$926 million for the remainder of 2002, $1,251 million in 2003, $1,130 million
in 2004, $921 million in 2005 and $478 million in 2006, primarily related to
customer lists and non-network software.

8.   FINANCIAL INSTRUMENTS

Effective January 1, 2001, we adopted SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" and SFAS No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities." The initial impact of
adoption on our consolidated financial statements was recorded as a cumulative
effect of an accounting change resulting in a charge of $182 million to current
earnings and income of $110 million to other comprehensive income (loss). The
recognition of assets and liabilities was immaterial to our financial position.

The ongoing effect of SFAS No. 133 on our consolidated financial statements is
determined each quarter by several factors, including the specific hedging
instruments in place and their relationships to hedged items, as well as market
conditions at the end of each period. For the three and six months ended June
30, 2002, we recorded charges to current earnings of $8 million and $11 million,
respectively, and income of $20 million and $17 million to other comprehensive
income (loss), respectively. The charges to current earnings relate primarily to
the mark-to-market adjustments on our long-term call options and the income in
other comprehensive income (loss) relates to our cash flow hedges on foreign
exchange risk. For the three and six months ended June 30, 2001, we recorded
charges to current earnings of $37 million and $153 million, respectively, and
losses of $2 million and $14 million to other comprehensive income (loss),
respectively. The charges to current earnings in 2001 related primarily to the
mark-to-market adjustment on the conversion option on our MFN debt securities
and the loss in other comprehensive income (loss) related to our cash flow
hedges on foreign exchange risk.




                                       9
<PAGE>
9.   DEBT

Exchangeable Notes

Previously, Verizon Global Funding issued two series of notes that are
exchangeable into shares of TCNZ and into C&W and NTL shares.

The exchangeable notes are indexed to the fair market value of the common stock
into which they are exchangeable. If the price of the shares exceeds the
exchange price established at the offering date, a mark-to-market adjustment is
recorded, recognizing an increase in the carrying value of the debt obligation
and a charge to income. If the price of the shares subsequently declines, the
debt obligation is reduced (but not to less than the amortized carrying value of
the notes).

At June 30, 2002 and 2001, the exchange prices of the notes exchangeable into
TCNZ and into C&W and NTL shares exceeded the fair market value of the common
stocks into which they are exchangeable. Consequently, the notes were recorded
at their amortized carrying value with no mark-to-market adjustments recorded in
the second quarter or in the first six months of 2002 and 2001. In the second
quarter of 2002, we recorded the extinguishment of $243 million of the notes
exchangeable into C&W and NTL shares. As of June 30, 2002, $8,000 in principal
amount of TCNZ notes has been delivered for exchange.

Support Agreements

All of Verizon Global Funding's debt has the benefit of Support Agreements
between us and Verizon Global Funding, which guarantee payment of interest,
premium (if any) and principal outstanding should Verizon Global Funding fail to
pay. The holders of Verizon Global Funding debt do not have recourse to the
stock or assets of most of our telephone operations or TCNZ; however, they do
have recourse to dividends paid to us by any of our consolidated subsidiaries as
well as assets not covered by the exclusion. Verizon Global Funding's long-term
debt, including current portion, aggregated $19,796 million at June 30, 2002.
The carrying value of the available assets reflected in our condensed
consolidated financial statements was approximately $61.1 billion at June 30,
2002.

Debt Issuances

In June 2002, Verizon Global Funding issued $1 billion of 6.125% notes due 2007,
$600 million of 6.875% notes due 2012 and $400 million of 7.750% notes due 2032
at discounts, resulting in total gross proceeds of approximately $1,978 million.

In May 2002, Verizon New England Inc., a wholly owned subsidiary of Verizon,
issued $480 million of 7% quarterly interest Series B debentures due 2042 at
par, resulting in gross proceeds of approximately $465 million.

In March 2002, Verizon New York Inc., a wholly owned subsidiary of Verizon,
issued $1 billion of 6.875% Series A debentures due 2012 and $500 million of
7.375% Series B debentures due 2032 at discounts, resulting in gross proceeds of
approximately $990 million and $489 million, respectively.

In February 2002, Verizon Maryland Inc., a wholly owned subsidiary of Verizon,
issued $500 million of 6.125% Series A debentures due 2012 at a discount,
resulting in gross proceeds of approximately $497 million.

In January 2002, Verizon New Jersey Inc., a wholly owned subsidiary of Verizon,
issued $1 billion of 5.875% Series A debentures due 2012 at a discount,
resulting in gross proceeds of approximately $987 million.



                                       10
<PAGE>
10.  COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) consists of net income and other gains and losses
affecting shareowners' investment that, under generally accepted accounting
principles, are excluded from net income.


Changes in the components of other comprehensive income (loss) are as follows:

<Table>
<Caption>
(Dollars in Millions)                                  THREE MONTHS ENDED JUNE 30,        SIX MONTHS ENDED JUNE 30,
                                                     -----------------------------    -----------------------------
                                                             2002             2001            2002             2001
                                                     ============     ============    ============     ============
<S>                                                  <C>              <C>             <C>              <C>
NET INCOME (LOSS)                                    $     (2,115)    $     (1,021)   $     (2,616)    $        551
                                                     ------------     ------------    ------------     ------------

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES
Foreign currency translation adjustments                      227              100             187              348
Unrealized gains on marketable securities                     284            1,947              99            1,152
Unrealized derivative gains (losses) on cash flow
    hedges                                                     20               (2)             17              (16)
Minimum pension liability adjustment                           --               --             (40)              --
                                                     ------------     ------------    ------------     ------------
                                                              531            2,045             263            1,484
                                                     ------------     ------------    ------------     ------------
TOTAL COMPREHENSIVE INCOME (LOSS)                    $     (1,584)    $      1,024    $     (2,353)    $      2,035
                                                     ============     ============    ============     ============
</Table>

The increase in the net unrealized gains on marketable securities in 2002
primarily relate to reclassification of after-tax realized losses of $246
million recorded due to the other than temporary decline in market value of
certain of our marketable securities in the second quarter of 2002 and our
investment in TCNZ (see Note 6). The minimum pension liability was increased in
2002 to include the minimum pension liability of TELPRI (see Note 6). The change
in unrealized gains on marketable securities in 2001 primarily relates to the
reclassification of after-tax realized losses of $2,926 million recorded
primarily due to the other than temporary decline in market value of investments
in C&W, NTL and MFN (see Note 6).

The components of accumulated other comprehensive loss are as follows:

<Table>
<Caption>
(Dollars in Millions)                                                        AT JUNE 30, 2002   AT DECEMBER 31, 2001
                                                                         --------------------   --------------------
<S>                                                                      <C>                     <C>
Foreign currency translation adjustments                                 $             (1,261)   $            (1,448)
Unrealized gains on marketable securities                                                 426                    327
Unrealized derivative losses on cash flow hedges                                          (28)                   (45)
Minimum pension liability adjustment                                                      (61)                   (21)
                                                                         --------------------    -------------------
Accumulated other comprehensive loss                                     $               (924)   $            (1,187)
                                                                         ====================    ===================
</Table>




                                       11
<PAGE>
11.  EARNINGS (LOSS) PER SHARE

The following table is a reconciliation of the share amounts used in computing
earnings per share.

<Table>
<Caption>
(Dollars and Shares in Millions, Except
         Per Share Amounts)                                  THREE MONTHS ENDED JUNE 30,        SIX MONTHS ENDED JUNE 30,
                                                                   2002             2001             2002            2001
                                                           ------------     ------------     ------------     ------------
<S>                                                        <C>              <C>              <C>              <C>
NET INCOME (LOSS)
Income (loss) before extraordinary item and cumulative
   effect of accounting change                             $     (2,118)    $     (1,021)    $     (2,114)    $        733
Extraordinary item, net of tax                                        3               --               (6)              --
Cumulative effect of accounting change, net of tax                   --               --             (496)            (182)
                                                           ------------     ------------     ------------     ------------
Net income (loss)                                          $     (2,115)    $     (1,021)    $     (2,616)    $        551
                                                           ============     ============     ============     ============

BASIC EARNINGS (LOSS) PER COMMON SHARE
Weighted-average shares outstanding                               2,726            2,707            2,723            2,706
                                                           ------------     ------------     ------------     ------------
Income (loss) before extraordinary item and cumulative
   effect of accounting change                             $       (.78)    $       (.38)    $       (.78)    $        .27
Extraordinary item, net of tax                                       --               --               --              --
Cumulative effect of accounting change, net of tax                   --               --             (.18)            (.07)
                                                           ------------     ------------     ------------     ------------
Net income (loss)                                          $       (.78)    $       (.38)    $       (.96)    $        .20
                                                           ============     ============     ============     ============

DILUTED EARNINGS (LOSS) PER COMMON SHARE
Weighted-average shares outstanding                               2,726            2,707            2,723            2,706
Effect of dilutive securities                                        --               --               --               22
                                                           ------------     ------------     ------------     ------------
Weighted-average shares outstanding - diluted                     2,726            2,707            2,723            2,728
                                                           ============     ============     ============     ============
Income (loss) before extraordinary item and cumulative
   effect of accounting change                             $       (.78)    $       (.38)    $       (.78)    $        .27
Extraordinary item, net of tax                                       --               --               --               --
Cumulative effect of accounting change, net of tax                   --               --             (.18)            (.07)
                                                           ------------     ------------     ------------     ------------
Net income (loss)                                          $       (.78)    $       (.38)    $       (.96)    $        .20
                                                           ============     ============     ============     ============
</Table>

Stock options for 226 million shares for the three months ended June 30, 2002
and 171 million shares for the six months ended June 30, 2002 were not included
in the computation of diluted earnings per share because the exercise price of
stock options was greater than the average market price of the common stock. For
the three and six months ended June 30, 2001, the number of shares not included
in the computation of diluted earnings per share was 116 million and 117
million, respectively.

12.  SEGMENT INFORMATION

We have four reportable segments, which we operate and manage as strategic
business units and organize by products and services. Our segments include a
Domestic Telecom group which provides domestic wireline communications services;
a Domestic Wireless group which provides domestic wireless communications
services; an International group which includes our foreign wireline and
wireless communications investments; and an Information Services group which is
responsible for our domestic and international publishing businesses and
electronic commerce services.

We measure and evaluate our reportable segments based on segment income. This
segment income excludes unallocated corporate expenses and other adjustments
arising during each period. The other adjustments include transactions that the
chief operating decision makers exclude in assessing business unit performance
due primarily to their nonrecurring and/or non-operational nature. Although such
transactions are excluded from the business segment results, they are included
in reported consolidated earnings. Gains and losses that are not individually
significant are included in all segment results, since these items are included
in the chief operating decision makers' assessment of unit performance. These
are mostly contained in International and Information Services since they
actively manage investment portfolios.



                                       12
<PAGE>
REPORTABLE SEGMENTS

The following table provides operating financial information for our four
reportable segments and a reconciliation of segment results to consolidated
results:

<Table>
<Caption>
(Dollars in Millions)                                 THREE MONTHS ENDED JUNE 30,          SIX MONTHS ENDED JUNE 30,
                                                 --------------------------------    -------------------------------
                                                            2002             2001             2002              2001
                                                 ---------------    -------------    -------------     -------------
<S>                                              <C>                <C>              <C>               <C>
EXTERNAL OPERATING REVENUES
Domestic Telecom                                 $        10,306    $      10,817    $      20,631     $      21,601
Domestic Wireless                                          4,726            4,373            9,090             8,411
International                                                728              586            1,452             1,111
Information Services                                         936              970            1,739             1,754
                                                 ---------------    -------------    -------------     -------------
Total segments                                            16,696           16,746           32,912            32,877
Reconciling items                                            139              163              298               298
                                                 ---------------    -------------    -------------     -------------
Total consolidated - reported                    $        16,835    $      16,909    $      33,210     $      33,175
                                                 ===============    =============    =============     =============

INTERSEGMENT REVENUES
Domestic Telecom                                 $           162    $         136    $         311     $         272
Domestic Wireless                                             12               10               22                18
International                                                 26               12               53                14
Information Services                                          --               14               --                19
                                                 ---------------    -------------    -------------     -------------
Total segments                                               200              172              386               323
Reconciling items                                           (200)            (172)            (386)             (323)
                                                 ---------------    -------------    -------------     -------------
Total consolidated - reported                    $            --    $          --    $          --     $          --
                                                 ===============    =============    =============     =============

TOTAL OPERATING REVENUES
Domestic Telecom                                 $        10,468    $      10,953    $      20,942     $      21,873
Domestic Wireless                                          4,738            4,383            9,112             8,429
International                                                754              598            1,505             1,125
Information Services                                         936              984            1,739             1,773
                                                 ---------------    -------------    -------------     -------------
Total segments                                            16,896           16,918           33,298            33,200
Reconciling items                                            (61)              (9)             (88)              (25)
                                                 ---------------    -------------    -------------     -------------
Total consolidated - reported                    $        16,835    $      16,909    $      33,210     $      33,175
                                                 ===============    =============    =============     =============

SEGMENT INCOME (LOSS)
Domestic Telecom                                 $         1,232    $       1,361    $       2,498     $       2,711
Domestic Wireless                                            240              151              437               249
International                                                256              243              467               453
Information Services                                         260              298              473               510
                                                 ---------------    -------------    -------------     -------------
Total segment income                                       1,988            2,053            3,875             3,923
Reconciling items                                         (4,103)          (3,074)          (6,491)           (3,372)
                                                 ---------------    -------------    -------------     -------------
Total consolidated net income (loss) - reported  $        (2,115)   $      (1,021)   $      (2,616)    $         551
                                                 ===============    =============    =============     =============
</Table>

<Table>
<Caption>
(Dollars in Millions)                                                           JUNE 30, 2002      DECEMBER 31, 2001
                                                                             ----------------      -----------------
<S>                                                                          <C>                    <C>
ASSETS
Domestic Telecom                                                             $         81,581       $         82,635
Domestic Wireless                                                                      61,440                 60,262
International                                                                          12,455                 14,324
Information Services                                                                    4,209                  4,160
                                                                             ----------------       ----------------
Total segments                                                                        159,685                161,381
Reconciling items                                                                       8,608                  9,414
                                                                             ----------------       ----------------
Total consolidated                                                           $        168,293       $        170,795
                                                                             ================       ================
</Table>




                                       13
<PAGE>
Major reconciling items between the segments and the consolidated results are as
follows:

<Table>
<Caption>
(Dollars in Millions)                                  THREE MONTHS ENDED JUNE 30,        SIX MONTHS ENDED JUNE 30,
                                                             2002             2001             2002            2001
                                                    -------------     ------------     -------------   -------------
<S>                                                 <C>               <C>              <C>             <C>
TOTAL REVENUES
Corporate, eliminations and other                   $         (61)    $         (9)    $         (88)  $         (25)
                                                    -------------     ------------     -------------   -------------

NET INCOME (LOSS)
Mark-to-market adjustment - financial
    instruments (see Note 8)                        $          (8)    $        (37)    $         (11)  $        (151)
Sales of assets, net (see Note 3)                              --                3               116               3
Transition costs (see Note 2)                                 (57)            (162)             (109)           (250)
Severance (see Note 2)                                       (475)              --              (475)             --
Cumulative effect of accounting change (see Note
    7 and Note 8)                                              --               --              (496)           (182)
Investment-related charges (see Note 6)                    (3,305)          (2,926)           (5,331)         (2,926)
NorthPoint settlement (see Note 2)                           (114)              --              (114)             --
WorldCom exposure and other special items (see
    Note 2 and Note 4)                                       (251)              --              (260)             --
Corporate, eliminations and other                             107               48               189             134
                                                    -------------     ------------     -------------   -------------
                                                    $      (4,103)    $     (3,074)    $      (6,491)  $      (3,372)
                                                    =============     ============     =============   =============
</Table>

Corporate, eliminations and other includes unallocated corporate expenses,
intersegment eliminations recorded in consolidation and the results of other
businesses such as lease financing. We generally account for intersegment sales
of products and services and asset transfers at current market prices. We are
not dependent on any single customer.

13.  RECENT ACCOUNTING PRONOUNCEMENTS

In June 2002, the Financial Accounting Standards Board (FASB) issued SFAS No.
146, "Accounting for Costs Associated with Exit or Disposal Activities." This
statement addresses financial accounting and reporting for costs associated with
exit or disposal activities and nullifies Emerging Issues Task Force (EITF)
Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in
Restructuring)." EITF Issue No. 94-3 required accrual of liabilities related to
exit and disposal activities at a plan (commitment) date. SFAS No. 146 requires
that a liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred. The provisions of this statement are
effective for exit or disposal activities that are initiated after December 31,
2002.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." This standard provides the accounting for the cost of legal
obligations associated with the retirement of long-lived assets. SFAS No. 143
requires that companies recognize the fair value of a liability for asset
retirement obligations in the period in which the obligations are incurred and
capitalize that amount as a part of the book value of the long-lived asset. That
cost is then depreciated over the remaining life of the underlying long-lived
asset. We are required to adopt SFAS No. 143 effective January 1, 2003. We are
currently evaluating the impact this new standard will have on our future
results of operations or financial position.

14.  COMMITMENTS AND CONTINGENCIES

Several state and federal regulatory proceedings may require our telephone
operations to refund to customers a portion of the revenues collected in the
current and prior periods. There are also various legal actions pending to which
we are a party and claims which, if asserted, may lead to other legal actions.
We have established reserves for specific liabilities in connection with
regulatory and legal actions, including environmental matters, that we currently
deem to be probable and estimable. We do not expect that the ultimate resolution
of pending regulatory and legal matters in future periods will have a material
effect on our financial condition, but it could have a material effect on our
results of operations.

On January 29, 2001, the bidding phase of the FCC reauction of 1.9 GHz C and F
block broadband Personal Communications Services spectrum licenses, which began
December 12, 2000, officially ended. Verizon Wireless was the winning bidder for
113 licenses. The total price of these licenses was $8,781 million, $1,822
million of which had been paid. Most of the licenses that were reauctioned
relate to spectrum that was previously licensed to




                                       14
<PAGE>

NextWave Personal Communications Inc. and NextWave Power Partners Inc.
(collectively NextWave), which have appealed to the federal courts the FCC's
action canceling NextWave's licenses and reclaiming the spectrum.

In a decision on June 22, 2001, the U.S. Court of Appeals for the D.C. Circuit
ruled that the FCC's cancellation and repossession of NextWave's licenses was
unlawful. The FCC sought a stay of the court's decision which was denied. The
FCC subsequently reinstated NextWave's licenses but it did not return Verizon
Wireless's payment on the NextWave licenses nor did it acknowledge that the
court's decision extinguished Verizon Wireless's obligation to purchase the
licenses. On October 19, 2001, the FCC filed a petition asking the U.S. Supreme
Court to consider reversing the U.S. Court of Appeals for the D.C. Circuit's
decision. On March 4, 2002, the U.S. Supreme Court granted the FCC's petition
and agreed to hear the appeal. Oral argument on the appeal has been scheduled
for October 8, 2002, with a decision by the U.S. Supreme Court expected in early
2003.

In April 2002, the FCC returned $1,479 million of Verizon Wireless's $1,822
million license payment and stated its view that Verizon Wireless remains
obligated to purchase the licenses if and when the FCC succeeds in regaining
them from NextWave. On April 4, 2002, Verizon Wireless filed a complaint in the
U.S. Court of Federal Claims against the United States government seeking both a
declaration that Verizon Wireless has no further performance obligations with
respect to the reauction, and money damages. On April 8, 2002, Verizon Wireless
filed a petition with the U.S. Court of Appeals for the District of Columbia
seeking a declaration that the auction obligation is voidable and a return of
its remaining down payment of $261 million. Both of these matters are pending.

In December 2001, Verizon Wireless and Price Communications Corp. (Price)
announced that an agreement had been reached combining Price's wireless business
with a portion of Verizon Wireless in a transaction valued at approximately $1.7
billion, including $550 million of net debt. The resulting limited partnership
will be controlled and managed by Verizon Wireless. Price's partnership interest
will be exchangeable into Verizon Wireless or Verizon stock, subject to several
conditions including an exchange price minimum and maximum. Price's shareholders
approved the transaction on July 23, 2002, and the transaction is now expected
to close in the third quarter of 2002.

In 2001, we agreed to provide up to $2.0 billion in financing to Genuity with
maturity in 2005 and have loaned $1,150 million of that commitment to date,
which was included in our analysis of financial statement exposure to Genuity
(see Note 6). As a result of our recent decision to convert all but one of our
shares of Class B common stock of Genuity into shares of Class A common stock of
Genuity and relinquish our right to convert to a controlling interest in
Genuity, we are no longer committed to fund the additional $850 million under
the $2.0 billion agreement. Our commercial relationship with Genuity will
continue, which includes a five-year purchase commitment for Genuity services
such as dedicated Internet access, managed web hosting and Internet security.
Under this purchase commitment, which terminates in 2005, Verizon has agreed to
pay Genuity a minimum of $500 million over five years for its services, of which
we have satisfied $230 million as of June 30, 2002.

In addition, under the terms of an investment agreement relating to our wireless
joint venture, Vodafone Group plc (Vodafone) may require us or Verizon Wireless
to purchase up to an aggregate of $20 billion worth of its interest in Verizon
Wireless between 2003 and 2007 at its then fair market value. The purchase of up
to $10 billion, in cash or stock at our option, may be required in the summer of
2003 or 2004, and the remainder, which may not exceed $10 billion at any one
time, in the summers of 2005 through 2007. Vodafone has the option to require us
or Verizon Wireless to satisfy up to $7.5 billion of the remainder with cash or
contributed debt.

As previously discussed in Note 2, during the second quarter of 2002, we
recorded a pretax charge of $175 million ($114 million after-tax) for a proposed
settlement of the NorthPoint litigation. The lawsuit arose from Verizon's
decision to terminate an agreement with NorthPoint to combine the two companies'
DSL businesses. Verizon terminated the merger agreement due to the deterioration
in NorthPoint's business, operations and financial condition. The proposed
settlement is subject to approval by the bankruptcy court, expected in the third
quarter of 2002.




                                       15
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

OVERVIEW

Verizon Communications Inc. is one of the world's leading providers of
communications services. Verizon companies are the largest providers of wireline
and wireless communications in the United States, with 135.1 million access line
equivalents and 30.3 million wireless customers. Verizon is also the largest
directory publisher in the world. With more than $67 billion in annual revenues
and approximately 241,000 employees, Verizon's global presence extends to more
than 40 countries in the Americas, Europe, Asia and the Pacific.


We have four reportable segments, which we operate and manage as strategic
business units: Domestic Telecom, Domestic Wireless, International and
Information Services. Domestic Telecom includes local, long distance and other
telecommunication services. Domestic Wireless products and services include
wireless voice and data services, paging services and equipment sales.
International operations include wireline and wireless communications operations
and investments in the Americas, Europe, Asia and the Pacific. Information
Services consists of our domestic and international publishing businesses,
including print and electronic directories and Internet-based shopping guides,
as well as includes website creation and other electronic commerce services.

CONSOLIDATED RESULTS OF OPERATIONS

In this section, we discuss our overall reported results and highlight special
and nonrecurring items. In the following section, we review the performance of
our segments. We exclude from the segments' reported results the effects of
these items, which management does not consider in assessing segment performance
due primarily to their nonrecurring and/or non-operational nature. We believe
that this presentation will assist readers in better understanding operating
results and trends from period to period.

Reported consolidated revenues were $16,835 million and $33,210 million for the
quarter and the six months ended June 30, 2002, respectively, compared to
$16,909 million and $33,175 million for the quarter and six months ended June
30, 2001, respectively. Reported consolidated expenses were $14,152 million and
$27,016 million for the second quarter and the first six months of 2002,
respectively, compared to $13,108 million and $25,767 million, respectively, for
the same periods of 2001. Prior year reported consolidated revenues and
operating expenses were not adjusted to reflect the deconsolidation of CTI
Holdings, S.A. (CTI) to the equity method and the consolidation of
Telecomunicaciones de Puerto Rico, Inc. (TELPRI). See "Segment Results of
Operations - International" for additional discussion of the CTI and TELPRI
transactions. We reported net losses of $2,115 million ($.78 per diluted share)
and $2,616 million ($.96 per diluted share) for the quarter and six months ended
June 30, 2002, respectively, compared to a net loss of $1,021 million ($.38 per
diluted share) and net income of $551 million ($.20 per diluted share) for the
quarter and six months ended June 30, 2001, respectively.

Reported consolidated revenues decreased by $74 million, or 0.4% in the second
quarter of 2002 and grew by $35 million, or 0.1% in the first six months of
2002, compared to the similar periods of the prior year. For the second quarter
and the first half of 2002, reported consolidated operating expenses increased
$1,044 million, or 8.0% and increased $1,249 million, or 4.8% compared to the
similar periods of 2001, respectively. In the second quarter and six months
ended June 30, 2002, higher Domestic Wireless and International revenues and
expenses were offset by lower Domestic Telecom revenues and expenses compared to
the similar periods of 2001 (see summary below and "Segment Results of
Operations"). In addition, operating expenses in the current quarter are
impacted by severance costs and other special charges primarily related to our
financial statement exposure to WorldCom Inc. and a proposed settlement of a
litigation matter involving NorthPoint Communications Group, Inc. (NorthPoint),
partially offset by lower transition costs, compared to the second quarter of
2001. Operating expenses in the first six months of 2002 also include a portion
of our investment-related charges, partially offset by a net gain on asset sales
compared to the similar period of 2001 (see summary below and "Special Items").
The significant items impacting net income also include higher
investment-related charges in the current quarter, partially offset by lower
unfavorable mark-to-market adjustments related to financial instruments compared
to the second quarter of 2001, and a higher cumulative effect of accounting
change, partially offset by lower unfavorable mark-to-market adjustments related
to financial instruments, in the first six months of 2002 compared to the
similar period of 2001. These items are described in the "Special Items"
section.



                                       16
<PAGE>
CONSOLIDATED REVENUES

Domestic Wireless revenues grew by $355 million, or 8.1%, in the second quarter
of 2002 and $683 million, or 8.1%, for the six months ended 2002 compared to the
similar periods in 2001. This increase was primarily due to an 8.5% increase in
subscribers, partially offset by a slight decline in average service revenue per
subscriber. Average service revenue per subscriber decreased 1.4% to slightly
under $49 for the quarter and by 1.1% to $47 for the six months ended 2002
compared to the similar periods in 2001.

Revenues earned by our International segment grew by $156 million, or 26.1%, in
the second quarter of 2002 and $380 million, or 33.8% in the first six months of
2002 as compared to the similar periods in 2001. This growth is primarily due to
the consolidation of TELPRI partially offset by the deconsolidation of CTI in
2002. Adjusting the quarter and first six months of 2001 to be comparable with
2002, revenues earned from our international businesses declined by $74 million,
or 8.9%, in the second quarter of 2002 and $50 million, or 3.2%, in the first
six months of 2002 as compared to the similar periods in 2001 primarily due to
weak economies and increased competition in Latin America.

The decline in Domestic Telecom's revenues in the current quarter and six months
ended June 30, 2002 was driven by lower local and other services, partially
offset by higher network access services for the six months ended June 30, 2002.
The decline in local service revenues of $315 million, or 5.7% in the second
quarter of 2002 and $700 million, or 6.3% in the first half of 2002 was largely
due to lower demand and usage of our basic local wireline services and mandated
intrastate price reductions. Revenues from other services declined $208 million,
or 16.6% in the second quarter of 2002 and $451 million, or 18.1% in the first
half of 2002. This decline was substantially due to lower sales of customer
premises equipment to some major customers and a decline in public telephone
revenues as more customers substituted wireless communications for pay telephone
services. Our network access revenues grew $184 million, or 2.7% in the first
half of 2002. This growth was mainly attributable to higher customer demand for
data transport services (primarily special access services and digital
subscriber line, or DSL).

CONSOLIDATED OPERATING EXPENSES

Domestic Wireless's operations and support expenses increased by $229 million,
or 8.1%, in the second quarter 2002 and $411 million, or 7.5%, for the six
months ended June 30, 2002 compared to the similar periods in 2001. This
increase was primarily due to increased salary and wage expense, advertising and
billing and data processing charges and selling expenses related to an increase
in gross customer additions in the second quarter 2002 compared to the second
quarter 2001, partially offset by cost savings resulting from headcount
reductions. Partially offsetting this increase, Domestic Wireless's depreciation
and amortization decreased by $102 million, or 11.5%, for the quarter ended June
30, 2002 and by $240 million, or 13.3%, in the six months ended June 30, 2002
compared to the similar periods in 2001. The decrease was primarily attributable
to a reduction of amortization expense from the adoption of Statement of
Financial Accounting Standards (SFAS) No.142, "Goodwill and Other Intangible
Assets," effective January 1, 2002, which requires that goodwill and
indefinite-lived intangible assets no longer be amortized. This decrease was
partially offset by increased depreciation expense related to the increase in
depreciable assets related to an increased asset base.

International's operations and support expenses increased by $42 million, or
9.7%, in the second quarter of 2002 and $156 million, or 19.1%, in the first six
months of 2002 as compared to the similar periods in 2001. This growth is
primarily due to the consolidation of TELPRI partially offset by the
deconsolidation of CTI in 2002. Adjusting the quarter and first six months of
2001 to be comparable with 2002, operations and support expenses decreased $51
million, or 9.7%, in the second quarter of 2002 and $8 million, or 0.8%, in the
first six months of 2002 as compared to the similar periods in 2001 reflecting
lower variable costs associated with reduced sales volumes in Latin America
offset in part by higher variable start-up costs. Adjusting the quarter and
first six months of 2001 to be comparable with 2002, depreciation and
amortization expense decreased $7 million, or 4.9%, in the second quarter of
2002 and $10 million, or 3.5%, in the first six months of 2002 as compared to
the similar periods in 2001.

Domestic Telecom's operations and support expenses decreased by $312 million, or
5.3% in the second quarter of 2002 and $691 million, or 5.8% in the first half
of 2002 principally due to lower costs at our domestic telephone operations.
These reductions were attributable to reduced spending for materials and
contracted services, lower overtime for repair and maintenance activity
principally as a result of reduced volumes at our dispatch and call centers and
lower employee costs associated with declining workforce levels. Operating costs
have also decreased due to business integration activities, achievement of
merger synergies and other effective cost containment measures, including lower
spending by non-strategic businesses, and favorable adjustments to ongoing
expense



                                       17
<PAGE>

estimates as a result of specific regulatory decisions in New York and
other states. These cost reductions were partially offset by higher costs
associated with our growth businesses such as data and long distance services.
Increased costs associated with higher uncollectible accounts receivable and
salary and wage increases for employees further offset cost reductions in both
periods of 2002. Pension income, net of postretirement benefit costs, was $335
million and $657 million for the second quarter and year-to-date 2002,
respectively, compared to $420 million and $762 million for the second quarter
and year-to-date 2001, respectively. Partially offsetting this decrease,
Domestic Telecom's depreciation and amortization expense increased by $49
million, or 2.1% in the second quarter of 2002 and $131 million, or 2.8% in the
first half of 2002. This expense increase was principally due to growth and a
change in the mix of depreciable telephone plant and increased software
amortization costs partially offset by the effect of lower rates of
depreciation.

Consolidated operating expenses in the second quarter of 2002 include $692
million of severance charges, $394 million of special charges primarily related
to our financial statement exposure to WorldCom Inc. and a charge of $175
million related to the NorthPoint litigation matter, partially offset by lower
transition costs of $102 million compared to $279 million in the second quarter
of 2001. For the six months ended June 30, 2002, consolidated operating expenses
also include $227 million of investment-related charges, partially offset by
lower transition costs of $198 million compared to $442 million in the first six
months of 2001 and a net pretax gain of $220 million primarily resulting from
the sale of a business and exit activities.

CONSOLIDATED NET INCOME (LOSS)

Total segment income was driven by the after-tax impact of operating revenues
and operating expenses, after minority interests. Our reported results for all
periods were primarily affected by special items. These special items, described
in detail on pages 25 to 27, impacted net income (loss) by $4,210 million ($1.55
per diluted share) and $6,680 million ($2.45 per diluted share) in the current
quarter and the first six months of 2002, respectively, and by $3,122 million
($1.15 per diluted share) and $3,506 million ($1.29 per diluted share) in the
comparable periods of 2001, respectively. In addition, for the three and six
months ended June 30, 2002, our net losses were impacted by lower interest
expense and by higher minority interest and income taxes, compared to the
similar periods of the prior year. See "Other Consolidated Results" for
additional discussion of these items.

SEGMENT RESULTS OF OPERATIONS

We have four reportable segments, which we operate and manage as strategic
business units and organize by products and services. Our segments are Domestic
Telecom, Domestic Wireless, International and Information Services. You can find
additional information about our segments in Note 12 to the condensed
consolidated financial statements.

We measure and evaluate our reportable segments based on segment income. This
segment income excludes unallocated corporate expenses and other adjustments
arising during each period. The other adjustments include transactions that the
chief operating decision makers exclude in assessing business unit performance
due primarily to their nonrecurring and/or non-operational nature. Although such
transactions are excluded from business segment results, they are included in
reported consolidated earnings. We previously highlighted the more significant
of these transactions in the "Consolidated Results of Operations" section. Gains
and losses that are not individually significant are included in all segment
results, since these items are included in the chief operating decision makers'
assessment of unit performance. These are mostly contained in International and
Information Services since they actively manage investment portfolios.

DOMESTIC TELECOM

Domestic Telecom provides local telephone services, including voice and data
transport, enhanced and custom calling features, network access, directory
assistance, private lines and public telephones in 30 states and the District of
Columbia. This segment also provides long distance services, customer premises
equipment distribution, data solutions and systems integration, billing and
collections, Internet access services and inventory management services.



                                       18
<PAGE>
OPERATING REVENUES

<Table>
<Caption>
(Dollars in Millions)         THREE MONTHS ENDED JUNE 30,                     SIX MONTHS ENDED JUNE 30,
                              ---------------------------                  ----------------------------
                                     2002            2001      % CHANGE           2002             2001    % CHANGE
                              -----------     -----------     ---------    -----------    -------------  ----------
<S>                           <C>             <C>                <C>       <C>            <C>              <C>
Local services                $     5,230     $     5,545         (5.7)%   $    10,465    $      11,165        (6.3)%
Network access services             3,418           3,399           .6           6,875            6,691         2.7
Long distance services                777             758          2.5           1,556            1,520         2.4
Other services                      1,043           1,251        (16.6)          2,046            2,497       (18.1)
                              -----------     -----------                  -----------    -------------
                              $    10,468     $    10,953         (4.4)    $    20,942    $      21,873        (4.3)
</Table>

Local Services

Local service revenues are earned by our telephone operations from the provision
of local exchange, local private line, wire maintenance, voice messaging and
value-added services. Value-added services are a family of services that expand
the utilization of the network, including products such as Caller ID, Call
Waiting and Return Call. The provision of local exchange services not only
includes retail revenue but also includes local wholesale revenues from
unbundled network elements (UNEs), interconnection revenues from competitive
local exchange carriers (CLECs), wireless interconnection revenues and some data
transport revenues.

The decline in local service revenues of $315 million, or 5.7% in the second
quarter of 2002 and $700 million, or 6.3% in the first half of 2002 was largely
due to lower demand and usage of our basic local wireline services and mandated
intrastate price reductions. Our switched access lines in service declined 3.3%
from June 30, 2001, primarily reflecting the impact of the economic slowdown and
competition for some local services. Technology substitution has also affected
local service revenue growth, as indicated by lower demand for residential
access lines of 2.1% from a year ago. The primary contributor to the decline in
residential access lines is negative growth in additional lines, with second
line penetration at 19% at June 30, 2002, compared to 20% at the similar period
last year. At the same time, business access lines have declined 5.3% from a
year ago, primarily reflecting the continued weakness in the economy. Local
service revenues were also negatively impacted in both periods of 2002 by
one-time billing increases recorded in the prior year.

These factors were partially offset by higher payments received from CLECs for
interconnection of their networks with our network and by increased sales of
packaged wireline services. Sales of packages of wireline services increased by
27% year-over-year, with over half of our new lines installed with packages.
Furthermore, we have expanded our new ONE-BILL service, which bundles Verizon
wireline and wireless charges on a single monthly bill. This service was
expanded in the second quarter of 2002 to Vermont, Maine and New Hampshire,
after successful launches in New York, Massachusetts, New Jersey and
Connecticut.

Network Access Services

Network access services revenues are earned from end-user subscribers and long
distance and other competing carriers who use our local exchange facilities to
provide usage services to their customers. Switched access revenues are derived
from fixed and usage-based charges paid by carriers for access to our local
network. Special access revenues originate from carriers and end-users that buy
dedicated local exchange capacity to support their private networks. End-user
access revenues are earned from our customers and from resellers who purchase
dial-tone services.

Our network access revenues grew $19 million, or 0.6%, in the second quarter of
2002 and $184 million, or 2.7% in the first half of 2002. This growth was mainly
attributable to higher customer demand for data transport services (primarily
special access services and DSL) that grew 7.5% and 8.9% in the second quarter
and first six months of 2002, respectively. Special access revenue growth
reflects strong demand in the business market for high-capacity, high-speed
digital services. Voice-grade equivalents (switched access lines and data
circuits) grew 7.9% from June 30, 2001 as more customers chose digital services.
We added 150,000 new DSL lines in the second quarter of 2002 and 300,000 lines
year-to-date, for a total of 1.5 million lines in service at June 30, 2002, a
nearly 80% year-over-year increase. Currently, 55% of our total access lines
qualify for DSL service. At the same time, customer service levels continue to
show improvement through a reduction in the DSL order provisioning interval from
more than fifteen days a year ago to five days by the second quarter 2002, and
we have nearly reached a 100% self installation rate by our customers.



                                       19
<PAGE>
Volume-related growth was partially offset by price reductions of approximately
$40 million in the second quarter of 2002 and $90 million year-to-date
associated with federal and state price cap filings and other regulatory
decisions. Revenue growth in both periods of 2002 was also affected by the
slowing economy, as reflected by declines in minutes of use from carriers and
CLECs of 7.4% in the second quarter 2002 and 7.5% year-to-date from the similar
periods last year.


WorldCom Inc. currently has several long-term contracts with us for the
provision of various network access products and services. If WorldCom Inc.
terminated those contracts, our network access revenues would be lower in future
periods. Lower revenues as a result of cancelling these contracts could be
partially offset with termination liabilities and/or migration of customers to
other interexchange carriers that interconnect with us.

Long Distance Services

Long distance service revenues include both intraLATA toll services and
interLATA long distance voice and data services.


Long distance service revenues increased $19 million, or 2.5% in the second
quarter of 2002 and $36 million, or 2.4% in the first half of 2002, primarily as
a result of revenue growth from our interLATA long distance services offered
throughout the region. We now offer long distance service in 44 states and to
more than 80% of our local telephone customers across the country. More than 45%
of our long distance customers come from states where service was most recently
introduced - New York, Massachusetts, Pennsylvania, Connecticut, Rhode Island
and Vermont. In June 2002, we received Federal Communications Commission (FCC)
approval to sell long distance in Maine and New Jersey and began offering
service in those states in July 2002. We added 800,000 new long distance
customers in the second quarter of 2002 and 1.6 million new customers in the
first half of 2002. At June 30, 2002, we had a total of 9.0 million long
distance customers nationwide, representing an increase of 3.0 million long
distance customers year-over-year or nearly 51% customer growth and 26% revenue
growth from the similar period last year. We currently have applications at the
FCC for New Hampshire, Delaware and Virginia. The FCC must decide on the New
Hampshire and Delaware applications by September 25, 2002 and decide on the
Virginia application by October 30, 2002. We are targeting completion of the FCC
filing process in all former Bell Atlantic jurisdictions by year-end.

This growth was partially offset by the effects of competition and toll calling
discount packages and product bundling offers of our intraLATA toll services.
However, in the second quarter of 2002, we saw a net win-back in customers for
intraLATA toll services in the states where interLATA long distance service has
been introduced. Technology substitution and lower access line growth due to the
slowing economy also affected long distance services revenue growth.

Other Services

Our other services include such services as billing and collections for long
distance carriers, public (coin) telephone and customer premises equipment
services. Other services revenues also include services provided by our
non-regulated subsidiaries such as inventory management and purchasing, and data
solutions and systems integration businesses.


Revenues from other services declined $208 million, or 16.6% in the second
quarter of 2002 and $451 million, or 18.1% in the first half of 2002. This
decline was substantially due to lower sales of customer premises equipment to
some major customers and a decline in public telephone revenues as more
customers substituted wireless communications for pay telephone services.


OPERATING EXPENSES

<Table>
<Caption>
(Dollars in Millions)            THREE MONTHS ENDED JUNE 30,                 SIX MONTHS ENDED JUNE 30,
                                 ---------------------------                 --------------------------
                                         2002           2001     % CHANGE           2002           2001     % CHANGE
                                 ------------    -----------     --------    -----------    -----------     --------
<S>                              <C>             <C>             <C>         <C>            <C>             <C>
Operations and support           $      5,592    $     5,904       (5.3)%    $    11,170    $    11,861        (5.8)%
Depreciation and amortization           2,393          2,344        2.1            4,758          4,627         2.8
                                 ------------    -----------                 -----------    -----------
                                 $      7,985    $     8,248       (3.2)     $    15,928    $    16,488        (3.4)
</Table>



                                       20
<PAGE>

Operations and Support

Operations and support expenses, which consist of employee costs and other
operating expenses, decreased by $312 million, or 5.3% in the second quarter of
2002 and $691 million, or 5.8% in the first half of 2002 principally due to
lower costs at our domestic telephone operations. These reductions were
attributable to reduced spending for materials and contracted services, lower
overtime for repair and maintenance activity principally as a result of reduced
volumes at our dispatch and call centers and lower employee costs associated
with declining workforce levels. We have reduced our full-time headcount by
21,000 employees, or 10.8% from a year ago and 6,400 employees, or 3.6% since
year-end 2001. We have reduced overtime hours per employee, per week, by 38.4%
from a year ago. Operating costs have also decreased due to business integration
activities and achievement of merger synergies. Other effective cost containment
measures, including lower spending by non-strategic businesses, and favorable
adjustments to ongoing expense estimates as a result of specific regulatory
decisions in New York and other states also contributed to cost reductions in
both periods of 2002. These cost reductions are reflected in improved
productivity levels of 9.1% for installation and 6.4% for repair services, as
compared to the second quarter of 2001. Furthermore, we have reduced rework
service levels from a year ago by 11.7% for installation and 20.9% for repair,
and repair dispatches have declined by more than 11.5% since the second quarter
of 2001.

These cost reductions were partially offset by higher costs associated with our
growth businesses such as data and long distance services. Increased costs
associated with higher uncollectible accounts receivable and salary and wage
increases for employees further offset cost reductions in both periods of 2002.
Pension income, net of postretirement benefit costs, was $335 million and $657
million for the second quarter and year-to-date 2002, respectively, compared to
$420 million and $762 million for the second quarter and year-to-date 2001,
respectively.

Depreciation and Amortization

Depreciation and amortization expense increased by $49 million, or 2.1% in the
second quarter of 2002 and $131 million, or 2.8% in the first half of 2002. This
expense increase was principally due to growth and a change in the mix of
depreciable telephone plant and increased software amortization costs. These
factors were partially offset by the effect of lower rates of depreciation.

SEGMENT INCOME

<Table>
<Caption>
(Dollars in Millions)           THREE MONTHS ENDED JUNE 30,                  SIX MONTHS ENDED JUNE 30,
                                ---------------------------                  --------------------------
                                         2002          2001      % CHANGE            2002         2001     % CHANGE
                                 ------------   -----------    ----------     -----------   ----------    ---------
<S>                              <C>            <C>                <C>        <C>           <C>              <C>
Segment Income                   $      1,232   $     1,361        (9.5)%     $     2,498   $     2,711      (7.9)%
</Table>

Segment income decreased by $129 million, or 9.5% in the second quarter of 2002
and $213 million, or 7.9% on year-to-date, compared to the similar periods last
year, primarily as a result of the after-tax impact of operating revenues and
operating expenses described above.

DOMESTIC WIRELESS

Our Domestic Wireless segment provides wireless voice and data services, paging
services and equipment sales. This segment primarily represents the operations
of the Verizon Wireless joint venture.


OPERATING REVENUES

<Table>
<Caption>
(Dollars in Millions)           THREE MONTHS ENDED JUNE 30,                   SIX MONTHS ENDED JUNE 30,
                                ---------------------------                  --------------------------
                                         2002          2001      % CHANGE            2002          2001    % CHANGE
                                --------------   ----------    ----------    ------------   -----------   ---------
<S>                               <C>            <C>           <C>           <C>            <C>           <C>
Wireless services                 $      4,738   $    4,383          8.1%    $      9,112   $     8,429        8.1%
</Table>

Revenues earned from our consolidated wireless segment grew by $355 million, or
8.1%, in the second quarter of 2002 and $683 million, or 8.1%, for the six
months ended June 30, 2002 compared to the similar periods in 2001. This
increase was primarily due to an 8.5% increase in subscribers, partially offset
by a slight decline in average service revenue per subscriber.

Our Domestic Wireless segment ended the second quarter 2002 with 30.3 million
subscribers, compared to 27.9 million subscribers at the end of the second
quarter 2001, an increase of 8.5%. Approximately 25 million, or 83%, of these
customers subscribe to digital service, compared to 64% in the second quarter
2001. Approximately 1.1 million net retail customers were added during the
second quarter of 2002, partially offset by a net reduction of




                                       21
<PAGE>

wholesale customers of 378,000 driven primarily by subscribers related to
WorldCom Inc. Overall, total customers including wholesale increased by 723,000.
Total churn, including retail and wholesale, remained constant at 2.3% in the
second quarter of 2002 and decreased to 2.4% for the six months ended June 30,
2002, compared to 2.6% for the similar period in 2001.

Average service revenue per subscriber decreased 1.4% to slightly under $49 for
the second quarter of 2002 and by 1.1% to $47 for the six months ended June 30,
2002 compared to the similar periods in 2001. This decrease is mainly
attributable to decreased roaming and long distance revenues for the second
quarter of 2002 compared to the second quarter of 2001. Offsetting these
decreases was the launch of America's Choice in February 2002. Since then,
approximately 61% of new contract customers chose the America's Choice plans.
Nearly 21% of America's Choice subscribers are on price plans with monthly
access of $55 and above. In addition, retail customers, who generally have
higher service revenue, now comprise approximately 95% of the subscriber base,
compared to 92% in the second quarter of 2001. The overall composition of the
customer base is 90% contract retail customers, 5% retail prepaid and 5%
resellers.

The Express Network, which was launched in the first quarter of 2002 and is
based on third generation 1XRTT technology, now covers a population of 145
million or approximately 65% of Verizon Wireless' network in second quarter of
2002 compared to a population of 74 million, or approximately one-third of the
Domestic Wireless network in first quarter 2002.

OPERATING EXPENSES

<Table>
<Caption>
(Dollars in Millions)            THREE MONTHS ENDED JUNE 30,                 SIX MONTHS ENDED JUNE 30,
                                 ---------------------------                 -------------------------
                                         2002           2001      % CHANGE          2002           2001     % CHANGE
                                  -----------    -----------    ----------   -----------    -----------   ----------
<S>                               <C>            <C>            <C>          <C>            <C>           <C>
Operations and support            $     3,046    $     2,817         8.1%    $     5,865    $     5,454         7.5%
Depreciation and amortization             785            887       (11.5)          1,566          1,806       (13.3)
                                  -----------    -----------                 -----------    -----------
                                  $     3,831    $     3,704         3.4     $     7,431    $     7,260         2.4
</Table>

Operations and Support

Operations and support expenses, which represent employee costs and other
operating expenses, increased by $229 million, or 8.1%, in the second quarter
2002 and $411 million, or 7.5%, for the six months ended June 30, 2002 compared
to the similar periods in 2001. This increase was primarily due to increased
salary and wage expense, advertising, billing and data processing charges and
selling expenses related to an increase in gross customer additions in the
second quarter 2002 compared to the second quarter 2001, partially offset by
cost savings resulting from headcount reductions occurring earlier this year.

Depreciation and Amortization

Depreciation and amortization decreased by $102 million, or 11.5%, in the second
quarter 2002 and by $240 million, or 13.3%, for the six months ended June 30,
2002 compared to the similar periods in 2001. The decrease was primarily
attributable to a reduction of amortization expense from the adoption of SFAS
No. 142, effective January 1, 2002, which requires that goodwill and
indefinite-lived intangible assets no longer be amortized. This decrease was
partially offset by increased depreciation expense related to the increase in
depreciable assets related to an increased asset base.


SEGMENT INCOME

<Table>
<Caption>
(Dollars in Millions)           THREE MONTHS ENDED JUNE 30,                   SIX MONTHS ENDED JUNE 30,
                                ---------------------------                  --------------------------
                                         2002         2001       % CHANGE            2002          2001      % CHANGE
                                -------------    ----------     ---------    ------------   -----------     ---------
<S>                               <C>            <C>            <C>          <C>            <C>             <C>
Segment Income                    $       240    $      151         58.9%    $        437   $       249         75.5%
</Table>

Segment income increased by $89 million, or 58.9% in the second quarter of 2002
and by $188 million, or 75.5%, for the six months ended June 30, 2002 when
compared to the similar period in 2001. The increase is primarily due to the
result of the after-tax impact of operating revenues and operating expenses
described above, partially offset by an increase in minority interest.

The significant increase in minority interest of $102 million, or 44.0% to $334
million in second quarter 2002 and $219 million, or 56.6% to $606 million for
the six months ended June 30, 2002 was principally due to the increase in the
earnings of the Domestic Wireless segment, which has a significant minority
interest attributable to Vodafone Group plc (Vodafone).




                                       22
<PAGE>
INTERNATIONAL

Our International segment includes international wireline and wireless
telecommunication operations and investments in the Americas, Europe, Asia and
the Pacific. Our consolidated international investments as of June 30, 2002
included Grupo Iusacell, S.A. de C.V. (Iusacell) (Mexico), CODETEL, C. por A.
(Codetel) (Dominican Republic), TELPRI (Puerto Rico), Micronesian
Telecommunications Corporation (Northern Mariana Islands) and Global Solutions
Inc. (GSI). Those investments in which we have less than a controlling interest
are accounted for by either the cost or equity method.

On January 25, 2002, we exercised our option to purchase an additional 12% of
TELPRI common stock, from the government of Puerto Rico. We now hold 52% of
TELPRI stock, up from 40% held at December 31, 2001. As a result of gaining
control over TELPRI, we changed the accounting for this investment from the
equity method to full consolidation, effective January 1, 2002. Accordingly,
TELPRI's net results are reported as a component of Income from Unconsolidated
Businesses for the three and six month periods ended June 30, 2001, while 2002
results of operations are included in consolidated revenues and expenses in the
tables below.

On March 28, 2002, we transferred 5.5 million of our shares in CTI to an
indirectly wholly-owned subsidiary of Verizon and subsequently transferred
ownership of that subsidiary to a newly created trust for CTI employees. This
decreased our ownership percentage in CTI from 65% to 48%. We also reduced our
representation on CTI's Board of Directors from five of nine members to four of
nine (subsequently reduced to two of five members). As a result of these actions
that surrender control of CTI, we changed our method of accounting for this
investment from consolidation to the equity method. On June 3, 2002, as a result
of an option exercised by Telfone (BVI) Limited (Telfone), a CTI shareholder,
Verizon acquired approximately 5.3 million additional CTI shares. Also on June
3, 2002, we transferred ownership of a wholly owned subsidiary of Verizon that
held 5.4 million CTI shares to a second independent trust leaving us with an
approximately 48% non-controlling interest in CTI. In addition, during the first
quarter of 2002, we wrote our remaining investment in CTI, including those
shares we were contractually committed to purchase under the Telfone option,
down to zero (see "Special Items"). Since we have no other future commitments or
plans to fund CTI's operations and we have written our investment down to zero,
in accordance with the accounting rules for equity method investments, we are no
longer recording operating income or losses related to CTI's operations. CTI's
results of operations are reported in revenues and expenses for the three and
six month periods ended June 30, 2001, while 2002 revenues and expenses are not
included in the tables below.


OPERATING REVENUES

<Table>
<Caption>
(Dollars in Millions)           THREE MONTHS ENDED JUNE 30,                  SIX MONTHS ENDED JUNE 30,
                                ---------------------------                  --------------------------
                                         2002          2001      % CHANGE            2002          2001      % CHANGE
                                -------------    ----------      --------    ------------   -----------      --------
<S>                               <C>            <C>               <C>       <C>            <C>               <C>
Operating revenues                $       754    $      598          26.1%    $      1,505   $     1,125         33.8%
</Table>

Revenues earned from our international businesses grew by $156 million, or
26.1%, in the second quarter of 2002 and $380 million, or 33.8% in the first six
months of 2002 as compared to the similar periods in 2001. This growth is
primarily due to the consolidation of TELPRI partially offset by the
deconsolidation of CTI in 2002. Adjusting the quarter and first six months of
2001 to be comparable with 2002, revenues earned from our international
businesses declined by $74 million, or 8.9%, in the second quarter of 2002 and
$50 million, or 3.2%, in the first six months of 2002 as compared to the similar
periods in 2001. These decreases in revenues are primarily due to the weak
economies and increased competition in Latin America. These decreases were
offset in part by higher revenues generated by the GSI network, which began its
commercial operations in the first quarter of 2001.

OPERATING EXPENSES

<Table>
<Caption>
(Dollars in Millions)           THREE MONTHS ENDED JUNE 30,                   SIX MONTHS ENDED JUNE 30,
                                ---------------------------                  --------------------------
                                         2002          2001      % CHANGE            2002          2001     % CHANGE
                                -------------    ----------      --------    ------------   -----------     --------
<S>                               <C>            <C>             <C>         <C>            <C>             <C>
Operations and support            $       474    $      432           9.7%   $        972   $       816         19.1%
Depreciation and amortization             137           114          20.2             273           219         24.7
                                  -----------    ----------                  ------------   -----------
                                  $       611    $      546          11.9    $      1,245   $     1,035         20.3
</Table>

Operations and Support

Operations and support expenses, which include employee costs and other
operating expenses, increased by $42 million, or 9.7%, in the second quarter of
2002 and $156 million, or 19.1%, in the first six months of 2002 as compared to
the similar periods in 2001. This growth is primarily due to the consolidation
of TELPRI partially




                                       23
<PAGE>

offset by the deconsolidation of CTI in 2002. Adjusting the quarter and first
six months of 2001 to be comparable with 2002, operations and support expenses
decreased $51 million, or 9.7%, in the second quarter of 2002 and $8 million, or
0.8%, in the first six months of 2002 as compared to the similar periods in
2001. These decreases reflect lower variable costs associated with reduced sales
volumes in Latin America offset in part by higher variable costs associated with
the increased revenues and start-up of GSI's operations.

Depreciation and Amortization

Depreciation and amortization expense increased by $23 million, or 20.2%, in the
second quarter of 2002 and $54 million, or 24.7%, in the first six months of
2002 as compared to the similar periods in 2001. This growth is primarily due to
the consolidation of TELPRI partially offset by the deconsolidation of CTI in
2002. Adjusting the quarter and first six months of 2001 to be comparable with
2002, depreciation and amortization expense decreased $7 million, or 4.9%, for
the second quarter of 2002 and $10 million, or 3.5%, for the first six months of
2002 as compared to the similar periods in 2001. These decreases were
attributable to the January 1, 2002 cessation of the amortization of goodwill
and intangible assets with indefinite lives as required by SFAS No.142, offset
in part by increased depreciation due to ongoing network capital expenditures
necessary to meet the increase in subscriber base.


SEGMENT INCOME

<Table>
<Caption>
(Dollars in Millions)           THREE MONTHS ENDED JUNE 30,                 SIX MONTHS ENDED JUNE 30,
                                ---------------------------                 --------------------------
                                        2002           2001      % CHANGE          2002          2001      % CHANGE
                                -------------    ----------     ---------   -----------     ----------    ---------
<S>                               <C>            <C>            <C>         <C>             <C>           <C>
Segment Income                    $       256    $      243          5.3%     $     467     $      453        3.1%
</Table>

Segment income increased by $13 million, or 5.3%, for the second quarter of 2002
as compared to the similar period in 2001. The increase is primarily the result
of the after-tax impact of operating revenues and operating expenses described
above, as well as an increase in income from unconsolidated businesses partially
offset by the impact on Iusacell of fluctuations of the Mexican peso of $104
million, before minority interest benefit of $64 million. An after-tax gain on
the sale of a portion of our interest in Taiwan Cellular Corporation of $31.5
million was recorded in the second quarter of 2002, compared to an after-tax
gain on the sale of our interest in QuebecTel in the second quarter of 2001 of
$63.7 million. Proportionate wireless subscribers grew 9.8% over the second
quarter 2001 to 8.7 million. Segment income increased by $14 million, or 3.1%,
for the first six months of 2002 as compared to the similar period in 2001. The
increase is primarily the result of the after-tax impact of operating revenues
and operating expenses described above, partially offset by a decrease in income
from unconsolidated businesses and the impact on Iusacell of fluctuations of the
Mexican peso of $108 million, before minority interest benefit of $67 million.
The favorable impact on minority interest expense of losses at Iusacell was
offset by the consolidation of TELPRI and the deconsolidation of CTI for the
second quarter and six months ended June 30, 2002 as compared to the similar
periods in 2001.

Income from unconsolidated businesses increased by $9 million, or 3.4%, for the
second quarter of 2002 and decreased by $32 million, or 6.6%, for the first six
months of 2002 as compared to the similar periods in 2001. Adjusting the quarter
and first six months of 2001 for the consolidation of TELPRI and the
deconsolidation of CTI in 2002, income from unconsolidated businesses increased
by $58 million, or 26.7%, for the second quarter of 2002 and $66 million, or
17.1%, for the first six months of 2002 as compared to the similar periods in
2001. The increases reflect the 2002 cessation of recording CTI's operating
losses and the discontinuation of amortization of goodwill and intangible assets
with indefinite lives of our equity investments, as required by SFAS 142.
Partially offsetting these increases was the impact of fluctuations of the
Venezuelan bolivar on the results of Compania Anonima Nacional Telefonos de
Venezuela (CANTV) in 2002.

INFORMATION SERVICES

Our Information Services segment consists of our domestic and international
publishing businesses, including print and electronic directories and
Internet-based shopping guides, as well as includes website creation and other
electronic commerce services. This segment has operations principally in North
America, Europe and Latin America.



                                       24
<PAGE>
OPERATING REVENUES

<Table>
<Caption>
(Dollars in Millions)           THREE MONTHS ENDED JUNE 30,                  SIX MONTHS ENDED JUNE 30,
                                ---------------------------                  --------------------------
                                        2002           2001      % CHANGE           2002           2001    % CHANGE
                                ------------     ----------      --------    -----------    -----------    --------
<S>                             <C>              <C>             <C>         <C>            <C>            <C>
Information services              $      936     $      984         (4.9)%    $    1,739    $     1,773      (1.9)%
</Table>

Operating revenues from our Information Services segment decreased by $48
million, or 4.9%, in the second quarter of 2002 and $34 million, or 1.9%, in the
first six months of 2002 compared to the similar periods in 2001. The decreases
were primarily due to the negative impact of shifts in the timing of directory
publications and reduced affiliate revenues partially offset by domestic
operational multi-product revenue growth and increased revenue from the 2001
acquisition of TELUS Corporation's (TELUS) advertising services business in
Canada. Revenues from SuperPages.com, Verizon's Internet directory service, grew
81.6% over second quarter 2001 as Information Services continues to strengthen
its leadership position in online directory services.

OPERATING EXPENSES

<Table>
<Caption>
(Dollars in Millions)            THREE MONTHS ENDED JUNE 30,                  SIX MONTHS ENDED JUNE 30,
                                 ---------------------------                 --------------------------
                                         2002           2001    % CHANGE           2002            2001     % CHANGE
                                  -----------    -----------    --------     ----------     -----------     --------
<S>                               <C>            <C>            <C>          <C>            <C>             <C>
Operations and support            $       477    $       453         5.3%    $      911     $       869          4.8%
Depreciation and amortization              16             20       (20.0)            31              41        (24.4)
                                  -----------    -----------                 ----------     -----------
                                  $       493    $       473         4.2     $      942     $       910          3.5
</Table>

Total operating expenses for the second quarter of 2002 increased $20 million,
or 4.2%, and $32 million, or 3.5%, in the first six months of 2002 compared to
similar periods in 2001. The increases were primarily due to a small asset sale
gain in 2001 partially offset by the lower costs associated with changes in
publication dates mentioned above.


SEGMENT INCOME

<Table>
<Caption>
(Dollars in Millions)            THREE MONTHS ENDED JUNE 30,                  SIX MONTHS ENDED JUNE 30,
                                 ---------------------------                 --------------------------
                                         2002           2001    % CHANGE           2002            2001     % CHANGE
                                  -----------    -----------    --------     ----------     -----------     --------
<S>                               <C>            <C>            <C>          <C>            <C>             <C>
Segment Income                    $       260    $      298        (12.8)%    $      473    $       510        (7.3)%
</Table>

Segment income decreased by $38 million, or 12.8% in the second quarter of 2002
and $37 million, or 7.3% in the first six months of 2002 compared to the similar
periods in 2001 primarily as a result of the after-tax impact of operating
revenue and expense issues described above.

SPECIAL ITEMS

Special items generally represent revenues and gains as well as expenses and
losses that are nonrecurring and/or non-operational in nature. Several of these
special items include impairment losses. These impairment losses were determined
in accordance with our policy of comparing the fair value of the asset with its
carrying value. The fair value is determined by quoted market prices, if
available, or by estimates of future cash flows.

These special items are not considered in assessing operational performance,
either at the segment level, or for the consolidated company. However, they are
included in our reported results. This section provides a detailed description
of these special items.

TRANSITION COSTS

In connection with the Bell Atlantic Corporation-GTE Corporation merger and the
formation of the wireless joint venture, we expect to incur a total of
approximately $2 billion of transition costs through the end of 2002. These
costs are incurred to integrate systems, consolidate real estate and relocate
employees. They also include approximately $500 million for advertising and
other costs to establish the Verizon brand. Transition costs incurred through
the second quarter of 2002 total $1,931 million. Transition costs in the second
quarter and for the first six months of 2002 were $102 million and $198 million
($57 million and $109 million after taxes and minority interest, or $.02 and
$.04 per diluted share), respectively. During the second quarter and for the
first six months of 2001, we incurred transition costs of $279 million and $442
million ($162 million and $250 million after taxes and minority interest, or
$.06 and $.09 per diluted share), respectively.




                                       25
<PAGE>
SALES OF ASSETS, NET

During the first quarter of 2002, we recorded a net pretax gain of $220 million
($116 million after-tax, or $.04 per diluted share), primarily resulting from a
pretax gain on the sale of TSI Telecommunication Services Inc. (TSI) of $466
million ($275 million after-tax, or $.10 per diluted share), partially offset by
an impairment charge in connection with our exit from the video business and
other charges of $246 million ($159 million after-tax, or $.06 per diluted
share).

During the second quarter 2001, we completed the sale of the overlapping
Cincinnati wireless market. The pretax gain was $80 million ($48 million
after-tax, or $.02 per diluted share). In addition, during the second quarter of
2001, an agreement to sell the overlapping Chicago wireless market at a price
lower than the net book value of the Chicago assets was executed. Consequently,
we recorded an impairment charge of $75 million ($45 million after-tax, or $.02
per diluted share) related to the expected sale. The sale of the Chicago market
closed in the second half of 2001.

SEVERANCE/RETIREMENT ENHANCEMENT COSTS AND SETTLEMENT GAINS

During the second quarter of 2002, we recorded a special charge of $734 million
($475 million after taxes and minority interest, or $.17 per diluted share)
primarily associated with employee severance costs and severance-related
activities in connection with the voluntary and involuntary separation of
approximately 8,000 employees.

MARK-TO-MARKET ADJUSTMENT - FINANCIAL INSTRUMENTS

During 2001, we began recording mark-to-market adjustments in earnings relating
to some of our financial instruments in accordance with newly effective
accounting rules on derivative financial instruments. In the second quarter and
the first six months of 2002, we recorded losses on mark-to-market adjustments
of $8 million ($8 million after-tax, or less than $.01 per diluted share) and
$11 million ($11 million after-tax, or less than $.01 per diluted share),
respectively. In the second quarter and the first six months of 2001, we
recorded losses on mark-to-market adjustments of $37 million ($37 million after
taxes and minority interest, or $.01 per diluted share) and $153 million ($151
million after taxes and minority interest, or $.06 per diluted share),
respectively. The losses on mark-to-market adjustments in 2001 were primarily
due to the change in the fair value of the Metromedia Fiber Network, Inc. (MFN)
debt conversion option.

INVESTMENT-RELATED CHARGES

During the second quarter of 2002, we recorded pretax losses of $3,558 million
($3,305 million after-tax, or $1.20 per diluted share), including a loss of
$2,443 million ($2,443 million after-tax, or $.89 per diluted share) related to
our interest in Genuity Inc. (Genuity) (see "Other Factors That May Affect
Future Results - Genuity and Bell Atlantic-GTE Merger" for additional
information); a loss of $580 million ($430 million after-tax, or $.16 per
diluted share) to the market value of our investment in TELUS; a loss of $303
million ($201 million after-tax, or $.07 per diluted share) to the market value
of our investment in Cable & Wireless plc (C&W) and a loss of $232 million ($231
million after-tax, or $.08 per diluted share) relating to several other
investments. We determined that market value declines in these investments were
considered other than temporary.

Results for the six months ended June 30, 2002 also include the recognition of
pretax losses totaling $2,146 million ($2,026 million after-tax, or $.74 per
diluted share) recorded in the first quarter of 2002 relating to our investments
in CANTV, MFN and CTI which are described below.

We recorded a pretax loss of $1,400 million ($1,400 million after-tax, or $.51
per diluted share) due to the other than temporary decline in the market value
of our investment in CANTV. As a result of the political and economic
instability in Venezuela, including the devaluation of the Venezuelan bolivar,
and the related impact on CANTV's future economic prospects, we no longer
expected that the future undiscounted cash flows applicable to CANTV were
sufficient to recover our investment. Accordingly, we wrote our investment down
to market value as of March 31, 2002.

We recorded a pretax loss of $516 million ($436 million after-tax, or $.16 per
diluted share) to market value primarily due to the other than temporary decline
in the market value of our investment in MFN. During 2001, we




                                       26
<PAGE>

wrote down our investment in MFN due to the declining market value of its stock.
We wrote off our remaining investment and other financial statement exposure
related to MFN in the first quarter of 2002 primarily as a result of its
deteriorating financial condition and related defaults. In addition, we
delivered to MFN a notice of termination of our fiber optic capacity purchase
agreement.

We recorded a pretax loss of $230 million ($190 million after-tax, or $.07 per
diluted share) to fair value due to the other than temporary decline in the fair
value of our remaining investment in CTI. In 2001, we recorded an estimated loss
of $637 million ($637 million after-tax, or $.23 per diluted share) to reflect
the impact of the deteriorating Argentinean economy and devaluation of the
Argentinean peso on CTI's financial position. As a result of the first quarter
2002 and 2001 charges, our financial exposure related to our equity investment
in CTI has been eliminated.

During the second quarter of 2001, we recognized a pretax loss of $3,913 million
($2,926 million after-tax, or $1.07 diluted loss per share) primarily relating
to our investments in C&W, NTL Incorporated (NTL) and MFN. We determined that
market value declines in these investments were considered other than temporary.

OTHER CHARGES AND SPECIAL ITEMS

During the second quarter of 2002, we recorded pretax charges of $394 million
($254 million after-tax, or $.09 per diluted share) primarily resulting from a
pretax impairment charge in connection with our financial statement exposure to
WorldCom Inc. of $300 million ($183 million after-tax, or $.07 per diluted
share) and other pretax charges of $94 million ($71 million after-tax, or $.02
per diluted share). In addition, during the second quarter of 2002, we recorded
a pretax charge of $175 million ($114 million after-tax, or $.04 per diluted
share) related to a proposed settlement of a litigation matter that arose from
our decision to terminate an agreement with NorthPoint to combine the two
companies' DSL businesses.

EXTRAORDINARY ITEM

During the second quarter of 2002, we recognized a pretax extraordinary gain of
$4 million ($3 million after-tax, or less than $.01 per diluted share) related
to the extinguishment of $243 million of debt prior to the stated maturity date.
Results for the six months ended June 30, 2002 include the retirement in the
first quarter of 2002 of $1,536 million of debt prior to the stated maturity
date, resulting in a pretax extraordinary charge of $15 million ($9 million
after-tax, or less than $.01 per diluted share).

CUMULATIVE EFFECT OF ACCOUNTING CHANGE

Impact of SFAS No. 142

We adopted the provisions of SFAS No. 142 on January 1, 2002. SFAS No. 142 no
longer permits the amortization of goodwill and indefinite-lived intangible
assets. Instead, these assets must be reviewed annually (or more frequently
under various conditions) for impairment in accordance with this statement. Our
results for the six months ended June 30, 2002 include the initial impact of
adoption recorded as a cumulative effect of an accounting change of $496 million
after-tax (or $.18 per diluted share). In accordance with the new rules,
starting January 1, 2002, we are no longer amortizing goodwill, acquired
workforce intangible assets and wireless licenses which we determined have an
indefinite life. On a comparable basis, had we not amortized these intangible
assets in the quarter and six months ended June 30, 2001, net income (loss)
before extraordinary item and cumulative effect of accounting change would have
been $(924) million, or $(.34) per diluted share, and $924 million, or $.34 per
diluted share, respectively.

Impact of SFAS No. 133

We adopted the provisions of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," and the related SFAS No. 138, "Accounting
for Certain Derivative Instruments and Certain Hedging Activities" on January 1,
2001. The impact to Verizon pertains to the recognition of changes in the fair
value of derivative instruments. The initial impact of adoption was recorded as
a cumulative effect of an accounting change of $182 million after-tax (or $.07
per diluted share) and is included in our results for the six months ended June
30, 2001. This cumulative effect charge primarily relates to the change in the
fair value of the MFN debt conversion option prior to January 1, 2001.





                                       27
<PAGE>



OTHER CONSOLIDATED RESULTS

The following discussion of several nonoperating items is based on the amounts
reported in our condensed consolidated financial statements.

<Table>
<Caption>
(Dollars in Millions)            THREE MONTHS ENDED JUNE 30,                SIX MONTHS ENDED JUNE 30,
                                 ---------------------------                -------------------------
                                         2002           2001    % CHANGE           2002          2001     % CHANGE
                                 ------------    -----------    --------    -----------   -----------    ----------
<S>                               <C>            <C>            <C>          <C>            <C>             <C>
OTHER INCOME AND (EXPENSE), NET
Interest Income                    $       53    $        62      (14.5)%   $       107   $       115       (7.0)%
Foreign exchange gains (losses),
    net                                   (63)            41     (253.7)            (61)           40     (252.5)
Other, net                                 14             11       27.3              23            29      (20.7)
                                 ------------    -----------                -----------   -----------
Total                              $        4    $       114      (96.5)    $        69   $       184      (62.5)
</Table>

The changes in other income and expense in the three and six months ended June
30, 2002, compared to the similar periods in 2001, were primarily due to the
changes in foreign exchange gains and losses. Foreign exchange gains and losses
were driven primarily by fluctuations in the Mexican peso, which is used by
Iusacell as its functional currency. We expect that our earnings will continue
to be affected by foreign currency gains or losses associated with the U.S.
dollar denominated debt issued by Iusacell.

<Table>
<Caption>
 (Dollars in Millions)              THREE MONTHS ENDED JUNE 30,                SIX MONTHS ENDED JUNE 30,
                                    ---------------------------                -------------------------
                                             2002          2001     % CHANGE          2002          2001    % CHANGE
                                    -------------   -----------     --------   -----------    ----------    ---------
<S>                                 <C>             <C>             <C>        <C>            <C>           <C>
INTEREST EXPENSE
Interest expense                       $      798   $       909       (12.2)%    $   1,612    $    1,830      (11.9)%
Capitalized interest costs                     64            93       (31.2)           101           177      (42.9)
                                    -------------   -----------                -----------    ----------

Total interest costs on debt
   balances                            $      862   $     1,002       (14.0)     $   1,713    $    2,007      (14.6)
                                    =============   ===========                ===========    ==========
Average debt outstanding               $   61,626   $    63,879        (3.5)     $  63,184    $   61,622        2.5
Effective interest rate                       5.6%          6.3%                       5.4%          6.5%
</Table>

The decrease in interest costs for the three and six months ended June 30, 2002,
as compared to the similar periods in 2001, was principally attributable to
lower average interest rates and was partially offset in the six months ended
June 30, 2002 by the higher average debt level. The increase in the average debt
level for the six months ended June 30, 2002 was mainly the result of funding
for capital expenditures and acquisitions at our Domestic Telecom and Domestic
Wireless segments. The reduction in the average debt level for the second
quarter of 2002 is primarily due to lower commercial paper borrowings.

<Table>
<Caption>
 (Dollars in Millions)              THREE MONTHS ENDED JUNE 30,                SIX MONTHS ENDED JUNE 30,
                                    ---------------------------                -------------------------
                                             2002          2001     % CHANGE          2002          2001    % CHANGE
                                    -------------   -----------     --------   -----------    ----------    ---------
<S>                                 <C>             <C>             <C>        <C>            <C>           <C>
MINORITY INTEREST                     $       313   $       209        49.8%     $      556   $      307       81.1%
</Table>

The increase in minority interest expense for the three and six months ended
June 30, 2002, compared to the similar periods in 2001, was primarily due to
higher earnings at Domestic Wireless, which has a significant minority interest
attributable to Vodafone (see "Segment Results of Operations-Domestic
Wireless"). The favorable impact on minority interest expense of losses at
Iusacell was offset by the consolidation of TELPRI and the deconsolidation of
CTI for the second quarter and six months ended June 30, 2002 as compared to the
similar periods in 2001 (see "Segment Results of Operations-International").

<Table>
<Caption>
                                                      THREE MONTHS ENDED JUNE 30,        SIX MONTHS ENDED JUNE 30,
                                                      ---------------------------        -------------------------
                                                         2002                2001              2002           2001
                                                      -------             -------        ----------      ---------
<S>                                                   <C>                 <C>            <C>             <C>
EFFECTIVE INCOME TAX RATES                              (18.1)%             (12.9)%          (157.8)%         60.5%
</Table>

The effective income tax rate is the provision for income taxes as a percentage
of income before the provision for income taxes. Our effective income tax rates
for the three and six months ended June 30, 2002 and 2001 were impacted by the
other than temporary decline in fair value of several of our investments during
2002 and 2001 because tax benefits were not available on some of the losses (see
"Special Items"). The effective rate for the quarter and six months ended June
30, 2002 was favorably impacted by a tax law change relating to ESOP dividend
deductions, increased state tax benefits and capital loss utilization.



                                       28
<PAGE>

CONSOLIDATED FINANCIAL CONDITION

<Table>
<Caption>
(Dollars in Millions)                                                SIX MONTHS ENDED JUNE 30,
                                                           -----------------------------------
                                                                     2002                 2001            $ CHANGE
                                                           --------------      ---------------      --------------
<S>                                                        <C>                 <C>                  <C>
CASH FLOWS PROVIDED BY (USED IN)
Operating activities                                       $       10,042      $         7,658      $        2,384
Investing activities                                               (3,513)             (10,875)              7,362
Financing activities                                               (4,546)               5,076              (9,622)
                                                           --------------      ---------------      --------------
INCREASE IN CASH AND CASH EQUIVALENTS                      $        1,983      $         1,859      $          124
                                                           ==============      ===============      ==============
</Table>

We use the net cash generated from our operations to fund capital expenditures
for network expansion and modernization, repay external financing, pay dividends
and invest in new businesses. Additional external financing is utilized when
necessary. While our current liabilities typically exceeded our current assets,
our sources of funds, primarily from operations and, to the extent necessary,
from readily available external financing arrangements, are sufficient to meet
ongoing operating and investing requirements. We expect that capital spending
requirements will continue to be financed primarily through internally generated
funds. Additional debt or equity financing will be needed to fund additional
development activities or to maintain our capital structure to ensure our
financial flexibility.

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES

Our primary source of funds continues to be cash generated from operations. The
increase in cash from operations in the first half of 2002 compared to the
similar period of 2001 primarily reflects a decrease in working capital
requirements and deferred tax favorability.

CASH FLOWS USED IN INVESTING ACTIVITIES

Capital expenditures continue to be our primary use of capital resources. We
invested $3,175 million in our Domestic Telecom business in the first half of
2002, compared to $6,406 million in the first half of 2001 to facilitate the
introduction of new products and services, enhance responsiveness to competitive
challenges and increase the operating efficiency and productivity of the
network. We also invested $2,060 million in our Domestic Wireless business in
the first half of 2002, compared to $2,372 million in the first half of 2001.
The decrease in 2002 is primarily due to the effective management of our capital
expenditure budget to current network demand. We expect total capital
expenditures in 2002 to be approximately $13 billion to $13.5 billion.

We invested $998 million in acquisitions and investments in businesses during
the first six months of 2002, including $556 million to acquire some of the
cellular properties of Dobson Communications Corporation and $218 million for
other wireless properties. We also received a $1,479 million refund from the FCC
in connection with our wireless auction deposit (see "Other Factors That May
Affect Future Results - Recent Developments - FCC Auction" for additional
information). In the first six months of 2001, we invested $2,212 million in
acquisitions and investments in businesses, including $1,625 million related to
an FCC auction of wireless licenses (see "Other Factors That May Affect Future
Results - Recent Developments - FCC Auction" for additional information) and
$410 million for additional wireless spectrum purchased from another
telecommunications carrier.

In the first half of 2002, we received cash proceeds of $770 million in
connection with the sale of TSI.

Other, net investing activities include capitalized non-network software of $513
million in the first half of 2002 compared with $473 million in the similar
period of 2001. The first half of 2001 also includes $750 million of loans to
Genuity (see "Other Factors That May Affect Future Results - Genuity and Bell
Atlantic-GTE Merger"), largely offset by proceeds of $515 million related to
wireless asset sales.

In addition, under the terms of an investment agreement relating to our wireless
joint venture, Vodafone may require us or Verizon Wireless to purchase up to an
aggregate of $20 billion worth of its interest in Verizon Wireless between 2003
and 2007 at its then fair market value. The purchase of up to $10 billion, in
cash or stock at our option, may be required in the summer of 2003 or 2004 and
the remainder, which may not exceed $10 billion at any one time, in the summers
of 2005 through 2007. Vodafone has the option to require us or Verizon Wireless
to satisfy up to $7.5 billion of the remainder with cash or contributed debt.



                                       29
<PAGE>
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES

Cash of $2,978 million was used to reduce our total debt during the first half
of 2002. We repaid $1,659 million of Verizon Global Funding Corp. and $1,796
million of Domestic Telecom long-term debt and reduced our short-term borrowings
by $4,623 million primarily with cash and the issuance of Domestic Telecom and
Verizon Global Funding long-term debt. Domestic Telecom and Verizon Global
Funding issued $3,429 million and $1,978 million of long-term debt,
respectively.

The net cash proceeds from increases in our total debt during the first six
months of 2001 was primarily due to the issuance of $7,006 million of long-term
debt by Verizon Global Funding, partially offset by net repayments of $589
million of commercial paper and other short-term borrowings by Verizon Global
Funding and by $617 million of maturities of other corporate long-term debt. In
addition, Verizon Wireless issued $580 million of long-term debt and Domestic
Telecom incurred $298 million of long-term debt, issued $1,225 million of net
short-term debt and retired $570 million of long-term debt.

Our debt to equity ratio was 68.3% at June 30, 2002, compared to 65.0% at June
30, 2001.

As of June 30, 2002, we had approximately $8.0 billion of unused bank lines of
credit and $560 million in bank borrowings outstanding. As of June 30, 2002, our
telephone and financing subsidiaries had shelf registrations for the issuance of
up to $6.4 billion of unsecured debt securities. The debt securities of our
telephone and financing subsidiaries continue to be accorded high ratings by
primary rating agencies. However, in March 2002, Standard & Poor's (S&P) revised
our credit rating outlook from stable to negative, and Moody's Investors Service
(Moody's) reaffirmed our credit rating outlook as negative. S&P and Moody's
cited concern about the overall debt level of Verizon. We have adopted a debt
portfolio strategy that includes a reduction in total debt as well as a
reduction in the short-term debt component. A change in an outlook does not
necessarily signal a rating downgrade but rather highlights an issue whose final
resolution may result in placing a company on review for possible downgrade. In
May 2002, Moody's placed our debt under review for possible downgrade.

As in prior quarters, dividend payments were a significant use of capital
resources. We determine the appropriateness of the level of our dividend
payments on a periodic basis by considering such factors as long-term growth
opportunities, internal cash requirements, and the expectations of our
shareowners. In the first and second quarters of 2002 and 2001, we announced
quarterly cash dividends of $.385 per share.

INCREASE IN CASH AND CASH EQUIVALENTS

Our cash and cash equivalents at June 30, 2002 totaled $2,962 million, a $1,983
million increase over cash and cash equivalents at December 31, 2001 of $979
million. This increase in cash and cash equivalents was primarily driven by a
debt issuance at the end of the current quarter, which will be used to reduce
outstanding borrowings after quarter-end.

MARKET RISK

We are exposed to various types of market risk in the normal course of our
business, including the impact of interest rate changes, foreign currency
exchange rate fluctuations, changes in equity investment prices and changes in
corporate tax rates. We employ risk management strategies using a variety of
derivatives, including interest rate swap agreements, interest rate caps and
floors, foreign currency forwards and options, equity options and basis swap
agreements. We do not hold derivatives for trading purposes.

It is our general policy to enter into interest rate, foreign currency and other
derivative transactions only to the extent necessary to achieve our desired
objectives in limiting our exposures to the various market risks. Our objectives
include maintaining a mix of fixed and variable rate debt to lower borrowing
costs within reasonable risk parameters and to protect against earnings and cash
flow volatility resulting from changes in market conditions. We do not hedge our
market risk exposure in a manner that would completely eliminate the effect of
changes in interest rates, equity prices and foreign exchange rates on our
earnings. While we do not expect that our liquidity and cash flows will be
materially affected by these risk management strategies, our net income may be
materially affected by certain market risks associated with the exchangeable
notes discussed below.



                                       30
<PAGE>
EXCHANGEABLE NOTES

In 1998, we issued exchangeable notes as described in Note 9 to the condensed
consolidated financial statements. These financial instruments expose us to
market risk, including:

o    Equity price risk, because the notes are exchangeable into shares that are
     traded on the open market and routinely fluctuate in value.

o    Foreign exchange rate risk, because the notes are exchangeable into shares
     that are denominated in a foreign currency.

o    Interest rate risk, because the notes carry fixed interest rates.

Periodically, equity price or foreign exchange rate movements may require us to
mark-to-market the exchangeable note liability to reflect the increase or
decrease in the current share price compared to the established exchange price,
resulting in a charge or credit to income. The following sensitivity analysis
measures the effect on earnings and financial condition due to changes in the
underlying share prices of the Telecom Corporation of New Zealand Limited
(TCNZ), C&W and NTL stock.

o    At June 30, 2002, the exchange price for the TCNZ shares (expressed as
     American Depositary Receipts) was $44.93. The C&W and NTL notes in the
     amount of $2,946 million are exchangeable into 118.9 million shares of C&W
     stock and 22.7 million shares of NTL stock.

o    For each $1 increase in the value of the TCNZ shares above the exchange
     price, our pretax earnings would be reduced by approximately $55 million.
     Assuming the aggregate value of the C&W and NTL stocks exceeds the value of
     the debt liability, each $1 increase in the value of the C&W shares
     (expressed as American Depositary Receipts) or NTL shares would reduce our
     pretax earnings by approximately $40 million or $23 million, respectively.
     A subsequent decrease in the value of these shares would correspondingly
     increase earnings, but not to exceed the amount of any previous reduction
     in earnings.

o    Our cash flows would not be affected by mark-to-market activity relating to
     the exchangeable notes.

If we decide to deliver shares in exchange for the notes, the exchangeable note
liability (including any mark-to-market adjustments) will be eliminated and the
investment will be reduced by the fair market value of the related number of
shares delivered. Upon settlement, the excess of the liability over the book
value of the related shares delivered will be recorded as a gain. We also have
the option to settle these liabilities with cash upon exchange.

EQUITY RISK

We also have equity price risk associated with our cost investments, primarily
in common stocks and equity price sensitive derivatives that are carried at fair
value. The value of these cost investments and derivatives is subject to changes
in the market prices of the underlying securities. Our cost investments and
equity price sensitive derivatives recorded at fair value totaled $1,634 million
at June 30, 2002.

A sensitivity analysis of our cost investments and equity price sensitive
derivatives recorded at fair value indicated that a 10% increase or decrease in
the fair value of the underlying common stock equity prices would result in a
$140 million increase or decrease in the fair value of our cost investments and
equity price sensitive derivatives. Of this amount, a change in the fair value
of our cost investments of $133 million would be recognized in Accumulated Other
Comprehensive Loss in our condensed consolidated balance sheets under SFAS No.
115 "Accounting for Certain Investments in Debt and Equity Securities." Our
equity price sensitive derivatives (primarily several long-term call options on
our common stock) (see Note 8 - Financial Instruments) do not qualify for hedge
accounting under SFAS No. 133. As such, a change of approximately $7 million in
the fair value of our equity price sensitive derivatives would be recognized in
our condensed consolidated balance sheets and in current earnings in
mark-to-market adjustment.

We continually evaluate our investments in marketable securities for impairment
due to declines in market value considered to be other than temporary. That
evaluation includes, in addition to persistent, declining stock prices, general
economic and company-specific evaluations. In the event of a determination that
a decline in market value is other than temporary, a charge to earnings is
recorded for all or a portion of the unrealized loss, and a new cost basis in
the investment is established.


                                       31
<PAGE>

OTHER FACTORS THAT MAY AFFECT FUTURE RESULTS

GENUITY AND BELL ATLANTIC - GTE MERGER

Prior to the merger of Bell Atlantic and GTE, we owned and consolidated Genuity
(a tier-one interLATA Internet backbone and related data business). In June
2000, as a condition of the merger, 90.5% of the voting equity of Genuity was
issued in an initial public offering. As a result of the initial public offering
and our loss of control, we deconsolidated Genuity. Our remaining ownership
interest in Genuity contained a contingent conversion feature that gave us the
option (if prescribed conditions were met), among other things, to regain
control of Genuity. Our ability to legally exercise this conversion feature was
dependent on obtaining approvals to provide long distance service in the former
Bell Atlantic states and satisfaction of other regulatory and legal
requirements.

On July 24, 2002, we converted all but one of our shares of Class B common stock
of Genuity into shares of Class A common stock of Genuity. We now own just under
a 10% voting and economic interest in Genuity. As a result, we have relinquished
the right to convert our current ownership into a controlling interest as
described above. Our commercial relationship with Genuity will continue, which
includes a five-year purchase commitment for Genuity services such as dedicated
Internet access, managed web hosting and Internet security. Under this purchase
commitment, which terminates in 2005, Verizon has agreed to pay Genuity a
minimum of $500 million over five years for its services, of which we have
satisfied $230 million as of June 30, 2002.

As a result of Genuity's continuing operating losses and a significant decrease
in the market price of the Class A common stock of Genuity during the second
quarter, we have determined that recoverability of our investment in Genuity is
not reasonably assured. As a result, we have recorded a pretax charge of $2,443
million to reduce the carrying value of our interest in Genuity to its estimated
fair value.

Federal and state regulatory conditions to the merger also included commitments
to, among other things, promote competition and the widespread deployment of
advanced services while helping to ensure that consumers continue to receive
high-quality, low-cost telephone services. In some cases, there are significant
penalties associated with not meeting these commitments. The cost of satisfying
these commitments could have a significant impact on net income in future
periods. The pretax cost to begin compliance with these conditions was
approximately $200 million in 2000 and approximately $300 million in 2001. We
expect an impact of $200 million to $300 million in 2002.

RECENT DEVELOPMENTS

VERIZON WIRELESS

FCC Auction

On January 29, 2001, the bidding phase of the FCC reauction of 1.9 GHz C and F
block broadband Personal Communications Services spectrum licenses, which began
December 12, 2000, officially ended. Verizon Wireless was the winning bidder for
113 licenses. The total price of these licenses was $8,781 million, $1,822
million of which had been paid. Most of the licenses that were reauctioned
relate to spectrum that was previously licensed to NextWave Personal
Communications Inc. and NextWave Power Partners Inc. (collectively NextWave),
which have appealed to the federal courts the FCC's action canceling NextWave's
licenses and reclaiming the spectrum.

In a decision on June 22, 2001, the U.S. Court of Appeals for the D.C. Circuit
ruled that the FCC's cancellation and repossession of NextWave's licenses was
unlawful. The FCC sought a stay of the court's decision which was denied. The
FCC subsequently reinstated NextWave's licenses, but it did not return Verizon
Wireless's payment on the NextWave licenses nor did it acknowledge that the
court's decision extinguished Verizon Wireless's obligation to purchase the
licenses. On October 19, 2001, the FCC filed a petition asking the U.S. Supreme
Court to consider reversing the U.S. Court of Appeals for the D.C. Circuit's
decision. On March 4, 2002, the U.S Supreme Court granted the FCC's petition and
agreed to hear the appeal. Oral argument on the appeal has been scheduled for
October 8, 2002, with a decision by the U.S. Supreme Court expected in early
2003.

In April 2002, the FCC returned $1,479 million of Verizon Wireless's $1,822
million license payment and stated its view that Verizon Wireless remains
obligated to purchase the licenses if and when the FCC succeeds in regaining
them from NextWave. On April 4, 2002, Verizon Wireless filed a complaint in the
U.S. Court of Federal Claims against the United States government seeking both a
declaration that Verizon Wireless has no further performance




                                       32
<PAGE>

obligations with respect to the reauction, and money damages. On April 8, 2002,
Verizon Wireless filed a petition with the U.S. Court of Appeals for the
District of Columbia seeking a declaration that the auction obligation is
voidable and a return of its remaining down payment of $261 million. Both of
these matters are pending.

Price Communications Transaction

In December 2001, Verizon Wireless and Price Communications Corp. (Price)
announced that an agreement had been reached combining Price's wireless business
with a portion of Verizon Wireless in a transaction valued at approximately $1.7
billion, including $550 million of net debt. The resulting limited partnership
will be controlled and managed by Verizon Wireless. Price's partnership interest
will be exchangeable into Verizon Wireless or Verizon stock, subject to several
conditions including an exchange price minimum and maximum. Price's shareholders
approved the transaction on July 23, 2002, and the transaction is now expected
to close in the third quarter of 2002.

SALE OF ACCESS LINES

In October 2001, we agreed to sell all 675,000 of our switched access lines in
Alabama and Missouri to CenturyTel Inc. (CenturyTel) for $2.2 billion. In early
July 2002, we completed the sale of approximately 300,000 switched access lines
and related local exchange operations in Alabama to CenturyTel for approximately
$1.0 billion in cash. The Missouri sale has been approved by the Missouri Public
Service Commission and the FCC. We expect to close the Missouri transaction in
the third quarter of 2002.

Also in October 2001, we agreed to sell approximately 600,000 switched access
lines in Kentucky to ALLTEL Corporation for $1.9 billion. This sale was
completed on July 31, 2002.

NEW YORK RECOVERY FUNDING

In August 2002, President Bush signed the Supplemental Appropriations bill
passed earlier this year by the U.S. House of Representatives and the U.S.
Senate. The Supplemental Appropriations bill includes $5.5 billion in New York
recovery funding. Of that amount, $750 million has been allocated to cover the
uninsured losses of two major utilities, which includes Verizon, incurred in
connection with the September 11th terrorist attacks. These funds will be
distributed as federal grants through the Lower Manhattan Development
Corporation following a thorough application process.

TELECOMMUNICATIONS ACT OF 1996

In-Region Long Distance

We offer long distance service throughout most of the country, except in those
regions served by the former Bell Atlantic telephone operations where we have
not yet received authority to offer long distance service under the
Telecommunications Act of 1996 (1996 Act). We now have authority to offer
in-region long distance service in eight states in the former Bell Atlantic
territory, accounting for three-quarters of the lines served by the former Bell
Atlantic. In addition to its New York order released in December 1999, the FCC
released orders on April 16, 2001, July 23, 2001, September 19, 2001, February
22, 2002, April 17, 2002, June 19, 2002 and June 24, 2002, approving our
applications for permission to enter the in-region long distance market in
Massachusetts, Connecticut, Pennsylvania, Rhode Island, Vermont, Maine and New
Jersey, respectively. The Massachusetts, Pennsylvania, Vermont and New Jersey
orders are currently on appeal to the U.S. Court of Appeals. Manhattan
Telecommunications Corporation (doing business as Metropolitan
Telecommunications) has filed a motion for a stay of the New Jersey order or, in
the alternative, for expedited briefing. We and the FCC filed oppositions to the
motion. WorldCom Inc. filed a complaint with the FCC seeking to have our long
distance authority in Massachusetts revoked or suspended. On July 23, 2002, the
FCC denied the complaint.

We have filed a joint application with the FCC to offer long distance service in
New Hampshire and Delaware. The FCC must rule on this application by September
25, 2002. We have also filed an application to offer long distance service in
Virginia. The FCC must rule on this application by October 30, 2002. We have
also filed state applications for support of anticipated applications with the
FCC for permission to enter the in-region long distance market in Maryland, West
Virginia and the District of Columbia.




                                       33
<PAGE>
FCC REGULATION AND INTERSTATE RATES

Access Charges and Universal Service

On May 31, 2000, the FCC adopted the Coalition for Affordable Local and Long
Distance Services (CALLS) plan as a comprehensive five-year plan for regulation
of interstate access charges. The CALLS plan has three main components. First,
it establishes a portable interstate access universal service support of $650
million for the industry. This explicit support replaces implicit support
embedded in interstate access charges. Second, the plan simplifies the patchwork
of common line charges into one subscriber line charge (SLC) and provides for
de-averaging of the SLC by zones and class of customers in a manner that will
not undermine comparable and affordable universal service. Third, the plan sets
into place a mechanism to transition to a set target of $.0055 per minute for
switched access services. Once that target rate is reached, local exchange
carriers are no longer required to make further annual price cap reductions to
their switched access prices. The annual reductions leading to the target rate,
as well as annual reductions for the subset of special access services that
remain subject to price cap regulation was set at 6.5% per year.

On September 10, 2001, the U.S. Court of Appeals for the Fifth Circuit ruled on
an appeal of the FCC order adopting the plan. The court upheld the FCC on
several challenges to the order, but remanded two aspects of the decision back
to the FCC on the grounds that they lacked sufficient justification. The court
remanded back to the FCC for further consideration its decision setting the
annual reduction factor at 6.5% minus an inflation factor and the size of the
new universal service fund at $650 million. The entire plan (including these
elements) will continue in effect pending the FCC's further consideration of its
justification of these components.

As a result of tariff adjustments which became effective in July 2002,
approximately 98% of our access lines reached the $0.0055 benchmark.

Unbundling of Network Elements

In July 2000, the U.S. Court of Appeals for the Eighth Circuit found that some
aspects of the FCC's requirements for pricing UNEs were inconsistent with the
1996 Act. In particular, it found that the FCC was wrong to require incumbent
carriers to base these prices not on their real costs but on the imaginary costs
of the most efficient equipment and the most efficient network configuration.
This portion of the court's decision was stayed pending review by the U.S.
Supreme Court. On May 13, 2002, the U.S. Supreme Court reversed that decision
and upheld the FCC's pricing rules.

On May 24, 2002, the U.S. Court of Appeals for the District of Columbia Circuit
released an order that overturned the most recent FCC decision establishing
which network elements were required to be unbundled. In particular, the court
found that the FCC did not adequately consider the limitations of the "necessary
and impair" standards of the 1996 Act when it chose national rules for
unbundling and that it failed to consider the relevance of competition from
other types of service providers, including cable and satellite. The court also
vacated a separate order that had authorized an unbundling requirement for "line
sharing" where a competing carrier purchases only a portion of the copper
connection to the end-user in order to provide high-speed broadband services
using DSL technology. Several parties, including the FCC, have petitioned the
court for rehearing of the court order.

Prior to the issuance of this order, the FCC had already begun a review of the
scope of its unbundling requirement through a rulemaking, the triennial review
of UNEs. This rulemaking reopens the question of what network elements must be
made available on an unbundled basis under the 1996 Act and will revisit the
unbundling decisions made in the order overturned by the U.S. Court of Appeals
for the District of Columbia Circuit. In this rulemaking, the FCC also will
address other pending issues relating to unbundled elements, including the
question of whether competing carriers may substitute combinations of unbundled
loops and transport for already competitive special access services.

Compensation for Internet Traffic

On April 27, 2001, the FCC released an order addressing intercarrier
compensation for dial-up connections for Internet-bound traffic. The FCC found
that Internet-bound traffic is interstate and subject to the FCC's jurisdiction.
Moreover, the FCC again found that Internet-bound traffic is not subject to
reciprocal compensation under Section 251(b)(5) of the 1996 Act. Instead, the
FCC established federal rates per minute for this traffic that decline from
$0.0015 to $0.0007 over a three-year period. The FCC order also sets caps on the
total minutes of this traffic that may be subject to any intercarrier
compensation and requires that incumbent local exchange carriers must offer to
pay reciprocal compensation for local traffic at the same rate as they are
required to pay on Internet-bound traffic.




                                       34
<PAGE>

On May 3, 2002, the U.S. Court of Appeals for the District of Columbia Circuit
rejected the justification relied upon by the FCC in its April 27, 2001 order,
and remanded the order for further proceedings. It did not vacate the interim
pricing rules established in that order.

Several parties, including Pac-West Telecomm and Focal Communications Corp. have
requested rehearing, asking the court to vacate the underlying order. A decision
on the rehearing petitions remains pending, and the FCC's underlying order
remains in effect.

OTHER MATTERS

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2002, the Financial Accounting Standards Board (FASB) issued SFAS No.
146, "Accounting for Costs Associated with Exit or Disposal Activities." This
statement addresses financial accounting and reporting for costs associated with
exit or disposal activities and nullifies Emerging Issues Task Force (EITF)
Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in
Restructuring)." EITF Issue No. 94-3 required accrual of liabilities related to
exit and disposal activities at a plan (commitment) date. SFAS No. 146 requires
that a liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred. The provisions of this statement are
effective for exit or disposal activities that are initiated after December 31,
2002.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." This standard provides the accounting for the cost of legal
obligations associated with the retirement of long-lived assets. SFAS No. 143
requires that companies recognize the fair value of a liability for asset
retirement obligations in the period in which the obligations are incurred and
capitalize that amount as a part of the book value of the long-lived asset. That
cost is then depreciated over the remaining life of the underlying long-lived
asset. We are required to adopt SFAS No. 143 effective January 1, 2003. We are
currently evaluating the impact this new standard will have on our future
results of operations or financial position.



                                       35
<PAGE>
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

In this Management's Discussion and Analysis, and elsewhere in this Quarterly
Report, we have made forward-looking statements. These statements are based on
our estimates and assumptions and are subject to risks and uncertainties.
Forward-looking statements include the information concerning our possible or
assumed future results of operations. Forward-looking statements also include
those preceded or followed by the words "anticipates," "believes," "estimates,"
"hopes" or similar expressions. For those statements, we claim the protection of
the safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995.


The following important factors, along with those discussed elsewhere in this
Quarterly Report, could affect future results and could cause those results to
differ materially from those expressed in the forward-looking statements:

o    the duration and extent of the current economic downturn;

o    materially adverse changes in economic conditions in the markets served by
     us or by companies in which we have substantial investments;

o    material changes in available technology;

o    technology substitution;

o    an adverse change in the ratings afforded our debt securities by nationally
     accredited ratings organizations;

o    the final results of federal and state regulatory proceedings concerning
     our provision of retail and wholesale services and judicial review of those
     results;

o    the effects of competition in our markets;

o    our ability to satisfy regulatory merger conditions and obtain combined
     company revenue enhancements and cost savings;

o    the ability of Verizon Wireless to achieve revenue enhancements and cost
     savings, and obtain sufficient spectrum resources;

o    the outcome of litigation concerning the FCC NextWave spectrum auction;

o    our ability to recover insurance proceeds relating to equipment losses and
     other adverse financial impacts resulting from the terrorist attacks on
     Sept. 11, 2001; and

o    changes in our accounting assumptions that regulatory agencies, including
     the SEC, may require or that result from changes in the accounting rules or
     their application, which could result in an impact on earnings.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Information relating to market risk is included in Item 2, Management's
Discussion and Analysis of Financial Condition and Results of Operations, in the
Consolidated Financial Condition section under the caption "Market Risk."



                                       36
<PAGE>
PART II -- OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Our 2002 Annual Meeting of Shareholders was held on April 24, 2002. At the
meeting, the following items were submitted to a vote of shareholders.


The number of common shares present at the Annual Meeting of Shareholders of
Verizon Communications Inc. voting and withholding authority to vote in the
election of Directors (the "Total Vote") was 2,224,172,047 or 81.79% of the
common shares outstanding on February 25, 2002, the record date for said
meeting.

(a)  The following nominees were elected to serve on the Board of Directors:

<Table>
<Caption>
       Name of Nominee                  Votes Cast For                    Votes Withheld
       -------------------------------- --------------------------------- ----------------------------------
<S>                                     <C>                               <C>
       James R. Barker                  2,137,316,961                       86,855,086
       -------------------------------- --------------------------------- ----------------------------------
       Edward H. Budd                   2,136,102,788                       88,069,259
       -------------------------------- --------------------------------- ----------------------------------
       Richard L. Carrion               2,151,928,142                       72,243,905
       -------------------------------- --------------------------------- ----------------------------------
       Robert F. Daniell                2,150,220,961                       73,951,086
       -------------------------------- --------------------------------- ----------------------------------
       Helene L. Kaplan                 2,111,827,168                      112,344,879
       -------------------------------- --------------------------------- ----------------------------------
       Charles R. Lee                   2,133,025,481                       91,146,566
       -------------------------------- --------------------------------- ----------------------------------
       Sandra O. Moose                  2,128,789,099                       95,382,948
       -------------------------------- --------------------------------- ----------------------------------
       Joseph Neubauer                  2,130,306,330                       93,865,717
       -------------------------------- --------------------------------- ----------------------------------
       Thomas H. O'Brien                2,138,105,611                       86,066,436
       -------------------------------- --------------------------------- ----------------------------------
       Russell E. Palmer                2,150,153,750                       74,018,297
       -------------------------------- --------------------------------- ----------------------------------
       Hugh B. Price                    2,037,624,844                      186,547,203
       -------------------------------- --------------------------------- ----------------------------------
       Ivan G. Seidenberg               2,138,489,471                       85,682,576
       -------------------------------- --------------------------------- ----------------------------------
       Walter V. Shipley                2,150,343,201                       73,828,846
       -------------------------------- --------------------------------- ----------------------------------
       John W. Snow                     2,114,587,602                      109,584,445
       -------------------------------- --------------------------------- ----------------------------------
       John R. Stafford                 2,131,839,846                       92,332,201
       -------------------------------- --------------------------------- ----------------------------------
       Robert D. Storey                 2,111,636,002                      112,536,045
       -------------------------------- --------------------------------- ----------------------------------
</Table>

(b)  The appointment of Ernst and Young LLP as independent accountants for 2002
     was ratified with 2,114,750,670 votes for, 85,619,046 votes against, and
     23,802,331 abstentions.

(c)  A shareholder proposal regarding Cumulative Voting was defeated with
     519,554,375 votes for, 1,181,461,380 votes against, 119,681,624 abstentions
     and 403,474,668 broker non-votes.

(d)  A shareholder proposal regarding Executive Severance Agreements was
     defeated with 544,830,236 votes for, 1,211,469,524 votes against,
     64,397,335 abstentions and 403,474,952 broker non-votes.

(e)  A shareholder proposal regarding composition of the Board of Directors was
     defeated with 483,719,748 votes for, 1,288,847,110 votes against,
     48,129,941 abstentions and 403,475,248 broker non-votes.

(f)  A shareholder proposal regarding Calculation of Incentive Compensation was
     defeated with 728,056,432 votes for, 972,294,070 votes against, 120,346,593
     abstentions and 403,474,952 broker non-votes.

(g)  A shareholder proposal regarding Additional Director Nominees was defeated
     with 194,627,486 votes for, 1,570,731,791 votes against, 55,337,816
     abstentions and 403,474,954 broker non-votes.



                                       37
<PAGE>
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

         Exhibit
         Number

             10a  Employment Agreement between Verizon and Mary Beth Bardin.

             10b  Employment Agreement between Verizon and David H. Benson.

             10c  Employment Agreement between Verizon and Ezra D. Singer.

             10d  Employment Agreement between Verizon and Doreen A. Toben.

             10e  Supplemental Letter to Employment Agreement between Verizon
                  and Charles R. Lee.

             10f  Verizon Communications Inc. Income Deferral Plan, as amended
                  and restated.

             10g  Description of the Split-Dollar Insurance Arrangements for
                  Lawrence T. Babbio and William P. Barr.

(b) Reports on Form 8-K filed or furnished during the quarter ended June 30,
2002:

         A Current Report on Form 8-K, filed April 9, 2002, containing a press
         release providing an estimate of adjusted diluted earnings per share,
         and estimating charges for goodwill and other investments, for the
         first quarter of 2002.

         A Current Report on Form 8-K, filed April 10, 2002, containing a legal
         opinion issued in connection with the Verizon Communications Direct
         Invest direct stock purchase and share ownership plan.

         A Current Report on Form 8-K, filed April 23, 2002, containing a press
         release announcing earnings for the first quarter of 2002 and selected
         slides containing supplemental information about our financial and
         other projections.

         A Current Report on Form 8-K, filed April 29, 2002, containing a press
         release announcing the retirement of Vice Chairman and Chief Financial
         Officer Frederic V. Salerno before year-end 2002.

         A Current Report on Form 8-K, filed April 30, 2002, containing a press
         release announcing the appointment of Doreen A. Toben as Executive Vice
         President and Chief Financial Officer, effective immediately.

         A Current Report on Form 8-K, furnished on May 22, 2002, containing the
         consolidated financial statements of Cellco Partnership, doing business
         as Verizon Wireless, as of December 31, 2001 and 2000 and for the years
         ended December 31, 2001, 2000 and 1999.

         A Current Report on Form 8-K, filed June 19, 2002, containing a Form of
         Purchase Agreement to be used in connection with the offering of debt
         securities.




                                       38
<PAGE>
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                     VERIZON COMMUNICATIONS INC.


Date:  August 12, 2002               By  /s/ John F. Killian
                                         ------------------------------------
                                         John F. Killian
                                         Senior Vice President and Controller
                                         (Principal Accounting Officer)




UNLESS OTHERWISE INDICATED, ALL INFORMATION IS AS OF AUGUST 7, 2002.


                                       39
<PAGE>
                                 EXHIBIT INDEX


<Table>
<Caption>
         Exhibit
         Number
         -------
<S>               <C>
             10a  Employment Agreement between Verizon and Mary Beth Bardin.

             10b  Employment Agreement between Verizon and David H. Benson.

             10c  Employment Agreement between Verizon and Ezra D. Singer.

             10d  Employment Agreement between Verizon and Doreen A. Toben.

             10e  Supplemental Letter to Employment Agreement between Verizon
                  and Charles R. Lee.

             10f  Verizon Communications Inc. Income Deferral Plan, as amended
                  and restated.

             10g  Description of the Split-Dollar Insurance Arrangements for
                  Lawrence T. Babbio and William P. Barr.
</Table>




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.A
<SEQUENCE>3
<FILENAME>d98774exv10wa.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT - MARY BETH BARDIN
<TEXT>
<PAGE>
                                                                     EXHIBIT 10a

                                                    [VERIZON LOGO]
                                                    1095 Avenue of the Americas
                                                    New York, NY 10036



July 1, 2002


Ms. Mary Beth Bardin
[Address]
[Address]

Dear Mary Beth:

         I am pleased to offer you this new employment agreement (the
"Agreement") with Verizon Communications Inc. ("Verizon"), and, as an indication
of my confidence in your abilities, I have added an automatic renewal provision.
For purposes of this Agreement, the term "Company" means Verizon, all corporate
subsidiaries and other companies affiliated with Verizon, all companies in which
Verizon has an ownership or other proprietary interest of more than 10 percent,
and their successors and assigns.

         The many opportunities and challenges facing the Company are enormous
and exciting. As a leader in our industry, we will be constantly challenged with
sustaining our market growth and presence. We will meet these challenges by
leveraging the strength of our talented and committed leaders. This Agreement
demonstrates my continued confidence in you.

         I value you and the leadership, vision, and commitment you bring to the
Company. I am excited by the prospect of you continuing as a key member of the
Company's leadership team.

         The terms and conditions of this Agreement are set forth below.

         1. PURPOSE - Verizon enters into this Agreement with you because the
rapidly-changing and increasingly global telecommunications market requires the
Company to make critical strategic, marketing, and technical decisions. These
decisions by the Company will be based, in whole or in part, on confidential
analyses of the evolving telecommunications market, confidential assessments of
the technical capabilities and strategic plans of the Company and competing
businesses, and confidential or proprietary information regarding the Company's
technology, resources, and business opportunities or other confidential or
proprietary information relating to the Company's business. Verizon seeks by
this


<PAGE>

Ms. Mary Beth Bardin
July 1, 2002
Page 2


Agreement to ensure that you remain a part of the executive management team that
plays a central role in this decision-making process.

         In consideration for your entering into this Agreement, including the
restrictions on the disclosure and use of confidential or proprietary
information and the limitations on your engaging in competitive activities, the
Company is providing you with the security of a written two-year agreement,
short- and long-term award opportunities, and other benefits.

         2. GENERAL - Under this Agreement, you shall continue as a senior
executive of the Company. As a senior executive, you shall report to the Chief
Executive Officer of Verizon (the "CEO").

         3. TERM - The term of employment under this Agreement ("Term of
Employment") shall commence on July 1, 2002, and end on June 30, 2004; provided
that, on the last day of the Term of Employment, the Term of Employment shall
automatically be extended for an additional two years unless, on or before that
date, the Term of Employment terminates or the Company notifies you in writing
that the Term of Employment shall not be extended. For example, on June 30,
2004, the Term of Employment shall be extended until June 30, 2006, unless, on
or before June 30, 2004, the Term of Employment terminates or the Company
notifies you in writing that the Term of Employment shall not be extended, and,
if the Term of Employment is extended until June 30, 2006, the Term of
Employment shall be extended on that date until June 30, 2008, unless, on or
before June 30, 2006, the Term of Employment terminates or the Company notifies
you in writing that the Term of Employment shall not be extended.
Notwithstanding the preceding provisions of this paragraph 3, the Company
reserves the right to terminate your employment and the Term of Employment at
any time. Your employment and the Term of Employment also may terminate for
other reasons (such as your resignation, retirement, death, or disability). The
consequences of the termination of your employment are specified in paragraph 11
("Termination Of Employment").

         4. DUTIES AND RESPONSIBILITIES - You shall continue to serve as a
senior executive of the Company in such capacities, with such titles and
authorities, as the CEO or his successor may from time to time prescribe, and
you shall perform all duties incidental to such positions, shall cooperate fully
with the CEO or his successor, and shall work cooperatively with the other
officers of the Company. You shall continue to devote your entire business
skill, time, and effort diligently to the affairs of the Company in accordance
with the duties assigned to you, and you shall perform all such duties, and
otherwise conduct yourself, in a manner reasonably calculated in good faith by
you to promote the best interests of the


<PAGE>

Ms. Mary Beth Bardin
July 1, 2002
Page 3


Company. During the Term of Employment, except to the extent specifically
permitted in writing by the CEO or his successor, and except for memberships on
boards of directors that you held on October 3, 2000, (the date of your previous
employment agreement with Verizon), you shall not, directly or indirectly,
render any services of a business, commercial, or professional nature to any
other person or organization other than the Company or a person or organization
in which the Company has a financial interest, whether or not the services are
rendered for compensation.

         5. LOCATION - During the Term of Employment, you shall perform services
for the Company at its New York City headquarters, or at any other location
designated by the Company as necessary or appropriate for the discharge of your
responsibilities under this Agreement. In the event of any change in your
principal work location, you shall be eligible for relocation assistance under
the terms of any Company relocation policy applicable to other senior executives
of the Company in your salary band at the time of such relocation.

         6. BASE SALARY - During the Term of Employment, your annual base salary
shall not be less than your annual base salary on the date of this Agreement;
provided that if you are granted a merit increase in your base salary, your base
salary shall not thereafter be reduced below that increased level during the
Term of Employment. The Human Resources Committee of Verizon's Board of
Directors or its designee shall review your base salary at least annually.

         7. SHORT-TERM AND LONG-TERM BONUS OPPORTUNITIES - During the Term of
Employment, the Company shall provide you with annual short-term and long-term
bonus opportunities equivalent to those available to other senior executives of
the Company in your salary band. While you are not guaranteed an annual
short-term or long-term bonus award in any amount, (a) the value of your annual
short-term bonus opportunity shall be not less than 75 percent of your
then-current base salary, and (b) the value of your annual long-term bonus
opportunity shall not be less than 425 percent of your then-current base salary.

         8. BENEFITS AND PERQUISITES - (a) IN GENERAL - For the immediate
future, you shall-

                           (1)      participate in the tax-qualified and
                                    nonqualified retirement plans and in the
                                    other employee benefit plans (such as the
                                    medical and dental plans), programs, and
                                    policies in which you currently participate;
                                    and

<PAGE>

Ms. Mary Beth Bardin
July 1, 2002
Page 4


                           (2)      be eligible for the perquisites available to
                                    senior executives in your salary band;

provided that the Company retains the right to amend or terminate any benefit
plan, policy, program, or perquisite at any time.

                  (b) ANNUAL PHYSICAL - You are encouraged to take an annual
physical examination from a physician at the Company's expense and to certify in
writing to the Company's designee each year (1) that you have had the
examination and (2) the nature and extent of any medical impairments that
prevent you from currently performing the essential functions of your position.

         9. SPECIAL RETENTION ACCOUNT PROGRAM - Pursuant to your October 3,
2000, employment agreement with Verizon (the "Prior Agreement"), the Company
established a Special Retention Account on your behalf under the GTE Executive
Salary Deferral Plan, which was subsequently transferred to the Verizon Income
Deferral Plan. You shall also be eligible for such other benefits as are
provided under the Verizon Income Deferral Plan to employees with Special
Retention Accounts. A copy of the applicable provisions of the Verizon Income
Deferral Plan relating to the Special Retention Account is attached hereto as
Exhibit A, which is incorporated herein by reference. Your rights to the balance
in your Special Retention Account following the termination of your employment
shall be governed by the applicable provisions of the Verizon Income Deferral
Plan, rather than by the terms of paragraphs 11 ("Termination of Employment")
and 12 ("Release").

         10. EXCISE TAX GROSS-UP - Under certain circumstances you may become
entitled to a gross-up payment with respect to the excise tax imposed by section
4999 of the Internal Revenue Code (the "Code"). The terms governing the gross-up
payment are set forth in Exhibit B, which is incorporated herein by reference.

         11. TERMINATION OF EMPLOYMENT - (a) VOLUNTARY TERMINATION BY YOU - You
may terminate your employment under this Agreement for a reason other than
Retirement (as defined in subparagraph (c), below) or Good Reason (as defined in
subparagraph (d), below) by giving the CEO, at least 30 calendar days'
(exclusive of vacation days) in advance of such termination, written notice of
your intent to so terminate. The termination shall automatically become
effective upon the expiration of such notice period. Upon the effective date of
such termination, your base salary and any other Company benefits and
perquisites shall cease to accrue, you shall forfeit all then-outstanding stock
options, and you shall forfeit all rights under this Agreement which as of the
relevant date have not yet been earned. A termination


<PAGE>

Ms. Mary Beth Bardin
July 1, 2002
Page 5


of employment in accordance with this subparagraph (a) shall be deemed a
"Voluntary Termination."

                  (b) TERMINATION DUE TO DEATH OR DISABILITY - If, during the
Term of Employment, you terminate employment because of death or disability (as
defined under the Company-sponsored long-term disability plan that applies to
you at the time your employment is so terminated), the Company shall make a
lump-sum cash payment to you equal to the excess of (1) one times the sum of
your base salary and short-term bonus (at 50% of maximum), over (2) any amounts
payable to you under Company-sponsored disability plans. You shall also be
entitled to accelerated vesting of all outstanding stock options, and you shall
be entitled to exercise all then-outstanding stock options until the earlier of
(1) the fifth anniversary of the date your employment terminates (or any later
date prescribed by the terms of the option relating to termination of
employment) or (2) the expiration of the option; provided that if you terminate
employment because of death, your rights under this subparagraph (b) shall pass
to your estate. For this purpose, your base salary shall be based on your base
salary rate in effect immediately before your employment terminated.

                  (c) RETIREMENT - You may terminate your employment under this
Agreement by reason of Retirement (as defined below) by giving the CEO, at least
30 calendar days' (exclusive of vacation days) in advance of such termination,
written notice of your intent to so terminate. The termination shall
automatically become effective upon the expiration of such notice period. Upon
the effective date of such termination, you shall be entitled to a pro-rated
portion of any short-term and long-term bonuses (when and to the extent that
they are earned) and accelerated vesting of all outstanding stock options (other
than the Founders' Grant), and you shall be entitled to exercise all
then-outstanding stock options (excluding nonvested Founders' Grant options)
until the earlier of (1) the fifth anniversary of the date your employment
terminates (or any later date prescribed by the terms of the option relating to
termination of employment) or (2) the expiration of the option. For purposes of
this Agreement, "Retirement" means attaining normal retirement age under the
terms of the Verizon Management Pension Plan (the "Pension Plan") or satisfying
the Rule of 75 under the Pension Plan (or being deemed retirement eligible
pursuant to any other plan or agreement of Verizon). Except as provided by the
preceding provisions of this subparagraph (c), upon the effective date of your
Retirement, your base salary and any other Company benefits and perquisites
shall cease to accrue; provided that you shall otherwise be eligible to receive
any and all compensation and benefits for which a similarly situated senior
executive would be eligible under the applicable provisions of the


<PAGE>

Ms. Mary Beth Bardin
July 1, 2002
Page 6


compensation and benefit plans in which he is then eligible to participate, as
those plans may be amended from time to time.

                  (d) TERMINATION FOR GOOD REASON - (1) You may terminate your
employment under this Agreement for Good Reason by giving the CEO, at least 30
calendar days' (exclusive of vacation days) in advance of such termination (the
"Notice Period"), written notice of your intent to so terminate, setting forth
in reasonable detail the facts and circumstances deemed to provide a basis for
such termination. For purposes of this Agreement, "Good Reason" means a material
breach by the Company of the terms and conditions of this Agreement, a material
reduction in your overall compensation opportunities, or your assignment to a
new principal work location that is more than 50 miles from your previous
principal work location. A "Good Reason" shall not occur merely because of a
change in the individual (or position) to whom (or to which) you report. In
addition, a "Good Reason" shall not occur merely because the Company notifies
you, in accordance with paragraph 3 ("Term"), that the Term of Employment shall
not be extended for an additional two-year period.

                           (2) Notwithstanding the foregoing, the Company shall
have 15 calendar days from its receipt of such notice to cure the action
specified in the notice. In the event of a cure by the Company within the 15-day
period, the action in question shall not constitute Good Reason.

                           (3) Except as provided in subparagraph (d)(2), above,
at the end of the Notice Period, the Good Reason termination shall take effect,
and your obligation to serve the Company, and the Company's obligation to employ
you, under the terms of this Agreement shall terminate simultaneously, and you
shall be deemed to have incurred an Involuntary Termination Without Cause, with
the consequences described in subparagraph (e), below; provided that your rights
under this subparagraph (d) are contingent on your execution of a release in
accordance with paragraph 12 ("Release").

                           (4) If you do not fulfill the notice and explanation
requirements imposed by this subparagraph (d), the resulting termination of
employment shall be deemed a Voluntary Termination.

                  (e) INVOLUNTARY TERMINATION WITHOUT CAUSE - The Company may
terminate your employment under this Agreement at any time and for any reason.
However, if the Company terminates your employment during the Term of Employment
for any reason other than death, disability, or Cause (as defined in
subparagraph (f), below), such termination shall be deemed an Involuntary
Termination by the Company, and you shall be entitled to receive the following

<PAGE>

Ms. Mary Beth Bardin
July 1, 2002
Page 7


payments and benefits in lieu of any payment or benefit otherwise provided
pursuant to paragraphs 6 ("Base Salary") through 8 ("Benefits And Perquisites"):

                           (1)      The Company shall make a lump-sum cash
                                    severance payment to you equal to the excess
                                    of (i) two times the sum of your base salary
                                    and short-term bonus (at 50% of maximum),
                                    over (ii) the sum of your then-current
                                    balance in your Special Retention Account,
                                    as determined under the Verizon Income
                                    Deferral Plan, and any amounts paid or
                                    payable to you under any Company-sponsored
                                    severance plan, program, policy, contract,
                                    account, or arrangement;

                           (2)      Your unvested stock options shall
                                    immediately vest, and you may exercise all
                                    of your then-outstanding stock options at
                                    any time up to the earlier of (i) the fifth
                                    anniversary of the date your employment
                                    terminates (or any later date prescribed by
                                    the terms of the option relating to
                                    termination of employment) or (ii) the
                                    expiration of the option; and

                           (3)      You shall be eligible for outplacement
                                    services to the extent that such services
                                    are then available to senior executives in
                                    your salary band;

provided that your rights under this subparagraph (e) are contingent on your
execution of a release in accordance with paragraph 12 ("Release"). For purposes
of this paragraph 11(e), the Company shall not be deemed to have terminated your
employment during the Term of Employment if the Company notifies you, in
accordance with paragraph 3 ("Term"), that the Term of Employment shall not be
extended for an additional two-year period.

                  (f) INVOLUNTARY TERMINATION FOR CAUSE - (1) Nothing in this
Agreement prevents the Company from terminating your employment under this
Agreement for Cause. In the event of your termination for Cause, the Company
shall pay you your full accrued base salary and accrued vacation time through
the date of your termination, you shall forfeit all then-outstanding stock
options if you are not eligible for Retirement at the time of your termination,
and the Company shall have no further obligations under this Agreement; provided
that you shall otherwise be eligible to receive any and all compensation and
benefits for which a similarly situated senior executive would be eligible under
the applicable provisions


<PAGE>

Ms. Mary Beth Bardin
July 1, 2002
Page 8


of the compensation and benefit plans in which he is then eligible to
participate, as those plans may be amended from time to time.

                           (2) For purposes of this Agreement, "Cause" is
defined as (i) grossly incompetent performance or substantial or continuing
inattention to or neglect of the duties and responsibilities assigned to you;
fraud, misappropriation or embezzlement involving the Company or a material
breach of any provision incorporated in paragraph 13 ("Covenants"), as
determined by the CEO in his discretion, or (ii) commission of any felony of
which you are finally adjudged guilty by a court of competent jurisdiction.

                           (3) If the Company terminates your employment for
Cause, the Company shall provide you with a written statement of the grounds for
such termination within 10 business days after the date of termination.

         12. RELEASE - You shall not be entitled to any benefits under
paragraphs 10 ("Excise Tax Gross-Up"), 11(d) ("Termination For Good Reason"),
and 11(e) ("Involuntary Termination Without Cause") following the termination of
your employment unless, at the time your employment terminates, you execute a
release satisfactory to the Company releasing the Company, its affiliates,
shareholders, directors, officers, employees, representatives, and agents and
their successors and assigns from any and all employment-related claims you or
your successors and beneficiaries might then have against them (excluding any
claims you might then have under this Agreement, or any employee benefit plan
that is subject to the vesting standards imposed by the Employee Retirement
Income Security Act of 1974, as amended).

         13. COVENANTS - In consideration for the benefits and agreements
described above, you agree to comply with the covenants set forth in Exhibit C
hereto, which is incorporated herein by reference.

         14. REQUEST FOR WAIVER - Nothing in this Agreement bars you from
requesting, at the time of your termination of employment or at any time
thereafter, that the CEO, in his sole discretion, waive in writing the Company's
rights to enforce some or all of the provisions incorporated in paragraph 13
("Covenants").

         15. OTHER AGREEMENTS AND POLICIES - The obligations imposed on you by
paragraph 13 ("Covenants") are in addition to, and not in lieu of, any and all
other policies and agreements of the Company regarding the subject matter of the
foregoing obligations.


<PAGE>

Ms. Mary Beth Bardin
July 1, 2002
Page 9


         16. NONDUPLICATION OF BENEFITS - No provision of this Agreement shall
require the Company to provide you with any payment, benefit, or grant that
duplicates any payment, benefit, or grant that you are entitled to receive under
any Company compensation or benefit plan, award agreement, or other arrangement.

         17. OTHER COMPANY PLANS - Except to the extent otherwise explicitly
provided by this Agreement, any awards made to you under any Company
compensation or benefit plan or program shall be governed by the terms of that
plan or program and any applicable award agreement thereunder as in effect from
time to time. Notwithstanding the foregoing, you shall not be entitled to
participate in any Company compensation or benefit plan that is established
after your employment with the Company terminates, and except as specifically
provided in this Agreement, you shall not be entitled to any additional grants
or awards under any Company compensation or benefit plan after your employment
with the Company terminates. The amounts paid, provided, or credited under this
Agreement shall not be treated as compensation for purposes of determining any
benefits payable under any Company-sponsored pension, savings, life insurance,
or other employee benefit plan except to the extent provided by the terms of
such plan.

         18. FORFEITURE - (a) If you breach any of the obligations incorporated
in paragraph 13 ("Covenants"), or engage in serious misconduct that is contrary
to written policies of the Company and is harmful to the Company or its
reputation, you shall forfeit:

                           (1)      all credits that are added to your
                                    Retirement Contribution Sub-Account in the
                                    Verizon Income Deferral Plan (or to any
                                    successor account in that plan or a
                                    successor plan) ("Retirement Contribution
                                    Sub-Account"), on or after January 1, 2002,
                                    other than the GTE Supplemental Executive
                                    Retirement Plan conversion credit (the
                                    "Conversion Credit");

                           (2)      any interest or other earnings or gains on
                                    or after January 1, 2002, with respect to
                                    any credits in your Retirement Contribution
                                    Sub-Account (including any interest, or
                                    other earnings or gains attributable to the
                                    Conversion Credit or any interest or other
                                    earnings or gains attributable to any other
                                    credit regardless of when the credit was
                                    added to your Retirement Contribution
                                    Sub-Account); and

                           (3)      any unpaid incentive compensation (such as
                                    performance bonus awards or other awards
                                    under the Verizon Communications Inc.

<PAGE>

Ms. Mary Beth Bardin
July 1, 2002
Page 10


                                    Long-Term Incentive Plan) that you are
                                    otherwise entitled to receive.

                  (b) The remedies available under this paragraph are in
addition to, and not in lieu of, the remedies available under paragraph 25
("Additional Remedies").

         19. NO DEEMED WAIVER - Failure to insist upon strict compliance with
any of the terms, covenants, or conditions of this Agreement shall not be deemed
a waiver of such term, covenant, or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time or
times.

         20. TAXES - The Company may withhold from any benefits payable under
this Agreement all taxes that the Company reasonably determines to be required
pursuant to any law, regulation, or ruling. However, it is your obligation to
pay all required taxes on any amounts and benefits provided under this
Agreement, including the benefits and perquisites provided to you pursuant to
paragraph 8 ("Benefits and Perquisites"), regardless of whether withholding is
required.

         21. CONFIDENTIALITY - Except to the extent otherwise required by law,
you shall not disclose, in whole or in part, any of the terms of this Agreement.
This paragraph 21 does not prevent you from disclosing the terms of this
Agreement to your spouse or to your legal, tax, or financial adviser, provided
that you take all reasonable measures to assure that he or she does not disclose
the terms of this Agreement to a third party except as otherwise required by
law.

         22. GOVERNING LAW - To the extent not preempted by federal law, the
provisions of this Agreement shall be construed and enforced in accordance with
the laws of the State of New York, excluding any conflicts or choice of law rule
or principle that might otherwise refer construction or interpretation of this
provision to the substantive law of another jurisdiction.

         23. ASSIGNMENT - Verizon may, without your consent, assign its rights
and obligations under this Agreement to any entity that is a part of the
Company, and if Verizon makes such an assignment, all references in this
Agreement to Verizon (except for references to Verizon common stock) shall be
deemed to refer to the assignee. However, you may not assign your rights and
obligations under this Agreement.


<PAGE>


Ms. Mary Beth Bardin
July 1, 2002
Page 11


         24. SEVERABILITY - The agreements contained herein and within the
release prescribed by paragraph 12 ("Release") shall each constitute a separate
agreement independently supported by good and adequate consideration, and shall
each be severable from the other provisions of the Agreement and such release.
If an arbitrator or court of competent jurisdiction determines that any term,
provision, or portion of this Agreement or such release is void, illegal, or
unenforceable, the other terms, provisions, and portions of this Agreement or
such release shall remain in full force and effect, and the terms, provisions,
and portions that are determined to be void, illegal, or unenforceable shall
either be limited so that they shall remain in effect to the extent permissible
by law, or such arbitrator or court shall substitute, to the extent enforceable,
provisions similar thereto or other provisions, so as to provide to the Company,
to the fullest extent permitted by applicable law, the benefits intended by this
Agreement and such release.

         25. ADDITIONAL REMEDIES - In addition to any other rights or remedies,
whether legal, equitable, or otherwise, that each of the parties to this
Agreement may have, you acknowledge that

                  (a)      The covenants incorporated in paragraph 13
                           ("Covenants") are essential to the continued good
                           will and profitability of the Company;

                  (b)      You have broad-based skills that will serve as the
                           basis for employment opportunities that are not
                           prohibited by the covenants incorporated in paragraph
                           13 ("Covenants");

                  (c)      When your employment with the Company terminates, you
                           shall be able to earn a livelihood without violating
                           any of the terms of this Agreement;

                  (d)      Irreparable damage to the Company shall result in the
                           event that the covenants incorporated in paragraph 13
                           ("Covenants") are not specifically enforced and that
                           monetary damages will not adequately protect the
                           Company from a breach of such covenants;

                  (e)      If any dispute arises concerning the violation by you
                           of the covenants incorporated in paragraph 13
                           ("Covenants"), an injunction may be issued
                           restraining such violation pending the determination
                           of such controversy, and no bond or other security
                           shall be required in connection therewith;


<PAGE>

Ms. Mary Beth Bardin
July 1, 2002
Page 12


                  (f)      Such covenants shall continue to apply after any
                           expiration, termination, or cancellation of this
                           Agreement; and

                  (g)      Your breach of any of such covenants shall result in
                           your immediate forfeiture of all rights under this
                           Agreement.

         26. SURVIVAL - The provisions of paragraphs 13 ("Covenants") through 28
("Entire Agreement") shall survive the Term of Employment. In addition, if the
Term of Employment is not extended in accordance with paragraph 3 ("Term") but
your employment continues after the end of the Term of Employment, you shall be
subject to the obligations imposed by each of such paragraphs with respect to
such employment. Any obligations that the Company has incurred under this
Agreement to provide benefits that have vested under the terms of this Agreement
(including the Company's obligations under paragraph 11(c) ("Retirement")) shall
likewise survive the Term of Employment. Except as provided by the preceding
provisions of this paragraph 26, if the Term of Employment is not extended in
accordance with paragraph 3 ("Term") but your employment continues after the end
of the Term of Employment, the terms of such employment shall not be governed by
this Agreement.

         27. ARBITRATION - Any dispute arising out of or relating to this
Agreement (except any dispute arising out of or relating to paragraph 13
("Covenants")), and any dispute arising out of or relating to your employment,
shall be settled by final and binding arbitration, which shall be the exclusive
means of resolving any such dispute, and the parties specifically waive all
rights to pursue any other remedy, recourse, or relief. With respect to disputes
by the Company arising out of or relating to paragraph 13 ("Covenants"), the
Company has retained all its rights to legal and equitable recourse and relief,
including but not limited to injunctive relief, as referred to in paragraph 25
("Additional Remedies"). The arbitration shall be expedited and conducted in the
State of New York pursuant to the Center for Public Resources ("CPR") Rules for
Non-Administered Arbitration in effect at the time of notice of the dispute
before one neutral arbitrator appointed by CPR from the CPR Panel of neutrals
unless the parties mutually agree to the appointment of a different neutral
arbitrator. The arbitration shall be governed by the Federal Arbitration Act, 9
U.S.C. sections 1-16, and judgment upon the award rendered by the arbitrator may
be entered by any court having jurisdiction. The finding of the arbitrator may
not change the express terms of this Agreement and shall be consistent with the
arbitrator's understanding of the findings a court of proper jurisdiction would
make in applying the applicable law to the facts underlying the dispute. In no
event whatsoever shall such an arbitration award include any award of damages
other than the amounts in controversy under this Agreement. The parties waive
the right


<PAGE>

Ms. Mary Beth Bardin
July 1, 2002
Page 13


to recover, in such arbitration, punitive damages. Each party hereby agrees that
New York City is the proper venue for any litigation seeking to enforce any
provision of this Agreement or to enforce any arbitration award under this
paragraph 27, and each party hereby waives any right it otherwise might have to
defend, oppose, or object to, on the basis of jurisdiction, venue, or forum
nonconveniens, a suit filed by the other party in any federal or state court in
New York City to enforce any provision of this Agreement or to enforce any
arbitration award under this paragraph 27. Each party also waives any right it
might otherwise have to seek to transfer from a federal or state court in New
York City a suit filed by the other party to enforce any provision of this
Agreement or to enforce any arbitration award under this paragraph 27.

         28. ENTIRE AGREEMENT - Except for the terms of the compensation and
benefit plans in which you participate (including any award agreements issued
thereunder), this Agreement, including the Exhibits hereto, sets forth the
entire understanding of you and the Company, and supersedes all prior agreements
and communications, whether oral or written, between the Company (or GTE or Bell
Atlantic or any of their respective subsidiaries) and you regarding the subject
matter of this Agreement, including the Prior Agreement. This Agreement shall
not be modified except by written agreement of you and Verizon.

Mary Beth, I believe that this Agreement continues to provide you and your
family with a firm foundation of financial security as our Company faces many
new challenges and opportunities. I recognize that the Company and the
telecommunications industry operate in a rapidly changing and demanding
environment. It is my hope that this Agreement demonstrates to you the level of
confidence that I have in your abilities to meet the commitments that I expect
from you. Please indicate your acceptance by signing below and returning the
signed Agreement to me or Ezra Singer within ten business days after your
receipt of this Agreement.

Sincerely yours,

/s/ Ivan Seidenberg
-----------------------------
Ivan Seidenberg
Chief Executive Officer

cc:  E. Singer

<PAGE>

Ms. Mary Beth Bardin
July 1, 2002
Page 14


I agree to the terms described above.


/s/ Mary Beth Bardin
-----------------------------
Mary Beth Bardin

Attachments:     Exhibit A - Special Retention Account Program
                 Exhibit B - Excise Tax Gross-Up
                 Exhibit C - Covenants


<PAGE>
                                    EXHIBIT A

================================================================================

                            SPECIAL RETENTION ACCOUNT
                           AND OTHER BENEFITS PROGRAM

                                   ----------

                                   PART OF THE
                          VERIZON INCOME DEFERRAL PLAN

                                   ----------

                 Amended and Restated Effective January 1, 2002

================================================================================

<PAGE>

                            SPECIAL RETENTION ACCOUNT
                           AND OTHER BENEFITS PROGRAM

                                TABLE OF CONTENTS

<Table>
<S>                                                                                                               <C>
Article 1. Introduction...........................................................................................1

         1.01.    Nature of Program...............................................................................1
         1.02.    Effective Date..................................................................................1

Article 2. Definitions and Construction...........................................................................2

         2.01.    Definitions.....................................................................................2
         2.02.    Part of the Plan................................................................................3
         2.03.    Gender and Number...............................................................................3

Article 3. Eligibility and Account Balance........................................................................4

         3.01.    Eligibility.....................................................................................4

Article 4. Accounts...............................................................................................5

         4.01.    Accounts........................................................................................5

Article 5. Payments...............................................................................................6

         5.01.    Exclusive Entitlement to Payment................................................................6
         5.02.    Amount and Sources of Payment...................................................................6
         5.03.    Limitations on Rights to Payment................................................................7

Article 6. Other Benefits.........................................................................................8

         6.01.    Other Benefits..................................................................................8
         6.02.    Certain Additional Payments by the Company......................................................9
         6.03.    Nonduplication..................................................................................9
</Table>

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program          Table of Contents
<PAGE>

                            ARTICLE 1. INTRODUCTION

1.01. NATURE OF PROGRAM.

     This Program was established effective July 1, 2000, as part of the GTE
Executive Salary Deferral Plan (and any successors to that plan). Effective
January 1, 2002, it became part of the Verizon Income Deferral Plan, which is a
successor to the GTE Executive Salary Deferral Plan. This Program shall apply
only to those participants in the Verizon Income Deferral Plan who have Special
Retention Accounts by virtue of having waived any entitlement they might
otherwise have had to certain payments and/or other benefits as a result of the
merger involving GTE Corporation and Bell Atlantic Corporation.

1.02. EFFECTIVE DATE.

     The Program was originally effective as of July 1, 2000. This amendment and
restatement of the Program is effective January 1, 2002, except to the extent
specifically provided herein.

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                      Page 1
<PAGE>

                    ARTICLE 2. DEFINITIONS AND CONSTRUCTION

2.01. DEFINITIONS.

     Unless the context clearly indicates otherwise, the following terms, when
used in capitalized form in this Program, shall have the meanings set forth
below.

     COMMITTEE. "Committee" shall mean the Human Resources Committee of the
Board of Directors of the Company.

     COMPANY. "Company" shall mean Verizon Communications Inc. and its
affiliates.

     COVERED EMPLOYEE. "Covered Employee" shall mean an employee of the Company
who is designated as a Covered Employee by the Plan Administrator.

     MERGER. "Merger" shall mean the merger of the businesses of GTE Corporation
and Bell Atlantic Corporation pursuant to the terms of an Agreement and Plan of
Merger dated as of July 27, 1998, among Bell Atlantic, GTE, and Beta Gamma
Corporation.

     OTHER BENEFITS. "Other Benefits" shall mean the benefits described in
Article 6 of this Program.

     OTHER PLANS. "Other Plans" shall mean all employee benefit plans, programs,
awards, arrangements, policies, and practices of the Company, whether or not
qualified under the Code or subject to the Employee Retirement Income Security
Act of 1974, as amended, including any employment agreement the Participant may
have with the Company or its predecessors.

     PARTICIPANT. "Participant" shall mean each Covered Employee whose Special
Retention Account has a positive balance.

     PLAN. "Plan" shall mean the Verizon Income Deferral Plan, as effective
January 1, 2002, and as it may be amended from time to time, and any successor
thereto.

     PLAN ADMINISTRATOR. "Plan Administrator" shall mean the chief human
resources officer of the Company or any other Person designated by the Committee
to serve as Plan Administrator of the Plan.

     PROGRAM. "Program" shall mean this Special Retention Account and Other
Benefits program.

     SPECIAL RETENTION ACCOUNT. "Special Retention Account" shall mean the
subaccount established under the Plan pursuant to the terms of this Program.

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                      Page 2
<PAGE>

2.02. PART OF THE PLAN.

     The provisions of this Program are a part of the Plan. The terms of the
Plan shall apply to the benefits provided by this Program to Participants,
except to the extent a provision of this Program is contrary to a provision of
the Plan, in which case the provisions of this Program shall control.

2.03. GENDER AND NUMBER.

     Masculine pronouns shall refer to both males and females. The singular form
shall include the plural, where appropriate.

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                      Page 3
<PAGE>

                   ARTICLE 3. ELIGIBILITY AND ACCOUNT BALANCE

3.01. ELIGIBILITY.

     Individuals who were Participants on January 1, 2002, shall remain
Participants after that date for as long as they have a positive balance in
their Special Retention Account. No individual shall first become a Participant
after December 31, 2001.

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                      Page 4
<PAGE>

                              ARTICLE 4. ACCOUNTS

4.01. ACCOUNTS.

     (a) The Special Retention Account shall be maintained as a separate
subaccount in each Participant's Account in the Plan.

     (b) The Special Retention Account shall be invested in the Moody's
Investment Fund in accordance with Section 6.03 of the Plan ("Moody's Investment
Fund"), unless the Plan Administrator determines in its discretion that a
different hypothetical investment vehicle is appropriate for the Special
Retention Account.

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                      Page 5
<PAGE>

                              ARTICLE 5. PAYMENTS

5.01. EXCLUSIVE ENTITLEMENT TO PAYMENT.

     A Participant in the Program has waived his right to receive change in
control benefits under one or more prior agreements with the Company or its
predecessors (including his executive severance agreement) as a result of the
Merger and has agreed to receive in lieu thereof the amount payable to him at
the times and in the amounts specified in this Article 5 and in Article 7 of the
Plan ("Payments From The Plan"), as well as the Other Benefits set forth in
Article 6, below. No other amounts shall be due under the Plan or otherwise as a
result of the Participant's deferral election pursuant to Section 3.03 of the
Program as it existed before the January 1, 2002, amendment and restatement.

5.02. AMOUNT AND SOURCES OF PAYMENT.

     (a) Upon termination of employment, a Participant shall be entitled to
receive the greater of (1) the balance in his Special Retention Account at
termination of employment or (2) the cash component of any severance benefits
that the Participant receives or is entitled to receive in the aggregate under
all Other Plans. For purposes of this Section 5.02(a)--

          (1) the "cash component" of any severance benefits shall include
     monetary benefits payable in all forms, whether payable in a lump sum or
     otherwise; and

          (2) a Participant shall be treated as "entitled to receive" any
     benefits under a Company-sponsored employee benefit plan to which the
     Participant would be entitled based on compensation and service, even if
     the Participant does not receive the benefit for any other reason.

     (b) The amount payable under the Program after application of Section
5.02(a) shall be payable to the Participant from the following sources in the
following order until the entire amount is paid, if available--

          (1) any of the Other Plans that is qualified (or intended to be
     qualified) under Section 401(a) of the Code;

          (2) the Special Retention Account;

          (3) any of the Other Plans that is not qualified (or intended to be
     qualified) under Section 401(a) of the Code; and

          (4) the general assets of the Company.

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                      Page 6
<PAGE>

     (c) Any amount not paid from the Special Retention Account as a result of
application of this Section 5.02 shall be forfeited.

5.03. LIMITATIONS ON RIGHTS TO PAYMENT.

     (a) Period of Service, Notice. A Participant shall not be entitled to
receive any amount from his Special Retention Account if he (1) voluntarily
terminates from the Company (including a retirement) without providing 30 days'
written notice of his intent to terminate or (2) is terminated for Cause (as
defined in Section 5.03(b), below). Nothing in this Section 5.03(a) shall affect
the right of a Participant to receive any amount from his Special Retention
Account if he is involuntarily terminated without Cause or terminates employment
due to his death or disability (as defined in the applicable long-term
disability plan).

     (b) Cause. For purposes of this Program, "Cause" shall mean (i) grossly
incompetent performance or substantial or continuing inattention to or neglect
of the duties and responsibilities assigned to the Participant; fraud,
misappropriation or embezzlement involving the Company or a material breach of
any provision incorporated in paragraph 13 ("Covenants") of the employment
agreement to which this Program is an exhibit, as determined by the CEO in his
discretion or (ii) commission of any felony of which the participant is finally
adjudged guilty by a court of competent jurisdiction.

     (c) Other Benefits. The Other Benefits provided in Article 6, below, shall
not be subject to the requirements of Section 5.03(a), above, except to the
extent specifically provided in Article 6, below.

     (d) Other Limitations on Rights to Payment. The provisions of Sections 8.04
and 8.06 of the Plan ("Forfeiture" and "Non-Competition/Non-Solicitation
Agreement Upon or After Termination of Employment," respectively) shall not
apply to the Special Retention Account or the Other Benefits provided in Article
6, below.

     (e) In-Service Withdrawals. The provisions of Section 7.06 of the Plan
("Early Payments") shall not apply to the Special Retention Account to the
extent they permit withdrawals or distributions before a Participant terminates
employment with the Company, except that a Participant may apply to the
Committee for such a withdrawal or distribution, which the Committee may grant
in its discretion.

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                      Page 7
<PAGE>

                           ARTICLE 6. OTHER BENEFITS

6.01. OTHER BENEFITS.

     In addition to the benefits provided in the Plan or otherwise in this
Program, Participants shall be entitled to the benefits set forth in paragraphs
(a) and (b) of this Section 6.01.

     (a) Insurance. The Company shall provide each Participant, at the Company's
expense, for a period beginning on the date of the Participant's termination of
employment with the Company, the same medical, dental, and life insurance
coverage as was in effect on June 30, 2000, or, if greater, coverage under any
other Company-sponsored medical, dental, or life insurance coverage available on
the date of the Participant's termination of employment. Such coverage shall end
upon the expiration of 24 months after the Participant's termination of
employment. For purposes of this paragraph (a), "at the Company's expense" means
that the Company shall make all contributions or premium payments required to
obtain coverage, and that the Participant shall not make any such contributions
or premium payments, but that the Participant shall be subject to any
deductibles and co-payment provisions in effect on June 30, 2000 (or, if
applicable, immediately before the termination of employment). Except to the
extent otherwise required by law, the period of coverage for any health care
continuation coverage required by the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, shall begin on the date of the Participant's
termination of employment.

     (b) Benefit Credit.

          (1) Each Participant shall receive service credit, for the purpose of
     receiving benefits and for vesting, retirement eligibility, benefit
     accrual, and all other purposes, under all employee benefit plans sponsored
     by the Company (including, but not limited to, health, life insurance,
     pension, savings, stock, and stock ownership plans, but excluding the
     Company's short-term and long-term disability plans) in which he
     participated on June 30, 2000, for 24 months.

          (2) Other than the benefit credit set forth in Section 6.01(b)(1),
     above, a Participant shall not receive any additional benefit credit under
     the Program. The benefit credit provided in accordance with Section 6.01(b)
     of the Program as in effect before January 1, 2002 (other than to the
     extent such provisions are preserved in Section 6.01(b)(1), above) was
     converted to a dollar amount that was reflected in each Participant's
     Account as of January 1, 2002, or has otherwise been provided to the
     Participant through another plan or program of the Company. Therefore, that
     benefit credit has already been provided and will not be credited again.

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                      Page 8
<PAGE>

6.02. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

     Participants shall be entitled to a tax gross-up payment in accordance with
Addendum A to the Program.

6.03. NONDUPLICATION.

     No provision of this Program shall require the Company to provide the
Participant with any payment, benefit, or grant that duplicates any payment,
benefit, or grant that the Participant is entitled to receive under any Company
compensation or benefit plan, award agreement, or other arrangement or a
payment, benefit, or grant that was included in the Participant's Account in the
Verizon Income Deferral Plan as of January 1, 2002.

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                      Page 9
<PAGE>

              SPECIAL RETENTION ACCOUNT AND OTHER BENEFITS PROGRAM
                                   ADDENDUM A
                       ADDITIONAL PAYMENTS BY THE COMPANY

     A Participant in the Program shall be entitled to a tax gross-up payment in
accordance with the following provisions:

     (a) Gross-Up Payment. If any payment or benefit received or to be received
by the Participant from the Company pursuant to the Plan (the "Payments") would
be subject to the excise tax (the "Excise Tax") imposed by section 4999 of the
Code as determined in accordance with this Addendum A, the Company shall pay the
Participant, at the time specified below, an additional amount (the "Gross-Up
Payment") such that the net amount that the Participant retains, after deduction
of the Excise Tax on the Payments and any federal, state, and local income tax
and the Excise Tax upon the Gross-Up Payment, and any interest, penalties, or
additions to tax payable by the Participant with respect thereto, shall be equal
to the total present value (using the applicable federal rate (as defined in
section 1274(d) of the Code) in such calculation) of the Payments at the time
such Payments are to be made.

     (b) Calculations. For purposes of determining whether any of the Payments
shall be subject to the Excise Tax and the amount of such excise tax,

          (1) The total amount of the Payments shall be treated as "parachute
     payments" within the meaning of section 280G(b)(2) of the Code, and all
     "excess parachute payments" within the meaning of section 280G(b)(1) of the
     Code shall be treated as subject to the excise tax, except to the extent
     that, in the written opinion of independent counsel selected by the Company
     and reasonably acceptable to the Participant ("Independent Counsel"), a
     Payment (in whole or in part) does not constitute a "parachute payment"
     within the meaning of section 280G(b)(2) of the Code, or such "excess
     parachute payments" (in whole or in part) are not subject to the Excise
     Tax;

          (2) The amount of the Payments that shall be subject to the Excise Tax
     shall be equal to the lesser of (i) the total amount of the Payments or
     (ii) the amount of "excess parachute payments " within the meaning of
     section 280G(b)(1) of the Code (after applying clause (1), above); and

          (3) The value of any noncash benefits or any deferred payment or
     benefit shall be determined by Independent Counsel in accordance with the
     principles of section 280G(d)(3) and (4) of the Code.

     (c) Tax Rates. For purposes of determining the amount of the Gross-Up
Payment, the Participant shall be deemed to pay federal income taxes at the
highest marginal rates of federal income taxation applicable to individuals in
the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rates of taxation applicable to
individuals as are in effect in the state and locality of the Participant's
residence in the calendar year in which the Gross-Up

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                Addendum A-1
<PAGE>

Payment is to be made, net of the maximum reduction in federal income taxes that
can be obtained from deduction of such state and local taxes, taking into
account any limitations applicable to individuals subject to federal income tax
at the highest marginal rates.

     (d) Time of Gross-Up Payments. The Gross-Up Payments provided for in this
paragraph 12 shall be made upon the earlier of (i) the payment to the
Participant of any Payment or (ii) the imposition upon the Participant, or any
payment by the Participant, of any Excise Tax.

     (e) Adjustments to Gross-Up Payments. If it is established pursuant to a
final determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax is less than the
amount previously taken into account hereunder, the Participant shall repay the
Company, within 30 days of the Participant's receipt of notice of such final
determination or opinion, the portion of the Gross-Up Payment attributable to
such reduction (plus the portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state, and local income tax imposed on the Gross-Up
Payment being repaid by the Participant if such repayment results in a reduction
in Excise Tax or a federal, state, and local income tax deduction) plus any
interest received by the Participant on the amount of such repayment, provided
that if any such amount has been paid by the Participant as an Excise Tax or
other tax, the Participant shall cooperate with the Company in seeking a refund
of any tax overpayments, and the Participant shall not be required to make
repayments to the Company until the overpaid taxes and interest thereon are
refunded to the Participant.

     (f) Additional Gross-Up Payment. If it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax exceeds the amount
taken into account hereunder (including by reason of any payment the existence
or amount of which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of such excess
within 30 days of the Company's receipt of notice of such final determination or
opinion.

     (g) Change In Law Or Interpretation. In the event of any change in, or
further interpretation of section 280G or 4999 of the Code and the regulations
promulgated thereunder, the Participant shall be entitled, by written notice to
the Company, to request a written opinion of Independent Counsel regarding the
application of such change to any of the foregoing, and the Company shall use
its best efforts to cause such opinion to be rendered as promptly as
practicable.

     (h) Fees And Expenses. All fees and expenses of Independent Counsel
incurred in connection with this Addendum A shall be borne by the Company.

     (i) Survival. The Company's obligation to make a Gross-Up Payment with
respect to Payments made or accrued before the Participant's termination of
employment with the Company shall survive the termination of the Participant's
with the Company unless (1) the Participant's employment is terminated for
Cause, or (2) the

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                Addendum A-2
<PAGE>

Participant fails to execute a release, in which event the Company's obligation
under this Addendum A shall terminate immediately.

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                Addendum A-3
<PAGE>
                                    EXHIBIT B

                               EXCISE TAX GROSS-UP

     1. GROSS-UP PAYMENT - If any payment or benefit received or to be received
by you from the Company pursuant to the terms of the Agreement to which this
Exhibit B is attached or otherwise (the "Payments") would be subject to the
excise tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue
Code (the "Code") as determined in accordance with this Exhibit B, the Company
shall pay you, at the time specified below, an additional amount (the "Gross-Up
Payment") such that the net amount that you retain, after deduction of the
Excise Tax on the Payments and any federal, state, and local income tax and the
Excise Tax upon the Gross-Up Payment, and any interest, penalties, or additions
to tax payable by you with respect thereto, shall be equal to the total present
value (using the applicable federal rate (as defined in section 1274(d) of the
Code) in such calculation) of the Payments at the time such Payments are to be
made.

     2. CALCULATIONS - For purposes of determining whether any of the Payments
shall be subject to the Excise Tax and the amount of such excise tax,

     (a)  The total amount of the Payments shall be treated as "parachute
          payments" within the meaning of section 280G(b)(2) of the Code, and
          all "excess parachute payments" within the meaning of section
          280G(b)(1) of the Code shall be treated as subject to the excise tax,
          except to the extent that, in the written opinion of independent
          counsel selected by Verizon and reasonably acceptable to you
          ("Independent Counsel"), a Payment (in whole or in part) does not
          constitute a "parachute payment" within the meaning of section
          280G(b)(2) of the Code, or such "excess parachute payments" (in whole
          or in part) are not subject to the Excise Tax;

     (b)  The amount of the Payments that shall be subject to the Excise Tax
          shall be equal to the lesser of (i) the total amount of the Payments
          or (ii) the amount of "excess parachute payments " within the meaning
          of section 280G(b)(1) of the Code (after applying clause (a), above);
          and

     (c)  The value of any noncash benefits or any deferred payment or benefit
          shall be determined by Independent Counsel in accordance with the
          principles of section 280G(d)(3) and (4) of the Code.

     3. TAX RATES - For purposes of determining the amount of the Gross-Up
Payment, you shall be deemed to pay federal income taxes at the highest marginal
rates of federal income taxation applicable to individuals in the calendar year
in which the Gross-Up Payment is to be made and state and local income taxes at
the highest marginal rates of taxation applicable to individuals as are in
effect in the state and locality of your residence in the calendar year in which
the Gross-Up

<PAGE>

                                       -2-

Payment is to be made, net of the maximum reduction in federal income taxes that
can be obtained from deduction of such state and local taxes, taking into
account any limitations applicable to individuals subject to federal income tax
at the highest marginal rates.

     4. TIME OF GROSS-UP PAYMENTS - The Gross-Up Payments provided for in this
Exhibit B shall be made upon the earlier of (a) the payment to you of any
Payment or (b) the imposition upon you, or any payment by you, of any Excise
Tax.

     5. ADJUSTMENTS TO GROSS-UP PAYMENTS - If it is established pursuant to a
final determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax is less than the
amount previously taken into account hereunder, you shall repay the Company,
within 30 days of your receipt of notice of such final determination or opinion,
the portion of the Gross-Up Payment attributable to such reduction (plus the
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state, and local income tax imposed on the Gross-Up Payment being repaid by you
if such repayment results in a reduction in Excise Tax or a federal, state, and
local income tax deduction) plus any interest received by you on the amount of
such repayment, provided that if any such amount has been paid by you as an
Excise Tax or other tax, you shall cooperate with the Company in seeking a
refund of any tax overpayments, and you shall not be required to make repayments
to the Company until the overpaid taxes and interest thereon are refunded to
you.

     6. ADDITIONAL GROSS-UP PAYMENT - If it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax exceeds the amount
taken into account hereunder (including by reason of any payment the existence
or amount of which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of such excess
within 30 days of the Company's receipt of notice of such final determination or
opinion.

     7. CHANGE IN LAW OR INTERPRETATION - In the event of any change in or
further interpretation of section 280G or 4999 of the Code and the regulations
promulgated thereunder, you shall be entitled, by written notice to Verizon, to
request a written opinion of Independent Counsel regarding the application of
such change or further interpretation to any of the foregoing, and Verizon shall
use its best efforts to cause such opinion to be rendered as promptly as
practicable.

     8. FEES AND EXPENSES - All fees and expenses of Independent Counsel
incurred in connection with this Exhibit B shall be borne by Verizon.

     9. SURVIVAL - The Company's obligation to make a Gross-Up Payment with
respect to Payments made or accrued before the end of the Term of Employment

<PAGE>
                                      -3-

shall survive the Term of Employment unless (a) your employment is terminated
for Cause pursuant to paragraph 11(f) of the Agreement to which this Exhibit B
is attached ("Involuntary Termination For Cause"), (b) you fail to execute a
release in accordance with paragraph 12 of such Agreement ("Release"), or (c)
you fail to comply with the covenants incorporated in paragraph 13 of such
Agreement ("Covenants"), in which event the Company's obligation under this
Exhibit B shall terminate immediately.

     10. DEFINED TERMS - Except where clearly provided to the contrary, all
capitalized terms used in this Exhibit B shall have the definitions given to
those terms in the Agreement to which this Exhibit B is attached.
<PAGE>
                                    EXHIBIT C

                                    COVENANTS

     1. NONCOMPETITION - In consideration for the benefits and agreements
described in the Agreement to which this Exhibit C is attached, you agree that:

         (a) PROHIBITED CONDUCT - During the period of your employment with the
Company, and for the period ending six months after your termination of
employment for any reason from the Company, you shall not, without the prior
written consent of the CEO(s):

               (1)  personally engage in Competitive Activities (as defined
                    below); or

               (2)  work for, own, manage, operate, control, or participate in
                    the ownership, management, operation, or control of, or
                    provide consulting or advisory services to, any individual,
                    partnership, firm, corporation, or institution engaged in
                    Competitive Activities, or any company or person affiliated
                    with such person or entity engaged in Competitive
                    Activities; provided that your purchase or holding, for
                    investment purposes, of securities of a publicly-traded
                    company shall not constitute "ownership" or "participation
                    in ownership" for purposes of this paragraph so long as your
                    equity interest in any such company is less than a
                    controlling interest;

provided that this paragraph (a) shall not prohibit you from (i) being employed
by, or providing services to, a consulting firm, provided that you do not
personally engage in Competitive Activities or provide consulting or advisory
services to any individual, partnership, firm, corporation, or institution
engaged in Competitive Activities, or any company or person affiliated with such
person or entity engaged in Competitive Activities, or (ii) engaging in the
private practice of law as a sole practitioner or as a partner in (or as an
employee of or counsel to) a law firm in accordance with applicable legal and
professional standards.

         (b) COMPETITIVE ACTIVITIES - For purposes of the Agreement to which
this Exhibit C is attached, "Competitive Activities" means business activities
relating to products or services of the same or similar type as the products or
services (1) which are sold (or, pursuant to an existing business plan, will be
sold) to paying customers of the Company, and (2) for which you then have
responsibility to plan, develop, manage, market, or oversee, or had any such
responsibility within your most recent 24 months of employment with the Company.
Notwithstanding the previous sentence, a business activity shall not be treated
as a Competitive Activity if the geographic marketing area of the relevant
products or services sold by you or

<PAGE>
                                      -2-

a third party does not overlap with the geographic marketing area for the
applicable products and services of the Company.

     2. INTERFERENCE WITH BUSINESS RELATIONS - During the period of your
employment with the Company, and for a period ending with the expiration of 12
months following your termination of employment for any reason from the Company,
you shall not, without the written consent of the CEO(s):

          (a)  recruit or solicit any employee of the Company for employment or
               for retention as a consultant or service provider;

          (b)  hire or participate (with another company or third party) in the
               process of hiring (other than for the Company) any person who is
               then an employee of the Company, or provide names or other
               information about Company employees to any person or business
               (other than the Company) under circumstances that could lead to
               the use of that information for purposes of recruiting or hiring;

          (c)  interfere with the relationship of the Company with any of its
               employees, agents, or representatives;

          (d)  solicit or induce, or in any manner attempt to solicit or induce,
               any client, customer, or prospect of the Company (1) to cease
               being, or not to become, a customer of the Company or (2) to
               divert any business of such customer or prospect from the
               Company; or

          (e)  otherwise interfere with, disrupt, or attempt to interfere with
               or disrupt, the relationship, contractual or otherwise, between
               the Company and any of its customers, clients, prospects,
               suppliers, consultants, or employees.

     3. RETURN OF PROPERTY; INTELLECTUAL PROPERTY RIGHTS - You agree that on or
before your termination of employment for any reason with the Company, you shall
return to the Company all property owned by the Company or in which the Company
has an interest, including files, documents, data and records (whether on paper
or in tapes, disks, or other machine-readable form), office equipment, credit
cards, and employee identification cards. You acknowledge that the Company is
the rightful owner of any programs, ideas, inventions, discoveries, patented or
copyrighted material, or trademarks that you may have originated or developed,
or assisted in originating or developing, during your period of employment with
the Company, where any such origination or development involved the use of
Company

<PAGE>
                                      -3-

time or resources, or the exercise of your responsibilities for or on behalf of
the Company. You shall at all times, both before and after termination of
employment, cooperate with the Company in executing and delivering documents
requested by the Company, and taking any other actions, that are necessary or
requested by the Company to assist the Company in patenting, copyrighting, or
registering any programs, ideas, inventions, discoveries, patented or
copyrighted material, or trademarks, and to vest title thereto in the Company.

     4. PROPRIETARY AND CONFIDENTIAL INFORMATION - You shall at all times
preserve the confidentiality of all proprietary information and trade secrets of
the Company, except to the extent that disclosure of such information is legally
required. "Proprietary information" means information that has not been
disclosed to the public and that is treated as confidential within the business
of the Company, such as strategic or tactical business plans; undisclosed
financial data; ideas, processes, methods, techniques, systems, patented or
copyrighted information, models, devices, programs, computer software, or
related information; documents relating to regulatory matters and correspondence
with governmental entities; undisclosed information concerning any past,
pending, or threatened legal dispute; pricing and cost data; reports and
analyses of business prospects; business transactions that are contemplated or
planned; research data; personnel information and data; identities of users and
purchasers of the Company's products or services; and other confidential matters
pertaining to or known by the Company, including confidential information of a
third party that you know or should know the Company is bound to protect.

     5. DEFINITIONS - Except where clearly provided to the contrary, all
capitalized terms used in this Exhibit C shall have the definitions given to
those terms in the Agreement to which this Exhibit C is attached.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.B
<SEQUENCE>4
<FILENAME>d98774exv10wb.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT - DAVID H. BENSON
<TEXT>
<PAGE>

                                                                     EXHIBIT 10b

                                                    [Verizon Logo]
                                                    1095 Avenue of the Americas
                                                    New York, NY 10036

July 1, 2002

Mr. David Benson
[Address]
[Address]

Dear Dave:

     I am pleased to offer you this new employment agreement (the "Agreement")
with Verizon Communications Inc. ("Verizon"), and, as an indication of my
confidence in your abilities, I have added an automatic renewal provision. For
purposes of this Agreement, the term "Company" means Verizon, all corporate
subsidiaries and other companies affiliated with Verizon, all companies in which
Verizon has an ownership or other proprietary interest of more than 10 percent,
and their successors and assigns.

     The many opportunities and challenges facing the Company are enormous and
exciting. As a leader in our industry, we will be constantly challenged with
sustaining our market growth and presence. We will meet these challenges by
leveraging the strength of our talented and committed leaders. This Agreement
demonstrates my continued confidence in you.

     I value you and the leadership, vision, and commitment you bring to the
Company. I am excited by the prospect of you continuing as a key member of the
Company's leadership team.

     The terms and conditions of this Agreement are set forth below.

     1. PURPOSE - Verizon enters into this Agreement with you because the
rapidly-changing and increasingly global telecommunications market requires the
Company to make critical strategic, marketing, and technical decisions. These
decisions by the Company will be based, in whole or in part, on confidential
analyses of the evolving telecommunications market, confidential assessments of
the technical capabilities and strategic plans of the Company and competing
businesses, and confidential or proprietary information regarding the Company's
technology, resources, and business opportunities or other confidential or
proprietary information relating to the Company's business. Verizon seeks by
this

<PAGE>
Mr. David Benson
July 1, 2002
Page 2

Agreement to ensure that you remain a part of the executive management team that
plays a central role in this decision-making process.

     In consideration for your entering into this Agreement, including the
restrictions on the disclosure and use of confidential or proprietary
information and the limitations on your engaging in competitive activities, the
Company is providing you with the security of a written two-year agreement,
short- and long-term award opportunities, and other benefits.

     2. GENERAL - Under this Agreement, you shall continue as a senior executive
of the Company. As a senior executive, you shall report to the Chief Executive
Officer of Verizon (the "CEO").

     3. TERM - The term of employment under this Agreement ("Term of
Employment") shall commence on July 1, 2002, and end on June 30, 2004; provided
that, on the last day of the Term of Employment, the Term of Employment shall
automatically be extended for an additional two years unless, on or before that
date, the Term of Employment terminates or the Company notifies you in writing
that the Term of Employment shall not be extended. For example, on June 30,
2004, the Term of Employment shall be extended until June 30, 2006, unless, on
or before June 30, 2004, the Term of Employment terminates or the Company
notifies you in writing that the Term of Employment shall not be extended, and,
if the Term of Employment is extended until June 30, 2006, the Term of
Employment shall be extended on that date until June 30, 2008, unless, on or
before June 30, 2006, the Term of Employment terminates or the Company notifies
you in writing that the Term of Employment shall not be extended.
Notwithstanding the preceding provisions of this paragraph 3, the Company
reserves the right to terminate your employment and the Term of Employment at
any time. Your employment and the Term of Employment also may terminate for
other reasons (such as your resignation, retirement, death, or disability). The
consequences of the termination of your employment are specified in paragraph 11
("Termination Of Employment").

     4. DUTIES AND RESPONSIBILITIES - You shall continue to serve as a senior
executive of the Company in such capacities, with such titles and authorities,
as the CEO or his successor may from time to time prescribe, and you shall
perform all duties incidental to such positions, shall cooperate fully with the
CEO or his successor, and shall work cooperatively with the other officers of
the Company. You shall continue to devote your entire business skill, time, and
effort diligently to the affairs of the Company in accordance with the duties
assigned to you, and you shall perform all such duties, and otherwise conduct
yourself, in a manner reasonably calculated in good faith by you to promote the
best interests of the

<PAGE>
Mr. David Benson
July 1, 2002
Page 3

Company. During the Term of Employment, except to the extent specifically
permitted in writing by the CEO or his successor, and except for memberships on
boards of directors that you held on February 23, 2001 (the date of your
previous employment agreement with Verizon), you shall not, directly or
indirectly, render any services of a business, commercial, or professional
nature to any other person or organization other than the Company or a person or
organization in which the Company has a financial interest, whether or not the
services are rendered for compensation.

     5. LOCATION - During the Term of Employment, you shall perform services for
the Company at its New York City headquarters, or at any other location
designated by the Company as necessary or appropriate for the discharge of your
responsibilities under this Agreement. In the event of any change in your
principal work location, you shall be eligible for relocation assistance under
the terms of any Company relocation policy applicable to other senior executives
of the Company in your salary band at the time of such relocation.

     6. BASE SALARY - During the Term of Employment, your annual base salary
shall not be less than your annual base salary on the date of this Agreement;
provided that if you are granted a merit increase in your base salary, your base
salary shall not thereafter be reduced below that increased level during the
Term of Employment. The Human Resources Committee of Verizon's Board of
Directors or its designee shall review your base salary at least annually.

     7. SHORT-TERM AND LONG-TERM BONUS OPPORTUNITIES - During the Term of
Employment, the Company shall provide you with annual short-term and long-term
bonus opportunities equivalent to those available to other senior executives of
the Company in your salary band. While you are not guaranteed an annual
short-term or long-term bonus award in any amount, (a) the value of your annual
short-term bonus opportunity shall be not less than 75 percent of your
then-current base salary, and (b) the value of your annual long-term bonus
opportunity shall not be less than 425 percent of your then-current base salary.

     8. BENEFITS AND PERQUISITES - For the immediate future, you shall-

          (1)  participate in the tax-qualified and nonqualified retirement
               plans and in the other employee benefit plans (such as the
               medical and dental plans), programs, and policies in which you
               currently participate; and

<PAGE>
Mr. David Benson
July 1, 2002
Page 4

          (2)  be eligible for the perquisites available to senior executives in
               your salary band;

provided that the Company retains the right to amend or terminate any benefit
plan, policy, program, or perquisite at any time.

     9. ANNUAL PHYSICAL - You are encouraged to take an annual physical
examination from a physician at the Company's expense and to certify in writing
to the Company's designee each year (1) that you have had the examination and
(2) the nature and extent of any medical impairments that prevent you from
currently performing the essential functions of your position.

     10. EXCISE TAX GROSS-UP - Under certain circumstances you may become
entitled to a gross-up payment with respect to the excise tax imposed by section
4999 of the Internal Revenue Code (the "Code"). The terms governing the gross-up
payment are set forth in Exhibit A, which is incorporated herein by reference.

     11. TERMINATION OF EMPLOYMENT - (a) VOLUNTARY TERMINATION BY YOU - You may
terminate your employment under this Agreement for a reason other than
Retirement (as defined in subparagraph (c), below) or Good Reason (as defined in
subparagraph (d), below) by giving the CEO, at least 30 calendar days'
(exclusive of vacation days) in advance of such termination, written notice of
your intent to so terminate. The termination shall automatically become
effective upon the expiration of such notice period. Upon the effective date of
such termination, your base salary and any other Company benefits and
perquisites shall cease to accrue, you shall forfeit all then-outstanding stock
options, and you shall forfeit all rights under this Agreement which as of the
relevant date have not yet been earned. A termination of employment in
accordance with this subparagraph (a) shall be deemed a "Voluntary Termination."

         (b) TERMINATION DUE TO DEATH OR DISABILITY - If, during the Term of
Employment, you terminate employment because of death or disability (as defined
under the Company-sponsored long-term disability plan that applies to you at the
time your employment is so terminated), the Company shall make a lump-sum cash
payment to you equal to the excess of (1) one times the sum of your base salary
and short-term bonus (at 50% of maximum), over (2) any amounts payable to you
under Company-sponsored disability plans. You shall also be entitled to
accelerated vesting of all outstanding stock options, and you shall be entitled
to exercise all then-outstanding stock options until the earlier of (1) the
fifth anniversary of the date your employment terminates (or any later date
prescribed by the terms of the option relating to termination of employment) or
(2) the expiration of

<PAGE>
Mr. David Benson
July 1, 2002
Page 5

the option; provided that if you terminate employment because of death, your
rights under this subparagraph (b) shall pass to your estate. For this purpose,
your base salary shall be based on your base salary rate in effect immediately
before your employment terminated.

         (c) RETIREMENT - You may terminate your employment under this Agreement
by reason of Retirement (as defined below) by giving the CEO, at least 30
calendar days' (exclusive of vacation days) in advance of such termination,
written notice of your intent to so terminate. The termination shall
automatically become effective upon the expiration of such notice period. Upon
the effective date of such termination, you shall be entitled to a pro-rated
portion of any short-term and long-term bonuses (when and to the extent that
they are earned) and accelerated vesting of all outstanding stock options (other
than the Founders' Grant), and you shall be entitled to exercise all
then-outstanding stock options (excluding nonvested Founders' Grant options)
until the earlier of (1) the fifth anniversary of the date your employment
terminates (or any later date prescribed by the terms of the option relating to
termination of employment) or (2) the expiration of the option. For purposes of
this Agreement, "Retirement" means attaining normal retirement age under the
terms of the Verizon Management Pension Plan (the "Pension Plan") or satisfying
the Rule of 75 under the Pension Plan. Except as provided by the preceding
provisions of this subparagraph (c), upon the effective date of your Retirement,
your base salary and any other Company benefits and perquisites shall cease to
accrue; provided that you shall otherwise be eligible to receive any and all
compensation and benefits for which a similarly situated senior executive would
be eligible under the applicable provisions of the compensation and benefit
plans in which he is then eligible to participate, as those plans may be amended
from time to time.

         (d) TERMINATION FOR GOOD REASON - (1) You may terminate your employment
under this Agreement for Good Reason by giving the CEO, at least 30 calendar
days' (exclusive of vacation days) in advance of such termination (the "Notice
Period"), written notice of your intent to so terminate, setting forth in
reasonable detail the facts and circumstances deemed to provide a basis for such
termination. For purposes of this Agreement, "Good Reason" means a material
breach by the Company of the terms and conditions of this Agreement, a material
reduction in your overall compensation opportunities, or your assignment to a
new principal work location that is more than 50 miles from your previous
principal work location. A "Good Reason" shall not occur merely because of a
change in the individual (or position) to whom (or to which) you report. In
addition, a "Good Reason" shall not occur merely because the Company notifies
you, in accordance

<PAGE>
Mr. David Benson
July 1, 2002
Page 6

with paragraph 3 ("Term"), that the Term of Employment shall not be extended for
an additional two-year period.

               (2) Notwithstanding the foregoing, the Company shall have 15
calendar days from its receipt of such notice to cure the action specified in
the notice. In the event of a cure by the Company within the 15-day period, the
action in question shall not constitute Good Reason.

               (3) Except as provided in subparagraph (d)(2), above, at the end
of the Notice Period, the Good Reason termination shall take effect, and your
obligation to serve the Company, and the Company's obligation to employ you,
under the terms of this Agreement shall terminate simultaneously, and you shall
be deemed to have incurred an Involuntary Termination Without Cause, with the
consequences described in subparagraph (e), below; provided that your rights
under this subparagraph (d) are contingent on your execution of a release in
accordance with paragraph 12 ("Release").

               (4) If you do not fulfill the notice and explanation requirements
imposed by this subparagraph (d), the resulting termination of employment shall
be deemed a Voluntary Termination.

         (e) INVOLUNTARY TERMINATION WITHOUT CAUSE - The Company may terminate
your employment under this Agreement at any time and for any reason. However, if
the Company terminates your employment during the Term of Employment for any
reason other than death, disability, or Cause (as defined in subparagraph (f),
below), such termination shall be deemed an Involuntary Termination by the
Company, and you shall be entitled to receive the following payments and
benefits in lieu of any payment or benefit otherwise provided pursuant to
paragraphs 6 ("Base Salary") through 8 ("Benefits And Perquisites"):

               (1)  The Company shall make a lump-sum cash severance payment to
                    you equal to the excess of (i) two times the sum of your
                    base salary and short-term bonus (at 50% of maximum), over
                    (ii) the sum of any amounts paid or payable to you under any
                    Company-sponsored severance plan, program, policy, contract,
                    account, or arrangement;

               (2)  Your unvested stock options shall immediately vest, and you
                    may exercise all of your then-outstanding stock options at
                    any time up to the earlier of (i) the fifth anniversary of
                    the date your employment terminates (or

<PAGE>
Mr. David Benson
July 1, 2002
Page 7

                    any later date prescribed by the terms of the option
                    relating to termination of employment) or (ii) the
                    expiration of the option; and

               (3)  You shall be eligible for outplacement services to the
                    extent that such services are then available to senior
                    executives in your salary band;

provided that your rights under this subparagraph (e) are contingent on your
execution of a release in accordance with paragraph 12 ("Release"). For purposes
of this paragraph 11(e), the Company shall not be deemed to have terminated your
employment during the Term of Employment if the Company notifies you, in
accordance with paragraph 3 ("Term"), that the Term of Employment shall not be
extended for an additional two-year period.

         (f) INVOLUNTARY TERMINATION FOR CAUSE - (1) Nothing in this Agreement
prevents the Company from terminating your employment under this Agreement for
Cause. In the event of your termination for Cause, the Company shall pay you
your full accrued base salary and accrued vacation time through the date of your
termination, you shall forfeit all then-outstanding stock options if you are not
eligible for Retirement at the time of your termination, and the Company shall
have no further obligations under this Agreement; provided that you shall
otherwise be eligible to receive any and all compensation and benefits for which
a similarly situated senior executive would be eligible under the applicable
provisions of the compensation and benefit plans in which he is then eligible to
participate, as those plans may be amended from time to time.

               (2) For purposes of this Agreement, "Cause" is defined as (i)
grossly incompetent performance or substantial or continuing inattention to or
neglect of the duties and responsibilities assigned to you; fraud,
misappropriation or embezzlement involving the Company or a material breach of
any provision incorporated in paragraph 13 ("Covenants"), as determined by the
CEO in his discretion, or (ii) commission of any felony of which you are finally
adjudged guilty by a court of competent jurisdiction.

               (3) If the Company terminates your employment for Cause, the
Company shall provide you with a written statement of the grounds for such
termination within 10 business days after the date of termination.

     12. RELEASE - You shall not be entitled to any benefits under paragraphs 10
("Excise Tax Gross-Up"), 11(d) ("Termination For Good Reason"), and 11(e)
("Involuntary Termination Without Cause") following the termination of your

<PAGE>
Mr. David Benson
July 1, 2002
Page 8

employment unless, at the time your employment terminates, you execute a release
satisfactory to the Company releasing the Company, its affiliates, shareholders,
directors, officers, employees, representatives, and agents and their successors
and assigns from any and all employment-related claims you or your successors
and beneficiaries might then have against them (excluding any claims you might
then have under this Agreement, or any employee benefit plan that is subject to
the vesting standards imposed by the Employee Retirement Income Security Act of
1974, as amended).

     13. COVENANTS - In consideration for the benefits and agreements described
above, you agree to comply with the covenants set forth in Exhibit B hereto,
which is incorporated herein by reference.

     14. REQUEST FOR WAIVER - Nothing in this Agreement bars you from
requesting, at the time of your termination of employment or at any time
thereafter, that the CEO, in his sole discretion, waive in writing the Company's
rights to enforce some or all of the provisions incorporated in paragraph 13
("Covenants").

     15. OTHER AGREEMENTS AND POLICIES - The obligations imposed on you by
paragraph 13 ("Covenants") are in addition to, and not in lieu of, any and all
other policies and agreements of the Company regarding the subject matter of the
foregoing obligations.

     16. NONDUPLICATION OF BENEFITS - No provision of this Agreement shall
require the Company to provide you with any payment, benefit, or grant that
duplicates any payment, benefit, or grant that you are entitled to receive under
any Company compensation or benefit plan, award agreement, or other arrangement.

     17. OTHER COMPANY PLANS - Except to the extent otherwise explicitly
provided by this Agreement, any awards made to you under any Company
compensation or benefit plan or program shall be governed by the terms of that
plan or program and any applicable award agreement thereunder as in effect from
time to time. Notwithstanding the foregoing, you shall not be entitled to
participate in any Company compensation or benefit plan that is established
after your employment with the Company terminates, and except as specifically
provided in this Agreement, you shall not be entitled to any additional grants
or awards under any Company compensation or benefit plan after your employment
with the Company terminates. The amounts paid, provided, or credited under this
Agreement shall not be treated as compensation for purposes of determining any
benefits payable under any Company-sponsored pension, savings, life insurance,
or other employee benefit plan except to the extent provided by the terms of
such plan.

<PAGE>
Mr. David Benson
July 1, 2002
Page 9

     18. FORFEITURE - (a) If you breach any of the obligations incorporated in
paragraph 13 ("Covenants"), or engage in serious misconduct that is contrary to
written policies of the Company and is harmful to the Company or its reputation,
you shall forfeit:

          (1)  all credits that are added to your Retirement Contribution
               Sub-Account in the Verizon Income Deferral Plan (or to any
               successor account in that plan or a successor plan) ("Retirement
               Contribution Sub-Account"), on or after January 1, 2002;

          (2)  any interest or other earnings or gains on or after January 1,
               2002, with respect to any credits in your Retirement Contribution
               Sub-Account (including any interest, or other earnings or gains
               attributable to any credit regardless of when the credit was
               added to your Retirement Contribution Sub-Account); and

          (3)  any unpaid incentive compensation (such as performance bonus
               awards or other awards under the Verizon Communications Inc.
               Long-Term Incentive Plan) that you are otherwise entitled to
               receive.

         (b) The remedies available under this paragraph are in addition to, and
not in lieu of, the remedies available under paragraph 25 ("Additional
Remedies").

     19. NO DEEMED WAIVER - Failure to insist upon strict compliance with any of
the terms, covenants, or conditions of this Agreement shall not be deemed a
waiver of such term, covenant, or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time or
times.

     20. TAXES - The Company may withhold from any benefits payable under this
Agreement all taxes that the Company reasonably determines to be required
pursuant to any law, regulation, or ruling. However, it is your obligation to
pay all required taxes on any amounts and benefits provided under this
Agreement, including the benefits and perquisites provided to you pursuant to
paragraph 8 ("Benefits and Perquisites"), regardless of whether withholding is
required.

<PAGE>
Mr. David Benson
July 1, 2002
Page 10

     21. CONFIDENTIALITY - Except to the extent otherwise required by law, you
shall not disclose, in whole or in part, any of the terms of this Agreement.
This paragraph 21 does not prevent you from disclosing the terms of this
Agreement to your spouse or to your legal, tax, or financial adviser, provided
that you take all reasonable measures to assure that he or she does not disclose
the terms of this Agreement to a third party except as otherwise required by
law.

     22. GOVERNING LAW - To the extent not preempted by federal law, the
provisions of this Agreement shall be construed and enforced in accordance with
the laws of the State of New York, excluding any conflicts or choice of law rule
or principle that might otherwise refer construction or interpretation of this
provision to the substantive law of another jurisdiction.

     23. ASSIGNMENT - Verizon may, without your consent, assign its rights and
obligations under this Agreement to any entity that is a part of the Company,
and if Verizon makes such an assignment, all references in this Agreement to
Verizon (except for references to Verizon common stock) shall be deemed to refer
to the assignee. However, you may not assign your rights and obligations under
this Agreement.

     24. SEVERABILITY - The agreements contained herein and within the release
prescribed by paragraph 12 ("Release") shall each constitute a separate
agreement independently supported by good and adequate consideration, and shall
each be severable from the other provisions of the Agreement and such release.
If an arbitrator or court of competent jurisdiction determines that any term,
provision, or portion of this Agreement or such release is void, illegal, or
unenforceable, the other terms, provisions, and portions of this Agreement or
such release shall remain in full force and effect, and the terms, provisions,
and portions that are determined to be void, illegal, or unenforceable shall
either be limited so that they shall remain in effect to the extent permissible
by law, or such arbitrator or court shall substitute, to the extent enforceable,
provisions similar thereto or other provisions, so as to provide to the Company,
to the fullest extent permitted by applicable law, the benefits intended by this
Agreement and such release.

     25. ADDITIONAL REMEDIES - In addition to any other rights or remedies,
whether legal, equitable, or otherwise, that each of the parties to this
Agreement may have, you acknowledge that

          (a)  The covenants incorporated in paragraph 13 ("Covenants") are
               essential to the continued good will and profitability of the
               Company;

<PAGE>
Mr. David Benson
July 1, 2002
Page 11

          (b)  You have broad-based skills that will serve as the basis for
               employment opportunities that are not prohibited by the covenants
               incorporated in paragraph 13 ("Covenants");

          (c)  When your employment with the Company terminates, you shall be
               able to earn a livelihood without violating any of the terms of
               this Agreement;

          (d)  Irreparable damage to the Company shall result in the event that
               the covenants incorporated in paragraph 13 ("Covenants") are not
               specifically enforced and that monetary damages will not
               adequately protect the Company from a breach of such covenants;

          (e)  If any dispute arises concerning the violation by you of the
               covenants incorporated in paragraph 13 ("Covenants"), an
               injunction may be issued restraining such violation pending the
               determination of such controversy, and no bond or other security
               shall be required in connection therewith;

          (f)  Such covenants shall continue to apply after any expiration,
               termination, or cancellation of this Agreement; and

          (g)  Your breach of any of such covenants shall result in your
               immediate forfeiture of all rights under this Agreement.

     26. SURVIVAL - The provisions of paragraphs 13 ("Covenants") through 28
("Entire Agreement") shall survive the Term of Employment. In addition, if the
Term of Employment is not extended in accordance with paragraph 3 ("Term") but
your employment continues after the end of the Term of Employment, you shall be
subject to the obligations imposed by each of such paragraphs with respect to
such employment. Any obligations that the Company has incurred under this
Agreement to provide benefits that have vested under the terms of this Agreement
(including the Company's obligations under paragraph 11(c) ("Retirement")) shall
likewise survive the Term of Employment. Except as provided by the preceding
provisions of this paragraph 26, if the Term of Employment is not extended in
accordance with paragraph 3 ("Term") but your employment continues after the end
of the Term of Employment, the terms of such employment shall not be governed by
this Agreement.

     27. ARBITRATION - Any dispute arising out of or relating to this Agreement
(except any dispute arising out of or relating to paragraph 13 ("Covenants")),
and any dispute arising out of or relating to your employment, shall be settled
by final

<PAGE>
Mr. David Benson
July 1, 2002
Page 12

and binding arbitration, which shall be the exclusive means of resolving any
such dispute, and the parties specifically waive all rights to pursue any other
remedy, recourse, or relief. With respect to disputes by the Company arising out
of or relating to paragraph 13 ("Covenants"), the Company has retained all its
rights to legal and equitable recourse and relief, including but not limited to
injunctive relief, as referred to in paragraph 25 ("Additional Remedies"). The
arbitration shall be expedited and conducted in the State of New York pursuant
to the Center for Public Resources ("CPR") Rules for Non-Administered
Arbitration in effect at the time of notice of the dispute before one neutral
arbitrator appointed by CPR from the CPR Panel of neutrals unless the parties
mutually agree to the appointment of a different neutral arbitrator. The
arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. sections
1-16, and judgment upon the award rendered by the arbitrator may be entered by
any court having jurisdiction. The finding of the arbitrator may not change the
express terms of this Agreement and shall be consistent with the arbitrator's
understanding of the findings a court of proper jurisdiction would make in
applying the applicable law to the facts underlying the dispute. In no event
whatsoever shall such an arbitration award include any award of damages other
than the amounts in controversy under this Agreement. The parties waive the
right to recover, in such arbitration, punitive damages. Each party hereby
agrees that New York City is the proper venue for any litigation seeking to
enforce any provision of this Agreement or to enforce any arbitration award
under this paragraph 27, and each party hereby waives any right it otherwise
might have to defend, oppose, or object to, on the basis of jurisdiction, venue,
or forum nonconveniens, a suit filed by the other party in any federal or state
court in New York City to enforce any provision of this Agreement or to enforce
any arbitration award under this paragraph 27. Each party also waives any right
it might otherwise have to seek to transfer from a federal or state court in New
York City a suit filed by the other party to enforce any provision of this
Agreement or to enforce any arbitration award under this paragraph 27.

     28. ENTIRE AGREEMENT - Except for the terms of the compensation and benefit
plans in which you participate (including any award agreements issued
thereunder), this Agreement, including the Exhibits hereto, sets forth the
entire understanding of you and the Company, and supersedes all prior agreements
and communications, whether oral or written, between the Company (or Bell
Atlantic or GTE or any of their respective subsidiaries) and you regarding the
subject matter of this Agreement, including your February 23, 2001, employment
agreement with Verizon. This Agreement shall not be modified except by written
agreement of you and Verizon.

<PAGE>
Mr. David Benson
July 1, 2002
Page 13

Dave, I believe that this Agreement continues to provide you and your family
with a firm foundation of financial security as our Company faces many new
challenges and opportunities. I recognize that the Company and the
telecommunications industry operate in a rapidly changing and demanding
environment. It is my hope that this Agreement demonstrates to you the level of
confidence that I have in your abilities to meet the commitments that I expect
from you. Please indicate your acceptance by signing below and returning the
signed Agreement to me or Ezra Singer within ten business days after your
receipt of this Agreement.

Sincerely yours,

/s/ Ivan Seidenberg
-------------------------------------
Ivan Seidenberg
Chief Executive Officer

cc: E. Singer

I agree to the terms described above.

/s/ David Benson
-------------------------------------
David Benson

Attachments: Exhibit A - Excise Tax Gross-Up
             Exhibit B - Covenants
<PAGE>
                                    EXHIBIT A

                               EXCISE TAX GROSS-UP

     1. GROSS-UP PAYMENT - If any payment or benefit received or to be received
by you from the Company pursuant to the terms of the Agreement to which this
Exhibit A is attached or otherwise (the "Payments") would be subject to the
excise tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue
Code (the "Code") as determined in accordance with this Exhibit A, the Company
shall pay you, at the time specified below, an additional amount (the "Gross-Up
Payment") such that the net amount that you retain, after deduction of the
Excise Tax on the Payments and any federal, state, and local income tax and the
Excise Tax upon the Gross-Up Payment, and any interest, penalties, or additions
to tax payable by you with respect thereto, shall be equal to the total present
value (using the applicable federal rate (as defined in section 1274(d) of the
Code) in such calculation) of the Payments at the time such Payments are to be
made.

     2. CALCULATIONS - For purposes of determining whether any of the Payments
shall be subject to the Excise Tax and the amount of such excise tax,

     (a)  The total amount of the Payments shall be treated as "parachute
          payments" within the meaning of section 280G(b)(2) of the Code, and
          all "excess parachute payments" within the meaning of section
          280G(b)(1) of the Code shall be treated as subject to the excise tax,
          except to the extent that, in the written opinion of independent
          counsel selected by Verizon and reasonably acceptable to you
          ("Independent Counsel"), a Payment (in whole or in part) does not
          constitute a "parachute payment" within the meaning of section
          280G(b)(2) of the Code, or such "excess parachute payments" (in whole
          or in part) are not subject to the Excise Tax;

     (b)  The amount of the Payments that shall be subject to the Excise Tax
          shall be equal to the lesser of (i) the total amount of the Payments
          or (ii) the amount of "excess parachute payments " within the meaning
          of section 280G(b)(1) of the Code (after applying clause (a), above);
          and

     (c)  The value of any noncash benefits or any deferred payment or benefit
          shall be determined by Independent Counsel in accordance with the
          principles of section 280G(d)(3) and (4) of the Code.

     3. TAX RATES - For purposes of determining the amount of the Gross-Up
Payment, you shall be deemed to pay federal income taxes at the highest marginal
rates of federal income taxation applicable to individuals in the calendar year
in which the Gross-Up Payment is to be made and state and local income taxes at
the highest marginal rates of taxation applicable to individuals as are in
effect in the state and locality of your residence in the calendar year in which
the Gross-Up

<PAGE>
                                      -2-

Payment is to be made, net of the maximum reduction in federal income taxes that
can be obtained from deduction of such state and local taxes, taking into
account any limitations applicable to individuals subject to federal income tax
at the highest marginal rates.

     4. TIME OF GROSS-UP PAYMENTS - The Gross-Up Payments provided for in this
Exhibit A shall be made upon the earlier of (a) the payment to you of any
Payment or (b) the imposition upon you, or any payment by you, of any Excise
Tax.

     5. ADJUSTMENTS TO GROSS-UP PAYMENTS - If it is established pursuant to a
final determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax is less than the
amount previously taken into account hereunder, you shall repay the Company,
within 30 days of your receipt of notice of such final determination or opinion,
the portion of the Gross-Up Payment attributable to such reduction (plus the
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state, and local income tax imposed on the Gross-Up Payment being repaid by you
if such repayment results in a reduction in Excise Tax or a federal, state, and
local income tax deduction) plus any interest received by you on the amount of
such repayment, provided that if any such amount has been paid by you as an
Excise Tax or other tax, you shall cooperate with the Company in seeking a
refund of any tax overpayments, and you shall not be required to make repayments
to the Company until the overpaid taxes and interest thereon are refunded to
you.

     6. ADDITIONAL GROSS-UP PAYMENT - If it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax exceeds the amount
taken into account hereunder (including by reason of any payment the existence
or amount of which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of such excess
within 30 days of the Company's receipt of notice of such final determination or
opinion.

     7. CHANGE IN LAW OR INTERPRETATION - In the event of any change in or
further interpretation of section 280G or 4999 of the Code and the regulations
promulgated thereunder, you shall be entitled, by written notice to Verizon, to
request a written opinion of Independent Counsel regarding the application of
such change or further interpretation to any of the foregoing, and Verizon shall
use its best efforts to cause such opinion to be rendered as promptly as
practicable.

     8. FEES AND EXPENSES - All fees and expenses of Independent Counsel
incurred in connection with this Exhibit A shall be borne by Verizon.

     9. SURVIVAL - The Company's obligation to make a Gross-Up Payment with
respect to Payments made or accrued before the end of the Term of Employment
shall survive the Term of Employment

<PAGE>
                                      -3-

unless (a) your employment is terminated for Cause pursuant to paragraph 11(f)
of the Agreement to which this Exhibit A is attached ("Involuntary Termination
For Cause"), (b) you fail to execute a release in accordance with paragraph 12
of such Agreement ("Release"), or (c) you fail to comply with the covenants
incorporated in paragraph 13 of such Agreement ("Covenants"), in which event the
Company's obligation under this Exhibit A shall terminate immediately.

     10. DEFINED TERMS - Except where clearly provided to the contrary, all
capitalized terms used in this Exhibit A shall have the definitions given to
those terms in the Agreement to which this Exhibit A is attached.

<PAGE>

                                    EXHIBIT B

                                    COVENANTS

     1. NONCOMPETITION - In consideration for the benefits and agreements
described in the Agreement to which this Exhibit B is attached, you agree that:

         (a) PROHIBITED CONDUCT - During the period of your employment with the
Company, and for the period ending six months after your termination of
employment for any reason from the Company, you shall not, without the prior
written consent of the CEO(s):

               (1)  personally engage in Competitive Activities (as defined
                    below); or

               (2)  work for, own, manage, operate, control, or participate in
                    the ownership, management, operation, or control of, or
                    provide consulting or advisory services to, any individual,
                    partnership, firm, corporation, or institution engaged in
                    Competitive Activities, or any company or person affiliated
                    with such person or entity engaged in Competitive
                    Activities; provided that your purchase or holding, for
                    investment purposes, of securities of a publicly-traded
                    company shall not constitute "ownership" or "participation
                    in ownership" for purposes of this paragraph so long as your
                    equity interest in any such company is less than a
                    controlling interest;

provided that this paragraph (a) shall not prohibit you from (i) being employed
by, or providing services to, a consulting firm, provided that you do not
personally engage in Competitive Activities or provide consulting or advisory
services to any individual, partnership, firm, corporation, or institution
engaged in Competitive Activities, or any company or person affiliated with such
person or entity engaged in Competitive Activities, or (ii) engaging in the
private practice of law as a sole practitioner or as a partner in (or as an
employee of or counsel to) a law firm in accordance with applicable legal and
professional standards.

         (b) COMPETITIVE ACTIVITIES - For purposes of the Agreement to which
this Exhibit B is attached, "Competitive Activities" means business activities
relating to products or services of the same or similar type as the products or
services (1) which are sold (or, pursuant to an existing business plan, will be
sold) to paying customers of the Company, and (2) for which you then have
responsibility to plan, develop, manage, market, or oversee, or had any such
responsibility within your most recent 24 months of employment with the Company.
Notwithstanding the previous sentence, a business activity shall not be treated
as a Competitive Activity if the geographic marketing area of the relevant
products or services sold by you or

<PAGE>
                                      -2-

a third party does not overlap with the geographic marketing area for the
applicable products and services of the Company.

     2. INTERFERENCE WITH BUSINESS RELATIONS - During the period of your
employment with the Company, and for a period ending with the expiration of 12
months following your termination of employment for any reason from the Company,
you shall not, without the written consent of the CEO(s):

          (a)  recruit or solicit any employee of the Company for employment or
               for retention as a consultant or service provider;

          (b)  hire or participate (with another company or third party) in the
               process of hiring (other than for the Company) any person who is
               then an employee of the Company, or provide names or other
               information about Company employees to any person or business
               (other than the Company) under circumstances that could lead to
               the use of that information for purposes of recruiting or hiring;

          (c)  interfere with the relationship of the Company with any of its
               employees, agents, or representatives;

          (d)  solicit or induce, or in any manner attempt to solicit or induce,
               any client, customer, or prospect of the Company (1) to cease
               being, or not to become, a customer of the Company or (2) to
               divert any business of such customer or prospect from the
               Company; or

          (e)  otherwise interfere with, disrupt, or attempt to interfere with
               or disrupt, the relationship, contractual or otherwise, between
               the Company and any of its customers, clients, prospects,
               suppliers, consultants, or employees.

     3. RETURN OF PROPERTY; INTELLECTUAL PROPERTY RIGHTS - You agree that on or
before your termination of employment for any reason with the Company, you shall
return to the Company all property owned by the Company or in which the Company
has an interest, including files, documents, data and records (whether on paper
or in tapes, disks, or other machine-readable form), office equipment, credit
cards, and employee identification cards. You acknowledge that the Company is
the rightful owner of any programs, ideas, inventions, discoveries, patented or
copyrighted material, or trademarks that you may have originated or developed,
or assisted in originating or developing, during your period of employment with
the Company, where any such origination or development involved the use of
Company

<PAGE>
                                      -3-

time or resources, or the exercise of your responsibilities for or on behalf of
the Company. You shall at all times, both before and after termination of
employment, cooperate with the Company in executing and delivering documents
requested by the Company, and taking any other actions, that are necessary or
requested by the Company to assist the Company in patenting, copyrighting, or
registering any programs, ideas, inventions, discoveries, patented or
copyrighted material, or trademarks, and to vest title thereto in the Company.

     4. PROPRIETARY AND CONFIDENTIAL INFORMATION - You shall at all times
preserve the confidentiality of all proprietary information and trade secrets of
the Company, except to the extent that disclosure of such information is legally
required. "Proprietary information" means information that has not been
disclosed to the public and that is treated as confidential within the business
of the Company, such as strategic or tactical business plans; undisclosed
financial data; ideas, processes, methods, techniques, systems, patented or
copyrighted information, models, devices, programs, computer software, or
related information; documents relating to regulatory matters and correspondence
with governmental entities; undisclosed information concerning any past,
pending, or threatened legal dispute; pricing and cost data; reports and
analyses of business prospects; business transactions that are contemplated or
planned; research data; personnel information and data; identities of users and
purchasers of the Company's products or services; and other confidential matters
pertaining to or known by the Company, including confidential information of a
third party that you know or should know the Company is bound to protect.

     5. DEFINITIONS - Except where clearly provided to the contrary, all
capitalized terms used in this Exhibit B shall have the definitions given to
those terms in the Agreement to which this Exhibit B is attached.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.C
<SEQUENCE>5
<FILENAME>d98774exv10wc.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT - EZRA D. SINGER
<TEXT>
<PAGE>

                                                                     EXHIBIT 10c

                                                    [Verizon Logo]
                                                    1095 Avenue of the Americas
                                                    New York, NY 10036

July 1, 2002

Mr. Ezra D. Singer
[Address]
[Address]

Dear Ezra:

     I am pleased to offer you this new employment agreement (the "Agreement")
with Verizon Communications Inc. ("Verizon"), and, as an indication of my
confidence in your abilities, I have added an automatic renewal provision. For
purposes of this Agreement, the term "Company" means Verizon, all corporate
subsidiaries and other companies affiliated with Verizon, all companies in which
Verizon has an ownership or other proprietary interest of more than 10 percent,
and their successors and assigns.

     The many opportunities and challenges facing the Company are enormous and
exciting. As a leader in our industry, we will be constantly challenged with
sustaining our market growth and presence. We will meet these challenges by
leveraging the strength of our talented and committed leaders. This Agreement
demonstrates my continued confidence in you.

     I value you and the leadership, vision, and commitment you bring to the
Company. I am excited by the prospect of you continuing as a key member of the
Company's leadership team.

     The terms and conditions of this Agreement are set forth below.

     1. PURPOSE - Verizon enters into this Agreement with you because the
rapidly-changing and increasingly global telecommunications market requires the
Company to make critical strategic, marketing, and technical decisions. These
decisions by the Company will be based, in whole or in part, on confidential

<PAGE>
Mr. Ezra D. Singer
July 1, 2002
Page 2

analyses of the evolving telecommunications market, confidential assessments of
the technical capabilities and strategic plans of the Company and competing
businesses, and confidential or proprietary information regarding the Company's
technology, resources, and business opportunities or other confidential or
proprietary information relating to the Company's business. Verizon seeks by
this Agreement to ensure that you remain a part of the executive management team
that plays a central role in this decision-making process.

     In consideration for your entering into this Agreement, including the
restrictions on the disclosure and use of confidential or proprietary
information and the limitations on your engaging in competitive activities, the
Company is providing you with the security of a written two-year agreement,
short- and long-term award opportunities, and other benefits.

     2. GENERAL - Under this Agreement, you shall continue as a senior executive
of the Company. As a senior executive, you shall report to the Chief Executive
Officer of Verizon (the "CEO").

     3. TERM - The term of employment under this Agreement ("Term of
Employment") shall commence on July 1, 2002, and end on June 30, 2004; provided
that, on the last day of the Term of Employment, the Term of Employment shall
automatically be extended for an additional two years unless, on or before that
date, the Term of Employment terminates or the Company notifies you in writing
that the Term of Employment shall not be extended. For example, on June 30,
2004, the Term of Employment shall be extended until June 30, 2006, unless, on
or before June 30, 2004, the Term of Employment terminates or the Company
notifies you in writing that the Term of Employment shall not be extended, and,
if the Term of Employment is extended until June 30, 2006, the Term of
Employment shall be extended on that date until June 30, 2008, unless, on or
before June 30, 2006, the Term of Employment terminates or the Company notifies
you in writing that the Term of Employment shall not be extended.
Notwithstanding the preceding provisions of this paragraph 3, the Company
reserves the right to terminate your employment and the Term of Employment at
any time. Your employment and the Term of Employment also may terminate for
other reasons (such as your resignation, retirement, death, or disability). The
consequences of the termination of your employment are specified in paragraph 11
("Termination Of Employment").

     4. DUTIES AND RESPONSIBILITIES - You shall continue to serve as a senior
executive of the Company in such capacities, with such titles and authorities,
as the CEO or his successor may from time to time prescribe, and you shall
perform all duties incidental to such positions, shall cooperate fully with the
CEO or his

<PAGE>
Mr. Ezra D. Singer
July 1, 2002
Page 3

successor, and shall work cooperatively with the other officers of the Company.
You shall continue to devote your entire business skill, time, and effort
diligently to the affairs of the Company in accordance with the duties assigned
to you, and you shall perform all such duties, and otherwise conduct yourself,
in a manner reasonably calculated in good faith by you to promote the best
interests of the Company. During the Term of Employment, except to the extent
specifically permitted in writing by the CEO or his successor, and except for
memberships on boards of directors that you held on January 26, 2001 (the date
of your previous employment agreement with Verizon), you shall not, directly or
indirectly, render any services of a business, commercial, or professional
nature to any other person or organization other than the Company or a person or
organization in which the Company has a financial interest, whether or not the
services are rendered for compensation.

     5. LOCATION - During the Term of Employment, you shall perform services for
the Company at its New York City headquarters, or at any other location
designated by the Company as necessary or appropriate for the discharge of your
responsibilities under this Agreement. In the event of any change in your
principal work location, you shall be eligible for relocation assistance under
the terms of any Company relocation policy applicable to other senior executives
of the Company in your salary band at the time of such relocation.

     6. BASE SALARY - During the Term of Employment, your annual base salary
shall not be less than your annual base salary on the date of this Agreement;
provided that if you are granted a merit increase in your base salary, your base
salary shall not thereafter be reduced below that increased level during the
Term of Employment. The Human Resources Committee of Verizon's Board of
Directors or its designee shall review your base salary at least annually.

     7. SHORT-TERM AND LONG-TERM BONUS OPPORTUNITIES - During the Term of
Employment, the Company shall provide you with annual short-term and long-term
bonus opportunities equivalent to those available to other senior executives of
the Company in your salary band. While you are not guaranteed an annual
short-term or long-term bonus award in any amount, (a) the value of your annual
short-term bonus opportunity shall be not less than 75 percent of your
then-current base salary, and (b) the value of your annual long-term bonus
opportunity shall not be less than 425 percent of your then-current base salary.

     8. BENEFITS AND PERQUISITES - (a) IN GENERAL - For the immediate future,
you shall-

<PAGE>
Mr. Ezra D. Singer
July 1, 2002
Page 4

               (1)  participate in the tax-qualified and nonqualified retirement
                    plans and in the other employee benefit plans (such as the
                    medical and dental plans), programs, and policies in which
                    you currently participate; and

               (2)  be eligible for the perquisites available to senior
                    executives in your salary band;

provided that the Company retains the right to amend or terminate any benefit
plan, policy, program, or perquisite at any time.

         (b) ANNUAL PHYSICAL - You are encouraged to take an annual physical
examination from a physician at the Company's expense and to certify in writing
to the Company's designee each year (1) that you have had the examination and
(2) the nature and extent of any medical impairments that prevent you from
currently performing the essential functions of your position.

     9. SPECIAL RETENTION ACCOUNT PROGRAM - Pursuant to your January 26, 2001,
employment agreement with Verizon (the "Prior Agreement"), the Company
established a Special Retention Account on your behalf under the GTE Executive
Salary Deferral Plan, which was subsequently transferred to the Verizon Income
Deferral Plan. You shall also be eligible for such other benefits as are
provided under the Verizon Income Deferral Plan to employees with Special
Retention Accounts. A copy of the applicable provisions of the Verizon Income
Deferral Plan relating to the Special Retention Account is attached hereto as
Exhibit A, which is incorporated herein by reference. Your rights to the balance
in your Special Retention Account following the termination of your employment
shall be governed by the applicable provisions of the Verizon Income Deferral
Plan, rather than by the terms of paragraphs 11 ("Termination of Employment")
and 12 ("Release").

     10. EXCISE TAX GROSS-UP - Under certain circumstances you may become
entitled to a gross-up payment with respect to the excise tax imposed by section
4999 of the Internal Revenue Code (the "Code"). The terms governing the gross-up
payment are set forth in Exhibit B, which is incorporated herein by reference.

     11. TERMINATION OF EMPLOYMENT - (a) VOLUNTARY TERMINATION BY YOU - You may
terminate your employment under this Agreement for a reason other than
Retirement (as defined in subparagraph (c), below) or Good Reason (as defined in
subparagraph (d), below) by giving the CEO, at least 30 calendar days'
(exclusive of vacation days) in advance of such termination, written notice of
your intent to so terminate. The termination shall automatically become
effective upon the expiration

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Mr. Ezra D. Singer
July 1, 2002
Page 5

of such notice period. Upon the effective date of such termination, your base
salary and any other Company benefits and perquisites shall cease to accrue, you
shall forfeit all then-outstanding stock options, and you shall forfeit all
rights under this Agreement which as of the relevant date have not yet been
earned. A termination of employment in accordance with this subparagraph (a)
shall be deemed a "Voluntary Termination."

         (b) TERMINATION DUE TO DEATH OR DISABILITY - If, during the Term of
Employment, you terminate employment because of death or disability (as defined
under the Company-sponsored long-term disability plan that applies to you at the
time your employment is so terminated), the Company shall make a lump-sum cash
payment to you equal to the excess of (1) one times the sum of your base salary
and short-term bonus (at 50% of maximum), over (2) any amounts payable to you
under Company-sponsored disability plans. You shall also be entitled to
accelerated vesting of all outstanding stock options, and you shall be entitled
to exercise all then-outstanding stock options until the earlier of (1) the
fifth anniversary of the date your employment terminates (or any later date
prescribed by the terms of the option relating to termination of employment) or
(2) the expiration of the option; provided that if you terminate employment
because of death, your rights under this subparagraph (b) shall pass to your
estate. For this purpose, your base salary shall be based on your base salary
rate in effect immediately before your employment terminated.

         (c) RETIREMENT - You may terminate your employment under this Agreement
by reason of Retirement (as defined below) by giving the CEO, at least 30
calendar days' (exclusive of vacation days) in advance of such termination,
written notice of your intent to so terminate. The termination shall
automatically become effective upon the expiration of such notice period. Upon
the effective date of such termination, you shall be entitled to a pro-rated
portion of any short-term and long-term bonuses (when and to the extent that
they are earned) and accelerated vesting of all outstanding stock options (other
than the Founders' Grant), and you shall be entitled to exercise all
then-outstanding stock options (excluding nonvested Founders' Grant options)
until the earlier of (1) the fifth anniversary of the date your employment
terminates (or any later date prescribed by the terms of the option relating to
termination of employment) or (2) the expiration of the option. For purposes of
this Agreement, "Retirement" means attaining normal retirement age under the
terms of the Verizon Management Pension Plan (the "Pension Plan") or satisfying
the Rule of 75 under the Pension Plan (or being deemed retirement eligible
pursuant to any other plan or agreement of Verizon). Except as provided by the
preceding provisions of this subparagraph (c), upon the effective date of your
Retirement, your base salary and any other Company benefits

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Mr. Ezra D. Singer
July 1, 2002
Page 6

and perquisites shall cease to accrue; provided that you shall otherwise be
eligible to receive any and all compensation and benefits for which a similarly
situated senior executive would be eligible under the applicable provisions of
the compensation and benefit plans in which he is then eligible to participate,
as those plans may be amended from time to time.

         (d) TERMINATION FOR GOOD REASON - (1) You may terminate your employment
under this Agreement for Good Reason by giving the CEO, at least 30 calendar
days' (exclusive of vacation days) in advance of such termination (the "Notice
Period"), written notice of your intent to so terminate, setting forth in
reasonable detail the facts and circumstances deemed to provide a basis for such
termination. For purposes of this Agreement, "Good Reason" means a material
breach by the Company of the terms and conditions of this Agreement, a material
reduction in your overall compensation opportunities, or your assignment to a
new principal work location that is more than 50 miles from your previous
principal work location. A "Good Reason" shall not occur merely because of a
change in the individual (or position) to whom (or to which) you report. In
addition, a "Good Reason" shall not occur merely because the Company notifies
you, in accordance with paragraph 3 ("Term"), that the Term of Employment shall
not be extended for an additional two-year period.

               (2) Notwithstanding the foregoing, the Company shall have 15
calendar days from its receipt of such notice to cure the action specified in
the notice. In the event of a cure by the Company within the 15-day period, the
action in question shall not constitute Good Reason.

               (3) Except as provided in subparagraph (d)(2), above, at the end
of the Notice Period, the Good Reason termination shall take effect, and your
obligation to serve the Company, and the Company's obligation to employ you,
under the terms of this Agreement shall terminate simultaneously, and you shall
be deemed to have incurred an Involuntary Termination Without Cause, with the
consequences described in subparagraph (e), below; provided that your rights
under this subparagraph (d) are contingent on your execution of a release in
accordance with paragraph 12 ("Release").

               (4) If you do not fulfill the notice and explanation requirements
imposed by this subparagraph (d), the resulting termination of employment shall
be deemed a Voluntary Termination.

         (e) INVOLUNTARY TERMINATION WITHOUT CAUSE - The Company may terminate
your employment under this Agreement at any time and for any reason. However, if
the Company terminates your employment during the Term of

<PAGE>
Mr. Ezra D. Singer
July 1, 2002
Page 7

Employment for any reason other than death, disability, or Cause (as defined in
subparagraph (f), below), such termination shall be deemed an Involuntary
Termination by the Company, and you shall be entitled to receive the following
payments and benefits in lieu of any payment or benefit otherwise provided
pursuant to paragraphs 6 ("Base Salary") through 8 ("Benefits And Perquisites"):

               (1)  The Company shall make a lump-sum cash severance payment to
                    you equal to the excess of (i) two times the sum of your
                    base salary and short-term bonus (at 50% of maximum), over
                    (ii) the sum of your then-current balance in your Special
                    Retention Account, as determined under the Verizon Income
                    Deferral Plan, and any amounts paid or payable to you under
                    any Company-sponsored severance plan, program, policy,
                    contract, account, or arrangement;

               (2)  Your unvested stock options shall immediately vest, and you
                    may exercise all of your then-outstanding stock options at
                    any time up to the earlier of (i) the fifth anniversary of
                    the date your employment terminates (or any later date
                    prescribed by the terms of the option relating to
                    termination of employment) or (ii) the expiration of the
                    option; and

               (3)  You shall be eligible for outplacement services to the
                    extent that such services are then available to senior
                    executives in your salary band;

provided that your rights under this subparagraph (e) are contingent on your
execution of a release in accordance with paragraph 12 ("Release"). For purposes
of this paragraph 11(e), the Company shall not be deemed to have terminated your
employment during the Term of Employment if the Company notifies you, in
accordance with paragraph 3 ("Term"), that the Term of Employment shall not be
extended for an additional two-year period.

         (f) INVOLUNTARY TERMINATION FOR CAUSE - (1) Nothing in this Agreement
prevents the Company from terminating your employment under this Agreement for
Cause. In the event of your termination for Cause, the Company shall pay you
your full accrued base salary and accrued vacation time through the date of your
termination, you shall forfeit all then-outstanding stock options if you are not
eligible for Retirement at the time of your termination, and the Company shall
have no further obligations under this Agreement; provided that you shall

<PAGE>
Mr. Ezra D. Singer
July 1, 2002
Page 8

otherwise be eligible to receive any and all compensation and benefits for which
a similarly situated senior executive would be eligible under the applicable
provisions of the compensation and benefit plans in which he is then eligible to
participate, as those plans may be amended from time to time.

               (2) For purposes of this Agreement, "Cause" is defined as (i)
grossly incompetent performance or substantial or continuing inattention to or
neglect of the duties and responsibilities assigned to you; fraud,
misappropriation or embezzlement involving the Company or a material breach of
any provision incorporated in paragraph 13 ("Covenants"), as determined by the
CEO in his discretion, or (ii) commission of any felony of which you are finally
adjudged guilty by a court of competent jurisdiction.

               (3) If the Company terminates your employment for Cause, the
Company shall provide you with a written statement of the grounds for such
termination within 10 business days after the date of termination.

     12. RELEASE - You shall not be entitled to any benefits under paragraphs 10
("Excise Tax Gross-Up"), 11(d) ("Termination For Good Reason"), and 11(e)
("Involuntary Termination Without Cause") following the termination of your
employment unless, at the time your employment terminates, you execute a release
satisfactory to the Company releasing the Company, its affiliates, shareholders,
directors, officers, employees, representatives, and agents and their successors
and assigns from any and all employment-related claims you or your successors
and beneficiaries might then have against them (excluding any claims you might
then have under this Agreement, or any employee benefit plan that is subject to
the vesting standards imposed by the Employee Retirement Income Security Act of
1974, as amended).

     13. COVENANTS - In consideration for the benefits and agreements described
above, you agree to comply with the covenants set forth in Exhibit C hereto,
which is incorporated herein by reference.

     14. REQUEST FOR WAIVER - Nothing in this Agreement bars you from
requesting, at the time of your termination of employment or at any time
thereafter, that the CEO, in his sole discretion, waive in writing the Company's
rights to enforce some or all of the provisions incorporated in paragraph 13
("Covenants").

     15. OTHER AGREEMENTS AND POLICIES - The obligations imposed on you by
paragraph 13 ("Covenants") are in addition to, and not in lieu of, any and all
other

<PAGE>
Mr. Ezra D. Singer
July 1, 2002
Page 9

policies and agreements of the Company regarding the subject matter of the
foregoing obligations.

     16. NONDUPLICATION OF BENEFITS - No provision of this Agreement shall
require the Company to provide you with any payment, benefit, or grant that
duplicates any payment, benefit, or grant that you are entitled to receive under
any Company compensation or benefit plan, award agreement, or other arrangement.

     17. OTHER COMPANY PLANS - Except to the extent otherwise explicitly
provided by this Agreement, any awards made to you under any Company
compensation or benefit plan or program shall be governed by the terms of that
plan or program and any applicable award agreement thereunder as in effect from
time to time. Notwithstanding the foregoing, you shall not be entitled to
participate in any Company compensation or benefit plan that is established
after your employment with the Company terminates, and except as specifically
provided in this Agreement, you shall not be entitled to any additional grants
or awards under any Company compensation or benefit plan after your employment
with the Company terminates. The amounts paid, provided, or credited under this
Agreement shall not be treated as compensation for purposes of determining any
benefits payable under any Company-sponsored pension, savings, life insurance,
or other employee benefit plan except to the extent provided by the terms of
such plan.

     18. FORFEITURE - (a) If you breach any of the obligations incorporated in
paragraph 13 ("Covenants"), or engage in serious misconduct that is contrary to
written policies of the Company and is harmful to the Company or its reputation,
you shall forfeit:

               (1)  all credits that are added to your Retirement Contribution
                    Sub-Account in the Verizon Income Deferral Plan (or to any
                    successor account in that plan or a successor plan)
                    ("Retirement Contribution Sub-Account"), on or after January
                    1, 2002, other than the GTE Supplemental Executive
                    Retirement Plan conversion credit (the "Conversion Credit");

               (2)  any interest or other earnings or gains on or after January
                    1, 2002, with respect to any credits in your Retirement
                    Contribution Sub-Account (including any interest, or other
                    earnings or gains attributable to the Conversion Credit or
                    any interest or other earnings or gains attributable to any
                    other credit regardless of when the credit was added to your
                    Retirement Contribution Sub-Account); and

<PAGE>
Mr. Ezra D. Singer
July 1, 2002
Page 10

               (3)  any unpaid incentive compensation (such as performance bonus
                    awards or other awards under the Verizon Communications Inc.
                    Long-Term Incentive Plan) that you are otherwise entitled to
                    receive.

         (b) The remedies available under this paragraph are in addition to, and
not in lieu of, the remedies available under paragraph 25 ("Additional
Remedies").

     19. NO DEEMED WAIVER - Failure to insist upon strict compliance with any of
the terms, covenants, or conditions of this Agreement shall not be deemed a
waiver of such term, covenant, or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time or
times.

     20. TAXES - The Company may withhold from any benefits payable under this
Agreement all taxes that the Company reasonably determines to be required
pursuant to any law, regulation, or ruling. However, it is your obligation to
pay all required taxes on any amounts and benefits provided under this
Agreement, including the benefits and perquisites provided to you pursuant to
paragraph 8 ("Benefits and Perquisites"), regardless of whether withholding is
required.

     21. CONFIDENTIALITY - Except to the extent otherwise required by law, you
shall not disclose, in whole or in part, any of the terms of this Agreement.
This paragraph 21 does not prevent you from disclosing the terms of this
Agreement to your spouse or to your legal, tax, or financial adviser, provided
that you take all reasonable measures to assure that he or she does not disclose
the terms of this Agreement to a third party except as otherwise required by
law.

     22. GOVERNING LAW - To the extent not preempted by federal law, the
provisions of this Agreement shall be construed and enforced in accordance with
the laws of the State of New York, excluding any conflicts or choice of law rule
or principle that might otherwise refer construction or interpretation of this
provision to the substantive law of another jurisdiction.

     23. ASSIGNMENT - Verizon may, without your consent, assign its rights and
obligations under this Agreement to any entity that is a part of the Company,
and if Verizon makes such an assignment, all references in this Agreement to
Verizon (except for references to Verizon common stock) shall be deemed to refer
to the assignee. However, you may not assign your rights and obligations under
this Agreement.

<PAGE>
Mr. Ezra D. Singer
July 1, 2002
Page 11

     24. SEVERABILITY - The agreements contained herein and within the release
prescribed by paragraph 12 ("Release") shall each constitute a separate
agreement independently supported by good and adequate consideration, and shall
each be severable from the other provisions of the Agreement and such release.
If an arbitrator or court of competent jurisdiction determines that any term,
provision, or portion of this Agreement or such release is void, illegal, or
unenforceable, the other terms, provisions, and portions of this Agreement or
such release shall remain in full force and effect, and the terms, provisions,
and portions that are determined to be void, illegal, or unenforceable shall
either be limited so that they shall remain in effect to the extent permissible
by law, or such arbitrator or court shall substitute, to the extent enforceable,
provisions similar thereto or other provisions, so as to provide to the Company,
to the fullest extent permitted by applicable law, the benefits intended by this
Agreement and such release.

     25. ADDITIONAL REMEDIES - In addition to any other rights or remedies,
whether legal, equitable, or otherwise, that each of the parties to this
Agreement may have, you acknowledge that

          (a)  The covenants incorporated in paragraph 13 ("Covenants") are
               essential to the continued good will and profitability of the
               Company;

          (b)  You have broad-based skills that will serve as the basis for
               employment opportunities that are not prohibited by the covenants
               incorporated in paragraph 13 ("Covenants");

          (c)  When your employment with the Company terminates, you shall be
               able to earn a livelihood without violating any of the terms of
               this Agreement;

          (d)  Irreparable damage to the Company shall result in the event that
               the covenants incorporated in paragraph 13 ("Covenants") are not
               specifically enforced and that monetary damages will not
               adequately protect the Company from a breach of such covenants;

          (e)  If any dispute arises concerning the violation by you of the
               covenants incorporated in paragraph 13 ("Covenants"), an
               injunction may be issued restraining such violation pending the
               determination of such controversy, and no bond or other security
               shall be required in connection therewith;

<PAGE>
Mr. Ezra D. Singer
July 1, 2002
Page 12

          (f)  Such covenants shall continue to apply after any expiration,
               termination, or cancellation of this Agreement; and

          (g)  Your breach of any of such covenants shall result in your
               immediate forfeiture of all rights under this Agreement.

     26. SURVIVAL - The provisions of paragraphs 13 ("Covenants") through 28
("Entire Agreement") shall survive the Term of Employment. In addition, if the
Term of Employment is not extended in accordance with paragraph 3 ("Term") but
your employment continues after the end of the Term of Employment, you shall be
subject to the obligations imposed by each of such paragraphs with respect to
such employment. Any obligations that the Company has incurred under this
Agreement to provide benefits that have vested under the terms of this Agreement
(including the Company's obligations under paragraph 11(c) ("Retirement")) shall
likewise survive the Term of Employment. Except as provided by the preceding
provisions of this paragraph 26, if the Term of Employment is not extended in
accordance with paragraph 3 ("Term") but your employment continues after the end
of the Term of Employment, the terms of such employment shall not be governed by
this Agreement.

     27. ARBITRATION - Any dispute arising out of or relating to this Agreement
(except any dispute arising out of or relating to paragraph 13 ("Covenants")),
and any dispute arising out of or relating to your employment, shall be settled
by final and binding arbitration, which shall be the exclusive means of
resolving any such dispute, and the parties specifically waive all rights to
pursue any other remedy, recourse, or relief. With respect to disputes by the
Company arising out of or relating to paragraph 13 ("Covenants"), the Company
has retained all its rights to legal and equitable recourse and relief,
including but not limited to injunctive relief, as referred to in paragraph 25
("Additional Remedies"). The arbitration shall be expedited and conducted in the
State of New York pursuant to the Center for Public Resources ("CPR") Rules for
Non-Administered Arbitration in effect at the time of notice of the dispute
before one neutral arbitrator appointed by CPR from the CPR Panel of neutrals
unless the parties mutually agree to the appointment of a different neutral
arbitrator. The arbitration shall be governed by the Federal Arbitration Act, 9
U.S.C. sections 1-16, and judgment upon the award rendered by the arbitrator may
be entered by any court having jurisdiction. The finding of the arbitrator may
not change the express terms of this Agreement and shall be consistent with the
arbitrator's understanding of the findings a court of proper jurisdiction would
make in applying the applicable law to the facts underlying the dispute. In no
event whatsoever shall such an arbitration award include any award of damages
other than the amounts in controversy under this Agreement. The parties waive
the right

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Mr. Ezra D. Singer
July 1, 2002
Page 13

to recover, in such arbitration, punitive damages. Each party hereby agrees that
New York City is the proper venue for any litigation seeking to enforce any
provision of this Agreement or to enforce any arbitration award under this
paragraph 27, and each party hereby waives any right it otherwise might have to
defend, oppose, or object to, on the basis of jurisdiction, venue, or forum
nonconveniens, a suit filed by the other party in any federal or state court in
New York City to enforce any provision of this Agreement or to enforce any
arbitration award under this paragraph 27. Each party also waives any right it
might otherwise have to seek to transfer from a federal or state court in New
York City a suit filed by the other party to enforce any provision of this
Agreement or to enforce any arbitration award under this paragraph 27.

     28. ENTIRE AGREEMENT - Except for the terms of the compensation and benefit
plans in which you participate (including any award agreements issued
thereunder), this Agreement, including the Exhibits hereto, sets forth the
entire understanding of you and the Company, and supersedes all prior agreements
and communications, whether oral or written, between the Company (or GTE or Bell
Atlantic or any of their respective subsidiaries) and you regarding the subject
matter of this Agreement, including the Prior Agreement. This Agreement shall
not be modified except by written agreement of you and Verizon.

Ezra, I believe that this Agreement continues to provide you and your family
with a firm foundation of financial security as our Company faces many new
challenges and opportunities. I recognize that the Company and the
telecommunications industry operate in a rapidly changing and demanding
environment. It is my hope that this Agreement demonstrates to you the level of
confidence that I have in your abilities to meet the commitments that I expect
from you. Please indicate your acceptance by signing below and returning the
signed Agreement to me within ten business days after your receipt of this
Agreement.

Sincerely yours,

/s/ Ivan Seidenberg
-------------------------------------
Ivan Seidenberg
Chief Executive Officer

<PAGE>
Mr. Ezra D. Singer
July 1, 2002
Page 14

I agree to the terms described above.

/s/ Ezra D. Singer
-------------------------------------
Ezra D. Singer

Attachments: Exhibit A - Special Retention Account Program
             Exhibit B - Excise Tax Gross-Up
             Exhibit C - Covenants
<PAGE>
                                    EXHIBIT A

================================================================================

                            SPECIAL RETENTION ACCOUNT
                           AND OTHER BENEFITS PROGRAM

                                   ----------

                                   PART OF THE
                          VERIZON INCOME DEFERRAL PLAN

                                   ----------

                 Amended and Restated Effective January 1, 2002

================================================================================

<PAGE>

                            SPECIAL RETENTION ACCOUNT
                           AND OTHER BENEFITS PROGRAM

                                TABLE OF CONTENTS

<Table>
<S>                                                                                                               <C>
Article 1. Introduction...........................................................................................1

         1.01.    Nature of Program...............................................................................1
         1.02.    Effective Date..................................................................................1

Article 2. Definitions and Construction...........................................................................2

         2.01.    Definitions.....................................................................................2
         2.02.    Part of the Plan................................................................................3
         2.03.    Gender and Number...............................................................................3

Article 3. Eligibility and Account Balance........................................................................4

         3.01.    Eligibility.....................................................................................4

Article 4. Accounts...............................................................................................5

         4.01.    Accounts........................................................................................5

Article 5. Payments...............................................................................................6

         5.01.    Exclusive Entitlement to Payment................................................................6
         5.02.    Amount and Sources of Payment...................................................................6
         5.03.    Limitations on Rights to Payment................................................................7

Article 6. Other Benefits.........................................................................................8

         6.01.    Other Benefits..................................................................................8
         6.02.    Certain Additional Payments by the Company......................................................9
         6.03.    Nonduplication..................................................................................9
</Table>

--------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program           Table of Contents
<PAGE>

                            ARTICLE 1. INTRODUCTION

1.01. NATURE OF PROGRAM.

     This Program was established effective July 1, 2000, as part of the GTE
Executive Salary Deferral Plan (and any successors to that plan). Effective
January 1, 2002, it became part of the Verizon Income Deferral Plan, which is a
successor to the GTE Executive Salary Deferral Plan. This Program shall apply
only to those participants in the Verizon Income Deferral Plan who have Special
Retention Accounts by virtue of having waived any entitlement they might
otherwise have had to certain payments and/or other benefits as a result of the
merger involving GTE Corporation and Bell Atlantic Corporation.

1.02. EFFECTIVE DATE.

     The Program was originally effective as of July 1, 2000. This amendment and
restatement of the Program is effective January 1, 2002, except to the extent
specifically provided herein.

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Special Retention Account and Other Benefits Program                     Page 1
<PAGE>

                     ARTICLE 2. DEFINITIONS AND CONSTRUCTION

2.01. DEFINITIONS.

     Unless the context clearly indicates otherwise, the following terms, when
used in capitalized form in this Program, shall have the meanings set forth
below.

     COMMITTEE. "Committee" shall mean the Human Resources Committee of the
Board of Directors of the Company.

     COMPANY. "Company" shall mean Verizon Communications Inc. and its
affiliates.

     COVERED EMPLOYEE. "Covered Employee" shall mean an employee of the Company
who is designated as a Covered Employee by the Plan Administrator.

     MERGER. "Merger" shall mean the merger of the businesses of GTE Corporation
and Bell Atlantic Corporation pursuant to the terms of an Agreement and Plan of
Merger dated as of July 27, 1998, among Bell Atlantic, GTE, and Beta Gamma
Corporation.

     OTHER BENEFITS. "Other Benefits" shall mean the benefits described in
Article 6 of this Program.

     OTHER PLANS. "Other Plans" shall mean all employee benefit plans, programs,
awards, arrangements, policies, and practices of the Company, whether or not
qualified under the Code or subject to the Employee Retirement Income Security
Act of 1974, as amended, including any employment agreement the Participant may
have with the Company or its predecessors.

     PARTICIPANT. "Participant" shall mean each Covered Employee whose Special
Retention Account has a positive balance.

     PLAN. "Plan" shall mean the Verizon Income Deferral Plan, as effective
January 1, 2002, and as it may be amended from time to time, and any successor
thereto.

     PLAN ADMINISTRATOR. "Plan Administrator" shall mean the chief human
resources officer of the Company or any other Person designated by the Committee
to serve as Plan Administrator of the Plan.

     PROGRAM. "Program" shall mean this Special Retention Account and Other
Benefits program.

     SPECIAL RETENTION ACCOUNT. "Special Retention Account" shall mean the
subaccount established under the Plan pursuant to the terms of this Program.

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Special Retention Account and Other Benefits Program                     Page 2
<PAGE>

2.02. PART OF THE PLAN.

     The provisions of this Program are a part of the Plan. The terms of the
Plan shall apply to the benefits provided by this Program to Participants,
except to the extent a provision of this Program is contrary to a provision of
the Plan, in which case the provisions of this Program shall control.

2.03. GENDER AND NUMBER.

     Masculine pronouns shall refer to both males and females. The singular form
shall include the plural, where appropriate.

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Special Retention Account and Other Benefits Program                     Page 3
<PAGE>

                   ARTICLE 3. ELIGIBILITY AND ACCOUNT BALANCE

3.01. ELIGIBILITY.

     Individuals who were Participants on January 1, 2002, shall remain
Participants after that date for as long as they have a positive balance in
their Special Retention Account. No individual shall first become a Participant
after December 31, 2001.

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Special Retention Account and Other Benefits Program                     Page 4
<PAGE>

                              ARTICLE 4. ACCOUNTS

4.01. ACCOUNTS.

     (a) The Special Retention Account shall be maintained as a separate
subaccount in each Participant's Account in the Plan.

     (b) The Special Retention Account shall be invested in the Moody's
Investment Fund in accordance with Section 6.03 of the Plan ("Moody's Investment
Fund"), unless the Plan Administrator determines in its discretion that a
different hypothetical investment vehicle is appropriate for the Special
Retention Account.

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Special Retention Account and Other Benefits Program                     Page 5
<PAGE>

                              ARTICLE 5. PAYMENTS

5.01. EXCLUSIVE ENTITLEMENT TO PAYMENT.

     A Participant in the Program has waived his right to receive change in
control benefits under one or more prior agreements with the Company or its
predecessors (including his executive severance agreement) as a result of the
Merger and has agreed to receive in lieu thereof the amount payable to him at
the times and in the amounts specified in this Article 5 and in Article 7 of the
Plan ("Payments From The Plan"), as well as the Other Benefits set forth in
Article 6, below. No other amounts shall be due under the Plan or otherwise as a
result of the Participant's deferral election pursuant to Section 3.03 of the
Program as it existed before the January 1, 2002, amendment and restatement.

5.02. AMOUNT AND SOURCES OF PAYMENT.

     (a) Upon termination of employment, a Participant shall be entitled to
receive the greater of (1) the balance in his Special Retention Account at
termination of employment or (2) the cash component of any severance benefits
that the Participant receives or is entitled to receive in the aggregate under
all Other Plans. For purposes of this Section 5.02(a)--

          (1) the "cash component" of any severance benefits shall include
     monetary benefits payable in all forms, whether payable in a lump sum or
     otherwise; and

          (2) a Participant shall be treated as "entitled to receive" any
     benefits under a Company-sponsored employee benefit plan to which the
     Participant would be entitled based on compensation and service, even if
     the Participant does not receive the benefit for any other reason.

     (b) The amount payable under the Program after application of Section
5.02(a) shall be payable to the Participant from the following sources in the
following order until the entire amount is paid, if available--

          (1) any of the Other Plans that is qualified (or intended to be
     qualified) under Section 401(a) of the Code;

          (2) the Special Retention Account;

          (3) any of the Other Plans that is not qualified (or intended to be
     qualified) under Section 401(a) of the Code; and

          (4) the general assets of the Company.

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Special Retention Account and Other Benefits Program                     Page 6
<PAGE>

     (c) Any amount not paid from the Special Retention Account as a result of
application of this Section 5.02 shall be forfeited.

5.03. LIMITATIONS ON RIGHTS TO PAYMENT.

     (a) Period of Service, Notice. A Participant shall not be entitled to
receive any amount from his Special Retention Account if he (1) voluntarily
terminates from the Company (including a retirement) without providing 30 days'
written notice of his intent to terminate or (2) is terminated for Cause (as
defined in Section 5.03(b), below). Nothing in this Section 5.03(a) shall affect
the right of a Participant to receive any amount from his Special Retention
Account if he is involuntarily terminated without Cause or terminates employment
due to his death or disability (as defined in the applicable long-term
disability plan).

     (b) Cause. For purposes of this Program, "Cause" shall mean (i) grossly
incompetent performance or substantial or continuing inattention to or neglect
of the duties and responsibilities assigned to the Participant; fraud,
misappropriation or embezzlement involving the Company or a material breach of
any provision incorporated in paragraph 13 ("Covenants") of the employment
agreement to which this Program is an exhibit, as determined by the CEO in his
discretion or (ii) commission of any felony of which the participant is finally
adjudged guilty by a court of competent jurisdiction.

     (c) Other Benefits. The Other Benefits provided in Article 6, below, shall
not be subject to the requirements of Section 5.03(a), above, except to the
extent specifically provided in Article 6, below.

     (d) Other Limitations on Rights to Payment. The provisions of Sections 8.04
and 8.06 of the Plan ("Forfeiture" and "Non-Competition/Non-Solicitation
Agreement Upon or After Termination of Employment," respectively) shall not
apply to the Special Retention Account or the Other Benefits provided in Article
6, below.

     (e) In-Service Withdrawals. The provisions of Section 7.06 of the Plan
("Early Payments") shall not apply to the Special Retention Account to the
extent they permit withdrawals or distributions before a Participant terminates
employment with the Company, except that a Participant may apply to the
Committee for such a withdrawal or distribution, which the Committee may grant
in its discretion.

-------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                     Page 7
<PAGE>

                           ARTICLE 6. OTHER BENEFITS

6.01. OTHER BENEFITS.

     In addition to the benefits provided in the Plan or otherwise in this
Program, Participants shall be entitled to the benefits set forth in paragraphs
(a) and (b) of this Section 6.01.

     (a) Insurance. The Company shall provide each Participant, at the Company's
expense, for a period beginning on the date of the Participant's termination of
employment with the Company, the same medical, dental, and life insurance
coverage as was in effect on June 30, 2000, or, if greater, coverage under any
other Company-sponsored medical, dental, or life insurance coverage available on
the date of the Participant's termination of employment. Such coverage shall end
upon the expiration of 24 months after the Participant's termination of
employment. For purposes of this paragraph (a), "at the Company's expense" means
that the Company shall make all contributions or premium payments required to
obtain coverage, and that the Participant shall not make any such contributions
or premium payments, but that the Participant shall be subject to any
deductibles and co-payment provisions in effect on June 30, 2000 (or, if
applicable, immediately before the termination of employment). Except to the
extent otherwise required by law, the period of coverage for any health care
continuation coverage required by the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, shall begin on the date of the Participant's
termination of employment.

     (b) Benefit Credit.

          (1) Each Participant shall receive service credit, for the purpose of
     receiving benefits and for vesting, retirement eligibility, benefit
     accrual, and all other purposes, under all employee benefit plans sponsored
     by the Company (including, but not limited to, health, life insurance,
     pension, savings, stock, and stock ownership plans, but excluding the
     Company's short-term and long-term disability plans) in which he
     participated on June 30, 2000, for 24 months.

          (2) Other than the benefit credit set forth in Section 6.01(b)(1),
     above, a Participant shall not receive any additional benefit credit under
     the Program. The benefit credit provided in accordance with Section 6.01(b)
     of the Program as in effect before January 1, 2002 (other than to the
     extent such provisions are preserved in Section 6.01(b)(1), above) was
     converted to a dollar amount that was reflected in each Participant's
     Account as of January 1, 2002, or has otherwise been provided to the
     Participant through another plan or program of the Company. Therefore, that
     benefit credit has already been provided and will not be credited again.

-------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                     Page 8
<PAGE>

6.02. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

     Participants shall be entitled to a tax gross-up payment in accordance with
Addendum A to the Program.

6.03. NONDUPLICATION.

     No provision of this Program shall require the Company to provide the
Participant with any payment, benefit, or grant that duplicates any payment,
benefit, or grant that the Participant is entitled to receive under any Company
compensation or benefit plan, award agreement, or other arrangement or a
payment, benefit, or grant that was included in the Participant's Account in the
Verizon Income Deferral Plan as of January 1, 2002.

-------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program                     Page 9
<PAGE>

              SPECIAL RETENTION ACCOUNT AND OTHER BENEFITS PROGRAM
                                   ADDENDUM A
                       ADDITIONAL PAYMENTS BY THE COMPANY

     A Participant in the Program shall be entitled to a tax gross-up payment in
accordance with the following provisions:

     (a) Gross-Up Payment. If any payment or benefit received or to be received
by the Participant from the Company pursuant to the Plan (the "Payments") would
be subject to the excise tax (the "Excise Tax") imposed by section 4999 of the
Code as determined in accordance with this Addendum A, the Company shall pay the
Participant, at the time specified below, an additional amount (the "Gross-Up
Payment") such that the net amount that the Participant retains, after deduction
of the Excise Tax on the Payments and any federal, state, and local income tax
and the Excise Tax upon the Gross-Up Payment, and any interest, penalties, or
additions to tax payable by the Participant with respect thereto, shall be equal
to the total present value (using the applicable federal rate (as defined in
section 1274(d) of the Code) in such calculation) of the Payments at the time
such Payments are to be made.

     (b) Calculations. For purposes of determining whether any of the Payments
shall be subject to the Excise Tax and the amount of such excise tax,

          (1) The total amount of the Payments shall be treated as "parachute
     payments" within the meaning of section 280G(b)(2) of the Code, and all
     "excess parachute payments" within the meaning of section 280G(b)(1) of the
     Code shall be treated as subject to the excise tax, except to the extent
     that, in the written opinion of independent counsel selected by the Company
     and reasonably acceptable to the Participant ("Independent Counsel"), a
     Payment (in whole or in part) does not constitute a "parachute payment"
     within the meaning of section 280G(b)(2) of the Code, or such "excess
     parachute payments" (in whole or in part) are not subject to the Excise
     Tax;

          (2) The amount of the Payments that shall be subject to the Excise Tax
     shall be equal to the lesser of (i) the total amount of the Payments or
     (ii) the amount of "excess parachute payments " within the meaning of
     section 280G(b)(1) of the Code (after applying clause (1), above); and

          (3) The value of any noncash benefits or any deferred payment or
     benefit shall be determined by Independent Counsel in accordance with the
     principles of section 280G(d)(3) and (4) of the Code.

     (c) Tax Rates. For purposes of determining the amount of the Gross-Up
Payment, the Participant shall be deemed to pay federal income taxes at the
highest marginal rates of federal income taxation applicable to individuals in
the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rates of taxation applicable to
individuals as are in effect in the state and locality of the Participant's
residence in the calendar year in which the Gross-Up

-------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program               Addendum A-1
<PAGE>

Payment is to be made, net of the maximum reduction in federal income taxes that
can be obtained from deduction of such state and local taxes, taking into
account any limitations applicable to individuals subject to federal income tax
at the highest marginal rates.

     (d) Time of Gross-Up Payments. The Gross-Up Payments provided for in this
paragraph 12 shall be made upon the earlier of (i) the payment to the
Participant of any Payment or (ii) the imposition upon the Participant, or any
payment by the Participant, of any Excise Tax.

     (e) Adjustments to Gross-Up Payments. If it is established pursuant to a
final determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax is less than the
amount previously taken into account hereunder, the Participant shall repay the
Company, within 30 days of the Participant's receipt of notice of such final
determination or opinion, the portion of the Gross-Up Payment attributable to
such reduction (plus the portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state, and local income tax imposed on the Gross-Up
Payment being repaid by the Participant if such repayment results in a reduction
in Excise Tax or a federal, state, and local income tax deduction) plus any
interest received by the Participant on the amount of such repayment, provided
that if any such amount has been paid by the Participant as an Excise Tax or
other tax, the Participant shall cooperate with the Company in seeking a refund
of any tax overpayments, and the Participant shall not be required to make
repayments to the Company until the overpaid taxes and interest thereon are
refunded to the Participant.

     (f) Additional Gross-Up Payment. If it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax exceeds the amount
taken into account hereunder (including by reason of any payment the existence
or amount of which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of such excess
within 30 days of the Company's receipt of notice of such final determination or
opinion.

     (g) Change In Law Or Interpretation. In the event of any change in, or
further interpretation of section 280G or 4999 of the Code and the regulations
promulgated thereunder, the Participant shall be entitled, by written notice to
the Company, to request a written opinion of Independent Counsel regarding the
application of such change to any of the foregoing, and the Company shall use
its best efforts to cause such opinion to be rendered as promptly as
practicable.

     (h) Fees And Expenses. All fees and expenses of Independent Counsel
incurred in connection with this Addendum A shall be borne by the Company.

     (i) Survival. The Company's obligation to make a Gross-Up Payment with
respect to Payments made or accrued before the Participant's termination of
employment with the Company shall survive the termination of the Participant's
with the Company unless (1) the Participant's employment is terminated for
Cause, or (2) the

-------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program               Addendum A-2
<PAGE>

Participant fails to execute a release, in which event the Company's obligation
under this Addendum A shall terminate immediately.

-------------------------------------------------------------------------------
Special Retention Account and Other Benefits Program               Addendum A-3
<PAGE>

                                    EXHIBIT B

                               EXCISE TAX GROSS-UP

     1. GROSS-UP PAYMENT - If any payment or benefit received or to be received
by you from the Company pursuant to the terms of the Agreement to which this
Exhibit B is attached or otherwise (the "Payments") would be subject to the
excise tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue
Code (the "Code") as determined in accordance with this Exhibit B, the Company
shall pay you, at the time specified below, an additional amount (the "Gross-Up
Payment") such that the net amount that you retain, after deduction of the
Excise Tax on the Payments and any federal, state, and local income tax and the
Excise Tax upon the Gross-Up Payment, and any interest, penalties, or additions
to tax payable by you with respect thereto, shall be equal to the total present
value (using the applicable federal rate (as defined in section 1274(d) of the
Code) in such calculation) of the Payments at the time such Payments are to be
made.

     2. CALCULATIONS - For purposes of determining whether any of the Payments
shall be subject to the Excise Tax and the amount of such excise tax,

     (a)  The total amount of the Payments shall be treated as "parachute
          payments" within the meaning of section 280G(b)(2) of the Code, and
          all "excess parachute payments" within the meaning of section
          280G(b)(1) of the Code shall be treated as subject to the excise tax,
          except to the extent that, in the written opinion of independent
          counsel selected by Verizon and reasonably acceptable to you
          ("Independent Counsel"), a Payment (in whole or in part) does not
          constitute a "parachute payment" within the meaning of section
          280G(b)(2) of the Code, or such "excess parachute payments" (in whole
          or in part) are not subject to the Excise Tax;

     (b)  The amount of the Payments that shall be subject to the Excise Tax
          shall be equal to the lesser of (i) the total amount of the Payments
          or (ii) the amount of "excess parachute payments " within the meaning
          of section 280G(b)(1) of the Code (after applying clause (a), above);
          and

     (c)  The value of any noncash benefits or any deferred payment or benefit
          shall be determined by Independent Counsel in accordance with the
          principles of section 280G(d)(3) and (4) of the Code.

     3. TAX RATES - For purposes of determining the amount of the Gross-Up
Payment, you shall be deemed to pay federal income taxes at the highest marginal
rates of federal income taxation applicable to individuals in the calendar year
in which the Gross-Up Payment is to be made and state and local income taxes at
the highest marginal rates of taxation applicable to individuals as are in
effect in the state and locality of your residence in the calendar year in which
the Gross-Up

<PAGE>
                                      -2-

Payment is to be made, net of the maximum reduction in federal income taxes that
can be obtained from deduction of such state and local taxes, taking into
account any limitations applicable to individuals subject to federal income tax
at the highest marginal rates.

     4. TIME OF GROSS-UP PAYMENTS - The Gross-Up Payments provided for in this
Exhibit B shall be made upon the earlier of (a) the payment to you of any
Payment or (b) the imposition upon you, or any payment by you, of any Excise
Tax.

     5. ADJUSTMENTS TO GROSS-UP PAYMENTS - If it is established pursuant to a
final determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax is less than the
amount previously taken into account hereunder, you shall repay the Company,
within 30 days of your receipt of notice of such final determination or opinion,
the portion of the Gross-Up Payment attributable to such reduction (plus the
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state, and local income tax imposed on the Gross-Up Payment being repaid by you
if such repayment results in a reduction in Excise Tax or a federal, state, and
local income tax deduction) plus any interest received by you on the amount of
such repayment, provided that if any such amount has been paid by you as an
Excise Tax or other tax, you shall cooperate with the Company in seeking a
refund of any tax overpayments, and you shall not be required to make repayments
to the Company until the overpaid taxes and interest thereon are refunded to
you.

     6. ADDITIONAL GROSS-UP PAYMENT - If it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax exceeds the amount
taken into account hereunder (including by reason of any payment the existence
or amount of which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of such excess
within 30 days of the Company's receipt of notice of such final determination or
opinion.

     7. CHANGE IN LAW OR INTERPRETATION - In the event of any change in or
further interpretation of section 280G or 4999 of the Code and the regulations
promulgated thereunder, you shall be entitled, by written notice to Verizon, to
request a written opinion of Independent Counsel regarding the application of
such change or further interpretation to any of the foregoing, and Verizon shall
use its best efforts to cause such opinion to be rendered as promptly as
practicable.

     8. FEES AND EXPENSES - All fees and expenses of Independent Counsel
incurred in connection with this Exhibit B shall be borne by Verizon.

     9. SURVIVAL - The Company's obligation to make a Gross-Up Payment with
respect to Payments made or accrued before the end of the Term of Employment

<PAGE>
                                      -3-

shall survive the Term of Employment unless (a) your employment is terminated
for Cause pursuant to paragraph 11(f) of the Agreement to which this Exhibit B
is attached ("Involuntary Termination For Cause"), (b) you fail to execute a
release in accordance with paragraph 12 of such Agreement ("Release"), or (c)
you fail to comply with the covenants incorporated in paragraph 13 of such
Agreement ("Covenants"), in which event the Company's obligation under this
Exhibit B shall terminate immediately.

     10. DEFINED TERMS - Except where clearly provided to the contrary, all
capitalized terms used in this Exhibit B shall have the definitions given to
those terms in the Agreement to which this Exhibit B is attached.

<PAGE>

                                    EXHIBIT C

                                    COVENANTS

     1. NONCOMPETITION - In consideration for the benefits and agreements
described in the Agreement to which this Exhibit C is attached, you agree that:

         (a) PROHIBITED CONDUCT - During the period of your employment with the
Company, and for the period ending six months after your termination of
employment for any reason from the Company, you shall not, without the prior
written consent of the CEO(s):

               (1)  personally engage in Competitive Activities (as defined
                    below); or

               (2)  work for, own, manage, operate, control, or participate in
                    the ownership, management, operation, or control of, or
                    provide consulting or advisory services to, any individual,
                    partnership, firm, corporation, or institution engaged in
                    Competitive Activities, or any company or person affiliated
                    with such person or entity engaged in Competitive
                    Activities; provided that your purchase or holding, for
                    investment purposes, of securities of a publicly-traded
                    company shall not constitute "ownership" or "participation
                    in ownership" for purposes of this paragraph so long as your
                    equity interest in any such company is less than a
                    controlling interest;

provided that this paragraph (a) shall not prohibit you from (i) being employed
by, or providing services to, a consulting firm, provided that you do not
personally engage in Competitive Activities or provide consulting or advisory
services to any individual, partnership, firm, corporation, or institution
engaged in Competitive Activities, or any company or person affiliated with such
person or entity engaged in Competitive Activities, or (ii) engaging in the
private practice of law as a sole practitioner or as a partner in (or as an
employee of or counsel to) a law firm in accordance with applicable legal and
professional standards.

         (b) COMPETITIVE ACTIVITIES - For purposes of the Agreement to which
this Exhibit C is attached, "Competitive Activities" means business activities
relating to products or services of the same or similar type as the products or
services (1) which are sold (or, pursuant to an existing business plan, will be
sold) to paying customers of the Company, and (2) for which you then have
responsibility to plan, develop, manage, market, or oversee, or had any such
responsibility within your most recent 24 months of employment with the Company.
Notwithstanding the previous sentence, a business activity shall not be treated
as a Competitive Activity if the geographic marketing area of the relevant
products or services sold by you or

<PAGE>
                                      -2-

a third party does not overlap with the geographic marketing area for the
applicable products and services of the Company.

     2. INTERFERENCE WITH BUSINESS RELATIONS - During the period of your
employment with the Company, and for a period ending with the expiration of 12
months following your termination of employment for any reason from the Company,
you shall not, without the written consent of the CEO(s):

          (a)  recruit or solicit any employee of the Company for employment or
               for retention as a consultant or service provider;

          (b)  hire or participate (with another company or third party) in the
               process of hiring (other than for the Company) any person who is
               then an employee of the Company, or provide names or other
               information about Company employees to any person or business
               (other than the Company) under circumstances that could lead to
               the use of that information for purposes of recruiting or hiring;

          (c)  interfere with the relationship of the Company with any of its
               employees, agents, or representatives;

          (d)  solicit or induce, or in any manner attempt to solicit or induce,
               any client, customer, or prospect of the Company (1) to cease
               being, or not to become, a customer of the Company or (2) to
               divert any business of such customer or prospect from the
               Company; or

          (e)  otherwise interfere with, disrupt, or attempt to interfere with
               or disrupt, the relationship, contractual or otherwise, between
               the Company and any of its customers, clients, prospects,
               suppliers, consultants, or employees.

     3. RETURN OF PROPERTY; INTELLECTUAL PROPERTY RIGHTS - You agree that on or
before your termination of employment for any reason with the Company, you shall
return to the Company all property owned by the Company or in which the Company
has an interest, including files, documents, data and records (whether on paper
or in tapes, disks, or other machine-readable form), office equipment, credit
cards, and employee identification cards. You acknowledge that the Company is
the rightful owner of any programs, ideas, inventions, discoveries, patented or
copyrighted material, or trademarks that you may have originated or developed,
or assisted in originating or developing, during your period of employment with
the Company, where any such origination or development involved the use of
Company

<PAGE>
                                      -3-

time or resources, or the exercise of your responsibilities for or on behalf of
the Company. You shall at all times, both before and after termination of
employment, cooperate with the Company in executing and delivering documents
requested by the Company, and taking any other actions, that are necessary or
requested by the Company to assist the Company in patenting, copyrighting, or
registering any programs, ideas, inventions, discoveries, patented or
copyrighted material, or trademarks, and to vest title thereto in the Company.

     4. PROPRIETARY AND CONFIDENTIAL INFORMATION - You shall at all times
preserve the confidentiality of all proprietary information and trade secrets of
the Company, except to the extent that disclosure of such information is legally
required. "Proprietary information" means information that has not been
disclosed to the public and that is treated as confidential within the business
of the Company, such as strategic or tactical business plans; undisclosed
financial data; ideas, processes, methods, techniques, systems, patented or
copyrighted information, models, devices, programs, computer software, or
related information; documents relating to regulatory matters and correspondence
with governmental entities; undisclosed information concerning any past,
pending, or threatened legal dispute; pricing and cost data; reports and
analyses of business prospects; business transactions that are contemplated or
planned; research data; personnel information and data; identities of users and
purchasers of the Company's products or services; and other confidential matters
pertaining to or known by the Company, including confidential information of a
third party that you know or should know the Company is bound to protect.

     5. DEFINITIONS - Except where clearly provided to the contrary, all
capitalized terms used in this Exhibit C shall have the definitions given to
those terms in the Agreement to which this Exhibit C is attached.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.D
<SEQUENCE>6
<FILENAME>d98774exv10wd.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT - DOREEN A. TOBEN
<TEXT>
<PAGE>

                                                                     EXHIBIT 10d

                                                    [Verizon Logo]
                                                    1095 Avenue of the Americas
                                                    New York, NY 10036

July 1, 2002

Ms. Doreen A. Toben
[Address]
[Address]

Dear Doreen:

     I am pleased to offer you this new employment agreement (the "Agreement")
with Verizon Communications Inc. ("Verizon"), and, as an indication of my
confidence in your abilities, I have added an automatic renewal provision. For
purposes of this Agreement, the term "Company" means Verizon, all corporate
subsidiaries and other companies affiliated with Verizon, all companies in which
Verizon has an ownership or other proprietary interest of more than 10 percent,
and their successors and assigns.

     The many opportunities and challenges facing the Company are enormous and
exciting. As a leader in our industry, we will be constantly challenged with
sustaining our market growth and presence. We will meet these challenges by
leveraging the strength of our talented and committed leaders. This Agreement
demonstrates my continued confidence in you.

     I value you and the leadership, vision, and commitment you bring to the
Company. I am excited by the prospect of you continuing as a key member of the
Company's leadership team.

     The terms and conditions of this Agreement are set forth below.

     1. PURPOSE - Verizon enters into this Agreement with you because the
rapidly-changing and increasingly global telecommunications market requires the
Company to make critical strategic, marketing, and technical decisions. These
decisions by the Company will be based, in whole or in part, on confidential
analyses of the evolving telecommunications market, confidential assessments of
the technical capabilities and strategic plans of the Company and competing
businesses, and confidential or proprietary information regarding the Company's
technology, resources, and business opportunities or other confidential or

<PAGE>
Ms. Doreen A. Toben
July 1, 2002
Page 2

proprietary information relating to the Company's business. Verizon seeks by
this Agreement to ensure that you remain a part of the executive management team
that plays a central role in this decision-making process.

     In consideration for your entering into this Agreement, including the
restrictions on the disclosure and use of confidential or proprietary
information and the limitations on your engaging in competitive activities, the
Company is providing you with the security of a written two-year agreement,
short- and long-term award opportunities, and other benefits.

     2. GENERAL - Under this Agreement, you shall continue as a senior executive
of the Company. As a senior executive, you shall report to the Chief Executive
Officer of Verizon (the "CEO").

     3. TERM - The term of employment under this Agreement ("Term of
Employment") shall commence on July 1, 2002, and end on June 30, 2004; provided
that, on the last day of the Term of Employment, the Term of Employment shall
automatically be extended for an additional two years unless, on or before that
date, the Term of Employment terminates or the Company notifies you in writing
that the Term of Employment shall not be extended. For example, on June 30,
2004, the Term of Employment shall be extended until June 30, 2006, unless, on
or before June 30, 2004, the Term of Employment terminates or the Company
notifies you in writing that the Term of Employment shall not be extended, and,
if the Term of Employment is extended until June 30, 2006, the Term of
Employment shall be extended on that date until June 30, 2008, unless, on or
before June 30, 2006, the Term of Employment terminates or the Company notifies
you in writing that the Term of Employment shall not be extended.
Notwithstanding the preceding provisions of this paragraph 3, the Company
reserves the right to terminate your employment and the Term of Employment at
any time. Your employment and the Term of Employment also may terminate for
other reasons (such as your resignation, retirement, death, or disability). The
consequences of the termination of your employment are specified in paragraph 11
("Termination Of Employment").

     4. DUTIES AND RESPONSIBILITIES - You shall continue to serve as a senior
executive of the Company in such capacities, with such titles and authorities,
as the CEO or his successor may from time to time prescribe, and you shall
perform all duties incidental to such positions, shall cooperate fully with the
CEO or his successor, and shall work cooperatively with the other officers of
the Company. You shall continue to devote your entire business skill, time, and
effort diligently to the affairs of the Company in accordance with the duties
assigned to you, and you shall perform all such duties, and otherwise conduct
yourself, in a manner

<PAGE>
Ms. Doreen A. Toben
July 1, 2002
Page 3

reasonably calculated in good faith by you to promote the best interests of the
Company. During the Term of Employment, except to the extent specifically
permitted in writing by the CEO or his successor, and except for memberships on
boards of directors that you held on October 3, 2000 (the date of your previous
employment agreement with Verizon), you shall not, directly or indirectly,
render any services of a business, commercial, or professional nature to any
other person or organization other than the Company or a person or organization
in which the Company has a financial interest, whether or not the services are
rendered for compensation.

     5. LOCATION - During the Term of Employment, you shall perform services for
the Company at its New York City headquarters, or at any other location
designated by the Company as necessary or appropriate for the discharge of your
responsibilities under this Agreement. In the event of any change in your
principal work location, you shall be eligible for relocation assistance under
the terms of any Company relocation policy applicable to other senior executives
of the Company in your salary band at the time of such relocation.

     6. BASE SALARY - During the Term of Employment, your annual base salary
shall not be less than your annual base salary on the date of this Agreement;
provided that if you are granted a merit increase in your base salary, your base
salary shall not thereafter be reduced below that increased level during the
Term of Employment. The Human Resources Committee of Verizon's Board of
Directors or its designee shall review your base salary at least annually.

     7. SHORT-TERM AND LONG-TERM BONUS OPPORTUNITIES - During the Term of
Employment, the Company shall provide you with annual short-term and long-term
bonus opportunities equivalent to those available to other senior executives of
the Company in your salary band. While you are not guaranteed an annual
short-term or long-term bonus award in any amount, (a) the value of your annual
short-term bonus opportunity shall be not less than 75 percent of your
then-current base salary, and (b) the value of your annual long-term bonus
opportunity shall not be less than 425 percent of your then-current base salary.

     8. BENEFITS AND PERQUISITES - For the immediate future, you shall-

               (1)  participate in the tax-qualified and nonqualified retirement
                    plans and in the other employee benefit plans (such as the
                    medical and dental plans), programs, and policies in which
                    you currently participate; and

<PAGE>
Ms. Doreen A. Toben
July 1, 2002
Page 4

               (2)  be eligible for the perquisites available to senior
                    executives in your salary band;

provided that the Company retains the right to amend or terminate any benefit
plan, policy, program, or perquisite at any time.

     9. ANNUAL PHYSICAL - You are encouraged to take an annual physical
examination from a physician at the Company's expense and to certify in writing
to the Company's designee each year (1) that you have had the examination and
(2) the nature and extent of any medical impairments that prevent you from
currently performing the essential functions of your position.

     10. EXCISE TAX GROSS-UP - Under certain circumstances you may become
entitled to a gross-up payment with respect to the excise tax imposed by section
4999 of the Internal Revenue Code (the "Code"). The terms governing the gross-up
payment are set forth in Exhibit A, which is incorporated herein by reference.

     11. TERMINATION OF EMPLOYMENT - (a) VOLUNTARY TERMINATION BY YOU - You may
terminate your employment under this Agreement for a reason other than
Retirement (as defined in subparagraph (c), below) or Good Reason (as defined in
subparagraph (d), below) by giving the CEO, at least 30 calendar days'
(exclusive of vacation days) in advance of such termination, written notice of
your intent to so terminate. The termination shall automatically become
effective upon the expiration of such notice period. Upon the effective date of
such termination, your base salary and any other Company benefits and
perquisites shall cease to accrue, you shall forfeit all then-outstanding stock
options, and you shall forfeit all rights under this Agreement which as of the
relevant date have not yet been earned. A termination of employment in
accordance with this subparagraph (a) shall be deemed a "Voluntary Termination."

         (b) TERMINATION DUE TO DEATH OR DISABILITY - If, during the Term of
Employment, you terminate employment because of death or disability (as defined
under the Company-sponsored long-term disability plan that applies to you at the
time your employment is so terminated), the Company shall make a lump-sum cash
payment to you equal to the excess of (1) one times the sum of your base salary
and short-term bonus (at 50% of maximum), over (2) any amounts payable to you
under Company-sponsored disability plans. You shall also be entitled to
accelerated vesting of all outstanding stock options, and you shall be entitled
to exercise all then-outstanding stock options until the earlier of (1) the
fifth anniversary of the date your employment terminates (or any later date
prescribed by the terms of the option relating to termination of employment) or
(2) the expiration of

<PAGE>
Ms. Doreen A. Toben
July 1, 2002
Page 5

the option; provided that if you terminate employment because of death, your
rights under this subparagraph (b) shall pass to your estate. For this purpose,
your base salary shall be based on your base salary rate in effect immediately
before your employment terminated.

         (c) RETIREMENT - You may terminate your employment under this Agreement
by reason of Retirement (as defined below) by giving the CEO, at least 30
calendar days' (exclusive of vacation days) in advance of such termination,
written notice of your intent to so terminate. The termination shall
automatically become effective upon the expiration of such notice period. Upon
the effective date of such termination, you shall be entitled to a pro-rated
portion of any short-term and long-term bonuses (when and to the extent that
they are earned) and accelerated vesting of all outstanding stock options (other
than the Founders' Grant), and you shall be entitled to exercise all
then-outstanding stock options (excluding nonvested Founders' Grant options)
until the earlier of (1) the fifth anniversary of the date your employment
terminates (or any later date prescribed by the terms of the option relating to
termination of employment) or (2) the expiration of the option. For purposes of
this Agreement, "Retirement" means attaining normal retirement age under the
terms of the Verizon Management Pension Plan (the "Pension Plan") or satisfying
the Rule of 75 under the Pension Plan. Except as provided by the preceding
provisions of this subparagraph (c), upon the effective date of your Retirement,
your base salary and any other Company benefits and perquisites shall cease to
accrue; provided that you shall otherwise be eligible to receive any and all
compensation and benefits for which a similarly situated senior executive would
be eligible under the applicable provisions of the compensation and benefit
plans in which he is then eligible to participate, as those plans may be amended
from time to time.

         (d) TERMINATION FOR GOOD REASON - (1) You may terminate your employment
under this Agreement for Good Reason by giving the CEO, at least 30 calendar
days' (exclusive of vacation days) in advance of such termination (the "Notice
Period"), written notice of your intent to so terminate, setting forth in
reasonable detail the facts and circumstances deemed to provide a basis for such
termination. For purposes of this Agreement, "Good Reason" means a material
breach by the Company of the terms and conditions of this Agreement, a material
reduction in your overall compensation opportunities, or your assignment to a
new principal work location that is more than 50 miles from your previous
principal work location. A "Good Reason" shall not occur merely because of a
change in the individual (or position) to whom (or to which) you report. In
addition, a "Good Reason" shall not occur merely because the Company notifies
you, in accordance

<PAGE>
Ms. Doreen A. Toben
July 1, 2002
Page 6

with paragraph 3 ("Term"), that the Term of Employment shall not be extended for
an additional two-year period.

               (2) Notwithstanding the foregoing, the Company shall have 15
calendar days from its receipt of such notice to cure the action specified in
the notice. In the event of a cure by the Company within the 15-day period, the
action in question shall not constitute Good Reason.

               (3) Except as provided in subparagraph (d)(2), above, at the end
of the Notice Period, the Good Reason termination shall take effect, and your
obligation to serve the Company, and the Company's obligation to employ you,
under the terms of this Agreement shall terminate simultaneously, and you shall
be deemed to have incurred an Involuntary Termination Without Cause, with the
consequences described in subparagraph (e), below; provided that your rights
under this subparagraph (d) are contingent on your execution of a release in
accordance with paragraph 12 ("Release").

               (4) If you do not fulfill the notice and explanation requirements
imposed by this subparagraph (d), the resulting termination of employment shall
be deemed a Voluntary Termination.

         (e) INVOLUNTARY TERMINATION WITHOUT CAUSE - The Company may terminate
your employment under this Agreement at any time and for any reason. However, if
the Company terminates your employment during the Term of Employment for any
reason other than death, disability, or Cause (as defined in subparagraph (f),
below), such termination shall be deemed an Involuntary Termination by the
Company, and you shall be entitled to receive the following payments and
benefits in lieu of any payment or benefit otherwise provided pursuant to
paragraphs 6 ("Base Salary") through 8 ("Benefits And Perquisites"):

               (1)  The Company shall make a lump-sum cash severance payment to
                    you equal to the excess of (i) two times the sum of your
                    base salary and short-term bonus (at 50% of maximum), over
                    (ii) the sum of any amounts paid or payable to you under any
                    Company-sponsored severance plan, program, policy, contract,
                    account, or arrangement;

               (2)  Your unvested stock options shall immediately vest, and you
                    may exercise all of your then-outstanding stock options at
                    any time up to the earlier of (i) the fifth anniversary of
                    the date your employment terminates (or

<PAGE>
Ms. Doreen A. Toben
July 1, 2002
Page 7

                    any later date prescribed by the terms of the option
                    relating to termination of employment) or (ii) the
                    expiration of the option; and

               (3)  You shall be eligible for outplacement services to the
                    extent that such services are then available to senior
                    executives in your salary band;

provided that your rights under this subparagraph (e) are contingent on your
execution of a release in accordance with paragraph 12 ("Release"). For purposes
of this paragraph 11(e), the Company shall not be deemed to have terminated your
employment during the Term of Employment if the Company notifies you, in
accordance with paragraph 3 ("Term"), that the Term of Employment shall not be
extended for an additional two-year period.

         (f) INVOLUNTARY TERMINATION FOR CAUSE - (1) Nothing in this Agreement
prevents the Company from terminating your employment under this Agreement for
Cause. In the event of your termination for Cause, the Company shall pay you
your full accrued base salary and accrued vacation time through the date of your
termination, you shall forfeit all then-outstanding stock options if you are not
eligible for Retirement at the time of your termination, and the Company shall
have no further obligations under this Agreement; provided that you shall
otherwise be eligible to receive any and all compensation and benefits for which
a similarly situated senior executive would be eligible under the applicable
provisions of the compensation and benefit plans in which he is then eligible to
participate, as those plans may be amended from time to time.

               (2) For purposes of this Agreement, "Cause" is defined as (i)
grossly incompetent performance or substantial or continuing inattention to or
neglect of the duties and responsibilities assigned to you; fraud,
misappropriation or embezzlement involving the Company or a material breach of
any provision incorporated in paragraph 13 ("Covenants"), as determined by the
CEO in his discretion, or (ii) commission of any felony of which you are finally
adjudged guilty by a court of competent jurisdiction.

               (3) If the Company terminates your employment for Cause, the
Company shall provide you with a written statement of the grounds for such
termination within 10 business days after the date of termination.

     12. RELEASE - You shall not be entitled to any benefits under paragraphs 10
("Excise Tax Gross-Up"), 11(d) ("Termination For Good Reason"), and 11(e)
("Involuntary Termination Without Cause") following the termination of your

<PAGE>
Ms. Doreen A. Toben
July 1, 2002
Page 8

employment unless, at the time your employment terminates, you execute a release
satisfactory to the Company releasing the Company, its affiliates, shareholders,
directors, officers, employees, representatives, and agents and their successors
and assigns from any and all employment-related claims you or your successors
and beneficiaries might then have against them (excluding any claims you might
then have under this Agreement, or any employee benefit plan that is subject to
the vesting standards imposed by the Employee Retirement Income Security Act of
1974, as amended).

     13. COVENANTS - In consideration for the benefits and agreements described
above, you agree to comply with the covenants set forth in Exhibit B hereto,
which is incorporated herein by reference.

     14. REQUEST FOR WAIVER - Nothing in this Agreement bars you from
requesting, at the time of your termination of employment or at any time
thereafter, that the CEO, in his sole discretion, waive in writing the Company's
rights to enforce some or all of the provisions incorporated in paragraph 13
("Covenants").

     15. OTHER AGREEMENTS AND POLICIES - The obligations imposed on you by
paragraph 13 ("Covenants") are in addition to, and not in lieu of, any and all
other policies and agreements of the Company regarding the subject matter of the
foregoing obligations.

     16. NONDUPLICATION OF BENEFITS - No provision of this Agreement shall
require the Company to provide you with any payment, benefit, or grant that
duplicates any payment, benefit, or grant that you are entitled to receive under
any Company compensation or benefit plan, award agreement, or other arrangement.

     17. OTHER COMPANY PLANS - Except to the extent otherwise explicitly
provided by this Agreement, any awards made to you under any Company
compensation or benefit plan or program shall be governed by the terms of that
plan or program and any applicable award agreement thereunder as in effect from
time to time. Notwithstanding the foregoing, you shall not be entitled to
participate in any Company compensation or benefit plan that is established
after your employment with the Company terminates, and except as specifically
provided in this Agreement, you shall not be entitled to any additional grants
or awards under any Company compensation or benefit plan after your employment
with the Company terminates. The amounts paid, provided, or credited under this
Agreement shall not be treated as compensation for purposes of determining any
benefits payable under any Company-sponsored pension, savings, life insurance,
or other employee benefit plan except to the extent provided by the terms of
such plan.

<PAGE>
Ms. Doreen A. Toben
July 1, 2002
Page 9

     18. FORFEITURE - (a) If you breach any of the obligations incorporated in
paragraph 13 ("Covenants"), or engage in serious misconduct that is contrary to
written policies of the Company and is harmful to the Company or its reputation,
you shall forfeit:

          (1)  all credits that are added to your Retirement Contribution
               Sub-Account in the Verizon Income Deferral Plan (or to any
               successor account in that plan or a successor plan) ("Retirement
               Contribution Sub-Account"), on or after January 1, 2002;

          (2)  any interest or other earnings or gains on or after January 1,
               2002, with respect to any credits in your Retirement Contribution
               Sub-Account (including any interest, or other earnings or gains
               attributable to any credit regardless of when the credit was
               added to your Retirement Contribution Sub-Account); and

          (3)  any unpaid incentive compensation (such as performance bonus
               awards or other awards under the Verizon Communications Inc.
               Long-Term Incentive Plan) that you are otherwise entitled to
               receive.

         (b) The remedies available under this paragraph are in addition to, and
not in lieu of, the remedies available under paragraph 25 ("Additional
Remedies").

     19. NO DEEMED WAIVER - Failure to insist upon strict compliance with any of
the terms, covenants, or conditions of this Agreement shall not be deemed a
waiver of such term, covenant, or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time or
times.

     20. TAXES - The Company may withhold from any benefits payable under this
Agreement all taxes that the Company reasonably determines to be required
pursuant to any law, regulation, or ruling. However, it is your obligation to
pay all required taxes on any amounts and benefits provided under this
Agreement, including the benefits and perquisites provided to you pursuant to
paragraph 8 ("Benefits and Perquisites"), regardless of whether withholding is
required.

     21. CONFIDENTIALITY - Except to the extent otherwise required by law, you
shall not disclose, in whole or in part, any of the terms of this Agreement.
This

<PAGE>
Ms. Doreen A. Toben
July 1, 2002
Page 10

paragraph 21 does not prevent you from disclosing the terms of this Agreement to
your spouse or to your legal, tax, or financial adviser, provided that you take
all reasonable measures to assure that he or she does not disclose the terms of
this Agreement to a third party except as otherwise required by law.

     22. GOVERNING LAW - To the extent not preempted by federal law, the
provisions of this Agreement shall be construed and enforced in accordance with
the laws of the State of New York, excluding any conflicts or choice of law rule
or principle that might otherwise refer construction or interpretation of this
provision to the substantive law of another jurisdiction.

     23. ASSIGNMENT - Verizon may, without your consent, assign its rights and
obligations under this Agreement to any entity that is a part of the Company,
and if Verizon makes such an assignment, all references in this Agreement to
Verizon (except for references to Verizon common stock) shall be deemed to refer
to the assignee. However, you may not assign your rights and obligations under
this Agreement.

     24. SEVERABILITY - The agreements contained herein and within the release
prescribed by paragraph 12 ("Release") shall each constitute a separate
agreement independently supported by good and adequate consideration, and shall
each be severable from the other provisions of the Agreement and such release.
If an arbitrator or court of competent jurisdiction determines that any term,
provision, or portion of this Agreement or such release is void, illegal, or
unenforceable, the other terms, provisions, and portions of this Agreement or
such release shall remain in full force and effect, and the terms, provisions,
and portions that are determined to be void, illegal, or unenforceable shall
either be limited so that they shall remain in effect to the extent permissible
by law, or such arbitrator or court shall substitute, to the extent enforceable,
provisions similar thereto or other provisions, so as to provide to the Company,
to the fullest extent permitted by applicable law, the benefits intended by this
Agreement and such release.

     25. ADDITIONAL REMEDIES - In addition to any other rights or remedies,
whether legal, equitable, or otherwise, that each of the parties to this
Agreement may have, you acknowledge that

          (a)  The covenants incorporated in paragraph 13 ("Covenants") are
               essential to the continued good will and profitability of the
               Company;

<PAGE>
Ms. Doreen A. Toben
July 1, 2002
Page 11

          (b)  You have broad-based skills that will serve as the basis for
               employment opportunities that are not prohibited by the covenants
               incorporated in paragraph 13 ("Covenants");

          (c)  When your employment with the Company terminates, you shall be
               able to earn a livelihood without violating any of the terms of
               this Agreement;

          (d)  Irreparable damage to the Company shall result in the event that
               the covenants incorporated in paragraph 13 ("Covenants") are not
               specifically enforced and that monetary damages will not
               adequately protect the Company from a breach of such covenants;

          (e)  If any dispute arises concerning the violation by you of the
               covenants incorporated in paragraph 13 ("Covenants"), an
               injunction may be issued restraining such violation pending the
               determination of such controversy, and no bond or other security
               shall be required in connection therewith;

          (f)  Such covenants shall continue to apply after any expiration,
               termination, or cancellation of this Agreement; and

          (g)  Your breach of any of such covenants shall result in your
               immediate forfeiture of all rights under this Agreement.

     26. SURVIVAL - The provisions of paragraphs 13 ("Covenants") through 28
("Entire Agreement") shall survive the Term of Employment. In addition, if the
Term of Employment is not extended in accordance with paragraph 3 ("Term") but
your employment continues after the end of the Term of Employment, you shall be
subject to the obligations imposed by each of such paragraphs with respect to
such employment. Any obligations that the Company has incurred under this
Agreement to provide benefits that have vested under the terms of this Agreement
(including the Company's obligations under paragraph 11(c) ("Retirement")) shall
likewise survive the Term of Employment. Except as provided by the preceding
provisions of this paragraph 26, if the Term of Employment is not extended in
accordance with paragraph 3 ("Term") but your employment continues after the end
of the Term of Employment, the terms of such employment shall not be governed by
this Agreement.

     27. ARBITRATION - Any dispute arising out of or relating to this Agreement
(except any dispute arising out of or relating to paragraph 13 ("Covenants")),
and any dispute arising out of or relating to your employment, shall be settled
by final

<PAGE>
Ms. Doreen A. Toben
July 1, 2002
Page 12

and binding arbitration, which shall be the exclusive means of resolving any
such dispute, and the parties specifically waive all rights to pursue any other
remedy, recourse, or relief. With respect to disputes by the Company arising out
of or relating to paragraph 13 ("Covenants"), the Company has retained all its
rights to legal and equitable recourse and relief, including but not limited to
injunctive relief, as referred to in paragraph 25 ("Additional Remedies"). The
arbitration shall be expedited and conducted in the State of New York pursuant
to the Center for Public Resources ("CPR") Rules for Non-Administered
Arbitration in effect at the time of notice of the dispute before one neutral
arbitrator appointed by CPR from the CPR Panel of neutrals unless the parties
mutually agree to the appointment of a different neutral arbitrator. The
arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. sections
1-16, and judgment upon the award rendered by the arbitrator may be entered by
any court having jurisdiction. The finding of the arbitrator may not change the
express terms of this Agreement and shall be consistent with the arbitrator's
understanding of the findings a court of proper jurisdiction would make in
applying the applicable law to the facts underlying the dispute. In no event
whatsoever shall such an arbitration award include any award of damages other
than the amounts in controversy under this Agreement. The parties waive the
right to recover, in such arbitration, punitive damages. Each party hereby
agrees that New York City is the proper venue for any litigation seeking to
enforce any provision of this Agreement or to enforce any arbitration award
under this paragraph 27, and each party hereby waives any right it otherwise
might have to defend, oppose, or object to, on the basis of jurisdiction, venue,
or forum nonconveniens, a suit filed by the other party in any federal or state
court in New York City to enforce any provision of this Agreement or to enforce
any arbitration award under this paragraph 27. Each party also waives any right
it might otherwise have to seek to transfer from a federal or state court in New
York City a suit filed by the other party to enforce any provision of this
Agreement or to enforce any arbitration award under this paragraph 27.

     28. ENTIRE AGREEMENT - Except for the terms of the compensation and benefit
plans in which you participate (including any award agreements issued
thereunder), this Agreement, including the Exhibits hereto, sets forth the
entire understanding of you and the Company, and supersedes all prior agreements
and communications, whether oral or written, between the Company (or Bell
Atlantic or GTE or any of their respective subsidiaries) and you regarding the
subject matter of this Agreement, including your October 3, 2000, employment
agreement with Verizon. This Agreement shall not be modified except by written
agreement of you and Verizon.

<PAGE>
Ms. Doreen A. Toben
July 1, 2002
Page 13

Doreen, I believe that this Agreement continues to provide you and your family
with a firm foundation of financial security as our Company faces many new
challenges and opportunities. I recognize that the Company and the
telecommunications industry operate in a rapidly changing and demanding
environment. It is my hope that this Agreement demonstrates to you the level of
confidence that I have in your abilities to meet the commitments that I expect
from you. Please indicate your acceptance by signing below and returning the
signed Agreement to me or Ezra Singer within ten business days after your
receipt of this Agreement.

Sincerely yours,

/s/ Ivan Seidenberg
-------------------------------------
Ivan Seidenberg
Chief Executive Officer

cc: E. Singer

I agree to the terms described above.

/s/ Doreen Toben
-------------------------------------
Doreen Toben

Attachments: Exhibit A - Excise Tax Gross-Up
             Exhibit B - Covenants
<PAGE>
                                    EXHIBIT A

                               EXCISE TAX GROSS-UP

     1. GROSS-UP PAYMENT - If any payment or benefit received or to be received
by you from the Company pursuant to the terms of the Agreement to which this
Exhibit A is attached or otherwise (the "Payments") would be subject to the
excise tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue
Code (the "Code") as determined in accordance with this Exhibit A, the Company
shall pay you, at the time specified below, an additional amount (the "Gross-Up
Payment") such that the net amount that you retain, after deduction of the
Excise Tax on the Payments and any federal, state, and local income tax and the
Excise Tax upon the Gross-Up Payment, and any interest, penalties, or additions
to tax payable by you with respect thereto, shall be equal to the total present
value (using the applicable federal rate (as defined in section 1274(d) of the
Code) in such calculation) of the Payments at the time such Payments are to be
made.

     2. CALCULATIONS - For purposes of determining whether any of the Payments
shall be subject to the Excise Tax and the amount of such excise tax,

     (a)  The total amount of the Payments shall be treated as "parachute
          payments" within the meaning of section 280G(b)(2) of the Code, and
          all "excess parachute payments" within the meaning of section
          280G(b)(1) of the Code shall be treated as subject to the excise tax,
          except to the extent that, in the written opinion of independent
          counsel selected by Verizon and reasonably acceptable to you
          ("Independent Counsel"), a Payment (in whole or in part) does not
          constitute a "parachute payment" within the meaning of section
          280G(b)(2) of the Code, or such "excess parachute payments" (in whole
          or in part) are not subject to the Excise Tax;

     (b)  The amount of the Payments that shall be subject to the Excise Tax
          shall be equal to the lesser of (i) the total amount of the Payments
          or (ii) the amount of "excess parachute payments " within the meaning
          of section 280G(b)(1) of the Code (after applying clause (a), above);
          and

     (c)  The value of any noncash benefits or any deferred payment or benefit
          shall be determined by Independent Counsel in accordance with the
          principles of section 280G(d)(3) and (4) of the Code.

     3. TAX RATES - For purposes of determining the amount of the Gross-Up
Payment, you shall be deemed to pay federal income taxes at the highest marginal
rates of federal income taxation applicable to individuals in the calendar year
in which the Gross-Up Payment is to be made and state and local income taxes at
the highest marginal rates of taxation applicable to individuals as are in
effect in the state and locality of your residence in the calendar year in which
the Gross-Up

<PAGE>
                                      -2-

Payment is to be made, net of the maximum reduction in federal income taxes that
can be obtained from deduction of such state and local taxes, taking into
account any limitations applicable to individuals subject to federal income tax
at the highest marginal rates.

     4. TIME OF GROSS-UP PAYMENTS - The Gross-Up Payments provided for in this
Exhibit A shall be made upon the earlier of (a) the payment to you of any
Payment or (b) the imposition upon you, or any payment by you, of any Excise
Tax.

     5. ADJUSTMENTS TO GROSS-UP PAYMENTS - If it is established pursuant to a
final determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax is less than the
amount previously taken into account hereunder, you shall repay the Company,
within 30 days of your receipt of notice of such final determination or opinion,
the portion of the Gross-Up Payment attributable to such reduction (plus the
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state, and local income tax imposed on the Gross-Up Payment being repaid by you
if such repayment results in a reduction in Excise Tax or a federal, state, and
local income tax deduction) plus any interest received by you on the amount of
such repayment, provided that if any such amount has been paid by you as an
Excise Tax or other tax, you shall cooperate with the Company in seeking a
refund of any tax overpayments, and you shall not be required to make repayments
to the Company until the overpaid taxes and interest thereon are refunded to
you.

     6. ADDITIONAL GROSS-UP PAYMENT - If it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax exceeds the amount
taken into account hereunder (including by reason of any payment the existence
or amount of which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of such excess
within 30 days of the Company's receipt of notice of such final determination or
opinion.

     7. CHANGE IN LAW OR INTERPRETATION - In the event of any change in or
further interpretation of section 280G or 4999 of the Code and the regulations
promulgated thereunder, you shall be entitled, by written notice to Verizon, to
request a written opinion of Independent Counsel regarding the application of
such change or further interpretation to any of the foregoing, and Verizon shall
use its best efforts to cause such opinion to be rendered as promptly as
practicable.

     8. FEES AND EXPENSES - All fees and expenses of Independent Counsel
incurred in connection with this Exhibit A shall be borne by Verizon.

     9. SURVIVAL - The Company's obligation to make a Gross-Up Payment with
respect to Payments made or accrued before the end of the Term of Employment

<PAGE>
                                      -3-

shall survive the Term of Employment unless (a) your employment is terminated
for Cause pursuant to paragraph 11(f) of the Agreement to which this Exhibit A
is attached ("Involuntary Termination For Cause"), (b) you fail to execute a
release in accordance with paragraph 12 of such Agreement ("Release"), or (c)
you fail to comply with the covenants incorporated in paragraph 13 of such
Agreement ("Covenants"), in which event the Company's obligation under this
Exhibit A shall terminate immediately.

     10. DEFINED TERMS - Except where clearly provided to the contrary, all
capitalized terms used in this Exhibit A shall have the definitions given to
those terms in the Agreement to which this Exhibit A is attached.

<PAGE>
                                    EXHIBIT B

                                    COVENANTS

     1. NONCOMPETITION - In consideration for the benefits and agreements
described in the Agreement to which this Exhibit B is attached, you agree that:

         (a) PROHIBITED CONDUCT - During the period of your employment with the
Company, and for the period ending six months after your termination of
employment for any reason from the Company, you shall not, without the prior
written consent of the CEO(s):

               (1)  personally engage in Competitive Activities (as defined
                    below); or

               (2)  work for, own, manage, operate, control, or participate in
                    the ownership, management, operation, or control of, or
                    provide consulting or advisory services to, any individual,
                    partnership, firm, corporation, or institution engaged in
                    Competitive Activities, or any company or person affiliated
                    with such person or entity engaged in Competitive
                    Activities; provided that your purchase or holding, for
                    investment purposes, of securities of a publicly-traded
                    company shall not constitute "ownership" or "participation
                    in ownership" for purposes of this paragraph so long as your
                    equity interest in any such company is less than a
                    controlling interest;

provided that this paragraph (a) shall not prohibit you from (i) being employed
by, or providing services to, a consulting firm, provided that you do not
personally engage in Competitive Activities or provide consulting or advisory
services to any individual, partnership, firm, corporation, or institution
engaged in Competitive Activities, or any company or person affiliated with such
person or entity engaged in Competitive Activities, or (ii) engaging in the
private practice of law as a sole practitioner or as a partner in (or as an
employee of or counsel to) a law firm in accordance with applicable legal and
professional standards.

         (b) COMPETITIVE ACTIVITIES - For purposes of the Agreement to which
this Exhibit B is attached, "Competitive Activities" means business activities
relating to products or services of the same or similar type as the products or
services (1) which are sold (or, pursuant to an existing business plan, will be
sold) to paying customers of the Company, and (2) for which you then have
responsibility to plan, develop, manage, market, or oversee, or had any such
responsibility within your most recent 24 months of employment with the Company.
Notwithstanding the previous sentence, a business activity shall not be treated
as a Competitive Activity if the geographic marketing area of the relevant
products or services sold by you or

<PAGE>
                                      -2-

a third party does not overlap with the geographic marketing area for the
applicable products and services of the Company.

     2. INTERFERENCE WITH BUSINESS RELATIONS - During the period of your
employment with the Company, and for a period ending with the expiration of 12
months following your termination of employment for any reason from the Company,
you shall not, without the written consent of the CEO(s):

          (a)  recruit or solicit any employee of the Company for employment or
               for retention as a consultant or service provider;

          (b)  hire or participate (with another company or third party) in the
               process of hiring (other than for the Company) any person who is
               then an employee of the Company, or provide names or other
               information about Company employees to any person or business
               (other than the Company) under circumstances that could lead to
               the use of that information for purposes of recruiting or hiring;

          (c)  interfere with the relationship of the Company with any of its
               employees, agents, or representatives;

          (d)  solicit or induce, or in any manner attempt to solicit or induce,
               any client, customer, or prospect of the Company (1) to cease
               being, or not to become, a customer of the Company or (2) to
               divert any business of such customer or prospect from the
               Company; or

          (e)  otherwise interfere with, disrupt, or attempt to interfere with
               or disrupt, the relationship, contractual or otherwise, between
               the Company and any of its customers, clients, prospects,
               suppliers, consultants, or employees.

     3. RETURN OF PROPERTY; INTELLECTUAL PROPERTY RIGHTS - You agree that on or
before your termination of employment for any reason with the Company, you shall
return to the Company all property owned by the Company or in which the Company
has an interest, including files, documents, data and records (whether on paper
or in tapes, disks, or other machine-readable form), office equipment, credit
cards, and employee identification cards. You acknowledge that the Company is
the rightful owner of any programs, ideas, inventions, discoveries, patented or
copyrighted material, or trademarks that you may have originated or developed,
or assisted in originating or developing, during your period of employment with
the Company, where any such origination or development involved the use of
Company

<PAGE>
                                      -3-

time or resources, or the exercise of your responsibilities for or on behalf of
the Company. You shall at all times, both before and after termination of
employment, cooperate with the Company in executing and delivering documents
requested by the Company, and taking any other actions, that are necessary or
requested by the Company to assist the Company in patenting, copyrighting, or
registering any programs, ideas, inventions, discoveries, patented or
copyrighted material, or trademarks, and to vest title thereto in the Company.

     4. PROPRIETARY AND CONFIDENTIAL INFORMATION - You shall at all times
preserve the confidentiality of all proprietary information and trade secrets of
the Company, except to the extent that disclosure of such information is legally
required. "Proprietary information" means information that has not been
disclosed to the public and that is treated as confidential within the business
of the Company, such as strategic or tactical business plans; undisclosed
financial data; ideas, processes, methods, techniques, systems, patented or
copyrighted information, models, devices, programs, computer software, or
related information; documents relating to regulatory matters and correspondence
with governmental entities; undisclosed information concerning any past,
pending, or threatened legal dispute; pricing and cost data; reports and
analyses of business prospects; business transactions that are contemplated or
planned; research data; personnel information and data; identities of users and
purchasers of the Company's products or services; and other confidential matters
pertaining to or known by the Company, including confidential information of a
third party that you know or should know the Company is bound to protect.

     5. DEFINITIONS - Except where clearly provided to the contrary, all
capitalized terms used in this Exhibit B shall have the definitions given to
those terms in the Agreement to which this Exhibit B is attached.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.E
<SEQUENCE>7
<FILENAME>d98774exv10we.txt
<DESCRIPTION>SUPPLEMENTAL LETTER, EMPLOYMENT AGREEMENT - C. LEE
<TEXT>
<PAGE>
                                                                     EXHIBIT 10e

                                            [Verizon Logo]
EZRA D. SINGER                              1095 Avenue of the Americas
Executive Vice President                    Room 3909
Human Resources                             New York, NY 10036

                                            Tel: 212.395.1041
                                            Fax: 212.597.2979
                                            Ezra.Singer@verizon.com

Charles R. Lee
1095 Avenue of the Americas
Room 3919
New York, NY 10036

Dear Chuck:

On behalf of the Board of Directors, I am writing to express our gratitude for
the leadership, vision, and commitment you have provided to Verizon. Consistent
with your past actions, your decision to relinquish your title and duties as
Co-Chief Executive Officer at this time was based on your view of what was in
Verizon's interest, and Verizon will always be indebted to you for the example
you have set by acting on that basis. We look forward to your continued
leadership as Chairman of Verizon's Board of Directors.

This letter will confirm that you are voluntarily stepping down as Co-Chief
Executive Officer of Verizon effective as of the close of business on March 31,
2002. As a result, your December 5, 2000 Employment Agreement now provides that
you will continue to be an employee of Verizon until June 30, 2002 and then,
after your retirement, you will continue to serve as the non-employee Chairman
of the Board of Directors of Verizon until June 30, 2004. Except as amended by
this letter, the terms and conditions of your employment agreement remain in
effect and are unchanged.

Please indicate your agreement by signing and returning one copy of this letter.

Sincerely yours,

/s/ Ezra Singer
------------------------------------------
Ezra Singer
Executive Vice President - Human Resources
Verizon Communications Inc.

I agree to the terms set forth above.

/s/ Charles R. Lee
------------------------------------------
Charles R. Lee

cc: Ivan Seidenberg

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.F
<SEQUENCE>8
<FILENAME>d98774exv10wf.txt
<DESCRIPTION>INCOME DEFFERRAL PLAN AS AMENDED AND RESTATED
<TEXT>
<PAGE>
                                                                     EXHIBIT 10f

================================================================================

                           VERIZON COMMUNICATIONS INC.

                                   ----------

                          VERIZON INCOME DEFERRAL PLAN

                                   ----------

                            Effective January 1, 2002

================================================================================
<PAGE>

                                TABLE OF CONTENTS

<Table>
<S>                                                                                                               <C>
ARTICLE 1.   INTRODUCTION.........................................................................................1
         1.01     Name of Plan....................................................................................1
         1.02     Purpose of Plan.................................................................................1
         1.03     Effective Date..................................................................................1
         1.04     Employees Who Terminated Employment Before Effective Date.......................................1

ARTICLE 2.   DEFINITIONS..........................................................................................2
         2.01     Definitions.....................................................................................2
         2.02     Gender and Number...............................................................................7

ARTICLE 3.   PARTICIPATION........................................................................................8
         3.01     Active Participation............................................................................8
         3.02     Inactive Participation..........................................................................9

ARTICLE 4.   PARTICIPANT DEFERRALS...............................................................................10
         4.01     Nature of Deferrals............................................................................10
         4.02     Exclusive Entitlement to Payment...............................................................10
         4.03     Time and Manner of Deferral Elections..........................................................10
         4.04     Timing of Elections............................................................................10
         4.05     Amount of Deferrals............................................................................12

ARTICLE 5.   COMPANY CONTRIBUTION CREDITS........................................................................13
         5.01     Matching Contribution Credits..................................................................13
         5.02     Section 415 Credits............................................................................14
         5.03     Retirement Contribution Credits................................................................14
         5.04     Other Credits..................................................................................15

ARTICLE 6.   ACCOUNT INVESTMENTS.................................................................................16
         6.01     General........................................................................................16
         6.02     Verizon Shares Fund............................................................................16
         6.03     Moody's Investment Fund........................................................................17
         6.04     Investment Elections...........................................................................18

ARTICLE 7.   PAYMENTS FROM THE PLAN..............................................................................20
         7.01     Participant Elections..........................................................................20
         7.02     Method of Payment..............................................................................22
         7.03     Payment Commencement...........................................................................23
         7.04     Special Rules in the Event of Disability.......................................................25
         7.05     Death Benefits.................................................................................26
         7.06     Early Payments.................................................................................27
         7.07     Default for Form and Timing of Payments........................................................29
         7.08     Payment of Small Benefits......................................................................29
         7.09     Prior Plan Payment Rules.......................................................................29
</Table>

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                              Page i
<PAGE>

<Table>
<S>                                                                                                              <C>
ARTICLE 8.   VESTING, FORFEITURE, NON-COMPETITION, AND NON-SOLICITATION..........................................30
         8.01     Personal Deferral Sub-Account..................................................................30
         8.02     Matching Contribution Sub-Account..............................................................30
         8.03     Retirement Contribution Sub-Account............................................................30
         8.04     Forfeiture.....................................................................................31
         8.05     Competitive Activities.........................................................................33
         8.06     Non-Competition/Non-Solicitation Agreement Upon or After Termination of Employment.............34
         8.07     Change in Control..............................................................................35

ARTICLE 9.   NATURE OF PLAN AND ACCOUNTS.........................................................................37
         9.01     Unfunded Plan..................................................................................37
         9.02     Hypothetical Accounts..........................................................................37

ARTICLE 10.   MISCELLANEOUS......................................................................................38
         10.01    Plan Administrator.............................................................................38
         10.02    Allocation of Administrative and Other Expenses................................................38
         10.03    Amendment and Termination of Plan..............................................................38
         10.04    Determination and Withholding of Taxes.........................................................40
         10.05    No Assignment or Alienation....................................................................40
         10.06    Severability...................................................................................40
         10.07    Certain Rights Reserved........................................................................40
         10.08    Titles and Headings Not to Control.............................................................41
         10.09    Governing Law..................................................................................41
</Table>

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                             Page ii
<PAGE>

                            ARTICLE 1. INTRODUCTION

1.01 NAME OF PLAN

     The name of the Plan is the Verizon Income Deferral Plan.

1.02 PURPOSE OF PLAN

     The Verizon Income Deferral Plan is a nonqualified deferred compensation
     and supplemental retirement plan. The purpose of the Plan is to enable
     Participants to defer voluntarily the receipt of certain compensation not
     otherwise eligible for deferral under any other deferred compensation
     arrangement maintained by any Verizon Company, to receive matching credits
     on certain deferrals that are comparable to the matching contributions
     under the Savings Plan, and to provide retirement and other benefits to
     Participants through an individual account program.

1.03 EFFECTIVE DATE

     The Plan is an amendment and restatement of the plan formerly known as the
     Bell Atlantic Senior Management Income Deferral Plan, which was effective
     January 1, 1998. The effective date of this amendment and restatement of
     the Plan is January 1, 2002.

1.04 EMPLOYEES WHO TERMINATED EMPLOYMENT BEFORE EFFECTIVE DATE

     The terms of the Plan, as amended and restated herein, apply only to
     individuals who are actively employed as a Senior Manager by a Verizon
     Company on or after January 1, 2002. If an employee terminated employment
     on or before December 31, 2001, with an account balance governed by the
     provisions of the Plan in effect before January 1, 2002, or with an account
     balance or accrued benefit governed by the provisions of any other deferred
     compensation or supplemental retirement plan of any Verizon Company, his
     account balance or accrued benefit shall be governed by the plan provisions
     that were in effect on the date he terminated employment (as those plan
     provisions may be amended from time to time).

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                              Page 1
<PAGE>

                            ARTICLE 2. DEFINITIONS

2.01 DEFINITIONS

     Unless the context clearly indicates otherwise, the following terms, when
     used in capitalized form in the Plan, shall have the meanings set forth
     below.

     (a)  "ARTICLE" means an Article of the Plan.

     (b)  "BASE SALARY" means the gross amount of annual base salary, before
          such annual base salary is reduced for tax withholding and pre-tax or
          after-contributions to any employee benefit plan, and before any other
          special payroll deductions.

     (c)  "BENEFICIARY" or "BENEFICIARIES" means a Participant's beneficiary or
          beneficiaries designated in accordance with procedures established by
          the Plan Administrator, or, if no beneficiary is so designated, the
          Participant's estate. A Beneficiary shall not be permitted to name a
          beneficiary of his right to all or a portion of a Participant's
          Account in the Plan; the beneficiary of a Beneficiary shall be the
          Beneficiary's estate.

     (d)  "BOARD" means the Board of Directors of Verizon.

     (e)  "CAUSE" means (1) grossly incompetent performance or substantial or
          continuing inattention to or neglect of the duties and
          responsibilities assigned to an employee; fraud, misappropriation or
          embezzlement involving the Company; or a material breach of the
          Participant's Non-Compete Agreement, as determined by the Plan
          Administrator or (2) commission of any felony of which the employee is
          finally adjudged guilty by a court of competent jurisdiction. A
          Participant who voluntarily terminates employment with a Verizon
          Company to avoid being terminated for Cause shall, for purposes of the
          Plan, be deemed to have been terminated for Cause. Notwithstanding the
          preceding two sentences of this Section 2.01(e), for purposes of the
          Plan, a Participant shall not be treated as having been terminated for
          Cause if the Participant is eligible to Retire.

     (f)  "CHANGE IN CONTROL" has the meaning provided in Section 8.07.

     (g)  "CODE" means the Internal Revenue Code of 1986, as amended, and any
          applicable Treasury regulations and rulings issued thereunder.

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                              Page 2
<PAGE>

     (h)  "COMPANY BALANCE" means the vested balances in a Participant's
          Matching Contribution Sub-Account, Retirement Contribution Sub-Account
          and any other sub-account so designated by the Plan Administrator.

     (i)  "COMMITTEE" means the Human Resources Committee of the Board or any
          successor to that committee.

     (j)  "DIRECTOR" means any active employee of a Verizon Company who is
          designated as a "Director" in accordance with procedures that the
          Committee approves or is in a position comparable to that of a
          Director as determined by the Plan Administrator. The term Director
          shall not include an individual temporarily assigned the status of
          Director or promoted to or designated as a Director on an acting
          basis.

     (k)  "DISABILITY" means "Disability" as that term is defined in the Pension
          Plan.

     (l)  "ELIGIBLE BASE SALARY" means the amount of Base Salary for a Plan Year
          in excess of the limit for that Plan Year under section 401(a)(17) of
          the Code; provided that, in determining Eligible Base Salary for a
          Plan Year, the Plan Administrator may disregard all or part of any
          Base Salary earned before an Eligible Employee becomes an Active
          Participant.

     (m)  "ELIGIBLE COMPENSATION" means the sum of Eligible Base Salary and
          Eligible Short-Term Incentive.

     (n)  "ELIGIBLE SHORT-TERM INCENTIVE" means all of an Active Participant's
          Short-Term Incentive for a Plan Year; provided that, in determining
          the amount of an Eligible Short-Term Incentive for a Plan Year, the
          Plan Administrator may disregard all or part of any Short-Term
          Incentive earned before an Eligible Employee becomes an Active
          Participant.

     (o)  "ELIGIBLE EMPLOYEE" means an employee of a Participating Company who
          has the status of Senior Manager and has been designated by the Plan
          Administrator as being eligible to participate in the Plan.

     (p)  "EMPLOYEE BALANCE" means the vested balance in a Participant's
          Personal Deferral Sub-Account.

     (q)  "EXECUTIVE DIRECTOR" means any active employee of a Verizon Company
          who is designated as an "Executive Director" in accordance with
          procedures that the Committee approves or is in a position comparable
          to that of an Executive Director as determined by the Plan
          Administrator. The term Executive Director shall not include an
          individual temporarily assigned the status of Executive Director or
          promoted to or designated as a Executive Director on an acting basis.

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                              Page 3
<PAGE>

     (r)  "INCUMBENT BOARD" means those persons who either (1) have been members
          of the Board of Directors of the Company since June 30, 2000, or (2)
          are new directors whose election by the Board of Directors or
          nomination for election by the shareowners of the Company was approved
          by a vote of at least three-fourths of the members of the Incumbent
          Board then in office who either were directors described in Section
          2.01(r)(1) or whose election or nomination for election was previously
          so approved, but shall not include any director elected as a result of
          an actual or threatened solicitation of proxies by any Person.

     (s)  "INVESTMENT FUNDS" means the unfunded bookkeeping accounts identified
          in Article 6.

     (t)  "MOODY'S RATE" means the "Corporate Average" yield of long-term,
          high-grade corporate bonds as reported by Moody's Investors Service,
          or such other substantially similar yield that the Plan Administrator
          designates as the applicable interest rate.

     (u)  "NON-COMPETE AGREEMENT" means the non-competition/non-solicitation
          agreement described in Section 8.06(a).

     (v)  "OTHER ELIGIBLE COMPENSATION" means any compensation that (1) is not
          Eligible Base Salary or an Eligible Short-Term Incentive and (2) the
          Plan Administrator determines is eligible to be deferred under the
          Plan or otherwise used as the basis for credits to a Participant's
          Account. The Plan Administrator may determine the sub-account to which
          Other Eligible Compensation shall be credited.

     (w)  "PARTICIPANT" means an individual who is either an "Active
          Participant" or an "Inactive Participant" as those terms are defined
          in Article 3.

     (x)  "PARTICIPANT'S ACCOUNT" means, collectively, the unfunded book-entry
          sub-accounts that represent a Participant's deferred compensation,
          retirement benefits, and other benefits under the Plan, as adjusted
          from time to time to reflect credits to and withdrawals from such
          sub-accounts as well as earnings and losses derived from the
          performance of the Investment Funds to which sub-account balances have
          been allocated. Each Participant's Account, and the credits reflected
          in such Participant's Account, shall consist of the aggregate of the
          amounts, if any, in the following sub-accounts and of the following
          credits:

          (1)  PERSONAL DEFERRAL SUB-ACCOUNT AND PERSONAL DEFERRAL CREDITS

               The "Personal Deferral Sub-Account" shall consist of (A) certain
               conversion and other credits provided for in Appendix A or

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                              Page 4
<PAGE>

               Appendix B, (B) credits pursuant to a Participant's voluntary
               election to defer the receipt of Eligible Base Salary, Eligible
               Short-Term Incentive, or Other Eligible Compensation as provided
               for in Article 4, and (C) certain credits pursuant to any
               employment, retention, stay incentive, or other agreement between
               a Participant and any Verizon Company that provides for a credit
               of Other Eligible Compensation to this sub-account. All credits
               described in this Section 2.01(x)(1), as adjusted to reflect all
               earnings and losses with respect to such credits, are referred to
               collectively as "Personal Deferral Credits."

          (2)  MATCHING CONTRIBUTION SUB-ACCOUNT AND MATCHING CONTRIBUTION
               CREDITS

               The "Matching Contribution Sub-Account" shall consist of (A)
               certain conversion and other credits provided for in Appendix A
               and (B) matching credits provided by the Company in accordance
               with Section 5.01. All credits described in this Section
               2.01(x)(2), as adjusted to reflect all earnings and losses with
               respect to such credits, are referred to collectively as
               "Matching Contribution Credits."

          (3)  RETIREMENT CONTRIBUTION SUB-ACCOUNT AND RETIREMENT CONTRIBUTION
               CREDITS

               The "Retirement Contribution Sub-Account" shall consist of (A)
               certain conversion and other credits provided for in Appendix A
               or Appendix B, (B) retirement credits provided by the Company in
               accordance with Section 5.02, (C) certain other retirement
               credits provided by the Company in accordance with Section 5.03,
               and (D) credits pursuant to any employment, retention, stay
               incentive or other agreement between a Participant and any
               Verizon Company that provides for a credit of Other Eligible
               Compensation to this sub-account. All credits described in this
               Section 2.01(x)(3), as adjusted to reflect all earnings and
               losses with respect to such credits, are referred to collectively
               as "Retirement Contribution Credits."

     (y)  "PARTICIPATING COMPANY" means each Verizon Company that the Plan
          Administrator designates as a "Participating Company."

     (z)  "PENSION PLAN" means the Verizon Management Pension Plan, as it may be
          amended from time to time, or any successor thereto.

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                              Page 5
<PAGE>

     (aa) "PERSON" means any individual, firm, corporation, partnership, joint
          venture, association, trust, or other entity.

     (bb) "PLAN" means this Verizon Income Deferral Plan, as it may be amended
          from time to time, or any successor thereto.

     (cc) "PLAN ADMINISTRATOR" means "Plan Administrator" as that term is
          defined in Section 10.01, except that, with respect to a Section 16
          Person, the "Plan Administrator" means the Committee.

     (dd) "PLAN YEAR" means the calendar year.

     (ee) "RETIRE" or "RETIREMENT" means attaining normal retirement age under
          the Pension Plan or satisfying either the Rule of 75 in section
          6A.2(b)(i) (or any successor provision) of the Pension Plan or the
          Rule of 73 in section 6A.2(b)(ii) (or any successor provision) of the
          Pension Plan.

     (ff) "SAVINGS PLAN" means the Verizon Savings Plan for Management
          Employees, as it may be amended from time to time, or any successor
          thereto.

     (gg) "SECTION" means a section of the Plan, unless the context clearly
          indicates another meaning (for example, "Section 16" shall have the
          meaning prescribed by Section 2.01(hh)).

     (hh) "SECTION 16" means Section 16 of the Securities Exchange Act of 1934,
          as amended from time to time, and "SECTION 16 PERSON" means a
          Participant who is an "officer" or "director" of the Company within
          the meaning of Section 16.

     (ii) "SENIOR MANAGER" means any active employee of a Verizon Company who is
          designated as a "Senior Manager" in accordance with procedures
          approved by the Committee or is in a position comparable to that of a
          Senior Manager as determined by the Plan Administrator. The term
          "Senior Manager" shall not include an individual temporarily assigned
          the status of Senior Manager or promoted to or designated as a Senior
          Manager on an acting basis.

     (jj) "SHORT-TERM INCENTIVE" means the amount of (1) any short-term
          incentive award paid or payable under the Verizon Short-Term Incentive
          Plan and (2) any other incentive award that the Plan Administrator
          designates as Short-Term Incentive for purposes of the Plan. The term
          Short-Term Incentive shall mean the gross amount of any such award,
          before such award is reduced for tax withholding and pre-tax or
          after-

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                              Page 6
<PAGE>

          contributions to any employee benefit plan, and before any other
          special payroll deductions.

     (kk) "VERIZON" or "COMPANY" means Verizon Communications Inc. or any
          successor. "VERIZON COMPANY" means (1) Verizon, (2) each corporation
          and partnership in which Verizon has a direct or indirect ownership
          interest of at least 50%, and (3) any other corporation, partnership,
          or other entity that the Plan Administrator determines shall be
          treated as a Verizon Company for purposes of the Plan.

2.02 GENDER AND NUMBER

     Throughout the Plan, the use of masculine pronouns shall refer to both
     males and females. The singular form shall include the plural, where
     appropriate.

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                              Page 7
<PAGE>

                           ARTICLE 3. PARTICIPATION

     3.01 ACTIVE PARTICIPATION

     (a)  BECOMING AN ACTIVE PARTICIPANT

          (1)  ELIGIBLE EMPLOYEES ON JANUARY 1, 2002

               A Senior Manager who is actively employed on January 1, 2002,
               shall be an "Active Participant" effective January 1, 2002.

          (2)  ELIGIBLE EMPLOYEES AFTER JANUARY 1, 2002

               An individual who is not an Active Participant and who becomes a
               Senior Manager after January 1, 2002, shall be an Active
               Participant effective on the date on which the individual becomes
               a Senior Manager.

     (b)  DURATION OF ACTIVE PARTICIPATION

          An Active Participant shall remain an Active Participant for so long
          as he is a Senior Manager.

     (c)  AFFECT ON PARTICIPATION IN OTHER PLANS

          Each Participant shall not participate in any other nonqualified
          deferred compensation plan or arrangement of a Verizon Company if the
          Plan Administrator determines that the Senior Manager shall no longer
          participate in such plan or arrangement.

          Each Senior Manager who was a Participant in the Plan before January
          1, 2002, and is actively employed by a Verizon Company on or after
          January 1, 2002, shall no longer be subject to the terms of the Plan
          as it existed before January 1, 2002.

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                              Page 8
<PAGE>

3.02 INACTIVE PARTICIPATION

     (a)  BECOMING AN INACTIVE PARTICIPANT

          An Active Participant whose employment terminates shall be an
          "Inactive Participant" as of the effective date of his termination.

          An Active Participant who is demoted shall become an "Inactive
          Participant" as of the effective date of his demotion if, in his new
          position after the demotion, he is not a Senior Manager.

     (b)  DURATION OF INACTIVE PARTICIPATION

          An Inactive Participant shall remain an Inactive Participant for so
          long as he has a positive account balance under the Plan and does not
          become an Active Participant under Section 3.01(a).

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                              Page 9
<PAGE>

                       ARTICLE 4. PARTICIPANT DEFERRALS

4.01 NATURE OF DEFERRALS

     Each Eligible Employee may elect to defer receipt of Eligible Base Salary,
     Eligible Short-Term Incentive, and Other Eligible Compensation in
     accordance with this Article 4.

     If an Eligible Employee makes an election to defer pursuant to this Article
     4, Personal Deferral Credits for the amounts deferred shall be calculated
     and added to his Personal Deferral Sub-Account according to such procedures
     as the Plan Administrator may establish.

4.02 EXCLUSIVE ENTITLEMENT TO PAYMENT

     If an Eligible Employee makes an election to defer pursuant to this Article
     4, he waives his right to receive the amount deferred and agrees to receive
     instead the amounts payable to him under Article 7. No other amounts shall
     be due to or on behalf of an Eligible Employee as a result of his election
     to defer pursuant to this Article 4.

4.03 TIME AND MANNER OF DEFERRAL ELECTIONS

     An Eligible Employee's election to defer (or a change in any such election
     to defer) must be made, executed, and delivered at a time and in a manner
     acceptable to the Plan Administrator.

4.04 TIMING OF ELECTIONS

     (a)  ELIGIBLE BASE SALARY

          Subject to Section 4.03, an Eligible Employee may at any time deliver
          an election to defer Eligible Base Salary to the Plan Administrator,
          and may at any time change, revoke, or modify such election. If an
          individual delivers an election to the Plan Administrator before he
          becomes an Eligible Employee, his election shall be deemed to have
          been delivered on the date he becomes an Eligible Employee.

          Any such election shall be effective (1) as soon as administratively
          practicable after the election is delivered or deemed to be delivered
          to the Plan Administrator or on such later date as the Eligible
          Employee may

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                             Page 10
<PAGE>

          elect, (2) only with respect to Eligible Base Salary earned after the
          effective date of the election, and (3) only with respect to Eligible
          Base Salary earned while the Eligible Employee is an Active
          Participant.

          Any such election shall remain in effect until changed, revoked, or
          modified, and shall be deemed to be renewed automatically for each
          succeeding Plan Year unless changed, revoked, or modified by the
          Eligible Employee as provided in this Section 4.04(a).

     (b)  ELIGIBLE SHORT-TERM INCENTIVE

          Subject to Section 4.03, an Eligible Employee may at any time deliver
          an election to defer an Eligible Short-Term Incentive to the Plan
          Administrator. Any such election may be changed, revoked, or modified
          at any time before, but not after, the deadline for making such
          election or such other period as may be determined by the Plan
          Administrator.

          Any such election shall be effective for a Plan Year (1) only if it is
          executed and delivered or deemed to be delivered before the last
          business day of December before the year in which the Eligible
          Short-Term Incentive to be deferred would have been payable, or such
          other date as may be determined by the Plan Administrator for this
          purpose, (2) only with respect to an Eligible Short-Term Incentive
          earned after the election is delivered to the Plan Administrator, and
          (3) only if the Eligible Employee is an Active Participant when such
          Eligible Short-Term Incentive becomes payable. For purposes of the
          Plan, a Participant shall be deemed to have "earned" all of his
          Eligible Short-Term Incentive for a Plan Year on the last day of such
          Plan Year or at such earlier date as the Plan Administrator may
          determine.

          Unless changed, revoked, or modified sooner, any such election (1)
          shall remain in effect until the beginning of the next succeeding Plan
          Year and (2) shall not be deemed to be renewed automatically for each
          succeeding Plan Year.

     (c)  OTHER ELIGIBLE COMPENSATION

          Any election to defer receipt of Other Eligible Compensation must be
          delivered or deemed to be delivered to the Plan Administrator not
          later than the date determined by the Plan Administrator.

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Verizon Income Deferral Plan                                             Page 11
<PAGE>

          Any such election may be changed, revoked, or modified for such period
          as the Plan Administrator may determine.

4.05 AMOUNT OF DEFERRALS

     An Eligible Employee may make separate deferral elections for Eligible Base
     Salary, Eligible Short-Term Incentive, and Other Eligible Compensation,
     subject to the requirements of this Article 4 and such requirements as the
     Plan Administrator may impose, in the following percentages or amounts:

     (a)  ELIGIBLE BASE SALARY

          An Eligible Employee may elect to defer a whole percentage (up to 100%
          or such lesser percentage as the Plan Administrator may determine for
          this purpose) of his Eligible Base Salary or, if permitted by the Plan
          Administrator, a stated amount of his Eligible Base Salary.

     (b)  ELIGIBLE SHORT-TERM INCENTIVE

          An Eligible Employee may elect to defer a whole percentage (up to 100%
          or such lesser percentage as the Plan Administrator may determine for
          this purpose) of his Eligible Short-Term Incentive or, if permitted by
          the Plan Administrator, a stated amount of his Eligible Short-Term
          Incentive.

     (c)  OTHER ELIGIBLE COMPENSATION

          An Eligible Employee may elect to defer a whole percentage (up to 100%
          or such lesser percentage as the Plan Administrator may determine for
          this purpose) of his Other Eligible Compensation or, if permitted by
          the Plan Administrator, a stated amount of his Other Eligible
          Compensation.

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Verizon Income Deferral Plan                                             Page 12
<PAGE>

                    ARTICLE 5. COMPANY CONTRIBUTION CREDITS

5.01 MATCHING CONTRIBUTION CREDITS

     Each Active Participant who makes an election to defer pursuant to Article
     4 shall have Matching Contribution Credits added to his Matching
     Contribution Sub-Account as provided in this Section 5.01, at a time and in
     a manner that the Plan Administrator approves, and as of the same date as
     the associated Personal Deferral Credits provided for in Article 4.

     (a)  ELIGIBLE BASE SALARY AND ELIGIBLE SHORT-TERM INCENTIVE

          Subject to the next paragraph of this Section 5.01(a), for each Plan
          Year--

          (1)  An Eligible Employee who defers at least 6% of his Eligible
               Compensation for the Plan Year shall receive Matching
               Contribution Credits equal to 5% of his Eligible Compensation.

          (2)  An Eligible Employee who defers less than 6% of his Eligible
               Compensation for the Plan Year shall receive Matching
               Contribution Credits equal to the sum of (A) 100% of the first 4%
               of the Eligible Compensation he defers and (B) 50% of the next 2%
               of the Eligible Compensation he defers.

          If a Participant is an Inactive Participant at the time an Eligible
          Short-Term Incentive becomes payable (or would otherwise become
          payable in the absence of a deferral election under the Plan), the
          Participant shall receive the Matching Contribution Credits with
          respect to such Eligible Short-Term Incentive (1) only if the Plan
          Administrator determines that the Participant shall receive such
          Matching Contribution Credits and (2) subject to any terms and
          conditions that the Plan Administrator establishes.

     (b)  OTHER ELIGIBLE COMPENSATION

          An Eligible Employee who elects to defer all or part of his Other
          Eligible Compensation for the Plan Year shall receive Matching
          Contribution Credits only to the extent the Plan Administrator
          determines that the Participant shall receive such Matching
          Contribution Credits.

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Verizon Income Deferral Plan                                             Page 13
<PAGE>

5.02 SECTION 415 CREDITS

     To the extent provided in the succeeding paragraph of this Section 5.02, if
     the present value of a Participant's accrued benefit under the Pension
     Plan, upon commencement of benefits thereunder, exceeds the benefit that
     can be paid to the Participant from the Pension Plan under section 415 of
     the Code, the excess amount shall be credited to the Participant's
     Retirement Contribution Sub-Account as of the Participant's benefit
     commencement date, except that such credit shall be reduced by the amount,
     if any, previously credited to such Participant account under the NYNEX
     Senior Management Nonqualified Defined Contribution Pension Plan (the
     "NYNEX Defined Contribution Plan") because his benefit under a qualified
     retirement plan exceeded the benefit permitted to be paid from that plan
     under section 415 of the Code. Any credit pursuant to this Section 5.02
     shall be in full satisfaction of any right to similar credits or benefits
     that the Participant may have under any other employee benefit plan of a
     Verizon Company.

5.03 RETIREMENT CONTRIBUTION CREDITS

     Each Active Participant who is a Senior Manager shall have Retirement
     Contribution Credits added to his Retirement Contribution Sub-Account on
     the following basis at a time and in a manner that the Plan Administrator
     approves:

     (a)  ELIGIBLE BASE SALARY

          Following commencement of participation in the Plan as a Senior
          Manager, Retirement Contribution Credits equal to 32% of the
          Participant's Eligible Base Salary shall be added to the Participant's
          Retirement Contribution Sub-Account for each of the first 240 months
          during which the Participant earns Eligible Base Salary, except that
          such 240-month period shall be reduced by the number of months (if
          any) during which the Participant previously participated in the NYNEX
          Defined Contribution Plan. After such 240-month (or shorter) period,
          Retirement Contribution Credits equal to 7% of the Participant's
          Eligible Base Salary shall be added to the Participant's Retirement
          Contribution Sub-Account for each month that the Participant is a
          Senior Manager and earns Eligible Base Salary.

          The Retirement Contribution Credits provided for in this Section
          5.03(a) shall be calculated in accordance with guidelines that the
          Plan Administrator shall establish.

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Verizon Income Deferral Plan                                             Page 14
<PAGE>

     (b)  ELIGIBLE SHORT-TERM INCENTIVE

          Following commencement of participation in the Plan as a Senior
          Manager and subject to the next paragraph of this Section 5.03(b),
          annual Retirement Contribution Credits equal to 32% of a Participant's
          Eligible Short-Term Incentive for the Plan Year shall be added to each
          Active Participant's Retirement Contribution Sub-Account for each Plan
          Year ends during the first 240 months in which the Participant earns
          Eligible Short-Term Incentive, except that such 240-month period shall
          be reduced by the number of months (if any) during which the
          Participant previously participated in the NYNEX Defined Contribution
          Plan. After such 240-month (or shorter) period, annual Retirement
          Contribution Credits equal to 7% of the Participant's Eligible
          Short-Term Incentive for the Plan Year shall be added to the
          Participant's Retirement Contribution Sub-Account. Such Retirement
          Contribution Credits shall be made on an annual basis.

          If a Participant is an Inactive Participant as a result of his
          Retirement or involuntarily termination without Cause at the time an
          Eligible Short-Term Incentive becomes payable (or would otherwise
          become payable in the absence of a deferral election under the Plan),
          the Participant shall receive the Retirement Contribution Credits
          provided for in this Section 5.03(b) with respect to such Eligible
          Short-Term Incentive only if (1) the Participant executes a release in
          a form acceptable to the Plan Administrator or (2) the Plan
          Administrator determines that the Participant shall receive such
          Retirement Contribution Credits. A Participant who is an Inactive
          Participant for any other reason shall not be eligible to receive the
          Retirement Contribution Credits unless the Plan Administrator
          determines otherwise.

          The Retirement Contribution Credits provided for in this Section
          5.03(b) shall be added to the Participant's Retirement Contribution
          Sub-Account as of the date that the associated Eligible Short-Term
          Incentive becomes payable (or would otherwise become payable in the
          absence of a deferral election under the Plan).

5.04 OTHER CREDITS

     Other credits shall be provided to Participants in accordance with
     Appendices A and B to this Plan.

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Verizon Income Deferral Plan                                             Page 15
<PAGE>

                        ARTICLE 6. ACCOUNT INVESTMENTS

6.01 GENERAL

     A Participant may allocate the balance in the Participant's Account among
     the Investment Funds available under the Plan in accordance with this
     Article 6. The Investment Funds shall consist of a set of unfunded
     book-entry investment accounts. A separate bookkeeping account shall be
     maintained for each Participant.

     Except as provided in this Article 6, (a) the investment performance of
     each Investment Fund shall mirror the investment performance of a
     corresponding investment fund under the Savings Plan; (b) each Investment
     Fund shall be subject to any restrictions imposed on the corresponding
     investment fund in the Savings Plan; (c) each Investment Fund shall be
     available as an investment choice for the balance in a Participant's
     Account; and (d) if there is a change in, addition to, or deletion of any
     of the investment funds under the Savings Plan, a corresponding change,
     addition, or deletion shall be made in the Investment Funds offered under
     this Plan.

6.02 VERIZON SHARES FUND

     (a)  THE INVESTMENT FUND

          The Plan shall maintain an Investment Fund known as the "Verizon
          Shares Fund." The investment performance of this fund shall mirror the
          investment performance of Verizon common stock.

          Any credits added to a Participant's Matching Contribution
          Sub-Account, other than credits made pursuant to Appendix A, shall
          initially be allocated to the Verizon Shares Fund, and a Participant
          may thereafter transfer all or any portion of such balance out of the
          Verizon Shares Fund and into any other available Investment Fund in
          accordance with the "Diversification Transfers" provisions in section
          14.17 of the Savings Plan or any successor to those provisions.

          If a Participant transfers any portion of his Participant's Account
          into or out of the Verizon Shares Fund, such transfer shall be
          executed using the closing price of a share of Verizon common stock on
          the composite tape of New York Stock Exchange issues on the day the
          Participant initiates the transfer (or if there was no reported sale
          of Verizon common stock on

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Verizon Income Deferral Plan                                             Page 16
<PAGE>

          such date, on the next succeeding day on which there was such a
          reported sale).

     (b)  DIVIDEND EQUIVALENTS

          Any credits in a Participant's Account allocated to the Verizon Shares
          Fund shall be increased on each date that a dividend is paid on
          Verizon common stock. The number of additional credits credited to a
          Participant's Account as a result of such increase shall be determined
          by (1) dividing the balance of a Participant's Account in the Verizon
          Shares Fund by the closing price of a share of Verizon common stock on
          the composite tape of New York Stock Exchange issues on the dividend
          declaration date (or if there was no reported sale of Verizon common
          stock on such date, on the next preceding day on which there was such
          a reported sale), and then (2) multiplying the amount resulting from
          the calculation in clause (1) by the amount of the dividend declared
          per share of Verizon common stock on the dividend declaration date.

     (c)  EFFECT OF RECAPITALIZATION

          In the event of a transaction or event described in this Section
          6.02(c), the balance in a Participant's Account in the Verizon Shares
          Fund shall be adjusted in such manner as the Plan Administrator deems
          equitable. A transaction or event is described in this Section 6.02(c)
          if and only if (1) it is a dividend or other distribution (whether in
          the form of cash, shares, other securities, or other property),
          extraordinary cash dividend, recapitalization, stock split, reverse
          stock split, reorganization, merger, consolidation, split-up,
          spin-off, combination, repurchase, or exchange of shares or other
          securities, the issuance of warrants or other rights to purchase
          shares or other securities, or other similar corporate transaction or
          event, and (2) the Plan Administrator determines that such transaction
          or event affects the shares of Verizon common stock, such that an
          adjustment pursuant to this Section 6.02(c) is appropriate to prevent
          dilution or enlargement of the benefits or potential benefits intended
          to be made available under the Plan.

6.03 MOODY'S INVESTMENT FUND

     The Plan shall maintain an Investment Fund known as the "Moody's Investment
     Fund" that shall credit interest as follows: (1) balances in this
     Investment Fund as of the end of the immediately preceding calendar quarter
     that were not withdrawn from or transferred out of the Moody's Investment
     Fund shall

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Verizon Income Deferral Plan                                             Page 17
<PAGE>

     earn interest for the entire calendar quarter; and (2) all other balances
     in this Investment Fund shall earn interest from the beginning of the
     calendar quarter until the day they are withdrawn from or transferred out
     of the Moody's Investment Fund. The rate at which interest shall be
     credited for purposes of this Section 6.03 shall be the equivalent of the
     annualized rate equal to the Moody's Rate as of the day immediately
     preceding the beginning of the applicable calendar quarter. Any or all of
     the balance of a Participant's Account allocated to the Moody's Investment
     Fund may be transferred to any other Investment Fund in accordance with
     Section 6.04(b), below.

6.04 INVESTMENT ELECTIONS

     A Participant may allocate the balance in his Participant's Account among
     the available Investment Funds in whole percentages and at a time and in a
     manner that the Plan Administrator approves, subject to the following
     rules:

     (a)  INITIAL ELECTIONS

          Each Active Participant may submit his initial investment elections at
          any time. However, if an Active Participant fails to submit an
          investment election before amounts are credited to his Participant's
          Account, the Plan Administrator shall allocate such amounts as the
          Plan Administrator deems appropriate, except that, if the individual
          first becomes a Senior Manager on or after January 1, 2002, and fails
          to submit an investment election before amounts are credited to his
          Retirement Contribution Sub-Account, such Retirement Contribution
          Credits shall initially be allocated to the Moody's Investment Fund
          described in Section 6.03 and may be transferred only as provided in
          Section 6.03.

          Investment elections may allocate balances in a Participant's Account
          to any Investment Fund, and elections shall be applied uniformly to
          the balance in each of the Participant's sub-accounts, except that
          balances in the Matching Contribution Sub-Account shall initially be
          allocated to the Verizon Shares Fund as provided in Section 6.02 and
          may be transferred only as provided in Section 6.02.

     (b)  CHANGES IN INVESTMENT ELECTIONS

          Except as otherwise provided in this Article 6, Participants shall be
          permitted to change their investment elections daily, and may be
          permitted to change their elections more frequently if the Plan
          Administrator so determines.

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Verizon Income Deferral Plan                                             Page 18
<PAGE>

          Changes in investment elections and the consequent transfers among
          Investment Funds shall be applied uniformly to the balances in each of
          the Participant's sub-accounts, except that balances in the Matching
          Contribution Sub-Account shall initially be allocated to the Verizon
          Shares Fund as provided in Section 6.02 and may be transferred only as
          provided in Section 6.02. Any change in investment elections shall be
          effected as soon as administratively practicable after the Plan
          Administrator receives the Participant's request for the change.

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Verizon Income Deferral Plan                                             Page 19
<PAGE>

                       ARTICLE 7. PAYMENTS FROM THE PLAN

7.01 PARTICIPANT ELECTIONS

     Each Participant shall be permitted to make an election regarding the
     payment of the vested balance in his Participant's Account on a form
     provided by the Plan Administrator. Any such election must comply with the
     requirements of this Article 7, must be made at a time and in a manner that
     the Plan Administrator approves, and shall be subject to Sections 8.04 and
     8.06.

     (a)  TIMING OF ELECTION

          A Participant's completed election form must be delivered to the Plan
          Administrator at least twelve months before the earlier of (1) the
          commencement date specified on the Participant's election form or (2)
          the commencement date specified by Section 7.07. Any such election
          that modifies a previously-delivered payment election shall also be
          subject to the provisions of Section 7.01(b).

          Except as provided in the next paragraph of this Section 7.01(a) or in
          Section 7.04, if an election does not comply with the provisions of
          the preceding paragraph, (1) the election shall be disregarded for the
          first twelve months following the delivery of the Participant's
          election to the Plan Administrator and payment shall be made in
          accordance with a valid payment election (made in accordance with
          Section 7.01) in effect or, if there is no such election in effect, in
          accordance with the default rules in Section 7.07) and (2) after the
          expiration of such twelve-month period, any unpaid amount to which the
          election applies shall be paid in accordance with the election (and
          the earlier valid election under which payments were being made during
          such twelve-month period shall be disregarded).

          If a Participant elects to commence payment as of his termination of
          employment with all Verizon Companies, and such termination occurs
          during the twelve-month period immediately following the date such
          election is delivered to the Plan Administrator, payment shall be made
          as of the last day of the month in which the Participant terminates
          employment with all Verizon Companies only (1) if the Participant
          elects, before January 1, 2002, to commence payments as of such date
          and such termination occurs during the twelve-month period immediately
          following the delivery of such election to the Plan Administrator or
          (2) if the Participant elects, within thirty days after becoming an
          Active Participant, to commence payments as of the last day of the
          month in which the

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Verizon Income Deferral Plan                                             Page 20
<PAGE>

          Participant terminates employment with all Verizon Companies and such
          termination occurs during the twelve-month period immediately
          following the delivery of such election to the Plan Administrator.

     (b)  MODIFYING AN ELECTION

          Once each Plan Year, a Participant may modify a previously delivered
          payment election with respect to the Participant's Employee Balance
          and modify a previously delivered payment election with respect to the
          Participant's Company Balance, provided that a modification will be
          effective only with respect to payments that are scheduled to be made
          more than twelve months from the date the modification is delivered to
          the Plan Administrator. Such modifying elections may be made on
          separate occasions, on a form provided by the Plan Administrator,
          provided that each such election shall otherwise be subject to the
          rules set forth in this Section 7.01 (including the requirement of
          Section 7.01(a) that the date for payment commencement be at least
          twelve months after the date the election is delivered to the Plan
          Administrator).

          If a modification delivered to the Plan Administrator is invalid for
          any reason with respect to any or all payments subject to the
          modification, such payments shall be made in accordance with the
          election in effect at the time the modification was delivered to the
          Plan Administrator or, if no such election was in effect, in
          accordance with the default rules in Section 7.07.

     (c)  DIVISION OF ACCOUNT

          A Participant may divide his Employee Balance and his Company Balance
          into no more than two parts each (with each such part consisting of a
          whole percentage of the total Employee Balance or Company Balance) and
          may elect a different method of payment and payment commencement date
          for each part, except as provided in Section 8.06(d).

     (d)  DISABILITY OR DEATH OF PARTICIPANT

          If a Participant becomes Disabled or dies, the disability or death
          benefit payment rules, as applicable, in Sections 7.04 and 7.05 shall
          apply.

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Verizon Income Deferral Plan                                             Page 21
<PAGE>

     (e)  PAYMENT OF SMALL BENEFITS

          If, on termination of employment, the vested balance in a
          Participant's Account is $100,000 or less, the rules applicable to
          small benefits in Section 7.08 shall apply.

7.02 METHOD OF PAYMENT

     Payments to a Participant shall be made solely in cash and pursuant to the
     method provided for in this Section 7.02 that the Participant elects in
     accordance with Section 7.01, pursuant to the default rules in Section 7.07
     if no valid election is in effect, or pursuant to the small benefit rules
     in Section 7.08 if the vested balance in the Participant's Account is
     $100,000 or less at his termination of employment. Subject to Sections 8.04
     and 8.06, the Participant may elect to receive payment of all or a portion
     of the vested balance in his Participant's Account as follows:

     (a)  SINGLE SUM

          A Participant may elect to receive a single-sum payment of all or a
          portion of the vested balance in the Participant's Account. At the
          time such payment is due, the amount of the payment shall be
          calculated by the Plan Administrator and shall be paid as soon as
          administratively practicable following such calculation.

     (b)  INSTALLMENT PAYMENTS

          A Participant may elect to receive installment payments of all or a
          portion of the vested balance in the Participant's Account, which
          shall be paid monthly, quarterly, semi-annually, or annually, over a
          period of two to thirty years as elected by the Participant, except as
          provided in Section 7.03(a). Each installment shall be equal to (1)
          the unpaid portion of the vested balance in the Participant's Account
          covered by the election (as adjusted to reflect any earnings or losses
          thereon and any earlier payments), divided by (2) the number of
          remaining installments. At the time each installment is due, the Plan
          Administrator shall calculate the amount of the installment and shall
          pay the installment as soon as administratively practicable following
          such calculation.

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Verizon Income Deferral Plan                                             Page 22
<PAGE>

     (c)  APPRECIATION ONLY

          A Participant may elect to receive payments of appreciation with
          respect to the Employee Balance or Company Balance covered by an
          election, provided such Employee Balance or Company Balance is at
          least $100,000 at the time the election is delivered to the Plan
          Administrator. Under this option, payments shall be made to the
          Participant each month over a period of two to thirty years as elected
          by the Participant, except as provided in Section 7.03(a). At the end
          of the payment period, the then-unpaid balance covered by this
          election (adjusted to reflect such prior monthly payments) shall be
          paid in a lump sum as soon as administratively practicable. Each
          monthly payment shall be equal to the greater of (1) a fixed amount
          equal to two-thirds of 1% of the vested balance covered by the
          election before the first payment, or (2) the amount by which the
          current vested balance covered by the election exceeds such balance
          immediately after the first payment. Before each monthly payment is
          due, the Plan Administrator shall calculate the amount of the payment
          and shall pay the installment as soon as administratively practicable
          following such calculation.

7.03 PAYMENT COMMENCEMENT

     Subject to Sections 7.08, 8.04, and 8.06, the payments to a Participant
     with respect to the vested balance in the Participant's Account shall
     commence either on a specific date in accordance with Section 7.03(a) or on
     termination of employment in accordance with Section 7.03(b), as selected
     by the Participant under Section 7.01, or otherwise shall commence pursuant
     to the default rules in Section 7.07.

     If the Participant begins to receive payments under this Section 7.03 and
     becomes Disabled or dies before the vested balance of his Participant's
     Account is paid in accordance with this Section 7.03, the then-remaining
     vested balance in his Participant's Account shall be paid in accordance
     with Sections 7.04 (Disability) or 7.05 (Death) below.

     (a)  SPECIFIC DATE

          A Participant may select a specific date for the commencement of
          payment of the vested portion of the Participant's Account, subject to
          the following rules:

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Verizon Income Deferral Plan                                             Page 23
<PAGE>

          (1)  SPECIFIC DATE BEFORE TERMINATION OF EMPLOYMENT

               With respect to the Participant's Employee Balance, a Participant
               may select a specific date that precedes the Participant's
               termination of employment with all Verizon Companies.

               With respect to the Participant's Company Balance, a
               Participant's election of a specific date that precedes the
               Participant's termination of employment with all Verizon
               Companies shall be valid only if there has been a Change in
               Control before payments commence. If there has not been a Change
               in Control, the election with respect to the Company Balance
               shall be invalid, and such Company Balance shall be paid in
               accordance with the default rules in Section 7.07.

               Any election to have payments commence before a Participant's
               termination of employment with all Verizon Companies shall apply
               only with respect to the vested balance of the Participant's
               Account as of the date such payments commence. Subject to Section
               7.01(c), any amounts attributable to subsequent deferrals or
               credits shall be paid in accordance with either the terms of a
               separate election applicable to such deferrals or credits or the
               default rules in Section 7.07.

          (2)  SPECIFIC DATE AFTER TERMINATION OF EMPLOYMENT

               With respect to the vested balance in the Participant's Account,
               a Participant may select a specific date that is after the
               Participant's termination of employment with all Verizon
               Companies.

               A lump sum shall not be paid to or on behalf of a Participant
               more than thirty years from the date the Participant terminates
               employment with all Verizon Companies. For any part of a
               Participant's Account that is paid in a lump sum, the Participant
               shall be deemed to have elected to receive the lump sum on the
               earlier of (a) the date elected by the Participant or (b) the
               date that is thirty years from the date the Participant
               terminates employment with all Verizon Companies.

               No installment or appreciation-only payments shall be made to or
               on behalf of a Participant more than thirty years from the date
               the Participant terminates employment with all Verizon Companies.

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Verizon Income Deferral Plan                                             Page 24
<PAGE>

               For any part of a Participant's Account that is paid in
               installment or appreciation-only payments, the Participant shall
               be deemed to have elected the number of installments or
               appreciation-only payments equal to the lesser of (a) the number
               of installments or appreciation-only payments elected by the
               Participant or (b) the maximum number of installments or
               appreciation-only payments between the date payments commence and
               the date that is thirty years from the date the Participant
               terminates employment with all Verizon Companies.

     (b)  TERMINATION OF EMPLOYMENT

          A Participant may elect to commence receiving payments upon his
          termination of employment with all Verizon Companies.

          The Plan Administrator shall calculate the amount of such payment or
          payments and pay the Participant as soon as administratively feasible
          after the Participant's termination of employment.

7.04 SPECIAL RULES IN THE EVENT OF DISABILITY

     A Participant who incurs a Disability after he terminates employment with
     all Verizon Companies shall be paid the vested balance of his Participant's
     Account in accordance with a valid payment election (made in accordance
     with Section 7.01) in effect at the onset of the Disability or, if there is
     no such election then in effect, in accordance with the default rules in
     Section 7.07.

     A Participant who incurs a Disability before he terminates employment with
     all Verizon Companies shall be paid the vested balance of his Participant's
     Account (a) if the vested balance in his Participant's Account is $100,000
     or less at the onset of the Disability, in accordance with the small
     benefit payment rules in Section 7.08 or (b) if the vested balance in his
     Participant's Account exceeds $100,000 at the onset of the Disability, in
     accordance with a valid payment election (made in accordance with Section
     7.01) in effect at the onset of the Disability or, if there is no valid
     election in effect at the onset of the Disability, in accordance with the
     default rules in Section 7.07; provided that, if the vested balance in the
     Participant's Account exceeds $100,000 at the onset of a Disability, the
     Participant may make a new election regarding the form and timing of
     payments without regard to the 12-month requirements in Section 7.01(a)
     or(b), subject to the approval of the Plan Administrator.

     If payments are to be made in installments, the Plan Administrator shall
     calculate and pay the first installment as soon as administratively
     practicable following the date of the Participant's Disability, provided
     that no payment shall be made until

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Verizon Income Deferral Plan                                             Page 25
<PAGE>

     the first business day of the first calendar quarter that begins after the
     onset of the Disability.

     If the Participant begins to receive payments under this Section 7.04 and
     dies before the vested balance of his Participant's Account is paid in
     accordance with this Section 7.04, the then-remaining vested balance in his
     Participant's Account in the Plan shall be paid in accordance with Section
     7.05 below.

7.05 DEATH BENEFITS

     If a Participant dies with a vested balance in his Participant's Account
     that exceeds $100,000, the payment election in effect on the date of death
     shall be canceled (except as provided in clause (1) of the next paragraph)
     and the rules of this Section 7.05 shall apply. If a Participant dies with
     a vested balance in his Participant's Account equal to $100,000 or less,
     the payment election in effect on the date of death shall be canceled and
     payment shall be made in accordance with the small payment rules in Section
     7.08.

     Each Participant shall be entitled to make a payment election that provides
     for the then-remaining vested balance in his Participant's Account at the
     time of his death to be paid to the Participant's Beneficiary or
     Beneficiaries either (1) in accordance with a valid payment election in
     effect at the time of the Participant's death, (2) in two to ten annual
     installments, or (3) in a single sum as soon as administratively
     practicable after the Participant's death. Any such election must be
     delivered to the Plan Administrator before the Participant's death on a
     form provided by the Plan Administrator. A Participant may change any such
     election at any time before his death, but a Beneficiary shall not be
     permitted to change such election.

     Any installment paid to a particular Beneficiary shall be equal to (1) the
     unpaid portion of the Participant's account balance to which the
     Beneficiary is entitled (as adjusted to reflect any earnings or losses
     thereon and any earlier payments), divided by (2) the number of remaining
     installments. The Plan Administrator shall calculate and pay the first
     installment as soon as administratively practicable following the date of
     the Participant's death.

     With respect to any portion of the Participant's Account payable to the
     Beneficiary of a deceased Participant, such Beneficiary shall be permitted
     to change investment elections in accordance with Section 6.04(b) and to
     take an early payment in accordance with Section 7.06. Any such changes in
     investment elections or early payments shall be made on the same terms and
     subject to the same conditions as would be imposed if the Beneficiary were
     the Participant.

     No payment under this Section 7.05 may be made more than thirty years after
     the Participant's termination of employment with all Verizon Companies. A
     Participant whose death benefit election would cause a payment under this

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     Section 7.05 to be scheduled to be made more than thirty years after the
     Participant's termination of employment with all Verizon Companies shall be
     deemed to have made a death benefit election that permits all payments to
     be made within thirty years of the Participant's termination of employment
     by applying the applicable provisions of Section 7.03(a)(2).

     If a Participant dies without having made a death benefit election, the
     entire vested balance of his Participant's Account shall be paid in a
     single sum to the Participant's beneficiaries or estate as soon as
     administratively practicable following the date of death.

7.06 EARLY PAYMENTS

     Before the commencement of any payments under Sections 7.01 through 7.05, a
     Participant may withdraw all or any portion of the vested balance of the
     Participant's Account, subject to the following rules:

     (a)  HARDSHIP

          At the request of a Participant, the Plan Administrator may permit the
          payment of all or part of the vested balance in the Participant's
          Personal Deferral Sub-Account if the Plan Administrator determines
          that the Participant has incurred unusual, extraordinary expenses or
          hardship caused by events beyond the Participant's control, such as
          accident or illness. The amount that may be withdrawn shall be limited
          to the amount reasonably necessary to relieve the hardship or
          financial emergency upon which the request is based. The Plan
          Administrator may require a Participant who requests a payment under
          this Section 7.06(a) to submit such evidence as the Plan Administrator
          deems necessary or appropriate to substantiate the circumstances upon
          which the request is based.

     (b)  OTHER

          (1)  PERSONAL DEFERRAL SUB-ACCOUNT

               A Participant may at any time elect that all or a designated
               portion of the vested balance in his Personal Deferral
               Sub-Account shall be paid to him 30 days following the filing of
               such an election; provided that the Plan Administrator may
               approve or disapprove such election; and provided further that,
               if a Participant receives a payment pursuant to this Section
               7.06(b)(1), an amount equal to 6% of the amount paid to the
               Participant shall be permanently forfeited from the vested
               balance in the Participant's Personal

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<PAGE>

               Deferral Sub-Account and shall not be paid to, or in respect of,
               the Participant at any time.

               A Participant's request for a payment from his Personal Deferral
               Sub-Account pursuant to the preceding paragraph of this Section
               7.06(b)(1) shall be denied to the extent a payment pursuant to
               such request would cause the vested balance in the Participant's
               Personal Deferral Sub-Account to be less than 6% of the amount
               paid to the Participant.

          (2)  MATCHING CONTRIBUTION SUB-ACCOUNT OR RETIREMENT CONTRIBUTION
               SUB-ACCOUNT

               At any time following a Change in Control of Verizon, a
               Participant may elect that all or a designated portion of the
               vested balance in his Matching Contribution Sub-Account or,
               subject to the provisions of Sections 8.04 and 8.06, in his
               Retirement Contribution Sub-Account shall be paid to him 30 days
               following the filing of such an election; provided that the Plan
               Administrator may approve or disapprove such election; and
               provided further that, if a Participant receives a payment
               pursuant to this Section 7.06(b)(2), an amount equal to 6% of the
               amount paid to the Participant shall be permanently forfeited
               from the vested balance in the Participant's sub-account from
               which the payment is made and shall not be paid to, or in respect
               of, the Participant at any time.

               An Inactive Participant who has terminated employment with all
               Verizon Companies may elect that all or a designated portion of
               the vested balance in his Matching Contribution Sub-Account or,
               subject to the provisions of Sections 8.04 and 8.06, in his
               Retirement Contribution Sub-Account, shall be paid to him 30 days
               following the filing of such an election; provided that the Plan
               Administrator may approve or disapprove such election; and
               provided further that, if a Participant receives a payment
               pursuant to this Section 7.06(b)(2), an amount equal to 6% of the
               amount paid to the Participant shall be permanently forfeited
               from the vested balance in the Participant's sub-account from
               which the payment is made and shall not be paid to, or in respect
               of, the Participant at any time.

               A Participant's request for a payment from his Matching
               Contribution Sub-Account or Retirement Contribution Sub-Account
               pursuant to the preceding paragraphs of this Section 7.06(b)(2)

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<PAGE>

               shall be denied to the extent a payment pursuant to such request
               would cause the vested balance in such sub-account to be less
               than 6% of the amount paid to the Participant.

7.07 DEFAULT FOR FORM AND TIMING OF PAYMENTS

     If, with respect to all or a portion of a Participant's Account, a
     Participant does not make a payment election, or if his payment election is
     determined to be invalid and is not subject to a prior valid election, the
     entire vested portion of such Participant's Account that is not subject to
     a valid payment election shall be paid in a single sum during the 13th
     month following the later of (a) the last day of the month in which the
     Participant's 60th birthday occurs or (b) the last day of the month in
     which the Participant terminates employment with all Verizon Companies,
     provided that any payment of the balance in the Participant's Retirement
     Contribution Sub-Account shall be subject to the provisions of Sections
     8.04.

7.08 PAYMENT OF SMALL BENEFITS

     If the vested balance in a Participant's Account does not exceed $100,000
     at the time of the Participant's termination of employment with all Verizon
     Companies (including a termination that results from Disability or death),
     any existing payment election with respect to such Participant's Account
     shall be canceled and such Participant's Account shall be paid in the form
     of a single sum at the time of the termination of employment (subject to
     Sections 8.04, and 8.06).

7.09 PRIOR PLAN PAYMENT RULES

     With respect to the balance in a Participant's Account, the payment rules
     of this Article 7 and any payment elections made hereunder shall supersede
     the payment rules and any elections made under any other plan, except that,
     if a Participant elected under any such plan, before the fourth quarter of
     the 2001 Plan Year, to receive an in-service payment from such plan in 2002
     with respect to an account balance or accrued benefit that was transferred
     to the Plan, such payment election shall be honored for 2002 but not for
     subsequent years.

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<PAGE>

     ARTICLE 8. VESTING, FORFEITURE, NON-COMPETITION, AND NON-SOLICITATION

8.01 PERSONAL DEFERRAL SUB-ACCOUNT

     Except as otherwise provided in an agreement between the Participant and a
     Verizon Company regarding the crediting of Other Eligible Compensation to
     the Participant's Personal Deferral Sub-Account and except as provided in
     Section 7.06(b) with regard to early payments, the Participant shall at all
     times be fully vested in the balance in his Personal Deferral Sub-Account,
     and such balance shall under no circumstances be subject to forfeiture.

8.02 MATCHING CONTRIBUTION SUB-ACCOUNT

     Each Participant shall be fully vested in the balance in his Matching
     Contribution Sub-Account upon the earliest to occur of the following:

     (a)  the Participant's account in the Savings Plan is fully vested;

     (b)  the Participant's employment with all Verizon Companies is
          involuntarily terminated other than for Cause, provided the
          Participant executes a release in a form acceptable to the Plan
          Administrator or the Plan Administrator otherwise determines that all
          or part of the Matching Contribution Sub-Account should be vested;

     (c)  the Participant becomes Disabled before his termination of employment
          with all Verizon Companies;

     (d)  the Participant dies before his termination of employment with all
          Verizon Companies; or

     (e)  there is a Change in Control (as defined in Section 8.07).

8.03 RETIREMENT CONTRIBUTION SUB-ACCOUNT

     (a)  PRIOR TO JULY 1, 2002

          Except as otherwise provided in an agreement between the Participant
          and a Verizon Company regarding the crediting of Other Eligible
          Compensation to the Participant's Retirement Contribution Sub-Account,
          and subject to Sections 8.04 and 8.06 below, each Participant shall at
          all times be fully vested in each Retirement Contribution Credit
          credited on or after January 1, 2002, and before July 1, 2002 (and any
          related earnings).

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<PAGE>

     (b)  BEGINNING JULY 1, 2002

          Except as otherwise provided in an agreement between the Participant
          and a Verizon Company regarding the crediting of Other Eligible
          Compensation to the Participant's Retirement Contribution Sub-Account,
          and subject to Section 8.04 and 8.06 below, each Participant shall be
          fully vested in each Retirement Contribution Credit credited after
          June 30, 2002 (and any related earnings), upon the earliest to occur
          of the following:

          (1)  the Participant becomes eligible to Retire;

          (2)  the Participant completes three years of Net Credited Service (as
               that term is defined in the Pension Plan) with all Verizon
               Companies after receiving the Retirement Contribution Credit;

          (3)  the Participant's involuntary termination of employment with all
               Verizon Companies other than for Cause, provided the Participant
               executes a release in a form acceptable to the Plan Administrator
               or the Plan Administrator otherwise determines that all or part
               of the Retirement Contribution Sub-Account should be vested;

          (4)  the Participant becomes Disabled before his termination of
               employment with all Verizon Companies;

          (5)  the Participant dies before his termination of employment with
               all Verizon Companies; or

          (6)  there is a Change in Control (as defined in Section 8.07).

8.04 FORFEITURE

     (a)  UNVESTED ACCOUNT BALANCE

          A Participant shall forfeit the unvested portion, if any, of his
          Participant's Account on his termination of employment with all
          Verizon Companies.

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<PAGE>

     (b)  PORTION OF RETIREMENT CONTRIBUTION SUB-ACCOUNT

          Before, but not after, a Change in Control, if the Plan Administrator
          determines that one or more of the events set forth in Section
          8.04(b)(1) has occurred, the Plan Administrator may cause a forfeiture
          with respect to all or any portion of the Participant's Retirement
          Contribution Sub-Account set forth in Section 8.04(b)(2).

          (1)  CAUSES OF FORFEITURE

               (A)  The Participant has engaged in "Competitive Activities" as
                    described in Section 8.05,

               (B)  The Participant has engaged in serious misconduct contrary
                    to written policies and harmful to Verizon or its affiliated
                    companies or their reputation, or

               (C)  The Participant has been terminated for Cause.

          (2)  AMOUNTS SUBJECT TO FORFEITURE

               (A)  All Retirement Contribution Credits added to the
                    Participant's Retirement Contribution Sub-Account on or
                    after January 1, 2002, other than the GTE Supplemental
                    Executive Retirement Plan conversion credit (the "Conversion
                    Credit") and

               (B)  Any interest or other earnings or gains on or after January
                    1, 2002, with respect to any Retirement Contribution Credits
                    in the Participant's Retirement Contribution Sub-Account
                    (including any interest or other earnings or gains
                    attributable to the Conversion Credit or any interest or
                    other earnings or gains attributable to any other credit
                    regardless of when the credit was added to the Participant's
                    Retirement Contribution Sub-Account).

     (c)  ENTIRE ACCOUNT BALANCE

          Each Participant or beneficiary entitled to receive payment under the
          Plan shall keep the Plan Administrator advised of his current address.
          If the Plan Administrator is unable for a period of 36 months to
          locate a

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<PAGE>

          Participant or beneficiary to whom a payment(s) is (are) due under the
          Plan, commencing with the first day of the month as of which the first
          such payment is due, the total amount payable to such Participant or
          beneficiary shall be forfeited. Should such a Participant or
          beneficiary contact the Plan Administrator requesting payment
          thereafter, the Plan Administrator shall, upon satisfaction of its
          requests for any corroborating documentation, restore and pay the
          forfeited payment in a lump sum, the value of which shall not be
          adjusted to reflect any interest or other earnings or gains for the
          period of forfeiture.

8.05 COMPETITIVE ACTIVITIES

     (a)  ENGAGING IN COMPETITIVE ACTIVITIES

          The Plan Administrator may determine that a Participant has engaged in
          "Competitive Activities" if, during the period of the Participant's
          employment with any Verizon Company, through the first anniversary of
          the Participant's termination of employment with all Verizon Companies
          for any reason, the Participant, without the prior written consent of
          the Plan Administrator, (1) personally engages in "Competitive
          Activities" (as hereinafter defined) or (2) works for, owns, manages,
          operates, controls, or participates in the ownership, management,
          operation or control of, or provides consulting or advisory services
          to, any individual, partnership, firm, corporation, or institution
          engaged in Competitive Activities, provided that the Participant's
          purchase or holding, for investment purposes, of securities of a
          publicly-traded company shall not constitute "ownership" or
          "participation in ownership" for purposes of this paragraph so long as
          the Participant's equity interest in any such company is less than a
          controlling interest.

     (b)  DEFINITION OF COMPETITIVE ACTIVITIES

          "Competitive Activities" means business activities relating to
          products or services of the same or similar type as the products or
          services that (1) are sold (or, pursuant to an existing business plan,
          shall be sold) to paying customers of one or more Verizon Companies,
          and (2) for which the Participant had responsibility to plan, develop,
          manage, market, or oversee within the prior 24 months, or, in the case
          of an Inactive Participant, within the 24 months preceding his
          termination of employment with all Verizon Companies.

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<PAGE>

     (c)  DISCRETION OF PLAN ADMINISTRATOR

          If the Plan Administrator determines that a Participant has engaged in
          Competitive Activities, the Plan Administrator in its sole discretion
          may determine what remedies to invoke.

8.06 NON-COMPETITION/NON-SOLICITATION AGREEMENT UPON OR AFTER TERMINATION OF
     EMPLOYMENT

     (a)  GENERAL

          Except as provided in Section 8.06(c), any payment that meets the
          conditions of Section 8.06(b) shall be made only if the Participant
          executes an agreement provided by the Plan Administrator that (1)
          prohibits the Participant from engaging in Competitive Activities
          within one year following termination of employment with all Verizon
          Companies, (2) gives Verizon the right to obtain injunctive relief if
          the Participant violates such agreement, and (3) includes such other
          terms and conditions as the Plan Administrator may determine.

     (b)  APPLICABILITY

          This Section 8.06 shall apply if (1) a Participant has elected to
          receive payments from his Retirement Contribution Sub-Account to
          commence upon termination of employment with all Verizon Companies or
          within one year following such termination or (2) the Participant has
          directed the Plan Administrator to make payments from such Retirement
          Contribution Sub-Account pursuant to Section 7.06.

     (c)  EXCEPTION FOR CHANGE IN CONTROL

          Following a Change in Control, a Non-Compete Agreement shall not be
          required as a condition to making a payment to a Participant, and any
          such Non-Compete Agreement that a Participant executed before the
          Change in Control shall become null and void as of the effective date
          of the Change in Control.

     (d)  CONSEQUENCES OF FAILING TO EXECUTE AGREEMENT

          If the Participant does not execute the Non-Compete Agreement required
          by this Section 8.06, no payments may be made from the Participant's
          Retirement Contribution Sub-Account for one year following the

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          Participant's termination of employment with all Verizon Companies.
          During such one-year period, the provisions of the Plan (including
          Section 8.04) shall apply to the Participant. At the conclusion of
          such one-year period, the vested balance in the Participant's
          Retirement Contribution Sub-Account shall be paid in accordance with
          the Participant's payment election.

          If payments would have commenced within the one-year period
          immediately following the Participant's termination of employment but
          were delayed under this Section 8.06, no retroactive payments shall be
          made and the Participant shall be deemed to have elected to commence
          payments from his Retirement Contribution Sub-Account on the date that
          is one year following the date of his termination of employment with
          all Verizon Companies, notwithstanding Section 7.01. The method of
          payment shall remain unchanged, except as required by Section
          7.03(a)(2).

8.07 CHANGE IN CONTROL

     (a)  GENERAL RULE

          For purposes of the Plan, and except as provided in Section 8.07(b), a
          "Change in Control" shall occur if:

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          (1)  any Person, through a transaction with a Person, becomes a
               beneficial owner (as determined under Rule 13d-3 under the
               Securities Exchange Act of 1934, as amended from time to time),
               or has the right to acquire beneficial ownership within sixty
               days, through tender offer or otherwise, of shares of one or more
               classes of stock of the Company representing 20% or more of the
               total voting power of the Company's then outstanding voting
               stock;

          (2)  the Company and any Person consummate a merger, consolidation,
               reorganization, or other business combination; or

          (3)  the Board adopts resolutions authorizing the liquidation or
               dissolution, or sale to any Person of all or substantially all of
               the assets, of the Company.

     (b)  EXCEPTIONS TO GENERAL RULE

          Notwithstanding the provisions of Section 8.07(a), a Change in Control
          shall not occur if:

          (1)  the Company's voting stock outstanding immediately before the
               consummation of the transaction will represent no less than 45%
               of the combined voting power entitled to vote for the election of
               directors of the surviving parent corporation immediately
               following the consummation of the transaction;

          (2)  members of the Incumbent Board will constitute at least one-half
               of the board of directors of the surviving parent corporation;

          (3)  the Chief Executive Officer or co-Chief Executive Officers of the
               Company will be the chief executive officer or co-chief executive
               officers of the surviving parent corporation; and

          (4)  the headquarters of the surviving parent corporation will be
               located in New York, New York.

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<PAGE>

                    ARTICLE 9. NATURE OF PLAN AND ACCOUNTS

9.01 UNFUNDED PLAN

     No Participating Company shall be required to fund any obligations under
     the Plan. Any assets that may be accumulated by a Participating Company to
     meet its obligations under the Plan shall for all purposes be part of the
     general assets of such Participating Company. To the extent that any
     Participant or beneficiary acquires a right to receive payments under the
     Plan for which any Participating Company is liable, such rights shall be no
     greater than the rights of any unsecured general creditor of the applicable
     Participating Company.

9.02 HYPOTHETICAL ACCOUNTS

     Each account and investment established under the Plan shall be
     hypothetical in nature and shall be maintained for bookkeeping purposes
     only. The accounts established under the Plan shall hold no actual funds or
     assets. Any liability of the Company to any Participant, former
     Participant, or beneficiary with respect to a right to payment shall be
     based solely upon contractual obligations created by the Plan. Neither the
     Company, the Board, nor any other Person shall be deemed to be a trustee of
     any amounts to be paid under the Plan. Nothing contained in the Plan, and
     no action taken pursuant to its provisions, shall create or be construed to
     create a trust of any kind, or a fiduciary relationship, between or among
     the Company, a Participant, or any other Person.

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<PAGE>

                           ARTICLE 10. MISCELLANEOUS

10.01 PLAN ADMINISTRATOR

     The Executive Vice President - Human Resources of Verizon (or, if that
     position is vacant, the most senior officer in the Human Resources
     organization of Verizon) shall have the authority and responsibility to act
     as "Plan Administrator," as that term is used in the Plan, except as
     provided in Section 2.01(cc) regarding Section 16 Persons. The Plan
     Administrator's authority and responsibility shall include, without
     limitation, the discretionary authority and responsibility to develop
     administrative guidelines, to distribute summary descriptions of the Plan,
     to notify Participants of their rights and obligations under the Plan, and
     to calculate balances of Participant's Accounts and the payments from the
     Plan. The Plan Administrator, with the advice of counsel, may delegate to
     one or more persons the authority to decide any dispute raised in any
     written claim by any Participant or beneficiary. Any appeal from such a
     claim shall be decided by the Plan Administrator, and the decision of the
     Plan Administrator shall be final and shall be binding on both the Plan and
     the Participant or beneficiary.

10.02 ALLOCATION OF ADMINISTRATIVE AND OTHER EXPENSES

     Participants shall not be charged for their participation in the Plan or
     their withdrawals from the Plan, except that (a) Participants who receive
     an early payment shall be subject to the 6% penalty provided for in Section
     7.06 and (b) the reasonable expenses of administering the Plan (including
     reasonable fees in connection with the set-up or maintenance of Participant
     accounts) may be offset against the earnings of the Investment Funds under
     the Plan. The Plan Administrator shall have authority to establish and
     maintain cost allocation guidelines that shall govern the allocation of
     accrued expenses under the Plan for financial accounting purposes, and the
     determination of any amounts by which Participating Companies are obligated
     to reimburse each other for disbursements and other expenditures under the
     Plan. Any such guidelines shall allocate to each Participating Company its
     reasonable and appropriate share of the direct benefit cost of the Plan,
     plus any associated administrative cost to the extent such cost is not
     offset against Investment Fund earnings.

10.03 AMENDMENT AND TERMINATION OF PLAN

     The Committee may at any time amend or terminate the Plan; provided that no
     amendment or termination of the Plan may adversely affect the present
     dollar value of the vested account balance of any Participant (or
     Beneficiary, in the case of a deceased Participant) without his consent,
     except to the extent required by law; and provided further that, for a
     period of five years following a

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<PAGE>

     Change in Control, except to the extent required by law (a) the Plan shall
     not be terminated and (b) no amendment may adversely affect any right under
     the Plan of a Participant (or Beneficiary, in the case of a deceased
     Participant) without his consent, except that an amendment may adversely
     affect the right to future Matching Contribution Credits pursuant to
     Section 5.01. In addition to this general rule protecting the prior rights
     of Participants, the following specific rules shall apply in the case of
     certain Plan amendments or the termination of the Plan:

     (a)  ADMINISTRATIVE AMENDMENTS

          The Plan Administrator, with advice of counsel, may develop additional
          terms and conditions for the administration of the Plan, and may
          modify the administrative terms and conditions of the Plan from time
          to time.

     (b)  SHORT-SWING PROFITS

          The Plan Administrator shall have the authority (1) to adopt
          amendments to the Plan that the Plan Administrator determines, with
          the advice of counsel, are necessary or appropriate to ensure that
          transactions under the Plan are exempt, to the maximum extent
          practicable, from the short-swing trading provisions of Section 16 and
          (2) to refuse any investment redirection request by a Participant who
          is subject to the reporting obligations of Section 16 if the Plan
          Administrator determines, with the advice of counsel, that fulfilling
          such investment redirection request would cause the Participant to
          engage in matching purchase and sale transactions that give rise to a
          short-swing profit that the Participant would have a legal obligation
          to disgorge to Verizon. Under no circumstances shall the Plan
          Administrator or any of all Verizon Companies be responsible for any
          liability that may be incurred by a Participant as a result of a
          transaction that gives rise to such a short-swing profit.

     (c)  PLAN TERMINATION

          If the Plan is terminated, (1) any existing deferral elections under
          Article 4 shall be disregarded with respect to compensation earned
          after the termination date, and (2) Participants shall no longer be
          entitled to the credits provided for in Article 5 with respect to
          compensation earned after the termination date. However, the remaining
          provisions of the Plan shall remain in effect until such time as the
          entire vested balance in each Participant's Account has been paid to
          the Participant and/or the Participant's estate or beneficiaries in
          accordance with Article 7.

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<PAGE>

10.04 DETERMINATION AND WITHHOLDING OF TAXES

     The Plan Administrator and each Verizon Company shall have full authority,
     without the consent of a Participant, (a) to withhold from any compensation
     being deferred under the Plan, and to withhold from a Participant's other
     compensation from any and all sources, any taxes that it reasonably
     determines to be applicable to deferred amounts including, without
     limitation, any FICA taxes and any income taxes occasioned by the
     withholding of FICA taxes, (b) to withhold any FICA taxes that it
     reasonably determines to be due with respect to credits made to a
     Participant's Matching Contribution Sub-Account or Retirement Contribution
     Sub-Account from the Participant's other compensation from any and all
     sources, and (c) satisfy the responsibility of any Verizon Company to
     withhold any taxes by withholding such taxes from any payments under the
     Plan to the Participant or his beneficiaries or estate or, if necessary, by
     directing a payment from the Plan to satisfy such withholding
     responsibility.

10.05 NO ASSIGNMENT OR ALIENATION

     The rights of the Participant to the balance in his Personal Deferral
     Sub-Account, Matching Contribution Sub-Account, and Retirement Contribution
     Sub-Account shall not be assignable or subject to alienation, except that
     the Plan may recognize and comply with domestic relations orders subject to
     such rules and procedures as the Plan Administrator may establish.

10.06 SEVERABILITY

     If any provision of the Plan shall be held unlawful or otherwise invalid or
     unenforceable in whole or in part, the unlawfulness, invalidity, or
     unenforceability shall not affect any other provision of the Plan or part
     thereof, each of which shall remain in full force and effect.

10.07 CERTAIN RIGHTS RESERVED.

     Nothing in the Plan shall confer upon any employee of the Company or other
     Person the right (a) to continue in the employment or service of the
     Company or affect any right that the Company may have to terminate the
     employment or service of (or to demote or to exclude from future
     participation in the Plan) any such employee or other Person at any time
     for any reason or (b) to receive an annual base salary of any particular
     amount.

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<PAGE>

10.08 TITLES AND HEADINGS NOT TO CONTROL

     The titles to Articles of the Plan and the headings of Sections and
     subsections of the Plan are placed herein for convenience of reference only
     and, as such, shall have no force or effect on the interpretation of the
     Plan.

10.09 GOVERNING LAW

     The Plan shall be construed and enforced in accordance with applicable
     federal law and, to the extent not preempted by federal law, the laws of
     the State of Delaware (without regard to the legislative or judicial
     conflict of laws rules of any state or other jurisdiction).

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<PAGE>

                         APPENDIX A. CONVERSION CREDITS

A.01 CONVERSION CREDITS

     Each individual who becomes a Participant shall receive conversion credits
     under the Plan equal to the amount, if any, of the Participant's account
     balance or the present value of the Participant's accrued benefit under any
     nonqualified deferred compensation plan or arrangement of a Verizon
     Company, if the Plan Administrator determines that the employee shall no
     longer participate in such plan or arrangement. The Plan Administrator may
     make such a determination at any time (including after a Participant's
     termination of employment) and shall award conversion credits as soon as
     practicable following the date of such a determination.

     Any conversion credits in a Participant's Account shall remain subject to
     any vesting requirements or other restrictions imposed by the plan or
     arrangement in which such conversion credits were credited before they were
     credited to the Participant's Account.

A.02 CHARACTERIZATION OF CONVERSION CREDITS

     For purposes of this Appendix A, the Plan Administrator shall determine (a)
     the present value of the accrued benefit under any applicable plan and (b)
     based on the character of the account balance or accrued benefit under the
     applicable plan, whether conversion credits under the Plan shall be
     Personal Deferral Credits, Matching Contribution Credits, or Retirement
     Contribution Credits.

A.03 CONSEQUENCES OF CONVERSION CREDITS

     A Participant who receives conversion credits pursuant to this Appendix A
     shall no longer be a participant in the plan (or portion of a plan) from
     which the account balance or accrued benefit was transferred or, in the
     case of an individual who was a Participant in the Plan before January 1,
     2002, shall no longer be subject to the terms of the Plan as it existed
     before January 1, 2002, and shall no longer be entitled to any benefits
     thereunder. However, a Participant shall forfeit any conversion credits and
     related earnings if, and to the extent that, the Participant becomes
     entitled to a benefit under another plan that duplicates a benefit for
     which conversion credits are provided under this Plan.

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                          Appendix A
<PAGE>

              APPENDIX B. SPECIAL RULES APPLICABLE TO OTHER CREDITS

B.01 ANNUAL TRANSITION CREDITS

     If a Participant is entitled to an annual transition credit for a Plan
     Year, such transition credit shall be made to the Participant's Retirement
     Contribution Sub-Account as of December 31st of such year, unless the
     Participant terminates employment with all Verizon Companies during such
     year, in which case the transition credit shall be made as soon as
     practicable following the Participant's termination of employment.

B.02 POTENTIAL INTERIM AMOUNT

     If a Participant is entitled to a potential interim amount ("PIA") credit
     for the year in which the Participant terminates employment with all
     Verizon Companies, such PIA shall be credited to the Participant's
     Retirement Contribution Sub-Account as soon as practicable following the
     Participant's termination of employment.

     Before, but not after, a Change in Control, the Chief Executive Officer of
     Verizon may cause a forfeiture of any PIA credit if the Participant
     terminates employment from all of all Verizon Companies and the Chief
     Executive Officer determines that the Participant's termination of
     employment is seriously detrimental to the interests of any Verizon
     Company.

--------------------------------------------------------------------------------
Verizon Income Deferral Plan                                          Appendix B

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.G
<SEQUENCE>9
<FILENAME>d98774exv10wg.txt
<DESCRIPTION>DESCRIPTION - SPLIT-DOLLAR INSURANCE ARRANGEMENTS
<TEXT>
<PAGE>
                                                                     EXHIBIT 10g

Description of Split-Dollar Insurance Arrangements

Messrs. Babbio and Barr have waived their rights to receive certain previously
earned deferred compensation in exchange for the Company's entering into
split-dollar insurance arrangements for their benefit. Under these arrangements,
the insurance premiums paid by the Company will be ultimately returned to the
Company. The present value after-tax costs of these arrangements to the Company
are designed to be equivalent to the after-tax costs to the Company of these
waived deferred compensation obligations. The value of the premium paid by the
Company in 2002 for these split-dollar insurance arrangements for Messrs. Babbio
and Barr were $1,163,800 and $405,573, respectively.

</TEXT>
</DOCUMENT>
</SUBMISSION>
